Oct 04

Today’s News 4th October 2020

  • Financialization & The Road To Zero, Part 1: The Evolution Of Commerce
    Financialization & The Road To Zero, Part 1: The Evolution Of Commerce

    Tyler Durden

    Sat, 10/03/2020 – 23:30

    Authored by ‘ICE-9’ via The Burning Platform blog,

    This is Part 1 of a 4-part series.

    fi·nan·cial·i·za·tion

    /fəˌnanCHələˈzāSHən, fīˌnanCHələˈzāSHən/

    noun

    The process by which financial institutions, markets et cetera increase in size and influence.

    This definition is about as complex as one finds in the popular financial media, nestled in a hyperlink somewhere between a continuous onslaught of graphs, numbers, and opinions shouted from frenetic podcasts.  One enters financialization’s surface world as if it is the natural and evolved state of things, and leaves believing every increase in that buzz and energy must be good, progressive, and lead to some kind of a collective better tomorrow. 

    There is this perpetual urge and ever present push to “do something”.  Everyone’s piling in – get in now or you’ll miss the boat.  Thirty year mortgage refi rates are at historic lows.  It has never been a better time to buy a house.  Zero commission brokerage accounts click here (fees and restrictions apply).  Buy, sell, or hold?  What are you waiting for?  Another all-time high!  Synergies, paradigm shifts, raising the bar, the deal of a lifetime, low hanging fruit, win-win.  Get off the fence, get your ducks in a row, step up to the plate, and think outside the box and push the envelope because failure is not an option.  The business of America – is business.

    Somewhat “deeper” discussions about financialization exist within the Fourth Estate front page editorials filled with explanations of its effects and non-explanations of its causes penned by an assortment of well-compensated Nobel Laureates, PhDs, think tank advisors, and Wall Street promoters.  After reading such well-crafted pieces one barely senses the authors’ constrained yet directed criticisms of financialization nudging one’s doubts towards acceptance of “reforms” and away from underlying systemic issues.  Adjustments and a minor compromise are always the solutions.  A tweak here, a Congressional rider there, a new regulation or two should patch things up.  Who could possibly argue against such esteemed credentials?

    And then there are the “learned” journal tomes full of lofty enumerations of financialization’s effects, theories as to its complex workings complete with equations full of Greek letters and predicate logic, and so many competing ideas that the sum total of all this erudite thinking is a zero sum non-consensus that for all the tens of thousands of pages does not definitively identify causa principalis.  Here are some random examples –

    “Financialization refers to the increasing importance of finance, financial markets, and financial institutions to the workings of the economy.”

    “A pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production.”

    “The fusion of the interests of domestic and foreign financial capital in the state apparatus as the institutionalized priorities and overarching social logic guiding the actions of state managers and government elites, often to the detriment of labor.”

    The above three sentences penned by distinguished scholars took a combined twenty-four years of college to construct, so it is little wonder why it is so difficult for the uninitiated layman to compile the true workings and objectives of financialization.  The more one reads, the closer one comes to this educated zero sum non-consensus and no closer to unlocking the secrets of not only why does financialization exist, but also why has a mass edifice of confusion been purpose built to hide these secrets?

    Profits and risk mitigation are standard replies to that existential why, spoken with all the confidence bestowed by Fourth Estate economists.  Mockery and conspiracy theory accusations follow every mention of the purpose built mass edifice of confusion surrounding financialization.  But these are the ground level foot soldier answers that push one squarely back into financialization’s surface world, just more of that buzz and energy that is the perceived natural and evolved state of things.  Profit motive – case closed.  But profit and risk mitigation were achieved with the old industrial production and export model, so why has financialization today risen to supremacy?  Higher profits and greater risk mitigation – just more begging the question, ad infinitum.  But could there be hidden mechanisms at work facilitating this rise of financialization and, is there a larger opaque objective to it?

    At a ground level perspective one generally sees the accumulation of money as power.  But when one looks at “wealth” from a higher level perspective, it is actually vouchsafed, gathered up in that “free market” scrum called “competition” from the invisible hands of those with the ability to conjure money out of thin air and throw it into the general arena.  And the working mechanisms within “wealth” accumulation also hold the mechanisms of “wealth” destruction and confiscation, so “wealth” cannot be power in of its self, as it can be both granted and denied, and therefore is only a tenuous grant of privilege.  And granted by whom, by what higher authority?  What class of people are above the power of money, control the mechanisms of “wealth” accumulation and destruction and confiscation, and are able to both vouchsafe and expropriate this privilege that money provides?  Is there a higher order level design at work within financialization, and if so, what are its means and end goals?

    This series examines and defines what financialization is, identifies what has enabled it to rise above all other economic activity in stature, and binds together financialization with the role it plays in this higher order design for the nation.  The preceding essay The Evolution of Fiat Money, Endless War, and the End of Citizenship provides much of the underlying philosophical premises upon which this present work is constructed.  It is necessary background towards a comprehensive understand of how financialization is ultimately regressive, dehumanizing, and will not lead to a better collective tomorrow – rather, it will serve as an evolutionary societal dead end for the bulk of humanity.

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    The Evolution of Commerce

    For untold millennia the human economic condition remained that of the hunter-gatherer where simple goods of utility were produced and consumed by their users.  Sharing produced goods among tribal members or stealing them from other tribes were probably about as complex as commerce got during this long stretch of pre-history.  Then roughly 40,000 years ago cave paintings and sculpted objet d’art began to appear in the archeological record indicating some amount of leisure was afforded our ancient ancestors.  This advent of leisure appears to have led to the development of other time consuming and non-essential activities like ritualistic burial practices and simple jewelry craft.  Soon afterward the first instances of proto-industrial labor specialization appears where flint, chert, and obsidian were quarried to mass produce a surplus of sophisticated arrowheads, stone axes, spear tips, and implements used to skin and dismember hunting kills.  It is this first indication of surplus that suggests some form of trade existed between our Mesolithic brethren and is supported by the wide distribution of these manufactured tools far beyond their quarry and production sites.   From analogy to Mesolithic peoples encountered during European colonialization of the Americas, our ancestors did not use money and therefore, surplus was not produced to obtain profit, but instead was an ancient form of “foreign policy” that brought the various scattered tribes together and served as a means of maintaining cordial relations.  Thus in the Mesolithic world, our ancestors did not prosecute trade wars, but likely practiced a kind of trade peace.

    Our Neolithic ancestors developed additional survival skills like animal husbandry and proto-farming so they tended to spend more time in one place and their settlements began to take on a permanent nature.  They depended less on hunting and gathering and more on tending animals and crops for their existence.  Surplus food was stored as reserve for times of scarcity and individual private ownership is not well defined in the archeological record.  Proto-industry now matured into industry where labor specialization expanded with the rise of cities requiring large amounts of standardized building materials, pottery stockpiles, and large scale meat, cooking oil, and grain processing capabilities.  Within these cities we begin to see the development of a managerial class – the priests and their administrators – who control the cities’ collective food surplus but do not own it.  Using this control over food surplus the theocratic-managerial class were able to entice workers away from their own food producing activities to instead undertake civil works projects like digging and maintaining irrigation canals, excavating cisterns, constructing perimeter fortifications, erecting public buildings, the provision of sanitation, and maintenance of a bureaucracy to provide project services like design, procurement, and execution.  Again by analogy with Neolithic peoples encountered during colonialization, all of this occurred in a world without money and would not have been possible without the rise of barter trade and most importantly – the advent of labor barter.

    The civilized Neolithic world had a quasi-collective property ownership structure evidenced by large repositories of unearthed clay pots used to store grain, cooking oil, and wine with no identifying ownership markings, a prevalence of communal buildings in the city layout – possibly mess halls, interconnected housing units et cetera.  Barter was the sole form of commerce, and is defined here as the mutually agreed exchange of goods and / or services between individuals without the aid of an intermediate exchange means (i.e., money).  Thus barter suggests some nascent concept of private ownership, and labor barter implies a notion of independence from the collective where one “owns” his labor to offer in exchange for rations from the collective stores.  With the growth of cities and the collection of groups of cities into civilizations, labor barter became the primary economic transaction in the civilized Neolithic world where money and private ownership of large surplus does not appear to exist.  Thus labor barter is one of humanity’s oldest and most fundamental social interactions and is a critical component to what it means for an individual to belong to a complex society – a necessary part of being human among one’s fellow men.

    Labor barter allowed individuals to temporarily walk away from their personal food producing activities to provide collective labor for civil projects, yet still procure food from the city surplus for them and their families and was the necessary prerequisite for the development of both cities and industry.  E.g., it was common practice in ancient Egypt for Nile Valley farmers to move to the mountain quarries during the flood season and work there until the waters subsided, where they would then return home to survey their fields and plant, sow, and harvest that year’s single crop.  A societal equilibrium was established where the laborer received food for his labor and the theocratic-managerial class got the manual labor they needed for their public works projects, and more elaborate benefactor schemes were provided to full time skilled laborers and the administrative bureaucracy.  This equilibrium worked successfully for several millennia as archeology suggests there was no need for slavery in the civilized Neolithic world, nor was there the need to force people into a labor corvée to accomplish these ancient civil works projects.

    As cities grew and our Neolithic ancestors entered the Bronze Age, it did not take long for larger families to become predominate under the barter trade system as they could pool their superior collective resources to accomplish more ambitious endeavors.  Over time these large families accumulated a surplus to themselves and used it to purchase the labor of others in pursuit of accumulating further surplus to themselves with which they then exchanged for land, animals, implements, and materials to build larger homes.  This development is evident in the archeological record in Bronze Age cities where for the first time there are clearly demarcated housing units and the clay pots in grain repositories bear ownership markings.  With the advent of bronze in faraway mountain lands these families assembled some of their surplus into caravans for export and trade with early metallurgists, salt workers, and native metal and gem miners.  Laden with goods for their return journey, these early traders picked up other exotic goods from cities along the route home.  Once home, these traders then exchanged the metals, salt, and exotic goods with other families possessing surplus and generated a “profit” in these exchanges  – e.g., 50 jars of commonly available wine could be traded for scarce brass ingots that were brought back home and traded again for 200 jars of wine.  Thus begins the dawn of private property and private enterprise embodied in this surplus of goods accumulated through one’s own endeavors – the mercantile period of human history.  Mercantilism is defined here as the exchange of goods for the purpose of generating a profit where the merchants and creditors of goods assume full liability and risk in the event of loss, theft, spoilage et cetera.  There is no mechanism within mercantilism to lessen or adsorb these potential risks and real losses.

    Trade between cities and civilizations flourished through the Bronze Age into the Iron Age with labor barter, goods and service barter, and mercantile commerce all practiced simultaneously and settling into a similarly ordered societal hierarchy with the theocratic-managerial class now replaced at the highest level with kings and their royal lieutenants.  These kings assumed ownership over the collective surplus that was used more and more to provision standing armies and provide for a coterie of advisors and enforcers.  And for the first time, we observe not only a surplus in food stuffs but a surplus in gold and silver accumulated by the sovereign obtained through war, tribute, and the collection of taxes.  Thus it appears that this change in ownership of the communal surplus is the seminal factor in the formation of standing armies and prosecution of wars of conquest.  And with the advent of standing armies and taxes, we also observe the first instances of slavery and people forced into a labor corvée.

    With rising Iron Age trade, networks of extensive, well maintained, and secured overland trade routes were constructed complete with toll and excise stations, and port cities proliferated for the transport of goods by sea.  It is safe to assume that with the expansion of trade facilities, the profits from mercantile endeavors were expanding as well and so too was the tax take from these activities as cities grew larger and better fortified and offered increased public amenities.  So the rhythm of civilized Iron Age humanity was established by the activities of trade, supported by the actions of agricultural, pastoral, and industrial producers with piracy, highway robbery, and war always lurking to disrupt this rhythm.  And thus the mercantile story remains consistent for approximately 4,500 years from the kings of Akkad to the French Revolution where the mercantile model operated and spread to nearly every corner of Eurasia and North Africa.  Despite the many advents and inventions to facilitate mercantile trade – usury, credit vehicles, precious metal coins and their use as a store of value in of its self, coin debasement and inflation, et cetera – this commercial model in its essential form as defined earlier continued unabated despite a kaleidoscope of empires, peoples, and technologies rolling through it.  That was, until the late 17th century arrived to the City of London Corporation and a small group of bankers and promoters would change the world forever.

    At the onset of the end of mercantilism all modes of commerce described up to this point were practiced at some place in the world.  The hunter-gatherers remained active with the Bushmen of southern Africa, the arctic Eskimo, and the Australian Aborigine.  Mesolithic cultures were predominant in what was to become the United States and Canada, and civilized Neolithic peoples were predominant in Mesoamerica and the northern Andes mountains of South America, although they had declined significantly from their technological and cultural zeniths.  Thus a great swath of the world lay open to musket, canon, and credit based ventures seeking unlimited stocks of exotic goods and undiscovered gold and silver reserves for the taking.  But that taking was expensive, dangerous, and represented a significant risk and not unlikely loss of large quantities of gold and silver to both entrepreneur and creditor.  To get at these exotic goods and untouched mineral resources, one had to first invade and subjugate these regions, and due to the extreme investment risk inherent in colonization, a new commercial model was needed to make these endeavors profitable – to generate a “positive expected value”.  And that new commercial model was capitalism.

    The imperative for the development a new commercial model was presented with the “conquest funded by physical money” rapid rise and failures of the Spanish and Portuguese states.  Although the 16th century Spanish conquest of the Americas brought the crown tremendous amounts of silver and gold, the costs to support their navy flotillas to protect and transport these riches were great, and losses through piracy and storms at sea occurred regularly.  These losses could have been adsorbed and profits maintained had colonial extraction been the only pursuit of the Spanish kings.  However, these riches soon drew the envy of rivals and grew the European continental aspirations of the Spanish kings themselves.  So when the high operating costs of colonial wealth extraction were combined with the very high costs of prosecuting wealth depleting wars closer to home – wars paid for in physical silver and gold – the mercantile commercial model began to show its flaws when applied to modern super-states as the Spanish treasury depleted with every battle.  This mature mercantile commercial model could not simultaneously secure extensive colonial trade networks and simultaneously prosecute large scale wars of attrition, and it inevitably led to state bankruptcy and military defeat.  The sovereign existing in the mercantile commercial world therefore had to choose between either trade or war, but ego generally led to the sovereign choosing both and therefore secured the downfall of many prosperous mercantile states.  And, as Spain was a Catholic country, foreign creditors were rare that would lend money to a nation that had banned usury and had not long before expelled its nascent bankers en masse.  The Portuguese experience was even more convoluted as their empire delivered little in the way of silver and gold and all commodities extracted like spices and textiles had to first be sold and converted into physical gold and silver to cover the costs to secure its colonial holdings and fund its wars on the European continent.  So if there were no buyers, there was no secure colonial empire and no European wars other than defensive, which did not last long as national gold and silver reserves depleted.  In the end, when the silver ran low, defeats at home and abroad mounted and the bankrupt states fell to those countries that could afford to continue to pay for these wars of attrition.  Some other funding solution was needed if a nation was to conquer the world, keep hold of it while extracting every conceivable thing of value from it, while at all times prosecuting wars of attrition on the European home front.

    Capitalism is specifically defined here as a commercial model whereby investment risk is not wholly borne by entrepreneurs and their creditors, but instead spread over the entirety of society through the deployment of fiat money connected to a fractional reserve banking system.  Fiat money acts as the mere representation of some physical underlying store of value held in trust by the controllers of this fractional reserve banking system.  Under capitalism, investment losses transacted in fiat money do not jeopardize the physical holdings of real value – stockpiles of gold and silver – but only depreciate the perceived exchange “value” of that fiat money relative to some unit price, again in fiat money, of the underlying gold and silver reserve assuming a transparent and impartial banking system.  Thus as credit based business ventures in the aggregate progress into “profits” or “losses”, in the transparent and impartial banking system, fiat money will either appreciate or depreciate in purchasing power relative to the underlying unit reserve of real value held in gold and silver.  For those who control this fiat money, capitalism is a risk free proposition as the real value – gold and silver held in “trust” – never leaves their possession as fiat money losses accumulate.  It is instead the populace and especially the peripheral fiat empire satellites that bear the full effects of inflation and inevitably “pay” for aggregate commercial losses through their erosion of purchasing power.  Unlike mercantilism, losses are pushed onto both participants and non-participants in commerce which makes capitalism the ultimate “heads we win, tails they lose” banking hedge.  This hedge against any real value loss is the core mechanism of modern “free enterprise” as it is indeed enterprise free of risk and loss at the highest level of its system – the central bank cross-ownership nexus.  So unlike mercantilism where creditors lose physical gold and silver, under capitalism entrepreneurs lose chits of paper and credibility, and the central banks lose only chits of paper and continue to hold their gold and silver reserves regardless of all aggregate gains or losses transacted in fiat money.

    Three mechanisms were required to enable this new capitalism to operate effectively – an opaque central bank, an empire forced to import value added goods from and export raw commodities to the home country, and a fiat currency used throughout the empire to pay for all these goods exchanges that tolerates no rival.  The central bank exercises full macroscopic control regarding who it will issue credit to or withhold credit from, is the sole agency that sets interest rates to its primary dealers who then devolve this fiat money down to all hopeful debtors, and provides the only store and account for gold and silver held in “trust” that theoretically gives fiat money its “value”.  Private ownership of the central bank is required to ensure the home country government does not interfere in monetary policy and risk the central bank’s power and profitability.  And besides discretely making its owners the most powerful unseen men in their home country, private ownership provides the opacity required to shield the true amounts of gold and silver held in “trust”, allows the initiation of economic “crises” as political weapons with reduced interference from the home government, and enables the covert manipulation of foreign exchange rates and commodity prices.  The empire was needed to cycle the fiat money out of and back into the home country via a “virtuous cycle” that provided underwriting to the aggregate credit-based export ventures domiciled in the home country.  The home country’s value added export economy was necessary for the return of the fiat money as this “virtuous cycle” underpins “growth” within the home country, increases the “value” of all goods and services including labor simultaneously through inflation, and acts as a dampener on inflationary pressures for imported raw materials at home.  And the fiat currency itself required only a printing press and a formidable standing army to assure its supremacy.

    A special note on communism.  Both communism and capitalism are unnatural commercial models invented by monetary and political scientists and forced upon the world through conquest, revolution, legislation, incrementalism, and subterfuge.  Capitalism is no more a natural and evolutionary progression from mercantilism as is communism a natural and evolutionary progression from capitalism.  As capitalism is not a natural commercial evolution, it follows that neither is communism.  When one compares the nature of both commercial models using the definition of capitalism provided earlier, one finds that in both systems investment risk is not wholly borne by entrepreneurs or state entities and their creditors, but instead spread over the entirety of society through the deployment of fiat money connected to a fractional reserve banking system.  The aggregate accumulating gains or losses in fiat money from commercial activity in both systems never puts the underlying reserves of gold held by either capitalist or communist central banks at risk.  Furthermore, both systems employ opaque central banks to set monetary policy and both systems have fiat empires attached to their home countries.  Additionally, as both systems issue loans at interest, the accumulating amount of loans grows much faster than the underlying value of reserves held in “trust”, and this widening disparity depreciates the “value” of each systems fiat money equally.  This depreciation generates the inflation required in each system to simulate economic “growth” and the illusion of “prosperity”.  All aggregate losses from individual or state commercial activities are socialized to both participants and non-participants of commercial activity through this process of inflation.  Both systems tax their subjects, both systems rely heavily on war for economic “stimulus”, and both systems will tolerate no rival to their fiat empires.  Both see the other as the enemy, both strive for the destruction of the other, and both claim the moral and righteous prerogative.  Despite nearly 100 years of animosity, wars both hot and cold, and entire military infrastructures designed at the ready to destroy the other, there is at their fundamental cores no operating difference between communism and capitalism, and for all practical purposes they are identical systems.  Thus communism and capitalism are, in fact, the equivalence of choice between baked and boiled potatoes in political economy.

    Thus with the advent of the capitalist commercial model of debt-based fiat money enterprise, the world stage was set for the consolidation of the colonial empires into an integrated nexus, the industrial revolution was set to proceed, and the prosecution of endless wars that no longer depleted national treasuries could be undertaken in earnest all thanks to the magic formula of unlimited fiat money…

    Read Part 2: From Capitalism to Financialization tomorrow…

  • Here's What Happens Every Minute On The Internet In 2020
    Here's What Happens Every Minute On The Internet In 2020

    Tyler Durden

    Sat, 10/03/2020 – 23:00

    In 2020, an unfathomable amount of digital activity is occurring at any given moment. As Visual Capitalist’s Aran Ali details below, this ongoing explosion in activity is the aggregate output of 4.5 billion internet users today, a number that’s projected to increase even further in coming years.

    This powerful visual from Domo helps capture what happens each minute in today’s hyper-connected internet era, and it’s actually the eighth edition produced since the year 2012.

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    What can we learn from the evolution of what happens in an internet minute?

    How Times Have Changed

    Over its relatively short history, the internet has been a catalyst for both the rise and demise of new companies and platforms.

    By looking at which brands have appeared in the graphic in earlier years, we can roughly chart the prominence of certain tech segments, as well as observe brands with the most staying power.

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    As you can see above, platforms like Tumblr, Flickr, and Foursquare showed some promise, but eventually got omitted from the graphic as they dropped off in relevance.

    Meanwhile, tech companies like Facebook, Amazon, and Google have had impressive staying power, evolving to become some of the biggest companies in the world. In the process, they’ve caught up to longer-standing titans like Apple and Microsoft at the top of the food chain.

    The New “New Thing”

    Not surprisingly, much of the internet landscape looks different in 2020. Here are a few of the digital hot spots today.

    Cash Transfers
    Nearly $240,000 worth of transactions occur on Venmo per minute. This has served as a catalyst for parent company PayPal, which evolved along successfully with fintech trends. PayPal’s stock now trades at near all-time highs.

    E-Commerce
    Even before COVID-19 resulted in shuttered storefronts and surging online orders, e-commerce was a booming industry. It’s now estimated that $1 million is now spent per minute online. Amazon ships an astounding 6,659 packages every minute to keep up with this demand.

    Collaboration Tools
    In a predominantly remote-working environment, tools like Zoom and Microsoft Teams host 208,333 and 52,083 users each minute respectively. Particularly in the pandemic era, it seems that this trend is here to stay.

    Accelerated Turnover

    The accelerated world we are in today means that many companies do not sustain a competitive advantage for as long. Social media companies have dwindled as observed above, and this is similarly reflected in the average lifespan of an S&P 500 company.

    A typical company’s tenure on the S&P 500 is expected to shrink rapidly in the next few years:

    • 1964: 33 years

    • 2016: 24 years

    • 2027E: 12 years

    Companies are shaving anywhere between 15-20 years off those highs, with estimates of further declines. This metric symbolizes the rapid evolution of the business landscape.

    What Lies Ahead

    It’s seemingly easy to forget mankind is still very early in the developments when it comes to the internet. But in this short period, its rise to prominence and the broad digitization of the world has left us with a very eventful timeline.

    If the last decade serves as a reference point, one can expect further and intensifying competition among tech companies. After all, the reward—winning in today’s digital economy—reaps much greater value.

    All signs point to internet activity advancing to further heights, if not because of 5G and its associated breakthroughs, then perhaps due to the steady rise in people gaining internet access.

  • No News Is Good News: Media Willfully Ignore Hunter Biden Scandal
    No News Is Good News: Media Willfully Ignore Hunter Biden Scandal

    Tyler Durden

    Sat, 10/03/2020 – 22:30

    Authored by Mark Hemingway via RealClearPolitics.com,

    Last week, a Senate Intelligence Committee report detailed how the son of a major presidential candidate, who has an extensive history of shady foreign business dealings, received a $3.5-million wire transfer from the wife of a Russian politician.

    The New York Times, Washington Post, CNN, MSNBC, and most major media outlets didn’t cover the wire-transfer story at all. Four years ago, not reporting such a story was a possibility too absurd to even contemplate – but then again, no one would have predicted the candidate with the shady Russia ties is not Donald Trump, but Joe Biden.

    People often talk about how Trump is responsible for destroying political norms, and that’s a valid concern. However, one of the truly frightening things about the Trump era is how institutions have exploited a perceived crisis in truth-telling to justify abandoning their own standards by blaming it on Trump. Increasingly, we see major stories break where the media establishment decides on a collective omertà because the story undermines its own credibility or might sway voters in directions it doesn’t approve of. When that happens, no news is good news.

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    The problem with hiding the truth is that you can’t suppress it forever, let alone a week, in this news environment. After the initial blackout, we are finally starting to see some coverage of Hunter Biden’s suspect wire transfer – but only after Trump himself raised the issue in the recent presidential debate and forced the media’s hand. The little coverage the issue has received is instructive, and not in a good way.

    When Trump raised the issue at the debate, Joe Biden responded by saying the claim was “Totally discredited. Totally discredited.” Given that it’s a direct allegation in a government document and Biden is flatly denying it, you’d think this would be a perfect opportunity for the media to dig in and sort out the truth of the claim. Instead, they have essentially punted on the issue.

    According to PolitiFact, which refused to rate the claim either true or false, the facts are in dispute because “Biden’s lawyer says he did not co-found the partnership [that received the money] and had no stake in it,” and “Democrats say they reviewed the Republicans’ documentation but did not find a specific link to Hunter Biden.”

    Serious journalists would see this for the artful dodge that it is. Essentially, no one disputes Treasury documents showing $3.5 million was wired to the Rosemont Seneca Thornton firm from the wife of the former mayor of Moscow for a vague “consultancy agreement.” Hunter Biden’s lawyer is suddenly disputing his client’s involvement in Rosemont Seneca Thornton without providing any tangible evidence to back up the denial. Senate Democrats have a partisan interest in separating Hunter Biden from the source of the tainted cash and their denial is obviously parsed.  

    So why does the Senate intel committee report that Biden was a “co-founder” of the firm in question? Well, one clue might be that committee members read it in the media. A lengthy New Yorker profile of Hunter Biden from last year, which clearly had extensive cooperation from the Biden team, reported the following: “In June, 2009, five months after Joe Biden became Vice-President, Hunter co-founded a second company, Rosemont Seneca Partners, with Christopher Heinz, Senator John Kerry’s stepson.” That was 15 months ago. For the Biden camp to be disputing this key fact now seems awfully convenient. Further, in that same magazine article, Hunter Biden admits to taking an $80,000 bribe from a Communist Chinese Party-connected tycoon, in the form of a 2.8-carat diamond delivered to his hotel room.

    If the Biden camp is denying Hunter’s role in the firm in question, the media should note the denial, while investigating the truth of the claim. In the meantime, the press is probably obligated to note his history of taking money from foreign sources, a pattern which tends to undercut the denials. And then there’s still the issue of what his father said at the debate.

    For Joe Biden to tell the American people this accusation is “totally discredited,” when the media hadn’t even touched the story, well, honest fact-checkers would tell it like it is: Joe Biden stood up in front of tens of millions of Americans on Tuesday night and told a self-serving lie – a lie that would have been called a four-alarm trouser conflagration if Trump had said it.  

    Naturally, there are consequences for the decision not to report major news such as the Hunter Biden story until you are forced to. The most obvious one is that media credibility takes a huge hit. The media have adopted a fairly jejune attitude toward their own institutional decline, blaming it on an increase in partisanship and polarization, but they’re quick to mix up cause and effect. They never seem to ask how much their skewed coverage is fueling that same polarization.

    Exhibit A here would be the media’s QAnon fascination – the right-wing, largely pro-Trump online cult centered on a bunch of deranged conspiracies about a pedophile ring running the country. There’s a case to be made that the blizzard of media coverage has vastly overstated the influence of QAnon, but it’s caused enough real-world problems that the media are understandably baying for relevant Republicans and conservative activists to make it clear this lunacy is “totally discredited,” in the literal, as opposed to Joe Biden meaning of the phrase.

    The rise of QAnon, however, is also partially a result of a media environment where supposedly authoritative sources of information aren’t credible. If you can’t trust, say, the New York Times to do straightforward reporting on Hunter Biden’s obvious corruption, you’re going to be a lot more inclined to stumble across fringe sources of information while searching for facts online.

    Unfortunately, the Hunter Biden story is practically the new normal in terms of how it illustrates media willingness to suppress or ignore inconvenient truths. The credulous groupthink coverage of Trump-Russia collusion, as well as the unwillingness to pursue Jeffrey Epstein – an actual pedophile cabal involving very powerful people – also goes a long way toward making QAnon’s nutjobbery seem more credible than it should be.

    None of this is to say that the mainstream press is responsible for anything QAnon does or says, but the media can still do something about America’s information crisis. If citizens lacked valid reasons to suspect the truth is being hidden, they wouldn’t go looking for it on parts of the information superhighway where it’s a good idea not to roll down the window.

    Edicts need to come down from major media outlets about reporting the news when it happens, not when political circumstances necessitate or dictate how a story is covered. One way of preventing such obvious imbalances in coverage is to pursue ideological diversity in newsrooms along with actual diversity – if no one in your newsroom attends church weekly, owns a gun, or regularly votes Republican, you don’t have reporters who are going to raise objections about imbalanced coverage, much less understand half the country.

    Right now, any understanding of half the country begins and ends with the fact they loathe and distrust the media. Perhaps not all of that anger at the media is justified, but it’s righteous enough, especially after last week. For once, the media were handed a Russian influence-peddling scandal on a silver platter and the vast majority of major outlets declined to even mention it. Such bad behavior makes the calculus for determining who’s a bigger threat pretty clear for a lot of Trump supporters. Even if the president does and says things that make them uncomfortable, he’ll be gone in four months or four years. A media that hides the truth this brazenly is going to be much harder to get rid of.

  • Trump's Condition Substantially Improved, But He's "Not Out Of The Woods Yet", Doctor Says
    Trump's Condition Substantially Improved, But He's "Not Out Of The Woods Yet", Doctor Says

    Tyler Durden

    Sat, 10/03/2020 – 22:08

    Update (2200ET): White House Chief of Staff Mark Meadows has apparently decided to “come clean” to the American public, and, in an interview with Fox News on Saturday evening, acknowledged publicly for the first time that Trump’s condition appeared to be rapidly deteriorating on Friday.

    “Yesterday, we were real concerned. He had a fever and his blood oxygen level dropped rapidly,”

    Meadows added that it was Trump’s doctors who made the “recommendation” that Trump travel to Walter Reed “out of an abundance of caution,” adding that “there was never a consideration and never even a risk with the transition of power.” The Chief of Staff confirmed that the latest video published on Trump’s twitter feed was filmed a few hours ago.

    White House Press Secretary Kayleigh McEnany released another statement from Dr Sean Conley, who said that Trump’s condition had improved Saturday, that his blood-oxygen levels have been between 96% and 98%. Though Trump isn’t “out of the woods yet”, doctors remain “cautiously optimistic”. They also noted that Trump has completed his 2nd dose of remdesivir.

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    Meanwhile, dozens of the president’s supporters gathered outside Walter Reed earlier waving signs and flags bearing well wishes for the president.

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    In other news, three Minnesota congressmen are facing backlash over taking a commercial flight home from Washington, DC on Friday night just two days after they shared Air Force One with President Donald Trump.

    Apparently, police were called in to investigate a bomb threat, but found nothing.

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    Finally, CNN’s Jake Tapper has reportedly spoken with an administration offiial who confirmed that investigators believe Trump was infected during the ceremony announcing his choice of Amy Coney Barrett to succeed Ruth Ginsburg on the Supreme Court at the Rose Garden last weekend. The current thinking is that it “may have come from the Hill”.

    * * *

    Update (1900ET): In the latest video from Walter Reed, undoubtedly prompted by media rumors that the president might be in “very serious” condition, Trump (once again looking notably pale and sounding hoarse and congested) said he “came here, wasn’t feeling so well, but I feel much better now.” Trump added that the doctors are doing an excellent job to get him back to 100%, adding that he’ll be “back soon” to the White House.

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    However, during the 4-minute recorded speech, Trump acknowledged that the real test will be seeing how the infection develops over the coming days. He also offered a terse explanation about why him being exposed to COVID-19 was inevitable. “As a leader, you have to confront problems.”

    Before Trump addressed the rumors, anonymous reports about his condition had gotten pretty out of hand.

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    In other news, NJ Gov Chris Christie has reportedly checked himself into a hospital as his COVID-19 systems worsen. The governor’s history of asthma and obesity make him a ‘high risk’ patient.

    Reactions on social media were pretty positive, with many hailing it as one of the finer moments of his presidency.

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    If nothing else, it should put all speculation about his condition to rest.

    * * *

    Update (1530ET): Vanity Fair’s Gabriel Sherman, best known for breaking the story about the history of sexual abuse allegations against Roger Ailes, has just  launched himself to the front of the pack of left-wing reporters reporting scurrilous rumblings about the president’s condition.

    The “am I going out like Stan Chera?” line is almost too on the nose; perhaps it was said in jest.

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    Why is Trump doing all this? He doesn’t want to invoke the 25th amendment, which he could do voluntarily, or – if he’s incapacitated, like put on a ventilator – could be done by his cabinet working with Pence, without the president’s consent.

    Such a transfer of power would be perfunctory and impermanent. And at any rate, if Trump’s condition truly does worsen to that point, it might become inevitable.

    Meanwhile, at CNN.com.

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    * * *

    Update (1420ET): Apparently, the fact that Dr. Conley’s memo included a prominent typo (it misspelled the name of the pharma company Regeneron) set off a fact-checking spree that has led Regeneron to issue another correction.

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    Thanks for clearing that up.

    * * *

    Update (1400ET): Dr. Conley has unsurprisingly confirmed the White House’s claims that he “misspoke” about Trump being 72 hours in, saying that Saturday is the start of Day 3, meaning Trump is 48 hours in.

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    Dr. Conley also reaffirmed that Trump was diagnosed Thursday night as the MSM continues to speculate that Trump either wasn’t tested right away after developing symptoms, or that he had concealed the true timing of his diagnosis until news of Hope Hicks’ infection hit.

    * * *

    Update (1355ET): President Trump is showing the world that the market isn’t far from his mind. While some on Wall Street have suggested that Trump’s illness could change the calculus for another stimulus deal, Mitch McConnell’s decision to shut down floor activity Saturday probably means that stimulus talks are effectively over for now, as the GOP’s Congressional leaders focus on their top priority: the Supreme Court.

    But in a tweet sent minutes ago, Trump urged both sides to come together and get a deal done.

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    Expect more tweets like this one between now and 1800ET tomorrow.

    * * *

    Update (1340ET): Here’s the timeline from Dr. Conley’s press conference and the comments made yesterday that the White House is now trying to dispute.

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    We will likely learn more as the weekend drags on.

    * * *

    Update (1320ET): As the MSM pushes questions about Trump’s condition, the president has once again chimed in on Twitter to tweet that he’s “feeling well”.

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    Shortly before, CBS’s Paula Reid claimed the fact that the White House and Trump’s doctors apparently “can’t keep their stories straight”.

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    Trump’s backers are accusing the media of “sow doubt” about the president’s condition, while the press are insisting that the White House is trying to down play the severity of Trump’s sickness, and also possibly disguising the timeline of when Trump was infected, and when he first suspected that he might be infected.

    * * *

    Update (1300ET): The AP has just apparently “confirmed” what Dr. Conley suggested – but didn’t confirm ooutright – during this morning’s briefing: That Trump received supplemental oxygen at the White House on Friday.

    • TRUMP WAS ADMINISTERED SUPPLEMENTAL OXYGEN AT THE WHITE HOUSE ON FRIDAY BEFORE GOING TO THE HOSPITAL : AP SOURCE

    Dr. Conley said during the press briefing that Trump’s blood-oxygen level was 96% on Saturday, which is normal.

    Here’s Ryan Lizza, seemingly confirming it.

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    Dr. Conley insisted earlier that as of Saturday morning, Trump’s oxygen levels were normal and he needed no assistance breathing.

    Meanwhile, CNN is reporting that there are “more questions than answers” as Trump’s condition “remains unclear”.

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    * * *

    Update (1255ET): The “anonymous” source of the note contradicting Dr. Conley’s report is suspected to be none other than White House Chief of Staff Mark Meadows, who was caught on video asking that some comments be given “off the record”.

    LIKELY SOURCE OF THE ANONYMOUS INFO TO THE PRESS POOL ABOUT TRUMP’S CONDITION WAS CHIEF OF STAFF MARK MEADOWS

    Another White House official also reportedly offered some “clarifications” of Dr. Conley’s timeline, which suggested that Trump had been diagnosed earlier than he had revealed.

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    To sum up: It looks like Trump’s inner circle are trying to minimize Trump’s condition as much as possible, likely to prevent markets from taking another panicked leg lower. Unfortunately, as we’ve seen time and time again, these attempts at pumping the market might pan out for a little while – but eventually, that debt to the truth is paid.

    * * *

    Update (1210ET): Just minutes after Trump’s doctors insisted the president is doing well and that his fever had disappeared, while refusing to confirm that Trump had been treated with oxygen (though their refusal to deny it clearly suggested that he had), Reuters led a flurry of anonymously sourced reports claiming the president’s condition is much worse than his team is letting on.

    Reuters said Trump’s vital signs are in reality “very concerning” and that the next 48 hours will be “critical”.

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    CNBC’s Eamon Javers confirmed that an “odd note” from an anonymous administration official had been shared with the entire White House press pool. The note claimed Trump was more ill than the doctors had let on.

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    One Twitter wit noted that these kind of tactics are simply “not acceptible” right now.

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    Then there was this: White House Chief of Staff Mark Meadows asking to speak to reporters “off the record” before allegedly giving “an entierly different account”.

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    The report added that the president was still not on the path to a full recovery. In other words, the description of his condition was a gross exaggeration by an administration determined to make the president look “strong” at all costs – because that’s clearly what Trump wants.

    One reporter also noted that Dr. Conley ended the briefing when a reporter asked whether Trump had been treated with steroids.

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    Still, this isn’t exactly saying much. The White House is trying to make it seem like Trump is completely fine, the reality is probably closer to ‘the president is suffering from moderate flu-like symptoms’, but that’s still a far stretch away from requiring prone positioning and intubation.

    * * *

    Update (1150ET): Trump’s doctors have just concluded a lengthy press briefing offering updates about the president’s condition. The takeaway: Trump is doing “very well” and doesn’t currently have a fever although it appears he did briefly receive oxygen before he traveled to Walter Reed. Whether that was the catalyst for the decision to send him to the hospital remains to be seen.

    CNN and the rest of the mainstream media are also going off about another tacit admission: While Dr. Conley didn’t offer many specifics about the timeline of Trump’s infection, he let slip that we’re approximately 72 hours in, which means Trump may have been infected for an entire day and a half before he informed the public about his condition.

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    Then again, because of Trump’s busy travel schedule, it’s possible he may have skipped some tests, like how he wasn’t tested before arriving at the debate on Tuesday.

    * * *

    Update (1130ET): As the press briefing from Trump’s medical team began, Chris Christie took to twitter to confirm that he is, in fact, COVID-19 positive. That was after he said so on Fox News earlier, then retracted it.

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    Will Rick Scott now do the same?

    * * *

    Update (1125ET): Amazingly, Chris Christie is now saying he “misspoke” during an appearance on Fox, and that he too also tested negative, not positive.

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    It’s the same misstake that Sen. Rick Scott made earlier this am.

    * * *

    Update (1100ET): Former NJ Gov. Chris Christie, who helped Trump with debate prep before his face off against Biden on Tuesday, has become the 25th person in Trump’s orbit to test positive.

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    A reporter for ABC News just revealed that, according to their anonymous sources, the president is feeling “well rested”.

    * * *

    Update (1100ET): While we await the update from Dr. Conley, here’s an update on Fla. Sen. Rick Scott.

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    If you had Scott under the ‘positive’ column, please move him over to the ‘negative’ side.

    Here’s a recap of all the meds Trump has received, according to his doctor and the White House.

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    * * *

    Update (1050ET): As we await an update from President Trump’s doctor, Dr. Sean Conley, anxieties are spreading about Trump’s condition – that it might be worse than the White House is letting on – after initial denials about Trump’s condition turned out to be false.

    In addition to Pence, Don Jr. said he has tested negative again Saturday morning.

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    Biden fired off another tweet urging Americans to wear their masks.

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    Meanwhile, Sen. Marco Rubio called for more transparency from the White House to help combat the spread of “conspiracy theories” and misinformation.

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    Hopefully, the medication and world-class treatment Trump is receiving will help him beat back the virus quickly.

    * * *

    Update (1015ET): VP Mike Pence (along with his wife, First Lady Karen Pence) has tested negative again Saturday morning, according to his office.

    The VP is ready to take over the president’s duties, and according to the most recent statement from the campaign, Pence will take part in Wednesday’s VP debate in Salt Lake City.

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    Meanwhile, the administration’s critics insisted that Pence should quarantine and keep testing for at least another few days (though technically the quarantine period is 10 days. Both Pence and AG Bill Barr have tested negative, despite both having attended last Saturday’s potential “super spreader” event at the White House.

    * * *

    Update (1000ET): Trump’s doctor, Dr. Sean Conley, will deliver another update on the president’s condition at 1100ET, according to Press Secretary Kayleigh McEnany.

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    * * *

    There have been quite a few major developments in the White House COVID-19 outbreak late Friday and into the early hours of Saturday morning. When we last checked in, an anonymously sourced reports from NBC News claimed Trump had developed “shortness of breath” after arriving at Walter Reed.

    That news followed reports that Thom Tillis, another member of the group of observers who attended a White House event on Saturday where Trump announced Judge Amy Coney Barrett as his nominee for the Supreme Court seat left by the deceased Ruth Bader Ginsburg.

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    Photos like this have circulated widely since Tillis became the 6th member of the group to test positive.

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    As of Saturday morning, 24 people have tested positive in the White House outbreak, as the number of infected staffers who attended the Cleveland debate climbed from 1 to 11.

    1+2. President & Melania Trump

    3. Bill Stepien, Trump campaign mgr

    4. Hope Hicks

    5. Kellyanne Conway

    6. Sen. Ron Johnson

    7. Sen. Mike Lee

    8. Sen. Thom Tillis

    9. Ronna McDaniel

    10. Notre Dame Pres. Jenkins

    11-13. Three WH reporters

    14-24. Eleven staffers from Cleveland debate

    But as the list above also reflects, three additional major figures in TrumpWorld have tested positive: Former White House advisor Kellyanne Conway, Trump Campaign Manager Bill Stepien, and Sen. Ron Johnson.

    Johnson’s announcement hit just minutes ago on Saturday morning with a statement from his office.

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    He is the third GOP senator to test positive, and – like Lee and Tillis – he also attended Saturday’s event in the Rose Garden.

    Preempted by her teenage daughter Claudia, who made headlines earlier this year by speaking out against both her parents before asking AOC to “adopt” her, Conway announced late Friday evening that she had tested positive, becoming at least the 10th person connected to the White House to contract the virus. Conway left the White House over the summer after her daughter’s outbursts created a national scandal. She has apparently become the 7th person to attend that event to also come down with the virus. Three White House reporters have also tested positive.

    News of Conway’s diagnosis was preempted by her daughter Claudia, who once again took to TikTok to embarrass her mother, claiming in a series of videos that Kellyanne once told her “masks are stupid”. Claudia also implied her mother got them all sick “for that stupid Amy Coney Barrett thing”.

    @claudiamconway

    bye i’m done i’ll see you all in two weeks

    ♬ smack my blank like a drum – andy war

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    @claudiamconway

    ##duet with @claudiamconway

    ♬ original sound – linds

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    @claudiamconway

     

    ♬ KC CHIEFS TECH N9NE – TinkGrrl

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    Meanwhile, George Conway, a longtime critic of Trump and the administration in which his wife serves, tweeted that he was “Livid” about the White House’s cavalier attitude toward the virus.

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    Though the investigation into the origins of the cluster is only just beginning, contact tracers appear to be focusing on Saturday’s White House event, which Vox News opined increasingly has the making of a “super spreader” event.

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    That would at the very least account for why no Democrats have gotten sick in the outbreak, since none of them were invited to the press conference. It would also suggest that Joe Biden and Nancy Pelosi are probably in the clear. They’ve both already tested positive as of Friday.

    But in a sign that the outbreak might already be spreading beyond Saturday’s gathering, Trump campaign manager Bill Stepien, who announced last night that all Trump campaign events involving the president and the first family would be cancelled, or transitioned to virtual format, has also tested positive. Stepien took the reins over the summer, taking over from Brad Parscale following the Tulsa comeback event disaster. One aide told Politico that Stepien was experiencing “mild flu-like symptoms”. They also reported that Stepien plans to quarantine until he recovers. Deputy Campaign Manager Justin Clark is expected to oversee the campaign from its Arlington Va. headquarters while Stepien works remotely.

    With Stepien and GOP leader Ronna McDaniel sickened, two key players of Trump’s political machine are now out of commission.

    Though he didn’t attend Saturday’s event in the Rose Garden, Stepien traveled to and from Cleveland for Tuesday’s presidential debate, and joined Trump and Hope Hicks aboard Air Force One. The campaign manager was also with the president in the White House on Monday.

    Stepien’s role as campaign manager means participating in dozens of meetings per day. If he was contagious, then many more may need to quarantine, though top Trump cabinet officials including Treasury Secretary Mnuchin and AG Barr have already said they won’t quarantine.

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    All Trump campaign events through next week, when Trump was supposed to swing through the West, have been cancelled as everybody awaits more information on Trump’s condition.

    Trump’s doctor released a statement late Friday claiming Trump was “doing well” and that he did not require any “supplemental oxygen”, though he was being treated with Gilead’s remdesivir.

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    Trump was also treated with a battery of anti-virals and other meds earlier in the evening as well.

    Incidentally, the president set off a mini firestorm when he tweeted last night that he was doing “WelI” – with a capital “I” instead of an “L” – spawning a torrent of quasi-serious speculation that the president was sending a secret message by saying he was “going Weli”.

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    Some are going off the “A Beautiful Mind” deep-end.

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    At any rate, WSJ says White House contact tracers are scrambling to test hundreds of people who may have come into contact with those infected. Trump’s doctors insist that his hospital stay will only last “a few days” as a precaution.

    Trump walked out of the White House Friday evening wearing a mask and gave a thumbs-up to reporters but did not speak before boarding Marine One at 1816ET and heading to Walter Reed National Military Medical Center. Already, the Washington Post is reporting that Trump’s team made the “preemptive” decision so that he could be seen boarding the helicopter while he could still walk – an attempt to present an image of strength to the American people.

    Still, White House communications director Alyssa Farah told reporters that there would be no transfer of power with Trump’s trip to Walter Reed, and that the presdient would continue to govern remotely. Sens. Mitch McConnell and Lindsey Graham, the GOP leader and the chairman of the Senate Judiciary Committee, respectively, have said they plan to push ahead with Barrett’s nomination proceedings to try and get her on the court before election day, as Dems called for the proceedings to be postponed. It’s still not clear how many aides who were with Trump this week are quarantining. CDC guidelines call for an individual to quarantine for up to 14 days after coming into contact with an infected individual. Trump traveled during each of the three days leading up to his diagnosis, dragging countless aides and advisors with him, along with party officials and members of Congress.

    As we explained yesteday, if Trump’s condition worsens, he could transfer power to VP Mike Pence under the proceedings outlined in the 25th Amendment. That has happened only three times in US history: When Ronald Reagan and George W Bush underwent colonoscopies in the White House. When Reagan was shot in 1981, Power was never formally transferred.

  • Autonomous Indoor Serving Robots Set To Invade Restaurants Near You
    Autonomous Indoor Serving Robots Set To Invade Restaurants Near You

    Tyler Durden

    Sat, 10/03/2020 – 22:00

    Before readers know it, restaurants of the future will have their entire front-end automated, nevertheless, the backend where the food is prepped will be operated by robot chefs. 

    For years we’ve spoken about the automation wave that is set to sweep across the food industry, but it wasn’t until the virus pandemic when demand for automation, producing a contactless environment between patron and employee, absolutely erupted. 

    Two companies making robots for restaurants are Bear Robotics, a robotics and artificial intelligence company, and SoftBank Robotics Group, a robotics manufacture. They have jointly designed a new robot named Servi that will be sold to foodservice and hospitality companies. 

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    Both companies expect “skyrocketing demand for these autonomous indoor robots in restaurants and other dining venues,” stated a Bear Robotics and SoftBank Robotics Group press release.  

    “Servi has been developed to be a new member of the food service workforce to assist staff and elevate the overall customer experience. Servi’s agility and object detection put its safety in a class of its own. This has resulted in significant interest in from the hospitality market in Japan, Korea, and the United States. Servi comes with additional features like bussing, drink delivery, and patrol mode. This will allow restaurant and dining hall owners to maximize their operating efficiency, while also elevating service quality to customers,” the press release said. 

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    For more color on the restaurant of the future, we recently noted how Kentucky Fried Chicken unveiled a new automated storefront. The trend in the fast-food industry will be a move to swap out humans with automation and artificial intelligence. 

    “But it’s not just KFC, and it’s not just China where automation, robots, and artificial intelligence is taking the place of human workers. If and when these automated restaurants gain traction in places like China, they are sure to be implemented in the U.S., as well. In fact, they already are — though to a lesser extent, for now. McDonald’s and other food chains are experimenting with digital kiosks similar to the self-checkout machines already found in many grocery stores,” said Nick Bernabe via TheAntiMedia.org. 

    The inevitable automation of the food industry will displace millions of minimum-wage jobs. The question everyone needs to be asking, what will elites do with these unskilled workers. Keep giving them Trump stimulus checks, retool their skills, or send them off to war? 

  • Doug Casey Debunks Four Myths About Trump, Taxes, & The Economy
    Doug Casey Debunks Four Myths About Trump, Taxes, & The Economy

    Tyler Durden

    Sat, 10/03/2020 – 21:30

    Via InternationalMan.com,

    International Man: For many years, President Trump has made no apologies for trying to pay the least amount of taxes possible. He’s clearly stated this in many interviews.

    His desire to minimize his taxes has brought scorn from many in the mainstream media, and politicians from both sides of the aisle. These people are of the opinion that paying taxes is an honorable and necessary responsibility. It brings to mind the wrongheaded saying “taxes are the price we pay for a civilized society”, which came from US Supreme Court Justice Oliver Wendell Holmes. Many people believe this.

    But if that’s true, how come low tax locales like Singapore, the Cayman Islands, Monaco aren’t backward hell holes, but rather sophisticated and civilized?

    Doug Casey: Almost any lie can be accepted as truth if it’s said often enough and with enough certainty. That absolutely applies to what Holmes said. It’s shameful how people don’t think about its meaning, but slavishly repeat it.

    Taxes aren’t the price we pay for civilized society. They’re a sign of the fact that society is becoming uncivilized. A civilized society is based on voluntarism. Taxes are all about coercion.

    People don’t seem to recognize or remember that before 1913 there was no income tax in the US. There was no reporting of any kind to the US government. It was a much more civilized and far freer country then.

    As far as Trump minimizing his taxes, congratulations to him. The object should be to cut the size of the US government in half, and cut it in half again, and again. And along with it, cut the tax burden that it imposes on the average American.

    Trump should be proud of himself for cutting his taxes. It’s your patriotic duty as an American citizen to deny revenue to the State and the kind of people that are drawn to it and populate it.

    The fact that some people resent others for not paying taxes is just evidence that they’ve been consumed by the vice of envy, which is one of the worst of the vices. Jealousy says “if you have something that I want, I’ll try to take it from you, just because I want it.” Envy says “if you have something that I want, and I can’t take it from you, I’ll destroy it and hurt you.”

    It’s speaks poorly of the ethics of the average American, that they’ll self-righteously shame their neighbors for not paying “enough” taxes to the State.

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    International Man: We often hear from politicians and the media that some people aren’t paying their “fair share” in taxes. Who gets to define what “fair” is, and based on what justifications?

    Doug Casey: Whenever you hear the word fair, start running the other way. Everybody has a different idea of what’s “fair”— it’s an arbitrary concept. People manipulate its definition to their advantage. The only way to determine what might be fair is voluntary mutual agreement. That’s not possible with taxes—there’s no voluntarism involved. They are, in fact, a levy enforced at the point of a gun.

    The most creative and productive people tend to have the highest incomes—unless they’re crony capitalists, which means they’re basically using the government to steal from everybody else.

    Productive people shouldn’t be penalized for supplying more goods and services to their neighbors—to the market. The money they give to the government in taxes would have otherwise been used to create more wealth for the whole world. When it’s taken from them by taxes it’s mostly squandered on welfare and warfare.

    The bottom half of the US really doesn’t pay any income tax. They only pay Social Security taxes, roughly a flat 15%. It’s theoretically a pension program, although in fact it’s a Ponzi scheme. Social Security is bankrupt. If anyone gets it in the years to come it will be at the expense of future taxpayers—not because any capital has been set aside.

    Social Security is, and always has been, a swindle. It makes it harder for people to save on their own. And makes them feel they don’t have to. But it’s not a real pension plan; it’s a highly politicized welfare program. People have been propagandized into believing not just what isn’t true, but actually believing the opposite of the truth. The situation is actually pretty hopeless from a philosophical point of view and it’s getting worse. The average American believes Social Security and the income tax are both moral and necessary.

    International Man: Doesn’t this system—which diverts wealth from productive use into government, which is naturally unproductive—make everyone worse off? You would think the lower and middle classes would be clamoring for more wealth creation that would also benefit them. Instead, many are asking for more wealth to be destroyed.

    It seems this sort of thinking helps solidify a backwards system.

    Doug Casey: Absolutely. The US government and its welfare programs are actually cementing the lower classes to the bottom of society.

    You get what you encourage. When you give people free money for doing nothing, that’s what they’ll do. Take personal responsibility away from a man, and he’ll tend to act irresponsibly. The next step seems to be a guaranteed annual income for everybody where—presumably—where everybody can just sit around Starbucks all day sipping latte and playing with their iPhones, and be paid for it.

    This trend has been building almost 100 years, and the curve is starting to go parabolic. To use a fashionable word, it’s “unsustainable” for everyone to try living at the expense of everyone else.

    International Man: Another misnomer we often hear is that “deficits don’t matter”, a saying popularized by Dick Cheney, an ostensible fiscal conservative.

    Doug Casey: Well, deficits do matter. In order to become wealthy you have to produce more than you consume and save the difference. Saving the difference builds capital. And you need capital to create more wealth.

    Countries without capital are poor. Places like Zimbabwe, Cuba, and Mauritania. The only capital they have is sticks and stones.

    The US government is in effect training people to consume more than they produce. Now, you can do that in basically two ways. One, by borrowing capital that’s been saved and created in the past, and consuming it. Or, two, you can do it by mortgaging your future.

    It’s not a pro-survival policy to consume more than you produce. It’s possible for a while, of course, but will wind up in disaster. The US government is encouraging people to do just that, however, directly and indirectly.

    International Man: Yet another misguided, yet popular, saying is that we shouldn’t worry about the national debt because “we owe it to ourselves.” What’s your take Doug?

    Doug Casey: It’s another glib, gigantic, lie. “We” don’t owe it to ourselves. Some people owe it to some other people. If it’s not paid back somebody is going to walk away disappointed.

    In fact, most of the debt is owed to non-Americans. Directly, in the form of the national debt. And indirectly, in the form of US dollars outside the US. For many years the major export of the US hasn’t been Boeings, or IBMs, or wheat. It’s been US dollars. We run a trade deficit of about $800 billion every year. In exchange, foreigners send us electronics, Mercedes, cocaine, and other real goods. This has artificially propped up the average American’s standard of living.

    Those dollars circulate in other countries; the US dollar is the de facto currency of 50 other countries around the world.

    At some point—since the US dollar is backed by nothing—if confidence goes away, those foreigners are going to want to get rid of their dollars. They’ll necessarily come back to the US where legal tender laws force Americans to accept them.

    There are many trillions of dollars that are now abroad are a liability. Someday they’re going to be traded for US shares of stock, US real estate, US technology, and US labor.

    Americans, who have grown accustomed to an artificially high standard of living for many years, are going to have a very real drop in their standard of living when those dollars come home.

    We’re sending dollars to the Chinese and other foreigners. We’re also selling US government debt to the Federal Reserve, which then credits the government’s accounts at commercial banks with dollars. But that’s another story. It’s all a moving paper fantasy. It’s going to end badly, and end soon.

    It could easily destroy everybody’s savings. And that, in turn, could destroy the very basis of society.

    *  *  *

    The days of the US Dollar as the reserve currency are numbered. When that happens, the US will experience an economic crisis unlike we’ve seen before. The window to prepare yourself is still open. That’s why Doug’s Casey and his team have created this urgent new report on what to expect and how to protect yourself. Click here to download it now.

  • "Extremely Rude" – American Jailed Over Bad Tripadvisor Review In Thailand
    "Extremely Rude" – American Jailed Over Bad Tripadvisor Review In Thailand

    Tyler Durden

    Sat, 10/03/2020 – 21:00

    A reminder to all readers: While visiting Thailand, don’t leave bad reviews for restaurants and spas – you may end up in a Thai jail. 

    This is exactly what happened to one American, who goes by Wesley Barnes, wrote a one-star review on TripAdvisor about a recent restaurant experience, was jailed over a defamation lawsuit filed by the owner, according to The Jakarta Post.

    Barnes was sued by the owner of the Sea View Resort & Spa, Kah Change in response to the negative review. Here’s what was said: 

    Unfriendly staff, no one ever smiles. They act like they don’t want anyone there. The restaurant manager was the worst. He is from the Czech Republic. He is extremely rude and impolite to guests. Find a another place. There are plenty with nicer staff that are happy you are staying with them. – Wesley Barnes wrote on TripAdvisor

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    The resort/restaurant manager, Tom Storup, immediately responded to Barnes’ review. Here’s the response:

    We are sad to see that you have decided to post 2 negative reviews (the first one removed by Tripadvisor for violating their review guidelines) with the only purpose to defame our Food & Beverage Manager and the resort. We are certain, however, that everyone that reads and compares your review to that of all our other guests will see that your comments are far from the truth. We think it is very unfair for that you have chosen to try to give a very negative image of our wonderful resort and our very friendly staff so we would like to shed some light on what made you go this far… – Tom Storup, Rooms Division Manager at Sea View Resort & Spa, Kah Chang

    According to Colonel Thanapon Taemsara of Koh Chang police, he told AFP News, that the “Sea View Resort owner filed a complaint that the defendant had posted unfair reviews on his hotel on the Tripadvisor website.” 

    Taemsara said Barnes was accused of causing “damage to the hotel’s reputation.” He said Barnes had a brief yelling spat with the restaurant over not paying a corkage fee. Barnes was recently arrested by immigration police, where he was detained and then freed on bail.

    Richard Barrow, a British ex-pat living in Thailand, tweeted that his friend, presumably Barnes, “was arrested at his school for posting a one-star review on Google maps about a resort he visited on Koh Chang.” 

    https://platform.twitter.com/widgets.js

    As for Thailand’s strict anti-defamation laws, the American faces up to two years in prison if found guilty. 

  • Microchip'd? DARPA Biochip To "Save" Us From COVID Can Control Human DNA
    Microchip'd? DARPA Biochip To "Save" Us From COVID Can Control Human DNA

    Tyler Durden

    Sat, 10/03/2020 – 20:30

    Authored by Robert Wheeler via The Organic Prepper blog,

    While half of the American voting public is no doubt waiting in earnest for the announcement of a release of the COVID vaccine and as totalitarian states and governments the world over attempt to require proof of negative tests before travel, a new tool in the shed of government surveillance and control is revealing itself.

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    The microchip has arrived.

    While many are still attacking anyone warning of the “coming Microchip” as a conspiracy theorist, Luddite, or religious fanatic, that microchip has arrived.

    But governments aren’t having to market the chip as a method to track, trace, and control their populations. Instead, they are marketing the chip as a way to track and detect COVID and other coronaviruses. Clearly, this is a much easier sell to a public literally terrorized by their governments and mainstream media outlets for the last six months.

    Raul Diego details the creation and coming rollout of the new biochip in his article, “A DARPA-Funded Implantable Microchip to Detect COVID-19 Could Hit Markets By 2021,” where he writes,

    The most significant scientific discovery since gravity has been hiding in plain sight for nearly a decade and its destructive potential to humanity is so enormous that the biggest war machine on the planet immediately deployed its vast resources to possess and control it, financing its research and development through agencies like the National Institutes of Health (NIH), the Defense Advanced Research Projects Agency (DARPA) and HHS’ BARDA.

    The revolutionary breakthrough came to a Canadian scientist named Derek Rossi in 2010 purely by accident. The now-retired Harvard professor claimed in an interview with the National Post that he found a way to “reprogram” the molecules that carry the genetic instructions for cell development in the human body, not to mention all biological lifeforms.

    These molecules are called ‘messenger ribonucleic acid’ or mRNA and the newfound ability to rewrite those instructions to produce any kind of cell within a biological organism has radically changed the course of Western medicine and science, even if no one has really noticed yet. As Rossi, himself, puts it: “The real important discovery here was you could now use mRNA, and if you got it into the cells, then you could get the mRNA to express any protein in the cells, and this was the big thing.” (Source)

    Here’s what the technology can do

    This new technology amounts to the remote control of biological processes.

    Diego continues:

    As early as 2006, DARPA was already researching how to identify viral, upper respiratory pathogens through its Predicting Health and Disease (PHD) program, which led to the creation of the agency’s Biological Technologies Office (BTO), as reported by Whitney Webb in a May article for The Last American Vagabond. In 2014, DARPA’s BTO launched its “In Vivo Nanoplatforms” (IVN) program, which researches implantable nanotechnologies, leading to the development of ‘hydrogel’.

    Hydrogel is a nanotechnology whose inventor early on boasted that “If [it] pans out, with approval from FDA, then consumers could get the sensors implanted in their core to measure their levels of glucose, oxygen, and lactate.” This contact lens-like material requires a special injector to be introduced under the skin where it can transmit light-based digital signals through a wireless network like 5G.

    Once firmly implanted inside the body, human cells are at the mercy of any mRNA program delivered via this substrate, unleashing a nightmare of possibilities. It is, perhaps, the first true step towards full-on transhumanism. (Source)

    Patrick Tucker of Defense One goes into a few more specifics of how the biochip works. He describes it as follows:

    The sensor has two parts. One is a 3mm string of hydrogel, a material whose network of polymer chains is used in some contact lenses and other implants. Inserted under the skin with a syringe, the string includes a specially engineered molecule that sends a fluorescent signal outside of the body when the body begins to fight an infection. The other part is an electronic component attached to the skin. It sends light through the skin, detects the fluorescent signal and generates another signal that the wearer can send to a doctor, website, etc. It’s like a blood lab on the skin that can pick up the body’s response to illness before the presence of other symptoms, like coughing.

    You won’t be surprised by who supports this.

    It is clear this project has support in the halls of the corporate world and the American government.

    The private company created to market this technology, that allows for biological processes to be controlled remotely and opens the door to the potential manipulation of our biological responses and, ultimately, our entire existence, is called Profusa Inc and its operations are funded with millions from NIH and DARPA. In March, the company was quietly inserted into the crowded COVID-19 bazaar in March 2020, when it announced an injectable biochip for the detection of viral respiratory diseases, including COVID-19. (Source)

    Diego writes,

    The only obstacle is a delivery system, which though Moderna claims to be developing separately, is unlikely to get FDA approval before the federal government’s own DARPA-developed hydrogel technology, in tandem with Profusa’s DARPA-funded light sensor technology, which is expected to receive fast track authorization from the Food and Drug Administration by early 2021 and, more than likely, used to deploy a coronavirus vaccine with the capacity to literally change our DNA.

    In addition, the Department of Health and Human Services (HHS), is currently investigating Moderna’s patent filings, claiming it failed to disclose “federal government support” in its COVID vaccine candidate patent applications, as required by law. The technicality could result in the federal government owning a 100 percent stake in mRNA-1273. (Source)

    Take a microchip or face the consequences.

    Activists and concerned citizens need to stop talking about the “coming microchip” and how they will refuse to be chipped when the time comes. That time is now. Soon, people all over the world are going to have a very difficult decision to make – take a microchip or face the consequences. Judging by the amount of people walking around in masks during my trips to the supermarket, I’d say the odds are not in the favor of free humanity. Most people will line up for it willingly.

    Note: Listen to researcher Alan Watt of CuttingThroughTheMatrix.com discuss the biochip and much more in a historical and analytical context here:

  • Motorcyclist Facing Multiple Felony Charges After Being Caught Doing 181 MPH On San Diego Freeway
    Motorcyclist Facing Multiple Felony Charges After Being Caught Doing 181 MPH On San Diego Freeway

    Tyler Durden

    Sat, 10/03/2020 – 20:00

    A motorcyclist in San Diego was caught doing 181 miles per hour on a San Diego freeway and is now facing felony charges of evading, reckless driving, street racing and being an unlicensed driver, according to NBC. 

    The driver, 32 year old Scott Meiner, was riding in the HOV lane back on March 29 when officers chose not to pursue him due to the speed he was traveling at. He was seen near the Mira Mesa Boulevard exit at the time, before running a red light on Mira Mesa Boulevard. 

    CHP spokesman Salvador Castro said: “Our units were conducting a lidar incident and, basically, they got this motorocycle going 181 and weren’t able to catch up to it.”

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    He continued: “So we forwarded all the information to our investigators, and a couple of months later, they were able to identify the [rider] and link them to several street-racing and reckless-driving incidents, and also running from several police officers from various law enforcement agencies on numerous occasions.”

    Meiner’s Facebook page lists “motorcycles, golf, cars and work” as his interests. It also shows him selling a Kawasaki Ninja ZX-10 motorcycle, which retails for $15,399. That bike has a top speed of 180 mph. Meiner wrote on his Facebook paged that he is “Training to circuit race in the Isle of Man TT and MGP by ’22.”

    Even at the famous Isle of Man Tourist Trophy race, however, the top lap speed is 135.4 miles per hour, set in 2018. 

    Meiner was taken into custody on Tuesday after investigators executed search warrants. He was booked into the San Diego County Jail and released on Wednesday of last week. 

    No word if the bike was on “Autopilot” and if he plans on using “unintended acceleration” as a defense…

  • A Crisis Of Competence
    A Crisis Of Competence

    Tyler Durden

    Sat, 10/03/2020 – 19:30

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    Things Change

    “Doing more of what’s hollowed out our economy and society” is a slippery path to ruin.

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    Things change, supposedly immutable systems crumble and delusions die. That’s the lay of the land in the The Empire of Uncertainty I described yesterday.

    It’s difficult not to be reminded of the Antonine Plague of 165 AD that crippled the Western Roman Empire. The exact nature of the virus that struck down as many as one-third of the Empire’s residents is unknown; it’s thought to be an early variant of measles or smallpox.

    One would have guessed the populace achieved “herd immunity” after the first wave devastated the Empire, but that’s not what happened. The plague continued until 180 AD, and recurred a decade later, continuing to sow misery and economic costs.

    Valiant co-Emperor Verus fell ill and died in 169 AD, leaving his adopted brother Marcus Aurelius to struggle on as the sole leader of Rome’s efforts to repel invasions and maintain its defenses.

    What’s different now is the extreme fragility of America’s financial and social orders. The apparent strength of the economy rests on increasing extremes of financialization and its corrupting fruit, soaring wealth/power inequality.

    “The market” would have us believe corporations profiting from “engagement” (i.e. divisiveness and turmoil) are the most valuable assets in the land. If the Empire’s most precious assets are the derangements of “engagement,” then what else do we need to know about its advanced fragility?

    If data stripmined from debt-dependent consumers is the most profitable resource in the nation, that’s a definition of distortion and delusion. It’s almost as if the American economy and social order have discounted the material world, as if financial leverage, data-mining and “engagement” are all that really matters and the material world will magically take care of itself

    Just as we can’t eat an iPad, we also can’t eat “engagement” or burn data to keep warm or use leverage and other tricks to conjure up productive wealth. The rising tide of dysfunction and incompetence in America’s institutions can be monitored by tracking how functionaries are rewarded for navigating the bureaucratic thickets and padding budgets, not for achieving the institution’s purpose.

    The Crisis of Competence is increasingly visible, but delusions of grandeur still hold. As everyday life decays into developed-world status, we’re told the problem is the hospital or university or corporation no longer has sufficient revenues to cover its bloated expenses, and so the nation must borrow additional trillions to bail out virtually every entity in the land.

    The concept of financial viability without access to ever-expanding debt has been lost, and with that lost, resilience and competence have also been lost. The status quo’s “solutions” are nothing more than doing more of what’s hollowed out our economy and society.

    Things change. We can’t freeze change in its tracks, we can only respond: either competently and effectively, fully aware of our limitations and the risks of relying on debt to paper over our weaknesses, or incompetently, clinging on to delusions of magical thinking, misguided faith in failed leadership and institutions and seeing debt and money created out of thin air as our savior rather than the source of our downfall.

    Here’s the projection I made on February 2, 2020, a week after Covid-19 was finally acknowledged by authorities as a global threat. By my reckoning, this projection is still on track, and we’re approaching “Wave 2 outbreaks around the world, half-measures fail, vaccine months away.”

    “World finally awakens to the pandemic, global economy slides into depression” is on tap for 2021. Things change. Doing more of what’s hollowed out our economy and society is a slippery path to ruin.

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    *  *  *

    My recent books:

    A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

    Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
    (Kindle $5, print $10, audiobook) Read the first section for free (PDF).

    Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

    The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

    Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

    *  *  *

    If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

  • "Space Bubbles" Line The Street At This NYC Restaurant 
    "Space Bubbles" Line The Street At This NYC Restaurant 

    Tyler Durden

    Sat, 10/03/2020 – 19:00

    “With everything going on in this world, eating in a bubble is about one of the best experiences we can have,” Valerie Worthy, a customer who ate a meal in what is being called a “space bubble” at French restaurant Cafe du Soleil, on Broadway and 104th Street, told Reuters. 

    Cafe du Soleil’s Facebook page uploaded a video in early September, showing these protected domes lining the sidewalk in front of the eatery.  

    Another video shows patrons enjoying live jazz in their bubbles on a rainy night. 

    Cafe du Soleil owner Alain Chevreux told Reuters the bubbles caught his eye in July. He paid upwards of $400 per bubble, purchasing fifteen bubbles in total. 

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    Chevreux said, “families love it. Kids love it. Friends who want to get together love it… It was raining a couple of weeks ago, midweek, pouring, raining. Everybody that was inside those bubbles were having a blast.”

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    The bubbles could come in handy for the fall time when eateries across Manhattan’s Upper West Side; nevertheless, the entire city, will be at the mercy of Mother Nature. Readers may recall, the seasonal shift to much colder temperatures could make outside dining challenging for some eateries. 

    We noted Monday, a cold airmass will encompass all U.S. Plains, Midwest, Southeast, and Northeast, where temperatures could hover 8 to 15 degrees below normal through the first week of October. 

    At limited indoor capacity, Chevreux said the bubbles had worked well, though he still isn’t generating enough revenue to cover his chef, cooks, and other staff salaries. 

    Chevreux made no mention if the bubbles would be heated come fall/winter. 

  • Free Speech Crisis On Campus: 60% Of Students Keep Quiet Due To Fear How Others Would Respond
    Free Speech Crisis On Campus: 60% Of Students Keep Quiet Due To Fear How Others Would Respond

    Tyler Durden

    Sat, 10/03/2020 – 18:30

    By Nathan Harden of RealClearEducation

    A university should be a place where students can be exposed to new ideas, where they can engage freely in debate and discussion. But do college students really feel free to speak their minds on campus? Newly released College Free Speech Rankings show that, at most colleges, the answer is no.

    RealClearEducation launched the College Free Speech Rankings, with an interactive website, so parents and students can see how schools they’re interested in stack up.

    The rankings are based on a survey of nearly 20,000 students at 55 schools across the country. The survey reveals some startling facts. Almost 20% of students say that using violence to stop an unwanted speech or event is in some cases acceptable. Among Ivy League students, 36% said that it was “always” or “sometimes” acceptable to shout down a speaker one doesn’t like.

    Self-censorship is also a major problem. Sixty percent of college students say they have kept quiet due to fear of how others would respond. Among conservative students, that number is 72%.

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    Colleges have become perilous places to express unpopular ideas. Professors and students fear being shouted down, shunned, or, in some cases, fired or expelled. This has a chilling effect on the classroom.

    Jonathan Haidt, a professor at New York University, frames the problem this way: “At my university we have a ‘bias response line.’ Students are encouraged to anonymously report anyone who says anything that offends them. So, as a professor, I no longer take risks; I must teach to the most easily offended student in the class. I therefore avoid saying or doing anything provocative. My classes are less fun and engaging.”

    The University of Chicago received the highest score in the College Free Speech Rankings. Both liberal and conservative students there say that the administration supports tolerance for a wide range of views and opinions. Rounding out the top five in the rankings are Kansas State, Texas A&M, UCLA, and Arizona State.

    Most of the schools in the top 10 are large public universities. Only one Ivy League school, Brown University, made it into that group.

    DePauw University came in last in the College Free Speech Rankings, with both liberal and conservative students rating the school poorly. DePauw had the highest percentage of students who self-censored, a whopping 71%.

    Coming in at No. 52 out of the 55 schools surveyed, Dartmouth received the worst ranking among Ivy League members. Rounding out the bottom five were Syracuse, Louisiana State University, and the University of Texas at Austin, which ranked only slightly above DePauw.

    The bottom 10 in the rankings includes seven private universities and two Ivy League schools.

    RealClearEducation developed the College Free Speech Rankings in partnership with the Foundation for Individual Rights in Education (FIRE), a leading advocacy group for free speech and academic freedom. Data research firm College Pulse conducted the survey that forms the basis of the rankings.

    At 80% of the schools included in the rankings, liberalism is the dominant political ideology among students. Students say that racial issues are the most challenging topics to discuss.

    Chicago’s top ranking is no coincidence. University President Robert J. Zimmer has taken a proactive approach to defending free speech, releasing the influential “Chicago Statement” in defense of freedom of expression on campus, which has been adopted by dozens of other universities.

    The rankings demonstrate that academic administrators have real power to create a culture of free speech and open inquiry. Students who attend colleges where their political opinions line up with the majority naturally say that they are more comfortable sharing their beliefs. The University of Chicago has one of the most liberal student bodies of any school in the rankings. Seventy-four percent of students there self-identify as liberals, while only 12% identify as conservatives. Yet both liberal and conservative students rate the university relatively highly in the area of free speech.

    Still, even Chicago has plenty of room for improvement. It won the top spot with an overall score of only 64.19 out of a possible 100 on the scale developed for these rankings. That shows just how poorly most other schools are doing.

    The College Free Speech Rankings paint a clear picture of the speech crisis on America’s colleges and universities. Most schools are failing to protect open inquiry, academic freedom, and free speech. The good news is that now, for the first time, students and parents have a tool they can use to find out which colleges and universities are doing a better job of living up to those ideals.

  • "Skinny" Or "Supersized": What Happens To The Treasury Market When The Next Stimulus Bill Passes
    "Skinny" Or "Supersized": What Happens To The Treasury Market When The Next Stimulus Bill Passes

    Tyler Durden

    Sat, 10/03/2020 – 18:00

    While Congress remains gridlocked over the fifth covid stimulus bill (demanded by 90% of all Americans), rcent headlines suggested on-going discussions for a stimulus breakthrough between Democrats and Senate Republicans prior to the election. And while chances for a deal finalized prior to the November election are slim to nil, Bank of America acknowledges that the chances have improved from near zero at the start of the week. To be sure, timing is critical since the Congressional recess through the election starts on Oct 2 for the House & Oct 9 for the Senate (while Congress can always be called back for a vote but a pre-election deal seems most likely to happen in the next few days if it happens at all).

    Yet while the political and calendar dynamics of any new stimulus deal have been widely discussed, one aspect that remains an open question are the market implications of said deal: just how will the Treasury fund the proposed stimulus and what will its impact be on Treasury spreads, either before or after the election.

    In a recent analysis of just this issue, Bank of America concludes that most scenarios will see little change to coupon or bill sizes unless there is a “supersized” stimulus plan following a Democratic sweep, the same scenario that prompted Goldman to expect a surge in yields.

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    As BofA’s Mark Cabana writes, “the limited supply impact is due to the very large existing UST cash balance and recent coupon supply increases that generate sizeable net cash raises each month ($200bn / month thru end ‘21).” And, for those curious where on the curve is the fulcrum point for new stimulus, Cabana expects “most of the supply impact from stimulus will be concentrated at the front-end of the UST curve.”

    Before we get into the specifics, we fast forward to the bank’s conclusions which, similar to Goldman’s recent thoughts on the matter, find that “any sizeable stimulus would support higher back end UST rates & a steeper curve due to improved growth expectations & higher longer-run deficits.” At the same time, front end rates will continue grinding lower in most scenarios since bill supply will be limited and Treasury is sitting on $1.65+tn of cash which will likely be used to fund new stimulus: “A paydown of this cash results in more money in the banking system which will offset bill supply.”

    * * *

    With that in mind, we focus on the scenario matrix proposed by Cabana, which breaks down roughly as follows – now vs later, supersize vs skinny.

    The BofA rates strategist considers 5 potential scenarios for his supply analysis:

    1. no stimulus
    2. a near-term $1.5tn package agreed to prior to the election
    3. a $500bn “skinny” package post inauguration
    4. a $1.5tn package post inauguration
    5. a $3.5tn “supersized” package post inauguration.

    With the Treasury having already increased coupon sizes substantially this year, only in the “supersized” stimulus package post-inauguration does BofA see a compelling case for higher coupon sizes, although another small coupon supply increase at the Nov refunding is not ruled out if stimulus is passed pre-election; In either scenario, any coupon increase will be relatively small and is unlikely to have a large impact on markets. Bill supply outcomes are more varied across the proposed scenarios. In most cases the bill need should be relatively small and are unlikely to offset the impact from a lower Treasury cash balance & ongoing Fed UST purchases.

    Going back to the three key post-stimulus scenarios, Cabana writes that he expects Congress to “eventually” address the need for more fiscal stimulus. If the stimulus does pass before the election, BofA expects it to be around $1.6TN, which would suggest Democrats concede on their demand for state and local bailouts (i.e., a taxpayer bailout of underwater pensions).

    Here it is worth noting a brief report in Saturday’s Politico Playbook, according to which “PELOSI and Treasury Secretary STEVEN MNUCHIN are expected to work through this weekend. Everyone understands that one of the main issues is funding for state and local governments. The last offers traded were Dems offering $436 billion, and Republicans countering at $250 billion. ON THURSDAY, PELOSI and MNUCHIN held a private phone call with Fed Chair JAY POWELL to discuss state and local funding, and municipal lending. This call has not yet been reported, and underscored the lengths to which the two principals are going to try to get a deal.“

    As such, the odds of a deal where the Fed comes up with some “inert” source of funds to placate Senate Republicans suddenly looks quite real.

    Alternatively, if the stimulus is delayed until after the election, there are 3 most likely sizes as shown in the table below; the BofA base case is a $1.5tn stimulus package after the election but there is a great deal of uncertainty over the size, timing and makeup of any bill.

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    • “Supersized” ($3.5tn): This scenario assumes the Democrats sweep the November elections and pass a bill that closely resembles the $3.4tn Heroes act passed by the House Democrats in May. The bill would include a second round of stimulus checks, $1tn in State and Local aid paid out in two installments and an extension of the $600/week additional unemployment. Even under a Democratic sweep, the likelihood of a bill of this magnitude passing is low given that the economic recovery has been much faster than what was anticipated in May.
    • “Baseline” ($1.5tn): This is our current assumption and assumes that Biden wins the presidential election and Congress control remains split. Similar to the extreme scenario, the bill is expected to include another round of stimulus checks, $500bn in aid for state and local governments and an extension of the additional unemployment benefits but at a lower rate. Expect a similar sized bill if Trump were to be reelected and Congress control remains split.
    • “Skinny” ($0.5tn): This scenario assumes a Republican sweep of the elections, Under this scenario, the Republicans would move forward quickly with a skinny deal targeted primarily at money for the PPP program and unemployment insurance. Expect an earlier passage than the other two scenarios even though Democrats would still hold the House until January.

    According to the Cabana, the two “extreme scenarios” are more illustrative than anything else as they underscore the differences in stimulus approach between the two parties.

    However, they are useful for our discussion around the deficit and Treasury supply issuance. For each of the above scenarios, we have included a lower bound and upper bound estimate of the two month deficit impact following the passage of the bill. The key difference between the two is that in the upper bound scenario we assume that the added UI benefit is retroactive to October 1.

    As shown in Table 1, whether or not this provision is retroactive could be a significant swing factor for the deficit, which could amplify or compress depending on the pace of the labor market recovery over the coming months.

    Another important swing factor is the tax filing deadline. As a reminder, in 2020 the deadline was shifted from April 15 to July 15, which shifted around $250bn in revenue from April to July. If the deadline is again moved to July, then one should anticipate another revenue shift of a little under $250bn from April to July. BofA’s Treasury financing projections currently assume the tax date is kept in April which reduces UST financing need in 1H ’21.

    In sum, Cabana – a former NY Fed Markets Group staffer – “easily” sees a bill that increases the near-term deficit by over $1tn following its passage. And while he is rather bizarrely optimistic, saying that “in the long-run”, he expects the deficit to decline “significantly” in 2022 (good luck with that), he concedes that the deficit will be very elevated compared to the pre-virus levels as the government deals with the lingering scars of the virus.

    * * *

    What about the stimulus bill impact on rates markets and financing needs?  In Table 2, BofA outlines the impact of these stimulus scenarios on Treasury financing needs.

    Coupons: As noted above, the Treasury has already increased coupon sizes substantially this year to all time highs and most scenarios should see little change to coupon sizes unless there is a “supersized” stimulus plan following a Democratic sweep. Additionally, a $1.5tn stimulus bill passed pre-election could see Treasury pursue one last modest round of coupon size increases at the November refunding but it’s probably unnecessary. Any coupon size increase after a “supersized” or pre-election deal would likely include $1bn/month growth for 2/3/5/7Y notes and $1bn increase in 10/20/30Y offerings for new issue & reopening auctions; any coupon growth would only last for one quarterly refunding cycle.

    Bills: there is a range of bill supply outcomes between now & 1H ’21 as shown in Table 2. Much of the bill supply impact will be a function of the Treasury cash balance level, which remains near record levels. The implications of a few bill supply scenarios are listed below:

    • Pre-election stimulus: In Q4 ’20 bill supply would likely total $250-$300bn. The Treasury will drop their cash balance to $1tn, which would add ~$600bn of cash into the banking system. The expected increase in banking system cash would likely overwhelm bill supply & keep front end rates stable to lower.
    • Base case (no stimulus pre-election, $1.5tn post inauguration): In Q4 ’20 bill supply will likely be flat or slightly negative with a Treasury cash balance at year-end of $1.6tn. This is lower vs prior forecasts due to a downward revision in deficit estimates and the TGA ending September higher than BofA had previously anticipated. In 1H ’21 bill supply will also likely be flat on net but there may be one notable variation; Cabana “might anticipate” $200-$300bn bill supply after stimulus is passed in Feb or March but expect this would be paid down after the April tax date. The decline in Treasury cash balance will limit the need for elevated bill supply.
    • Extreme scenarios: in 1H ’21 a “supersized” or “skinny” deal could see bill supply range from positive $350-$400bn to negative $1tn. In a “supersized” scenario the bill supply increase would likely be greatest after a bill is passed in Feb or March ’21. In a “skinny” deal the risk of sharply negative bill supply stems from a potential “forced” reduction of the Treasury cash balance. 

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    When considering Treasury supply scenarios, one must also consider 2 wildcards: (1) Treasury cash balance (2) PPP forgiveness options. A few details on each:

    Treasury cash balance: As we have shown previously, the Treasury currently sits on $1.65trillion of cash, well above historical norms and near a record high.

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    These funds will likely be used to pay for a large portion of any fiscal stimulus plan and the Treasury will ultimately target a $400bn cash balance after stimulus needs are met & PPP loan forgiveness is complete, suggesting a $1 2 trillion drawdown from current levels. Treasury will face material pressure to get their cash balance down by the summer of next year. Specifically, as BofA notes, Treasury will need to lower their cash balance to $133bn by end July ’21 to be in compliance with the existing debt limit law (the 2019 Bi-Partisan Budget Act suspends the debt limit through end July ’21 but when the debt limit is reinstated UST needs to hold no more cash on hand vs when the bill was originally signed into law which is $133bn). If a new debt ceiling is not instituted before end July ’21 it could imply less financing need from bills, all else equal. The impact of different TGA levels on expected Q420 and 1H21 net bill supply in tables 3 and 4.

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    PPP loan forgiveness: a sizeable amount of the Treasury cash balance is being held for PPP loan forgiveness. Recall, the PPP approved $525bn of loans for which the largest Treasury financing draw does not occur until the loans are forgiven. According to BofA estimates, a maximum of $30bn in PPP loans has already been forgiven since most large banks did not start accepting PPP loan forgiveness applications until August and there have only been $30bn of additional Small Business Administration withdraws from Treasury since then. As such, one can assume another $100bn in PPP loan forgiveness + UST outflows in Q4 ’20 and $400bn of PPP loan forgiveness + UST outflows in 1H ’21.

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    Wildcard bottom line: the base case of $400bn standard TGA operating balance + $500bn of PPP loan forgiveness needs leaves UST with roughly $700-$800bn of “unencumbered cash” at present to fund the next round of stimulus

    * * *

    Putting all of the above together, Cabana writes that “the most striking takeaway” from his simulations is “the relatively limited impact stimulus has on Treasury’s expected near-term debt issuance, even under the “supersized” supply scenario.” This is due to prior coupon auction size increases & available financing from the Treasury cash balance. “These scenarios also offer limited hope for a supply driven increase in front-end UST rates” which means that any action – assuming there is one – will be entirely in the long-end.

    One final – and interesting – note raised by Cabana is his claim that the choice of who is the next US Treasury Secretary after the election “matters for debt management policy.” According to the BOfA strategist, “debt management practices under Treasury  Secretary Mnuchin have been “regularly unpredicatable” in contrast to Treasury’s more typical practice of ‘regular & predictable’.” This view was formed by the unusual means by which the 20Y UST issue was introduced & the post-COVID larger-than-expected long-dated coupon sizes vs market & TBAC guidance

    According to Cabana, “debt management decisions made under Mnuchin are likely to favor long-end issuance while a new Treasury Secretary would likely favor issuance more concentrated towards the belly of the UST curve.  If President Trump  wins re-election we expect that Mnuchin will remain Treasury Secretary based on some of the Treasury Secretary’s prior
    comments. If former Vice President Biden wins we expect a new Treasury Secretary and one that would likely follow more “orthodox” debt management practices. We think a new Treasury Secretary would likely favor TBAC’s recommended strategy of concentrating issuance at the belly of the curve to minimize interest cost and interest rate variability. A focus on issuance towards the belly would also be easier since the weighted average maturity of Treasury debt is expected to normalize or exceed pre-COVID levels by the end of FY ’22 under the existing coupon trajectory.”

    The reason why this is important is that it partially offsets the adverse consequences for long-end prices in the scenario presented by Goldman at the end of September, as such a shift in debt management strategy might lessen the extent of UST cheapening at the long end of the curve and concentrate the impact of any coupon increases at the  belly of the curve. Those who wish to trade, or hedge, a change in Treasury Secretary, are advised to “consider” 5s30s swap spread steepeners “or greater tightening potential concentrated at the 5Y part of the curve as a part of any trade to position for a potential Democratic sweep.”

  • Texas Taxpayers Face $117 Billion Bill For Orphaned Oil Wells
    Texas Taxpayers Face $117 Billion Bill For Orphaned Oil Wells

    Tyler Durden

    Sat, 10/03/2020 – 17:30

    Authored by Josh Owens via OilPrice.com,

    The state of Texas and its taxpayers could be on the hook for paying up to US$117 billion for the cleaning-up of abandoned wells as a growing number of U.S. oil companies go bust, and the guarantees for paying for the cleanup cover only 1 percent of estimated costs, a report by climate finance think-tank Carbon Tracker showed on Thursday.  

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    U.S. oil and gas producing states and taxpayers may have to pay in total as much as US$280 billion in cleanup costs, with Texas leading with US$117 billion, followed by Oklahoma with US$31 billion and Pennsylvania with US$15 billion, Carbon Tracker’s report says.

    The US$280-billion estimate is for 2.6 million unplugged onshore oil and gas wells in the United States, while there may be another estimated 1.2 million undocumented onshore wells, Carbon Tracker said.

    While operators are obliged to pay for the cleanup of oil and gas wells, the so-called surety bonds – the guarantee that the operator will indeed pay those costs – currently cover around 1 percent of the closure costs for plugging and cleanup of the wells, the think-tank said.

    The growing number of defaults in the U.S. shale patch may put taxpayers “at risk of picking up costs in excess of available bonds,” Carbon Tracker said.

    The lower-for-longer oil prices and the high debt levels of many U.S. oil companies resulted in as many as 16 filings for bankruptcy protection in the shale patch in July alone, bringing the total since the price crash to 50, the latest bankruptcy monitoring data from law firm Haynes and Boone showed at the end of August.

    According to Carbon Tracker, “States can lower their orphan well liability risk and protect taxpayers by demanding higher bond rates and forcing companies to plug long-inactive ‘zombie’ wells. These actions will shift responsibility for oilfield cleanup costs to industry and also position states to qualify for U.S. federal aid.”

  • Cruise Industry Bust Sparks Global 'Ship-Breaking' Boom
    Cruise Industry Bust Sparks Global 'Ship-Breaking' Boom

    Tyler Durden

    Sat, 10/03/2020 – 17:00

    As the virus pandemic rages around the world, the cruise ship industry remains in rough waters. The question everyone has, especially Barstool Sports founder Dave Portnoy and Robinhood traders, is when the Great Cruise Shutdown of 2020 will end? 

    While some cruise ship operations have resumed in Europe, many operations in North America remain closed. The CDC recently extended a no-sail order for U.S.-based cruise ships through Oct. 31, which could pave the way for a possible November restart. 

    However, a November restart seems unlikely as the U.S. has made little progress in lowering its baseline of COVID-19 cases. After President Trump announced Friday that he and his wife tested positive for the virus, the U.S.’s average daily new cases on Friday stood around 46,300. 

    Dr. Anthony Fauci, director of the NIAID and member of the White House Coronavirus Task Force, said not too long ago, that “no matter how you slice it, that’s not good.” He referred to the plus 40,000 caseloads per day, warning that the U.S. is headed “into a more problematic winter.”

    Reuters notes a sea dock in western Turkey is absolutely booming with cruise ship dismantlings with the cruise ship industry in the Western world unlikely to resume full operations this year. 

    On Friday, at the docks in Aliaga, a town on Turkey’s west coast, five massive cruise ships are being stripped down for scrap, as cruise ship operators reduce fleet sizes. Three more cruise ships are expected to arrive in Aliaga in the near term. 

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    Before the virus pandemic, ship-breaking yards in Turkey mostly concentrated on dry bulk carriers and container ships. Now there’s been an increase in cruise ships since the industry has gone bust, Kamil Onal, chairman of a ship recycling industrialists’ association, told Reuters.

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    “But after the pandemic, cruise ships changed course towards Aliaga in a very significant way,” Onal said of the town. “There was growth in the sector due to the crisis. When the ships couldn’t find work, they turned to dismantle.”

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    Onal said 2,500 people work at the scrapyard in teams that take around six months to dismantle an entire cruise ship. He said most of the ships arrived from Britain, Italy, and the U.S.

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    Here’s a cruise ship recently arriving at Aliaga. 

    With no end in sight in containing the virus, cruise ship passenger volumes will likely remain depressed for the next 12-24 months. Portnoy and Robinhood traders are likely to become bagholders of cruise ship stocks.

    Carnival

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    Norwegian Cruise Line

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    Royal Caribbean Cruises 

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    If you want any more confirmation, the cruise ship industry is going bust. A snippet from Carnival’s latest SEC filing outlines how the operator is accelerating plans to dispose of at least 18 vessels. 

    “In total, the 18 ships represented approximately 12 percent of pre-pause capacity and only three percent of operating income in 2019,” Carnival wrote, in an SEC filing.

    The cruise ship bust will linger for years as recovery is nowhere in sight. Expect more operators to trim fleet sizes, either selling the vessels or completely writing down the asset and sending it to a ship-breaking yard.  

  • Feds Close Investigation Into Yet Another 'Hate Crime' Hoax
    Feds Close Investigation Into Yet Another 'Hate Crime' Hoax

    Tyler Durden

    Sat, 10/03/2020 – 16:30

    Authored by Rick Moran via PJMedia.com,

    Federal authorities have closed their investigation into a “hate crime” incident in Madison, WI where a black woman claimed 4 white men threw lighter fluid on her and set her on fire after shouting a racial epithet at her.

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    Eighteen-year-old Althea Bernstein claimed she was the victim of a hate crime attack. Her story was uncritically reported across the nation. CNN, NBC, Good Morning America, and most major print publications told a horrific story.

    Althea Bernstein, 18, told investigators she was stopped at a traffic light in the city at around 1 a.m. Wednesday when she heard someone yell a racial slur through her rolled-down window, according to a police department incident report

    “She looked and saw four men, all white. She says one used a spray bottle to deploy a liquid on her face and neck, and then threw a flaming lighter at her, causing the liquid to ignite,” the report states.

    But after an investigation by the FBI, which included examining every scrap of video available, no evidence ever emerged of a “hate crime” and, indeed, Bernstein was nowhere to be seen.

    Washington Free Beacon:

    “After reviewing all available evidence, authorities could not establish that the attack, as alleged by the complainant, had occurred,” U.S. attorney Scott Blader said in a Friday statement. A statement from Madison’s chief of police stated that “detectives were unable to corroborate or locate evidence consistent with what was reported.”

    In a statement released by police, Bernstein and her family said they “appreciate the detailed investigative efforts by all involved in this case.”

    You’d think the media would have been taught a lesson after the first 50 hate crime hoaxes. Instead, they doubled down on this one, reporting every detail with that hysterical tone they get when they think America needs to be taught a lesson.

    It’s them that need to go back to school and learn how to be journalists.

    In addition to earning national headlines, Bernstein was interviewed on ABC’s Good Morning America, included in a floor speech by Rep. Joe Kennedy III (D., Mass.), and received a phone call from Meghan Markle and Prince Harry. She was also included in the NFL’s list of “victims of systemic racism, victims of police brutality, and social justice heroes,” and her name has been featured this season on the helmet of players such as the Atlanta Falcon’s Todd Gurley.

    Hate crime hoaxes will continue as long as the media reacts this way. And as long as authorities let the criminals get away with it.

    I love this statement from “community leaders” who, like Bernstein’s family, never mention the investigation’s findings.

    “This morning the Mayor and the Police Chief briefed myself and other community leaders about the investigation surrounding Althea Bernstein and I appreciate the time federal authorities and local law enforcement officials put into this case,” Johnson told the Washington Free Beacon. “In the meantime, we will continue to provide support to Althea and hope and pray for her healing and well-being.”

    CNN and NBC haven’t gotten around to issuing a correction yet.

  • JPMorgan: "A Trump Win Would Constitute A Big Surprise For Markets"
    JPMorgan: "A Trump Win Would Constitute A Big Surprise For Markets"

    Tyler Durden

    Sat, 10/03/2020 – 16:00

    How quickly people forget.

    With the narrative across both media and markets driven by the latest polling data turning to the “guaranteed” victory of Joe Biden over Donald Trump on Nov 3, it’s worth remembering that exactly this time 4 years ago, Trump’s betting odds to defeat Hillary Clinton were about half where they are now, as the following chart from JPMorgan shows.

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    But while most have forgotten Trump’s dismal polling in 2016, when the NYT declared Hillary’s chances of victory at 92% just days before the election, everyone remembers what happened on Nov 8, 2016, even if the NYT and the entire polling industry would like to forget.

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    And yet, despite this clear lesson from the very recent past that polling and political prediction markets are total garbage, we are going through all the motions again, and as JPMorgan’s “other” quant, Nick Panagirtzoglou writes in the latest Flows and Liquidity report, “markets have been factoring in greater probability of Biden winning the election” which naturally “implies that a potential Trump win  would constitute a big surprise for markets”… just like in 2016. At the same time, with hopes for a fiscal deal before the election now effectively dead, “a large fiscal package under a Democratic sweep could also constitute a significant surprise for rate markets.”

    Addressing the main news this week, i.e., Trump testing positive for Covid, the JPM strategist writes that this “news create some uncertainty as, in the scenario where the US President and Presidential candidate gets ill, potential succession issues could be raised on multiple fronts should it prove to be serious.” In response, Panigirtzoglou notes that following this news betting odds for the US election widened even further from this week’s debate, with Trump’s odds already below 40% on Oct 1st and likely lower today according to preliminary indications, down from 46% a week ago. Of course, as discussed at the top, even with the Friday drop to around 40%, Trump’s winning chances are still nearly double the 25% betting odds seen a month before the 2016 election.

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    Curiously, just yesterday, the “other” JPM quant, Marko Kolanovic laid out a case where Trump’s illness could actually boost the president’s odds, to wit: “a combination of voter sympathy, turnout and an asymptomatic or mild virus outcome boosts Trump’s election chances (e.g. vindicating his strategy of opening by example).”

    In any case, as JPM’s Panigirtzoglou writes, the sharp decline in Trump’s betting odds over the past week is raising questions about what is priced in across markets. To answer this question the bank looked at various markets to assess whether the market pricing has moved in similar direction to US presidential election betting odds over the past weeks.

    Starting with stocks, to gauge how equity markets are positioned, JPM uses baskets constructed by the bank’s equity strategists for US equities. In particular, it focuses on the Democratic Agenda Outperformers and Underperformers baskets and the ratioof the two baskets is depicted in Figure 2. It shows relatively flat performance until September. After the tech-led correction in early September, the Democrat Agenda Outperformers have gained 10% relative to the Underperformers baskets, suggesting the US equity markets have been pricing in a higher probability of a Biden Presidency.

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    Next, we look at European equities, where JPM again looks at thematic baskets that include companies with higher US sales exposure, ESG underperformers and defence in a European ‘Trump winners’ basket. And the European ‘Biden Winners’ includes companies in the tech (including green tech) and healthcare sectors as well as companies with greater exposure to trade and Asia. These baskets suggest that European equities have also been gradually pricing in a higher chance of a Biden Presidency.

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    A third way to assess market pricing of a US election is to look at the performance of Asian equities and FX, “given that a  continued Trump Presidency would mean further US/China conflict on trade, technology and investments.” JPM looks at the Bloomberg JPM Asian Dollar Index (ADXY) as well as the relative performance of the MSCI Asia Free float index vs. the MSCI AC World.

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    The figures show the performance over the past three months as well as the performance around the same stage ahead of the 2016 election. Both of the charts show that in 2016 the bulk of the reaction came after the election result, consistent with the low odds betting markets were assigning to a continued Trump Presidency outlined above. This year, the charts suggest increased chances of a Biden Presidency up until mid-September, after which there has been some retracement. In other words, after mid-September Asian equities and FX appear to have diverged somewhat from US and European equities that continued to price in a greater probability of a Biden Presidency.

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    But enough about stocks, what about rate markets? Given the backdrop of endless continued Fed QE purchases, and that the implications for fiscal policy of a Biden or Trump Presidency under a split Congress are less likely to be significantly different, it is not as clear cut how different market pricing ought to be in either of those scenarios. In other words, when it comes to monetary policy, the name of the US president is completely irrelevant (once again demonstrating that the Fed Chair is far more powerful than the US president). Indeed, a clear victory by either candidate could reduce uncertainty and hence term premium priced in longer maturity yields. That said, there is a question over how rate markets would react to a ‘Democratic Sweep’ scenario. Recall that Goldman recently predicted a sharp spike in yields in the case of a Blue sweep. However, JPM counters by warning that the immediate reaction could be to add uncertainty given the prospect of changes to tax policy and potentially pushing yields lower.

    Then again, over the medium term JPM agrees with Goldman, that “the prospect of a significant fiscal stimulus package could add to steepening pressure by adding to the already increased issuance needs of the US Treasury as well as potentially higher inflation expectations via infrastructure spending and minimum wage increases.” The chart below shows the change in the 2s/10s slope around the election date in 2016 and in 2020, with 0 representing the current level in 2020 and the equivalent period ahead of the 2016 election.

     

    It shows that in the 2016 election, markets only began to price a prospect of significant fiscal stimulus in the form of then-candidate Trump’s tax cut agenda after the election, consistent with the above.

    Putting it all together, JPmorgan find “that markets have been factoring in greater probability of Biden winning the election” just like in 2016.  “This implies that a potential Trump win would constitute a big surprise for markets” according to the largest US commercial bank. 

  • The Absurdity Of COVID "Cases"
    The Absurdity Of COVID "Cases"

    Tyler Durden

    Sat, 10/03/2020 – 15:30

    Authored by Jeff Deist via The Mises Institute,

    Today’s headlines announced Donald and Melania Trump “tested positive” for covid-19. Another claims nineteen thousand Amazon workers “got” covid-19 on the job. Both of these pseudostories are sure to ignite another absurd media frenzy. 

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    As always, the story keeps changing: Remember ventilators, flatten the curve, the next two weeks are crucial, etc.? Remember Nancy Pelosi in Chinatown back in February, urging everyone to visit? Remember Fauci dismissing masks as useless? Why should we believe anything the political/media complex tells us now?

    So what do these headlines really mean? What exactly is a covid “case”? 

    Since the beginning of the coronavirus outbreak, most US media outlets have been exceedingly credulous and complicit in their reporting. Journalists almost uniformly promote what we can call the “prolockdown” narrative, which is to wildly exaggerate the risks from covid-19 to serve a political agenda. They may be motivated to hurt Trump politically, to promote a more socialist “new normal,” or simply to drive more clicks and views. Bad news sells. But the bias is clear and undeniable. 

    This explains why media outlets use the terms “case” and “infection” so loosely, to the point of actively misinforming the public. All of the endless talk about testing, testing, testing served to obscure two important facts. First, the tests themselves are almost laughably unreliable in producing both false positives and negatives. And what is the point? Are we going to test people again and again, every time they go out to the grocery or bump into a neighbor? Second, detecting virus particles or droplets in a human’s respiratory tract tells us very little. It certainly does not tell us they are sick, or transmitting sickness to anyone. 

    Take a perfectly healthy person with no particular symptoms and swab the inside of their nose. If the culture shows the presence of staphylococcus aureus, do we insist they have a staph infection? When someone drives to work without incident or accident, do we create statistics about their exposure to traffic?

    A virus is not a disease. Only a very small percentage of those exposed to the virus itself – SARS-CoV-2 – show any kind of acute respiratory symptoms, or what we can call “coronavirus disease.” 

    The only meaningful statistics show the incidence of serious illness, hospitalizations, and deaths. The single most important statistic among these is the infection fatality rate (IFR). Data collected through July shows that the IFR for those under age forty-five is actually lower than that of the common flu. The covid-19 IFR rises for those over fifty, but it is hardly a death sentence. And the data does not segregate those with preexisting health issues caused by obesity, diabetes, and heart disease. If we could see data only for reasonably healthy people under fifty, the numbers would be even more reassuring. 

    Mild or asymptomatic covid cases are effectively meaningless. The world is full of bacteria and viruses, and sometimes they make us a bit sick for a few days. There are millions of them in the world all around us, on our skin, in our nose and respiratory tract, in our organs. We are meant to live with them, which is why we all have immune systems designed to help us coexist and adapt to ever-changing organisms. We develop antibodies naturally, or we attempt to stimulate them through vaccines, but ultimately our own immune systems have to deal with covid-19. The virus will always be out there waiting, on the other side of any lockdown or mask—so we might as well get on with it. 

    From day one the focus should have been on boosting immunity through exercise, fresh air, sunlight, proper dietary supplementation, and the promotion of general well-being. Instead our politicians, bureaucrats, and media insisted on business lockdowns, school closures, distancing, isolation, masks, and the mirage of a fast, effective vaccine. As with almost everything in life, state intervention made the situation worse. We can only hope many governors are removed from office, either by impeachment or at the next election. Several, including Andrew Cuomo in New York and Gretchen Whitmer in Michigan, should face criminal charges for their lawless edicts. There is no due process exception for “public health.”

    Lockdowns were never justified, either in terms of the covid-19 risk or the staggering economic tradeoffs, which will be felt for decades. They certainly are not justified now, given seven months of additional data showing that the transmission and lethality of covid-19 are not particularly worse than previous SARS, swine flu, or Ebola pandemics. We still don’t know how many of the reported two hundred thousand US covid-19 deaths were actually caused by the SARS-CoV-2 respiratory disease, or simply reflect people who died of other causes after exposure to covid-19. We do know that the harms caused by the lockdowns far outweigh the harms posed by the covid-19 virus.

    We have had nearly eight months of life and liberty stolen from us by politicians and their hysteria-promoting accomplices in media. How much more will we accept?

  • Iranian Fuel Seized By US For Venezuela 'Sanctions-Busting' Discharges In New York
    Iranian Fuel Seized By US For Venezuela 'Sanctions-Busting' Discharges In New York

    Tyler Durden

    Sat, 10/03/2020 – 15:00

    Recall that in July the US seized 1.1 million barrels of Iranian fuel aboard four privately owned tankers that had been bound for Venezuela. This after a federal court deemed the move was lawful in accord with sanctions on Iran and Venezuela. 

    That confiscated gasoline was previously bound for Houston, according to top US administration official statements; however, it was recently rerouted, with at least half of it discharged in New York on Thursday.

    Vessel tracking data shows that the Singapore-flagged Maersk Progress unloaded its cargo there, estimated at 557,000 barrels of gasoline, according to Reuters.

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    Venezuelan Oil Minister Tareck El Aissami (left), AFP via Getty

    “The Maersk Progress was due to arrive in Houston last month, but changed its route. Euroforce, a second tanker carrying some of the seized cargo, has been off the coast of Texas since Sept. 9,” Reuters writes.

    Meanwhile the private owners of four Iranian fuel cargoes are attempting to sue and get the seizure ruling overturned in US District Court, basing their argument primarily on claims that the customers are in Peru and Colombia, and not blacklisted Maduro’s Venezuela. 

    Meanwhile, officials in Tehran recently mocked the whole episode, claiming the seized fuel was not Iran’s at all, stating that it had already been sold to international customers.

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    Even as the alleged Iranian fuel was being discharged in New York, Venezuela hailed a separate “victory” this past week : 

    Two Iranian fuel tankers have reportedly reached Venezuela with a third ship set to dock soon. Their arrival constitutes a success for the two nations sanctioned by the United States following an August seizure of such fuel.

    The Iran-flagged ship Forest reached a Venezuelan port Tuesday. A second Iranian ship, the Fortune, entered Venezuelan waters Wednesday. The Forest brought 275,000 barrels of gasoline, The Associated Press reported.

    A third Iranian ship, the Faxon, is expected to arrive this weekend; the three are collectively carrying around 815,000 barrels of fuel in total, the AP said.

    More such maneuvering and controversy regarding cargo on the high seas is expected in the coming months, given Iran and Venezuela’s deepening trade and military ties.

    Last summer multiple Iranian fuel ships were escorted safely to Venezuelan ports by Maduro’s armed forces, something which Secretary of State Mike Pompeo has vowed to stop.

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