- Putin & Trump Versus The New World Order: The Final Battle
Putin & Trump Versus The New World Order: The Final Battle
Authored by Sylvain LaForest via OrientalReview.org,
We live in exciting times.
The unknown that lays ahead for all of us is both exhilarating and scary. Exhilarating in the long term, but rather scary in the short term. All empires eventually die and we’re in the terminal phase of the New World Order that will not recover from the Russian roulette game it has been playing, for Vladimir Putin handed it a loaded gun and it pulled the trigger.
The last few weeks put everything in place for the last battle. There are so many different facts and events, left and right, and I will try to do my best to remain methodical in this complicated expose. Bare with me, I’ve been struggling for three weeks with this article because of the insane amount of additional details that each day provides. It might have been a wrong time to quit smoking, but I enjoy a good challenge.
Dropping dollars
A little context is required. The New World Order concept is simply the wish of a handful of international bankers that want to economically and politically rule the whole planet as one happy family. It started in 1773 and if it went through important changes over the years, but the concept and objective haven’t changed an iota. Unfortunately for them, international banks that have been looting the planet through the US dollar since 1944 are now threatened by hyperinflation, as their printing machine has been rotating for years to cover their absurd spendings to sustain oil and resource wars that they’ve all ultimately lost. In order to prevent this upcoming hyperinflation, they generated a virus attack on four countries (China, Iran, Italy and now the United States) to spread panic in the population, with the precious help of their ignominious medias. Even though this corona virus isn’t different from any new viruses that attack humans every year, the media scare pushed people to voluntarily isolate themselves through fear and terror. Some lost their jobs, companies are going bankrupt, the panic created a stock exchange crash that emptied wallets and dried assets, resulting in a few trillion virtual dollars off the market to release pressure off the currency.
So far, so good, but everything else went wrong in this desperate and ultimate banzai. The top virologist on the planet confirmed that chloroquine was being used by the Chinese with spectacular results to cure patients, then he improved his magic potion by adding a pneumonic antibacterial called azythromicin, and saved everyone of his first 1000 cases, but one. Donald Trump immediately imposed the same treatment through a fight against his own Federal Drug Administration, bought and owned by the deep state. This forced all medias to talk about Dr Didier Raoult’s Miracle Elixir, signing the death warrant on our confidence in all Western governments, their medical agencies, the World Health Organization, and medias that were trying to destroy the impeccable doctor’s reputation, while inventing sudden «dangerous side effects» of a nearly inoffensive drug that has been used for 60 years to treat malaria. Not so far away in Germany, internationally praised Dr Wolfgand Wodarg noted that the engineered panic was totally useless, since this virus isn’t any different than the others that affect us every years. This has been an amazing victory for Trump and the general population on social medias, whom exposed together the pathological lies of the official communication channels of every New World Order country. De facto, the credibility’s of these puppet governments have vanished in the air, and from the eye of the storm, Italy will surely exit the EU right after the crisis, which will trigger a domino effect running through every EU countries and NATO members. My friends, globalism is dead and ready for cremation.
Digging the abyss
International bankers couldn’t see it coming in 1991, when they dominated 95% of the planet after the fall of the Soviet Union. It seemed that nothing could halt their ultimate mission to complete their Orwellian dream: destroy a few countries in the Middle East, enlarge Israel, and get the total control over the world oil market, the last piece of their Xanadu puzzle that they’ve been working on for a whole century, starting with the Balfour declaration in 1917.
When Vladimir Putin got charge of Russia, there was no sign that he would do better than the drunk he had replaced. An ex KGB officer seemed like a choice more driven by nostalgia rather than ideology, but Putin had many more assets going for him than first met the eyes: patriotism, humanism, a sense of justice, cunning ruse, a genius economist friend named Sergey Glazyev whom openly despised the New World Order, but above all, he embodied the reincarnation of the long lost Russian ideology of total political and economical independence. After a few years spent at draining the Russian swamp from the oligarchs and mafiosis that his stumbling predecessor had left in his trail of empty bottles, Vlad rolled his sleeves and got to work.
Because his opponents had been looting the planet for 250 years through colonization insured by a military dominance, Vlad knew that he had to start by building an invincible military machine. And he did. He came up with different types of hypersonic missiles that can’t be stopped, the best defensive systems on the planet, the best electronic jamming systems, and the best planes. Then to make sure that a nuclear war wouldn’t be an option, he came up with stuff which nightmares are made of, such as the Sarmat, the Poseidon and the Avangard, all unstoppable and able to destroy any country in a matter of a few hours.
Russian President Vladimir Putin, center, gestures while speaking during an annual meeting with top military officials in the National Defense Control Center in Moscow, December 24, 2019. Putin said that Russia is the only country in the world that has hypersonic weapons even though its military spending is a fraction of the U.S. military budget. Russian Defense Minister Sergei Shoigu, left, and Chief of General Staff of Russia Valery Gerasimov, right, attend the meeting.
With a new and unmatched arsenal, he could proceed to defeat any NATO force or any of its proxies, as he did starting in September 2015 in Syria. He proved to every country that independence from the NWO banking system was now a matter of choice. Putin not only won the Syrian war, but he won the support of many New World Order countries that suddenly switched sides upon realizing how invincible Russia had become. On a diplomatic level, it also got mighty China by its side, and then managed to protect independent oil producers such as Venezuela and Iran, while leaders like Erdogan of Turkey and Muhammad Ben Salman of Saudi Arabia decided to side with Russia, who isn’t holding the best poker hand, but the whole deck of cards.
Ending in the conclusion that Putin now controls the all-mighty oil market, the unavoidable energy resource that lubricates economies and armies, while the banksters’ NATO can only watch, without any means to get it back. With the unbelievable results that Putin has been getting in the last five years, the New World Order suddenly looks like a house of cards about to crumble. The Empire of Banks has been terminally ill for five years, but it’s now on morphine, barely realizing what’s going on.
Tragedy and hope
Since there is no hope in starting WW3 which is lost in advance, the last banzai came out of the bushes in the shape of a virus and the ensuing media creation of a fake pandemic. The main focus was to avoid a catastrophic hyperinflation of the humongous mass of US dollar that no one wants anymore, to have time to implement their virtual world crypto-currency, as if the chronically failing bankers still have any legitimacy to keep controlling our money supplies. It seemed at first that the plan could work. That’s when Vlad took out his revolver to start the Russian roulette game and bankers blew their brains out upon the pressure on the trigger.
He called a meeting with OPEP and killed the price of oil by refusing to lower Russia’s production, taking the barrel to under 30 dollars. Without any afterthought and certainly even less remorse, Vlad killed the costly Western oil production. All the dollars that had been taken out of the market had to be re-injected by the Fed and other central banks to avoid a downslide and the final disaster. By now, our dear bankers are out of solutions.
In the meantime, Trump also poked at the tie-wearing gangsters. While medias avoided the corona-killing chloroquine subject, an old pill designed to cure malaria, Trump imposed to the FDA the use of this life-saving drug on US infected patients. Medias didn’t have any choice but to start talking about it, which ignited a chain reaction: big pharmas CEO’s were fired because they had just lost the vaccine contract, countries like Canada looked like genocidal fools for not using the cheap and inoffensive medication, while a most outrageous criminal act by a government was exposed in full light: the Macron government had proclaimed in January 2020 that chloroquine was harmful and had restrained its use, just a couple of weeks before the burst of the fake pandemic! Russian roulette is a popular game in Western governments these days around.
On Saturday March 28th, Russia announced its own corona-killing brew, based on Dr Raoult’s magic potion. Yet another Cossack blow, this time to the big pharmas jugular vein, while most Western countries now have to implement the good doctor’s treatment, or face the slap of a Russian pill coming to save its citizen. Putin is in the lifesaving business these days: in the last week of March, he sent 15 military planes filled with doctors and supplies directly to North Italy, after an aid plane from China was blocked by the Czech Republic. We’re about to learn that European countries fear that China or Russia finds the truth in the Lombardy region, where people are not dying from some corona bug, but probably from a deadly cocktail hybrid from two earlier vaccines for meningitis and influenza, that they were injected in separate vaccination campaigns.
The punchline
I said earlier that everyday brings amazing news. Well on Sunday March 29th, the most stunning of them all fell like a ton of bricks on social medias: confined onlookers learned that Trump had taken control over the Federal Reserve, that is now handled by two representatives of the Treasury of State. Of all the crazy news within the last month, this is by far the best and most shocking. After three years in power, Trump has finally fulfilled his electoral promise of taking private banks out of the US public affairs, ending a century of exploitation of the American citizens. He has put the infamous Blackrock investment group to start buying important corporations for the Fed, meaning that he’s nationalizing chunks of the economy, while avoiding the crash of the market by implicating important private investors in the deal.
President Donald Trump gestures with Jerome Powell, his nominee to become chairman of the U.S. Federal Reserve at the White House in Washington, U.S., November 2, 2017
This utmost daring move comes at a crucial point in time, and faces us with the realization that Vladimir Putin and Donald Trump are united and have taken humanity to the crossroads of the New World Order and freedom. As I have stated often before, I thought that the world would deeply change between 2020 and 2024, because these would be the last 4 years of these two heroes in political power of their nations.
The New World Order is facing the two most powerful countries on the planet, and this fake pandemic changed everything. It showed how desperate the banksters are, and if we don’t want to end up with nuclear warheads flying in both directions, Putin and Trump have to stop them now.
Terminate the BIS, the World Bank, the IMF, the European Central bank, the EU, NATO, now. Our world won’t be perfect, but it might get much better soon.
Easter resurrection is coming. This might get biblical.
Tyler Durden
Fri, 04/03/2020 – 02:45 - Toilet Paper Producers Roll'ing In The Dough
Toilet Paper Producers Roll’ing In The Dough
Because not only food, but – most importantly – toilet paper is being stockpiled during the worldwide coronavirus pandemic, producers of precious TP are on a roll.
Sales of toilet paper in the U.S. rose by an estimated 60 percent in March compared to the same month last year.
As Statista’s Katharina Buchholz notes, the increase was more than double that in Italy, which was hit by the outbreak earlier than the U.S. There, revenues generated with bathroom tissue rose by 140 percent.
You will find more infographics at Statista
The Statista Consumer Market Outlook compared data and calculated estimates for 16 countries to show that revenues had risen most in Italy, followed by Vietnam and Australia. In other countries hit hard by the virus, for example Spain and France, the sale of toilet paper rose by 82 percent and 30 percent, respectively.
Tyler Durden
Fri, 04/03/2020 – 02:10 - "Borders Matter" – Austria's COVID-19 Chronicles
“Borders Matter” – Austria’s COVID-19 Chronicles
Authored by Elisabeth Sabaditsch-Wolff via The Gatestone Institute,
Week 1 in a country in complete shutdown. Austria has been at the forefront of forcing its citizens to “shelter in place” by enacting measures so severe that even the country’s elderly cannot remember anything similar.
To snuff out a virus that originated in China in November and has since made its way around the world, roughly a month ago, the Austrian government, led by Chancellor Sebastian Kurz, thankfully heeded a dire warning by Israeli Prime Minister Benjamin Netanyahu, took hard a look at Austria’s neighboring country, Italy, and immediately enacted a first set of measures, followed by the drastic rules mentioned above, that were first extended until April 13 and stepped up on March 30.
The new measures include wearing compulsory masks when grocery shopping, which, in due course, will be extended to the wearing masks when outdoors at any time. In addition, vulnerable men and women, that is, those whose immune systems are compromised, are required to stay home, with their salaries covered by the government. The chancellor warned the population that “what we are witnessing right now is the quiet before the storm” and added that if measures are loosened, they will start with the opening of shops and some restaurants; universities and schools will follow at the very end of this process. Schools in Austria are therefore unlikely to reopen before the fall, although there are already extensive courses online.
Noteworthy findings turned up, however, such as what public issues matter and what do not:
Borders matter.
For many years, Europeans have been told by their leaders that borders could not be closed to curb illegal migration due to the Schengen Agreement, to the detriment of security in European countries. Suddenly, with the numbers of COVID-19 deaths rising, and with the spread of the virus traced across Europe, border controls, barriers and other measures were swiftly introduced. The United States followed suit in closing its borders with Canada and Mexico. Strict border security helps to stop the virus from spreading. In the 14th century, Polish King Casimir III knew what to do in order to save his country from the plague, which had spread from China to Europe and killed countless millions of people. Poland was less affected by the plague because King Casimir isolated his country, closed borders and quarantined the border regions. Border security is health security.
Freedom of speech matters.
The Austrian government has installed a “ministry of truth” in the office of the chancellor, staffed by police cadets. In times of crisis, the search for the truth is more challenging than ever. Abundant propaganda, fake news and rumors are disseminated, even by the governments (here and here). But a cow remains a cow even if it is called a sheep. The Austrian government and the UK government have set up special task forces to weed out so-called fake news and “‘defend the country’ from misinformation” with respect to anything concerning Covid-19.
Andreas Unterberger, Austria’s most widely read political blogger, notes:
“It is absolutely stunning that a large police unit has now started to officiate in the Chancellery….The government acts as if it were in possession of the absolute truth amid a sea of lies and half-truths. On the contrary, the opposite is true… whenever a government got its hands on truth control, it has massively abused it within a very short time to gag and ban critical and oppositional voices. Once they have the power to control opinion, it is a massive temptation for those in power to use it in the self-interest of a government. The government ministers fail to realize the most important connection: the more a government carries out opinion control, the more people inevitably trust alternative sources of information, and not the government officials or those financed by the government.”
Sadly, not just the government but also Amazon, has discreetly eliminated a sizeable list of books from its listing, citing “dubious” information or even “conspiracy theories” on the defense against or even cure for Covid-19. Who decides what is a conspiracy theory? Amazon? Where has the marketplace of ideas disappeared to? Where, in fact, is the marketplace?
Sovereignty and nationalism matter.
The president of the American Freedom Alliance, Karen Siegemund, notes:
“Notice how each country – country! – took upon itself its right to sovereign action to protect its citizens.
Italy imposed quarantines; Austria closed its borders and implemented various restrictions on gatherings and mandated closures of entertainment venues, restaurants etc. Even Germany has now closed its borders.
Borders in the context of Europe is an astounding thing, and it’s heartbreaking that it took a virus, and the deaths it’s left in its wake, rather than the years-long invasions for [the countries] to assert sovereignty, and to finally, finally, turn to protecting their citizens.“‘Europe’ in the form of the European Union has been silent. The United Nations does not even seem to be speaking out although, in a rational world they would — and should — be calling for “Crimes against humanity” charges to be brought against China. That silence under these circumstances is simply further proof of the UN’s uselessness at best, and of the EU’s utter irrelevance.
“It is nations putting the health, safety and security of their people above all else that will stem the spread of this virus; the nightmare is that it took this pandemic to wake governments up to the primacy of their people as the core of their responsibility.”
Leadership matters.
Whether the greatly differing measures taken by continental Europe or those in the United Kingdom are successful remains to be seen, but leadership in times of crisis is crucial. In the UK, it is prime minister Boris Johnson who on March 3 launched a four-step plan to combat the outbreak in the UK, later backing away from herd immunity. New and tough measures, including a lockdown, were later implemented. In Austria, Chancellor Sebastian Kurz exhibited tough leadership. It is too early to assess whether the government is taking the “right” steps; however, remaining calm and in control are key to garnering support even among his critics. Kurz is adept at team-building, by including all members of his government as well as by keeping the political opposition informed. This approach has led to bi-partisan support for all implemented measures. In the United States, President Donald J. Trump has been personally leading an extremely popular daily televised press briefing with members of his Covid-19 task force.
Receding into the background have been topics such as climate change, Greta Thunberg, and Fridays for Future. Health measures have clearly taken precedence over kids cutting school. Nevertheless, many have always been adept at “never letting a crisis go to waste” (Rahm Emanuel) and at using one to do things that could not be done before; they will probably be back to doing their best to see what they can land in their “dream catcher”.
Armed forces matter.
Germany has mobilized its military to assist in maintaining public order, with German Minister of Defense Annegret Kramp-Karrenbauer reassuring Germans that “in these difficult times, the citizens can rely on their Bundeswehr.” Despite being financially starved in recent years, the Austrian armed forces were mobilized early on in the crisis to assist the Ministry of Foreign Affairs in repatriating Austrians from abroad, providing support in logistical tasks such as stocking grocery stores, and relieving police by protecting foreign embassies in Vienna. The move proved right the rejection of the 2013 referendum to end conscription and introduce a professional army.
Civil vigilance matters.
A particularly worrisome trend is having politicians using crises to increase the power of the state — a terrifying thought. Although in this instance, people actually did need to be quarantined to prevent the rolling spread of the virus, the widespread lockdowns in the United States, Europe and in Israel — which, in Austria’s case, took place after unprecedented accelerated parliamentary discussion — are likely bound for even more debate after the return to normalcy. Also potentially problematic is the British Coronavirus Bill, which “will enable the police and immigration officers to detain a person, for a limited period, who is, or may be, infectious and to take them to a suitable place to enable screening and assessment”. In a different situation, the words “may be” could be ominous in their broadness. For now, however, we should be thankful to our governments for trying to contain a runaway virus to which we have no immunity until some form of limiting its medical and economic harm can be found.
Tyler Durden
Fri, 04/03/2020 – 01:35 - March Jobs Preview: The First Negative Print In Ten Years, And Then All Hell Breaks Loose
March Jobs Preview: The First Negative Print In Ten Years, And Then All Hell Breaks Loose
As RanSquawk notes, the data for March are already stale, given the release of the timelier initial jobless claims data, which showed another record high number of claims, and some 10 million laid off workers in the past 2 weeks. Additionally, the survey period of the BLS Employment Situation Report runs through the month ending 12th March, and therefore does not capture the full effect of the coronavirus disruptions on the US labor market, with “stay at home” orders being issued only after the 19th March in some US states.
Still, even though it captures only the slowdown in the first half of the month, the March jobs report will almost certainly show a decline in monthly payrolls – the first since Sept 2010 – and breaking the longest stretch of positive payroll prints on record.
That said none of that matters: with the Fed having now gone full tilt in perpetuity no matter what the data says, we know that the data for the next 3-6 months will be catastrophic, with Goldman predicting 15% unemployment in Q2, meaning that in the next two months tens of millions of people will lose their job.
As such what the BLS reports tomorrow is completely meaningless. Still, for what it’s worth, here’s what Wall Street expects:
- Non-farm Payrolls: Exp. -100K, Prev. +273K
- Unemployment Rate: Exp. 3.8%, Prev. 3.5%
- Avg. Earnings M/M: Exp. 0.2%, Prev. 0.3%
- Avg. Earnings Y/Y: Exp. 3.0%, Prev. 3.0%
- Avg. Work Week Hours: Exp. 34.1, Prev. 34.4
- Private Payrolls: Exp. -163k, Prev. +228k
- Manufacturing Payrolls: Exp. -20k, Prev. +15k
- Government Payrolls: Prev. +45k
- U6 Unemployment Rate: Prev. +7.0%
- Labor Force Participation: Prev. 63.4%
Speaking of Goldman, the bank estimates nonfarm payrolls declined 180k in March, below consensus of -100k. In addition to employment surveys falling into contractionary territory and jobless claims rebounding dramatically, sharp declines in commuting patterns in both New York City and Seattle indicate a sizeable drag from the coronavirus in those MSAs during the survey week. Goldman also estimate declining payrolls in the food services, accommodation, recreation services, social assistance, and temporary help subindustries (both in these cities and nationwide). Goldman also thinks the unemployment rate rose three tenths to 3.8%, with risks skewed towards a larger increase (consensus 3.8%). Jobless claims data indicate that the pace of layoffs increased sharply and an NPR/PBS poll found that 18% of employees were laid off or had their hours reduced. The silver lining, at least for those who still have jobs, is that the average hourly earnings increased 0.2% month-over-month and 3.0% year-over-year, reflecting negative calendar effects but a possible composition shift towards higher-paid workers (consensus also +0.2%/+3.0%).
And as noted above, while Goldman looks for a weaker-than-consensus report tomorrow, the March employment numbers are already fairly stale and insignificant in our view, “because the April report will likely show job losses in the millions.”
Here are some general observations courtesy of RanSquawk:
TREND RATES: The trend rates are meaningless going into the data, given disruptions caused by coronavirus. After the release of the February data, the 3-month average trend rate was at 243k (prev. 239k); 6-month was 231k (prev. 220k); 12-month at 201k (prev. 178k).
ADP EMPLOYMENT: ADP reported 27k payrolls were shed from the US economy in March, better than the consensus view for -150k. However, while the data appear encouraging, the ADP itself noted that the survey period ran through the 12th of the month, meaning that much of the COVID impact has not been captured in the data. It is also worth noting that the official BLS employment situation report also runs through that same period and therefore may be subject to similar caveats.
WEEKLY INITIAL JOBLESS CLAIMS: Weekly jobless claims for the week ending 28th March rose to a fresh record high 6.648mln, around double last week’s tally which was in itself a record high. The latest spike in jobless claims will not have an impact on the BLS data; in the corresponding survey period for the BLS data, initial jobless claims rose from 211k to 282k. But ahead, the data signals April’s Employment Situation Report will be grim, given accelerating claims; and ahead, analysts are not convinced the peak is in yet. Total layoffs between the March and April payroll surveys look destined to reach perhaps 16-to-20mln, according to Pantheon Macroeconomics, which would be consistent with the unemployment rate rising to 13- to-16%. “We have consistently argued from the beginning that the USD 2trln CARES Act is nothing like big enough; these data, and the numbers which will follow, make another huge package inevitable,” Pantheon said.
Additionally, some individuals may classify themselves as “employed but not at work”, which could limit the magnitude of the increase in the jobless rate tomorrow. Taken together, the March unemployment rate likely rose three tenths to 3.8%. And while the risks tomorrow are skewed towards a larger increase, the majority of the unemployment rise will occur in April and subsequent reports, with the jobless rate reaching 15% by midyear.
CHALLENGER JOB CUTS: Job cuts announced by US-based employers surged to 222,288 in March from 56,660, the highest monthly tally since January 2009; challenger noted that the data did not include the hundreds of thousands of workers who were furloughed in March. “The virus has caused total whiplash for HR, hiring managers, and recruiters. The labor data for February showed a strong economy with a tight labor market. Companies were fighting for talent across industries. Now, millions of workers have filed for unemployment, companies have frozen hiring, and in many cases, cut operations or closed completely,” Challenger said. It notes that the shut-down of nonessential businesses caused 141,844 cuts, primarily in entertainment/leisure; of the 54,300 cuts announced where no specific reason was provided, Challenger suspects many are due to COVID-19. Challenger notes that despite the jump in job cut announcements, hiring announcements have also surged during the outbreak. Instacart recently announced they would hire 300,000 new drivers, while grocery stores, like Kroger and Albertsons, are hiring tens of thousands of workers, and Pizza Hut, Domino’s, and Papa John’s are hiring thousands of delivery drivers. “The pandemic has created an opportunity for grocers and food delivery services, as well as consumer products delivery services, to thrive right now. The issue is whether they can find the workers to do jobs that now come with inherent risks that did not previously exist,” said Challenger.
BUSINESS SURVEYS: Not all of the business surveys are in ahead of the March jobs report. However, the March manufacturing ISM report saw the employment sub-index fall by 3.1 points to 43.8; ISM said this was the eighth month of employment contraction, and at a faster rate compared to February. It is again worth highlighting that the manufacturing sector accounts for around 11% of the US economy, and as such, it is difficult to infer what the ISM means for the BLS Data, particularly since manufacturing surveys have held up better than their services equivalent, of late. Additionally, some analysts, like those at UBS, have questioned the usefulness of survey data at the moment, noting that they are subject to quirks around a) some of the treatment of supply chains, which has flattered data, b) the fact that many respondents will not be replying to surveys during the virus disruption period, and c) survey data will give more accurate assessments during ‘normal’ times, perhaps not as much in unusual times.
CORONAVIRUS: As shown below, Seattle public parking and NYC subway usage both declined 30% during the survey week (and by -14% and -18% on the Monday of the survey week, respectively), consistent with a sizeable drag on economic activity and employment from the 6.5mn payroll employees in these cities. And across the entire country, OpenTable reservations declined 25% year-on-year during the survey week, with declines in 35 out of 37 major cities on Monday of the survey week. Because of the coronavirus, expected declining payrolls in the food services, accommodation, recreation services, social assistance, and temporary help subindustries in this week’s report (both nationwide and in New York City and
Seattle).And next month, expect all hell to break loose.
Tyler Durden
Fri, 04/03/2020 – 01:00 - Mnuchin Says Energy Firms Can Be Bailed Out By The Fed
Mnuchin Says Energy Firms Can Be Bailed Out By The Fed
As part of the Coronavirus CARES Act, the $2 trillion fiscal stimulus meant to resuscitate the US economy, Congress allocated $454 billion to help underwrite the special lending programs from the Federal Reserve. This could generate up to $4.540 trillion in new lending (assuming 10x leverage for highly-rated assets) likely geared toward small and medium-sized businesses.
It now turns out that the first industry to benefit from direct Fed loans is the imploding US energy sector, which for the past decade benefited indirectly from Fed generosity by issuing junk bonds to yield starved investors who are now facing near certain bankruptcy in the face, as the price of oil – if it stays at this level – assures they will never be repaid.
Speaking at a White House news conference on Thursday, Treasury Secretary Steven Mnuchin said energy companies squeezed by the oil-price war can turn to the Federal Reserve’s lending facilities for aid but won’t get direct loans from his department.
“I have very limited ability to do direct loans out of the Treasury,” he said, suggesting that distressed shale companies should instead beg the Fed.
As Bloomberg notes, the $2.2 trillion coronavirus-related economic package authorizes the secretary to provide loans and grants to passenger airlines, cargo airlines, contractors and companies important to national security, Mnuchin said. Other companies must turn to the Fed, which is authorized to inject $4 trillion into the U.S. economy through various lending facilities approved by Congress.
“Our expectation is the energy companies, like all our other companies, will be able to participate in broad-based facilities, whether it’s the corporate facility or whether it’s the main street facility, but not direct lending out of the Treasury,” he said, leaving the Fed as the only option.
And now we look forward to the populist backlash when a line of insolvent shale CEOs forms outside the Marriner Eccles all begging to have their junk bonds taken out at par, and refinance with a Fed loan yielding, well, nothing and ideally forgiveable if the new round of cheap debt manages to bankrupt Saudi Arabia as the price of oil goes negative.
Tyler Durden
Fri, 04/03/2020 – 00:11 - The State-By-State Toll Of Coronavirus On The Job Market
The State-By-State Toll Of Coronavirus On The Job Market
Courtesy of Joseph Brusuelas of the Real Economy Blog and Wallet Hub
The widespread layoffs of American workers worsened in the third week of the coronavirus shutdown, with all states (with the exception of the Virgin Islands) now having reported a significant increase in initial jobless claims at some point during the three-week period.
This strongly suggests that Congress will have to make state and municipal finance a policy priority to prevent a spillover of the recent carnage in the labor market into the public sector.
Nationally, there were 6.6 million initial jobless claims for the week ending March 28 on a seasonally adjusted basis. That amounts to a nearly 300-standard-deviation shock to the labor force that is likely to have a long-run impact on consumer spending and the economy as a whole.
To identify which states have experienced the largest unemployment increases, WalletHub compared the 50 states and the District of Columbia across two key metrics. These metrics compare initial unemployment claim increases for the week of March 23, 2020 to both the same week in 2019 and the first week of 2020. Below, you can see highlights from the report, along with a WalletHub Q&A.
Nevada, Minnesota, New Hampshire and Rhode Island reported fewer claims in the latest week of reporting (March 28) than in the first week of widespread layoffs, but that’s not to say things are getting better.
For example, Nevada reported 71,000 initial claims in the week ending March 28, versus 92,000 in the week ending March 21. By comparison, the average number of claims in Nevada was 2,900 per week in the pre-crisis period.
And Minnesota reported 110,000 initial claims in the week ending March 28, versus 116,000 in the week ending March 21. By comparison, the average number of claims in Minnesota was 4,300 per week in the pre-crisis period.
Also discouraging is that 6,000 of those claims involved plant closings during the month of March, as reported by Minnesota Department of Employment and Economic Development, which suggests that the impact of the virus is moving beyond the service sector.
The map below shows three numbers below the state name:
- The cumulative number of initial unemployment claims since March 7, the before the effect of shutdowns began in earnest.
- The latest increase (decrease) in the number of claims.
- The Z-score of the latest increase (decrease) in claims, which is the number of standard deviations above (below) the pre-coronavirus average.
The first number indicates the depth of the impact of the virus on the labor force.
The second number indicates the direction of the claims (i.e., a first derivative of sorts): Positive numbers indicate an increase in claims and labor market distress; positive numbers approaching zero indicate the deceleration in new filings; zero would suggest a plateauing of claims; while negative numbers are an indication that businesses and employees are returning to normal.
The third number shows the unprecedented degree of the shock, with Z-scores outside the range of plus-or-minus two standard deviations considered to be outside of normal occurrences.
Tyler Durden
Thu, 04/02/2020 – 23:40 - WHO Targeted In Major COVID-19 Data-Hacking Campaign Believed Tied To Iran
WHO Targeted In Major COVID-19 Data-Hacking Campaign Believed Tied To Iran
A new report by Reuters alleges a major attempted hack of the World Health Organization (WHO) during the worldwide coronavirus pandemic linked to Iranian state entities.
WHO officials described “a sustained digital bombardment” by hackers described as seeking internal information on the deadly coronavirus, further said to be “more than doubled” compared to prior hacking attempts of the United Nations health agency.
Iran has vehemently denied that it or any of its intelligence arms were behind the computer network attacks, with the Islamic Republic’s information technology ministry dismissing the reports as “sheer lies to put more pressure on Iran.” Instead, the ministry said, “Iran has been a victim of hacking.”
Image source: Cybercrime Magazine Iran’s leaders have of late lashed out at the US and Western humanitarian organizations for sanctions, which have exacerbated the intensity of the deadly outbreak inside Iran.
Reuters cited an unnamed source only described as working for a large technology company which monitors global cyber-threats as alleging, “We’ve seen some targeting by what looks like Iranian government-backed attackers targeting international health organizations generally via phishing.”
Specifically the report describes the hackers’ methods as follows:
The latest effort has been ongoing since March 2 and attempted to steal passwords from WHO staff by sending malicious messages designed to mimic Google web services to their personal email accounts, a common hacking technique known as “phishing,” according to four people briefed on the attacks. Reuters confirmed their findings by reviewing a string of malicious websites and other forensic data.
Western intelligence sources interviewed further pointed to an Iranian pattern of intensifying cyber-attacks against European and American institutions and targets during times of major international crisis.
Over the past year there’ve been multiple instances of hackers infiltrating US federal websites and displaying pro-Iranian messages on them, especially becoming more intense following the Jan.3 assassination of the IRGC’s Gen. Soleimani.
Reuters referenced the pattern as follows: “Other details in this phishing attempt point to links with Tehran. For example, Reuters found that the same malicious websites used in the WHO break-in attempts were deployed around the same time to target American academics with ties to Iran,” according to the report.
“The related activity – which saw the hackers impersonate a well-known researcher – parallels cases Reuters previously documented where alleged Iranian hackers masqueraded as media figures from organizations such as CNN or The New York Times to trick their targets,” it said.
Upon information and belief, Iran or its proxies are planning a sneak attack on U.S. troops and/or assets in Iraq. If this happens, Iran will pay a very heavy price, indeed!
— Donald J. Trump (@realDonaldTrump) April 1, 2020
https://platform.twitter.com/widgets.js
Since last summer when tensions began soaring between Tehran and Washington, eventually nearly leading to war and tit-for-tat military strikes in January of this year, cyber operations between the US and Iran have reportedly ramped up dramatically, with both sides considering the covert digital intrusions of each others’ classified data an ‘act of war’.
This week the White House has put US forces in the Middle East on a state of alert, with Trump on Wednesday alleging that Iranian proxies in Iraq are preparing a major attack on American bases there.
Tyler Durden
Thu, 04/02/2020 – 23:20 - Escobar: Ground-Control To Planet Lockdown – "The Existing World-System Has To Go"
Escobar: Ground-Control To Planet Lockdown – “The Existing World-System Has To Go”
Authored by Pepe Escobar via The Strategic Culture Foundation,
As much as Covid-19 is a circuit breaker, a time bomb and an actual weapon of mass destruction (WMD), a fierce debate is raging worldwide on the wisdom of mass quarantine applied to entire cities, states and nations.
Those against it argue Planet Lockdown not only is not stopping the spread of Covid-19 but also has landed the global economy into a cryogenic state – with unforeseen, dire consequences. Thus quarantine should apply essentially to the population with the greatest risk of death: the elderly.
With Planet Lockdown transfixed by heart-breaking reports from the Covid-19 frontline, there’s no question this is an incendiary assertion.
In parallel, a total corporate media takeover is implying that if the numbers do not substantially go down, Planet Lockdown – an euphemism for house arrest – remains, indefinitely.
Michael Levitt, 2013 Nobel Prize in chemistry and Stanford biophysicist, was spot on when he calculated that China would get through the worst of Covid-19 way before throngs of health experts believed, and that “What we need is to control the panic”.
Let’s cross this over with some facts and dissident opinion, in the interest of fostering an informed debate.
The report Covid-19 – Navigating the Uncharted was co-authored by Dr. Anthony Fauci – the White House face of the fight –, H. Clifford Lane, and CDC director Robert R. Redfield. So it comes from the heart of the U.S. healthcare establishment.
The report explicitly states, “the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively.”
On March 19, four days before Downing Street ordered the British lockdown, Covid-19 was downgraded from the status of “High Consequence Infectious Disease.”
John Lee, recently retired professor of pathology and former NHS consultant pathologist, has recently argued that, “the world’s 18,944 coronavirus deaths represent 0.14 per cent of the total. These figures might shoot up but they are, right now, lower than other infectious diseases that we live with (such as flu).”
He recommends, “a degree of social distancing should be maintained for a while, especially for the elderly and the immune-suppressed. But when drastic measures are introduced, they should be based on clear evidence. In the case of Covid-19, the evidence is not clear.”
That’s essentially the same point developed by a Russian military intel analyst.
No less than 22 scientists – see here and here – have expanded on their doubts about the Western strategy.
Dr. Sucharit Bhakdi, Professor Emeritus of Medical Microbiology at the Johannes Gutenberg University in Mainz, has provoked immense controversy with his open letter to Chancellor Merkel, stressing the “truly unforeseeable consequences of the drastic containment measures which are currently being applied in large parts of Europe.”
Even New York governor Andrew Cuomo admitted on the record about the error of quarantining elderly people with illnesses alongside the fit young population.
The absolutely key issue is how the West was caught completely unprepared for the spread of Covid-19 – even after being provided a head start of two months by China, and having the time to study different successful strategies applied across Asia.
There are no secrets for the success of the South Korean model.
South Korea was producing test kits already in early January, and by March was testing 100,000 people a day, after establishing strict control of the whole population – to Western cries of “no protection of private life”. That was before the West embarked on Planet Lockdown mode.
South Korea was all about testing early, often and safely – in tandem with quick, thorough contact tracing, isolation and surveillance.
Covid-19 carriers are monitored with the help of video-surveillance cameras, credit card purchases, smartphone records. Add to it SMS sent to everyone when a new case is detected near them or their place of work. Those in self-isolation need an app to be constantly monitored; non-compliance means a fine to the equivalent of $2,800.
Controlled demolition in effect
In early March, the Chinese Journal of Infectious Diseases, hosted by the Shanghai Medical Association, pre-published an Expert Consensus on Comprehensive Treatment of Coronavirus in Shanghai. Treatment recommendations included, “large doses of vitamin C…injected intravenously at a dose of 100 to 200 mg / kg per day. The duration of continuous use is to significantly improve the oxygenation index.”
That’s the reason why 50 tons of Vitamin C was shipped to Hubei province in early February. It’s a stark example of a simple “mitigation” solution capable of minimizing economic catastrophe.
In contrast, it’s as if the brutally fast Chinese “people’s war” counterpunch against Covid-19 had caught Washington totally unprepared. Steady intel rumbles on the Chinese net point to Beijing having already studied all plausible leads towards the origin of the Sars-Cov-2 virus – vital information that will be certainly weaponized, Sun Tzu style, at the right time.
As it stands, the sustainability of the complex Eurasian integration project has not been substantially compromised. As the EU has provided the whole planet with a graphic demonstration of its cluelessness and helplessness, everyday the Russia-China strategic partnership gets stronger – increasingly investing in soft power and advancing a pan-Eurasia dialogue which includes, crucially, medical help.
Facing this process, the EU’s top diplomat, Joseph Borrell, sounds indeed so helpless:
“There is a global battle of narratives going on in which timing is a crucial factor. […] China has brought down local new infections to single figures – and it is now sending equipment and doctors to Europe, as others do as well. China is aggressively pushing the message that, unlike the U.S., it is a responsible and reliable partner. In the battle of narratives we have also seen attempts to discredit the EU (…) We must be aware there is a geo-political component including a struggle for influence through spinning and the ‘politics of generosity’. Armed with facts, we need to defend Europe against its detractors.”
That takes us to really explosive territory. A critique of the Planet Lockdown strategy inevitably raises serious questions pointing to a controlled demolition of the global economy. What is already in stark effect are myriad declinations of martial law, severe social media policing in Ministry of Truth mode, and the return of strict border controls.
These are unequivocal markings of a massive social re-engineering project, complete with inbuilt full monitoring, population control and social distancing promoted as the new normal.
That would be taking to the limit Secretary of State Mike “we lie, we cheat, we steal” Pompeo’s assertion, on the record, that Covid-19 is a live military exercise: “This matter is going forward — we are in a live exercise here to get this right.”
All hail BlackRock
So as we face a New Great Depression, steps leading to a Brave New World are already discernable. It goes way beyond a mere Bretton Woods 2.0, in the manner that Pam and Russ Martens superbly deconstruct the recent $2 trillion, Capitol Hill-approved stimulus to the U.S. economy.
Essentially, the Fed will “leverage the bill’s $454 million bailout slush fund into $4.5 trillion”. And no questions are allowed on who gets the money, because the bill simply cancels the Freedom of Information Act (FOIA) for the Fed.
The privileged private contractor for the slush fund is none other than BlackRock. Here’s the extremely short version of the whole, astonishing scheme, masterfully detailed here.
Wall Street has turned the Fed into a hedge fund. The Fed is going to own at least two thirds of all U.S. Treasury bills wallowing in the market before the end of the year.
The U.S. Treasury will be buying every security and loan in sight while the Fed will be the banker – financing the whole scheme.
So essentially this is a Fed/ Treasury merger. A behemoth dispensing loads of helicopter money – with BlackRock as the undisputable winner.
BlackRock is widely known as the biggest money manager on the planet. Their tentacles are everywhere. They own 5% of Apple, 5% of Exxon Mobil, 6% of Google, second largest shareholder of AT&T (Turner, HBO, CNN, Warner Brothers) – these are just a few examples.
They will buy all these securities and manage those dodgy special Purpose Vehicles (SPVs) on behalf of the Treasury.
BlackRock not only is the top investor in Goldman Sachs. Better yet: Blackrock is bigger than Goldman Sachs, JP Morgan and Deutsche Bank combined. BlackRock is a serious Trump donor. Now, for all practical purposes, it will be the operating system – the Chrome, Firefox, Safari – of Fed/Treasury.
This represents the definitive Wall Street-ization of the Fed – with no evidence whatsoever it will lead to any improvement in the lives of the average American.
Western corporate media, en masse, have virtually ignored the myriad, devastating economic consequences of Planet Lockdown. Wall to wall coverage barely mentions the astonishing economic human wreckage already in effect – especially for the masses barely surviving, so far, in the informal economy.
For all practical purposes, the Global War on Terror (GWOT) has been replaced by the Global War on Virus (GWOV). But what is not being seriously analyzed is the Perfect Toxic Storm: a totally shattered economy; The Mother of All Financial Crashes – barely masked by the trillions in helicopter money from the Fed and the ECB; the tens of millions of unemployed engendered by the New Great Depression; the millions of small businesses that will simply disappear; a widespread, global mental health crisis. Not to mention the masses of elderly, especially in the U.S., that will be issued an unspoken “drop dead” notice.
Beyond any rhetoric about “decoupling”, the global economy is already, de facto, split in two. On one side, we have Eurasia, Africa and swathes of Latin America – what China will be painstakingly connecting and reconnecting via the New Silk Roads. On the other side, we have North America and selected Western vassals. A puzzled Europe lies in the middle.
A cryogenically induced global economy certainly facilitates a reboot. Trumpism is the New Exceptionalism – so that means an isolationist MAGA on steroids. In contrast, China will painstakingly reboot its market base along the New Silk Roads – Africa and Latin America included – to replace the 20% of trade/exports to be lost with the U.S.
The meager $1,200 checks promised to Americans are a de facto precursor of the much touted Universal Basic Income (UBI). They may become permanent as tens of millions of people will be permanently unemployed. That will facilitate the transition towards a totally automated, 24/7 economy run by AI – thus the importance of 5G.
And that’s where ID2020 comes in.
AI and ID2020
The European Commission is involved in a crucial but virtually unknown project, CREMA (Cloud Based Rapid Elastic Manufacturing) which aims to facilitate the widest possible implementation of AI in conjunction to the advent of a cashless One-World system.
The end of cash necessarily implies a One-World government capable of dispensing – and controlling – UBI; a de facto full accomplishment of Foucault’s studies on biopolitics. Anyone is liable to be erased from the system if an algorithm equals this individual with dissent.
It gets even sexier when absolute social control is promoted as an innocent vaccine.
ID2020 is self-described as a benign alliance of “public-private partners”. Essentially, it is an electronic ID platform based on generalized vaccination. And its starts at birth; newborns will be provided with a “portable and persistent biometrically-linked digital identity.”
GAVI, the Global Alliance for Vaccines and Immunization, pledges to “protect people’s health “ and provide “immunization for all”. Top partners and sponsors, apart from the WHO, include, predictably, Big Pharma.
At the ID2020 Alliance summit last September in New York, it was decided that the “Rising to the Good ID Challenge” program would be launched in 2020. That was confirmed by the World Economic Forum (WEF) this past January in Davos. The digital identity will be tested with the government of Bangladesh.
That poses a serious question: was ID2020 timed to coincide with what a crucial sponsor, the WHO, qualified as a pandemic? Or was a pandemic absolutely crucial to justify the launch of ID2020?
As game-changing trial runs go, nothing of course beats Event 201, which took place less than a month after ID2020.
The Johns Hopkins Center for Health Security in partnership with, once again, the WEF, as well as the Bill and Melinda Gates Foundation, described Event 201 as “a high-level pandemic exercise”. The exercise “illustrated areas where public/private partnerships will be necessary during the response to a severe pandemic in order to diminish large-scale economic and societal consequences.”
With Covid-19 in effect as a pandemic, the Johns Hopkins Bloomberg School of Public Health was forced to issue a statement basically saying they just “modeled a fictional coronavirus pandemic, but we explicitly stated that it was not a prediction”.
There’s no question “a severe pandemic, which becomes ‘Event 201’ would require reliable cooperation among several industries, national governments, and key international institutions”, as spun by the sponsors. Covid-19 is eliciting exactly this kind of “cooperation”. Whether it’s “reliable” is open to endless debate.
The fact is that, all over Planet Lockdown, a groundswell of public opinion is leaning towards defining the current state of affairs as a global psyop: a deliberate global meltdown – the New Great Depression – imposed on unsuspecting citizens by design.
The powers that be, taking their cue from the tried and tested, decades-old CIA playbook, of course are breathlessly calling it a “conspiracy theory”. Yet what vast swathes of global public opinion observe is a – dangerous – virus being used as cover for the advent of a new, digital financial system, complete with a forced vaccine cum nanochip creating a full, individual, digital identity.
The most plausible scenario for our immediate future reads like clusters of smart cities linked by AI, with people monitored full time and duly micro-chipped doing what they need with a unified digital currency, in an atmosphere of Bentham’s and Foucault’s Panopticum on overdrive.
So if this is really our future, the existing world-system has to go. This is a test, this is only a test.
Tyler Durden
Thu, 04/02/2020 – 23:00 - New York's Unemployment Fund Will Be Insolvent In 2 Months
New York’s Unemployment Fund Will Be Insolvent In 2 Months
With 92,381 total cases, surging by 8,669 in one day, and resulting in 2,373 deaths, New York has emerged the epicenter of the coronavirus pandemic.
Just as concerning, is that it is also among the states least prepared to deal with the record surge of unemployment claims by workers in restaurants, retail shops and hotels closed to slow the outbreak.
New York’s unemployment insurance trust had about $2.7 billion at the end of 2019, less than half the minimum needed to remain solvent during a recession, according to the U.S. Department of Labor. Alas, it is now facing a depression and with claims skyrocketing, the state has enough money to cover the checks for only 10 weeks, according to an estimate by the Tax Foundation, a Washington-based think tank.
“New York’s unemployment compensation trust fund is basically insolvent,” wrote Jared Walczak, director of state tax policy at the Tax Foundation as quoted by Bloomberg. “Funds will be exhausted even more quickly should unemployment compensation claims continue to rise.”
Almost 10 million American applied for unemployment benefits in the last two weeks, highlighting the devastating economic impact of the coronavirus as shutdowns widened across the country. About 450,000 of them were New Yorkers, according to the state’s Department of Labor. Only California, Pennsylvania and Ohio saw more claims.
During the Great Recession, the majority of states exhausted their unemployment insurance reserves and either borrowed from the U.S. Treasury or issued bonds to rebuild their trusts, according to Kroll Bond Rating Agency.
States that have rebuilt reserves such as Georgia and North Carolina will have less pressure to raise unemployment taxes, Kroll wrote in a report Wednesday. New York, unfortunately, is not among them.
New York’s trust fund had a solvency level of 0.36 as of Dec. 31, where a level of 1.0 means the state could pay out claims for a year at the average level of the worst three years of the past twenty, according to the U.S. Labor Department. California, Texas, New York, Illinois, Ohio and Pennsylvania are among the 22 states and jurisdictions that do not meet the recommended standard of solvency. Only California’s unemployment trust fund is in worse shape than New York’s, according to the department: almost as if the most liberal states also happen to be most insolvent.
It gets worse: there are now nearly twice as many people claiming or already receiving unemployment benefits as there were over the comparison period, meaning that with current claims, states would run out twice as fast, the Tax Foundation’s Walczak wrote.
The economic stimulus signed by President Donald Trump provides additional federally-funded benefits to unemployed workers, and expands eligibility to previously uncovered workers, but states are still on the hook for regular benefits.
“The state will have to borrow from the federal government, and will ultimately have to pay back those loans with interest, while New York employers will eventually face higher federal unemployment insurance taxes to compensate the federal government for extending loans to the state,” Walczak wrote, who clearly is unaware that under helicopter money nobody will repay anything, ever again, and instead the perpetual Minsky moment will be stretch forever, defying every law of finance, and physics, just because the Fed will monetize it all, and everyone will live happily ever after.
Tyler Durden
Thu, 04/02/2020 – 22:40 - What Really Caused Oil To Rally By 25%?
What Really Caused Oil To Rally By 25%?
Submitted by Nick Cunningham of <a href="
Just had a great conversation with Russia's @novakav1. While we normally compete, we agreed that #COVID19 requires unprecedented level of int'l cooperation. Discussed 10mbpd out of global supply. Look forward to speaking with Saudi Prince Abdulaziz bin Salman soon.
— Ryan Sitton (@RyanSitton) April 2, 2020
https://platform.twitter.com/widgets.js “>OilPrice
Oil prices spiked 25 percent on Thursday after President Trump tweeted that Saudi Arabia and Russia would cut production by 10 to 15 million barrels per day (mb/d), but there are a variety of reasons why a cut of this size faces steep odds. Incidentally it was the biggest one day percentage surge in the price of oil in history.
This should be prefaced with the fact that nobody knows what will happen and that the onset of a global pandemic means that all of the old rules are thrown out the window. Anything can happen in the context of the greatest public health and economic crisis in a century.
But Trump’s tweets raise a ton of questions. Right off the bat, a 10-15 mb/d cut is incredibly massive. How could that be divided up? Russia and Saudi Arabia are both at around 11 mb/d; would they both cut their output in half? That’s an absurd notion.
Indeed, immediately, Russia shot down the idea that there was some agreement. That was followed by a clarification from Saudi Arabia, which called for an emergency OPEC+ meeting that could lead to cuts with “another group of countries” in an attempt to arrive at a “fair solution.”
That statement means that Saudi Arabia has not signed onto anything, and would only cut if a lot of other countries did the same. The Saudi statement hints that it wants more than just the OPEC+ coalition, which presumably would include the U.S., Canada, Brazil and/or some other non-OPEC producers.
Then, news surfaced that Saudi Arabia was willing to cut output below 9 mb/d if others joined them. That means that Saudi will chip in around 2 mb/d of cuts, which is incredibly modest compared to what Trump’s tweet suggests.
It would also bring Saudi output roughly back to where it was a month ago, prior to the breakdown of the OPEC+ negotiations.
Meanwhile, an even larger question is what the U.S. would need to give in order to achieve anything close to what Trump claimed. With U.S. shale on the ropes and destined for a substantial decline, the American government would presumably need to offer quite a bit to get Saudi and Russia on board with deep cuts.
Will the U.S. implement its own production cuts? It’s not clear how the U.S. could do this with hundreds of privately-owned oil companies, whether the government even has that authority, whether it can practically implement such a plan, and whether the oil industry itself wants such an outcome.
One avenue could be a federal ban on exports, an idea that would be highly controversial and would require Congressional action, which essentially rules it out. A group of Republican Senators from oil states have also proposed a tariff on imported oil, but the American Petroleum Institute has pushed back on that.
Texas Railroad Commissioner Ryan Sitton upped the ante midday on Thursday, stating that he spoke with Russian energy minister Alexander Novak about “10mbpd out of global supply,” and that he would soon speak with the Saudi energy minister. Texas regulators had already started exploring state-led production cuts, something that has divided the U.S. oil industry.
Just had a great conversation with Russia’s @novakav1. While we normally compete, we agreed that #COVID19 requires unprecedented level of int’l cooperation. Discussed 10mbpd out of global supply. Look forward to speaking with Saudi Prince Abdulaziz bin Salman soon.
Just had a great conversation with Russia’s @novakav1. While we normally compete, we agreed that #COVID19 requires unprecedented level of int’l cooperation. Discussed 10mbpd out of global supply. Look forward to speaking with Saudi Prince Abdulaziz bin Salman soon.
— Ryan Sitton (@RyanSitton) April 2, 2020
https://platform.twitter.com/widgets.js
Not long after Trump’s tweet, Reuters reported that the Trump administration does not actually plan on asking domestic drillers to cut production. Trump is set to meet with a group of oil CEOs on Friday, but he apparently won’t ask them to cut output, Reuters says.
Bloomberg reported that there was widespread confusion even within the U.S. government about what Trump’s tweet meant.
If the U.S. is not going to cut, what, then, is Trump talking about? One thing to consider is that Saudi Arabia can earn some goodwill in Washington by agreeing to call for an emergency OPEC+ meeting. The Saudis could be nodding along with Trump, commiserating about low oil prices, while also suggesting that they could take strong action…if others go along. Riyadh does not have to agree to anything immediately, but by putting the ball in the court of the U.S. and Russia, they may entice production cuts from elsewhere.
Oil prices jumped sharply on Trump’s tweet, but his assertion raises more questions than answers. While international diplomacy does seem to be accelerating, a massive unilateral cut from Saudi Arabia, or even a bilateral cut with Russia, remains highly unlikely.
Tyler Durden
Thu, 04/02/2020 – 22:18 - Texas Case Could Produce One Of The First COVID-19 Hate-Crime Charges
Texas Case Could Produce One Of The First COVID-19 Hate-Crime Charges
Jose L. Gomez, 19, may have the dubious distinction of being the first person charged and convicted of a Corona hate crime.
Gomez is accused of stabbing three members of a family of four inside a Sam’s Club. The family is Asian and police say that he was trying to stop them from spreading the virus. His victims included a 2-year-old and 6-year-old child. While other anti-Asian hate crimes have been reported in the pandemic, this one could result in an early plea or conviction.
The FBI report states:
“The suspect indicated that he stabbed the family because he thought the family was Chinese, and infecting people with coronavirus.”
The report itself confirms that federal prosecutors are considered federal hate crime charges. He is currently charged with three counts of attempted capital murder and one count of aggravated assault with a deadly weapon.
There is a hero in this story.
A store employee, Zack Owen, intervened, tackled Gomez and brought him to the ground. Owen was stabbed in the leg and cut on the hand as a result of his brave action. Off-duty Border Patrol Agent, Bernie Ramirez was fortunately also present and rushed forward to place Gomez into custody. He also credited Owen for his bravery.
Most criminal defense lawyers would be asking for an immediate psychiatric evaluation and ultimately some form of plea bargain. This is not a case that you want to ever see the inside of a jury trial.
Tyler Durden
Thu, 04/02/2020 – 22:05 - Concerned Citizens Or Rats? Americans Snitch On Local Businesses & Neighbors Amid Shutdowns
Concerned Citizens Or Rats? Americans Snitch On Local Businesses & Neighbors Amid Shutdowns
Scott Horton at the Libertarian Institute is alarmed at how fast the rise in corona-moral shaming is translating into Americans snitching to police and town authorities on local small businesses and neighbors…
“Umm, umm, ummm! I’m telling on you! I’m gonna get you in trouble!” – Nickie and Melissa, Mrs. Tuttle’s kindergarten class, 1981.
Now look here, I think everyone who can possibly stay at home to try to “flatten the curve” and short-circuit this novel coronavirus, the better. But do you people really have to turn America into North Korea in the process?
Local neighborhood bar, file image via Frost Design Mere hyperbole perhaps? Well, take a quick look at these tales from Middle Amerika amid the nationwide coronavirus lockdown. Apparently the Associated Press notices enough of a rising trend to profile the emerging numbers of what it bluntly dubs “snitches”:
Snitches are emerging as enthusiastic allies as cities, states and countries work to enforce directives meant to limit person-to-person contact amid the virus pandemic that has claimed tens of thousands of lives worldwide. They’re phoning police and municipal hotlines, complaining to elected officials and shaming perceived scofflaws on social media.
“In some places, investigators are patrolling the streets, looking for violators,” AP notes. “In some cases, residents are turning on neighbors.”
* * *
Oklahoma
“One Tulsa, Oklahoma, bar owner said more than a dozen motorcyclists showed up unannounced, but he served them a round of shots anyway to celebrate a birthday. Another live-streamed a drag queen show on Facebook while up to 20 people drank inside the locked bar, ignoring police when they knocked on the door.”
“Both were busted — and received misdemeanor citations and court dates — after police responded to tips that the bars were violating the mayor’s order shuttering all nonessential businesses to help slow the spread of the coronavirus.”
“…Lt. Meulenberg said the department’s call volume has increased substantially with residents ratting out businesses and neighbors alike, though they can’t respond to all of them.”
Illinois
“In Chicago, a yoga studio that believed it qualified as an essential health and wellness service was closed after the city — tipped off by several residents — disagreed. Teacher Naveed Abidi of Bikram Yoga West Loop studio said he thought the studio could remain open if the space was sanitized, class size limited and students stayed far enough apart.”
“If we were naughty with the government’s order, then we’re very, very sorry” said Abidi, who faces a fine of up to $10,000. “We’re not here to cause problems, we’re here to practice our poses.”
Via PhillyMag Colorado
A team enforcing Denver’s shelter-in-place order issued five citations — including to Hobby Lobby and a Game Stop franchise that claimed it was essential — and more than 600 warnings to businesses and individuals as of Tuesday, city spokesman Alton Dillard said. The team also patrols neighborhoods, parks and recreation areas.
Connecticut
“Naugatuck, Connecticut, resident Gwen Becker said she was ‘mortified’ when she drove by a golf course and saw a crowd gathered around a food truck and eating at tables together. So she took a video that her friend posted on Facebook — prompting the mayor to shut down the course.”
“I was angry and upset, and I threw some f-bombs,” said Becker, 54. “You’re not going to consider that what you’re doing could kill somebody?”
Virtual vigilantes are naming and shaming people they believe are putting others at risk with their real-world behaviors https://t.co/j9FBht7z4b
— The Wall Street Journal (@WSJ) March 28, 2020
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New Jersey
“In Newark, New Jersey, police shut down 15 businesses in one night and cited 161 people for violating the governor’s restrictions, saying others would be next if they didn’t heed directives. And Maryland State Police said they’d conducted nearly 6,600 business and crowd compliance checks.”
Even Funerals!
“Chicago police even disbanded a funeral Sunday after seeing a group of up to 60 people, many elderly, congregating inside a church, police spokesman Anthony Guglielmi said.”
“Balcony Police”
In one viral video, the person recording it is heard criticizing a woman who decides to go for a jog and resists police orders to produce her ID card. Another shows a family of four heading to a supermarket carrying a scooter for one of their children while half a dozen neighbors yell at them from the window.
* * *
Finally, we should ask: what will America look like when its economy finally opens back up and bars, restaurants, studios, and streets are bustling once again?
Possibly a certain paranoia and fear will remain, and deep suspicions will endure, after in crisis-hit times neighbor so easily turned against neighbor.
Tyler Durden
Thu, 04/02/2020 – 21:45 - "Bad Senator" Schumer "Apalled" After Trump Letter, Implores "Stop The Pettiness"
“Bad Senator” Schumer “Apalled” After Trump Letter, Implores “Stop The Pettiness”
Update (2125ET): Unsurprisingly, Senator Schumer has responded to President Trump’s brutal letter by appearing on MSNBC tonight:
“I spoke to the president late this afternoon and explained it and the result is this letter. So I’m just appalled. You know I say to the president just stop the pettiness. People are dying and so, President Trump, we need leadership. We need to get the job done. Stop the pettiness.“
* * *
President Trump and the White House task force delivered another lengthy, and at times rambling, press conference Thursday evening, and after Mnuchin finished speaking about the stimulus bill ‘complications’, we suspect most viewers probably tuned out.
But those who didn’t may have heard Trump engage in some classic Trump opposition-baiting, telling off Chuck Schumer for a letter he wrote to President Trump criticizing the White House’s coronavirus response, and – included among a list of suggestions – urging the White House to appoint a “senior military officer” to help lead the federal response.
Well, as it turns out, Trump didn’t stop there. As millions of Americans wonder what’s taking so long with the bailout checks, and hundreds of thousands of small business owners anxiously chew their cuticles while wondering how long it will take to get the money in their accounts, Trump was busy composing a written response to Schumer’s letter, essentially calling him an idiot for failing to realize that Trump already has military people in charge of the federal coronavirus response (though there are no active military personnel on the task force).
Trump also blasted Schumer for failing to take helpful steps to help his state – New York, the epicenter of the crisis in the US – prepare for this crisis. But the truth is, when it comes to “who’s responsible?” there’s enough to go around (and some for Trump as well). But this time, he added a new element. Since Schumer is in Congress, he spent most of the last two years helping the Democrats build up their ridiculous impeachment hoax instead of helping prepare for the crisis, or doing, well – anything – truly productive other than inside-baseball favor-trading to protect his constituents.
Dear Senator Schumer:
Thank you for your Democrat public relations letter and incorrect sound bites, which are wrong in every way.
1. As you are aware, Vice President Pence is in charge of the Task Force. By almost all accounts, he has done a spectacular job.
2. The Defense Production Act (DPA) has been consistently used by my team and me for the purchase of billions of dollars’ worth of equipment, medical supplies, ventilators, and other related items. It has been powerful leverage, so powerful that companies generally do whatever we are asking, without even a formal notice. They know something is coming, and that’s all they need to know.
3. A “senior military officer” is in charge of purchasing, distributing, etc. His name is Rear Admiral John Polowczyk. He is working 24 hours a day, and is highly respected by everyone. If you remember, my team gave you this information, but for public relations purposes, you choose to ignore it.
4. We have given New York many things, including hospitals, medical centers, medical< supplies, record numbers of ventilators, and more. You should have had New York much better prepared than you did, and as Dr. Fauci and Dr. Birx said yesterday, New York was very late in its fight against the virus. As you are aware, the Federal Government is merely a back-up for state governments. Unfortunately, your state needed far more of a back-up than most others.
If you spent less lime on your ridiculous impeachment hoax, which went haplessly on forever and ended up going nowhere (except increasing my poll numbers), and instead focused on helping the people of New York, then New York would not have been so completely unprepared for the “invisible enemy.” No wonder AOC and others are thinking about running against you in the primary. If they did, they would likely win.
Fortunately, we have been working with your state and city governments, Governor Andrew Cuomo and Mayor Bill Delllasio, to get the job done. You have been missing in action, except when it comes to the “press.” While you have stated that you don’t like Andrew Cuomo, you ought to start working alongside him for the good of all New Yorkers.
I’ve known you for many years, but I never knew how bad a Senator you are for the state of New York, until I became President.
If you have any questions, please do not hesitate to call. Or, in the alterative, call Rear Admiral Polowczyk.
Even after Trump back-tracked, caved to Democrats, and summoned his DPA powers to try to ramp up production of the desperately needed ventilators (something he probably should have done almost two weeks ago), the president didn’t shy away from taking a swing at Schumer during Thursday night’s briefing, bringing up the letter the Senator had written him, and mocking Schumer for purportedly being unaware that Trump had already appointed a “military man” to help run the federal response.
“Chuck if you knew a little bit more, we have one of the most highly respected people in the military, the admiral…”
Watch the clip below:
President Trump sets Senator Schumer straight regarding Schumer’s letter stating Trump should put a military man in charge. pic.twitter.com/6ghziIGy7b
— The Daily Wire (@realDailyWire) April 2, 2020
https://platform.twitter.com/widgets.js
After re-watching that clip, it also occurred to us that Admiral Polowczyk might have only been brought to the press conference as a prep. But we have no evidence to back up that claim.
Does Trump know Rear Admiral Polowczyk name? Probably not. And is it really fair to say that Polowczyk is helping to lead the federal coronavirus response? That might be a stretch, for example, he’s not actually on the task force, though he does seem to have a relatively senior role, at least on paper.
But then again, does anybody really know who’s running what inside the task force, other than the fact that VP Pence is nominally in charge.
Tyler Durden
Thu, 04/02/2020 – 21:28 - Beijing Ramps Up South China Sea War Drills As Pandemic Swallows West
Beijing Ramps Up South China Sea War Drills As Pandemic Swallows West
China conducted war drills in the South China Sea this week as the COVID-19 pandemic terrorizes the US, forcing the Pentagon to divert its attention to the Homeland to manage the public health crisis that is unfolding rather than countering Beijing in the open seas.
Asia Times reports that in recent days China ramped up military drills and deployed military assets in the highly contested waters of the South China Sea, specifically in areas that are known to have massive fossil fuel reserves.
While some see China’s nationalistic messaging as a bid to rally its people during difficult Covid-19 times, others view the increasingly aggressive naval maneuvers as a bid to exploit America’s weakened condition to secure new advantage in the hot spot theater. -Asia Times
While China conducted maritime exercises, countries surrounding the South China Sea, who also have staked rights to the fossil fuel reserves in the contested waters, are in countrywide lockdowns enforced by their respective militaries. This is an instance where military assets of Western powers and allies are preoccupied in their own countries, as Beijing sails around the South China Sea uncontested.
Many people don’t realize, the Chinese virus unleashed a nuclear bomb on America, but did not destroy any physical assets. Instead, it imploded the financial economy. And without China firing a shot, the US Navy has likely lost the USS Theodore Roosevelt (CVN-71), a massive nuclear aircraft carrier stationed in Guam. At least 1,000 sailors have been evacuated from the vessel for fear of contracting the virus.
The virus is a giant distraction from the Pentagon’s freedom of navigation missions that are used to counter China in the South China Sea. With most of its time and effort focused on fighting the virus on the Homeland and maintaining social order – America’s power overseas diminishes.
The Western world is melting down over a virus outbreak. China didn’t even have to fire one shot – as it now seizes this opportunity to increase its power in the South China Sea:
China’s bid to opportunize on the Covid-19 crisis which originated in its Wuhan city has been on display on multiple fronts. On one hand, Beijing has launched a concerted attempt to reshape the pandemic’s narrative, including the bizarre suggestion by top Chinese officials that the US military planted the virus in China.
This has gone hand-in-hand with attempts to drive a diplomatic wedge between the US and its traditional transatlantic allies, some of which have recently committed naval vessels to US-led freedom of navigation operations in the South China Sea. -Asia Times
The People’s Liberation Army flexed its muscles in the northern portions of the South China Sea last month, saying:
Training for war preparedness will not be stopped even in the middle of the Covid-19 epidemic, and the training of carrier-based fighter pilots must continue.
The Global Times described the latest war drill as part of fighting the pandemic.
An aircraft carrier is a large warship with many people concentrated in its cabins, making it vulnerable to infectious diseases. Being able to successfully conduct related missions indicated that the Liaoning has done a great job in controlling the epidemic. – Beijing-based naval expert Li Jie told Global Times.
And just like that, a Chinese virus implodes the American economy, takes out an aircraft carrier in the Pacific, and China makes a big move in the South China Sea. Is the virus the first silent shot fired by Beijing in World War III?
Tyler Durden
Thu, 04/02/2020 – 21:25 - It Begins: US Treasury Balance Hits All Time High After Historic Flood Of Bill Issuance
It Begins: US Treasury Balance Hits All Time High After Historic Flood Of Bill Issuance
One didn’t need to read our post explaining why with the Fed’s reverse repo operations now much more aggressively used (and in fact seeing some $182BN of usage well into the second quarter, so much more than just a quarter-end window dressing exercise) …
… than the Fed’s recently expanded, massive repo ops, which have basically been abandoned by Dealers in the past week …
… there was now a shortage of Treasuries: a quick look at where T-bills yields were trading on Monday was sufficient – virtually every issue to the left of 3 months had a deeply negative yield, and ushered in a risk-free arb that bond traders could take advantage of to make virtually unlimited money by purchasing Bills at a 0%-yield capped auctions and then selling them in the open market above par.
That’s when Steven Mnuchin realized he had to do something to address the bond shortage which was literally taking money from the Treasury and handing it to Wall Street, and that thing was to unleash a historic flood of Bills and Cash Management Bills, something we pointed out in “Treasury To Sell Over A Quarter Trillion Bills In 48 Hours.” Immediately the yields across the curve spiked, with all tenors now yielding back above 0% (the Bill arb disappearing in the process).
Yet this does not do justice to the absolute tsunami of issuance in the Bill market where the Treasury did everything in its power to not only flood the market with new debt (not that it had much of a choice) but to also prefund the Treasury’s historic outflows in the coming days.
As shown in the chart below, in addition to the previously discussed Bills and CMBs, this week’s Treasury has been on an absolute tear and in just the past 4 days has issued, in addition to the regularly scheduled 4-Week, 8-Week, 3-Month and 6-Month Bills, also 154 Day, 102 Day, 39 Day, 119 Day, 42 Day, 69 Day, and 37 Day Cash Management Bills, as shown in the chart below.
This $563 billion in gross Bill issuance ($93BN on Monday, $154BN on Tuesday, $85BN on Wednesday, $220BN on Thursday), is more than anything ever seen previously in a 4 day period. And while a portion of this gross issuance went to offset current maturities, the net effect was massive nonetheless, and nowhere more so than the Treasury’s cash balance (i.e. the Federal Reserve Account).
And, as shown in the final chart, the result of this Bill issuance flood is that the cash balance of the Treasury (i.e. the US government) just hit a record $515 billion, the highest on record.
Why? Because tomorrow is the day the crisis response officially begins as hundreds of billions in small, medium and very large business bailout demands hit the Treasury as up to $2 trillion in funds are handed out across the economy over the coming weeks.
As such, the half a trillion dollars held electronically at the US Treasury is just the beginning.
And here a quick aside: consider the path the money is taking before ending up in Joe Sixpack’s pocket: a desk worker at the Treasury punches a few buttons and sells electronic certificates which mature in a few weeks and are backstopped by the US government and which in turn fund the Treasury’s account with electronic dollars which were paid by some investor who similarly punched a few buttons on his computer and in hopes of parking his cash somewhere safe, handed over his electronic money to the Treasury desk worker. As a result of this transaction, hundreds of millions will receive a small amount of electronic ones and zeros in the next few days, which for countless people will mean the difference between disaster and survival.
Tyler Durden
Thu, 04/02/2020 – 21:22 - "Who Are These Parents?" – As COVID-19 Cases Soar, America's Teenaged 'Covidiots' Still Aren't Obeying Quarantine Orders
“Who Are These Parents?” – As COVID-19 Cases Soar, America’s Teenaged ‘Covidiots’ Still Aren’t Obeying Quarantine Orders
Looking back, the fact that most Americans went about their daily lives as if nothing was happening for most of February – heeding the official advice of mayors including NYC’s Bill de Blasio and others – seems almost unconscionable. All the while, COVID-19 was spreading, unseen, among communities in suburban Seattle, and in NYC and the suburban areas surrounding the city.
And yet, even after colleges around the country cancelled classes or converted to all-digital learning, hundreds of thousands of “Covidiot” teenagers and early twentysomethings were still hell-bent on capitalizing on cheap flights and enjoying the extended spring break of their dreams, public welfare be damned.
Many of these selfishly ignorant teenagers helped spread the virus around the country, as studies have now shown. But sadly, the ignorance of American teenagers – and the at-times depressing impotence of parents struggling to ‘civilize’ them – apparently knows no bounds. Because the Washington Post‘s ‘society’ section just ran a story about parents trying to cope with teenagers who are almost pathologically incapable of staying at home and doing nothing.
The reporter told the story of one suburban Virginia mom with an undisclosed medical condition that has left her immunocompromised. Despite this, her 18-year-old son insists on going out and meeting up with “his boys” – fellow high-school-senior-age teenagers who have built a fort in the nearby woods where they go to violate the newfound strictures of society.
For two weeks now, since Loudoun County closed its schools March 12, Julian has been building a fort near the Potomac River with “my boys,” he says, about two dozen seniors who show up randomly, bringing free pallets of wood they’ve spotted on Craigslist and building supplies from Home Depot. Rather than socially distancing, they’ve hammered away for hours before grilling hot dogs and fish they catch in a nearby pond and huddling together “to chill.”
Julian arrived first to the clearing Thursday and offered a tour of the fort, which rose from the wooded landscape like a hermit’s dream with its frame of poles set in quick cement, covered by a blue tarp to keep out the rain. In recent days, the crowd had been dwindling as news of the coronavirus contagion grew more alarming and parents began putting their collective feet down.
Many teens in the Washington region and across the country are gradually moving past anger and depression to acceptance, at least for the time being, as they grieve the social losses that come with self-quarantining. But Julian — his mother wanted his last name withheld to protect his privacy — is stuck in denial.
His mother fights back with an endless barrage of “sticky note” reminders encouraging her son to wash his hands for more than 20 seconds and to take other steps to protect the family from being sickened by the careless actions of their ungrateful teenage child.
Julian knows he is supposed to keep his distance from his mother, who takes a medication that compromises her immune system. He calls her concerns “100 percent valid,” and said “it freaked me out” when she recently had a small cold. Even so, he sheepishly tries to duck into her space.
“Staying six feet apart from my mom is hard,” Julian says. “I like to go up and hug her all the time.”
As for Elisa’s written reminders, “As soon as I walk in, I get hit in the face with a sticky note,” Julian says. “You can’t grab something in the kitchen without a sticky note in your face.”
He seems more amused than annoyed; again, he understands. Still, “it’s hard to get in the habit of washing my hands literally after everything I touch,” he says.
No such rules apply at “Coronavirus Outpost,” the name he has given his communal fort in the woods.
Maybe these kids will remember the coronavirus as their big struggle, their “World War II” as it were. Though, given the tendency to accept and embellish unpleasant experiences into “traumas”, we imagine that American teens will use this as one more excuse why the government owes them every handout imaginable, from paying off their student loans to covering health-care costs for life.
One mom wondered why some parents were still allowing kids to have group sleepovers and other social events when the governor had expressly forbade gatherings of more than 5.
Kelly Davis was willing to take a hit when her 14-year-old daughter, Victoria, begged to go to a sleepover at a friend’s house. Victoria, a competitive gymnast and straight-A student who Davis calls “the love of my life,” pled with her mother. “Why can’t I go?” she demanded, as her friends watched raptly on FaceTime.
“First, I made her get off FaceTime,” recounted Davis, 52, a single mom and special education teacher in Elkhart, Ind. “I said, ‘No,Victoria.’ I really don’t care what other parents are doing,” She pulled the “grandmother card,” because Davis’s 84-year-old mother lives with them.
Still, Davis finds herself resenting other parents. After the sleepover smackdown, another friend invited Victoria to a birthday party.
“Who are these parents?” she asked. “… It’s hard when other parents aren’t doing the right thing. It makes me look like the mean mom.”
Kim Baxter was able to forge alliances with other parents so her 17-year-old daughter, Charlotte, a senior at Yorktown High in Arlington, could spend time with friends during the pandemic. Outside, of course, and the requisite six feet apart.
It did not go well.
Charlotte unwittingly texted her mother a photo while the foursome were out hiking. “They weren’t keeping any kind of distance,” Baxter, a 51-year-old attorney, said ruefully.
She later declined on Charlotte’s behalf when the mother of her daughter’s boyfriend and two other parents jointly approved a group camping trip. “The boys are Eagle Scouts and so that wasn’t my concern,” she said. “It was just the close proximity of what they were doing.”
Charlotte “had a moment,” then that moment passed. Now Charlotte and her boyfriend are allowed to hang out at each others’ houses.
“I’ve met his mom, and we’ve been texting,” Baxter said. “I think we both kind of agreed that these two are pretty tight and it would probably be unhealthy to separate them.”
These aren’t the first reports of American teenagers not taking the quarantine seriously. Oddly, the young’s seeming unwillingness to accept that they truly are vulnerable has led to them catching the disease in larger numbers since they’re more likely to recklessly ignore quarantine advice.
Tyler Durden
Thu, 04/02/2020 – 21:05 - Crypto, QEternity, & "We Won't Know Hyperinflation's Happening Until It's Too Late"
Crypto, QEternity, & “We Won’t Know Hyperinflation’s Happening Until It’s Too Late”
Authored by Andrew Singer via CoinTelegraph.com,
These are perilous times, and it hasn’t escaped anyone’s notice that the United States Federal Reserve is doing its part to alleviate the suffering — which began with the coronavirus pandemic and has spread to the global economy. It’s printing more money.
“There is an infinite amount of cash at the Federal Reserve,” Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, told Scott Pelley of CBS on March 22, adding:
“We will do whatever we need to do to make sure there is enough cash in the financial system.”
The U.S. Federal Reserve itself reinforced that message on March 23, announcing that it would “continue to purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning.”
image courtesy of CoinTelegraph
The death of capitalism?
Reactions to these affirmations of quantitative easing, or QE, have been swift from sectors of the crypto community: “With these words, the last vestige of #capitalism died in the US,” wrote Caitlin Long, who established the first crypto-native bank in the United States. “[The] Fed’s monetization U.S. debt is now unlimited.”
Mati Greenspan, the CEO and co-founder of Quantum Economics told Cointelegraph: “The Fed said it is willing to buy the entire market” if necessary to stabilize markets. Meanwhile, on the fiscal side, Congress’s $2 trillion stimulus package includes handouts like “helicopter money” — i.e., a $1,200 payment to every tax-paying adult who has an annual income below $75,000. “Inflation is pretty much a foregone conclusion at this point,” he stated elsewhere.
Garrick Hileman, head of research at Blockchain.com, told Cointelegraph: “The response by central banks to COVID-19 is truly unprecedented, with Fed and Bank of England officials using terms like ‘infinite,’ ‘unlimited’ and ‘radical.’” They’ve been using such extraordinary language in the hope they’ll prevent equity and credit markets from seizing up. “Only time will tell if they have gone too far.”
The U.S. dollar is dominant
Is inflation really imminent, though? Not if one recognizes that the global demand for U.S. dollars continues to exceed supply. As Civic CEO Vinny Lingham told Cointelegraph: “The reality is: Everyone needs to reprice assets, and they need to do it in U.S. dollars.”
Lingham grew up in South Africa. He saw what happened with hyperinflation in neighboring Zimbabwe where “the demand for stable currency exceeded everything else.” With people in the grip of the current pandemic, entire business sectors have been shutting down all over the world. People have been selling assets whether it’s equities, collectible classic cars or Bitcoin (BTC). Lingham added:
“If I’m living in South Africa, I may have kept money in the form of a bar of gold that is priced in Rands. Now I’m selling it for local Rands and buying U.S. dollars with those Rands. As the Rand devalues, the dollar gets stronger.”
Under such conditions, “if the Federal Reserve prints another $2 trillion USD, it’s okay,” said Lingham. Greenspan agrees that the U.S. dollar has been the world’s most in-demand financial asset in recent weeks, and theoretically, the Fed could print trillions more than it is currently proposing — and there may not be any hyperinflation. The problem is that no one knows what the “stop point” is — i.e., how much is too much. “We won’t know [hyperinflation is] happening until it’s too late.”
BTC as a store of value?
What does all of this mean for cryptocurrencies? Many in the crypto world assume that Bitcoin, with its fixed maximum supply — 21 million BTC — is bound to come out ahead if the Fed and other central banks print too much money. “Though that assumption has not been tested in real-time except in Venezuela,” said Greenspan. If you had bought BTC at its low point in Venezuelan bolivars and had sold BTC at its height, also for bolivars, you would have come out way ahead. It’s not clear that this case can be generalized, though. During the current crisis, BTC and other cryptocurrencies have plunged dramatically, just like equities — which has somewhat damaged Bitcoin’s claim of being a store of value.
The current economic environment is not favorable for any asset class, Lingham observed. Bitcoin i3s now positively correlated with other asset classes. Greenspan said the correlation between BTC and the stock market has recently reached a high point of 0.6 — with 1.0 representing perfect positive correlation. If this were not the case, BTC would currently be priced somewhere between $12,000 and $15,000, Lingham suggested.
Ariel Zetlin-Jones, associate professor of economics at Carnegie Mellon University’s Tepper School of Business, told Cointelegraph that he understands this moment is critical for the future of cryptocurrencies:
“U.S. equity markets have suddenly become as volatile as Bitcoin markets, and the U.S. government is undertaking a large scale intervention that involves a massive expansion of the money supply which in the absence of other major shocks (the economic shutdown due to the pandemic), would normally induce a large increase in the inflation rate.”
However, Zetlin-Jones does not see these developments causing Bitcoin to emerge as a leading store of value because in the long run: “Bitcoin is one of the riskiest stores of value in the world, with Bitcoin price volatility more than five times that of both gold or even U.S. equity prices.” Kevin Dowd, a professor of finance and economics at Durham University in the United Kingdom, told Cointelegraph:
“BTC does offer an alternative store of value, and there is no question about that. The issue is: How good is it? It all depends upon when you buy and when you sell, and so there remains a huge element of luck.”
According to Hileman, the University of Cambridge’s first “cryptocurrency academic,” the prices of gold and Bitcoin should both rise:
“Even before COVID-19, we felt the unprecedented level of public and private debts made Bitcoin, and hard assets in general, attractive. Historically, recessions and large fiscal and monetary expansions have driven up the price of hard assets like gold. […] We do not see a reason why this time should be any different.”
The future of crypto?
It is still too early to gauge the impact of QE on crypto, said Greenspan. “The initial shock of the global economy grinding to a halt” is still too fresh. “The long-term trend is yet to emerge.”
Moreover, BTC is just a small part of the story, though it has held its value well compared with other asset classes, Greenspan told Cointelegraph.
People have been struggling, and many individuals are selling everything they can, said Lingham. “Until there is excess capital, Bitcoin is in the same basket as other assets. There will be no mad rush to get into cryptocurrency unless the U.S. dollar falters” — and then, only maybe.
“I would be surprised if BTC bit the dust due to the current crisis, but you cannot rule anything out,” said Dowd, who has maintained in the past that Bitcoin’s price must go to zero in the long term — principally because its mining model, a natural monopoly, is unsustainable.
In the short term, meanwhile: “The injection of money tends to float all markets, and that includes crypto,” said Greenspan. “Stocks will be first, but [the fiscal stimulus] is also likely to push up the price of BTC.”
A more decentralized global economy?
The current crisis might eventually impel structural changes in the world economy, however, and these could change the crypto and blockchain space — for the better. Zetlin-Jones told Cointelegraph that once the recovery begins, a new way has to be found:
“We will need a more robust economy — one where supply chains are less dependent on a single producer, where workers are less dependent on the operations of a single firm, where individuals are less dependent on a single source of health care.”
These are effective movements toward a more decentralized world economy, in which blockchain technology seems uniquely poised to play a key role, Zetlin-Jones said. “They might speed up the demand for blockchain solutions and, therefore, [improve] the long-run viability of blockchains and their associated cryptocurrencies.
Tyler Durden
Thu, 04/02/2020 – 20:45 - "Pandemic Drones" Can Now Detect Fever and Coughing
“Pandemic Drones” Can Now Detect Fever and Coughing
The COVID-19 outbreak is proving to be the Trojan horse that justifies the ushering in of the surveillance state. We’ve noted how governments and corporations are quickly deploying big data and spy tools to monitor people during the pandemic.
The war on terror, the war on drugs, the war on illegal immigration, and now the war on COVID-19: all start out as legitimate responses but then are used by politicians to increase the surveillance state and erode any freedoms citizens have left.
What’s coming to America in the not too distant future is a full-blown surveillance state, that could be on par with China’s. In particular, we want to show ZeroHedge readers what could be coming down the pipe: That is, “pandemic drones” outfitted with specialized sensor and computer vision system that can fly around cities and detect if people have elevated body temperatures, respiratory rates, as well as to identify if people are sneezing and coughing (all signs of a COVID-19 carrier)
A US-based drone company called Dragonfly is spearheading the effort to build a drone network across public areas to detect infected people. The drone network is called the “global early warning system” that would be able to spot the first signs of a pandemic.
Dragonfly was recently selected by Vital Intelligence, a healthcare data services and deep learning company in conjunction with the University of South Australia, to “immediately commercialize” pandemic drones to monitor people in public areas.
“Draganfly is honored to work on such an important project given the current pandemic facing the world with COVID-19. Health and respiratory monitoring will be vital for not only detection, but also utilizing the data to understand health trends. As we move forward, drones and autonomous technology doing detection will be an important part of ensuring public safety,” said Andy Card, Director of Draganfly and former Secretary of Transportation and White House Chief of Staff.
As shown below, the pandemic drone can easily detect breathing rate, heart rate, body temperature, and if the person is sneezing and coughing – all signs that could point to a COIVD-19 carrier.
Here’s Dragonfly’s video showing the drone in action:
On Monday, former FDA chief Scott Gottlieb told CNBC that the US must build a “massive surveillance system” to detect where the virus might be spreading next – and maybe one of the best ways to monitor large swaths of the population could be through the use of pandemic drones across major US metropolitan cities.
“What you really want … is a massive sentinel, surveillance system where you can be testing people randomly in the background to detect where the virus might be spreading. That’s going to be an early tripwire,” says @ScottGottliebMD on preventing more #coronavirus outbreaks. pic.twitter.com/GfumE4XJXn
— Squawk Box (@SquawkCNBC) March 30, 2020
Tyler Durden
Thu, 04/02/2020 – 20:25 - "50-Cent" Shifts Away From VIX 'Catastrophe Insurance': "Gold Is Now The Right Place To Be For Battles Ahead"
“50-Cent” Shifts Away From VIX ‘Catastrophe Insurance’: “Gold Is Now The Right Place To Be For Battles Ahead”
Having ‘come out’ as the infamous VIX-whale “50-Cent,” London-based fund manager Jonathan Ruffer has called it quits on his VIX-call-buying strategy:
“In sum, the catastrophe insurance did absolutely everything that might be expected of it. And it is now spent. It is likely to be some time before this insurance again prices at levels that makes it attractive as a defensive investment.“
So what is he looking at now, and what does the future hold?
The next defence was – and still is – a position in credit spreads. These spreads reflect the difference in yield between, say, a government bond, and a high-quality corporate bond. For years the spreads had been falling – a phenomenon which occurred in the UK in 1936 – and for exactly the same reason. As interest rates came down, the reality of the diminishing income was more eloquent than the shadow of the fear that a less-sound borrower might default. Victorian grandees wanted to know what their future daughters-in-law were worth – worth was expressed as an income figure, not as capital – and her Ladyship would want a second question answered: was this income from government Consols, or something flakier?
Our investments in credit spreads have protected the overall values of the portfolios, as conventional asset prices have tumbled. As I write, there still seems a good deal more mileage in this idea – we had positioned ourselves just outside the ‘safest’ corporates, as these could be the beneficiaries of Federal Reserve intervention. The Fed has intervened, and it will be interesting to know whether this does in fact stabilise the corporate bond market.
Our equities have borne the brunt of the grief, as they did in Q4 2018, falling by every bit as much as the overall indices. We were caught out then because action by the Fed meant that the markets recovered sufficiently to neutralise the effectiveness of our protective investments. This time round, our equity positions would have saved us a fair bit of money if they had performed better. It is worth peering into this part of the portfolios. Commentators divide the market into ‘momentum’ – stocks whose share price pattern is favourable – and value. Generally speaking, the best companies will be in the momentum bucket, and Fred Karno’s army relegated to value.
For the last decade, the gulf between momentum and value stocks has grown wider, and unprecedently so. Some of this may well be justified, as the techie carnivores eat up the Laura Ashleys of this world. But much of it is due to the fact that, recently, more money has come into equity markets through ETFs (exchange traded funds, a passive move to ‘buy the index’) than by specific analysis of each company’s prospects. Many have laughed bitterly at the fund management industry for being sent to the cleaners by index performers. It’s true that we are pretty hopeless, but one would expect a cheap ETF to be in the middle of the fifth decile (about 45th out of a hundred) – its performance median, but, being cheaper, better than an active fund manager who is trying to do the same thing. It feels to us as if the ETF phenomenon is beginning to unravel: they do not always trade at asset value any more, and there could be widespread liquidations. As this happens, momentum stocks will lead the markets lower, since that is where the indices are most heavily weighted.
There was more to our emphasis on ‘value’ stocks, than the ‘less bad’ aspect. The unprecedented monetary looseness in the period since the 2008 crisis has always meant that the economy might find traction – and if it had done, then these companies would have prospered, some of them mightily. Ironically, we believed that 2020 itself was going to be a year when world economies coordinated into a pattern of significant growth. Just as the fat lady reached for the high C, the platform collapsed.
Elsewhere, gold has been somewhat disappointing, with its performance weighed down by forced sellers.
But we think gold is the right place to be for the battles ahead.
Where do we go from here?
Mercifully, I have left myself little space for the humiliation of calling the future. Until the market becomes calmer, it will suffer all the vagaries of a civil war.
The biggest danger comes from an overwhelming desire in all of us to ‘buy the dips’.
In the old days, that was right – and wrong – pretty much 50% of the time.
Since Alan Greenspan, chair of the Federal Reserve, began medicating the markets after the 1987 crash, it has always – always – been right to do so.
Not many of us old-timers who acquired our hard wiring before 1987 are left; I started as a stockbroker in 1972, when a falling stock market was friendless, and bad news was pretty much just that – bad.
Buying the dips is predicated on the assumption that bad news is in fact good news since it opens up Uncle Sam’s pocketbook. Now debt is so great, and the promises needed so egregious, that there has to be a question mark over the efficacy of the pocketbook.
Any loss of confidence in the value of the collateral will manifest itself in a fear of inflation, since money is an expression of confidence in a token (fiat money, it is called – the divine ‘let it be’) – and if that confidence is lost, it ceases to do its job as a store of value.
What is clear is that central banks and governments will use whatever firepower they have – even if it turns out that their cheques are blank.
Accordingly, we have increased again our holdings in inflation-linked bonds (notably in the US). These will be a proper protection against a grinding bear market in money, in savings, in prosperity. The time is moving on from a world where we had to protect against sudden shocks – catastrophe insurance is behind us, job done. The investment landscape is going to become much more familiar, but it will only be a homecoming to the greybeards (what’s the gender neutral word for this? The mind boggles) who have lived it before.
Thirty-three years is a long detour – and for many it will have proved a cul-de-sac. It is difficult to master old tricks, secondhand, but my prediction is that it will prove a valuable quality over the next longish while.
Lastly, I want to express a personal view. It’s one which reflects that of all of us at Ruffer – of gratitude to you for sticking it out over the lean times. To do so, you had to trust us that a shock was on the way, and that we would rise to meet it. (I had more confidence in the first of those than the second…). The battle to keep clients safe is not won – alas, it is never won. But the first onslaught of a bear market has been successfully navigated, and this review ends with a reiteration of our investment priorities – first and second, to keep portfolios safe, third, to make them sing.
* * *
In January – amid the roaring meltup in stocks – Ruffer proclaimed:
“the central plank of what we’re doing – that there’s a dislocation ahead, speaking of wealth-destruction and illiquidity – well, our sureness of that makes us lions!”
His firm’s philosophy is built around the fact that clients love making money, but they hate losing it more than they like making it… something we suspect many “gurus” who have ‘come-up’ in the last decade of central bank largesse are about to discover this lesson the hard way.
Tyler Durden
Thu, 04/02/2020 – 20:05
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