- First Negative Oil Prices, Now Sicily Will Pay Tourists To Visit
First Negative Oil Prices, Now Sicily Will Pay Tourists To Visit
Everything is upside down. First, it was oil long paying “buyers” to take delivery of oil that nobody could store; now it’s popular tourism destinations paying tourists to come visit.
It is only appropriate that the birthplace of the Italian mafia has come up with the tourism equivalent of the WTI deliverable contract: according to The Times, Sicily is offering to pay tourists half of their plane ticket, as well as a night at a hotel an attraction entry fees in a bid to encourage tourists to return.
Sicily, located off the south of Italy, most famous perhaps for giving the world the Cosa Nostra mafia, is attempting to lure foreign visitors back to the island after the lockdown ends on May 4. The offers, first reported by The Times, will be available on the island’s tourism website. They include a free night at a hotel for every three, as well as museum and archaeological entry tickets. The Government will use €50 million to fund the scheme, with losses of €1 billion ($1.6 billion) reported from March and April.
Italy generates 13% of its GDP from tourism and is desperate to restart inbound tourism as soon as the country is reopened.
According to News.com, it’s not the first time the island has offered cheap deals to entice people to visit. Last year, the towns of Mussomeli and Sambuca in Sicily offered houses for just $1.60 as local numbers dwindled. The catch was that new owners had to fork out up to $25,000 to renovate the houses within the first year of buying them.
The rest of Italy is also looking at ways to restart the tourism industry after being the hotspot of coronavirus in Europe. One region has even drawn up plans for tourists to use “plexiglass boxes” while relaxing on the beach to reduce the spread of coronavirus.
Italy is not alone in a bid to reboot tourism following a total collapse in global travel: hotels elsewhere in the world are offering guests free upgrades and extra night to encourage them to stay, as coronavirus causes bookings to plummet.
Tyler Durden
Tue, 04/28/2020 – 02:45 - What The COVID-19 Crisis Means For Europe & The Eurozone
What The COVID-19 Crisis Means For Europe & The Eurozone
[An interview with Dr. Hulsmann, originally published in German by Die Freie Welt.]
As a result of the corona crisis, economic life was severely restricted in many countries. How long can the economy take this?
As long as stocks last. In other words: as long as you can allow yourself to live off previous savings. There is no difference between a family and the overall economy in this regard.
The German federal government has passed a bailout fund of around €750 billion to stabilise the economy and save companies from bankruptcy. Can such measures mitigate the economic downturn?
No. Such measures have two very different effects, which only give the brief appearance of a cushion.
On the one hand, income and wealth will be massively redistributed and, on the other hand, the future will be sacrificed on the altar of contemporary concerns.
Let me describe that in a little more detail.
The federal government’s bailout fund generates additional income or income of €750 billion. Where does this money come from? There are three main sources to consider: taxes, public debt, and the music press. In all three cases, it is by no means the state that conjures up 750 billion out of nothing. It is the citizens who are robbed of this sum in one form or another. Taxes are not supposed to be raised this time. I therefore conclude that the citizens will be expropriated, as in the past, by devaluing their financial assets. Interest income is pushed down even further. Savings are taxed with negative interest rates, and price inflation gnaws at what is left.
As in the past, this redistribution is justified by the fact that there would otherwise be a collapse in the financial markets, which would also severely damage the real economy. Without the manna of the rescue umbrella, many companies would go bankrupt and lay off their workers. Loans could not be reimbursed, causing the banking industry to collapse, which would affect other companies. In a word, there would be a downward spiral, standstill, and mass unemployment. The citizens would be asked to foot the bill one way or another. Either they have to fund the rescue package or they have to suffer the collapse of the entire economy. All in all, therefore, it would be much better to fleece the citizens a little bit now, rather than to expose them to even greater losses.
This argument is correct insofar as rescue packages can prevent a short-term collapse.
This is exactly why the appearance of a cushion is created.
Why only apparently?
Because this short-term success comes at the expense of the future. The downturn is mitigated in the short term, but is reinforced in the long term. With the 750 billion, companies are now being saved that have not done what companies are supposed to do. They did not manage their own savings and other people’s savings sustainably. They had a run at short-term profits and funded their ventures with loans. It is these very firms, whose incompetence has become apparent through the crisis, that are now artificially kept alive. And those who have wisely foregone credit-financed adventures will again be asked to foot the bill. Hence, the real effect of the rescue package is to bring even more funds into projects that are already on shaky feet and are led by adventurers. It is obvious what that means for the future.
The whole thing is compounded by the fact that government spending is notoriously inefficient and corrupt anyway. Unfortunately, there is no reason to hope that people who fail in all other areas of responsibility (education, healthcare, airport construction, housing construction, national defence, etc.) will find their first-class form right now.
Let me conclude on this question with an even more fundamental consideration. It is wrong to always avoid short-term inconveniences at the expense of the future, especially with taxpayers’ money. But that’s exactly what we’ve been doing for many decades. This little game was previously limited to banking and finance, and as a result it was only noticed by experts. It has been played on a large scale since 2008 and as a result is becoming the focus of the general public. Anyway, it’s a very stupid game. Some government-related agents benefit, but ordinary citizens cannot gain anything here in the long run.
It would be much more sensible to seek solutions in a fundamentally different way. You can actually make a good case for taking a short-term collapse of the entire economy “on the chin”—in Boris Johnson’s memorable words—so that the economy be cured and put on a healthier basis in the long term. After all, until recently, Germans were ready to leave their homes during the winter flu season and take the risk of catching a cold. If you do not want to accept any risks and inconveniences now, you’ll get plenty of both in the long term.
What about the monetary system? Do you expect the eurozone to fall apart or inflation to rise?
Higher price inflation, yes, but not a disintegration of the eurozone.
Rising price inflation is unavoidable as government and central banks do anything to prevent that less money be spent overall in the economy. Since they have the printing press, they will probably succeed. In this case, price inflation is inevitable, since the supply of goods decreases due to the curfews.
The eurozone will stay together as long as there are no better alternatives for national governments. The Italians grumble, but just like the Greeks back then, they will be wondering what loans they will get if they give up the euro.
We have not heard of eurobonds for a long time. Now there are calls for corona bonds. What do you think of this idea?
Nothing at all.
They would exacerbate the basic problems of the eurozone: even more debt, more fragility, more irresponsibility by the immediate beneficiaries in politics and finance. Corona bonds would be a disservice not only to German, but also to Italian taxpayers. In the medium and long run, they would also be a disservice to the people who are dependent on medical services in Italy. The Italian state is alone responsible for its financial calamities and for the overwhelming burden on its state-owned and state-run hospitals. But even in the current mess, it could bring substantial relief in a fairly short time, simply by immediately liberating the private sector in the healthcare services. But that’s exactly what the state doesn’t want to do. Corona bonds are intended to ensure that nothing has to change, so that in fact nothing changes in the state’s mismanagement and shortage economy. Government representatives raise their fingers and contend: “If you Germans don’t do anything for us, then people will die over here.”
The truth is that they themselves do not want to do anything that could question Italy’s inefficient welfare state. They take the Germans into moral custody, but accept that Italians will remain underserved because they do not wish them to be provided for outside the welfare state.
If the shutdown is lifted, how long will it take for the economy to recover? Is this just a temporary slump or is the economic crisis going on for a long time?
Basically, the recovery can take place very quickly. My main concern is government intervention, which can prolong and increase the current difficulties. The classic example from economic history is the Great Depression of the 1930s in the USA. At that time, a simple stock market crash was so badly managed by ever new and increasingly rigid state intervention that it expanded into a long-standing economic crisis.
How do you rate the crisis management in the different countries? The United Kingdom and the Netherlands have opted for mass immunisation, France for curfews. Which reaction do you think is the right one?
I am not an immunologist and do not presume to define the best solution from a medical point of view. As an economist, however, I know the following: it is fundamentally wrong to put the entire economy at the service of a single goal and to commit to a single solution. Human action always involves weighing up different goals and different means. Of course, maintaining health can be of paramount importance in the short run. But even then, it is never the sole goal and there are always different means. Free competition is essential, particularly when it comes to the efficient selection of ways and means. I therefore believe that the countries that respond best are those which give citizens and families the greatest possible freedom and responsibility, and which also do not centralise political responsibility, as here in France, but hand it over to the town halls and other local authorities. Examples would be Switzerland and the Netherlands.
Which countries will emerge from the crisis as losers and which as winners?
That’s difficult to say at the moment, because we are not through this yet. As I said, the greatest imponderability lies in state action.
In any case, I do not see France, Italy, and Spain among the winners, since in these countries the crisis is “used” by circles close to the state to secure and expand their own privileges, if possible with the help of corona bonds.
Tyler Durden
Tue, 04/28/2020 – 02:00 - China Threatens Australia Over 'Dangerous' Investigation Into Coronavirus
China Threatens Australia Over ‘Dangerous’ Investigation Into Coronavirus
China has threatened Australia with an economic hit if it doesn’t stop investigating the CCP’s handling of the coronavirus, according to Sky News.
Chinese Ambassador Cheng Jingye told the outlet on Monday that while China’s response may not have been “perfect,” Australia’s inquiry was “dangerous,” and could lead to Chinese consumers avoiding Chinese exports and travel.
“So what is being done by the Australia side?” asked Cheng. “The proposition is a kind of teaming up with those forces in Washington and to launch a kind of political campaign against China.”
“The Chinese public is frustrated, dismayed and disappointed with what Australia is doing now,” said Cheng. “I think in the long term… if the mood is going from bad to worse, people would think ‘Why should we go to such a country that is not so friendly to China?’ The tourists may have second thoughts.“
“The parents of the students would also think whether this place which they found is not so friendly, even hostile, whether this is the best place to send their kids here,” Cheng continued (via the Daily Wire). “It is up to the people to decide. Maybe the ordinary people will say ‘Why should we drink Australian wine? Eat Australian beef?’“
Australia’s Foreign Minister Marise Payne hit back against the call for an independent inquiry, saying “Australia has made a principled call for an independent review of the COVID-19 outbreak, an unprecedented global crisis with severe health, economic and social impacts.”
“We reject any suggestion that economic coercion is an appropriate response to a call for such an assessment, when what we need is global co-operation.”
According to Sky News reporter Tom Connell, Australian politicians are in agreement over the need for a “global independent” investigation into the Wuhan coronavirus, adding that “China’s response, of course, has been to push back and the stakes did increase today from the Chinese ambassador in this interview with the Australian Financial Review.”
China’s opposition to an Australian investigation comes after the United States reportedly launched a “full-scale investigation” into whether COVID-19 escaped from a biolab in Wuhan, China, according to Fox News.
According to the report, US intelligence operatives are gathering information regarding the laboratory and the initial outbreak of the virus, which was found in a horseshoe bat specimen collected by scientists from the Wuhan Institute of Virology in 2013 in a cave in Yunnan, China.
Tyler Durden
Tue, 04/28/2020 – 01:00 - A Locked-Down Country Is Vulnerable To Attack
A Locked-Down Country Is Vulnerable To Attack
Authored by Peter Earle via The American Institute for Economic Research,
Right now, hundreds of thousands of businesses are closed, and countless American streets are empty. Individuals, families, and businesses are rapidly burning through their savings, supply chains are atrophying, and every economic indicator is revealing a rapid retrenchment from healthy levels just one month ago. We have had a stock market crash, an oil price crash, inverted yield curves, and many other warnings revealing an economy in serious distress.
What if, in this state of worsening economic vulnerability, the once-unthinkable were to happen yet again?
What would tomorrow look like if today were September 10, 2001?
It’s true that, presently, aircraft are hardly flying and most office buildings are operating with skeleton crews, and thus the mechanics of an attack of the sort perpetrated on September 11th, 2001, are unlikely. But for all they lack, the enemies of the United States are surely not short of ideas or a terrifying form of homicidal entrepreneurialism. Propriety resists speculation as to other ways that such a thing could take place, but as a wealthy nation with many major cities, ports, and other critical points, America has and will always have vulnerabilities.
In a state of lockdown, we are more vulnerable than ever. People are prisoners in their homes, with private firms shuttered and inert. America is in a recession, and perhaps in a depression. Government resources are depleted, and a sizable portion of the population is wandering around their home demoralized, confused, and depressed.
Straight talk: the United States is tremendously vulnerable right now.
Despite Trump’s campaign pledge to end American’s “endless wars,” soldiers, sailors, airmen, Marines, and government contractors in military roles are active every second of every day worldwide. Whether one believes that America’s foreign engagements are wholly justified or that they are an incredibly unsustainable exercise in imperial overreach – Americans in combat in four or five countries; another 150,000 troops in 800 bases spanning 150 countries; and entangling alliances in most of the remainder – the idea that these interventions don’t create new enemies, some of whom are likely to be innovative in the most sinister of ways, is both gullible and irresponsible.
The Congressional Research Service’s September 2002 Report “The Economic Effects of 9/11: A Retrospective Assessment” makes clear that one of the major factors blunting the full impact of the attacks was the Fed’s immediate action.
The economy was contracting when 9/11 occurred… The terrorist attacks did cause some severe localized effects, especially in and around the target areas, and that may have muted the magnitude of growth in the 4th quarter. The fairly modest effect may have been due to assurances given by the Federal Reserve within hours of the attack that it was still in business and that sufficient liquidity would be available for the financial community. Over the next three days the Federal Reserve added some $100 billion per day in liquidity.
And that only takes into account the days and weeks after the attacks. There were, of course, longer-term effects of the attacks in the tourism, airline, insurance, and food/agriculture sectors, as well as to some 18,000 small businesses near the World Trade Center, and in both New York City and Washington, D. C. more broadly. We live today with much of the legacy of that awful day, where I personally saw and experienced the devastation first-hand.
Fast forward to today, and we are facing a nationwide, politically-imposed economic standstill wherein the Federal Reserve has already extended massive programs of historic size and scope. The Fed Funds rate is, once again, effectively at zero. It seems doubtful that, were another such tragedy to occur, they would have much dry powder left other than unconventional monetary policy options.
It would be naive to think that the squeamishness and knee-jerk policy response demonstrated in the face of COVID-19 hasn’t been noticed by adversaries of the United States: most of all by those with whom any conflict is likely to be asymmetric in nature. Many of the same people who advocate for “readiness” in a military sense haven’t or don’t seem to have considered how politicians shutting down the entire US economy have increased our exposure to risk in a very short amount of time.
If we know that we’re vulnerable, “they” surely do as well. It is especially ironic that the Trump Administration has labeled Bitcoin and cryptocurrencies a “national security issue,” but for all we can tell either hasn’t considered or has chosen to neglect the risks posed by a prostrate economy.
Which points to another, more immediate fragility exposed by recent policy choices: kinetic attacks are one thing, but if the enemies of the United States know that the government will shut down our entire economy in the face of spreading disease, will the long-conjectured possibilities of more subtle but lethal assaults – the purposeful spreading of smallpox, measles, or other highly contagious diseases – appear? Will microbes be the new WMDs?
We are now at the trough of a self-inflicted economic collapse. If military adventurism is to remain a core (if unfortunate) facet of America’s foreign policy gadgetry, I would argue for a rapid reprioritization of the economic aspects of national security. The revealed propensity to lock the U.S. economy down in the face of uncommon but not existential uncertainty represents an Achilles heel that will likely not be overlooked, at least not for long.
Even, sadly, if arguments about liberty, prosperity, and quality of life do not resonate with many Americans, the basic notion of civil continuity should. These are admittedly uncomfortable topics which require discussion as a nation: discourse about policy, foreign and domestic, and about what we as a people are willing to bear for the doubtful benefits and already soaring costs of global interventionism.
Tyler Durden
Tue, 04/28/2020 – 00:00 - Secret 'COVID-19 Manhattan Project' Led By Billionaires Seeking To Influence Trump Admin
Secret ‘COVID-19 Manhattan Project’ Led By Billionaires Seeking To Influence Trump Admin
Last month Massachusetts Senator Ed Markey called for the bold and urgent launch of what he called “a Manhattan Project-type approach” to fight the coronavirus pandemic given the enormity of the health and economic impact, increasingly even harming US defense readiness.
Apparently there has been such a group operating behind the scenes, but very unlike the original Manhattan Project it’s a private sector initiative, funded by a tiny network of ultra-rich industry titans working closely with government contacts. Meet “the secret group of scientists and billionaires pushing Trump on a Covid-19 plan” profiled in a lengthy Wall Street Journal investigation Monday:
These scientists and their backers describe their work as a lockdown-era Manhattan Project, a nod to the World War II group of scientists who helped develop the atomic bomb. This time around, the scientists are marshaling brains and money to distill unorthodox ideas gleaned from around the globe.
They call themselves Scientists to Stop Covid-19, and they include chemical biologists, an immunobiologist, a neurobiologist, a chronobiologist, an oncologist, a gastroenterologist, an epidemiologist and a nuclear scientist. Of the scientists at the center of the project, biologist Michael Rosbash, a 2017 Nobel Prize winner, said, “There’s no question that I’m the least qualified.”
Getty Images The until now secretive group is led by a 33-year-old physician-turned-venture capitalist, Tom Cahill, and is described as an elite go-between the pharmaceutical industry and Trump administration decision-makers, or an “ad hoc review board” of sorts pursuing cutting edge outside the box ideas.
The scientists include a dozen world renowned researchers, pathology experts and inventors closely networked at institutions ranging from The Scripps Research Lab in La Jolla, California, to Yale University School of Medicine to Harvard to MIT’s Laboratory for Nuclear Security and Policy to private companies and labs like Merck and others.
Recommendations and ideas floated by Scientists to Stop Covid-19 have already reportedly had far-reaching influence, including affecting policy inside FDA and the Department of Veterans Affairs, and the group is reportedly advising close Pence aide Nick Ayers.
Among other billionaire influencers and backers to the private initiative include Peter Thiel, Jim Palotta, Michael Milken, Brian Sheth, and Steve Pagliuca, among others.
I was reading this thinking: There’s no way Peter Thiel isn’t involved in this and then . . . yup. https://t.co/anj1BJCBUz
— Elliot Kaufman (@ElliotSKaufman) April 27, 2020
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As an example of how the group was previously able to get a confidential 17-page report (since published by the WSJ) recommending various introductory unorthodox approaches to fighting and treating the pandemic, the WSJ details :
“Steve Pagliuca, co-owner of the Boston Celtics and the co-chairman of Bain Capital — as well as one of Dr. Cahill’s investors — helped copy edit drafts of their report, and he passed a version to Goldman Sachs Group Inc. Chief Executive David Solomon. Mr. Solomon got it to Treasury Secretary Steven Mnuchin.”
“Much of the early work involved divvying up hundreds of scientific papers on the crisis from around the world,” the report describes of the team’s daily communications.
“They separated promising ideas from dubious ones. Each member blazed through as many as 20 papers a day, around 10 times the pace they would in their day jobs. They gathered to debate via videoconference, text messages — ‘like a bunch of teenagers,’ Mr. Rosbash said — and phone calls.”
Brian Sheth, co-founder of private-equity firm Vista Equity Partners, via Bloomberg/WSJ. Among the ‘big ideas’ described by the network of researchers led by scientist-investor Dr. Cahill, who first gained the attention of aides within the Trump administration when they listened on an early March conference call tailored toward answering investors’ questions, include the following:
- Experimenting with treatments utilizing powerful anti-Ebola drugs in heavier dosages.
- The possibility of renaming the virus “SARS-2,” after the 2003 China animal virus, so that the connection is better made in the public mind with a deadly disease: “the name sounded scarier and might get more people to wear face masks. They dropped it.”
- The group considers Hydroxychloroquine, long a focus of interest and debate in Trump administration circles, to be “a long shot at best”.
- The team has looked negatively on recent efforts to push antibody testing and ‘immunity passports’ that show recovery from the virus.
- They’ve sought to reduce FDA hurdles and red tape in order to get potential successful drugs out faster, especially to streamline hoped-for ‘miracle’ cures.
- The WSJ emphasizes further: “The scientists had in their research identified monoclonal antibody drugs that latch onto virus cells as the most promising treatment.”
- A saliva test which is easy to administer with ultra-fast results is being pursued, one that offices and companies could utilize to make sure employees come into work virus-free each day.
- Tech like smartphone apps to help track and gauge symptoms is a major focus.
- The scientists are also helping to craft state and national reopening strategies for the near and long-term.
* * *
Read a copy of the 17-page report drafted by the Scientists to Stop COVID-19 here.
Tyler Durden
Mon, 04/27/2020 – 23:40 - Narrative Managers Argue China-Like Internet Censorship Is Needed
Narrative Managers Argue China-Like Internet Censorship Is Needed
Authored by Caitlin Johnstone via Medium.com,
Neoconservative publication The Atlantic has published an article authored by two university professors titled “Internet Speech Will Never Go Back to Normal”, subtitled “In the debate over freedom versus control of the global network, China was largely correct, and the U.S. was wrong.”
The article is actually worth reading in full, not just because it’s outrage porn for anyone who values human communication that is unregulated by oligarchs and government agencies, but because it’s actually packed full of extensively sourced information about the way Silicon Valley tech giants are collaborating with western governments to censor speech. The only difference between this article and something you might read on some libertarian website is that this article argues that all of these regulations on speech are a good thing.
Here’s an archive of the article if you don’t want to give clicks to The Atlantic, whose editor-in-chief Jeffrey Goldberg once assured the world that “the coming invasion of Iraq will be remembered as an act of profound morality.” Do give it a look if this interests you and you have time.
Fmr. Bush admin lawyer/current Harvard Law prof Jack Goldsmith goes full-Thomas Friedman, credits China’s enlightened authoritarian approach to information as “largely right” and laments the US’ provincial fealty to the First Amendment as “largely wrong.” https://t.co/1WyQtgE8bK pic.twitter.com/1M03ybxh0I
— Anthony L. Fisher (@anthonyLfisher) April 26, 2020
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“In the great debate of the past two decades about freedom versus control of the network, China was largely right and the United States was largely wrong,” argue the article’s authors, one of whom is a former Bush administration lawyer.
“Significant monitoring and speech control are inevitable components of a mature and flourishing internet, and governments must play a large role in these practices to ensure that the internet is compatible with a society’s norms and values.”
The article paints an accurate picture of the ways in which supposedly independent social media platforms have been collaborating with governments and with each other to regulate speech and have increased that collaboration during the Covid-19 pandemic, noting how “In March 2019, Zuckerberg invited the government to regulate ‘harmful content’ on his platform” and how “As in other contexts, Facebook relies on fact-checking organizations and ‘authorities’ (from the World Health Organization to the governments of U.S. states) to ascertain which content to downgrade or remove.”
“These platforms have engaged in ‘strategic collaboration’ with the federal government, including by sharing information, to fight foreign electoral interference,” The Atlantic reports after outlining ways in which Facebook, Twitter and Youtube have been censoring speech in “aggressive but still imperfect steps to fend off foreign adversaries.”
“The harms from digital speech will also continue to grow, as will speech controls on these networks,” the article’s authors assert. “And invariably, government involvement will grow. At the moment, the private sector is making most of the important decisions, though often under government pressure. But as Zuckerberg has pleaded, the firms may not be able to regulate speech legitimately without heavier government guidance and involvement. It is also unclear whether, for example, the companies can adequately contain foreign misinformation and prevent digital tampering with voting mechanisms without more government surveillance.”
This article comes out days after journalist Whitney Webb published another article worth reading titled “Techno-Tyranny: How The US National Security State Is Using Coronavirus To Fulfill An Orwellian Vision”.
Last May, a govt org outlined an extremely Orwellian vision for what the US must to do to win “the tech war” against China in AI. It essentially called to remake the entire American economy and society. Now, thanks to Covid19,their vision is taking shape.https://t.co/fhWkyQR5n3
— Whitney Webb (@_whitneywebb) April 20, 2020
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Webb details how FOIA-obtained document by a US government organization called the National Security Commission on Artificial Intelligence (NSCAI) argues for the need to implement authoritarian measures like increased surveillance more in line with those used in China, in order to prevent the PRC from technologically surpassing the United States.
Webb notes for example how the document “cites the use of mass surveillance on China’s ‘huge population base’ is an example of how China’s ‘scale of consumer market’ advantage allowing ‘China to leap ahead’ in the fields of related technologies, like facial recognition.”
We’re also seeing an increase in surveillance being pushed for in a new report by the think tank Tony Blair Institute for Global Change, arguing that a drastic increase in tech surveillance is “a price worth paying” in order to fight Covid-19. Which is of course hilarious, because having the think tank of a Bush lapdog Prime Minister argue that more surveillance is a price worth paying to stop coronavirus is a lot like a bunch of muggers arguing that time saved by cutting through dark alleyways is worth the increased risk of mugging.
So that’s great. We’re seeing mainstream narrative managers shriek about the need for new cold war escalations against China’s bad, bad authoritarian government, while simultaneously arguing that western governments should espouse Beijing’s worst authoritarian impulses. This as we’ve discussed previously is because consent needs to be manufactured in order for the US-centralized empire to take drastic steps to prevent China from surpassing it and creating a multipolar world, and the freer people are to think and act and organize, the harder that’s going to be.
Oligarchs have no business controlling what we can and cannot say to each other. Governments have no business bringing more and more transparency to us while bringing more and more opacity to themselves. This is ugly, it is abusive, and it must end.
Freedom of speech is actually about freedom of thought. Speech is the carrying agent of thought; controlling human communication is actually about controlling the spread of ideas. Censorship is about controlling the thoughts that the public think in their heads. Speech control is mind control.
* * *
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Tyler Durden
Mon, 04/27/2020 – 23:20 - The US Will Sell $4 Trillion In Debt This Year, A 300% Increase: This Is What It Will Look Like
The US Will Sell $4 Trillion In Debt This Year, A 300% Increase: This Is What It Will Look Like
Don’t look now, but just weeks after it passed the biggest fiscal stimulus in US history, Congress passed an additional round of fiscal measures totaling $484bn. This raises Goldman’s estimated 2020 US deficit financing need to ~$3.5 trillion. But there’s more: the bank does not think the latest measure is the final word here, and its economists expect another round totaling $550bn to pay for items such as aid to state and local governments, that haven’t been fully addressed thus far.
On the whole, this would translate to between $3.8-$4 trillion in financing needs for 2020, almost a trillion dollar increment Goldman’s prior deficit estimate, and 300% more than the US sold in calendar 2019. Financing such a massive gap, amounting to 20% of GDP, will require a broad-based increase across maturities and product types.
So how will the US pay for this massive financing hole. Below Goldman lays out what it believes to be a “sensible strategy” to raise these funds. In the subsequent two years, Goldman turns optimistic and sees the deficit declining to $2.4tn in FY2021 and $1.65tn in FY2022, and reversing some of this year’s increases. We doubt it: once you go helicopter money, you never go back, just look at Japan.
Exhibit 1 shows Goldman’s latest split for CY2020 funding. Bills are still the dominant venue for raising funds, with net supply from April to year-end coming in at around $2.1tn (and about $2.3tn for the calendar year), a magnitude large enough to mean that the bills market will have nearly doubled in size this year. That projection isn’t as far-fetched as it might seem—just in the month of April, Treasury has issued roughly $1.26tn of bills.
This heavy near term reliance on bills is even more visible when looking at split on a fiscal year basis. Exhibit 2 shows Goldman’s projections for net bill and coupon issuance for FY2020, FY2021, and FY2022. As can be seen, as financing needs drop from nearly $4tn this year to about $2.6tn and $1.7tn in the next two years, bills again adjust as the shock absorber. This pattern should be very similar to issuance around the 2008-2009 recession, when bills outstanding shot up to over 30% of USTs outstanding, only to decline to between 15-20% over the subsequent two years.
Such an initial surge in bill issuance makes sense, according to Goldman, only when there’s reason to believe a sizable portion of the funding gap is temporary and likely to fade quickly (it would take a huge optimist to believe that’s the case now). That way, coupon auction size changes can be more gradual, and absorb less of the uncertainty/volatility in deficits. Still, given the large amount that has to be raised, even with bills doing the heavy lifting, Goldman estimates Treasury will have to fund about $1.4tn in FY2020 from coupon issuance.
Exhibit 3 shows Goldman’s best guess of the auction sizes that would be required to raise this amount. As can be seen, auction sizes will have to be lifted fairly aggressively across the spectrum—a conservative estimates sees increases of $12-$15bn in monthly auction sizes across the front and belly, and a more conservative $5-$8bn in longer maturities. Goldman also expects the introduction of both the 20y bond at the upcoming refunding, and a 1y SOFR-linked FRN in summer. For most of the maturities, the auction sizes will hit their peak levels later this year or early next year.
On the demand side, Goldman expects – for obvious reasons – that the Fed will remain the largest player in the market, as Helicopter money goes BRRRRR. In the bank’s most recent analysis, it had estimated that the Fed would have to absorb slightly more than $2tn of the issuance this year to maintain “normal functioning”; with the upsized deficits, the bank now believes that number is now closer to $2.4-$2.6 trillion.
Tyler Durden
Mon, 04/27/2020 – 23:08 - Crude Carnage Continues Across Asia As Another Futures Contract Roll Looms
Crude Carnage Continues Across Asia As Another Futures Contract Roll Looms
Following last week’s bloodbathery in WTI as its May contract expired and the biggest oil ETF (US-Oh!) wreaked havoc between spot and futures markets, it appears we are set for deja vu all over again this week – except this time it’s the Brent contract that may suffer.
“Some of this downward pressure particularly in the June contract is an increasing lack of liquidity,” said John Kilduff, a partner at hedge fund Again Capital LLC.
This is not coming only from the USO, but also due to brokerage firms, like Marex Spectron and TD Ameritrade, restricting client’s abilities to add new positions to certain crude contracts, according to Kilduff.
“It’s going to exacerbate the whole marrying of the June contract with the over supplied physical conditions and the lack of storage,” Kilduff said.
As Bloomberg notes, With the Brent contract for June settlement expiring Thursday, any contracts that haven’t been closed out by then will be cash settled at a price set by the Intercontinental Exchange based on cash sales of North Sea crude on the day. Right now, physical prices are trading well below futures – Dated Brent was $16.01 a barrel on Friday.
Source: Bloomberg
But it appears the unwinds in US-Oh! are also weighing more on the heavier-weighted (in the ETF) WTI contract – most notably June…
…which is down 15% further after settlement today, trading back at a $10 handle…
As a reminder, the ETF has changed its investment policy five times in the last two weeks, as shown in the following chart which depicted the ETF’s holdings as of Friday’s close:
Source: Bloomberg’s Laura Cooper It also warned investors its valuation may deviate significantly from the underlying oil price, in effect acknowledging that it’s momentarily less focused on the price of WTI crude.
“While it is USO’s expectation that at some point in the future it will be able to return to primarily investing in the Benchmark Futures Contract or other similar futures contracts of the same tenor based on light, sweet crude oil, there can be no guarantee of when, if ever, that will occur,” it said in the filing, adding that USO investors “should expect that there will be continued deviations between the performance of USO’s investments and the Benchmark Oil Futures Contract, and that USO may not be able to track the Benchmark Oil Futures Contract or meet its investment objective.”
All of which suggests we have crossed the eye of the hurricane as Goldman expects the market to test global storage capacity in the next 3-4 weeks – unlike WTI which was merely a Cushing event – which will likely create substantial volatility with more spikes to the downside until supply finally equals demand, as with nowhere to store the oil, supply has no other option but to be shut-in down in-line with the expected demand losses.
Alternatively, we could see another “Monday massacre” with producers of oil willing to pay buyers to take physical possession right around the time all global capacity is full, unless of course US shale producers drastically cut output in the coming days, not weeks.
Tyler Durden
Mon, 04/27/2020 – 23:00 - Sen. Tom Cotton Calls To Ban Chinese Students From Studying Science In The US
Sen. Tom Cotton Calls To Ban Chinese Students From Studying Science In The US
For the most part, Senator Tom Cotton has been on the ball: he was one of the first to raise objections about how China has reported their coronavirus data and was calling for investigations and accountability months before others in government even knew that the virus was a threat to the U.S.
Cotton is now calling for Chinese students to no longer be able to study science and technology in the U.S. and also claims that China is likely trying to steal a vaccine from the U.S.
On Fox News Sunday morning, Cotton said: “In the middle of a pandemic, what’s the most valuable intellectual property in the world? It’s the research that our great laboratories and life science companies are doing on prophylactic drugs, therapeutic drugs, and ultimately a vaccine.”
He continued: “So I have little doubt that the Chinese intelligence services are actively trying to steal America’s intellectual property as it relates to the virus that they unleashed on the world, because, of course, they want to be the country that claims credit for finding those drugs or finding a vaccine, and then use it as leverage against the rest of the world.”
He referred to the fact that U.S. education has trained “so many of the Chinese Communist Party’s brightest minds” as a scandal, according to the NY Post.
Cotton continued: “So I think we need to take a very hard look at the visas that we give the Chinese nationals to come to the United States to study, especially at the post-graduate level in advanced scientific and technological fields.”
“If Chinese students want to come here and study Shakespeare and the Federalist Papers, that’s what they need to learn from America. They don’t need to learn quantum computing and artificial intelligence from America,” he concluded.
Cotton has said that the CCP is “both criminally negligent and incompetent” in reacting the virus, which has now spread across the world.
You can watch his full appearance with Maria Bartiromo here:
Tyler Durden
Mon, 04/27/2020 – 22:40 - Pelosi Pitches Universal Basic Income To Cope With Pandemic
Pelosi Pitches Universal Basic Income To Cope With Pandemic
After holding up aid to small business owners before rushing to bail out horribly managed blue states, House Speaker Nancy Pelosi is now pushing a guaranteed minimum income for Americans struggling due to the pandemic.
“Let’s see what works, what is operational and what needs attention,” said Pelosi during a Monday interview with MSNBC, adding “Others have suggested a minimum income, a guaranteed income for people. Is that worthy of attention now? Perhaps so. Because there are many more people than just in small business and hired by small business … that may need some assistance as well.”
WATCH: Speaker Pelosi: A minimum guaranteed income may now be “worthy of attention.” pic.twitter.com/19W3gwKGm4
— MSNBC (@MSNBC) April 27, 2020
More via CNBC:
The idea of a government-guaranteed minimum income has gained attention in the past year thanks largely to Andrew Yang, who ran in the 2020 Democratic presidential primary on a platform built around universal basic income. Yang failed to win any delegates in the primary, but he built a devoted campaign following and raised the issue of UBI onto the national debate stage.
More recently, as the coronavirus pandemic has ravaged the U.S. economy and forced more than 25 million Americans to seek unemployment benefits, the idea of guaranteed income has reemerged as a possible way to stabilize the economy and help people meet their basic needs while millions of businesses are under forced closures.
https://platform.twitter.com/widgets.js
Supporters of UBI such as Yang and Bernie Sanders (I-VT) have noted that the $1,200 cash payment for guaranteed income for those making under $90,000 per year is quite similar.
Tyler Durden
Mon, 04/27/2020 – 22:22 - "Playing Into Putin's Hands" – Critics Lash-Out At Joint US-Russia Declaration On Historic Elbe Meeting
“Playing Into Putin’s Hands” – Critics Lash-Out At Joint US-Russia Declaration On Historic Elbe Meeting
Authored by Jason Ditz via AntiWar.com,
In what seems a very innocuous statement, the US and Russia issued a joint commemoration this weekend of the 1945 meeting of US and Russian troops on the Elbe River, saying it showed the nations “overcoming their differences in pursuit of a greater cause.”
The intention is to liken the common enemy, Nazi Germany in 1945, to the current foe of the coronavirus pandemic, and suggest that the US and Russia could once again put aside differences to work together in this new crisis.
Russian President Vladimir Putin, Kremlin file photo. But because this is 2020, and the statement involves Russia, it necessarily became a political row almost immediately, with the statement panned both by President Trump’s political rivals as a sign of his being too close to Russia, and by anti-Russia hawks who see this as Vladimir Putin trying to trick the US in some way into being less hostile.
“The ‘Spirit of the Elbe’ is an example of how our countries can put aside differences, build trust, and cooperate in pursuit of a greater cause,” U.S. President Donald Trump and Russian President Vladimir Putin said in a joint statement on April 25. —RFE/RL
“I am sure this was a Russian initiative,” said former official Angela Stent, while Rep. Eliott Engel (D-NY) chalked it up to Trump’s “bizarre infatuation with Russia’s autocratic leader” and said he was “playing into Putin’s hands.”
Yet the coronavirus really is an opportunity for nations to put differences aside to address mutual threats. Everywhere else in the world such initiatives are being put forward, with the UN even calling for a global ceasefire to address the pandemic. It’s only natural for the US and Russia to also address that possibility.
US and Soviet soldiers greet each other on the Elbe in Germany on April 25, 1945. Via RFE/RL And typical grousing about that notwithstanding, a rapprochement between the US and Russia to focus on coronavirus would only be a good thing, bringing the world’s two biggest nuclear powers away from tensions and seeing if there are ways to cooperate.
It is also noteworthy that the US and Russia are the two major parties to resist the UN call for a global ceasefire for the pandemic, but may still find some common ground with one another. This may suggest that the entire call for unity may not be lost on them, even if it takes some outside their comfort zone.
Tyler Durden
Mon, 04/27/2020 – 22:20 - Macro Strategist: "Major Bond Markets Are Now The Most Worthless Indicators"
Macro Strategist: “Major Bond Markets Are Now The Most Worthless Indicators”
Exactly one month ago, when commenting on the Fed’s unlimited QE, we summarized Jerome Powell’s unprecedented nationalization of what was formerly the world’s deepest and most important market as follows: “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.”
Now, with the mandatory cool down period to allow “objective contemplation”, others are starting to admit that this was the right assessment. Here is Bloomberg’s macro commentator Mark Cudmore admitting that “Interest Rates Are Past Their Sell-By Date as Guide.”
His full note is below:
Long considered the purest macro instrument, major bond markets are now among the most worthless of indicators.
Conviction is hard to come by right now. It doesn’t help that our established navigation tools are broken.
Free markets are an endangered species. Extraordinary monetary policy measures are now ordinary and bonds are the most distorted markets as a result.
It used to be that a 10 basis point move in U.S. 10-year yields indicated a major shift in market thinking. Now? Who cares.
The only sure message from DM bond markets is that liquidity is abundant. Even the corollary that money is cheap isn’t always strictly true for everyone, precisely because what interest rate you pay on any loan is now far more dependent on who or what you are, rather than what the base rate is in the market.
The Fed and the ECB both meet this week. Never mind not caring about what the policy rate is, we no longer care about their interest rate guidance. Even the banks’ mutterings on inflation are largely a side-show.
Almost everywhere, benchmark rates are near zero and will be staying that way for some time. And those policy rates are almost irrelevant to the inflation story, which is instead a narrative about when a resurgence in global economic demand will potentially clash with supply-side destruction.
What matters from policy makers are the lending and asset-purchase programs. Even there, the message is seeping through that there are no taboos left. “Moral hazard” is an antiquated concept among the supposed stewards of the financial system. With limits removed, the marginal impact of each new measure is diminishing rapidly.
Will stimulus solve the health crisis? Will financial market manipulation solve the real economic problems on Main Street? Does coronavirus infection provide you with subsequent immunity? When will a vaccine be widely available? Good luck working out the answers to these questions from anything 10-yr government bond yields tell you.
So with what should we replace Treasury yields as the ultimate macro guide? Funny you should ask — I’d really appreciate it if you could let me know the answer when you find out.
Tyler Durden
Mon, 04/27/2020 – 22:19 - Petition To Oust WHO's Dr. Tedros Attracts More Than 1 Million Signatures
Petition To Oust WHO’s Dr. Tedros Attracts More Than 1 Million Signatures
A petition demanding the immediate resignation of World Health Organization Director-General Dr. Tedros Adhanom Ghebreyesus over his handling of the coronavirus pandemic has gathered more than 1 million signatures, according to the Korean Times.
The petition, which was started by an individual using the handle ‘Osuka Yip’ on Jan. 31, blamed Tedros and his ‘poor leadership’ for the spread of the pandemic, which has killed more than 200k people around the world. And as the FT noted last night, the true death toll could be more than 350k.
The exact timeline of when the virus first began spreading from person to person in Wuhan remains unclear, as China has withheld reams of critical information about the early days of the pandemic. The Dr. Tedros-led WHO initially tried to help with the coverup by praising China’s response and claiming Beijing’s handling of the situation should be a “model” for countries all over the world.
In reality, Chinese officials suppressed news about the virus, punished doctors who initially warned about the outbreak, grabbed up all the PPE and other vital equipment, while unleashing the virus on the world by failing to stop millions of Chinese travelers from leaving the country, and hundreds of thousands of people from leaving Wuhan and Hubei.
Over the weekend, the WHO endured its latest gaffe when it said that ‘immunity passports’ wouldn’t be helpful because it’s unclear whether those who have recovered from the virus are truly immune. The WHO the next day offered a clarification, saying that the exact levels of immunity for former COVID-19 patients have yet to be closely studied. Dr. Scott Gottlieb said on CNBC Monday morning that almost every coronavirus patient would develop some level of immunity, despite preliminary research suggesting that some patients can quickly become reinfected because their bodies don’t produce enough antibodies.
President Donald Trump accused the WHO of failing in its basic duty to warn the world of the virus and suspended US funding to the WHO – technically an arm of the UN – earlier this month. Two days later, 17 other Republicans on the House Foreign Affairs Committee backed Trump’s decision, saying they had also lost faith in Tedros.
Disapproval of Dr. Tedros over his kowtowing to Beijing is particularly intense in Taiwan, as the government and the people accuse the WHO of ignoring the great accomplishments of local public health officials in suppressing the outbreak in the ‘renegade province’.
The petition to oust Dr. Tedros had garnered more than 1,018,453 signature as of Monday morning.
After announcing his plans to cut US funding for the WHO, Trump was asked at a White House press briefing whether he would reconsider the decision if Dr. Tedros was forced out. Trump refused to answer, though one of his aids called it a “good question.”
Tyler Durden
Mon, 04/27/2020 – 22:00 - Life After COVID: A Look At The New Economy
Life After COVID: A Look At The New Economy
Authored by Daisy Luther via The Organic Prepper blog,
Many Americans have been locked down in their homes for more than a month now, and they’re anxiously awaiting the day when things “get back to normal.”
I regret to inform you, as I wrote previously, that we’re never going “back to normal.”
The world After COVID will not be like the world Before COVID.
It’s very important to understand what lies ahead so we can prepare for it.
Two reasons that the world After COVID will be so different are problems with the economy and the supply chain. Let’s take a look at both and see where we’re headed.
The After-COVID economy for businesses
The government stepped in fairly quickly after lockdowns began to approve a massive number of small business loans. These loans were to be distributed by the institution with which the small business does their banking.
Unfortunately, the outcome would be laughable if it wasn’t so tragic.
Here’s an example: Chase Bank gaveRuth’s Chris Steak House a $20 million forgivable loan meant for small businesses by dividing it up by locations instead of treating the company like the large corporation that it is. Incidentally, Chase “earned” $100K for processing the loan. After everyone rightly lost their marbles over this, Ruth’s Chris is returning the 20 mill. Chase and Ruth’s Chris aren’t the only culprits. There were all sorts of shenanigans that meant the fund ran out of money before the legitimate small businesses could even complete their applications. For example, big banks earned ten billion dollars in fees for processing the loans and here’s a list of big companies that played around with this system and drained it of millions.
Another round of small business loans has been approved by Congress but I’m not really holding my breath that any of this will happen in the way we’ve been told it will.
So to summarize, a lot of the small businesses who need the money to survive haven’t gotten it yet and may never get it, but big banks and big businesses are sitting pretty with the help of their cronies in Congress. It isn’t a stretch of the imagination to say that the longer a small business stays closed, paying their expenses and holding inventory while not being able to earn income, the less likely they are to reopen successfully (or at all) once the all-clear is given.
And if they can’t reopen? All those folks they used to employ will be out of a job.
The After-COVID economy for individuals
Despite seemingly generous government offerings of stimulus payments and higher-than-normal unemployment payments, getting by is about to get a whole lot harder. First of all, many people haven’t yet received their stimulus payments. Some states still haven’t rolled out their COVID unemployment registration websites, so we have unemployed folks who still haven’t gotten one thin dime.
It isn’t going to be long before that stimulus money is gone and if unemployment hasn’t yet kicked in, the first week of May is not looking pretty. A lot of folks were unable to make rent or mortgage payments in April, and of the ones who managed to hack together last month’s payments won’t be able to pay rent and mortgages.
It isn’t just a roof over their heads that people are worried about. The use of food banks has soared over the past month. People who were barely making ends meet before are in a hole from which they may never dig out. And this isn’t out of laziness or any other lack of “virtue” – people can’t go to work because their workplace is closed.
And it’s a perfect storm. If people are not allowed to work and the government is not following through with its promises of aid, there will be a response – most likely in the form of civil unrest and crime waves.
At the same time, many of those who have gotten their COVID unemployment are refusing to go back to work. Why would they go back to getting minimum wage when with unemployment and the extra $600 per week, they’re getting close the $3000 a month? Businesses can’t reopen without employees. Unfortunately, when the COVID unemployment is over (it’s currently good for a total of 3-4 months), people may not have jobs to come back to, because, as I mentioned above, the longer a business is closed while still facing expenses, the less likely that business is to survive.
It’s very likely that even once we’re “open” again, unemployment numbers will remain extraordinarily high.
Prices are going up.
Meanwhile, what money people are able to scrape together isn’t going to go nearly as far as it did Before-COVID.
A lot of folks haven’t been to the store in a month or so. When they do go back they’re going to be in for one hell of a surprise. Prices have increased on just about everything. On the products with no price increase, many companies have reverted to the rather deceptive practice of selling a smaller container for the same price as before. (We found this to be true on both peanut butter and coffee, to name two examples.) You’re going to pay more for things like meat, eggs, canned goods, pasta, frozen pizza, and other popular lockdown foods.
As well, food manufacturers are halting promotions – so things won’t be going on sale like they used to. Of course, they’re doing this to “help” us out by making it more expensive, thus keeping people from being able to buy as much.
“But the tactical dynamic is that we’re in daily discussions with our customers on how to help them meet the needs of their shoppers. And many customers are looking to pull back on promotions as they try to manage the basics of just keeping their shelves stocked.” (source)
In a given month, “22% of food on store shelves is discounted, according to the companies under its coverage, and the average discount is 23%.” According to Market Watch, getting rid of the discounts will lead to a 5% increase in sales. This means, of course, a 5% increase in what consumers are paying will occur. And that’s just for certain items. Eggs have actually tripled in price since early March and many readers have reported seeing the price of their commonly purchased items increase by 25% all the way up to double the Before-COVID price.
Then there are the supply chain issues.
And this isn’t the worst of the news. Shortages are appearing to occur across the country – shortages that stores struggle to hide by spreading out the inventory and filling in gaps with items that are more plentiful.
Some of the things that are missing are products that originate in China – see this list.
Other items, like paper products, are also sparse even though many of these things are made in the USA. It isn’t just because of so-called “hoarders” either, as the media wants us to believe. There have been shortages of TP across the globe and the main reason is the fact that everyone is now at home most of the time now. Previously, a lot of a person’s toilet paper usage was outside the home – so everyone was using those giant janitorial supply rolls. Most households are now using 40% more toilet paper than before. This interesting article goes into detail about why there isn’t a quick and easy fix for this.
Then there are food “shortages.” Interestingly, this problem isn’t necessarily about actual shortages as much as it is processing and distribution.
Processing plants across the country are shutting down as more and more employees become ill. At least ten large meat processing plants have closed due to the virus. Distribution issues have farmers dumping thousands of gallons of milk, plowing under vegetables in the fields, and leaving potatoes to rot.
A lot of the food being produced was destined for restaurants, hotels, and cruise ships. Diverting it to grocery stores and the millions of people using food banks right now (because they didn’t get their money from unemployment yet, remember?) is unfortunately not as easy as it should be. This article explains some of the issues with getting food to hungry people.
One of the issues processing. With meat, in particular, this is difficult – most folks aren’t even going to be willing to process their own chickens and it’s wildly unrealistic to imagine a family in the city processing a cow or a pig. With produce, it becomes a little bit easier – anyone can wash fruits and vegetables – but employees are still needed to harvest the food.
A lot of that scarcity could be remedied if we could reallocate things – if janitorial supplies could be sold to the general public, if farmers could sell directly to stores or consumers, and if farmers could donate unpurchased items to food banks.
To summarize, farmers are losing billions of dollars and people are going without food, while the food we have is left to rot. Hopefully, President Trump’s new 19 billion dollar plan will allow the federal government to play matchmaker between frustrated farmers and hungry families.
Introducing another run at UBI
Let’s put all this information together. Here’s the TL;dr version:
Trillions of dollars were created from thin air to “help” us through the crisis. Unfortunately, a lot of that money is now lining the pockets of massive businesses that would survive regardless. Many small businesses will never reopen. Many jobs will never come back.
People who are getting COVID unemployment would have to take a massive pay cut – for many, more than two thousand dollars a month – to go back to work so they have no interest in returning to their jobs. Why would they when they’re more financially secure sitting at home? But they’re not thinking ahead – these new-found riches are only coming in for 3-4 months.
People who are not getting money are going to run out very soon (if they haven’t already) and this will result in an uptick of crime and civil unrest. Meanwhile, the money that folks have will buy less as the cost of just about everything goes up and scarcity continues.
This all leads nowhere good. I’m not saying that COVID-19 itself was a big conspiracy but more a case of “never let a good crisis go to waste.”
One possible outcome is Universal Basic Income.
We’re being told we’ve got no place to go except giving away a lot of free money – although they’re calling it something different: the Emergency Money for the People Act. (I previously wrote about UBI here but I thought the trigger would be different).
This fund would give everyone 16 and over $2000 per month for at least the next six months.
The bill is called the Emergency Money for the People Act and would provide $2,000 a month for a guaranteed six months or until “employment returns to pre-COVID-19 levels.”
“Pre-COVID-19 levels” mean the employment to population ratio for people ages 16 and older is greater than 60%. The monthly cash payments would not count as income.
You could still apply for income-based federal or state assistance programs, such as assistance with purchasing food.
Who would be eligible for the money?
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Everyone 16 and older making less than $130,000 annually would receive $2,000 a month;
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Married couples earning less than $260,000 would receive at $4,000 per month;
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Qualifying families with children will also receive an additional $500 per child for up to three children.
So a family of four with two children earning income up to $260,000 a year would receive $5,000. A single tax filer would get $2,000.
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If you are unemployed, you are eligible for the money, as well.
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College students will be eligible for the money. They were not eligible for the stimulus payment sent out this week if they were claimed on their parent’s income tax as a dependent.
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Adults with disabilities were also left out of the stimulus payment since they could be claimed as dependents on others’ tax returns. They would be eligible for the Emergency Money for the People Act. (source)
What could possibly go wrong with “free money,” right?
Plenty. Hyperinflation is one major factor nobody’s talking about – this money they want to give away does not exist and is backed by nothing. If you think prices are super-high now, just wait.
And then there’s the other cost.
Trust me when I tell you there will be a high price tag for that “free” money and the cost will be liberty. Maybe it will be your freedom to decide where you work. Maybe it will be your freedom to choose what you buy. Maybe it will be mandatory vaccines or microchips or ID cards but it will cost you something that you’ll never get back.
UBI Emergency Money for the People isn’t a done deal yet. But the government is going to feel that they’re obligated to take some kind of measures to maintain order. (Back to that civil unrest and crime again). And to some degree, they’re right – the current straits Americans are finding themselves in can be chalked up to decisions made by the government. But I can’t imagine that in this direction lies liberty.
What can you do?
The answer, as always, lies in self-reliance. The less you need, the better off you’ll be. I’ll go more in-depth later but below, find some general guidelines.
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Produce or acquire food as much as possible. Gardening; sprouting; raising livestock for meat, eggs, and dairy; hunting; and foraging are all ways to put food on the table yourself.
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Learn to preserve food. When food is plentiful, putting it back by canning, dehydrating, and freezing.
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Localize your supply chain. Find local farmers and purchase directly from them. Visit pick-your-own farms, get CSA shares, or hit up your farmer’s market. Buy in as much quantity as you can for the best prices.
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Slash your budget. Get spending down to a bare minimum right now while we wait to see how things pan out.
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Mend and repair. Instead of throwing things away and buying new when something breaks or gets damaged, learn how to fix things like clothing and household items.
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Make do. There are a lot of things we get that we don’t need: upgraded phones, new clothing, decorative items, updated vehicles, newer tools, and small kitchen appliances. Whenever possible, make do with the things that you already have.
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Make things last. Use everything to the last drop. Squeeze out that last little bit of toothpaste. Add some water to your dish soap. Use a little less detergent in the laundry. These are tiny changes that can really add up over time.
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Be prepared for a lack of services. At some point, as income tax revenue continues to decrease, we’ll start to see cuts in services like garbage pick-up and first responders. Start thinking now about your solutions should these things happen.
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Continue building your stockpile. Even though prices have gone up, continue adding food and supplies to your pantry as you can.
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Participate in a barter economy. If you have eggs and your neighbor has honey, see if they’re interested in a trade. Do the same with skills – swap yardwork for haircuts, repair something in return for someone else’s used item that you need, supply manual labor in return for part of someone’s harvest. If you run a small business, be open to barter within your local community.
We’ll talk a lot more about handling these issues in upcoming articles. (Sign up here for the daily newsletter.) A shift in mindset will be essential to survive and thrive in the After-COVID world.
Tyler Durden
Mon, 04/27/2020 – 21:40 -
- Detroit Democrats Cast Out Fellow Lawmaker Who Had Audacity To Credit Trump For HCQ COVID Cure
Detroit Democrats Cast Out Fellow Lawmaker Who Had Audacity To Credit Trump For HCQ COVID Cure
A Detroit Democratic lawmaker was officially censured by her party colleagues last weekend after she credited President Trump with for promoting hydroxychloroquine, which she says saved her life after she contracted COVID-19.
According to The Detroit News, State Rep. Karen Whitsett of Detroit ‘broke protocol’ by meeting with President Trump and VP Mike Pence during an April 14 meeting of coronavirus survivors.
“Thank you for everything that you have done,” Whitsett told Trump at the meeting. “I did not know that saying thank you had a political line. … I’m telling my story and my truth, and this how I feel and these are my words,” she said during the meeting.
Whitsett’s penalty? She was cast out by the 13th Congressional District Democratic Party organization, which unanimously voted via Zoom on Saturday to oust the first-term lawmaker representing Michigan’s 9th House District.
“We have the ability to be the referee when we see our leaders out there attacking and not being willing to have a discussion to find common ground,” said chairman Jonathan Kinloch. “Based on her actions and recent statements, she’s chosen to be a stand-alone Democrat with the goals of a Republican.”
According to the resolution, Whitsett has “misrepresented the needs and priorities” of Democrats to the President and public, and that she participated in events with the Republican Women’s Federation of Michigan to express her thanks to Trump.
Whitsett “has repeatedly and publicly praised the president’s delayed and misguided COVID-19 response efforts in contradiction with the scientifically based and action-oriented response” from Michigan’s Democratic leadership, “endangering the health, safety and welfare of her constituents, the city of Detroit and the state of Michigan.”
The admonition means she will not get the group’s endorsement for this year nor will she be able to engage in the group’s activities for the next two election cycles.
Trump appeared to offer his support for the state representative late Thursday, tweeting, “Disgraceful. (Whitsett) Should join the Republican Party!”
The president also tweeted Friday morning about the controversy: “The Fake and totally corrupt News is after her as a means of getting to me. She’s smart and strong, knows the truth. Already a heroine to many!“
Until March, Kinloch was Democratic Gov. Gretchen Whitmer’s community liaison to southeast Michigan. He saidthe censure “speaks to the heart of Democratic representation” and should she wish, Whitsett has seven days to appeal.
“This is done with unless she appeals,” he said. “We will begin screening someone else to support that district.” –The Detroit News
Whitsett says she won’t engage in the “pettiness politics” of the Michigan Democratic organization, telling the Detroit News that she’s raised $450,000 in four days for resources for her district.
“I was asked to speak about my COVID experience,” she said. “The board has various issues and I don’t understand what this censure is this censure supposed to do?“
“We are in the middle of a pandemic if anyone has forgotten, which is what Jonathan and the governor should be concerned about,” she said, while stating that she had no involvement with the Republican women’s group.
Tyler Durden
Mon, 04/27/2020 – 21:20 - China Brokerage Forced To Retract Report Admitting Unemployment Rate Is 20%
China Brokerage Forced To Retract Report Admitting Unemployment Rate Is 20%
Is China’s unemployment rate 4 times higher than the official one?
While we would be the last to accuse China of lying about anything – and Jack Dorsey would agree – a Chinese securities brokerage may have been foolish enough to admit the truth about China’s dismal economic reality… followed by promptly retracting an analyst report Monday that put the country’s real jobless rate above 20%, far greater than the official number.
According to an April 24 report by analysts from Shandong-based Zhongtai Securities, as many as 70 million people could have lost their jobs due to the economic fallout from the coronavirus pandemic, translating into an actual unemployment rate of around 20.5%. The surge in unemployment, according to Bloomberg which saw the report, was due to the outsize impact of the pandemic on services and small businesses, which provide the bulk of job opportunities, they said.
“The urban surveyed unemployment rate is obviously flawed in depicting the unemployment situation, because of China’s special condition that there is a very large group of migrant workers and that the urban surveyed unemployment rate couldn’t truly reflect the employment situation of migrant workers,” the analysts admitted.
There were about 50 million fewer working migrant workers in the first quarter compared to last year, part of whom were not included in the survey, according to the 11-page original report.
The problem: if accurate, this means that China is not only lying about the source of the coronavirus, and the number of casualties, but also about its unprecedented fallout on the economy. And to preserve confidence, Beijing is pretending that tens of millions of workers are employed when they are, in fact, jobless.
The official unemployment rate was 5.9% in March, down from the “record-high” 6.2% in the first two months of the year, according to data from the National Bureau of Statistics, but of course that number is fabricated just like everything else in China. Like every other economic “data” point, the employment reading has been goalseeked in a tight range of around 5% since the series was first introduced in 2016, similar to GDP which had barely budged more than 0.1% vs the consensus number until the coronacrisis.
In any case, telling the truth was a huge mistake because just like everything else, in mainland China it is verbotten for economists to critique the official job data, a topic of extremely political sensitivity to the Communist Party leadership, especially if the truth is that China is this close to the social disorder that results from tens of millions of jobless people.
And sure enough, almost immediately after the report was published, it became inaccessible according to Bloomberg. One of the report’s authors, Zhang Chen, said by phone that it had been retracted: “Zhongtai’s attitude is that we should go by the official figures for unemployment,” Zhang said, confirming indirectly that China is lying about the official data and will censor anyone who dares to tell the truth.
Tyler Durden
Mon, 04/27/2020 – 21:00 - Top Manhattan ER Doctor Commits Suicide After Treating Coronavirus Patients
Top Manhattan ER Doctor Commits Suicide After Treating Coronavirus Patients
In a shocking example of the psychic toll that those fighting on the front lines of the coronavirus outbreak endure, a top emergency room doctor who treated coronavirus patients at a hospital in Manhattan has committed suicide, the New York Times reports.
Dr. Lorna M. Breen, the medical director of the emergency department at New York-Presbyterian Allen Hospital, died in Virginia on Sunday, where she was staying with family, according to her father who discussed her death with the Times.
Her father said she had described to him “devastating scenes of the toll the coronavirus took on patients,” the NYT reported.
“She tried to do her job, and it killed her,” he said.
Breen’s father, also an MD, said his daughter had contracted the virus, but had gone back to work after recuperating for about a week and a half. Then, the hospital sent her home again, but at this point her family moved to bring her back to Charlottesville, Va.
Breen, 49, had no history of mental illness, but when she last spoke with her father, she reportedly described a horrifying onslaught of patients found DOA in ambulances, all of them COVID-19 patients.
Dr. Breen
Her father asked the NYT to “make sure [Breen] is treated like a hero,” since she died doing her job and protecting this country from a devastating health care epidemic.
“She was truly in the trenches of the front line,” he said. “She’s a casualty just as much as anyone else who has died.”
Dr. Lawrence A. Melniker, the vice chair for quality care at the NewYork-Presbyterian Brooklyn Methodist Hospital, told the NYT that Dr. Breen was well-respected and well-liked in their hospital system.
“You don’t get to a position like that at Allen without being very talented,” he said.
The coronavirus has presented unusual mental health challenges for emergency physicians throughout New York, the epicenter of the crisis in the United States. As the paper added, while ER doctors are inured to treating patients will all kinds of grisly injuries, they’re not accustomed to being at risk of infection themselves, or of passing it to their colleagues.
Tyler Durden
Mon, 04/27/2020 – 20:44 - WHO Mysteriously Deletes Tweet About Reinfection As 'Immunity Passports' Being Debated
WHO Mysteriously Deletes Tweet About Reinfection As ‘Immunity Passports’ Being Debated
The World Health Organization (WHO) on Sunday deleted an alarming tweet for unknown reasons suggesting COVID-19 infected persons could catch the disease a second time.
The tweet was live long enough to be picked up in the media — some of which reported the information as “misleading” — before its quiet deletion later in the day.
The tweet garnered well over ten thousand retweets and tens of thousands of “likes” before it disappeared.
The controversial statement said: “There is currently no evidence that people who have recovered from #COVID19 and have antibodies are protected from a second infection.”
Health experts and some publications immediately took issue with the phraseology, pointing out that “no evidence” will be taken broadly taken as ‘confirmation’ that people are not protected via antibodies.
Most epidemiologists believe COVID-19 survivors do build up some immunity, but still admit the virus is so new it hasn’t been studied enough to come to definitive conclusions.
Drive-thru coronavirus testing site in the UK, via The Guardian/Shutterstock. As Reason pointed out, the controversy comes as the idea of so-called “immunity passports” is being hotly debated:
On Friday, the WHO published a scientific brief on “immunity passports” — the idea that governments should grant special documents to citizens who test positive for COVID-19 antibodies, allowing them to move about freely. The WHO warned that this is premature, since “no study has evaluated whether the presence of antibodies to SARS-CoV-2 confers immunity to subsequent infection by this virus in humans.”
The WHO is correct that scientists have not determined the degree of immunity enjoyed by COVID-19 survivors.
One critic, statistician Nate Silver said in a tweet pushing back against the WHO’s Sunday Tweet, saying:
…“no evidence” means “something like ‘no definitive proof, yet’… But the average person is going to read it as ‘there’s no immunity to coronavirus,’ which is likely false and not a good summation of the evidence.”
It appears the WHO deleted the tweet out of concern that it could be misleading to the general public, however, it’s ultimately unclear why they made this decision, instead of just updating it with more nuanced information.
Tyler Durden
Mon, 04/27/2020 – 20:40 - A Federal Bailout Won't Fix States' Finances
A Federal Bailout Won’t Fix States’ Finances
Authored by Kevin William son via National Review.com,
Bailing out the Illinois state pension system is the worst idea from a week in which we were discussing the health benefits of mainlining Lysol. (Please do not mainline Lysol. It will kill you.)
Irresponsible state and local governments are attempting to exploit the fear and disruption of the coronavirus epidemic to push off the consequences of their decades of reckless and culpably dishonest policies onto the federal government. This will inspire a great deal of conversation about “moral hazard” and “fairness,” but the fundamental problem is something else: Such a bailout would not work because it would not actually solve the real-world problems that threaten to cripple state and local finances.
Contra Mitch McConnell, the Senate majority leader, this is not exclusively a “blue state” problem.
State and local governments are facing short-term financial problems that are tied to the epidemic and the imposition of social distancing, lost tax revenue prominent among them. With businesses forcibly closed and unemployment soaring, there is less money coming into state, county, and city tax coffers. Some states are better prepared for this than others: Wyoming maintains a “rainy-day” fund that has socked away in it funds equal to 109 percent of the state’s annual government expenditures. Alaska has more than half a year’s expenditures tucked away, North Dakota 30 percent, New Mexico 27 percent. Most states have a good deal less, and some have very little: New York has only 3 percent, Pennsylvania 1 percent, and Senator McConnell’s home state of Kentucky less than 3 percent. Illinois, to nobody’s great surprise, comes in at 0.0 percent, no doubt from spending all its money on Chicago-style avocado toast.
Conservatives often have been critical of these funds, characterizing the reserves as excessive and arguing that the funds should be drawn down to finance tax cuts. In uncertain times, Wyoming’s big fat fund looks pretty smart.
Illinois still looks like Illinois.
The thing about unforeseeable circumstances is, they’re unforeseeable. Nobody knows which days are going to be rainy, though we do know with a reasonable degree of confidence how many rainy days there will be in a year or a five-year period. Responsible people and governments save up for emergencies — even if they do not know what the emergency is going to be.
Or they used to. But when credit is cheap, the ability to use debt in lieu of emergency savings can be very alluring. And it even may make financial sense on a limited fiscal horizon.
Because the United States has for so long relied on driving down interest rates as a form of economic stimulus, carrying lots of debt and very little cash savings may make financial sense on any given day or in any given week. If you can get a 3.5 percent mortgage with inflation at 2 percent, then it makes more sense to keep your money invested than to drain your brokerage account to buy a house or make a big down payment. If you are the federal government and can get your money for nothing, then there’s a certain sort of logic to running big deficits. State and local governments can’t usually borrow quite as cheaply as Washington can, but the incentives are much the same.
The political incentives are even more powerful than the financial ones. A few curmudgeons and your favorite scold aside, everybody likes spending. Nobody likes paying taxes. If you can get an extra $1 trillion a year to throw at the voters without taxing them an extra $1 trillion a year, then that has strong appeal.
But the shenanigans get more complicated than that. One of the largest problems facing state and local governments, from Illinois to Oklahoma and from Los Angeles to Dallas, is “unfunded liabilities,” meaning the differences between the promises governments have made to their employees and the money they have set aside to pay for those things.
This mostly has to do with pensions and medical benefits in retirement. Government workers are a powerful political constituency — they run California — and they want the same thing everybody else does: more. In order to keep them happy, governments may give them bigger salaries, but these have to be paid for on an ongoing basis, which means putting these expenditures in the budget and collecting taxes to pay for them. Those taxes are not very popular with the people who have to pay them. So what governments do instead is ask their employees to forgo larger increases in salary today in exchange for more-generous pensions and retirement benefits in the future. But instead of saving the money they’ll need to pay those future benefits, irresponsible state and local governments spend that money in the here and now, shortchanging their pension funds.
The short-term problem for ailing state and local governments is diminished tax revenue from the epidemic. That is precisely the kind of problem that can be mitigated through ordinary fiscal responsibility: Don’t take on debt in good times, carry reserves when possible, diversify revenue streams. State and local governments have long experience riding the revenue roller-coaster. In California, much of the state’s revenue comes from capital-gains taxes, while in Texas much comes from energy, and both of those states maintain rainy-day funds precisely because of their experience with the volatility of their important revenue streams. States should carry larger reserves. It is true that it is easier for Alaska to do this than it is for New York State, because Alaska has all that oil revenue, but New York State lacks oil revenue because of Governor Andrew Cuomo’s fracking ban — not because of a lack of oil.
(What’s your excuse, Pennsylvania?)
If you doubt that the pension issue is central here, consider Illinois’s request for a federal bailout, which proposes $10 billion in pension aid but only $1 billion to help provide health care to poor people. It also seeks $15 billion in unrestricted assistance to the state and $9.6 billion in direct aid for the cities. This proposal was put together by the Democratic state-senate leader in Illinois, Don Harmon, who knows that current and retired employees are 35 times more important to him and his party than are poor people who need health care — and he did the numbers accordingly.
Congress cannot solve the problems in Springfield or in any other state capital — even if it knew how, and even if it wanted to. If Washington were to dump a few billion dollars into the lap of the feckless cartwheeling goobers who run Illinois, the underlying problem of chronic underfunding of future pension liabilities would remain, and Illinois would be right back where it is today in a year or two. A bailout would not solve the problem — it would keep the problem from being solved.
Under our Constitution, Congress cannot simply dictate to Illinois how it organizes its own affairs, and those affairs are going to have to be reorganized. Specifically, Illinois is at some point going to have to enter into negotiations with its pensioners and current employees and get them to agree to accept substantially reduced benefits. The state cannot tax its way out of this hole. Illinois’s unfunded liabilities right now are $137 billion. Another way of saying that is that Illinois has about 15 years’ worth of pension contributions to make up for. Given that making up this deficit would cost Illinois 100 percent of its tax revenues for about four years, it is unlikely to be able to make up the shortfall even if it wanted to. The state already is running chronic deficits as it is.
When it comes to the question of aid to state and local governments, Washington has to distinguish the short-term problems from the long-term problems. And the long-term problems will not — and cannot — be solved in Congress.
Illinois and other states with similar problems have a few tools for addressing them: higher taxes, lower spending, reduced benefits, and a few outside possibilities such as asset sales, something Illinois governor J. B. Pritzker has sought to explore. How to mix and combine those approaches is a question of politics. That is has to be done is a question of math.
And there is no sense in trying to bail out these states until they address the real problem: the epidemic of irresponsible government.
Tyler Durden
Mon, 04/27/2020 – 20:20
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