- The Nobel Peace Prize Is A Sick Joke
The Nobel Peace Prize Is A Sick Joke
Authored by Ben Barbour via Off-Guardian.org,
The Nobel Peace Prize was founded in 1901 by Alfred Nobel, an arms manufacturer. His family factory first gained notoriety for producing weapons for the Crimean War of 1853-1856. Alfred Nobel invented dynamite and various other powerful explosives. These explosives were used to devastate people in conflicts such as the Spanish-American War.
After Nobel’s brother died, because of a journalistic error, the public believed that Alfred Nobel had died. In his obituary, he was portrayed as an amoral businessman who made millions of dollars off of the deaths of others. His critics declared that “the merchant of death is dead” and that Alfred Nobel “became rich by finding ways to kill more people faster than ever before.”
According to Live Science, this discovery shocked Nobel, and to improve his legacy, “one year before he died in 1896, Nobel signed his last will and testament, which set aside the majority of his vast estate to establish the five Nobel Prizes, including one awarded for the pursuit of peace.” This may very well have been a genuine act, but it is important to draw parallels between the origin of the award and its not so peaceful recipients. Here are three of the Nobel Peace Prize winners that turned out to be war criminals.
HENRY KISSINGER
Henry Kissinger won the award in 1973 for his “efforts” to conclude the Vietnam War. What a joke. In 1968, Kissinger helped tank President Johnson’s peace talks on behalf of the Nixon campaign for political gain. Kissinger helped orchestrate the secret bombing of Cambodia. These bombing operations were known as Operation Menu and Operation Freedom Deal.
The carpet bombing of Cambodia led to the deaths of 10,000s, if not 100,000s, of Cambodian civilians. The total death count has been estimated to be as high as 500,000 (most estimates range between 150,000-300,000 deaths). The vast majority of these deaths are considered to be civilians because of the indiscriminate nature of the carpet bombing. These bombings also destabilized Cambodia and allowed for the rise of the genocidal ruler, Pol-Pot. The bombing campaign was so gratuitous that it made Congress pass the War Powers Resolution in 1973, in an attempt to curb the bombing campaign.
With all of that being said, Kissinger still won the award for his role in the Paris Peace Accords. The peace talks began in 1968, the same year that Kissinger undermined the process to win an election for Nixon. After the agreement was signed in January 1973, it lasted less than two months before full-scale war broke out again in March 1973.
After winning the award, Henry Kissinger then proceeded to indirectly back Pol Pot’s genocide in Cambodia. This was done primarily as a way to put pressure on the former North Vietnamese Army. Pol-Pot’s genocide killed between 1.5-2 million people (20%-25% of Cambodia’s population).
Henry Kissinger’s crimes are not limited to Vietnam. He has a long bloody history in Latin America as well. Kissinger was a major proponent of Operation Condor. The highly secretive US-backed campaign enabled South American dictators to kill an estimated 60,000 to 80,000 people. It also led to political imprisonments of over 400,000 people. Transcripts of telephone conversations reveal that after President Allende’s election in 1970, Kissinger began plotting a coup with CIA director Richard Helm. After the 1973 coup in Chile, Kissinger, as Secretary of State, formalized close ties between Pinochet and the United States.
For years to come, Kissinger proceeded to have close ties with the Chilean dictator, Augusto Pinochet, who killed 1000s of his political opponents and imprisoned and tortured 10,000s more. Pinochet popularized death flights: a practice where people’s stomachs were cut open before they were tossed out of planes into the ocean.
Kissinger also backed Argentina’s military dictatorship. He was buddy-buddy with Jorge Videla, a dictator who disappeared an estimated 30,000 political dissidents. Videla also tortured political opponents and their families at secret concentration camps. Kissinger encouraged all of this brutality and praised the dictatorship for stamping out “terrorism.”
Henry Kissinger’s war crimes are far too numerous to neatly fit into one article. For a better understanding of his many war crimes that I left out, I recommend reading The Trail of Henry Kissinger.
BARACK OBAMA
In 2009, Barack Obama was awarded the Nobel Peace Prize for his “extraordinary efforts to strengthen international diplomacy and cooperation between people.” Before digging into Obama’s war crimes, I would like to add a few caveats. Obama is not exactly like Kissinger.
On the 2008 campaign trail, Obama did claim that he would meet with adversaries without preconditions. Furthermore, he followed through on this promise in two major ways. He successfully negotiated the Iran Deal and lifted the embargo on Cuba. These are not accomplishments that should be brushed aside. That being said, Obama’s diplomatic achievements are overshadowed by his imperialist failures. I also blame most of Obama’s failures on a lack of conviction in his values and not on any Machiavellian schemes. Most of Obama’s bad foreign policy decisions can be traced back to him getting rolled by people in the military industrial complex establishment like his CIA director John O. Brennan.
Barack Obama’s most reprehensible policy was his support of the Saudi Arabian-fueled genocide in Yemen. Obama authorized mid-air refueling to refuel Saudi bombers on average twice per day and he set up a Joint Planning Cell to give Saudi intelligence and logistical support to bomb Yemen.
Obama also approved 10s of billions in arms sales to Saudi Arabia that were used to devastate Yemen’s infrastructure and throw the country into a mass famine.
In 2016 alone, Obama’s policies led to the deaths of 63,000 Yemeni children. They died from preventable causes overwhelmingly linked to malnutrition. These deaths were caused by the Saudi bombing campaign and the de-facto blockade of humanitarian aid.
For example, Saudi Arabia, with US backing, bombed the cranes at the port of Hodeidah in August 2015. 70% of all humanitarian assistance to Yemen is channeled through Hodeidah. Bombing the cranes of the major port in this area is a war crime.
In fact, humanitarian aid groups warned that the US-backed August 2015 bombings would lead to mass child death in Yemen. The Obama administration’s support and aid of these siege warfare tactics was an abhorrent moral failure. It is highly unlikely that the war in Yemen would have even been possible without US support. Neither Saudi Arabia or the UAE had the ability to wage a sustained bombing campaign without outside support from a major imperialist power like the United States.
Barack Obama also authorized Operation Timber Sycamore, the CIA train-and-equip program in Syria. The multi-billion-dollar program armed and trained fighters to topple Assad. I personally believe that the Syrian conflict is not black and white. There is a lot of blame to go around. In my opinion, both pro-Assad and anti-Assad writers do not tell the entire complex story. Over half a dozen countries helped fuel the proxy war for different reasons, and Assad himself is not simply a victim of Western imperialism.
Those caveats aside, it is very clear that Timber Sycamore was a terrible idea that led to textbook mutual escalation that broke open the Syrian conflict further and might well be the reason that 100,000s more Syrians died. Billions of dollars were poured into “vetted” rebel groups. Many of these groups turned out to be Salafi jihadist groups and Muslim Brotherhood-linked groups that carried out ethnic murder and various other war crimes.
Among these groups that received either training or weapons were Ahrar al Sham, Jaysh al Islam, and Nour al-Din al-Zenki, all of whom have been accused of war crimes as per Amnesty International. The massive delivery of BGM-71 TOWs via Timber Sycamore is also sometimes cited (in my opinion correctly) as the policy that caused Russia to intervene in Syria. This is the aforementioned textbook case of mutual escalation.
Obama also set up a worldwide drone program that Noam Chomsky called “the most extreme terrorist campaign of modern times.” A study done in Afghanistan over a six-month period found that 90% of people killed in US drone strikes were not the intended targets. The Bureau of Investigative Journalism is one resource that has documented the high civilian casualty rate that occurred under Obama’s drone program (and continued and oftentimes increased under Trump’s administration).
AUNG SAN SUU KYI
Aung San Suu Kyi won the Nobel Peace Prize in 1991 for “her nonviolent struggle for democracy and human rights.” She is currently the State Counsellor (equivalent of prime minister) of Myanmar. State Counsellor Suu Kyi just oversaw one of the largest violent ethnic cleansing projects of the 21st century. It turns out that she fought for human rights and democracy…unless you are a Rohingya Muslim.
The crackdown on the Rohingya that Suu Kyi oversaw led to a conservative death toll of 10,000 Rohingya. The Myanmar military burned children alive and raped 1000s of Rohingya women. Since 2015, over 900,000 Rohingya have had to flee from Myanmar, mostly into neighboring Bangladesh.
There have been claims that the ethnic cleansing project may have been a response to violent Rohingya extremist groups that operated in the Rakhine State area of Myanmar. I find this to be plausible given the history of oppression that Rohingya faced and their subsequent insurrections dating back over a half a century.
However, this certainly does not excuse hacking Rohingya civilians to death with machetes (similar to what the Hutus did to the Tutsis in the Rwandan genocide)
State Counsellor Suu Kyi denied that an ethnic cleansing project was taking place and she backed the military crackdown. She gave cover for the war criminals in her military by stating “there have been allegations and counter-allegations…We have to listen to all of them.”
Suu Kyi proceeded to be the figurehead that attacked the International Criminal Court investigations into Myanmar’s ethnic cleansing project as “not in accordance with international law.” She proceeded to run interference for her military’s war crimes at the UN.
To be clear, as I alluded to above, not all Rohingya are innocent in the conflict. There are credible reports that tie some of the more extremist groups in Rakhine State to outside Saudi funding. But it is a false equivalency used by ethnic cleansing apologists to conflate all the Rohingya in Myanmar with Al Qaeda. Buddhist nationalists used the (likely) correct allegation that worldwide terrorism sponsor Saudi Arabia was funding a couple of Rohingya groups as an excuse to ethnically cleanse an entire population that is mostly peaceful.
CONCLUSION
It’s very simple. The Nobel Peace Prize is just like most other awards. Sometimes its distributors get it right and sometimes they get it wrong. The people that win awards do not win them based off of objective score cards about morality. They win these awards based off of media narratives.
When the Nobel Peace Prize awarded Martin Luther King Jr. with the award, they got it right. When they awarded Henry Kissinger with the award, they exposed themselves to be clowns of the highest order. Do not take awards like the Nobel Peace Prize seriously. They are popularity contests, where oftentimes those that are popular are actually in favor of abhorrent policies.
Tyler Durden
Wed, 02/26/2020 – 00:05 - America's Newest Most Powerful Submarine Has A Stealth Problem
America’s Newest Most Powerful Submarine Has A Stealth Problem
The Navy’s newest fast-attack submarine was recently spotted with structural damage to its stealth coating after returning from its first deployment, which brings into question the manufacturing process of the shipbuilder, reported Forbes.
The USS Colorado (SSN 788), a nuclear-powered US Navy Virginia-class attack submarine, was recently photographed with large sections of its stealth coating, known as anechoic coating, missing on its starboard side. The layer is an outer skin, consisting of a sonar-absorbing material that makes the vessel virtually undetectable.
Colorado was launched on March 17, 2018, and this is one of America’s newest and most powerful submarines, already experiencing issues with its outer stealth coating that could make it susceptible to detection by enemy forces.
The vessel recently returned from deployment in harsh northern waters, traveling approximately 39,000 nautical miles.
Forbes notes that the US, British, and Russian navies have all had similar problems with stealth skin breaking off during deployments.
However, Colorado experienced structural damage to its stealth coating on its first deployment, opening up questions surrounding the shipbuilder’s manufacturing process.
The Trump administration has plowed nearly $2 trillion into the military, and the Navy still can’t figure out a reliable stealth skin for its most advanced nuclear-powered submarines.
At some point, all this unproductive war spending will bankrupt America. The latest evidence above shows the amount of waste the administration is spending on the military for machines that fall apart in the first deployment.
Tyler Durden
Tue, 02/25/2020 – 23:45 - Ron Paul Blasts Trump's Betrayal Of Julian Assange
Ron Paul Blasts Trump’s Betrayal Of Julian Assange
Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,
One thing we’ve learned from the Trump Presidency is that the “deep state” is not just some crazy conspiracy theory. For the past three years we’ve seen that deep state launch plot after plot to overturn the election.
It all started with former CIA director John Brennan’s phony “Intelligence Assessment” of Russian involvement in the 2016 election. It was claimed that all 17 US intelligence agencies agreed that Putin put Trump in office, but we found out later that the report was cooked up by a handful of Brennan’s hand-picked agents.
Via Reuters/The Independent Donald Trump upset the Washington apple cart as presidential candidate and in so doing he set elements of the deep state in motion against him.
One of the things candidate Donald Trump did to paint a deep state target on his back was his repeated praise of Wikileaks, the pro-transparency media organization headed up by Australian journalist Julian Assange. More than 100 times candidate Trump said “I love Wikileaks” on the campaign trail.
Trump loved it when Wikileaks exposed the criminality of Hillary Clinton and the Democratic Party, as it cheated to deprive Bernie Sanders of the Democratic Party nomination. Wikileaks’ release of the DNC emails exposed the deep corruption at the heart of US politics, and as a candidate Trump loved the transparency.
Then Trump got elected.
The real tragedy of the Trump presidency is nowhere better demonstrated than in Trump’s 180 degree turn away from Wikileaks and its founder Julian Assange. “I know nothing about Wikileaks,” he said as president. “It’s really not my thing.”
Donald Trump is trying to “make an example” of Julian Assange, the WikiLeaks founder’s defense team argued Monday at the start of his extradition hearing https://t.co/wVgjWyl9y1
— CNN International (@cnni) February 24, 2020
https://platform.twitter.com/widgets.js
US pressure and bribes to the Ecuadorian government ended Assange’s asylum and his seven years in a room at the Ecuadorian embassy in London. After his dramatic arrest by London’s Metropolitan Police last April, he has been effectively tortured in British jails at the behest of the US deep state.
Starting Monday the 24th of February, Assange faces an extradition hearing in a UK courthouse. The Trump Administration – led by a man who praised Assange’s work – seeks a show trial of Assange worthy of the worst of the Soviet era. The US is seeking a 175 year prison sentence.
The Trump Administration argues that the Australian Assange should be tried and convicted of espionage against a country of which he is not a citizen. At the same time the Trump Administration argues that the First Amendment does not apply to Assange because he is not an American citizen! So Assange is subject to US law when it comes to publishing information embarrassing to the US deep state but he is not subject to the law of the land – the US Constitution – which protects all journalists and is the backbone of our system of government.
It is ironic that a President Trump who has been victim of so much deep state meddling has done the deep state’s bidding when it comes to Assange and Wikileaks. President Trump should preempt the inevitable US show trial of Assange by granting the journalist blanket pardon under the First Amendment of the United States Constitution.
The deep state Trump is serving by persecuting Assange is the same deep state that continues to plot Trump’s own ouster. Free Assange!
Tyler Durden
Tue, 02/25/2020 – 23:25 - Secretive Cult Linked To Coronavirus Outbreak In South Korea Held Meetings In Wuhan
Secretive Cult Linked To Coronavirus Outbreak In South Korea Held Meetings In Wuhan
Following reports that a strange Christian cult might be behind the outbreak in Daegu that kickstarted South Korea’s COVID-19 crisis, readers around the world have been curious to learn more details about the Shincheonji Church of Jesus, the small but surprisingly extensive church that follows a man named Lee Man-hee who claims to be the second coming of Jesus Christ.
Americans will recognize this as a similar concept to the Mormon theology. In South Korea, it’s one of several high-profile Christian cults with a doomsday-oriented philosophy (the leader of the Shincheonji will allegedly take thousands of followers with him to heaven when the world ends).
But in China, a cult like this is extremely illegal. Yet, somehow, in a state that’s constitutionally athiest, cults like this survive and sometimes flourish as it’s one of the few options that ordinary people have to do something genuinely subversive.
Churches like Shincheonji survive in a sort of tense standoff with the government, with scrutiny coming in waves. Typically, any kind of high profile attention would be bad for the church because it would rouse the authorities. In which case, the story that we’re about to share will likely be very, very bad for the church. But unfortunately for them the cat is already out of the bag.
he South China Morning Post has learned that the Shincheonji Church of Jesus has a branch in Wuhan, the Chinese city at the epicenter of the COVID-19 outbreak that is rocking the world right now.
And the paper has it on good authority that the church’s ~200 members in the city, most of whom are now in quarantine outside Wuhan, continued meeting even after the outbreak started to pick up steam.
One alleged member, who spoke under condition of anonymity, said in the beginning, nobody took the virus seriously – because authorities said it wasn’t serious.
“Rumours about a virus began to circulate in November but no one took them seriously,” said one member, a 28-year-old kindergarten teacher.
“I was in Wuhan in December when our church suspended all gatherings as soon as we learned about [the coronavirus],” said the woman, who declined to be named because of the sensitivity of the matter.
As of Tuesday evening in the US, there were 977 confirmed cases in South Korea, the highest number outside China, as well as 11 deaths. Of the 84 new cases reported on Tuesday, more than half were reported in Daegu.
A pastor in Hubei province who spoke with SCMP said that Shincheonji church members were especially dedicated, and probably continued their missions to recruit during the outbreak.
Another alleged member of the church, identified only as a kingergarten teacher in Wuhan, said she was sure the church in Wuhan had nothing to do with the outbreaks in South Korea.
The Wuhan kindergarten teacher said she was confident that the recent mass outbreaks in South Korea were not linked to Shincheonji church members from the city.
“I don’t think the virus came from us because none of our brothers and sisters in Wuhan have been infected. I don’t know about members in other places but at least we are clean. None of us have reported sick,” she said.
“There are so many Chinese travelling to South Korea, it’s quite unfair to pin [the disease] on us.”
However, she can’t prove this.
She sidestepped questions on whether church members had travelled from Wuhan to South Korea after the outbreak.
A spokesman for the church told SCMP that the group has had troubles with the Chinese authorities before, and that they would do anything to avoid any undue scrutiny connected to the virus, which they stressed had nothing to do with the church.
The teacher said that in 2018 the Wuhan group’s “holy temple” in Hankou district had been raided by police “who branded us a cult,” but members continued to worship in small groups.
“We are aware of all the negative reporting out there after the outbreak in South Korea, but we do not want to defend ourselves in public because that will create trouble with the government,” she said. “We just want to get through the crisis first.”
We wonder if Chinese authorities will see things the same way?
Tyler Durden
Tue, 02/25/2020 – 23:05 - What Will Americans Do If The Democrats Steal It From Sanders Again?
What Will Americans Do If The Democrats Steal It From Sanders Again?
Authored by John Eskow via Counterpunch.org,
“If Hillary gave up one of her balls and gave it to Obama, he’d have two.”
–James Carville
“Well, you know, James Carville is well-known for spouting off his mouth without always knowing what he’s talking about. And I intend to stay focused on fighting for the American people because what they don’t need is 20 more years of performance art on television. And that’s what James Carville and a lot of those folks are expert at … a lot of talk and not getting things done for the American people.”
–Barack Obama
This is what they’ve got? James freaking Carville?
Yes, twelve years after he mismanaged Hillary Clinton’s campaign into a thoroughly delightful but stunningly unlikely defeat, James freaking Carville is the best footsoldier that MSNBC can muster up in the tireless (and tiresome) war they are fighting against Bernie Sanders, against the will of the voters, and against any chance of progressive change in our lifetimes.
I have no idea how—-or even if—-James Carville is still alive. He seems to be permanently coated in the death-spray of a female praying mantis, some corrosive fluid that’s permeated his brain and turns him more bitter by the millisecond; as you watch him writhe around in his seat among the standard MSBNC crew of failed Democratic Party apparatchiks, Chris Matthews-type mental cases, and ex-CIA bosses with weak-ass gravitas, he seems even more disturbed than the rest of the panel; it seems like he’s about to start consuming his own flesh, live, on national TV.
(Now, I think I speak for a sizable portion of the American public, of all political stripes, on this one: I wish James Carville hadn’t forced me to consider the issue of Hillary Clinton’s balls. It’s, um, distasteful. But when you delve into Carville’s quotes, you discover that they’re nearly ALL distasteful. While proudly fighting to break that glass ceiling and elect the first female president, for example, he said of Pamela Jones—-one of the women sexually assaulted by Bill Clinton—-“this is what you get when you drag a $100 bill through a trailer park.” The guy seems to have some deep psychosexual issues.)
The fact that MSBNC is already so desperate to kill the Sanders’ candidacy in its cradle that they’re willing to exhume poor James Carville, dress him up in his least filthy rugby shirt, stick a baseball cap over his skull to keep the children from shrieking, and prop him up to babble at Joy Reid is one more signal that the fix is in. As if we needed it: for months, MSNBC hacks have been saying that Sanders is a Russian plant, an idiot, someone only “racist liberal whites” and “misfit black girls” could like, and-—when all else fails, simply a guy (Jew?) who “makes my flesh crawl.”
Lets’ spare ourselves months of these subtle, rapier-like rhetorical thrusts and cut, as they say, to the chase: the Democratic Party, with James Carville serving as just one of their low-rent Paul Reveres, is screaming out a warning: it doesn’t matter if Bernie Sanders sweeps all, or most, of the remaining primaries, as he seems certain to do. It doesn’t matter what the plurality of Democrats actually wants: their hopes, their passions, their dreams mean nothing.
They’re simply not going to let him win.
Bloomberg, Biden, god help us Klobuchar, the reanimated corpse of Hubert Humphrey: God knows what human form the Party will assume, but it won’t be Bernie Sanders.
So I find myself wondering how those voters will respond to the brazen theft that we’re about to witness. “What happens to a dream deferred?” asked the poet Langston Hughes. How will the young people of America—-the idealistic anti-Carvilles among us-—react on that day, when they see the last pretense of American democracy stripped away to reveal the huge and reeking meat factory that’s owned and operated by the Mike Bloombergs of this world? What about the older ones among us, lying dormant in cynicism for decades, who’ve dared to awaken to at least a flicker of hope?
Will this blatant death-blow to democracy send us, at last, into the streets? Will we finally rain hell down on these monsters?
“Maybe it just sags, like a heavy load,” wrote Hughes, speaking of that dream deferred.
And that would be the most heartbreaking of outcomes…the outcome that James Carville, and Hillary Clinton, and Chris Matthews, and Joy Reid, and the CIA, and Wall Street, are all calmly expecting, as they lie back, smiling in the absolute certitude that they’re always right…
“Or does it explode?”
Tyler Durden
Tue, 02/25/2020 – 22:45 - Hong Kong Embraces Helicopter Money – Govt Gives Every Adult Citizen HK$10,000
Hong Kong Embraces Helicopter Money – Govt Gives Every Adult Citizen HK$10,000
Hong Kong just went full monetary-policy retard.
In a desperate effort to “do something” about the economic collapse that the region is suffering…
Hong Kong’s Financial Secretary Paul Chan Mo-po is set to unveil a HK120 billion relief deal which includes ‘helicopter money’ – giving every Hong Kong permanent resident over the age of 18 a cash handout of HK$10,000 (around US$1,300) to, reportedly, ease the burden on individuals and companies.
As SCMP reports, Chan has been under intense pressure from lawmakers to dose out a heavier aid to help the city ride out of the economic slump – battered by the coronavirus epidemic and months of anti-government protests, sparked by the now-withdrawn extradition bill.
Hong Kong is suffering an unprecedented slump in consumption, with retail sales having collapsed…
And as we detailed recently, Sun Hung Kai Properties, which is among Hong Kong’s largest mall owners, said on Wednesday it would reduce February rent by up to 50% for most of its tenants, in an effort to stabilize economy and protect employment.
Earlier this month, KPMG urged the Hong Kong government to unleash the helicopter money:
“The Hong Kong government should avoid the temptation to increase taxes or cut expenditures at a time when the city should in fact protect and even step up its domestic support programs,” said John Timpany, partner and head of tax in Hong Kong at KPMG China.
KPMG went on to propose a series of short and long-term spending measures, including:
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Giving out HK$10,000 electronic consumption vouchers to permanent residents age 18 and older to promote spending at local businesses.
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Tax relief measures for local businesses such as deferred payments and partial waivers of provisional tax.
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Extending rent subsidies for Hong Kong Science Park, Cyberport and other public institutions for six to 12 months.
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Support to working parents as well as allowance on rental expenses for residences.
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Boost Hong Kong’s long-term competitiveness by adopting bolder tax incentives and lower rates to attract overseas business.
“The reserves are meant to prepare Hong Kong for rainy days, and we should use it timely and wisely to weather the storm we are in now,” said Alice Leung, a partner for corporate tax advisory at KPMG China.
But, the money-drop was first suggested back in December, when the the pro-business Liberal Party proposed that the Hong Kong government should give cash or vouchers to each adult permanent resident in order to stimulate local consumption.
Last Friday, pan-democrats tabled a non-binding motion in Legco urging the government to include a HK$10,000 cash handout in its HK$30 billion aid package.
The motion was voted down by Chow and other pro-government lawmakers who said it would delay passage of the funding application for the package.
And as recently as Sunday, Chan said in a blog post:
“The government’s resources are finite, it is impossible for this budget to completely satisfy demands from everyone.”
But, it seems Chan was able to see past that ‘finite-ness’ and the virus scare was just the right crisis not to waste and will dip into the government’s large fiscal reserves of about HK$1.1 trillion to help the city ride out the economic slump.
The handout will cost HK$71 billion and benefit around 7 million people:
“I have to emphasise that, although the cash payout scheme involves a huge sum of public money, it is an exceptional measure taken in light of the current unique circumstances and will not, therefore, impose a burden on our long-term fiscal position.”
Notably, Bloomberg’s Iain Marlow points out that Chan noted he needs to get the approval of the Legislative Council for the “exceptional” cash handout.
Given that LegCo has been paralyzed as a result of opposition filibustering, I wonder whether it will be delayed or stopped – or whether the pro-democracy camp in Hong Kong will think standing in the way of a cash handout at this time would be political suicide.
However, Chan says Hong Kong’s economic growth this year will be between negative 1.5 per cent and positive 0.5 per cent.
“It is hard to be optimistic on this year,” Chan says.
If the city’s economy contracts this year, it would mean gross domestic product has shrunk two years in a row, something which has not happened since Hong Kong’s return to Chinese rule in 1997.
So Hong Kong is about to unleash the mother of all stagflations on its people – who were already on the brink of massive social unrest before the virus forced lockdowns. Supply chains have collapsed, therefore there is no supply of goods or services, but demand is about to soar (thanks to free money drops from the government)…What happens to prices we wonder?
Tyler Durden
Tue, 02/25/2020 – 22:23 -
- The Real Meaning Of Red Scare 3.0
The Real Meaning Of Red Scare 3.0
Authored by Nicholas Klein via Counterpunch.org,
The US corporate media, who had such a long run as relative monopolizers of truth, have been discrediting themselves in serial fashion since 9/11. Their lapdoggery to the Bush regime backfired on them during the WMD lie operation and the resulting war of aggression. Then came their participation in the fraudulent business reporting leading up to the 2007-2009 Wall Street crash, and their big lies afterward that “no one could have imagined.” The next big rupture arrived in 2015-2016, their million-minutes spent on preemptive coronations of Trump as one candidate and Clinton as the other, and their responsibility for the unexpected result, which they have tried ever since to blame daily on a vague, ever-present “Russia.”
In the last few years, it is true that a few million mostly well-meaning people have partaken in the fandom and breaking-news rituals of the Extended Maddowverse. A similar number have bought into the sorry fantasies of Murdochworld, in which a heroic manly Trump is always about to drain the swamp that spawned him. These groups are like the devoted audiences of Game of Thrones or Star Wars, but smaller. Of course it’s a far more serious matter, because they don’t distinguish between their favorite shows and reality, and they are politically influential people, relatively speaking. A third minority, meanwhile, also small if growing, reject both sides of the #Russiagate coin.
Meanwhile 90-95% of everyone else in this country just aren’t following it, don’t know, don’t care. The QAnon Volk call them sheeple, and the committed Hamiltonian liberals of the Russia-Ukrainegate priesthood want to condemn these vulgar Americans for their supposed toleration of Trump’s constitutional outrages. (The latter are the ones who assured that toleration, when they cheered on a ridiculously narrow impeachment, one bound to lose and based on the least atrocious of Trump’s many crimes, and proclaimed that “all roads lead to Russia.”)
But it’s okay. It is okay that most working people are worried about work and wages and health care and debt, and bills and university and maybe ending the endless wars, and don’t have a fucking clue who Oleg Deripaska or Lev Parnas are. Those people have their priorities straight. Or, at least, their priorities are set more by the realities of having to get by and make a living, and perhaps just a little bit less by flickering shadows on a cave wall.
In short, the more the corporate media and the mercenary-intellectual complexes (of private “think tanks” and “analysts”) continue to act openly as adjuncts of the alphabet-agencies and assert the hegemony of the new #Russiagate creed (or its flipside, on Fox and Co), the less they are believed.
The more exposed they are.
This is a big story: the decline of the corporate media’s power to persuade, an upheaval in what Guy Debord described as the Society of the Spectacle. It is why these outlets have become so fervent in condemning social media, as if people sharing bullshit on Facebook — problematic as it can be, although it should be noted that most of this bullshit is also corporate media product — is somehow inherently more pernicious than the activities of the cable news networks and the pronouncements of their “unnamed sources” at the blood-drenched State Department, Pentagon and natsec agencies.
The corporate media have effectively joined the campaigns calling for Internet censorship. I don’t know if that will work, given the confluence of crises, the way all the inevitable disasters of capitalism, its wars and its ecocides might allow for sudden new repressive measures. But the corporate media’s credibility keeps setting new lows, and they keep grasping for the same increasingly blunted instrument of blaming the All-American shitshow on Russia. This week, apparently, Russia is why Sanders is winning.
Tyler Durden
Tue, 02/25/2020 – 22:05 - Mapping Coronavirus In The Middle East: 9 Countries Hit As Alarm Raised Over Vulnerable Refugee Camps
Mapping Coronavirus In The Middle East: 9 Countries Hit As Alarm Raised Over Vulnerable Refugee Camps
Unprepared countries across the Middle East are scrambling to respond as they’ve begun recording more and more coronavirus cases.
While official government figures across the region likely fall short of the true number — for example hard hit Iran may have already seen 50 deaths according to one lawmaker in the city of Qom despite the Health Ministry denying this high figure and confirming only 12 deaths to date — it’s deeply alarming that Covid-19 has been confirmed in multiple corners of the Middle East, from Egypt to the Gulf to Iran.
Notice also that the United Arab Emirates now has at least 13 confirmed cases, in a worrisome sign in could hit the gulf region hard, given also it’s a major international transport hub straddling east Asia and the West.
The WHO is especially concerned of an outbreak among refugee populations in war-torn regions of Iraq and Syria.
“Refugees and internally displaced populations across Iraq and Syria have been identified as the most vulnerable groups in the region, should the spread of the virus become a pandemic,” The Guardian reports of recent statements.
“Health officials in both countries remain under-equipped to deal with such a a reality that seems more possible with each passing day,” the report added.
Sprawling and densely packed “tent cities” of refugees along the border areas of Syria remain the most vulnerable.
Refugee camp in northwest Syria, via the AP. Official government numbers of infected in the region are as follows:
- Bahrain (17 cases)
- Egypt (1 case)
- Iran (61 cases)
- Iraq (5 cases)
- Israel (2 cases)
- Kuwait (3 cases)
- Lebanon (1 case)
- Oman (4 cases)
- UAE (13 cases)
Meet #Iran’s Deputy Health minister Iraj Harirchi. The one profusely sweating, wiping his face in conference. Turns out, he is infected with #Corona.
No definitive # from Iran but hundreds suspected, a lawmaker put deaths at 50. Harichi got quarantined: pic.twitter.com/YZm9QdWvbI
— Joyce Karam (@Joyce_Karam) February 25, 2020
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The below includes excerpts of Middle East Eye’s brief summary report on confirmed coronavirus cases in each country.
* * *
Bahrain (17 cases)
Bahrain’s health ministry announced on 25 February that a total of 17 people have been infected with the coronavirus.
The ministry reported its first case of the coronavirus on 24 February after a “citizen arriving from Iran was suspected of having contracted the virus based on emerging symptoms”…
Egypt (1 case)
The WHO confirmed on 19 February that a man identified a week earlier was recovering and no longer a carrier of the illness, but would remain in quarantine for the mandated 14 days.
Iran (61 cases, 16 dead)
Iran is the worst-hit country outside of China, with at least 16 people dead due to the coronavirus. Several countries in the region confirmed their first patients had all previously been in Iran.
The country’s deputy health minister, tasked with heading the country’s response, was also infected by the virus, a health ministry announcement confirmed on Tuesday 25 February…
On 24 February, an Iranian MP accused the government of “lying” about the extent of the virus’s spread in Iran, claiming 50 people have been killed by it in the holy city of Qom alone.
Iraq (5 cases)
Iraq confirmed four new cases of the coronavirus on 25 February in an Iraqi family returning from Iran to the city of Kirkuk.
Baghdad reported its first case of the coronavirus on 24 February. Health officials said the patient was an Iranian theology student living in the southern city of Najaf.
All students studying at the same religious seminary were quarantined, while one of the city’s most important religious sites was temporarily closed to pilgrims while it was disinfected.
#Syria #Damascus is taking no chances with #Coronavirius
Any student exhibiting any signs of sickness is sent home immediately and quarantined pic.twitter.com/Zq1TvVWCRf
— EHSANI2 (@EHSANI22) February 25, 2020
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Israel (2 cases)
An Israeli woman tested positive for the virus after returning from a heavily affected cruise ship, Israel announced on 21 February.
The country later sent 180 South Korean tourists back home and closed travel to and from South Korea. According to Israeli media, the government is considering quarantining another 200 South Koreans at a military base.
Kuwait (3 cases)
The Kuwaiti health ministry reported its first cases of coronavirus on 24 February.
In a statement posted on Twitter, the ministry said: “Tests conducted on those coming from the Iranian holy city of Mashhad showed there were three confirmed cases of the coronavirus (COVID-19).”…
Lebanon (1 case)
The first confirmed case in Lebanon involved a 45-year-old woman who had travelled from Iran and was quarantined.
She had arrived on a plane from the Iranian city of Qom, where authorities have said Iran’s outbreak started.
Oman (4 cases)
Oman reported two more cases of coronavirus from individuals who had just travelled to Iran, according to the country’s health ministry Twitter account.
The health ministry reported the first two cases of coronavirus infections in the country on 24 February, Oman TV said.
The two Omani women diagnosed with the illness had visited Iran, it said. They are in a stable condition…
UAE (13 cases)
The UAE banned all travel to Iran and Thailand over fears about the spread of the virus, state news agency WAM reported on 24 February.
It recorded the first of its 13 cases when four members of a Chinese family were diagnosed on 28 January.
Tyler Durden
Tue, 02/25/2020 – 21:45 - No Financing And No Demand: Chinese Refiners Run Into Trouble
No Financing And No Demand: Chinese Refiners Run Into Trouble
Authored by Irina Slav via OilPrice.com,
International banks are suspending credit lines for some independent oil refiners worried about the growing risk of defaults across industries because of the coronavirus epidemic, Reuters reports, citing industry sources.
According to the sources, at least three private refiners, or teapots, have had credit lines to the tune of $600 million suspended by banks including French Natixis, Dutch ING, and Singapore DBS Group Holdings.
“All our applications for new open-account credits are frozen … these clean credits are pivotal as we buy 6 to 8 million barrels of oil each month,” one source told Reuters.
Refiners, both private and state, have already reduced their run rates in response to the slump in fuel demand resulting from the outbreak, and now they have deepened these cuts, Bloomberg reported last week.
The average as of last Thursday was about 10 million bpd, down by 25 percent on the same time last year, when the average run rates were at a record high of close to 13 million bpd. Analysts expect the low run rates to continue at least until the end of this month, but if it spills into March, some refiners – notably independent refiners – will start experiencing a lack of storage space, too, after earlier this month they took advantage of low prices to stock up on crude.
Now, on top of that, the teapots that have accounted for a large portion of China’s increased thirst for oil that was instrumental in oil price recovery after the crisis, are having financing trouble.
“We were told by our banks that so long as the open-account credits are for oil heading to Shandong, it will be very hard chance winning approvals,” another Reuters source said.
The three refiners refused credit line extensions have combined oil import quotas of about 240,000 bpd, Reuters reports. If more banks become wary of defaults among refiners, this could hit imports over a longer term.
Tyler Durden
Tue, 02/25/2020 – 21:25 - US Plotted To Assassinate Julian Assange, WikiLeaks Attorney Tells London Court
US Plotted To Assassinate Julian Assange, WikiLeaks Attorney Tells London Court
On Monday Julian Assange’s defense team told a London court that the United States plotted to assassinate the WikiLeaks founder.
After describing US intelligence attempts to plant “intrusive and sophisticated” secret surveillance devices in the Ecuadorian Embassy in London where Assange had been living under asylum for seven years, Assange’s attorney Edward Fitzgerald told the court according to an explosive Daily Mail report published Tuesday:
“There were conversations about whether there should be more extreme measures contemplated, such as kidnapping or poisoning Julian Assange in the embassy.”
Via Getty Images The plot is alleged to have involved a private Spanish security company named UC Global, reportedly acting on behalf of the US authorities, which was engaged in eavesdropping on Assange and his visitors who entered the Ecuadorian embassy to meet privately with him. Officially the firm was in charge of protecting the Ecuadorian embassy in London.
Prior reports say live-stream audio and video devices were secretly hidden inside the embassy, and supplemented what could be picked up by laser microphones from outside. Court documents detailing UC Global SL’s illegal operation were previously presented to Spain’s High Court.
The new disturbing allegations which came out during the first day of the WikiLeaks’ founder extradition hearing involved scenarios wherein a “kidnapping” or killing could be made to look like an “accident”.
US wanted to kill WikiLeaks founder and make it look like accident:https://t.co/HsR7DebDxx
— WikiLeaks (@wikileaks) February 25, 2020
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Fitzgerald made reference to a “Witness Two” who revealed UC Global owner David Morales — a former Spanish military officer — discussed the “extreme measures”. The witness was among a group of whistleblowers who previously came forward to testify against illegal and shady practices of the Spanish security firm.
Witness Two detailed that Morales “said the Americans were desperate and had even suggested more extreme measures could be applied against the guest to put an end to the situation,” Fitzgerald told the court.
Fitzgerald read the witness statement in court, which according to The Daily Mail also included the following:
He said there was a suggestion the embassy door could be left open to make a kidnapping look like it could have been ‘an accident’, adding ‘even the possibility of poisoning had been discussed’.
Giving credence to the newly revealed alleged plot, it must be remembered that in 2017 while Assange was still holed up in the embassy, then CIA Director Mike Pompeo said in a speech before a Washington think tank audience that he deems WikiLeaks a “hostile intelligence service”.
David Morales, left, owner of Spanish security firm Undercover Global SL. Image source: UC Global/Reuters “It is time to call out WikiLeaks for what it really is, a non-state hostile intelligence service often abetted by state actors like Russia,” Pompeo said.
This was widely interpreted as a sign the CIA considered Assange and WikiLeaks members as fair game for assassination or kidnapping, given Pompeo essentially declared them “enemy agents” of the US.
Julian Assange and his Australian lawyers were secretly recorded in Ecuador’s London embassyhttps://t.co/5x8gN4DTgK
— WikiLeaks (@wikileaks) February 23, 2020
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Two years following these remarks, the Spanish-language daily newspaper El País revealed the major surveillance plot targeting Assange while in the embassy:
Documents and videos revealed by EL PAÍS in July, months before Assange took legal action against Morales, show that UC Global SL spied on the cyber-activist’s conversations with his lawyers, at meetings where they were designing his defense strategy to avoid extradition to the US. Morales allegedly delivered these and other conversations to US intelligence services, this newspaper revealed. Morales was arrested and released pending trial to face charges of violation of client-attorney privilege and illegal arms possession.
ABC News Australia also days ago published spy footage it obtained from inside the embassy showing:
“Julian Assange’s conversations, including legally privileged meetings with Australian lawyers Geoffrey Robertson, Jennifer Robinson and Melinda Taylor, [which] were secretly recorded inside his London embassy home.”
During his last months and years in the embassy, Assange was said to be deeply worried he was being recorded by WikiLeaks’ enemies, at times going so far as to sleep in a tent in his room so his every movement couldn’t be captured.
He was rightly paranoid in part because the US and UK have long charged that Assange “put lives at risk” in previously releasing hundreds of thousands of government top secret files related to wars and covert operations especially across the Middle East, which gained international attention. He’s now awaiting potential extradition to the US while under horrible conditions at London’s notorious Belmarsh prison.
Tyler Durden
Tue, 02/25/2020 – 21:05 - South Korea Confirms 169 New Cases As Total Surpasses 1,000; China Reports Drop In Deaths
South Korea Confirms 169 New Cases As Total Surpasses 1,000; China Reports Drop In Deaths
Update (2045ET): Now that every has apparently accepted that China’s heavy handed quarantine measures worked, even if they won’t come clean with the real numbers, Beijing has reported a sharp drop in deaths, with just 52, the lowest in a single day since the early days of its outbreak disclosures.
- CHINA REPORTS 52 NEW CORONAVIRUS DEATHS FEB. 25
- CHINA REPORTS 406 ADDITIONAL CORONAVIRUS CASES FEB. 25
* * *
Update (2000ET): South Korea has reported 169 new cases, raising its total to 1,146, while the death toll stood still at 11.
That’s up from 51 a week ago.
In other news, three passengers found to have a fever on the flight from Seoul to Nanjing in East China. All 94 passengers have been quarantined, according to Chinese state TV.
We now await for the latest numbers out of Hubei and mainland China, even as the focus has solidly shifted away from China.
* * *
As South Korea confirms another 144 cases during the day on Tuesday to bring the country-wide total to 977, the small East Asian nation has become home to the largest outbreak outside China. The country’s death toll also climbed to 11. The second-highest death toll outside the mainland after only Iran.
On Tuesday, President Moon Jae-in traveled to Daegu, the city where more than half of the country’s cases have been detected, and pledged to avoid the draconian restrictions Chinese authorities implemented in Wuhan, and across Hubei. Though he also advised residents to stay indoors. His comments were accompanied by a warning from the South Korean government advising foreigners to put off travel to the country.
However, Moon’s bold promises were somewhat blunted by the fact that the government has implemented a containment policy on Daegu, North Gyeongsang Province, according to a party official cited by Yonhap. Other reports claimed South Korea is in the process of drafting a supplemental budget, while Moon has declared Daegu a “special disaster zone.”
As Daegu sinks into isolation, Korean Air Lines and Asiana Airlines announced they would suspend domestic flights to the city until next month. A Singaporean government minister warned that the city-state could impose sweeping travel restrictions targeting South Korea if the outbreak gets worse. Korean Air also said it’s working with government health authorities to prevent the spread of the virus after a crew member fell sick.
But in Seoul took on a more morbid tone Tuesday following reports in the local press that a civil servant from the Ministry of Justice’s Emergency Safety Planning Office jumped off a bridge in Seoul at around 5 am local time Tuesday.
The official was one of several individuals charged with overseeing the government’s response to the virus. As cases soar and hysteria mounts, we suspect this news won’t exactly help quiet the public’s nerves.
Finally, over in the US, the CDC has upgraded its travel notice for South Korea to “avoid nonessential travel”.
Tyler Durden
Tue, 02/25/2020 – 20:48 - After Breaking The Repo Market, JPMorgan Wants To Start Using The Fed's Discount Window Again
After Breaking The Repo Market, JPMorgan Wants To Start Using The Fed’s Discount Window Again
Back in 2013, JPMorgan’s billionaire CEO reminded the general public why it hates bankers so much when in response to a simple question from bank analyst Mike Mayo, he answered “that’s why I’m richer than you.” Dimon’s arrange aside, nothing in that exchange explained why Dimon is richer not only than Mayo, but 99.9999999% of the US population; the real reason why Dimon was richer than most is that every few years, JPMorgan, now America’s biggest bank, gets a generous taxpayer or Fed bailout even as Dimon claims he never needed that bailout and would have been perfectly ok if unlike his failing peers, he was left to his own devices. He did that in 2008, and he did it again today.
As a reminder, back in 2008, JPMorgan – alongside most other major US commercial banks – received a $25 billion bailout as part of the TARP program (which was created by current Minneapolis Fed president Neil Kashkari). With the money, JPMorgan, whose fate was inexorably intertwined with that of its its weakest peer and counterparty, would have ceased to exist long ago. However, thanks to the Fed’s generosity which not only did not shutter any bank but rewarded bank CEOs handsomely for blowing up the financial system in 2008, JPMorgan flourished, eventually becoming the largest US commercial bank, and made Jamie Dimon into a billionaire. Of course, being a master at revisionist history, Jamie has repeatedly claimed that he didn’t need the $25BN TARP bailout, and that the bank would have been perfectly ok, but he only took the money under duress and to appear in solidarity with his far more insolvent peers.
That, of course, is a lie: facing tens of billions in exposure to counterparties that would have liquidated and dragged JPM down with them, Dimon’s bank needed the money as much as anyone, because only if the entire financial system was rescued would every bank survive – there would not be piecemeal winners or survivors. The fact that he not only got the money, but then pretended he didn’t need it – amazingly without any serious pushback – is why Jamie Dimon was “richer than you” for the past decade.
So fast forward 11 years, when on the 11th anniversary of Lehman’s bankruptcy, the repo crisis shocked Wall Street when on Sept 16, 2019 it suddenly became apparent that despite $1.3 trillion in “excess” deposits, there was not enough liquidity in the system. A month later we were the first to piece together the puzzle, which confirmed that it was JPMorgan’s drain of over $100 billion in repo and money market liquidity that was the precipitating factor for the repo market collapse. In other words, not only did JPMorgan precipitate the repocalypse (and it’s not just us who make this claim, but other more “reputable” websites and news sources have since joined our clarion call), but with its actions it also triggered the launch of the repo liquidity flood and, a few weeks later, the Fed $60BN in T-Bill purchases, aka QE4. And yes, with JPMorgan stock surging as a result of JPMorgan once again holding the financial system hostage and forcing the Fed to inject hundreds of billions in liquidity, Jamie Dimon just became “even richer than you.”
But wait, there’s more, because after pretending it had nothing to do with the repo market fiasco or the resultant QE4, the same way it did not need a TARP bailout in 2008, JPMorgan – which singlehandedly forced the Fed’s hand into injecting over $600BN in liquidity in the past 4 months – today said that it planned to borrow funds through the Federal Reserve’s emergency lending facility in “an exercise designed to break the stigma attached to a program that can scare investors and spark political attacks” according to Bloomberg.
Wait, what? Didn’t JPM just get the benefit of hundreds of billions in repo and QE4 funding? Well, yes, it did… and for the bank’s next trick, it plans to “virtue signal” its way to the funding mechanism that originally started the global financial crisis. Recall that it was speculation, innuendo (and fact) that first Bear and then Lehman, was using tens of billions in discount window liquidity, which helped precipitate a bear raid against the insolvent banks (and which allowed JPMorgan to acquire Bear Stearns for $10/share, up from $2 originally).
In a moment of brutal hypocrisy, Jennifer Piepszak, JPM’s CFO and the woman who certainly was involved in the bank’s decision to drain repo markets and eventually force the Fed to inject hundreds of billions in repo and QE4 funds, said Tuesday the bank would borrow from the so-called discount window from time to time this year and had discussed the plan with regulators.
“We think this is an important step for us to take to break the stigma here,” Piepszak, who is also “richer than you”, said during the firm’s investor day in New York, without even a trace of self-referential humor from the bank that has now made repo market access the next big “stigma.” Because while nobody actually cares about the Fed’s tiny discount window which hasn’t been used in over a decade, not a single bank will admit that it is one of the dozens of dealers that submit daily (or term) collateral to the Fed in exchange for emergency liquidity.
As a reminder, the Fed’s discount window was meant to provide emergency liquidity to banks that otherwise have healthy balance sheets; however after QE1, QE2, QE3 and now QE4 as well as the restart of repo, the discount window fell into disuse as there were far bigger and far more efficient ways to inject liquidity into the system. As a further reminder, in a cash crunch, banks could pledge collateral to the Fed’s discount window in return for cash. Well, they can do the same now… only it’s called repo!
Meanwhile, when banks still did use the discount window, they become increasingly reluctant to use it because of the reaction it would provoke among investors, who feared it reveals a more serious problem – after all why would a bank need emergency liquidity if it wasn’t in dire strats – and among politicians keen to attack taxpayer-funded bank bailouts.
In short, the hypocrisy of JPMorgan truly knows no bounds: after making a mockery of the 2008 bailout, the bank which acquired one of its top peers which imploded after using the discount window, is now thriving thanks to launching QE4 and repo liquidity injections, yet in doing so has shifted the stigma away from the discount window, or any other Fed funding vehicle, and to the Fed’s repo operations.
As Bloomberg notes, Piepszak’s remarks come less than three weeks after Randal Quarles, the Federal Reserve’s vice chairman for banking supervision, spoke of the need to make it easier for banks to access emergency lending from the Fed.
“The discount window is meant to be used by healthy banks when it is needed,” Quarles said in a Feb. 6 speech. “While there has long been discussion about how the discount window is ‘broken’ because of stigma about using it, we know it is still an important part of firms’ contingency planning and preparations.”
Quarles also discussed in his speech how improving access to the discount window could also help enhance money-market liquidity by reducing the demand among banks to hold excess reserves parked at the Fed. That demand contributed to a shortfall of lending by banks into overnight funding markets in September, forcing the Fed to boost reserves with purchases of Treasury bills. By making Treasuries more substitutable for reserves while still meeting liquidity requirements, the thinking goes, Quarles’ plan might encourage banks to hold more Treasuries and fewer reserves. Alternatively, it would merely reincarnate the same stigma that ended the discount window use in the first place.
Joseph Abate, a money-market strategist at Barclays Plc, wrote in a Feb. 12 note to clients that the Fed could help overcome the long-standing stigma attached to the facility by making it “significantly more attractive” for banks to pledge Treasuries for cash through the discount window.
Well, of course, but why? After all pledging securities for cash to the Fed is now done via the Fed’s daily or term repo operation, which just like the discount window has stigma associated with it.
Don’t believe us? Just ask the Fed, or JPMorgan, which banks participate in the Fed’s repo ops, or which banks sell Bills to the Fed as part of QE4. Spoiler alert: the highly confidential answer will never be revealed because it would result in the stigmatization of the associate banks.
Which simply means that as JPMorgan has now mastered the art of soaking up liquidity from every possible Fed orifice, it is now seeking to distract by pretending that it is willing to use the discount window (even as it aggressively uses repo) ahead of the next crisis.
Tyler Durden
Tue, 02/25/2020 – 20:45 - U.S. Car Industry Most Reliant On Chinese Parts
U.S. Car Industry Most Reliant On Chinese Parts
As the COVID-19 crisis drags on, the epidemic’s economic impact is starting to be felt around the world. Due to China’s role in the global economy, the prolonged standstill in the country has the potential to disrupt supply chains for several key industries, including electronics, chemicals and automobiles.
Considering that Wuhan, the outbreak’s epicenter, is often referred to as “China’s Motor City”, Statista’s Felix Richter notes that the automotive sector is among the industries most exposed to the negative impact of the virus. Not only will Chinese production suffer a significant hit due to extended shutdowns, but many manufacturers around the world who rely on Chinese parts are facing production outages.
“It only takes one missing part to stop a line,” Mike Dunne, an industry consultant formerly heading GM’s operations in Indonesia, told CNN.
Last week, Fiat Chrysler Automobiles (FCA) said it would be temporarily halting production at a plant in Kragujevac, Serbia due to a lack of parts from China, while Hyundai and Renault have done the same in South Korea.
China is among the world’s largest suppliers of car parts, exporting motor vehicle parts and accessories worth $34.8 billion in 2018, according to the UN’s Comtrade database. As the following chart shows, the U.S. car industry is theoretically most at risk of production outages as it relies heavily on parts sourced from China.
You will find more infographics at Statista
It remains to be seen how significant the impact of the epidemic on the global car industry will be, as it depends on how quickly the flow of components from Chinese suppliers can return to the required level. While automakers are gradually reopening factories across the country, those plants located in and around Wuhan remain closed for the time being.
Tyler Durden
Tue, 02/25/2020 – 20:25 - How Many Cases Of Covid-19 Will It Take For You To Decide Not To Frequent Public Places?
How Many Cases Of Covid-19 Will It Take For You To Decide Not To Frequent Public Places?
Authored by Charles Hugh Smith via OfTwoMinds blog,
As empty streets and shelves attest, people taking charge of risk has dire economic consequences.
How many cases of Covid-19 in your community will it take for you to decide not to frequent public places such as cafes, restaurants, theaters, concerts, etc? How many cases in your community will it take for you to decide not to take public transit, Uber/Lyft rides, etc.? How many cases in your community will it take for you to limit going to supermarkets and ask your boss to work at home?
One of the most unexamined aspect of the Covid-19 pandemic is the human psychology of risk assessment and fear. The default human response to novel threats such as the Covid-19 virus is denial and abstraction: it can’t happen here, it won’t happen to me, it’s no big deal, etc.
This careless denial of danger and urgency characterized the official response in China before the epidemic exploded and it characterizes the lackadaisical sloppiness of official response in the U.S.: few facilities have test kits, thousands of people who arrived on U.S. soil on direct flights from Wuhan have not been tested, confirmed carriers have been placed on flights with uninfected people, and the city of Costa Mesa, CA had to file a lawsuit to stop federal agencies from transferring confirmed carriers to dilapidated facilities that are incompatible with thorough quarantine protocols.
This lackadaisical sloppiness didn’t hinder the spread of the virus in China and it won’t hinder it in the U.S. That means each of us will eventually have to make our own risk assessments and decide to modify our routines and behaviors or not.
Hence the question: what’s your red line number? Do you stop going out to public places and gatherings when there’s ten confirmed cases in your community, or is your red line number 50 cases? Or is it 100?
For many people, even a handful of cases will be a tremendous shock because they were unrealistically confident that it can’t happen here. The realization that the virus is active locally and can be spread by people who don’t have any symptoms shatters the comfortable complacency and introduces a chilling reality: what was an abstraction is now real.
Human psychology is exquisitely attuned to risk once it moves from abstraction to reality. Why take a chance unless absolutely necessary? For many people, the first handful of local cases will be enough to cancel all exposure to optional public gatherings: cafes, bistros, theaters, concerts, etc.
Many others will decide to forego public transit, taxis and Uber/Lyft rides because who knows if the previous fare was an asymptomatic carrier?
If you doubt this impulse to over-reaction once abstraction gives way to reality, look at how quickly market shelves are stripped in virus-affected areas. Once we understand what rationalists might declare over-reaction is merely prudence when faced with difficult-to-assess dangers, we realize that there’s a bubble not just in the stock market and Big Tech but in complacency.
Once a consequential number of people decide to avoid public places and gatherings, streets become empty and all the businesses that depend on optional public mixing–cafes, bistros, restaurants, theaters, music venues, stadiums, etc. etc. etc.– dry up and blow away, even if officials maintain their careless denial of danger and urgency.
All the jobs in this vast service sector will suddenly be at risk, along with the survival of thousands of small businesses, many of which do not have the resources to survive weeks, much less months, of a sharp decline in business.
All the official reassurances won’t be worth a bucket of warm spit. After being assured the risk of the virus spreading in North America was “low,” the arrival of the virus will destroy trust in official assurances. People will awaken to the need to control their own risk factors themselves. And as empty streets and shelves attest, people taking charge of risk has dire economic consequences.
* * *
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Tyler Durden
Tue, 02/25/2020 – 20:05 - Watch Live: 'Bloomberg Bashing' Round II At South Carolina Democrat Debate
Watch Live: ‘Bloomberg Bashing’ Round II At South Carolina Democrat Debate
After being savaged in the previous Democratic presidential candidate debate, all eyes will be billionaire Mike Bloomberg to see if he can recover tonight and his campaign is definitely coming out swinging as Bernie dominates the pack.
Seven Democratic presidential candidates qualified for the South Carolina debate:
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Former Vice President Joe Biden
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Former New York Mayor Michael Bloomberg
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Former South Bend, Indiana, Mayor Pete Buttigieg
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Minnesota Sen. Amy Klobuchar
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Massachusetts Sen. Elizabeth Warren
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Vermont Sen. Bernie Sanders
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Businessman Tom Steyer
Hawaii Rep. Tulsi Gabbard did not qualify for the debate stage in South Carolina.
As Politico reports, after the disastrous first outing – his net favorability rating dropped 20 points in the aftermath, according to Morning Consult – Bloomberg’s debate goals in the Charleston, S.C., debate are twofold:
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Persuade viewers that Sanders is too divisive to defeat President Donald Trump in November,
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while sidestepping landmines surrounding complaints from women at his private media company and his race-based policing practices as mayor.
“The debate tomorrow night and the campaign in general … needs to be about one candidate and that’s Bernie Sanders,” Dan Kanninen, a top strategist overseeing Bloomberg’s states operation, said in a conference call with reporters Monday morning.
“We’ve been saying for some time that the nature of this contest means someone with even a small plurality of delegates can come away with an outsize and disproportionate delegate lead.”
“We’ve trained our eyes on [Bernie]. Something the rest of the field has failed to do eight debates prior and a year in a campaign,” a top aide said in an interview.
However, since the last debate, Bloomberg’s odds plummeted as Bernie’s soared…
But, most worryingly for the DNC et al., the odds of a Trump win have surged in line with Bernie’s rise…
Which makes us wonder if tonight will be different… with the candidates ganging up on Bernie and toeing the establishment line.
Here the five key things to watch in tonight’s debate according to The Hill:
Sanders is going to come under attack
Sanders is heading into the debate as the primary race’s nominal front-runner following a near-win in Iowa and back-to-back victories in New Hampshire and Nevada, giving his opponents all the more reason to go on the attack. Already, some campaigns have telegraphed plans to go after Sanders on Tuesday night. Dan Kanninen, an adviser to Bloomberg’s campaign, told reporters on Monday that the debate “needs to be about one candidate and that’s Bernie Sanders.” Meanwhile, Biden has stepped up attacks on the Vermont senator in recent days, launching a digital ad in South Carolina that accused him of plotting to undercut former President Barack Obama. Buttigieg has also shown a willingness to aggressively take on Sanders, using a speech after the Nevada caucuses on Saturday to sharpen contrasts between himself and the senator. All the candidates have a common goal in targeting Sanders: to cast themselves as a leading alternative to a front-runner who some Democrats fear will be a liability to the party if he clinches the nomination. The situation is now viewed as more urgent than ever, especially with Super Tuesday just a week away. Bloomberg’s and Buttigieg’s campaigns have already warned that the March 3 primaries could give Sanders an “insurmountable” delegate lead in the race unless a moderate alternative is able to emerge from the crowded pack.
Candidates will make appeals to black voters
South Carolina may be the fourth state to vote in the Democratic nominating contest, but it’s the first in which a majority – about 60 percent – of the Democratic electorate is black. Expect the candidates to make explicit appeals to those voters when they take the stage in Charleston on Tuesday night. For Biden, who has long held a polling edge over his rivals in support among black voters, Tuesday’s debate may be more of a test of whether he can hold onto that support. The former vice president has faced criticism over his past stances on issues affecting black communities – the 1994 crime bill or his opposition to mandatory school busing in the 1970s, for instance – and recent polls suggest his advantage may be fading. He’s also facing competition from billionaire activist Tom Steyer, who has spent heavily in the state and is aggressively courting black voters. Recent polls show the former hedge fund manager with some strength in South Carolina, but he’s also likely to face attacks for his business record, including his past investments in private prisons. For Buttigieg, Sen. Amy Klobuchar (D-Minn.) and Elizabeth Warren (D-Mass.), in particular, there’s a sense of urgency to the South Carolina debate. All three have struggled to build strong support among black voters in the Palmetto State, with recent polls showing them lingering in single digits. An NBC News/Marist survey released on Monday showed Warren with 7 percent support among black voters, while Buttigieg and Klobuchar notched 4 percent and 3 percent, respectively. The debate may offer them their last big chance before the primary on Saturday to make a case to those voters.
Can Warren have a second big night?
Warren came alive in the Democratic debate in Las Vegas last week, delivering the kind of incisive attacks against Bloomberg and other rivals that many of her supporters had been hoping for for months and fueling a fundraising surge that netted her more than $5 million in the day that followed. The Massachusetts senator is likely to try to recreate that energy on Tuesday night when she takes the debate stage in Charleston. But unlike the Las Vegas debate, the one in South Carolina carries more urgency. She’s running in fourth place in recent polls in the state and Tuesday’s debate offers one of her last chances to improve her standing. One key question is whether – or how aggressively – she’ll go after Sanders. The senators two are longtime allies and both occupy the primary field’s progressive lane. On one hand, attacking Sanders too sharply risks isolating many of the liberal voters that Warren will likely need to succeed in the race. On the other, she hasn’t yet notched any victories in the nominating contest and time is running out for her to show that she can be a competitive candidate.
Bloomberg gets a chance for a bounce-back
In the roughly three months since he launched his presidential bid, Bloomberg propelled himself near the top of national polls with a free-spending advertising campaign that cast him as the only candidate capable of taking on President Trump in the 2020 general election. But the image that Bloomberg had spent hundreds of millions of dollars cultivating took a massive hit last week as he struggled to fend off rapid-fire attacks from his rivals on the debate stage in Las Vegas. Throughout the forum, he stumbled through responses, often appearing out of touch and unrepentant for past policy positions. Tuesday night’s debate will give him an opportunity to try to revive his image. Making it even more important for Bloomberg is the fact that Super Tuesday is just a week away. The former New York City mayor declined to compete in the first four primary and caucus states and opted instead to anchor his presidential prospects on a strong showing in the March 3 primary contests. There won’t be another debate for another three weeks, meaning that the forum in Charleston on Tuesday night will be his last chance for a while to show he has what it takes to win.
How nasty will the attacks get?
As the race for the Democratic presidential nomination has become more urgent, the candidates’ attacks on one another have grown more bitter and personal, and it appears increasingly likely that that shift may set the tone for Tuesday night’s debate. In his digital ad attacking Sanders as being disloyal to Obama this week, Biden asserted that the Vermont senator “can’t be trusted.” Buttigieg mounted his most explicit attacks yet on the Sanders in a post-Nevada caucuses speech that accused his rival of “ignoring, dismissing, or even attacking the very Democrats we absolutely must send to Capitol Hill.” And that’s not to mention the flurry of attacks that characterized the last debate in Las Vegas. The debate in Charleston may end up being the most hostile yet. Not only will there be more candidates on stage than in Las Vegas, but it may end up being the last debate for some of the candidates, especially those that fall flat in the South Carolina primary or on Super Tuesday. Consequently, it’s possible that the candidates see little downside to getting nasty or personal on Tuesday night.
The debate, co-hosted by CBS News and the Congressional Black Caucus Institute, will begin at 8 p.m. EST. Watch Live here…
Tyler Durden
Tue, 02/25/2020 – 19:50 -
- The Grim Reality About Pandemics They Don't Want You To Know: "No Country Is Prepared"
The Grim Reality About Pandemics They Don’t Want You To Know: “No Country Is Prepared”
Authored by Sara Tipton via ReadyNutrition.com,
It’s been 100 years since the Spanish Flu caused a global pandemic. While the WHO would like you to rest easy right now given their belief that Covid-19 is not currently a global pandemic threat, it is just a matter of time before they admit it’s true. And when that day does arrive, “scientists say an outbreak of a flu-like illness could sweep across the planet in 36 hours and kill tens of millions due to our constantly-traveling population.”
According to the Daily Mail, “The report, named A World At Risk, said current efforts to prepare for outbreaks in the wake of crises such as Ebola are ‘grossly insufficient’”. It was headed by Dr. Gro Harlem Brundtland, the former Norwegian prime minister and director-general of the WHO (World Health Organization). He said in the report:
“The threat of a pandemic spreading around the globe is a real one. ‘A quick-moving pathogen has the potential to kill tens of millions of people, disrupt economies and destabilize national security.’”
No country is fully prepared for the mayhem a pandemic flu can cause
Out of the entire world, a mere 13 countries had resources and health care systems to put up a fight against a global pandemic. Among the countries ranked in the top tier were Britain, the United States, Australia, Canada, France, and Holland.
Scientists say that the size of a city and its structure can impact an influenza epidemic, meaning where you live could affect the spread of the virus. Regardless of whether flu cases rise to a wintertime peak or plateau from fall to spring, new research suggests that the size of a city itself is what influences the contours of its flu season according to Science News. Larger cities with higher levels of crowding were associated with a steady accumulation of influenza cases throughout the flu season. Smaller cities with less crowding tended to have a flu season with a more intense surge in winter, researchers report in the October 5 publication.
When a highly lethal flu pandemic comes, it will affect everyone alive today. In a related article, “Pandemic flu is apolitical and does not discriminate between rich and poor. Geographical boundaries are meaningless, and it can circle the globe within hours.” Dr. Gupta goes on to explain that when most people hear “flu”, they think of seasonal flu, but pandemic flu is “a different animal, and you should understand the difference.”
Preparations start at home
So just how do we prepare for a possible pandemic? A big concern with pandemics is that supplies would be quickly exhausted leaving many unprepared to handle the ordeal. This will only fuel a more chaotic situation. These concerns are not new to most governments and steps have been taken to ensure communities are prepared and are able to contain most epidemics.
Which such a large-scale emergency, it is difficult to know where to start and the best answer this author can give you is to start at home. We can’t control if or when governments decide to prepare, but we can control when and what we, as individuals need to protect our families.
This a suggested list of supplies to help you combat a pandemic based on the best-selling book, The Prepper’s Blueprint. The preparedness manual offers real-world advice for preppers of all levels and stages to help gear up for a pandemic.
The following is a list of pandemic supplies for your home:
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One month supply of emergency foods that require no refrigeration.
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Store 1 gallon of water per person per day, in clean plastic containers. Avoid using containers that will decompose or break, such as milk cartons or glass bottles.
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2-3 small wastebasket or a bucket lined with a plastic garbage bag (to dispose of clothing, soiled supplies, etc.)
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Gallon-sized zip-loc bags
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Portable toilet with disposable liners
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Supply of nonprescription drugs and pain relievers
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Stomach remedies
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Duct tape
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Vitamins that have immune-boosting enhancers
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Fluids with electrolytes
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Bleach or disinfectant
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Soap
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Tissues
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Garbage bags to collect soiled clothing and bedding before they are washed.
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A thermometer
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Protective eye gear and/or face shield
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nitrile gloves
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Hand wipes
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Alcohol-based hand sanitizers or homemade hand sanitizer supplies
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Disposable aprons or smocks (at least 2 cases)
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Duct tape for sealing off doorways and vents
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Disposable nitrile gloves (2-3 boxes)
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N95 masks or N100 respirator masks for use when the sick person is coughing or sneezing (can be purchased at hardware stores and some drugstores)
In the event of a pandemic, because of anticipated shortages of supplies, health care professionals and widespread implementation of social distancing techniques, it is expected that the large majority of individuals infected with the pandemic illness will be cared for in the home by family members, friends, and other members of the community – not by trained health care professionals. Bear in mind that persons who are more prone to contracting illnesses include people 65 years and older, children younger than five years old, pregnant women, and people of any age with certain chronic medical conditions.
In addition to having some necessary supplies on hand, you’ll also want to do the following:
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Store a one month supply of water and food. During a pandemic, if you cannot get to a store, or if stores are out of supplies, it will be important for you to have extra supplies on hand.
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Periodically check your regular prescription drugs to ensure a continuous supply in your home.
Have any nonprescription drugs and other health supplies on hand, including pain relievers, stomach remedies, cough, and cold medicines, fluids with electrolytes, and vitamins. -
Talk with family members and loved ones about how they would be cared for if they got sick, or what will be needed to care for them in your home.
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Prepare a sick room for the home to limit family member’s exposure to the virus.
Brainstorming in advance is a great way to determine where you’d quarantine a family member or create your sick room. Individual preparation is critical if you would like to beat any pandemic and that all starts with brainstorming and coming up with the best ideas to keep yourself and loved ones healthy.
* * *
This article was originally published at Ready Nutrition™ on November 12th, 2019
Tyler Durden
Tue, 02/25/2020 – 19:35 -
- Brazil Says It Might Have First COVID-19 Case In South America: Live Updates
Brazil Says It Might Have First COVID-19 Case In South America: Live Updates
Summary:
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WHO warns the rest of the world “is not ready for the virus to spread…”
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CDC warns Americans “should prepare for possible community spread” of virus.
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San Francisco Mayor declares state of emergency
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Later, CDC says pandemic not a question of it, but when
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Brazil may have South America’s first coronavirus case
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Germany confirms 2nd case on Tuesday, brings total to 17
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Italy cases spike to 322; deaths hit 10
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Japan’s Shiseido tesll 8k employees to work from home
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Kudlow tries to jawbone markets higher
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HHS Sec. Azar warns US lacks stockpiles of masks
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Italy Hotel in Lockdown After First Coronavirus Case in Liguria
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Algeria confirms 1st case
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First case in Switzerland
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Kuwait halts all flights to Singapore and Japan
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Iran confirms 95 cases, 15 deaths
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First case in Austria
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Spain reports 7 cases in under 24 hours, including in Madrid, Canary Islands, Barcelona
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Iran Deputy Health Minister infected with Covid-19
* * *
Update (1900ET): We’ve got some (potentially) big news. Brazil’s Health Ministry said a man has tested positive for the coronavirus on in initial test. If it’s confirmed in a second test, it will be the first case in South America.
The virus has already spread from Asia to Europe, North America, Australia and Africa.
On that note, El Salvador on Tuesday announced it would prevent entry of people from Italy and South Korea.
In Spain, a 7th cases has been confirmed in under 24 hours. Just over a day ago, Spain had zero confirmed cases.
Though it’s unconfirmed, there’s a rumor floating around twitter that an Iranian official who met with the Ayatollah a few days ago has tested positive for the virus.
* * *
Update (1750ET): Following reports just a few hours ago claiming Germany had reported its first case of the virus, Europe’s largest economy has just reported its second case, according to domestic media reports.
The first patient was reportedly a 25-year-old German who recently traveled to Milan. Patient No. 2 was confirmed near Germany’s border with the Netherlands. The man is in critical condition.
This brings Germany’s total cases to 18.
Germany’s neighbors Austria and Switzerland confirmed their first cases on Tuesday as the virus spread through Central Europe.
Over in Japan, Shiseido told 8,000 employees, roughly 30% of the personal-care company’s workforce, to telecommute in keeping with the Japanese government’s push for private employers to keep their workers out of offices and public places. Japanese companies started this more than a week ago, and have since expanded the number of employees affected.
* * *
Update (1700ET): SFChronicle reports that Mayor London Breed declared a state of emergency for San Francisco Tuesday, which will ramp up the city’s efforts to prepare for and confront potential cases.
There have been no confirmed coronavirus cases in San Francisco to date, but “the global picture is changing rapidly, and we need to step-up preparedness,” Breed said in a statement.
Three people have been treated at San Francisco hospitals for coronavirus, two of which have been discharged, but to date no cases have originated inside the city.
“We see the virus spreading in new parts of the world every day, and we are taking the necessary steps to protect San Franciscans from harm.”
This decision follows Santa Clara County, which declared a state of emergency a few weeks ago for similar reasons.
* * *
Update (1545ET): In keeping with the spate of ominous comments from American government officials, there have been reports about FDA Director Stephen Hahn warning about a shortage of medical supplies like facemasks as the CDC warns that outbreaks in the US are inevitable.
He made a similar comment yesterday…
“We are now many weeks into the response with still no diagnostic or surveillance test available outside of CDC for the vast majority of our member laboratories,” the Association of Public Health Laboratories wrote in a letter to FDA Commissioner Stephen Hahn on Monday.
— The_Real_Fly (@The_Real_Fly) February 25, 2020
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* * *
Update (1520ET): Following an intro from HHS’s Alex Azar where he assured the public that the US is expanding its flu-monitoring surveillance system and taking other measures to mitigate the outbreak, a CDC representative attested that its response to the virus started in December following the initial reports.
The US has pursued a policy of containment, travel restrictions and travel warnings. “We believe those precautions are working.”
She largely repeated the warnings from earlier, hinting at the possibility of “community-based measures” for infection response that could include quarantines, while the US shifts to a policy of treating mild cases in isolation at home.
She also reiterated that it’s no longer a question of if a pandemic will happen – it’s a question of when.
“Our public health system has detected 14 people among the travelers entering the US. The fact that we have been cases at this level is an accomplishment. Based on what we know right now we believe the immediate risk in the US remains ‘low’. But we must use this time to prepare for the event of human transmission in the US. Part of that is educating the public about what transition from emergency measures to community-based measures would look like.
“Patients with the virus with mild or no symptoms have been placed in medical environments in quarantined. That level of care is mostly not needed. In most cases, the proper care would be management at home, with use of healthcare facilities only permitted for those with other underlying conditions, the elderly and other vulnerable people.”
“Circumstances suggest the virus will cause a pandemic, if that happens, new strategies will need to be implemented. These interventions at the community level will vary depending on local conditions.”
“It’s not so much a question of if this will happen, but when, and how many people will become infected, and how many of those will develop a more complicated disease. “
Well, there you have it…
After that, Dr. Fauci spoke about the issue of a vaccine.
Vaccine development began as soon as the virus genome was uploaded to the international database, and that human trials would likely begin within two months. He then explained the painstaking process of drug trials to illustrate why it will take “an additional 6-8 months” just to get the vaccine in circulation within “a year-year-and-a-half”.
But that’s okay, Dr. Fauci said, because this virus isn’t going away any time soon, and will likely return with next year’s flu season.
* * *
Update (1500ET): Germany has confirmed its first case of the virus, a traveler who reportedly came from Milan.
Maybe they should give the whole ‘keep the borders open’ idea a rethink?
Meanwhile, HHS is delivering its press conference:
LIVE: HHS holds briefing on the coronavirus. https://t.co/qKwCFZK0Y7
— NBC News (@NBCNews) February 25, 2020
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* * *
Update (1445ET): Algeria has confirmed its first case of the virus as the focus on the Middle East intensifies.
Back in the US, the Dems are on the offensive against President Trump, with Chuck Schumer likening the administration’s purportedly ‘lackluster’ virus response to Chernobyl (we also enjoyed the HBO series, Mr. Senator). Conn. Sen. and wax-faced robot Dick Blumenthal also criticized Trump’s request for Congressional funds as “too little, too late.”
* * *
Update (1420ET): Kuwait has halted all flights to Singapore and Japan, according to Al Arabiya, as the paranoia over the outbreak in Iran intensifies, particularly among the GCC member states who barely need an excuse to shit on Iran.
* * *
Update (1400ET): Here’s an update on the situation in Iran via the Washington Post.
Iran has confirmed 95 cases across the country, with at least 15 deaths, as more cases have popped up in Bahrain, the region of Kirkuk in neighboring Iraq, and elsewhere.
* * *
Update (1335ET): Like a champion boxer who is just past his prime, Trump economic advisor Larry Kudlow took to CNBC early Tuesday afternoon to try and jawbone the markets higher as US stocks headed for their fourth day in a row.
Kudlow stressed that the US has been “ahead of the curve” when it comes to “protecting citizens” (by canceling flights, barring foreigners etc.) – even as the CDC warns that the US is dangerously unprepared for “community outbreaks” that it believes will inevitably arrive. People need to stay “calm”, Kudlow said, adding that we won’t really know how bad this will be for the US until a few weeks have passed.
Kudlow stressed the human toll of the outbreak, calling it “an incredible human tragedy.” But as far as the economy is concerned, “I don’t think we’re looking at an economic disaster at all,” he added.
To support his claim, Kudlow cited the recent spate of Fed data, claiming there has been “no evidence” of supply disruptions.
Granted, there have been bright spots, but we can’t help but wonder: Is Kudlow looking at the same data we are?
And how does one explain gold and the 30-year?
As far as rate cuts are concerned, Kudlow says “I’m not hearing that.”
“I’m not hearing the Fed is going to make any panic moves.”
Notably, Kudlow echoed Fisher’s comments from earlier.
FISHER on @CNBC: “I’m not clear what a Fed cut of the Fed Funds rate would do to sort of ‘goose’ those supply chains. You really can’t solve this problem in that way. So I would not be advocating for a cut here.”@SquawkStreet
— Carl Quintanilla (@carlquintanilla) February 25, 2020
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We can almost hear the bulls shouting ‘Aw, C’mon Larry!’ at their TV screens.
* * *
Update (1245ET): More updates out of Europe. Earlier, we reported the first coronavirus cases had been confirmed in Austria and Croatia, showing that the virus has now spread to both central and southeastern Europe.
#UPDATE Austria placed a hotel in the Alpine city of Innsbruck under lockdown after an Italian receptionist working there contracted the coronavirus, becoming one of the country’s first cases https://t.co/hVwGsGsljA pic.twitter.com/S76E4uVYAL
— AFP news agency (@AFP) February 25, 2020
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Over in Italy, the number of confirmed cases has surpassed 300 to 322, while the number of dead climbed to 10, according to Italian emergency chief Angelo Borrelli, who said the newly deceased were over the age of 80. That’s up from just 20 confirmed cases on Friday.
Newly deceased were over 80 years old, says at press conference in Rome Tuesday. The new infections include three cases in southern Sicily region, Italian Civil Protection official Borrelli said.
Earlier, we noted the WHO saying that while the pace of new infections has slackened in China thanks in part to the administration’s heavy handed crackdown to fight the virus, if officials and the public aren’t careful, we could see a resurgence. The WHO also warned that the world is wildly unprepared for the coronavirus, a fact that the CDC and HHS Secretary have now echoed about America’s ability to respond to the crisis.
German officials gave the first hint at what is coming earlier today when they said that closing borders with Italy wouldn’t solve the problem (note: this is the same logic they used during the migrant crisis and we all remember how that turned out). Now, European health officials have collectively decided that closing borders would be “ineffective,” concluding days of mounting speculation about whether Italy, or its neighbors, would suspend Schengen rules governing the free movement of people across the EU.
According to Bloomberg, health ministers from Austria, Croatia, France, Germany, Italy, Slovenia, Switzerland and a representative from San Marino agreed on Tuesday to keep European borders open, arguing that closing them would be a “disproportionate and ineffective measure” at this time.
* * *
Before we go, the story of the four-star hotel at Tenerife, a Spanish island where an Italian doctor and his wife who both tested positive for COVID-19, appears to have captured the imagination of the international press.
According to the BBC, the couple were staying at the H10 Costa Adeje Palace hotel on the island, which is the largest of Spain’s Canary Islands. The doctor tested positive Monday, and his wife the following day. They’ve been placed in isolation at the University Hospital Nuestra Senora de Candelaria.
But in their wake, an entire hotel with more than 100 guests has been put under quarantine.
Here’s a still from a video of the residents gazing forlornly at the outside world that was initially shared by the NY Post.
Residents have been told to wait in their rooms as health officials test everyone in the building.
* * *
Update (1145ET): US CDC says COVID-19 epidemic is rapidly evolving and expanding, warning that a vaccine could be ready in a year, and Americans should prepare for possible spreads in communities.
“Now is the time for businesses, hospitals, communities, and schools to begin preparing to respond to coronavirus.”
Nancy Messonnier, the director of the CDC’s National Center for Immunization and Respiratory Diseases, said: “As more and more countries experience community spread, successful containment at our borders becomes harder and harder.”
Additionally, HHS Secretary Alex Azar says at Senate panel hearing that the U.S. doesn’t have enough stockpiles of masks and ventilators to fight the coronavirus and that’s one reason the Trump administration is seeking $2.5b in funding.
About 30m so-called N95 respirator masks are stockpiled but as many as 300m are needed for healthcare workers, Azar says, adding that his department doesn’t yet know how much they would cost.
Democratic Sen. Patty Murray, who questioned the administration’s readiness to battle the spread of the virus:
“I’m deeply concerned we’re way behind the eight ball on this,” Murray said while questioning Azar at the Appropriations subcmte hearing.
Azar also says the money would be used to help develop vaccines and treatments for the virus and that a vaccine could be ready in a year.
* * *
Update (1100ET): WHO’s Bruce Aylward told journalists that China’s actions “prevented hundreds of thousands of cases” and warned that the rest of the world “is not ready for the virus to spread,” adding that “countries should instruct citizens now on hygeine.”
* * *
Update (1001ET): A case of the novel corona virus has been confirmed for the first time in Switzerland. The federal government announced on Tuesday. One person was tested positive for the virus, said those responsible.
Italian officials stated that the first patient was “obviously infected in Italy,” and will consider further measures if they think “uncontrolled transmission” of the virus is occurring.
* * *
Update (0950ET): Spanish authorities have confirmed the fourth case of coronavirus in Catalonia, according to La Vanguardia.
Jordan has banned flights arriving from Italy, becoming the first country in the region to guard against travelers from Europe’s third-largest economy.
* * *
Update (0900ET): Iran’s MP Mahmoud Sadeghi said he had tested positive for the coronavirius, telling supporters: “I don’t have a lot of hope of continuing life in this world”.
CBS has confirmed that it was an Italian doctor visiting the Spanish isle of Tenerife who prompted all guests at his hotel to be confined to their rooms on Tuesday. The country has now confirmed nearly 60 cases on Tuesday.
In the UAE, home to long-haul carriers Emirates and Etihad, airlines have suspended flights to and from Iran for at least a week, cutting the country’s 80 million people off from thousands of flights.
Unsurprisingly, the Dems were quick to slam the White House’s $2.5 billion spending plan that was sent lawmakers on Monday to address the deadly coronavirus outbreak. Democrats said the request fell far short of what’s needed.
House Speaker Nancy Pelosi called the president’s request “long overdue and completely inadequate to the scale of this emergency” in a statement released Monday. She added that the House would propose a “strong, strategic” funding package of its own to address the public health crisis.
Because nothing solves a public health crisis like a political stalemate.
“We have a crisis of coronavirus and President Trump has no plan, no urgency, no understanding of the facts or how to coordinate a response,” said Senate Minority Leader Chuck Schumer.
Trump joked in public remarks Tuesday that if he had authorized more, Chuck Schumer and the rest would be criticizing him, saying “it should be less.”
For those who have been watching, CNBC has been talking up a storm about the drugmaker Moderna, which delivered its first experimental coronavirus vaccine for testing, with the clinical trial slated to start in April. The WSJ is supposedly one reason why market’s are clinging to optimism on Tuesday.
The CDC’s Dr. Fauci praised the development, said “nothing has ever gone that fast.”
“Going into a Phase One trial within three months of getting the sequence is unquestionably the world indoor record. Nothing has ever gone that fast,” Dr. Fauci said.
As Jim Cramer won’t stop repeating Tuesday morning, the advances are “really remarkable.”
Finally, Austrian health officials have confirmed that at least one of the likely coronavirus patients isolated Tuesday was an Italian living in the country.
This comes after Italian authorities reported the first coronavirus case in the country’s south: a tourist visiting Sicily who had traveled from Bergamo, an Italian city in the Lombardy region.
* * *
Update (0825ET): Bahrain has banned its citizens from traveling to Iran as it reports 9 new cases of coronavirus, raising the total cases in the tiny island kingdom to 17 in the span of 24 hours.
* * *
Update (0800ET): With his reputation under fire and his popularity slipping, PM Giuseppe Conte said Tuesday that he’s confident that the measures his government has put in place will contain the contagion in the coming days.
This comes after the PM admitted that a hospital in Lombardy inadvertently helped spread the virus by not adhering to certain health-care protocols. The PM has blamed the hospital for the outbreak in the north, raising questions about whether “the European nation is capable of containing the outbreak,” according to CNN. To put things in perspective, Italy now has 3x the number of cases in Hong Kong.
“That certainly contributed to the spread,” Conte said, without naming the institution concerned. The infection has been centered around the town of Codogno, around 35 miles south of Milan.
“Obviously we cannot predict the progress of the virus. It is clear that there has been an outbreak and it has spread from there,” Conte told reporters, referring to the hospital.
A team of health experts from the World Health Organization and the European Center for Disease Prevention and Control arrived in Italy on Monday to assist local authorities while some 100,000 remain under an effective quarantine.
Over in India, Trump added to his earlier comments by saying a vaccine is “very close”, even though the most generous estimates claim we need another year.
Market experts cited a WSJ report on a possible vaccine as helping market sentiment, though even that report made clear that human tests of the drug are not due until the end of April and results not until July or August.
* * *
Update (0650ET): It’s not even 7 am in the US, and it looks like a new outbreak is beginning in Central Europe.
Local news agencies report that Croatia has confirmed its first case, while the Austrian Province of Tyrol has confirmed two cases.
In South Korea, meanwhile, officials have just confirmed the 11th coronavirus-linked death, a Mongolian man in his mid-30s who had a preexisting liver condition.
Over in India, where President Trump is in the middle of an important state visit with the newly reelected Prime Minister Narendra Modi, the president struck an optimistic tone once again claiming that the virus will be a “short-term” problem that won’t have a lasting impact on the global economy.
“I think it’s a problem that’s going to go away,” he said.
Trump also reportedly told a group of executives gathered in India that the US has “essentially closed the borders” (well, not really) and that “we’re fortunate so far and we think it’s going to remain that way,” according to CNN.
Meanwhile, SK officials announced they’re aiming to test more than 200,000 members of the Shincheonji Church of Jesus, the “cult-like” church at the center of the outbreak in SK.
* * *
Last night, a post written by Paul Joseph Watson highlighted commentary from a Harvard epidemiology professor (we realize we’ve heard from pretty much the whole department at this point in the crisis, but bear with us for a moment) who believes that, at some point, ‘we will all get the coronavirus’.
Well, up to 70% of us, but you get the idea: The notion that this outbreak is far from over is finally starting to sink in. Stocks are struggling to erase yesterday’s losses, with US futures pointing to an open in the green after the biggest drop in two years. More corporations trashing their guidance, and more research offering a glimpse of the faltering Chinese economy (offering a hint that all the crematoriums are keeping air pollution levels elevated even as coal consumption and travel plunge) have seemingly trampled all over the market’s Fed-ensured optimism.
And across Europe, the Middle East and the Far East, headlines tied to the outbreak hit at a similarly non-stop pace on Tuesday.
With so much news, where to start?
In China, data out of the Transport Ministry revealed that barely one-third of China’s workforce has returned to work, despite state-inspired threats. CNN reported Tuesday that only 30% of small businesses in China have returned to work. The problem? Travel disruption has left millions of migrant workers stranded. There’s also the question of schools: Some cities, including Shanghai, are offering students the option of completing their studies online after March 2.
China’s rapidly advancing tech sector has responded to the crisis by unleashing a wide range of technologies outfitted for specific tasks, including ferrying supplies to medical workers, fitting drones with thermal cameras and leveraging computer-processing power to aid the search for a vaccine.
In a televised interview, one health official said it might take 28 days to safely say an area is free of coronavirus, while another official insisted that “low risk” areas should “resume normal activity” on Tuesday. The government is dividing the country outside Hubei and Beijing into three ‘risk’ tranches, and will mandate that those in the lowest tranche get back to work, school or whatever they were doing before the virus hit.
Investors are clearly concerned that, instead of the ‘v’-shaped recovery promised by the IMF, the economic bounce-back from the coronavirus might be closer to a “u”-shape. On top of that, as cases proliferate in South Korea, Italy and the US, pundits are beginning to worry that the rest of the world is where China was two months ago – in other words
Throughout the day, South Korea confirmed 144 more cases, bringing the country-wide total to 977, the highest number outside China.
As the Korean government warns that foreigners shouldn’t travel there, Korean Air Lines and Asiana Airlines, to South Korean airlines, said they would halt flights to Daegu until next month, leaving the door open to a longer shutdown.
On Tuesday afternoon, South Korean President Moon Jae-in traveled to Daegu, the city where more than half of the country’s cases have been detected, and advised its residents to stay indoors but pledged to avoid the draconian restrictions Chinese authorities implemented in Wuhan.
Outbreak-related news in Seoul took on a more morbid tone Tuesday following reports in the local press that a civil servant from the Ministry of Justice’s Emergency Safety Planning Office jumped off a bridge in Seoul at around 5 am local time Tuesday.
The official was one of several individuals charged with overseeing the government’s response to the virus. As cases soar and hysteria mounts, we suspect this news won’t exactly help quiet the public’s nerves.
A Singaporean government minister warned that the city-state could impose sweeping travel restrictions targeting South Korea if the outbreak gets worse.
Minutes ago, Italian authorities confirmed another 8 coronavirus cases, 54 of which have been confirmed on Tuesday, bringing the total to 283.
More than 100,000 Italians in 10 villages are under lockdown in the ‘red zone’ in northern Italy, where the military has been deployed and people have been told to stay inside. Fears about the virus spreading throughout the region were validated yesterday when Spain reported a third case, an Italian traveler. On Tuesday, Reuters reports that Spanish authorities have closed the Tenerife Hotel on the Canary Islands and are testing all of its occupants.
Most of the cases have been recorded in Lombardy (200+), while Veneto, Emilia-Romagna, Piedmont, Bolzano, Trentino and Rome have all confirmed at least one case. The UK government warned that any British travelers in northern Italy should self-isolate, according to the Washington Post.
In Japan, the “J League”, Japan’s professional soccer league, has announced that it will postpone all games until at least March 15, saying in a statement that it’s “fully committed” to stopping the spread of the coronavirus. The decision followed a government recommendation to cancel all public events and gatherings.
Embracing a markedly different approach from Beijing, Japan has announced a new policy on Tuesday designed to focus medical care on the most serious cases, while urging people with mild symptoms to treat themselves at home.
According to the FT, the new strategy of containment announced by a panel overseeing the virus response acknowledged that simply testing everyone potentially exposed to the more than 100 cases outside the ‘Diamond Princess’ would overwhelm its health-care system.
It is radically different approach from that adopted by China,
Though it hasn’t announced new cases in a day or so, Japan has confirmed 840 cases of novel coronavirus so far, with nearly 700 of them linked to the ‘Diamond Princess’ cruise ship.
Iran’s ‘official’ death toll climbed to 14 on Tuesday, with 61 cases confirmed so far. Despite a wave of border closures that left Iran virtually isolated by its neighbors, more cases have started to bleed across the border: Iraqi health ministry officials have confirmed four coronavirus cases in Kirkuk, all of whom are members of a family. He previously looked unwell during a press conference.
Even more embarrassing for the Iranians than having a local lawmaker expose the horrifyingly real death toll: on Tuesday, the government confirmed that a Deputy Health Minister had been sickened by the virus.
We suspect we’ll be hearing more bad news from the Middle East as the full scope of the Iranian outbreak becomes more clear.
Tyler Durden
Tue, 02/25/2020 – 19:21 -
- NYC Hotel Loans Defaulting At Alarming Rate As Room-Rates Plunge, Tourism Tumbles
NYC Hotel Loans Defaulting At Alarming Rate As Room-Rates Plunge, Tourism Tumbles
More and more New York City hotels are defaulting on their mortgages, signaling an alarming trend in the industry as “challenging market fundamentals” and new supply act as headwinds for the industry.
This has resulted in room rates declining and sites like Airbnb gaining traction in the market, according to The Real Deal.
The main metric to watch is the average daily room rate, which has dropped in New York City to its lowest point since at least 2013: $255.16, according to STR. More than 22,000 new hotel rooms remain in the pipeline, as well, which will further add to the supply glut and likely push room rates even lower.
As a result, loans like a $260 million loan on the Row Hotel near Times Square have been in default. In the case of the Row Hotel, it’s lender is looking to offload the loan on the secondary market for as little as $50 million. Meanwhile, the hotel itself has been on the market since last year, but has little interest from buyers.
Colony Credit, the lender, says there has been a “significant deterioration” in the hotel market and that feedback during the sales process has led them to mark down the value of the loan.
In 2019, Heritage Equity Partners defaulted on a $68 million loan for the Williamsburg Hotel. That property is now in the process of heading toward receivership. Lenders to Maefield Development’s hotel at 20 Times Square have also sought to foreclose on $650 million in loans that were made for the project. East West Bank has also moved to foreclose on loans secured by the Selina Chelsea.
The Blakely Hotel was shut down altogether last month by its owner, Richard Born, who blamed challenges facing the industry.
Finally, there are an additional 21 CMBS mortgages backed by New York hotels that remain under watch for potential difficulties.
As if the industry wasn’t facing headwinds of its own, it also now has to deal with the backlash of the coronavirus outbreak. We’re guessing that the droves of Chinese tourists usually meandering their way around Manhattan on any given day will likely continue to thin out, as travel restrictions between China and the U.S. remain in place. As we’ve already noted, the virus has already taken its toll on Chinese owned businesses in New York.
Now Wah Tea Parlor’s owner, Wilson Tang, said that on February 3, his restaurant saw an unprecedented 40% drop in business, according to Eater New York. It was a similar story out of critically acclaimed Sichuan restaurant Hwa Yuan, which also saw a steep plunge in sales 2 weeks ago.
Tang said: “It sucks. The past couple days suck. We’ve been letting people go early, just to let them take some extra time off. It’s slow in general.”
Elizabeth Chin, a travel agent in Fort Lee, N.J. told the NY Times: “It’s going to be a serious financial burden. The flights are canceled. The tour operators have canceled.”
Bruce Zhu, the manager of China Tour Travel Services in Flushing, Queens said: “It’s a big problem. We have to cancel the bookings, cancel the hotels. We lose a lot of money on the bookings.”
“It’s all stopped — zero,” another travel agent in Flushing lamented.
Tyler Durden
Tue, 02/25/2020 – 19:15 - Why Governments Hate Secession
Why Governments Hate Secession
Authored by Ryan McMaken via The Mises Institute,
When the Soviet Union began its collapse in 1989, the world witnessed decentralization and secession on a scale not seen in Europe since the nineteenth century.
Over the next several years, puppet regimes and states-in-name-only broke away from Soviet domination and formed sovereign states. Some states which had completely ceased to exist—such as the Baltic states—declared independence and became states in the own right. In total, secession and decentralization in this era brought about more than twenty newly independent states.
This period served as an important reminder that human history is not, in fact, just a story of ever increasing state power and centralization.
Since then, however, the world has seen very few successful secession movements. A handful of new countries have come into being over the past twenty years, such as East Timor and South Sudan. But in spite of many efforts by separatists worldwide, there have been few changes to the lines on the maps.
This has certainly been the case in Europe and the Americas, where from Quebec to Scotland to Catalonia to Venice demands for independence have been met with trepidation and sometimes outright threats of violence from central governments.
Countries Don’t Like to Get Smaller
This is partly due to the fact state organizations—that is, the people who control them—have little motivation to give up the benefits conferred by bigness. States that control larger geographic areas and larger populations have greater ability to project their power and get more power.
Greater size means a larger frontier that can act as a physical buffer between the state’s enemies and the state’s economic core. Physical size is also helpful in terms of pursuing self-sufficiency in both energy production and agriculture. More land means greater potential for resource extraction and acreage devoted to food production. From the state’s perspective, these activities are good things because they can be taxed or expropriated.
In terms of population size, state control over larger populations means more human workers to tax, and, potentially, more highly productive urban workers. Historically at least, larger populations also provided personnel for military uses.
Thus, states that control large territories and populations are able to directly control larger and more diverse economies within their borders. This means more tax revenue, which in turn means greater military capability.
Naturally, state organizations are not inclined to abandon these advantages lightly, even when secession movement express a desire that they do so.
Why States Sometimes Get Smaller
Sometimes, though, states are forced to contract in size and scope. This usually happens when the cost of maintaining the status quo becomes higher than the cost of allowing a region to gain autonomy.
Historically, the cost of maintaining unity is raised through military means. Examples of this tactic being successfully employed include the cases of the United States, the Republic of Ireland, and some of the successor states of Yugoslavia.
But secession and decentralization have also often been achieved through bloodless or near bloodless means. This was the case in Iceland and throughout most of the post-Iron Curtain states.
Bloodless secession movements, however, only occur when the parent state is weakened by larger events beyond the secession movement itself. Iceland, for example, seceded in 1944, when World War II ensured that Denmark was in no position to object. The post-Soviet states seceded when the Soviet state had been rendered impotent by decades of economic decline and (in 1991) a failed coup. Nor is it a coincidence that India gained independence from the United Kingdom in the years immediately following World War II. It is likely the UK could have held on to India through military means indefinitely, but this would have come at a very high cost to the British economy and standard of living.1
It is possible to envision largely “amicable” separations. The model for this is the separation of Canada, Australia, and New Zealand from the the United Kingdom. But even in these cases, British control over these Commonwealth states’ foreign policy was not totally abandoned until after World War II, when the British state had been weakened by depression and war. Moreover, the British state assumed that these newly independent states would remain highly reliable geopolitical and economic allies indefinitely. Thus, the geopolitical cost of separation was perceived to be low.
Mega-States Are the Ideal State
In cases where the seceding state is perceived to have differing cultural, economic, or geopolitical interests—which is true of the overwhelming majority of cases—the parent state is, all else being equal, likely to meet demands for secession with much hostility.
Although liberal ideology has diminished the perception among much of the world’s population that bigger is better, most government agents—who are by nature decidedly illiberal—see things differently. For them, the ideal state is most certainly a large state.
Those who delight in the generous application of state violence have noticed that it is not a coincidence the world’s most powerful states—e.g., the US, Russia, China—are those that control large populations, large economic centers, and large geographic areas with sizable frontiers. The combination of these three factors in various configuration ensures that existential threats to the regime are few and far between. Russia’s relatively small economy—only a fraction of the size of Germany’s economy—is mitigated by its enormous geographical frontiers. Its economy is nonetheless large enough to maintain a nuclear arsenal. China’s per capita wealth is quite small, but Chinese territory and the sheer size of its overall economy ensures protection from foreign attack. The US’s enormous economy and its huge ocean frontiers render it essentially immune to all existential threats other than large-scale nuclear war.
Large states such as these are limited only by the defensive capabilities of other states, and by the threat of domestic unrest and resistance. As Ludwig von Mises noted in Liberalism, states can take only as much power as their populations are willing to give it. There are limits to the public’s generosity.
Totalitarian States Require Bigness
This relationship between bigness and state power has been illustrated in the fact totalitarian states are virtually always large states.
In her book The Origins of Totalitarianism, Hannah Arendt examines a number of nontotalitarian dictatorships that sprang up in Europe before the Second World War. These included (among others) the Baltic states, Hungary, Portugal, and Romania. In many of these cases, Arendt contends the regimes attempted to turn themselves into totalitarian regimes, but failed. This was largely due to their lack of size:
Although [totalitarian ideology] had served well enough to organize the masses until the movement seized power, the absolute size of the country then forced the would-be totalitarian ruler of masses into the more familiar patterns of class or party dictatorship. The truth is that these countries simply did not control enough human material to allow for total domination and its inherent great losses in population. Without much hope for the conquest of more heavily populated territories, the tyrants in these small countries were forced into a certain old-fashioned moderation lest they lose whatever people they had to rule. This is also why Nazism, up to the outbreak of the war and its expansion over Europe, lagged so far behind its Russian counterpart in consistency and ruthlessness; even the German people were not numerous enough to allow for the full development of this newest form of government. Only if Germany had won the war would she have known a fully developed totalitarian rulership.
Arendt was not an economist, but had she been one, she might have noted that the necessity of size is so central to totalitarian regimes because they are so economically inefficient. Contrary to promises of machine-like efficiency made by advocates of ever more powerful states, totalitarian states are absurdly wasteful both in terms of capital and human life. The same is true—to varying extents—for all regimes. But as the most centrally-planned ones—whether totalitarian or not—quickly become economic basket cases, large size is necessary. A smaller state would quickly exhaust its capital and its population, and the regime would collapse. Size can provide the appearance of sustainability for longer.
Cultural factors cannot be ignored, however. Arendt concedes this process of collapse can be drawn out longer in societies that are more ideologically tolerant of it:
Conversely, the chances for totalitarian rule are frighteningly good in the lands of traditional Oriental despotism, in India and China…
That region’s relative tolerance for despotism is enabled by local ideologies that foster a “feeling of superfluousness,” which according to Arendt “has been prevalent for centuries in the contempt for the value of human life.”
Continued Movement toward Smaller States
Fortunately for humanity, the trend in the world today is toward smaller states. As numerous scholars have noted, the average number of states in the world is larger now than at any other time in recent centuries. Moreover, the rise of global trade has lessened the benefits of imperialism and expanding a state’s frontiers and population. As Mises observed, freedom in trade negates the need for a state to acquire more of the world’s wealth through militaristic or imperialistic methods. States often still seek economic “self-sufficiency,” but the cost of this is so high, and the benefits of open trade so enticing, that more states are willing to accept trade as a substitute for “lebensraum.” This can already be observed, as globalization has allowed small states to thrive, and small states have even acted to force greater discipline on large states through tax competition.
There are certainly exceptions to this. Some small states, such as North Korea, have maintained an economically isolationist and totalitarian stance—fueled both by internal paranoia and by real perennial threats issued by its enemies (especially the US), in the case of the latter. For the most part, however, the spread of markets (and promarket ideology) has raised the opportunity cost of militaristic expansion from the state’s perspective. If offered the chance to expand at low cost, though, virtually all regimes would take the opportunity in a heartbeat. And this is why we will likely continue to see regimes enthusiastically resist secession within their own borders. States don’t have many opportunities to expand their territories and populations. So they’re not about to sign off on secession lightly. Nevertheless, new economic realities, wars, and demographic shifts may certainly affect the equation in coming years. And then we may again see a redrawing of maps of a sort not seen since the end of the Cold War.
Tyler Durden
Tue, 02/25/2020 – 18:55
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