- France Remains The World's Most Nuclear-Dependent Nation
France Remains The World’s Most Nuclear-Dependent Nation
Tyler Durden
Mon, 08/03/2020 – 02:45France is getting greener.
A series of measures have been announced aimed at making the economy more environmentally friendly such as a ban on outdoor heaters at bars and restaurants, more efficient domestic heating systems and two regional parks. Most importantly though, as Statista’s Niall McCarthy notes, the country has set a goal to reduce nuclear’s share of electricity generation from its current 70 percent to 50 percent by 2035.
The change in direction comes amid the controversial construction of the Flamanville EPR nuclear reactor by state-utility EDF which is more than a decade over schedule and is expected to cost €12.4 billion compared to an initial budget of €3.5 billion. It is finally expected to start operation in 2023. France also appointed former green politician and nuclear critic Barbara Pompili minister for the environment earlier this month.
As this infographic, based on the 2019 World Nuclear Industry Status Report, shows, no country is as reliant on nuclear energy as France.
You will find more infographics at Statista
It operated 58 reactors last year, second only to the United States’ 97, and they accounted for 71.7 percent of total electricity generation. The U.S. reactors had a 19.3 percent share of total electricity generation.
After France, the countries most reliant on nuclear power are all concentrated in Eastern Europe. Reactors generate between 50 and 55 percent of all electricity in Slovakia, Ukraine and Hungary. Sweden is also high up on the list with just over 40 percent, with Belgium (39 percent) and Switzerland (37.7 percent) close behind.
- US Troop Removal From Germany: A NATO-Skeptic POTUS Always Wins
US Troop Removal From Germany: A NATO-Skeptic POTUS Always Wins
Tyler Durden
Mon, 08/03/2020 – 02:00Authored by Tim Kirby via The Strategic Culture Foundation,
Is there any good reason why Germany is still occupied by the United States? After 75+ years one could make a strong argument that the Nazi threat is over. Donald Trump would seem to agree with this sentiment and directly stated that he wants to continue to reduce the number of American soldiers on the territory of today’s friendlier tolerant and geopolitically submissive Deutschland. The logic by which U.S. forces are stationed across the globe has been called into question many times and very often has no sellable answer. Trump himself agrees with the dubious nature of the need to have an American army base in every possible location. He even told the graduates of West Point that “We are not the policeman of the world”. This a very unusual statement from an American President, so is Trump’s threat to remove troops from Germany practical, ideological, or some odd reflection of his famed narcissism?
So how exactly did Trump threaten Germany with a troop withdrawal? On his most beloved platform of communication with the masses the President of the United States recently tweeted the following…
Germany pays Russia billions of dollars a year for Energy, and we are supposed to protect Germany from Russia. What’s that all about? Also, Germany is very delinquent in their 2% fee to NATO. We are therefore moving some troops out of Germany!
— Donald J. Trump (@realDonaldTrump) July 29, 2020
https://platform.twitter.com/widgets.js
The amount of U.S. forces in Germany, even before this demand by Trump was a good number for a flaccid superficial occupation but not a real determining factor in preventing a foreign invasion, but then again Germany is surrounded by allies and Switzerland so maybe one soldier would be good enough. With the Cold War having ended in the early 90s, from 2006-2018 the number of American personal occupying Germany went from around 72,000 to a bit over 32,000. A month before this historic tweet Trump had already threatened to remove 9,500 U.S. soldiers from Germany, shifting many to Poland, i.e. closer to Russia.
Since Germany did not pay up, after having a month to think about it, it would seem that the manpower shift has been increased to 12,000 men. So if this is a mob-style threat of “pay for protection or pay the price” then it really doesn’t seem worth it for Germany to bother, if they actually have the free will not to pay.
So what is the difference if Berlin does or does not pay their tribute to NATO?
Germany refuses to pay up
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They remain occupied but by less men.
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They become marginally weaker to a proposed highly unlikely Russian threat.
Germany decides to pay up
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They remain occupied by the current number of men.
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They remain as weak/strong to proposed highly unlikely Russian threat as they were before.
The threat traditional land based invasion happening between major powers in the 21st century seems impossible. No matter how much the clowns in the Mainstream Media portray modern war through a filter of WWII understanding, this does not make it true.
Photo: Men with guns provide no protection for Germany in a WWIII scenario.
A conflict between Russia and the West would be conducted by missiles with nuclear warheads. But for the sake of argument let’s say things change and infantry become a viable means of winning big wars again. In this instance having your troops deep in the heartland of the EU away from the Russian front makes no sense. The exception to this would be air force bases as having one’s fighters and bombers off the front line is not a problem, but the idea that “guys with guns” is somehow protecting Germany from Russia is mental even if infantry warfare became viable again.
Furthermore, what exactly would Russia gain by making a bayonet push the Reichstag actually get Moscow? The opportunity to occupy territory with no resources that traditionally hate them? Moscow has neither the means nor the motive to bother, making a Russian threat a very weak justification to do anything with tanks and men. Soft Power works against Russia, Hard Power cannot.If we look at things from this perspective this threat from Trump, it all seems rather empty and pointless, but if we take a look at it from the perspective of NATO’s future and not Germany’s national security we get a much different picture.
Germany refuses to pay up
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They and any who refuse to pay are slowly weaned off of NATO.
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This can weaken an organization Trump does not like or force the weaker nations to beg for American protection from the Chinese/Russians who are scarier overlords.
Germany decides to pay up
- NATO becomes a profitable protection racket that continues to serve American interests without putting so much burden on the back of the core of the organization.
Trump was very critical of NATO during his electoral campaign and seems to continue to be a skeptic. And perhaps this pressure on the big anti-Russian alliance could be a win-win scenario for Trump. If the member nations start paying up/contributing then this no longer becomes a burden for America while providing the same benefits that it always did. If the nations do not pay up, which could be bad for their health, then Trump does not seem particularly worried about this troublesome organization changing or dying out.
Certain member nations, especially those close to Russia are very weak and very poor, if they lose NATO protection then their destiny will be in their own hands which should prove to be a very terrifying thought to the leadership of these micronations – having to deal with great powers on their own two feet and not as a vassal of greatness.
In summation
It is obvious to everyone that the U.S. has long overstayed its “10-year Allied occupation” of then Nazi Germany, which is a country unrecognizable in comparison to today’s core of the EU. Presenting the need to protect Germany from the Russians makes little sense, but a little is infinitely more than zero.
Being occupied by ~20,000 U.S. soldiers is not much different than paying up to be occupied by ~30,000 U.S. soldiers from a German perspective.
Airbases in Germany could matter in a theoretical (and extremely unlikely) traditional conflict with Russia. Posting infantry in the country would contribute nothing in a conflict.
As a NATO skeptic, putting pressure on the organization is a win-win scenario for Trump as either he pushes it towards the breaking point to get rid of it or forces it to become profitable/beneficial to the United States and thus worth keeping.
Weaker NATO nations near Russia have no choice but to pay up to the West because their stability rests on being a complete part of it and having its protection.
Trump may want to coerce the Germans to buy oil/gas products from someone else.
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- Macau's Gaming Revenues Crash 94.5% In July As Recovery Hopes Dim
Macau’s Gaming Revenues Crash 94.5% In July As Recovery Hopes Dim
Tyler Durden
Mon, 08/03/2020 – 00:45Casino stocks roared back to life in early July on prospects of easing Chinese travel restrictions for Macau would lead to booming tourism in the world’s largest casino hub. But as we found out Saturday morning, via Reuters, that’s wasn’t the case as gaming revenues crashed.
Gaming revenues for Macau collapsed 94.5% in July, on a YoY basis, despite travel restrictions to the area relaxed. Gambling in a pandemic, or mainly the fear of being around other people in a closed, indoor space was enough to deter Chinese mainlanders.
July’s gaming revenue figure was around $163 million and in line with analysts’ expectations of a 95% drop.
“Casinos are staring at heavy losses for the second quarter, with not much hope for a near-term recovery as a resurgence in coronavirus cases muddies the outlook for when China will reinstate travel visas,” said Reuters.
Even with travel restrictions eased, Macau last month saw about 2,000 visitors per day, or about 98% reduction in traffic from its usually 108,000 daily average in 2019.
Shares in MGM Resorts International soared in early July on prospects MGM Macau would see an influx of mainland Chinese as Macau started to reopen. Judging from the continued decline after the pop in optimism, along with Reuters’ Macau gaming revenues for the month, the road to recovery appears to be a bumpy one.
Here’s our reporting on collapsing gaming revenue in the gambling hub:
- Macau Orders All Casinos To Close For Two Weeks Over Virus Outbreak
- Macau Gaming Revenue Collapses 87.8% In February
- Macau Gaming Revenues Down 97% As Travel Restrictions Take Toll
MGM Macau is heavily discounting room rates into August.
As for Las Vegas, we noted last week, it could take three years for the gambling city in the US to recover.
Macau’s continued plunge in gaming revenue through the summer doesn’t bode well for the global V-shaped recovery narrative.
- How The Billionaires Control American Elections
How The Billionaires Control American Elections
Tyler Durden
Sun, 08/02/2020 – 23:40Authored by Eric Zuesse via The Strategic Culture Foundation,
The great investigative journalist Glenn Greenwald gave an hour-long lecture on how America’s billionaires control the U.S. Government, and here is an edited summary of its opening twenty minutes, with key quotations and assertions from its opening — and then its broader context will be discussed briefly:
“How Congress Maintains Endless War – System Update with Glenn Greenwald” – The Intercept, 9 July 2020
2:45: There is “this huge cleavage between how members of Congress present themselves, their imagery and rhetoric and branding, what they present to the voters, on the one hand, and the reality of what they do in the bowels of Congress and the underbelly of Congressional proceedings, on the other. Most of the constituents back in their home districts have no idea what it is that the people they’ve voted for have been doing, and this gap between belief and reality is enormous.”
Four crucial military-budget amendments were debated in the House just now, as follows:
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to block Trump from withdrawing troops from Afghanistan.
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to block Trump from withdrawing 10,000 troops from Germany
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to limit U.S. assistance to the Sauds’ bombing of Yemen
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to require Trump to explain why he wants to withdraw from the Intermediate Nuclear Forces Treaty
On all four issues, the pro-imperialist position prevailed in nearly unanimous votes – overwhelming in both Parties. Dick Cheney’s daughter, Republican Liz Cheney, dominated the debates, though the House of Representatives is now led by Democrats, not Republicans.
Greenwald (citing other investigators) documents that the U.S. news-media are in the business of deceiving the voters to believe that there are fundamental differences between the Parties. “The extent to which they clash is wildly exaggerated” by the press (in order to pump up the percentages of Americans who vote, so as to maintain, both domestically and internationally, the lie that America is a democracy — actually represents the interests of the voters).
16:00: The Chairman of the House Armed Services Committee — which writes the nearly $750B annual Pentagon budget — is the veteran (23 years) House Democrat Adam Smith of Boeing’s Washington State.
“The majority of his district are people of color.” He’s “clearly a pro-war hawk” a consistent neoconservative, voted to invade Iraq and all the rest.
“This is whom Nancy Pelosi and House Democrats have chosen to head the House Armed Services Committee — someone with this record.”
He is “the single most influential member of Congress when it comes to shaping military spending.”
He was primaried by a progressive Democrat, and the “defense industry opened up their coffers” and enabled Adam Smith to defeat the challenger.
* * *
That’s the opening.
Greenwald went on, after that, to discuss other key appointees by Nancy Pelosi who are almost as important as Adam Smith is, in shaping the Government’s military budget. They’re all corrupt. And then he went, at further length, to describe the methods of deceiving the voters, such as how these very same Democrats who are actually agents of the billionaires who own the ‘defense’ contractors and the ‘news’ media etc., campaign for Democrats’ votes by emphasizing how evil the Republican Party is on the issues that Democratic Party voters care far more about than they do about America’s destructions of Iraq and Syria and Libya and Honduras and Ukraine, and imposing crushing economic blockades (sanctions) against the residents in Iran, Venezuela and many other lands. Democratic Party voters care lots about the injustices and the sufferings of American Blacks and other minorities, and of poor American women, etc., but are satisfied to vote for Senators and Representatives who actually represent ‘defense’ contractors and other profoundly corrupt corporations, instead of represent their own voters. This is how the most corrupt people in politics become re-elected, time and again — by deceived voters. And — as those nearly unanimous committee votes display — almost every member of the U.S. Congress is profoundly corrupt.
Furthermore: Adam Smith’s opponent in the 2018 Democratic Party primary was Sarah Smith (no relation) and she tried to argue against Adam Smith’s neoconservative voting-record, but the press-coverage she received in her congressional district ignored that, in order to keep those voters in the dark about the key reality. Whereas Sarah Smith received some coverage from Greenwald and other reporters at The Intercept who mentioned that “Sarah Smith mounted her challenge largely in opposition to what she cast as his hawkish foreign policy approach,” and that she “routinely brought up his hawkish foreign policy views and campaign donations from defense contractors as central issues in the campaign,” only very few of the voters in that district followed such national news-media, far less knew that Adam Smith was in the pocket of ‘defense’ billionaires. And, so, the Pentagon’s big weapons-making firms defeated a progressive who would, if elected, have helped to re-orient federal spending away from selling bombs to be used by the Sauds to destroy Yemen, and instead toward providing better education and employment-prospects to Black, brown and other people, and to the poor, and everybody, in that congressional district, and all others. Moreover, since Adam Smith had a fairly good voting-record on the types of issues that Blacks and other minorities consider more important and more relevant than such things as his having voted for Bush to invade Iraq, Sarah Smith really had no other practical option than to criticize him regarding his hawkish voting-record, which that district’s voters barely even cared about. The billionaires actually had Sarah Smith trapped (just like, on a national level, they had Bernie Sanders trapped).
Of course, Greenwald’s audience is clearly Democratic Party voters, in order to inform them of how deceitful their Party is. However, the Republican Party operates in exactly the same way, though using different deceptions, because Republican Party voters have very different priorities than Democratic Party voters do, and so they ignore other types of deceptions and atrocities.
Numerous polls (for examples, this and this) show that American voters, except for the minority of them that are Republican, want “bipartisan” government; but the reality in America is that this country actually already does have that: the U.S. Government is actually bipartisanly corrupt, and bipartisanly evil. In fact, it’s almost unanimous, it is so bipartisan, in reality. That’s the way America’s Government actually functions, especially in the congressional votes that the ‘news’-media don’t publicize. However, since it lies so much, and its media (controlled also by its billionaires) do likewise, and since they cover-up instead of expose the deepest rot, the public don’t even know this. They don’t know the reality. They don’t know how corrupt and evil their Government actually is. They just vote and pay taxes. That’s the extent to which they actually ‘participate’ in ‘their’ Government. They tragically don’t know the reality. It’s hidden from them. It is censored-out, by the editors, producers, and other management, of the billionaires’ ‘news’-media. These are the truths that can’t pass through those executives’ filters. These are the truths that get filtered-out, instead of reported. No democracy can function this way — and, of course, none does.
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- Mysterious Drone Swarm Breached Secure Airspace Over Largest Nuclear Power Plant In US
Mysterious Drone Swarm Breached Secure Airspace Over Largest Nuclear Power Plant In US
Tyler Durden
Sun, 08/02/2020 – 23:15A mysterious incident related to a serious breach of secure airspace over America’s largest nuclear power plant has been unearthed through Freedom of Information Act documents gained from the government.
It’s leading to new fears that America’s energy infrastructure is prone to attack and potentially being knocked offline, akin to the drone and missile attack which temporarily halted all Saudi oil exports last year at Aramco’s Abaqaiq oil processing facility. Forbe’s presents the astonishing details as follows:
A tiny armada of between four and six unmarked drones flew over the Palo Verde Generating Station nuclear power plant in Arizona on the nights of September 29 and 30, 2019, with plant security proving unable to stop them and authorities still uncertain who was operating them or why.
Palo Verde Generating Station nuclear power plant in Arizona, via Wiki Commons. The newly accessed Nuclear Regulatory Commission (NRC) documents had called the incident a “drone-a-palooza” as it involved swarms of inexpensive, likely off-the-shelf drones flying in large numbers over restricted airspace and near sensitive structures of Arizona’s Palo Verde Nuclear Power Plant.
The documents conclude that it’s still as yet unknown who or what entity sent them or who was operating them during the illegal incursion.
“Documents gained under the Freedom of Information Act show how a number of small drones flew around a restricted area at Palo Verde Nuclear Power Plant on two successive nights last September,” Forbes writes further. “Security forces watched, but were apparently helpless to act as the drones carried out their incursions before disappearing into the night. Details of the event gives some clues as to just what they were doing, but who sent them remains a mystery.”
File image: Getty/Daily Beast The FOIA documents underscore the incident was confusing and chaotic for security on the ground, as the security logs suggest:
“Officer noticed several drones (5 or 6) flying over the site. The drones are circling the 3 unit site inside and outside the Protected Area. The drones have flashing red and white rights and are estimated to be 200 to 300 hundred feet above the site. It was reported the drones had spotlights on while approaching the site that they turned off when they entered the Security Owner Controlled Area. Drones were first noticed at 2050 MST and are still over the site as of 2147 MST. Security Posture was normal, which was changed to elevated when the drones were noticed. The Licensee notified one of the NRC resident inspectors.”
And on a subsequent night, the logs indicate:
Four (4) drones were observed flying beginning at 2051 MST [on Sept. 30, 2019] and continuing through the time of this report (2113 MST). As occurred last night, the drones are flying in, through, and around the owner controlled area, the security owner controlled area, and the protected area. Also, as last night, the drones are described as large with red and white flashing lights. Spotlights have not been noted tonight.
The licensee has not changed their security posture. The licensee continues to monitor the drones.
As of 0355 EDT, no drones have been observed at the site since before 0020 MST. LLEA [local law enforcement agency] surveyed the area and were unable to locate drones on the ground or anyone controlling the drones.
Guards at the high secure facility were without any ability to deter the drones overhead. Subsequent media reports in the wake of the internal security memos going public say that county police were deployed to scour the area for the drone operator or operators but to no avail.
The whole unsolved incident highlights that it appears America’s network of nuclear power sites essentially remain defenseless when it comes to drone incursions.
It appears that at least at the Palo Verde site, the facility was not equipped with drone detection gear or jamming technology which could have disabled the drones. However, the sprawling facility is reportedly due to receive drone and small aircraft detection gear, but it’s unknown whether other sensitive facilities are also due for a security ungrade.
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Some details on America’s largest nuclear power plant at Palo Verde:
- Cover-Up Continues: Revisiting The Incident At Benghazi
Cover-Up Continues: Revisiting The Incident At Benghazi
Tyler Durden
Sun, 08/02/2020 – 22:50Authored by Carlton Meyer via AntiWar.com,
Chris Stevens was an ambitious US State Department employee who volunteered to participate in the overthrow of the Libyan government in 2011.
He covertly arrived in Libya in early 2011 aboard a Greek cargo ship with CIA personnel and set up operations in Benghazi to coordinate illegal shipments of weaponry into Libya and organized attacks on the Libyan army.
After Africa’s most prosperous nation was in ruins, Stevens became the US Ambassador to Libya in Tripoli and was given a new mission of shipping tons of arms to Syria to destroy that nation.
He traveled to Benghazi in September 2012 to check on progress and was attacked. Stevens was captured, beaten, and killed.
The Obama administration hid these facts and proclaimed Chris Stevens an American hero who had traveled to Benghazi to mediate peace among warring factions when he was killed by terrorists.
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Watch how the covert op turned disastrous & into a continuing cover-up:
- More Than 60% Of Global Debt Now Yields Less Than 1%
More Than 60% Of Global Debt Now Yields Less Than 1%
Tyler Durden
Sun, 08/02/2020 – 22:25For all its monetary generosity, despite injecting $3 trillion reserves into the banking system (if not the economy), the Fed remains stuck with two big problems. The first one, as we touched on earlier, is that the newly printed money is unable to make its way into the broader monetary plumbing and spark the much needed inflation that will do away with the trillions in debt, although as we also noted, the Fed now has a plan to deposit digital funds directly into individual US accounts (using a “household app” in the words of former Fed economist Julia Coronado).
The other problem is that despite all its attempts to stimulate equity animal spirits, the bulk of new fund has flowed into bonds, not stocks. In fact, YTD equity outflows amount to $39BN while inflows to bonds and commodities are over $200BN, with a whopping $1.145 trillion going to cash via money-markets.
And so with so many investors stubbornly buying the one asset class the Fed does not want to be in wide demand (even as it monetized some $3 trillion of it), and even with trillions more in new debt to be paradropped by the US Treasury – something which has failed to taper demand for 10Y Treasurys whose yields just hit an all time low – the hunt for yield is getting harder than ever for fixed-income investors.
According to the FT, a record 86% of the $60 trillion global bond market tracked by ICE Data Services traded with yields no higher than 2%, with more than 60% of the market yielding less than 1 per cent as of June 30.
At the same time, global negative yielding debt has soared to $14.6 trillion, from $11 trillion in January, and rapidly approaching the all time high of $17 trillion hit one year ago.
Meanwhile, just 3% of the investable bond universe today yields more than 5%, a share that is close to an all-time low, and represents a precipitous drop from levels seen roughly two decades ago. Consider that in the late 1990s, nearly 75% of bonds traded with yields above 5 per cent, while sub-2% yields comprised under 10% of the market. That was before central banks took over capital markets, and responded to the a series of financial crises by slashing interest rates to ever lower, and eventually negative rates, and launching trillions in bond-buying programs that fundamentally altered the investing landscape.
This has pushed investors into riskier segments in search of income, compelling them to lend to lower-quality companies and countries.
“Yield-chasing behavior has become much more pronounced,” said Matt King, Citi’s legendary credit strategist. “If you are a pension fund or an insurance company, you are forced to go down in quality and take extreme risk.”
It all came to a head in this year’s Covid-19 crisis, when the Fed again cut interest rates to near zero, and pledged to buy an unlimited quantity of government debt (and has been doing so, monetizing all gross Treasury issuance in 2020). The central bank also launched a number of emergency programs to shore up an unprecedented range of securities — including IG, junk bonds and municipal debt – which sent investment grade prices to all time highs and disconnected them from fundamentals. Investors expect additional stimulus measures to be announced at either this week’s Fed meeting or the next one in September.
After the latest round of interventions, real yields on US Treasuries — which strip out expectations for inflation — have dropped to all time lows of -1%.
This move “is the direct consequence of all of the central bank support”, said King. “It is the main force driving investors to pile into risky assets” such as gold and cryptos, both of which are at or near all time highs.
- From Lockdowns To "The Great Reset"
From Lockdowns To “The Great Reset”
Tyler Durden
Sun, 08/02/2020 – 22:00Authored by Anthony Mueller via The Mises Institute,
The lockdown in the wake of the coronavirus pandemic has accelerated the implementation of long-held plans to establish a so-called new world order. Under the auspices of the World Economic Forum (WEF), global policymakers are advocating for a “Great Reset” with the intent of creating a global technocracy. It is not by coincidence that on October 18, 2019, in New York City the WEF participated in “Event 201” at the “high-level” pandemic exercise organized by the John Hopkins Center for Health Security.
This coming technocracy involves close cooperation between the heads of the digital industry and of governments. With programs such as guaranteed minimum income and healthcare for all, the new kind of governance combines strict societal control with the promise of comprehensive social justice.
The truth, however, is that this new world order of digital tyranny comes with a comprehensive social credit system. The People’s Republic of China is the pioneer of this method of surveillance and control of individuals, corporations, and sociopolitical entities.
For the individual, one’s identity is reduced to an app or chip that registers almost any personal activity. In order to gain a few individual rights, and be it only to travel to a certain place, a person must balance such apparent privileges with his submission to a web of regulations that define in detail what is “good behavior” and deemed as beneficial to humankind and the environment. For example, during a pandemic, this sort of control would extend from the obligation of wearing a mask and practicing social distancing to having specific vaccinations in order to apply for a job or to travel.
It is, in short, a type of social engineering which is the opposite of a spontaneous order or of development. Like the mechanical engineer with a machine, the social engineer—or technocrat—treats society as an object. Different from the brutal suppressions by the totalitarianism of earlier times, the modern social engineer will try to make the social machine work on its own according to the design. For this purpose, the social engineer must apply the laws of society the way the mechanical engineer follows the laws of nature. Behavioral theory has reached a stage of knowledge that makes the dreams of social engineering possible. The machinations of social engineering operate not through brute force, but subtly by nudge.
Under the order envisioned by the Great Reset, the advancement of technology is not meant to serve the improvement of the conditions of the people but to submit the individual to the tyranny of a technocratic state. “The experts know better” is the justification.
The Agenda
The plan for an overhaul of the world is the brainchild of an elite group of businessmen, politicians, and their intellectual entourage that used to meet in Davos, Switzerland, in January each year. Brought into existence in 1971, the World Economic Forum has become a megaglobal event since then. More than three thousand leaders from all over the world attended the meeting in 2020.
Under the guidance of the WEF, the agenda of the Great Reset says that the completion of the current industrial transformation requires a thorough overhaul of the economy, politics, and society. Such a comprehensive transformation requires the alteration of human behavior, and thus “transhumanism” is part of the program.
The Great Reset will be the theme of the fifty-first meeting of the World Economic Forum in Davos in 2021. Its agenda is the commitment to move the world economy toward “a more fair, sustainable and resilient future.” The program calls for “a new social contract” that is centered on racial equality, social justice, and the protection of the nature. Climate change requires us “to decarbonize the economy” and to bring human thinking and behavior “into harmony with nature.” The aim is to build “more equal, inclusive and sustainable economies.” This new world order must be “urgently” implemented, the promotors of the WEF claim, and they point out that the pandemic “has laid bare the unsustainability of our system,” which lacks “social cohesion.”
The WEF’s great reset project is social engineering at the highest level. Advocates of the reset contend that the UN failed to establish order in the world and could not advance forcefully its agenda of sustainable development—known as Agenda 2030—because of its bureaucratic, slow, and contradictory way of working. In contrast, the actions of the organizational committee of the World Economic Forum are swift and smart. When a consensus has been formed, it can be implemented by the global elite all over the world.
Social Engineering
The ideology of the World Economic Forum is neither left nor right, nor progressive or conservative, it is also not fascist or communist, but outright technocratic. As such, it includes many elements of earlier collectivist ideologies.
In recent decades, the consensus has emerged at the annual Davos meetings that the world needs a revolution, and that reforms have taken too long. The members of the WEF envision a profound upheaval at short notice. The time span should be so brief that most people will hardly realize that a revolution is going on. The change must be so swift and dramatic that those who recognize that a revolution is happening do not have the time to mobilize against it.
The basic idea of the Great Reset is the same principle that guided the radical transformations from the French to the Russian and Chinese Revolutions. It is the idea of constructivist rationalism incorporated in the state. But projects like the Great Reset leave unanswered the question of who rules the state. The state itself does not rule. It is an instrument of power. It is not the abstract state that decides, but the leaders of specific political parties and of certain social groups.
Earlier totalitarian regimes needed mass executions and concentration camps to maintain their power. Now, with the help of new technologies, it is believed, dissenters can easily be identified and marginalized. The nonconformists will be silenced by disqualifying divergent opinions as morally despicable.
The 2020 lockdowns possibly offer a preview of how this system works. The lockdown worked as if it had been orchestrated—and perhaps it was. As if following a single command, the leaders of big and small nations—and of different stages of economic development—implemented almost identical measures. Not only did many governments act in unison, they also applied these measures with little regard for the horrific consequences of a global lockdown.
Months of economic stillstand have destroyed the economic basis of millions of families. Together with social distancing, the lockdown has produced a mass of people unable to care for themselves. First, governments destroyed the livelihood, then the politicians showed up as the savior. The demand for social assistance is no longer limited to specific groups, but has become a need of the masses.
Once, war was the health of the state. Now it is fear of disease. What lies ahead is not the apparent coziness of a benevolent comprehensive welfare state with a guaranteed minimum income and healthcare and education for all. The lockdown and its consequences have brought a foretaste what is to come: a permanent state of fear, strict behavioral control, massive loss of jobs, and growing dependence on the state.
With the measures taken in the wake of the coronavirus pandemic, a big step to reset the global economy has been made. Without popular resistance, the end of the pandemic will not mean the end of the lockdown and social distancing. At the moment, however, the opponents of the new world order of digital tyranny still have access to the media and platforms to dissent. Yet the time is running out. The perpetrators of the new world order have smelled blood. Declaring the coronavirus a pandemic has come in handy to promote the agenda of their Great Reset. Only massive opposition can slow down and finally stop the extension of the power grip of the tyrannical technocracy that is on the rise.
- Xi’s Decision To Turn Inward Is Dangerous For Trade
Xi’s Decision To Turn Inward Is Dangerous For Trade
Tyler Durden
Sun, 08/02/2020 – 21:35By Ye Xie, Bloomberg macro commentator
Three things we learned last week:
1. A major pivot by Xi has China turning inward
At the Politburo meeting on Thursday, President Xi Jinping reiterated his recent call for “dual circulation,” emphasizing self-sufficiency in supply and demand. The combination of a weak global economy and anti-China sentiment in the West means China has to rely more on itself. The shift suggests China will substitute some imports, including technology, with local supply, and reorient some exports to domestic markets. In other words, global trade, which is already contracting, is likely to remain sluggish due to Xi’s pivot inward. This isn’t good news for countries that sell to China, including Germany and most emerging markets. The chart below shows how closely correlated China and U.S. imports are to the performance of global stocks.
Trade data this week is likely to confirm that imports and exports remain weak in China.
2. Dollar’s decline is about to slow down
The Bloomberg Dollar Index fell to a two-year low last week. But its decline may start to slow. The pandemic is showing signs of leveling off in the U.S., and it’s picking up in other countries, including Spain and Japan. A reversal of the virus’s trend globally would remove one of the negatives for the dollar. European stocks underperformed the U.S. last week, underscoring that the dynamics may already be at play.
Still, investors are bracing for radical changes in the Fed policy in September, which sent five-year Treasury yields to record lows. The long-term structural weaknesses for the dollar — including valuation and twin deficits — are still there. That means any respite is likely to be short-lived for the U.S. currency.
3. Volatility may pick up in August with a looming fiscal cliff in the U.S.
The U.S. and Europe posted record GDP contraction last quarter. And American jobs data this week is likely to show that employment growth slowed significantly in July. While most companies have managed to beat low expectations for their earnings, U.S. lawmakers are struggling to pass another economic relief package, and the extra federal unemployment benefits of $600 a week that had been helping to prop up the economy have expired. Expect some volatility in August — that’s when it tends to pick up.
Things to Know:
- China’s ByteDance Ltd. is prepared to sell its music-video app TikTok’s U.S. operations after President Trump threatened to order the move, according to people with knowledge of the situation
- The grace period for wealth management rules will be extended to the end of 2021 due to impact of the coronavirus on the finance industry, China’s central bank said in a statement
- Hong Kong delayed a key Legislative Council election scheduled for September for a year due to a recent surge in Covid-19 cases, fueling more outrage among the city’s opposition
- The U.S. Treasury announced sanctions against a Chinese company and two individuals linked to it, amid tensions between the two nations over issues ranging from trade to Beijing’s treatment of ethnic minorities
- Gold surged to a fresh record, fueled by a persistent dollar weakness and low interest rates
- Vaccine Hunt: Is Injecting Human Volunteers With COVID-19 Ethical?
Vaccine Hunt: Is Injecting Human Volunteers With COVID-19 Ethical?
Tyler Durden
Sun, 08/02/2020 – 21:10In the race to find a vaccine for COVID-19, an ethical debate is brewing over whether it’s justifiable to deliberately infect healthy volunteers with the disease in the hopes of achieving a scientific breakthrough sooner, according to the South China Morning Post.
A patient in the US state of New York is injected with a possible Covid-19 vaccine in the world’s largest clinical study. Photo: AP And while consenting adults should be allowed to take whatever risks they want, there’s a known unknown regarding this relatively new illness – namely, why do most people who contract coronavirus range from asymptomatic to ‘worst flu of my life,’ only to fully recover, while others – known as ‘long haulers‘ – remain ill for months, experiencing ‘waves’ of debilitating symptoms with no end in sight.
We don’t know much about long haulers – particularly one’s chances of becoming one if infected with COVID-19.
Deliberately infecting people for research is done through what’s known as a “human challenge trial” (HCT) – which can be done concurrently with phase III vaccine trials. Deciding on HCTs for COVID-19 will be a panel of experts at the World Health Organization (WHO) – which includes Wuhan ‘Bat Woman’ Shi Zhengli, whose lab has fallen under suspicion as the source of the COVID-19 outbreak despite her repeated denials.
The advisory panel must contend with three ‘particularly contentious’ questions, according to SCMP:
- First, should such trials be carried out even if there is no cure for Covid-19?
- Second, the most probable HCT trial would recruit young, healthy volunteers to minimise the chance that they might die or become seriously ill after infection. But studies have found that elderly people, the group most vulnerable to the disease, are less responsive to vaccines. So, would it be worth the potential risks to find a vaccine that may not work for those who need it most?
- Third, would human challenge trials shorten the time to discover a vaccine? Would scientists gain any distinct advantage by exposing volunteers to the risks?
The experts in the WHO advisory group were split on the first and third questions, while the majority thought elderly people might not benefit from the findings of the trials. How Shi voted on these questions was not known. She did not reply to an email query from the South China Morning Post. –SCMP
In 2016, an ethics committee denied a proposal to use HCTs on a Zika virus vaccine over concerns of the risks it posed to volunteers and their sexual partners.
“The right question is whether challenge trials would increase study participants’ likelihood of similar bad outcomes, compared to two alternative scenarios: non-participation in any trial and participation in standard efficacy trials for the same vaccines,” posed Nir Eyal, a biomedical ethicist at Rutgers Global Health Institute.
At present, a total of 32,665 people from 140 countries have signed up as volunteers for a potential HCT organized by volunteer group 1Day Sooner.
“We see considerable potential in the use of human challenge studies to accelerate Covid-19 vaccine development, [to help filter] and validate the best candidate vaccines, and optimise vaccination approaches,” said Professor Adrian Hill, director of Oxford University’s Jenner Institute – who is collaborating with 1Day Sooner to prepare for possible HCTs in addition to phase III clinical trials.
Illustration: Perry Tse “We’re hoping to be doing challenge trials by the end of the year,” Hill told The Guardian. “This might be in parallel or might be after the phase-three trial is completed. They’re not competing options, they’re complementary.“
Abie Rohrig, a spokesman for 1Day Sooner, said no volunteers had asked to withdraw, despite some new findings pointing to possible long-term damage to organs such as the kidneys, heart and nerves, although they were rare among young adults.
“I have not heard from any volunteers about withdrawing because of these risks. Every volunteer I have personally spoken with understands that there is a large degree of uncertainty with respect to Covid-19, and they are willing to take on that uncertain risk in a challenge trial,” Rohrig said. -SCMP
Meanwhile, over 150 scientists and academics, including 15 Nobel laureates, have signed an open letter to the Director of the US National Institutes of Health, Francis Collins, asking the US government to collaborate with international teams to prepare for HCTs. That said, they also called for a ‘high-quality ethical review’ before they could start, according to the report.
“HCTs for Covid-19 have a tremendous amount of advocacy behind them that is unprecedented, for two main reasons. First, the advocacy group 1Day Sooner has been working hard to keep media attention focused on HCTs. Second, the widespread damage that has already been done by Covid-19 leaves the public grasping for any way to speed up vaccine development,” said Northwestern University bioethicist, Seema Shah – the primary author of the Zika ethics panel report.
Some scientists, however, have voiced serious concerns over whether the risks to volunteers is justified.
In an opinion piece published on the US medical website STAT, Michael Rosenblatt, chief medical officer of Flagship Pioneering and former chief medical officer of pharmaceutical giant Merck, wrote: “These authors, like 1Day Sooner’s volunteers, are well-intentioned but wrong.”
Rosenblatt, who is also an adviser to Moderna, said HCTs took months to prepare and Covid-19 vaccine development would not be accelerated by testing young volunteers.
“The volunteers might end up having risked their own health without truly helping those who are in greatest need of vaccine protection,” he said, referring to the elderly.
“An equally disturbing scenario is what if one of the first volunteers dies, either due to the play of chance, a problem with the vaccine, or the individual’s genetic make-up? This is unlikely to happen, but it can, and did, in another setting with consequences that stretched far beyond the single tragic death,” he wrote. He was referring to the death of an 18-year-old volunteer in the first gene therapy trials in 1999. The death put similar research on hold for years. -SCMP
What’s more, since no ‘weakened’ SARS-CoV-2 strains have been manufactured for use in HCTs, volunteers would be injected with ‘wild strains.’
“If HCTs are green-lighted now, when there is substantial uncertainty about the risks, they could set a new precedent for the level of risk and uncertainty that is tolerated in research,” said Shah. “If there are bad outcomes in these trials, or if the vaccines tested in them have safety issues when given to the general public, HCTs could hurt public trust in vaccines in the longer term.”
- Millions Locked Down Under Draconian Covid Rules in Australia
Millions Locked Down Under Draconian Covid Rules in Australia
Tyler Durden
Sun, 08/02/2020 – 20:59Submitted by Mish Shedlock of MishTalk
To combat a Covid outbreak, Melbourne initiated its most severe restrictions yet. Victoria, Australia Declares ‘State of Disaster,’ Locking Down Millions in Melbourne.
The premier of Victoria plunged the region into a “state of disaster” on Sunday, announcing even stricter lockdown measures, introducing a nightly curfew and banning virtually all trips outdoors after Australia’s second largest state recorded 671 new infections in a single day.
Daniel Andrews told Victorians at a news conference that “we have to do more, and we have to do more right now,” as the state battles to contain a devastating coronavirus outbreak that had already stripped residents of their freedoms, livelihoods and social interactions and made it an outlier from the rest of the country.
New Rules
- “Where you slept last night is where you’ll need to stay for the next six weeks.“
- Curfew between 8 p.m. and 5 a.m.
- Only one person per household will be allowed to leave their homes once a day — outside of curfew hours — to pick up essential goods, and they must stay within a 5 kilometer radius of their home unless nearest shop is over 5 KM away.
- Exercise can be taken for up to an hour a day, with one other person, but still within five kilometers of a person’s home.
What’s Going On?
Australia Total Covid Cases
Daily New Cases
Total Coronavirus Deaths
Questions of the Day
- Do these measures fit the outbreak?
- What if someone was in a hotel? Someone else’s house?
I expect there are some exceptions but we have not seen anything like this outside of China and a few cities in Italy.
Meanwhile in the US
As noted earlier today, Fed’s Kashkari Urges Congress to Hand Out More Free Money
“If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it,” Kashkari said.
Fed Independence?
The Fed hollers every time Trump or Congress meddles in monetary policy, but the Fed repeatedly meddles in fiscal policy.
And here’s a new one: The Fed is willing to interject its beliefs about medical policy as well.
- Tech Stock Buybacks Are Surging
Tech Stock Buybacks Are Surging
Tyler Durden
Sun, 08/02/2020 – 20:46Two months ago, we showed that contrary to conventional wisdom and corporate reps and warrants that buybacks had effectively been put on hold for the duration of the covid pandemic, not only were companies still repurchasing their shares but it was the tech names – those who have stormed higher since the March lows – that were the biggest culprits.
Now, two months after we first revealed Wall Street’s worst kept secret, the Financial Times has also noticed that Corporate America is finding it hard to kick the share buyback habit, even after the US slipped into its worst recession in decades.
While total buybacks are indeed expected to drop this year as the downturn caused by coronavirus saps corporate profits, companies in the S&P 500 that have reported second-quarter earnings so far have reduced the number of their outstanding shares by an average of 0.3 per cent from the previous quarter, according to calculations from Credit Suisse.
Furthermore, updates showed that some of the largest US multinationals continued to buy back their own stock or even accelerated stock repurchases and nowhere more so than the tech names we first highlighted at the end of May.
Take Google’s parent company Alphabet, which spent $6.9bn on buybacks for the quarter, up 92% from a year prior, the company revealed in its earnings results last Thursday.
Microsoft, the second-largest listed US company, purchased $5.8bn of its own stock in the period, up 25% from a year earlier, and likely among the chief reasons for the stock’s amazing surge.
Elsewhere, Biogen spent $2.8bn on buybacks for the period, up 17% from last year, WR Berkley, an insurer, did not buy any of its shares in the second quarter last year, but spent $97m on its stock in the period this year, and Celanese increased its planned buybacks for the year by $500m to $1.5bn in July, after selling its stake in a Japanese joint venture.
Of course, the biggest source of buybacks was once again Apple, which repurchased $16BN in the second quarter, down 6% on the period last year, though by far the biggest stock repurchaser among S&P 500 companies in recent years.
As we first noted in May, and as JPM strategist David Lebovitz echoed last week, the buybacks were “not happening everywhere”, but were “driven by specific sectors and stocks”. He added that financial and materials companies were potentially more willing to engage in buybacks through the downturn, because their stocks have not advanced as much as companies in other sectors since the lows in March.
More marquee names joined the party with Edward Jones estimating that Berkshire Hathaway plowed about $5.3bn into stock repurchases during the quarter. Berkshire reports its earnings next month and if the sum is confirmed it would mark the largest quarterly share repurchase since the company began buying back its stock in 2011.
In summary after a brief dip in Q1, the buybacks have staged an impressive rebound as shown in the chart below:
As the FT notes, companies expanding repurchase programs – which is most tech names – “run against the grain of the broader market, where many businesses reduced or suspended buybacks as the downturn took hold. Second-quarter EPS for companies in the S&P 500 will probably drop about 39%”, a number that would be even bigger had it not been for buybacks according to Refinitiv.
And while in April Goldman projected that the amount spent by S&P 500 companies could halve this year, to $371bn from a record $806bn spent on share buybacks in 2018, Goldman’s forecast may prove to be far too low, even though nearly a fifth of companies in the S&P 500 have put buyback programs on ice since March, including the big banks such as Bank of America, Wells Fargo and JPMorgan Chase, who are typically among the biggest buyers of their own stock.
In any case, the buyback spree doesn’t seem like it will end any time soon: “As long as you’re a company that is earning money greater than your borrowing rate, you can just keep borrowing and buying back shares,” said Stephen Dover, head of equity for Franklin Templeton, the San Mateo-based fund manager.
That said, sentiment may change now that buybacks have become a hot political topic, especially as Congress debated stimulus programs this spring. Joe Biden and Donald Trump have both spoken out against the practice, noting that big programs have often sucked free cash flow away from businesses, while Democratic senators Bernie Sanders and Chuck Schumer have also called for curbs.
“Scrutiny around buybacks is already happening and will continue to happen,” said Mr Dover. “It was there before the current crisis and now it’s amplified.”
- One Of The First Ships To Resume Cruising Is Having A COVID Outbreak
One Of The First Ships To Resume Cruising Is Having A COVID Outbreak
Tyler Durden
Sun, 08/02/2020 – 20:20By Gene Sloan of ThePointsGuy
On second thought, maybe it was too soon. One of the first cruise ships in the world to resume sailing since the coronavirus-caused worldwide halt to cruising in March is experiencing a significant outbreak of the illness that already has sent several people to the hospital.
Norwegian expedition cruise company Hurtigruten late Friday said four sick crew members from the 535-passenger Roald Amundsen were admitted to the University Hospital of North Norway in Tromsø, Norway, earlier in the day after the vessel docked in the city. All four had tested positive for COVID-19. On Saturday, the line said another 32 crew members had tested positive for the illness.
The Roald Amundsen on Friday had just finished a seven-night sailing out of Tromsø to the Arctic’s wildlife-filled Svalbard archipelago.
The Roald Amundsen All four of the hospitalized crew members had been sick for several days while on board the vessel, and all four had been placed in isolation. But the line said their symptoms weren’t consistent with COVID-19. They only tested positive for the illness after the ship docked in Tromsø early Friday.
It’s unclear if the crew members are seriously ill, or if they only are being hospitalized as a way to keep them isolated.
The entire ship has now been placed in isolation, and the 154 remaining crew members on board have all been tested for COVID-19. Hurtigruten on Saturday said 122 of the crew members had tested negative for the illness.
Hurtigruten on Saturday said it had contacted all 178 passengers who left the ship early Friday, and they had been ordered to self-quarantine in line with Norwegian health regulations.
The company also has contacted another 209 passengers who were aboard the previous sailing of the Roald Amundsen, and they have been told to self-quarantine, too.
The next voyage of the vessel, which had been scheduled to begin Friday, has been canceled.
Hurtigruten has been at the forefront of efforts to restart cruising in Europe in the wake of falling coronavirus case counts across the continent. The line started cruises to Norway out of Hamburg, Germany, in June with a single ship, the 530-passenger Fridtjof Nansen. It added cruises to Svalbard on the Roald Amundsen and the 335-passenger Spitsbergen in July.
The trips only have been open to local travelers from select European countries. No Americans have been on board the vessels.
“We are now focusing all available efforts in taking care of our guests and colleagues,” Hurtigruten spokesperson Rune Thomas Ege said in a statement posted Saturday at the line’s website. “We work closely with the Norwegian national and local health authorities for follow-up, information, further testing, and infection tracking.”
Hurtigruten had implemented a wide range of new health and safety measures on Roald Amundsen and the other ships it brought back into operation, including enhanced cleaning, added medical screenings for passengers and crew, and an end to buffets. All the vessels were operating at a sharply reduced capacity, below 50% of normal, to ensure social distancing.
The measures were similar to what many lines have been touting as the solution to keeping coronavirus off ships as cruising resumes.
The Roald Amundsen trips included Zodiac landings for wildlife sightseeing in the Svalbard archipelago as well as kayaking and other expedition-related activities.
Huirgruten pioneered cruises to Svalbard in 1896.
Cruises to Svalbard and other parts of the Arctic were thought to be somewhat simpler to run during a pandemic as they don’t involve much passenger interaction with other humans. The typical Arctic voyage is an expedition-style sailing that involves landings and Zodiac excursions to see wildlife, glaciers and floating ice formations.
The Roald Amundsen currently is scheduled to begin sailings around the British Isles for U.K. residents in early September. Hurtigruten didn’t say whether those trips would go ahead.
Hurtigruten is just one of several cruise companies in Europe that have been starting to bring back sailings since June. Until now, no cruise operators in North America have resumed sailings. But one small-ship cruise company, UnCruise Adventures, plans to resume trips out of Juneau, Alaska, on Saturday.
- Another Market Top Indicator: "Blank Check" IPO Issuance Explodes
Another Market Top Indicator: “Blank Check” IPO Issuance Explodes
Tyler Durden
Sun, 08/02/2020 – 19:55The similarities with the housing bubble boom-bust are growing by the day. Not only are stocks at all time highs, to which we can now add record low yields and an all time high gold price as the 10Y real yield just dropped to an unprecedented minus 1% all time low…
… and risk-on euphoria is rampant among the retail investing community, but over the past year there has also been a veritable explosion of “blank check” companies which are shell companies that have no operations but plan to go public with the intention of acquiring or merging with a company with the proceeds of the SPAC’s initial public offering. Investment in SPACs usually surges near market peaks, when there is broad consensus among the professional investing community that equities are overvalued as there is now – as a reminder the June Fund Manager Survey from BofA found that a record 78% of Wall Street professionals believe that stocks are overvalued.
The last time we saw such a surge in SPACs? 2007.
And while the SPAC bubble burst in 2008 along with the rest of the housing/credit bubble, it has slowly recovered, and as Goldman’s David Kostin writes in his latest Weekly Kickstart, SPAC capital raising has soared YTD.
Some statistics: since the start of 2020, 51 SPAC offerings have been completed raising $21.5 billion, up 145% from the comparable year-ago period. In 2019, 51 SPAC IPOs were completed totaling $13.2 billion and 2018 witnessed 35 offerings for $9.3 billion. SPACs have accounted for one-third of all US IPO activity since the start of 2019.
As noted above, a SPAC is a “blank-check” company formed with the intention of acquiring or merging with another company. The SPAC needs to complete an acquisition within two years or the capital raised must be returned to investors, as such it mostly represents a vote of confidence in the sponsor or investor behind the SPAC and in their ability to find future deals that would generate a high ROI.
According to Goldman, completed SPAC offerings currently searching for acquisitions exceeds $38 billion. In a typical SPAC structure, the sponsor raises initial capital by issuing units consisting of 1 share and ½ or ⅓ of a warrant. The shares are generally priced at $10 and the warrants are typically struck 15% out of the money ($11.50) with a 5-year term and an $18 forced exercise.
And while by definition a SPAC is a blank-check, it comes with an embedded put option as Kostin explains:
Because the acquisition target is unknown at the time of the IPO, potential value creation is completely dependent on the ability of the sponsor to identify a target (typical private) company and negotiate the purchase. The SPAC purchase represents the de facto IPO for the acquired firm. However, in exchange for not knowing ahead of time the specific company that will be acquired, SPAC investors receive two benefits.
- First, the right to evaluate the pending purchase and elect to hold or redeem the initial investment at cost (plus accrued interest) two days before the vote.
- Second, warrants.
The decisions are separate. A SPAC investor may choose to retain both the shares and warrants, or redeem the shares and hold the warrants, or sell both.
The SPAC sponsor is typically compensated with a promote equal to 20% of pro forma equity and warrants. In a US SPAC, the sponsor’s promote is not contingent upon meeting any financial targets. However, the sponsors of some recent SPACs have put their equity promote into an earn-out that is only received if the company achieves certain performance objectives, further aligning the financial incentives of the SPAC sponsor and shareholders.
European SPACs are structured slightly differently. First, since they lack a redemption feature, they are truly “blank check” firms. The European SPAC investor owns the shares regardless of whether the investor likes the acquisition or not. Second, the sponsor does not receive a 20% promote up front. Instead, the sponsor only earns a promote if the company achieves certain return targets.
Once the IPO is complete, and the SPAC sponsor – now with millions in fresh funds in the bank – finds a suitable target, he or she negotiates a non-binding term sheet. Depending on the size of the transaction, the sponsor may wall cross potential new outside investors to raise a PIPE (private investment in public equity). The transaction is then announced to the public and an 8-K is filed.
Curiously, the SPAC investor base is highly fluid and as Goldman writes, many SPACs experience nearly a full rotation in their shareholder base during the time between the announcement of the deal and closing of the acquisition (transition from merger arbitrage traders and hedge funds to longer-term fundamental investors).
The sponsor will then file a proxy with the SEC, conduct a pre-merger roadshow, receive redemption notices (if any), and hold a shareholder vote. Redemption notices are due 2 days prior to the shareholder vote, and shareholders will typically determine whether or not to redeem based on where shares are trading at the time redemption notices are due. If the vote passes, the SPAC merges with the target company and will often undergo a ticker change to reflect the name of the target business.
On the other hand, if the vote fails, the sponsor will resume searching for a suitable target. After 24 months from the capital raise the SPAC will be closed and the capital returned to investors if a merger has not been completed.
So why the interest in SPACs?
As Goldman explains, from a capital raiser’s perspective SPACs offer companies a path to the public markets as an alternative to a traditional IPO. Two features of the SPAC process are notable: Forecasts and proceeds.
- First, in the traditional IPO process, issuers are prohibited from including any forward-looking guidance in their Form S-1 registration. As a result, prospective investors are required to evaluate the merits of an issue based on backward-looking results and their own expectations. In contrast, the SPAC due diligence process allows a target company to present forecasts and enhances the ability of a SPAC to acquire early-stage companies or those with complicated business models. This can be useful in businesses like sports betting, cannabis, electric vehicles, or other nascent industries that lack meaningful comparisons in the traditional IPO market. Of course, it is a given that the target company will present the most optimistic projections to potential investors, which is why removing the investor diligence aspect of the process is usually a sign of complacent groupthink whereby the investor base is willing to believe anything the target company presents similar to how i) rating agencies assessed all pre-crisis debt as stellar even if it was generally garbage and ii) investors are willing to engage in groupthink when someone else does their “diligence” job for them.
- Second, in a traditional IPO, the amount of new capital raised is limited, typically to 20%-25% of the value of a company. But in a SPAC transaction, no limit exists on potential proceeds. A SPAC may acquire a majority or minority interest in the target firm and the concurrent PIPE capital raise may be any size.
According to Goldman, whose taks is to spin SPACs as an attractive investment opportunity instead of yet another market top signal, investing in SPACs – from a portfolio manager’s perspective – “offers upside potential with downside protection.” And yes, ultimately, the upside potential is a function of the sponsor’s ability to identify the target, negotiate terms, inject needed external capital, and create long-term value. Which of course is also an admission by the provider of capital that they can’t find any other attractive investment opportunities and the money is bestowed upon someone who supposedly is good at finding the kinds of deals that have become especially scarce in the public markets. Meanwhile, the redemption option limits downside.
Some more statistics: Goldman analyzed 56 SPACs that completed mergers/de-SPAC transactions since January 2018. Tech and Industrials dominated the targets, followed by Energy and Financials.
The typical deal value was $920 million. During the 1-month and 3-month periods following the acquisition announcement, the average SPAC outperformed the S&P 500 by 1 percentage point and 11 %, respectively, and beat the Russell 2000 by 6% and 15%, respectively. That’s the good news.
Now the bad news: the average SPAC underperformed both indexes during the 3, 6, and 12-months after the merger completion.
As shown in the chart above, the performance distribution is extremely wide, with the 75th percentile SPAC outperforming the S&P 500 by 22% while the 25th percentile transaction lagged by 69%. The comparable returns vs. Russell 2000 were from +37% to -63 %.
In other words, just like with regular IPOs, SPAC returns are a coin-toss and since they tend to underperform the broader market several months after the merger and after the initial euphoria fades one may as well just buy the SPY, which unlike a SPAC, is now actively managed by the Fed whose mandate is to never allow another market drop again. It’s also another indicator that a market top has been reached, although while in the past this would be a signal to take profits at this time – when the Fed is actively managing equity risk and making any material declines virtually impossible – this time is not only different, but the recent explosion in SPACs issuance may simply be an indicator to add on even more risk, with the Fed’s blessing of course.
- Microsoft Says Talks To Buy TikTok Are Back On As White House Ups Pressure
Microsoft Says Talks To Buy TikTok Are Back On As White House Ups Pressure
Tyler Durden
Sun, 08/02/2020 – 19:44Word on the street – according to WSJ – is that Microsoft and TikTok-owner ByteDance were on the cusp of a deal for the software giant to buy TikTok’s business (which encompasses all global markets except China) when President Trump’s comment about barring the app from the US (which followed repeated hints that the administration was “looking into” some kind of action) prompted both sides to put things on hold, barring more concrete guidance from the administration.
It’s reasonable to suspect that any deal for Microsoft to buy TikTok would require dependable assurances from the administration that Microsoft would be protected should lawmakers try to turn around and target Microsoft alongside Amazon, Facebook and Alphabet, as anti-trust probes into the Silicon Valley titans ramp up.
And, apparently, the “OK” has been handed down, because Microsoft, which has, until now, refused to comment on the record about the purported deal, has reportedly just affirmed that it’s moving ahead with deal talks to potentially buy TikTok, which a private group of investors recently valued at $50 billion. The deal may involve outside investors from the US as well.
In sum: At a time when Congress is beating the tech antitrust drum louder than at any other time since the late 1990s during the landmark Microsoft antitrust case, the tech giant, which has a market cap of $1.6 trillion and already owns one social media platform with more than half a billion members (LinkedIn), is about to get even bigger.
To be sure, even with Trump’s blessing, a deal with TikTok would still be a risk for Microsoft, should Democrats take back control and redouble their anti-trust efforts. But right now, with the administration threatening to drop the hammer, the company might be able to get a reasonably good deal.
Microsoft is now planning to wrap up the deal talks by the middle of September:
- MICROSOFT SAYS IT WILL CONTINUE TALKS ABOUT US TIKTOK BUY
- MICROSOFT SAYS IT WILL MOVE QUICKLY ON TIKTOK TALKS
- MICROSOFT SAYS IT WILL FINISH TALKS NO LATER THAN SEPT 15
- MICROSOFT SAYS DEAL WOULD ALSO INCLUDE TIKTOK IN CA, NZ AND AUS
- MICROSOFT SAYS MAY INVITE OTHER U.S. INVESTORS FOR TIKTOK DEAL
Earlier today, Sec Pompeo dropped the latest threats about potential action against TikTok, WeChat and other Chinese apps.
- Stockman Slams "Lockdown Lunacy" – Your Government Ordered Depression Has Arrived
Stockman Slams “Lockdown Lunacy” – Your Government Ordered Depression Has Arrived
Tyler Durden
Sun, 08/02/2020 – 19:30Authored by David Stockman via Contra Corner blog,
Well, the Virus Patrol sure has done it. In a fit of reckless overkill they have managed to vaporize six years of economic growth during the last 90 days. And that’s just by the mechanical reckoning of the GDP accounts, where total output in Q2 weighed in at essentially the same level as Q4 2014.
The real damage is far deeper, however, and is reflected in millions of small businesses permanently destroyed, tens of millions of households wiped-out financially and the vicious daisy chain of delinquencies, deferrals and defaults just beginning to rip through the $78 trillion edifice of debt which entombs the US economy.
Real GDP Level
Of course, most of the Wall Street talking heads were nonplussed by this week’s release because, well, Q2 results are claimed to be ancient history: Reality is purportedly the “V”-shaped recovery on their spreadsheets, which really can’t fail to happen because it’s always two quarters out regardless of conditions at the moment.
So let’s get something straight. What is happening is an economic catastrophe the likes of which we have never seen before, even during the Great Depression of the 1930s.
In fact, the worst annual decline back then was a 14.8 percent drop in 1932, while the entire peak-to-trough real GDP decline between 1929 and the 1933 bottom was 30.5 percent.
So it would be fair to say that measured at an annualized rate, the idiotic Dr. Fauci and his Virus Patrol have now delivered a 32.9 percent GDP plunge, which single-handedly tops the entire contraction of the Great Depression.
Needless to say, the Q2 result also leaves the recessionary drops since 1950 way back in the dust. Even the auto industry induced plunge of Q1 1958 didn’t make the double-digit threshold. It clocked in at a 9.986 percent annualized decline or less than one-third of today’s cliff dive.
What was especially notable, however, was the vaporization of personal consumption spending on services, which ordinarily accounts for upwards of 70 percent of total PCE; and which is also ballyhooed by the paint-by-the-numbers Wall Street economist as the ballast the keeps GDP moving ever higher.
Not this time!
Services spending literally fell through the trapdoor, contracting at a 43.4 percent annualized rate. That compares with the 11 recessions since 1950 where real spending on services never went negative, save for the pinprick decline of -1.6 percent annualized during the Q1 2009 bottom of the Great Recession.
By every account, the economic plunge in the winter of 2008-2009 was the worst since the 1930s, but this week the Commerce Department reported a PCE-services drop that was 28X deeper!
Our purpose here is not to marshal scary numbers, even as they surely are.
Rather, our point is that what is coursing through the Q2 numbers is not anything that resembles a normal chain-of-reactions macroeconomic cycle. For instance, where job losses cascade through to shrinking incomes, thereby causing consumer confidence and spending wherewithal to diminish and household spending to be curtailed.
To the contrary, what is depicted below is essentially economic martial law. Agencies of the state commanded airports, restaurants, bars, hair salons, gyms, movies, dentist offices, theme parks, sporting events etc. to close or operate at drastically reduced capacity, which meant, in turn, that day-in-and-day out commerce and economic output vanished instantly.
Stated differently, this 43 percent plunge in services spending didn’t happen for the ordinary reason that people were short on cash. As we show below, personal income during the quarter – thanks to the massive flow of free stuff from Washington (aka government transfer payments) – clocked in at a record level!
Consequently, there will be no rebound in the plunging red line below no matter how much fiscal and monetary “stimulus” Washington pumps into the main street economy.
The services sector accounts for nearly 66 percent of total PCE, which, in turn, accounts for 68 percent of measured GDP. So the latter will not recover until the Virus Patrol gets its foot off the neck of what we call the social congregation activities of daily economic life; and also until it and its MSM collaborationist desist from fanning the false claim that the Covid is the equivalent of the Black Plague, thereby causing people to voluntarily quarantine out of misplaced fear.
Of course, you don’t have to listen to Dr. Fauci and the Scarf Lady for long – yes, they have not yet been locked up in padded cells where they belong – to realize that the Virus Patrol is on a once-in-a lifetime power trip.
In ultra-busy body/Nanny State fashion they are virtually regimenting the comings and goings of a $20 trillion economy – even as they keep the US economy on indefinite idle waiting for the vaccines and antivirals from their allies in Big Pharma and the Gates Complex to ride to the (mandatory) rescue.
Annualized Change In Personal Consumption Expenditures, Services, 1950-2020
We don’t expect the Virus Patrol to be put out of business any time soon because the Donald is too confused and weak to shut them down.
Moreover, if he keeps shooting himself in the kneecaps via tweets like this week’s “lets-postpone-the-election” numbskullery, he will guarantee an even worse scenario: Namely, that while Sleepy Joe is being oxygenated and propped-up behind the Resolute Desk for daily Oval Office photo ops, the left-wing health Nazis who surround him will really go to town on Lockdown Nation.
Nor is that any kind of unhinged trashing of the camarilla of out-and-out statists who will form the core of the Biden Administration. The fact is, the Donald’s malpacticing doctors, the MSM and the Blue State mayors and governors have now unleashed a full-on public hysteria that is self-fueling.
It is now transforming ordinary sheeples into obedient and unquestioning brown-shirts. Even in the purportedly enlightened, socialist republic of Aspen, where we are sheltering for the duration, we see them “mask-up” even with no one in sight, while pumping strenuously up the mountain side on a fat-tired bike.
One manifestation of the Covid-Hysteria is the soaring level of “testing” going on as people either try to get a hall pass in order to return to work or just plain run to the nearest testing station every time the media sends off new alarm bells.
During April, for instance, which was the very worst month of the contagion in terms of serious illnesses and deaths, 5.2 million new tests were reported or 175,000 per day.
By contrast, in July to date (thru the 29th), there have been 21.5 million new tests reported or an average of 745,000 per day.
In a population that has been thoroughly exposed to the virus after five months, it is a given that with the number of tests soaring, the number of positive cases will rise proportionately. But that’s a misdirection because the real issue is the true medical severity of the new cases, and that has dropped precipitously.
The death rate has dropped from 1,800 per day in April to 780 in July; and whereas 15-20 percent of new cases were being hospitalized in most states during April, that figure has now fallen to 2-4 percent.
That is, after the Grim Reaper’s original romp through the most vulnerable populations – especially the nursing homes and long-term care facilities in March/April – the preponderant share of the remaining populations being infected and testing positive appear to have stronger immune defenses, and are mainly either asymptomatic or treating and recovering at home in the normal flu-season manner.
So on the facts, the Hysteria should be dying out, but, alas, the facts are of small moment in the context of a runaway public hysteria that is being turbocharged by a severely aggravated anti-Trump partisanship that has no modern precedent, or any at all.
We are constantly reminded that there are less than 100 days until the election, but probably of even more salience is that the next flu season will be arriving even sooner in October. And it won’t matter whether the obvious herd immunities building up against the SARS-Cov-2 cause the next flu season to be unusually mild or not.
That’s because the Virus Patrol will be at shrill alert for the “second wave” in the run-up to October, keeping the suffocated economy evident in today’s GDP report on its back foot for the balance of the year, at least. That means the ballyhooed V is now surely dead-as-a-door nail.
In this context, it needs be recalled that the services sector of the US economy is bearing the brunt of the Lockdown orders, but that it now counts for fully $8.7 trillion or 45 percent of GDP. That compares to a mere 26 percent back in the days of America’s industrial might in the mid-1950s.
In the big picture context, therefore, national policy – especially at the Eccles Building – caused the off-shoring and hollowing-out of the US industrial economy over the last three decades. In turn, that has left main street especially vulnerable to a state-orchestrated attack on its new services sector center of gravity such as outpatient surgery clinics, Pilates studios and tapas bars.
Again, an economic martial law attack on the new epicenter of the US economy means that the issue is not traditional stimulus, but clearing the decks and clearing the air of the Virus Patrol orders and Covid-Hysteria, which was the real culprit behind the Q2 GDP disaster.
Nominal GDP (light brown) Versus Service Sector PCE (dark brown), 1955-2020
Perhaps nowhere is the impact of economic martial law more evident, ironically, than in the health care sub-sector of the services economy.
The former, of course, has been the workhorse of US GDP growth for decades. However, after peaking at $2.50 trillion in Q4 2019, it weighed in at just $1.89 trillion in Q2 2020. That’s a $608 billion decline, reflecting an astounding -24 percent contraction.
And this is supposed to be the worst medical crisis to hit America since the Spanish Flu of 1918!
But, actually, the government’s data mill is telling an absolutely opposite, nay crazy, story. Namely, that the single largest sector of the US economy plunged at a 61.6 percent annualized rate in Q2 – meaning that the figure gives the notion of being “off the charts” of history an altogether new definition.
Needless to say, health care spending is not now and never has been amenable to Washington’s vaunted stimulus machines. The overwhelming share of spending is government funded directly through Medicare/Medicaid et al or through the $300 billion per year tax shelter for employer health plans; and whether public or private, consumer health payments are overwhelming made by third-parties, thereby further limiting the efficacy of the cheap money from the Fed and free money from Uncle Sam.
The plunging red line below, therefore, is the doing of the Virus Patrol and its orders to shutdown most so-called discretionary healthy care services, such as cancer screenings. So until it is put out of business and the public Covid-Hysteria is substantially abated, the rebound of the health services sector is likely to the contained and protracted.
In short, what we have is a government-ordered depression, not a macroeconomic recession that is purportedly remediable by a huge dose of monetary and fiscal stimulus. So the truth is, the Virus Patrol, not the Fed and Washington’s everything bailout brigade, is in charge of the recovery from the Q2 disaster, and they are not much interested in letting it happen.
To take another salient example, the go-to strategy of the Virus Patrol has been to shutdown large scale public gatherings entirely, but that’s obviously the venue of the recreation sector.
So it is not surprising that the PCE spending rate for this sector has given “cliff-diving” a run for its money. Compared to the $590 billion annualized rate of spending in Q4 2019, the current quarter clocked in at just $272 trillion.
The amounted to a 53.4 percent decline from Q4 and an out-of-this-world contraction of 61 percent annualized in the current quarter. Or alternatively, recreation spending in Lockdown Nation during Q2 reverted to the level first crossed in Q2 2002.
That’s 18 year’s worth of growth gone in a virtual economic heartbeat.
Of course, there was one thing that was way up in Q2 – transfer payments and personal income. And every dime of the massive increase in transfer payments shown below was borrowed by Uncle Sam and monetized by the Fed.
Yet the only thing it accomplished was to further balloon the public debt because the current depression does not flow from the want of means or desire to spend: It’s the product of economic martial law ordered up by the Virus Patrol.
Still, it is worth noting that wage and salary income (brown line) was down by $680 billion at an annual rate in Q2, while the Washington spending machine boosted transfer payments at a $2.4 trillion annual rate, or by nearly four times more!
Once upon a time, that would have been considered insane overkill, and at least caused Republicans to screech at the top of their lungs about fiscal profligacy.
Alas, as they put up their $1.2 trillion Everything Bailout 5.0 against the House Dems’ $3.3 trillion alternative in the days just ahead, the chart below will be nowhere seen in the porkers’ lounges of Capitol Hill.
Change From Prior Quarter In Billions: Transfer Payments (purple line) Versus Wages and Salaries (brown line)
- College Expels Student For "Racist" Social Media Post, Then Discovers What Actually Happened
College Expels Student For “Racist” Social Media Post, Then Discovers What Actually Happened
Tyler Durden
Sun, 08/02/2020 – 19:15Authored by Dean Barker via Campus Reform,
A student at Georgia’s Wesleyan College was reinstated after initially being expelled for social media posts that the school says it now realizes she did not make.
After an investigation and appeal from the student at the all-female campus, the school found that “new information” revealed that the expelled student was not involved in the posts in question.
On June 4, the student, who is remaining nameless, was expelled from the school for allegedly putting out a social media post that contained the n-word. The post was put out by an account claiming to be a student at Wesleyan. The same account also made a Halloween-related post featuring a woman in a green “Border Patrol” shirt posing as if she were arresting a man in a sombrero and serape. The photo was captioned “border?…secured. found him, met him & and just had to get a pic.”
According to Wesleyan College Alumnae Board of Managers member Jan Lawrence, the board was told that the student provided information proving that a high school photo of the student had been downloaded and reposted by a third party who included the caption.
“On the morning we learned of the information, we launched an investigation and expelled the student that afternoon, giving her the right to appeal as provided in our policies,” college president Vivia Fowler said in an Instagram post.
The student did appeal, and was reinstated after the university found that “the student did not post the racist content.”
“On July 10, the Wesleyan Student-Faculty Judicial Board, comprised of two faculty members, two staff members and two members of student government, ruled in the student’s favor, overturning the expulsion effective immediately,” Fowler said.
“The committee considered new information that we learned in the weeks following the student’s expulsion, which called into question the accuracy of the original information. This information shows that the student did not post the racist content in early June while enrolled at Wesleyan.”
A version of the statement posted by the Wesleyan College Alumnae Association includes a paragraph lamenting the fact that the process for the investigation was not carried out in a more equitable manner:
“We must be better in how we think, communicate, and act. This passionate call for introspection is very much for the good. But with action comes the responsibility to make decisions rooted in careful analysis, sound consideration, open dialogue, and above all, fairness
Those principles help form the very core of higher education and scientific and cultural inquiry. There is no place for racism at Wesleyan College, and we take seriously our responsibility to combat that scourge across all aspects of our institution.”
The school then used this opportunity to tout its diversity efforts, assuring the community that “even though” a student was wrongly expelled, “that will not deter us from doing our part to denounce racism and hate.”
“In addition, we will continue our work, particularly over the last few years, of promoting diversity, equity and inclusion. We are proud of our diverse student body,” said Fowler in the same announcement. “We are one of the first higher education institutions to offer trainings and workshops on the harmful impact of white privilege.”
“We recently created a Cabinet-level position of Chief Diversity Officer, who also serves as Assistant Dean for Equity and Inclusion,” Fowler added.
Fowler did not respond to Campus Reform’s request for comment in time for publication.
- Deutsche Bank Launches Investigation Into Personal Banker To Trump, Kushner Over 2013 Transaction
Deutsche Bank Launches Investigation Into Personal Banker To Trump, Kushner Over 2013 Transaction
Tyler Durden
Sun, 08/02/2020 – 19:05Deutsche Bank has launched an internal investigation into Rosemary Vrablic, the longtime personal banker of President Trump and Jared Kushner – after a Friday disclosure by Trump’s son-in-law revealed what may have been an inappropriate real estate transaction between Vrablic, two Deutsche Bank colleagues, and a company part-owned by Kushner in 2013.
On Friday, Kushner disclosed in an annual personal financial report that he and wife Ivanka Trump received between $1 million and $5 million in 2019 from a company called Bergel 715 Associates.
The New York Times did some digging and uncovered that in 2013 Vrablic and her Deutsche Bank colleagues purchased a Park Avenue apartment for approximately $1.5 million from Bergel at the time Kushner held an ownership stake in the entity, posing a potential conflict of interest which may have violated firm rules.
When Ms. Vrablic and her colleagues bought the apartment on Manhattan’s Upper East Side, Mr. Trump and Mr. Kushner were her clients at Deutsche Bank. They had received roughly $190 million in loans from the bank and would seek hundreds of millions of dollars more.
Typically banks restrict employees from doing personal business with clients because of the potential for conflicts between the employees’ interests and those of the bank. –NYT
According to the report, Deutsche Bank was unaware of the potentially inappropriate nature of the transaction until the Times contacted them.
“The bank will closely examine the information that came to light on Friday and the fact pattern from 2013,” said bank spokesman Daniel Hunter.
Until now, Deutsche Bank has tried to shield Vrablic from outside scrutiny, presumably in part because she knows *so much* about the Trump and Kushner relationships.
It is therefore quite interesting that the bank is now publicly stating that they are looking into her conduct.
— David Enrich (@davidenrich) August 2, 2020
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Christopher Smith, general counsel at Kushner Companies, told the Times that “Kushner is not the managing partner of that entity and has no involvement with the sales of the apartments.”
Kushner’s stake in Bergel – which has sold dozens of high-end condos in the Park Avenue building since the 1980s – is unknown, though at least one apartment was sold to the Kushner family’s real estate company according to the report.
Bergel 715’s main owners include George Gellert, a close friend of the Kushner family and an investor in numerous deals with Kushner Companies.
There is no indication that the three Deutsche Bank employees bought the apartment — described on Zillow as a 908-square-foot, one-bedroom, one-bath unit with a balcony overlooking Park Avenue — at a below-market price.
In 2014, the deed for the apartment, Unit 12A, was transferred to a limited liability company registered to Ms. Vrablic’s home address, according to property records. The next year, the apartment was sold for $1.85 million — a not-unheard-of 22 percent increase from the 2013 purchase price. –NYT
The Kushner family has a long relationship with Vrablic predating her employment at Deutsche Bank which began in 2006. As one of New York’s leading private bankers, Kushner brought Vrablic to meet his father-in-law in 2011 at a time when many banks avoided business with Trump over his previous bankruptcies.
“I introduced him to this woman Rosemary,” Kushner told the House Intelligence Committee during closed-door testimony in 2017. “She is one of the biggest private wealth bankers, probably in the world. Amazing banker, amazing woman. Very smart banker. And she banked my family for a long time.”
- US Announces New Action Against "Array" Of Chinese Software Companies
US Announces New Action Against “Array” Of Chinese Software Companies
Tyler Durden
Sun, 08/02/2020 – 18:53Update (1850ET): The SCMP is reporting that WeChat, a popular chat app developed and run by Chinese tech giant Tencent, will also be targeted by the Trump administration along with TikTok.
WECHAT TO BE BANNED IN THE U.S ALONG WITH TIKTOK – SCMP
— FXHedge (@Fxhedgers) August 2, 2020
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* * *
As the White House teased in a media trial balloon yesterday, the administration has just announced its latest initiative to hector Beijing, and the Chinese technology sector, as the Trump Administration ratchets up the retaliatory pressure in a burst of election-year fervor.
The Trump administration will announce measures shortly against “a broad array” of Chinese-owned software that pose a “national security risk”, according to Mike Pompeo, Trump’s Secretary of State.
Ever since President Trump said late Friday that a ban on the popular social media app TikTok was “imminent”, talks between ByteDance, the owner of TikTok and a separate app called “Douyin” – (equivalent to “TikTok” in English) which is similar to TikTok in many ways, but is a different app built to operate on the Chinese Internet – have apparently collapsed. Media reports claimed that, after being courted by a group of VC firms, ByteDance was in advanced talks to sell TikTok to Microsoft.
But those talks have apparently stalled. Treasury Secretary Steven Mnuchin said earlier that the app must either be “sold or blocked”, and it appears that Beijing has soured on the optics of appearing to kowtow to Trump just before the election – god forbid President Xi be accused of intervening on Trump’s behalf.
Pompeo signaled he expects a Trump announcement “shortly.” He added that Chinese software companies doing business in the US are working with Chinese State Security: “whether it’s TikTok or WeChat, there are countless more,” Pompeo said during an interview on Fox New’s “Sunday Morning Futures” program.
Trump “will take action in the coming days with respect to a broad array of national-security risks that are presented by software connected to the Chinese Communist Party,” Pompeo added.
From placing new restrictions and pressures on Huawei – including successfully pressing allies like the UK to walk back their earlier support for allowing Huawei parts to be incorporated into “non-core” parts of their 5G networks – as well as taking shots at foreign students studying in the US, among other things.
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