- COVID-19 Reaction Boosts Key British Politicians' Popularity
COVID-19 Reaction Boosts Key British Politicians’ Popularity
The UK government’s response to the coronavirus outbreak in the country has so far been well received by the public. At least, that is what survey figures from YouGov suggest. As Statista’s Martin Armstrong points out, when comparing the favorability of politicians key to the pandemic response, a clear positive trend can be observed.
You will find more infographics at Statista
At the beginning of March, the prime minister for example had a negative net favourability rating of minus seven. Fast forward to the beginning of this week – and the introduction of a far-reaching lockdown – and this has jumped to plus 20.
The most dramatic of turns has been seen by Rishi Sunak. A relative political unknown upon his appointment as chancellor in February, Sunak has gone from a minus seven rating to a plus 49, thanks presumably to the financial support he has provided to individuals and businesses to counteract some of the negative economic effects of the coronavirus.
Tyler Durden
Fri, 03/27/2020 – 02:45 - Former UK Prime Minister Calls For Global Government To Fight COVID-19
Former UK Prime Minister Calls For Global Government To Fight COVID-19
Authored by Paul Joseph Watson via Summit News,
Former Prime Minister of the UK Gordon Brown has called on world leaders to create “a temporary form of global government” to fight the coronavirus outbreak.
Brown wants international organizations like the WHO and the UN to be given executive powers that would supersede national sovereignty as part of a new system overseen by world leaders and health experts.
“This is not something that can be dealt with in one country,” he said.
“There has to be a coordinated global response.”
An international task force would “make sure the efforts of central banks were coordinated,” help find a vaccine and prevent profiteering according to Brown, who wants more money and power given to the World Bank and the International Monetary Fund.
“We need some sort of working executive,” Brown said.
“If I were doing it again, I would make the G20 a broader organisation because in the current circumstances you need to listen to the countries that are most affected, the countries that are making a difference and countries where there is the potential for a massive number of people to be affected – such as those in Africa.”
As we have exhaustively documented, it was globalism that helped spread the pandemic in the first place.
Even as the virus was raging through China, the World Health Organization repeatedly insisted that countries should not impose any border controls.
When many western countries finally did close their borders weeks later it was too little too late.
* * *
My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.
Tyler Durden
Fri, 03/27/2020 – 02:00 - US Warship Transits Taiwan Strait As Virus Blame-Game Escalates
US Warship Transits Taiwan Strait As Virus Blame-Game Escalates
The Wall Street Journal’s Jacky Wong pretty much sums it up: “World War 3 during a pandemic wasn’t something I expected.”
World War 3 during a pandemic wasn’t something I expected https://t.co/DanPluaFlr
— Jacky Wong (@jackycwong) March 26, 2020
https://platform.twitter.com/widgets.js
A US warship transited through the Taiwan Strait on Wednesday, angering Beijing as both countries are fighting wars of their own against COVID-19 and escalating the blame-game for exactly who is ultimately responsible for the spread of the deadly virus.
The US Pacific Fleet tweeted that the Arleigh Burke-class guided-missile destroyer, USS McCampbell (DDG 85), conducted operations through the Taiwan Strait on Wednesday.
#USNavy Sailors stand watch aboard #USSMcCampbell as the forward-deployed @US7thFleet guided-missile destroyer transits the Taiwan Strait on Wednesday. #DDG85 #NavyReadiness pic.twitter.com/cejXv49hj3
— U.S. Pacific Fleet (@USPacificFleet) March 25, 2020
https://platform.twitter.com/widgets.js
Taiwan’s armed forces said in a statement that the US warship sailed through the region on an “ordinary mission,” indicating that there was no need for alarm, reported Reuters.
The transit comes at a time when President Trump has repeatedly called COVID-19, the “Chinese virus,” as social distancing and mass quarantines have led to the collapse of not just China’s economy but a depression that will likely unfold in the US in the second quarter.
Anthony Junco, a spokesman for the US Seventh Fleet, said the USS McCampbell conducted “a routine Taiwan Strait transit on March 25 (local time) in accordance with international law.”
“The ship’s transit through the Taiwan Strait demonstrates the US commitment to a free and open Indo-Pacific. The US Navy will continue to fly, sail and operate anywhere international law allows,” Junco said.
The cross-Strait relations between China and Taiwan could be heating up again. China slammed the US on Thursday for its latest stunt in the region.
Ren Guoqiang, the spokesperson for the Chinese Ministry of National Defense, said the “US’s recent actions concerning Taiwan, such as dispatching warships across the Taiwan Strait and passing of the TAIPEI Act, were tantamount to interference in China’s internal affairs and undermined cross-strait peace and stability.”
“The Chinese armed forces have firm will, full confidence and sufficient capability to thwart any form of separatist acts and will take all necessary measures to safeguard national sovereignty and territorial integrity,” Guoqiang said.
We noted back in November that if China’s economy were to crash for any reason, then the threat of war between China and Taiwan would increase.
So what happens next? China’s economy crashed, the world is swamped in a pandemic, Trump is increasingly calling COVID-19, the “Chinese flu,” is the next move military conflict?
Tyler Durden
Fri, 03/27/2020 – 01:00 - 230 Years Of Rights And Liberties Shredded: Why I Oppose The Lockdown
230 Years Of Rights And Liberties Shredded: Why I Oppose The Lockdown
Authored by Brandon Tourbeville via ActivistPost.com,
Although it was nearly twenty years ago, I can remember 9/11 like it was yesterday. I remember the shock of hearing about the planes crashing into towers, at first believing it was a tragic accident and quickly learning it to be otherwise. I remember being told that 19 hijackers, part of a fundamentalist plot to destroy America, were behind the attacks and that the mastermind was a man in a cave in Afghanistan named Osama bin Laden.
As all of America was glued to their television screens, many rushed out to give blood in an effort to at least do something to help one another. George W. Bush’s answer for Americans was to go to work and then go out and shop. Americans dutifully complied. But the government’s answer, in tandem with mainstream media, was also to be afraid. Very afraid. Americans also complied with this request, perhaps more than any other.
In the days and weeks after the initial shock, a college professor informed me about a bill called the PATRIOT ACT that would essentially eviscerate much of the Constitution and Bill of Rights. After class, I questioned him further about the bill, which he explained, and suggested that if I really wanted to understand what was happening, I should read 1984 by George Orwell. I went home and did just that and was surprised to learn that not only was he right, but that I was watching what I was reading happen in front of me in real life.
I watched as the fear of speaking your mind and saying certain words became known as freedom. I watched as Americans came to assume that their communications were listened to, frightened of what they said, but justifying it as they praised their country for being unlike the totalitarian governments of the past. Peace became war. Any suggestion that invading Afghanistan was wrong was unpatriotic. In fact, any criticism of the government was considered unpatriotic and anyone who valued freedom over temporary security was borderline a traitor.
I watched as the United States became The Homeland and I watched as my friends had their window busted out of their car because they did not have one of those ridiculous window flags.
Still, shortly after the event itself, I began speaking out against the erosion of our Constitution and the Bill of Rights. I questioned the official story of 9/11 and fought against the passage of the PATRIOT ACT. In those days, anyone who did either of these things was considered either woefully ignorant and naive or a traitor who was giving moral support to the enemy.
I spoke out after 9/11 and was largely alone with a few notable exceptions. I was forced to watch the majority of my fellow Americans give away the most precious thing they had, the things which no other country could lay claim to, and the thing that they claimed they were supporting war to protect. America gave away a huge chunk of its rights in the wake of 9/11 and, though they were promised the measures were only temporary, twenty years on we have never received them back.
Instead, police officers are now often indistinguishable from military soldiers, the United States is still in Afghanistan as well as Iraq, Libya, Syria, Somalia, Ukraine, and a host of theatres across the world where its undefinable “interests” apparently lie. It is now a foregone conclusion that cellphone, internet, and all other communications are monitored. It is well understood that the iron fist of the state can come down with lack of due process and the Second Amendment is under daily attack. Torture is now general practice for foreign and domestic arrestees.
Now, here we are close to twenty years later. Americans once again have a shadowy nemesis for which our government has once again failed to provide adequate information. Once again, the governmental response is not a robust rethinking of how we got to be where we are, (in this case how medical care is provided, who has access to it, or the overarching philosophy behind it), but a massive police state, quasi martial law, and the evisceration of what is left of the liberties and rights they didn’t give away twenty years ago or give away gradually in the time between.
This time, it is not so much the President leading the charge to burn the Constitution, but Governors all across the country, acting in concert with one another. But they aren’t acting alone. Because of the massive propaganda mouthpiece of the mainstream media blasting hysteria and panic as well as the desired conclusions they intend for their audiences to reach, many Americans are demanding that their rights be taken away and that they and their fellow citizens be forced off the streets and into their homes at gunpoint.
My opposition to the potential Lockdown is twofold but principally it is based on the fact that over two hundred and thirty years of rights and liberties should not be shredded on the basis of any threat, real or imagined. Americans either have rights or we don’t. There is no asterisk in the Constitution that states the Bill of Rights is null and void in the event of a terrorist attack or a virus outbreak. If we do not maintain our rights in a time of crisis, then, simply put, we do not truly have rights at all.
If we do not maintain these rights, our country, such as it is, ceases to exist.
As Peter Hitchens, one of the few critics of this Lockdown mentality (happening all over the world and, in his case, Britain) wrote in his recent article for the Mail Online,
All the crudest weapons of despotism, the curfew, the presumption of guilt and the power of arbitrary arrest, are taking shape in the midst of what used to be a free country. And we, who like to boast of how calm we are in a crisis, seem to despise our ancient hard-bought freedom and actually want to rush into the warm, firm arms of Big Brother.
Hitchens’ article is well worth reading, not only for his views but for his critique of the scale of the pandemic, which is highly questionable.
Secondly, we are quickly driving this country to a second Great Depression where unemployment is at levels never before seen and where only the 1% and the major banks have anything resembling wealth. This Depression will be so devastating that it will make the first look weak in comparison, not just because of employment but because of the real human toll after decades of globalism, Free Trade, and urbanization have gutted this country of its workforce, manufacturing, healthcare, education, production capabilities, and general living standards. With more Americans living urban lives and fewer and fewer farms by the day, the Second Great Depression will kill many more people than the virus and leave those left alive scrounging for crumbs at the bottom. Already, since the beginning of this virus emergency, we have witnessed a huge transfer of wealth from the lower classes to the higher and we will no doubt witness more as this insane Lockdown attempt continues.
After the Lockdown passes, Americans will complain about low wages and lack of work. They will wait in lines for benefits that may or may not exist and that will be lower than their current living standards require. Unlike the loss of their rights, the benefits will be temporary. But Americans won’t be able to fully blame Wall Street this time around since it was the media and the people who listen to it who were howling in the streets for Lockdowns and shutdowns. They will have gotten what they wanted as well as the opportunity to live to regret it.
So here I am, twenty years after a writing career began as a result of generally good people who were frightened into giving away their rights, writing about exactly the same thing yet again. Of course, there may be time to reverse the direction in which we are heading. The next few weeks will most likely determine that matter. One thing is for certain, however, if Americans give up their rights now, they will never get them back.
I don’t have any illusions about the effect this article will have on the direction we are heading as a nation. Instead, I expect it to bring about more criticism, more insults, and more claims that I am no longer “credible” as the propaganda repeaters seen on the major cable networks are credible. But it will be worth it, for no other reason than to register my voice so that, for the record, there was at least a few people who retained their sanity through this worldwide era of panic and did not willingly sacrifice his rights on the altar of fear.
If we are able to step back from the abyss, perhaps the “credibility” and respect that I lose from peers as a result of this article will someday be returned. But if we are not able to step back, I can’t imagine anyone will be able to remember anything I’ve said here and, if that is the case, it probably wouldn’t matter if they did.
Tyler Durden
Fri, 03/27/2020 – 00:05 - "Help Flatten The Curve" – Pornhub Offers Free Premium Service To Everyone
“Help Flatten The Curve” – Pornhub Offers Free Premium Service To Everyone
Pornhub is offering free premium accounts to anyone in the world, a statement from the company read.
The new campaign is called “Help Flatten the Curve,” a move that it says could “encourage people around the world to stay home to help flatten the Coronavirus curve by self-isolating with FREE Premium!”
Having first tried this in Italy, Pornhub vice president Corey Price stated: “With nearly one billion people in lockdown across the world, it’s important that we lend a hand (LOL) and provide them with an enjoyable way to pass the time,” adding that he believed it would prove “an extra incentive to stay home and flatten the curve.”
Price said a non-premium user of the site could click the box titled “I agree to self-isolate and enjoy Premium Videos for Free.”
In response to the pandemic, Pornhub has been actively donating medical supplies to local governments across the US and in Europe. Here are some of their efforts:
· 15,000 surgical masks to protect first responders from the Local 2507 of New York City, which represents emergency medical technicians (EMTs), paramedics and fire inspectors of the Fire Department of the City of New York (FDNY).
· 15,000 surgical masks to the Uniformed Firefighters Association (UFA) Local 94 of New York City to protect first responders.
· 20,000 surgical masks to Mount Sinai South Nassau to bolster the safety of nurses, physicians and support staff caring for Coronavirus patients.
· €50,000 to various European organizations to purchase additional masks and medical equipment, including Dein Quarantäne Engel / Deutsches Rotes Kreuz in Germany, Croce Verde di Vicenza in Italy, España vs Coronavirus. Mascarillas AQUÍ AHORA and Material Sanitario para Hospitales Públicos ESPAÑA in Spain.
· $25,000 to Sex Workers Outreach Project (SWOP), contributing directly to sex worker relief funds in the SWOP-USA network to meet immediate requests for support from sex workers impacted by COVID-19.
Free premium Pornhub will only be offered for the next 30 days, though at the current rate of infections in the US, the premium service could be extended.
Here’s how Twitter reacted to free Pornhub Premium:
free pornhub premium? it’s a good day 💯 pic.twitter.com/tabcAg2Z61
— bert (@BertIsHurt) March 26, 2020
https://platform.twitter.com/widgets.js
A WINNING pic.twitter.com/qUktqqtZsG
— lew (@Iewislewinsky) March 26, 2020
https://platform.twitter.com/widgets.js
just cashed in on my free pornhub premium acc hell yeah pic.twitter.com/KCGHZ7xonO
— james (@PRlNCEREMUS) March 26, 2020
Tyler Durden
Thu, 03/26/2020 – 23:45 - Earn More Or Spend Less? It’s Never Been A Better Time To Look At Your Money Situation
Earn More Or Spend Less? It’s Never Been A Better Time To Look At Your Money Situation
Submitted by Market Crumbs ,
The sudden outbreak of the coronavirus and its effects on the economy, which has ground to a halt, are being felt by just about everyone. Whether you’re an investor who has seen your portfolio take a hit or someone without any investments who has lost a job, the current situation is very difficult for many.
While you can’t go back a month and change your investments to be better positioned or do anything differently to prevent the job you may have lost, you can always find ways to save money or pick up a side hustle to make a few extra bucks.
David Solomon, CEO of Goldman Sachs. Source: CNBC In uncertain times like these, where the idea of job losses and investment losses is higher than normal, it’s important to make sure you have a “rainy day” fund to be prepared for the worst. While it’s difficult for many to just get by, let alone save, we’ll go through some ways you can begin saving a few extra bucks and even earn some extra cash.
Saving—it’s one of the most difficult parts about being an adult. Surveys have shown about 75% of Americans are living paycheck to paycheck. Even those at the top of the income distribution live paycheck to paycheck. About one in four families earning more than $150,000 live paycheck to paycheck, while one in three earning between $50,000 and $100,000 do so.
While it’s important to save, it’s also important to enjoy yourself and do things. Making small changes to your spending habits can add up. Eliminating small, consistent charges for things such as a coffee at Starbucks everyday or $10 worth of lottery tickets each week adds up. Try packing lunch for work or having a few drinks at home with friends before going out to the bar. Reddit’s Personal Finance community has great 30-day challenges to follow along.
While they won’t approve of doing so, try getting together with a few friends and have each commit to paying for a subscription service and share logins. Rather than paying for Netflix, Hulu, Disney+ and Spotify, pay for one and find three friends to each pay for one.
If you’re traveling, look for cheaper options such as an Airbnb instead of a hotel or using ride-sharing services instead of renting a car. As bad as it is, fly Spirit and stuff your belongings in a backpack rather than opt for a more comfortable flight with a pricier airline.
Plenty of credit card companies offer rewards, cash back and discounts on certain purchases. Taking advantage of these perks can help you consistently save a few bucks and even get a cash deposit or statement credit at the end of each billing cycle.
If you work for a large corporation, take advantage of employee discounts. Most employers offer discounts on things such as car leases, phone bills and local services, such as home services, dry-cleaning and restaurants.
On the other hand, the rise of the internet has enabled countless opportunities to make a quick buck on the side or even turn multiple gig jobs into full-time work. Gig jobs such as driving for a ride-sharing company, walking dogs on Wag, or doing freelance work on Fiverr or Upwork have proven to be extremely lucrative.
It’s often said the average millionaire has seven streams of income. Furthermore, some of the wealthiest people are often said to be some of the most frugal with their money. Warren Buffett, despite being one of the wealthiest people in the world, lives in the same house he bought for $31,500 in 1958.
Warren Buffet’s House While the uncertainty about the economy continues to mount, it’s never too late to make small changes to your spending habits or pick up a gig on the side to make a few extra bucks. By doing so, you can have peace of mind knowing you have funds for when things go south.
Tyler Durden
Thu, 03/26/2020 – 23:25 - Here Is The Treasury's (Not So) Secret Trade Printing Millions In Guaranteed, Risk-Free Profits Every Day
Here Is The Treasury’s (Not So) Secret Trade Printing Millions In Guaranteed, Risk-Free Profits Every Day
When the Senate unanimously passed a $2 trillion economic rescue plan late last night, it was targeting tens of millions of middle-class American households many of whom had lost their jobs, and whose lives had ground to a halt due to the global coronavirus pandemic and lockdown. It certainly wasn’t targeting Wall Street bankers.
Naturally, the Congressional stimulus plan which is set for House passage tomorrow, received much publicity – after all, some of those trillions in stimulus payments will end up going into the pockets of America’s workers, and while the final amount is a modest $1,200 per month, both Democrats and Republicans – and the President of course – will take full credit for the handout (while blaming each other for the far bigger corporate bailouts that are at the core of the package).
What has received far less coverage is that to fund this plan, the Treasury will have to issue trillions and trillions in new debt, much of which will be quickly monetized by the Fed (whose balance sheet is now $5.5 trillion and exploding), in what is essentially the arrival of helicopter money in the United States. As a result of the ongoing panic among capital markets participants who are scrambling to respond to this tsunami of new debt, there has been a surge in demand for cash and cash-equivalent products, including gold – which as we discussed earlier this week can not be found at virtually any merchant at a price remotely close to spot – and short-term Treasury Bills, those maturing in 3 months or less.
In fact, so intense is the scramble for near-term Bills that they are all now trading with a negative yield all the way to the 3 month mark, and in some cases, further out.
It is this unexpected drop in hundreds of billions in US Treasury Bills into the monetary twilight zone of negative interest rates that represents a far more secretive if far more generous handout amounting to millions in virtually guaranteed handouts to Wall Street’s bond traders.
But wait, the US doesn’t have negative yields, at least not yet, so why are Bills trading below zero. There are several answers, but the key one is traders’ preference to park cash not in their bank – which suddenly may have the dreaded “counterparty risk” thanks to some $40 billion in borrowings on the Fed’s Discount Window…
… and a bizarre surge in Libor that is hinting at one or more banks suffering from a liquidity crunch…
… but in the safety of debt instruments backstopped by Uncle Sam. After all, if the US were to default, which judging by the recent surge in US CDS is something quite a few are considering….
… investors would have far bigger problems than withdrawing their money.
And it is here that a fantastically profitable arbitrage has emerged, one which is far more generous to Wall Street bond traders than the fiscal bailout is to the middle class, as it is literally handing out billions in risk-free money to pretty much anyone who figures it out.
You see, unlike Germany, Switzerland or Japan, the US Treasury is prohibited from issuing debt with negative yields. Why? There is no one specific reason, but as Bloomberg, which first noticed this arb, points out “one reason the government might not want to allow negative-rate bidding is that it risks signaling to investors that negative rates are here to stay. Of course, since it is only a matter of time now before the Fed follows the ECB, BOJ and SNB by sinking into NIRP, this arb may soon disappear, but for now read on.
Effectively what the arb boils down to is taking advantage of the maximum price, or rather minimum yield limit of Bills sold to the public (but mostly to Wall Street traders) and the unlimited yields these Bills can trade in the open market.
Take the following example picked by Boomberg: on Thursday, the Treasury sold $60 billion of four-week bills at the minimum allowed rate of 0% (at a price of par, or 100 cent on the dollar).
But because the current yield on this security is roughly -0.14%, dealers can turn around and sell those bills at a premium to par, and pocket an immediate windfall of about $7 million. While that might not sound like much, with over $2.5 trillion of bills outstanding, and rolling every single month, it could add up very quickly, amounting to over $100 million every month in risk-free handouts directly from Uncle Sam if the yield on the short-end remains negative!
Another example: in addition to the four-week bill auction above, Treasury sold $50 billion of eight-week bills on Thursday at an auction rate of 0%. But in the open market, eight-week bills now trade at -0.1%, yielding a price that is above par, or over 100 cents on the dollar. (A quick BBG refresher: T-bills don’t actually pay a coupon, but are instead sold at a discount to par, which reflects the effective interest rate on the security. At 0%, the price would be 100 cents on the dollar. If the Treasury allowed negative-rate bidding, the securities would be sold at a premium.)
As Bloomberg notes, the presence of this risk-free trade “has the potential to cost U.S. taxpayers billions of dollars if rates stay lower for longer, particularly as the U.S. is poised to issue more debt after the Senate passed a $2 trillion rescue package this week.”
“The Treasury absolutely, categorically, right now has to be thinking about this,” UBS economist and a former Treasury official and adviser to the Fed, Seth Carpenter, told Bloomberg, as this trade is “essentially just transferring wealth to other people. The Treasury is in a bind and they have to make a decision on this with bill rates being negative as they are.“
Curiously, it turns out that the systems to eliminate this unprecedented arb are already in place. In 2015, when bills also traded at persistently negative levels amid supply cuts to keep the U.S. under its statutory debt limit, Treasury adjusted its systems to allow it to handle a negative auction rate, according to former Treasury officials familiar with the matter. However, according to Bloomberg, it never followed through and changed its policy.
One can only imagine why “nothing changed” in this dark corner of the Treasury market that allows bond traders to literally print free, guaranteed and perfectly legal money with the full blessing of the US Treasury. It is also hardly a surprise why virtually nobody would talk about this trade: after all if you have a golden goose, why bring attention to it?
And yet now that everyone knows about this trade, there may be little the Treasury can do to stop savvy traders from collecting millions every single day, absent permitting negative-rate bidding to eliminate the primary-secondary market arb.
As noted above, the Fed may not want to give the impression negative rates are here to stay and that negative Bill yields are just an abberation (that “explanation” may have worked before, but now that helicopter money is here, it no longer will). Then there are political considerations: while the Fed has made clear it doesn’t see negative rates as a viable policy tool, President Trump, has been pushed Powell to follow the ECB and cut its benchmark rate to below zero.
“It’s a political hot potato,” said Ward McCarthy, chief financial economist at Jefferies and a former senior economist at the Richmond Fed. And “philosophically, I am just opposed to investors paying the U.S. government to hold their debt. Especially since small investors tend to be especially involved in the Treasury bill market.”
We agree Ward, but unless you can tell us where we can buy physical gold in size and at spot, Bills it is especially once a depository institution fails and the bank runs begin: at that moment, negative yields will go well into coupon territory.
Incidentally, Bloomberg points out that this is not the first time the issue of negative-rate auctions has come up. In August 2012, in a statement presented at its quarterly debt-refunding operation, the Treasury’s then-assistant secretary for financial markets said the government was “in the process of building the operational capabilities to allow for negative-rate bidding in Treasury bill auctions, should we make the determination to allow such bidding in the future.”
Mysteriously, those capabilities never came online. Maybe because the “then assistant secretary” planned to work at a bank that is now making tens of millions from precisely this trade?
Yet even with bill demand as high as it’s been, competing priorities could keep the Treasury from pulling the trigger, at least for now.
“Selling bills at negative yields would benefit the taxpayers, but would put the Treasury at odds with the Fed, which hasn’t sanctioned negative rates,” said Mary Miller, the Treasury’s former undersecretary for domestic finance in the Obama administration, who is now running for mayor of Baltimore. The current situation “may just be a temporary disruption, so it’s worth watching to see if this rights itself with the big economic rescue steps.”
“Temporary” maybe. But what happens when, not if, the crisis returns and investors have no choice but to park trillions into the “safety” of the Bill market sending yields far below zero and on a rather “permanent” basis. Which brings up another question: just how much undisclosed taxpayer subsidies do the banks get courtesy of Uncle Sam every single day, and what happens when the current crisis fully spills over into the banking sector?
Tyler Durden
Thu, 03/26/2020 – 23:05 - COVID-19: How A Coronavirus Broke The System
COVID-19: How A Coronavirus Broke The System
Authored by Marc Saxer via ConsortiumNews,com,
The corona-crisis sends shockwaves through political, economic and social systems. The status quo simply cannot continue…
No one knows how long the pandemic will last, how many people will fall ill, how many lives the coronavirus will claim. But the economic and political consequences of the outbreak are already emerging. Measures to contain the pandemic are disrupting public life around the world.
Starting with China, production has come to a standstill in one country after another. Global supply chains are broken. You don’t need a lot of imagination to see a wave of bankruptcies approaching in many industries where every last cent counts.
In the past few days, panic buying has dominated media coverage. However, anxious consumers tend to postpone larger purchases. When shortages appear, consumption also drops. These upheavals are likely to cause the already sluggish European economies to slide into recession.
The sudden slump in Chinese demand has shaken the commodity markets. After the Organisation of Petroleum Exporting Countries (OPEC) could not agree with Russia to cut production in order to stabilise prices, Saudi Arabia changed its strategy and flooded the markets with cheap oil. As a result, the oil price plummeted to historic lows. In the short term, this might provide a measure of relief to industry and consumers. However, oil price wars, fears of recession and calamities on the bond markets are causing the stock markets to crash. Only a far-reaching intervention by all major central banks has so far staved off a financial crunch.
The Economic Response
Some countries, Germany in particular, have quickly launched extensive packages of measures to cushion the impending economic crisis. After some initial wavering, the United States is also planning a comprehensive economic stimulus, including the unprecedented dispersal of helicopter money. Whether these and other potential immediate measures are sufficient to stop the economic downturn depends on how deeply the crisis eats through the system. After past epidemics, a brief, sharp slump, the economy was usually followed by a quick return to growth. Whether this will also be the case with the corona crisis depends on many factors, not least how long the pandemic lasts.
However, of greater concern are the shock waves that are now running through the ailing financial systems, where they are accelerating worrying longer-term trends. Many American industries and households are over-indebted. In China, shadow banks, real-estate enterprises and state-owned companies, along with the provinces, are all straining under the debt burden. The European banks have not yet recovered from the previous financial crisis. The economic collapse in Italy could cause the euro crisis to flare up all over again. The way in which investors are fleeing for the safety of government bonds indicates the deep fear that these houses of cards will collapse. The corona crisis could set in motion a chain reaction that would end in a global financial crisis.
A Republic of Korea Army Soldier assists a U.S. Army soldier in donning personal protective equipment before sanitizing a COVID-19 infected area during a joint disinfecting operation in Daegu, South Korea, March 13, 2020. (U.S. Army, Hayden Hallman)
Unlike the 2008 crisis, however, this time the central banks are not in a position to save the day. To date, interest rates have been at historic lows in all major economies. The US Federal Reserve has therefore started to provide liquidity directly to the markets through repo transactions. The new head of the European Central Bank, Christine Lagarde, initially stumbled on the European crisis response, thereby provoking speculation against the cohesion of the the euro group. By means of a coordinated intervention, however, all major central banks have now shown their determination to take a stand against the panic in the markets. The crucial question, however, is whether the Corona crisis can be overcome with monetary policy instruments at all. That very much depends on the nature of the crisis.
Democracies Now Have to Deliver
This is because the crisis is by no means limited to the economic sphere. The ability of states to protect the life and limb of their own citizens, is also being put to the test – and the stakes are nothing less than the fundamental legitimacy of the Leviathan.
In the authoritarian regimes of Eurasia, the main issue is the legitimacy of the strongmen, whose claim to power is based on the central promise “I protect you.”. Chinese President Xi Jinping has understood this and, accordingly, is taking drastic measures against the spread of the virus regardless of the costs. However, his counterparts in Thailand, the Philippines and Brazil have treated control of the disease lightly and are now being lashed out at by their own supporters. The question of whether, in the eyes of his voters, President Donald Trump lives up to his central promise to protect America from external threats is likely to have a decisive impact on the outcome of the American elections.
An international pandemic cries out for a coordinated global response. So far, however, each nation has pursued a solo effort.
While the corona crisis may be disenchanting populists in government, it could be just what their counterparts in opposition have been waiting for. In the eyes of many citizens, the democratic states already lost control in the crises of 2008 and 2015. Decades of austerity policies and of health care systems cut back to the absolute minimum have hollowed out state structures; many people worry whether their nations will still be able to cope with major crises. In many countries, the public mood is turning against the free movement of money, goods and people.
Many Italians have long feared to be among the losers of globalisation and the euro. Now come the emergency measures, the economic shock and yet another refugee crisis. The Lombard right-wing populist Matteo Salvini is not the only one who knows how to use the ingredients of “open borders, dangerous foreigners, corrupt elites, and defenseless states” to mix a toxic brew. Make no mistake, the liberal democracies of Western Europe are under scrutiny. In the midst of a right-wing populist revolt, democrats must now prove that they can and will protect the lives of all citizens.
But how far can individual liberties be restricted? How long should the state of emergency last? Would Western societies tolerate drastic measures like those in China? Should they, like the East Asians, give priority to the collective over the individual? How can the rate at which the disease is spreading be slowed down if citizens do not adhere to the recommendations on “social distancing?” And what does solidarity with others mean when the only thing we can do is to isolate ourselves?
Each Nation on Its Own
An international pandemic cries out for a coordinated global response. So far, however, each nation has pursued a solo effort. Even within Europe there is a lack of solidarity. As in the euro crisis and the refugee crisis, Italy in particular feels that its partners have let it down. China cleverly took advantage of the lack of European solidarity and sent a plane to Italy, its Belt and Road partner country, loaded with medical supplies. In the meantime, Berlin has recognized the geopolitical dimension of the dual crises – coronavirus and refugees – and is concerned about the attempts by external powers to divide Europe. The export ban on medical protective equipment was eased again and Italy was assured of emergency aid in the form of one million face masks. More importantly, the European Stability Pact was suspended to give Italy enough fscal breathing room to save its economy.
The crisis is another stress test for the already heavily burdened transatlantic partnership. Trump’s decision to isolate the United States from its European allies without consulting them has sent a clear signal. The American attempt to take over CureVac, a company based in Tübingen, to secure the vaccine exclusively for the United States, even escalated into a heated dispute with Berlin. Any joint, coordinated crisis response is hardly conceivable under these conditions. In the West, the byword so far has been ‘Every man for himself.’
Curevac in Tübingen. (Dktue, CC0, Wikimedia Commons)
At the global level, the new conflicts between major powers are fuelling the crisis even more. The oil price war in particular is driven by geo-economic motives. The conflict between Saudi Arabia and Russia raises questions about the survival of the OPEC cartel. The big loser in the historic drop in prices could ultimately be the heavily indebted American shale oil industry. So if cheaper prices at the petrol pumps are really a blessing, as the US President promised, depends on who can endure this war of attrition the longest. In any case, Russia and Saudi Arabia have a key interest in knocking out their debt-financed American competitor.
Whatever the outcome of the oil price war, the balance of power in the oil markets will be readjusted. The debate about “peak oil,” which has been raging for decades, should also experience an interesting turn. In the end, it might not be a dwindling supply of fossil fuels that will seal the decline of the oil industry. With permanently low prices, it might simply be no longer economically viable to exploit the remanining reserves. Could a geo-economic conflict unintentionally herald the end of the fossil age?
The crisis is also fueling the U.S.-China hegemony conflict. For some time now, there is a bipartisan consensus in Washington to decouple the American from the Chinese economy so as not to strengthen the competitor for global supremacy by supplying Beijing with its money and technology. Globally positioned companies now need to re-assemble their supply chains overnight. Will all of these corporations return to China when the immediate crisis is over? Corporate executives would then have to think twice whether to willingly ignore the geopolitical marching orders from Washington.
And how will Europe’s companies reposition themselves after the crisis, after the costs of being overly dependent on Chinese supply chains have become all too clear? In the debate over whether the Chinese company Huawei should be excluded from the expansion of the European 5G infrastructure, Europeans already had a taste of how great American pressure can be. The corona crisis could then accelerate a development that has been going on for some time: deglobalisation. As a result, the global division of labor could disintegrate into competing economic blocs.
Overnight, the Age of Neoliberalism Coming to an End
Suddenly everything is happening very quickly. Within hours, such large sums are being pumped into the markets that make the “radical” promises of Democratic presidential candidate Senator Bernie Sanders seem like pocket money in comparison. German politicians, who yesterday had gotten heated up by the intellectual musings of young socialist Kevin Kühnert, are now seriously considering the nationalization of corporations. What was dismissed in the climate debate as the naive dreams of children is now a sad reality: global air traffic is coming to a standstill. Borders that were considered unclosable in the refugee crisis are now indeed closed. And along the way, conservative governor of Bavaria, Markus Söder has abandoned the German fetish of balanced budgets, announcing, “We will not be guided by accounting issues, but by what Germany needs.”
The age of neoliberalism, in terms of the primacy of market interests over all other social interests, is coming to an end. Of course, all of these measures are due to the state of emergency. However, citizens will remember them when they soon again are told ‘There is no alternative.’ With the crisis, long-dormant sphere of politics has been set into motion. After four decades of neoliberal scepticism about the state, a long forgotten fact is coming to the light: that nation states still have enormous creative power, if only they are willing to use it.
The corona crisis amounts to an enormous field test. Millions of people are experimenting with new ways to organise their everyday lives.
Like a spotlight, the corona crisis is illuminating the geopolitical, economic, ideological and cultural fault lines of our time. Might this crack in the edifice even signal an epochal break? Does the age of turbo-globalisation end with the decoupling of the major economic blocs? Are the oil price wars heralding the end of fossil industrial economies? Is the global financial system changing into a new regime? Is the system guarantor’s baton going from the United States to China, or are we experiencing the breakthrough of the multipolar world?
What is certain is that the Coronavirus could lead to a breakthrough of a number of trends that have long been hidden. All of these developments are mutually influencing each other at breathtaking speed. This complexity suggests that this crisis will go deeper than the 2008 recession. The pandemic could be the burning fuse on the powder keg of a global system crisis.
Markus Söder in 2012. (Michael Lucan, Lizenz: CC-BY-SA 3.0 de, Wikimedia Commons)
Window to Future Wide Open
The corona crisis amounts to an enormous field test. Millions of people are experimenting with new ways to organise their everyday lives. Business travellers are switching from flights to video conferences. University teachers are holding webinars. Employees are working from home. Some will return to their old patterns after the crisis. But many now know from personal experience that the new way of operating not only works, but is also more environmentally and family-friendly. We have to use this moment of disruption, the immediate experience of deceleration, to generate long-term behavioural changes in the fight against climate change.
British journalist Jeremy Warner cynically sums up the neoliberal view of the crisis: “From an entirely disinterested economic perspective, the COVID-19 might even prove mildly beneficial in the long term by disproportionately culling elderly dependents [sic!].” In stark contrast to the lack of solidarity shown by its governments, people are experiencing a wave of solidarity in their neighbourhoods, at work, and within their circles of friends. When was the last time the capitalist machine was halted in order to protect the old and the sick? We can build on this experience of solidarity to make society as a whole more cohesive again. If we manage to overcome the crisis together, we are creating a symbol at the dawn of a new era: a community that stays together can meet any challenge.
However, reacting to the crisis also poses dangers. Borders are being closed around the globe, visas are cancelled, and entry bans are imposed on foreigners. The record number of orders for industrial robots indicates that the production chains will be made more resilient to breakdowns through a decisive step towards greater automation. Both trends threaten to accelerate the spiral of job losses, fear of social exclusion, resentment of immigrants, and political revolts against the liberal establishment.
Liberal economist Philippe Legrain rightly warns: ‘The Coronavirus crisis is a political gift for nativist nationalists and protectionists. It has heightened perceptions that foreigners are a threat. It underscores that countries in crisis can’t always count on their neighbours and close allies for help.” We must not leave the right to interpret the crisis to right-wing populists. The answer to global challenges must not be isolation and national selfishness, but rather solidarity and international cooperation. As opposed to 2008, progressives cannot afford again to lose the battle over interpreting what is happening, and what needs to be done. Over the next weeks, the groundwork of the new world order will be laid. We must make sure we will shape the debates over how it will look like.
A Stronger Democratic State Can Emerge
Many, especially young people, are for the first time experiencing a national emergency. Within days, their freedoms are restricted to an unimaginable extent. Not only in China, but in the middle of Europe, technologies are being used on a large scale to monitor and regulate the behaviour of citizens. As the “fight against terrorism” taught us, many of the emergency regulations now enacted will remain in force after the crisis has ended. One does not need to sense a hidden agenda behind the normalization of the state of emergency, the way Giorgio Agamben and Naomi Klein do, which is to make individuals docile for disaster capitalism. However, we must prevent our fundamental rights from being permanently eroded.
Naomi Klein, a key critic of “disaster capitalism,” on Oct. 6, 2011, Day 21 of Occupy Wall Street, when she led an open forum. (David Shankbone, CC BY 3.0, Wikimedia Commons)
Slavoj Žižek hits the nail on the head when he warns that people rightly consider state power to be responsible: ‘you have the power, now show what you can do! The challenge for Europe is to show that what China has done can be done in a more transparent and democratic way.’ The East Asian democracies of South Korea, Taiwan and Japan have so far impressively demonstrated how to do this without unduly restricting citizens’ freedoms. Their approach seems more compatible with Western democracies than the draconian Chinese way. Still, successful management of the crisis would also strengthen confidence in the democratic state. In a crisis, people tend to rally around competent, hard-working and protective governments.
The global crisis has raised awareness of how vulnerable hyperglobalisation has made us. In a globally networked world, pandemics can and do spread across borders at high speed.
After years of austerity programmes have cut health care systems back to a bare minimum, now every effort must be made to enable the system to cope with the many sick people. The closure of municipal clinics, the chronic undersupply of nursing staff and the pitiful state of technical equipment are now taking their toll. Seldom has the demand to reverse the privatisation of health care received greater public support. In the crisis, Spain has quickly nationalized all of its private clinics and health services. In France, the President openly questions the wisdom of neoliberal privatisation and vows to shift course. In Germany, too, the debate has begun as to whether it was really prudent to subject our social life to the dictates of the market. In future, it must no longer be the individual’s interest in profit, but the common good of all that will be the central focus of public services.
The reconstruction of public services requires investments in the order of billions. Chancellor Angela Merkel has affirmed that the constitutional debt brake does not apply in exceptional situations like these: “What the budget balance will look like in the end of the year is not the issue for us.” In the current situation, the German government is opening a historically unprecedented rescue umbrella for the economy, covering everyone from small self-employed and freelancers to large corporations. “We will do everything possible,” assured Federal Finance Minister Scholz. The framework for providing guarantees, in a total amount of half a trillion euros, is only the beginning, states Federal Minister of Economics Altmaier.
Thus, in the crisis we are all Keynesians again. Unlike after the 2008 recession, we must not return to austerity after the crisis. After decades of austerity policies, many services are exhausted: health and education, local government, transport infrastructure, the German armed forces, and the police. In order to counter widespread fears of losing control, to prepare the economy and society for the digital revolution and, last but not least, to combat climate change, investments of historic proportions are necessary.
Social Democracy Can Save Us from the Crisis
The global crisis has raised awareness of how vulnerable hyperglobalization has made us. In a globally networked world, pandemics can and do spread across borders at high speed. Global supply chains are all too easily cut. The financial markets are vulnerable. Right-wing populists want to close the borders and isolate themselves from the world – but that is the wrong answer to the global challenges of epidemics, wars, migration, trade and climate change. Rather, our goal should be to address the root causes of these crises. To do this, the global economy must be placed on a more resilient foundation.
Image from U.S. history textbook used in Catholic primary schools in 1915. Text appearing with image: “They wanted to have their own assemblies levy the tax.” (Internet Archive Book Images, Flickr)
In the wake of the Corona crisis, global supply chains are already reorganizing. Shorter supply chains, for example, with American production facilities in Mexico and European facilities in Eastern Europe, create more stability. Technologically, Europe must become sovereign again. To do this, we need to cooperate much more closely in research and development. The global financial system, which is held together by not more more than duct tape, urgently needs re-ordering. For over a decade, central banks have not been able to counter deflationary trends through monetary policies. In the crisis, governments with expansionary fiscal policies are jumping aside. Politically, this means a return to the the founding logic of parliamentarianism, the principle of “No taxation without representation.” In other words, the financial systems must be put back under democratic control.
Conflicts arise from excessive interdependence. These conflicts must be cushioned by international norms and multilateral cooperation. The World Health Organization’s competent crisis management demonstrates the effectiveness of multilateral cooperation in combating the pandemic. Unlike the 2008 financial crisis, however, this time there is no coordinated response from the twenty largest economies. The geopolitical rivalry of the great powers on the one hand and the right-wing populist call for isolation on the other hand stand in the way of greater international cooperation. The existing elements of multilateral governance need to be strengthened with concrete contributions. This can begin by providing more solid funding to the World Health Organization and continuing with a G20 meeting to coordinate economic crisis management. Here the Alliance of Multilateralists can prove its value added.
The crisis has made it drastically clear to the populace that the status quo cannot continue. The desire for a fundamental reorganisation of our economic activity and collective life has never been greater. At the same time, existential dangers must be fended off without disproportionately restricting democracy and freedoms. Which political power can negotiate the necessary social compromises to pull this off? The American political scientist Sheri Berman has posed an anxious question: “Can social democrats save the world (again)?” Let’s get it done.
Tyler Durden
Thu, 03/26/2020 – 22:45 - "I’ve Never, Ever, Ever Seen Anything Like This Before"
“I’ve Never, Ever, Ever Seen Anything Like This Before”
With the Fed buying $622 billion in Treasury and MBS, a staggering 2.9% of US GDP, in just the past five days…
… any debate what to call the current phase of the Fed’s asset monetization – “NOT NOT-QE”, QE4, QE5, or just QEternity – can be laid to rest: because what the Fed is doing is simply Helicopter money, as it unleashes an unprecedented debt – and deficit – monetization program, one which is there to ensure that the trillions in new debt the US Treasury has to issue in the coming year to pay for the $2 (or is that $6) trillion stimulus package find a buyer, which with foreign central banks suddenly dumping US Treasuries…
… would otherwise be quite problematic, even if it means the Fed’s balance sheet is going to hit $6 trillion in a few days.
The problem, at least for traders, is that this new regime is something they have never encountered before, because during prior instances of QE, Treasuries were a safe asset. Now, however, with fears that helicopter money will unleash a tsunami of so much debt not even the Fed will be able to contain it resulting in hyperinflation, everything is in flux, especially when it comes to triangulating pricing on the all important 10Y and 30Y Treasury.
Indeed, as Bloomberg writes today, core investor tenets such as what constitutes a safe asset, the value of bonds as a portfolio hedge, and expectations for returns over the next decade are all being thrown out as governments and central banks strive to avert a global depression.
And as the now infamous “Money Printer go Brrr” meme captures so well, underlying the uncertainty is the risk that trillions of dollars in monetary and fiscal stimulus, and even more trillions in debt, “could create an eventual inflation shock that will trigger losses for bondholders.”
Needless to say, traders are shocked as for the first time in over a decade, they actually have to think:
“I’ve never, ever, ever seen anything like this before,” Nader Naeimi, head of dynamic markets at AMP Capital Investors, told Bloomberg.
“You have enormous buyers of debt meeting massive coordinated fiscal stimulus by governments across the globe. For bond investors, you’re caught between a rock and a hard place.”
And while equity investors may be confident that in the long run, hyperinflation results in positive real returns if one sticks with stocks, the Weimar case showed that that is not the case. But that is a topic for another day. For now we will focus on bond traders, who are finding the current money tsunami unlike anything they have seen before.
Indeed, while past quantitative easing programs have led to similar concerns, this emergency response is different because it’s playing out in weeks rather than months and limits on QE bond purchases have quickly been scrapped.
Any hope that the Fed will ease back on the Brrring printer was dashed when Fed Chairman Jerome Powell said Thursday the central bank will maintain its efforts “aggressively and forthrightly” saying in an interview on NBC’s “Today” show that the Fed will not “run out of ammunition” after promising unlimited bond purchases. His comments came hours after the European Central Bank scrapped most of the bond-buying limits in its own program.
The problem is that while this type of policy dominates markets, fundamental analysis scrambling to calculate discount rates and/or debt in the system fails, and “strategic thinking is stymied and some prized investment tools appear to be defunct”, said Ronald van Steenweghen of Degroof Petercam Asset Management.
“Valuation models, correlation, mean reversion and other things we rely on fail in these circumstances,” said the Brussels-based money manager. Oh and as an added bonus, “Liquidity is also very poor so it is difficult to be super-agile.”
The irony: the more securities the Fed soaks up, be they Treasuries, MBS, Corporate bonds, ETFs or stocks, the worse the liquidity will get, as the BOJ is finding out the hard way, as virtually nobody wants to sell their bonds to the central bank.
Another irony: normally the prospect of a multi-trillion-dollar government spending surge globally ought to send borrowing costs soaring. But central bank purchases are now reshaping rates markets – emulating the Bank of Japan’s yield-curve control policy starting in 2016 – and quashing these latest volatility spikes.
In effect, the Fed’s takeover of bond markets (and soon all capital markets), means that any signaling function fixed income securities have historically conveyed, is now gone, probably for ever.
“Investors shouldn’t expect to see much more than moderately steep yield curves, since the Fed and its peers don’t want higher benchmark borrowing costs to undermine their stimulus,” said Blackrock strategist Scott Thiel. “That would be detrimental to financial conditions and to the ability for the stimulus to feed through to the economy. So the short answer is, it’s yield-curve control.”
Said otherwise, pretty soon the entire yield curve will be completely meaningless when evaluating such critical for the economy conditions as the price of money or projected inflation. They will be, simply said, whatever the Fed decides.
And with the yield curve no longer telegraphing any inflationary risk, it is precisely the inflationary imbalances that will build up at an unprecedented pace.
Additionally, when looking further out, Bloomberg notes that money managers need to reassess another assumption that’s become widely held in recent years: that inflation is dead. Van Steenweghen says he’s interested in inflation-linked bonds, though timing a foray into that market is “tricky.”
Naeimi also said he expects that the coordination by central banks and governments will spike inflation at some stage. “It all adds to the volatility of holding bonds,” he said. But for the time being, he’s range-trading Australian bonds — buying when 10-year yields hit 1.5%, and selling at 0.6%.
That’s right: government bonds have become a daytrader’s darling. Whatever can possibly go wrong.
But the biggest fear – one we have warned about since 2009 – is that helicopter money, which was always the inevitable outcome of QE, will lead to hyperinflation, and the collapse of both the US Dollar, and the fiat system, of which it is the reserve currency. Bloomberg agrees:
Many market veterans agree that faster inflation may return in a recovery awash with stimulus that central banks and governments may find tough to withdraw. A reassessment of consumer-price expectations would be a major setback for expensive risk-free bonds, especially those with the longest maturities, which are most vulnerable to inflation eroding their value over time.
Of course, at the moment that’s hard to envisage, with market-implied inflation barely at 1% over the next decade, but as noted above, at a certain point the bond market no longer produces any signal, just central bank noise, especially when, as Bloomberg puts it, “central bank balance sheets are set to explode further into unchartered territory.” Quick note to the Bloomberg editors: it is “uncharted”, although you will have plenty of opportunity to learn this in the coming months.
Alas, none of this provides any comfort to bond traders who no longer have any idea how to trade in this new “helicopter normal“, and thus another core conviction is being revised: the efficacy of U.S. Treasuries as a safe haven and portfolio hedge.
Mark Holman, chief executive and founding partner of TwentyFour Asset Management in London, started questioning that when the 10-year benchmark hit its historic low early this month.
“Will government bonds play the same role in your portfolio going forward as they have in the past?” he said. “To me the answer is no they don’t — I’d rather own cash.”
For now, Mark is turning to high-quality corporate credit for low-risk income, particularly in the longer maturity bonds gradually rallying back from a plunge, especially since they are now also purchased by the Fed. He sees no chance of central banks escaping the zero-bound’s gravitational pull in the foreseeable future. “What we do know is we’re going to have zero rates around the world for another decade, and we’re going to have the need for income for another decade,” he said.
Other investors agree that cash is the only solution, which is why T-Bills – widely seen as cash equivalents – are now trading with negative yields for 3 months and over.
Yet others rush into the safety of gold… if they can find it. At least check, physical gold was trading with a 10% premium to paper gold and rising fast.
Ultimately, as Bloomberg concludes, investors will have to find their bearings “in a crisis without recent historical parallel.”
“It’s very hard to look at this in a historical context and then apply an investment framework around it,” said BlackRock’s Thiel. “The most applicable period is right before America entered WW2, when you had gigantic stimulus to spur the war effort. I mean, Ford made bombers in WW2 and now they’re making ventilators in 2020.”
Tyler Durden
Thu, 03/26/2020 – 22:30 - Footage Of Indian Police Beating Lockdown Violators Goes Viral
Footage Of Indian Police Beating Lockdown Violators Goes Viral
With only 500 or so cases confirmed as of Tuesday, Indian Prime Minister Narendra Modi declared in a late-night address that as of midnight (at the time, only a few hours away) the entire country of between 1.3 and 1.4 billion people would be placed under a strict lockdown.
Individuals would be allowed to leave just once per day to buy food, and only for trips to buy essential products like medicine, or to see a doctor.
Modi claimed the 21-day lockdown would be necessary to avoid setting India back “21 years”, and argued that “to save India, to save its every citizen, you, your family…every street, every neighborhood is being put under lockdown.”
Less than a day later, images and video of Indian police beating citizens caught violating the lockdown, or perhaps mistakenly accused of leaving home for frivolous reasons when they were really out buying food.
Alok Barman, a houseworker who works in south Delhi, said he was beaten by cops when he ventured into the outskirts of the city to try and find food, according to wire reports cited by the NYP.
“Some homes that I work in paid me some money and I thought it was best to get some food in the house. But the police attacked us with sticks and beat us,” Barman said. “Now we have nothing to eat.”
Another local, Tarique Anwar, said he went out to buy milk and vegetables at a grocery store in Delhi’s Jamia Nagar neighborhood, but was stopped by police, who ordered him to turn back. While the owner of a meat shop, whose name wasn’t given, said police beat him for opening his store on Wednesday even though he thought it was protected as an essential business.
“They charged inside and started abusing and beating me,” the store owner said.
Some of the video show police forcing locals to do uncomfortable exercises like squats.
While other videos showed police beating locals with sticks.
So if you decide to violate India’s lockdown, you better be in good shape.
Tyler Durden
Thu, 03/26/2020 – 22:25 - Welcome To The War On Death
Welcome To The War On Death
Authored (satirically) by CJ Hopkins via The Unz Review,
OK, I’ve got some good news and I’ve got some some bad news.
The good news is mainly for authoritarians who missed all the fun during the War on Terror. The news is … welcome to the War on Death!
Yes, that’s right, global capitalism (a/k/a “the world”) is now at war with Death … which is great news for authoritarians! No more bothersome critical thinking. The time for questioning our leaders is over. It’s time to shut up and follow orders. We’re in a global state of emergency, folks! We’re talking lockdowns, soldiers in the streets, abrogation of our constitutional rights, arbitrary arrests, indefinite detentions, round-the-clock media fear-propaganda … the whole totalitarian megillah!
What, you’re probably asking, is the War on Death? Well … for those who remember the War on Terror, the War on Death is just like that, except this time the evil enemy is Death … or, all right, maybe not exactly like that, but there are a number of striking similarities.
For one thing, just like the War on Terror, we didn’t start it. Death attacked us! There we were, peacefully going about our global capitalist business, quelling a worldwide “populist” rebellion orchestrated by Russian-backed Nazis, when Death attacked us with a coronavirus … more or less exactly the way that the terrorists attacked us in 2001.
And, just like after those terrorist attacks, the world has united and forcefully responded. No, we haven’t invaded Iraq again (well, actually, we did bomb them a little), but we have locked down almost the entire planet, virtually shut down the global economy, and are scaring the masses into a state of unprecedented mass hysteria.
Police are patrolling the streets of Europe, checking people’s “permission-to-go-outside” papers. In the U.K., soldiers are standing by to assist with “protecting possible quarantine zones,” or to “cope with the breakdown of civil society.” Israel is tapping its formerly secret collection of everyone’s mobile phone records to identify people who might be infected, and assorted “others who need to be quarantined.”
Macron (now relieved of his Gilets Jaunes problem!) is ready to “rule by decree” if necessary. California is “prepared to enact martial law.” The U.S. military is “prepared to deploy in support of potential extraordinary missions,” including “quelling civil disturbances.”
The U.S. Department of Justice is asking Congress for the power to detain people indefinitely. The British Parliament is on the brink of passing an emergency “Coronavirus Bill” that will (among other unsettling provisions) grant authorities the power to arrest and indefinitely quarantine anyone they deem a “potentially infectious person” … or, in other words, pretty much anyone they want.
As if that wasn’t dystopian enough, according to a report in Politico:
“Counter-terrorism troops have been redeployed across Italy to beef up police forces throughout Italian cities. Patrol cars are now circulating in every major city in Italy with a monotone male voice warning citizens over a loudspeaker not to leave their residences or risk a ticket. ‘GO BACK INTO YOUR HOMES,’ the voice warns.”
But wait, it gets even better than that. In Missouri, prosecutors have charged an idiot who licked some items at Walmart as a “terrorist.” I kid you not, a Coronavirus Terrorist.
I could go on, but I think you get the picture (if you need more examples, check this Twitter thread).
The point is, the global capitalist empire (for whatever reasons, real or imagined) has turned on the MINDLESS HYSTERIA machine, and dialed it up as high as it goes. People are in full-blown headless chicken mode. No one (or hardly anyone) is thinking, or listening to dissenting opinions, or paying attention to official statistics, or common sense, or anything else that contradicts the War on Death narrative.
The British tabloids are publishing horror stories about “doctors” standing by and helplessly watching as patients slowly suffocate to death. According to such stories, not only are these “doctors” unable to treat roughly 400 patients with any of the UK’s over 8,000 ventilators, but, apparently, patients whose hearts have stopped (and who are therefore unconscious) are also now capable of “dying in agony” with “terror in their eyes.”
According to The New York Times, the Coronapocalypse has begun in Elmhurst, where the authorities have called in the refrigerator trucks to haul away the mountains of corpses, after 13 people who “had tested positive” died (of something) in the course of one day.
The rest of the corporate media are running moment-by-moment deathometer updates, apocalyptic prognostications of the millions or billions who are possibly going to die, and of course the latest on which celebrities have been infected and are clinging to life, or experiencing mild, cold-like symptoms, or absolutely no symptoms whatsoever. Greta suspects she might have been infected! Prince Charles! Colton Underwood (whoever that is), Tom Hanks, and even Idris Elba! Just the other night, celebrated playwright Terrence McNally (who was 81, and had a history of lung cancer and COPD) was struck down in the prime of his life!
In short, the authorities have whipped the masses into an orgy of shrieking, white-eyed FEAR of this new, evil, “invisible enemy” that is coming to kill them and their families. Millions of people (now confined in their homes) have taken to the Internet to pump up the hysteria, share totally un-sourced personal accounts of the horrors their therapists’ accountants’ doctors have personally witnessed on the war’s “front lines,” and hunt down any infected persons, or potentially infected persons (or otherwise uncooperative persons) who might have gone outside for some air.
So, that’s the good news for you authoritarians!
For the rest of us … yeah, not so good.
Oh, I almost forgot the bad news. The bad news is … well, the bad news is Death. The bad news is, you are going to die. I’m going to die. We are all going to die. All of us. We are going to die. We are going to die of … well, something. Cancer. A heart attack. A stroke. The flu. Diabetes. Alzheimer’s disease. Possibly a coronavirus. Maybe even this coronavirus.
In fact, a lot of us are dying right now, according to the Internet, around a hundred per minute … which, it goes without saying, is unacceptable, and a tragedy, and something we need to take drastic action to prevent at all costs. We can’t let these Russian dissension sowers, neo-Nazi accelerationists, and coronavirus-sympathizers confuse us. They want to convince us that Death is, yes, scary, and sad, but inevitable, and natural. How utterly heartless and insane is that?!
No, we need to close our minds to that nonsense. People are dying! This is not normal! Death is our enemy! We have to defeat it! We need to hunt down and neutralize Death! Root it out if its hidey hole and hang it like we did with Saddam!
I’m not kidding. There is a war on, people! GloboCap is taking the gloves off again. (You remember what happens when the gloves come off, don’t you?) So get your mind right and get with the program or get ready to face the consequences.
Relax, I’m not referring to all these tanks (2:34 in the NBC video). I’m referring to other consequences. I am not some crazy conspiracy theorist. Plus, Los Angeles Mayor Eric Garcetti has assured us there’s no cause for concern:
“If and when National Guard or military units are deployed to the streets of L.A., trust me, I’ll let you know.”
See? Everything is perfectly fine. No one is preparing for martial law. Those tanks just returned from the Middle East and are “being sent back home to Texas.” This kind of thing happens all the time. It has nothing to do with the global lockdown.
I don’t know about you, but I’m extremely relieved… for a moment there I thought we were in trouble.
* * *
C. J. Hopkins is an award-winning American playwright, novelist and political satirist based in Berlin. His plays are published by Bloomsbury Publishing and Broadway Play Publishing, Inc. His dystopian novel, Zone 23, is published by Snoggsworthy, Swaine & Cormorant. Volume I of his Consent Factory Essays is published by Consent Factory Publishing, a wholly-owned subsidiary of Amalgamated Content, Inc. He can be reached at cjhopkins.com or consentfactory.org.
Tyler Durden
Thu, 03/26/2020 – 22:05 - Pandemonium In The Pacific: US Carrier Diverts To Guam As COVID-19 Cases Spike Among Crew
Pandemonium In The Pacific: US Carrier Diverts To Guam As COVID-19 Cases Spike Among Crew
An absolute disaster is fast unfolding aboard the aircraft carrier USS Theodore Roosevelt in the Western Pacific causing emergency contingency plans to be put in place.
By Wednesday eight sailors aboard the carrier tested positive for COVID-19, but clearly the outbreak aboard the ship is nowhere near being contained as on Thursday the US Navy said that number has jumped to 23 sailors confirmed for the virus.
Pentagon officials further admitted the ability to conduct widespread testing aboard the ship is limited in a situation so dangerous that the carrier has been diverted from it’s original course, though Acting Navy Secretary Thomas B. Modly sought to stress “the ship is operationally capable and can do it’s mission if required” — no doubt a message ultimately meant for America’s rivals and enemies in the region.
The aircraft carrier USS Theodore Roosevelt, US Navy image. The outbreak has sent ship crew and US troops in Guam scrambling, reports The Daily Beast, as it appears a nightmare outbreak among military service-members is unfolding:
U.S. Navy and Marine Corps service members in Guam were ordered on Wednesday to break their own quarantine to set up makeshift shelters for U.S. troops coming off a nuclear-powered aircraft carrier, where an outbreak of the novel coronavirus is rapidly spreading within the hulls of the ship.
Some of the U.S. troops at Naval Base Guam, located on the western side of the U.S. territory at Apra Harbor, were assembled into 100-man working parties to begin transforming some of the base’s facilities into temporary quarantine shelters for some of the 5,000 service members arriving from the aircraft carrier U.S.S. Theodore Roosevelt, a naval vessel where COVID-19 is spreading.
The nature of the emergency is unprecedented, causing one unidentified US service member to tell The Daily Beast, “We’re fucked” — given obvious concerns that base personnel will be potentially exposed to coronavirus via the disembarking USS Roosevelt crew.
The Pentagon did not try to downplay the situation. Acting Secretary Modly said it’s urgent enough to conduct tests on 100% of the crew, presumably in Guam.
“We found several more cases aboard the ship, we are in the process now of testing 100 percent of the crew of that ship to ensure that we are able to contain whatever spread that might have occurred there… but I also want to emphasize that the ship is operationally capable and can do it’s mission if required,” Modly said at the Pentagon on Thursday.
On average, about 7,000 American troops are more are stationed among Guam’s multiple US bases (three major bases plus smaller HQs). The Roosevelt had recently been on deployment in the Persian Gulf and Indian Ocean region as part of the Trump administration’s “maximum pressure” campaign against Iran.
Navy vessels are moored in port at the U.S. Naval Base Guam at Apra Harbor, Guam. Via Reuters. “But in Guam on Wednesday, both Navy and Marine Corps service members set up roughly 140 military beds in a basketball gymnasium,” the Daily Beast report continues. “To squeeze more troops into the gym, Navy medical professionals recommended measuring the six-foot distance per guidance from the CDC from the center of the bed rather than from the outer edges, meaning, that the beds are actually 3-feet apart.”
All of this means that some ten to twelve-thousand plus US personnel will be squeezed onto Guam’s bases at a moment the Navy is dealing with an alarming development of 133 cases total of COVID-19 branch-wide this week.
Tyler Durden
Thu, 03/26/2020 – 21:45 - Wake Up! Your Fears Are Being Manipulated
Wake Up! Your Fears Are Being Manipulated
Authored by Peter van Buren via TheAmericanConservative.com,
We have a terrifying example in 9/11 of how this goes… Let’s calm down and figure out who has what to gain by stirring panic…
I’m not worried about the guy coughing next to me. I’m worried about the ones who seem to be looking for Jim Jones.
Jones was the charismatic founder of the cult-like People’s Temple. Through fear-based control, he took his followers’ money and ran their lives. He isolated them in Guyana where he convinced over 900 of them to commit suicide by drinking cyanide-laced grape Kool Aid. Frightened people can be made to do anything. They just need a Jim Jones.
So it is more than a little scary that media zampolit Rick Wilson wrote to his 753,000 Twitter followers: “People who sank into their fear of Trump, who defended every outrage, who put him before what they knew was right, and pretended this chaos and corruption was a glorious new age will pay a terrible price. They deserve it.” The tweet was liked over 82,000 times.
The New York Times claims that “the specter of death speeds across the globe, ‘Appointment in Samara’-style, ever faster, culling the most vulnerable.” Others are claiming Trump will cancel the election to rule as a Jim Jones. “Every viewer who trusts the words of Earhardt or Hannity or Regan could well become a walking, breathing, droplet-spewing threat to the public,” opined the Washington Post. Drink the damn Kool Aid and join in the panic en route to Guyana.
The grocery store in Manhattan, just after the announcement of the national state of emergency, was pure panic. I saw a fight break out after an employee brought out paper towels to restock the shelf and someone grabbed the whole carton for himself. The police were called. One cop had to stay behind to oversee the lines at the registers and maintain order. To their credit, the NYPD were cool about it. I heard them talk down one of the fighters, saying, “You wanna go to jail over Fruit Loops? Get a hold of yourself.” Outside New York, sales of weapons and ammunition spiked.
Panic seems to be something we turn on and off, or moderate in different ways. Understanding that helps reveal what is really going on.
No need for history. Right now, in real time, behind the backs of the coronavirus, is the every-year, plain-old influenza. Some 12,000 people have died, with over 13 million infected from influenza just between October 2019 and February 2020. The death toll is screamingly higher (as of this writing, coronavirus has infected 60,653 and killed 819 Americans). Bluntly: more people have already died of influenza in the U.S. than from the coronavirus in China, Iran, and Italy combined. Double in fact. To be even blunter, no one really cares, even though a large number of bodies are piling up. Why?
The first cases of the swine flu, H1N1, appeared in April 2009. By the time Obama finally declared a national emergency seven months later, the CDC was reporting that 50 million Americans, one in six people, had been infected, and 10,000 Americans had died. In the early months, Obama had no HHS secretary or appointees to the department’s 19 key posts, as well as no commissioner of the Food and Drug Administration, no surgeon general, no CDC director. The vacancy at the CDC was especially important because in the early days of the crisis, only they could test for the virus (sound familiar?). Yet some 66 percent of Americans thought the president was protecting them. There was no panic. Why?
Of course, Trump isn’t Obama. But if you really think it is that black and white, that one man makes that much difference in the multi-leveled response of the vast federal government, you don’t know much about bureaucracy. Most of the people who handled the swine flu are now working the coronavirus, from the rank and file at CDC, HHS, and DHS to headliners like Drs. Andrew Fauci (in government since 1968, worked ebola) and Deborah Brix (in government since 1985, prior to corona was an Obama AIDS appointee).
Maybe the most salient example is 9/11. Those who lived through it remember it well, the color threat alerts, the jihadi cells around every corner, the sense of learned/taught helplessness. The enemy could be anywhere, everywhere, and we had no way to fight back. But because the Dems and Repubs were saying the same thing, there was a patina of camaraderie to it (led by Rudy Giuliani and Mike Bloomberg, where are they now?), not discord. But the panic was still very real.
Why? We panicked when people took steps to ensure we would. We were kept calm when there was nothing to gain by spurring us to panic (the swine flu struck in the midst of the housing crisis; there was enough to worry about). After 9/11, a fearful populace not only supported everything the government wanted to do, they demanded more. Nearly everyone cheered the wars in Afghanistan and Iraq, and not believing the government meant you were on their side. The Patriot Act, which did away with whole swaths of the Bill of Rights, was overwhelmingly supported. There was no debate over torture, offshore penal colonies, assassinations, kidnappings, and all the little horrors. The American people counted that as competent leadership and re-elected George W. Bush. Fear was political currency.
Need a 2020 example of how to manipulate panic? Following fears of a liquid bomb, the TSA limited carry-on liquids to four ounces for years. Can’t be too careful! Yet because of corona, they just changed the limit for hand sanitizer only (which, with its alcohol content, is actually flammable, as opposed to say, shampoo) to 12 ounces. Security theater closed down alongside Broadway tonight.
False metrics are also manipulative because they make fear seem scientific. We ignore the low death rate and focus on the number of tests done. But whatever we do will never be enough, never can be enough, the same way any post-disaster aid is never delivered quick enough because the testing is not (just) about discovering the extent of the virus. For those with naughty motives, it is about creating a race we can’t win, so testing becomes proof of failure. Think about the reality of “everyone who wants one should get a test.” The U.S. has 331 million people. Testing 10 percent of them in seven days means 4,714,285 individuals a day while the other 90 percent hold their breath. Testing on demand is not realistic at this scale. Selective decision-based testing is what will work.
South Korea, held up as the master of mass testing, conducted at its peak about 20,000 a day. Only 4 percent were positive, a lot of effort for a little reassurance. Tests are valuable to pinpoint the need for social distancing, but blunt tools like mass social distancing (see China) also work. Tests do not cure the virus. You can hide the number of infections by not testing (or claim so to spur fear), but very sick people make themselves known at hospitals and actual dead bodies are hard to ignore. Tests get the press, but actual morbidity is the clearest data point.
There will be time for after-action reviews and arguments over responsibility. That time is never in the midst of things, and one should question the motives of journalists who use rare access to the president to ask questions meant largely to undermine confidence. If they succeed, we will soon turn on each other. You voted for him; that’s why we’re here now. Vote for Bernie and Trump wins and we all literally die. You bought the last toilet paper. You can afford treatment I can’t. You’re safe working from home while I have to go out. Just wait until the long-standing concept of medical triage is repackaged by the media as “privilege” and hell breaks loose in the ERs. We could end up killing each other even as the virus fades.
At the very least, we will have been conditioned to new precedents of control over personal decisions, civil life, freedom of movement and assembly, whole city lockdowns, education, and an increasing role for government and the military in health care. Teachers, don’t be surprised if less of you, and fewer classrooms, are needed in the virus-free future, in favor of more classes online. It’s almost as if someone is taking advantage of our fears for their own profits and self-interest.
There are many reasons to take prudent action. There are no good reasons for fear and panic. The fear being promoted has no rational basis compared to regular influenza and the swine flu of 2009. We have a terrifying example in 9/11 of how easily manipulated fearful people are. Remaining calm and helping others do so is a big part of what your contribution to the disaster relief could be.
That’s one way to see this. Too many right now, however, seem to be looking for Jim Jones.
* * *
Peter Van Buren, a 24-year State Department veteran, is the author of We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People, Hooper’s War: A Novel of WWII Japan, and Ghosts of Tom Joad: A Story of the #99 Percent.
Tyler Durden
Thu, 03/26/2020 – 21:25 - Americans Coping With Virus-Inspired Toilet Paper Shortage Are Clogging Pipes In Unprecedented Numbers
Americans Coping With Virus-Inspired Toilet Paper Shortage Are Clogging Pipes In Unprecedented Numbers
Millions of Americans sheltering in place at home combined with an acute shortage of toilet paper inventory in grocery stores and wholesale clubs across the country – even as manufacturers continue to insist that there’s been no cutback in production – has created an unprecedented crisis for municipal and metropolitan sewer systems.
The New York Times reports that sewer officials around the country are pleading with residents not to flush baby wipes, tissue paper, and paper towels, even if the products purport to be “flushable”.
These toilet paper-alternatives don’t break up like toilet paper does, and thus they’ve contributed to unprecedented blockages around the country.
But with toilet paper still unavailable in stores around the country, and with store employees typically answering desperate shoppers’ questions about when it might arrive with a shrug, it’s unclear when the supply ‘non-shortage’ will clear up. Some industry executives said the shortages will end once shoppers stop hoarding, but they’ve been saying that for days.
Remember, kids: #WipesClogPipes.
Across the country – in Charleston, S.C.; northeastern Ohio; Lexington, Ky.; Austin, Texas; and Spokane, Wash. – wastewater treatment officials have beseeched residents not to flush wipes down the toilet using the hashtag #WipesClogPipes.
“Flushable wipes are not truly flushable,” said Jim Bunsey, chief operating officer of the Northeast Ohio Regional Sewer District. “They might go down the drain, but they do not break up like regular toilet paper.”
The plumbing repair company Roto-Rooter issued a similar plea to its customers, and said that substituting facial tissue for toilet paper was “another bad idea,” unless it’s used in small amounts and flushed frequently.
The California State Water Resources Control Board warned this week that “even wipes labeled ‘flushable’ will clog pipes and interfere with sewage collection and treatment throughout the state.”
“Flushing wipes, paper towels and similar products down toilets will clog sewers and cause backups and overflows at wastewater treatment facilities, creating an additional public health risk in the midst of the coronavirus pandemic,” it said.
The agency said wastewater treatment plants across California were reporting problems.
Plumbers told the NYT that they were fielding an unprecedented number of calls, considering the level of national lockdown, as clogged toilets quickly escalated into a desperate situation for homeowners.
Plumbers said they were fielding an increase in calls from people working from home and self-quarantining.
“We have noticed an uptick in the amount of clogged main sewer lines and, when we dispatch our technicians, we are pulling baby wipes out of the line and we’re seeing paper towels and Lysol wipes,” Mark Russo, vice president of Russo Brothers & Company, a plumbing and heating service in East Hanover, NJ, said on Saturday.
“These items are things that should never be flushed down the toilet,” he said.
It’s just one of the many unanticipated ancillary complications by the ructions in normal society caused by the world’s first true pandemic in a century.
Tyler Durden
Thu, 03/26/2020 – 21:05 - Fed Balance Sheet Hits $5.5 Trillion As Discount Window Usage Soars
Fed Balance Sheet Hits $5.5 Trillion As Discount Window Usage Soars
As previewed last night when we showed that in the past week the Fed has bought a staggering $587BN in Treasuries and MBS, we calculated that as of March 25, the Fed’s balance sheet would rise to a record $5.3 trillion, a phenomenal increase of $1.2 trillion in just the past two weeks, equivalent to roughly 5.6% of US GDP.
Today, the release of the latest weekly H.4.1 statement from the Fed confirmed our math, and that as of close on Wednesday, March 25, the Fed’s total asset were indeed $5.3 trillion. Which, sadly, is now a stale number because we now live in a world where the Fed buys a record $125 billion in bonds (and who knows what else either directly or via Blackrock) every single day, which means that as of the Friday’s close, the Fed will have added a record $625 billion to its balance sheet…
… and more specifically, $250 billion to the total as of March 25. In other words, in just a few short hours, the Fed’s balance sheet will be $5.5 trillion…
… an increase of $1.3 trillion in two weeks (6% of GDP), which was the amount the Fed monetized during all of QE1 in response to the financial crisis, but which took place over a period of almost 2 years.
And as an aside, the Fed’s push to get banks to use the discount window appears to have worked: after more than a decade of stigma associated with any bank caught within 100 feet of the Primary Credit Facility, also known as the Discount Window, and with zero usage since mid-2010, last week borrowings under the Discount Window surge to $40 billion.
And while the Fed’s attempts to legitimize and de-stigmatize Discount Window usage are noble, we doubt it will be public just which bank(s) had to resort to this “Plan Z” source of funding.
Tyler Durden
Thu, 03/26/2020 – 20:58 - Putin Front-Runs QE, Proposes Taxing Investment Outflows
Putin Front-Runs QE, Proposes Taxing Investment Outflows
Authored by Tom Luongo via Gold, Goats, ‘n Guns,
Russia is going to be a destination for safe-haven flows in the post-COVID-19 world. It will be due to its vast savings, prudent fiscal policy and maneuver room available in monetary policy.
The biggest reason, however, for why I think Russia looks attractive to foreign investors is simply because of its political stability. Putin deftly proposed to devolve power out of the presidency and reorganize both his cabinet and the current government before the outbreak.
And while the final vote on these changes has been delayed because of COVID-19 they will very likely pass without incident when the worst of the crisis in Russia is over.
The same cannot be said for Russia’s neighbors in Europe, where the response has been both heavy-handed and inadequate to stem the tide against the virus.
And given the extreme fragility of the European banking system the response on the financial side both fiscally and through monetary policy will destroy what little confidence exists there.
When no less than former ECB President Mario Draghi is writing in the Financial Times to justify dropping the fiduciary equivalent of a nuclear bomb on Europe, you know things are desperate.
You only bring out the big guns when things are ready for substantive change.
Read Draghi’s words carefully and you’ll notice the only time he references the past is to justify, what else, war spending. There is no other way to fight this fight.
We must print all the money in the world and destroy the futures of our grand children in order to save ourselves today. It’s typical apocalyptic rhetoric from someone who was the architect of the current system’s fragility in the first place.
Draghi actively destroyed not only real capital and real wealth with negative interest rates he destroyed the sovereign debt market in Europe by buying up whole swaths of it.
Christine Lagarde came in this morning to continue Draghi’s work, pushing down European bond yields after the U.S. Senate approved the biggest stimulus package in our history.
And into this mess Russia will also be spending money. Most of this was money already earmarked for this year. Putin is no Austro-libertarian or anything. There’s going to be stimulus in Russia.
And that’s why, at the same time, he’s looking to shore up Russia’s tax reciepts by shifting some of the tax burden to those looking to take advantage of what are now very high real rates of return on Russian capital.
Putin is putting a 15% tax (or tariff) on dividends paid to foreign entities as a way to front run the influx of capital fleeing the destruction that’s happening around Russia.
I was contacted for a comment by Sputnik News on this and here’s what I had to say:
“Putin is trying to get in front of capital outflow in the case of a wider global recession since Russian companies are more likely to weather that storm better than in a lot of other countries”, the analyst says.
Luongo underscores that the Russian president has recently put an emphasis on the concept that companies which “benefitted from the state’s assistance should be held to account for bettering Russia”. Likewise, “international investors should be on the hook paying back that assistance”, he notes.
According to Luongo, the Kremlin is “also trying to ensure that Russia as a destination for capital fleeing the chaos in the West doesn’t become a kind of ‘high-yield’ slush fund”.
“Russia is about to spend a lot of money in support of its economy and Putin understands that as the West struggles Russia will be seen as an emerging safe haven”, he adds. “And this tariff on dividends is a way of attenuating that and offsetting lower oil tariffs”.
With oil at or below $30 per barrel there is now a much bigger hole in Russia’s budget as tariffs from domestic oil and gas producers will likely drop to near zero. Russian Finance Minister Anton Siluanov expects a shortfall of RUB 3 trillion next year (~$38.7 billion).
So, some of that money can be made up elsewhere and taxing foreign investors looking for easy 10-12% real yields makes sense. Currently Russian 10 year government bonds trade around 7%. That number is likely to continue falling back to its longer-term run rate since yield curves in the West are getting crushed right now thanks to QE and further financial repression.
When most western economies are going to be contracting between 5-10% for the next couple of quarters the potential real yields for investors is very tasty. And it makes sense for Putin to want to 1) slow that down and 2) offset the lost oil revenues.
Into this market the Bank of Russia could easily sell into demand and recoup a lot of its coupon payments on the back end through this tariff without having to lower rates to over-stimulate the Russian domestic markets.
But, these are all secondary effects. The main effect is to protect the domestic economy from capital inflow that does nothing to assist the development of Russia’s non-oil economy.
As all those new trillions in bailout money come in to blow a bubble in Russian assets and take all the money right back out again when a slightly better deal comes along.
I’m no fan of tariffs but in a world of unlimited money printing a move like this makes sense, especially now that you are public enemy #1 for having helped precipitate the crash overseas in the first place.
* * *
Join My Patreon because you hate QE. Install the Brave Browser if you want to help mitigate QE
Tyler Durden
Thu, 03/26/2020 – 20:45 - President Trump Urges Governors To Rank Counties By Virus Risk In Bid To Re-Open America's Economy
President Trump Urges Governors To Rank Counties By Virus Risk In Bid To Re-Open America’s Economy
President Trump said in a letter to governors today that governments should soon be ranking individual counties across the U.S. as “low, medium or high” risk for coronavirus outbreaks, in what is likely a beginning stage attempt to get the wheels of the American economy turning again.
His letter says:
“My administration is working to publish new guidelines for state and local policymakers to use in making decisions about maintaining, increasing, or relaxing social distancing and other mitigation measures they have put in place.”
“This is what we envision: Our expanded testing capabilities will quickly enable us to publish criteria, developed in close coordination with the nation’s public health officials and scientists, to help classify counties with respect to continued risks posed by the virus,” it continues.
You will find more infographics at Statista
Here is Trump’s full letter to America’s Governors:
Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases stated in an interview with NBA star Steph Curry on Thursday that some parts of the country may be able to back off the social distancing guidelines that are being stressed heavily in places like New York City.
“There are places in the country now where you want to look at carefully and say you know maybe you want to pull back a little bit on the restrictions so long as you don’t just say let it rip and say I don’t care what happens,” Fauci told Curry.
“You treat New York City a little different than you treat Nebraska,” he continued.
White House counselor Kellyanne Conway assured the nation on Fox News Thursday that President Trump is “listening to his health professionals” and that his proposed date of Easter to get the country back on its feet is only “an example”, according to Bloomberg.
Tyler Durden
Thu, 03/26/2020 – 20:25 - Dual Paths In Dark Times: Despair Or Hope For Antiwar Dreamers
Dual Paths In Dark Times: Despair Or Hope For Antiwar Dreamers
Authored by Danny Sjursen via AntiWar.com,
“Red” (Morgan Freeman): “Hope is a dangerous thing my friend, it can kill a man…”
Andy (Tim Robbins): “Remember, Red. Hope is a good thing, maybe the best of things, and no good thing ever dies.”
~ The Shawshank Redemption (1994)
Two futures lie before us. Like the classic visions of late-Old Testament prophets, contemporary observers – perhaps voyeurs – of U.S. national security policy can, at this precipice of pandemic, discern, however vaguely, as dual, dichotomous prospective paths unfurl.
The first, and Washington’s long-preferred, course is one of militarist escalation.
It’s contours are there for us to see.
In the past couple of weeks, the Pentagon has unapologetically ramped up its proxy war with Iran – on the soil of an unmistakably unwilling “sovereign” state which has politely, if futilely, asked the US military to leave – by bombing, and killing, third-party “allies” of the Islamic Republic.
Then, though it was hardly covered or noticed, Washington killed a Somali child and an elderly disabled man in an airstrike: the 31st such US attack-from-the-sky in a Trump-accelerated campaign upon yet another country we are not at war with. US Africa Command announced, of course, that five “terrorists” had been killed in the strike with zero reports of civilian casualties. Well, naturally, it helps to have folks on the ground (hardly the norm for America’s techno-killers) to accurately access victim-status. Which is probably one reason – besides flagrant duplicity – that a UK-based airstrike monitoring group’s relevant report estimates Somali civilian casualties in US attacks since 2007 may be 73 times higher than official Pentagon claims.
Nor should anyone forget that the U.S.-backed and critically enabled Saudi/UAE terror war on, and blockade of, Yemen hasn’t ceased. Back when most folks thought “Corona” was just a cheap brand of cerveza, that unlucky nation – already the Arab World’s poorest – had the ignoble distinction of being the globe’s grimmest humanitarian disaster area. With more than 100,000 war-related deaths and counting, Yemen still faces the world’s worst cholera outbreak. Now, hidden under the veil of pandemic-media-blackout, America’s ostensible Saudi and Emirati “allies” – I think the kids call them frenemies – have just violently turned on each other in South Yemen. It seems a predictably failed US policy on the Arabian Peninsula has finally reached it’s absurd destined denouement, as Washington’s treasured, theocratic, authoritarian, Arab state “partners” turn fratricidal.
Finally, in a fit of remarkable sadism – even for him, and the late-stage empire he “diplomatically” represents – last week Secretary of State Mike Pompeo reportedly (unsuccessfully) urged President Trump to use this pandemic opportunity to bomb Iran. For this former military academy valedictorian – the current administration is literally loaded with members of Pompeo’s Class of 1986, calling themselves the “West Point Mafia” – chickenhawk who never saw a shot fired in anger, waging proxy war with Iran isn’t sufficient. That’s right: Mr. Pompeo sought to attack a sovereign state the congress has not declared war upon, which is riddled with Corona, and has already had its public health response crippled by brutal US economic sanctions.
Sanctions are usually – as is empirically provable – ineffective, and always tantamount to murder (of innocents), especially in times of disease-pandemic. That’s by design; the inherent nature of the blockade beast. Need proof? Consider the case of Iraq: the absolute gold standard of U.S.-imposed (1990-2003) sanctions-cruelty. We now know – actually have long known – that, according to a widely cited UNICEF report, economic sanctions killed more than 500,000 children there, by increasing the infant mortality rate. Lest one naively suppose this to be the unintended cost of doing business, recall that Defense Intelligence Agency documents (DIA) uncovered in 2001, proved that the US purposefully “used sanctions against Iraq to degrade the country’s water supply after the [1991] Gulf War,” and admitted that “This could lead to increased incidences, if not epidemics, of disease.”
So, sure, one potential path is to tighten the embargo-noose on Cuba, Iran, Venezuela, Yemen, and other states that Uncle Sam deems disagreeable. Recent events and administration pronouncements indicate that to be the Trump team’s opportunistic inclination. This in spite of a litany of credible reports showing such sanctions have killed, and will kill, thousands upon thousands of innocents. What’s certain is that “maximum pressure,” applied to Iran or others, will doom countless more.
All of which is to say nothing about the final – and perhaps most treacherous – threat on the potential Corona-contemporaneous path: that of government’s proven penchant for opportunistic domestic suppression. The disturbing writing is already on the wall in reports that the US military plans to temporarily seize power in a Corona-pinch, and that the Justice Department seeks indefinite detention authority in this, or a similar, emergency. And why not? We’ve seen it before.
The US warfare state has run amok since the end of the Second World War, and veritably gone “off-the-rails” since September 11, 2001. It is behaving as badly as ever in the wake of this Corona-outbreak. That much is undeniable. Still, reasons remain to not slip into apathy or despair. As the great Leonard Cohen once sang, “There is a crack, a crack in everything; That’s how the light gets in.” Staring straight into the ugly face of COVID-19, a growing number of antiwar scholars and activists are today widening those very fissures in the edifice of American militarism.
Despite the impending darkness, there have been (exponentially) growing – domestic and international – calls for the US military to finally march out of Iraq. There’s even been unprecedented talk of the need to evacuate and close American bases in the Mideast writ large. The severity of the Corona-plague is such that it appears the military is even quietly “repositioning” (read: leaving) some of its smaller bases in Iraq, as part of an unprecedented DOD-wide response to the pandemic.
Most vitally, the activist (and to some degree policymaker) appetite for a complete moratorium on worldwide US sanctions (which, until now, have rarely raised any meaningful public ire) is particularly encouraging. What’s remarkable, and potentially decisive, is that the rationalizations raised for a demilitarized foreign policy hold the weight of both prudence and morality.
Traditionally, policy arguments centered solely on “sensible” strategy, or “emotional” ethics, respectively, rarely garner mass appeal. This reality reflects the nature of the human condition. Homo sapiens are a rather peculiar species, driven by neither reason nor passion, exclusively. Such is the duality of Man. Usually, the positions that ultimately carry the day – for good or ill – appeal to both the cerebral cortex (or “Mammal“) and limbic (or “Lizard”) portions of the collective brain. There are hopeful signs that such dual-rationales are available with respect to ending America’s deadly sanctions regime.
In the midst of the current pandemic, twin-track arguments for relief range (quite effectively) from ethical clamors for mercy – consider it a form of Love in the Time of
CholeraCorona – to tactical self interest. After all, mass outbreaks in one country inevitably affect public health in our own; as even the most stringent travel-bans and blockades inescapably leak like sieves in this increasingly interconnected, technologically-advanced, world. Straddling both lines of argument, are a respected group of economists – hardly known as a particularly emotive lot – who recently called for the lifting of all US sanctions worldwide. Such penalties on Iran, Cuba, Venezuela and others, they astutely asserted, have the effect of “feeding the coronavirus epidemic,” and that the prevailing “policy is unconscionable and flagrantly against international law.” Whether such arguments will ultimately prevail remains uncertain, but this is nevertheless a powerful, persuasive line of reasoning.This sort of uncomfortable self-awareness and conscience-consistency would demonstrate a level of national policy maturity that could serve as an example to the world from a country that (generally) has been historically hypocritical as a self-styled democratic “beacon,” and “indispensable,” shining “City on a Hill.” Words matter; so do their meanings. Never underestimate the potency of semantics in public policy.
Consider one more, somewhat ideological, aperture for an antiwar positional explication. The increasingly self-evident necessity of interstate cooperation, for global responses to a global calamity, presents a unique opportunity for scholars, sympathizers, and street activists to forcefully shrug-off the pejorative poundage of the “isolationism” label – a convenient descriptive cudgel to dismiss all war critics – and avow their own internationalism, of sorts. An antiwar movement which necessarily spans the spectrum from the faintly socialist to vaguely libertarian, need not tip towards extreme, much-maligned (with some reason) positions of “globalism” to effectively counter the security-state establishments go-to accusational canard that such opposition is wholly “isolationist.” That would be a victory in itself.
Whatever one thinks about the severity of this pandemic, its logical conclusion, or the evolving government (and global) response, these are unquestionably crucial times. Folks are really frightened and downright dying. Understandable, this, but all must remain critically cognizant that History shall not end, that the force of events will carry on. The Empire will act out, in these tumultuous times, like the petulant child it truly is.
History is ceaselessly contingent; human beings are inherently imbued with agency; and nothing is inevitable. What is certain, is that the American Republic, and its people, are about to be tested on a grand, epochal scale.
Let us hope, or pray, that they are not found wanting…
* * *
Danny Sjursen is a retired US Army officer.
Principled alternative publications like Antiwar.com, are needed for now than ever. We the People, our readers, will necessarily win or lose the fight, but count on this publication to lend a pivotal assist in the unfolding struggle for peace and justice. Contribute now, and your donation will be matched dollar for dollar. Please do it today.
Tyler Durden
Thu, 03/26/2020 – 20:05 - "I Would Rather Be Dead": Calls To Suicide Hotlines Spike Amid COVID-19 Pandemic
“I Would Rather Be Dead”: Calls To Suicide Hotlines Spike Amid COVID-19 Pandemic
Calls to the National Suicide Prevention Hotline have spiked 300% amid the coronavirus pandemic, according to KVLY, while the Sacramento Bee reports that other suicide prevention services have similarly risen for the same reasons.
“It’s so scary, it’s almost like … I would rather be dead,” said suicidal writer Danielle Sinay, who lives in New York City. “I mean, I wouldn’t be, but sometimes I get so scared it feels like that.”
President Donald Trump, who has been pressing to lift restrictions on most people as soon as possible, has warned of “suicides by the thousands” if people remain isolated, Forbes reported.
More than 487,000 cases of the COVID-19 virus have been confirmed worldwide with more than 22,000 deaths as of March 26, according to Johns Hopkins University. The United States has more than 69,000 confirmed cases with more than 1,000 deaths. –Sacramento Bee
(That figure topped 523,000 infected and 23,639 deaths as of this writing just hours later, according to the same source).
“There are ramifications, sometimes fatal, with events like these that are not just related to getting infected or dying from infection or consequences of infection,” said Eric Caine, co-director of the Center for the Study of Prevention of Suicide at the University of Rochester Medical Center, in a statement to USA Today.
“Fear and anxiety about a disease can be overwhelming and cause strong emotions in adults and children. Coping with stress will make you, the people you care about, and your community stronger,” said the CDC in a statement.
Meanwhile, the national crisis text line, they handled 6,000 text conversations last week – approximately twice the normal volume according to spokeswoman Ashley Womble.
In Portland, Oregon, suicide-related 911 calls rose 23 percent in the past 10 days, compared to the 10 days before the city declared an emergency, The Oregonian reported. All 911 calls in the city dropped 10 percent in the same period.
Other suicide prevention efforts in Portland report rising calls from people who feel anxious, depressed or frightened, but not in calls from those feeling acutely suicidal, according to the publication. Officials fear that may change. –Sacramento Bee
“If this nears a large disaster like Hurricane Katrina, there is a flood coming,” said Chris Bouneff, who heads up the Oregon chapter of the National Alliance on Mental Illness, according to The Oregonian.
And at the largest suicide prevention hotline in Massachusetts, the Samaritans, they received 350 calls per day last week, up from 250 – 275 calls they normally receive according to the Boston Globe. Text messages in March are on pace to reach a record high of more than 1,000.
Tips to fight anxiety (via the Sacramento Bee)
“Isolation is a big trigger for a lot of people,” according to California social worker Norine VanderHooven. “People are becoming so anxious because they don’t know what to expect. Anxiety is fear of the unexpected or unknown.”
Experts suggest that people keep to a routine schedule, exercise, eat a healthy diet, meditate and take walks to quell anxiety, The Boston Globe reported.
Avoid information overload if it increases your fear and stave off feelings of isolation by staying in touch with friends or family by phone or online, according to the publication.
“None of us are immune to this feeling of anxiety and stress,” said Leticia Sainz, interim deputy director of Multnomah County’s behavioral health division, The Oregonian reported. “I think we’re still really seeing the beginnings of the effects of this.” –Sacramento Bee
If you or someone you know is struggling with mental health or suicidal thoughts, please call the National Suicide Prevention Lifeline at 800 273-8255 or text the Crisis Text Line at 741741.
Tyler Durden
Thu, 03/26/2020 – 19:45
Digest powered by RSS Digest
Saving...![<!–[if IE 9]><![endif]–>](https://i0.wp.com/www.zerohedge.com/s3/files/inline-images/david%20solomon%20teaser.jpg?ssl=1){kind=link}
![<!–[if IE 9]><![endif]–>](https://i0.wp.com/www.zerohedge.com/s3/files/inline-images/buffett%27s%20house.jpg?ssl=1){kind=link}
![<!–[if IE 9]><![endif]–>](https://i0.wp.com/www.zerohedge.com/s3/files/inline-images/roosevelt.jpg?ssl=1){kind=link}
![<!–[if IE 9]><![endif]–>](https://i0.wp.com/www.zerohedge.com/s3/files/inline-images/guamnavybase.jpg?ssl=1){kind=link}