Today’s News 24th August 2021

• Didi Cancels Planned UK/EU Expansion As Troubles With Beijing Drag On
  Didi Cancels Planned UK/EU Expansion As Troubles With Beijing Drag On

  With Chinese stocks still reeling from Beijing’s ongoing push to bring Big Tech to heel, the beleaguered ride-sharing app Didi has reportedly suspended plans to launch in Britain and Continental Europe, an expansion the company has been planning for years.

  The Telegraph reports that while Didi has secured licenses to operate in a handful of British cities. Didi secured licenses to operate in Manchester, Sheffield, Salford and Wolverhampton as part of its effort to challenge Uber directly in the UK.

  

  Beijing’s crackdown on the company, and the subsequent plunge in its share price – which, remember, reportedly prompted Didi to consider going private just a month after its IPO (the biggest involving a Chinese firm in the US since Alibaba listed in 2014) – may have inspired the decision to pull back, as Didi works to preserve its position and defend against encroachment both in China (where Beijing has tacitly encouraged rivals to step up) and the 15 other markets Didi presently operates in.

  Those markets include Australia, and parts of Africa and South America.

  The decision to pull back from the UK is particularly bad news for the Didi employees who were hired to focus on that market. The company no longer advertises any open jobs in the UK, and the Telegraph’s sources say cuts are coming in Europe within the next month (although some workers will be allowed to continue in other roles).

  When approached for comment by the Telegraph, a Didi spokeswoman shared the following statement:

  A Didi spokesman said: “We continue to explore additional new markets, liaising with relevant stakeholders in each and being thoughtful about when to introduce our services. As soon as we have news on additional new markets, we look forward to sharing it.”

  “We have established an international talent hub in the UK, recognising the exceptional quality of people in the market. Beyond that, any personnel matters remain strictly confidential. We seek to fully comply with all laws and regulations in all markets in which we operate.”

  Didi’s app remains un-downloadable across China (though nearly 1 billion Chinese consumers had already downloaded the app when it was forced off line over data privacy concerns). We still haven’t heard anything about the investigation in China, or how it’s going. But as far as its shares are concerned, one thing seems likely: China stocks will likely remain in the doghouse for some time.

  Tyler Durden
  Tue, 08/24/2021 – 02:45

• Wither Germany?
  Wither Germany?

  Authored by Francis Lee via The Saker blog,

  Germany has been the keystone of the failing EU. Does it intend to remain so, or is it time to pursue its own interests?

  

  Germany has been and still is the most important economy in Europe, the export-driven colossus and if not yet the most important imperial power; that designation belongs to France with its Force de Frappe (Nuclear Strike Force), and additionally the UK which is also a member of the nuclear club but has since left the EU remains as a loyal – and oh so loyal! – member of NATO. However, Germany is without question the most dominant country in Europe and still the main creditor and funder of euro states. Looking back to the rise of (West) Germany was a key presence in the formation of the European Coal and Steel Community (ECSC) in 1951. These various states pooled the coal and steel resources of six European countries: France, Germany, Italy, Belgium, the Netherlands, and Luxembourg which became known by the acronym – BENELUX. These states would be collectively known as “the Six”. It was argued that the pooling of coal and steel resources greatly reduced the threat of war between France and (West) Germany.

  It was perhaps entirely predictable that Germany with its system of Bismarckian style guided capitalism would emerge to poll position in this imperial club. At the time France had other, imperial and pressing commitments in Algeria and Indo-China, the British had commitments more or less everywhere East of Suez, and even little Belgium had problems in the Congo (Zaire). Germany had no such incumbrances on its economic development and was thus free to power ahead with its version of guided, bank-funded capitalism, and avoid the pitfalls of Anglo-American financialised capitalism. Under Chancellor Konrad Adenauer and Economics Minister Ludwig Erhard Germany’s rebirth was dubbed the Wirtschaftswunder (economic miracle). A far-reaching contract between business and labour unions allowed the rapid rebuilding of industry and strong growth, creating the foundations of an economic powerhouse.

  THE GERMAN MODEL

  The centrality of Germany and German economic policy in this shifting economic montage requires attention to the gradual increasing dominance of what is the de facto European economic dynamo. It was perhaps inevitable that Germany would – in economic terms at least – become the regional hegemon in this continental configuration. After all,

  ‘’ … it had a globally competitive industrial base, pivoting on automobiles, chemicals and machine tools. Its exports enabled it to command vast surpluses on current account thus providing the wherewithal to lend globally.’

  The peculiarities of the Anglo-American financialised system has not been replicated in Germany. To be sure Germany has a large and growing service sector similar to the financialised Atlanticist models this much is true; but Germany has also systematically defended its industrial sector, not least by manipulating the exchange rate to protect its exports of which many go to the other member states of the EU. The German manufacturing sector enjoys high levels of productivity, is export-based with relatively strong labour unions in wage negotiations compared to the rest of the private sector. But this did give rise to a two-tier labour market. The ‘good’ jobs were to be found in the export industries and the not so good jobs tended to be located in the internal domestic service sector.

  ‘’What happened from 2003 onwards to enable German capitalism to exploit its workers more intensely than before? In 2003-2005 the Social-Democratic Party (SPD) government implemented a number of wide-ranging labour-market reforms, the so-called Hartz Reforms, after one Herr Peter Hartz. The first three parts of the reform package, Hartz I-iii, were mainly concerned with, (i) mainly creating new types of employment opportunities (ii) introducing additional wage subsidies, (iii) instructing the Federal Employment Agency. The final parts of Hartz (iv) was implemented in 2005 and resulted in a significant cut in the unemployment benefits for the long-term unemployed. Between 2005 and 2008 the unemployment rate fell from almost 11% to 7.5%, barely increased during the Great Recession of 2008 and continued its downward trend reaching 5.5% at the end of 2012, although it is still higher than was the case during the global period of expansion in the 1960s.’’

  GERMAN BANKING – FUNDS INDUSTRY AND DEVELOPMENT AT ALL LEVELS.

  Perhaps what was more important has been the banking system in Germany and its relationship to German industry.

  1.1 Savings banks (Sparkassen and Landesbanken)

  German savings banks are usually owned by the cities and villages. Formerly, each city had its own savings bank. Over the past 20 years, many savings banks have merged due to the competitive situation. As opposed to the big private Banks – Deutsche Bank, Commerz Bank whose main interests are in housing and stock market investment – the small and medium banks operate with a local focus.

  Although the savings banks have been losing customers for a number of years, they are still among the best-known. Often, the accounts are open, because the savings bank is “on the spot”. Later, when one has to deal with more finances, then there is often a change to another bank that is more cost-effective or offers better services. These banks provide funds to industry at good rates of interest, and this particularly applies to small start-up firms.

  1.2 Volksbanken / Raiffeisen Banken (cooperative banks)

  This is the next best-known bank organization in Germany. VR-banks – their abbreviation – are cooperative banks (Genossenschaftsbanken). They are organized similar to associations and are owned by their members. Members may only purchase very few shares of the bank so that no single person is enabled to have too much influence on the business of the bank.

  Just like the savings banks, the Volksbanken have to deal with a loss of customers. Although they have many branch offices, they can often not keep up with the price and service of the modern direct banks. In Germany, there are several hundred different VR-banks. They belong to the cooperative banks. Another successful innovation and feature of German development was the technical education of the German labour force.

  GERMAN TECHNICAL EDUCATION – SMEs AND THE MITTELSTAND

  The success of the German economy is driven by its small and medium Enterprises ( SMEs), a group to which more than 99 per cent of all firms in Germany belong. These companies account for more than half of Germany’s economic output and almost 60 per cent of jobs. Approximately 82 per cent of apprentices in Germany do their vocational training in an SME.

  These small and medium-sized companies (SMEs), also known as the ‘Mittelstand’, (4) are the country’s strongest driver of innovation and technology and are renowned across the world. Companies that want to keep their competitive edge must be at the forefront of new developments. A study on SMEs commissioned by the Federal Ministry for Economic Affairs and Energy shows that innovative SMEs will continue to drive the success behind the ‘Made in Germany’ trademark. Provided that they embrace new trends, particularly digitisation, and that they find ways of recruiting the skilled labour they need, even in times of a skills shortage, SMEs have every opportunity to remain successful in their chosen specialised niche markets.

  The Federal Ministry for Economic Affairs and Energy wants Germany’s SMEs to embrace new challenges and remain vibrant, strong, and innovative. This is why the ministry is working on many levels to strengthen the Mittelstand’s competitiveness, its capacity to innovate, and its ability to create jobs.

  SMALL, DIVERSE, DYNAMIC, PIONEERING

  Germany’s small and medium-sized companies (SMEs) play a defining role in the country’s economy. Germany’s economic model derives its strength not from a small number of dominant players, industries, or industrial regions, but from the fact that Germany has a wide range of companies – small, medium-sized and large – that are based in locations all across Germany, specialise in all sorts of different sectors, and often form close networks with one another.

  Germany’s Mittelstand, is extremely diverse. Family-owned companies that were established generations ago, trendy start-ups, traditional crafts firms, self-employed people and service providers, retailers and freelancers, pioneering high-tech companies, regional suppliers and global players. The size of these  SMEs ranges from one person to several hundred employed across the globe. The Mittelstand has many well-established brands, but also newcomers and lesser-known brands that still deliver the same standard of quality, precision and innovation. It is this high level of diversity that makes it so strong.

  The Mittelstand also acts as a strong partner for large corporations, across the entire value chain. Mittelstand companies are often highly specialised and produce the type of up and downstream products that enable large corporations to create innovative and complex products, services and systems solutions

  Moreover, the Mittelstand is global in its reach. Some 44 per cent of German companies export their capital goods or intermediate goods to other markets, thereby contributing to the success of the German economy. At least one in two German firms that turn over 2 million euros or more per year are exporting companies. Even small companies benefit from venturing on foreign markets. This is attested by the fact that even very small firms generate an average of over 20 per cent of their turnover from exports.

  THE TWENTY FIRST CENTURY AND THE DOUBLE WHAMMY

  The German Economic model which had performed so well compared to its competitors – during the period from the Wirtshaftwunder until the 21st century – outmatched both European and North American rivals. But of course this golden age was to stutter in the late 1990s – the dot com bubble – and collapse completely during the 2008 and the property price debacle. For all its efficiency the German economy was, like the rest of the world, engulfed in the double whammy of the EU/euro crisis and the 2008 blow-out. Figures for growth make interesting reading.

  (These are World Bank figures for declining growth rates in both the developed and developing economies for the period of 1960s through 2009.

  • 1960s = 4.9%

  • 1970s = 3.93%

  • 1980s = 2.95%

  • 1990s =2.7%

  • 2000/09 = 2.58%

  It should be by now common knowledge that the global economy has been on a downward path for decades as can be seen from the above figures. Moreover, with the possible exception of China and some other East Asian dynamos, these figures did not improve in the post-2008 era, quite the contrary.

  Suffice it to say that the 2007/2008 explosion of the speculative bubble was avoided with massive injections (hmmm, sounds familiar) of ‘liquidity’ basically the extension of credit to the banking sector. Starting in 2008 the European Central Bank (ECB) lent the European banks money at an interest rate of 1%. (As did the Fed on the other side of the pond.) Predictably these same banks used that liquidity for speculation rather than lending to the productive sectors. In passing, we may say the Anglo-American financialised model – at least for Europe – didn’t work and given the objective situation shows no signs of working. In addition, the euro was stillborn with different rates of growth and trade between sometimes diverse member states. The euro was extended to other euro states, and particularly those in the southern bloc, which were far from enjoying the levels of productivity of the northern bloc. Europe’s weaker and less productive countries and thus of international competitiveness could not live with Germany’s productivity levels and low costs. The southern bloc could not devalue the euro – the centre-piece of the euro economy – and they ran up trade deficits with the German-dominated northern bloc which consistently ran up trade surpluses. Most commentators knew this apart from the brain-dead euro-elites who seemed impervious to the situation.

  Given these fundamental geopolitical and economic changes Germany would be wise to now examine its options.

  At the present time, another deeper and all-encompassing economic and financial crisis has occurred. The EU has, for better or worse, already had to swallow the departure of the UK from the EU; and it is not too difficult to imagine that this is only the beginning of a process of dissolution, particularly in light of the present and future possible political/economic developments. Moreover, the whole brouhaha which has already been instanced by the Nordstream-2 episode represented a win for one particular German faction – in this instance the business class – which now appears to be reorientating to a longer-term strategy of a pivot to Eurasia. It would appear to have won against the political class – including those lovely Greens who seem hot for a war against Russia. The German political and ideological class would appear to inhabit a different time-warp, circa 1989 and the fall of the Berlin Wall and moreover being hopelessly fixated with NATO, liberalism, globalism and everything American, including woke ideology.

  The same German business elite, however, seeks parallel factions together with other similar groupings in other financially strong and reliable countries, who wish to seek the expansion of Germany toward China and Russia. There are obvious reasons for this move. Both these countries have immense reserves of raw materials. Secondly, the level of Chinese economic growth and the size of its market is way above those of the EU. Thirdly, Germany’s relative technological superiority is an ideal for the inter-trade appropriation of Chinese surplus value. Fourthly, if bilateral trading relations continue at the current pace, Beijing will become Germany’s main trading partner by early 2023 at the earliest. Fifthly, for China, Germany, is the optimal country for the best investment opportunities.

  So this is the current situation with the Nordstream-2 instalment concentrating the minds of those who have read the runes of Germany’s future development with newer and dynamic trading partners east of the Oder-Neisse line. We shall wait and we shall see for such developments.

  Tyler Durden
  Tue, 08/24/2021 – 02:00

• The Second Amendment Is About Rifles Not Racism
  The Second Amendment Is About Rifles Not Racism

  Authored by Jonathan Turley,

  Below are my thoughts on academic work claiming that the Second Amendment is a relic of slavery. The reframing of the debate follows a familiar pattern in academia. Indeed, the same type of sweeping (and unchallenged) generalities was used recently to declare Olympic surfing a relic of American imperialism. The framing of such claims often precede any search for the facts. However, academics know that there is an eager and unquestioning audience for such publications. Conversely, those academics challenging such claims risk isolation and shunning in today’s intolerant environment. What is most striking about this latest claim is that it is directly and comprehensively contradicted by historical sources. Yet, there are relatively few academics who have publicly challenged the claims as media heralds the theory as a type of breakthrough publication. As discussed earlier, the theory is neither new nor well-founded.

  

  Racism seems to be the most common denominator of today’s political controversies.

  Issues long debated over other grounds — the Senate’s filibuster rule, voter ID laws, even standardized testing, math, statistics and meritocracy — have all been reframed as a choice between racism and equality.

  The reframing of such issues in racial terms removes any need to respond to other issues — and it relieves advocates of defending the racism charge. It may be the ultimate conversation stopper — but that advantage is precisely its weakness, particularly when racist roots are less than evident.

  The latest example comes from the American Civil Liberties Union, which posted a discussion of how the Second Amendment is a product of racism. Supporting commentary explained how “Anti-Blackness determined the inclusion of the Second Amendment in the Bill of Rights, and has informed the unequal and racist application of gun laws.”

  Some media and legal commentators have fawned over a new book, “The Second: Race and Guns in a Fatally Unequal America,” by Dr. Carol Anderson, chair of Emory University’s Black Studies Department. Anderson claims the Second Amendment “was designed and has consistently been constructed to keep African Americans powerless and vulnerable.” In interviews with media outlets like CNN and NPR, her theory was not challenged on the Second Amendment’s history or purpose, despite overwhelming (and largely ignored) evidence to the contrary. Instead, NPR breathlessly billed its interview as “Historian Carol Anderson Uncovers The Racist Roots Of The Second Amendment.”

  Slavery was a matter discussed both at the Declaration of Independence and during the Constitutional debates. However, the suggestion that it was a primary motivation for the Second Amendment is utter nonsense.

  States opposed to slavery, like Vermont, Pennsylvania, New Hampshire, New York and Rhode Island, had precursor state constitutional provisions recognizing the right to bear arms. In his famous 1770 defense of Capt. Thomas Preston in the Boston Massacre trial, John Adams declared that British soldiers had a right to defend themselves since “here every private person is authorized to arm himself.” His second cousin and co-Founding Father, Samuel Adams, was vehemently anti-slavery and equally supportive of the right to bear arms.

  Guns were viewed as essential in much of America, which was then a frontier nation, needed for food — but also to protect a free people from tyranny and other threats. (The Minutemen at Concord, after all, were not running to a Klan meeting in 1775.) Law enforcement was relatively scarce at the time, even in the more populous states — but, of course, some writers today claim the first police departments were products of slavery, too, used to enforce that system and to recapture escaped slaves.

  The latest claim is reminiscent of the controversy over “The 1619 Project” produced by New York Times journalist Nikole Hannah-Jones, who claimed the American Revolution was motivated in large part to preserve slavery. Hannah-Jones clearly came up with her framing before looking at the facts, which directly contradict her claim. While at least one historian objected during the fact-checking process, it was published and only later corrected, along with other errors.

  The Second Amendment claim is equally unfounded, but the argument allows for advocates to argue that this original “antiblackness” continues to shape “the unequal and racist application of gun laws.” This argument is maintained despite the fact that a quarter of African Americans are gun owners (compared with 36 percent of whites) and gun sales have been increasing in the African American community. Some African Americans have long viewed guns as an equalizer, including escaped slave and famed abolitionist Frederick Douglass, who, in an editorial, heralded the power of “a good revolver, a steady hand.” Gun ownership has a long, fiercely defended tradition in the Black community. Indeed, Ida B. Wells, one of the most prominent anti-lynching activists, declared: “The Winchester Rifle deserves a place of honor in every Black home.”

  For decades, the meaning of the Second Amendment wallowed in a debate over whether the right to bear arms is an individual right. Gun-control advocates lost that debate before the Supreme Court in 2008. Now, however, critics can dispense with such long-standing arguments by claiming the amendment is a relic of slavery and a tool of racism. That instantly converts any Second Amendment defenders into advocates not of freedom but of anti-blackness and oppression. It simplifies the argument and silences opposing views.

  Indeed, in today’s standard, it is not enough to be non-racist, you must prove yourself to be anti-racist.

  Yet it is hard to establish yourself as anti-racist if you are defending rules or amendments or countries already decried as being racist.

  Moreover, if you are trained to view everything through an anti-racist lens, it can become the only discernible option — like the old military adage that “if you only have a hammer, every problem looks like a nail.”

  It is even dangerous today to observe that any given legal problem is not a problem of racism. Some are; many are not. But if everything is a product or relic of racism, the “racism” label becomes less notable or less imperative to address.

  There is no need to rewrite history. Racism permeates our history, including a war in which hundreds of thousands of many races died to end slavery in this country.

  We have continued that struggle through the Civil Rights period and into the current day. But those efforts are hampered, not advanced, by converting all political disputes into zero-sum fights over racism, which leaves little room for debate and even less room for persuasion.

  The resulting silence is not evidence of consensus but of intimidation. Racism is real, but it cannot be defeated if it is reduced to a political trump card.

  Tyler Durden
  Tue, 08/24/2021 – 00:00

• NASA Postpones Spacewalk As China Completes Second
  NASA Postpones Spacewalk As China Completes Second

  NASA is postponing a spacewalk at the International Space Station (ISS) on Tuesday “due to a minor medical issue” involving one astronaut. This comes as China conducted the second spacewalk on the country’s new space station on Friday as the superpower rivalry intensifies beyond this world. 

  NASA said Tuesday’s spacewalk outside the ISS with US astronaut Mark Vande Hei and JAXA (Japan Aerospace Exploration Agency) astronaut Akihiko Hoshide had been delayed due to a “minor medical” issue involving Vande Hei. The extent of the health issue was not revealed by the space agency but said it’s “not a medical emergency.” 

  

  Both astronauts were expected to install brackets on the ISS to support new solar arrays. 

  Meanwhile, on Friday, the Chinese conducted their second spacewalk outside their new space station’s core module, called Tianhe (“Harmony of the Heavens”). 

  

  Tianhe is part of communist China’s space program to dominate low Earth orbit and possibly surpass the US in military and scientific capabilities in outer space in the coming decades. 

  We see the next battleground of superpower rivalry between the US and China in space. Tensions beyond Earth will increase as both countries are in a race to launch imaging, telecoms, and 6G satellites, along with conducting probing missions of moons and planets for rare metals and other valuable raw materials. 

  The US spacewalk is rescheduled after the SpaceX CRS-23 cargo resupply mission is completed this weekend and two Russian spacewalks on Sept. 2 and 8. 

  While NASA’s ISS is more than two decades old and nearing its lifespan, the Russians have said they will withdraw from the ISS by 2025. This means that China is building an advanced space station as the US is still using the 23-year old ISS that is rapidly aging, posing a danger for astronauts. ISS crew recently had to hunt for a mystery air leak. 

  Tyler Durden
  Mon, 08/23/2021 – 23:40

• Nearby Planetary System May Have The Right Conditions To Host Life
  Nearby Planetary System May Have The Right Conditions To Host Life

  Authored by Lu Xiao via The Epoch Times,

  Astronomers researched a planetary system only 35 light-years away that contains rocky exoplanets, and they found that it may have a planet in the habitable zone, the area around a star where conditions are suitable for liquid water to exist.

  

  An artist’s impression of L 98-59b, one of the planets in the L 98-59 system 35 light-years away. The system contains four confirmed rocky planets with a potential fifth, the furthest from the star, being unconfirmed. (ESO/M. Kornmesser)

  Using the European Southern Observatory’s Very Large Telescope in Chile, a team of astronomers studied the planets around the nearby star L 98-59, which has planets resembling those in the inner solar system.

  Among their findings is a planet with half the mass of Venus, which is the lightest exoplanet ever measured with the radial velocity technique, according to a statement. They also discovered a planet that could be an ocean world as well as a possible planet in the habitable zone.

  “The planet in the habitable zone may have an atmosphere that could protect and support life,” María Rosa Zapatero Osorio, an astronomer at the Centre for Astrobiology in Madrid, Spain, and one of the authors of the study, said in the statement.

  The new findings mark a milestone in scientists’ quest to find life on other planets.

  The findings include a technical breakthrough, since the team used the radial velocity method to discover the small mass of the innermost planet in the system.

  This method measures the tiny gravitational pull of an orbiting planet on the host star. Based on how much the star moves, astronomers can estimate the exoplanet’s mass.

  Then, given the mass and size of the exoplanet, scientists can calculate its density, which helps determine its composition: Denser ones are likely rocky, while fluffier ones are gaseous.

  “If we want to know what a planet is made of, the minimum that we need is its mass and its radius,” explained Olivier Demangeon, a researcher at the Instituto de Astrofísica e Ciências do Espaço, University of Porto in Portugal, and lead author of the study, in the statement.

  The above-described type of measurement, however, is very hard to achieve. The team made use of the Echelle SPectrograph for Rocky Exoplanets and Stable Spectroscopic Observations (ESPRESSO) instrument on board the Very Large Telescope.

  “Without the precision and stability provided by ESPRESSO this measurement would have not been possible,” Osorio said in the statement.

  “This is a step forward in our ability to measure the masses of the smallest planets beyond the Solar System.”

  The detection of biosignatures on exoplanets relies on the study of the planets’ atmospheres, but today’s telescopes are not powerful enough to achieve this with small rocky planets. According to the statement, the L 98-59 planetary system is a potential target for future studies of exoplanets’ atmospheres.

  Based on the data analyses, the team inferred that three of the planets in this system may contain water. The two planets closest to the central star may have small amounts of water, while the third planet’s mass could be up to 30 percent water.

  Hidden exoplanets not previously found may exist in this planetary system. The team discovered a fourth planet and even suspect there is a fifth planet in the zone where liquid water may exist on its surface.

  “We have hints of the presence of a terrestrial planet in the habitable zone of this system,” Demangeon said in the statement.

  The fifth exoplanet, if confirmed, may have a mass of 2.46 Earth mass, with an orbital period of about 23 days. Although this is quite close to the host star, since L 98-59 is a red dwarf, which is much cooler than the sun, this distance is perfect for creating temperatures similar to Earth’s.

  “This system announces what is to come,” added Demangeon.

  “We, as a society, have been chasing terrestrial planets since the birth of astronomy and now we are finally getting closer and closer to the detection of a terrestrial planet in the habitable zone of its star, of which we could study the atmosphere.”

  The new research is published in a paper in a forthcoming volume of Astronomy & Astrophysics.

  Tyler Durden
  Mon, 08/23/2021 – 23:20

• How Biden's American Families Plan Could "Destroy" Iowa Farmers
  How Biden’s American Families Plan Could “Destroy” Iowa Farmers

  In April, President Biden announced the American Families Plan (AFP) that promises billions of dollars as “an investment in our kids, our families, and our economic future.” But deep within the proposal, it describes gains on property transfers would be considered a taxable event. 

  Conservative news outlet The Center Square called out the Biden administration on Thursday for attempting to “destroy Iowa family farms” through the proposed AFP property transfer tax. 

  AFP describes gains on property transferred at death or by gift would exclude up to $1 million per taxpayer. The exclusion would be indexed for inflation after 2022.

  Craig Hill, the president of Iowa Farm Bureau, calls the proposed transfer tax a “major threat” for family farms in the corn-growing state who pass along significant sums of farmland to the next generation to work. 

  AFP can be compared with Biden’s Rural Plan that calls for “partners with rural communities to invest in their unique assets, with the goal of giving young people more options to live, work, and raise the next generation in rural America – making sure the wealth created in rural America stays in rural America.”

  The Rural Plan says it will “make it easier to pass farms and ranches onto the next generation.”

  

  However, Hill told The Center Square that is not the case. He said the transfer tax could devastate some families who don’t have enough money to pay the tax because land values have been artificially inflated with cheap money from the Federal Reserve. 

  Crunching numbers, the planned exemption for a married couple is a million dollars. Anything above, the couple would be taxed at 40%. Given typical Iowa farm size is 359 acres on average at $7,559 per acre, that would leave the couple with $1.7 million exposed to taxes. After the exemption, this means they might owe $680,000. 

  Given that farmers have already experienced a decade of depressed farm income and razor-thin margins, the ability to pay a hefty tax on a land transfer could force lower-income farmers to sell.  

  Sen. John Boozman of Arkansas serves as the top Republican on the Senate Committee on Agriculture, Nutrition, and Forestry, said the “land swap tax would dry up the farmland market, create barriers to entry for new or beginning farmers, and stunt agriculture business growth and reinvestment in much of rural America.”

  So what’s the real agenda of the Biden administration pushing the tax proposal ahead that could wreck small farmers and force them to sell? Well, we can only speculate vultures like Bill Gates and big Wall Street private equity firms circling the Midwest waiting for distressed farm sales. 

  Tyler Durden
  Mon, 08/23/2021 – 23:00

• Quantifying The "Staggering Costs" Of US Military Equipment Left Behind In Afghanistan
  Quantifying The “Staggering Costs” Of US Military Equipment Left Behind In Afghanistan

  Authored by Adam Andrzejewski via Forbes.com,

  The U.S. provided an estimated $83 billion worth of training and equipment to Afghan security forces since 2001. This year, alone, the U.S. military aid to Afghan forces was $3 billion.

  

  Putting price tags on American military equipment still in Afghanistan isn’t an easy task. In the fog of war – or withdrawal – Afghanistan has always been a black box with little sunshine.

  Not helping transparency, the Biden Administration is now hiding key audits on Afghan military equipment. This week, our auditors at OpenTheBooks.com reposted two key reports on the U.S. war chest of military gear in Afghanistan that had disappeared from federal websites.

  #1. Government Accountability Office (GAO) audit of U.S. provided military gear in Afghanistan (August 2017): reposted report (dead link: report).

  #2. Special Inspector General For Afghanistan Reconstruction (SIGAR) audit of $174 million in lost ScanEagle drones (July 2020): reposted report (dead link: report).

  U.S. taxpayers paid for these audits and the U.S.-provided equipment and should be able to follow the money.

  After publication, the GAO spokesman responded to our request for comment, “the State Department requested we temporarily remove and review reports on Afghanistan to protect recipients of US assistance that may be identified through our reports and thus subject to retribution.” However, these reports only have numbers and no recipient information.

  Furthermore, unless noted, when estimating “acquisition value,” our source is the Department Logistics Agency (DLA) and their comprehensive databases of military equipment.

  Vehicles and airplanes

  Between 2003 and 2016, the U.S. purchased and provided 75,898 vehicles and 208 aircraft, to the Afghan army and security forces, according to a Government Accountability Office report.

  

  Quantities and examples of key U.S.-funded Military Vehicles for Afghanistan.  OPENTHEBOOKS.COM

  Here is a breakdown of estimated vehicle costs:

  • Armored personnel carriers such as the M113A2 cost $170,000 each and recent purchases of the M577A2 post carrier cost $333,333 each. 

  • Mine resistant vehicles ranges from $412,000 to $767,000. The total cost could range between $382 million to $711 million.

  • Recovery vehicles such as the ‘truck, wrecker’ cost between for the base model $168,960 and $880,674 for super strength versions.

  • Medium range tactical vehicles include 5-ton cargo and general transport trucks were priced at $67,139. However, the family of MTV heavy vehicles had prices ranging from $235,500 to $724,820 each. Cargo trucks to transport airplanes cost $800,865.

  • Humvees – ambulance type (range from $37,943 to $142,918 with most at $96,466); cargo type, priced at $104,682. Utility Humvees were typically priced at $91,429. However, the 12,000 lb. troop transport version cost up to $329,000.

  • Light tactical vehicles: Fast attack combat vehicles ($69,400); and passenger motor vehicles ($65,500). All terrain 4-wheel vehicles go up to $42,273 in the military databases.

  

  U.S.-Funded Aircraft For the Afghan Forces  OPENTHEBOOKS.COM

  This month, the Taliban seized Black Hawk helicopters and A-29 Super Tucano attack aircraft. As late as last month, Afghanistan’s Ministry of Defense posted photos on social media of seven newly arrived helicopters from the U.S., Reuters reported.

  Black Hawk helicopters can cost up to $21 million. In 2013, the U.S. placed an order for 20 A-29 Super Tucano attack aircraft for $427 million – that’s $21.3 million for each plane. Other specialized helicopters can cost up to $37 million each.

  The Afghan air force contracted for C-208 light attack airplanes in March 2018: seven planes for $84.6 million, or $12.1 million each. The airplanes are very sophisticated and carry HELLFIRE missiles, anti-tank missiles and other weaponry.

  The PC-12 intelligence, reconnaissance and surveillance airplanes use the latest in technology. Having these planes fall into Taliban control is disconcerting. Civilian models sell new for approximately $5 million each and the military planes could sell for many times that price.

  Basic fixed-wing airplanes range in price from $3.1 million to $22 million in the DLA database.

  Of course, helicopter prices also range widely depending on the technology, purpose, and equipment. For example, according to the DLA, general purpose helicopters range in price from $92,000 to $922,000. Observation helicopters can cost $92,000 and utility helicopters up to $922,000.

  Even if the Taliban can’t fly our planes, the parts are very valuable. For example, just the control stick for certain military planes has an acquisition value of $17,808 and a fuel tank sells for up to $35,000.

  Lost drones

  In 2017, the U.S. military lost $174 million in drones that were part of the attempt to help the Afghan National Army (ANA) defend itself. But the ANA didn’t immediately use the drones and then lost track of them.

  This week, the SIGAR audit on the $174 million drone loss disappeared from its website.

  Weapons, communications equipment, and night vision googles

  Since 2003 the U.S. gave Afghan forces at least 600,000 infantry weapons, including M16 rifles, 162,000 pieces of communication equipment, and 16,000 night-vision goggle devices, according to the GAO report.

  

  Key Weaponry funded by U.S. into Afghanistan  OPENTHEBOOKS.COM

  The howitzer is the modern cannon for the U.S. military and each unit can cost up to $500,000; however most are in the $200,000 price range. At the higher end, there’s GPS guidance on fired shells.

  A common price of a M16 rifle is $749, according to DLA. Adding a grenade launcher can push the price of the M16 to $12,032. M4 carbine rifles are slightly more expensive with unit prices as high as $1,278.

  Just the sights on night-vision sniper rifle scopes can run as high as $35,000, however, most vary in price between $5,000 and $10,000.

  Here are the costs of other types of weaponry provided to Afghan forces:

  • Machine guns, i.e. the M240 model, were priced between $6,600 and $9,000 each.

  • Grenade launchers cost between $1,000 and $5,000 each; however, in 2020, the manufacture sold 53 for $15,000 each.

  • Army shotguns were acquired for only $150 each, according to DLA.

  • Military pistols cost $320 each, such as the .40 caliber Glock Generation 3.

  

  Key U.S.-Funded Intelligence, Surveillance, and Reconnaissance Equipment into Afghanistan  OPENTHEBOOKS.COM

  Each Aerostat surveillance balloon costs $8.9 million. Each ScanEagle drone costs approximately $1.4 million according to recent procurement news. Even as late at 2021, U.S. appropriations for the Wolfhounds radio monitoring systems approached $874,000.

  Night vision devices: The total cost for the 16,000 night-vision goggles alone could run as high as $80 million. Individually, the high-tech goggles were priced between $2,742 and $5,000 by the DLA. Other equipment like image intensifiers are commonly priced at $10,747 each; however, sophisticated models run as high as $66,000 each.

  Radio equipment: the cost of equipment adds up – receiver-transmitters ($210,651); sophisticated radio sets ($61,966); amplifiers ($28,165); repeater sets ($28,527); and deployment sets to identify frequencies run up to $18,908.

  However, if the Taliban doesn’t have the expertise or technologies to program the equipment, it will become obsolete quickly. Or it could be sold off to other countries who wanted to acquire U.S. technology.

  And there’s more… years 2017 through 2019

  From 2017 to 2019, the U.S. also gave Afghan forces 7,035 machine guns, 4,702 Humvees, 20,040 hand grenades, 2,520 bombs and 1,394 grenade launchers, according to the since removed 2020 SIGAR report, reported by The Hill.

  An unnamed official told Reuters that current intelligence assessment was that the Taliban took control of more than 2,000 armored vehicles, including American Humvees, and as many as 40 aircraft that may include UH-60 Black Hawks, scout attack helicopters and ScanEagle military drones.

  Crucial quote

  “We don’t have a complete picture, obviously, of where every article of defense materials has gone, but certainly a fair amount of it has fallen into the hands of the Taliban,” White House national security adviser Jake Sullivan said Tuesday, The Hill reported.

  “And obviously, we don’t have a sense that they are going to readily hand it over to us at the airport.”

  Critic

  Republican Senators have demanded that there be a full count of U.S. military equipment left in Afghanistan.

  In a letter to Secretary of Defense Lloyd Austin, the lawmakers said they were “horrified” to see photos of Taliban militants taking hold of military equipment, including Black Hawk helicopters.

  “It is unconscionable that high-tech military equipment paid for by U.S. taxpayers has fallen into the hands of the Taliban and their terrorist allies,” the lawmakers said in the letter.

  “Securing U.S. assets should have been among the top priorities for the U.S. Department of Defense prior to announcing the withdrawal from Afghanistan.”

  *  *  *

  Further reading

  Planes, guns, night-vision goggles: The Taliban’s new U.S.-made war chest

  Billions in US weaponry seized by Taliban

  US military equipment left in Afghanistan needs full accounting, GOP senators say

  Billions spent on Afghan army ultimately benefited Taliban

  Note:

  Procurement prices can vary widely over a 20-year period. Factors influencing prices include when the item was purchased, quantities, and other acquisition details.

  Tyler Durden
  Mon, 08/23/2021 – 22:40

• Australian Truck Drivers Vow To Block Every Major Highway In Radical Anti-Lockdown Strike
  Australian Truck Drivers Vow To Block Every Major Highway In Radical Anti-Lockdown Strike

  As Australians take to the streets to protest the country’s lockdown measures – most recently clashing with police over the weekend, Aussie truck drivers are planning to shut down every major highway across the country and have advised people to ‘stock up on groceries.’

  

  One driver, according to the Daily Mail, declared in a video that truck drivers are ‘planning to shut down the country’ to ‘remove the shit government’ on August 31 beginning at 9 a.m.

  “It’s on. The truckies are doing it. The truckies are going to shut down the country,” the man says, adding “What that means is you need to go shopping now, get what you can for the next week or two, load your fridge, freezers.”

  He said supply chains would soon be interrupted and urged Aussies to stock up on groceries to get them through the next couple of weeks. 

  A GoFundMe page has since been launched to support the truckies financially as they prepare to strike from 9am on Tuesday August 31, which will involve ‘blocking every highway entering into every state at the same time’. -Daily Mail

  According to the man, truck drivers have been in discussion with people from around ‘the world,’ and have been working with war veterans to carry out the protest.

  “The truckies are in, the VETS are in, I’m in. I’m willing to go to jail to save my country and children,” said the man.

  It is unknown how many truck drivers are involved in the demonstration, however truck drivers from around the globe have been posting advice online on how to impede efforts by authorities to tow their vehicles.

  A GoFundMe page which appears to have been taken down had raised nearly $4,000 for the effort.

  

  If the protest proceeds, it won’t be the first time truckies have blocked roads in protest of pandemic restrictions. Last month, several trucks protested the temporary closure of construction in Sydney by parking their vehicles on the freeway and blaring their horns.

  

  Tyler Durden
  Mon, 08/23/2021 – 22:20

• Is Afghanistan The First Domino To Fall?
  Is Afghanistan The First Domino To Fall?

  Authored by Tim Kirby via The Strategic Culture Foundation,

  It certainly looks like a domino that has been put in position poised to fall waiting for others to take their places in the line.

  

  With America withdrawing from Afghanistan abruptly after some 20 years, one big question is being discussed throughout the strategic sphere by those both in big institutions and laying on their couches – is the American loss in Afghanistan the first domino to fall in the eventual collapse of the Global Hegemon? After all, Afghanistan is the “graveyard of empires” probably because it is an expression that sounds nice and because the Soviets fell apart a few years after losing to the locals. So this must be the “beginning of the end” right?

  Well, we should never be so quick as to jump onto narrow narratives without looking at the big picture. Side-by-side images of the Americans and their allies fleeing Vietnam and Afghanistan by helicopter are flooding Facebook, posted by those in the Alternative Media who take great joy in any loss by the 21st century’s “Evil Empire” but they seem to forget that just a few decades after losing in Vietnam the United States won the Cold War and took dominance over the planet.

  

  Image: Strategic meme-of-the-year material for 2021.

  No single event no matter how photogenic it is, is not going to be a sign of the grand demise of the “Sole Hyperpower”. It really took from the beginning of WWI till the end of WWII for the British to truly fall apart as a geopolitical force. The Soviet Union fell much quicker, but it is very widely believed that Perestroika (or the The Reykjavik Summit) was the real first white flag that devolved into the breakup of the union years later. The Roman Empire was a vastly slower burn than either of these two modern behemoths.

  This means we should not be debating if Afghanistan is the first “domino” to fall, but instead we should really take a look at what the rest of the dominos falling would look like. At this point we can surely put together a rough picture of what the next tiles to fall would look like, i.e. what other major failures/events would really be signs of the Monopolar World meeting its demise? The following are a few humble offerings as to what these dominos could be…

  Abandoning the Maidan Regime in the Ukraine

  The unexpected surrender and soon to be total fall of Kabul has certainly resonated in another city that starts with the letter K. If Washington is finding it necessary to abandon a twenty-year Nation-Building project that they have invested vast sums of money and manpower into, that means that back-burner Kiev could be cut loose in the near future, putting the fate of the region in the hands of the Russians.

  

  Image: We all know who secures Ukrainian “independence”.

  The Maidan has been a major roadblock for Russia. As Brzeziński wrote, “It cannot be stressed enough that without Ukraine, Russia ceases to be an empire, but with Ukraine suborned and then subordinated, Russia automatically becomes an empire” and Washington has done an absolutely fantastic job of turning the region into an “anti-Russia” as Putin recently called it.

  If the Maidan project were to be abandoned, it would become another quite massive domino. Washington giving up on Kiev, resulting in that current political entity probably being divided up, mostly going to Moscow, would symbolize either the USA’s inability to stop the rise of the Russians or their begrudging acceptance of it.

  Taiwan, Hong Kong and/or South Korea

  The Trump-era State Department Democracy storm that was inflicted on Hong Kong has seemed to fade away, but a total abandonment of the thorns in the side of the Chinese Dragon would also result in another domino being placed into position.

  

  Image: Not State Department = No Professional Protest Organizers in China.

  Bailing on Hong Kong activists or failing to maintain Taiwan’s independence would certainly present a strong sign of weakness and inability from the standpoint of Washington. Furthermore, although China has never had a passionate love for the North Koreans, having South Korea as essentially an American beachhead right next door has been a cause of concern for decades for Beijing. The South Korean economy on paper looks amazing and their cities dazzle with progress but what would be the effects of Ameria giving up on them? Is South Korea able to stand as a great nation, or is it really only successful thanks to the American umbrella? The answer to that would reveal itself within two weeks of an America-free Korean Peninsula.

  Simply put, if Washington gives up on Hong Kong, Taiwan and/or South Korea it is another sign of the end for sure as China would be more or less rid of these weak points that have been exploited against it for decades.

  A Loss of Control Over the “Bigs”

  Big Tech, Big Pharma, Big Agro and so on, have dutifully served Washington’s interests despite their theoretically international nature. But we should never forget that large for-profit entities are quite “whoreish” and will serve whichever master they need to. If Washington cannot control the Bigs as it used to, this would be another domino.

  To a small extent this is happening in Hollywood where the Chinese market’s (and its official and unofficial) demands are having a major impact. But if it comes to a point that Hollywood is only making a chunk of the world’s blockbusters rather than nearly all of them it would be the end of the total unobstructed Soft Power dominance of this American institution. Or even worse, if Hollywood can be bought out from under America then a new global narrative could be spun quite quickly.

  If the Hegemon fades, the leadership of the Bigs will feel increasing pressure from the Russians, Chinese and Arabs to give up the whole “gay thing” and portray these societies in a positive light whether through bribery or threats of force. Apple may be “designed in California” but if need be they would surely bail for greener pastures rather than living a life of poverty loyal to a failed America.

  Mexico, Lakotastan and African-America

  The United States has done a fantastic job of fostering independence movements within its rivals while making diverse masses “American” at home. However, as with the Soviets and the British, waves of breakaway republics and successful secessionist movements would be a very big domino indeed.

  The Soviets tried to create an African workers uprising in America in the 60’s and failed miserably, but BLM could get out of control, or in the case of a dying USA, could become used by foreign powers. An Afro-American Maidan would certainly be another sign of doom.

  The rise of an independent Native-American state like the Lakota Indians’ lands would be yet another tile being stood into place, opening the door for further break-away attempts.

  When the Mexicans lost the Mexican-American war they lost the chance to become the dominant power on the continent. Few remember, but the destiny of this New World was not just given to the Americans wrapped in a box. If the Mexicans had won the war they would be the ones with access to the Atlantic (via the Gulf of Mexico) and the Pacific simultaneously, not Washington. It would have been very possible for them to secure the entire West Coast. A Mexico that would begin to take action as an independent actor would certainly be another sign of serious trouble for Washington. Thus far, on the North American continent “there can be only one” but perhaps that isn’t necessarily going to always remain the same “one”.

  The death of the Dollar or collapse of the Federal Reserve

  If the dollar were to collapse, or there were serious problems at the Federal Reserve, as have been predicted for many years due to insane national debt, this would of course be the biggest domino of all. The West has been able to accumulate bafflingly massive debt with no consequences because of the dominance of Washington. It is very hard to call in a debt from the toughest kid school surrounded by his henchmen. But when the big bully stops growing, and loses his buddies, all of a sudden getting your $5 back with a few whacks from a baseball bat becomes viable.

  

  Image: If you are powerful enough no one can call in your debts.

  No one can call in the debt of a Global Hegemon, but Regional Powers have to balance their checkbook. A decrease in power could lead to the national debt prophecy coming true in our lifetimes which would be probably the largest domino of all.

  In conclusion

  Is Afghanistan “the first domino to fall” in the death of the American Empire? This cannot be proven, but it certainly looks like a domino that has been put in position poised to fall waiting for others to take their places in the line. Other major defeats would be required to say for sure that this “New American Century” is over, not even making it to the one-fourth mark. It is really the other potential signs of the end that are of most concern not squabbling over Afghanistan’s domino status. So the big question is, if Washington is losing its Monopolar World Order, then where will be the next grand retreats?

  Tyler Durden
  Mon, 08/23/2021 – 22:00

• Coinbase President Says USDC Reserves Will Now Be Held Only In Cash And Short Term Treasuries
  Coinbase President Says USDC Reserves Will Now Be Held Only In Cash And Short Term Treasuries

  Coinbase’s President and COO said this week that Coinbase’s reserves of its USDC stablecoin are going to now be held in cash and treasuries.

  Digital currency company Circle had said back in July that the some of the $27 billion in assets backing USDC would also be held in corporate and commercial bonds.

  Centre, a consortium founded by Circle and crypto exchange Coinbase, wrote in a blog post this weekend: “Mindful of community sentiment, our commitment to trust and transparency, and an evolving regulatory landscape, Circle, with the support of Centre and Coinbase, has announced that it will now hold the USDC reserve entirely in cash and short duration US Treasuries. These changes are being implemented expeditiously and will be reflected in future attestations by Grant Thornton.”

  

  Bloomberg added on Monday:

  Centre, the consortium that includes Coinbase and Circle, revealed in July that 61% of the reserves were in risk-free assets like cash and its equivalents, but that some of the reserves were in assets that contain some risk of default, such as corporate debt and certificates of deposit with foreign banks. An additional 12% of the funds were in Treasury bonds, which aren’t considered a default risk but also aren’t as liquid as cash.

  The revelation in July stood at odds with Coinbase’s website, which had previously said that all USD Coin was “backed by dollars in a bank account”. 

  Coinbase President and COO Emilie Choi admitted that the company was in error after Circle made the revelation. 

  1/ Quick update on USDC. Starting September 2021, USDC reserves will be held in cash and short-duration US government treasuries. This is the approach we want for USDC reserves. https://t.co/29liaGg2LA

  — Emilie Choi (@emiliemc) August 23, 2021

  https://platform.twitter.com/widgets.js

  “USDC has always been fully backed by reserves equal to or greater than the USDC in circulation, giving users the ability to always redeem 1 USD Coin for US$1.00,” she wrote. “We know that a lot of customers get USDC on Coinbase, and we previously said that every USDC is ‘backed by a dollar in a bank account.’ Our language could have been clearer here.”

  “When Circle shared their May report about USDC reserves in late July (which included a more diversified pool of investments for the first time) we should have moved faster to update statements like that on our website. That was a mistake and Coinbase takes ownership for that,” Choi concluded.

  Though the move may seem like a seismic revelation, not all analysts agree. 

  “The old investment rules for USD Coin were perfectly sound. Circle is making a splashy announcement to address a problem that doesn’t exist, in hopes of making itself
  seem more prudent than rivals,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion.

  USDC is the world’s second largest stablecoin. The world’s largest stablecoin, Tether, is currently under scrutiny by Washington for its claim that each token is backed by one U.S. dollar, either through cash or assets like bonds. Regulators continue to seek to examine if a run on stablecoins could cause a selloff in the underlying assets backstopping them. 
   

  Tyler Durden
  Mon, 08/23/2021 – 21:40

• Rare Breed Triggers Fires Back At ATF, Says "Will Not Comply" ​​​​​​​
  Rare Breed Triggers Fires Back At ATF, Says “Will Not Comply” ​​​​​​​

  Lawrence DeMonico, president of Rare Breed Triggers (RBT), brought everyone up to speed in a new video statement regarding the lawsuit filed by RBT against the Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice (DoJ), and Attorney General (AG). He addresses the ATF’s attempted to redefine the term “machine gun” to apply it to RBT’s FRT-15 semi-automatic trigger in contradiction to federal law (Gun Control Act and National Firearms Act).

  On July 27, DeMonico said the ATF Tampa Field Division, accompanied by a government attorney, personally served him and his attorney with a cease and desist letter, informing him that his FRT-15 trigger had been classified as a “machine gun.” The letter went on to say that RBT needs to halt all manufacturing and sales of the FRT-15 and discuss a strategy to address the triggers that have already been sold. 

  

  DeMonico said the directives laid out in the cease and desist letter were based on an “alleged examination” of the trigger had been “properly classified as a “machine gun” as defined by the National Firearms Act. He said “alleged” because no copy of the examination was provided with the cease and desist. 

  And to blow readers’ minds, DeMonico said when he spoke to special agents who personally served him the cease and desist letter – they said they haven’t even seen the copy of the “examination” nor haven’t even seen an actual FRT-15. 

  DeMonico then goes on to say how the FRT-15 is not a machine as it will not fire more than one round by a single function of the trigger – that’s important to note because that’s the most critical part of the definition of a machine gun in the Gun Control Act and National Firearms Act. 

  He said RBT immediately responded to the ATF’s cease and desist that they disagreed with their “claim” and “wouldn’t be complying with their demand,” adding that his attorney had filed a lawsuit in the Middle District of Florida. 

  For more, DeMonico explained, “why he is so confident in our opinion of the facts and be so brazen in our non-compliance.” 

  DeMonico concludes by saying the ATF was able to reinterpret a law under the Trump administration and enabled them to ban bump stocks through executive fiat that sets a “terrifying precedent.”  

  Tyler Durden
  Mon, 08/23/2021 – 21:20

• Why Goldman Sees Oil Hitting New Highs After Recent Rout
  Why Goldman Sees Oil Hitting New Highs After Recent Rout

  Over the weekend, we presented one explanation behind the recent plunge in the price of oil which dragged it close to a bear market from its post-covid highs just one month earlier: as Rabobank’s Ryan Fitzmaurice said, it was the short-term momentum and some trend signals that turned bearish this week. Furthermore, medium-term momentum signals are also at risk of flipping from “long” to “short” over the coming days should prices continue to weaken, which could bring another wave of aggressive systematic selling to the oil market before the pressure subsides. As such, the Rabo strategist said “we are attributing a large portion of the recent fall in oil prices to the herd-like behavior of systematic funds rather than to any material shift in the fundamental outlook for oil markets.”

  Overnight, Goldman’s commodity head Jeffrey Currie expanded on this, including fundamental drivers and writing that for the past 9 months, commodities have been driven by strong macro trends, with significant cross-commodity correlations that pushed the entire complex higher through June. But more recent macro trends – reflation unwind, Delta variant concerns and caution over China – have generated headwinds, driving all markets lower. Furthermore, “key markets remain in deficit with inventories in oil and base metals continuing to fall sharply” and while “peak growth is clearly behind” the Goldman strategist again emphasizes that “commodities are driven by demand levels not growth rates “

  Currie then also observes the technicals, noting that “combined with low liquidity and fresh shorts from momentum investors the move has been swift and large.”

  Quantifying the technical downside further, Reuters’ John Kemp writes that hedge funds sold petroleum for the seventh time in nine weeks:  Hedge funds and other money managers sold the equivalent of 40 million barrels in the six most important futures and options contracts in the week to Aug. 17, taking total sales to 253 million barrels since June 15. In the most recent week, funds were sellers across the board of Brent (-25 million barrels), NYMEX and ICE WTI (-9 million), U.S. gasoline (-3 million), U.S. diesel (-1 million) and European gas oil (-3 million).

  

  So what happens next? According to Goldman, while liquidity will likely remain low and the trend is not our friend right now, “the micro – steadily tightening commodity fundamentals – will trump these macro trends as we move towards autumn, pushing many markets like oil and base metals to new highs for this cycle.”

  Below we excerpt from his note which describes why in Currie’s view, the bullish micro will soon trump the bearish macro:

  Shifting gears to a micro driven bull market. Indeed, we see these macro trends drawing attention away from increasingly constructive micro data across the complex. On the back of this data we maintain our bullish view. Even those markets like steel and iron ore where micro fundamentals have weakened, there are very specific idiosyncratic reasons for the weakness. While the demand for oil has clearly weakened in Asia, it has weakened less than we expected. Further, both base metal and agriculture demand remains strong. Although US shale output has surprised to the upside recently, it is in line with our expectations while supply elsewhere for oil and all other markets remains structurally weak. As a result, key markets remain in deficit with inventories in oil and base metals continuing to fall sharply. While peak growth is clearly behind us we once again emphasize that commodities are driven by demand levels not growth rates and once we pass through this Delta variant – China cases are already declining – even oil demand levels should recover into year-end. Accordingly, we maintain our 4Q price targets — $80/bbl oil and $10,620/t copper and now forecast 17.1% returns for the S&P GSCI into year-end.

  Delta a transient event to oil demand, supply losses are persistent. Both oil prices and timespreads have sold off over the last three weeks as Delta concerns have darkened the outlook for demand; however, flat prices have overshot timespreads to the downside, suggesting an oversold market. So far the demand hit has remained within our conservative expectations in China (0.7 mb/d vs 1 mb/d base case), and overall demand continues to track near 98 mb/d as regional mobility indicators remain robust ex-APAC. The c.1.5mb/d deficit over the last month has been focused in EM, where storage levels ex-China are now precariously low, and we expect DM stocks will have to take the brunt of future drawdowns. Cash markets have weakened substantially, partly due to the post-Covid biannual storage play unwinds, nevertheless refining margins have remained supported and, in fact, a simple average of Brent and Dubai prompt timespreads remain near post-Covid highs. In addition, supply data points continue to disappoint versus our below-consensus expectations; the IEA has now revised down non-OPEC+ ex US/Canada supply by almost 1 mb/d each of the last two quarters, with growth increasingly back-loaded. The latest leg of the sell-off has been more parallel in nature, with the market reflecting anxiety over medium-term growth, China stimulus, and the possibility that US shale may be inflecting higher. Nevertheless, we expect Delta will prove to be a transient event, and that US producers will retain their newfound discipline, as the drivers of our bullish view shift from cyclical demand impulses to the structural binding constraints of under-investment in supply that were only accelerated by Covid-19.

  China steel weakness in Q3 is no canary in the coal mine. There is no doubt that China’s steel data has deteriorated since mid-year. After a strong H1 with apparent onshore steel demand rising nearly 6% y/y, the data since then has pointed to a 4% y/y decline so far in Q3. Coupled with a softening trend in early cycle construction activity, investors are concerned over rising headwinds to onshore demand. We think such concerns are over-emphasized. First, there have been transitory yet material distortions to steel apparent demand from mid-year. Flooding in several provinces alongside Delta lockdowns has exacerbated the seasonal slowdown in construction activity, which should reverse into Autumn. In addition, policy led steel supply cuts and resultant higher steel prices have contributed to downstream destocking which has, just as with copper in Q2 generated a negative adjustment to apparent demand. Second, it is also clear that Beijing is shifting to a more pro-growth policy setting which should generate a boost to infrastructure investment over the next 2-3 quarters, whilst also limiting further tightening measures on the property sector. In this context, we expect an improvement in China’s steel demand trends in Q4 (vs Q3) though the trend will be closer to flat y/y into next year. In this context we also see iron ore as oversold after a near 30% fall. A combination of improving steel demand, policy developments and a stabilizing physical market should act as upside catalysts for iron ore.

  Sustained deficits across base metals supports higher prices. There is no evidence that the current weaker micro trends in China’s ferrous sector are feeding into base metals markets. Onshore inventories across all the base metals have drawn over Q3 and for the majority are falling at the fastest pace seen year-to-date. In particular, we would note that onshore copper stocks (social and bonded) are now c.30% lower than their mid-Q2 peak, whilst high frequency indicators such as physical premiums and the import arb all point to a material tightening trend onshore. We think this reflects so far solid demand conditions through the summer period with evidence of y/y apparent demand growth rates inflecting higher after the negative downstream destocking distortions in Q2 (due to high prices). At the same time, supply side constraints via both scrap (Delta lockdowns impacting SE Asian processing flows) and power supply on smelting/refining (cutting refined output across a number of base metals) have supported the call on inventories. As demand improves seasonally from September, aided by reduced lockdown effects and some probable supportive policy adjustments, we expect continued tightness onshore into Q4 and support for higher import volumes of refined metal. This fundamental setup will offer support for a trend higher in both copper and aluminium prices in particular.

  Gold searching for a catalyst: Despite the recent spike in growth concerns, gold has largely remained range bound, closely correlated with the dollar. In our view this is because growth worries were actually quite contained and inflows into equity market funds have remained strong indicating that investors still prefer riskier assets. Inflation concerns were also moderate leaving little catalyst for gold investment demand. Nevertheless, at current prices gold is attractive to long term buyers looking to diversify their portfolio. Central Bank demand for gold has picked up materially with large purchases from Brazil, Thailand, India and Hungary. Moreover, unlike 2017-18 when Central Bank gold demand was coming primarily from countries with political tensions with the US (Russia, Turkey, China), the current spike in demand appears to be driven more by diversification motives. At the same time, Shanghai gold premium remains positive reflecting strong demand onshore and Indian imports have rebounded from their May-June slump. Overall our view remains that gold will continue to trade moderately higher on weaker dollar and recovery in EM demand. For gold to move materially higher though there has to be general risk off event which will trigger demand for defensive inflation hedges such as return of inflation worries.

  Tyler Durden
  Mon, 08/23/2021 – 21:00

• Evergrande Crashes Again As The Bad News Just Won't Stop
  Evergrande Crashes Again As The Bad News Just Won’t Stop

  It’s just keeps going from bad to catastrophic for China’s largest and most indebted developer, Evergrande.

  Just days after Chinese authorities called for indebted (some would say insolvent) property giant Evergrande to resolve its debt risks during a rare meeting with executives Thursday and warning it to refrain from spreading “untrue” information, and not long after Evergrande – which has debt of more than $300 billion making it one of China’s most systematically important companies – pulled the short stick when Beijing decided to bail out China’s original bad bank Huarong but left Evergrande out in the cold, shares of the Chinese property giant sank to a fresh six-year low amid mounting concern that shareholders will bear the brunt of the developer’s liquidity crisis.

  Shares of Evergrande, which had lost 60% of their value coming into this week, crashed 12% on Monday in Hong Kong to close at the lowest since September 2015, while China Evergrande New Energy Vehicle Group – the company’s electric-vehicle unit – cratered 27%, the most since October 2015.  Completing the trifecta was the group’s property services unit, which plunged 9%.

  

  The catalyst for the latest blow to shareholder in the Shenzhen-based Evergrande, which is liquidating assets including stakes in units to avoid a cash crunch following a regulatory crackdown on leverage in the property industry,  was a report that Evergrande may sell its Hong Kong headquarters building at a loss.

  According to Bloomberg, the developer plans to sell the office tower to Yuexiu Property Co. for just HK$10.5 billion ($1.3 billion), a third less than the HK$15.6 billion it sought, Sing Tao Daily reported. It acquired the building for HK$12.5 billion in 2015. This means that the company’s last recourse at obtaining liquidity – via asset sales – may falter if its assets prove to have a far lower value than ascribed by the market.

  “Evergrande’s planned liquidity injection via asset sales could face challenges as potential buyers may negotiate lower prices,” Bloomberg Intelligence analyst Lisa Zhou wrote.

  While Evergrande stock was slammed, the bond market reacted more positively to the news of the building sale plans, which could help Evergrande meet upcoming debt repayments and/or provide greater recoveries for bondholders in a bankruptcy. Its note due 2022 climbed 0.6 cent on the dollar to 49.5 cents.

  

  As noted above, in a first for China, financial regulators last week issued a rare public rebuke of Evergrande, urging it to address its debt woes and refrain from spreading “untrue” information (leading to growing speculation that unlike Huarong, Beijing just make let Evergrande collapse sparking a bond market crisis). The company said it will do its best to resolve debt risks and keep stability in housing and financial markets.

  Tyler Durden
  Mon, 08/23/2021 – 20:40

• Jack Ma "Behaved Too Much Like An American Entrepreneur" For The Chinese Communist Party's Liking
  Jack Ma “Behaved Too Much Like An American Entrepreneur” For The Chinese Communist Party’s Liking

  Given the recent decimation in U.S. listed China based stocks, it is becoming abundantly clear who is running the show in China.

  

  And no one person is coming to that realization quicker than Jack Ma. Once revered as a beacon of success and entrepreneurship out of China, Ma’s outspoken nature and boisterous antics saw him fall out of favor with the Chinese Communist Party – quickly.

  Such was the topic of a new, comprehensive Wall Street Journal report, which detailed the lesson Ma is now learning first hand: there is only one most powerful man in China. 

  How did Ma – who now is rarely, if ever, seen in public – fall out of favor with the CCP? He “behaved too much like an American entrepreneur,” the report says. 

  After Ma gave a speech in October criticizing Chinese regulators for “stifling financial innovation”, days later his $34 billion IPO of Ant Group had been blocked by the CCP. Since then, the company has had to restructure its business. 

  Within “hours” of his speech in October, state regulators began to compile reports on his companies and their operations.

  Additionally, when Ant filed its IPO, the Journal reported that some regulators were “caught off guard” at how big the company’s lending business had become. 

  Ant was also seen as “acting arrogantly” during its IPO roadshow, requiring people to make presentations if they wanted to invest, and limiting attendance for meetings with the company’s executives, the report said. 

  And despite the company being in a “silent period” prior to its IPO, Jack Ma instead “live-streamed a singalong last September with Faye Wong, a Chinese pop superstar”

  . 

  Now, Ma has been forced to hit the brakes: no more singalongs with Chinese pop stars, no more days dressing up as Michael Jackson. Instead of jetsetting globally and taking meetings, he has resorted to golfing and hiring a teacher to learn oil painting. 

  Ma also took to Beijing to try and smooth over his relationship with the government recently, but it was “too little, too late,” the Wall Street Journal reported. Ma had already “strayed too far out of his lane”. One of the world’s richest men was brought to heel in just under a year…

  “His ambition and outspoken nature, traits that drew a strong following among many in China, would no longer be tolerated in the tightened grip of Mr. Xi and the ruling party,” the report said.

  One Beijing official told the WSJ that Ma should have focused on “giving back to the Party instead of just focusing on his own interests.”

  Now, we’re seeing the same type of “reining in” with other businesses in China, including Didi, where the CCP has also recently initiated regulatory probes in hope of having the business operate closer to the state’s interests. 

  You can read the WSJ’s full report on Ma’s history with the CCP here. 

  Tyler Durden
  Mon, 08/23/2021 – 20:20

• Jen Psaki Claims There Are No Americans Stranded In Kabul During Testy Exchange With Reporter
  Jen Psaki Claims There Are No Americans Stranded In Kabul During Testy Exchange With Reporter

  For multiple days running every major outlet from The Washington Post to Associated Press to CNN to NBC have run stories describing the plight of stranded Americans who’ve desperately sought to make their way to Kabul’s international airport, where evacuation flights have steadily ramped up.

  So naturally the press pool was taken aback Monday when White House press secretary Jen Psaki claimed that no, there are not Americans stranded in Kabul – though clearly she was engaged as usual in stretching the very meaning of words to the point of laughably obvious spin and blatant falsehood…

  Psaki says “no Americans are stranded” in Afghanistan pic.twitter.com/llLYD2m7ds

  — The Post Millennial (@TPostMillennial) August 23, 2021

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  Psaki was sparring with Fox’s Peter Doocy, not for the first time, in an exchange prompted by this question: “Does the president have a sense that most of the criticism is not of leaving Afghanistan? It’s the way that he has ordered it to happen by pulling the troops before getting these Americans who are now stranded. Does he have a sense of that?”

  A visibly angry Psaki called his assertion “irresponsible” and then stated bluntly:

  “I think it’s irresponsible to say Americans are stranded. They are not. We are committed to bringing Americans who want to come home, home.” 

  An incredulous Doocy followed by seeking to clarify that the official White House position is that “there are no Americans stranded”… to which Psaki doubled down, responding in the testy back-and-forth:

  “I’m just calling you out for saying we are stranding Americans in Afghanistan when we have been very clear that we are not leaving Americans who want to return home,” she said. “We are going to bring them home and I think that’s important for the American public to hear and understand.”

  The absurdity of Psaki’s statement given the constant flood of on the ground reporting detailing the plight of those US citizens stranded was enough for Psaki to lose even CNN’s support on this one.

  Indeed, Jake Tapper himself later exposed her statements as false…

  CNN’s Jake Tapper fact checks Psaki for saying Americans are “not” stranded in Afghanistan.

  “There are no doubt Americans who feel stranded in Afghanistan right now.” pic.twitter.com/MaaYR1gMiE

  — RNC Research (@RNCResearch) August 23, 2021

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  Of course, for much of last week when the crisis was at its most intense, resulting in many Afghan civilian deaths in and around Hamid Karzai airport, Psaki was “out of the office” on vacation with her family, a vacation which was cut short as increasingly the MSM began turning on the Democratic president along with the public, slamming the unfolding debacle. 

  Jen Psaki: “The test of competence and of leadership is not about how you operate on your best day. It’s about how you operate when the chips are down, when things are difficult.”

  Biden was on vacation when Kabul fell. pic.twitter.com/KHlPtK5CXI

  — RNC Research (@RNCResearch) August 23, 2021

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  Meanwhile, deflections continue across various departments within the administration…

  Biden admin officials haven’t given a public readout of the number of Americans evacuated, deflecting Qs on it at Pentagon and WH briefings today.

  h/t @DanLamothe for a helpful sidebar convo on this. https://t.co/JlFAUJxcRu

  — Jack Detsch (@JackDetsch) August 23, 2021

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  This as according to MSNBC former DHS Secretary Jeh Johnson, who weighed in on the situation, the Kabul airport crisis is certainly “going to get a lot worse before it gets better.”

  “This is a country of 38 million people. We’ve got to deal with the American citizens, those who qualify for special immigrant visas but then those who also qualify for refugee status under our laws. And that population could snowball,” Johnson said in a Monday NBC interview.

  Tyler Durden
  Mon, 08/23/2021 – 20:00

• As Pentagon's Afghan Debacle Unfolds, Russia Announces Joint War Drills With China & Iran In Gulf
  As Pentagon’s Afghan Debacle Unfolds, Russia Announces Joint War Drills With China & Iran In Gulf

  At a moment much of the world sees the US in ‘retreat’ from central Asia amid the ongoing Afghan evacuation debacle, it increasingly looks like Russia and China are stepping in as the next great power influencers in the region. The timing of a Russian announcement detailing upcoming joint military exercises appears geared toward sending just such a message.

  “Russia, Iran and China will hold joint maritime exercises in the Persian Gulf around late 2021 or early 2022, Russia’s ambassador to Tehran said, the RIA news agency reported on Monday,” according to Reuters.

  It’s been no secret that the Russian and Chinese militaries have grown closer over the past years, but rarer still are major drills involving the superpowers plus Iran, and centered in the Persian Gulf – site of recent soaring tensions which lately included Iranian commandos briefly seizing a foreign tanker, as well as the drone attack of the Israeli-managed ‘Mercer Street’ tanker off the coast of Oman on July 30.

  

  Russia’s ambassador to Tehran, Levan Jagaryan, confirmed the games in Monday statements, saying “Russian, Iranian and Chinese warships are taking part in it.” He added, “The main aim is to practice actions on ensuring international shipping safety, and combating sea pirates.”

  The Russian official also addressed the recent tanker incidents of this summer: “There are tensions indeed, especially following the tanker incidents in the Persian Gulf and the Gulf of Oman, but I would not be dramatic and say that the situation is more acute now than during previous crises. Neither Iran nor its Arab neighbors are interested in further escalation.”

  The Islamic Republic has of late seen growing military ties with Russia, given also just last month Iran sent a pair of warships all the way to Saint Petersburg to participate in a major naval parade at the invitation of Russia.

  As the Iranian ships – known to also have elite IRGC Quds force commandoes on board – traveled up Africa’s West Coast, there was unfounded speculation in Western media that they were actually headed toward Venezuela. 

  Previously these three unlikely allies have held drills in the Indian Ocean, starting a couple years ago, which corresponded to all three countries coming under increasing Washington sanctions.

  Tyler Durden
  Mon, 08/23/2021 – 19:40

• America's Latest COVID Wave Appears To Have Peaked As "Hot Spots" Turn The Corner
  America’s Latest COVID Wave Appears To Have Peaked As “Hot Spots” Turn The Corner

  The other day, we shared some official CDC numbers suggesting the COVID wave had likely peaked across the Northeast. Well, on Monday, CDC numbers cited by Bloomberg appeared to suggest that much of the US is seeing a similar pattern, as the latest delta-driven summer COVID wave finally begins to crest, just as President Biden is pushing third jabs and vaccine mandates across the US workforce (and, eventually, in schools).

  

  According to the official numbers, Arkansas and Missouri, where the delta surge began, have seen their seven-day average of cases is down 12% from the peak.

  And Florida and Louisiana, which have attracted the lion’s share of media attention lately, have also started to see similar declines.

  

  Source: Bloomberg

  That would seem to suggest that the delta wave truly has begun to wane, just as Dr. Scott Gottlieb and others expected it would.

  As Bloomberg points out in its story about the latest COVID trends in the US, one of the few immutable truths of the pandemic in North America (at least, so far) has been that viral surges haven’t lasted more than a few months. Afterwards, we see daily infections decline. Then again, there’s not exactly a ton of history to go on.

  Obviously, the best-case scenario would be seeing COVID cases decline even more during the coming month.

  The wave began in Arkansas and Missouri in early June and appears to be ending there two months laterr. Florida and Louisiana ignited about two weeks after the Ozarks, and they saw the surge last about 58 days, while in the rest of the country the wave turns 60 days old on Monday.

  Covidestim, a collection of projections that Dr. Gottlieb has long cited (it includes input from scientists from virtually every major US research institution). Numbers below 1 signal that the virus is contracting, not spreading and 22 states are already below that level, per Covidestim’s projections.

  

  Source: Bloomberg

  And once COVID peaks this time around, scientists believe the US should expect “a sustainable lull” in infections, especially as the population’s immunity levels continue to rise as more vaccinations (and more infections) inevitably increase the population’s immunity, even as herd immunity is believed to be beyond our reach now.

  However, while case numbers appear to be dropping, deaths will likely take longer to wane, especially after America’s ICUs have swelled against with terminally ill patients over the last few weeks.

  

  Source: Bloomberg

  Right now, more people are dying in US hospitals from COVID than at any time in February, though President Biden has assured the population that only the unvaccinated get terminally ill (with a growing number of exceptions), and that the time has come for those waiting for the FDA’s final word should get off the fence and get their jabs.

  Tyler Durden
  Mon, 08/23/2021 – 19:20

• SEC Gives Chinese Companies New Requirements For US IPO Disclosures
  SEC Gives Chinese Companies New Requirements For US IPO Disclosures

  While China is making it increasingly difficult for its companies to IPO in the US, the US has decided to make it that more challenging too.

  According to Reuters, the SEC has started to issue new disclosure requirements to Chinese companies seeking to go public in New York as part of a push to boost investor awareness of the risks involved.

  “Please describe how this type of corporate structure may affect investors and the value of their investment, including how and why the contractual arrangements may be less effective than direct ownership, and that the company may incur substantial costs to enforce the terms of the arrangements,” said one SEC letter seen by Reuters.

  While one wonders why it took 10 years for the SEC to wake up to the VIE risks that we warned about over a decade ago, it’s better late than never, and according to the report, some Chinese companies have now started to receive detailed instructions from the SEC about greater disclosure of their use of offshore vehicles known as variable interest entities (VIEs) for IPOs; implications for investors and the risk that Chinese authorities will interfere with company operations.

  The information crackdown follows after SEC Chair Gary Gensler asked for a “pause” in U.S. initial public offerings of Chinese companies and sought more transparency about these issues. Chinese listings in the United States came to a standstill after the SEC freeze, but not before hitting a record $12.8 billion in the first seven months of 2021, as Chinese companies capitalized on the soaring U.S. stock market.

  The SEC has also asked Chinese companies for a disclosure that “investors may never directly hold equity interests in the Chinese operating company,” according to the letter. Many Chinese VIEs are incorporated in tax havens such as the Cayman Islands. Gensler has said there are too many questions about how money flows through these entities.

  “Refrain from using terms such as ‘we’ or ‘our’ when describing activities or functions of a VIE,” the letter stated.

  The SEC has also provided disclosure requirements pertaining to the risk of Chinese regulators intervening with company data security policies, the sources said. Last month, just days after the blockbuster IPO of Didi Global, Chinese regulators banned the ride-sharing giant from signing up new users. This move was followed by crackdowns on technology and private education companies.

  The SEC has also asked some companies for more details in cases where they do not comply with the U.S. Holding Foreign Companies Accountable Act on accounting disclosures to regulators. China has so far prevented companies from sharing the work of their auditors with the U.S. Public Company Accounting Oversight Board. Last month, the SEC removed the chairman of the board, which has been unsuccessful in its push to ensure independent auditing of U.S.-listed Chinese companies.

  The SEC’s move represents the latest salvo by U.S. regulators against corporate China, which for years has frustrated Wall Street with its reluctance to submit to U.S. auditing standards and improve the governance of companies held closely by founders.

  The SEC is also under pressure to finalize rules on the delisting of Chinese companies that do not comply with U.S. auditing requirements.

  Tyler Durden
  Mon, 08/23/2021 – 19:00

• NY Still Needs To Come Clean On COVID-19 Nursing Home Deaths Scandal
  NY Still Needs To Come Clean On COVID-19 Nursing Home Deaths Scandal

  Authored by Petr Svab via The Epoch Times (emphasis ours),

  The government of the State of New York still has more explaining to do and heads that should roll regarding the decision to order that nursing homes accept patients with COVID-19 last year, according one of the state’s leading think tanks.

  

  The state government still hasn’t released data crucial to gauging the real magnitude of the scandal. It’s obvious, though, that the governor’s office and other officials are engaged in a coverup, according to the Empire Center for Public Policy’s health policy expert Bill Hammond. All of those responsible should resign, including the state’s health commissioner Howard Zucker, Hammond said.

  The scandal revolves around an order issued by Zucker on March 25, 2020, which stipulated that “no resident shall be denied re-admission or admission to the NH [nursing home] solely based on a confirmed or suspected diagnosis of COVID-19.”

  The order went as far as prohibiting staff from testing “medically stable” hospitalized clients for COVID-19 before admission.

  Under the policy, more than 9,000 COVID-19 positive patients were transferred to long-term care facilities, contributing to the nearly 16,000 deaths attributed to COVID in such facilities, according to a statistical analysis by the think tank. Exactly how much the policy contributed to the deaths is “very difficult to perfectly quantify,” according to Hammond, who is a senior research fellow at the Empire Center.

  The difficulty is compounded by the state’s delaying the publication of a large amount of data that it has collected on the issue. A coverup and dishonesty regarding the issue has been the most blatant part of the scandal, he claimed.

  Gov. Andrew Cuomo recently announced his resignation, on its face value due to a separate issue of inappropriate behavior toward women. But others involved in the coverup are still holding onto their chairs, Hammond pointed out.

  He called on the incoming Gov. Kathy Hochul to “fire the falsifiers,” in a recent op-ed in the New York Daily News.

  Origins

  

  In some regards, Hammond said, he is willing to give the Cuomo administration “the benefit of the doubt,” he told The Epoch Times.

  In mid-March, 2020, COVID-19 was quickly spreading in the city and hospitalizations multiplied from about 300 to more than 3,000 in less than two weeks. Expert projections were showing hospitalizations would reach as high as 110,000 in the state, about twice its hospital capacity.

  “It was reasonable for him to be really concerned about that,” Hammond said.

  Under these circumstances, there was a danger that elderly patients who were already recovering from COVID-19, but could still be infections, would be occupying hospital beds for weeks as long-term care facilities would refuse to accept them. If nursing homes were required to accept them, despite the obvious risks involved, it would have freed up some hospital capacity.

  Hammond was willing to cut the Cuomo administration some slack for trying to pick what it could have seen as the lesser of two evils.

  There are many things, however, for which the government should be faulted, he said.

  Poorly Worded

  Cuomo said the policy was based on guidance from the Centers for Disease Control and Prevention (CDC). The guidance said that nursing homes can accept recovering COVID-19 patients, but only if they can adhere to the CDC’s “Transmission-Based Precautions” that outlined considerations for the safety of other residents.

  The guidance recommended the homes set up an isolated area where the potentially infectious residents could quarantine for 14 days. The state directive, on the other hand, didn’t include these precautions. It bluntly said nursing homes “must comply with the expedited receipt of residents returning from hospitals.”

  Cuomo later argued that nursing homes always had the option, under state law, to refuse any patient they couldn’t properly care for. But, as Hammond pointed out, the state directive came in a state of emergency when the government is authorized to suspend certain laws and regulations.

  “Since the March 25 directive invoked the emergency and used prescriptive language, nursing home officials might reasonably have assumed that it was meant to supersede normal regulations,” Hammond said in his Aug. 17 report on the issue.

  No Outreach

  

  Another problem was that nursing homes weren’t consulted on the state directive, Hammond said. If there was an outreach effort, the directive could have been better worded, nursing homes could have been clearer on what they could and couldn’t do, and the state could have learned crucial information, such as which homes were actually equipped to accept potentially infectious patients.

  Late Reevaluation

  The state directive is technically still in effect, but in practice, it was discontinued after six weeks when another directive that banned hospitals from sending COVID-19 patients to nursing homes was issued.

  Six weeks, however, was too long given the facts on the ground at the time, according to Hammond.

  After just one week, hospitalization data had already indicated that the hospitalization projections were grossly off-mark. One of the most prominent state-by-state projection models came from the University of Washington’s Institute for Health Metrics and Evaluation.

  On April 1, 2020, the model was updated with additional data, but it was clear that it had little to no correspondence with the facts on the ground. The projections warned that New York would need 41,000 to 58,000 hospital beds for COVID-19 patients by April 1, 2020. But even by April 3, 2020, the state had less than 16,000 hospitalized. The hospitalizations peaked before mid-April, below 19,000, and then dropped about as quickly as they rose.

  One Size Didn’t Fit All

  

  While some hospitals in the New York City area got overloaded during the pandemic peak, that was not the case further upstate. The impact of COVID-19 was much milder in those small-town and rural areas, but the local nursing homes were still required to accept COVID-19 patients. It is in these areas where Empire Center’s statistical analysis showed the most severe impact of the state directive.

  The admission of every 10 COVID-19-positive patients resulted in about six additional COVID-19 related deaths, the data indicated.

  “In the upstate region, facilities that admitted at least one positive patient during this period accounted for 82 percent of coronavirus deaths among nursing home residents, even though they had only 32 percent of the residents,” the analysis stated.

  The analysis could benefit from additional data to make its conclusions broader and more robust. But the state hasn’t been forthcoming with this data. This alludes to a major problem that Hammond pointed out—one that’s as damning as it is indisputable, he said.

  Coverup

  As it became clear how COVID-19 was having a devastating impact on nursing home clients, the state directive started to draw increasing scrutiny. In response, the governor and many in his administration engaged in blatant dishonestly, Hammond documented in this report.

  “They’ve done nothing but spin from the very beginning,” he said.

  The officials tried to explain the directive away by implying that it mainly pertained to COVID-19 patients who were sent to a hospital and then simply returned back, Hammond’s report said. In fact, more than two thirds of the nursing home COVID-19 patient admissions were not prior residents, he found from data released thanks to a court order stemming from the Empire Center’s freedom of information lawsuit.

  Another move came in early May when the state started to omit from nursing home reports any COVID-19 deaths that didn’t occur in the home itself, such as those that took place after the patient was transferred to a hospital. The state acknowledged this change in its reporting in a footnote, but the fact remained that a portion of the deaths was thus hidden.

  “The result was to make New York’s nursing home death toll look roughly one-third lower than it actually was,” the report stated.

  In an unusual move, the state also removed the March 25 directive from its website sometime in early May. Media noticed the edit several weeks later.

  Probably the most outrageous part of the cover up came in July, 2020, when the state health department released a report saying the March 25 directive was “not a factor in nursing home fatalities.” Instead, it blamed staff members for unwittingly bringing the virus in early in the pandemic.

  

  “Although presented in the form of a scientific analysis, the [state health department] report was replete with falsehoods, omissions, errors and questionable analyses that discredited its central findings. Some of its flaws were evident right away; others came to light later,” Hammond’s report said.

  For starters, the government’s report omitted the resident deaths that occurred outside of the homes.

  Most importantly, its conclusion was a non-sequitur, according to Hammond.

  The report correctly pointed out that nursing home deaths peaked in early April, too early for the March 25 directive to act as the driving factor. But that hardly rules out that transfers from hospitals played a role, Hammond argued.

  “Residents kept dying by the hundreds per day for weeks after the peak, and certainly some of those victims could have caught the virus from an infected patient arriving from a hospital,” he said.

  It was later reported that, although prepared by the health department, the state report had been heavily edited by Cuomo’s aides.

  When various groups started to demand data on the nursing home deaths, the government stonewalled them, Hammond said.

  “The governor and other officials consistently deflected requests for that data from reporters, watchdog groups, industry associations, and even members of the Legislature,” the report said.

  Zucker repeatedly claimed he couldn’t provide the numbers because he needed to make sure they were “absolutely accurate.”

  Reportedly, a Cuomo aide completed an audit of nursing home deaths in late August, but the administration withheld the data until February, after the Empire Center won a court order forcing its release.

  Data accuracy isn’t a grounds for blocking Freedom of Information (FOIL) requests to begin with, Hammond noted.

  “No large-scale data-gathering system is error-free. An accuracy-based exception to FOIL would be license to block virtually any request for records,” he said in the report.

  The state’s “delaying tactics” clearly violated the law, he said.

  New York State Supreme Court Justice Kimberly O’Connor eventually agreed.

  That order, however, only pertained to data regarding deaths. To assess more accurately how much of an impact the March 25 directive had, it would also be necessary to analyze data on infections in nursing homes—both those determined by a test as well as those suspected based on COVID-19-like symptoms.

  The Empire Center filed dozens of requests for this and other data sets, but the state responded by claiming it’s still searching for the data. This is the same delay tactic used for the death data, Hammond said.

  Fallout

  Hammond didn’t try to determine criminal culpability by state officials. For that, he looks to the investigation led by the U.S. Attorney’s office in Brooklyn. He has called for an investigation into the state’s preparedness for health emergencies and the pandemic response in general.

  “The state was caught with its pants down when the pandemic arrived. That’s partly on the governor, the fact that he was not better prepared for what happened,” he said.

  Notably, the state should have had contingencies in place for the eventuality that hospitals would get overrun due to an infectious disease outbreak, he said.

  Petr Svab is a reporter covering New York. Previously, he covered national topics including politics, economy, education, and law enforcement.

  Tyler Durden
  Mon, 08/23/2021 – 18:40

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