- WTO Says 'Historic' World Trade Plunge Could Have Been Worse, Cushioned By Government Response
WTO Says ‘Historic’ World Trade Plunge Could Have Been Worse, Cushioned By Government Response
Tyler Durden
Wed, 06/24/2020 – 02:45The World Trade Organization (WTO) outlines, in a new report, that “rapid government responses helped temper the contraction” in the world trade and likely thwarted the worst-case scenario projected in April.
WTO is referring to massive fiscal stimulus deployed by governments, and the balance sheet of the G-6 central banks that has exploded, with the Fed’s total asset expected to double in 2020 amid an avalanche of money printing that has helped arrest the collapse in world trade.
The Geneva-based organization said the volume of merchandise trade contracted 3% YoY in the first quarter and plunged 18.5% in the second.
WTO’s previous outlook in April set out two growth models: an optimistic scenario in which world trade in 2020 would contract by 13%, and a pessimistic scenario in which trade would drop by 32%.
As things currently stand, the report said, “trade would only need to grow by 2.5% per quarter for the remainder of the year to meet the optimistic projection. However, looking ahead to 2021, adverse developments, including a second wave of COVID‑19 outbreaks, weaker than expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections.”
“The fall in trade we are now seeing is historically large – in fact, it would be the steepest on record. But there is an important silver lining here: it could have been much worse,” said Director‑General Roberto Azevedo.
“Policy decisions have been critical in softening the ongoing blow to output and trade, and they will continue to play an important role in determining the pace of economic recovery. For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction,” said Azevedo.
The report said the dark green line in Chart 1 could suggest a 5% to 20% rebound next year, which is in line with the optimistic scenario. But there are many uncertainties, including the second wave of Covid-19 outbreak and the effectiveness of fiscal and monetary policy (something we outlined here).
“For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction,” Azevedo said.
To sum up, the outlook for the global economy over the next several years remains highly uncertain – though unprecedented money printing has cushioned the global crash in trade – that doesn’t necessary mean a V-shaped recovery will be seen.
- NATO 2030: How To Make A Bad Idea Worse
NATO 2030: How To Make A Bad Idea Worse
Tyler Durden
Wed, 06/24/2020 – 02:00Authored by Matthew Ehret via The Strategic Culture Foundation,
Just when you thought the leaders of NATO could not push the limits of insanity any further, something like NATO 2030 is announced.
After helping blow up the Middle East and North Africa, dividing the Balkans into zones of war and tension, turning Ukraine upside down using armadas of neo Nazis, and encircling Russia with a ballistic missile shield, the leaders of this Cold War relic have decided that the best way to deal with instability of the world is… more NATO.
In a June 8th online event co-sponsored by the Atlantic Council, NATO Secretary General Jens Stoltenberg announced the launch of a planning project to reform NATO called NATO 2030. Stoltenberg told his audience that in order to deal with Russia and China’s strategic partnership which is transforming the global balance of power, “we must resist the temptation of national solutions and we must live up to our values: freedom, democracy and the rule of law. To do this, we must stay strong militarily, be more united politically and take a broader approach globally.”
In the mind of Stoltenberg, this means expanding NATO’s membership into the Pacific with a high priority on the absorption of Australia, New Zealand, Japan and South Korea into NATO’s dysfunctional family. It also means extending NATO’s jurisdiction beyond a military alliance to include a wider political and environmental dimension (the war on climate change is apparently just as serious as the war on terrorism and should thus be incorporated into NATO’s operating system).
Analyzing China’s intentions through the most Hobbesian dark age lens on the market, Stoltenberg stated “they are investing heavily in modern military capabilities, including missiles that can reach all NATO allied countries. They are coming closer to us in cyberspace. We see them in the Arctic, in Africa… and they are working more and more together with Russia.”
In spite of NATO’s Cold War thinking, Russia and China have continuously presented olive branches to the west over the years– offering to cooperate on such matters as counter-terrorism, space exploration, asteroid defense, and global infrastructure projects in the Arctic and broader Belt and Road Initiative. In all instances, these offers have been met with a nearly unanimous cold shoulder by the western military industrial complex ruling NATO and the Atlantic alliance.
The Engine of War Heats Up
As Stoltenberg spoke these words, the 49th Baltic Operations running from June 1-16th were underway as the largest NATO exercise in the Baltic Sea featuring “30 ships and submarines, and 30 aircraft, conducting air defence, anti-submarine warfare, maritime interdiction and mine countermeasure operations.” In response Moscow reinforced its armored forces facing Europe.
Meanwhile in China’s backyard, three aircraft carriers all arrived in the Pacific (the USS Theodore Roosevelt, USS Ronald Reagan and USS Nimitz) with a senate Armed Services Committee approval of $6 billion in funds for the Pacific Defense Initiative which Defense News stated will “send a strong signal to the Chinese Communist Party that America is deeply committed to defending our interests in the Indo-Pacific”. The committee also approved a U.S. Airforce operating location in the Indo-Pacific for F-35A jets in order to “prioritize the protection of the air bases that might be under attack from current or emerging cruise missiles and advanced hypersonic missiles, specifically from China.”
Another inflammatory precursor for confrontation came from a House Republican Study Committee report co-authored by Secretary of State Pompeo calling for sanctioning China’s leadership, listing Russia as a state sponsor of terror and authorizing the use of military force against anyone on a Foreign Terrorist Organization list. When one holds in mind that large sections of Iran’s Revolutionary Guard happen to be on this list, it is not hard to see how quickly nations doing business with Iran can be considered “state sponsors of terror”, justifying a use of military force from America.
With this level of explicit antagonism and duplicity, it is no wonder that China’s foreign ministry announced on June 10th that it would not participate in joint three-way arms talks between the USA and Russia. If America demonstrated a coherent intention to shift its foreign policy doctrine towards a genuine pro-cooperation perspective, then it is undoubtably the case that China would enthusiastically embrace such proposals. But until then, China is obviously unwilling to loose any part of its already small nuclear deterrent of 300 warheads (compared to Russia and the USA, who each own 6000).
The Resistance to the Warhawks
I have said it many times before, but there is currently not one but two opposing American military doctrines at war with each other and no assessment of American foreign policy is complete without a sensitivity to that fact.
On the one hand, there is the sociopathic doctrine which I outlined summarily above, but on the other hand, there exists a genuine intention to stop the “forever wars”, pull out of the Middle East, disengage with NATO and realign with a multipolar system of sovereign nation states.
This more positive America expressed itself in Trump’s June 7th counter-attack on former Secretary of Defense Gen. James Mattis who had fueled the American Maidan now unfolding by stating his belife that solutions can happen without the President. Trump had fired Mattis earlier over the Cold Warrior’s commitment to endless military enmeshment in Syria, Turkey, Afghanistan and Iraq. In this Oval Office interview, the President called out the Military industrial complex which Mattis represents saying “The military-industrial complex is unbelievably powerful… You have no idea. Some legit, and some non-legit.”
Another aspect of Trump’s resistance to the neo-cons running the Pentagon and CIA is reflected in the June 11 joint U.S.-Iraq statement after the Strategic Dialogues summit of American and Iraqi delegates which committed to a continued reduction of troops in Iraq stating:
“Over the coming months, the U.S. would continue reducing forces from Iraq and discuss with the government of Iraq the status of remaining forces as both countries turn their focus towards developing a bilateral security relationship based on strong mutual interests”.
This statement coincides with Trump’s May 2020 call to accelerate U.S. troop withdrawal from Afghanistan which has seen a fall from 12000 troops in February to under 9000 as of this writing.
Most enraging to the NATO-philes of London, Brussels and Washington was Trump’s surprising call to pull 9500 American troops out of Germany hours before Stoltenberg gave his loony NATO 2030 speech with Johann Wadephul (Deputy head of the CDU) saying “these plans demonstrate once again that the Trump administration neglects a central element of leadership: the involvement of alliance partners in the decision-making process”. In his next breath, Wadephul made his anti-Eurasian delusion transparent saying “Europe gains from the Alliance being unified. Only Russia and China gain from strife.”
Just a few months earlier, the President showed his disdain for the NATO bureaucracy by unilaterally pulling 3000 American military personnel out of the Trident Juncture exercise held annually every March.
In Defense of President Trump
In spite of all of his problems, Trump’s resistance to the dark age/neocon faction which has been running a virtually independent military-industrial-intelligence complex since FDR’s death in 1945 demonstrates a high degree of courage unseen in American presidents for many decades.
Most importantly, this flawed President represents a type of America which is genuinely compatible with the pro-nation state paradigm now being led by Russia and China.
Trump’s recent attempt to reform the G7 into a G11 (incorporating Russia, India, South Korea and Australia) is a nice step in that direction but his exclusion of China has made it an unworkable idea.
To solve this problem, American University in Moscow President Edward Lozansky stated in his recent Washington Times column that adding China to the list making it a G12 would be a saving grace to the idea and one of the best flanking maneuvers possible during this moment of crisis. Lozansky’s concept is so important that I wish to end with a larger citation from his article:
“Both Russia and China got the message a long time ago that they need to stay together to withstand the efforts to destroy them in sequence… The G-7 indeed is an obsolete group and it definitely needs a fresh blood. Therefore, a G-12 meeting in New York in late September during the annual meeting of the U.N. General Assembly would be a perfect place and timing since Mr. Trump had already announced that he is willing to hold a G-5 summit with the leaders of Russia, China, Britain and France — the five permanent members of the U.N. Security Council — to discuss nuclear security issues. China so far is reluctant to join these talks, arguing that its smaller nuclear force is defensive and poses no threat. However, for the discussion in the G-12 format Mr. Putin might be able to convince his pal Xi to accept Mr. Trump’s invitation. This would be a huge achievement for the world’s peace and at the same time allow Mr. Trump to score lots of political points not only from his electoral base but from undecided and even from his opponents who want to save their families from nuclear holocaust.”
Unless world citizens who genuinely wish to avoid the danger of a nuclear holocaust learn how to embrace the idea of a G-12, and let the NATO/Cold War paradigm rot in the obsolete trash bin of history where it rightfully belongs, then I think it is safe to say that the future will not be something to look forward to.
For the next installment, we will take a look at the British Imperial origins of NATO and the American deep state in order to help shed greater light on the nature of the “two Americas” which I noted above, have been at war with each other since 1776.
- F-35 Stealth Jets "Elephant Walk" In Japan Amid Rising Sino-US Trade Tensions
F-35 Stealth Jets “Elephant Walk” In Japan Amid Rising Sino-US Trade Tensions
Tyler Durden
Wed, 06/24/2020 – 01:00On the same day White House trade advisor Peter Navarro told Fox News the trade deal with China is “over” (and immediately, the White House reversed Navarro’s comments because of market gyrations) – a massive show off force, likely directed at China, took place Monday at a Japanese airbase involving stealth fighter jets.
Navarro’s comments suggest the phase one trade deal is trouble. It also signals tensions are rising between both countries over the origins of COVID-19 and China’s assertion of power over Hong Kong. At the moment, China is lagging significantly behind phase one targets it promised, and as we’ve noted, Chinese buyers ditched U.S. markets for Brazilian ones.
Now it’s hard to say if around the time Navarro made the comments that a fleet of warplanes conducting an “elephant walk” at the Misawa base in Japan was connected – but it certainly implies tensions are heating up.
Readers may recall the U.S. has built an “F-35 friends circle” in the Asia-Pacific region, mainly around China. So when an elephant walk and or military exercise is conducted in the area, it’s usually to stimulate war with China.
According to Misawa Air Base, F-35 stealth jets from the Japan Air Self-Defense (JASDF) joined the U.S. Air Force F-16s, MC-130Js, and U.S. Navy EA-18Gs, C-12 and P-8A in an elephant walk, which is an exercise that prepares a military base for an incoming attack. The objective is to have all fighters and bombers in the air within fifteen minutes.
Misawa officials took pictures of the elephant walk, conducted on June 22.
Earlier this year, an elephant walk was conducted with 52 Lockheed Martin F-35s at Hill Air Force base in Utah, which was around the time tensions exploded between the U.S. and Iran.
While it’s hard to say if the elephant walk in Japan, occurring on the same day as Navarro’s trade comments, are connected in any which way, one thing is certain, tensions between China and the U.S. are likely to rise through the summer.
- What Americans Fear Most In The JFK Assassination, Part 1
What Americans Fear Most In The JFK Assassination, Part 1
Tyler Durden
Wed, 06/24/2020 – 00:05Authored by Jacob Hornberger via The Future of Freedom Foundation,
One of the fascinating phenomena in the JFK assassination is the fear of some Americans to consider the possibility that the assassination was actually a regime-change operation carried out by the U.S. national-security establishment rather than simply a murder carried out by a supposed lone-nut assassin.
The mountain of evidence that has surfaced, especially since the 1990s, when the JFK Records Act mandated the release of top-secret assassination-related records within the national-security establishment, has been in the nature of circumstantial evidence, as compared to direct evidence. Thus, I can understand that someone who places little faith in the power of circumstantial evidence might study and review that evidence and decide to embrace the “lone-nut theory” of the case.
But many of the people who have embraced the lone-nut theory have never spent any time studying the evidence in the case and yet have embraced the lone-nut theory. Why? My hunch is that the reason is that they have a deep fear of being labeled a “conspiracy theorist,” which is the term the CIA many years ago advised its assets in the mainstream press to employ to discredit those who were questioning the official narrative in the case.
Like many others, I have studied the evidence in the case. After doing that, I concluded that the circumstantial evidence pointing toward a regime-change operation has reached critical mass. Based on that evidence, for me the Kennedy assassination is not a conspiracy theory but rather the fact of a national-security state regime-change operation, no different in principle than other regime-change operations, including through assassination, carried out by the U.S. national-security establishment, especially through the CIA.
Interestingly, there are those who have shown no reluctance to study the facts and circumstances surrounding foreign regime-change operations carried out by the CIA and the Pentagon. But when it comes to the Kennedy assassination, they run for the hills, exclaiming that they don’t want to be pulled down the “rabbit hole,” meaning that they don’t want to take any chances of being labeled a “conspiracy theorist.”
For those who have never delved into the Kennedy assassination but have interest in the matter, let me set forth just a few of the reasons that the circumstantial evidence points to a U.S. national-security state regime-change operation. Then, at the end of this article, I’ll point out some books and videos for those who wish to explore the matter more deeply.
I start out with a basic thesis: Lee Harvey Oswald was an intelligence agent for the U.S. deep state. Now, that thesis undoubtedly shocks people who have always believed in the lone-nut theory of the assassination. They just cannot imagine that Oswald could have really been working for the U.S. government at the time of the assassination.
Yet, when one examines the evidence in the case objectively, the lone-theory doesn’t make any sense. The only thesis that is consistent with the evidence and, well, common sense, is that Oswald was an intelligence agent.
Ask yourself: How many communist Marines have you ever encountered or even heard of? My hunch is none. Not one single communist Marine. Why would a communist join the Marines? Communists hate the U.S. Marine Corps. In fact, the U.S. Marine Corps hates communists. It kills communists. It tortures them. It invades communist countries. It bombs them. It destroys them.
What are the chances that the Marine Corps would permit an openly avowed communist to serve in its ranks? None! There is no such chance. And yet, here was Oswald, whose Marine friends were calling “Oswaldovitch,” being assigned to the Atsugi naval base in Japan, where the U.S. Air Force was basing its top-secret U-2 spy plane, one that it was using to secretly fly over the Soviet Union. Why would the Navy and the Air Force permit a self-avowed communist even near the U-2? Does that make any sense?
While Oswald was serving in the Marine Corps, he became fluent in the Russian language. How is that possible? How many people have you known who have become fluent in a foreign langue all on their own, especially when they have a full-time job? Even if they are able to study a foreign language from books, they have to practice conversing with people in that language to become proficient in speaking it. How did Oswald do that? There is but one reasonable possibility: Language lessons provided by U.S. military-suppled tutors.
After leaving the Marine Corps, Oswald traveled to the Soviet Union, walked into the U.S. embassy, renounced his citizenship, and stated that he intended to give any secrets he learned while serving in the military to the Soviet Union. Later, when he stated his desire to return to the United States, with a wife with family connections to Soviet intelligence, Oswald was given the red-carpet treatment on his return. No grand jury summons. No grand-jury indictment. No FBI interrogation. No congressional summons to testify.
Remember: This was at the height of the Cold War, when the U.S. national-security establishment was telling Americans that there was a worldwide communist conspiracy based in Moscow that was hell-bent on taking over the United States and the rest of the world. The U.S. had gone to war in Korea because of the supposed communist threat. They would do the same in Vietnam. They would target Cuba and Fidel Castro with invasion and assassination. They would pull off regime-change operations on both sides of the Kennedy assassination: Iran (1953), Guatemala (1954), Cuba (1960s), Congo (1963), and Chile (1973).
During the 1950s, they were targeting any American who had had any connections to communism. They were subpoenaing people to testify before Congress as to whether they had ever been members of the Communist Party. They were destroying people’s reputations and costing them their jobs. Remember the case of Dalton Trumbo and other Hollywood writers who were criminally prosecuted and incarcerated. Recall the Hollywood blacklist. Recall the Rosenbergs, who they executed for giving national-security state secrets to the Soviets. Think about Jane Fonda.
Indeed, if you want a modern-day version of how the U.S. national-security state treats suspected traitors and betrayers of its secrets, reflect on Julian Assange, Edward Snowden, and Chelsea Manning. That’s how we expect national-security state officials to behave toward those they consider traitors and betrayers of U.S. secrets.
Not so with Oswald. With him, we have what amounts to two separate parallel universes. One universe involves all the Cold War hoopla against communists. Another one is the one in which Oswald is sauntering across the world stage as one of America’s biggest self-proclaimed communists — a U.S. Marine communist — who isn’t touched by some congressional investigative committee, some federal grand jury, or some FBI agent. How is that possible?
Later, when Oswald ended up in Dallas, his friends were right-wingers, not left-wingers. He even got job at a photographic facility that developed top-secret photographs for the U.S. government. How is that possible? Later, when he ended up in New Orleans, he got hired by a private company that was owned by a fierce anti-communist right-winger. Why would he hire a supposed communist who supposedly had betrayed America by supposedly joining up with America’s avowed communist enemy, the Soviet Union, and to whom he had supposedly given U.S. national-security state secrets, just like Julian and Ethel Rosenberg had?
- USA Plunges To 10th Place In World Competitiveness Rankings
USA Plunges To 10th Place In World Competitiveness Rankings
Tyler Durden
Tue, 06/23/2020 – 23:45The decline of the American empire has been outlined to readers over the years.
A new report shows the US has stumbled into the new decade, losing a competitive economic edge that it had firmly retained in the post–World War II economic expansion.
For the second consecutive year, the US has been dethroned as the world’s most competitive economy, thanks partially to President Trump’s trade war. The US now ranks 10th (3rd in 2019), according to the Institute for Management Development’s (IMD) new report on the ranking of most competitive world economies.
“Trade wars have damaged both China and the USA’s economies, reversing their positive growth trajectories. China this year dropped to 20th position from 14th last year,” IMD said.
The annual rankings, now in their 32nd year, show Singapore, Denmark, Switzerland, the Netherlands, and Hong Kong as the top five most competitive economies.
While observing data on economies’ competitiveness – IMD noticed the strength of smaller ones.
“The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness. In part, these may be fed by the fact it is easy to find social consensus,” said Arturo Bris, director of the IMD World Competitiveness Center.
Singapore held the top spot for the second consecutive year, due mostly because of its strong trade and investment, and high emphasis on expanding education and technology infrastructure.
The report noted Denmark, ranked 2nd, was recognized for its robust economy, labor market, and health and education systems. It was said the Scandinavian country topped Europe in business efficiency.
Video: IMD’s breakdown of the results
Switzerland ranked third for its robust international trade that fuels its strong economic performance. The Central European country has increased investments in scientific infrastructure and health and education systems.
The UK ranked 19th on the list, which IMD said was mostly due to BREXIT turmoil. Canada ranked higher than the US, coming in 8th for its economic competitiveness.
Asia-Pacific, Latin America, and the Middle East were ranked mostly lower on the list.
As for the US – what made it so competitive over the years was booming trade with China – now gross Sino-US trade flows have plunged since the start of the trade war – America’s competitive economic edge is in collapse mode, lining up with IMD’s findings.
h/t Refinitiv Datastream/ Fathom Consulting Slumping gross Sino-US trade flows and waning competitive economic edge is a recipe for lower US stocks.
h/t Refinitiv Datastream/ Fathom Consulting America’s competitive economic edge will continue to slump as trade wars, pandemic, and social unrest have paralyzed the empire.
- Twitter Bans Trump's Favorite Meme-Maker As Election Heats Up
Twitter Bans Trump’s Favorite Meme-Maker As Election Heats Up
Tyler Durden
Tue, 06/23/2020 – 23:25Twitter has permanently suspended one of the most significant figures in political satire; Logan Cook, otherwise known as CarpeDonktum.
Cook makes memes – short clips which typically poke fun at Democrats, the MSM or the establishment, which President Trump has tweeted to his audience of 82 million followers on a regular basis.
On Tuesday, Twitter banned Cook – who said in a blog post that it was over a ‘the Toddler video that President Trump tweeted last week.” Cook received a DCMA takedown order, followed by a letter of suspension hours later.
“Per our copyright policy, we respond to valid copyright complaints sent to us by a copyright owner or their authorized representatives,” Twitter told the Daily Beast. “The account was permanently suspended for repeated violations of this policy.”
Cook explained on his blog:
“I have ALWAYS complied with DMCA takedown rules, and I have submitted counterclaims when necessary, but I have NEVER uploaded content that has been removed.
I have abided by the community guidlines, and followed the rules. It doesn’t matter.
I have been banned for being effective and they won’t even look me in the eye as they do it.”
Master meme-maker Carpe Donktum has an update over at Parler about Twitter’s non-transparent actions taken against him. https://t.co/QXteAYoCJP pic.twitter.com/Dc3FkehwSr
— Mollie (@MZHemingway) June 24, 2020
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The impact of Cook’s suspenion did not go unnoticed by The Federalist‘s Mollie Hemmingway, who considers it election interference.
Twitter ramps up 2020 election interference by banning masterful meme maker Carpe Donktum https://t.co/O8UbUEjj3e
— Mollie (@MZHemingway) June 24, 2020
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Why? Because Cook’s memes are hilarious, widely shared, and fire up conservatives.
The power of memes (a.k.a. ‘meme magic’)
Not only are memes funny, they invoke emotional responses without having to focus much of one’s attention – leaving them particularly effective when it comes to influencing people, particularly voters.
Memes, a term first used by Richard Dawkins in 1976 to mean easily transmissible cultural units, are essentially viral internet images containing short humorous text. Much like their animated brother, the GIF (graphic interchange format), memes are intended to be created quickly, shared widely, and received humorously.
…
When considering their hyper-popularity (a verified ‘Memes’ Facebook page has 15 million online likers), it is perhaps no surprise that researchers have noted a psychological, emotional facet to meme appeal. For example, Guadagno et al. (2013) found that online content which provokes strong affective responses was more likely to be shared. Therefore, it may be argued that there are much deeper psychosocial mechanisms underpinning our relationship with this seemingly benign media form.
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Burroughs (2013) states, in a discussion of meme usage in American politics, that memes can ‘serve to heighten spectacle’. In this sense, memes are culturally performative and therefore important psychological artefacts. –The Psychologist
Last Thursday Twitter added a “manipulated media” label to the ‘toddler video’ – which mocks CNN by humorously suggesting they would incite racial division by editing a video of a black toddler and a white toddler hugging, into a chase scene in which the white child is chasing the black one.
Watch it while you still can:
- Another Study Finds School Children Typically Don't Spread COVID-19 To Parents
Another Study Finds School Children Typically Don’t Spread COVID-19 To Parents
Tyler Durden
Tue, 06/23/2020 – 23:05The latest study of how COVID-19 manifests in schoolchildren suggests that children don’t play a major role in spreading the virus, according to a Bloomberg report.
Ever since a mysterious inflammatory syndrome first emerged in children infected by SARS-CoV-2, researchers around the world, but especially in the US and Europe (where the syndrome was most widely found), have been working to determine the nature of the connection between this syndrome and the virus.
Of course, there’s an important economic factor at play here as well: Before adults can be expected to return to work en masse, provisions must be made for schoolchildren, since childcare is prohibitively expensive for most families. Many colleges across the US have decided to resume classroom-based learning in the fall, even if students will abide by new COVID-19-sensitive social distancing guidelines. And while most expect elementary, middle and high school students to return to the classroom, most states have yet to make a formal decision.
Scientists at Institut Pasteur, a massive French research institute named after the scientist who invented the pasteurization process for milk, studied 1,340 people in Crepy-en-Valois, a town northeast of Paris that suffered an outbreak in February and March. The study included 510 students from six primary schools.
Among these students, researchers found three students who had contracted the virus. But in each example, it appears the kids didn’t pass the virus on to their parents, or teachers.
Scientists at Institut Pasteur studied 1,340 people in Crepy-en-Valois, a town northeast of Paris that suffered an outbreak in February and March, including 510 students from six primary schools. They found three probable cases among kids that didn’t lead to more infections among other pupils or teachers.
The study confirms that children appear to show fewer telltale symptoms than adults and be less contagious, providing a justification for school reopenings in countries from Denmark to Switzerland. The researchers found that 61% of the parents of infected kids had the coronavirus, compared with about 7% of parents of healthy ones, suggesting it was the parents who had infected their offspring rather than the other way around.
This small study is one of several suggesting that young children do not often spread the coronavirus. Though there has been at least one study showing the opposite.
But because of this small number of students studied, scientist believe they must study more schools like this one. So far, though, it appears a staggering 41% of the children who contracted the virus didn’t show any symptoms…
Understanding the pandemic and the new virus’s transmission patterns is key to determining which parts of society can reopen – or should be shuttered again in the event of a resurgence — and mitigate the outbreak’s impact on the economy. The data on kids has been contradictory so far, with some reports corroborating the Pasteur findings and at least one pointing the other way.
Epidemiologist Arnaud Fontanet and colleagues said more studies on schools were needed because of the small number of cases they were able to study. They found that an estimated 41% of the children infected showed no symptoms, compared with about 10% of adults.
…that compares to just 10% for adults.
- COVID-19 Will Accelerate March Of The Robots
COVID-19 Will Accelerate March Of The Robots
Tyler Durden
Tue, 06/23/2020 – 22:45Authored by Gordon Watts via The Asia Times,
Tech revolution threatens an unemployment crisis in China and developed world after gathering pace during pandemic
They have been compared to quantum leaps in humanity’s historic journey. But they are more like Grand Canyon-style jumps in our evolution.
During the past 200 years, technological revolutions have expanded the borders of globalization and have dragged millions of people out of poverty. Yet they have come at a price.
The Fourth Industrial Revolution will be no different.
Already the landscape is changing dramatically with China at the forefront of this brave, new world for some and a nightmare for others.
“China is using automation on a scale like no other country. From AI news anchors on [state-run television] to one-minute [health] clinics to robot-run factories, China is using artificial intelligence and robots to take over the entire spectrum of human capabilities,” Abishur Prakash, a geopolitical futurist at the Center for Innovating the Future, a strategy consulting firm, told Asia Times.
“This could transform politics in the country. It was city-jobs that drove urbanization in China. Now, however, if the blue-collar and white-collar jobs are both being automated, reverse urbanization may follow. This will create a new kind of economy for China, which in turn could change domestic politics, trade deals and foreign policy,” he said.
The “sheer scale” of Beijing’s ambitions are immense. Investment in science and technology research in the world’s second-largest economy was US$355.4 billion last year or 2.5% of GDP, official data revealed.
Only the United States spent more as China edged past Japan.
Moveover, funding looks certain to accelerate in 2020 with 3 trillion yuan, or $423 billion, earmarked for major projects in response to the Covid-19 pandemic.
Up to 17.5 trillion yuan, or $2.47 trillion, will be pumped into ramping up infrastructure spending in the high-tech sector during the next six years, the Shanghai Securities News reported in May.
Priority funding in the next 12 months will go to 5G base stations, EV charging outlets, big data centers, AI and the industrial internet, such as robotics.
Also, unlike previous rounds of traditional infrastructure investment on roads, bridges and high-speed rail networks, private companies will be heavily involved in the mix.
Still, the pace of change will generate a different set of problems, including the specter of unemployment.
“China has dealt with large-scale layoffs or economic downturns by creating a massive state-run construction force. But, now, the people that may lose their jobs to automation may be the educated, skilled class in cities like Shenzhen and Shanghai. What’s China’s plan for them?,” Prakash, the author of The Age of Killer Robots, said.
Since 2014, the nation’s automation industry has expanded by 28% with 650,000 robots going online in 2018.
Yet this has generated a backlash from the Chinese public. A study released to the media by Spanish university IE showed a rise in “robophobia” during the coronavirus crisis.
Before the pandemic infected more than nine million people worldwide, only 27% supported limited automation in China. That number has more than doubled to 59%, with the Chinese just behind the French as the most hostile to automation.
“The changing nature of work is generating fears about mass unemployment. These trends are straining the relationships among citizens, firms and governments across the globe,” the World Bank stated in a report, entitled the Changing Nature of Work, last year.
Even so, the benefits of the controversial Made in China 2025 digital program proved vital during the Covid-19 crisis.
Artificial intelligence, big data, cloud computing and 5G “effectively improved the efficiency of the country’s efforts” in tackling the epidemic.
“It [was crucial] to monitoring virus tracking, prevention, control and treatment, [as well as] resource allocation,“ Qi Xiaoxia, the director-general of the Cyberspace Administration of China’s Bureau of International Cooperation, said in a commentary published on the World Economic Forum website in April.
Even basic models of service robots appeared to play their role in delivering meals and cleaning hospital corridors.
“Admittedly, the acceleration of automation may reduce certain jobs on an individual basis. Some people may suffer, which is the inevitable cost of technological transition and advancement … still, new jobs will be created to replace those that have been lost,” Jon Yuan Jiang, an assistant researcher at the Queensland University of Technology in Australia, told Asia Times.
But concerns persist. In developed and developing economies, the fallout from the coronavirus catastrophe threatens to trigger economic pandemonium and ballooning unemployment across the globe.
The urban jobless numbers in China have been on the rise since the start of the year. For the upper echelons of the ruling Communist Party, unemployment is a notoriously sensitive subject.
Indeed, the Fourth Industrial Revolution risks adding to the upheaval.
“Already, it’s projected that 51 million jobs in Europe could disappear because of automation [with Covid-19 being a factor]. The point is, the appetite for automation is rising and it’s no longer limited to just entry-level jobs,” Prakash, of the Center for Innovating the Future, said.
“It’s no longer just about janitors or truck drivers or factory workers. Everyone could be on the chopping block because the pandemic has fundamentally changed how businesses operate. There are now huge geopolitical risks as automation takes off,” he added.
Possibly, a revolution against a revolution?
- China & India Agree To "Cooling" & Disengagement Along Contested Border
China & India Agree To “Cooling” & Disengagement Along Contested Border
Tyler Durden
Tue, 06/23/2020 – 22:25China has dismissed widespread Indian media claims that its side suffered 40 casualties during the June 15 night border clash which left 20 Indian soldiers dead as “fake news”. It has further condemned New Delhi giving its troops “freedom of action” to respond with deadly fire if under attack by PLA troops.
But despite the soaring tensions which many feared could see war break out along the disputed Ladakh border region, the two nuclear armed neighbors have agreed to deescalation and disengagement at the border.
Chinese Foreign Ministry spokesman Zhao Lijian confirmed at a news briefing on Tuesday that talks between the two sides’ top regional commanders resulted in a positive breakthrough. They “agreed to take necessary measures to promote a cooling of the situation,” Zhao said.
Chinese Foreign Ministry spokesman, via Global Times. “The holding of this meeting shows that both sides want to deal with their disagreement, manage the situation and de-escalate the situation through dialogue and consultations,” Zhao added.
The foreign ministry spokesman further described that they “exchanged frank and in-depth views” and “agreed to maintain dialogue and jointly committed to promoting peace and tranquility in the border areas.”
The Indian Army also assured that broader conflict along the Actual Line of Control (LAC) has been averted following last week’s most serious and deadliest clash in a half-century, with a statement reading: “Corps Commander level talks between India-China yesterday were held at Moldo in cordial, positive and constructive atmosphere,” according to the ANI news agency.
“There was mutual consensus to disengage. Modalities for disengagement from all friction areas in Eastern Ladakh were discussed and will be taken forward by both sides,” the Indian Army added.
Standoff at border, via Tibetan Review However, there are continued disruptions and worsening relations on other fronts, especially given Modi’s domestic base is clamoring for vengeance.
CNN reports:
Authorities in India are hitting pause on more than $600 million in deals with Chinese companies in the wake of a deadly border clash with China.
Officials in the western Indian state of Maharashtra said Monday that they were reviewing agreements with three Chinese companies as they seek clarity from the Indian government on how — or whether — to proceed.
Recall too that on Monday China’s state-run Global Times issued threats based on overwhelming PLA superiority, underscoring that if Indian troops carry firearms along the LAC and are given ‘freedom of action’ orders, then it will inevitably “turn into a military conflict” which is “not what most Chinese and Indian people wish to see,” according to the editorial.
- The COVID Shock To The Dollar
The COVID Shock To The Dollar
Tyler Durden
Tue, 06/23/2020 – 22:05Authored by Stephen Roach via Project Syndicate,
Pandemic time runs at warp speed. That’s true of the COVID-19 infection rate, as well as the unprecedented scientific efforts under way to find a vaccine. It is also true of transformational developments currently playing out in pandemic-affected economies. Just as a lockdown-induced recession brought global economic activity to a virtual standstill in a mere two months, hopes for a V-shaped recovery are premised on an equally quick reopening of shuttered economies.
It may not be so simple. A sudden stop – long associated with capital flight out of emerging markets – often exposes deep-rooted structural problems that can impair economic recovery.
It can also spark abrupt asset-price movements in response to the unmasking of long-simmering imbalances.
Such is the case for the pandemic-stricken US economy. The aggressive fiscal response to the COVID-19 shock is not without major consequences. Contrary to the widespread belief that budget deficits don’t matter because near-zero interest rates temper any increases in debt-servicing costs, in the end there is no “magic money” or free lunch. Domestic saving, already depressed, is headed deep into negative territory. This is likely to lead to a record current-account deficit and an outsize plunge in the value of the dollar.
No country can afford to squander its saving potential – ultimately, the seed-corn of long-term economic growth. That’s true even of the United States, where the laws of economics have often been ignored under the guise of “American exceptionalism.”
Alas, nothing is forever. The COVID-19 crisis is an especially tough blow for a country that has long been operating on a razor-thin margin of subpar saving.
Heading into the pandemic, America’s net domestic saving rate – the combined depreciation-adjusted saving of households, businesses, and the government sector – stood at just 1.4% of national income, falling back to the post-crisis low of late 2011. No need to worry, goes the conventional excuse – America never saves.
Think again. The net national saving rate averaged 7% over the 45-year period from 1960 to 2005. And during the 1960s, long recognized as the strongest period of productivity-led US economic growth in the post-World War II era, the net saving rate actually averaged 11.5%.
Expressing these calculations in net terms is no trivial adjustment. Although gross domestic saving in the first quarter of 2020, at 17.8% of national income, was also well below its 45-year norm of 21% from 1960 to 2005, the shortfall was not as severe as that captured by the net measure. That reflects another worrisome development: America’s rapidly aging and increasingly obsolete stock of productive capital.
That’s where the current account and the dollar come into play. Lacking in saving and wanting to invest and grow, the US typically borrows surplus saving from abroad, and runs chronic current-account deficits in order to attract the foreign capital. Thanks to the US dollar’s “exorbitant privilege” as the world’s dominant reserve currency, this borrowing is normally funded on extremely attractive terms, largely absent any interest-rate or exchange-rate concessions that might otherwise be needed to compensate foreign investors for risk.
That was then. In COVID time, there is no conventional wisdom.
The US Congress has moved with uncharacteristic speed to provide relief amid a record-setting economic free-fall. The Congressional Budget Office expects unprecedented federal budget deficits averaging 14% of GDP over 2020-21. And, notwithstanding contentious political debate, additional fiscal measures are quite likely. As a result, the net domestic saving rate should be pushed deep into negative territory. This has happened only once before: during and immediately after the 2008-09 global financial crisis, when net national saving averaged -1.8% of national income from the second quarter of 2008 to the second quarter of 2010, while federal budget deficits averaged 10% of GDP.
In the COVID-19 era, the net national saving rate could well plunge as low as -5% to -10% over the next 2-3 years. That means today’s saving-short US economy could well be headed for a significant partial liquidation of net saving.
With unprecedented pressure on domestic saving likely to magnify America’s need for surplus foreign capital, the current-account deficit should widen sharply. Since 1982, this broad measure of the external balance has recorded deficits averaging 2.7% of GDP; looking ahead, the previous record deficit of 6.3% of GDP in the fourth quarter of 2005 could be eclipsed. This raises one of the biggest questions of all: Will foreign investors demand concessions to provide the massive increment of foreign capital that America’s saving-short economy is about to require?
The answer depends critically on whether the US deserves to retain its exorbitant privilege. That is not a new debate. What is new is the COVID time warp: the verdict may be rendered sooner rather than later.
America is leading the charge into protectionism, deglobalization, and decoupling. Its share of world foreign-exchange reserves has fallen from a little over 70% in 2000 to a little less than 60% today. Its COVID-19 containment has been an abysmal failure. And its history of systemic racism and police violence has sparked a transformative wave of civil unrest. Against this background, especially when compared with other major economies, it seems reasonable to conclude that hyperextended saving and current-account imbalances will finally have actionable consequences for the dollar and/or US interest rates.
To the extent that the inflation response lags, and the Federal Reserve maintains its extraordinarily accommodative monetary-policy stance, the bulk of the concession should occur through the currency rather than interest rates. Hence, I foresee a 35% drop in the broad dollar index over the next 2-3 years.
[ZH: Is that what gold is pricing?]
Shocking as that sounds, such a seemingly outsize drop in the dollar is not without historical precedent. The dollar’s real effective exchange rate fell by 33% between 1970 and 1978, by 33% from 1985 to 1988, and by 28% over the 2002-11 interval. COVID-19 may have spread from China, but the COVID currency shock looks like it will be made in America.
- Pentagon Release First Images Of Stealth Jets Dropping Inert Nuclear Bombs
Pentagon Release First Images Of Stealth Jets Dropping Inert Nuclear Bombs
Tyler Durden
Tue, 06/23/2020 – 21:45As the Pentagon builds an “F-35 friends circle” in the Asia-Pacific region,” mainly around China – new images have surfaced of stealth jets conducting mock nuclear attacks with inert bombs in the California desert.
The Aviationist reports the F-35 Joint Program Office has released a series of pictures showing various drop tests of inert nuclear bombs between 2019 and 2020. The tests were conducted with all variants of the fifth-generation F-35 Lightning II at Edwards Air Force Base, California.
“The tests were carried out: the first separation test with AF-1 flown by Jason Shulze was conducted on Jun. 27, 2019; sixth separation test with AF-1 (pilot unspecified) was carried out on Nov. 7, 2019; first separation test from AF-6 flown by Major Chris’ Beast’ Taylor was conducted on Nov. 25, 2019. Separation test #6 with AF-1 was carried out with F-35 AF-01 flown by Major Rachael “Banshee” Winiecki on Feb. 6, 2020. A more recent test with AF-6 was carried out on Apr. 2, 2020 (no additional detail can be gathered about this test),” The Aviationist said.
An F-35 dropping an inert nuclear bomb on June 27, 2019.
Underneath view of the F-35 after inert nuclear bomb drop on November 7, 2019.
An F-35 dropping an inert nuclear bomb on February 6, 2020.
An F-35 dropping an inert nuclear bomb on April 2, 2020.
The tests were completed as all variants of the F-35 have yet to receive their nuclear certification, expected in early 2023.
In 2018, we noted the Pentagon was busy upgrading its B61 nuclear gravity bombs, a move that would increase the lifespan of these weapons.
“The upgraded, B61-12 LEP will replace all of the bomb’s nuclear and non‐nuclear components for another two decades, and improve the bomb’s safety, effectiveness, and security. This life extension program will address all age-related issues of the weapon, and enhance its reliability, field maintenance, safety, and use control.”
More of less, the Pentagon is preparing stealth fighter jets for the next military conflict with nuclear bombs.
- Where's The Omelet? Black Lives Matter Chicago Answers George Orwell's Question
Where’s The Omelet? Black Lives Matter Chicago Answers George Orwell’s Question
Tyler Durden
Tue, 06/23/2020 – 21:25Authored by Mark Glennon via Wirepoints.org,
“You can’t make an omelet without breaking eggs.” In George Orwell’s day — the 1930s — that’s what supporters of violent, Marxist revolution often said in justification.
Orwell, the stunningly prescient author of Nineteen Eighty-Four, had a simple response: “Where’s the omelet?”
An honest look at the omelet offered by Black Lives Matter is long overdue, particularly for BLM Chicago.
What do they want? Do its supporters and apologists know?
Where’s their omelet?
BLM co-founder Patrisse Cullers
In an interview about Black Lives Matter, its national co-founder Patrisse Cullors said, “We actually do have an ideological frame. “Myself and Alicia [Alicia Garza, another co-founder] in particular are trained organizers. We are trained Marxists.”
Chicago BLMers are likewise trained.
Watch the video meeting they hosted last week titled, “Black Abolitionist Huddle: On How We Win Police Abolition.” You will see that many of them are very fluent with Marxist rhetoric, particularly the modern version focused on toppling “late stage capitalism.”
On Twitter, BLM Chicago said this, which you could imagine coming from a reincarnated, woke, twenty-something Vladimir Lenin:
Stay in the streets! The system is throwing every diversionary and de-mobilizing tactic at us. We are fighting to end policing and prisons as a system which necessitates fighting white supremacist capitalist heteropatriarchial imperialism. Vet your comrades and stay focused.
That BLM Chicago video and its other statements should also put to bed lingering spin that its demand to defund police actually means just reimagining how policing works and partial redirection of resources.
They mean abolish the police. That’s their word for it.
Abolish prisons, too. Here’s their separate post on that.
Don’t stop there. The entire Department of Corrections must end. On Twitter, BLM Chicago said,
We say #DefundThePolice and #DefundDepOfCorrections because they work in tandem. The rise of mass incarceration occurred alongside the rise of militarized and mass policing. They must be abolished as a system.
What they don’t say is perhaps more important than what they say. There’s no condemnation of violence. With BLM graffiti covering so much of Chicago, there’s no doubt many members and supporters participated in the vandalism.
BLM’s evolution with Marxism was described nicely by The Federalist in 2016, which showed how parts of BLM’s platform read like they were lifted straight from the pages of Karl Marx’s Communist Manifesto. BLM faded in popularity around then and politicians began to shy away from mentioning it, mostly because of its controversial positions like that.
BLM nevertheless became mainstream just in the past couple months. It’s easy to find BLM yard signs and seemingly reasonable people who have marched with BLMers or carried its signs.
I know some of the apologists and supporters, and you may, too. Some marched. Some are friends. They are peaceful and principled just like most protesters were, genuinely fed up with racial inequality and police misconduct.
But they, too, must answer Orwell’s question. Where’s the omelet?
More precisely, what is the omelet they think BLM hopes to serve up? Why the indifference to support for a violent, Marxist revolution and the anarchy of abolishing police and prisons?
The least charitable explanations are that they are just foolish or uninformed – unaware of what BLM is about.
Others understand fully and approve. Those explanations do account for some of BLM’s support.
A more charitable explanation probably covers most who embrace BLM, which is that they seek only to make a statement about police misconduct and racial justice, and they might point to some of BLM’s other deeds, like food banks.
“Black Lives Matter” is also just a phrase, they might say might say; never mind the organization. And the organization has many chapters that aren’t all singing the same tune. They might point to BLM’s own Facebook page that says, “This group is one of many iterations of #BlackLivesMatter: a movement, a rebellion, an affirmation, an intervention… and so much more.”
But that murkiness about phrasing, organization and diffused power is precisely what makes BLM dangerous. It allows peaceful protesters to be used as pawns who carry their signs and draw law enforcement away from rioters. It sucks in the well-intentioned but gullible, especially the young. Most importantly, its disbursed leadership and the vague distinction from an ambiguous phrase are the perfect cocktail for intoxicating society into the stupor essential for violent revolutions to succeed: chaos.
Let’s put that more bluntly: Well-intentioned BLM supporters are getting had. The majority of those either using the BLM phrase or supporting the organization are being used on behalf of a violent, chaotic insurrection.
They are also supporting, deliberately or not, the nonviolent but vicious mob now running unchallenged across America.
Though twice as many Americans and a majority of black Americans prefer the All Lives Matter phrase over Black Lives Matter, saying so can get you fired. Grant Napear, a 32-year veteran TV voice of the Sacramento Kings, lost his job simply for saying, “All Lives Matter, every single one.”
Similar stories now fill the news.
The poll therefore only highlights the size of the potential purge by the mob.
Toppled statue of George Washington
Tear down a statue of George Washington or Thomas Jefferson and spray it with BLM? No problem. The police stand aside. But questioning BLM will put your career and reputation at risk.
Don’t expect BLM supporters to answer Orwell’s question about the omelet they think they’ll get from breaking some eggs because they see questions, too, as racist.
If you want Orwell’s answer, here it is, from Nineteen Eighty-Four:
Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped.
One thing BLM says should be universally accepted, though for different reasons. “Silence is violence,” they say.
Indeed it is.
If the two-thirds of Americans who believe all lives matter continue to remain silent, expect more violence from many causes.
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Racism will surge thanks to passions deliberately inflamed by identity politics.
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Poverty will soar as businesses flee Chicago and other big cities.
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Shrunken budgets and emptied prisons will overload police departments.
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The Ferguson effect will embolden thugs, initially, but bad apples in the police will later respond with a vengeance.
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And trained Marxists will pursue their dream of violent insurrection.
There’s your omelet.
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- Royal Caribbean Cruises Suspends Bermuda Line Through October
Royal Caribbean Cruises Suspends Bermuda Line Through October
Tyler Durden
Tue, 06/23/2020 – 21:05Royal Caribbean Cruises Ltd. announced Tuesday morning that it has decided to extend the suspension of most sailings through September 15. The announcement said Chinese sails are suspended through the end of July, and sailings on its Bermuda line won’t reopen until October 31.
This comes days after Cruise Lines International Association (CLIA) said most cruise lines would voluntarily extend the suspension of operations from US ports until September 15.
With the risks of a second coronavirus wave emerging in the US, Royal Caribbean appears to be delaying the Bermuda line about 45 days after CLIA’s September 15 extension. If a full-blown virus pandemic is seen by fall, it would suggest the Bermuda segment could be offline for the remainder of the year.
Royal Caribbean shares have jumped nearly 300% since the low (19.25) on March 18 to a high of 75.48 on June 8. Price has since slid 33% to the 52 handle on Tuesday – as it becomes evident, investors got way ahead of fundamentals.
Since Barstool Sports founder Dave Portnoy, the biggest cruise line bull on social media, told his 1.5 followers “cruise ships are poised for take-off again” – share price in Royal Caribbean initially popped on his tweet but has subsided to pre-tweet levels.
Royal Caribbean has been a top favorite stock among Robinhood traders – account holders went from 4,000 at the start of March to nearly 240,000 on June 22.
With no vaccine and the emergence of confirmed virus cases, the cruise industry will remain dead this year – any more extensions for the industry could be devastating, especially for equity holders, and likely result in a reverse of share price for many cruise ship stocks, which would leave a generation of millennial traders as bagholders.
- Five Places That Should Boom From The Coming COVID Migration
Five Places That Should Boom From The Coming COVID Migration
Tyler Durden
Tue, 06/23/2020 – 20:45Authored by Simon Black via SovereignMan.com,
Today’s the day.
Across the Land of the Free, and much of the world, local governments are finally starting to allow businesses to re-open and employees to come back to the office.
Offices in New York City opened this morning for the first time in months, after Comrade Mayor Bill de Blasio’s politburo finally approved the policy.
The Republic of CHAZ, formerly known as Seattle, was approved for ‘Phase II reopening’ on Friday, both by state health authorities as well as local warlords.
Other major cities and anarcho-communist enclaves around the world have been slowly re-opening over the past few weeks. And so far one key trend is obvious:
A lot of people aren’t showing up.
New York City’s major Wall Street banks, for example, are still keeping most people at home.
Goldman Sachs only expects 10% of its workforce back in the office, and those are all ‘volunteers’. Morgan Stanley has less than 10% of its workforce nationwide at the office.
Citigroup expects 5% of its workforce back in the office over the next few weeks, and JP Morgan isn’t requiring anyone to return to work right now.
Companies in a variety of other industries have taken a similar approach.
Microsoft, Disney, Twitter, Mastercard, Facebook, Nationwide Insurance, Google, Amazon, Square, CNN, Slack, Sales Force, PayPal, Shopify, and Apple are among countless others who have told employees they can keep working from home.
And many of those changes are permanent; Facebook’s Mark Zuckerberg, for example, has said that potentially half of his company’s work force could end up working remotely forever.
Twitter and Square have told employees they can work from home “indefinitely”. Nationwide Insurance announced a permanent transition to working from home.
The CEO of banking giant Barclays called crowded offices with thousands of workers “a thing of the past”. Morgan Stanley’s CEO expects his bank to need “a lot less real estate” in the future. Disney’s chairman said his company will reopen “with less office space.”
This is a pretty obvious trend– there will continue to be a LOT of people working from home.
And if you can work from home, you can work just about anywhere within reason.
We talked about this briefly last week– I told you that I expect a massive trend in migration from high tax, high cost urban places to lower tax, lower cost suburban and rural places.
And the reasons are obvious.
Plenty of people have been miserably cooped up in shoebox-sized apartments for the past three months due to local lockdown restrictions. And now they’re finally realizing– ‘if I don’t need to go to the office anymore, I don’t need to be in this city anymore…’
Plus they’re wisely thinking about the future.
Sure, maybe medical researchers find the miracle drug to treat Covid-19. Or they develop a vaccine that Bill Gates will personally inject into each and every one of us at gunpoint.
But then what happens if Covid-20 hits? Or an antibiotic resistant superbug is unleashed upon the world?
Or people simply decide they don’t want to raise their children in a place where arson, vandalism, and looting are considered acts of heroism?
This is not a passing trend. It’s a way of life.
It’s unlikely that cities will become ghost towns… but people who understand what’s happening are really starting to consider new places to live.
The arithmetic is quite simple. Someone can trade a $5,000/month hamster cage in Manhattan for a 4,000+ square foot home with water views and a spacious yard in sunny Florida, and still have plenty of extra money left over… with the added benefit that Florida has no state income tax.
This logic makes five places very interesting for prospective migrants.
Texas, Florida, Nevada, and Tennessee are four states with warm weather, plenty of wide-open spaces, cheap living costs, access to big city amenities, and no state income tax.
We’ll talk about this a lot more in future letters because there’s a LOT to digest– from the decline of office property (WeWork has already started skipping some rent payments) to the ridiculously low mortgage rates available to investors.
But before we get to that, there’s a fifth place worth mentioning– and that’s right here in Puerto Rico.
Lately there’s been a surge of prospective residents who have arrived here over the past few weeks looking at property.
I live in a fairly high end, luxury resort, and most of the residents are investors and entrepreneurs. One of my neighbors, for example, is a prominent hedge fund manager, another is an acclaimed tech entrepreneur, and another is a former pro-athlete who built a highly successful sports business.
I’m fairly close with the executives in my development, and they told me there’s been a flood of people from the mainland (mostly from New York) who are trying to get out of Manhattan as quickly as possible.
And they’re looking very hard at Puerto Rico.
That’s because, in addition to the great weather and time zone (Puerto Rico is currently in the same time zone as New York), the tax incentives are unbeatable.
New Yorkers who move to Florida no longer have to pay city or state income tax. And that can easily save 10%.
But as we’ve discussed many times in the past, bona fide residents of Puerto Rico who meet certain conditions are exempt from US federal income tax as well.
Puerto Rico’s tax incentives can reduce your business profits tax to just 4%, and individual tax to ZERO… plus you can live on the beach and never be cold again.
* * *
On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.
- Maduro "Prepared" To Meet Trump After US President Said "Not Opposed" To Direct Talks
Maduro “Prepared” To Meet Trump After US President Said “Not Opposed” To Direct Talks
Tyler Durden
Tue, 06/23/2020 – 20:25In a dramatic opening nobody expected, President Trump told Axios in an Oval Office interview last Friday that he would “maybe think about” a face-to-face meeting with Venezuela’s Nicolás Maduro to discuss to future of the embattled Latin American country.
“I would maybe think about that… Maduro would like to meet. And I’m never opposed to meetings — you know, rarely opposed to meetings,” Trump said when pressed on the matter. “I always say, you lose very little with meetings. But at this moment, I’ve turned them down,” he added.
Maduro responded Monday, saying he’s “prepared” to talk to Trump. “When the time comes I’m prepared to speak respectfully with President Donald Trump,” Maduro told state media.
This set off a political firestorm, with the Biden campaign seizing to moment to portray Trump as “weak” on Venezuela, targeting the Miami area with political ads to that effect.
“News of President Donald Trump’s willingness to meet some day with embattled Venezuelan ruler Nicolás Maduro is coming to the AM radio dial in Miami. And to Facebook, Instagram and YouTube,” Miami Herald reports Tuesday.
“We’ve known for some time that Donald Trump is no friend to the Venezuelan people fighting for human rights and democracy in their country, and now there can be no doubt,” the Biden campaign announced in a statement. “This is deeply personal to all those in South Florida who have fled to the United States from the brutal Maduro regime, and this November, Floridians are going to hold Trump accountable for his behavior toward the Venezuelan people and elect Joe Biden.”
Perhaps backtracking on the Axios interview, or at least sensing he needed to clarify based on the growing Biden campaign pressure in Florida, Trump tweeted Monday in follow-up: “My Admin has always stood on the side of FREEDOM and LIBERTY and against the oppressive Maduro regime! I would only meet with Maduro to discuss one thing: a peaceful exit from power!“
Unlike the radical left, I will ALWAYS stand against socialism and with the people of Venezuela. My Admin has always stood on the side of FREEDOM and LIBERTY and against the oppressive Maduro regime! I would only meet with Maduro to discuss one thing: a peaceful exit from power!
— Donald J. Trump (@realDonaldTrump) June 22, 2020
https://platform.twitter.com/widgets.js
Of course, the admin does indeed have a record of covert coup attempts targeting the socialist country, not to mention bestowing official recognition on opposition leader Juan Guaido as ‘Interim President’.
Trump has also long discussed a naval blockade on the country to ensure no sanctions busting, however, his admirals and generals have reportedly balked, citing the practical difficulty of such an effort, not to mention the potential of getting dragged into a new war in America’s ‘backyard’ with little in the way of defined end goals.
But given the controversy over the possibility of a Trump-Maduro meeting, a remote scenario at this point, nothing is likely to materialize ahead of November, given the political sensitivity especially in the key battleground state of Florida.
- Senator Accuses Google Of Posing "Tremendous Threat To Free And Fair Press" As Antitrust Probe Gets Going
Senator Accuses Google Of Posing “Tremendous Threat To Free And Fair Press” As Antitrust Probe Gets Going
Tyler Durden
Tue, 06/23/2020 – 20:10As part of an escalating probe into anti-competitive and antitrust practices by Google, Reuters reports that DOJ officials and some state attorneys general are set to meet on Friday to discuss next steps. The federal government and nearly all state attorneys general have opened investigations into allegations that the company which once upon a time said its motto was “don’t be evil” has broken antitrust laws.
The federal probe focuses on search bias, advertising and management of Google’s Android operating system, according to the report.
Separately, in a letter sent Sunday to U.S. Attorney General Bill Barr, Tennessee Senator Marsha Blackburn on Tuesday said that Google and parent company, Alphabet, pose a “threat to a free and fair press in America.”
Addressing the Attorney General, Blackburn urges him “to thoroughly scrutinize how the company’s anticompetitive practices could lead to the crippling of journalistic freedom. I also ask that your probe examine abuses in both the online advertising and online search markets, and to take enforcement action swiftly before further economic harm results.“
The rest of the story is well known to everyone on this site:
Google leverages the power of its ad platform GoogleAds to harm consumers and competitors alike. Last week, Google took actions towards demonetizing two conservative news media organizations based on the sites’ third-party user comments. A NBC article incorrectly reported that The Federalist and ZeroHedge were being banned from the GoogleAds platform for publishing racist articles, and a Google representative claimed that the punishment was for the publication of “derogatory content that promotes hatred, intolerance, violence or discrimination based on race.”1 In reality, the takedown pretext was based on user comments and not on news content. While The Federalist was allowed to remain on GoogleAds after suspending the user comment function, ZeroHedge’s entire site was blocked. Google knows it holds clients’ livelihoods in the palm of its hands, as publishers have no meaningful choice to generate ad revenue. Google has no qualms falsely labeling news publishers as racist as a convenient way to turn off their sites and scare writers from debating controversial ideas
Blackburn praised the DOJ for issuing a proposal last week to “roll back liability shields” for Google and other online platforms under Section 230 of the Communications Decency Act. These reforms alone, however, won’t stop “Google’s encroachment on competitors and grip on public discourse,” Blackburn warned.
Google’s behavior could lead to the crippling of our free press.
Today I asked AG Barr @TheJusticeDept to examine abuses of online advertising & search markets, and to take action before further economic harm results. pic.twitter.com/TRJy9ZeaNT
— Sen. Marsha Blackburn (@MarshaBlackburn) June 22, 2020
“Google must be held accountable for such anticompetitive conduct. Both the American free market and the openness of our democracy are presently at stake,” she concluded her letter. “As the Department decides which actions to pursue, I urge mounting a full investigation that examines the company’s control over vast sectors of the Internet economy, from online advertising to online search.”
Her full letter is below (pdf link):
- Every Federal Reserve Board Member Is A Multi-Millionaire
Every Federal Reserve Board Member Is A Multi-Millionaire
Tyler Durden
Tue, 06/23/2020 – 20:05There are five Senate-confirmed members of the Federal Reserve. It won’t surprise you to know that all five of them are millionaires. Here’s a list, with links to their financial disclosure forms. (If you have some time to poke around and find anything interesting, let me know or put it in the comments.)
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The Chair, Jay Powell, 67, is worth between $20 million and $55 million, the richest Fed Chair in history.
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Randal Quarles, 62, is worth between $24.7 million and $125 million.
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Richard H. Clarida, 63, is worth between $9 million and $39 million.
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Michelle Bowman, 49, is worth between $2 million and $11 million.
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Lael Brainaird, 58, is worth between $3 million and $11 million.
I’ve gone over the financial disclosure forms of all five of these members, and they are all invested in various forms of indexes. Some are invested in private equity funds, Blackrock iShares, or various other assets referencing financial corporations. These strike me as a violation of Section 10, part 5 of the Federal Reserve Act, which says:
No member of the Board of Governors of the Federal Reserve System shall be an officer or director of any bank, banking institution, trust company, or Federal Reserve bank or hold stock in any bank, banking institution, or trust company;
It’s been decades since anyone took conflicts of interest seriously, and I suspect that the Fed has lawyers who can weasel their way into ensuring that Fed board members get to invest in the financial services industry without violating this law. But the statute is there for a reason, which is that the Fed was created in 1913 to take power from Wall Street banks, not to place them on a publicly sanctioned monetary throne. (The original House passed version of the Federal Reserve Act had the Secretary of Agriculture as a Fed Governor, because farmers were the main labor force and borrowing group in the economy back then.)
There’s a more fundamental problem with the arrangement of having an all-millionaire Fed board, aside from any pecuniary gain that might result from all members of the Fed having public positions in which their policy decisions affect their portfolios in similar ways. The Fed is supposed to manage lending and borrowing conditions, but the only people represented among decision-makers are lenders, as opposed to a balance of lenders and borrowers.
America is full of people with credit card debt, student debt, auto debt and medical debt, people who have had trouble getting jobs, or people with bad credit, or entrepreneurs who can’t get loans to build their businesses. Young people. Old people. Middle-aged people, of different races. Yet the Fed board is composed of those with graduate degrees and high net worths, most of whom are in their late 50s or early 60s in terms of age.
In other words, based on their asset ownership and educational credentials alone, no one on the Fed is in touch with the world in which most Americans live. My analysis actually understates the problem, because there are members of the key policy committee at the Fed, known as the Federal Open Markets Committee, that aren’t even appointed by the President and confirmed by the Senate, but are hired by regional bankers to run Fed branches. (I’m not kidding. It was actually a brief flashpoint during the debate over post-financial crisis legislation, whether bankers could continue to hire their own regulators. Barney Frank’s compromise was that they could.)
This lack of representation has serious consequences. In 2017, I reported on how key Fed policymakers mocked unemployed Americans behind closed doors, laughing at and making jokes about them as lazy drug addicts. People didn’t want jobs, according to several officials, one of whom based his commentary on what his wife had told him about her charity work.
These rigid members had to debate Fed board member Sarah Bloom Raskin, who had gone, undercover, to a job fair, to see how employment conditions were on the ground. She was shocked at the poor quality of job offerings, despite what appeared to be a solid economy. Raskin’s undercover attendance at a job fair caused a bit of a stir, because it was a violation of decorum; Fed members simply don’t do such things. Her view, unsurprisingly, was that the Fed should see unemployment as a function of the bad economy, not poor work ethic. I don’t know if anyone on the FOMC has gone to a job fair since Raskin did. But the stack of old millionaires on the board suggests there’s a serious imbalance in terms of representation; there are more private equity barons on the Fed board than people with student debt.
One of the main policy problems in America is that political elites seem to over-prioritize the stock market. It’s not just an inequality problem, but even broader than that. For instance, no one in power really took the Coronavirus seriously until the market started tanking in March. One of the main reasons for this is that policymaking increasingly flows through the Federal Reserve, and the people who run the place have social networks and portfolios that are dependent on how Wall Street is doing, not how the rest of America is.
Anyway, one of my dream pieces of legislation would be a law that reserves half of the slots on the Federal Reserve board for non-millionaires. I know such a law seems gimmicky, but representation really does matter. At least one person on the Fed board should know what it’s like to be harassed by a debt collector, instead of owning financial assets whose value depends on the people doing the harassing.
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- China Launches Final Beidou Satellite To Challenge America's GPS
China Launches Final Beidou Satellite To Challenge America’s GPS
Tyler Durden
Tue, 06/23/2020 – 19:45China, on Tuesday, successfully launched the final satellite in its BeiDou-3 navigation system, further cementing its ability to ditch the use of the US government-owned Global Positioning System (GPS).
State broadcaster CCTV tweeted a video of the launch from the Xichang Satellite Launch Center, in southwestern Sichuan province, showed a Long March-3B carrier rocket in the distance blasting off from a pad with a payload ontop.
China announced that the launch of the last #satellite of #BeiDou Navigation Satellite System (BDS) has succeeded after the Long March-3B carrier rocket sent it to its designated orbit.https://t.co/uzyBnnNA95 https://t.co/FN5fH2OCmW pic.twitter.com/A5AB0U6iMD
— CCTV+ (@CCTV_Plus) June 23, 2020
https://platform.twitter.com/widgets.js
The launch of the Beidou-3GEO3 satellite is a $10 billion project comprised of 35 satellites and provides a geolocation system designed to rival GPS. China began construction of its global navigation system in the early 1990s for transportation, marine, and military vehicles.
“I think the Beidou-3 system being operational is a big event,” Jonathan McDowell, an astronomer at the Harvard-Smithsonian Center for Astrophysics, told AFP.
“This is a big investment from China and makes China independent of US and European systems,” McDowell said.
Tens of millions of smartphones to drones to guided farm equipment to vessels to automated cars to even missiles can now use the new location service.
Chinese state media said 120 countries, including many along the Belt and Road Initiative, are using Beidou’s location service.
The launch of the final satellite, along with the completion of the geolocation system to revival GPS, comes at a time when tensions between Beijing and Washington are increasing over the pandemic, trade, and Hong Kong.
- Could COVID-19 Cause A Boom In Coal Power?
Could COVID-19 Cause A Boom In Coal Power?
Tyler Durden
Tue, 06/23/2020 – 19:25-
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
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The delay of new natural gas facilities means that many countries, such as Vietnam, will have to rely on coal-generated power to make up the shortfall.
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The case study of Vietnam shows that these infrastructure delays will also lead to an increase in LNG imports.
The global energy industry downturn at the hands of Covid-19 has not only hurt immediate revenues, but is also affecting national infrastructure and energy policy planning.
A Rystad Energy analysis shows that gas resources around the world will see development delays, with the construction of planned regasification facilities also at risk. Coal may benefit as a result.
The case of Vietnam is a good example of how a country with its own rich gas resources will fail to meet domestic production expectations, requiring an increase in liquefied natural gas (LNG) imports instead. Planned regasification facilities also risk delays due to the downturn, leaving the use of coal as the only financially viable option to meet growing power demand.
Vietnam’s strong GDP growth – about 6 percent to 7 percent per year – demands a growing amount of energy resources. With a hunger to satisfy the country’s stable growth, Vietnam expects its power generation capacity to reach 125 to 130 GW by 2030 from the current 54 GW of capacity. In 2019, 33 percent of the country’s power mix was met with gas and the rest was fueled by renewables and coal.
Even if non-gas sources meet their respective targets, there will still be significant gas demand as gas-fired power generation capacity is expected to grow from 7.2 GW at present, to 15 GW by 2025 and 19 GW by 2030.
Before the Covid-19 pandemic, Rystad Energy had forecasted that Vietnam’s domestic gas output would reach 10 billion cubic meters (Bcm) by 2025. Of this, around 60 percent of total gas produced was expected to come from new developments. Our updated outlook shows a much different picture, with the pandemic crisis and low oil prices postponing more than 200 Bcm of Vietnam’s undeveloped natural gas resources.
Regardless of the present environment, the country is already facing declining domestic gas production. Nam Con Son Gas accounted for approximately 30 percent of the country’s total gas production in 2019, and has seen an average year-over-year decline of 8 percent since 2010. Similarly, gas production from other gas projects has seen 11 percent to 40 percent y/y decline between 2011 and 2019.
Of the 180 Bcm of gas resources discovered in the last 10 years only the Sao Vang and Dai Nguyet fields have approved field development plans, as the FID process has proven a long and arduous road. In the past decade only 11 percent of projects have been able to secure funding and the right to proceed with drilling and the development of new resources.
“Although Vietnam greenfield spending was expected to triple in 2021, with investments surpassing $1.8 billion, the present dual-crisis of low oil prices and Covid-19 has affected the capital spend ability of major stakeholders, creating a huge obstacle for monetizing existing available resources,“ says Rystad Energy’s senior analyst Debika Chakraborty.
As a result, Vietnam will only produce 7 Bcm of gas in 2025, rather than the expected 10 Bcm, creating a 9 Bcm gap between domestic production and the 16 Bcm of expected domestic demand. Vietnam’s goal to produce 80 percent of power generation with gas in the next 15 years now seems even less likely.
In order to avoid reverting back to heavy coal imports, Vietnam will likely begin increasing its LNG imports as early as 2022. Even so, importing sufficient LNG volumes will be difficult.
There are currently four LNG terminals in the project pipeline – Thi Vai LNG, Son My LNG, Tien Giang LNG Projects, and South West LNG – which together will have a combined capacity of 10 million tonnes per annum by 2025. However, the terminals, which are being constructed primarily in southern Vietnam, will only reach 1 million tpa import capacity by 2023 with the start-up of Phase 1 of the Thi Vai terminal. This will only marginally fulfill the demand-supply gap.
Given this, any delays in the other planned regasification projects will put Vietnam’s goal at risk, a potential outcome that seems realistic in today’s volatile market conditions.
Thus, to ensure a stable and affordable power supply, Vietnam will likely have to increase coal imports, making it nearly impossible for the country to meet its goal and reduce greenhouse gas emissions by 20-30 percent by 2030.
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