- Two Hour Lines In The UK At McDonald's As Drive-Thrus Reopen
Two Hour Lines In The UK At McDonald’s As Drive-Thrus Reopen
Tyler Durden
Wed, 06/03/2020 – 02:45McDonald’s has started to reopen 924 drive-through restaurants in the UK and Ireland. The process will take three days, but by the end of the week, about 64% of McDonald’s restaurants will be serving Big Macs to hungry customers.
Each branch will have a slimmed-down menu and limited operating hours, between 11 am-10 pm until further notice. Reduced operating hours means there is no breakfast food. Dining areas of all restaurants will remain closed to the public.
Limited hours and no breakfast have likely caused a stir among some customers, who will also learn this week that a new spending cap of £25 ($31.30) will be applied on all drive-through orders.
Limited Menu
h/t MCD The reopenings come after several months of closures following strict lockdown orders enforced by the government to flatten the pandemic curve. COVID-19 devastated the UK with 277,738 confirmed cases, and 39,127 deaths, and 25,062 confirmed cases and 1,650 deaths in Ireland, according to data collected by Johns Hopkins (June 2).
About 168 McDonald’s drive-thrus opened on Tuesday, along with two dozen locations opened for at-home delivery orders only.
This week we are reopening Drive Thrus and McDelivery restaurants across the UK and Ireland, tap below to find your nearest reopened restaurant.
If your local restaurant isn’t on the list yet, don’t worry we’ll be announcing more tomorrow.
— McDonald’s UK (@McDonaldsUK) June 2, 2020
https://platform.twitter.com/widgets.js
The Daily Mail reports today’s opening was an absolute madhouse for many locations, which saw a flood of people who wanted to get their hands on Big Macs and McNuggets. Some people waited upwards of two hours to get their hands on a burger — with police managing traffic around several places as lines poured onto the streets.
After consulting with police, managers at McDonald’s in Newbridge, near Edinburgh, have decided to close the drive thru lane temporarily to traffic amid unprecedented demand today. – Daily Mail
h/t Daily Mail Two drive-thru lanes are packed with cars at Livingston’s McDonald’s, which reopened at 11 am with new social distancing measures in place. – Daily Mail
Over 70 cars are queuing for up to two hours this afternoon to get a McDonalds Drive Thru on the Middlebrook Retail Park in Bolton, Gtr Manchester, with the line snaking around the car park. – Daily Mail
Marshalls direct the queue of cars waiting to get their McDonald’s fix today in Astley Bridge, Bolton. – Daily Mail
Drive-thru lanes were packed in Dunstable as McDonald’s reopened at 11 am on Tuesday, but customers can only order up to £25 worth of food at a time. – Daily Mail
h/t Daily Mail Peace and calm were widely seen as McDonald’s reopened some European locations, unlike the US, rioters are burning down shops in a fit of rage.
- Will Italy Be The Next Country To Leave The EU?
Will Italy Be The Next Country To Leave The EU?
Tyler Durden
Wed, 06/03/2020 – 02:00Authored by Paul Antonopoulos via InfoBrics,
On May 27, the political movement Italia Libera submitted a constitutional bill to the Supreme Court of Cassation demanding a referendum for Italy to leave the EU. After years of discussions, the foundation stone was laid for Italians to debate whether they want to remain in the EU or follow the United Kingdom out of the bloc. The draft bill presented by Italia Libera to the Supreme Court of Cassation is entitled “Call for a referendum on the withdrawal of the state from the European Union.”
Effectively, Italia Libera has demonstrated that it is possible to follow an institutional path to allow citizens to decide whether they want to remain in the EU or not – and for those who want to leave, now is the best time considering the massive decline in popularity for the bloc after their abandonment of Italy when it was at the peak of the coronavirus pandemic.
Gian Luca Proietti Toppi, a lawyer involved in the bill, said that it is necessary to reach ordinary Italians and “open their eyes to the harmful effects of participating in a Union without a soul and based only on finance. It is clear that with the filing of the 50,000 signatures necessary to start the parliamentary process of the proposal, a broad debate will open on the opportunity to exit the cage of the EU and the Euro.”
He continued to explain that “the effects of liberating the old continent from this bureaucratic and oppressive superstructure will certainly be complex to manage. However, Italia Libera, who is the first promoter of the Committee that collected the signatures needed, has already put experts and academics to work to draw up a plan that will secure the savings of Italians and from the debt.”
Although he did not mention the EU’s abandonment of Italy during the peak of the coronavirus pandemic, he did emphasize how the bloc financially exploits Italy, just as it does to all of Mediterranean Europe with the exception of France.
There are many positive aspects to the EU, most notably the free movement of people and a coordinated effort to fight crime through Europol, but these multilateral agreements can exist without a European Parliament and domineering institutions based in Brussels and Strasbourg. As Toppi explained, Italy imagined the EU to be “a community of peoples and not of bankers.” It is for this reason that they announced the bill on the same day an unprecedented European Union Recovery Fund became official. This fund was only established because of the backlash received due to the bloc’s initial disinterest in assisting already struggling economies of the EU that were being further devastated financially by the pandemic.
With widespread southern European dissatisfaction with how the EU abandoned its supposed liberal ideals, particularly Germany, in favour of serving inward self-interests, bloc leaders are now playing catch up. President of the European Commission and Angela Merkel’s right-hand man in previous German governments, Ursula Von Der Leyen, and the President of the European Central Bank, Christine Lagarde, who was also a former member of the Troika of bankers, announced the unprecedented measures to assist Europe through its financial woes. This time they promised real aid that would not completely decimate state structures and entire economies like what happened to Greece, Spain, Portugal, and to a lesser extent Italy, for the entirety of the 2010’s. The Governor of the Bank of Italy expects a 13% drop in GDP in 2020, and for this reason Toppi emphasized that Italy does not need any further indebtedness which will increasingly put Italy in the hands of international speculators.
However, Italians remember that Lagarde announced on March 13, just as coronavirus was truly beginning to overwhelm hospitals, that the pandemic was an Italian problem only. This was the catalyst that saw ordinary Italians begin to remove EU flags from public display and replace them with Russian and Chinese flags in gratitude to the significant assistance that these two countries gave to Italy when it was abandoned by Brussels and Berlin.
An “Italexit” would be a bigger blow to the prestige of the EU then Brexit. Italy, as a G20 country, uses the Eurodollar unlike Britain which maintained currency sovereignty and continued to use the pound. Therefore, to prevent the strong possibility that Italy in the coming years could leave the EU, Brussels and Berlin must take note of its political failures and work to design a new community that has respect for national sovereignty and identity, and on the basis of reciprocity. It is not acceptable that Germany remains the dominant country of the EU and effectively rules over the European Commission, the European Central Banks, the European Court of Justice and the European Parliament.
A Europe free of unscrupulous bankers, self-referential bureaucrats and inadequate politicians is at the forefront of those pushing for their respective countries to exit the EU or call for its reformation. However, for this to be achieved, a major state must lead the charge, and it appears that Italy will take on this mantle and could very well be the first Eurodollar state to leave the EU if drastic reformations are not made. And Italian exit will surely have a domino effect felt all across Europe.
- Gordon Chang On China: What We Must Do, & What We Must Not Do
Gordon Chang On China: What We Must Do, & What We Must Not Do
Tyler Durden
Wed, 06/03/2020 – 00:05Authored by Gordon Chang via The Gatestone Institute,
China has attacked America with coronavirus. At this moment, more than 100,000 Americans have been killed. We brace ourselves for the deaths to come.
Today, I’ll do two things. First, I’ll talk about the nature of that attack. The second thing, what we must do to protect ourselves.
First of all, China is not, as many people will tell you, just a competitor. It is an enemy. China is trying to overthrow the international system, and in that process, it is trying to make you subject to modern-day Chinese emperors.
I know this sounds as if it cannot be true, but we must listen to what Chinese leaders say. When we do that, we realize that to defend the American republic and defend our way of life, we are going to have to decouple from China.
On May 6, President Donald J. Trump said that China’s attack was worse than Pearl Harbor, worse than the World Trade Center. “There’s never been an attack like this,” he said, and he is right.
Most critically, Chinese leaders publicly admitted that the novel coronavirus, the pathogen causing COVID-19, could be transmitted from one human to another on January 20.
Yet doctors in Wuhan, the epicenter, were noticing the contagiousness of this virus no later than the second week in December. Beijing knew a few days after that. If Chinese leaders had said nothing during that five‑week period, that would have been grossly irresponsible.
What they tried to do, however, was deceive the world into believing that this was not transmissible human-to-human. As a result of that campaign, the World Health Organization (WHO) propagated China’s false narrative, especially with that infamous January 14 tweet:
“Preliminary investigations conducted by the Chinese authorities have found no clear evidence of human-to-human transmission of the novel #coronavirus (2019-nCoV) identified in #Wuhan, #China.”
At the same time, Xi Jinping, general secretary of the Communist Party of China since 2012, pressured countries not to impose travel restrictions or quarantines on arrivals from China. Again, WHO helped China, this time with its January 10 statement opposing these restrictions.
What happened was arrivals from China — when Chinese officials knew this virus was human-to human-transmissible — turned what should have been an epidemic contained to China into a global pandemic.
I don’t know what Xi Jinping, the Chinese ruler, was thinking, but if after having seen what the coronavirus did to cripple China, he decided to cripple other societies to get even, he would have done exactly what in fact he did do.
That means there is only one inescapable conclusion. This conclusion is that China maliciously spread this virus around the world, sickening people, killing others.
This is the first time in history that one nation has attacked all the others.
That is not all. After admitting the human-to-human contagiousness of this disease, Beijing then downplayed it.
On January 21, the day after formally admitting the disease’s human-to-human transmissibility, Beijing got its propaganda machine in full gear to tell the world that this was less dangerous than SARS.
SARS is the 2002‑2003 epidemic that according to the World Health Organization infected 8,096 people across the world, killing 744. By then, on January 21, Chinese officials knew it was much worse than SARS.
According to Der Spiegel, Germany’s intelligence agency, the BND, believes that on January 21 ‑‑ this is the day after China formally admitted human‑to‑human transmissibility of the disease ‑‑ Xi Jinping spoke to Dr. Tedros, the director-general of WHO, and tried to get the organization to hold back information on human‑to‑human transmissibility, as well as to delay declaring a pandemic.
Now, WHO denies that this phone conversation between Xi and Tedros took place, but it fits known facts. It also fits what the US intelligence community has been saying, according to various reports.
China’s actions had consequences. Beijing lulled public health officials around the world, including those in the United States, into not taking actions that they otherwise would have adopted.
Democrats and Chinese communists have criticized President Trump for acting too slowly after he imposed the travel restrictions on China on January 31. If that is true, it is only because people on his coronavirus task force were actually listening to what Beijing was saying and making judgments on what they had heard.
For instance, Dr. Deborah Birx, the White House coronavirus task force coordinator, in her March 31 press briefing said she had seen the data from China and decided that this was no more dangerous than SARS, but realized, after the infections ripped through both Italy and Spain, that she had been deceived by the Chinese. She is not the only one. Dr. Anthony Fauci has also talked in public about how the Chinese misled him.
We must impose costs on China. We must impose costs because, first of all, what China did was a crime against all of humanity. We must also impose costs because we need to deter China. This is not going to be the last pathogen generated on Chinese soil. We got to make sure the Chinese leaders do not believe that they can maliciously spread another disease.
This means there is going to be friction between China and the United States as we Americans take steps to protect ourselves in the future. Those steps are going to cause arrogant and belligerent Chinese to move against us.
We should take a look about how the arrogant and belligerent Chinese indeed view the international system, how they view the world order. You will hear many analysts say that the friction between the United States and China is just another one of these boys-will-be-boys contests in history.
The notion is that the United States is jealously protecting its position in the international system fits in with Beijing’s narrative that their rise is inevitable and that we are in terminal decline.
The truth is that the United States is defending more than just its position in the international system. We are defending the international system itself, the system of treaties, conventions, rules, and norms.
Unfortunately, Xi Jinping, the Chinese ruler, does not believe in that system. He is trying to impose China’s imperial‑era notions of the world. In other words, he believes that everyone around the world must acknowledge Chinese rule.
In short, Chinese rulers believed that they had the mandate of heaven over tianxia, meaning “all under heaven.” Xi Jinping has used tianxia‑like language for more than a decade. Recently, his pronouncements have become unmistakable.
For instance, in his 2017 New Year’s message he said, and I quote, “The Chinese have always held that the world is united and all under heaven” — all under heaven — “are one family.”
If this were not enough, his foreign minister, Wang Yi, in September of 2017 wrote an article in Study Times, the Central Party School’s influential newspaper. Wang Yi wrote that “Xi Jinping thought” ‑‑ “thought” in Communist Party lingo is an important body of ideological work — “made innovations on and transcended the traditional Western theories of international relations for the past 300 years.”
If you take 2017 and subtract 300 years, you almost get to 1648. Wang, with his time reference of 300 years, was almost certainly pointing to the Treaty of Westphalia of 1648, which established the current international system. That system recognizes the sovereignty of different states.
Also, when Wang Yi used the word “transcended,” he was saying that Xi Jinping does not believe that there should be sovereign states, or at least no more sovereign states than China itself. The trend of Xi Jinping’s recent comments is that he doesn’t want to live within the international system. He does not even want to adjust it. He wants to overthrow it altogether.
This means China once again is a revolutionary state. Now, Xi Jinping, of course, has not had the power to compel others to accept this audacious vision of worldwide Chinese rule.
Nonetheless, in the last few months, he has seen an historic opportunity because the United States has been stricken by the disease that China itself has pushed out beyond its borders.
What must we do? First, let us talk about what we must not do.
We must not save Chinese communism again. In the past, American presidents, when China had been stressed, have ridden to the rescue of the Chinese state. In 1972, for instance, Richard Nixon went to a Beijing that had been weakened by more than a half decade of the Cultural Revolution, signaling America’s support for China’s communism. That is how people in China took that visit.
The second time, 1989, George H. W. Bush sent Brent Scowcroft, his secret emissary, to Deng Xiaoping in the wake of the Tiananmen massacre. Again, America was telling the Chinese, “Don’t worry about American sanctions, don’t worry about what we say in public, we have your back.”
The third time, 1999, President William Jefferson Clinton signed a trade deal with China – at a time when the Chinese economy, in reality, was contracting. Certainly, China was suffering geopolitical setbacks. That deal was the basis of China’s entry into the World Trade Organization.
Despite all these saves of Chinese communism, China’s communist leaders have remained hostile. We have seen this hostility, especially since the first week of February of this year when the Global Times, which is a Communist Party newspaper, and the Chinese foreign ministry have engaged in an inflammatory disinformation campaign against the United States in an attempt to tar the US with all sorts of disease‑related sins.
This campaign culminated, reached a high point — although this campaign is still continuing today — on March 12th when the foreign ministry went on a Twitter storm. As a part of that Twitter storm, foreign ministry spokesman Zhao Lijian said that coronavirus patient zero was in the United States.
In other words, the disease started here. He also suggested that the US Army carried the disease to Wuhan. We were seeing daily stories about how the United States had been spreading the disease around the world.
Now, Americans, of course, were taken by surprise by this Twitter storm, but we really should not be — because on May 13 of last year Beijing declared a “people’s war” on the United States. This means the contest with China is existential. There is going to be one survivor. It is going to be either the Peoples’ Republic of China or the United States of America, not both.
We have just heard about what we should not be doing. We should not be rescuing Chinese communism.
What should we do? In my call for action, there are eight items.
First, we need to cut off trade with China. Now, I know a lot of people think we should not do this, or this would be unfortunate.
Yes, this is unfortunate, but the point is that China’s communism cannot be reformed, so the only way we can protect American society and Americans is to reduce our exposure to China and our great exposure, of course, is trade. In any event, we should not be enriching a hostile state with the proceeds of commerce with the United States.
This means, of course, that we need to get our factories off Chinese soil, but especially our pharmaceutical factories. China has been threatening to throw the United States into what it calls “a mighty sea of coronavirus,” and it has not been kidding.
For instance, we know the Chinese have turned around at least one ship carrying personal protective equipment — masks, gowns, gloves — that were on their way to New York hospitals. Moreover, Peter Navarro has said China has even nationalized one American factory in China producing those N‑95 masks.
China’s leadership always talks about how it is not possible for the US and China to “decouple.” Now, it is possible. Our job is to make it inevitable.
Second thing that we need to do: The administration is well on the way to making sure federal pension money is not invested in China’s markets. We also need to make sure that state pension money, and money from individuals, is not put into China’s markets. We should not be enriching China with our investments into its equity markets.
Third thing, we need to make China pay. Now, many people have sued the Chinese central government. There are class‑action suits in the federal district courts in Florida, Texas, and Nevada. Of course, the Chinese Central Government has sovereign immunity, but there are a number of bills in Congress, including one sponsored by Senator Blackburn and Representative Lance Gooden.
There is also another bill sponsored by Tom Cotton and Dan Crenshaw, and these would strip China of sovereign immunity. I believe Josh Hawley, the Senator from Missouri, also has a bill.
The State of Missouri, by the way, has sued the Communist Party of China, which is far more important and far richer than the Chinese central government. Guess what? China’s Communist Party does not have sovereign immunity.
People have also been talking about seizing China’s holdings of US Treasury obligations. According to official records, it holds more than a trillion dollars. In reality, it is probably a bit higher than that because China holds US Treasuries through nominees.
Of course, China would engage in a vociferous propaganda campaign if we did that. Beijing would say we are repudiating our debt. They would also say we are not responsible members and stewards of the global financial system. They would be wrong, they would be incorrect, but the US might suffer reputational damage.
That is why I think we should seize Treasuries, but we should be doing this in connection with the holders and issuers of other major currencies. For instance, the Canadian dollar, the British pound, the European Union’s euro, the Swiss franc, the Japanese yen, maybe the Singapore dollar
When we act with others, this becomes not a China-versus-US issue but an issue of China versus the world. No one country is going to suffer reputational damage.
Of course, Beijing could nationalize American factories in China, but I’m not so sure they’re going to do that because China would be hurt far more than we would by that.
Remember that China’s economy is still in a contraction phase and it is still export‑dominated, which means it needs those factories on its soil.
Fourth, with the possibility of the coronavirus escaping from the Wuhan Institute of Virology, we are now thinking about whether China has a biological weapons program in contravention of its obligations under the Biological Weapons Convention.
Right now, we have seen all sorts of circumstantial evidence suggesting lab leak, and we have seen all sorts of circumstantial evidence that the Chinese military has been involved in the cleanup.
The Biological Weapons Convention does not have an inspections regime.
The item on my action list is that the United States should insist on inspections of China’s labs, and if we cannot get inspections we should withdraw from the Convention. I am not saying that the novel coronavirus was a biological weapon. We really do not know.
The one thing we do know is that in China’s labs, they have been engineering coronaviruses in the past. They have issued scientific papers on this, and what they are doing is extremely risky.
Fifth, we should make sure that China does not mess in our elections. China was extremely active in the 2018 midterms. They were concerned about President Trump’s tariffs, and they actually did have an effect in electing Democrats to the House of Representatives.
We know they are going to do that, or something like that, this time. The New York Times a few weeks ago said they are trying to sow chaos in the American public square by disseminating false rumors.
Sixth, we need to stop China from using its nationals to systematically gather information on our soil. Unfortunately, we have had a series of American presidents who have, for various reasons, either done nothing about China’s intelligence operations here, or the actions they took were deliberately ineffective.
We know that China’s diplomats operate on our soil, sometimes spying, other times in a manner inconsistent with the diplomatic status they have. Also, China’s Ministry of State Security agents operate here, freely.
We need to “rip and replace” all the equipment in our telecom backbone that has been supplied by Huawei Technologies, China’s telecom equipment manufacturer. China has been using that company’s equipment to spy on others. We should have no Huawei equipment in our backbone.
Also, we should be turfing out even more Chinese journalists. Those “journalists,” we know, work for China’s intelligence services. We have allowed them to stay on our soil for far too long. Secretary of State Pompeo has expelled many of them, and we need to complete the job.
We have to remember that China’s 2017 National Intelligence Law requires every Chinese citizen and every Chinese entity to spy if demanded, which means that Chinese nationals on our soil can be under a compulsion to engage in intelligence collection.
Seventh, let’s remove China from our cable networks and our newsstands. We should not be allowing China to exploit the openness of our system to try to end it.
Eighth, and the last, we have to deter China, which right now is engaging in what people in Beijing call “wolf warrior” diplomacy. For instance, we see Xi Jinping, with these threats to invade Taiwan.
Since the middle of February, there have been these boat-bumping and other provocative engagements in the South China and East China Seas against almost all of China’s sea neighbors. A Chinese diplomat laid the groundwork for taking over Kazakhstan, in Central Asia, and also China has moved to end the autonomy in Hong Kong.
China is lashing out, challenging everybody at the same time. This is a Maoist tactic, and it suggests problems inside the Chinese political system. In any event, we know that this is an incredibly dangerous moment for everyone.
One final note. Pushed by China, the Trump Administration is moving to an historic rupture with the People’s Republic of China. Because of this, we are seeing changes in the five‑decade‑old engagement policy.
Those changes are absolutely essential for us because, without them, we cannot be self‑reliant.
* * *
Q: As an attorney, do you feel there is any way to hold China accountable, liable for financial compensation to devastated nations ravaged by their actions?
If so, as a practical matter, exactly how? Are there US companies that were collaborating with Wuhan labs via research responsible for this corona strain?
Chang: Great. I should say I haven’t practiced law for two decades, and I’ve given up my bar memberships. I’m more than happy to answer that question, however. First of all, as I mentioned, China does have sovereign immunity.
Now, a lot of people will tell you, and this is not an unreasonable argument, that sovereign immunity benefits the US more than any other nation. I do believe the fight with China is existential. To me, it’s important that we make China pay.
As I said, we can avoid this sovereign immunity issue ‑‑ and which would have some blowback for the US ‑‑ if the plaintiffs sue the Communist Party. Because the Communist Party is not sovereign.
In China, there’s a clear distinction between the party and the state. The state has sovereign immunity like other countries and other states have, but the party does not. We can go after the party.
By the way, the party actually has more control over China’s enterprises, which means it should be considered to be the owner of those enterprises. So, it has assets to seize.
We talk about China’s military. Actually, it is not a state army. It is an army of the Communist Party, which means that if we can find a Chinese plane, or a ship, or whatever, that would be subject to a successful suit in US Court because there’s no sovereign immunity and it’s a party army.
Having said all that, I think where we are going to seize assets will be the Treasuries. We should be working, as mentioned, with our allies and friends so that all countries in the world seize China’s assets. That, I think, will work.
Q. Are there US companies that were collaborating with Wuhan labs via research responsible for this corona strain?
Chang: I don’t think so. The Wuhan Institute of Virology was built with French companies, not American, as far as I know. Of course, the issue here is not corporate support but is US government support.
The US has chipped in, most famously, $3.7 million to the Wuhan Institute of Virology for research on bats. Many people think that the novel coronavirus is derived from a bat. I think part of the reason for the contribution is that the United States thought that experimenting on bat viruses was really too risky to be done in the US, so it decided to let the Chinese do it.
That is crazy. If it is too dangerous for us to do it, it’s too dangerous for the Chinese to do it, especially because we know that in China’s labs ‑‑ although the Wuhan Institute of Virology has a P4 biosafety lab, that is the highest level of safety standards ‑‑ we know that the Chinese do not adhere to those standards.
In 2018, State Department teams that visited the Wuhan Institute of Virology came away appalled — actually I should say alarmed — because they saw that Chinese technicians were not adhering to safety standards and protocols.
Also, we had those China Daily pictures. China Daily is an official state media publication. They tried to convince the world how safe the Wuhan Institute was so they posted these pictures, and those pictures actually documented broken or bent seals on refrigerators, a real safety problem.
We know that that lab was a walking disaster and something was going to happen. Unfortunately, it looks as if it did. Probably the coronavirus was an accidental lab release.
Q: How would you advise key US allies?
Chang: I advise every country to cut their trade relations with China because of the danger China poses.
The general view I have is that the world just needs to cut relations with China. If it were possible to reform Chinese communism, maybe that would be a worthwhile experiment, but we Americans have tried that for almost a half‑century and it has not worked.
As a matter of fact, our engagement of China has produced the opposite of what we wanted. We now have a richer and stronger China, more belligerent, more provocative, more aggressive, and much more dangerous. We have got to reverse what was clearly then, and is certainly clearly now, a misguided policy.
Q: What can we do now to try and protect us from more of these viral attacks?
Chang: The less trade and travel we have with China, then the better we are going to be. If there is no Chinese traveler, there would be no global pandemic. There would be no infections outside China. What we are going to have to do is to severely restrict travel from China.
We have to do this at least until we get our hands around this issue. Clearly, we have not been able to manage this. We have this notion, and everybody accepts it, at least implicitly, about globalization, comparative advantage, all of these things that have underpinned our modern world.
Unfortunately, China does not believe in comparative advantage, it does not believe in being a responsible member of the international community. Unfortunately, the only thing we can do is what many people think is unthinkable, and that is to cut our ties with China.
We cut our ties until we feel comfortable dealing with China, which in my mind means that the Communist Party no longer rules, that the Chinese people govern themselves, and then we can get along with them. I believe the Chinese people eventually will get this right.
At least at the moment, until they get it right, we have an obligation to our own citizens to cut those links. Because without those links, we are not going to have the next disease. Remember, China produces, especially in southern China, a lot of disease. Most of the world’s diseases do come from southern China.
This is not some academic question. Unfortunately, the remedy is severe, but I do not know how else we do this because you just cannot cooperate with China. You have got to cut your links.
Q: What might be possible in the way of the US government exposing details on high‑ranking members of the CCP’s overseas bank accounts, family dealings, and for instance, how Xi, on a government salary, paid for his daughter’s attendance at Harvard.
The press has covered some of these things, but that is different from official confirmation and surely greater access to such things as bank records.
Chang: I think we should just publicize it, and seize the assets of Chinese leaders in the United States. We have the Global Magnitsky Act.
These guys, even before the coronavirus episode, were engaging in a crime against humanity with the detention of somewhere between 1.3 and 3 million Uyghurs, Kazakhs, and other peoples of Turkic backgrounds in what China calls Xinjiang, the northwestern part of China.
We know that people were dying in those camps because China has been building crematoria. We know that this is an attempt to eliminate a religion, to eliminate ethnic identity. This is very close to genocide. If it is not genocide, it is as bad as what the Third Reich did before the mass extermination of what, 1941?
That alone should give us justification for applying the Global Magnitsky Act and just seizing all their assets in this country. As I mentioned, I believe this was a deliberate spread of the coronavirus. More than 100,000 Americans have died. We have the right to do everything we can within our power to protect ourselves and to punish wrongdoers.
We may not be able to bring Xi Jinping to The Hague. We may not be able to put him in that prison we have in Florence, Colorado, otherwise known as the Supermax. We may not be able to put him in Guantanamo, but we sure can seize his assets.
Q: Please discuss what we need to do to regain the technology commanding heights, national industrial plan, whole of government, whole of economy, society, Sputnik‑like program.
Chang: It is a whole-of-society approach. You go back maybe 10 years, China was not considered to be a tech competitor. Right now, it is ahead in crucial technologies such as, for instance, 5G, the fifth generation of wireless communications, and in quantum communications it has at least a half‑decade lead on us.
This is really stunning because this whole theoretical notion of quantum communications was developed by an American, Albert Einstein. For us, this is just Americans not paying attention.
It is also, of course, China’s stealing. China steals somewhere between $150 to $600 billion of US intellectual property each year, and now, the FBI is warning that it is trying to steal vaccines and medical‑related information.
What China has been able to do, and it is more than just that, it has had determined programs to develop technology. For instance, China has its 13th Five‑Year Plan, which is just about finished. It has the Made in China 2025 Initiative, where medicines and medical equipment comprise one of the 10 sectors that China wants to dominate by the year 2025.
These are, for China, a whole-of-society approach toward developing technology. We really need to do the same thing, and we can do it. President John F. Kennedy went to Rice University and said, “We are going to go to the moon.” That was a time when the Soviets were well ahead of us.
Through federal programs, through cooperation with business, just through everything, we were able to put the first man on the moon. By the way, no other country has left earth orbit, but the Chinese probably are ahead of us in the race to get back to the moon.
For us, I think what we are going to have to adopt the whole-of-society approach. The one thing that we should focus on is our universities. We have Chinese students and others taking in ways which are sometimes violative of federal law, sometimes just inconsistent with their status on campus.
They have been stealing, downloading entire databases, doing all the rest of this. We need to stop that. I know Chinese students, Chinese professors play a large role in our campuses, but they have also been taking US technology. We need to end that.
For me, it means a renewed approach. One of the ways we can stop this is, we have allowed Chinese diplomats and Ministry of State Security agents to surveil Chinese students on campus. That means Chinese students feel really under a compulsion to do what Beijing wants.
We are Americans. This is our country. We can get those diplomats out of those campuses, get the Chinese agents off our soil. That is up to us. To me, this is important of course. I’m here because my dad came here as a student in 1945, just before the end of the war.
I think we have got a long way to go, to solving what I think is actually the most complex issue we face: what do you do with Chinese students on American campuses? There are no easy solutions, but we need to address this in a much more rigorous way than we have been. We must do all of those things, that means we have a whole-of-society approach.
Q: Pharmaceuticals, how can we best replace the Chinese market? And rare earth strategic elements. Does the US have adequate resources to produce our own? How can we best disconnect from the dependence on the Chinese market?
Chang: On rare earths, we have rare earths in our country and our allies’ — most notably, Canada and Australia — have a lot of rare earths. What we do not have is the refining capacity. Stuff mined in countries other than China is actually shipped to China to be refined.
That has occurred because we do not want to suffer the environmental damage caused by refining rare earths, which in the past has really been awful. New technologies, and those that are coming on-stream now, mitigate much of the environmental impact. I think we need to start refining rare earths in North America.
If not here, then in Canada, which has huge deposits of many of the rare earths. It is a political decision for us to make, that we decide not to be dependent on China.
With regard to pharmaceuticals, Peter Navarro, President Trump’s trade adviser, has been talking for weeks about an executive order that would require the federal government to not buy pharmaceuticals from China. That EO has yet to be signed.
I think there is intense fighting at the top of the administration: trade groups and pharmaceutical companies have been fighting that executive order. This is something the President needs to do. It is in his power.
He can wake up one morning and say to the pharmaceutical companies, “I don’t care what you think. This is a national security issue.” You remember that on July 21, 2017, President Trump signed that executive order on supply chain robustness.
We know on March 24 of this year he talked about what is now called his American independence agenda, which is Americans making things for Americans.
Remember, he has the power under the International Emergency Economic Powers Act of 1977 to do a lot of stuff, including getting pharmaceutical companies out of China. It’s up to him. We should be, I hope, putting pressure on the White House to do what should be done because he is getting a lot of pressure on the other side. President Trump can do this.
Now, one other note. I do not do domestic politics, but I have noticed that there is an election this year. That is probably going to slow down the reaction of the president to many of the initiatives I think should be taken, but nonetheless, this is a really critical one. We cannot allow China to make our pharmaceuticals.
We should not be relying on any single country to the extent that we are relying on China, but certainly not a hostile regime that threatens to cut off products. Again, this is a question of American political will.
Q: How do we get other countries to join us in this effort? They are already getting blackmailed by China. If they criticize China, it punishes them over trade. Australia dared to join 100 countries asking for an investigation into coronavirus origin.
China responded by imposing 80% tariffs on Australian agricultural imports. How can we help other countries to stand up to China?
Chang: At the World Health Assembly, which just concluded, the resolution for an independent investigation of the origins of the coronavirus actually was sponsored by 144 countries. It passed without objection.
This is an investigation which China does not want, although China eventually saw the handwriting on the wall and decided not to oppose it. I think we get to this is a couple of ways. One of them is, the intelligence community, our intelligence community, has a lot of information which is going to throw a light on what China actually did, in terms of spreading the coronavirus.
I know that the intelligence community does not like disclosing a lot of this stuff because it compromises sources and methods. Every once in a while, you get an intelligence issue which is so critical to the future of our country.
I think that this is one of those where disclosure of information really is important. Once countries know what China did in terms of deliberately spreading this coronavirus, I think it is over for China.
With regard to Australia, because Australia was the second country to propose this investigation after we did, China has decided to punish Australia more than any other country, especially with those tariffs on barley.
This is one of those cases where we Americans should start buying Australian barley. We have got to show Beijing that we can out-muscle them. Remember, China looks fearsome because it has had economic growth.
China right now is in a contraction phase, and it has also got one other huge problem, and that is a lot of its Belt and Road loans to other countries are coming due this year. These countries cannot pay China back, which means China’s debt‑trap diplomacy is trapping not just the debtors, but it’s trapping China itself.
What we should be doing is making sure these countries do not pay back, because this is one way to starve the beast. There are many different ways to do it, cutting off trade, cutting off investments.
Those are things we can do, and we can be working with our allies, our friends, and countries that normally are not our friends. They now have an interest in opposing China, so we should be working with them.
Q: To what extent do you consider Xi’s position as head of the CCP to be precarious? Might concerns about his own vulnerability have anything to do with his renewed aggressiveness?
Chang: That’s the question I wish I knew the answer to. There are a number of things that can be said. Of course, China’s political system is not transparent. Especially at moments like this, it can be very opaque. I think this is one of those do-or-die moments for Xi Jinping. I mean that literally.
You have got to remember, Xi has changed the nature of the Chinese political system. Under Hu Jintao, his predecessor, it was collective, which means a Chinese leader really did not get blamed for things that went wrong.
Also, he did not get that much credit: all decisions were essentially made by consensus, especially at the Politburo Standing Committee, but even in the wider Politburo. The Chinese leader did not worry too much about things going bad.
Xi Jinping, of course, has taken that consensus system that he inherited at the end of 2012, and he has made it more or less into a one‑person system where he is the one person. Which means, of course, he has the greater accountability that goes along with that great power.
Xi Jinping, even before the coronavirus, was having a pretty bad year, in 2019, because he had a stumbling economy. He had problems in Hong Kong. He had some pretty unhappy people in China.
What Xi has done is run roughshod over everybody. As long as he can do that, he is safe. You have got to remember, though: people have not forgotten what Xi Jinping has done to them in terms of taking away their power, putting their family members in jail, all the rest of this.
They are sort of waiting on the sidelines for an opportunity to strike back. When Xi Jinping stumbles, they will strike back. This is a particularly important time for Xi because what he is trying to do is intimidate the world with this “wolf warrior” diplomacy.
If he succeeds, he is golden. If he does not succeed, if the world starts to contain China, starts to reduce relations with Beijing, all the rest of it, he is gone. By gone, I mean, he not only loses his position, he also loses perhaps his freedom, his assets, and maybe even his life.
He has taken what was a consensus-driven system and made it like the Maoist political system of the first years of the People’s Republic. When people lost political struggles, they not only lost power, they sometimes were executed.
Xi Jinping knows what is at stake right now. There are rumors ‑‑ I don’t know how much weight to give them ‑‑ that he is not going to get a third term as general secretary at the next Communist Party Congress in 2022. I tend to believe them, but I think that has not yet been determined.
What is interesting is that people in Beijing are talking about that. Which means that it probably is an option for the party to ditch Xi Jinping at the next opportunity. We shall see.
Q: Can we analyze some of the pharmaceuticals or even vitamins that come in that possibly show pathogens because of their poor oversight and loose regulations?
Chang: The answer is yes. We have had in the past medicines coming from China that have been adulterated. For instance, in the middle of this decade, maybe even earlier, Heparin, the blood thinner, was adulterated.
I do not think China would intentionally try to adulterate their vaccines and stuff. Nonetheless, they have had these fake vaccines scandals periodically in China. One not too long ago. We have got to be very concerned.
China can actually get to a vaccine before anybody else does if for no other reason that they are willing to cut corners. It is important for us to make sure that whatever China comes up with is not only effective but also safe.
Xi Jinping at the World Health Assembly address that he gave a couple of days ago, said he was going to share the vaccine with the world. I am happy if that is the case, but we have to be concerned that what they come up with is probably going to be ineffective or dangerous.
The Chinese are not going to test. They are not going to adhere to the same safety protocols that the rest of the world will. We need to be really concerned about what comes out of China in terms of a vaccine.
- Already-Obese Average Americans Have Drunk & Eaten Their Way To An Extra 5lbs During Lockdown
Already-Obese Average Americans Have Drunk & Eaten Their Way To An Extra 5lbs During Lockdown
Tyler Durden
Tue, 06/02/2020 – 23:45Months of coronavirus lockdowns have resulted in the average American body weight to increase by about five extra pounds, a new survey found.
With gyms, yoga and spin studios, and recreational facilities closed in most parts of the country; many were forced to “Netflix and quarantine” for several months.
The study, commissioned by Naked Nutrition, a firm that sells dietary supplements, surveyed 2,000 Americans and found at least half who said they would never get their pre-corona body back.
At least 65% said they had “let themselves go a bit” during the lockdowns. Respondents said it would take several months of intense workouts to revert to their pre-corona weight.
About three weeks into the lockdown (in early April), Americans resorted to watching porn, drinking beer, smoking pot, and devouring chocolate to cope with quarantine stress and job loss.
The survey found many folks developed unhealthy habits; a third said the consumption of alcohol surged during lockdowns, and more than 50% said their carbohydrate-loading increased. A little more than half (54%) said they increased vegetable intake, and 46% said they increased protein intake.
Bloomberg’s Michael McDonough shows an exponential jump in US beer, wine, and spirits consumption during the lockdowns.
h/t BBG Read: ‘We Have To Adjust To New Reality’ – Pandemic Leads To Surge In Americans Drinking At Home
Nearly 64% of respondents said lockdowns made them unhealthy. Two-thirds of respondents said they turned to an in-home exercise routine to counter weight gain.
When it came to exercise, half bought gym equipment for the home. The top five purchases were yoga mats (45%), a stationary bike (41%), chairs (39%), and ankle weights (39%).
As gyms were forced to close, many went bankrupt, resulting in Americans purchasing Peloton bikes for their home.
“The COVID-19 has been a stressful time for many, but maintaining a healthy lifestyle can support a person’s overall health and should remain a priority. This data highlights the importance of finding simple solutions for people to be able to maintain a healthy lifestyle while in isolation,” said Registered Dietitian Nutritionist Lauren Manaker in a statement.
The study also said 50% of respondents had added dietary supplements to their daily routine, 44% have started eating protein bars, and 43% have added protein powder to their diet.
Months of lockdowns have made Americans more obese but with mass social unrest across the country, some will clearly burn the excess weight as they run from National Guard troops.
- This Is Not A Revolution. It's A Blueprint For Locking Down The Nation
This Is Not A Revolution. It’s A Blueprint For Locking Down The Nation
Tyler Durden
Tue, 06/02/2020 – 23:25Authored by John Whitehead via The Rutherford Institute,
“When it gets down to having to use violence, then you are playing the system’s game. The establishment will irritate you—pull your beard, flick your face—to make you fight. Because once they’ve got you violent, then they know how to handle you.”
– John Lennon
Brace yourselves.
There is something being concocted in the dens of power, far beyond the public eye, and it doesn’t bode well for the future of this country.
Anytime you have an entire nation so mesmerized by political theater and public spectacle that they are oblivious to all else, you’d better beware.
Anytime you have a government that operates in the shadows, speaks in a language of force, and rules by fiat, you’d better beware.
And anytime you have a government so far removed from its people as to ensure that they are never seen, heard or heeded by those elected to represent them, you’d better beware.
What is unfolding before us is not a revolution.
The looting, the burning, the rioting, the violence: this is an anti-revolution.
The protesters are playing right into the government’s hands, because the powers-that-be want this. They want an excuse to lockdown the nation and throw the switch to all-out martial law. They want a reason to make the police state stronger.
It’s happening faster than we can keep up.
The Justice Department is deploying federal prison riot teams to various cities. More than half of the nation’s governors are calling on the National Guard to quell civil unrest. Growing numbers of cities, having just barely emerged from a coronavirus lockdown, are once again being locked down, this time in response to the growing upheaval.
This is how it begins.
It’s that dystopian 2030 Pentagon training video all over again, which anticipates the need for the government to institute martial law (use armed forces to solve domestic political and social problems) in order to navigate a world bedeviled by “criminal networks,” “substandard infrastructure,” “religious and ethnic tensions,” “impoverishment, slums,” “open landfills, over-burdened sewers,” a “growing mass of unemployed,” and an urban landscape in which the prosperous economic elite must be protected from the impoverishment of the have nots.
We’re way ahead of schedule.
The architects of the police state have us exactly where they want us: under their stamping boot, gasping for breath, desperate for freedom, grappling for some semblance of a future that does not resemble the totalitarian prison being erected around us.
This way lies certain tyranny.
For just one fleeting moment, “we the people” seemed united in our outrage over this latest killing of an unarmed man by a cop hyped up on his own authority and the power of his uniform.
That unity didn’t last.
Indeed, it didn’t take long—no surprise there—for us to quickly become divided again, polarized by the misguided fury and senseless violence of mobs taking to the streets, reeking of madness and mayhem.
Deliberately or not, the rioters have directed our attention away from the government’s crimes and onto their own.
This is a distraction.
Don’t allow yourself to be so distracted.
Let’s not lose sight of what started all of this in the first place: the U.S. government.
More than terrorism, more than domestic extremism, more than gun violence and organized crime, the systemic violence being perpetrated by agents of the government constitutes a greater menace to the life, liberty and property of its citizens than any of the so-called dangers from which the government claims to protect us.
Case in point: George Floyd died at the hands of the American police state.
The callous, cold-blooded murder of the unarmed, 46-year-old black man by police is nothing new: for 8 minutes and 46 seconds, police knelt on Floyd’s neck while the man pleaded for his life, struggled to breathe, cried out for his dead mother, and finally passed out and died.
Floyd is yet another victim of a broken system of policing that has placed “we the people” at the mercy of militarized cops who have almost absolute discretion to decide who is a threat, what constitutes resistance, and how harshly they can deal with the citizens they were appointed to “serve and protect.”
Daily, Americans are being shot, stripped, searched, choked, beaten and tasered by police for little more than daring to frown, smile, question, challenge an order or just exist.
I’m talking about the growing numbers of unarmed people are who being shot and killed for just standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety.
Killed by police for standing in a “shooting stance.” Killed for holding a cell phone. Killed for holding a baseball bat. Killed for opening the front door. Killed for being a child in a car pursued by police. Killed for approaching police while holding a metal spoon. Killed for running in an aggressive manner while holding a tree branch. Killed for crawling around naked. Killed for hunching over in a defensive posture. Killed because a police officer accidentally fired his gun instead of his taser. Killed for wearing dark pants and a basketball jersey. Killed for reaching for his license and registration during a traffic stop. Killed for driving while deaf. Killed for being homeless. Killed for brandishing a shoehorn. Killed for peeing outdoors. Killed for having his car break down on the road. Killed for holding a garden hose.
Now you can make all kinds of excuses to justify these shootings, and in fact that’s exactly what you’ll hear from politicians, police unions, law enforcement officials and individuals who are more than happy to march in lockstep with the police. However, as these incidents make clear, the only truly compliant, submissive and obedient citizen in a police state is a dead one.
Sad, isn’t it, how quickly we have gone from a nation of laws—where the least among us had just as much right to be treated with dignity and respect as the next person (in principle, at least)—to a nation of law enforcers (revenue collectors with weapons) who treat us all like suspects and criminals?
This is not how you keep the peace.
This is not justice. This is not even law and order.
This is certainly not freedom. This is the illusion of freedom.
Unfortunately, we are now being ruled by a government of psychopaths, scoundrels, spies, thugs, thieves, gangsters, ruffians, rapists, extortionists, bounty hunters, battle-ready warriors and cold-blooded killers who communicate using a language of force and oppression.
The facts speak for themselves.
We’re being ravaged by a government of ruffians, rapists and killers. It’s not just the police shootings of unarmed citizens that are worrisome. It’s the SWAT team raids gone wrong that are leaving innocent citizens wounded, children terrorized and family pets killed. It’s the roadside strip searches—in some cases, cavity searches of men and women alike carried out in full view of the public—in pursuit of drugs that are never found. It’s the potentially lethal—and unwarranted—use of so-called “nonlethal” weapons such as tasers on children for “mouthing off to a police officer. For trying to run from the principal’s office. For, at the age of 12, getting into a fight with another girl.”
We’re being held at gunpoint by a government of soldiers—a standing army. While Americans are being made to jump through an increasing number of hoops in order to exercise their Second Amendment right to own a gun, the government is arming its own civilian employees to the hilt with guns, ammunition and military-style equipment, authorizing them to make arrests, and training them in military tactics. Among the agencies being supplied with night-vision equipment, body armor, hollow-point bullets, shotguns, drones, assault rifles and LP gas cannons are the Smithsonian, U.S. Mint, Health and Human Services, IRS, FDA, Small Business Administration, Social Security Administration, National Oceanic and Atmospheric Administration, Education Department, Energy Department, Bureau of Engraving and Printing and an assortment of public universities. There are now reportedly more bureaucratic (non-military) government civilians armed with high-tech, deadly weapons than U.S. Marines. That doesn’t even begin to touch on the government’s arsenal, the transformation of local police into extensions of the military, and the speed with which the nation could be locked down under martial law depending on the circumstances. Clearly, the government is preparing for war—and a civil war, at that—and “we the people” are the perceived enemy.
We’re being taken advantage of by a government of scoundrels, idiots and cowards. American satirist H.L. Mencken calculated that “Congress consists of one-third, more or less, scoundrels; two-thirds, more or less, idiots; and three-thirds, more or less, poltroons.” By and large, Americans seem to agree. When you’ve got government representatives who spend a large chunk of their work hours fundraising, being feted by lobbyists, shuffling through a lucrative revolving door between public service and lobbying, and making themselves available to anyone with enough money to secure access to a congressional office, you’re in the clutches of a corrupt oligarchy. Mind you, these same elected officials rarely read the legislation they’re enacting, nor do they seem capable of enacting much legislation that actually helps rather than hinders the plight of the American citizen.
We’re being locked up by a government of greedy jailers. We have become a carceral state, spending three times more on our prisons than on our schools and imprisoning close to a quarter of the world’s prisoners, despite the fact that crime is at an all-time low and the U.S. makes up only 5% of the world’s population. The rise of overcriminalization and profit-driven private prisons provides even greater incentives for locking up American citizens for such non-violent “crimes” as having an overgrown lawn. As the Boston Review points out, “America’s contemporary system of policing, courts, imprisonment, and parole … makes money through asset forfeiture, lucrative public contracts from private service providers, and by directly extracting revenue and unpaid labor from populations of color and the poor. In states and municipalities throughout the country, the criminal justice system defrays costs by forcing prisoners and their families to pay for punishment. It also allows private service providers to charge outrageous fees for everyday needs such as telephone calls. As a result people facing even minor criminal charges can easily find themselves trapped in a self-perpetuating cycle of debt, criminalization, and incarceration.”
We’re being spied on by a government of Peeping Toms. The government, aided by its corporate allies, is watching everything you do, reading everything you write, listening to everything you say, and monitoring everything you spend. Omnipresent surveillance is paving the way for government programs that profile citizens, document their behavior and attempt to predict what they might do in the future, whether it’s what they might buy, what politician they might support, or what kinds of crimes they might commit. The impact of this far-reaching surveillance, according to Psychology Today, is “reduced trust, increased conformity, and even diminished civic participation.” As technology analyst Jillian C. York concludes, “Mass surveillance without due process—whether undertaken by the government of Bahrain, Russia, the US, or anywhere in between—threatens to stifle and smother that dissent, leaving in its wake a populace cowed by fear.”
We’re being forced to surrender our freedoms—and those of our children—to a government of extortionists, money launderers and professional pirates. The American people have been repeatedly sold a bill of goods about how the government needs more money, more expansive powers, and more secrecy (secret courts, secret budgets, secret military campaigns, secret surveillance) in order to keep us safe. Under the guise of fighting its wars on terror, drugs, domestic extremism, pandemics and civil unrest, the government has spent billions in taxpayer dollars on endless wars that have sown the seeds of blowback, surveillance programs that have subjected all Americans to a surveillance society, and militarized police that have turned communities into warzones.
We’re being robbed blind by a government of thieves. Americans no longer have any real protection against government agents empowered to seize private property at will. For instance, police agencies under the guise of asset forfeiture laws are taking property based on little more than a suspicion of criminal activity.
And we’re being forced to live in a perpetual state of emergency. From 9/11 through the COVID-19 lockdowns and now the threat of martial law in the face of growing civil unrest, we have witnessed the rise of an “emergency state” that justifies all manner of government tyranny and power grabs in the so-called name of national security.
Whatever else it may be—a danger, a menace, a threat—the U.S. government is certainly not looking out for our best interests, nor is it in any way a friend to freedom.
When the government views itself as superior to the citizenry, when it no longer operates for the benefit of the people, when the people are no longer able to peacefully reform their government, when government officials cease to act like public servants, when elected officials no longer represent the will of the people, when the government routinely violates the rights of the people and perpetrates more violence against the citizenry than the criminal class, when government spending is unaccountable and unaccounted for, when the judiciary act as courts of order rather than justice, and when the government is no longer bound by the laws of the Constitution, then you no longer have a government “of the people, by the people and for the people.”
What we have is a government of wolves.
Our backs are against the proverbial wall.
The government and its cohorts have conspired to ensure that the only real recourse the American people have to express their displeasure with the government is through voting, which is no real recourse at all.
The penalties for civil disobedience, whistleblowing and rebellion are severe. If you refuse to pay taxes for government programs you believe to be immoral or illegal, you will go to jail. If you attempt to overthrow the government—or any agency thereof—because you believe it has overstepped its reach, you will go to jail. If you attempt to blow the whistle on government misconduct, there’s a pretty good chance you will go to jail.
For too long, the American people have obeyed the government’s dictates, no matter now extreme. We have paid its taxes, penalties and fines, no matter how outrageous. We have tolerated its indignities, insults and abuses, no matter how egregious. We have turned a blind eye to its indiscretions and incompetence, no matter how imprudent. We have held our silence in the face of its lawlessness, licentiousness and corruption, no matter how illicit.
We have suffered.
How long we will continue to suffer depends on how much we’re willing to give up for the sake of freedom.
America’s founders provided us with a very specific explanation about the purpose of government and a roadmap for what to do when the government abuses its authority, ignores our objections, and establishes itself as a tyrant.
We must choose between peaceful slavery (in other words, maintaining the status quo in servitude to the police state) and dangerous freedom. That will mean carving out a path in which we begin to take ownership of our government, starting at the local level, challenging the status quo, and raising hell—nonviolently—whenever a government official steps out of line.
We can no longer maintain the illusion of freedom.
As I make clear in my book Battlefield America: The War on the American People, we are at our most vulnerable right now.
- Idaho Town Taken Over By Armed 'Patriot' Patrols Amid Rumors Antifa Headed There
Idaho Town Taken Over By Armed ‘Patriot’ Patrols Amid Rumors Antifa Headed There
Tyler Durden
Tue, 06/02/2020 – 23:05Amid rumors of mass protests and riots in the northwest Idaho city of Coeur d’Alene, some locals weren’t having it, and armed themselves to patrol city streets lined with small businesses.
It’s a trend giving rise to fears that violent armed clashes between different American factions are imminent. Already videos from cities across the nation have depicted counter-demonstrators taking matters into their own hands as police retreat.
“Reports and rumors that groups bent on rioting and violence in Coeur d’Alene brought out men and women with guns on Monday determined to stop them if they arrive,” local Idaho media reported.
Image source: Coer d’Alene/Post Falls Press “Dan Carson was patrolling Sherman Avenue with an AR-12 automatic 12-gauge across his chest, an AR-15 strapped to his back, two 9mm handguns holstered and a .38 special, too,” the report continued.
Groups of loosely affiliated ‘Proud Boys’ and armed ‘patriots’ began lining the streets of downtown Coeur d’Alene over reports left wing militants and Antifa anarchists were planning to cause mayhem in the area:
Soon, more armed men, self-described as a loosely formed group of patriots, arrived. They took up posts at corners on both sides of Sherman Avenue.
Later, they were joined by hundreds of citizens packing rifles, semi-automatic weapons, handguns, and bows and arrows.
The sidewalks were packed with people walking up and down Sherman Avenue, firearms proudly displayed for all to see.
They carried guns, had them holstered around their hips and had them strapped across their backs.
— Maher Kawash (@MaherKXLY) June 2, 2020
As it turns out, a group of Black Lives Matter protesters did in parts of the city briefly face off with the ‘protect Idaho’ group of armed locals, however, the scene stayed peaceful and without incident, dispersing relatively early into the evening as the police monitored the situation.
Image source: Coer d’Alene/Post Falls Press Ultimately it appeared that in the downtown area it was only the armed patriot group which was out in force, unopposed. But the armed citizens patrols were in such large numbers they effectively took over the streets.
Our beautiful home sweet home of North Idaho!! God bless our patriots, law-enforcement, & peaceful protestors (we support you) you are welcome! Those of you who incite violence, to destroy our communities will be met with a force in the likes of which you have never seen! #NIdaho pic.twitter.com/JKyUrLzqSD
— Laurie Powell (@JaynLaurieP) June 2, 2020
It’s a scene that’s also played out in places like Texas, where smaller towns and rural areas have vowed to keep rioters far away, also as individual citizens practice ‘open carry’ in states where it’s permissible.
Armed citizen warns outsider in live stream (below):
“I’m telling you… if you guys are thinking about coming to Coeur d’Alene to riot or loot, you better fuckin think again, because we ain’t havin it over here.”
“Everybody’s out and strapped… getting ready for the so-called invasion.”
WATCH:
But the trend suggests it could take a single ‘incident’ to spark a deadly encounter between such armed ‘citizens patrol’ groups and Antifa, BLM, or left-wing militants in locations across the nation.
Meanwhile, in San Bernardino County, California an armed clash between rival demonstrators nearly erupted:
As hundreds protest in Upland, tensions are now rising between Trump supporters and George Floyd Activists. Currently police are monitoring the protest. pic.twitter.com/Yql1rgy1g2
— Romualdo Sanchez (@romualdotv) June 1, 2020
Given that local and state police can barely handle the growing riots and random destruction as it is, such a scenario would send things escalating to far more violent proportions at flashpoints across the US.
During the early momentum of riots taking over Minnesota’s twin cities – ground zero for the initial George Floyd protests that began late last week – local and state police came under intense criticism as they retreated from riot-hit parts of the city, leaving business owners to watch helplessly as their stores and in some cases homes burned the ground.
This and other scenes of lawlessness have resulted in a growing trend this week of armed ‘citizen patrols’ – adding to a potentially deadly combustible mix amid increasingly chaotic unpredictable scenarios on American city streets.
- The Senate Should Focus On What The Flynn Transcripts Do Not Contain… Starting With A Crime
The Senate Should Focus On What The Flynn Transcripts Do Not Contain… Starting With A Crime
Tyler Durden
Tue, 06/02/2020 – 22:45Yesterday, the attorney hired by Judge Emmet Sullivan responded on his behalf to defend his controversial orders in the case to invite third parties to argue the merits of the motion to dismiss as well as raising his option to substitute his own criminal charge of perjury against Flynn. The Justice Department responded with a 45-page filing to a three-judge appeals court panel.
The attention will now focus on the appearance tomorrow of former Deputy Attorney General Rod Rosenstein in the Senate. For me, the most pertinent question is why this investigation continued past December and seemed to become to a search for a crime rather than the investigation of any crime or collusion with Russia.
“Remember … Ambassador, you’re not talking to a diplomat, you’re talking to a soldier.”
When President Trump’s incoming national security adviser, Michael Flynn, said those words to then-Russian Ambassador Sergey Kislyak, he also spoke to American intelligence agents listening in on the call. For three years, congressional Democrats have assured us Flynn’s calls to Kislyak were so disturbing that they set off alarms in the closing days of the Obama administration.
They were right. The newly released transcripts of Flynn’s calls are deeply disturbing — not for their evidence of criminality or collusion but for the total absence of such evidence. The transcripts, declassified Friday, strongly support new investigations by both the Justice Department and by Congress, starting with next week’s Senate testimony by former Deputy Attorney General Rod Rosenstein.
It turns out Flynn’s calls are not just predictable but even commendable at points. When the Obama administration hit the Russians with sanctions just before leaving office, the incoming Trump administration sought to avoid a major conflict at the very start of its term. Flynn asked the Russian to focus on “common enemies” in order to seek cooperation in the Middle East. The calls covered a variety of issues, including the sanctions.
What was not discussed was any quid pro quo or anything untoward or unlawful. Flynn stated what was already known to be Trump policy in seeking a new path with Russia. Flynn did not offer to remove sanctions but, rather, encouraged the Russians to respond in a reciprocal, commensurate manner if they felt they had to respond.
The calls, and Flynn’s identity, were leaked by as many as nine officials as the Obama administration left office — a serious federal crime, given their classified status. The most chilling aspect of the transcripts, however, is the lack of anything chilling in the calls themselves. Flynn is direct with Kislyak in trying to tone down the rhetoric and avoid retaliatory moves. He told Kislyak, “l am a very practical guy, and it’s about solutions. It’s about very practical solutions that we’re — that we need to come up with here.” Flynn said he understood the Russians might wish to retaliate for the Obama sanctions but encouraged them not to escalate the conflict just as the Trump administration took office.
Kislyak later spoke with Flynn again and confirmed that Moscow agreed to tone down the conflict in the practical approach laid out by Flynn. The media has focused on Flynn’s later denial of discussing sanctions; the transcripts confirm he did indeed discuss sanctions. However, the Justice Department has not sought to dismiss criminal charges against him because he told the truth but because his statements did not meet a key element of materiality for the crime and were the result of troubling actions by high-ranking officials.
The real question is why the FBI continued to investigate Flynn in the absence of any crime or evidence of collusion. In December 2016, investigators had found no evidence of any crime by Flynn. They wanted to shut down the investigation; they were overruled by superiors, including FBI special agent Peter Strzok, Deputy Director Andrew McCabe and Director James Comey. Strzok told the investigators to keep the case alive, and McCabe is described as “cutting off” another high-ranking official who questioned the basis for continuing to investigate Flynn. All three officials were later fired, and all three were later found by career officials to have engaged in serious misconduct as part of the Russia investigation.
Recently disclosed information revealed that Comey and President Obama discussed using the Logan Act as a pretense for a criminal charge. The Logan Act criminalizes private negotiations with foreign governments; it is widely viewed as unconstitutional and has never been used successfully against any U.S. citizen since the earliest days of the Republic. Its use against the incoming national security adviser would have been absurd. Yet, that unconstitutional crime was the only crime Comey could come up with, long before there was a false statement by Flynn regarding his calls.
Not until February 2017 did Comey circumvent long-standing protocols and order an interview with Flynn. Comey later bragged that he “probably wouldn’t have … gotten away with it” in other administrations, but he sent “a couple guys over” to question Flynn, who was settling into his new office as national security adviser. We learned recently that Strzok discussed trying to get Flynn to give false or misleading information in that interview, to enable a criminal charge, and that FBI lawyer Lisa Page suggested agents “just casually slip” in a reference to the criminal provision for lying and then get Flynn to slip up on the details.
Flynn did slip up. While investigators said they were not convinced he intentionally lied, he gave a false statement. Later, special counsel Robert Mueller charged Flynn with that false statement, to pressure him into cooperating; Flynn fought the case into virtual bankruptcy but agreed to plead guilty when Mueller threatened to prosecute his son, too.
The newly released transcripts reveal the lack of a foundation for that charge. Courts have held that the materiality requirement for such a charge requires that misstatements be linked to the particular “subject of the investigation.” The Justice Department found that the false statement in February 2017 was not material “to any viable counterintelligence investigation — or any investigation, for that matter — initiated by the FBI.” In other words, by that time, these FBI officials had no crime under investigation but were, instead, looking for a crime. The question is: Why?
So the transcripts confirm there never was a scintilla of criminal conduct or evidence of collusion against Flynn before or during these calls. Indeed, there was no viable criminal investigation to speak of when Comey sent “a couple guys over” to entrap Flynn; they already had the transcripts and the knowledge that Flynn had done nothing wrong. Nevertheless, facing the release of these transcripts, House Intelligence Committee Chairman Adam Schiff (D-Calif.) bizarrely maintained that “Flynn posed a severe counterintelligence risk” because he could be blackmailed over his false statement.
Putting aside the lack of prior evidence of criminality, Schiff ignores that there were transcripts to prevent such blackmail. Indeed, in the interview, Flynn indicated he assumed there was a transcript, and leaked media reports indicated that various officials were familiar with the content of the calls. The key to blackmail would have been for the Russians to have information that others did not have.
Ironically, in his calls with Kislyak, Flynn expressly sought a more frank, honest relationship with Russia. He told Kislyak “we have to stop talking past each other on — so that means that we have to understand exactly what it is that we want to try to achieve, okay?” That is a question that should now be directed at the FBI, to understand what it was trying to achieve by continuing an investigation long after it ran out of crimes to investigate.
- Pentagon Says 1,600 Army Troops Have Moved To Joint Base Andrews Outside Washington DC To "Support Civil Authorities"
Pentagon Says 1,600 Army Troops Have Moved To Joint Base Andrews Outside Washington DC To “Support Civil Authorities”
Tyler Durden
Tue, 06/02/2020 – 22:30One day after Trump warned he may call in the army if the situation in Washington D.C. does not normalize, sparking outrage in liberal circles who called this a de facto preparation for civil war, moments ago Pentagon spokesman Jonathan Hoffman said that 1,600 active duty troops have moved from Fort Bragg and Fort Drum, to the National Capitol region, “but are not in Washington” – technically they are now located in Joint Base Andrews, which is just on the outskirts of Washington DC).
We continue to update our post on the bizarre aerial activity over Washington DC tonight. A huge airlift operation is underway, multiple airlifters bringing troops and equipment into Andrews AFB outside of Washington DC right now: https://t.co/uQcquS1OrH
— Tyler Rogoway (@Aviation_Intel) June 2, 2020
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I would then spot other USAF flights from Fort Riley (Kan) & Fort Bragg (NC) also headed to Andrews w/troops activated by the President to quell protests. In the dark of the night.
Also US Army helicopter over Baltimore’s, peaceful, protests. It had been flying for hours (4/8) pic.twitter.com/ZmFUDdAFWh
— Dave McHugh 🏀 (@davemchugh) June 3, 2020
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Video: Elements of 16th Military Police Brigade deployed into Washington DC today.Other troops held in readiness at Andrews Air Force Base & Ft Belvoir incl a paratrooper battalion from 82nd ABD, its supporting helicopters, some surveillance elems of SOF https://t.co/aVIPUPHaEs
— Mark Urban (@MarkUrban01) June 2, 2020
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700 #US troops from 82nd airborne div. have been moved from their base in Fort Bragg, North Carolina, to the outskirts of Washington DC, are now poised at Joint Base Andrews in Maryland and Fort Belvoir in Virginia, AP reports. Are armed, have bayonets and have riot gear, pic.twitter.com/WvkSM1SMoh
— JUANA CARRASCO (@cubavence2019) June 3, 2020
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The Pentagon also said that the troops are on “heightened alert status but remain under Title X authority and are not participating in defense support to civil authority operations”, at least not yet.
The full Pentagon statement is below.
- Two Doctors Explain Why COVID-19 Was Likely Lab Experiment
Two Doctors Explain Why COVID-19 Was Likely Lab Experiment
Tyler Durden
Tue, 06/02/2020 – 22:05Authored by Jonathan Latham, PhD and Allison Wilson, PhD via Independent Science News (emphasis ours)
The Case Is Building That COVID-19 Had a Lab Origin
If the public has learned a lesson from the COVID-19 pandemic it is that science does not generate certainty. Do homemade face masks work? What is the death rate of COVID-19? How accurate are the tests? How many people have no symptoms? And so on. Practically the lone undisputed assertion made so far is that all the nearest known genetic relatives of its cause, the Sars-CoV-2 virus, are found in horseshoe bats (Zhou et al., 2020). Therefore, the likely viral reservoir was a bat.
However, most of these ancestor-like bat coronaviruses cannot infect humans (Ge et al., 2013). In consequence, from its beginning, a key question hanging over the pandemic has been: How did a bat RNA virus evolve into a human pathogen that is both virulent and deadly?
The answer almost universally seized upon is that there was an intermediate species. Some animal, perhaps a snake, perhaps a palm civet, perhaps a pangolin, served as a temporary host. This bridging animal would probably have had an ACE2 cellular receptor (the molecule which allows cellular entry of the virus) intermediate in protein sequence (or at least structure) between the bat and the human one (Wan et al., 2020).
In the press and in the scientific literature, scenarios by which this natural zoonotic transfer might have occurred have been endlessly mulled. Most were fuelled by early findings that many of the earliest COVID-19 cases seem to have occurred in and around Wuhan’s Huanan live animal market. [The latest data are that 14 of the 41 earliest cases, including the first, had no connection to the animal market (Huang et al. 2020)].
Since the two previous coronavirus near-pandemics of SARS (2002-3) and MERS (2012) both probably came from bats and both are thought (but not proven) to have transitioned to humans via intermediate animals (civets and dromedaries respectively), a natural zoonotic pathway is a reasonable first assumption (Andersen et al., 2020).
The idea, as it applied to the original (2002) SARS outbreak, is that the original bat virus infected a civet. The virus then evolved briefly in this animal species, but not enough to cause a civet pandemic, and then was picked up by a human before it died out in civets. In this first human (patient zero) the virus survived, perhaps only barely, but was passed on, marking the first case of human to human transmission. As it was successively passed on in its first few human hosts the virus rapidly evolved, adapting to better infect its new hosts. After a few such tentative transmissions the pandemic proper began.
Perhaps this scenario is approximately how the current COVID-19 pandemic began.
But one other troubling possibility must be dispensed with. It follows from the fact that the epicentre city, Wuhan (pop. 11 million), happens to be the global epicentre of bat coronavirus research (e.g. Hu et al., 2017).
Prompted by this proximity, various researchers and news media, prominently the Washington Post, and with much more data Newsweek, have drawn up a prima facie case that a laboratory origin is a strong possibility (Zhan et al., 2020; Piplani et al., 2020). That is, one of the two labs in Wuhan that has worked on coronaviruses accidentally let a natural virus escape; or, the lab was genetically engineering (or otherwise manipulating) a Sars-CoV-2-like virus which then escaped.
Unfortunately, in the US at least, the question of the pandemic’s origin has become a political football; either an opportunity for Sinophobia or a partisan “blame game“.
But the potential of a catastrophic lab release is not a game and systemic problems of competence and opacity are certainly not limited to China (Lipsitch, 2018). The US Department of Homeland Security (DHS) is currently constructing a new and expanded national Bio and Agro-defense facility in Manhattan, Kansas. DHS has estimated that the 50-year risk (defined as having an economic impact of $9-50 billion) of a release from its lab at 70%.
When a National Research Council committee inspected these DHS estimates they concluded “The committee finds that the risks and costs could well be significantly higher than that“.
A subsequent committee report (NAP, 2012) continued:
“the committee was instructed to judge the adequacy and validity of the uSSRA [updated Site-Specific Risk Assessment]. The committee has identified serious concerns about (1) the misapplication of methods used to assess risk, (2) the failure to make clear whether and how the evidence used to support risk assessment assumptions had been thoroughly reviewed and adequately evaluated, (3) the limited breadth of literature cited and the misinterpretation of some of the significant supporting literature, (4) the failure to explain the criteria used to select assumptions when supporting literature is conflicting, (5) the failure to consider important risk pathways, and (6) the inadequate treatment of uncertainty. Those deficiencies are not equally problematic, but they occur with sufficient frequency to raise doubts about the adequacy and validity of the risk results presented. In most instances (e.g., operational activities at the NBAF), the identified problems lead to an underestimation of risk; in other instances (e.g., catastrophic natural hazards), the risks may be overestimated. As a result, the committee concludes that the uSSRA is technically inadequate in critical respects and is an insufficient basis on which to judge the risks associated with the proposed NBAF in Manhattan, Kansas.”
China, meanwhile, having opened its first in Wuhan in 2018, is planning to roll out a national network of BSL-4 labs (Zhiming, 2019). Like many other countries, it is investing significantly in disease surveillance and collection of viruses from wild animal populations and in high-risk recombinant virus research with Potential Pandemic Pathogens (PPPs).
On May 4th, nations and global philanthropies, meeting in Brussels, committed $7.4 billion to future pandemic preparedness. But the question hanging over all such investments is this: the remit of the Wuhan lab at the centre of the accidental release claims is pandemic preparedness. If the COVID-19 pandemic began there then we need to radically rethink current ideas for pandemic preparation globally. Many researchers already believe we should, for the sake of both safety and effectiveness (Lipsitch and Galvani, 2014; Weiss et al., 2015; Lipsitch, 2018). The worst possible outcome would be for those donated billions to accelerate the arrival of the next pandemic.
Historical lab releases, a brief history
An accidental lab release is not merely a theoretical possibility. In 1977 a laboratory in Russia (or possibly China), most likely while developing a flu vaccine, accidentally released the extinct H1N1 influenza virus (Nakajima et al., 1978). H1N1 went on to become a global pandemic virus. A large proportion of the global population became infected. In this case, deaths were few because the population aged over 20 yrs old had historic immunity to the virus. This episode is not widely known because only recently has this conclusion been formally acknowledged in the scientific literature and the virology community has been reluctant to discuss such incidents (Zimmer and Burke, 2009; Wertheim, 2010). Still, laboratory pathogen escapes leading to human and animal deaths (e.g. smallpox in Britain; equine encephalitis in South America) are common enough that they ought to be much better known (summarised in Furmanski, 2014). Only rarely have these broken out into actual pandemics on the scale of H1N1, which, incidentally, broke out again in 2009/2010 as “Swine flu” causing 3,000 or so deaths on that occasion (Duggal et al., 2016).
Many scientists have warned that experiments with PPPs, like the smallpox and Ebola and influenza viruses, are inherently dangerous and should be subject to strict limits and oversight (Lipsitch and Galvani, 2014; Klotz and Sylvester, 2014). Even in the limited case of SARS-like coronaviruses, since the quelling of the original SARS outbreak in 2003, there have been six documented SARS disease outbreaks originating from research laboratories, including four in China. These outbreaks caused 13 individual infections and one death (Furmanski, 2014). In response to such concerns the US banned certain classes of experiments, called gain of function (GOF) experiments, with PPPs in 2014, but the ban (actually a funding moratoriumactually a funding moratorium) was lifted in 2017.
For these reasons, and also to ensure the effectiveness of future pandemic preparedness efforts, it is a matter of vital international importance to establish whether the laboratory escape hypothesis has credible evidence to support it. This must be done regardless of the problem–in the US–of toxic partisan politics and nationalism.
The COVID-19 Wuhan lab escape thesis
The essence of the lab escape theory is that Wuhan is the site of the Wuhan Institute of Virology (WIV), China’s first and only Biosafety Level 4 (BSL-4) facility. (BSL-4 is the highest pathogen security level). The WIV, which added a BSL-4 lab only in 2018, has been collecting large numbers of coronaviruses from bat samples ever since the original SARS outbreak of 2002-2003; including collecting more in 2016 (Hu, et al., 2017; Zhou et al., 2018).
Led by researcher Zheng-Li Shi, WIV scientists have also published experiments in which live bat coronaviruses were introduced into human cells (Hu et al., 2017). Moreover, according to an April 14 article in the Washington Post, US Embassy staff visited the WIV in 2018 and “had grave safety concerns” about biosecurity there. The WIV is just eight miles from the Huanan live animal market that was initially thought to be the site of origin of the COVID-19 pandemic.
Wuhan is also home to a lab called the Wuhan Centers for Disease Prevention and Control (WCDPC). It is a BSL-2 lab that is just 250 metres away from the Huanan market. Bat coronaviruses have in the past been kept at the Wuhan WCDPC lab.
Thus the lab escape theory is that researchers from one or both of these labs may have picked up a Sars-CoV-2-like bat coronavirus on one of their many collecting (aka ‘”virus surveillance”) trips. Or, alternatively, a virus they were studying, passaging, engineering, or otherwise manipulating, escaped.
Scientific assessments of the lab escape theory
On April 17 the Australian Science Media Centre asked four Australian virologists: “Did COVID-19 come from a lab in Wuhan?“
Three (Edward Holmes, Nigel McMillan and Hassan Vally) dismissed the lab escape suggestion and Vally simply labeled it, without elaboration, a “conspiracy”.
The fourth virologist interviewed was Nikolai Petrovsky of Flinders University. Petrovsky first addressed the question of whether the natural zoonosis pathway was viable. He told the Media Centre:
“no natural virus matching to COVID-19 has been found in nature despite an intensive search to find its origins.”
That is to say, the idea of an animal intermediate is speculation. Indeed, no credible viral or animal host intermediaries, either in the form of a confirmed animal host or a plausible virus intermediate, has to-date emerged to explain the natural zoonotic transfer of Sars-CoV-2 to humans (e.g. Zhan et al., 2020).
In addition to Petrovsky’s point, there are two further difficulties with the natural zoonotic transfer thesis (apart from the weak epidemiological association between early cases and the Huanan “wet” market).
The first is that researchers from the Wuhan lab travelled to caves in Yunnan (1,500 Km away) to find horseshoe bats containing SARS-like coronaviruses. To-date, the closest living relative of Sars-CoV-2 yet found comes from Yunnan (Ge et al., 2016). Why would an outbreak of a bat virus therefore occur in Wuhan?
Moreover, China has a population of 1.3 billion. If spillover from the wildlife trade was the explanation, then, other things being equal, the probability of a pandemic starting in Wuhan (pop. 11 million) is less than 1%.
Zheng-Li Shi, the head of bat coronavirus research at WIV, told Scientific American as much:
“I had never expected this kind of thing to happen in Wuhan, in central China.” Her studies had shown that the southern, subtropical provinces of Guangdong, Guangxi and Yunnan have the greatest risk of coronaviruses jumping to humans from animals—particularly bats, a known reservoir. If coronaviruses were the culprit, she remembers thinking, “Could they have come from our lab?”
Wuhan, in short, is a rather unlikely epicentre for a natural zoonotic transfer. In contrast, to suspect that Sars-CoV-2 might have come from the WIV is both reasonable and obvious.
Was Sars-CoV-2 created in a lab?
In his statement, Petrovsky goes on to describe the kind of experiment that, in principle, if done in a lab, would obtain the same result as the hypothesised natural zoonotic transfer–rapid adaptation of a bat coronavirus to a human host.
“Take a bat coronavirus that is not infectious to humans, and force its selection by culturing it with cells that express human ACE2 receptor, such cells having been created many years ago to culture SARS coronaviruses and you can force the bat virus to adapt to infect human cells via mutations in its spike protein, which would have the effect of increasing the strength of its binding to human ACE2, and inevitably reducing the strength of its binding to bat ACE2.
Viruses in prolonged culture will also develop other random mutations that do not affect its function. The result of these experiments is a virus that is highly virulent in humans but is sufficiently different that it no longer resembles the original bat virus. Because the mutations are acquired randomly by selection there is no signature of a human gene jockey, but this is clearly a virus still created by human intervention.”
In other words, Petrovsky believes that current experimental methods could have led to an altered virus that escaped.
Passaging, GOF research, and lab escapes
The experiment mentioned by Petrovsky represents a class of experiments called passaging. Passaging is the placing of a live virus into an animal or cell culture to which it is not adapted and then, before the virus dies out, transferring it to another animal or cell of the same type. Passaging is often done iteratively. The theory is that the virus will rapidly evolve (since viruses have high mutation rates) and become adapted to the new animal or cell type. Passaging a virus, by allowing it to become adapted to its new situation, creates a new pathogen.
The most famous such experiment was conducted in the lab of Dutch researcher Ron Fouchier. Fouchier took an avian influenza virus (H5N1) that did not infect ferrets (or other mammals) and serially passaged it in ferrets. The intention of the experiment was specifically to evolve a PPP. After ten passages the researchers found that the virus had indeed evolved, to not only infect ferrets but to transmit to others in neighbouring cages (Herfst et al., 2012). They had created an airborne ferret virus, a Potential Pandemic Pathogen, and a storm in the international scientific community.
The second class of experiments that have frequently been the recipients of criticism are GOF experiments. In GOF research, a novel virus is deliberately created, either by in vitro mutation or by cutting and pasting together two (or more) viruses. The intention of such reconfigurations is to make viruses more infectious by adding new functions such as increased infectivity or pathogenicity. These novel viruses are then experimented on, either in cell cultures or in whole animals. These are the class of experiments banned in the US from 2014 to 2017.
Some researchers have even combined GOF and passaging experiments by using recombinant viruses in passaging experiments (e.g. Sheahan et al., 2008).
Such experiments all require recombinant DNA techniques and animal or cell culture experiments. But the very simplest hypothesis of how Sars-CoV-2 might have been caused by research is simply to suppose that a researcher from the WIV or the WCDCP became infected during a collecting expedition and passed their bat virus on to their colleagues or family. The natural virus then evolved, in these early cases, into Sars-CoV-2. For this reason, even collecting trips have their critics. Epidemiologist Richard Ebright called them “the definition of insanity“. Handling animals and samples exposes collectors to multiple pathogens and returning to their labs then brings those pathogens back to densely crowded locations.
Was the WIV doing experiments that might release PPPs?
Since 2004, shortly after the original SARS outbreak, researchers from the WIV have been collecting bat coronaviruses in an intensive search for SARS-like pathogens (Li et al., 2005). Since the original collecting trip, many more have been conducted (Ge et al., 2013; Ge et al., 2016; Hu et al., 2017; Zhou et al., 2018).
Petrovsky does not mention it but Zheng-Li Shi’s group at the WIV has already performed experiments very similar to those he describes, using those collected viruses. In 2013 the Shi lab reported isolating an infectious clone of a bat coronavirus that they called WIV-1 (Ge et al., 2013). WIV-1 was obtained by introducing a bat coronavirus into monkey cells, passaging it, and then testing its infectivity in human (HeLa) cell lines engineered to express the human ACE2 receptor (Ge et al., 2013).
In 2014, just before the US GOF research ban went into effect, Zheng-Li Shi of WIV co-authored a paper with the lab of Ralph Baric in North Carolina that performed GOF research on bat coronaviruses (Menachery et al., 2015).
In this particular set of experiments the researchers combined “the spike of bat coronavirus SHC014 in a mouse-adapted SARS-CoV backbone” into a single engineered live virus. The spike was supplied by the Shi lab. They put this bat/human/mouse virus into cultured human airway cells and also into live mice. The researchers observed “notable pathogenesis” in the infected mice (Menachery et al. 2015). The mouse-adapted part of this virus comes from a 2007 experiment in which the Baric lab created a virus called rMA15 through passaging (Roberts et al., 2007). This rMA15 was “highly virulent and lethal” to the mice. According to this paper, mice succumbed to “overwhelming viral infection”.
In 2017, again with the intent of identifying bat viruses with ACE2 binding capabilities, the Shi lab at WIV reported successfully infecting human (HeLa) cell lines engineered to express the human ACE2 receptor with four different bat coronaviruses. Two of these were lab-made recombinant (chimaeric) bat viruses. Both the wild and the recombinant viruses were briefly passaged in monkey cells (Hu et al., 2017).
Together, what these papers show is that: 1) The Shi lab collected numerous bat samples with an emphasis on collecting SARS-like coronavirus strains, 2) they cultured live viruses and conducted passaging experiments on them, 3) members of Zheng-Li Shi’s laboratory participated in GOF experiments carried out in North Carolina on bat coronaviruses, 4) the Shi laboratory produced recombinant bat coronaviruses and placed these in human cells and monkey cells. All these experiments were conducted in cells containing human or monkey ACE2 receptors.
The overarching purpose of such work was to see whether an enhanced pathogen could emerge from the wild by creating one in the lab. (For a very informative technical summary of WIV research into bat coronaviruses and that of their collaborators we recommend this post, written by biotech entrepreneur Yuri Deigin).
It also seems that the Shi lab at WIV intended to do more of such research. In 2013 and again in 2017 Zheng-Li Shi (with the assistance of a non-profit called the EcoHealth Alliance) obtained a grant from the US National Institutes of Health (NIH). The most recent such grant proposed that:
“host range (i.e. emergence potential) will be tested experimentally using reverse genetics, pseudovirus and receptor binding assays, and virus infection experiments across a range of cell cultures from different species and humanized mice” (NIH project #5R01Al110964-04).
It is hard to overemphasize that the central logic of this grant was to test the pandemic potential of SARS-related bat coronaviruses by making ones with pandemic potential, either through genetic engineering or passaging, or both.
Apart from descriptions in their publications we do not yet know exactly which viruses the WIV was experimenting with but it is certainly intriguing that numerous publications since Sars-CoV-2 first appeared have puzzled over the fact that the SARS-CoV-2 spike protein binds with exceptionally high affinity to the human ACE2 receptor “at least ten times more tightly” than the original SARS (Zhou et al., 2020; Wrapp et al., 2020; Wan et al., 2020; Walls et al., 2020; Letko et al., 2020).
This affinity is all the more remarkable because of the relative lack of fit in modelling studies of the SARS-CoV-2 spike to other species, including the postulated intermediates like snakes, civets and pangolins (Piplani et al., 2020). In this preprint these modellers concluded “This indicates that SARS-CoV-2 is a highly adapted human pathogen”.
Given the research and collection history of the Shi lab at WIV it is therefore entirely plausible that a bat SARS-like cornavirus ancestor of Sars-CoV-2 was trained up on the human ACE2 receptor by passaging it in cells expressing that receptor.
How do viruses escape from high security laboratories?
Pathogen lab escapes take various forms. According to the US Government Accountability Office, a US defense Department laboratory once “inadvertently sent live Bacillus anthracis, the bacterium that causes anthrax, to almost 200 laboratories worldwide over the course of 12 years. The laboratory believed that the samples had been inactivated.” In 2007, Britain experienced a foot and mouth disease outbreak. Its’ origin was a malfunctioning waste disposal system of a BSL-4 laboratory leaking into a stream from which neighbouring cows drank. The disposal system had not been properly maintained (Furmanski, 2014). In 2004 an outbreak of SARS originating from the National Institute of Virology (NIV) in Beijing, China, began, again, with the inadequate inactivation of a viral sample that was then distributed to non-secure parts of the building (Weiss et al., 2015).
Writing for the Bulletin of The Atomic Scientists in February 2019, Lynn Klotz concluded that human error was behind most laboratory incidents causing exposures to pathogens in US high security laboratories. While equipment failure was also a factor, of the 749 incidents reported to the US Federal Select Agent Programme between 2009-2015, Klotz concluded that 79% resulted from human error.
But arguably the biggest worry is incidents that go entirely unreported because escape of the pathogen goes undetected. It is truly alarming that a significant number of pathogen escape events were uncovered only because investigators were in the process of examining a completely different incident (Furmanski, 2014). Such discoveries represent strong evidence that pathogen escapes are under-reported and that important lessons still need to be learned (Weiss et al., 2015).
The safety record of the WIV
The final important data point is the biosafety history of the WIV. The WIV was built in 2015 and became a commissioned BSL-4 lab in 2018. According to Josh Rogin of the Washington Post, US embassy officials visited the WIV in 2018. They subsequently warned their superiors in Washington of a “serious shortage of appropriately trained technicians and investigators needed to safely operate this high-containment laboratory”.
And according to VOA News, a year before the outbreak, “a security review conducted by a Chinese national team found the lab did not meet national standards in five categories.”
Credible reports from within China also question lab biosafety and its management. In 2019, Yuan Zhiming, biosecurity specialist at the WIV, cited the “challenges” of biosafety in China. According to Zhiming: “several high-level BSLs have insufficient operational funds for routine yet vital processes” and “Currently, most laboratories lack specialized biosafety managers and engineers.” He recommends that “We should promptly revise the existing regulations, guidelines, norms, and standards of biosafety and biosecurity”. Nevertheless, he also notes that China intends to soon build “5-7” more BSL-4 laboratories (Zhiming, 2019).
And in February 2020, Scientific American interviewed Zheng-Li Shi. Accompanying the interview was a photograph of her releasing a captured bat. In the photo she is wearing a casual pink unzipped top layer, thin gloves, and no face mask or other protection. Yet this is the same researcher whose talks give “chilling” warnings about the dire risks of human contact with bats.
All of which tends to confirm the original State Department assessment. As one anonymous “senior administration official” told Rogin:
“The idea that it was just a totally natural occurrence is circumstantial. The evidence it leaked from a lab is circumstantial. Right now, the ledger on the side of it leaking from the lab is packed with bullet points and there’s almost nothing on the other side.”
The leading hypothesis is a lab outbreak
For all these reasons, a lab escape is by far the leading hypothesis to explain the origins of Sars-CoV-2 and the COVID-19 pandemic. The sheer proximity of the WIV and WCDCP labs to the outbreak and the nature of their work represents evidence that can hardly be ignored. The long international history of lab escapes and the biosafety concerns from all directions about the labs in Wuhan greatly strengthen the case. Especially since evidence for the alternative hypothesis, in the form of a link to wild animal exposure or the wildlife trade, remains extremely weak, being based primarily on analogy with SARS one (Bell et al,. 2004; Andersen et al., 2020).
Nevertheless, on April 16th Peter Daszak, who is the President of the EcoHealth Alliance, told Democracy Now! in a lengthy interview that the lab escape thesis was “Pure baloney”. He told listeners:
“There was no viral isolate in the lab. There was no cultured virus that’s anything related to SARS coronavirus 2. So it’s just not possible.”
Daszak made very similar claims on CNN’s Sixty Minutes: “There is zero evidence that this virus came out of a lab in China.” Instead, Daszak encouraged viewers to blame “hunting and eating wildlife”.
Daszak’s certainty is highly problematic on several counts. The closest related known coronaviruses to Sars-CoV-2 are to be found at the WIV so a lot depends on what he means by “related to”. But it is also dishonest in the sense that Daszak must know that culturing in the lab is not the only way that WIV researchers could have caused an outbreak. Third, and this is not Daszak’s fault, the media are asking the right question to the wrong person.
As alluded to above, Daszak is the named principal investigator on multiple US grants that went to the Shi lab at WIV. He is also a co-author on numerous papers with Zheng-Li Shi, including the 2013 Nature paper announcing the isolation of coronavirus WIV-1 through passaging (Ge et al., 2013). One of his co-authorships is on the collecting paper in which his WIV colleagues placed the four fully functional bat coronaviruses into human cells containing the ACE2 receptor (Hu et al. 2017). That is, Daszak and Shi together are collaborators and co-responsible for most of the published high-risk collecting and experimentation at the WIV.
An investigation is needed, but who will do it?
If the Shi lab has anything to hide, it is not only the Chinese Government that will be reluctant to see an impartial investigation proceed. Much of the work was funded by the US taxpayer, channeled there by Peter Daszak and the EcoHealth Alliance. Virtually every credible international organisation that might in principle carry out such an investigation, the WHO, the US CDC, the FAO, the US NIH, including the Gates Foundation, is either an advisor to, or a partner of, the EcoHealth Alliance. If the Sars-CoV-2 outbreak originated from the bat coronavirus work at the WIV then just about every major institution in the global public health community is implicated.
But to solve many of these questions does not necessarily require an expensive investigation. It would probably be enough to inspect the lab notebooks of WIV researchers. All research scientists keep detailed notes, for intellectual property and other reasons, but especially in BSL-4 labs. As Yuan Zhiming told Nature magazine in an article marking the opening of the facility in Wuhan: “We tell them [staff] the most important thing is that they report what they have or haven’t done.”
Meticulous lab records plus staff health records and incident reports of accidents and near-accidents are all essential components (or should be) of BSL work. Their main purpose is to enable the tracking of actual incidents. Much speculation could be ended with the public release of that information. But the WIV has not provided it.
This is puzzling since the Chinese government has a very strong incentive to produce those records. Complete transparency would potentially dispel the gales of blame coming its way; especially on the question of whether Sars-CoV-2 has an engineered or passaged origin. If Zheng-Li Shi and Peter Daszak are correct that nothing similar to Sars-CoV-2 was being studied there, then those notebooks should definitively exonerate the lab from having knowingly made an Actual Pandemic Pathogen.
Given the simplicity and utility of this step this lack of transparency suggests that there is something to hide. If so, it must be important. But then the question is: What?
A thorough investigation of the WIV and its bat coronavirus research is an important first step. But the true questions are not the specific mishaps and dissemblings of Drs Shi or Daszak, nor of the WIV, nor even of the Chinese government.
Rather, the bigger question concerns the current philosophy of pandemic prediction and prevention. Deep enquiries should be made about the overarching wisdom of plucking and counting viruses from the wild and then performing dangerous ‘what if’ recombinant research in high tech but fallible biosafety labs. This is a reductionistic approach, we also note, that has so far failed to predict pandemics and may never do so.
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Jonathan R. Latham PhD is co-founder and Executive Director of the Bioscience Resource Project and the Editor of Independent Science News. He holds a PhD in Virology and was a postdoctoral research associate in the University of Wisconsin Department of Genetics.
Allison K. Wilson, PhD is co-founder and Science Director of the the Bioscience Resource Project; Editor of the Bioscience Resource Project website; Assistant Editor of Independent Science News; and a contributor to the Poison Papers project. She holds a BA in Biology from Cornell University, a doctorate in Molecular Biology and Genetics from Indiana University, Bloomington, and was formerly a postdoctoral research associate at the Fred Hutchinson Cancer Research Center, Seattle and the John Innes Centre, Norwich, UK.
- GLJ Research: This Is Shaping Up As One Of The Worst Quarters In Tesla History
GLJ Research: This Is Shaping Up As One Of The Worst Quarters In Tesla History
Tyler Durden
Tue, 06/02/2020 – 21:54Submitted by Gordon Johnson of GLJ Research
After rising 449% m/m in China in March following China’s COVID-19 lockdowns ending, TSLA’s sales of cars in China in April fell -34.8% m/m (this came as a disappointment to many TSLA bulls as the competition gained materially on TSLA in the moth of April – link).
Aggregate EU Registrations: For the six EU countries that have reported May 2020 registrations, TSLA saw numbers for all cars “sold” fall -13.9% m/m and -67.8% y/y; through the first two months combined of 2Q20 (i.e., 2Q20 QTD) in these six EU countries, registrations are down -22.8% q/q and -67.8% y/y.
Aggregate EU EV Market Share: TSLA’s aggregated EU market share fell from 37.2% in 4Q19 to 25.3% in 1Q20.
NO + NL + SP Registrations: 2Q20 QTD, TSLA’s market share is down to 3.8%, vs. 7.7% in 1Q20 and 35.6% in 4Q19. Stated differently, TSLA has lost significant market share in the three key EU markets it… once… dominated.
NO + NL + SP Registrations (more detailed look): Through the first 63 days of 2Q20, sales in these three countries, combined, are down -34.7% q/q and -68.8% y/y.
Model 3 Tracker: Using TroyTeslike’s Model 3 tracker, through the first 63 days of 2Q20, Model 3 configurations are down -87.3% q/q and -86.7% y/y.
Model Y Tracker: Using TroyTeslike’s Model Y tracker, through the first 63 days of 2Q20, deliveries are running at 69 cars. By comparison, in the first full month the Model 3 tracker was collecting data on Model 3 sales, it reached 709 cars by quarter’s end. This may be why TSLA, recently, drastically reduced the lead times from when you order a Model Y in the USA to when you get it – i.e., to 4-8 weeks vs. 8-12 weeks prior (link) – this followed the sharp price cuts taken by TSLA last week due to weaker-than-expected demand globally.
New York State Data: While the data does not look bad, it’s important to remember that in NY State, registrations lag sales. So the April data below is from sales made in March. This means we won’t see the April/May COVID-19 sales impact in NYS until May/June data is out (i.e., later this week).
Colorado, USA: In Colorado, USA, through the 8th week of 2Q20, sales are trending down -22.3% q/q and -76.1% y/y.
RORO Boat Data: Looking at days boats loaded for TSLA cars, volumes are down -82.2% q/q and -78.1% y/y. The first boat of 2Q20 was sent to S. Korea; there is another boat that will arrive in Europe with roughly 3-4K cars (by our est.) before the end of 2Q20; finally, there is another RORO boat that is still moored, but we est. will arrive in Asia before the end of 2Q20 (it will be close, however).
CONCLUSION: Observing the publicly available data, and also observing a recent initiation on TSLA, in which the headline “Tesla (ticker: TSLA) is on the cusp of replicating its success in the U.S. EV market to potentially larger markets in China and Europe” (link) was published on a number of widely-followed financial media sites, as analysts are forced to revert back to TSLA’s actual fundamentals (which remain publicly available for anyone who wants it) – which include market share losses in both the EU and China – sentiment could be set to shift lower.
- Pandemic, Economic Crash, Social Unrest, And Now Four Asteroids?
Pandemic, Economic Crash, Social Unrest, And Now Four Asteroids?
Tyler Durden
Tue, 06/02/2020 – 21:45This year has been nothing short of astonishing. In the last five months, the US has been inundated with a virus pandemic, triggering an economic crash and 40 million unemployed, and now worsening social unrest in major metros. But what’s happening on the ground might be the least of our worries on Tuesday, as four asteroids are about to pass the planet.
NASA’s Center for Near-Earth Object Studies (CNEOS) has detected “four near-Earth objects that will fly past” the planet on Tuesday, reported International Business Times.
h/t The Sun CNEOS’ data showed the first asteroid, identified as 2020 KK7, measures about 108 feet wide and traveling at 34,000 mph, will pass the planet on Tuesday at a distance of 0.00343 astronomical units or approximately 319,000 miles. To put this in perspective, this means the giant space rock will pass Earth at a distance that is about from here to the Moon.
The second asteroid to pass Earth is called 2020 KD4. The rock measures about 115 feet wide and is traveling at 12,000 mph, will pass the planet at a distance of about 0.02680 astronomical units or around 2.5 million miles away.
The third asteroid to pass Earth is called 2020 KF, which has an estimated diameter of 144 feet, is the largest asteroid to approach the planet, and is traveling at about 24,000 mph. It’s expected to pass the planet at a distance of about 0.03102 astronomical units or 2.9 million miles.
And the fourth asteroid to pass Earth on Tuesday is called 2020 KJ1, has an estimated diameter of about 105 feet, and is moving at 11,000 mph, will pass the planet at about 0.01403 astronomical units or 1.3 million miles.
Amid the social-economic collapse of America, political commentator Katie Hopkins’ prayers could be answered…
Praying for an asteroid #GeorgeFloydsCriminalRecord
— Katie Hopkins (@KTHopkins) May 31, 2020
- Former Antifa Member Admits Group's Acts Are "Very Definition Of Domestic Terrorism"
Former Antifa Member Admits Group’s Acts Are “Very Definition Of Domestic Terrorism”
Tyler Durden
Tue, 06/02/2020 – 21:25Authored by Jon Street via Campus Reform,
Former Antifa member Gabriel Nadales praised President Donald Trump for his tweet saying that he intends to designate Antifa a domestic terror organization after several nights of violent riots and looting in dozens of major American cities.
Nadales, who is an employee of Campus Reform‘s parent organization, the Leadership Institute, joined Stuart Varney on Fox Business Network on Monday to discuss the recent riots that arose out of protests to the killing of George Floyd, an unarmed black man killed while in Minneapolis police custody.
Nadales was among the first to call for Antifa to be labeled a terror organization in 2019. Trump said at the time he was considering labeling the group a terror organization. Now, it appears the president has made up his mind.
“The United States of America will be designating ANTIFA as a Terrorist Organization,” Trump tweeted Sunday.
Nadales reacted to the news Monday, telling Varney, “Antifa’s acts are the very definition of domestic terrorism.”
“If you look at some of the violence, it’s being instigated by anarchists and Antifa activists,” Nadales, the former Antifa member said, “not by the peaceful protesters who are rightfully angered by what happened.”
WATCH:
- 77-Year-Old Retired Police Captain Murdered By Looters
77-Year-Old Retired Police Captain Murdered By Looters
Tyler Durden
Tue, 06/02/2020 – 21:05A retired St. Louis City police captain was shot and killed overnight trying to stop looters outside a North City pawn shop, according to KMOV4.
77-year-old David Dorn was found at approximately 2:30 a.m. Tuesday on the 4100 block of Martin Luther King Dr.
“He was murdered by looters at a pawnshop. He was the type of brother that would’ve given his life to save them if he had to. Violence is not the answer, whether it’s a citizen or officer,” wrote the St. Louis Ethical Society of Police of Dorn, whose wife is a sergeant with the St. Louis Metropolitan Police Department.
St. Louis Police Chief John Hayden said Dorn was murdered during a looting while “exercising law enforcement training.”
“David Dorn was a fine captain, many of us young officers looked up to him,” Chief Hayden said.
Chief Hayden said officers will wear their mourning badges in response to Dorn’s death. –KMOV4
Graphic:
“All over some TVs.” 77-year-old St. Louis retired Police Captain David Dorn was shot dead by looters when he tried to get them to stop looting a local pawn shop. pic.twitter.com/Xtvii4HoB1
— Ian Miles Cheong (@stillgray) June 2, 2020
According to the report, Dorn was with the St. Louis Metropolitan Police Department for 38 years before becoming the police chief in Moline Acres. He joined the police academy in November 1969, graduating in May 1970. After his retirement he joined Patrol Support in October 2007.
David Dorn was a father, a husband, a grandfather, a brother and a man beloved by so many. His son says he died doing what he loved: protecting his community. https://t.co/lOTFgvNogG @KMOV pic.twitter.com/SAjBhwRhMF
— Alexis Zotos (@alexiszotos) June 2, 2020
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Due to his history in law enforcement, Dorn helped out the owners of Lee’s Pawn and Jewelry – checking on it when the alarm would go off, which is what he was doing Tuesday when he was shot and killed.
Our highest respect to the family of David Dorn, a Great Police Captain from St. Louis, who was viciously shot and killed by despicable looters last night. We honor our police officers, perhaps more than ever before. Thank you! pic.twitter.com/0ouUpoJEQ4
— Donald J. Trump (@realDonaldTrump) June 3, 2020
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CrimeStoppers is offering a $10,000 reward for any information leading to an arrest in the case (866-371-8477).
Meanwhile, about the only mainstream coverage given to Dorn’s death has come from Fox News’ Tucker Carlson.
Tucker Carlson On The Violence Against Cops By The Mob
“For 38 years David Dorn was a police officer in the city of St. Louis. No one ever accused Dorn of racism, he was black. He’s dead now, he was murdered last night by the mob.” pic.twitter.com/hszxwYSn7h
— The Columbia Bugle 🇺🇸 (@ColumbiaBugle) June 3, 2020
Looters murdered David Dorn
CNN refuses to say his name
— Jack Posobiec (@JackPosobiec) June 3, 2020
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- This Treasury Official Is Running The Bailout And It's Been Great For His Family…
This Treasury Official Is Running The Bailout And It’s Been Great For His Family…
Tyler Durden
Tue, 06/02/2020 – 20:45Authored by Justin Elliott, Lydia DePillis and Robert Faturechi via ProPublica.org,
Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin have become the public faces of the $3 trillion federal coronavirus bailout. Behind the scenes, however, the Treasury’s responsibilities have fallen largely to the 42-year-old deputy secretary, Justin Muzinich.
A major beneficiary of that bailout so far: Muzinich & Co., the asset manager founded by his father where Justin served as president before joining the administration. He reported owning a stake worth at least $60 million when he entered government in 2017.
Today, Muzinich retains financial ties to the firm through an opaque transaction in which he transferred his shares in the privately held company to his father. Ethics experts say the arrangement is troubling because his father received the shares for no money up front, and it appears possible that Muzinich can simply get his stake back after leaving government.
Justin Muzinich, deputy Treasury secretary, in 2019. (Wolfgang Kumm/Picture Alliance via Getty Images)
When lockdowns crippled the economy in March, the Treasury and the Fed launched an unprecedented effort to buy up corporate debt to avert a freeze in lending at the exact moment businesses needed to borrow to keep running. That effort has succeeded, at least temporarily, with credit continuing to flow to companies over the last several weeks. This policy also allowed those who were heavily invested in corporate loans to recoup huge losses.
Muzinich & Co. has long specialized in precisely this market, managing approximately $38 billion of clients’ money, including in riskier instruments known as junk, or high-yield, bonds. Since the Fed and the Treasury’s actions in late March, the bond market has roared back. Muzinich & Co. has reversed billions in losses, according to a review of its holdings, with 28 of the 29 funds tracked by the investor research service Morningstar Direct rising in that period. The firm doesn’t publicly detail all of its holdings, so a precise figure can’t be calculated.
The Treasury is understaffed, and Muzinich was overseeing two-thirds of the department before the crisis hit. He spent his first year as the Trump administration’s point man on its only major legislative achievement, the landmark $1.9 trillion tax cut that mainly benefited the wealthy and corporations.
As the markets panicked about the economic impact of the coronavirus, Muzinich’s responsibilities expanded. The Treasury worked with the Fed on the emergency lending programs, and the agency has ultimate power to sign off. Muzinich was personally involved in crafting the programs, including the effort to bail out the junk bond market, The Wall Street Journal reported in April. He communicates with Fed officials daily by phone, email or text, the paper said.
That effort has many skeptics. The Fed has never bought corporate debt in its more than 100 years of existence, much less that of the indebted and fragile companies that raise money through the sale of junk bonds. Private equity firms, hedge funds and specialty investment firms like Muzinich & Co. dominate the market for junk-rated debt. In effect, the Fed has swooped in to protect the most sophisticated investors from losses on some of their riskiest bets.
Muzinich & Co. Profited From the Government’s Actions
Muzinich & Co.’s largest fund, with over $10 billion in assets, jumped in value when the Treasury and the Federal Reserve announced plans to buy bonds
Data from Morningstar Direct for the Muzinich Enhanced Yield Short-Term Fund
Justin Muzinich’s ongoing ties to the family firm present a thicket of potential conflicts of interest, ethics lawyers said. Instead of immediately divesting his stake in the firm when he joined the Trump administration in early 2017, Muzinich retained it until the end of that year. But even then, he did not sell his stake and use the proceeds to buy broad-based securities such as index funds, as is common practice. Instead, he transferred his piece of the company to his father, who owns Muzinich & Co. In exchange, he received what amounts to an IOU — a written agreement in which his father agreed to pay him for the shares, with interest, but with no principal due for nine years.
“This is something akin to a fake divestiture,” said Kathleen Clark, a law professor and ethics specialist at Washington University in St. Louis.
“It sure looks like he is simply parking this asset with a relative, and he will likely get it back after he leaves the government.”
A Treasury spokeswoman declined to say whether Muzinich has pledged not to take back the stake in the family firm once his public service ends. Muzinich “takes his ethics obligations very seriously” and “any suggestion to the contrary is completely baseless,” she said.
She added the arrangement with his family firm was approved by the Office of Government Ethics and agency ethics lawyers, who recently reexamined the setup given Muzinich’s role in the economic crisis response. They concluded that there is no currently envisaged scenario in which Muzinich would make decisions as a government official that would affect his father’s ability to repay the money he owes under the IOU.
“Treasury’s career Designated Agency Ethics Official has determined that there is no such conflict of interest, as there are no current or reasonably anticipated matters in which Deputy Secretary Muzinich would participate that would affect the note obligor’s ability or willingness to satisfy its financial obligations under the note,” she said in a statement. (The note obligor is Muzinich’s father.)
Muzinich & Co. did not respond to multiple requests for comment.
Muzinich’s relationship with the family firm also creates potential conflicts related to Muzinich & Co.’s clients. The firm makes money by charging investment management fees to several dozen wealthy individuals, insurance companies, pension funds, as well as what filings describe as a “quasi foreign government corporation.” The client list is not public and it’s unclear whether Muzinich would know about clients that came on board since he left. But any large investor has much to gain, or lose, from decisions being made by the Treasury about the bailout policies.
“The clients of this firm, I imagine, must be thrilled that Muzinich has this vitally important, powerful position with a huge amount of discretion and authority,” Clark said.
The Treasury spokeswoman declined to answer a question about the firm’s clients.
Even as Justin Muzinich has presided over bailout policies criticized by some observers, Muzinich & Co. executives have praised the government’s actions in recent briefings for investors. One described the interventions “as providing somewhat of a floor underneath the high yield market.”
Another Muzinich executive, David Bowen, who manages one of the firm’s high-yield bond portfolios, said during a May 20 webinar, “The Fed has been about as supportive, helpful, accommodative — whatever word you want to use — as anyone could imagine.”
Untangling the Financial Relationship
When Treasury Secretary Steven Mnuchin hired Justin Muzinich as counselor in early 2017, in many ways he was selecting a younger version of himself.
Justin Muzinich, center left, then a top adviser to Treasury Secretary Steven Mnuchin, center, on Capitol Hill on Sept. 12, 2017. (Al Drago/The New York Times/Redux)
Like Mnuchin, Muzinich grew up in New York City, the son of a wealthy finance executive. Also like his boss, Muzinich spent years collecting a series of elite credentials: He attended Groton and holds degrees from Harvard College, the London School of Economics, Yale Law School and Harvard Business School. He worked at Morgan Stanley and spent a few months at a hedge fund associated with billionaire Steven A. Cohen, followed by a few years at EMS Capital, which invests the money of the wealthy Safra family.
Colleagues praise Muzinich as hardworking and serious, and Democrats have expressed relief that he isn’t as inflammatory as many other Trump appointees. Powell, the Fed chair, called Muzinich “creative and extremely capable” in a statement to The Wall Street Journal in April.
In 2010, he joined the family firm and became its president. His father, George, founded the company in 1988, specializing in handling portfolios of American high-yield bonds for European pension funds. The company expanded to offer funds to other institutional investors and wealthy individuals, but it stuck to its focus on corporate credit — particularly the riskier type that pays higher interest rates. Headquartered in New York and London, the firm has eight offices across Europe and one in Singapore.
“Talking about credit all the time might sound boring, I’m sure it does,” Justin Muzinich said in a 2014 interview, “but that is what makes you good.”
As he rose in the family business, Muzinich also launched himself into GOP policy circles, advising the presidential campaigns of Mitt Romney in 2012 and Jeb Bush in 2016. He owns a $20 million ultramodern beachfront house in the Hamptons and a $4.5 million Park Avenue apartment and commutes from New York City to work in Washington.
When Muzinich entered the Trump administration, he reported owning stock and stock options in the family firm collectively worth at least $60 million. The true value could be much higher, but disclosure rules don’t require officials to give a specific figure for any asset worth more than $50 million.
The Treasury’s ethics officers are frequently called on to rule on complex questions, given that the department tends to attract people from careers on Wall Street who have large, complicated financial holdings — from ex-Goldman Sachs Chairman Hank Paulson to banker and Hollywood financier Mnuchin.
Stakes in individual companies can create conflicts of interest. So incoming Treasury officials typically sell those stocks and invest in broad-based options like mutual funds. Ownership in private investment funds can be particularly thorny because ethics rules treat each of the fund’s investments in specific companies as sources of potential conflicts. Sarah Bloom Raskin, who preceded Muzinich as deputy secretary in the Obama administration, reported holding only a collection of index and mutual funds that either track the whole stock market or a large basket of companies.
But government ethics officials did not require Muzinich to sell his stake in the family firm through his first year in office as counselor to Mnuchin.
According to ethics filings, Muzinich said that he did not divest it until December 2017, the month the tax law was signed. (Several months later, in April 2018, Trump nominated him to be deputy secretary.)
Muzinich did not receive cash for most of his stake in the family firm. Instead, his more recent financial disclosures show that the stake, held in a family trust, was replaced with an opaque asset described as a “receivable from family,” valued at over $50 million.
Muzinich’s disclosure filings don’t reveal much about this asset at all. They don’t say who the family member is or explain the arrangement. They don’t say how the terms were negotiated, or even if the valuation of the deal was vetted by an independent third party.
It turns out that Muzinich transferred his stake to his father. But his father didn’t have to pay him right away. According to a Senate Finance Committee memo obtained by ProPublica, Justin received two promissory notes from his father in return for the shares. The notes pay Justin between $1 million and $5 million in interest over a year, at a rate of 2.11%. Moreover, his father does not have to pay any principal on the loan for nine years.
Neither the financial disclosure forms nor the Senate memo say how long the agreement is supposed to last. Neither addresses the possibility of his getting the shares back after he leaves the government. The Treasury says the transaction is “not reversible” but did not elaborate.
In other words, Justin still has an ongoing long-term stake in the financial well-being of Muzinich & Co., since his father now owes him more than $50 million. If the company were to plummet in value or even go under, it could cost Justin. Actions the Treasury and the Fed take can either enhance the chances he gets his money back or lower them.
The Treasury defended the IOU transaction as an appropriate remedy for any conflicts of interest. The agency provided a statement from Elizabeth Horton, an ethics attorney who left the agency in 2019 and who worked with Muzinich on the divestiture from his family business. Horton said that when Muzinich first joined the agency, “the Treasury ethics office correctly advised him that he did not need to divest his holdings in his family business because of the generalized nature of his work on tax reform legislation.” She said that when his duties changed, “I advised Mr. Muzinich that an exchange for a fixed value note was an appropriate way to divest.”
Horton said that advice was “consistent with practice in previous administrations” — though the Treasury declined to cite similar cases. “Muzinich worked very closely with the ethics office and was extremely attentive to his ethics obligations,” Horton said.
ProPublica reached out to four ethics officials, including two former Treasury ethics lawyers. None could recall a similar divestment transaction. Three of the four disagreed that it resolved Muzinich’s conflicts, while one said that turning it into an asset with a value that doesn’t fluctuate with future developments should shield him from any allegations of impropriety.
The deal does not look like an arms-length transaction, said Virginia Canter, who served as a career ethics attorney at Treasury during the George W. Bush administration and is now at the watchdog group Citizens for Responsibility and Ethics in Washington.
“The terms of the loan suggest something less than a bona fide transaction,” she said. “Once he leaves office, nothing in the arrangement appears to preclude Muzinich from forgiving the debt owed to him by his father so they can amicably agree on returning to Muzinich the interest in the Muzinich family business.”
As ranking member of the Finance Committee, Sen. Ron Wyden opposed Muzinich’s nomination as deputy secretary because of his role in crafting the tax bill. Although he would have preferred a cash sale of the Muzinich & Co. stock, Wyden said in a statement that in July 2018 Muzinich had agreed to “strengthen his recusal commitments to include matters where his family’s company is a party.”
That satisfied Wyden at the time, but it is a very narrow restriction. A vast range of issues before the Treasury could affect Muzinich & Co. regardless of whether the firm was directly a party to any of them.
How Justin Muzinich treated the transaction for tax purposes could reveal whether it was a true and final sale or not.
Ordinarily, a sale of an asset such as equity in a company would trigger a capital gains tax bill. In Muzinich’s case, that could run into the tens of millions of dollars, even though his father paid him no cash upfront. But there is an exception if the asset in question is merely transferred with a commitment to have it returned, said Steve Rosenthal, a tax law expert at the Urban-Brookings Tax Policy Center.
“If you are merely parking or pledging securities, and you are going to get them back, that’s not viewed as a taxable transaction,” he said.
It is not clear how he reported the transaction to the IRS, and whether he was left with a huge tax bill. The Treasury declined to comment on the tax issues.
Tax Reform — for Friends and Family
Through his first year in the administration, even as Muzinich continued to own his stake in the family firm, he met with a wide range of business executives to hash out major tax provisions that would affect them, according to his 2017 calendars that ProPublica obtained after suing the Treasury last year under the Freedom of Information Act. Others were obtained by the watchdog group American Oversight. The Treasury redacted large sections of the calendars, saying that they required consultation with the White House before they could be released.
One of the most important principles in the federal government ethics rules covers whether an official is dealing with a “particular matter” that would affect a discrete group of people with specific interests or a “general matter” that affects a larger and more diverse group.
The Treasury spokeswoman said the tax reform bill was to affect a very large and diverse group, so ethics rules did not prevent Muzinich from working on it. He was allowed to keep his equity in the company while working on the tax bill because his “duties did not include particular matters that required divestiture of certain assets.”
But many industries had specific interests in the tax bill that they lobbied on — industries that may include clients of Muzinich & Co. Insurance companies, for example, featured prominently. Muzinich met with trade groups representing insurers as well as Liberty Mutual, The Hartford, Zurich and Blue Cross Blue Shield. In the final tax bill, property and casualty insurers fared particularly well by dodging new limitations on deductions that applied to other companies.
Insurance companies invest their premiums in order to increase their profits. In its regulatory filings, Muzinich & Co. reports that 17 of its 89 clients are insurance companies, which have given the firm more than $1.4 billion to invest. Muzinich & Co. did not provide a list of its clients.
Some of the companies Muzinich & Co. has stakes in also have been lobbying the Treasury on their own behalf. For example, Muzinich & Co. helps its clients invest in business development companies, a type of investment fund that enjoys lower taxes in exchange for providing capital to medium-sized companies. The firm itself owns stock in BDCs, many of them run by private equity companies such as Ares Capital Corporation, which has paid millions of dollars to lobby for looser rules governing the BDC industry.
Even beyond any overlap with the family firm’s interests, Muzinich’s calendars, which cover the period from February to September of 2017, reflect the administration’s priorities in negotiating the tax deal. Muzinich spent long days in meetings with private equity titans, energy company CEOs and heavy-hitting interest groups like the Business Roundtable and the anti-tax group Americans for Prosperity. His calendar shows no meetings with labor unions or progressive groups.
Muzinich did meet often with the Treasury’s in-house tax experts but frequently didn’t follow their recommendations. Richard Prisinzano, who served in the agency’s tax analysis office until August 2017, recalled trying to tell Mnuchin and Muzinich that drastically lowering corporate tax rates would likely prompt businesses to transform into C corporations, which often pay lower rates under the new law.
He argued that such a change would further reduce tax revenues. Muzinich disagreed, Prisinzano said, protesting that businesses wouldn’t change their corporate form just to lower their taxes. “He really pushed back,” Prisinzano recalled. “He said to me, ‘The secretary is a numbers person, and the numbers don’t make sense to him.’”
“‘I’m a numbers person, and they make perfect sense to me,’” Prisinzano said he responded. “That was not an answer that they liked.”
In the following two years, many large businesses did indeed convert into C corporations, including private equity giants Ares, Blackstone and KKR. The government hasn’t produced an estimate of how big a hit taxpayers took from these conversions.
During his confirmation hearing as deputy secretary in July 2018, Democratic senators pressed Muzinich on whether he agreed with the White House that the tax bill would “pay for itself,” despite the dire projections of independent forecasters such as the nonpartisan Congressional Budget Office. “Yes,” Muzinich responded.
It has not come close, as corporate tax collections plunged and left the national debt at historic levels on the eve of the pandemic.
Muzinich Takes on the COVID-19 Crisis
As the economic response to the novel coronavirus consumed Washington in March, Mnuchin turned again to Muzinich to negotiate with Congress over the shape of a bailout intended to sustain companies as they weathered the worst part of the crisis.
Ultimately, Trump administration officials and lawmakers settled on a package worth more than $2 trillion, divided into aid regimens for different sectors of the economy. While setting general parameters, the Coronavirus Aid, Relief and Economic Security Act gives the Treasury wide latitude over how the money is to be distributed. It calls for $50 billion in grants and loans for the airline industry, for example, with few rules on who should get what. (In another potential intersection with Muzinich’s Treasury work, Muzinich & Co. started a new business line to loan money to airlines to buy planes in February.)
Perhaps the greatest power the Treasury now has is the authority to sign off on Fed loan programs funded with CARES Act money. The Fed has said it will leverage that money to lend up to several trillion dollars.
Among their biggest decisions: Which firms to include in the $600 billion Main Street Lending Program, which will lend directly to mid-sized businesses, and how to structure two programs that will purchase up to $750 billion in corporate bonds.
The Main Street program, which has yet to launch, changed substantially after it was first announced to sweep in bigger companies and those with heavier debt loads. Offering a glimpse into how the Treasury directly shaped the Fed programs, Energy Secretary Dan Brouillette told Bloomberg the change was made in part to make sure beleaguered oil companies had access to the program’s favorable terms. Muzinich & Co.’s U.S.-based funds include dozens of energy companies.
Mnuchin also deputized Muzinich to fix problems that arose during the first round of funding for the Paycheck Protection Program, which offers forgivable loans to small businesses. The government hasn’t said who got money through the program, but Muzinich & Co.’s portfolio includes many companies that are small enough to be eligible.
The Fed’s bond purchasing programs will go even further to help companies with poorly rated credit.
On March 23, the Fed and the Treasury announced a sweeping stimulus program that would involve buying hundreds of billions of dollars of investment-grade bonds. Selling bonds is a way for large companies like Boeing or PepsiCo to raise money for new investments, to fund day-to-day operations or to pay back older loans. Companies that are strong and profitable are expected to be able to pay back the borrowed money. Their bonds are deemed “investment grade” and come with lower interest rates. The news of the Fed program on its own heralded a dramatic recovery in the bond market, which in three weeks recovered nearly all of the 13.6% it had lost since the plunge began on March 6, according to one index.
Then, on April 9, the Fed announced, with the Treasury’s approval, that it would expand its efforts to buy some junk bonds. These carry higher interest rates because the borrowing companies are viewed as riskier and may already be heavily in debt. One index tracking that market segment surged nearly 8% on the news, the most in a decade. This risker category of bonds has expanded dramatically in recent years as companies took on higher debt burdens to do things like acquire competitors and buy back stock. These are the bonds in which Muzinich & Co. has long specialized.
At the end of 2019, Muzinich & Co. reported it had $2.8 billion of assets under management in its U.S. high-yield bond strategy. A Muzinich fund that focuses specifically on those bonds took significant losses in March, as companies like oilfield services provider Targa Resources and Caesars Entertainment saw the price of their bonds fall 30% and 35% respectively.
The government’s announcement buoyed Muzinich & Co.’s high-yield holdings along with everyone else’s. The portfolio manager for the firm’s U.S. high-yield offering also praised CARES Act’s tax provisions that would “help high yield companies.”
In a separate development in May, the Fed expanded another Treasury-backed lending program in a way that could help Muzinich & Co.’s portfolio. The central bank said May 12 it would support “syndicated loans,” another form of corporate debt often in which riskier firms borrow money from multiple lenders. Muzinich & Co. had more than $3 billion in assets under management in U.S. and European syndicated loans at the end of last year.
The good news for Muzinich & Co. keeps coming. As the firm’s head of investment strategy, Erick Muller, told investors in a May 13 webcast about the junk bond market: “The recovery is pretty spectacular.”
- Unprecedented Surge In New CMBS Delinquencies Heralds Commercial Real Estate Disaster
Unprecedented Surge In New CMBS Delinquencies Heralds Commercial Real Estate Disaster
Tyler Durden
Tue, 06/02/2020 – 20:25One month ago, we thought that the unprecedented implosion in US commercial real estate in the month of April following the near-uniform economic shutdown following the coronavius pandemic, manifesting in the surge in newly delinquent CMBS loans would be one for the ages, even though as we predicted May would likely be worse as a result of the spike in specially services loans.
And indeed while April was catastrophic, May was even worse.
According to the latest remittance data by Trepp, the surge in CMBS delinquencies that most industry watchers were anticipating came through in May. After Trepp’s CMBS Delinquency Rate registered at 2.29% in April, in May the Delinquency Rate logged its largest increase in the history of this metric since 2009. The May reading was 7.15%, a jump of 481 basis points over the April number. Almost 5% of that number is represented by loans in the 30-day delinquent bucket.
There was some good news: given that about 8% of loans had missed payments for the April remittance cycle (in the grace period), the fact that delinquencies went up less than 5% has to be viewed as a small “win.” That, or simply the backlog of delinquencies has prevented the proper accounting of all deals.
Alas, that “win” won’t last, and will be reversed next month, when the delinquency rate will hits double digits as about 7.61% of loans by balance missed the May payment but remained less than 30 days delinquent (i.e., within the grace period).
On the other hand, as more forbearances receive approval, some delinquent loans could revert to current status based on expectations of how loan statuses will be reported in servicer data going forward, if reported correctly. For instance, if a loan’s last payment was made in March, it would not show up as 60 days delinquent in June if a forbearance had been granted. Of course, this step merely delayed the inevitable, and once forbearances are exhausted, all those loans which are classified as current will all slide right into the default bucket without passing go.
Some other overall statistics:
The percentage of loans in special servicing rose from 4.39% in April to 6.07% in May. According to May servicer data, 16.2% of all lodging loans were in special servicing, up from 11.4% in April. In addition, 9.3% of retail loans are with the special servicer, up from about 6% the month prior. The percentage of loans on servicer watchlist in May was 19.9%.
The Overall Numbers
- The overall US CMBS delinquency rate climbed 481 basis points in May to 7.15%. The all-time high on this basis was 10.34% registered in July 2012. We expect this number will be surpassed in the June update.
- The percentage of A/B loans (i.e. loans in “grace period” or “beyond grace” period) was 7.61% in May.
- Year-to-date, the overall US CMBS delinquency rate is up 449 basis points.
- The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or nonperforming balloons) is now 2.17%, up six basis points for the month. (As noted above, the largest increase this month was seen in the 30-day delinquency category; expect the percentages for 60+ day delinquencies to move higher in June.)
- If defeased loans were taken out of the equation, the overall 30-day delinquency rate would be 7.56%, up 515 basis points from April.
- One year ago, the US CMBS delinquency rate was 2.66%.
- Six months ago, the US CMBS delinquency rate was 2.34%
The CMBS 2.0+ Numbers
- The CMBS 2.0+ delinquency rate jumped 503 basis points to 6.19% in May. The rate is up 545 basis points year over year.
- The percentage of CMBS 2.0+ loans that are seriously delinquent is now 1.10%, which is up 12 basis points from April.
- If defeased loans were taken out of the equation, the overall CMBS 2.0+ delinquency rate would be 6.54%, up 531 basis points for the month.
The CMBS 1.0 Numbers
- Note: With CMBS 1.0 loans outstanding dwindling, we plan to retire this statistic beginning in Q3 2020.
- The CMBS 1.0 delinquency rate rose 110 basis points to 41.74 % in May.
- The percentage of CMBS 1.0 debt that is seriously delinquent rose 24 basis points to 40.89% last month.
- If defeased loans were taken out of the equation, the overall CMBS 1.0 delinquency rate would be 47.04%
Overall Property Type Analysis (CMBS 1.0 and 2.0+)
- The industrial delinquency rate climbed 46 basis points to 1.82%
- The amount of industrial loans categorized as A/B: 2.41% in May
- The lodging delinquency rate jumped 1642 basis points to 19.13%.
- The amount of lodging loans categorized as A/B: 14.08% in May
- The multifamily delinquency rate rose 133 basis points to 3.25%.
- The amount of multifamily loans categorized as A/B: 2.78% in May
- The office delinquency rate moved up 48 basis points to 2.40%.
- The amount of office loans categorized as A/B: 2.72% in May
- The retail delinquency rate spiked 647 basis points to 10.14%.
- The amount of retail loans categorized as A/B: 12.53% in May
- Shocking Evidence Suggests Coordinated Effort To Orchestrate An Uprising Inside The United States
Shocking Evidence Suggests Coordinated Effort To Orchestrate An Uprising Inside The United States
Tyler Durden
Tue, 06/02/2020 – 20:22Authored by Michael Snyder via TheMostImportantNews.com,
Violence has erupted in major cities all over America yet again today, and we are being told to brace ourselves for more rioting, looting and civil unrest in the days ahead. The death of George Floyd was a great tragedy, and the vast majority of Americans agree that we do not want to see that sort of police brutality in our nation, and so this should actually be a moment that brings our country together. But instead, America is being torn apart. The protests against police brutality have been hijacked by sinister forces, and they are attempting to channel the outrage over George Floyd’s death in a very violent direction. As you will see below, law enforcement authorities all over the U.S. are telling us that they have identified a highly organized effort to orchestrate violence, and this appears to be happening on a nationwide basis.
Let’s start by looking at what is happening in New York. According to the top terrorism official in the entire city, “certain anarchist groups” were making preparations for “violent interactions with police” before protests in the city even began…
On Sunday night, New York’s top terrorism cop, Deputy Commissioner for Intelligence and Counterterrorism John Miller, detailed his office’s analysis and investigation into why the New York City protests have become so violent and damaging at times.
“No. 1, before the protests began,” Miller said, “organizers of certain anarchist groups set out to raise bail money and people who would be responsible to be raising bail money, they set out to recruit medics and medical teams with gear to deploy in anticipation of violent interactions with police.”
And once the protests started, these groups used “a complex network of bicycle scouts” to direct rioters to locations where police officers would not be present…
“And they developed a complex network of bicycle scouts to move ahead of demonstrators in different directions of where police were and where police were not for purposes of being able to direct groups from the larger group to places where they could commit acts of vandalism including the torching of police vehicles and Molotov cocktails where they thought officers would not be.”
These are not just mindless angry mobs. They are being directed with a purpose, and that is very alarming.
In Chicago, Mayor Lori Lightfoot has publicly acknowledged that there has been “an organized effort” to turn the protests over George Floyd’s death “into something violent” in her city…
Speaking at an afternoon news conference today with other officials, Lightfoot didn’t say whether the groups are out-of-state left-wing anti-fascist organizations generally known as Antifa, right-wing agitators, local street gangs or something else. She said she’s asked three federal agencies—the FBI, the Bureau of Alcohol Tobacco Firearms & Explosives and the U.S. Attorney’s office—for help, with a focus on AFT’s bomb and arson unit.
“There is no doubt. This was an organized effort last night,” she said. “There were clearly efforts to subvert the peaceful process and make it into something violent.”
Lightfoot did not really elaborate on why she believes there has been “an organized effort”, but officials in other cities have been willing to give the public more specifics.
For example, law enforcement authorities in Minnesota have discovered “several caches of flammable materials” that were obviously intended to be used for rioting…
Earlier Sunday, state officials said several caches of flammable materials were found both in neighborhoods where there have already been fires and “in cars we’ve stopped as recently as this morning,” said John Harrington, state public safety commissioner. Some of the caches look like they may have been planted days ago and some only in the last 24 hours or so, he said.
Police are also finding stolen vehicles with plates removed that are being used to transport the flammable materials. Looted goods and weapons also have been found in the stolen cars, he said.
And in several other cities around the nation, law enforcement authorities have found bricks staged at or near protest sites.
On Sunday, police in Kansas City announced that they had found “stashes of bricks and rocks in & around the Plaza and Westport to be used during a riot”…
Kansas City police officers found bricks and rocks staged near protest sites around the city, stoking concerns that individuals or groups had pre-planned looting and destruction that hit the city over the weekend, the department said Sunday.
“We have learned of & discovered stashes of bricks and rocks in & around the Plaza and Westport to be used during a riot,” the department said in a tweet on Sunday.
And in Baltimore, law enforcement officials were racing to dismantle “mounds of bricks and bottles” that had been staged in downtown Baltimore…
According to sources, mounds of bricks and bottles have been found in Downtown Baltimore.
Baltimore Police confirmed they are working with law enforcement partners to sweep the area.
There are several demonstrations planned for Monday evening. Sources told Fox 45 officers are being briefed on the situation during roll call.
In New York, a “cache of bricks” just happened to be sitting directly in the path of rioters on Sunday evening…
Similarly, in New York City, video captured the moment rioters in Manhattan chanced upon a cache of bricks between St. Marks Place and Seventh Street in the East Village on Sunday evening, though no construction site appeared to be nearby.
Even down in Texas, “a large pile of bricks” was stacked up in front of the courthouse in Dallas and huge stacks of bricks were pre-staged right along a path that protesters would be taking in Frisco.
I don’t know about you, but I have a very hard time believing that all of this is just a giant coincidence.
The fact that huge piles of pre-staged bricks are suddenly showing up at protest locations all over America indicates a level of planning and coordination at a very high level.
Obviously we are dealing with something that is far more complex than just a few thousand angry people letting off some steam.
With the U.S. economy in deep disarray and with a presidential election coming up in November, anger and frustration are likely to remain at very high levels in the U.S. throughout the summer, and that will give those that are organizing these efforts more opportunities to promote violence.
Needless to say, the lawlessness that we are witnessing in the streets of our major cities is greatly alarming millions of ordinary Americans, and gun sales are going through the roof…
Gun sales surged in May as shops reported an uptick in interest and demand as the coronavirus pandemic continued and amid national protests after the Memorial Day killing of George Floyd.
“Almost, you couldn’t even keep up with it – that’s how crazy it was,” said Joe Hawk, owner of Guns & Roses in New Jersey. “After Memorial Day, it spiked again – it just went crazy again.”
Small Arms Analytics & Forecasting, a private research firm, estimated that there were more than 1.7 million gun sales in May – an 80% jump from May 2019.
The thin veneer of civilization that we all take for granted on a daily basis is disappearing, and a lot of people believe that a lot more civil unrest is ahead.
Our nation is more deeply divided than it has ever been in my entire lifetime, and that is not likely to change any time soon.
So I would very much encourage you to do whatever you need to do to get yourself and your family prepared for what is coming, because America appears to be on the precipice of complete and utter chaos.
- Taibbi: Where Did Policing Go Wrong?
Taibbi: Where Did Policing Go Wrong?
Tyler Durden
Tue, 06/02/2020 – 20:05Crime has been down for decades, but incarceration is still sky-high and brutality cases keep tearing the country apart. Does policing in America need a fundamental re-think?
Watching all the terrible news in the wake of the police killing of George Floyd, it’s been hard not to think about Eric Garner. The cases have so many similarities. Once again, an unarmed African-American man in his forties has been asphyxiated in broad daylight by a police officer with a history of abuse complaints. He and his fellow officers ignore cries of “I can’t breathe,” and keep subduing their target even after he stops moving, unconcerned that he’s being filmed.
Five years ago, while sketching the outline for a book about the Garner case called I Can’t Breathe, my editor suggested I take on a larger question.
Why, he asked, do we even have police? After all, the history of policing in our country, especially as it pertains to minority neighborhoods, has always rested upon dubious justifications. The early American police forces evolved out of slave patrols in the South, and “progressed” to enforce the Black Codes from the Civil War period and beyond, on to Jim Crow through the late sixties if not longer.
In an explicit way, American policing has almost always been concerned on some level with enforcing racial separatism. Because Jim Crow police were upholding a way of life, the actual laws they were given to enforce were deliberately vague, designed to be easily used as pretexts for controlling the movements of black people. They were charged with punishing “idleness” or “impudence,” and encouraged to enforce a range of vagrancy laws, including such offenses as “rambling without a job” and “leading an idle, profligate, or immoral course of life.”
I ended up not taking on that question, focusing on the hard-enough question of what had led two young, amped-up policemen to choke the life out of a harmless father and street character like Garner. I was more interested in those police than all police, and part of me – the white part, probably – thought the answer to the question of why we need police at all was at least somewhat self-evident.
But the Garner story ended up graphically revealing the way modern “Broken Windows” policing had evolved to fit the tactics of those centuries of racial enforcement. I learned that “vagrancy” laws had been replaced in cities like New York with essentially identical offenses like “obstructing pedestrian traffic” and “obstructing government administration.”
In Staten Island, a borough that to this day remains very segregated – white and black residents alike refer to the Staten Island Expressway that bisects black neighborhoods to the north and white neighborhoods to the south as the “Mason-Dixon line” – the young black men who lived in and around the Tompkinsville area where Garner was killed told stories of being stopped and ticketed whenever they crossed into the wrong neighborhoods.
The new strategies rely upon extremely high numbers of contacts between police and subject populations, who are stopped for every conceivable minor offense – public intoxication, public urination, riding bicycles the wrong way down a sidewalk, refusing to obey police orders, jumping subway turnstiles, and, in Garner’s case, selling loose cigarettes.
This idea of high-engagement policing was born in the mind of a Midwestern academic/corrections official named George Kelling. Kelling conducted a number of studies for think tanks like the Police Foundation and eventually co-authored a hugely influential 1982 article in the Atlantic called Broken Windows.
Kelling in his research found that while people may not actually be safer, they feel safer when there is less visible “disorder” in their neighborhoods, e.g. panhandling, litter, graffiti, etc. Also, research suggested such disorder was incentive to further disorder: as Stanford researcher Philip Zimbardo put it, “If a window in a building is broken and left unrepaired, all of the rest of the windows will soon be broken.”
“Broken Windows” revolutionized policing, changing it from a business of fighting crime to doing what Kelling described as “order maintenance.” If earlier police theorists like Orlando “O.W.” Wilson hoped to defeat crime by putting officers in squad cars and giving them advanced tools to react more quickly to offenses, the new strategy stressed stopping crime before it got started, by building and maintaining something not defined in law books – “order.”
Once again, police were charged with enforcing not rules but a way of life, and were asked again to view the law as more of a tool than an end in itself. The famous “Broken Windows” article spoke approvingly of officers in Chicago who read between the lines of the law to chase gang members out of a project: “In the words of one officer, ‘We kick ass.’”
The Kelling revolution was credited with early successes, like the cleaning up of the New York City subway. Soon the “Broken Windows” strategy (sometimes euphemistically called “community policing”) was the norm in big cities. Mass stops and arrests led to amazing numbers, like Baltimore under Mayor Martin O’Malley arresting 100,000 people in 2004 alone, or the city of Chicago stopping 250,000 people in 2014, a stop rate four times higher than New York in the peak years of “stop-and-frisk.”
When such policing became hot in the nineties, as advocates like Bill Bratton became national celebrities (here he is on the cover of Time in 1996 under the headline, “Finally, we’re winning the war against crime. Here’s why”), police departments became infected by a corporate-like mania for “goal-setting” and “deliverables.” There was no numerical way to impress politicians if police just worked cases as they came: to show progress, Bratton believed, one had to order police to produce concrete quantities of stops, searches, arrests.
Commissioners demanded captains deliver numbers and captains began browbeating lesser officers, who in turn pushed quotas on patrol cops, for reasons that often had nothing to do with crime. As depicted in the The Wire, in the stats revolution, “shit always rolls downhill.” The point was to get lieutenants promoted to captain, to get mayors re-elected, and help provide the rationale for the prison jobs state legislators were bringing home to suburban districts. All of this was greased by the lobbying money of construction firms, prison vendors, even private prison corporations – a great business for all, and all that was needed to keep it going was an endless stream of jailable people.
This is why, even as rates of both violent crime and property crime have been decreasing steadily since the early nineties, rates of incarceration have been exploding in the other direction. For most of the 20th century the rate of incarceration in America was roughly 110 per 100,000 people. As of last year, the number was 655 per 100,000. Although the numbers have dipped slightly in recent years, down from a high of about 760 per 100,000 in 2013, the quantity of prisoners in America remains absurdly high.
Such aggressive, military-style policing would be not be tolerated by voters if it were taking place everywhere. It’s popular, and continues to be embraced by politicians in both parties, because it’s only happening in “those” neighborhoods (or, as Mike Bloomberg once put it, “where the crime is”). Even during the Covid-19 crisis, 80% of the summonses for social distancing violations are given out to blacks and Hispanics. Does anyone really think that minorities account for that massive a percentage of those violations? Do they think black people really commit 3.73 times as many marijuana offenses as white people?
Basically we have two systems of enforcement in America, a minimalist one for people with political clout, and an intrusive one for everyone else. In the same way our army in Vietnam got in trouble when it started searching for ways to quantify the success of its occupation, choosing sociopathic metrics like “body counts” and “truck kills,” modern big-city policing has been corrupted by its lust for summonses, stops, and arrests. It’s made monsters where none needed to exist.
Because they’re constantly throwing those people against walls, writing them nuisance tickets, and violating their space with humiliating searches (New York in 2010 paid $33 million to a staggering 100,000 people strip-searched after misdemeanor charges), modern cops correctly perceive that they’re hated. As a result, many embrace a “warrior” ethos that teaches them to view themselves as under constant threat.
This is why you see so many knees on heads and necks, guns drawn on unarmed motorists, chokeholds by the thousand, and patterns of massive overkill everywhere – 41 shots fired at Amadou Diallo, 50 at Sean Bell, 137 at Timothy Russell and Malissa Williams in Cleveland, and homicides over twenty bucks or a loose cigarette.
Police are trained to behave like occupiers, which is why they increasingly dress like they’ve been sent to clear houses in Mosul and treat random motorists like potential car-bombers – think of poor Philando Castile, shot seven times by a police officer who leaped back firing in panic like he was being attacked by Freddy Krueger, instead of a calm, compliant, educated young man. Officers with histories of abuse complaints like Daniel Pantaleo and Derek Chauvin are kept on the force because senior officers value police who make numbers more than they fear outrage from residents in their districts. The incentives in this system are wrong in every direction.
The current protests are likely to inspire politicians to think the other way, but it’s probably time to reconsider what we’re trying to accomplish with this kind of policing. In upscale white America drug use is effectively decriminalized, and Terry stops, strip searches, and “quality of life” arrests are unknowns. The country isn’t going to heal as long as everyone else gets a knee in the neck.
- Lancet Issues Major Disclaimer On Anti-HCQ Study, As Manufactured Disinformation Foments Hysterics
Lancet Issues Major Disclaimer On Anti-HCQ Study, As Manufactured Disinformation Foments Hysterics
Tyler Durden
Tue, 06/02/2020 – 19:45The Lancet has issued a major disclaimer regarding a study which prompted the World Health Organization to halt global trials of hydroxychloroquine (HCQ), an anti-Malaria drug currently being used around the world to treat COVID-19.
As we noted last week, major data discrepancies have called the entire study into question – though the lead author says it does not change the study’s findings that patients who received HCQ died at higher rates and experienced more cardiac complications than without.
Until the data has been audited, The Lancet issued the following “expression of concern” regarding the study.
“Important scientific questions have been raised about data reported in the paper by Mandeep Mehra et al,” reads the “expression of concern” from The Lancet.
“Although an independent audit of the provenance and validity of the data has been commissioned by the authors not affiliated with Surgisphere and is ongoing, with results expected very shortly, we are issuing an Expression of Concern to alert readers to the fact that serious scientific questions have been brought to our attention. We will update this notice as soon as we have further information.”
Of course, this is yet more evidence of the manufactured disinformation surrounding HCQ that Richard Moss, MD, (via AmericanThinker.com) exposes below…
I took hydroxychloroquine for two years. A long time ago as a visiting cancer surgeon in Asia, in Thailand, Nepal, India, and Bangladesh. From 1987 to 1990. Malaria is rife there. I took it for prophylaxis, 400 milligrams once a week for two years. Never had any trouble. It was inexpensive and effective.
I started it two weeks before and was supposed to continue it through my stay and four weeks after returning. But I stopped it after two years. I was worried about potential side effects of which there are many, as with all drugs right down to Tylenol and aspirin. These, however, are rare. At a certain point, I was prepared to take my chances with mosquitoes and plasmodium, and so I stopped.
Chloroquine, the precursor of HCQ, was invented by Bayer in 1934. Hydroxychloroquine was developed during World War II as a safer, synthetic alternative and approved for medical use in the U.S. in 1955.
The World Health Organization considers it an essential medicine, among the safest and most effective medicines, a staple of any healthcare system. In 2017, US doctors prescribed it 5 million times, the 128th most commonly prescribed drug in the country. There have been hundreds of millions of prescriptions worldwide since its inception. It is one of the cheapest and best drugs in the world and has saved millions of lives. Doctors also prescribe it for Lupus and Rheumatoid arthritis patients who may consume it for their lifetimes with few or no ill effects.
Then something happened to this wonder drug.
From savior of the multitudes, redeemer and benefactor of hundreds of millions, it transformed into something else: a purveyor of doom, despair, and unspeakable carnage.
It began when President Trump discussed it as a possible treatment for COVID-19 on March 19, 2020. The gates of hell burst forth on May 18 when Trump casually announced that he was taking it, prescribed by his physician.
Attacks on Trump and this otherwise harmless little molecule poured in. The heretofore respected, commonly used, and highly effective medicinal became a major threat to life, a nefarious and wicked chemical that could alter critical heart rhythms, resulting in sudden cataclysmic death for unsuspecting innocents. Trump, more than irresponsible, was evil incarnate for daring to even mention it. While at it, the salivating media trotted out the canard about Trump’s nonrecommendation for injecting Clorox and Lysol or drinking fish-tank cleaner to combat COVID. It was Charlottesville all over again.
Before a nation of non-cardiologists, the media agonized over, of all things, the prolongation of the now infamous “QT interval,” and the risk of sudden cardiac death. The FDA and NIH piled on, piously demanding randomized, controlled, double-blind studies before physicians prescribed HCQ. No one mentioned that the risk of cardiac arrest was far higher from watching the Superbowl. Nor did the media declare that HCQ and chloroquine have been used throughout the world for half a century, making them among the most widely prescribed drugs in history with not a single reported case of “arrhythmic death” according to the sainted WHO and the American College of Cardiology. Or that physicians in the field, on the frontlines, so to speak, based on empirical evidence, have found benefit in treating patients with a variety of agents including HCQ, Zinc, Azithromycin, Quercetin, Elderberry supplements, Vitamins D and C with few if any complications. Or that while such regimens may not cure, they may help and carry little or no risk.
And so, the world was aflame once again with a nonstory driven by the COVID media. The HCQ divide within the nation is only a continuation of innumerable divides that have surfaced since the pandemic began — and before. One will know the politics of an individual based on his position on any number of pandemic issues: lockdowns, sheltering in place, face masks, social distancing, “elective surgery,” and “essential businesses.” The closing of schools and colleges. Blue states and Red states. Governor Cuomo or Governor DeSantis. Nationwide injunctions or federalism. The WHO and Red China. Or, pre-pandemic, Brexit, open borders, DACA, and amnesty. CBD oil, turmeric, and legalizing marijuana. Russia Collusion, Trump’s taxes, the 25th amendment, Stormy Daniels, the Ukraine non-scandal, and impeachment. Or Obamagate. And now HCQ.
HCQ is only another bellwether. It represents the latest nonevent in a long string of fabricated media nonscandals. If a nation can be divided over HCQ it can be divided over anything. It shows neatly, as many of the other non-issues did, whether one embraces the U.S., our history, culture, and constitutional system, or rejects it. Whether one believes in Americanism or despises it. It is part of the ongoing civil war, thus far cold, but who knows? The passions today are no less jarring than they were in 1860. One would have thought that a man taking a medicine prescribed by his physician, even a President, would be a private matter. But no. Not today.
We swim in an ocean of manufactured disinformation created by a radical COVID media, our fifth column. They inflame the nation one way or another based on political whims. The propaganda arm of the Left, they seek victory at all costs including dismantling the economy, culture, and our governing system. Is there a curative for the COVID media and their Democrat allies who would destroy a nation to destroy Trump? He is all that stands between us and them. Is there an antiviral for this, the communist virus that has infected the nation, metastasized throughout its corpus, and now threatens the republic?
* * *
Dr. Moss is a practicing Ear Nose and Throat Surgeon, author, and columnist, residing in Jasper, IN. He has written A Surgeon’s Odyssey and Matilda’s Triumph available on amazon.com. Find more of his essays at richardmossmd.com.
- The Property Tax Assessment Nationwide RICO Scam
The Property Tax Assessment Nationwide RICO Scam
Tyler Durden
Tue, 06/02/2020 – 19:25Submitted by George Wuenschel, Missoula, Montana.
I am a retired California real estate broker living in Montana. I am not an appraiser but I went beyond mere brokerage and was an expert witness for many law firms and have been trusted as an expert on valuation in several cases in state and federal trials. I was active in the support of California’s Prop 13 to limit property tax.
Recently I have found a serious nationwide injustice in the determination of assessed value for property taxation. There was a time when price and value could, in most cases, be considered synonymous. Those days are long gone.
There exists a balancing effect between price and financing terms which is precisely determinable mathematically. If an unusually low interest rate is available to a particular home (i.e. seller financing, assumable loan) a buyer can and will pay more for the property.
Property tax appraisers are required to make a “cash value” appraisal for real estate. They must make adjustments to value for every influence upon price that is not really part of the value of the real estate itself. An example would be a $700K sale price that included a Ferrari in the garage. The home’s cash value is less than its stated sale price. Cash equivalency adjustments must also be made for any influence upon price caused by financing to the extent such financing has a positive or negative annuity value.
In order to determine the value of favorable financing, it must be contrasted against some other financing package as a benchmark. Tax assessors have always presumed that no cash equivalency adjustments were necessary for financing if the terms a buyer received were substantially the same as those terms quoted by common financial institutions, or “street terms”. That was plausible as long as street terms resulted from free and open competition between borrowers and savers, as it was when real estate taxes were implemented.
That was the purpose of Fannie Mae. Investors would purchase FNMA bonds and that competitive market influenced interest rates on current loans. Interest rates are now merely set by the same entity that creates money; the Federal Reserve Bank.
Borrowers are no longer borrowing from savers using banks and marketplaces as an intermediary. The Federal Reserve Bank actually creates the money for borrowers, then the note executed by the borrower, through a circuitous route, eventually winds up on the Fed’s balance sheet as ‘backing’ for the money created. This is the only way that home mortgages could be made available today at 3.5% in a 10% inflationary environment. Consequently, the price of a home is considerably higher than its cash value.
This artificially-low interest rate loan has a current cash value that adds to the price of every real estate transaction in the US, but that added value doesn’t come from the property itself. It is akin to the Ferrari in the garage. In those rare cases where a buyer actually pays cash for a home, that buyer must compete with borrowing buyers. The seller wants the financial benefit of getting the highest price, so there is no discount for the cash buyer who declines this contribution to price from the FRB. Consequently, it is the mere availability of an artificially-low interest rate loan that adds to the price paid for real estate, but does not add to its true value. Should anyone doubt this dynamic, just remove the artificially-low interest rate and watch what happens to the price.
In order to determine the value of an artificially-low interest rate loan, it must be contrasted against a true market-based loan. That requires speculation about what the interest rates would be if based upon free and open competition between borrowers and savers. Since nobody can possibly make such loans in competition with the FRB’s member banks, there is no lending operations to obtain such figures. All we can determine is the floor or minimum interest rate required just to break even by starting with the real inflation rate that affects the US dollar.
The well-respected Chapwood index (chapwoodindex.com) and economist John Williams index (shadowstats.com) both show a loss of purchasing power in the US Dollar of about 10% annually. Lenders will always compute a real rate of return (note rate minus inflation). The first 10% interest they receive is really not a profit at all. It only offsets the decline in purchasing power of the dollars the lender has tied up in the loan. Since lenders will be taxed on interest income from nominal dollars, the lender additionally needs to recover those taxes from the interest rate. Then there are loan servicing costs, loan origination costs, and finally, profit.
There is no way interest rates could be less than 12% today if such rates had to be determined by free and open competition between borrowers and savers unless we expect such lenders to systematically lose wealth in order to make loans. They only way to circumvent that reality is to have the entity that creates money also be the ultimate funding source behind the loans. The injustice here is that appraisers contrast the street interest rate against the actual rate the borrower received resulting in no needed equivalency adjustment to arrive at the cash value of the real estate.
I contend they should be contrasting that artificially-low rate loan against the rate that would be required if determined from free and open competition between borrowers and savers. Remember, the purpose of the adjustment is to separate the value of the home from the value of extraneous elements of price that do not come from the home itself.
Why doesn’t a proposed real estate lender’s appraiser make such adjustments? All appraisals have a purpose. The purpose of a proposed lender’s appraisal is to protect their security interest so they don’t get over-extended. They must be confident that, if they need to foreclose, the property will sell for enough to satisfy the lender’s loan. A lender is unconcerned about the components that make up price. They are only concerned about price itself because that is what will protect their loan. But tax appraisers must determine cash value, which is very different than price in this artificial environment. And why do savers and bond purchasers routinely accept less than a 2% risk-adjusted yield on their investments in a 10% inflationary environment? Certainly not in pursuit of profit. They do it to mitigate the losses of staying liquid in cash because its the best that can be done in an artificial environment where the free market and price discovery is totally corrupted.
For property tax purposes, all real estate is overvalued by 30% to 35% for ad valorem taxation (tax based upon value) because of this valuation scam. About 2/3 of a typical property tax bill is based upon the value of the property while the remaining 1/3 is a tax on the value of an annuity injected into every sale transaction by the Federal Reserve system. All sale transactions become a historic comparable sale used to determine the value of all other homes for tax purposes. Each and every one of those comparable sales reflect an erroneous inflated value unless they are adjusted to cash equivalency – and they are never adjusted.
One way to understand the need for cash-equivalency adjustments is to consider the effect on price if home mortgage interest rates go negative, as they did in Denmark. A negative interest rate loan is actually an income instrument to the borrower. A negative interest rate loan will eventually amortize to a $0 balance without any payments ever being made. In such a case, the price of the secured real estate should go to infinity because price doesn’t matter. If cash equivalency adjustments were still not made for such financing, the property tax bill must likewise go to infinity. Can rates go negative in the US? Measuring from 12% rates, we have traversed three quarters of that distance. We are already deep into artificially high real estate valuations and very close to infinite valuations.
Having spoken informally to two lawyers about this matter, including a former US Assistant Prosecutor, they recommended a 42 US Code Section 1983 Civil Rights case. However, there are several prevailing facts that increase the severity of this tax injustice.
There are multiple government entities involved in the conspiracy: state appraisers, county tax assessors, county tax collectors, county recorder’s office, and sometimes even the state court when they induce a forced tax sale. There is an ever-present threat that if the inflated tax bill isn’t paid, the property will be involuntarily sold out from under the owner. There are government officials operating under the color of doing their job. So why isn’t this a violation of The Racketeer Influenced and Corrupt Organizations Act, 18 US Code Chapter 96 (RICO)?
It is RICO, but a nightmare of a case. Nonetheless, I have made a RICO complaint to the US Department of Justice. In my state of Montana, a state appraiser admitted they are not making such cash-equivalency adjustments and the Governor’s office will not respond. Its time for homeowners to get vocal.
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