- America's Dirtiest Little Secret Exposed
America’s Dirtiest Little Secret Exposed
Authored by John Whitehead via The Rutherford Institute,
“Children are being targeted and sold for sex in America every day.”
– John Ryan, National Center for Missing & Exploited Children
There can only be one winner emerging from this year’s Super Bowl LIV showdown between the San Francisco 49ers and the Kansas City Chiefs, but the biggest losers will be the hundreds of young girls and boys—some as young as 9 years old—who will be bought and sold for sex during the course of the big game.
It’s common to refer to this evil practice, which has become the fastest growing business in organized crime and the second most-lucrative commodity traded illegally after drugs and guns as child sex trafficking, but what we’re really talking about is rape.
Adults purchase children for sex at least 2.5 million times a year in the United States.
It’s not just young girls who are vulnerable to these predators, either.
According to a USA Today investigative report, “boys make up about 36% of children caught up in the U.S. sex industry (about 60% are female and less than 5% are transgender males and females).”
Consider this: every two minutes, a child is exploited in the sex industry.
In Georgia alone, it is estimated that 7,200 men (half of them in their 30s) seek to purchase sex with adolescent girls each month, averaging roughly 300 a day.
On average, a child might be raped by 6,000 men during a five-year period.
It is estimated that at least 100,000 children—girls and boys—are bought and sold for sex in the U.S. every year, with as many as 300,000 children in danger of being trafficked each year. Some of these children are forcefully abducted, others are runaways, and still others are sold into the system by relatives and acquaintances.
Child rape has become Big Business in America.
This is an industry that revolves around cheap sex on the fly, with young girls and women who are sold to 50 men each day for $25 apiece, while their handlers make $150,000 to $200,000 per child each year.
This is not a problem found only in big cities.
It’s happening everywhere, right under our noses, in suburbs, cities and towns across the nation.
As Ernie Allen of the National Center for Missing and Exploited Children points out, “The only way not to find this in any American city is simply not to look for it.”
Don’t fool yourselves into believing that this is merely a concern for lower income communities or immigrants.
It is estimated that there are 100,000 to 150,000 under-aged child sex workers in the U.S. These girls aren’t volunteering to be sex slaves. They’re being lured—forced—trafficked into it. In most cases, they have no choice. Every transaction is rape.
In order to avoid detection (in some cases aided and abetted by the police) and cater to male buyers’ demand for sex with different women, pimps and the gangs and crime syndicates they work for have turned sex trafficking into a highly mobile enterprise, with trafficked girls, boys and women constantly being moved from city to city, state to state, and country to country.
For instance, the Baltimore-Washington area, referred to as The Circuit, with its I-95 corridor dotted with rest stops, bus stations and truck stops, is a hub for the sex trade.
No doubt about it: this is a highly profitable, highly organized and highly sophisticated sex trafficking business that operates in towns large and small, raking in upwards of $9.5 billion a year in the U.S. alone by abducting and selling young girls for sex.
Every year, the girls being bought and sold gets younger and younger.
The average age of those being trafficked is 13. Yet as the head of a group that combats trafficking pointed out,
“Let’s think about what average means. That means there are children younger than 13. That means 8-, 9-, 10-year-olds.”
“For every 10 women rescued, there are 50 to 100 more women who are brought in by the traffickers. Unfortunately, they’re not 18- or 20-year-olds anymore,” noted a 25-year-old victim of trafficking.
“They’re minors as young as 13 who are being trafficked. They’re little girls.”
This is America’s dirty little secret.
But what or who is driving this evil appetite for young flesh? Who buys a child for sex?
Otherwise ordinary men from all walks of life. “They could be your co-worker, doctor, pastor or spouse,” writes journalist Tim Swarens, who spent more than a year investigating the sex trade in America.
Catholic and Protestant churches have been particularly singled out in recent years for harboring these sexual predators. Twenty years after the clergy sex abuse scandal rocked the Catholic Church, hundreds of sexual predators—priests, deacons, monks and lay people—continue to be given work assignments in proximity to children. In many cases, the abuse continues unabated.
Although much less publicized, the sex crimes within the Protestant Church have been no less egregious. For instance, a recent expose into the Southern Baptist Church leaders by the Houston Chronicle documents over 700 child sex victims “who were molested, sent explicit photos or texts, exposed to pornography, photographed nude, or repeatedly raped by youth pastors. Some victims as young as 3 were molested or raped inside pastors’ studies and Sunday school classrooms.”
And then you have national sporting events such as the Super Bowl, where sex traffickers have been caught selling minors, some as young as 9 years old. Yet even if the Super Bowl is not exactly a “windfall” for sex traffickers as some claim, it remains a lucrative source of income for the child sex trafficking industry and a draw for those who are willing to pay to rape young children.
According to criminal investigator Marc Chadderdon, these “buyers”—the so-called “ordinary” men who drive the demand for sex with children—represent a cross-section of American society: every age, every race, every socio-economic background, cops, teachers, corrections workers, pastors, etc.
And then there are the extra-ordinary men, such as Jeffrey Epstein, the hedge fund billionaire / convicted serial pedophile who was arrested on charges of molesting, raping and sex trafficking dozens of young girls, only to die under highly unusual circumstances.
It is believed that Epstein operated his own personal sex trafficking ring not only for his personal pleasure but also for the pleasure of his friends and business associates. According to The Washington Post, “several of the young women…say they were offered to the rich and famous as sex partners at Epstein’s parties.” At various times, Epstein ferried his friends about on his private plane, nicknamed the “Lolita Express.”
Men like Epstein and his cronies, who belong to a powerful, wealthy, elite segment of society that operates according to their own rules, skate free of accountability by taking advantage of a criminal justice system that panders to the powerful, the wealthy and the elite.
Still, where did this appetite for young girls come from?
Look around you.
Young girls have been sexualized for years now in music videos, on billboards, in television ads, and in clothing stores. Marketers have created a demand for young flesh and a ready supply of over-sexualized children.
“In a market that sells high heels for babies and thongs for tweens, it doesn’t take a genius to see that sex, if not porn, has invaded our lives,” writes Jessica Bennett for Newsweek.
“Whether we welcome it or not, television brings it into our living rooms and the Web brings it into our bedrooms. According to a 2007 study from the University of Alberta, as many as 90 percent of boys and 70 percent of girls aged 13 to 14 have accessed sexually explicit content at least once.”
This is what Bennett refers to as the “pornification of a generation.”
In other words, the culture is grooming these young people to be preyed upon by sexual predators.
Social media makes it all too easy. As one news center reported, “Finding girls is easy for pimps. They look on … social networks. They and their assistants cruise malls, high schools and middle schools. They pick them up at bus stops. On the trolley. Girl-to-girl recruitment sometimes happens.” Foster homes and youth shelters have also become prime targets for traffickers.
Rarely do these girls enter into prostitution voluntarily. Many start out as runaways or throwaways, only to be snatched up by pimps or larger sex rings. Others, persuaded to meet up with a stranger after interacting online through one of the many social networking sites, find themselves quickly initiated into their new lives as sex slaves.
Debbie, a straight-A student who belonged to a close-knit Air Force family living in Phoenix, Ariz., is an example of this trading of flesh. Debbie was 15 when she was snatched from her driveway by an acquaintance-friend. Forced into a car, Debbie was bound and taken to an unknown location, held at gunpoint and raped by multiple men. She was then crammed into a small dog kennel and forced to eat dog biscuits. Debbie’s captors advertised her services on Craigslist. Those who responded were often married with children, and the money that Debbie “earned” for sex was given to her kidnappers. The gang raping continued. After searching the apartment where Debbie was held captive, police finally found Debbie stuffed in a drawer under a bed. Her harrowing ordeal lasted for 40 days.
While Debbie was fortunate enough to be rescued, others are not so lucky.
According to the National Center for Missing and Exploited Children, nearly 800,000 children go missing every year (roughly 2,185 children a day).
With a growing demand for sexual slavery and an endless supply of girls and women who can be targeted for abduction, this is not a problem that’s going away anytime soon.
For those trafficked, it’s a nightmare from beginning to end.
Those being sold for sex have an average life expectancy of seven years, and those years are a living nightmare of endless rape, forced drugging, humiliation, degradation, threats, disease, pregnancies, abortions, miscarriages, torture, pain, and always the constant fear of being killed or, worse, having those you love hurt or killed.
Peter Landesman paints the full horrors of life for those victims of the sex trade in his New York Times article “The Girls Next Door”:
Andrea told me that she and the other children she was held with were frequently beaten to keep them off-balance and obedient. Sometimes they were videotaped while being forced to have sex with adults or one another. Often, she said, she was asked to play roles: the therapist patient or the obedient daughter. Her cell of sex traffickers offered three age ranges of sex partners–toddler to age 4, 5 to 12 and teens–as well as what she called a “damage group.” “In the damage group, they can hit you or do anything they want to,” she explained. “Though sex always hurts when you are little, so it’s always violent, everything was much more painful once you were placed in the damage group.”
What Andrea described next shows just how depraved some portions of American society have become. “They’d get you hungry then to train you” to have oral sex. “They put honey on a man. For the littlest kids, you had to learn not to gag. And they would push things in you so you would open up better. We learned responses. Like if they wanted us to be sultry or sexy or scared. Most of them wanted you scared. When I got older, I’d teach the younger kids how to float away so things didn’t hurt.”
Immigration and customs enforcement agents at the Cyber Crimes Center in Fairfax, Va., report that when it comes to sex, the appetites of many Americans have now changed. What was once considered abnormal is now the norm. These agents are tracking a clear spike in the demand for harder-core pornography on the Internet. As one agent noted, “We’ve become desensitized by the soft stuff; now we need a harder and harder hit.”
This trend is reflected by the treatment many of the girls receive at the hands of the drug traffickers and the men who purchase them. Peter Landesman interviewed Rosario, a Mexican woman who had been trafficked to New York and held captive for a number of years. She said: “In America, we had ‘special jobs.’ Oral sex, anal sex, often with many men. Sex is now more adventurous, harder.”
A common thread woven through most survivors’ experiences is being forced to go without sleep or food until they have met their sex quota of at least 40 men. One woman recounts how her trafficker made her lie face down on the floor when she was pregnant and then literally jumped on her back, forcing her to miscarry.
Holly Austin Smith was abducted when she was 14 years old, raped, and then forced to prostitute herself. Her pimp, when brought to trial, was only made to serve a year in prison.
Barbara Amaya was repeatedly sold between traffickers, abused, shot, stabbed, raped, kidnapped, trafficked, beaten, and jailed all before she was 18 years old. “I had a quota that I was supposed to fill every night. And if I didn’t have that amount of money, I would get beat, thrown down the stairs. He beat me once with wire coat hangers, the kind you hang up clothes, he straightened it out and my whole back was bleeding.”
As David McSwane recounts in a chilling piece for the Herald-Tribune: “In Oakland Park, an industrial Fort Lauderdale suburb, federal agents in 2011 encountered a brothel operated by a married couple. Inside ‘The Boom Boom Room,’ as it was known, customers paid a fee and were given a condom and a timer and left alone with one of the brothel’s eight teenagers, children as young as 13. A 16-year-old foster child testified that he acted as security, while a 17-year-old girl told a federal judge she was forced to have sex with as many as 20 men a night.”
One particular sex trafficking ring catered specifically to migrant workers employed seasonally on farms throughout the southeastern states, especially the Carolinas and Georgia, although it’s a flourishing business in every state in the country. Traffickers transport the women from farm to farm, where migrant workers would line up outside shacks, as many as 30 at a time, to have sex with them before they were transported to yet another farm where the process would begin all over again.
This growing evil is, for all intents and purposes, out in the open.
Trafficked children are advertised on the internet, transported on the interstate, and bought and sold in swanky hotels.
Unfortunately, as I make clear in my book Battlefield America: The War on the American People, the government’s war on sex trafficking – much like the government’s war on terrorism, drugs and crime – has become a perfect excuse for inflicting more police state tactics (police check points, searches, surveillance, and heightened security) on a vulnerable public, while doing little to protect our children from sex predators.
Tyler Durden
Thu, 01/30/2020 – 23:40 - US Opens 'Humanitarian Channel' To Iran For Life-Saving Drugs & Basic Staples
US Opens ‘Humanitarian Channel’ To Iran For Life-Saving Drugs & Basic Staples
In a significant development which could serve to soften soaring tensions between Washington and Tehran, as well as between the US administration and increasingly frustrated European allies, the US announced Thursday the opening of a new “humanitarian aid” banking channel with the cooperation of Swiss authorities through which the sanctioned country can find relief in terms of importing badly needed medicines and staples like food.
Since pulling out the 2015 nuclear deal nearly two years ago, the Trump White House has faced stinging criticism from the EU over extensive and unprecedented sanctions preventing children, elderly and other common Iranians from treating curable diseases or obtaining basic life-saving drugs. The Europeans have since erected an alternative sanctions-busting payment vehicle called INSTEX, said to focus initially on humanitarian-related transactions, after the Iranians were booted from SWIFT.
File image via Persia Digest In a Thursday statement the Treasury Department said “The successful completion of these transactions provides a model for facilitating further humanitarian exports to Iran,” but also noted transactions are “subject to strict due diligence measures to avoid misuse by the Iranian regime.” It further touted that “Cancer and organ transplant patients in Iran were the first to benefit from the new channel,” per the statement.
Switzerland is the key European country facilitating the program, which has been in the works since 2018. Reuters describes current participants as follows:
Geneva-based bank BCP and drugmaker Novartis took part in the pilot deal, with the humanitarian channel expected to be fully operational within weeks, a spokeswoman for the State Secretariat for Economic Affairs said.
…Politically neutral Switzerland has been working with U.S. and Iranian authorities and selected Swiss banks and Swiss companies on the plan. The U.S. Treasury Department will provide banks involved with assurances that financial transactions can be processed without violating U.S. law.
Treasury Secretary Steven Mnuchin further said upon the program’s roll out that “humanitarian transactions are currently allowed under our sanctions programs, and we encourage companies to use this humanitarian mechanism” [hint: not INSTEX – Mnuchin appears to be saying].
However, this follows months and years of the administration demanding all international companies sever ties with Iran, which has sent the economy and currency into a tailspin, and has ravaged human well-being related industries like aviation, food, transport and medicine.
1. Should be noted that the Swiss “payment channel” for humanitarian trade with #Iran is totally different from EU’s #SPV effort. The Swiss gov has been negotiating with the US Treasury for greater clarity for banks with *active relationships* with Iran. https://t.co/Hgbq2rBZWU
— Esfandyar Batmanghelidj (@yarbatman) December 19, 2018
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Critics say this new US-Swiss humanitarian channel is not only too-little-too-late, but still has overly difficult and cumbersome hurdles in place which could actually further disincentivize pharmaceutical companies from doing business with Tehran.
Bloomberg outlines some of these restrictions further:
In a four-page document released in October, the Treasury Department laid out the expectations of any financial entity wanting to use the Swiss banking channel. The “enhanced” due diligence includes restrictions on dealing with the Iranian central bank, which holds the nation’s forex reserves but is sanctioned.
Requirements also include the identities of Iranian customers, balance sheets of any Iranian customers’ accounts at the bank and a list of business relationships of the Iranian entity receiving the humanitarian aid.
That will certainly prove overly invasive even for those parties willing to test the waters.
And despite INSTEX still making slow progress – though beset by continued difficulties in implementation – many are already declaring the death of the Iran nuclear deal, especially following the near ‘state of war’ reality between the US and Iran after the killing of Qassem Soleimani. This also as Iran has said it’s blown past all uranium enrichment limits stipulated by the JCPOA.
It could further be argued that the new US ‘humanitarian channel’ is itself meant to reinforce the US position that the deal is already dead. It appears Washington’s ‘saving face’ attempt to shield itself from criticism in the future, given the sanctions regimen will likely only push the population of Iran to the brink of humanitarian disaster, while simultaneously only increasing the people’s dependency on the regime.
Tyler Durden
Thu, 01/30/2020 – 23:20 - Did The U.S. Just Concede Defeat In China Tech War?
Did The U.S. Just Concede Defeat In China Tech War?
Authored by David Goldman via AsiaTimes.com,
The Commerce Department has abandoned long-expected rules to tighten controls on US firms’ exports to Huawei, China’s national champion in broadband technology and the world leader in 5G Internet equipment. The Wall Street Journal this morning reported that the Defense Department blocked a long-signaled change in export rules that would forbid US companies from selling components to Huawei from foreign subsidiaries if 10% of the content is derived from US technology. The Treasury Department reportedly backed the Pentagon’s objections.
In related news, the United States has backed off from earlier threats to abandon a trade deal with Great Britain if Boris Johnson’s government allowed Huawei to build part of its 5G network, The Daily Telegraph reported on January 25. The United States has demanded that Britain exclude Huawei entirely in high-profile public statements. PM Johnson and President Donald Trump discussed the issue in a January 24 telephone call
In an apparent break from the previous US position, Treasury Secretary Steven Mnuchin told an audience at Britain’s Royal Institute of International Affairs on January 25 that the US might not oppose Huawei’s participation in some parts of Britain’s 5G network. Mnuchin said, “Which parts of the network it [Huawei 5G] goes into matters,” according to a tweet by the RIAA’s director Robin Niblett. “Is the Trump administration giving a sliver of manoeuvre to B Johnson?,” Niblett added.
Mnuchin’s declaration appears to echo the Johnson government’s position that the UK can manage any prospective security threat from Huawei as long as it is restricted to “non-core” parts of the 5G network. Last year, a study by British signals intelligence concluded that any prospective security problem with Huawei was manageable. A senior Huawei official told me,
“The Security Evaluation Centre Oversight Board looked at our source code exhaustively, and pointed out some ways we could improve. In fact, they did us an enormous favor by calling attention to less than perfect architecture. We made an enormous investment in improving the software and are confident that we will satisfy UK security concerns.”
US technology companies, especially chip designers, sell the great majority of their products in Asia. China’s chip design and manufacturing capacity is expanding rapidly with a blank check from Beijing, and US companies fear that Huawei and other Chinese companies will retaliate against US export controls with a price war for the high-end chips that power smartphones and servers. The Pentagon and Treasury objections to the proposed export controls indicate that the balance of power in the global chip industry has shifted towards China.
The Wall Street Journal reports:
“Commerce officials have withdrawn proposed regulations making it harder for US companies to sell to Huawei from their overseas facilities following objections from the Defense Department as well as the Treasury Department, people familiar with the matter said. The Pentagon is concerned that if US companies can’t continue to ship to Huawei, they will lose a key source of revenue – depriving them of money for research and development needed to maintain a technological edge, the people said.”
This appears to be an admission of defeat in the US-Chinese tech war, which in the long term is far more important than the trade war. China seeks to dominate what it calls the Fourth Industrial Revolution centered on 5G and artificial intelligence. China is investing massively in its “Made in China 2025” plan to leapfrog the West in high technology, while US support for basic R&D is barely half of its Reagan-era level in proportion to GDP.
In April 2018 the US banned chip exports to the Chinese handset manufacturer ZTE in retaliation for violation of Iran sanctions, shutting ZTE down until President Trump negotiated a massive fine in return for resumption of deliveries. Only four months later, in August 2018, Huawei announced its Kirin chipset for smartphones, claiming better performance than Qualcomm’s market-leading product. In December 2019 Huawei began shipping smartphones with no US components. It already had shipped 5G base stations in September 2019 with zero US components.
In May 2019, the Commerce Department placed Huawei on the “entity list,” requiring special licenses for US sales. As the Nikkei Asian Review reported in a December 2019 cover story, Huawei began “mobilizing Asian suppliers for a production surge,” leading “a split from US technology.” Taiwanese companies who for years had begged for Huawei’s business are now flooded with orders. Taiwan has the world’s best chip foundries, and Huawei depends heavily on Taiwan semiconductor manufacturing – for the moment. Meanwhile China has hired 3,000 Taiwanese chip engineers at double pay, to build chip foundries in the mainland.
Other US attempts to choke off Huawei’s access to chip technology have failed. The Chinese company uses chip design technology from Britain’s ARM, owned by Japan’s Softbank. In October, ARM announced that its exports to Huawei do not violate US content rules.
Despite the May 2019 export restrictions and Washington’s campaign to discourage Western countries from buying Huawei’s 5G technology, the Chinese giant boosted sales by 20% during 2019. In response to the failure of earlier efforts, the Commerce Department proposed to set the threshold for US content in offshore sales to Huawei at 10%, down from the present 25%.
A senior Huawei official told me that although the US restrictions are making life difficult for the company, China was moving rapidly towards self-sufficiency in the most advanced computer chips. That would do more than cut off US sales to China: It would enable China to undercut American companies in the global ship market. US chipmakers depend overwhelmingly on Asian sales.
Tyler Durden
Thu, 01/30/2020 – 23:00 - 'No Blank Check For War': House Votes To Bar Trump Military Action On Iran
‘No Blank Check For War’: House Votes To Bar Trump Military Action On Iran
On Thursday the Democratic-led House passed legislation to stop funding for military action in Iran and to repeal the 2002 war authorization for Iraq — which multiple administrations have based unilateral military actions on without the approval of Congress.
Predictably, Trump has threatened to veto both bills amid an ongoing struggle in which doves in Congress are attempting to reign in presumed executive war powers. The first bill blocks President Trump from accessing federal funds for “unauthorized military force against Iran” in a vote of 228-175, which largely came down along party lines.
White House file image The 2002 Authorization for Use of Military Force (AUMF) came up for debate immediately on the heels of the passed Iran vote. A number of Republicans have invoked the AUMF to defend the Jan.3 assassination by drone of IRGC Quds force chief Qassem Soleimani.
“The last thing we can do is give the Pentagon another blank check,” bill sponsor Rep. Ro Khanna of California Khanna (D) told reporters Wednesday. “The only time the Pentagon listens is where we exercise our power of the purse.”
Ahead of the vote, Trump tweeted Wednesday:
“Nancy Pelosi wants Congress to take away authority Presidents use to stand up to other countries and defend AMERICANS. Stand with your Commander in Chiefs!”
Both bills are expected meet their end in the Republican-held Senate, but even if not they would be vetoed by Trump.
Nancy Pelosi wants Congress to take away authority Presidents use to stand up to other countries and defend AMERICANS. Stand with your Commander in Chiefs!
— Donald J. Trump (@realDonaldTrump) January 29, 2020
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Ironically, the White House has argued that the bills actually make war with Iran “more likely” because they make it harder for Trump to take action to prevent broader conflict before it starts (i.e.- in the form of assassinating Iranian military leaders to send a strong punitive message, apparently).
Also ironic is that Trump previously criticized former President Obama as well as his Secretary of State Hillary Clinton for themselves waging non-Congressionally approved “regime change wars” in places like Libya and Syria, especially on the 2016 campaign trail.
Tyler Durden
Thu, 01/30/2020 – 22:40 - Global Governance Structure Is "Too Centralized & Too Authoritarian"
Global Governance Structure Is “Too Centralized & Too Authoritarian”
Authored by Michael Krieger via Liberty Blitzkrieg blog,
Disclaimer: I don’t have answers to everything. In fact, I probably don’t have answers to anything at all, just some thoughts on what’s wrong with the structure of governance around the world (it’s too centralized and authoritarian) and some general ideas about what direction we should head in.
Given the increased likelihood that all sorts of things about the current paradigm will begin to fail in a more acute and undeniable manner in the years ahead, well intentioned people capable of critical thought should begin contemplating how things could be as opposed to how they are. Ideally, this will lead to increased action and experimentation, particularly at a local level. Never forget, if we don’t come up with our own ideas and perspectives for how things should be, others will be more than happy to decide for us.
More than anything else this piece should be seen as a thought exercise of how I would try to structure things if presented with a blank slate opportunity.
In Part 3 of this series, I outlined a framework of sovereignty beginning with the individual, progressing to family, municipality/county, state and finally country. Though the broadest scope of decision making should always reside with the individual, the reality of social relations means some individual autonomy is relinquished as sovereign units grow to include more and more people. It’s part of human nature to expand beyond ourselves and our families into larger and more complex social relationships, but far more thought should be directed at the dangers and uncertainties that arise as these units start to include increased degrees of geography and population.
As you move along the units of sovereignty scale you always add complexity and individuals, but at certain levels you start piling on additional meaningful variables, such as geography (coastal, mountain, plains, etc) and various population densities (urban, suburban, rural, etc). Both these distinctions lead to meaningful differences in the needs and desires of given populations, and must be considered carefully rather than flippantly waved away in the pursuit of larger political unity. This is one reason I’ve come to conclude political life should be centered at the municipal/county level as opposed to larger units such as the state or country. It’s at this smaller unit that actual self-government is possible. Once you start adding geography and disparate masses of people you can’t properly and practically address local concerns (for more see my post: The Next Revolution by Murray Bookchin).
While it’d be nice to stop there and proclaim we’ve solved politics by deciding local’s the way to go, it’ll never be that easy. Issues will arise and conflicts will emerge that result in larger political structures being formed. The key aspect to discuss and ponder is how should these structures look once they grow beyond the city or county level? In the modern world, many people seem to think it intuitive and appropriate that larger political units exercise greater power and authority than the smaller bodies that comprise the whole. I believe this is fundamentally wrong and must be addressed and corrected in future models of governance.
I think we should stop viewing political constructs beyond the local level as sovereign. The individual, the family and the municipality/county can be seen as sovereign units for a few reasons. First, they check several important boxes that should be required in order to exercise ethical governance. For one, they’re generally voluntary since they offer well-defined escape routes (divorce, move to a new city). Second, there’s usually a shared geography that’s limited in scope, whether we’re talking about a concentrated metropolis or the boundaries of the more than three thousand counties that comprise the U.S. These attributes start to disappear once you leave the local level.
Although moving from one state to another is fairly easy in the U.S. (it checks the voluntary box), it doesn’t check the other boxes. Virtually all 50 states have some mix of rural and urban; liberal and conservative; mountainous, plains, or coastal; and many states have populations that exceed certain countries. As such, we should ask whether it makes sense to place so much power in the hands of the 50 state governments, as opposed to the people at the municipal or county level. If you ask me, it makes no sense at all. Moreover, if we’re going to concentrate a great deal of power in the states, why is 50 the right number? It seems low.
Beyond the states, putting power into a national government is far more concerning and problematic since the voluntary aspect of the union pretty much disappears. The vast majority of people on this earth are born to a certain piece of land with a particular national government, and they will live under it their entire lives. In most cases, leaving to go to one’s desired external country simply isn’t feasible or desirable for a variety of reasons. As such, at the national level you not only add the complexity of large numbers of people, diverse geography, but also a lack of exits. For all practical purposes, it is no longer a voluntary relationship at this stage. So what should we do about it?
We can’t just pretend political unions won’t expand beyond the city or county level, in fact, I’m convinced this will always occur to some degree. As such, the real question becomes how best to structure such bonds, and the first thing to do is establish some ground rules. I’d start with the view that any issue (beyond core civil liberties) which does not require larger scale cooperation, be decided at the municipal/county level.
For the relatively small number of issues that must be kicked up to the state or national level, the sovereign units that make up the larger body must be consulted. Directly. Via referendum. No more of this “elected representatives” deciding things for the people. They do not know best and they tend to be corrupt, unscrupulous types. We may still want to elect representatives to larger political unions for administrative tasks and crafting legislation, but the final vote on any such agreements should always be finalized and approved directly by the public.
This is a start, but it skirts an even larger issue that must be addressed. How do we ensure larger political bonds are more voluntary and fluid? The issue of secession is a challenging one to discuss in the U.S. due to its historical association with the civil war and slavery, but it’s something that must be addressed more thoroughly. I’ve personally come to believe questions of secession should be seen as a regular and normal part of human political life. Our larger political associations, particularly at the national level, are far too rigid. While stability is important, so is flexibility.
This really hit home for me during the Catalonia revolt of 2017. In the post, It’s Time to Question the Modern Nation-State Model of Governance, I noted:
As things stand today, humans essentially have two choices when it comes to political life. We either accept the nation-state we’re born into and play the game to the best of our advantage, or we try to become citizens of another country with values that more align with our own. The only way to really shatter existing political power structures and form new ones is through violent revolution or war, which is an insane way of reorganizing matters of human governance. One of Spanish Prime Minister Mariano Rajoy’s key arguments in casting the Catalan referendum as illegal is that Spain is an indivisible nation under the 1978 constitution. Let’s think about what this means in practice.
Anyone who’s spent any time in Spain understands how culturally and linguistically distinct many of the regions are when compared to Madrid. These are differences that go back centuries and can’t be brushed off by a constitution created a few decades ago. The idea that these various regions must be part of a centralized Spain even if the people within the regions want political autonomy is ethically preposterous, as well as authoritarian and evil in every sense of the word. If done properly, human governance should always be a voluntary arrangement. If an overwhelming majority of culturally distinct people within any nation-state decide the super state is no longer working for them, they should have every right to leave. Anything else is bondage.
If the smaller units that make up a nation decide they’ve had enough, they have no real options in the modern world. The presumption that the nation-state is eternal and unchanging is as unrealistic as it is authoritarian. As such, it’s my belief that any political union that reaches beyond the local (city or county) level be subject to regularly scheduled referendums on the union. The cities and counties that make up a state should periodically vote on whether or not they wish to continue in that relationship, and the states should do the same with regard to the federal government. It shouldn’t be some extraordinary act, but a regular affirmation or rejection of the larger union.
When entering into a larger political union, all parties should start with the assumption nothing in this world’s permanent and this new bond will last only so long as it’s working for the smaller units involved. Any initial agreement should include an explicit understanding that regular referendums on the bond will be held in order to ensure the union remains voluntary. The length of time between referendums should be long enough to provide for a period of stability, yet short enough to allow a person who lives a full life to vote on the union several times. I think a 20 or 25 year period between such votes might make sense.
The goal here isn’t to have nations constantly breaking apart, but rather a system that more properly distributes power and final say to the smaller units that comprise the whole. If such a system existed in these United States I doubt Washington D.C. would be as big, bloated and powerful as it is today. The simple understanding that states could easily leave in a few years if the feds pushed too hard could provide a meaningful deterrent to massive expansions of centralized control in the first place.
The key thing is we need to shift our entire perspective. We need to view the local units as sovereign, and emphasize that the larger unions exist only at the pleasure of the smaller bodies. Secession, as well as reconstitution into new more favorable/appropriate bonds, should not be seen as unthinkable and extreme, but rather as completely normal. This shouldn’t just apply at the national level, but every step of the way. Municipalities and counties should hold regularly scheduled votes on whether to remain in their current state, join another state, or perhaps even band together to form an entirely new state. Larger political bonds should be structured in a far more fluid and voluntary manner in order for them to serve their real purpose, which is the sovereign interests of the smaller units.
As I noted in the beginning, I don’t want anyone to think I’m presenting these thoughts as a silver bullet. Even if we implemented everything I outlined above from scratch, if humanity fails to become more conscious and ethical, it probably won’t make much of a difference.
I also understand it’s unlikely we move to such a governance model anytime soon — or even within my lifetime — but that doesn’t mean we shouldn’t be discussing these things. I think it’s helpful to highlight where sovereignty should reside (locally) and how larger political bonds should be structured in a more voluntary and fluid manner. This isn’t supposed to be the final word on anything, but a thought experiment in political philosophy. I hope it sparks inspiration in the minds of those who read it, so we can carry this important conversation forward.
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Tyler Durden
Thu, 01/30/2020 – 22:20 - "It Was The Final Bucket Of Straw" – Trump Tax Plan Sparks Middle-Class Exodus From California, New York
“It Was The Final Bucket Of Straw” – Trump Tax Plan Sparks Middle-Class Exodus From California, New York
Years of mismanagement by unaccountable Democrats in Sacramento has made it practically impossible to build new homes in the state of California. And even with the minimum-wage hikes, affordable homes are still few and far between.
Over the years, we’ve closely followed the trend of frustrated Californians seeking greener (or at least cheaper) pastures in Nevada, Idaho, Texas and other states in the West, Midwest and the South, because it’s a great example of how high-tax states sacrifice economic growth for the ability to finance generous benefits to state workers, as well as other generous giveaways.
But not only is this trend ultimately a threat to the local economy, which, to be fair, is still roaring, even if fewer and fewer residents are reaping the spoils, but just as we highlighted a few weeks back, the net population decline might cost the Golden State a few seats in Congress once the 2020 census is completed.
While most tax-paying Americans saw their overall tax bill decline under President Trump’s tax-reform package – and American corporations pay substantially less as well – there’s no question that homeowners in blue states, a group that includes some of the most affluent people in the county, lost out. By capping how much of an individual’s property and income taxes can be written off their federal tax bill, as well as lowering the threshold for mortgages that qualify for interest deductions to $750,000 from $1 million (one reason why the luxury market in places like Greenwich has gotten whacked), Trump managed to exact his revenge on the blue-staters who supported his presidential rival back in 2016.
Now, Trump has said offhandedly that there’s been talk of reinstating the deductions and raising the mortgage cap. But for the most part, this seems like idle talk. The federal budget deficit has exploded, but Trump and his team are still talking up their tax-reform part 2 (though it’s likely this chatter mostly a ruse to pump the market). But suspect any tax cuts between now and November will be focused squarely on aiding the midwestern states who handed Trump the presidency.
Since the tax-reform package was passed, what was once a trickle of blue-staters fleeing places like California, New York, New Jersey, Connecticut and even Texas over the past two years has become a flood.
And after a smattering of stories detailing the gradual migration from high-cost blue states and cities like San Francisco and New York (we’ve paid close attention to the trend over the years), two WSJ banking reporters have published a deep dive on the trend, signaling its arrival as a major national issue.
Just like Carl Icahn and David Tepper left New York and New Jersey for Florida, millions of Americans are following suit, swapping Connecticut for Florida, Nevada or Arizona.
Two years after President Trump signed the tax law, its effects are rippling through local economies and housing markets, pushing some people to move from high-tax states where they have long lived. Parts of Florida, for example, are getting an influx of buyers from states such as New York, New Jersey and Illinois.
Though the exact figures have probably changed since the tax reform was passed, this map helps illustrate how capping SALT and lowering threshold for mortgages impacted each state.
While President Trump, Secretary Mnuchin and the rest of the administration have insisted that they capped the deductions to end what they described as an unfair subsidy for blue states. The average US property tax bill in 2018 was about $3,500, according to Attom Data Solutions, a real-estate data firm cited by WSJ. But in New York, New Jersey and Connecticut, hundreds of thousands of residents make annual property tax payments well above that level. In New York’s tony Westchester County, the average property tax bill is more than $17,000.
Most of the people interviewed by WSJ said they had long considered moving to a more tax-friendly state. But for many, Trump’s tax plan was the catalyst to actually act on these impulses.
“It was another bucket of straw on the back of the camel,” said John Lee, a wealth-management executive and longtime resident of the Sacramento, Calif., area. Mr. Lee and his wife, Tracy, moved their primary residence last winter to Incline Village, a resort community on the Nevada side of Lake Tahoe.
The Lees kept their California home, where one of their six adult children is living. That means they are still paying California property taxes. But Mr. Lee estimates the move to Nevada, which has no state income tax, whacked his state tax bill by 90%.
The impact on housing markets in the ten most heavily taxed states has been impossible to ignore. The Manhattan luxury housing market is showing signs of serious distress that’s provoking anxieties among the wealthy developers who were expecting a boom in demand. According to Fitch Ratings, home-price appreciation in these states declined almost immediately after the tax reform package was passed. By comparison, home-price appreciation was steady for the 10 states with the lowest property taxes and levels of mortgage interest.
Among Gen Xers and Boomers who have only recently achieved empty-nest status, plotting an escape from taxation hell has become a simple tenant of good retirement planning.
Rick Bechtel, head of U.S. residential lending at TD Bank, lives in the Chicago area and said he recently went to a party where it felt like everyone was planning their moves to Florida. “It’s unbelievable to me the number of conversations that I’m listening to that begin with ‘When are you leaving?’ and ‘Where are you going?'” he said.
Even some states known for having relatively low taxes are being affected by this trend, as some residents opt for states with no income tax, like Florida or Nevada.
The dynamic is affecting even states typically thought to have low taxes. Mauricio Navarro and his family left Texas last year for Weston, Fla. Neither state collects its own income tax, but Mr. Navarro was paying more than $25,000 annually in property taxes in the Houston area, he said. Texas ranks among the states with the highest share of taxpayers who pay more than $10,000 in property taxes, according to the National Association of Home Builders.
Filling out his 2018 tax returns helped motivate him to move with his wife and two children, said Mr. Navarro, who owns a software-development business.
“It was not that we were struggling,” he said. “It’s that we did some analysis.”
Mr. Navarro is renting but plans to eventually buy a home in Florida. He expects his property tax bill will be lower than it was in Texas.
Another angle to this story that wasn’t really discussed in the WSJ piece is how this migration will impact state budgets. Particularly in California’s case, many of those leaving are homeowners and taxpayers, people who bear a disproportionate burden in financing the state budget. With pension funds in Illinois already dangerously underfunded thanks to the unsustainable benefits lavished on state employees.
A few days ago, the Chicago Tribune published an interesting editorial on the subject of pension reform that gets right to the heart of the problem:
You and your neighbor have a decade of familiarity and own similarly comfortable homes. You drive similarly fuel-efficient family SUVs.
You even cut your lawns in similar stripe patterns each Saturday, nodding to one another as you sweep the clippings and wrestle giant paper bags.
But when it comes to retirement, the similarities end. Your neighbor, who pulled in a similar salary, worked for the state. You didn’t.
The thought of retirement terrifies you as you prepare to live on a fixed 401(k) — one close to the American average of $195,000 for people close to retirement. Most of it comes from earnings that you’ve socked away over the years. Combined with a meager Social Security check, which maxes out at a little over $45,400 per year, it’ll have to last you for the rest of your life.
Your neighbor, meanwhile, is expected to receive more than $1.5 million in pension benefits during the course of his retirement. He personally contributed less than $60,000 to the pot. He gets to retire at 56. You? 70, if you’re lucky.
If a huge chunk of Illinois middle class decamps for Florida, what then?
But we digress. Another issue with this new great American migration is that sometimes the transplants clash with the locals – not only because of their ultra-liberal California values, but also because they’re inconveniently driving up home prices and rents for everybody else. As more Californians flood into Nevada, the locals have greeted them with a whiff of suspicion. “I just hope all the Californians going to Nevada don’t turn Nevada into a California,” said one recent transplant.
After watching how they bungled things in their former home state, that would indeed be a tragedy.
Tyler Durden
Thu, 01/30/2020 – 22:00 - Your Smart Vehicle Is Recording Your Every Move
Your Smart Vehicle Is Recording Your Every Move
Authored by Derrick Broze via TheMindUnleashed.com,
Recent reports indicate that data gathered by automakers and tech companies could be the next front in the battle over digital privacy.
In early January, companies at the CES 2020 displayed their plans for making use of the surprising amounts of data gathered by newer model vehicles. Amazon, Intel, Qualcomm, and Blackberry were among the companies seeking partnerships with automakers who are also searching for methods to monetize the data gathered by their vehicles.
Bloomberg reports that “modern cars roll out of factories packed with cellular connections, powerful processors and growing suite of sensors, including cameras, radar and microphones. That’s turning them into the next information goldmine, rivaling the data-creating capabilities of smartphones.”
Bloomberg also notes that Intel announced a new stage of its Mobileye technology which allows for driver-assistance and Intel to gather data from cameras, chips, and sensors within the vehicle. Intel says this anonymous information is used to create detailed maps to enhance vehicle navigation systems. Intel has estimated that data gathered by vehicles will be worth as much as $3.5 billion by 2030. Bloomberg reports that consulting firm McKinsey & Co. estimates that “up to $750 billion of value would created from car-related data by 2030.”
As the financial incentive for automotive data increases more companies will seek to enter this emerging marketplace. However, there are already serious privacy concerns related to the data being gathered by the vehicles. In December 2019 the Washington Post investigated how much information is gathered by one single computer in a 2017 Chevy Volt. The Post writes:
“In the 2020 model year, most new cars sold in the United States will come with built-in Internet connections, including 100 percent of Fords, GMs and BMWs and all but one model Toyota and Volkswagen. (This independent cellular service is often included free or sold as an add-on.) Cars are becoming smartphones on wheels, sending and receiving data from apps, insurance firms and pretty much wherever their makers want. Some brands even reserve the right to use the data to track you down if you don’t pay your bills.”
To determine just how much data was being collected, the Post worked with automotive technology expert Jim Mason to catch a glimpse of what vehicle manufacturers are capable of seeing. The Post and their expert learned that the vehicle was collecting a wide range of data including vehicle location and phone call records. Mason noted that any time you plug a smart phone into a vehicle the vehicle will likely copy personal data.
“Among the trove of data points were unique identifiers for my and Doug’s phones, and a detailed log of phone calls from the previous week. There was a long list of contacts, right down to people’s address, emails and even photos,” the Post reported.
The vehicle also collected information on “acceleration and braking style, beaming back reports to its maker General Motors over an always-on Internet connection,” the Post added.
“Coming next: face data, used to personalize the vehicle and track driver attention.”
Chevrolet does not currently have a policy of informing drivers about the data being recorded and the owner’s manual does not mention data collection. A spokesman for Chevrolet owner General Motors declined to offer specific details on data collection. However, the spokesman did note that data gathered by GM falls into three categories: vehicle location, vehicle performance, and driver behavior.
Unsurprisingly, the Post notes that with the coming 5G cellular network that promises to link cars to the internet, wireless connections will get cheaper, data more valuable, and “anything the car knows about you is fair game.”
Data collection by smart vehicles is only one of a myriad of privacy concerns related to the coming 5G Smart Grid where cities, vehicles, phones, streetlights, and clothes are fitted with sensors as part of the Internet of Things. It’s important to become educated about the threats posed by these emerging “smart devices.”
Only by actively fighting for and defending privacy can we hope to maintain any semblance of it.
Tyler Durden
Thu, 01/30/2020 – 21:40 - US Boosts 'Glide Breaker' Program To Shoot Down Putin's "Invincible" Hypersonic Missiles
US Boosts ‘Glide Breaker’ Program To Shoot Down Putin’s “Invincible” Hypersonic Missiles
Hypersonic weapons have been the big talk at the Pentagon of late. Early this week US defense officials unveiled that America’s classified hypersonics program will undergo a “very aggressive” expansion over the course of the next year. This is to include expanded testing, including at least “four initial flight tests of prototypes for glide bombs that can fly five times the speed of sound and maneuver en route,” according Bloomberg.
But after over the past two years both Russia and China have hyped their own advancing programs (Putin has touted that his Avangard hypersonic missile as “invincible”), which many analysts believe could be further along than the US program, the more pressing worry is how to defend against the nearly impossible to stop high-tech weapon. Hypersonic missiles, such as the kind Russia has lately tested, “are hard to stop, they can maneuver, they’re unpredictable” and “hard to detect” so “you don’t have a lot of time” to respond — Mike White, the Defense Department’s assistant director for hypersonics was quoted this week as saying.
Toward this end, the Pentagon is pursuing experimental interceptor technology designed to take out possible incoming hypersonics.
Artist’s concept of a hypersonic vehicle. DARPA Image. The military analysis site Defense One explains of the developing program, still in its infancy:
On Tuesday, the Defense Advanced Research Projects Agency announced that it had awarded $13 million to defense contractor Northrop Grumman for its Glide Breaker program, an experimental effort to develop interceptors to take out highly advanced and highly maneuverable hypersonic missiles.
Details of the nascent Glide Breaker program remain classified, and it’s as yet likely not far along, though we profiled the new program in 2018.
DARPA indicated that it “Intends to advance the United States’ (U.S.) means to counter hypersonic vehicles” by developing “enabling an advanced interceptor capable of engaging maneuvering hypersonic threats in the upper atmosphere.”
Illustrating the problem that enemy hypersonics poses for US homeland defense, former Vice Chief of Staff Paul Selva explained while addressing a Strategic Deterrent Coalition conference last year:
If you’re going Mach 13 at the very northern edge of Hudson Bay, you have enough residual velocity to hit all 48 of the continental United States and all of Alaska. You can choose [to] point it left or right, and hit Maine or Alaska, or you can hit San Diego or Key West. That’s a monstrous problem.
Among options listed for defending against the ultra-fast hypersonics includes “exploding warheads” as well as electronic warfare.
One missile defense analyst quoted in the Defense One report had this to say:
It’s important to remember that these things, traveling at high speeds under a lot of thermal pressure, are far from invincible. They have a lot of vulnerabilities. You might be able to bring together a mix of different approaches, including cyber or electronic warfare effects, to take one down.
The Pentagon is clearly reacting to the advancing programs of China and Russia. Defense Secretary Mark Esper a week ago referenced a developing “great-power competition” with China.
A 2018 report from the Government Accountability Office (GAO) warned that the current ballistic missile defense system in the US is powerless against hypersonic missiles from China and Russia.
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Illustration from DARPA’s ‘Glide Breaker program’.
Tyler Durden
Thu, 01/30/2020 – 21:20 - Tverberg: It Is Easy To Overreact To The Chinese Coronavirus
Tverberg: It Is Easy To Overreact To The Chinese Coronavirus
Authored by Gail Tverberg via Our Finite World blog,
Recently, a new coronavirus has been causing many illnesses and deaths. The virus first became active in Wuhan, China, but it has already spread to the rest of China. Scattered cases have been identified around the rest of the world as well.
There are two important questions that are already being encountered:
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How much of an attempt should be made to limit the spread of the new virus? For example, should businesses close to prevent the spread of the virus?
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Should this disease be publicized as being far worse than flu viruses that circulate each year and cause many deaths among the elderly and people in poor health? The median age of those dying from the new coronavirus seems to be about 75.
Unfortunately, there aren’t easy answers. We can easily see the likely outcome of under reaction. More people might die of the disease. More people might find themselves out of work for a couple of weeks or more with the illness. We tend to be especially concerned about ourselves and our own relatives.
The thing that is harder to see is that reacting too vigorously can have a hugely detrimental impact on the world economy. The world economy depends on international trade and tourism. China plays a key role in the world economy. Quarantines of whole regions that last for weeks and months can have a very detrimental impact on the wages of people in the area and profits of local companies. Problems with debt can be expected to spike. The greater the reaction to the coronavirus, the more likely the world economy will be pushed toward recession and job loss.
The following are a few of my thoughts regarding possible overreaction:
[1] The Chinese coronavirus seems to be extremely contagious, even before a person who has been exposed shows any symptoms. The only way we can be certain to contain the virus seems to be through quarantines lasting up to 14 days.
China’s National Health Minister, Ma Xiaowei, has provided information that seems quite alarming. With the new virus, a person may become communicable shortly after he/she has been infected, but symptoms may not appear for up to 14 days. This allows the infected person to infect many others without realizing that he/she is a carrier for the disease.
Today, the United States and many other countries screen for the virus by checking passengers arriving on planes from affected areas for fevers. Given the information provided by China’s National Health Minister, this approach seems unlikely to be sufficient to catch all of the people who may eventually come down with the disease. If a country really wants to identify all the potential carriers of the disease, it appears that a 14-day quarantine for all travelers from infected areas may be needed.
Such a quarantine becomes administratively difficult to handle for the huge number of people who are likely to travel from China. Such a quarantine would make it impossible for pilots and other airline workers to make a living, for example. They would be spending too much of their time in quarantine to do the work needed to support themselves and their families.
A related concern is that person-to-person transmission is very easy with the Chinese coronavirus. We don’t know for certain how many people each infected individual infects, but one estimate is that each infected person transmits the disease to an average of 2.5 other people. With this transmission rate, the number of people having the disease can be expected to grow exponentially, perhaps for several months.
Based on these concerns, it seems to me that funds spent on trying to contain the coronavirus are likely to be largely wasted. The new Chinese virus will spread widely, regardless of attempts to contain it. At most, quarantines will slightly slow the transmission of the disease. At the same time, quarantines will be quite disruptive of commerce. They will tend to reduce both total wages and total output of goods and services of the area.
[2] Deaths from pathogens are part of the natural cycle. They help prune back the population of the old and weak.
We know that in ecosystems, one of the functions of naturally occurring fires is to clear out “deadwood,” to allow healthy new growth to occur. In fact, some types of seeds seem to require smoke for germination. When inadequate natural burning takes place, bushfires as seen in Australia and forest fires as seen in California become an increasing problem.
Deaths from pathogens seem to play a similar role in human economies. This is especially the case with pathogens that especially target the weak and old. Most flu viruses have this characteristic. Early reports of deaths from the coronavirus suggest that this same pattern of targeting the old and weak is occurring with this virus as well. As noted above, the median age of those dying from the new coronavirus seems to be about 75 years.
Since the 1940s, modern medicine has been able to develop antibiotics and vaccines to counteract the impact of many pathogens. This, of course, makes citizens happy, but it has the disadvantage of changing the population in a way that leaves the economy with a much higher percentage of elderly people and others in poor health. This higher level of elderly and medically needy people makes it easy for viruses and other pathogens to make their rounds, just as leaving deadwood on the forest floor makes it easier for fires to spread.
With this rising population of people who cannot support themselves, tax rates for the remaining citizens tend to become very high. Young workers may become discouraged because they do not have enough income remaining after paying taxes to raise their own families. In effect, they cannot support both their young families and the many old people.
Viewed from this unusual perspective, the operation of the Chinese coronavirus might even be considered a benefit to society as a whole. The world has overcome the impact of measles, typhoid, polio, and many other diseases. In some sense, it “needs” a new disease added to its portfolio, to replace the ones that have been mostly taken care of by modern medicine. In this way, pensions and other payments targeting the old and weak don’t become too great a burden on the young.
[3] If the Chinese coronavirus were simply allowed to run its course, without publicity that it was in any way unusual, somewhat less than 1% of the world’s population might be expected to die.
To see what would happen if the Chinese coronavirus were to run its course, we might look at what happened with the Spanish Flu, back in 1918. At that time, doctors did not have a way of treating the virus and authorities downplayed concern for the disease. The US Center for Disease Control reports that 500 million people, or one-third of the world’s population, became infected. At least 50 million people (about 10% of those infected) died.
We don’t yet know with accuracy how many of those infected will die from the current virus. A recent estimate is that about 2.3% of those who are infected will die of the disease (based on 107 dying out of 4,600 infected). If we assume that the percentage of the population that will ultimately catch the new virus is 30%, then the share of the world’s population that would be expected to die would be about [(1/3) x 2.3% = 0.76%].
The UN estimates that the world’s population can be expected to grow by about 1.05% in 2020. If this is the case, the effect of the Chinese virus would be to sharply dampen the population increase for the year. Instead of population rising by 1.05%, it would rise by only 0.29% (= 1.05% – 0.76%), assuming all of the deaths associated with the Chinese coronavirus take place within a year. While this would be a change, it would be a fairly small, temporary change.
All of these deaths would be tragic for the families involved but, in a way, they would be less of a problem than the deaths that took place back in 1918. At that time, mortality was high for healthy 20 to 40 year olds, making the flu particularly disruptive for families. The total percentage of the population that died was also much higher, about 3% instead of 0.76%.
[4] A major danger of the virus seems to be one of overreaction.
Today’s world economy is fragile. China, like other countries, has a large amount of debt. Debt defaults related to poor profits of companies closing their operations for a time and workers losing income could easily skyrocket.
Closing down transportation from China would risk pushing the world economy into a very bad recession. In fact, simply having a very large number of people out sick from work would be expected to have an adverse impact on the economy. Spending a large amount of money on hospitalizations and face masks cannot compensate for the loss of productivity of the rest of the economy. Thus, the tendency would be toward recession in China, even if no action toward cutting off travel were taken.
China is a huge supplier of goods to the rest of the world. In fact, in 2016, it used more energy in producing industrial output than the United States, India, Russia and Japan combined.
Figure 1. Chart by the International Energy Agency showing total fuel consumed (TFC) by industry, for the top five fuel consuming nations of the world.
China’s economy has been growing very rapidly since 1990. Figure 2 shows this one way, in GDP comparisons using inflation-adjusted US dollars.
Figure 2. GDP of China and the United States, computed as percentages of World GDP. All amounts in 2010 US dollars, as provided by the World Bank.
Figure 3 is similar to Figure 2, except the growth comparison is made in “2011 Purchasing Power Parity International Dollars.” This adjustment is made because typically the currencies of less developed nations float far below the dollar, in terms of what the local currency will buy. The inflation-adjusted PPP comparison compares output on a basis that is expected to be more consistent with what the local currency will really purchase.
Figure 3. Ratios of the GDP of China and the United States to the World GDP. All amounts in 2011 Purchasing Power Parity International Dollars, as provided by the World Bank.
On this PPP basis, China’s GDP surpassed the US’s GDP in 2014. Figure 3 also shows that the United States has slipped from about 20% of the world’s GDP to about 15% on this basis.
We cannot simply cut off trade with China, regardless of how bad the situation is. China is too big and too important now. The rest of the world desperately needs goods and services produced in China, in spite of what is going wrong from an illness perspective. China plays too key a role in supply chains of many kinds for the country to be left out.
Even cutting off tourism becomes a problem. The share of China’s revenue from tourism amounted to 11% in 2018. While not all of this would drop off, even a dip would lead to lower employment in this part of its economy. Jet fuel use would drop as well.
[5] A particular problem today is low prices for many commodities, including oil and other fossil fuels. These prices are likely to fall further, if China’s economy falters further.
We used to hear that the world would “run out of” oil and that oil prices would rise very high. In fact, if the people who were concerned about the issue had studied history, they would have figured out that a far more likely outcome would be “collapse.” In such a situation, prices of many commodities might fall too low. Revelation 18:11-13 provides a list of a number of commodities, including humans sold as slaves, for which prices dropped very low at the time of the collapse of ancient Babylon.
The problem is a different squeeze than a high-price squeeze. It is more of a growing wage disparity problem, with fewer and fewer of the world’s workers being able to afford the goods and services made by the world economy. This problem feeds back to commodity prices that fall too low for producers of many types. The problem is an affordability issue, rather than one of running out. I have written about this issue many times.
Prices of fossil fuels have been low for a very long time–essentially since late 2014. OPEC has cut back its oil production because of low oil prices. Several US natural gas producers have taken big write offs on natural gas investments. China’s coal production has remained below its 2013 level, because of low prices.
Figure 4. China energy production by fuel, based on 2019 BP Statistical Review of World Energy data. “Other Ren” stands for “Renewables other than hydroelectric.” This category includes wind, solar, and other miscellaneous types, such as sawdust burned for electricity.
If China finds it necessary to cut back on production of goods and services for any reason (excessive sickness within China, visitors aren’t traveling to China, tariffs, customers around the world aren’t buying cars), this reduction in output would be likely to further lower the prices of commodities. More producers would go bankrupt. Countries exporting products as diverse as oil, iron ore, copper and lithium might have economic difficulties.
Lower fossil fuel prices may lead to a cutback in their output, but it is doubtful that this cutback would be offset by an increase in the production of renewables. Falling fossil fuel prices would make the price comparison of renewables to fossil fuels look even worse than it does today. China has cut back on its subsidies for solar panels, and this has led to decreasing Chinese solar installations in both 2018 and 2019.
[6] The best approach might just be to let the Chinese coronavirus run its course. Authorities might also discourage stories about how awful the illness is.
Today, we seem to think that we can fix all problems. Unfortunately, this medical problem doesn’t seem to be fixable in the near-term. We should probably do as governments through the ages have done, which is not very much. We should not publicize the disease as being a whole lot worse than flu viruses in general, for example.
We should certainly look for inexpensive treatments for the disease. For example, there seems to be an effort to examine the possibility of using existing antiviral drugs as a treatment. It seems like an effort could be made to look into ways of treating the disease at home, perhaps using supplemental oxygen for a period. In time, perhaps a vaccine can be developed.
Individuals around the world should be encouraged to get themselves in as good health as possible, so that their own immune systems can fight off pathogens of all types, not just this particular virus. Common sense should be used in washing hands and in avoiding being with sick people. I doubt that it makes sense to encourage the use of masks, goggles and other protective devices.
We, as individuals, cannot live forever on this earth. We also cannot spend an unlimited percentage of GDP on health care: It becomes too high-cost for most citizens. At some point, we need to call a halt to the expectation that we can fix all problems. We live in a world with limited resources. We need to start lowering our expectations, if we don’t want to make our problems worse.
Tyler Durden
Thu, 01/30/2020 – 21:00 -
- Rigged? China PMI Shows Services Industry Accelerated As Coronavirus Put Tens Of Millions Under Quarantine
Rigged? China PMI Shows Services Industry Accelerated As Coronavirus Put Tens Of Millions Under Quarantine
Over most of January, the situation in China has gone from bad to worse to worst-nightmare with factories and stores shuttered for weeks, citizens in every province under martial-law lockdowns, and coronovirus cases (and deaths) soaring at faster-than-prior-pandemic rates.
So it should be no surprise then that China’s Service Economy expanded at an accelerating rate in January according to the latest government-provided PMI data.
Yes, you heard that right, against expectations of a slowdown (as would be expected with most of the nation hunkering down in terror), the National Bureau of Statistics reports that the non-manufacturing gauge improved to 54.1, compared with 53.5 the previous month (and better than the 53.0 expected).
Reportedly, due to the Lunar New Year holiday, the surveys were conducted between Jan. 15 and Jan. 20, rather than between the 20th and 25th of each month as normal.
And you know how badly manipulated this survey is when the China’s National Bureau of Statistics issues an additional statement admitting that “the impact of coronavirus is not fully reflected in January’s PMI survey,” suggesting that “future trends need to be observed.”
However, if that is the case then what is more problematic is the fact the first official indicator of the Chinese manufacturing economy in 2020 signaled the nation’s factories were struggling even before the country shut down for the Lunar New Year and the coronavirus outbreak worsened.
We suspect, judging by the record collapse in (Dr.) Copper, that the manipulated-ly perfect 50.0 – neither expanding or contracting – will need to be adjusted for some sense of reality soon…
However, while the overall manufacturing survey dipped, the Steel industry PMI index surged to 47.1 from 43.1 in December.
So to sum up – China’s worst ever epidemic, killing hundreds and putting 10s of thousands in hospital, shutting down factories, stores, and all transportation across the entire nation at one of its busiest most consumption-heavy times of year prompted a tiny drop in Manufacturing, a rise in the Services industry, and a surge in the Steel Industry!!!!
As a reminder, Nomura economists led by Lu Ting wrote in a recent report to clients that:
…the economic hit to China could exceed that seen during the SARS outbreak of 2003.
Gross domestic product growth could “materially drop” this quarter from the 6% pace at the end of 2019, maybe even more than the 2 percentage point deceleration seen in the second quarter of 2003.
Just don’t tell the survey respondents!!
For some clarity on what is really going on – economically – here is none other than Michael Pettis, a professor of finance at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets, unleashing some truth in a 9 tweet thread:
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There’s a lot of fear everywhere, and Beijing streets and shops are almost empty. People still buy things online – for example my students and musician friends are overdosing on games and streaming, and…
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…one well-known musician told me last night that he did an online DJ set that attracted tens of thousands – but they buy very little that requires being near other people. What is worse, because factories will be closed, a lot of small business owners and workers, especially…
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..at the bottom, will have sharply reduced income for the year, which of course means less consumption. It is hard to imagine that all of this won’t have a significant impact on consumption growth in the first and perhaps second quarters (depending on when it starts to…
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…subside). Some consumption might just be postponed, but some of it will be permanently lost, including much of what should have been spent during this very important holiday season (for example, this is the main time to release blockbuster movies, but all the theaters are…
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…closed). Also if workers are unable to earn wages for a few weeks longer than expected, that’s also permanently lost consumption. The more interesting question to me is whether all this will have much impact ultimately on the 2020 growth target of “around 6%”, which will…
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…be formally announced in early March. I suspect it won’t, at most driving it closer to 5.6% than 6.0%. If that’s the case, the economic impact of the coronavirus will be to increase debt even more than expected, as Beijing accelerates later in the year to make up for the…
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…decline in the first and second quarters. It had already decided in Q4 2019 to push forward any and every infrastructure project it could think of, but now it will simply have to find more projects. The point is that while the coronavirus will certainly have an adverse…
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…impact on “real” economic growth, it will probably have very little impact on aggregate economic activity for the year, which is just one more reason to reject an input measure as measuring anything useful. The main place to see evidence of the coronavirus impact is in the…
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…lower consumption share of GDP and the higher credit growth. Finally there are also likely to be interesting political implications, but obviously that’s not easy to write about.
Tyler Durden
Thu, 01/30/2020 – 20:41 -
- Elites Have Destroyed A Possible US-Russia Alliance To Contain China
Elites Have Destroyed A Possible US-Russia Alliance To Contain China
Authored by James Rickards via The Daily Reckoning,
There’s no need to rehash the sordid politics of the U.S.-Russia relationship since 2014. That relationship became collateral damage to gross corruption in Ukraine.
The U.S. and its allies, especially the UK under globalists like David Cameron, wanted to peel off Ukraine from the Russian orbit and make it part of the EU and eventually NATO.
From Russia’s perspective, this was unacceptable. It may be true that most Americans cannot find Ukraine on a map, but a simple glance at a map reveals that much of Ukraine lies East of Moscow.
Putting Ukraine in a Western alliance such as NATO would create a crescent stretching from Luhansk in the South through Poland in the West and back around to Estonia in the North. There are almost no natural obstacles between that arc and Moscow; it’s mostly open steppe.
Completion of this “NATO Crescent” would leave Moscow open to invasion in ways that Napoleon and Hitler could only dream. Of course, this situation was and is unacceptable to Moscow.
Ukraine itself is culturally divided along geographic lines. The Eastern and Southern provinces (Luhansk, Donetsk, Crimea and Dnipro) are ethnically Russian, follow the Orthodox Church and the Patriarch of Moscow, and welcome commercial relations with Russia.
The Western provinces (Kiev, Lviv) are Slavic, adhere to the Catholic Church and the Pope in Rome, and look to the EU and U.S. for investment and aid.
Prior to 2014, an uneasy truce existed between Washington and Moscow that allowed a pro-Russian President while at the same time permitting increasing contact with the EU. Then the U.S. and UK overreached by allowing the CIA and MI6 to foment a “color revolution” in Kiev called the “Euromaidan Revolution.”
Ukrainian President Viktor Yanukovych resigned and fled to Moscow. Pro-EU protestors took over the government and signed an EU Association Agreement.
In response, Putin annexed Crimea and declared it part of Russia. He also infiltrated Donetsk and Luhansk and helped establish de facto pro-Russian regional governments. The U.S. and EU responded with harsh economic sanctions on Russia.
Ukraine has been in turmoil (with increasing corruption) ever since. U.S.-Russia relations have been ice-cold, exactly as the globalists intended.
The U.S- induced fiasco in Ukraine not only upset U.S.-Russia relations, it derailed a cozy money laundering operation involving Ukrainian oligarchs and Democratic politicians. The Obama administration flooded Ukraine with non-lethal financial assistance.
This aid was amplified by a four-year, $17.5 billion loan program to Ukraine from the IMF, approved in March 2015. Interestingly, this loan program was pushed by Obama at a time when Ukraine did not meet the IMF’s usual borrowing criteria.
Some of this money was used for intended purposes, some was skimmed by the oligarchs, and the rest was recycled to Democratic politicians in the form of consulting contracts, advisory fees, director’s fees, contributions to foundations and NGOs and other channels.
Hunter Biden and the Clinton Foundations were major recipients of this corrupt recycling. Other beneficiaries included George Soros-backed “open society” organizations, which further directed the money to progressive left-wing groups in the U.S.
This cozy wheel-of-fortune was threatened when Donald Trump became president. Trump genuinely desired improved relations with Russia and was not on the receiving end of laundered aid to Ukraine.
Hillary Clinton was supposed to continue the Obama policies, but she failed in the general election. Trump was a threat to everything the globalists, Democrats and pro-NATO elites had constructed in the 2010s.
The globalists wanted China and the U.S. to team up against Russia. Trump understood correctly that China was the main enemy and therefore a closer union between the U.S. and Russia was essential.
The elites’ efforts to derail Trump gave rise to the “Russia collusion” hoax. While no one disputes that Russia sought to sow confusion in the U.S. election in 2016, that’s something the Russians and their Soviet predecessors had been doing since 1917. By itself, little harm was done.
Yet, the elites seized on this to concoct a story of collusion between Russia and the Trump campaign. The real collusion was among Democrats, Ukrainians and Russians to discredit Trump.
It took the Robert Mueller investigation two years finally to conclude there was no collusion between Trump and the Russians. By then, the damage was done. It was politically toxic for Trump to reach out to the Russians. That would be spun by the media as more evidence of “collusion.”
Russian President Vladimir Putin (l.) has recently named a new Prime Minister, Mikhail Mishustin (r.). This is part of a complex government reorganization designed to extend Putin’s rule beyond existing term limits. This is a setback for democracy, but may be a plus for the economy because it adds stability and continuity to Putin’s programs.
This whirl of false charges, cover-ups, and deep state sabotage finally led to Trump’s impeachment on December 18, 2019.
Fortunately, the Senate impeachment trial may soon be behind us with Trump’s exoneration in hand (although new impeachment charges and false accusations cannot be ruled out).
Is the stage finally set for improved U.S.-Russia relations, relief from U.S. sanctions, and a significant increase in U.S. direct foreign investment in Russia?
Right now, my models are telling us that Russia is one of the most attractive targets for foreign investment in the world. Just because U.S. policymakers missed the boat does not mean that investors must do the same.
Russia is often denigrated by Wall Street analysts and mainstream economists who know little about the country. Russia is the world’s largest country by area and has the largest arsenal of nuclear weapons of any country in the world.
It has the world’s 11th largest economy at over $1.6 trillion in annual GDP, ahead of South Korea, Spain and Australia and not far behind Canada, Brazil and Italy.
It also is the world’s third largest producer of oil and related liquids, with output of 11.4 million barrels per day, about 11% of the world’s total. The U.S. (17.8 million b/d), Saudi Arabia (12.4 million b/d) and Russia combine to provide 41% of the world’s liquid fuels. The latter two countries effectively control the world’s oil price by agreeing on output quotas.
Russia has almost no external dollar-denominated debt and has a debt-to-GDP ratio of only 13.50% (the comparable ratio for the United States is 106%).
In short, Russia is too big and too powerful to ignore despite the derogatory and uninformed claims of globalists. Importantly, Russia is emerging from the oil price shock of 2014-2016 and is in a solid recovery.
The stage is now set for significant economic expansion as illustrated in the chart below from Moody’s Analytics:
This graphic analysis from Moody’s Analytics divides major economies into categories of Recovery, Expansion, Slowdown and Recession. Economies revolve clockwise through these four phases. The U.S. is in a Slowdown phase with some risk of Recession. Russia is in the Recovery phase heading toward Expansion. The Russian situation is the most attractive for investors because it offers cheap entry points with high returns as the Expansion phase begins.
Russia has also gone to great lengths to insulate itself from U.S. economic sanctions. Their reserves have recovered to the $500 billion level that existed before the 2014 oil price collapse with one important difference. The dollar component of reserves has shrunk substantially while the gold component has increased to over 20%.
With the recent surge in gold prices, Russia’s reserves get a significant boost (when expressed in dollars) because of the higher dollar value of the gold reserves. Gold cannot be hacked, frozen or seized, as is the case with digital dollar assets.
Russia’s fortunes have been improving not only because of low debt and higher gold prices but also because of higher oil prices. The country is poised for a strong expansion, even if U.S. hostility caused by the Democrats continues.
If Trump regains his footing after impeachment and wins a second term (which I expect), investors can expect warmer relations with Russia and an even more powerful Russian economic expansion than the one already underway.
Tyler Durden
Thu, 01/30/2020 – 20:20 - High Winds Knock Portion Of Trump's US-Mexico Border Wall Over
High Winds Knock Portion Of Trump’s US-Mexico Border Wall Over
A portion of President Trump’s $11 billion border wall with Mexico, or about $20 million per mile, blew over Wednesday from gusty winds, came crashing down on the Mexican side, reported CNN.
Agent Carlos Pitones of the Customs and Border Patrol (CBP) sector in El Centro, California, told CNN that 130 feet stretch of the wall in Calexico, California, fell on Wednesday after high winds were present in the area.
Pitones said the cause of the wall crashing down was due to freshly poured concrete not yet cured.
The National Weather Service (NWS) said gusts in Calexico were up to 40 mph Wednesday, which the video below shows the wall leaning against trees adjacent to a street in Mexicali, Mexico.
Trump border wall fell to the floor 29 january 2020 pic.twitter.com/PhF46R8PqC
— torressteel.official (@TorressteelO) January 29, 2020
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“We are grateful there was no property damage or injuries,” said Pitones.
CBP told USA Today in a statement that no property damage or injuries were seen during “this uncommon event.”
“The border wall system is imperative to securing the border and is what border patrol agents have asked for and need to maintain operational control of the southern border,” CBP said.
The agency said construction of the wall in Calexico would continue.
President Trump’s wall is expected to be completed in three phases.
Trump has so far allocated $11 billion to construct 576 miles of a new “border wall system.”
“You’re going to have a wall like no other. It’s going to be a powerful, terrific wall,” President Trump said at a rally in Milwaukee last week. “A very big and very powerful border wall is going up at a record speed, and we are fully financed now, isn’t that nice?”
By mid-January, the government had constructed 101 miles of the border wall.
Mexico has recently reported a 56% reduction in the number of undocumented migrants crossing the country, a sign that President Trump’s tough stance on Mexican President Andrés Manuel López Obrador (AMLO) has been working.
However, there’s a huge problem: the wall can’t prevent drug-smuggling tunnels that are all too common between California and Mexico.
The latest drug tunnel the CBP has discovered, measured a quarter-mile into the U.S. to San Diego and a half-mile into Mexico, to Tijuana.
CBP officials said the tunnel had a ventilation system, electricity, and even elevators.
Wall or no wall, it’s probably a good idea to have one, so if a zombie apocalypse unfolds, people with coronavirus in Mexico can’t easily cross the U.S. border.
Tyler Durden
Thu, 01/30/2020 – 20:00 - What Does Lowest Population Growth In US History Mean For Housing?
What Does Lowest Population Growth In US History Mean For Housing?
Authored by Chris Hailton via Econimica blog,
2019 saw US population growth at its lowest percentage level in US history aside from the pandemic years of 1918/1919 (when the Spanish flu took the lives of nearly 700,000 Americans). The 0.5% annual growth meant US population grew by approx. 1.55 million persons in 2019.
Today, I just wanted to focus on the implications of low population growth on the largest sector of the US economy, housing and in particular new housing starts. The chart below shows annual total US population growth in millions (red line, million), the next line is the US population growth among the under 70 year old population (yellow line, million), then annual housing starts (blue line, million), and finally the Federal Reserve set federal funds rate driving interest rates (black line, %).
Really take a minute to check to understand these relationships…its really important.
From 1960 to 2008, annual population growth (red line) varied from about 1.8 to 3.5 million a year and the vast majority of that growth came among the under 70 year old population (yellow line). During this nearly five decades, housing starts (blue line) varied from about 1 to 2 million units annually, with sharp inverse swings based on the cost of money represented by the changes in the federal funds rate (black line).
But starting in 2008, housing starts fell below 1 million units and would remain there through 2012 despite the cost of money (federal funds rate) sitting at zero for nearly a decade. The NAR and others suggest there is a housing shortage due to this period of significantly below trend housing starts…but if you happen to look at the red line (decelerating total population growth) and the yellow line (collapsing population growth among the under 70 year old population), perhaps something else is happening.
70+ year-old elderly folks have the highest home ownership rates, are least likely to undertake new loans, and have the lowest labor force participation rates among the adult population at something like 1 in 10 working versus 8 in 10 among 50 year-olds. In 2019, the 70+ population grew by about 1.3 million. Point is, 70+ year-olds are not net home buyers but net sellers as they pay down/pay off their mortgages, downsize, move to managed care, or pass away.
It is the annual growth of the under 70 year-old population that drives demand for new housing, that has high levels of employment, and the willingness to undertake long term mortgage debt. In 2019, the under 70 year-old population grew by less than 300 thousand. The 90%+ annual deceleration in the potential buyers versus a ten-fold rise in the annual growth of elderly has turned the housing market upside down.
But last year, more new homes were started than the total population increased…something that had not happened since the early 1970’s. The chart below shows annual starts as a percentage of annual population growth moving inverse the federal funds rate. The sharp increase in housing starts amid a population growth slowdown is definitely noteworthy.
While the total annual population growth is decelerating, all the deceleration is among the under 70 year-old population (declining births, declining immigration) while the 70+ year-old population growth is still accelerating. The chart below details the annual housing starts as a ratio of annual under 70 year-old population growth from 1960 through 2015. Nearly 40 years of interest rate cuts have mitigated the deceleration in housing starts as a percentage of under 70 year-old population growth, until…
That is until now…2018 and particularly 2019 saw new housing starts surge while population growth of the under 70 year old population took another leg down. The result was more than five new housing starts per every new under 70 year-old in the US…aka, the hockey stick chart below.
Now, go back and look at the first chart again. You will notice that for the whole of the 2020’s, what projected population growth there is, is among the 70+ year-old population and, so long as the declining birth rates / total births and decelerating immigration continue, we should expect little to no growth among home buyers. The idea that America needs more housing seems strange indeed. Far more realistic is that the 2020’s will see a period of replacement level new housing rather than outright growth. Of course, real estate is local. On a micro level, there is likely to be a surge of rural inventory, and inversely, increasingly tight urban inventory in select cities. This is due to a likely ongoing outflow of young adults from rural locales to select urban centers, in search of opportunity. Either way, the net picture is unchanged or even worsened as urban fertility and birth rates are even lower than those seen in rural areas.
Or, then again, maybe the Federal Reserve can just print new buyers…or add residential real estate to its already bloated balance sheet so America can keep on building…ever more…for ever fewer?
Tyler Durden
Thu, 01/30/2020 – 19:40 - Nordstrom Starts Selling Used Clothes To Broke Americans
Nordstrom Starts Selling Used Clothes To Broke Americans
Fashion retailer Nordstrom gets it: Americans are becoming poorer, and it’s time for it to capitalize on recommerce, otherwise known as reverse commerce, which basically means Nordstrom is going to sell secondhand clothing.
So, move over local consignment stores, and or Goodwill Industries, eBay, and The Salvation Army, there’s a new player in town, Nordstrom, that will jump into the recommerce industry on Jan. 31.
Nordstrom’s “See You Tomorrow” store will have a dedicated section at its New York flagship store, opens tomorrow, and will sell secondhand luxury clothes. There’s also going to be a section on the company’s website that will list a catalog of used clothing, the company said in press release, dated Jan. 30.
Nordstrom’s closet recommerce competitor will be The RealReal, an online and brick-and-mortar marketplace for authenticated luxury consignment, as the industry for used clothing increased to $28 billion in 2019.
Olivia Kim, vice president of creative projects for the retailer, said many of the brands Nordstrom carries would be resold through its “See You Tomorrow” shop.
“We want to provide a unique and elevated resale shopping experience that encourages a sense of discovery and provides access to the brands our customers know and love, while giving them a convenient opportunity to participate in the circular fashion economy,” Kim said
She said, “so many Americans are already engaged with recommerce, whether it’s rental or retail.”
She added that many of the items that will be carried at “See You Tomorrow” will be sourced from Nordstrom’s inventory of returned and damaged merchandise.
Nordstrom has partnered with Yerdle, which already handles resale for Eileen Fisher, Patagonia, and other top brands.
Yerdle is expected to clean and repair Nordstrom products, along with handling, inventory, processing and fulfillment.
Nordstrom’s resale items are expected to include “women’s apparel, women’s shoes, handbags, men’s apparel, accessories and shoes, children’s wear and a limited selection of jewelry and watches,” the retailer said.
Nordstrom is diving into the recommerce industry at a time when consumers are broke, heavily leverage with auto debt, credit cards, and student debt, but for some odd reason, are feeling very optimistic about life.
However, when the next recession strikes, consumers, who are already bound with insurmountable debts, will not enjoy the luxuries of purchasing new luxury goods and will have to opt for secondhand clothing at their local “See You Tomorrow.”
Tyler Durden
Thu, 01/30/2020 – 19:20 - 100,000 Chinese "Under Observation" As Coronavirus Deaths Soar; State Dept Issues "Do Not Travel" To China" Advisory
100,000 Chinese “Under Observation” As Coronavirus Deaths Soar; State Dept Issues “Do Not Travel” To China” Advisory
Summary:
- First human-to-human transmission confirmed in US
- 9,821 confirmed cases worldwide, 213 fatalities
- South Korea confirms first human-to-human transmission
- China reported largest one-day jump in fatalities on Wednesday with
- Hong Kong warns of surgical mask shortage
- Russia closes border
- 6,000 quarantined aboard Italian cruise ship
- Thailand leads with most cases outside China (14)
- Chinese national hospitalized and quarantined in York
- Virus arrives in India, Philippines
- Air France suspends flights to/from mainland
- IMF now monitoring crisis as economic fears grow
- State Department authorizes personnel to evacuate China
- WHO declares global pandemic
- American Airlines pilots union files lawsuit to end travel to China
- First 2 cases confirmed in Italy
- Germany confirms 5th case
- Turkish Airlines suspends China routes
* * *
Update (2100ET): Nearly two weeks since the start of the Coronavirus epidemic, which has now resulted in over 100,000 Chinese being placed under observation, and over 210 people dead, the US finally did the right thing when late on Thursday the U.S. State Department warned Americans not to travel to China because of the spreading coronavirus outbreak.
“Do not travel to China due to novel coronavirus first identified in Wuhan, China. On January 30, the World Health Organization has determined the rapidly spreading outbreak constitutes a Public Health Emergency of International Concern. Travelers should be prepared for travel restrictions to be put into effect with little or no advance notice. Commercial carriers have reduced or suspended routes to and from China.”
The new travel advisory was issued hours after the World Health Organization declared the outbreak a global health emergency. “Those currently in China should consider departing using commercial means,” the department said in the advisory.
In kneejerk response, US stock index futures erased a gain of as much as 0.2%, with March Emini contracts little changed as of 9pmET, confirming the pattern we noted earlier.
Stocks ramping on WHO promoting tourism to China, before reversing after China announces over 10,000 cases at 6pm
— zerohedge (@zerohedge) January 30, 2020
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* * *
Update (1900ET): The NHC is reporting a total of 9,692 coronavirus cases across China, up from 7,711 yesterday, an increase of 1,982 cases, and with 15,238 new suspected cases, up by over 3,000 from 12,167 yesterday, there are now 25,060 probable cases. Additionally 213 total deaths have been confirmed, up from 170, the biggest daily increase so far.
A total of 102,427 people are now under medical observation in China.
Outside of China 102 international cases were reported…
… including 28 cases across Hong Kong, Taiwan and Macau. This brings the total confirmed worldwide to 9,822.
Putting this in the context of the deadly SARS epidemic, the coronavirus pandemic has now officially exceeded SARS in cumulative cases in just two weeks.
* * *
Update (1730ET): Hubei Province has just confirmed another 42 coronavirus-related deaths for Thursday, another huge jump on par with some of the announcements from earlier in the week.
At present, 5486 cases are still being treated in the hospital (among them: 804 cases of severe cases and 290 cases of critical cases). Hubei diagnosed another 1,220 cases, bringing the total number for both China and the world above 9,000, well above SARS global total.
Here’s the full statement, translated to English via Google:
From 00:00 to 2400 on January 30, 2020 , Hubei Province newly added 1220 cases of pneumonia infected by new type of coronavirus (including: 378 in Wuhan, 55 in Huangshi, 31 in Shiyan, 123 in Xiangyang, Yichang 50 cases, 70 cases in Jingzhou City, 36 cases in Jingmen City, 66 cases in Ezhou City, 142 cases in Xiaogan City, 77 cases in Huanggang City, 36 cases in Xianning City, 85 cases in Suizhou City, 9 cases in Enshi Prefecture, 35 cases in Xiantao City, and Tianmen City 23 cases, 2 cases in Qianjiang City, and 2 cases in Shennongjia Forest District). There were 42 new deaths in the province (among them: 30 in Wuhan, 1 in Jingmen, 4 in Ezhou, 3 in Xiaogan, 1 in Xiantao, and 3 in Tianmen). There were 26 new hospital discharges (including: 21 in Wuhan, 2 in Xiaogan, 1 in Huanggang, and 2 in Shennongjia Forest District).
As of 24:00 on January 30, 2020, Hubei Province has reported a total of 5806 cases of pneumonia caused by new coronavirus infections (including 2639 cases in Wuhan, 168 in Huangshi, 150 in Shiyan, 286 in Xiangyang, and 167 in Yichang. 221 cases in Jingzhou, 227 in Jingmen, 189 in Ezhou, 541 in Xiaogan, 573 in Huanggang, 166 in Xianning, 228 in Suizhou, 75 in Enshi, 90 in Xiantao, and 67 in Tianmen , 12 cases in Qianjiang City, 7 cases in Shennongjia Forest District), 116 cases have been discharged and 204 deaths (including: 159 cases in Wuhan, 1 case in Huangshi City, 1 case in Yichang City, 3 cases in Jingzhou City, and 5 cases in Jingmen City). (6 cases in Ezhou City, 9 cases in Xiaogan City, 12 cases in Huanggang City, 1 case in Xiantao City, 6 cases in Tianmen City, and 1 case in Qianjiang City). At present, 5486 cases are still being treated in the hospital (among them: 804 cases of severe cases and 290 cases of critical cases), and they are all treated in isolation at designated medical institutions. A total of 35,144 close contacts have been tracked, and 32,340 people are still under medical observation.
Meanwhile, the Chinese ambassador to the UN is holding a press briefing, as Turkish Airlines becomes the latest to suspend flights to China (including routes to Beijing, Guangzhou, Shanghai and Xian).
In other news, India TV is reporting a suspected coronavirus-related death, what would be the first outside China. A 22-year-old man from Tripura died in a Malaysian Hospital Thursday, according to family sources. However, this has not yet been confirmed. Earlier reports about a Thai woman dying of nCoV in India were likewise never confirmed.
* * *
Update (1620ET): The first two coronavirus cases have been confirmed in Italy. No word yet if there’s any connection to the cruise ship that was quarantined earlier on Thursday (health officials gave it the all-clear a few hours ago). But PM Conte has just blocked air traffic with China.
- ITALY’S PM CONTE SAYS FIRST TWO CORONAVIRUS CASES CONFIRMED IN ITALY
And we thought the WHO just said not to worry, because China has it all under control?
The Italian Prime Minister just announced that 2 cases of #coronavirus in Italy are confirmed, Chinese tourists, and that the Health Minister ordered to close air traffic from Italy to China.
It can be the the first EU country to do thathttps://t.co/HdsWCuDMll— Ugo Mendes Donelli (@hugowiz) January 30, 2020
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German authorities just confirmed a fifth case of the virus: here are the latest numbers on confirmed cases & deaths.
Italy has suspended air traffic. We can’t help but wonder: What is President Trump waiting for? According to Pompeo, the option is ‘under consideration.’
* * *
Update (1520ET): Just as the WHO declared the coronavirus outbreak a global emergency, the State Department authorized its personnel in China to evacuate, somewhat undercutting the WHO’s optimistic rhetoric.
In spite of the WHO’s insistence that cutting travel links with China really isn’t necessary, the American Airlines pilots union has filed a lawsuit in Dallas seeking to force the airline to cease all travel to and from China. And the Health Ministry of Trinidad has temporarily barred Chinese tourists.
* * *
Update (12:40ET): Rumors that surfaced in recent days have been confirmed: the CDC said Thursday afternoon they have confirmed human-to-human transmission of the coronavirus in Chicago – meaning the US has now joined Germany, Japan, South Korea and Thailand in having confirmed human-to-human transmission outside China.
One of the five prior cases confirmed by the CDC apparently managed to pass the virus to her husband. The new patient is the spouse of the woman being treated in Chicago. It appears there are now six cases confirmed in the US.
The risk of infection is low, CDC said, and it’s not making recommendations to cancel plans or activities, and doesn’t recommend the need to wear facemasks at this time. The CDC still hasn’t confirmed whether carriers of the virus are contagious before showing symptoms.
Though the US is already planning to evacuate even more American citizens from Wuhan, The notion that we won’t import at least one case of the virus through this program seems unrealistic. Meanwhile, the total number of cases worldwide has eclipsed the total from the SARS outbreak, which lasted for nearly a year.
Stocks legged lower on the headline as investors grappled with the notion that the WHO now has no choice but to declare a global pandemic.
During the SARS outbreak in 2003, there were zero cases of human-to-human transmission in the US.
Over in France, a doctor has been hospitalized after treating the country’s fifth coronavirus patient.
#BREAKING 🇨🇵 #FRANCE
A doctor at #Pompidou hospital is currently hospitalized because he is suspected of carrying #coronavirus.He was in contact with the 5th patient who contracted the coronavirus in France.#nCoV2019 #WuhanCoronavirus #CoronavirusOutbreak pic.twitter.com/vKBf3O0tGe
— ISCResearch (@ISCResearch) January 30, 2020
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The WHO has scheduled its next press conference for Thursday.
Over in France, authorities have confirmed a 6th case of the virus, while Hong Kong has confirmed two more cases, bringing the total to 13.
* * *
Update (1120ET): CNBC’s Eunice Yoon is back with an update on how the coronavirus outbreak is impacting the global supply chain.
#WuhanVirus impact on global supply chain. Closed until..
PROVINCES
Feb 2: Jilin
Feb 9: Anhui, Fujian, Guangdong, Jiangsu, Jiangxi, Liaoning, Inner Mongolia, Shandong, Yunnan, Zhejiang
Feb 10: Heilongjiang
Feb 13: HubeiCITIES
Feb 8: Suzhou
Feb 9: Beijing, Chongqing, Shanghai— Eunice Yoon (@onlyyoontv) January 30, 2020
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Beijing expected to announce 2020 growth target of “around 6%” at March meeting. But Mizuho sees 5.6% as possibility. Fitch says maybe 5.4%. @TheEIU_China sees slowdown as weak as 4.4%. #China relies more on consumption compared to SARS era. Exports less likely to save the day.
— Eunice Yoon (@onlyyoontv) January 30, 2020
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Confirmed #WuhanCoronavirus cases far exceeds that of SARS in 2003. Hubei Province added another 300 cases. Global total now at 8,233 with 171 dead. Death rate not as high as SARS but prompting economists to warn of lower #China growth.
— Eunice Yoon (@onlyyoontv) January 30, 2020
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* * *
Update (1015ET): Bloomberg reported that the number of total cases in China has climbed past 8,000, the number of cases from the SARS outbreak (which lasted for months). However, that figure hasn’t been confirmed anywhere else.
Instead, SCMP says the number of confirmed cases hasn’t budged since early Thursday morning. Meanwhile, Australia reported its eighth coronavirus case on Thursday, a 42-year-old Chinese national from Wuhan tested positive for the virus and was isolated in Gold Coast University Hospital. The Australian government is also in talks with Beijing to evacuate its citizens.
As we mentioned earlier, Tang Zhihong, the head of the health commission of the central Chinese city of Huanggang, was sacked on Thursday night, according to the city’s Communist Party committee. This has morphed into a local scandal, as the scapegoating of local officials continues.
2019-nCoV compared to SARS & Swine Flu. https://t.co/0mOfIQirjx pic.twitter.com/UWLIluh3ht
— Tuur Demeester (@TuurDemeester) January 30, 2020
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Tang was embarrassed when CCTV aired footage of him failing to answer key questions at a press conference. Huanggang, near the Hubei provincial capital of Wuhan, has 324 confirmed cases of the illness, as of Thursday, the second-largest toll after Wuhan.
As worries about the economic fallout intensify, the IMF said it has started working with the WHO to monitor the crisis. The IMF Direct impact of the coronavirus outbreak is mostly on demand as people stay home during a busy time for retail and tourism, while on supply side there have been transport stoppages and workers idled, International Monetary Fund spokesman Gerry Rice told reporters in Washington. Direct impact of the coronavirus outbreak is mostly on demand, as the outbreak overshadows the holiday season of leisure consumption, while on the supply side, whole factories have been idled.
* * *
Update (1000ET): Italians are breathing a sigh of relief. Initial tests suggest there is no coronavirus aboard the quarantined cruise ship. A 54-year-old woman from Macau had a fever and respiratory symptoms that were suspiciously close to the virus’s symptoms. She has since been kept in isolation on board in the port of Civitavecchia, near Rome. Initial tests have cleared her, but the final results aren’t expected until later in the day.
In the US, American Airlines has extended cancellations of passenger flights between the US and China through March 28.
After closing its border with China, Russia is reportedly weighing the cancellation of the Sochi Economic Forum, which is slated to begin Feb. 12.
* * *
Update (0920ET): Air France has acquiesced to its employees demands and confirmed that it’s suspending all flights to and from the Chinese mainland, joining a host of other airlines who have done the same thing.
* * *
Update (0855ET): The UK is reporting shortages of facemasks amid several virus scares, the Guardian reports. Shortages have also been reported in Hong Kong, and across China.
On the Boots website, a six-pack of “safe & sound” surgical face masks is sold out, with a note saying they will not be receiving any further stock.
Another product on the Boots website, a box of 50 masks, is also sold out and carries the same message about not being restocked.
Boots said surgical face masks are available to order in stores as a special line from the pharmacy counter, adding that they are “working to make additional stock available for customers to purchase in store and on boots.com which we hope will land over the next week”.
A branch of B&Q in London appeared to be low on stocks of face masks, with racks empty on Wednesday evening.
Meanwhile, on amazon.co.uk, a pack of 12 “anti virus” flu surgical face masks is sold out, with the online retailer saying they do not know when, or if, the item will be back in stock, although there are other masks available on the site.
-Source: Guardian
And for those who can’t get their hands on a mask – we suggest you improvise.
From WeChat, the cutest mask. He’s 95. He lives so long for a reason~ pic.twitter.com/qHUeDICyac
— Li Yuan (@LiYuan6) January 30, 2020
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Meanwhile, Vietnam said it will stop issuing visas for Chinese tourists, as have the Philippines and Russia. In China, Beijing has removed the city health commissioner in Huanggang. We suspect he may never be heard from again.
* * *
Update (0816ET): Hubei has reported 317 new cases as of noon Thursday local time, according to local Party Secretary Jiang Chaoliang. Hubei is the province at the epicenter of the outbreak: the virus orginated in the province’s capital, Wuhan. The most recent count put the number of confirmed cases at 7,921 and the death toll steady at 170.
Hong Kong is reportedly struggling with a shortage of face masks. Chief Secretary Matthew Cheung said the government had bought 13 million masks, but public hospitals have been using 5x to 6x as many as normal. Hong Kong is stepping up local production at correctional facilities to keep up with demand, and another 24 million should be available at retail outlets soon
* * *
Update (0800ET): Has the virus come to Yorkshire?
A Chinese national has been rushed to a hospital after taking ill at a hospital in York….
More on this as we get it – Chinese national taken to hospital after taken ill at York hotel https://t.co/gN9QGJzMmp
— Chloe Laversuch (@ChloeLaversuch) January 30, 2020
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No cases of the virus have been confirmed in the UK so far, though there have been a handful of scares.
Foreign Secretary Dominic Raab said Thursday that the first British evacuation flight could take off from Wuhan as soon as Thursday evening UK time. The flight was supposed to leave Thursday morning, but there was a delay as Chinese officials were slow to grant permission for takeoff.
As viral outbreak turns neighbors against each other and inspired a wave of suspicion in towns and cities across China, some have chosen to seek comfort by playing children’s games.
While many are stuck at home in China because of the #coronavirus, some are finding comfort in humor or children’s games at an otherwise anxious time pic.twitter.com/wVNbs6aYco
— QuickTake by Bloomberg (@QuickTake) January 30, 2020
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* * *
Update (0745ET): South Korea just joined Japan, Thailand and Germany (and possibly the US) in confirming a case of human-to-human viral transmission that occurred within its borders, involving one individual who hasn’t recently traveled to China.
South Korea’s Centers for Disease Control and Prevention confirmed two more cases Thursday, bringing the total to six. However, the sixth patient to be confirmed, a 56-year-old South Korean man, was diagnosed after “coming in contact with a third patient” inside South Korea, according to CNA.
He has been quarantined at a hospital in Seoul. The other five were diagnosed after returning from Wuhan, the city where the virus first emerged, which is now under a draconian government-imposed lockdown.
* * *
Update (0725ET): Following several unconfirmed scares, India has confirmed its first case of the novel coronavirus. That means all three of the world’s most populous countries have now confirmed at least one case of the virus.
And that list could soon expand. Brazil, the world’s fifth most-populous country, reported three suspected cases yesterday. Malaysia has confirmed at least 8 cases. Reports that a Thai woman died of the virus on Kolkata were never confirmed.
First case of #coronavirus in India. One positive case of Novel Coronavirus patient, of a student studying in Wuhan University, has been reported in Kerala. The patient has tested positive for Novel Coronavirus and is in isolation in the hospital: @MoHFW_INDIA @IndianExpress
— abantika ghosh (@abantika77) January 30, 2020
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Meanwhile, here’s the most up-to-date map we could find:
Earlier, the White House said it had launched a task force that will meet daily to oversee the response to the coronavirus outreak that has resulted in at least five confirmed cases in the US, NBC reports. However, an expert who appeared on CNBC Thursday morning pointed out that the administration is a little behind the 8-ball.
If the administration wasn’t so bogged down with impeachment, maybe Trump would have more time to focus on the virus response?
“Let’s remember we have fewer than four cases in the United States, and they’re concentrated in four states,” he said. The maximum country is Thailand, with 14 cases, he said – and the US is nowhere near that.
Reports out of Atlanta claimed that more than 20 passengers had been quarantined at Hartsfield-Jackson airport as they undergo advanced screening for the virus.
In other news: The Philippines has also reported its first case: A 38-year-old female Chinese patient who arrived from Wuhan via Hong Kong on Jan. 21.
* * *
Update (0710ET): Airline employees are putting their feet down and demanding that their bosses halt flights to China, as more than a dozen airlines around the world have already done.
Air France cabin crew unions have demanded Air France stop flying to China, Reuters reports.
“Air France is monitoring the rapidly evolving situation in real time. The health and safety of its crew remain the absolute priority,” said Air France-KLM.
We’ve heard whispers of employee discontent before. But expect to see more to forcefully object.
* * *
National health officials in Beijing announced their biggest one-day jump in virus deaths and hundreds of new cases early Thursday morning (nearly 8,000 have been sickened, another 12,000 cases are suspected, and roughly 170 have died), but since then, things have been quiet.
If the recent past is any guide, this would suggest another dump of new cases and deaths is in the offing.
Three new cases were confirmed in Vietnam overnight. But in terms of news flow, most of the drama during the early hours of Thursday centered around Italy and Russia.
A map of cases hasn’t yet reflected the suspected cases in Italy.
With the WHO set to reconvene its emergency committee in Geneva on Thursday for the third time in a week, experts are calling on the supra-national organization to label the outbreak a “public health emergency of international concern,” or PHEIC – the official designation of a global pandemic.
The 16 independent experts on the WHO’s emergency committee will advise Director-General Tedros Adhanom Ghebreyesus on the decision and give recommendations for managing the outbreak. Earlier this week, Tedros met Chinese President Xi Jinping in Beijing earlier in the week to discuss the situation. Twice last week, the WHO decided to hold off on declaring a public health emergency, saying it was “too soon,” according to the SCMP.
Hitoshi Oshitani, a former regional adviser on communicable disease surveillance and response at the WHO’s Western Pacific office, told the SCMP that there is an “imminent risk” of a dangerous global outbreak.
“I think the WHO should have declared a public health emergency of international concern earlier. They are supposed to declare PHEIC based on a risk of international spread. There was already significant risk of international spread one week ago,” Oshitani said.
Oshitani added that controlling this new coronavirus is proving more difficult than suppressing the 2003 SARS outbreak, largely because the virus can spread via individuals who are infected, but exhibit few – or no – symptoms.
“For Sars, patients were infectious only when they developed very severe illness. But for this virus, patients are likely to be infectious even during the incubation period. If so, rapid isolation is not enough to contain the virus,” he said.
SARS infected 8,000 people and killed 813 worldwide. The coronavirus outbreak has already surpassed SARS in terms of the number of cases in China. Globally, the virus has already effectively tied SARS for the number of confirmed cases, though if skeptical epidemiologists are correct, the true number of cases has already far surpassed the total for SARs.
A number of evacuation missions have been completed, as the US and Japan have flown citizens trapped in Wuhan to safety. However, Japanese officials discovered that several citizens on the flight were infected with the virus, leading to a mass quarantine. UK officials said that citizens evacuated from Wuhan must agree to spend two weeks in quarantine after returning to the UK.
About 6,000 passengers and crew aboard the cruise ship “Costa Smeralda,” owned by the Carnival Corporation, have been confined to the vessel on Thursday amid new fears that two Chinese passengers are suspected of having coronavirus, reported Reuters.
Two Chinese tourists, traveling from Hong Hong and, originally, from Macau, have been placed in “isolation in separate rooms of the ship’s sanitary space,” said local media outlet, ANSA.
Coppia di cinesi con febbre alta su nave crociera a #Civitavecchia, bloccati seimila passeggeri: sospetti per #Coronavirus, in isolamento nell’ospedale di bordo, raggiunti dai medici dello#Spallanzani per realizzare i test#ioseguoTgr @TgrRaiLazio pic.twitter.com/ZOZXihg3G6
— Tgr Rai (@TgrRai) January 30, 2020
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The tourist arrived in Italy on Jan. 25 and boarded the vessel in the port of Savona in Italy. The two have come down with high fevers and breathing problems.
“The cabin of the Hong Kong couple on the ship has been isolated and they are closed there with the doctors. They told us that it is the woman who has a very high fever, while her husband is visiting him as a precaution. We arrived in the morning, returning from Palma de Mallorca. Of course, we are a bit worried. From the ship, apart from the doctors, no one goes down and no one goes up. Someone, who has only the flu, remained in the cabin. It is a vacation that risks ending like a nightmare, we hope to go down soon,” a passenger of the ship told ANSA.
The cruise ship has already moored in Marseilles in France and several Spanish ports this week before docking on Thursday at Civitavecchia, north of Rome.
Reuters notes that all passengers have been confined to the ship as tests are underway to determine if the two Chinese tourists have coronavirus.
Carnival shares plunged as much as 6% in pre-market Thursday after the ANSA report.
Now the cruise company has a difficult decision to make: those infected with coronavirus may not exhibit symptoms of the virus during the 7-10 day incubation period but can infect others at high rates. This means if the Chinese tourist test positive, they might have infected the entire ship. That many cases will likely overwhelm Italy’s ability to rapidly respond.
Here’s a live view of the cruise ship docked at Civitavecchia.
#Coronavirus Update : The Cruise ship Costa Smeralda in #Civitavecchia , #Italy with around 6,000 people on board is on lockdown . There are fears a Chinese couple have the virus. Passengers are not allowed to leave the ship.
Live Video : https://t.co/5DBIPgXWEW— Shark NewsWires (@SharkNewsWires) January 30, 2020
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Russia’s newly appointed Prime Minister Mikhail Mishustin on Thursday signed an order to close the country’s 2,600m mile border with the Far East to prevent the spread of coronavirus. Russia joins North Korea, becoming the second country to completely shutter its border with the world’s second-largest economy. Although Russia hasn’t provided details about the plan, Russia also border China, Japan and North Korea along the Far East.
Mishustin has also asked Deputy Prime Minister Tatyana Golikova to inform the population on a daily basis about the current situation and preventive measures, according to the Russian press.
Both Russia and the Czech Republic have decided to suspend the granting of visas to Chinese.
Meanwhile, villages and apartment complexes across China are “taking the fight against a deadly viral epidemic into their own hands,” according to AFP.
Some areas are starting to look like something out of a sectarian conflict, complete with check points and makeshift barricades. Groups of locals have constructed makeshift barricades across access roads to keep potentially-infected strangers out.
More holiday extensions have been reported across China as economists expect that most of the country’s economy will be shuttered well into February. Bloomberg reported that at least one Chinese city and several provinces have extended the Lunar New Year holiday beyond Feb. 2 in an effort to control the spread of the virus. Shanghai, the autonomous region of Inner Mongolia and provinces of Guangdong, Zhejiang, Jiangsu have suspended business until least Feb. 10. Hubei province said its holiday will continue until Valentine’s Day.
In one residential compound in Beijing, “a motley stack of shared bicycles have been haphazardly woven together and wired to a wooden ladder, blocking a side gate and forcing visitors to register with guards at the main entrance.”
With more than 50 million people still on lockdown, resentment against the ruling party has intensified, and more Chinese are speaking out on social media, according to the NYT: “We gave up our rights in exchange for protection,” the user wrote. “But what kind of protection is it? Where will our long-lasting political apathy lead us?” That post was shared more than 7,000 times.
Tyler Durden
Thu, 01/30/2020 – 19:08 - The Oil Industry's Radioactive Secret
The Oil Industry’s Radioactive Secret
Authored by Nick Cunningham via OilPrice.com,
“All oil-field workers are radiation workers.”
That quote comes from a blockbuster investigation by Justin Nobel writing in Rolling Stone, who has spent more than a year and a half researching and reporting on radioactivity in fracking waste.
When a well is drilled, it produces a ton of brine, a salty substance that comes out of the ground. Shale wells can produce as much as ten times more brine than they do oil and gas. While hydrocarbons prove to be useful, the brine needs to be hauled somewhere for disposal. Often it is reinjected into disposal wells, or, in some cases it is sent to water treatment plants.
The problem is that the brine can be radioactive. As Nobel writes in Rolling Stone, radioactive brine may be dramatically increasing the cancer risk for people who come in contact with it. The workers who handle the waste are most obviously at risk. But there are plenty of others. The brine is used for de-icing roads, so municipalities are essentially spreading radioactivity all over roads in various parts of the country.
Old oilfield equipment is also repurposed. Rolling Stone spoke with a Louisiana inspector who saw a child sitting on a fence that was so radioactive that someone might receive a full year’s radiation dose in a single hour.
The oil and gas industry dismisses the risk of radioactivity in the brine, which is naturally occurring, as not something that anybody should be worrying about. However, some of the experts that Nobel interviewed argue otherwise.
First of all, the notion that just because something exists naturally in the world somehow makes it benign, is odd.
“Arsenic is completely natural, but you probably wouldn’t let me put arsenic in your school lunch,” one nuclear-forensics scientist told Rolling Stone.
Second, the industry is barley regulated, if at all, when it comes to handling radioactive substances. Officials at EPA and the Nuclear Regulatory Commission sounded perplexed when Nobel presented questions to them about the risk, each indicating that they were not responsible for regulating radioactivity in the oil and gas industry.
Nobel profiled several people who have come in contact with brine and have suffered from an array of worrying health problems.
“The workers are going to be the canaries,” Raina Rippel of the Southwest Pennsylvania Environmental Health Project, told Rolling Stone.
“The radioactivity issue is not something we have adequately unpacked. Our elected leaders and public-health officials don’t have the knowledge to convey we are safe.”
This is not just an environmental story or a public health story, but it could also be a financial one. This is a whole aspect of the oil and gas industry that is mostly unregulated, underreported and largely unknown to the public. And it could yet turn into a massive liability for the industry if local, state or the federal government ever decided to get serious about it.
The industry would be directly impacted if it had to pay for remediation somehow, or even if the standards on the disposal of toxic brine were tightened up. It could spell financial “disaster” for oil and gas drillers if the EPA began regulating brine as a hazardous waste, one legal scholar told Rolling Stone. Reckoning with the public health fallout from radiation is not something anybody seems willing to take on at the moment.
But as Rolling Stone notes, public awareness of the problem itself could be a big problem for the industry. Oil and gas is already starting to see its “social license to operate” erode over climate change concerns. But the threat from climate change is diffuse in both space and time. The damage from fossil fuels is somewhat abstract in that sense.
In contrast, the extraction of toxic radioactive waste from beneath the earth, and then spreading it on roads, for example, is arguably more menacing. Or, at the very least, the direct health threat to the public is easier to understand. Certain types of cancers are cropping up, and scientists say there is a lot of evidence that points in the direction of exposure to brine and proximity to other oil and gas processes.
It seems as if the unconventional oil and gas industry has been around forever, as if it’s a fact of life that everyone has to live with. But the story of fracking is only a little over a decade old, and with each passing year the science surrounding the health risks grows more damning. Some presidential candidates are already calling for a ban on fracking. As the evidence of radioactivity becomes more known, the momentum for a crackdown on the industry could continue to grow.
Tyler Durden
Thu, 01/30/2020 – 19:00 - Men More Prone To Coronavirus Infection Than Women, Study Finds
Men More Prone To Coronavirus Infection Than Women, Study Finds
The medical journal ‘The Lancet’ has published several pieces of cutting-edge research about the coronavirus, including the first reports that infected individuals can become contagious before symptoms appear. Now, the journal is one-upping itself by publishing research showing that men are more susceptible to the coronavirus than women.
According to a study of 99 patients treated in Wuhan’s Jinyintan Hospital, along with researchers from Shanghai Jiao Tong University and Ruijin Hospital in Shanghai, men – particularly those with preexisting health problems – are more prone to the virus. It confirmed a similar finding from an earlier study.
The study also warned – somewhat unnecessarily – that early identification and treatment of the pneumonia-like illness was important, since complications like organ failure are common. So far, the virus has killed more than 170 people, all of them in China.
Of the patients studied by the researchers, more than half were infected in “clusters”, a sign of just how rapidly the virus can jump from an infected person to a non-infected person.
“We observed a greater number of men than women in the 99 cases of 2019-nCoV infection. Mers-CoV and Sars-CoV have also been found to infect more males than females,” the study said, referring to Middle East respiratory syndrome and severe acute respiratory syndrome, which are also coronaviruses.
“The reduced susceptibility of females to viral infections could be attributed to the protection from X chromosome and sex hormones, which play an important role in innate and adaptive immunity,” it said.
Another alarming finding from the study: The mortality rate among the group studied was 11%. While that number is well above the 2%-3% official death toll, other epidemiologists have suggested that the true death toll for the virus is closer to 11%.
The study also offered a glimpse of the virus’s more serious symptoms. One-third of the patients studied developed organ failure and other complications. Some 17% developed acute respiratory distress syndrome.
Given the potential consequences should the virus be left untreated, seeking care early after symptoms emerge is crucial, the researchers said. Of course, that doesn’t bode well for people in Wuhan who have reportedly been turned away from overcrowded hospitals.
As researchers debate the genesis of the virus, a separate study of nine coronavirus patients published in The Lancet on Wednesday found that only one of them had not been to the Hunan seafood market in Wuhan where the virus has been traced to the market’s illegal trade in wild animals. Many of them worked at the market.
And with that, the ‘bat soup’ theory lives on.
Tyler Durden
Thu, 01/30/2020 – 18:40 - Chicago Police Are Using A Facial Recognition Program That Scans Billions Of Facebook Photos
Chicago Police Are Using A Facial Recognition Program That Scans Billions Of Facebook Photos
Authored by Emma Fiala via TheMindUnleashed.com,
Manhattan-based Clearview AI is collecting data from unsuspecting social media users and the Chicago Police Department (CPD) is using the controversial facial recognition tool to pinpoint the identity of unknown suspects, reads a report from the Chicago Sun-Times.
And according to a bombshell New York Times report, it is also being used by the FBI and the Department of Homeland Security.
“Until this week, I had not heard of Clearview AI,” Gurbir Grewal, New Jersey’s attorney general, said in an interview. “I was troubled.”
Read the full investigation on Clearview AI from @kashhill: https://t.co/3jOFOxzs5X
— The New York Times (@nytimes) January 25, 2020
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The software’s creator, Hoan Ton-That, maintains that it is purely “an after-the-fact research tool for law enforcement, not a surveillance system or a consumer application.” However, privacy advocates are saying this technology is so intrusive and ripe for abuse its use should be immediately halted. And earlier this month, a lawsuit was filed in federal court seeking to do just that.
Chicago attorney Scott Drury who filed the lawsuit describes CPD’s signing of a two-year, $49,875 contract with Illinois tech firm CDW Government to use Clearview AI’s software as “frightening.”
Conversely, Chicago police spokesman Anthony Guglielmi explains:
“Our obligation is to find those individuals that hurt other people and bring them to justice. And we want to be able to use every tool available to be able to perform that function, but we want to be able to do so responsibly.”
According to police, some CPD officials at the Crime Prevention and Information Center used the software for two months on a trial basis prior to the signing of the contract in January.
Despite the two month trial and the contract having been signed for approximately one month, CPD spokesman Howard Ludwig has declined to explain if and when Clearview AI has been used by the department thus far. Ludgwig explained:
“Any information about ongoing investigations can only come from cases that have been thoroughly adjudicated. We haven’t had Clearview long enough for any of the cases to have gone through the courts.”
Clearview AI’s database includes three billion photos taken from social media and network platforms such as Facebook, YouTube, and Twitter. The software searches its massive database for matches after users, including CPD, upload a photo of a suspect. The user is then provided with links for each image returned in the search that the company once told Green Bay police to “run wild” with in a marketing email.
Ton-That told the Sun-Times, “Our software links to publicly available web pages, not any private data.” It is clear he doesn’t seem to think the software poses any problems. But just this month, New Jersey’s attorney general Gurbir Grewal “put a moratorium on Clearview AI’s chilling, unregulated facial recognition software.”
BREAKING: @NewJerseyOAG put a moratorium on Clearview AI’s chilling, unregulated facial recognition software.
It scraped 3 billion photos online, including from social media, into an index of names + faces for police department subscribers.
This step is unequivocally good news.
— ACLU of New Jersey (@ACLUNJ) January 24, 2020
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The ACLU of New Jersey responded to the move in a tweet last Friday:
“Technology like this opens a Pandora’s Box for constant warrantless searches, pretty much of anyone with a photo and name online.
It’s a tool that could make an already-unequal criminal justice system truly dystopian.
New Jersey is right to slam this Pandora’s Box shut.”
Technology like this opens a Pandora’s Box for constant warrantless searches, pretty much of anyone with a photo and name online.
It’s a tool that could make an already-unequal criminal justice system truly dystopian.
New Jersey is right to slam this Pandora’s Box shut.
— ACLU of New Jersey (@ACLUNJ) January 24, 2020
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The ACLU also rightfully pointed out that tendency of facial recognition technology to have a bias against “people of color, women, and non-binary people.” In fact, as TMU has previously reported, self-driving cars are less likely to detect black people and artificial intelligence (AI) is sending the wrong people to jail.
Critics of Clearview AI and facial recognition software extend far beyond those involved in the lawsuit mentioned above and the ACLU of New Jersey. In what is the one of the biggest efforts to date in the battle against the use of facial recognition technologies, 40 organizations signed a letter to the Department of Homeland Security’s Privacy and Civil Liberties Oversight Board calling for the banning of the U.S. government’s use of such technology “pending further review.” The letter notes that this technology could be exploited and used to “control minority populations and limit dissent.”
However, as Fast Company points out, not everyone feels the same. In fact, some view actions like the letter mentioned above “an overreaction.”
Jon Gacek, head of government, legal, and compliance for Veritone—a company that provides technology like Clearview AI for law enforcement in both Europe and the U.S.—says all the software does is use “technology to do what police already do, except far faster and at less cost.”
Twitter responded to the bombshell NYT report by sending a letter to Clearview AI last week. In a follow-up report, the NYT explained:
“Twitter sent a letter this week to the small start-up company, Clearview AI, demanding that it stop taking photos and any other data from the social media website “for any reason” and delete any data that it previously collected, a Twitter spokeswoman said. The cease-and-desist letter, sent on Tuesday, accused Clearview of violating Twitter’s policies.”
While those concerned with privacy are typically focused on their photos and data being used by social media companies for profit, the situation with Clearview AI is an excellent reminder that what we post online generally can and will be used in ways we do not consent to despite our best efforts to keep up with Terms of Service updates and checking as many “opt-out” boxes as possible.
Tyler Durden
Thu, 01/30/2020 – 18:20 - Carter Page Sues DNC Over Steele Dossier In "Opening Salvo"
Carter Page Sues DNC Over Steele Dossier In “Opening Salvo”
Carter Page is suing the DNC and the Perkins Coie law firm for their roles in funding the infamous Steele dossier, which was used as the foundation for controversial surveillance warrants used by the Obama administration to spy on him during and after the 2016 US election.
The former Trump campaign adviser filed a lawsuit Thursday in the Northern District of Illinois’ Eastern Division, which his attorneys described as the “first of multiple actions in the wake of historic” Foreign Intelligence Surveillance Act (FISA) abuse, according to Fox News.
“Defendants developed a dossier replete with falsehoods about numerous individuals associated with the Trump campaign—especially Dr. Page. Defendants then sought to tarnish the Trump campaign and its affiliates (including Dr. Page) by publicizing this false information,” reads the lawsuit, which adds “Even the DOJ and the FISC have recognized that the false information spread by Defendants led to invalid FISA warrants against Dr. Page.“
Justice Department Inspector General Michael Horowitz announced in a December report that the FBI made repeated errors and misrepresentations to the FISA court in the agency’s ham-handed efforts to surveil Page and those in his orbit in 2016 and 2017.
Horowitz confirmed that the FBI’s FISA applications to monitor Page heavily relied on the dossier and news reports rooted in Steele’s unverified research.
Just last week, the FISC released a newly declassified summary of a Justice Department assessment revealing at least two of the FBI’s surveillance applications to monitor Page lacked probable cause. -Fox News
“This is a first step to ensure that the full extent of the FISA abuse that has occurred during the last few years is exposed and remedied,” said attorney John Pierce on Thursday, adding “Defendants and those they worked with inside the federal government did not and will not succeed in making America a surveillance state.”
“This is only the first salvo. We will follow the evidence wherever it leads, no matter how high. … The rule of law will prevail.“
Page first filed a defamation suit on his own against the parties in October 2018 in federal court in Oklahoma, but that suit was dismissed in January 2019 after the judge ruled the court lacked jurisdiction over the case because neither Page nor the DNC had strong enough ties to the state.
Page is now represented by Pierce, the global managing partner of Pierce Bainbridge Beck Price & Hecht LLP. They filed in Illinois because they allege the relationship with the firm behind the dossier, Fusion GPS, was “orchestrated” through law firm Perkins Coie’s Chicago office. The suit also claims the DNC “has a historical pattern” of making Chicago its principal place of business. –Fox News
Read the complaint below:
Tyler Durden
Thu, 01/30/2020 – 18:00
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