- UK Unveils Harsh $13,000 Fine For Breaking Quarantine Amid Covid 2nd Wave
UK Unveils Harsh $13,000 Fine For Breaking Quarantine Amid Covid 2nd Wave
Tyler Durden
Mon, 09/21/2020 – 02:45The UK witnessed new record coronavirus case numbers reported in a single day since May on Saturday, logging over 4,420 confirmed infections.
And now authorities are getting desperate, threatening severe law enforcement measures and penalties, with the latest being that those who test positive but refuse to self-quarantine can be hit with a fine up to $13,000 (or 10,000 pounds).
It comes after Prime Minister Boris Johnson confirmed the country is undergoing an “inevitable” second wave of infections on Friday.
Via The Daily Records “Obviously, we’re looking carefully at the spread of the pandemic as it evolves over the last few days, and there’s no question, as I’ve said for several weeks now, that we could expect, and we are now seeing, a second wave coming in,” Johnson said.
He referenced case number spikes seen in nearby Spain and France, saying that it’s “absolutely inevitable, I’m afraid, that we would see it in this country.”
The new harsh penalty of the equivalent of a $13,000 fine takes effect by the end of this month, per the AP:
The new rule obliges people to self-isolate if they test positive for the coronavirus or are traced as a close contact. The rule comes into effect on Sept. 28.
The government will help those on lower incomes who face a loss of earnings as a result of self-isolating with a one-time support payment of 500 pounds ($633).
Amid continuing protests in London by Britons fed up with restricted freedoms, including mask and social distancing mandates and security crackdowns, PM Johnson’s latest comments also strongly hinted that a second lockdown is on the table, such as Israel is experiencing.
“I don’t think anybody wants to go into a second lockdown, but clearly when you look at what is happening, you’ve got to wonder whether we need to go further than the rule of six that we brought in on Monday,” Johnson said.
- Trump & The Nobel Prize: "Make Deals, Not War!"
Trump & The Nobel Prize: “Make Deals, Not War!”
Tyler Durden
Mon, 09/21/2020 – 02:00Authored by Amir Taheri via The Gatestone Institute,
Do Norwegian politicians have a sense of humor after all? Or are they being deliberately provocative by nominating President Donald Trump for the Nobel Peace Prize in the middle of the biggest campaign of character assassination faced by any Western politician in recent times?
At first glance, Trump may actually have a claim to the dynamite-maker’s prize. He has brokered normalization between Israel and two of its erstwhile Arab enemies, with more expected to follow. He may have also cleared the last foyer of conflict in former Yugoslavia by mediating a settlement between Serbia and Kosovo.
In both cases he has managed to jump historic, emotional and ideological hurdles that many, including this writer, believed could not be crossed in the foreseeable future. How he did it and what underhand measures he employed to clinch the deals is a matter for speculation. But what matters, as far as the Nobel judges are concerned, is that he did it; he brought peace where there was conflict.
Trump the peacemaker? The liberal elites on both sides of the Atlantic react to that phrase with a hearty “Ha! Ha! Ha!” or an angry cry of “scandal”.
But, wait a minute, a closer look may tell a different story.
First, with the exception of Dwight Eisenhower, Trump is the only US president since World War II not to have led his nation into a war, big or small.
President Harry Truman took America into the Korean War. John F. Kennedy got the US involved in the Vietnam War. His successor Lyndon Johnson extended the war into Laos. Richard Nixon and Gerald Ford prolonged the war and extended it into Cambodia. Ronald Reagan had his mini-war in Grenada plus proxy wars in El Salvador and Nicaragua while also helping British allies in the Falklands conflict.
George H. W. Bush led the invasion of Iraq plus a mini but costly incursion in Somalia. Bill Clinton dragged the US into the Yugoslav conflict. George W. Bush drew a double by invading first Afghanistan and then Iraq. Leading from behind, Barack Obama got the US involved in the Libyan war while starting the largest drone war in history in Afghanistan, Pakistan and Yemen. He also incited the Arabs to rebellion against their governments but then refused to raise a finger to help them, thus lighting the fire of civil wars, notably in Syria. His support for the mullahs of Tehran also encouraged them to speed up their empire-building efforts, plunging much of the Middle East into violence and war.
In contrast, Trump the dealmaker, ignoring hawkish advisers, refused to take military action against North Korea. He even accepted to demean himself in the eyes of many by treating the North Korean despot Kim Jung-un with decorum. Trump also pulled the plug on a series of planned airstrikes against the Islamic Republic of Iran.
Last but not least, Trump tried to broker a deal with the Afghan Taliban.
One may or may not approve of those acts, and in some cases, notably legitimizing the Taliban, one may even have a sense of betrayal. But, as far as Nobel judges are concerned, all those acts were aimed at making peace.
I doubt that, in the end, the liberal elites in control of the Nobel game will go for Trump. But if they do, he will be the fifth US president to gain the accolade. And if he does, he would be the most deserving of them all.
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The first to win the Nobel was Theodore Roosevelt in 1906, for mediating a ceasefire in the Russo-Japanese war, which Russia had lost. The mediation did not remove the core of the conflict over the Sea of Okhotsk, with Russia recovering its losses in World War II and annexing the Japanese Kuril archipelago. Roosevelt, endearingly known as “Teddy”, was far from a “peace and love” icon. He waged war to complete the conquest of the Philippines and campaigned for joining the First World War. Worse still, the dear “Teddy” was a promoter of eugenics, ordering that “criminals should be sterilized and mentally retarded be forbidden to have descendants.”
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The second of the four was President Woodrow Wilson, in 1919. Hailed for his “liberal internationalism,” Wilson had led the US into World War I, at the end of which he published a 14-point declaration promising self-determination to numerous “nations” and proto-nations in Europe and the Middle East. Britain and France ignored the declaration and went on to expand their empires with a series of treaties from Versailles to Lausanne and Montreux.
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During his presidency, Wilson the peace laureate had led several wars, notably an invasion of Mexico to seize Vera Cruz and destabilize the despot Victoriano Huerta in favor of the “liberal” Venustiano Carranza. Wilson’s Secretary of State William Jennings Bryan talked a good talk for liberal elites but achieved little. Had he been around today, Wilson’s thinly disguised racism alone would have disqualified him.
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The third Nobel laureate was Jimmy Carter for “his decades of untiring efforts to find peaceful solutions to international conflicts and advance democracy.” Since Carter was president only for four years, it is not clear where those “decades of efforts” came from. In any case, by arming, training and financing the first Mujahedin, Carter started a war that is still going on in Afghanistan. Carter’s Keystone Cops-style mini-invasion of Iran to release US hostages showed that was not shy about using force; he just didn’t know how to do it.
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The fourth Nobel winner was Barack Obama, who was chosen even before he had become president. His case illustrated what in 1817 Coleridge called “a suspension of disbelief” with Nobel judges deciding to honor Obama for what he might do in the future. That Obama did not turn out to be the champion, of “make love, not war,” as Nobel judges had expected, is beside the point. His fans like him because he talked their talk without walking the walk.
Trump’s message of “make deals, not war” isn’t intellectually sexy enough for the liberal elites who set the norm for Nobel-style gimmicks. He may yet win the Nobel, but don’t hold your breath.
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- CJ Hopkins Exposes The Final Act In 'The War On Populism'
CJ Hopkins Exposes The Final Act In ‘The War On Populism’
Tyler Durden
Sun, 09/20/2020 – 23:20Authored (mostly satirically) by CJ Hopkins via The Consent Factory,
So, it appears the War on Populism is building toward an exciting climax. All the proper pieces are in place for a Class-A GloboCap color revolution, and maybe even civil war. You got your unauthorized Putin-Nazi president, your imaginary apocalyptic pandemic, your violent identitarian civil unrest, your heavily-armed politically-polarized populace, your ominous rumblings from military quarters … you couldn’t really ask for much more.
OK, the plot is pretty obvious by now (as it is in all big-budget action spectacles, which is essentially what color revolutions are), but that won’t spoil our viewing experience. The fun isn’t in guessing what is going to happen. Everybody knows what’s going to happen. The fun is in watching Bruce, or Sigourney, or “the moderate rebels,” or the GloboCap “Resistance,” take down the monster, or the terrorists, or Hitler, and save the world, or democracy, or whatever.
The show-runners at GloboCap understand this, and they are sticking to the classic Act III formula (i.e., the one they teach in all those scriptwriting seminars, which, full disclosure, I teach a few of those). They’ve been running the War on Populism by the numbers since the very beginning. I’m going to break that down in just a moment, act by act, plot point by plot point, but, first, let’s quickly cover the basics.
The first thing every big Hollywood action picture (or GloboCap color revolution) needs is a solid logline to build the plot around. The logline shows us: (1) our protagonist, (2) what our protagonist is trying to do, and (3) our antagonist or antagonistic force.
For example, here’s one everyone will recognize:
“A computer hacker learns from mysterious rebels about the true nature of his reality and his role in the war against its controllers.”
In our case, the logline writes itself:
“After America is taken over by a Russian-backed Hitlerian dictator, the forces of democracy unite to depose the tyrant and save the free world.”
Donald Trump is our antagonist, of course. And what an antagonist he has been! As the deep-state spooks and the corporate media have been relentlessly repeating for the last four years, the man is both a Russian-backed traitor and literally the resurrection of Hitler! In terms of baddies, it doesn’t get any better.
It goes without saying that our protagonist is GloboCap (i.e., the global capitalist empire), or “democracy,” as it is known in the entertainment business.
Now, we’re in the middle of Act III already, and, as in every big-budget action movie, our protagonist suffered a series of mounting losses all throughout Act II, and the baddie was mostly driving the action. Now it’s time for the Final Push, but, before all the action gets underway, here’s a quick recap of those previous acts. Ready? All right, here we go …
Act I
(status quo/inciting incident)
There democracy (i.e., GloboCap) was, peacefully operating its de facto global capitalist empire like a normal global hegemon (i.e., destabilizing, restructuring, and privatizing everything it hadn’t already destabilized and privatized, and OK, occasionally murdering, torturing, and otherwise mercilessly oppressing people), when out of nowhere it was viciously attacked by Donald Trump and his Putin-Nazi “populists,” who stole the 2016 election from Clinton with those insidious Facebook ads. (For you writers, this was the Inciting Incident.)
(new situation/predicament/lock-in)
GloboCap did not take this well. The deep state and the corporate media started shrieking about a coming “Age of Darkness,” “The death of globalization at the hands of white supremacy,” “racial Orwellianism,” “Zionist anti-Semitism,” the “Bottomless Pit of Fascism,” and so on. Liberals festooned themselves with safety pins and went out looking for minorities to hide in their attics throughout the occupation. According to GloboCap, every “populist” that voted for Trump (or just refused to vote for Clinton) was a genocidal white supremacist undeserving of either empathy or mercy. Somewhere in there, the “Resistance” was born. (This is the plot point known as the Lock-In, where the protagonist commits to the struggle ahead.)
Act II (a)
(progress/obstacles)
As is traditional at the opening of Act II, things were looking promising for GloboCap. The “Resistance” staged those pink pussyhat protests, and the corporate media were pumping out Russia and Hitler propaganda like a Goebbelsian piano. Yes, there were obstacles, but the “Resistance” was growing. And then, in May of 2017, special counsel Robert Mueller was appointed, and “Russiagate” was officially launched. It appeared that Donald Trump’s days were numbered!
(rising action/first culmination)
But, no, it was never going to be that easy. (If it was, feature films would be less than an hour long, not to mention incredibly boring.) There was plenty of action (and an endless series of “bombshells”) throughout the ensuing two years, but by the end of March 2019, “Russiagate” had blown up in GloboCap’s face. “Populism” was still on the rise! It was time for GloboCap to get serious. (This was the classic first culmination, sometimes known as The Point of No Return.)
Act II (b)
(complications/subplots/higher stakes)
In the aftermath of the “Russiagate” fiasco, the GloboCap “Resistance” flailed around for a while. An assortment of ridiculous subplots unfolded … Obstructiongate, Ukrainegate, Pornstargate (and I’m probably forgetting some “gates”), white-supremacist non-terrorist terrorism, brain-devouring Russian-Cubano crickets, Russian spy whales, and other such nonsense. Meanwhile, the forces of “populism” were running amok all across the planet. The gilets jaunes were on the verge of taking down Macron in France, and gangs of neo-nationalist boneheads had launched a series of frontal assaults on Portlandia, GloboCap Anti-Fascist HQ, which Antifa was barely holding off.
(second culmination/major setback)
All wasn’t totally lost, however. GloboCap sprang back into action, successfully Hitlerizing Jeremy Corbyn, the leader of leftist “populism,” and thus preventing the mass exdodus of Jews from Great Britain. And the US elections were on the horizon. Trump was still Russian-agent Hitler, after all, so he wasn’t going to be too hard to beat. All that GloboCap had to do was put forth a viable Democratic candidate, then let the corporate media do their thing. OK, first, they had to do Bernie Sanders (because he was another “populist” figurehead, and the point of the entire War on Populism has been to crush the “populist” resistance to global capitalism from both the Left and the Right), but the DNC made short work of that.
So, everything was looking hunky-dory until — and you screenwriters saw this coming, didn’t you? — the pivotal plot-point at the end of Act II, The Major Setback, or The Dark Night of the Soul, when all seems lost for our protagonist.
Yes, implausible as it probably still seems, the Democratic Party nominated Joe Biden, a clearly cognitively-compromised person who literally sucked his wife’s fingers on camera and who can’t get through a two-minute speech without totally losing his train of thought and babbling non-sequiturial gibberish. Exactly why they did this will be debated forever, but, obviously, Biden was not GloboCap’s first choice. The man is as inspiring as a head of lettuce. (There is an actual campaign group called “Settle for Biden!”) GloboCap was now staring down the barrel of certain swing-voter death. And as if things weren’t already dire enough, the “populists” rolled out a catchy new slogan … “TRUMP 2020, BECAUSE FUCK YOU AGAIN!”
Act III
So, all right, this is part where Neo orders up “guns … lots of guns.” Which is exactly what our friends at GloboCap did. The time for playing grab-ass was over. Faced with four more years of Trump and this “populist” rebellion against global capitalism and its increasingly insufferable woke ideology, the entire global capitalist machine went full-totalitarian all at once. Suddenly, a rather undeadly virus (as far as deadly pestilences go) became the excuse for GloboCap to lock down most of humanity for months, destroy the economy, unleash the goon squads, terrorize everyone with hysterical propaganda, and otherwise remake society into a global totalitarian police state.
And that wasn’t all … no, far from it. GloboCap was just getting started. Having terrorized the masses into a state of anus-puckering paranoia over an imaginary apocalyptic plague and forced everyone to perform a variety of humiliating ideological-compliance rituals, they unleashed the identitarian civil unrest. Because what would a color revolution be without rioting, looting, wanton destruction, clouds of tear gas, robocops, and GloboCap-sponsored “moderate rebels” and “pro-regime forces” shooting each other down in the streets on television? (In an homage to Orwell’s Ministry of Truth, the corporate media, with totally straight faces, have been describing this rioting as “mostly peaceful.”)
*
That brings us up to speed, I think.
The rest of Act III should be pretty exciting, despite the fact that the outcome is certain.
One way or another, Trump is history. Or do you seriously believe that GloboCap is going to allow him to serve another four years?
Not that Trump is an actual threat to them. As I have said repeatedly over the past four years, Donald Trump is not a populist. Donald Trump is a narcissistic ass clown who is playing president to feed his ego. He is not a threat to global capitalism, but the people who elected him president are. In order to teach these people a lesson, GloboCap needs to make an example of Trump. Odds are, it’s not going to be pretty.
See, they have him between a rock and a hard place.
As CNN’s Fareed Zakaria explains, on election night, Trump will appear to have won (because the Democrats will all be mailing in their votes due to the apocalyptic plague), but later, once the mail-in votes are all counted, which may take weeks or even months, it will turn out that Biden really won. But, by then, it won’t matter who really won, because one of two scenarios will have already played out.
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In Scenario Number One, Trump declares victory before the mail-in votes have been tallied and is “removed from office” for “attempting a coup.”
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In Scenario Number Two, he doesn’t declare victory, and the country enters a state of limbo, which the Democrats will prolong as long as possible.
Either way, rioting breaks out. Serious rioting … not “peaceful” rioting. Rioting that makes the “BLM protests” we have witnessed so far look like a game of touch football.
And this is where the US military (or the military-industrial complex) comes in.
I’ll leave you with just a few of the many ominous headlines that GloboCap has been generating:
“This Election Has Become Dangerous for the U.S. Military” — Foreign Policy
“Al Gore suggests military will remove Trump from office if he won’t concede on election night” — Fox News
“Former ambassador warns of election violence” — The Guardian
“All Enemies, Foreign and Domestic”: An Open Letter to Gen. Milley (“If the commander in chief attempts to ignore the election’s results, you will face a choice.)” — Defense One
“Is Trump Planning a Coup d’État?” — The Nation
“Trump could refuse to concede” — Washington Post
“What happens if Trump loses but refuses to concede?” — Financial Times
“White Supremacists, Domestic Terrorists Pose Biggest Threat Of ‘Lethal Violence’ This Election, DHS Assessment Finds” — Forbes
“Trump’s Attacks Put Military In Presidential Campaign Minefield” — NPR
“Trump’s Election Delay Threat Is a Coup in the Making” — Common Dreams
“What If Trump Won’t Leave?” — The Intercept
“How to Plan a Coup” — Bill Moyers on Democracy
“It can happen here: A Trump election coup?” — Wall Street International Magazine
“Whose America Is It?” — The New York Times
Does it sound like GloboCap is bluffing? Because it doesn’t sound like that to me. I could be totally wrong, of course, and just letting my imagination run away with itself, but if I were back home in the USA, instead of here in Berlin, I wouldn’t bet on it.
In any event, whatever is coming, whether this is the end of the War on Populism or just the beginning of a new, more dramatic phase of it, the next two months are going to be exciting.
So, go grab your popcorn, or your AR-15, and your mask, or full-body anti-virus bubble suit (which you might want to have retrofitted with Kevlar), and sit back and enjoy the show!
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- Taiwan FM Blasts China's Military Drills: "After Hong Kong, Taiwan Might Be Next"
Taiwan FM Blasts China’s Military Drills: “After Hong Kong, Taiwan Might Be Next”
Tyler Durden
Sun, 09/20/2020 – 22:55Over the past two weeks there’s been multiple Chinese fighter jet incursions over Taiwan, which Beijing has expressly declared as severe ‘warnings’ amid two back-to-back high level US diplomatic official visits to Taipei.
In follow-up to a particularly large Chinese group of aircraft buzzing the island on Friday (no less than 18 military planes conducted the provocative maneuvers), Taiwan’s Foreign Minister Joseph Wu said in a weekend interview with France24 that after the mainland’s Hong Kong crackdown “Taiwan might be next”.
Foreign Minister Joseph Wu, Image via Presidential Office/Flickr According to a summary of his comments Wu warned that “China was ramping up its military pressure and that the threat of a military intervention against Taiwan had ‘intensified’.”
“Taiwan might be next” he warned, saying China’s PLA military drills along the Taiwan Strait have been significantly ramped up, leading to the potential for an “accidental war”.
According to France24:
Wu pointed to recent military drills by China as evidence that Beijing was eager to fulfill the commitment of President Xi Jinping to “reunify” China by taking control of Taiwan. He said Taiwan was beefing up its military in order to respond to the threat and welcomed US moves to warn China against using military force. He also said that the potential for an accidental war with China was escalating.
And further, he cited the Hong Kong example, specifically the oppressive national security law rolled out this summer as strongly suggesting the next ‘reunification’ goal is Taiwan:
The Taiwanese foreign minister said the mood in the European Union via-à-vis China and Taiwan was “changing”, stressing that China’s expansionist moves in the South China Sea, at the border with India and in Hong Kong had changed the perception.
PLA’s Eastern Theater Command conducts a live-fire drill in the Taiwan Strait starting from Friday, Ministry of National Defense spokesperson Ren Guoqiang said Fri, adding that the action is necessary to safeguard national sovereignty due to the current situation in the region. pic.twitter.com/lTOT6Q6WXi
— People’s Daily, China (@PDChina) September 18, 2020
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Meanwhile, upon the start of yet more PLA military drills which kicked off Friday, Beijing has warned the United States “not to play with fire”.
- Stephen Cohen Is Dead: Never Forget His Urgent Warnings Against The New Cold War
Stephen Cohen Is Dead: Never Forget His Urgent Warnings Against The New Cold War
Tyler Durden
Sun, 09/20/2020 – 22:30Authored by Caitlin Johnstone via Medium.com,
Stephen F Cohen, the renowned American scholar on Russia and leading authority on US-Russian relations, has died of lung cancer at the age of 81.
As one of the precious few western voices of sanity on the subject of Russia while everyone else has been frantically flushing their brains down the toilet, this is a real loss. I myself have cited Cohen’s expert analysis many times in my own work, and his perspective has played a formative role in my understanding of what’s really going on with the monolithic cross-partisan manufacturing of consent for increased western aggressions against Moscow.
In a world that is increasingly confusing and awash with propaganda, Cohen’s death is a blow to humanity’s desperate quest for clarity and understanding.
Very sad. A huge loss. America’s leading expert on Russia, Stephen Cohen, has died, aged 81. Stephen was subjected to a horrible smear campaign when he questioned US-policy towards Moscow after the 2014 estrangement. Condolences to @KatrinaNationhttps://t.co/3PNLdl758f
— Bryan MacDonald (@27khv) September 19, 2020
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I don’t know how long Cohen had cancer. I don’t know how long he was aware that he might not have much time left on this earth. What I do know is he spent much of his energy in his final years urgently trying to warn the world about the rapidly escalating danger of nuclear war, which in our strange new reality he saw as in many ways completely unprecedented.
The last of the many books Cohen authored was 2019’s War with Russia?, detailing his ideas on how the complex multi-front nature of the post-2016 cold war escalations against Moscow combines with Russiagate and other factors to make it in some ways more dangerous even than the most dangerous point of the previous cold war.
“We’re in a new cold war with Russia that is much more dangerous than the preceding cold war for various reasons,” Cohen told The Young Turks in 2017.
“One is that there are at least three cold war fronts that are fraught with hot war: that would be Ukraine, that would be the Baltic Black Sea region where NATO is undertaking an unprecedented military buildup on Russia’s border, and of course in Syria, where American and Russian aircraft are flying in the same airspace. And I would add to those three cold war fronts what is now called Russiagate, because the accusation that Trump needs to be impeached because he’s somehow a Russian agent so distorts and cripples the possibility of the White House making Russia policy that I think it’s a cold war front.”
Cohen repeatedly points to the most likely cause of a future nuclear war: not one that is planned but one which erupts in tense, complex situations where anything could happen in the chaos and confusion as a result of misfire, miscommunication or technical malfunction, as nearly happened many times during the last cold war.
“I think this is the most dangerous moment in American-Russian relations, at least since the Cuban missile crisis,” Cohen told Democracy Now in 2017.
“And arguably, it’s more dangerous, because it’s more complex. Therefore, we — and then, meanwhile, we have in Washington these — and, in my judgment, factless accusations that Trump has somehow been compromised by the Kremlin. So, at this worst moment in American-Russian relations, we have an American president who’s being politically crippled by the worst imaginable — it’s unprecedented. Let’s stop and think. No American president has ever been accused, essentially, of treason. This is what we’re talking about here, or that his associates have committed treason.”
“Imagine, for example, John Kennedy during the Cuban missile crisis,” Cohen added.
“Imagine if Kennedy had been accused of being a secret Soviet Kremlin agent. He would have been crippled. And the only way he could have proved he wasn’t was to have launched a war against the Soviet Union. And at that time, the option was nuclear war.”
“A recurring theme of my recently published book War with Russia? is that the new Cold War is more dangerous, more fraught with hot war, than the one we survived,” Cohen wrote last year.
“Histories of the 40-year US-Soviet Cold War tell us that both sides came to understand their mutual responsibility for the conflict, a recognition that created political space for the constant peace-keeping negotiations, including nuclear arms control agreements, often known as détente. But as I also chronicle in the book, today’s American Cold Warriors blame only Russia, specifically ‘Putin’s Russia,’ leaving no room or incentive for rethinking any US policy toward post-Soviet Russia since 1991.”
“Finally, there continues to be no effective, organized American opposition to the new Cold War,” Cohen added.
“This too is a major theme of my book and another reason why this Cold War is more dangerous than was its predecessor. In the 1970s and 1980s, advocates of détente were well-organized, well-funded, and well-represented, from grassroots politics and universities to think tanks, mainstream media, Congress, the State Department, and even the White House. Today there is no such opposition anywhere.”
“A major factor is, of course, ‘Russiagate’,” Cohen continued.
“As evidenced in the sources I cite above, much of the extreme American Cold War advocacy we witness today is a mindless response to President Trump’s pledge to find ways to ‘cooperate with Russia’ and to the still-unproven allegations generated by it. Certainly, the Democratic Party is not an opposition party in regard to the new Cold War.”
“Détente with Russia has always been a fiercely opposed, crisis-ridden policy pursuit, but one manifestly in the interests of the United States and the world,” Cohen wrote in another essay last year.
“No American president can achieve it without substantial bipartisan support at home, which Trump manifestly lacks. What kind of catastrophe will it take — in Ukraine, the Baltic region, Syria, or somewhere on Russia’s electric grid — to shock US Democrats and others out of what has been called, not unreasonably, their Trump Derangement Syndrome, particularly in the realm of American national security? Meanwhile, the Bulletin of Atomic Scientists has recently reset its Doomsday Clock to two minutes before midnight.”
And now Stephen Cohen is dead, and that clock is inching ever closer to midnight. The Russiagate psyop that he predicted would pressure Trump to advance dangerous cold war escalations with no opposition from the supposed opposition party has indeed done exactly that with nary a peep of criticism from either partisan faction of the political/media class. Cohen has for years been correctly predicting this chilling scenario which now threatens the life of every organism on earth, even while his own life was nearing its end.
And now the complex cold war escalations he kept urgently warning us about have become even more complex with the addition of nuclear-armed China to the multiple fronts the US-centralized empire has been plate-spinning its brinkmanship upon, and it is clear from the ramping up of anti-China propaganda since last year that we are being prepped for those aggressions to continue to increase.
We should heed the dire warnings that Cohen spent his last breaths issuing. We should demand a walk-back of these insane imperialist aggressions which benefit nobody and call for détente with Russia and China. We should begin creating an opposition to this world-threatening flirtation with armageddon before it is too late. Every life on this planet may well depend on our doing so.
Stephen Cohen is dead, and we are marching toward the death of everything. God help us all.
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- Hunter Biden Is "Riding The Dragon": Bombshell Film Explores Shady Deals With China's Military
Hunter Biden Is “Riding The Dragon”: Bombshell Film Explores Shady Deals With China’s Military
Tyler Durden
Sun, 09/20/2020 – 22:05In the lead-up to the November election political investigator and author Peter Schweizer, who currently heads the Florida-based Government Accountability Institute, has unveiled a bombshell exposé presenting damning evidence of Hunter and his father Joe Biden’s shady and hidden financial dealings with China.
Directed by Matthew Taylor, whose prior works include Clinton Cash and Creepy Line, the 41-minute film entitled “Riding the Dragon: The Bidens’ Chinese Secrets,” details a pile of corporate records, financial documents, legal briefings as well as court papers which tie Hunter’s firm with a major Chinese defense contractor, namely Aviation Industry Corp. of China (AVIC), and multiple other PLA linked companies.
“It’s a relationship that grew while Joe Biden was vice president of the United States and shortly after he was appointed the point person on U.S. policy towards China,” Schweizer, who narratives the film, described upon the documentary’s release earlier this month. “This new firm started making investment deals that would serve the strategic interests of the Chinese military.”
“It’s the story of the second most powerful man in the world at the time and how his family was striking deals with America’s chief rival on the global stage, the People’s Republic of China,” he added.
Watch the full length “Riding the Dragon” below:
- The 'Gender-Feminist/New-Left/Marxist' Axis Attacks All Civil Society
The ‘Gender-Feminist/New-Left/Marxist’ Axis Attacks All Civil Society
Tyler Durden
Sun, 09/20/2020 – 21:40Authored by Wendy McElroy via The Mises Institute,
Gender feminism, the New Left, and Marxism (FLM) are often said to be politically aligned, and, certainly, there is significant overlap. But does a political FLM axis exist?
The answer is important. A surreal dynamic has politicized every crevice of society and decent people now need to defend themselves against groundless accusations of racism, misogyny, and other “hate” crimes in order to keep their jobs, their reputations, and their futures.
An understanding of where the dynamic originates gives them more of a fighting chance. The answer begins with defining FLM and describing their interconnection.
(Of necessity, the ensuing analysis is highly simplified.)
Gender feminism became prominent in the 1970s and ’80s. It is called “gender” feminism because this form of feminism explains the world by dividing men and women into antagonistic classes. Also known as third wave feminism, its ideological successor is sometimes called fourth wave feminism; it focuses on equity for women and minorities, the use of social media as a political weapon, and on intersectionality.
The New Left was a broad coalition of liberals, radicals, and unorthodox Marxists in the 1960s. The word “New” distanced it from pure Marxism and the Old Left which focused on labor. By contrast, the New Left championed cultural causes such as feminism and gay rights. This is a Maoist approach to revolution—a cultural revolution to change “the system” by upending the traditions and institutions upon which everything else rests. That’s why the New Left was sometimes called the counterculture. Social justice emerged in its wake.
Marxism is the theory and practice of communism; it advocates class warfare as a path to a society in which there is no private property and goods are available based on need. The different schools of communism are united by some core beliefs. Two of them: capitalism is exploitation, and people are defined by their class affiliation.
All three movements condemn capitalism and believe that people are their “identity”—their race, for example. “Identity” is now the word preferred over “class” but the words mean basically the same thing. Because class is a fundamental concept to FLM and their successors, examining how it is handled can test how closely they are aligned politically.
A class is a group of people who share a common characteristic that serves the purpose of whoever is doing the grouping. A cancer researcher may group subjects according to types of cancer, for example. FLM all approach class for the purpose of forging ideology and political revolution. They all use relational class analysis, in which a class is defined by its relationship to an institution. Marx used the relationship to ownership of production to divide people into capitalists and workers.
The influential gender feminist Catharine MacKinnon called herself a “post-Marxist feminist.” The word “Marxist” indicated the movement’s embrace of anticapitalism, class warfare, and the redistribution of wealth and power. The “post” means they stumbled over Marx’s class theory of capitalists and workers.
Gender feminists rebelled against this division because men and women were to be found in both categories; this made gender irrelevant to class analysis. And so, while accepting the other basics of Marxism, they used a different dividing line: Are you male or female? In her book Of Woman Born (1976), Adrienne Rich argued that women’s class nemesis is the “social, ideological, political system” through which men control women. Today, this is called “the patriarchy” or male capitalism. Thus feminist class analysis fused with Marxism, giving it an ideological twist as it did so.
The New Left also deviated from Marxist class theory and spoke instead of the “power elite” or the military-industrial state—that is, state capitalism, which they viewed as capitalism itself. The power elite consisted of leaders in the military, business, and politics who manipulated average people into oblivious compliance; this middle class might include many workers, but they had been subsumed by the power elite. The true revolutionary class consisted of radical intellectuals who led marginalized groups, such as minorities or gays, into political battle. Thus the New Left fused with Marxism but put its own spin on class theory.
How do FLM’s successors view class?
Gender feminism’s successor relies heavily on intersectionality, which is a complex form of class analysis. It is the way in which a person’s different identities interconnect to define that person’s level of oppression. For example, a woman is said to be subjugated by men. A black woman is doubly subjugated, by both men and whites, and has a louder voice. A transgendered black woman…and so on. In calculating a person’s total oppression, different aspects of her or his identities are added together. A black male gains points because of his race. A white feminist loses points because her race. But the enemy of them all remains the same—white male capitalism.
The New Left’s successor is social justice, which wants to redistribute wealth, opportunities, and privileges in order to enrich those who are viewed as oppressed. Raising the subjugated, however, requires grinding down white male capitalists, who are responsible for the oppression. One class must lose for the other to gain. This means that the real goal is not equality, but what is known as “equity”—a form of political, social, and economic egalitarianism—which is enforced through the state and by law.
In short, the conclusions of these movements align well with Marxism. It is their methodologies that differ.
Theory is a wonderful thing but—assuming the theory is sound—does it translate into practice? This is akin to asking whether understanding of a problem makes solving it easier. Consider one example.
Those who have not been called racist, sexist, or the product of privilege are living on borrowed time. When the accusation does happen, its mere utterance can threaten livelihoods, reputations, and prospects for the future. If the claim is true, then an apology is due. If it is not, then it is important to understand the context from which such an accuser proceeds, and how she or he views the exchange. They proceed from class analysis, whether consciously held or absorbed from the culture. The exchange is not between two individuals but between two identities with irredeemably antagonistic interests. Reason, appeasement, and proof of innocent are not defenses. Simply by being white, male, or part of some other “privileged” class, the accused is guilty and an act of violence on two legs.
This verdict will not change, because it is foregone.
The dynamics established by concepts like intersectionality are a direct threat to any person who lacks a high score on the FLM axis of oppression. Unfortunately, the way of today’s world means that such concepts cannot receive the treatment they deserve—to be ignored. They need to be understood.
- Former FDA Director Expects "At Least One More Cycle" Of COVID-19 Before Vaccine Approval
Former FDA Director Expects “At Least One More Cycle” Of COVID-19 Before Vaccine Approval
Tyler Durden
Sun, 09/20/2020 – 21:15Former FDA Director Dr. Scott Gottlieb has been one of the most prominent ‘expert’ voices since the start of the COVID-19 epidemic, writing op-eds about how the FDA can safely speed up approval of a vaccine, and appearing daily on CNBC’s “Squawk Box”.
On Sunday, Gottlieb appeared on CBS News’ Face the Nation, where he shared that he expects the US to experience one more round of COVID-19 before a vaccine becomes widely available.
“Well I think we have at least one more cycle with this virus heading into the fall and winter…if you look around the country right now there’s an unmistakable spike in new cases and the declines in hospitalizations that we were achieving have started to level off.”
It’s possible it could be a “post-Labor Day bump,” and Saturday’s Sunday’s numbers could suggest that perhaps US cases are already leveling off again. But it’s clear that “we’re seeing a resurgence in infections,” Gottlieb said, adding that “there’s a lot of risk” heading into the fall season because that’s when “respiratory illnesses” like to spread.”
#COVID LOOKAHEAD: “I think we have at least one more cycle with this virus, heading into the fall and winter,” @ScottGottliebMD tells @margbrennan, highlighting an increase in infections in various states heading into the new season pic.twitter.com/6gJiwOcKUs
— Face The Nation (@FaceTheNation) September 20, 2020
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Gottlieb also weighed in on President Trump’s latest claim on vaccine timing – that a vaccine will be widely available by April. Gottlieb, who is on the board of Pfizer, said that he doesn’t expect a vaccine will be approved for general use until the end of the 2nd quarter, or perhaps even the beginning of the third quarter, of next year.
“I don’t believe a vaccine will be licensed for general use by the population until the end of the 2nd quarter of 2021, or perhaps a little later than that…what you really want is a vaccine available by the fall of 2021,” Gottlieb said.
Whether the vaccine is approved in April or June of next year, ultimately, shouldn’t make much difference, Gottlieb added. The outbreak should have mostly tapered off by then. But there will always be a risk of a comeback heading into the fall in the US.
While there’s a possibility that the vaccine could be made available to “select groups” who are particularly vulnerable to the virus, such exceptions will only be made “on a very limited basis”.
.@ScottGottliebMD tells @margbrennan it’s possible that @realDonaldTrump’s claims of ample #covid19 #vaccine by April are “possible,” but stresses it won’t be licensed for wide use by the general population until the end of Q2 2021. pic.twitter.com/aIwEpqpmYj
— Face The Nation (@FaceTheNation) September 20, 2020
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Dr. Gottlieb is best known for leading the push to combat teenage vaping during his time leading the FDA. He left last fall, just a few months before the outbreak hit.
- Central Banks Tell Markets: "You’re On Your Own Now"
Central Banks Tell Markets: “You’re On Your Own Now”
Tyler Durden
Sun, 09/20/2020 – 20:59By Ye Xie, Bloomberg macro commentator
Three things we learned last week:
1. Major central banks prefer the status quo, for now.
The Fed and BOJ joined other major central banks, including the ECB, to stay put as the global economy recovers. The Fed signaled that rates will remain near zero through at least 2023, but stopped short of adjusting its QE program. Only the Bank of England bucked the trend, giving the strongest signal yet that it may wade into negative interest rates in preparation for a potentially messy Brexit.
Besides the BOE, the other central banks are following in the footsteps of China, which is a global leading indicator given that its economy emerged from the pandemic first. The PBOC’s policy stance has shifted to neutral since May, leading to a bond selloff. On Monday, it is expected to keep the benchmark loan prime rate steady for a fifth month.
Without additional monetary support, risky assets are left on their own now. It’s worth noting that China’s stock market has stood still since July. The lack of fiscal stimulus in the U.S. underscores the risk heading into the presidential election.
2. China’s bond flows have come into focus.
Chinese regulators decided last week to increase the flexibility for bond settlements, increasing the chance that FTSE adds China’s debt to its World Government Bond Index on Sept. 24. Goldman Sachs estimates that the inclusion would add $140 billion of inflows to the Chinese bond market over time. There’s likely to be a grace period of 12 months, so the immediate flow impact would be limited, even if FTSE decides in China’s favor this week.
Foreign inflows have been a key pillar for the appreciation in the yuan over recent months. Much of the argument for a strong yuan, including the growth and rate differentials, is still there. So far, the PBOC opted to not stand in the way of appreciation, but the yuan fixing will be closely watched to see if there’s any change in attitude.
3. Soybean futures show an olive branch from China.
The U.S. moved to expel WeChat and TikTok from U.S. app stores last week, a reminder that the “getting tough on China” rhetoric is likely to get louder. For its part, China launched a fresh round of military maneuvers in the Taiwan Strait, including a rare incursion across its median line, in response to a top U.S. diplomat’s visit to Taiwan. Despite the deafening political noise, the real signal is that China’s been working hard to keep its commitment to the trade deal. China purchased a record amount of soybeans in the season that started Sept. 1. At least for soybean futures traders, the trade war is so 2018.
- The Best And Worst States For Homeschool Freedom
The Best And Worst States For Homeschool Freedom
Tyler Durden
Sun, 09/20/2020 – 20:50Submitted by Simon Black of Sovereign Man
Pennsylvania is among the most restrictive states when it comes to the freedom to homeschool your children. The state requires that parents teach their children state-mandated subjects for 180 days per year, for at least 900 hours. Tests must be administered, and the district must assess the child at the end of each school year. Immunizations are also required.
You can hire a tutor instead, but it won’t be cheap because the state requires homeschool tutors to have teachers’ qualifications. Plus, the tutor must be teaching only children from the same immediate family.
But this year with COVID closing down some schools and forcing others to learn remotely, the number of homeschooled children has doubled nationwide. Up to 10% of children are now homeschooled, according to Gallup polling— and this does not include remote learning.
Some parents in Pennsylvania (and elsewhere) opted to create homeschooling “pods” where they team up with other parents to homeschool a number of kids from different families.
And Pennsylvania responded by issuing strict operating rules for these pods, starting with the requirement to inform the state of your intention to host a homeschooling pod.
Now any parent who hosts children for a learning pod must undergo a background check, and make sure they are allowed to run a “residential daycare” in their area. They also must comply with state and CDC guidelines for social distancing while they homeschool.
The state can cram as many kids into one classroom as it wants, but pods must have one adult for each 12 young children (or 15 older students).
Pod parents have to open their home to DHS if child services come knocking, no warrant required. And they are considered mandatory reporters, meaning they could be prosecuted for failure to report signs of child abuse.
What this means:
Keep in mind that these pods aren’t generally made up of random strangers. A parent could host these same kids for a sleepover without requiring background checks and state permission. But for some reason, when it comes to learning, suddenly the state inserts itself into the relationship.
And as usual, these regulations are much harder on families with limited financial means. So amidst a crumbling economy and the biggest upset in lifestyle in modern memory, parents also have to comply with regulations just to choose the best method for their family’s education.
Luckily, not every state is as strict as Pennsylvania when it comes to homeschooling. In fact, most are much freer.
What you can do about it:
There are some states which don’t regulate homeschooling at all. You have complete freedom to educate your children as you see fit.
- The freest “no notice” states: Alaska, Idaho, Indiana, Iowa, Michigan, Missouri, Oklahoma, Texas, (and surprisingly) Connecticut, Illinois, and New Jersey. These states allow No Notice/Regulation. This means that if you never enroll your children in school, you don’t have to inform the state that you are homeschooling. Generally, though, you do have to formally withdraw your child from public school if you intend to switch to homeschooling. And that’s it. Teach your children as you see fit.
- 16 states have Low Regulation: California, Nevada, Arizona, Utah, and New Mexico fall into this category. These states generally require that you register your intention to homeschool with a school district (usually your local one) before the school year that your child turns 6 or 7, depending on the state. But there are generally very few other requirements.
- 18 states have Moderate Regulation. This requires registration, often every year. They also generally have testing requirements. This category includes Florida, Virginia, Colorado, Oregon and Washington.
- The most restrictive states: Massachusetts, New York, Pennsylvania, Rhode Island, and Vermont. These generally require registration, testing, submission of an annual syllabus that aligns with subjects taught by the state, and sometimes proof of immunizations.
Around the world, Australia, New Zealand, Canada, and the UK all allow homeschooling. Like in the United States, the requirements vary by region in each country. But it is an option.
- "He Needs Cash": Ron Perelman's Leveraged Empire Collapses In A Deluge Of Fire Sales
“He Needs Cash”: Ron Perelman’s Leveraged Empire Collapses In A Deluge Of Fire Sales
Tyler Durden
Sun, 09/20/2020 – 20:25For billionaire Ronald O. Perelman, the time to cash in his chips is now. And, of course, by “cash in his chips”, we mean liquidate everything in a panic after Covid sends your highly leveraged empire into ruins.
In what will likely wind up as a microcosm of the United States economy as a whole, Perelman is currently in the process of selling his Gulfstream 650, his 257 foot yacht and “crates” of his artwork, according to Bloomberg. According to the report, he has already sold his stake in AM General, sold a flavorings company he has owned for decades and has hired banks to sell stock he owns in other companies.
Among the art he is selling is Jasper Johns’s “0 Through 9,” worth about $70 million, Gerhard Richter’s “Zwei Kerzen (Two Candles),” worth about $50 million and Cy Twombly’s “Leaving Paphos Ringed with Waves,” which is worth about $20 million.
Art adviser Wendy Goldsmith said: “What he’s selling is as blue chip as it gets.”
Perelman, under pressure due to his crashing stake in Revlon, has seen his fortune drop from $19 billion to just $4.2 billion over the last two years, according to the Bloomberg Billionaire’s Index. His investment company, MacAndrews & Forbes, said it needed to “rework its holdings” back in July due to the pandemic.
That “reworking” looks more like a fire sale of – well – everything.
Perelman said publicly: “We quickly took significant steps to react to the unprecedented economic environment that we were facing. I have been very public about my intention to reduce leverage, streamline operations, sell some assets and convert those assets to cash in order to seek new investment opportunities and that is exactly what we are doing.”
He continued: “I realized that for far too long, I have been holding onto too many things that I don’t use or even want. I concluded that it’s time for me to clean house, simplify and give others the chance to enjoy some of the beautiful things that I’ve acquired just as I have for decades.”
A friend of Perelman’s, Graydon Carter, told Bloomberg: “Often when people say this sort of thing, it’s masking something else. In Ronald’s case, it’s true. He has learned to love and appreciate the bourgeois comforts of family and home.” He described Perelman as “crazy about spending time at home”.
Some of his sales will go to pay down loans from Citigroup, though Perelman’s spokesman says they are not “forced sales”. She also denied Perelman is selling his 57 acre estate in the Hamptons.
Perelman is best known being a fearless financial engineer in the 1980’s and 1990’s. Ken Moelis said of Perelman’s track record: “He was imaginative, aggressive and innovative in ways that changed the financial landscape.”
But the $1.74 billion valuation Revlon had back in the 1980’s when he purchased it has now fallen to just $365 million. Perelman loved the business and said it “defined him”. He had offered it several loans and had catalyzed several executive changes to try and keep the business afloat. Revlon is now losing to smaller cosmetic shops that advertise through social media – while dealing with the effects of Covid.
Some Revlon bonds trade at 14 cents on the dollar and the company has $3 billion in debt.
He used some of his massive stake in Revlon as collateral for debt in MacAndrews & Forbes. Revlon shares are down 68% this year, likely triggering the deluge of selling Perelman is doing.
All told, “at least nine banks” have claims against his assets, including his art collection, house in the Hamptons and “various aircraft”. There are $267 million in mortgages linked to his Upper East Side headquarters for MacAndrews & Forbes.
Currently, Perelman’s art collection makes up about a third of his fortune. And that can be tricky, for assets that have an illiquid market. Recently, one painting he tried to sell was pulled from auction at the last minute due to lack of interest.
MacAndrews & Forbes saw its general counsel, spokesman, head of capital markets and CFO all depart over the last few months.
And despite the spin on Perelman’s fire sales as being a way to spend more time with family, Perelman has his skeptics, including Richard Hack, who wrote a book about him in 1996.
Hack concluded: “If you want a simpler life, you go buy a farm in Oklahoma, not sell a painting out of your townhouse in Manhattan. If he’s selling his art, it’s because he needs cash.”
- California Burnin' – A Warning Against One-Party Rule
California Burnin’ – A Warning Against One-Party Rule
Tyler Durden
Sun, 09/20/2020 – 20:00Authored by Niall Ferguson, op-ed via Bloomberg.com,
Fires, blackouts, high taxes, poverty, scarce housing, urban squalor, lousy schools – it’s a wonder anybody stays.
“California, folks, is America fast forward.” Thus Governor Gavin Newsom, hoarsely, amid brown smoke at the North Complex Fire on Sept. 11.
“What we’re experiencing right here is coming to a community all across the United States of America… unless we get our act together on climate change.”
I was with him all the way until he said the words “on climate change.”
As my Hoover Institution colleague Victor Davis Hanson put it last month, California is “the progressive model of the future: a once-innovative, rich state that is now a civilization in near ruins. The nation should watch us this election year and learn of its possible future.”
Let’s start with the fires. So far this year, they have torched more than five times as much land as the average of the previous 33 years, killing 25 people and forcing about 100,000 people from their homes. At one point, three of the largest fires in the state’s history were burning simultaneously in a ring around the San Francisco Bay Area. According to the California Department of Forestry and Fire Protection, or CAL FIRE, of the 10 largest fires since 1970, five broke out this year. Nine out of 10 have occurred since 2012.
No doubt high temperatures and unusual thunderstorms bear some of the responsibility for this year’s terrifying wildfires on the West Coast. It is deeply misleading to claim, as some diehard deniers still do, that temperatures aren’t rising and making wildfires more likely. But it is equally misleading to claim, as the New York Times did last week, that “scientists say” climate change “is the primary cause of the conflagration.”
In reality, as Stanford’s Rebecca Miller, Christopher Field and Katharine J. Mach argue in a recent article in Nature Sustainability, this crisis has at least as much to do with disastrous land mismanagement as with climate change, and perhaps more. Anyone who thinks solar panels, Teslas and a $3.3 billion white elephant of a high-speed rail line will avoid comparable or worse fires next year (and the year after and the year after) doesn’t understand what the scientists are really saying.
Most measures proposed by environmentalists to reduce carbon dioxide and other “greenhouse gas” emissions will pay off over 50 to 100 years, as the International Panel on Climate Change has long made clear. Even a best-case scenario of “stringent mitigation” (what the IPCC calls Representative Concentration Pathway 2.6) would not bring carbon dioxide emissions down to 1950 levels until around 2050. Nor would it lower global average temperatures; it would merely stop them rising.
And that’s only if the whole world — including China and India — takes action. California’s wildfire problem cannot be solved by the state’s citizens “getting their act together on climate change,” in Newsom’s words. The problem needs immediately effective action — and that means a return to sane forest management, if such a return is still possible. For decades, Democratic leaders in California have presided over a policy of leaving dead trees to rot, instead of the old and rational system of prescribed or controlled burns, not least because environmental and clear air regulations, as well as problems of legal liability, made controlled burns harder and harder to do.
In prehistoric California, according to a recent analysis in ProPublica, between 4.4 million and 11.8 million acres burned each year.
California’s land managers burned about 30,000 acres a year on average between 1982 and 1998. Over the next 18 years, that number dropped to an annual 13,000 acres. The result has been a huge accumulation of highly flammable kindling.
Miller, Field and Mach concluded that a total area of around 20 million acres – roughly one-fifth of the state’s territory – was in urgent need of “fuel treatment,” meaning prescribed burns, mechanical thinning and managed wildfire. It is hard to imagine anything remotely close to that happening under the current political dispensation. (The authors politely called for “fundamental shifts in prescribed-burn policies, beyond those currently under consideration.”) Or rather, it is going to happen, but at a time of Nature’s choosing, with catastrophic consequences.
A case in point: For a year and a half, red tape slowed down a forest-thinning project in Berry Creek, Butte County. The project covered just 54 acres but, thanks to the burdensome provisions of the California Environmental Quality Act, work had yet to start when the North Complex wildfire struck, devastating the town and killing 10 people.
I have some skin in this game.
Four years ago, I moved from Harvard University to Stanford University. My family traded a solid, century-old professorial residence in Cambridge for a wooden house in a wooded area that to our wooden heads seemed most idyllic. A few weeks ago, our neighborhood was on the edge of the evacuation zone.
However, I have less skin in the game than Victor Davis Hanson. He lives on the fruit and nut farm near Selma, in the Central Valley, that his family has owned since the 1870s. The air quality index in Stanford rose above 170 on three days in the last month. In Selma last week it was 460. (Anything above 301 qualifies as “emergency conditions.”)
I write these words over 1,000 miles from our California home, but it’s no good: in recent days the smoke has found us, too. Hotel parking lots full of vehicles with CA license plates confirm that we are not the only eastward migrants. It’s like Steinbeck’s “Grapes of Wrath” in reverse: Now that the Golden State is the Char-Grilled State, Californians have become the new Okies, though a good deal less impecunious.
Yet wildfires are only one of the reasons people are fleeing California.
In addition, the wrongheaded environmental policies of the sages of Sacramento have so undermined the power grid (for example, by shutting down gas-fired power plants and refusing to count hydroelectric energy as renewable) that residents have been subjected to rolling blackouts this year. The same policies have largely killed off the oil and gas industry. Newsom & Co. have failed to upgrade the water system to keep pace with the last half-century of population growth.
It’s not that California politicians don’t know how to spend money. Back in 2007, total state spending was $146 billion. Last year it was $215 billion. I know, I know: In real terms California’s GDP increased by nearly a third in the same period. And I know: If it were an independent nation it would be the fifth-largest economy in the world, ahead of India’s. But for how much longer will that be true?
California’s taxes aren’t the highest in the country — for the median household. But the tax system is one of the most progressive, with a 13.3% top tax rate on incomes above $1 million — and that’s no longer deductible from the federal tax bill as it used to be. The top 1% of taxpayers (those earning more than $500,000) now account for half of personal income-tax revenue. And there’s worse to come.
The latest brilliant ideas in Sacramento are to raise the top income rate up to 16.8% and to levy a wealth tax (0.4% on personal fortunes over $30 million) that you couldn’t even avoid paying if you left the state.
(The proposal envisages payment for up to 10 years after departure to a lower-tax state.)
It is a strange place that seeks to repel the rich while making itself a magnet for illegal immigrants by establishing no fewer than 20 “sanctuary” cities or counties.
And the results of all this progressive policy?
A poverty boom.
California now has 12% of the nation’s population, but over 30% of its welfare recipients. By the official measure, based mainly on income and family size, California’s 11.4% poverty rate in 2019 was close to the national average over the past three years. However, according to a new Census Bureau report, which takes housing and other costs into account, the real poverty rate in California is 17.2%, the highest of any state. (Newsom gets one thing right when he says, “We’re living in the wealthiest as well as the poorest state in America.”)
About a third of California’s poverty can be attributed to housing and other living costs such as clothing and utilities. As everyone who resides there knows, there’s a chronic housing shortage in the Bay Area (the median-priced home in San Francisco costs about $1.5 million), mainly because a plethora of regulations make the construction of affordable housing well-nigh impossible. In blithe disregard of all we know about rent controls — which discourage landlords from providing housing — that is, predictably, the solution the Democrats propose.
But that’s not all. The state’s public schools rank 37th in the country overall and have the highest pupil-teacher ratio.
“Only half of California students meet English standards and fewer meet math standards, test scores show,” was a headline in the Los Angeles Times last October.
Health care and pension costs are unsustainable. Oh, and they messed up on Covid-19, despite imposing the nation’s first shelter-in-place orders. Having prematurely claimed victory, California now leads New York in terms of cases, though not deaths.
Back in the 1960s, California was the world’s fantasy destination. “California Dreamin’,” “California Girls,” “Going to California” — you know the songs. But reputations have a way of outliving reality. Despite the economic miracle wrought in Silicon Valley, beginning with the genesis of the internet back in the 1970s, and despite the continuing strength of the state’s universities, the dream in terms of quality of life has slowly died.
When I first visited San Francisco in 1981, it was still one of the loveliest cities I had ever beheld. Now its streets are so filthy – human feces and syringe needles are the principal hazards – that I avoid it. (I was going to say “like the plague,” but that’s Lake Tahoe.)
Yet the Bay Area and its southern sister Los Angeles are only one of the two Californias.
As Hanson argued 10 years ago, the Central Valley is another country, more “Caribbean” or Latin American, where “countless inland communities … have become near-apartheid societies, where Spanish is the first language, the schools are not at all diverse, and the federal and state governments are either the main employers or at least the chief sources of income.”
The principal reason for California’s decline is that the Golden State became a one-party state.
The Republican candidate won California in every election but one (1964) between 1952 and 1988. But the Democrat has won California in every election since, with the Democratic vote share rising from 46% in 1992 to 62% in 2016.
Democrats now have 61 out of 80 seats in the California State Assembly. The last time Republicans had a majority (of one) was in 1994, but that was an anomaly. The Democrats have essentially controlled the State Senate since 1958, with rising majorities since the 1990s. Apart from 1994, the only other year since 1958 when they did not win a majority of seats in the Assembly was 1968.
When regular voting has no effect, people eventually vote with their feet. From 2007 until 2016, about five million people moved to California but six million moved out to other states. For years before that, the newcomers were poorer than the leavers. This net exodus is surging in 2020. And businesses (for example, Charles Schwab Corp.) are leaving too. Silicon Valley is going virtual, with many big tech companies thinking of making work from home permanent for at least some employees. (One tech chief executive told me last week that his engineers were pleading not to return to the office.)
People are getting out of the Bay Area as much and perhaps more than they are getting out of New York City. Texas is only one of the favored alternatives. Realtors in Montana are reporting record demand from West Coast refugees. The hotels are full, which is unheard of at this time of year. I also know a number of eminent Californians who are now Hawaiians.
The conservative writer and broadcaster Ben Shapiro, born in L.A., just announced that he is heading to Nashville, Tennessee.
“I love the state, grew up in the state, married in the state and have had children in the state,” he told Laura Ingraham.
But California was “not a great place to raise children and not a great place to build a company.”
Now we know the true meaning of Calexit. It’s not secession. It’s exodus.
I cannot blame the leavers. When I moved West in 2016, it was in the naive belief that California was Massachusetts without snow and Stanford was Harvard with September weather all year round. How wrong I was.
But am I leaving? Well, maybe there’s no point. As Newsom’s predecessor Jerry Brown put it last week:
“There are going to be problems everywhere in the United States. This is the new normal. It’s been predicted and it’s happening … Tell me: Where are you going to go? What’s your alternative?”
Great question, but — as with Newsom’s prophecy — wrongly framed.
The big problem is not that climate change is coming to every state. It is, though most states will mitigate it better than California. The problem is that Democratic governance could be coming to the nation as a whole, starting on Jan. 20. And with the Democratic nominee, Joe Biden, turning 78 two weeks after election day, it is not a little troubling to me that his vice-presidential pick is a Californian, just as so many of his plans to spend, tax and regulate have “designed in California” all over them.
Yes, folks, California is America fast forward. Can someone please hit pause?
- "Protesters" In Philadelphia Chase Down And Assault Random Citizens For Being "Nazis"
“Protesters” In Philadelphia Chase Down And Assault Random Citizens For Being “Nazis”
Tyler Durden
Sun, 09/20/2020 – 19:35Just when we thought we had seen peak boredom from America’s misinformed Marxists disguised as some kind of anti-fascist freedom fighters, three new videos out of Philadelphia have surfaced showing that now, more than ever, there’s too many art students and unemployed millennials that need to find hobbies.
The first video shows a group of several people chasing a man through a park.
“Holy shit you made a bad mistake,” one ‘protester’ says before another, cloaked in a hood of what appears to be a $500 REI jacket, tries to kick the man they’re chasing and then falls over.
Protesters chasing a man through the park they accuse of being a Nazi #Philly #PhillyProtests #Antifa #AntiFascist pic.twitter.com/SfCuUSCSQ0
— Brendan Gutenschwager (@BGOnTheScene) September 19, 2020
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The man then jogs in the other direction and appears to get away from his “bad mistake”, whatever it was, scot-free.
A second video out of Philadelphia shows a man that a mob reportedly chased to his car. And by “mob”, we naturally mean a group of what appears to be kids in their early 20s, replete with the full Antifa halloween costume of black hoods and masks.
“Fuck off Nazi scum,” the supposed “protesters” can be heard saying.
Protesters chased a man to his vehicle, then threw rocks, smashed windows and dented the doors as he drove away from Clark Park #PhillyProtest #Philly #Antifa pic.twitter.com/CHvLEG8fH8
— Brendan Gutenschwager (@BGOnTheScene) September 19, 2020
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“Get the fuck out of here!” someone yells while other mob members kick and dent the person’s car repeatedly. When the car drives off, after being dented and damaged, someone throws a rock at its back window.
A third video shows a different angle of the assault, showing there was a dog in the back of the SUV at the time.
“F*ck you and your dog!”
Philadelphia: Antifa attacks a targeted individual, destroys his vehicle, and puts his dog’s (in the car) life in danger.
Reminds me of a scene from Wizard of Oz. pic.twitter.com/qOOkn8e4k2
— Kalen From Scriberr (@FromKalen) September 19, 2020
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The group can then be heard whooping and congratulating each other after the person drives away.
One more “Nazi” taken care of, right?
Keep fighting the good fight, Antifa.
- Record Numbers Of Companies Drown In Debt To Pay Dividends To Their Private Equity Owners
Record Numbers Of Companies Drown In Debt To Pay Dividends To Their Private Equity Owners
Tyler Durden
Sun, 09/20/2020 – 19:10One week ago we used Bloomberg data to report that in the latest Fed-fuelled bubble to sweep the market, now with Powell buying corporate bonds and ETFs, private equity firms were instructing their junk-rated portfolio companies to get even deeper in debt and issue secured loans, using the proceeds to pay dividends to owners: the same private equity companies. Specifically, we focused on five deals marketed at the start of the month to fund shareholder dividends, which accounting for half of the week’s volume, and the most in a week since 2017, according to Bloomberg.
Now, a little over a week late, the FT is also looking at these dividend recap deals which have become all the rage in the loan market in recent weeks, among other reasons because they are “ringing alarm bells since they come on top of already high leverage and weak investor protections and against a backdrop of economic uncertainty.”
Having updated our calculation, the FT finds that in September a quarter (24% to be exact) of all new money raised in the US loan market has been used to fund dividends to private equity owners, up from an average of less than 4% over the past two years: that would be the highest proportion since the beginning of 2015, according to S&P Global Market Intelligence.
As we wrote a little over a week ago, while the loan market — where PE firms fund the companies they own by selling secured first, second, third and so on lien debt — had until recently not seen the same volume of issuance as other parts of the financial markets. That changed after the Fed stepped into the corporate bond market sending yields crashing to record lows, and forcing US investors into the last corner of the fixed income world to still offer some modest yields: leveraged loans. And since this is the domain of PE firms which desperately need to extract as much cash as they can from their melting ice cubes (another names for single-B and lower rated portfolio companies which will likely all be broke in the next 3-5 years), everyone is rushing to market with dividend recaps to pay as much to their equity sponsor as they can before the window is shut again.
According to Jessica Reiss who heads leveraged loan research at Covenant Review, investors have been accepting divi recaps because “there isn’t a ton going on” while “from the lender’s perspective they are looking for deals, so if sponsors and their companies can refinance and get a dividend up to their owners they will try it.”
In the latest example, cloud computing company ECi Software, which is owned by Apax Partners, will raise $740MM in new loans, of which $118MM will be used to pay for a dividend to its owner.
It follows a similar deal from snack foods maker Shearer’s Foods, which in turn is a portfolio company of Wind Point Partners and the Ontario Teachers’ Pension Plan, which raised over $1BN in the loan market on Tuesday and used more than a third, or $388MM, ro pay for a dividend to its owners. The news deal, which will help its PE sponsors maximize their IRR on their LBO investment, will also accelerate Shearer’s inevitable bankruptcy as its debt/EBITDA will surge from 5.1x to 6.6x. Meanwhile, at ECi, default is not a matter of if but when: leverage there is now almost 10x after the latest debt-funded check to the company’s sponsor.
Finally, broadband company Radiate Holdco was also in the market this week to fund a $500m payment to its owner TPG.
“If private equity sponsors can take money off the table then they are doing it” said John Gregory, head of leveraged finance capital markets at Wells Fargo Securities. “There’s going to be more coming for sure.”
He’s right: as long as the Fed manipulates corporate bond markets by picking winners and losers, deciding whose debt it will buy (and whose it won’t), Wall Street will find ways to maximize its profits and PE firms will make out like bandits even as their portfolio companies drown in so much debt that bankruptcies – and mass layoffs at the company level – are just a matter of time.
In total, a little over a quarter, or $4bn of the $15bn borrowed in the loan market this month, will be paid out in dividends; another $2 billion in divi recap deals are currently in the market and will price before the end of the month.
While the FT tries to mitigate the insanity, noting that “investors, bankers and analysts noted that the opportunity for private equity companies to pull cash out of the groups they control has been limited largely to higher-quality borrowers” we fail to see how a pro forma leverage of 10x is even remotely “higher-quality.”
“You have some very high leverage deals,” said Wells Fargo’s Gregory. “But if it’s a good company that people are familiar with and investors have money that they need to invest then transactions tend to go through. It’s a bull market trade for sure.”
Yes indeed, and all the billionaires currently in charge of private equity firms who are about to get even richer by milking zombies that would be long gone if it wasn’t for the Fed, thank Powell from the borrom of their heart.
However, investors express concern over loose documentation underpinning the loans, offering little protection to investors should a company end up in trouble.
Still, not everyone is acting like a 16-year-old Robinhood trader during a Softbank-fueled Tesla meltup: some are warning that this year’s market turmoil and subsequent debt-issuance euphoria is as a missed opportunity to improve lending standards after years of seeing them whittled away.
“It’s a shame,” said John Bell, a portfolio manager at Loomis Sayles. “I wished this pandemic could have reset the clock for a while but it doesn’t look like that is happening.”
No, it doesn’t, and in fact the opposite is happening as both sovereign and corporate debt is now at all time record highs…
… comfortable with the assumption that when the next crisis inevitably hits, far stronger than what took place in March, the Fed will eventually end up buying it all.
- Massive FinCEN Leak Exposes How Biggest Western Banks Finance Drug Cartels, Terrorists & Mobsters
Massive FinCEN Leak Exposes How Biggest Western Banks Finance Drug Cartels, Terrorists & Mobsters
Tyler Durden
Sun, 09/20/2020 – 18:45In what looks like one of the biggest leaks of private banking records since the Panama Papers, Buzzfeed News has published a lengthy investigation into how the world’s biggest banks allow dirty money from organized criminals, drug cartels, and terror groups like Al Qaeda and the Taliban to flow through their networks.
The “FinCEN Files”, as Buzzfeed calls them, offer “a never-before-seen picture of corruption and complicity.” A lengthy investigation by Buzzfeed and the International Consortium of Investigative Journalists – the same group that handled the Mossack Fonseca leaks –
Instead of combating financial crime, the current system of requiring banks to report all suspicious transactions to FinCen simply allows money laundering to flourish, while ensuring that any enforcement will be of the ‘whack-a-mole’ variety.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees.
Money laundering is a crime that makes other crimes possible. It can accelerate economic inequality, drain public funds, undermine democracy, and destabilize nations — and the banks play a key role. “Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world,” said Martin Woods, a former suspicious transactions investigator for Wachovia.
Laws that were meant to stop financial crime have instead allowed it to flourish. So long as a bank files a notice that it may be facilitating criminal activity, it all but immunizes itself and its executives from criminal prosecution. The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees.
The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations’ financial intelligence operations. It even compiles a report called “Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin.
What it does not do is force the banks to shut the money laundering down.
In response to Buzzfeed‘s questions about the leaked trove of SARs, the Treasury Department warned that the company’s decision to publish information gleaned from the leaked SARs could make banks more hesitant to file them, because inevitably hundreds of thousands of reports are filed every year involving transactions that are legitimate. The program was first created in 1992, but it has changed substantially over the last 20 years.
Congress created the current SAR program in 1992 making banks the frontline in the fight against money laundering. But Michael German, a former FBI special agent who is a national security and privacy expert, said that after 9/11, “the SAR program became more about mass surveillance than identifying discrete transactions to disrupt money launderers.” Today, he said, “the data is used like the data from other mass surveillance programs. Find someone you want to get for whatever reason then sift through the vast troves of data collected to find anything you can hang them with.”
It also warned that leaking SARs is illegal, and that the Treasury Department’s inspector general would be looking into the leaks.
Since we must give credit where credit is due, Buzzfeed does point out that in addition to being a powerful law-enforcement tool, the SAR system is a “nightmare” of surveillance overreach. Particularly after 9/11, the system evolved into a tool of mass surveillance, creating a massive trove of data that could be weaponized against anybody, according to a former FBI special agent who spoke to Buzzfeed.
Congress created the current SAR program in 1992 making banks the frontline in the fight against money laundering. But Michael German, a former FBI special agent who is a national security and privacy expert, said that after 9/11, “the SAR program became more about mass surveillance than identifying discrete transactions to disrupt money launderers.”
Today, he said, “the data is used like the data from other mass surveillance programs. Find someone you want to get for whatever reason then sift through the vast troves of data collected to find anything you can hang them with.”
When it came time for Robert Mueller to investigate the Trump Campaign’s ties to Russia, and whether the president knowingly colluded with a foreign government – a narrative, we later learned, with zero basis in fact – Mueller was able to access reams of SARS filed on Manafort, Michael Cohen and other members of Trump’s circle.
What did any of this have to do with Russia? Nothing, apparently.
They requested SARs on Deutsche Bank, which had loaned Trump money; Christopher Steele, the former MI6 agent who wrote the so-called Trump dossier; an array of Russian oligarchs; Trump’s former campaign chairperson Paul Manafort; and even a small casino in the Pacific run by a former Trump employee. All told, they were looking for information on more than 200 entities.
Many of the 1,000-plus SARS received by Buzzfeed were apparently requested by the Mueller team. However, none of the SARS included any direct information on Trump or the Trump Organization.
FinCEN unearthed tens of thousands of pages of documents. Those documents, along with a few additional SARs requested by federal law enforcement authorities, make up the majority of the FinCEN Files. Some were never turned over to the committees that requested them.
A person familiar with the matter blew the whistle to multiple members of Congress. The collection does not include any SARs about Trump’s finances. (A source familiar with the matter told BuzzFeed News that FinCEN’s database did not contain SARs on either Trump or the Trump Organization.) And though the documents show suspicious payments to people in Trump’s orbit before and after key moments in the 2016 presidential campaign, they do not provide direct information on any election interference.
When banks settle AML violations with regulators, typically, they’re asked to improve their controls – and in most cases, that means filing more SARs. The way the system is set up, banks are required to detail transactions, but have no say in prosecuting them, and staff cuts at FinCEN mean only a very small percentage of notices every get read.
However, since all of this data is stored, prosecutors can bring it to bear whenever a particular person or organization catches their interest.
Buzzfeed saved the banks’ statements on their investigation for a separate article (one that most of its readers will probably never see). But in a series of statements, the banks explain that its not their place to investigate these types of crimes. Buzzfeed reports that banks’ compliance workers are often shunted away in backwater offices in places like Jacksonville Florida (where many of Deutsche Bank’s compliance employees are situated).
More than 2 million SARs were filed over the past year, a massive increase over the past decade, according to Buzzfeed. That’s because, as banks have been filing more reports to cover their own backsides, regulators have endured staff cuts that left far fewer people there to examine them.
But some of the most egregious financial frauds in recent memory never generated a single SAR, including Bernie Madoff’s Ponzi scheme. When the reckoning with authorities came, JPM got off with a slap on the wrist.
PMorgan Chase got a deferred prosecution deal of its own. For years, it was the primary bank of the world’s biggest Ponzi schemer, Bernie Madoff. Despite multiple warnings from its own employees, the bank never filed a suspicious activity report on him and allegedly collected $500 million in fees. For punishment, the bank was required to pay a $1.7 billion fine and promise to improve its money laundering defenses. But after it settled the Madoff case, the bank’s own investigators said they suspected it had opened its accounts to an alleged Russian organized crime figure who is known for drug trafficking and contract murders, as well as businesses tied to the repressive North Korean regime, which the US has placed off-limits.
Buzzfeed’s sources argue that the only way to fix the problem is to arrest the executives of banks that break laws.
“The bankers will never learn until you start putting silver bracelets on people…Think of the message you’re sending to repeat offenders.”
[…]
“These guys know what they’re doing,” said Thomas Nollner, a former regulator with the Office of the Comptroller of the Currency. “You break the law, you should go to jail, period.”
Of course, the report also pointed out why this hasn’t yet happened – and why it probably never will. Because thanks to the Fed and the Treasury, ‘too big to fail’ also means ‘too big to prosecute’.
In 2012, Standard Chartered and HSBC were facing criminal prosecution. George Osborne, at that time the UK’s chancellor of the exchequer, wrote to the chairperson of the US Federal Reserve, Ben Bernanke, and Treasury Secretary Timothy Geithner to discuss his “concerns” that a heavy-handed response could have “unintended consequences.” He warned of a “contagion.” The implication: Close one bank and the whole economy could suffer.
Because while money might come from unsavory places – Russian organized criminals, the Taliban, etc – it still contributes to economic growth, and puts dollars into the banking system.
One ex-federal agent told Buzzfeed there’s a “mosaic” of reasons why banks are rarely prosecuted for AML violations: “Even if it’s bad wealth, it buys buildings,” he said. “It puts money into bank accounts. It enriches the nation.”
- How To Tackle The Depression Head On
How To Tackle The Depression Head On
Tyler Durden
Sun, 09/20/2020 – 18:20Authored by MN Gordon via EconomicPrism.com,
“I want to see people get money.”
– Donald J. Trump, U.S. President, September 17, 2020
“Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet.”
– Steven Mnuchin, U.S. Secretary of the Treasury, September 14, 2020
Money for the People
The real viral contagion that has infected the American populace is not an illness of the body. It’s something far worse than COVID-19. The American populace is suffering from an illness of the mind.
The general malady, as we diagnose it, is the unwavering belief that the government has an endless supply of free money, and the expectation that everyone, except the stinking rich, has claim to it. Why pursue self-reliance and independence when a series of stimulus acts promises the more abundant life? This viral contagion’s really ripped through the population in 2020.
For example, just a year ago, the American populace thought they could all live off the forced philanthropy of their neighbors. That to pay Paul you had to first rob Peter. The CARES Act proved to Boobus americanus that, without a shadow of a doubt, there’s free ‘money for the people’ in Washington. Sí se puede!
This week the Congress did its part to further the greatest show on earth. The people want stimulus. Congress intends to get to them, in good time.
Of course, the need to sprinkle the Country with printing press money was already a foregone conclusion. There was no discussion of the wisdom of not having a stimulus bill. The debate at hand was centered on how much.
Crazy Nancy wants $3.4 trillion. Senate Republicans want $500 billion. Something called the House Problem Solvers Caucus wants $2 trillion.
President Trump wants Republicans to “go for the much higher numbers.” His rationale: “it all comes back to the USA anyway (one way or another!).”
Extreme Intervention
There are only 12 days left in the U.S. 2020 fiscal year. The budget deficit’s already well over $3 trillion – more than double the previous $1.4 trillion record deficit set in 2009. With a little luck, the March to Common Ground stimulus agreement will not be reached.
Fiscal year 2020 finances are a disaster. Why start FY 2021 with another massive stimulus bill? What good would it do? The longer Congress dithers the better.
In the meantime, the Federal Reserve’s fully committed to extreme intervention in financial markets. By this, the Fed promises to keep credit cheap and abundant forever.
On Wednesday, following a two day Federal Open Market Committee (FOMC) meeting, the Fed released new projections showing the federal funds rate would remain near zero through 2023. The Fed, via quantitative easing (QE) also promised to buy more Treasuries and mortgage-backed securities; at least $120 billion per month.
We’ll have to wait several weeks for the FOMC meeting minutes to confirm. But we presume there was no discussion of the wisdom of ending QE, reducing the Fed’s balance sheet, and raising the federal funds rate. Such contrary measures are off the table until at least 2024.
The unwritten objective of this now endless QE is to further inflate stock prices in the face of economic catastrophe. Once again, Wall Street and the big banks are being given an endless supply of cheap and abundant credit. Where does this all lead?
How to Tackle the Depression Head On
By and large, the challenges facing the economy have everything to do with central government. Over the last 40 years, as the Fed and the Treasury colluded to rig the financial system in totality, wealth has become ever more concentrated in fewer and fewer insider hands. The effect over the last decade has been a disparity that’s so magnified few can ignore it.
Obviously, something has gone horribly wrong. The main cause, as best we can explain, is the near total abandonment of the rules of common sense in the dealing of money and credit. Old standards, old principles, and honest thinking have given way to quack economists, shameless political swindlers, and a burgeoning citizenry of dependents.
Indeed, we live in a world of deception. A world that will only become more deceitful as policies of desperation are rolled out in earnest to keep the price of money cheap, the price of assets high, the government swindlers in Washington flush with printing press money, and the masses of dependents well supplied with bread and circuses. But make no mistake, deceit will lead to greater deceit.
More bread is needed. The masses have grown sick and tired of wealth being concentrated at the top of the wealth spectrum. Moreover, they’re sick and tired of having their noses rubbed in the mud.
To be clear, these are not failures of capitalism. They’re failures of America’s brand of a centrally planned economy. The tertiary impediments of fake money, regulatory insanity, and government dependency cannot be overcome.
However, there is another way. Steve Forbes, in a January 22, 2014 article, offered an alternative to the current paradigm:
“Vibrant economies, not central banks, create real money, and wealth is abundantly created when tax rates are low, money is stable and regulations are reasonable.”
Stop the deceit. Stop the stimulus. Stop the QE. Stabilize the money supply. Let markets determine the rate of interest.
No doubt, an epic depression would be immediately upon us. But the depression will come regardless. In fact, it’s already here. Better to tackle it head on, with honesty, than to attempt to shirk it with deceit and pretense.
- Portland Neighbors Frustrated After Police Take 90 Minutes Responding To Hostage Situation Involving 12-Year-Old
Portland Neighbors Frustrated After Police Take 90 Minutes Responding To Hostage Situation Involving 12-Year-Old
Tyler Durden
Sun, 09/20/2020 – 17:55Residents of a Southeast Portland neighborhood are furious after police took 90 minutes to respond to a bizarre hostage situation last week, when a man ran into an apartment with a 12-year-old boy inside, grabbed a knife, and eventually fled after a standoff with the boy’s father. Neighbors chased the man down and cornered him, but he ran off again before police arrived.
“I was so scared,” said Henry Kirim, who was searching for a missing bank card in his car when the man ran inside. After Kirim went back inside, the man charged at him with a knife and a 20-pound dumbbell he found in the apartment.
When Kirim sprinted back to the apartment and unlocked the door, he saw the man grab a large knife from his kitchen counter. Kirim’s son, trembling and crying, was behind the stranger.
…
More than a half-dozen calls had come into 911 over the course of the bizarre ordeal. But that apparently didn’t speed the response.
The wait confounded and angered Kirim and his neighbors. They wondered what it would take for police to respond if not an armed man placing a child in jeopardy.
“Every neighbor here was expecting the police to come. We called about a million times, and the police would not show up,” Kirim said. –Oregon Live
The police have acknowledged that the delay was unacceptable – however they cited a record number of retirements and fatigued officers who have been covering months of BLM protests.
“This is not the service our community expects, nor is it what we want to provide,” said Deputy Police Chief Cris Davis.
That said, 49 officers have retired and nine have resigned since July. According to Davis, other officers are injured or on vacation – leaving the bureau with around 310 officers on patrol divided between three precincts. 102 of those officers don’t have full training, Davis added.
In this case, officers were simultaneously responding to a tactical call in East Precinct which required a special team, as well as monitoring a violent clash between protesters downtown and preparing for chaos that evening.
The priority now is to respond to emergency calls “when there’s an active threat or a life safety issue,” he said, often leaving 80 to 100 lower priority calls holding during mass gatherings or what have been regular protests before historic wildfires gripped the state and hazardous air quality kept people inside in the last week. –Oregon Live
Kirim’s neighbor, Deja Sieles, was one of the people who called police during the knife incident – telling a dispatcher that several neighbors were holding the intruder down near her apartment.
“I told them what was going on, and the operator seemed to know because he had received so many other calls,” said Sieles. “I think it’s pretty sad because like anything could have happened to anybody here. It scares me because I can’t rely on the police to help us out.”
The first emergency call, presumably from a neighbor, came in at 12:41 p.m.: Intruder in the house. Has a knife. Boy still inside.
“They said police would be here,” Kirim said. “And no police came.”
Dispatch noted at 12:49 p.m.: “No units avail,” meaning no officers available to respond.
Over the next 15 minutes, the man with the knife ransacked the two-bedroom apartment. Then he suddenly ran out the back of the apartment, breaking down a screen door.
Neighbors and Kirim chased after him. They caught him less than a block away in a nearby driveway after he tried to enter another home.
Calls to 911 poured in. –Oregon Live
Read the rest of the report here.
- Goldman: A Biden Win Will Accelerate Dollar Weakness
Goldman: A Biden Win Will Accelerate Dollar Weakness
Tyler Durden
Sun, 09/20/2020 – 17:30In a Friday note from Goldman’s FX strategy team, strategist Zach Pandl previews what is sure to be a “November to Remember” (even more so now in the aftermath of RBG’s death and the SCOTUS vacancy which has profound implications for capital markets as discussed overnight), and frames in a generally optimistic note (similar to Morgan Stanley), expecting more cyclical upside despite possible near-term weakness through an eventful autumn, to wit: “despite recent risk obbles, we continue to see our central growth forecast as consistent with further strength in cyclical assets, including equities, and more depreciation for the US Dollar.” Pandl dismisses the recent – and still ongoing – tech-led sell-off, saying that the latest correction was more a position adjustment than a broader fundamental shift: “significant flows into cash and options helped drive the Nasdaq to a stellar August without much fresh news, outperformance that has now largely reversed.” Meanwhile, the announcement of the Fed’s framework review at Jackson Hole, though largely as expected, also resulted in an additional move in real rates and breakeven inflation whose reversal presaged the equity drops. Meanwhile, on the positive side, Pandl writes that the global growth recovery “while flattening out in places, has also been broadening.”
So, the Goldman strategists concludes, the “central case is that equity markets will revisit the September high over the next couple of months, but driven this time more by an upgrade to the market’s cyclical view” with the caveat that early vaccine approval remains central to the bank’s pro-cyclical outlook, while noting that “investors may be too pessimistic about risky assets under a Democratic election sweep, due to the prospect of substantial fiscal easing next year.”
Echoing Morgan Stanley’s latest thoughts (which we brought readers yesterday), while Goldman is optimistic, it does warn of a variety of potholes “from here to there”, most of which are identical to the list presented previously by MS:
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First, with the school reopening season now properly underway across much of the northern hemisphere, it will be important to watch if new economy-wide lockdowns (as has been the case in Israel) can be avoided.
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Second, investor expectations from the latest round of US fiscal negotiations are already low, but it will still be a negative surprise to markets if no agreement is reached, or if partisan tensions threaten a government shutdown at the end of September.
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Third, after a surprisingly unified response to the pandemic in Europe, political risks are rearing their head again. The constitutional referendum and regional elections in Italy this weekend—which may result in some losses for the governing coalition—will be a test of political stability. That said, without a new election, which seems unlikely, it is hard to see a major shift in political direction or a major selloff in BTPs. More importantly, Brexit has thrust itself back on the screen of global investors. Despite provocative legislation that would “break international law”, we think it is too early to completely dismiss the possibility of a negotiated “thin deal.”
Which brings us to the election, where Goldman focuses on the potential impact to two asset classes: equities, volatility and currencies.
Starting with stocks, Pandl writes that a Democratic sweep “would present a complicated mix for headline US equity indices” with the potential increase in corporate taxes from a Democratic sweep would be the most direct consequence for equity markets. But the prospect of larger fiscal stimulus and of more predictability in trade policy in that outcome push, at least modestly, in the other direction. While the net effect for US equity indices is probably a modest negative, Goldman notes that the uncertainty around that judgment is high, particularly since it is still unclear which policies will emerge as priorities for the possible Biden Administrations and how much has already been priced (the relative performance of “high-tax” and “low-tax equities” suggest, unsurprisingly, that the market has already shifted to some degree to price a possible Biden win).
Meanwhile, with worries about an extended delay over election results, a swift resolution in either direction may also reduce risk premia although now that we also have a SCOTUS vacancy to fill an optimistic outcome here looks unlikely. At the same time, and as in 2016, shifts in perceptions of the race around the Presidential debates may serve as a helpful barometer for the market’s initial reactions. But 2016 is also a reminder that the initial reaction may quickly reverse as the market reassesses the winner’s policy priorities. The more obvious shifts may be in relative performance, where Goldman thinks expansionary Democratic fiscal policy could support the outperformance of cyclicals over defensives, while non-US cyclical indices may benefit too (albeit less directly) from a stronger US fiscal impulse, and without facing the drag from higher US taxes.
Next, the Goldman strategist looks at volatility, writing that while it remains sticky, it is “vulnerable beyond the big events” as the election and vaccine events have important implications for the pricing of volatility and options risk:
For a broad range of assets, it is true both that implied volatility is unusually high relative to realized volatility and the slope of implied volatility between 1 and 3 months is unusually steep (in part because of the election “bump”). Both of these features are potentially important. Because the distribution of potential outcomes around the mix of vaccine and elections remains quite wide, options markets need to reflect that even if the day-to-day volatility is lower. But the experience around prior elections of the last few years and events like the 2016 Brexit referendum illustrates that resolution in any direction often leads to stickiness in implied volatility until that point and a sharp drop in implied volatility as one or other path is confirmed.
If Goldman is right that we will know the outcomes of both the vaccine and the election by December – even assuming the “risk-negative” versions – there is a good chance that the VIX may be significantly lower than forward pricing assumes by year-end, according to Pandl: “Given the potential for both some vaccine news as Phase III trials progress and potential shifts in election views through the debates, we think that horizon presents potentially interesting opportunities to position for core themes.” (which likely means Goldman prop is buying long vol from its clients).
Which brings us to the punchline, especially since this report is written by Goldman’s FX team. According to them, a Biden win should accelerate Dollar weakness. As Pandl explains, Goldman continues to see “a good case for sustained US Dollar weakness, reflecting the greenback’s high valuation, deeply negative real interest rates in the US, and a recovering global economy (which tends to weigh on the currency’s because of its unique global role).” A Democrat sweep in the US elections would likely accelerate this trend:
- First, Biden’s proposals to raise the US corporate tax rate would make domestic stocks less attractive compared to international markets, all else equal, which could result in Dollar selling if US equities underperform. Regulatory changes, especially anything targeting the technology sector, could have similar effects.
- Second, a large fiscal stimulus would also likely weaken the Dollar, due to the Fed’s commitment to keep rates low. Normally currencies appreciate after fiscal stimulus, because it lifts rates, and higher rates in turn attract portfolio inflows from abroad. But academic research finds that currencies depreciate after fiscal expansions when unemployment is high and/or central bank policy rates are stuck at their effective lower bound.
- Third, a more multilateral approach to foreign affairs should reduce risk premium in certain currencies, especially the Chinese Yuan. Goldman recently lowered its 12m target for USD/CNH to 6.50 for this reason: a Biden Administration would likely imply lower trade war risks, and therefore should allow the Chinese currency to gain alongside broad Dollar weakness.
That said, other election outcomes would likely imply less Dollar weakness and affect the performance of certain crosses, according to Goldman. For example, if Democrats were to take the White House but Republicans maintain control of the Senate, the US policy approach toward China would likely change, but fiscal stimulus would become much less likely. This could result in Yuan outperformance vs the more risk-sensitive EM and G10 currencies. Alternatively, a Trump win plus Republican control of the Senate would likely benefit the Dollar, especially vs the Euro and Yuan.
Finally, as discussed yesterday in Tug Of War Across Markets Hides “Trade Of A Lifetime“, Goldman agrees that “a potentially potent mix of vaccine approval and fiscal expansion” could lead to a rip-roaring value/cyclical/reflationary rally. Goldman explains:
Implied probabilities for early vaccine approval and a Biden win in the US election—e.g. probabilities provided by Good Judgment Inc and FiveThirtyEIght, respectively—have been hovering around the 65%-70% mark. As these probabilities have consolidated, there have already been some signs of markets moving to price the most likely outcomes: cyclical stocks have held onto most of their August outperformance even with the Nasdaq selloff and EM high-yielding currencies (with the telling exception of the Russian Ruble) have displayed remarkable resilience. In the event that such procyclical probabilities inch higher, “markets should move further towards pricing the modal outcomes: a move higher in cyclical exposures in equities, higher breakeven inflation, and a broadening in the outperformance versus a weaker Dollar to include EM.”
As Pandl concludes, “These remain our core cross-asset recommendations ahead of a very busy autumn. To state the obvious, the more the market moves to price either vaccine or election results with greater certainty, the worse risk/reward we would see in these expressions, and the greater the need to consider hedges.”
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- Global Debt Is Exploding At A Shocking Rate
Global Debt Is Exploding At A Shocking Rate
Tyler Durden
Sun, 09/20/2020 – 17:05The primary reason why the global financial system is on the verge of daily collapse, and is only held together with monetary superglue and central bank prayers thanks to now constant intervention of central banks, is because of debt. And, as BofA’s Barnaby Martin succinctly puts it, much more debt is coming since “the legacy of the COVID shock is debt, debt and more debt.” In short: use even more debt to “fix” a debt probem.
So in this world of explosive credit expansion coupled with tumbling economic output where helicopter money has become the norm, central banks – and specifically the ECB – are scaling their QE policies to monetize and absorb much of this debt (relieving the pressure on private investors to buy bonds), more debt “hotspots” mean more vulnerabilities for the global economy.
We won’t preach about the consequences of this debt binge which has catastrophic consequences – we do enough of that already – but below we lay out some of the more stunning facts of global debt levels at the end of Q1 2020 as compiled by the BIS, courtesy of Martin:
- Global debt/GDP surged to an all-time high in Q1 ’20, with overall debt for the non-financial sector now worth 252% of global GDP. This is up from 241% at the end of 2019, the biggest quarterly jump ever according to BIS data.
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The chart also confirms that central bank inflation targets are higher, much higher than the “”official 2%: to erase this debt, central banks needs inflation to be in the 10%+ range. Anything below that would require debt defaults instead of inflation to wipe away the debt… and that is unacceptable. - This increase reflects the fallout from the first few weeks of the COVID crisis, with most advanced economies implementing total or partial lockdowns in March. Hence, the historical contraction in GDP growth observed worldwide in Q2 and the debt surge from both governments and non-financial corporations will translate into an even bigger rise in the global leverage ratio in Q2 ’20.
- Pre-existing vulnerabilities have been laid bare by the nature of the COVID shock. While both advanced economies (DM) and emerging markets (EM) have seen their leverage ratios jump, the latter have observed a rapid increase since 2012 (Chart 13). The relatively deeper COVID recession expected for some EM economies – the OECD Sep ‘2020 Economic Outlook sees India and South Africa GDP falling by 10.2% and 11.5%, respectively – will likely magnify the jump in some EM’s leverage ratios.
- By sectors, governments drove the big uptick in debt/GDP in Q1 ’20. The global sovereign debt-to-GDP ratio has reached 89%, up 10 percentage points, the largest quarterly rise on record.
- Debt service ratios ticked up, but only marginally, reflective of the tremendous QE support unleashed by central banks this year.
Total non-financial debt/GDP across countries and segments is shown in the BofA chart below; it shows that…
- The total leverage ratio for Euro Area, China and the US are mostly in line now;
- In Europe, a number of core countries (Belgium, Finland and Norway) saw a bigger increase in their total debt/GDP ratio than in the periphery in Q1 ’20;
- While the rise in household debt has generally been more modest as consumers have moved into wait-and-see mode, China household debt/GDP rose 3.1% QoQ in Q1 ’20
Finally, the table below show global debt/GDP leverage ratio across the globe, broken down by countries and segments.
- Global debt/GDP surged to an all-time high in Q1 ’20, with overall debt for the non-financial sector now worth 252% of global GDP. This is up from 241% at the end of 2019, the biggest quarterly jump ever according to BIS data.
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