- Remembering The Biggest Empires In Human History
Remembering The Biggest Empires In Human History
Tyler Durden
Tue, 05/26/2020 – 02:45In 1913, 412 million people lived under the control of the British Empire, 23 percent of the world’s population at that time.
It remains the largest empire in human history and at the peak of its power in 1920, it covered an astonishing 13.71 million square miles – that’s close to a quarter of the world’s land area. Statista’s Niall McCarthy notes that at its height, it was described as “the empire on which the sun never sets” but of course the sun finally did set on it.
Today, Britannia no longer rules the waves and its remnants consist of 17 small dependent and unincorporated territories scattered across the world such as the Falkland Islands and Gibraltar.
You will find more infographics at Statista
The Mongol Empire existed during the 13th and 14th centuries and it is recognized as being the largest contiguous land empire in history. It of course originated in Mongolia and once stretched from Eastern Europe to the Sea of Japan, extending into the Indian subcontinent and the Middle East, covering 9.27 million square miles.
The Russian Empire comes third on the list with a peak land area of 8.8 million square miles.
The data for this infographic was published by website World Atlas.
- Italian Government Urges Unemployed To Become Social-Distancing Snitches
Italian Government Urges Unemployed To Become Social-Distancing Snitches
Tyler Durden
Tue, 05/26/2020 – 02:00Authored by Steve Watson via Summit News,
The Italian government announced intentions Sunday to create an army of social distancing snitches, saying it will recruit 60,000 people to monitor their friends and neighbours’ activities and make sure they are adhering to social distancing policies.
Reports indicate that the government will reach out especially to the unemployed for the roles, in particular those who have applied for benefits recently.
It wants them to become “civic assistants”, who will report infractions on the use of face masks and other state ordered rules in the wake of the coronavirus lockdown.
The informants will not be given uniforms or badges, and will simply be embedded within the population, meaning anyone could be a government snitch.
It’s not unprecedented in Italy, given that Rome mayor Virginia Raggi has employed a website where Italians can inform on their neighbors if they see them breaking social distancing rules.
The announcement was made by the Minister for Regional Affairs and Autonomies Francesco Boccia and the Mayor of Bari (Puglia), Antonio Decaro, who serves as the President of the National Association of Italian Municipalities.
“We are gradually entering a new normal where there is a gradual recovery of productive activities and citizens are returning to populate cities day after day,” a statement reads.
Municipalities “will be able to take advantage of the contribution of ‘civic assistants’ to enforce all the measures put in place to counter and contain the spread of the virus, beginning with social distancing.” the statement adds.
“Now is the time to recruit all those citizens who want to help the country, demonstrating a great civic sense,” the statement concludes.
Social distancing snitches, reminiscent of party informants in Orwell’s 1984, have also been employed by authorities in other countries.
“The family had become in effect an extension of the Thought Police. It was a device by means of which everyone could be surrounded night and day by informers who knew him intimately.”
– George Orwell, 1984
- China Wants To Deploy Helicopter Drones Along Indian Border As Tensions Soar
China Wants To Deploy Helicopter Drones Along Indian Border As Tensions Soar
Tyler Durden
Tue, 05/26/2020 – 01:00China’s first domestically built helicopter-drone made its maiden flight last week and could soon be deployed on the Sino-India border, reported Global Times.
The AR500C unmanned helicopter, developed by the state-owned Aviation Industry Corporation of China (AVIC), is capable of conducting reconnaissance, communication relay, electronic disruption, and attack missions at heights above 15,000 feet.
“The test flight of the AR500C came at a time when China-India border tensions have been flaring up, as Chinese border defense troops have bolstered border control measures,” the tabloid said.
An AR500C was tested at an AVIC facility in Poyang, East China’s Jiangxi Province, in which it conducted several aerial maneuvers on Wednesday (May 20).
Footage, first flight of AR500C highland UAV, designed for recon, electronic-recon and comm-relay. https://t.co/srMZ4uKaec pic.twitter.com/ZbatUHTk3e
— dafeng cao (@dafengcao) May 22, 2020
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Chinese air defense expert Fu Qianshao told the tabloid that the helicopter drone does not need a traditional airstrip with long runways, allowing it to be easily deployed in more rugged areas:
“The maiden flight of the AR500C marked a significant technological breakthrough in fields such as rotor and engine design,” Fu said, adding that, “thin air on plateaus usually makes it difficult for aircraft to fly.”
Global Times specifically notes the arrival of AR500C comes as tensions flare-up on the China-India border. Both sides have been massing troops and remain locked in stand-off positions at several points:
India and China are preparing for more turbulence on the border. Several weeks ago, dozens of Indian and Chinese soldiers were injured in a cross-border clash involving fistfights and stone-throwing at a remote but strategically important mountain pass near Tibet.
The violent clash is the first between the two countries since 2017, and it seems border disputes between the nuclear-armed neighbors are not going away anytime soon.
* * *
RT News is reporting Sunday that 800 to 1,000 Chinese troops have crossed into India — certainly, a move that will escalate tensions between both countries.
- In Memoriam, 2020
In Memoriam, 2020
Tyler Durden
Mon, 05/25/2020 – 23:30Authored by Robert Gore via StraightLineLogic.com,
“You don’t fight for your country, you fight for your government.”
– The Golden Pinnacle, by Robert Gore
On Memorial Day, America remembers and honors those who died while serving in the military. It is altogether fitting and proper to ask: for what did they die? Do the rationales offered by the military and government officials who decide when and how the US will go to war, and embraced by the public, particularly those who lose loved ones, stand up to scrutiny and analysis? Some will recoil, claiming it inappropriate on a day devoted to honoring the dead.
However, it is because war is a matter of life and death, for members of the military and inevitably civilians, that its putative justifications be subject to the strictest tests of truth and the most probing of analyses.
Millions have marched off to war believing they were defending the US, which implies the US was under attack. Yet, setting aside for a moment Pearl Harbor and 9/11, US territory hasn’t been invaded by a foreign power since the Mexican-American War (arguably—Mexico claimed the territory it “invaded” was part of Mexico), or, if the Confederacy is considered a foreign power, the Civil War. That war ended a century-and-a-half ago, yet every US military involvement since has been justified as a defense of the US. That has gradually attenuated, in a little noted slide, to a defense of US “interests,” which is something far different.
Only one of those involvements could, arguably, have been said to have forestalled not an invasion, but a possible threat of invasion: World War II. Watching newsreel graphics of Germany’s drives across Europe, Northern Africa, and the USSR, and Japan’s across Asia and the Pacific, it was perhaps understandable that Americans believed the Axis powers would eventually come for them, especially after Pearl Harbor. However, that was a one-off attack by the Japanese to disable the US’s Pacific Fleet. To launch an invasion of the US, Japan, a smaller, less populated nation whose economy depended on imports of vital raw materials, including oil, would have had to cross the Pacific and fight the US, and undoubtedly Canada, on their home territories. The Pearl Harbor attack, provoking America’s entry into the war, proved a strategic blunder for the Japanese. An invasion would have been ludicrous. Similarly, Germany, up to its eyeballs in a two-front war, couldn’t conquer Russian winters or Great Britain across the English Channel. How was it supposed to either cross the Atlantic, or the USSR and hostile guerrillas, then the Pacific, and attack the US? That, too, would have been ludicrous.
The 9/11 attack was also a one-off. A majority of the attackers came not from a US enemy but rather a supposed ally, Saudi Arabia. They received funding and other support from people in that country and perhaps its government. A conventional war against a “state sponsor of terrorism” might have required war against Saudi Arabia; it is still not clear how involved its government was. That option was never considered. Rather, the Bush administration performed metaphysical gymnastics and launched the first war in history against a tactic: terrorism. Although the jihadists who perpetrated 9/11 were self-evidently not the vanguard of an invasion, the terrorism they employed was deemed a threat to US interests in the Middle East, and to life and property in the US. However, none of our subsequent involvements in Afghanistan, Iraq, Syria, Libya, Egypt, and Yemen have been necessary to maintain US citizens’ freedoms, the nation’s territorial integrity, or its lives and property.
There are undoubtedly many epitaphs on tombstones in this country to the effect: Here lies the deceased, who died defending America, and not one that reads: Here lies the deceased, who died defending American interests. However, the latter is in most cases more accurate than the former. Who decides the interests for which members of America’s military will die? Those considering entering the military today must look beyond the slogans, contemplate the risks of being killed, wounded, dismembered, paralyzed, or psychologically traumatized, and ask themselves: why and for whom are these risks being borne? You don’t fight for your country, you fight for your government. Is it worth risking one’s life for the US government?
In 1821, John Quincy Adams said America had not gone “abroad in search of monsters to destroy,” and while we wished those seeking liberty well, theirs was not our fight (see “In Search of Monsters,” SLL, 4/11/15). Since then, America has searched for monsters, found, and in some cases, destroyed them. However, as the poison of power has worked its evil on the minds and souls of those who possess it, the monsters have become more ethereal, apparitions conjured like creatures in the closet by children when they go to bed. The war on terrorism creates more terrorists, the monsters of choice since 9/11. The government still pays occasional lip service to “democratic values” and “civil liberties,” but allies itself with regimes which have no more fealty to those values and liberties than the “tyrants” the government opposes. “Defending America” and “Promoting Our Way of Life” have become transparent pretexts for American power and domination unbounded. As Adams so presciently warned, the search for monsters has turned the government itself into a monster, the biggest threat to Americans’ “inextinguishable rights of human nature.”
Those who have fought and died to defend America and its freedoms are noble beyond measure. Those who pay self-serving tribute to their valor, but make war and expend lives as means to corrupt ends are evil beyond redemption. Honor the former; expose and oppose the latter.
- Kim's New 'Nuclear-Capable Submarine' About To Be Deployed: South Korea
Kim’s New ‘Nuclear-Capable Submarine’ About To Be Deployed: South Korea
Tyler Durden
Mon, 05/25/2020 – 23:00A day after Kim Jong Un oversaw a meeting of his top generals which resolved to continue to advance North Korea’s “nuclear war deterrence”, South Korea’s Yonhap news service reports that Pyongyang’s new ballistic missile-capable submarine is ready to imminently enter service.
Images released last July via KCTV broadcast. “South Korean intelligence authorities said they have been closely monitoring the North’s activities regarding preparations for the launching of a new submarine it first unveiled in July 2019,” Yonhap underscores, citing military and intelligence sources.
“The submarine, believed to be a 3,000-ton one, is capable of carrying three SLBMs and to have been under construction at its naval base in Sinpo on its east coast,” the report continues.
“It seems almost ready to be deployed,” a South Korean military source told Yonhap. “We are closely watching when the North will hold a launching ceremony.”
Crucially the new submarine has been touted as capable of launching intercontinental ballistic missiles with greater ranges, or submarine-launched ballistic missiles (SLBMs), which would significantly add to Pyongyang’s strategic nuclear launch capabilities.
In July of last year North Korean state media published photos of what was then dubbed Kim’s new “powerful submarine” – which appeared indeed more massive than anything seen out of the country before.
Pyongyang is currently believed to have a fleet of aging, low-tech submarines numbering at about 70, but they are considered loud (and thus can easily be detected) and most importantly incapable of firing nuclear-armed ballistic missiles. However, in 2016 the north successfully test-fired a submarine-launched ballistic missile (SLBM) in a bid to establish faster deterrence capabilities.
2014 state media photo of Kim in one of NK’s ageing, smaller subs. It’s believed that the Sunday meeting of the Workers’ Party of Korea Central Military Commission (CMC) was in preparation of a potential major announcement that the new submarine could be ready to enter service.
Specifically the Sunday meeting chaired by Kim set forth “new policies for further increasing the nuclear war deterrence of the country and putting the strategic armed forces on a high alert operation,” according to state media.
The state-run outlet noted that officials also took “crucial measures for considerably increasing the firepower strike ability of the artillery pieces.”
Seoul officials worry precisely that this could mean the soon roll-out of the new SLBM-capable large submarine. If not a game-changer altogether, then it would at least provide serious leverage in the north’s stalled talks with Washington, which is likely precisely the point.
- CDC Confirms Remarkably Low Death Rate – Media Chooses To Ignore COVID-19 Realities
CDC Confirms Remarkably Low Death Rate – Media Chooses To Ignore COVID-19 Realities
Tyler Durden
Mon, 05/25/2020 – 22:30Authored by Daniel Horowitz via ConservativeReview.com,
Most people are more likely to wind up six feet under because of almost anything else under the sun other than COVID-19.
The CDC just came out with a report that should be earth-shattering to the narrative of the political class, yet it will go into the thick pile of vital data and information about the virus that is not getting out to the public.
For the first time, the CDC has attempted to offer a real estimate of the overall death rate for COVID-19, and under its most likely scenario, the number is 0.26%.
Officials estimate a 0.4% fatality rate among those who are symptomatic and project a 35% rate of asymptomatic cases among those infected, which drops the overall infection fatality rate (IFR) to just 0.26% – almost exactly where Stanford researchers pegged it a month ago.
Until now, we have been ridiculed for thinking the death rate was that low, as opposed to the 3.4% estimate of the World Health Organization, which helped drive the panic and the lockdowns. Now the CDC is agreeing to the lower rate in plain ink.
‘Nuff Said….. pic.twitter.com/0nZsydNHNb
— Ethical Skeptic ☀ (@EthicalSkeptic) May 22, 2020
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Plus, ultimately we might find out that the IFR is even lower because numerous studies and hard counts of confined populations have shown a much higher percentage of asymptomatic cases. Simply adjusting for a 50% asymptomatic rate would drop their fatality rate to 0.2% – exactly the rate of fatality Dr. John Ionnidis of Stanford University projected.
More importantly, as I mentioned before, the overall death rate is meaningless because the numbers are so lopsided. Given that at least half of the deaths were in nursing homes, a back-of-the-envelope estimate would show that the infection fatality rate for non-nursing home residents would only be 0.1% or 1 in 1,000. And that includes people of all ages and all health statuses outside of nursing homes. Since nearly all of the deaths are those with comorbidities.
The CDC estimates the death rate from COVID-19 for those under 50 is 1 in 5,000 for those with symptoms, which would be 1 in 6,725 overall, but again, almost all those who die have specific comorbidities or underlying conditions. Those without them are more likely to die in a car accident. And schoolchildren, whose lives, mental health, and education we are destroying, are more likely to get struck by lightning.
To put this in perspective, one Twitter commentator juxtaposed the age-separated infection fatality rates in Spain to the average yearly probability of dying of anything for the same age groups, based on data from the Social Security Administration. He used Spain because we don’t have a detailed infection fatality rate estimate for each age group from any survey in the U.S. However, we know that Spain fared worse than almost every other country. This data is actually working with a top-line IFR of 1%, roughly four times what the CDC estimates for the U.S., so if anything, the corresponding numbers for the U.S. will be lower.
Being alive means there is a risk that you will die in every year of your life. Normally we don’t think about this because the probability is very small.
It turns out that even if you are infected with COVID, your increased risk to die vs normal is not very large at all. pic.twitter.com/lrQnTuHYRS
— Gummi Bear (@gummibear737) May 20, 2020
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As you can see, even in Spain, the death rates from COVID-19 for younger people are very low and are well below the annual death rate for any age group in a given year. For children, despite their young age, they are 10-30 times more likely to die from other causes in any given year.
While obviously yearly death rates factor in myriad of causes of death and COVID-19 is just one virus, it still provides much-needed perspective to a public policy response that is completely divorced from the risk for all but the oldest and sickest people in the country.
Also, keep in mind, these numbers represent your chance of dying once you have already contracted the virus, aka the infection fatality rate. Once you couple the chance of contracting the virus in the first place together with the chance of dying from it, many younger people have a higher chance of dying from a lightning strike.
Four infectious disease doctors in Canada estimate that the individual rate of death from COVID-19 for people under 65 years of age is six per million people, or 0.0006 per cent – 1 in 166,666, which is “roughly equivalent to the risk of dying from a motor vehicle accident during the same time period.” These numbers are for Canada, which did have fewer deaths per capita than the U.S.; however, if you take New York City and its surrounding counties out of the equation, the two countries are pretty much the same. Also, remember, so much of the death is associated with the suicidal political decisions of certain states and countries to place COVID-19 patients in nursing homes. An astounding 62 percent of all COVID-19 deaths were in the six states confirmed to have done this, even though they only compose 18 percent of the national population.
We destroyed our entire country and suspended democracy all for a lie, and these people perpetrated the unscientific degree of panic. Will they ever admit the grave consequences of their error?
- COVID-19 Pandemic Fuels Bicycle Boom
COVID-19 Pandemic Fuels Bicycle Boom
Tyler Durden
Mon, 05/25/2020 – 22:00As social distancing is the order of the day, riding a packed subway to get around is not exactly what the doctor prescribed. Add to that the need for people to stay active as gyms and sports centers across the nation are closed and, as Statista’s Felix Richter notes, you‘ve got the perfect recipe for a bicycle boom, which is exactly what the industry has been seeing for the past two months.
You will find more infographics at Statista
According to figures from the NPD Group’s retail tracking service, bicycle sales in the United States soared in March 2020, with some categories seeing growth rates of more than 100 percent compared to the previous year.
“Consumers are looking for outdoor- and kid-friendly activities to better tolerate the challenges associated with stay-at-home orders, and cycling fits the bill well,” said Dirk Sorenson, sports industry analyst at NPD, adding that kids bikes and affordable adult leisure bikes were selling particularly well.
Survey data from U.S. bike manufacturer Trek gives us an idea why cycling is so popular these days. 85 percent of Americans consider it safer than public transportation during the coronavirus outbreak, while 63 percent of respondents feel that it helps to relieve stress/anxiety associated with the pandemic.
- Privatize The PBS And The NPR
Privatize The PBS And The NPR
Tyler Durden
Mon, 05/25/2020 – 21:30Submitted by Walter Block, Chair and Professor of Economics Loyola University New Orleans
In this era of the pandemic, it is even more important than otherwise that the general public has unbiased information at its disposal. Unhappily, most of the major media is located on the left side of the political spectrum. There is nothing that can be done about the New York Times, the Washington Post, the Boston Globe and that ilk. They are all private concerns, and, hence, at least quasi-legitimate. However, at least the lack of balance can be addressed, if only in a small marginal way.
Journalists have long and properly been called members of the fourth estate. What are the other three? That’s easy: the executive, the legislative and the judiciary. All four are necessary and important, at least according to the democratic theory which undergirds the political economy of most civilized nations on the planet.
But there is a crucial difference between the first three estates and the fourth. All members of the former are elected either directly or indirectly through the ballot box. No one casts any political vote for journalists. Any writer can stand up on his two hind legs and declare himself a member of this crucially important group.
In days gone by, all that was needed was some paper and ink and perhaps, in the more modern era, a mimeograph machine (remember those?). Nowadays, the prerequisites are electricity, internet connection and perhaps a computer.
The function of the legislature is to pass laws; the executive is to carry them out. The judiciary settles any disputes that may arise between the other two, and interprets the laws and the constitution. What is the function of the fourth estate?
It is to keep an eye, an eagle eye if you will, on the other three. Yes, this estate is not part of government, but it is no less indispensable in keeping that institution under strict surveillance.
This leads us to the Public Broadcasting Service and National Public Radio. The PBS and the NPR are strongly associated with government. Their budgets are to a great degree predicated upon tax revenues. Therefore, it cannot at all function as an investigative tool for the latter. No dog bites the hand that feed it, at least not for long. How, then, can we expect PBS and the NPR to “bite” their master? Ok, maybe there will be a few slight nips at its ankles from time to time in order to establish their “independence” but there will not be any heavy chomping, at least not to a degree deemed dangerous by the powers that be.
There is an aphorism in law: you cannot be a judge in your own case. To be sure, this “public” media is not a judge in its own case. But it is indeed a judge in the case of the entity to which it is beholden. As such, it cannot be expected to fully function in its role as watchdog over the first three estates.
If the PBS and the NPR do not bite deeply into government failures, mismanagements, and there are certainly such from time to time, they do not deserve to be a member of the fourth estate. It is not an independent media institution. It is akin to an arm of government. What is needed is an arm’s length distance between the fourth, and the first three estates.
Let me try again. The media is like a referee in a hockey game. If he picks up the stick and tries to shoot the puck through the net, the “game” is ruined. If the fourth estate is beholden to the state, it cannot function in its proper role.
Then, there is the minor point of economics. As in the case of the post office and other parts and parcels of government, these organizations need never go broke if they does not satisfy their paying customers or advertisers. In sharp contrast, this is not at all the case for the periodical which brings you this op ed. It is entirely vulnerable to market forces.
PBS and the NPR should be cut off from the public trough and thereby be better enabled to serve customers. This should also be done if we value our democratic institutions.
Here are some words of wisdom from John Stuart Mill’s “On Liberty” that are pertinent:
If the roads, the railways, the banks, the insurance offices, the great joint-stock companies, the universities, and the public charities, were all of them branches of the government; if in addition, the municipal corporations and local boards, with all that now devolves on them, became a departments of the central administration; if the employees of all these different enterprises were appointed and paid by the government, and looked to government for every rise in life; not all the freedom of the press and popular constitution of the legislature would make this or any other country free otherwise than in name.”
- Mapped: The State Of Facial Recognition Around The World
Mapped: The State Of Facial Recognition Around The World
Tyler Durden
Mon, 05/25/2020 – 21:00From public CCTV cameras to biometric identification systems in airports, facial recognition technology is now common in a growing number of places around the world.
In its most benign form, facial recognition technology is a convenient way to unlock your smartphone. However, as Visual Capitalist’s Iman Ghosh notes, at the state level, facial recognition is a key component of mass surveillance, and it already touches half the global population on a regular basis.
Today’s visualizations from SurfShark classify 194 countries and regions based on the extent of surveillance.
Click here to explore the full research methodology.
Let’s dive into the ways facial recognition technology is used across every region.
North America, Central America, and Caribbean
In the U.S., a 2016 study showed that already half of American adults were captured in some kind of facial recognition network. More recently, the Department of Homeland Security unveiled its “Biometric Exit” plan, which aims to use facial recognition technology on nearly all air travel passengers by 2023, to identify compliance with visa status.
Perhaps surprisingly, 59% of Americans are actually in favor of implementing facial recognition technology, considering it acceptable for use in law enforcement according to a Pew Research survey. Yet, some cities such as San Francisco have pushed to ban surveillance, citing a stand against its potential abuse by the government.
Facial recognition technology can potentially come in handy after a natural disaster. After Hurricane Dorian hit in late summer of 2019, the Bahamas launched a blockchain-based missing persons database “FindMeBahamas” to identify thousands of displaced people.
South America
The majority of facial recognition technology in South America is aimed at cracking down on crime. In fact, it worked in Brazil to capture Interpol’s second-most wanted criminal.
Home to over 209 million, Brazil soon plans to create a biometric database of its citizens. However, some are nervous that this could also serve as a means to prevent dissent against the current political order.
Europe
Belgium and Luxembourg are two of only three governments in the world to officially oppose the use of facial recognition technology.
Further, 80% of Europeans are not keen on sharing facial data with authorities. Despite such negative sentiment, it’s still in use across 26 European countries to date.
The EU has been a haven for unlawful biometric experimentation and surveillance.
– European Digital Rights (EDRi)
In Russia, authorities have relied on facial recognition technology to check for breaches of quarantine rules by potential COVID-19 carriers. In Moscow alone, there are reportedly over 100,000 facial recognition enabled cameras in operation.
Middle East and Central Asia
Facial recognition technology is widespread in this region, notably for military purposes.
In Turkey, 30 domestically-developed kamikaze drones will use AI and facial recognition for border security. Similarly, Israel has a close eye on Palestinian citizens across 27 West Bank checkpoints.
In other parts of the region, police in the UAE have purchased discreet smart glasses that can be used to scan crowds, where positive matches show up on an embedded lens display. Over in Kazakhstan, facial recognition technology could replace public transportation passes entirely.
East Asia and Oceania
In the COVID-19 battle, contact tracing through biometric identification became a common tool to slow the infection rates in countries such as China, South Korea, Taiwan, and Singapore. In some instances, this included the use of facial recognition technology to monitor temperatures as well as spot those without a mask.
That said, questions remain about whether the pandemic panopticon will stop there.
China is often cited as a notorious use case of mass surveillance, and the country has the highest ratio of CCTV cameras to citizens in the world—one for every 12 people. By 2023, China will be the single biggest player in the global facial recognition market. And it’s not just implementing the technology at home–it’s exporting too.
Africa
While the African continent currently has the lowest concentration of facial recognition technology in use, this deficit may not last for long.
Several African countries, such as Kenya and Uganda, have received telecommunications and surveillance financing and infrastructure from Chinese companies—Huawei in particular. While the company claims this has enabled regional crime rates to plummet, some activists are wary of the partnership.
Whether you approach facial recognition technology from public and national security lens or from an individual liberty perspective, it’s clear that this kind of surveillance is here to stay.
- 500 Doctors Write To Trump Warning Lockdown Will Cause More Deaths
500 Doctors Write To Trump Warning Lockdown Will Cause More Deaths
Tyler Durden
Mon, 05/25/2020 – 20:30Authored by Steve Watson via Summit News,
More than 500 doctors have added their names to a letter to President Trump urging him to end the lockdown, warning that it will cause more death than the coronavirus itself.
In the letter, sent last week, doctors described the lockdown as a “mass casualty incident”.
“We are alarmed at what appears to be the lack of consideration for the future health of our patients. The downstream health effects of deteriorating a level are being massively under-estimated and under-reported. This is an order of magnitude error,” it states.
Written by Simone Gold, a California emergency medical specialist, and further signed by hundreds of doctors, the letter adds “The millions of casualties of a continued shutdown will be hiding in plain sight, but they will be called alcoholism, homelessness, suicide, heart attack, stroke, or kidney failure.”
“In youths it will be called financial instability, unemployment, despair, drug addiction, unplanned pregnancies, poverty, and abuse,” the letter further urges.
It notes that “Suicide hotline phone calls have increased 600%,” while sales of alcohol have increased 300% to 600%.
“Because the harm is diffuse, there are those that hold it does not exist. We, the undersigned, know otherwise,” the letter concludes.
While globalists have urged that lockdowns need to continue, medical and economic experts across the board in multiple countries are warning that the loss of life will be much greater than that caused directly by the virus itself, if lockdowns are not scrapped.
A leaked study from inside the German Ministry of the Interior has found that the impact of the country’s lockdown could end up killing more people than the coronavirus due to victims of other serious illnesses not receiving treatment.
A Guardian analysis has found that there have been thousands of excess deaths of people at home in the UK due to the lockdown.
Professor Richard Sullivan also warned that there will be more excess cancer deaths in the UK than total coronavirus deaths due to people’s access to screenings and treatment being restricted as a result of the lockdown. Physicians in the US are issuing the same warnings over cancer screening.
Sullivan’s comments were echoed by Peter Nilsson, a professor of internal medicine and epidemiology at Lund University, who said, “It’s so important to understand that the deaths of COVID-19 will be far less than the deaths caused by societal lockdown when the economy is ruined.”
In addition, new figures from the UK’s Office of National Statistics show that the number of deaths from flu and pneumonia is three times higher than the total number of coronavirus deaths this year.
A data analyst consortium in South Africa asserts that the economic consequences of the country’s lockdown will lead to 29 times more people dying than the coronavirus itself.
Experts have also warned that there will be 1.4 million deaths from untreated TB infections due to the lockdown.
- Clinton-Appointed Judge Lets Florida Felons Vote, Could Add 'Hundreds Of Thousands' To November Rolls
Clinton-Appointed Judge Lets Florida Felons Vote, Could Add ‘Hundreds Of Thousands’ To November Rolls
Tyler Durden
Mon, 05/25/2020 – 20:00A federal judge in Florida on Sunday declared key portions of the state’s felon voting law unconstitutional in a ruling that could allow hundreds of thousands of new voters being added to the rolls just in time for the 2020 presidential election.
In a 125-page ruling, US District Judge Robert Hinkle, a Clinton appointee, slammed the state’s “pay-to-vote” system which the GOP-controlled Florida Legislature passed nearly a year ago, which ended the state’s lifetime ban on voting for most ex-felons, but requires that they repay legal financial obligations first, according to Politico.
“This pay-to-vote system would be universally decried as unconstitutional but for one thing: each citizen at issue was convicted, at some point in the past, of a felony offense,” wrote Hinkle. “A state may disenfranchise felons and impose conditions on their reenfranchisement. But the conditions must pass constitutional scrutiny.”
“Whatever might be said of a rationally constructed system, this one falls short in substantial respects,” he added.
Hinkle’s ruling could lead to a major addition to the state’s voting rolls just months before the election in the battleground state. President Donald Trump, who narrowly won the state four years ago, has made winning Florida a key part of his reelection strategy.
One study done by Daniel Smith, a University of Florida political professor, found that nearly 775,000 people with felony convictions have some sort of outstanding legal financial obligation. –Politico
Hinkle claims that requiring people with felony convictions to pay legal fees – which are separate from restitution or fines ordered by the court – before being allowed to vote violated the US Constitution’s ban on poll taxes.
“[T]axation without representation led a group of patriots to throw lots of tea into a harbor when there were barely united colonies, let alone a United States,” wrote Hinkle. “Before Amendment 4, no state disenfranchised as large a portion of the electorate as Florida.”
Hinkle did, however, reject arguments by the groups and individuals who sued that the Florida’s law was discriminatory.
The ruling was immediately applauded by the long-line of groups that were part of the legal challenge, which spanned three different lawsuits.
“Today’s decision is a landmark victory for hundreds of thousands of voters who want their voices to be heard,” Paul Smith, vice president of the Campaign Legal Center, said in a statement. “This is a watershed moment in election law. States can no longer deny people access to the ballot box based on unpaid court costs and fees, nor can they condition rights restoration on restitution and fines that a person cannot afford to pay.” –Politico
And just like that, Trump lost Florida?
- Who Deserves Impeachment More – Trump Or Schiff?
Who Deserves Impeachment More – Trump Or Schiff?
Tyler Durden
Mon, 05/25/2020 – 19:30Authored by Daniel Lazare via The Strategic Culture Foundation,
Donald Trump was impeached last winter for one technical violation of the law and a host of made-up ones. The technical violation was his move to block $391 million in Ukrainian military aid.
It was a violation because it because it interfered with Congress’s exclusive spending powers. But it was purely technical because presidents traditionally have wide latitude in determining how expenditures are made. Back in 1801, Thomas Jefferson’s treasury secretary, Albert Gallatin, argued that the executive branch should be allowed “a reasonable discretion” while, 160 years later, John F. Kennedy had no scruples about unilaterally moving more than $1 million – a lot of money in those days – from one budget account to another to pay for a pet project known as the Peace Corps. No one thought much of it at the time, so Trump’s decision to hold up an appropriation in 2019 doesn’t seem like a big deal.
And it wasn’t, as the December 18 articles of impeachment made clear. Rather than dwelling on the blockage itself, they quickly moved on to the real question at hand, which is why it occurred. The answer, of course, was to pressure newly-elected Ukrainian President Volodymyr Zelensky to launch an investigation into why a notorious oligarch named Mykola Zlochevsky had given Joe Biden’s son Hunter a lucrative no-show job and why the then-vice president had then pushed for the firing of a prosecutor looking into Zlochevsky’s company, Burisma Holdings.
Since any such investigation would have reflected poorly on Biden, the presumptive Democratic nominee, Democrats charged that Trump was seeking to “obtain an improper personal political benefit” by “enlist[ing] a foreign power in corrupting democratic elections.” After welcoming Russian interference in 2016, he was now angling for Ukrainian interference in 2020 – or so they maintained. But the charge never made sense for one all-important reason: however much Trump might benefit, the public had a legitimate interest in learning why Biden had allowed his son to enter into an obviously corrupt relationship at a time when he was supposedly serving as Obama’s point man in rooting out Ukrainian corruption.
It’s as if 1920s Chicago crime buster Eliot Ness had looked the other way while a close relative took a job with Al Capone. So while Democrats made a big show of moral indignation, Senate Republicans were unmoved with the partial exception of notorious featherbrain Mitt Romney, and Trump was acquitted.
But now let’s take a look at Schiff’s sins and see how they compare. Back in 2017, he was the ranking Democrat on the House Intelligence Committee and therefore the man Democrats counted on to lead the charge that Trump had colluded with the Kremlin in order to steal the election. He did so with gusto. Quoting from a dossier prepared by ex-British MI6 agent Christopher Steele, he regaled a March 2017 committee hearing with tales of how Russia bribed Trump adviser Carter Page by offering him a hefty slice of a Russian natural-gas company known as Rosneft and of how Russian agents boosted Trump’s political fortunes by hacking Hillary Clinton’s emails and passing them on to WikiLeaks. Conceivably, such acts could have been purely coincidental, Schiff acknowledged.
“But it is also possible,” he went on, “maybe more than possible, that they are not coincidental, not disconnected, and not unrelated, and that the Russians used the same techniques to corrupt U.S. persons that they have employed in Europe and elsewhere. We simply don’t know, not yet, and we owe it to the country to find out.”
Hours later, he assured MSNBC that the evidence of collusion was “more than circumstantial.” Nine months after that, he informed CNN’s Jake Tapper that the case was no longer in doubt: “The Russians offered help, the campaign accepted help, the Russians gave help, and the president made full use of that help.” In February 2018, he told reporters: “There is certainly an abundance of non-public information that we’ve gathered in the investigation. And I think some of that non-public evidence is evidence on the issue of collusion and some … on the issue of obstruction.”
The press lapped it up.
But now, thanks to the May 7 release of 57 transcripts of secret testimony – transcripts, by the way, that Schiff bottled up for months – we have a better idea of what such “non-public information” amounts to.
The answer: nothing.
A parade of high-level witnesses told the intelligence committee that either they didn’t know about collusion or lacked evidence even to venture an opinion. Not one offered the contrary view that collusion was true.
“I never saw any direct empirical evidence that the Trump campaign or someone in it was plotting [or] conspiring with the Russians to meddle with the election,” testified ex-Director of National Intelligence James Clapper. Obama Attorney General Loretta Lynch told the committee that no one in the FBI or CIA had informed her that collusion had taken place. Sally Yates, acting attorney general during the Obama-Trump transition, was similarly noncommittal. So were Obama speechwriter Ben Rhodes and former acting FBI Director Andrew McCabe. David Kramer, a prominent neocon who helped spread word of the Steele dossier in top intelligence circles, was downright apologetic: “I’m not in a position to really say one way or the other, sir. I’m sorry.”
But rather than admit that the investigation had turned up nothing, Schiff lied that it had – not once but repeatedly.
Let that sink in for a moment. Collusion dominated the headlines from the moment Buzzfeed published the Steele dossier on Jan. 10, 2017, to the release of the Muller report on Apr. 18, 2019. That’s more than two years, a period in which newspapers and TV were filled with Russia, Russia, Russia and little else. Thanks to the uproar, acting FBI Director Andrew McCabe and Deputy Attorney General Rod Rosenstein secretly discussed using the Twenty-fifth Amendment to force Trump out of office, while an endless parade of newscasters and commentators assured viewers that the president’s days were numbered because “the walls are closing in.”
Schiff’s only response was to egg it on to greater and greater heights. Even when Special Prosecutor Robert Mueller issued his no-collusion verdict – “the investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities,” his report said – Schiff insisted that there was still “ample evidence of collusion in plain sight.”
“I use that word very carefully,” he said, “because I also distinguish time and time again between collusion, that is acts of corruption that may or may not be criminal, and proof of a criminal conspiracy. And that is a distinction that Bob Mueller made within the first few pages of his report. In fact, every act that I’ve pointed to as evidence of collusion has now been borne out by the report.”
So Trump colluded with the Kremlin, but in a non-criminal way? Even if Mueller got Schiff in a headlock and screamed in his ear, “No collusion, no collusion,” the committee chairman would presumably reply: “See? He said it – collusion.”
The man is an unscrupulous liar, in other words, someone who will say anything to gain attention and fatten his war chest, which is why contributions flowing to his re-election campaign have risen from under $1 million a year to $10.5 million since the Russia furor began. The man talks endlessly about the Constitution, patriotism, his father’s heroic service in the military, and so on. But the only thing Adam Schiff really cares about is himself.
Trump’s sins are manifold. But with unerring accuracy, Schiff managed to zero in on the one sin that didn’t take place. Considering that the $391 million was destined for ultra-right military units whose members sport neo-Nazi regalia and SS symbols as they battle pro-Russian separatists in the eastern Ukraine, Schiff’s crimes are just as bad, if not worse. Ladies and gentlemen, we give you the next candidate for impeachment, the congressman from Hollywood – Adam Schiff!
- JPMorgan: The Surge In Gold Is A Sign Of Eroding Confidence In Central Bank-Generated Money
JPMorgan: The Surge In Gold Is A Sign Of Eroding Confidence In Central Bank-Generated Money
Tyler Durden
Mon, 05/25/2020 – 19:00The past few months have been painful for many FX traders, as a result of a global economic crisis has left the major reserves currencies – USD, EUR, JPY, CHF, GBP – clustered at rate levels between roughly 0% to -0.5%, which doesn’t allow rate differentials to inspire much movement amongst them, and is also one reason a G10 currency index like DXY hasn’t moved much during this crisis.
But the lack of dispersion within this bloc shouldn’t be “misread as investor comfort with these reserve assets in an era of record budget deficits from high starting levels of indebtedness, in turn motivating long-term concerns about sovereign risk in Europe and inflation or fiscal irresponsibility elsewhere” as JPMorgan writes in its Weekly Asset View report authored by John Normand.
Indeed, as the bank ominously continues, these background concerns may partly explain why Gold, “which is the world’s legacy reserve asset”, has made or is nearing all-time highs versus the euro, yen, sterling, Swiss franc and the dollar (9% from an all-time high) even as the trade-weighted dollar creeps higher.
And while JPM takes a measured approach in qualifying what this move in gold means for the dollar, saying “this isn’t anything close to the dollar crisis that is foretold every few years in response to extreme loose Fed policy or rising twin deficits (fiscal and current account)” explaining that such an “outcome would deliver instead high-volatility USD depreciation versus all reserve currencies due to capital flight”, the bank’s conclusion is nonetheless disturbing for its brutal honesty:
… instead, take this Gold move as a sign of eroding confidence in central bank-generated money generally, a trend that will probably continue until enough growth returns to put fiscal policy on a more efficient path.
But what is enough growth does not return to put fiscal policy on a more efficient path? What if, instead, the entire world turns into China where the only economic growth comes from flooding the economy with debt, resulting in massive malinvestment and an avalanche of defaults just waiting to begin?
Indeed, what if the world is has crossed the Rubicon where the marginal utility of debt is collapsing and it takes exponentially more leverage to create even the smallest uptick in growth.
What happens to gold then?
- "The US Is Bluffing": China Claims Trump Too "Weakened" By Pandemic To Intervene In Hong Kong
“The US Is Bluffing”: China Claims Trump Too “Weakened” By Pandemic To Intervene In Hong Kong
Tyler Durden
Mon, 05/25/2020 – 18:29In his overnight market commentary, Rabobank’s Michael Every laid out an interesting hypothesis why markets continue to fade the risk of a serious escalation in tensions between the US and China: “within serious HK money circles there is absolute certainty that the US is now an EU-style paper tiger and has no stomach for a real fight, and that Trump is so beholden to Wall Street that he won’t dare act.“
And while Every himself disagrees with this sanguine assessment, saying this stance “captures the self-confidence in Beijing but utterly fails to capture the bipartisan anger in DC, or the fact that both sides are using Beijing as a stick to beat each other with in the 2020 presidential election, or that the US has financial weapons as fearsome as its military, or that the Fed is there to prop up the stock market anyway”, he appears to have a point regarding China’s “self-confidence.”
In an editorial published in China’s Global Times, the authors claim that Trump is indeed nothing but a paper tiger and that “US talk of Hong Kong a nothingburger” in response to Beijing’s formulation of a national security law. To be sure, the article is filled with the usual jingoist allegations, first claiming that “the US is again leading the Western camp in besieging China” a stance that is driven by the “compression of Western values”, resulting from “the rise of emerging markets and developing countries becoming increasingly independent.”
The editorial then makes a rather valid point that how China frames national security in the context of Hong Kong is entirely its own matter and not that of the US:
Fighting the national security law for Hong Kong is not a universal value and cannot withstand serious scrutiny. Isn’t national security the top priority for each and every country? Washington has always used national security as an excuse to suppress normal commercial activities. Saying that the national security law in Hong Kong hinders the city’s high degree of autonomy and ends its freedom will hardly fool all Westerners, let alone manipulate the whole international community.
China indeed has every right to pursue whatever it sees as its national interest; the real question is who will suffer more from the explicit return of Hong Kong under China rule. And while Trump has claimed that Hong Kong will be crippled as a financial gateway to China should it lose its special trade status with the US, China counters that the US is no longer a critical partners, read source of foreign funds (a curious position considering China’s capital account is about to turn negative and will, more than ever, rely on outside sources of capital). Instead, the Global Times argues that as Hong Kong’s relationship with the US fades, it will be replaced by a more powerful one with China:
The biggest pillar for Hong Kong’s status as an international financial center is its role as a window to the Chinese mainland as well as its special relationship with the mainland economy.
The special trade status given by the US is important, but is not a decisive factor to determine whether Hong Kong is a financial center or not. As long as the economy in the Chinese mainland keeps booming, Hong Kong will not decline. If the US changes its policy toward Hong Kong, that will result in a lose-lose situation. But Hong Kong will be able to adjust and maintain its prosperity with the support of the Chinese central government.
But what is most remarkable about the op-ed is the view that as a result of the US being “entangled” with the coronavirus epidemic, which has claimed 100,000 American lives, Trump will be unable to mobilize the “tools and resources” he needs to intervene externally:
As the US is entangled in the COVID-19 epidemic, its actual ability to intervene externally is weakening. The White House claimed it would impose sanctions on China, but the tools and resources at its disposal are fewer than those it could mobilize before the outbreak. It is only bluffing.
If this is indeed the fundamental position of China’s leadership re Covid-19 which just “slipped” through in an op-ed written by a state-owned newspaper – that the US’ own fight with the pandemic has left it too weak to respond to foreign policy challenges – it would provide China with a convenient motive to make sure the pandemic which started in Wuhan goes global and cripples any ability by the US to oppose China’s imminent intervention in Hong Kong.
The editorial concludes by claiming that while the Western world appears united, when it is faced with the risk of losing the “Huge Chinese market”, any opposition to Beijing would disappear:
The entire Western world will not follow the US. China is a huge market and the US is unable to provide enough compensation to offset the losses if Western countries become alienated from China. Values still have a strong appeal, but they cannot replace the fundamental interests of a country in pursuit of development. Besides, China has not intervened in the way of life of Western countries. Taking sides based on values at a disproportionate economic cost is not supposed to be the logic of international relations in the 21st century.
Judging by how most European countries have acted vis-a-vis China in recent years, vocally objecting to this and that in the front while assuring Beijing that nothing will change in the back, not to mention countless US tech firm just begging for access to the Chinese market, this observation is spot on.
The author then writes that “as long as China acts based on facts, resolutely formulates the national security law for Hong Kong, strictly limits the law’s scope to ensure both national security and the city’s stability under the “one country, two systems” principle, while safeguarding the basic rights and interests of the Hong Kong people”, which of course is all just the propaganda strawman that Xi Jinping is using to justify a historic move in Hong Kong, “China will take the initiative in Hong Kong affairs” and “the US stirring of Western public opinion will lead to nothing.”
- California Church Asks US Supreme Court To Intervene In Lockdown Battle After Clinton, Obama Judges Strike Down
California Church Asks US Supreme Court To Intervene In Lockdown Battle After Clinton, Obama Judges Strike Down
Tyler Durden
Mon, 05/25/2020 – 18:00A California church and its bishop have asked the US Supreme Court to step in after the 9th Circuit Court of Appeals struck down their emergency application to reopen amid the coronavirus pandemic, in defiance of executive orders issued by Gov. Gavin Newsom.
Lawyers for the South Bay United Pentecostal Church and Biship Arthur Hodges filed with the USSC after the 9th Circuit panel split 2-1, with Judges Barry Silverman and Jacqueline Nguyen – appointed by Clinton and Obama respectively – wrote in their Friday order “We’re dealing here with a highly contagious and often fatal disease for which there presently is no known cure,” adding “In the words of Justice Robert Jackson, if a ‘court does not temper its doctrinaire logic with a little practical wisdom, it will convert the constitutional Bill of Rights into a suicide pact.’”
Apparently a fatality rate below 0.3% counts as ‘often fatal,’ and it would be a ‘suicide pact’ to allow people to worship freely while accepting the well-established risks of contracting COVID-19.
The panel’s third judge, Trump appointee Daniel Collins, weighed in with an 18-page dissent arguing that Gov. Newsom’s orders intrude on religious freedom protected by the First Amendment, according to Politico.
“I do not doubt the importance of the public health objectives that the State puts forth, but the State can accomplish those objectives without resorting to its current inflexible and over-broad ban on religious services,” wrote Collins, who noted that the Governor’s orders allow many workplaces to open, while religious gatherings remain banned even if they can meet social distancing requirements imposed on other permitted activities.
“By explicitly and categorically assigning all in-person ‘religious services’ to a future Phase 3 — without any express regard to the number of attendees, the size of the space, or the safety protocols followed in such services8 — the State’s Reopening Plan undeniably ‘discriminate[s] on its face’ against ‘religious conduct,” Collins continued.
The legal dispute may turn on how much weight the justices choose to give to a 115-year-old Supreme Court precedent, Jacobson v. Massachusetts, which upheld a mandatory vaccination scheme for smallpox.
Lawyers for Newsom have argued that the decision gives states broad powers during a public health emergency and effectively supersedes typical protections for First Amendment activity, including religious practice.
While the 1905 high court ruling remains on the books with no case since where the justices have grappled with similar issues, in his dissent from the Friday 9th Circuit order, Collins sounded skeptical about the sweep of the century-old case.
“Even the most ardent proponent of a broad reading of Jacobson must pause at the astonishing breadth of this assertion of government power over the citizenry, which in terms of its scope, intrusiveness, and duration is without parallel in our constitutional tradition,” he said. –Politico
In other parts of the country, challenges to pandemic lockdowns have been met with mixed results in federal courts. For example, New Orleans’ Fifth Circuit and the Cincinnati Sixth Circuit have granted emergency relief to churches in defiance of state orders, while Chicago’s 7th Circuit joined the San Francisco-based 9tth circuit in declining to intervene.
Read the rest of the report here.
- Hedge Fund CIO: "We Have Reached The Point Where The Entirety Of Future Prosperity Has Been Pulled To The Present"
Hedge Fund CIO: “We Have Reached The Point Where The Entirety Of Future Prosperity Has Been Pulled To The Present”
Tyler Durden
Mon, 05/25/2020 – 17:40By Eric Peters, CIO of One River Asset Management
The Fed presides over the world’s largest economy. Treasury claims otherwise, but the Fed is also guardian of the world’s reserve currency. From this position of power, global central banks were drawn by force of gravity to adopt Fed policies. Over the past decade, global central banks gravitated to the Fed’s policy mix, lowering rates, expanding liquidity, spurring a historic rise in global debt and leverage. Entering 2020, the world had the most homogeneous policy mix since Roman rule. And, as in all things living, lack of diversity reduces resiliency.
Fed policy dominance had complex, unintended consequences, some of which we can observe. For instance, it relieved politicians of the task of governing. Each crisis was easily solved with monetary magic, pulling future demand to the present. This allowed politicians to avoid making tough choices between spending for today versus investing for tomorrow. Without such vital debates, we borrowed from our youth to spend on our ageing. Student debt is one of the many such manifestations. Wildly inflated asset prices are another.
Monetary policy dominance taken to its logical conclusion leads to a world where the entirety of future prosperity has been pulled to the present. At that end point, no matter how many monetary magic wands are waved, the real economy is unresponsive, monetary policy is utterly impotent. As you approach this point, monetary policy gradually losses effectiveness. Somewhere close to the end, politicians are forced to start governing again, making choices. But unlike central bankers who are all the same, each politician is uniquely different, heterogeneous.
As politicians fill the vacuum left by impotent central bankers, they deploy different tools – fiscal, tax, trade, exchange rate, regulatory, immigration and military. They try to coordinate with central bankers, but this produces only illusory benefits because monetary policy once impotent remains so until the system reboots. Today, we are transitioning from a world led by homogeneous central bankers who used a few identical policies in similar ways to one led by heterogeneous politicians who will be using a wide range of policies in wildly different ways.
Global central bank homogeneity produced an era of policy predictability. This encouraged economic actors to leverage balance sheets and business strategies to a stable future. Their actions, like share buybacks and just-in-time manufacturing, were reflexive in that each incremental investment dampened market and economic volatility, reinforcing expectations for a stable future. Naturally, reflexive processes lead to extreme outcomes. Without quite realizing it, economic actors accepted increased systemic fragility in exchange for higher profitability.
Trends unfold when the world changes. Prices adjust as we recognize that the future is likely to look different from the past. Underlying change is often driven by natural cycles. They include cycles in weather, debt, leverage, capital investment, innovation, politics, population, international relations. In late stage, they are sometimes amplified by mass hysteria. Systematic trend-following strategies just finished their worst decade of performance in 120yrs. So did long volatility strategies. It was a decade of homogeneity, policy predictability. It’s over.
- Goldman: The Default Cycle Has Started
Goldman: The Default Cycle Has Started
Tyler Durden
Mon, 05/25/2020 – 17:26Perhaps inspired by our recent articles showing that “Loan Defaults Hit 6 Years High” and “Bankruptcy Tsunami Begins: Thousands Of Default Notices Are “Flying Out The Door“, Goldman writes this morning that with businesses shuttered and job losses mounting rapidly, “there is growing concern over the ability of borrowers to service their debt obligations and the resulting risks to financial stability.”
In response, Goldman “assesses the likely scale of economy-wide credit losses, the exposure of creditors to those losses, and the potential risks to financial stability and the banking sector” to conclude that “rising bankruptcies and delinquencies suggest the default cycle has started.”
How did Goldman get to that assessment?
Looking at corporate credit, the bank first looked at corporate debt, noting that nonfinancial corporate debt grew by over 60% since 2011 and recently rose to an all-time high as a share of GDP (Exhibit 1, left), leading to growing concern even prior to the virus that corporate defaults could rise dramatically in the next downturn. Meanwhile, the sharp decline in revenues across many industries has left a large share of companies with negative cash flow, and rising bankruptcy filings and cases suggest the corporate default cycle has started.
Unlike the financial crisis, the bank finds that a unique feature of this downturn “is the wide variation in industry exposure to the virus, with physical constraints on spending, occupational health risks, and geographical variation in the virus outbreak affecting industries differently.”
Goldman then performs an analysis of which industries are most impacted by credit losses due to the coronacrisis, and summarizes the findings in the next chart, which shows a coarser breakdown of virus-impacted industries, as well as their market share in the high-yield corporate bond space.
The energy sector stands out both in terms of its size and default risks, given the collapse in oil demand, its disproportionately large footprint in the corporate bond market relative to its GDP share, and the heavy amounts of leverage in the sector. Roughly half of high-yield corporate bonds are in the energy or virus-impacted industries, according to Goldman which adds that its credit strategists “estimate that the 12-month trailing high-yield default rate will increase to 13% by the end of 2020, similar to the peak rate reached during the Global Financial Crisis (Exhibit 3, bottom).”
In addition to energy debt, another key area of concern – as we have repeatedly pounded the table in recent weeks – is commercial real estate (CRE), given signs of overheating and overstretched valuations prior to the virus, as well as the unprecedented declines in demand in industries such as lodging, healthcare, and retail.
Commercial real estate prices have outpaced single family house prices since the prior downturn (chart below, left), with CRE capitalization rates falling to historically low levels. Late payments on commercial mortgages have picked up sharply in recent months, suggesting mounting pressures (chart below, right).
Tangentially, and as also discussed here extensively before, the unique nature of this downturn suggests that “variation in virus exposure will play a large role in determining the breadth and depth of credit losses in commercial real estate.” Delinquencies by property type already show wide dispersion, with virus-exposed property types such as lodging and retail showing much higher delinquency rates than less exposed property types such as self-storage. This contrasts with the prior real estate bust, when delinquencies were roughly evenly distributed across property types.
Overall, Goldman expects a deeper contraction of property incomes than during the financial crisis period, given the heavy stresses to rents and occupancy rates facing many properties, and overall losses on commercial mortgages similar to those observed during the financial crisis.
Meanwhile, even as consumers have been slow to telegraph stress, kept afloat thanks to hundreds of billions in transfer payments, significant downside risks to household debt also remain, particularly if unemployment insurance benefits are not extended, and if higher out-of-pocket medical expenses due to loss of employer-based health insurance push more households to default.
Who Will Bear The Losses
We next look to see where credit losses are most likely to be felt. The Fed’s Financial Accounts suggests that the banking system plays a large role in providing credit for commercial real estate and overall corporate borrowing, two areas of greater concern. Household debt is also largely held by banks, particularly residential mortgages, credit card loans, and auto loans, while student debt is largely held by the federal government.
Municipal debt, another area of concern, is largely held by households, mutual funds and pensions funds, and insurance companies, and thus likely poses a smaller threat to financial stability. Lastly, a growing share of corporate lending—especially in riskier categories, such as leveraged loans—is now done by nonbank financial institutions, including collateralized loan obligations (CLOs), asset managers, hedge funds, and private equity companies, and such lending is not well captured in the Fed’s Financial Accounts. TIC data provides some evidence that non-bank financial institutions and insurance companies own much of US CLO securities, a growing area of concern. Crucially, CLOs do not generally permit early redemptions and are thus less susceptible to runs, which is why Goldman strategists do not see CLOs posing a major risk to financial stability, “despite the likely significant pickup in defaults on leveraged loans.”
The next chart shows a breakdown of financial asset holdings by creditor, excluding financial institutions such as hedge funds and private equity companies where data is less readily available. Banks are highly exposed to many areas of credit, while households, mutual funds, and pensions are largely more exposed to equities. Insurance companies are somewhere in between, and hold a significant amount of exposure to corporate debt, including CLOs.
The bottom line is simple: contrary to conventional wisdom that banks are now far, far safer than they were during the financial crisis, they bear the broadest exposure to the coming default wave which will soon test just how safe they are.
Risks to the Banking System
As Goldman reminds us, the Fed’s Financial Stability Report warned that financial sector vulnerabilities including for the banking sector, are likely to be significant in the near term, while the April FOMC minutes indicated concern that banks could come under greater stress, particularly if more adverse economic scenarios were realized. The Fed’s Senior Loan Officer Opinion Survey (SLOOS) indicated that lending standards tightened significantly, particularly for commercial and industrial (C&I) and CRE loans, with most banks citing a less favorable or more uncertain economic outlook, as well as a reduced tolerance for risk, as reasons for tightening lending standards. Loan loss provisions across banks have increased significantly in preparation for the rise in defaults and delinquencies.
Curiously, only a modest percentage of banks cited a deterioration in their capital position as playing a role in tightening lending standards in the first quarter. In addition, residential real estate remains the largest category of lending in the banking system by a significant margin. And while Goldman believes that given that this downturn was not precipitated by a housing crisis, losses on this particularly large category will likely be smaller than during the GFC, the question of how quickly consumer cash flows return to normal will be critical in answering just how significant residential losses will be in a few months time.
That said, one clear worry is that certain industries are heavily exposed to the virus, which may lead to larger risks to the banking system if the lending of particular banks, or the banking system as a whole, is highly concentrated in these industries.
Next, Goldman assesses the vulnerability of bank balance sheets as of 2019 Q4, and estimates the losses on total bank equity from losses across asset categories. The bank assumes similar losses on C&I and CRE lending as in the 2008 crisis, but a smaller hit on residential mortgages and consumer loans (this may be a costly mistake). The bank then calculates the estimated losses as a percent of total bank equity capital, estimating that losses on C&I, CRE, consumer, and residential real estate loans would amount to roughly 15% of total bank equity, compared to around 30% of total bank equity at risk heading into the Global Financial Crisis, using ex-post realized losses across the same categories. Two main reasons account for this difference: first, losses on the large residential real estate category are likely to be smaller, and second, bank equity levels are higher today than before the crisis. Once again, these optimistic assumptions may end up having to be substantially revised higher.
Finally, the bank looks at lending exposure of the largest banks individually: bank-level data can reveal differences across banks and highlight whether there are a significant number of banks with large exposures to at-risk categories. Naturally, using the optimistic assumptions profiled above, Goldman finds that while there is dispersion among the largest banks in their exposure to losses, almost all of the largest banks today are less vulnerable than the median large bank was prior to the financial crisis, thus invalidating the entire analysis for the simple reason that the current crisis may end up being far more dire to bank loans than 2008/2009 if an economic recovery isnt forthcoming in short notice.
In summary, Goldman finds that while financial stability concerns appear manageable, significant downside risks remain. A slower than expected recovery and a prolonged downturn would likely stress the banking system further, and a growing share of riskier lending is now done by less regulated nonbank financial institutions, where risks are harder to assess. Its conclusion: “Should a more adverse scenario arise, Fed officials have indicated the willingness to further help facilitate the provision of credit by the financial system.”
In other words, if the coming default crisis ends up being as bad as the GFC, the Fed will end up owning a whole lot more bankrupt bonds and loans than just Hertz.
- The Bank of Japan Was The Biggest Buyer Of Japanese Corporate Bonds In April
The Bank of Japan Was The Biggest Buyer Of Japanese Corporate Bonds In April
Tyler Durden
Mon, 05/25/2020 – 17:00Our observation that as of this moment the Fed owns, via the HYG and JNK ETFs, bonds of bankrupt rental company Hertz sparked inexplicable outrage in the bullish camp. We find this confusing: how is the Fed owning bonds either a bullish or bearish case? It merely confirms that capitalism is now dead, that we have centrally-planned, “fake markets” as Bank of America put it, and which as Deutsche Bank further clarified, “these are administered markets and market outcomes will be dictated by the policy goals of the Fed and Treasury, and the tools they select to implement policy.”
That bulls are taking this fact as an affront, simply shows just how vested they too are in perpetuating a myth that markets still exist (as if it is somehow the imploding economy and not the Fed’s $4 trillion in liquidity injections since March that has boosted the stock market) while pretending they have some idea of what happens next based on “fundamentals” or “data” when in reality the only thing that matters is how much liquidity the Fed injects on any given day, making strategists, analysts and “paywalled pundits” irrelevant (an outcome which is devastating to their financial health).
In any case, shortly after our article, the Fed apologists scrambled to write articles such as this one whose sole counterarguments are outright obtuse: the amount of bankrupt bonds held by the Fed is so small so please don’t worry, and in any event, the ETFs will likely sell them.
First of all, anyone who claims to “know” what the ETFs will do with the defaulted bonds likely has a barrel of snake oil they need offloaded with immediate delivery, and their motives should be closely scrutinized from now on. As we explicitly said in our article, it is most certainly the case that the Fed will seek to offload its exposure – similar to what the ECB did when it ended up holding bonds of bankrupt Steinhoff but not before sparking a major scandal in financial cricles – after all the last thing Powell needs is another Congressional hearing inquiring how the Fed buying junk bonds – and junk bonds from massively levered, defaulted zombie corporations at that – is helping US workers. If anything, this merely cements our core argument that the process of rushing to buy corporate bonds was a panicked scramble meant to preserve confidence in a bursting asset bubble, one that was rushed from the beginning without almost any thought as to the consequences.
And since said “paywalled pundits” appears to have missed what we said, we will repeat it: the way the Fed’s purchases of corporate bonds are structured, especially as the US nears a default tsunami, it is only a matter of time before Powell ends up holding dozens if not hundreds of defaulted CUSIPs both directly and via ETFs. Will Powell then quietly dump all of them to pretend the Fed never intended to lose the Treasury’s funds by propping up insolvent companies? He will of course try. But if he fails, and if the ETFs do not offload their exposure to defaults, the Fed will most certainly be part of the bankruptcy process, courtesy of the debt-to-equity conversion of the underlying securities.
We also eagerly look to find just which independent, third-party entity buys the defaulted Hertz bonds held by HYG and JNK on behalf of the Fed to absolve Powell of his dismal decisionmaking.
The truth is that nobody knows what happens next, now that the Fed is an active intermediary in capital markets and is purchasing highly risky paper that defaulted just days after the Fed started buying ETFs. Anyone who claims otherwise is a complete hack.
As for that other “counterargument”, that “neither the Fed nor the Treasury has significant exposure to HTZ“, well- yes of course – the program has been in operation for just over a week: it better not have significant exposure to Hertz. What about in 3 months, or 6 months or one year from now when dozens of the companies that make up the JNK and HYG ETFs also file Chapter 11? Or what about the “fallen angel” companies that sell bonds directly to the Fed and end up having to file themselves. Will it be significant then?
Here is the answer: now that the Fed has gone the path of the BOJ and is directly intervening in capital markets, if not yet buying stocks (we can’t wait for the same bulls to explain how the Fed buying the SPY is great news for everyone), we can look to the Bank of Japan for examples of just how “insigificant” its exposure to the corporate bond market is.
WEll, according to SMBC Nikko Securities analyst Riyon Matsuyama, the Bank of Japan was the biggest buyer of Japanese corporate bonds in April compared with other categories for the first time since June last year, as Bloomberg reported overnight.
That sounds pretty significant to us: when the central bank is not only the buyer of last resort, but buyer of biggest resort, that would suggest that something is very, very wrong. It also suggests that there are virtually no other buyers (although we are confident the abovementioned bulls can “explain” how this too is “not one of the things to worry about”). In any case, it would also suggest that the BOJ owns a lot of corporate bonds.
And the Fed is hot on the BOJ’s footsteps.
According to Matusyuama – who calculated using data released by the Japan Securities Dealers Association this week and BOJ – the BOJ’s purchases as a proportion of all notes transacted in April rose to 30%, the highest level since June 2018.
This surge in holdings should not come as s surprise: after all, at the end of April, the BOJ decided to double its purchases of corporate bonds and sure enough, that’s what it is doing even if it means not only crowding out all other market players, but in the process destroying what little was left of price discovery. Why? Because the BOJ buys corporate bonds with money it creates out of thin air, and with no regard for fundamentals, resulting in a complete disconnect between fundamentals and asset prices.
Maybe this is why the abovementioned “paywalled pundits” are so angry: the fact that they are now relegated to merely frontrunning central bank purchases (something which even Blackrock embraced, admitting that’s the only way to make money now adding that it “will follow the Fed and other DM central banks by purchasing what they’re purchasing, and assets that rhyme with those”) means that any of their so-called insights are nothing more than Fed cheerleading garbage. Which is fine – after all that’s the centrally-planned world we live in, but just own up to it and stop pretending to have some deep, premium-pricing insight (which costs $29.95 per month) about the US or global economy which translates into an outlook on prices, investing, the universe and everything.
- "Worse Than The Great Depression" – Peter Schiff Fears '70s Stagflation "On Steroids" Ahead
“Worse Than The Great Depression” – Peter Schiff Fears ’70s Stagflation “On Steroids” Ahead
Tyler Durden
Mon, 05/25/2020 – 16:30Via Greg Hunter’s USAWatchdog.com,
Money printing by the Fed and Congress is off the charts. The Federal Reserve doubled its balance sheet in a matter of months, and Congress is pumping out trillions of dollars in spending bills to fight the economic crisis caused by the Covid 19 lockdown. The really scary thing is not the massive money printing, but the fact that absolutely nobody seems to care about the risk to the U.S. dollar.
Money manager Peter Schiff thinks he knows why, and explains:
“(Back in 2008-2009,) even Larry Kudlow was worried about what the Fed was doing, but nobody is worried about it now. The reason is they have been lulled into this false sense of complacency in that we got away with it the last time… and there was no negative consequence.
We didn’t have runaway inflation and did not have loss of confidence in the dollar. So, there was no price to be paid…
Since we got away with it before, they think they will get away with it again, and I think they are completely wrong…
All we did was inflate a bigger bubble, but now this bubble has popped, and it found the mother of all pins in the Coronavirus that put a gaping hole in it, so the air is coming out much faster. Now, they are trying to reflate this thing. We are going to suffer the consequences, not only what we are doing now, but what we did back then…
When is all this inflation going to move out of the stock market and into the supermarket? I am surprised this has not already happened, but I do think we are at the end of the line… Here’s what is going on. We are going to have this massive inflation tax. We are seeing price increases at the supermarkets.”
What has to break is the U.S. dollar, and that’s coming, according to Schiff, “We are going to overwhelm with dollar supply…”
“We are printing all this money. The Fed is buying all these bonds. . . . This is it. The Fed is going all in on QE. There is no limit. They are printing all this money, and, so, ultimately, the dollar is going to tank. It hasn’t happened yet, but it will. That’s when the party really ends. That’s when there is massive pressure on consumer prices. That’s when there is massive (upward) pressure on interest rates. . . . This could be an inflationary depression. We could have hyper-inflation. We didn’t have anything like that in the Great Depression. During the 1930’s, prices went down, and people got some relief with lower prices. That made the downturn not as bad. Imagine high unemployment with the cost of living skyrocketing. That’s what we are heading for. It’s going to be the 1970’s only on steroids because it’s going to be a much deeper economic contraction with a much bigger increase in consumer prices.”
Schiff says, “When we reopen, nothing will be the same because we will not be able to reflate this bubble.”
So what do you do? Precious metals are a no-brainer investment. Schiff says,
“It’s not that gold is gaining in value, it’s that fiat currencies are all losing value. Gold is the one stable factor. It’s the one thing governments can’t create out of thin air. Every currency in the world, except the dollar, are hitting new record lows against gold. You need more Euros, Rands or Aussie dollars to buy an ounce of gold. . . . The U.S. dollar is losing value more slowly, but this is going to change. We are going to win the race to the bottom…
People need to convert their dollars now into gold or silver. If you think the price of gold is going up now, wait til the dollar is the weakest of the currencies. . . . That’s going to accelerate the appreciation of gold . . . and that’s going to put gold in the spotlight as the replacement to the U.S. dollar as the main reserve asset for global central banks.”
Join Greg Hunter of USAWatchdog.com as he goes One-on-One with money manager and economic expert Peter Schiff, founder of Euro Pacific Capital and Schiff Gold.
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