- Has Sweden's COVID-19 Strategy Backfired?
Has Sweden’s COVID-19 Strategy Backfired?
Tyler Durden
Fri, 06/05/2020 – 02:45Anders Tegnell, Sweden’s chief epidemiologist, has acknowledged that too many people have died in the country due to COVID-19. Tegnell was key in developing Sweden’s more relaxed strategy which saw bars, shops, cafes and gyms remain open while the rest of Europe locked down, which he criticised as being unsustainable.
Some restrictions were indeed imposed in Sweden with schools closing for over-16s but, as Statista’s Niall McCarthy notes, the public were generally trusted to remain responsible and carry out physical distancing without government enforcement.
During a radio interview, Tegnell said that:
“if we were to encounter the same disease again, knowing exactly what we know about it today, I think we would settle on doing something in between what Sweden did and what the rest of the world has done.”
His comments come as figures show Sweden’s per capita death rate being the highest worldwide in the seven days to June 02.
The government has now given in to opposition pressure and said it will launch an investigation into how COVID-19 was handled.
So how does Sweden’s more relaxed approach to the pandemic compare with neighbouring countries?
You will find more infographics at Statista
The latest data from the Johns Hopkins University shows that as of June 01, Sweden had 43.24 deaths per 100,000 of its population. That’s in stark contrast to Denmark and Finland who have recorded less than 10 deaths per 100,000 inhabitants and Norway which has had less than 5. Last week, Denmark and Norway said they would reopen tourism between their two countries from June 15 but that Sweden would continue to face restrictions.
- Prof. Karl Friston: "80% Of Brits Not Even Susceptible To COVID-19"
Prof. Karl Friston: “80% Of Brits Not Even Susceptible To COVID-19”
Tyler Durden
Fri, 06/05/2020 – 02:00As the threat of COVID-19 quickly fades from foreground and the damage from governments’ experimental panic-driven ‘lockdown’ measures, some experts are now asking an important question: why do different countries achieved such vastly different results in terms of fatalities due to Coronavirus?
The answers to this question will undoubtedly destroy official claims that the COVID lockdown was somehow science-based, let alone justified.
As it turns out, a large percentage of the population were never susceptible to this virus.
In other words: the threat was completely overblown, and lockdown and social distancing policies have never been based in reality.
UnHerd reports…
Professor Karl Friston is a computer modelling expert, world-renowned for his contributions to neuroscience. He has been applying his “dynamic causal modelling” approach to the Covid-19 pandemic, and has reached some startling results.
– The differences between countries are not primarily down to government actions, but due to ‘intrinsic’ differences in the populations
– We don’t yet fully understand what is driving it, although there are theories ranging from levels of vitamin D to genetic differences
– In each country, there appears to be a portion of the population that is ‘not even in the game’
– that is, not susceptible to Covid-19. This varies hugely between countries
– In the UK, Professor Friston estimates that portion to be at least 50%, and probably more like 80%
– The similar mortality results between Sweden (no lockdown) and the UK (lockdown) are best explained by the fact that in reality there was no difference – the impact of the legal lockdown in Professor Friston’s models “literally goes away.”
This is a highly informative interview with UnHerd host Freddie Sayer and Professor Karl Friston. Watch:
- Escobar: Why America's Revolution Won't Be Televised
Escobar: Why America’s Revolution Won’t Be Televised
Tyler Durden
Fri, 06/05/2020 – 00:05Authored by Peper Escobar via The Asia Times,
The Revolution Won’t Be Televised because this is not a revolution. At least not yet.
Burning and/or looting Target or Macy’s is a minor diversion. No one is aiming at the Pentagon (or even the shops at the Pentagon Mall). The FBI. The NY Federal Reserve. The Treasury Department. The CIA in Langley. Wall Street houses.
The real looters – the ruling class – are comfortably surveying the show on their massive 4K Bravias, sipping single malt.
This is a class war much more than a race war and should be approached as such. Yet it was hijacked from the start to unfold as a mere color revolution.
US corporate media dropped their breathless Planet Lockdown coverage like a ton of – pre-arranged? – bricks to breathlessly cover en masse the new American “revolution.” Social distancing is not exactly conducive to a revolutionary spirit.
There’s no question the US is mired in a convoluted civil war in progress, as serious as what happened after the assassination of Dr Martin Luther King in Memphis in April 1968.
Yet massive cognitive dissonance is the norm across the full “strategy of tension” spectrum. Powerful factions pull no punches to control the narrative. No one is able to fully identify all the shadowplay intricacies and inconsistencies.
Hardcore agendas mingle: an attempt at color revolution/regime change (blowback is a bitch) interacts with the Boogaloo Bois – arguably tactical allies of Black Lives Matter – while white supremacist “accelerationists” attempt to provoke a race war.
To quote the Temptations: it’s a ball of confusion.
Antifa is criminalized but the Boogaloo Bois get a pass (here is how Antifa’s main conceptualizer defends his ideas). Yet another tribal war, yet another – now domestic – color revolution under the sign of divide and rule, pitting Antifa anti-fascists vs. fascist white supremacists.
Meanwhile, the policy infrastructure necessary for enacting martial law has evolved as a bipartisan project.
Protesters jump on a street sign near a burning barricade near the White House during a demonstration against the death of George Floyd on May 31, 2020 in Washington, DC. Photo: AFP
We are in the middle of the proverbial, total fog of war. Those defending the US Army crushing “insurrectionists” in the streets advocate at the same time a swift ending to the American empire.
Amidst so much sound and fury signifying perplexity and paralysis, we may be reaching a supreme moment of historical irony, where US homeland (in)security is being boomerang-hit not only by one of the key artifacts of its own Deep State making – a color revolution – but by combined elements of a perfect blowback trifecta:Operation Phoenix; Operation Jakarta; and Operation Gladio.
But the targets this time won’t be millions across the Global South. They will be American citizens.
Empire come home
Quite a few progressives contend this is a spontaneous mass uprising against police repression and system oppression – and that would necessarily lead to a revolution, like the February 1917 revolution in Russia sprouting out of the scarcity of bread in Petrograd.
So the protests against endemic police brutality would be a prelude to a Levitate the Pentagon remix – with the interregnum soon entailing a possible face-off with the US military in the streets.
But we got a problem. The insurrection, so far purely emotional, has yielded no political structure and no credible leader to articulate myriad, complex grievances. As it stands, it amounts to an inchoate insurrection, under the sign of impoverishment and perpetual debt.
Adding to the perplexity, Americans are now confronted with what it feels like to be in Vietnam, El Salvador, the Pakistani tribal areas or Sadr City in Baghdad.
Iraq came to Washington DC in full regalia, with Pentagon Blackhawks doing “show of force” passes over protestors, the tried and tested dispersal technique applied in countless counter-insurgency ops across the Global South.
And then, the Elvis moment: General Mark Milley, chairman of the Joint Chiefs of Staff, patrolling the streets of DC. The Raytheon lobbyist now heading the Pentagon, Mark Esper, called it “dominating the battlespace.”
Well, after they got their butts kicked in Afghanistan and Iraq, and indirectly in Syria, full spectrum dominance must dominate somewhere. So why not back home?
Troops gather during a demonstration on June 1, 2020 in Washington, DC. Photo: Joshua Roberts/Getty Images/AFP
Troops from the 82nd Airborne Division, the 10th Mountain Division and the 1stInfantry Division – who lost wars in Vietnam, Afghanistan, Iraq and, yes, Somalia – have been deployed to Andrews Airbase near Washington.
Super-hawk Tom Cotton even called, in a tweet, for the 82nd Airborne to do “whatever it takes to restore order. No quarter for insurrectionists, anarchists, rioters and looters.” These are certainly more amenable targets than the Russian, Chinese and Iranian militaries.
Milley’s performance reminds me of John McCain walking around in Baghdad in 2007, macho man-style, no helmet, to prove everything was OK. Of course: he had a small army weaponized to the teeth watching his back.
And complementing the racism angle, it’s never enough to remember that both a white president and a black president signed off on drone attacks on wedding parties in the Pakistani tribal areas.
Esper spelled it out: an occupying army may soon be “dominating the battlespace” in the nation’s capital, and possibly elsewhere. What next? A Coalition Provisional Authority?
Compared to similar ops across the Global South, this will not only prevent regime change but also produce the desired effect for the ruling oligarchy: a neo-fascist turning of the screws. Proving once again that when you don’t have a Martin Luther King or a Malcolm X to fight the power, then power crushes you whatever you do.
Inverted Totalitarianism
The late, great political theorist Sheldon Wolin had already nailed it in a book first published in 2008: this is all about Inverted Totalitarianism.
Wolin showed how “the cruder forms of control – from militarized police to wholesale surveillance, as well as police serving as judge, jury and executioner, now a reality for the underclass – will become a reality for all of us should we begin to resist the continued funneling of power and wealth upward.
“We are tolerated as citizens only as long as we participate in the illusion of a participatory democracy. The moment we rebel and refuse to take part in the illusion, the face of inverted totalitarianism will look like the face of past systems of totalitarianism,” he wrote.
Sinclair Lewis (who did not say that, “when fascism comes to America, it will come wrapped in the flag and waving the cross”) actually wrote, in It Can’t Happen Here (1935), that American fascists would be those “who disowned the word ‘fascism’ and preached enslavement to capitalism under the style of constitutional and traditional native American liberty.”
So American fascism, when it happens, will walk and talk American.
George Floyd was the spark. In a Freudian twist, the return of the repressed came out swinging, laying bare multiple wounds: how the US political economy shattered the working classes; failed miserably on Covid-19; failed to provide affordable healthcare; profits a plutocracy; and thrives on a racialized labor market, a militarized police, multi-trillion-dollar imperial wars and serial bailouts of the too big to fail.
Instinctively at least, although in an inchoate manner, millions of Americans clearly see how, since Reaganism, the whole game is about an oligarchy/plutocracy weaponizing white supremacism for political power goals, with the extra bonus of a steady, massive, upwards transfer of wealth.
US President Donald Trump walks back to the White House escorted by the Secret Service after appearing outside of St John’s Episcopal church across Lafayette Park in Washington, DC, June 1, 2020. Photo: AFP/ Brendan Smialowski
Slightly before the first, peaceful Minneapolis protests, I argued that the realpolitik perspectives post-lockdown were grim, privileging both restored neoliberalism – already in effect – and hybrid neofascism.
President Trump’s by now iconic Bible photo op in front of St John’s church – including a citizen tear-gassing preview – took it to a whole new level. Trump wanted to send a carefully choreographed signal to his evangelical base. Mission accomplished.
But arguably the most important (invisible) signal was the fourth man in one of the photos.
Giorgio Agamben has already proved beyond reasonable doubt that the state of siege is now totally normalized in the West. Attorney General William Barr now is aiming to institutionalize it in the US: he’s the man with the leeway to go all out for a permanent state of emergency, a Patriot Act on steroids, complete with “show of force” Blackhawk support.
- Searching Twitter For "Racist" Returns Donald Trump As Top Result
Searching Twitter For “Racist” Returns Donald Trump As Top Result
Tyler Durden
Thu, 06/04/2020 – 23:44For some strange reason, when one types the word “racist” into Twitter’s people search, Donald Trump is the top result – a discovery made days after Trump took action against biased social media platforms.
According to The Independent, Twitter search results are affected by the data they collect on you – including political leaning and your interests, however their search of the word in a private browsing session using Brave browser was the same on both iPhone and Android app.
Other users on the social media site have reported the same result.
It is not immediately clear why Twitter’s search algorithm promotes the result. Other results in the “People” section when searching for the word “racist” include accounts who have mentioned the word in their display names, such as the “Yes, You’re Racist” account which raises awareness of racial issues. –The Independent
Twitter claims it’s unintentional – explaining that when an account is mentioned frequently alongside certain terms it can affect search recommendations.
While unclear how long this has been going on, the discovery comes just days after Trump signed an executive order which chips away at the “liability shield” contained within Section 230 of the Communications Decency Act of 1996, which protects neutral social media companies from being sued over content posted by their users. Last week Rep. Matt Gaetz (R-FL) told Breitbart:
A lot of people don’t see that Facebook and Twitter … you see Twitter disadvantaging the president, they enjoy liability protections that are not enjoyed by your local newspaper or your local TV station, or Fox News, or CNN, or MSNBC. They have special benefits under Section 230 of the Communications Decency Act as digital platforms because they’re not creating content for which they should be liable. They’re not making decisions about content, they’re simply saying come one, come all with your content. And as a consequence of that, they’re getting a bunch of protections.
This isn’t the first time Silicon Valley has deemed themselves the arbiters of information.
After they were busted trying to help Hillary Clinton in the 2016 election – and were beside themselves after she lost, Google employees discussed whether to bury conservative media outlets in the company’s search function after Donald Trump became president, according to the Daily Caller.
Communications obtained by TheDCNF show that internal Google discussions went beyond expressing remorse over Clinton’s loss to actually discussing ways Google could prevent Trump from winning again.
“This was an election of false equivalencies, and Google, sadly, had a hand in it,” Google engineer Scott Byer wrote in a Nov. 9, 2016, post reviewed by TheDCNF.
Byer falsely labeled The Daily Caller and Breitbart as “opinion blogs” and urged his coworkers to reduce their visibility in search results.
“How many times did you see the Election now card with items from opinion blogs (Breitbart, Daily Caller) elevated next to legitimate news organizations? That’s something that can and should be fixed,” Byer wrote.
“I think we have a responsibility to expose the quality and truthfulness of sources – because not doing so hides real information under loud noises,” he continued.
“Beyond that, let’s concentrate on teaching critical thinking. A little bit of that would go a long way. Let’s make sure that we reverse things in four years – demographics will be on our side.” –DCNF
Not everyone at Google agreed with muting ideological opponents. Senior software engineer Uri Dekel – a self-described Clinton supporter, suggested that it was the wrong approach.
“Thinking that Breitbart, Drudge, etc. are not ‘legitimate news sources’ is contrary to the beliefs of a major portion of our user base is partially what got us to this mess. MSNBC is not more legit than Drudge just because Rachel Maddow may be more educated / less deplorable / closer to our views, than, say Sean Hannity,” Dekel wrote Byer in a reply, adding “I follow a lot of right wing folks on social networks you could tell something was brewing. We laughed off Drudge’s Instant Polls and all that stuff, but in the end, people go to those sources because they believe that the media doesn’t do it’s job. I’m a Hillary supporter and let’s admit it, the media avoided dealing with the hard questions and issues, which didn’t pay off. By ranking ‘legitimacy’ you’ll just introduce more conspiracy theories.”
Another engineer, Mike Brauwerman, suggested that the company could avoid “accusations of conspiracy or bias” by using technology to “trace information to its source, to link to critiques of these sources, and let people decide what sources they believe.”
If only senior leadership at Google were as interested in allowing people to find, consume, and judge content on their own.
Meanwhile, Trump and his family still dominate Google image search results for the word “idiot.”
- Global Times Op-Ed: "It's Just A Matter Of Time" Before China Surpasses US In National Strength
Global Times Op-Ed: “It’s Just A Matter Of Time” Before China Surpasses US In National Strength
Tyler Durden
Thu, 06/04/2020 – 23:25At a time when Taiwan remains a crucial issue between China and the U.S., an “opinion” piece published in China’s nationalization propaganda machine, The Global Times, claims that: “It is just a matter of time before China surpasses the US in terms of comprehensive national strength.”
“No matter what card the US plays, it cannot change the general trend of China,” The Global Times wrote.
The piece is being published a time of heightened tensions between the U.S. and China. In addition to issuing blame for the coronavirus pandemic, there are a number of issues being grappled with by the two national superpowers: intellectual property issues, China’s seeming reluctance to hold up its end of the Phase 1 trade deal, and the latter country’s insistence of continuing to devalue the Yuan.
But the most current issue at bar for the two nations remains control over Taiwan. Tsai Ing-wen delivered her inaugural speech on May 20, which seems to have irked – and is likely what prompted – this “response” from the CCP propaganda machine.
The “interview” includes Douglas Paal, Distinguished Fellow at the Carnegie Endowment for International Peace of the US, and Jin Canrong, the associate dean of Renmin University of China’s School of International Studies in Beijing. Paal is a U.S. resident and directs the endowment’s Asia Program. Both were eager to push for support of China, apathy from Taiwan and skepticism toward U.S. policy.
For example, when asked about the Trump administration’s obvious support of Taiwan right off the bat, Paal had no problem criticizing and undermining his own country’s handling of the situation:
Even before the Trump administration came to power, there has been a dual faceted policy toward the island of Taiwan from him. Many in his government want to elevate US relations with Taiwan in every way possible. Some want to use Taiwan as a cudgel against the Chinese mainland and its influence. Strangely, Trump himself seems not to share this view. He seems to view Taiwan as a “small country,” small market, and maybe even tradable in negotiating business deals.
This duality seems to have kept lower level officials from crossing really sensitive redlines in the long established ambiguities prevailing in US-Taiwan-Chinese mainland relations. I don’t think all current American officials appreciate how sensitive and explosive this issue is. In fact, I believe some think it will help bring the Chinese government down. So the situation devolving into a major crisis has low probability, but potentially high consequences.
He claimed that Trump’s position on Taiwan policy is “unclear”, other than seeing Taiwan as an asset to help control the mainland. He also contradicted Trump’s withdrawal from the World Health Organization, making it seem as though the U.S. is “all bark and no bite” in its posturing that it would defend Taiwan.
“For example, in the middle of a global pandemic, the US has no interest in losing a role within the WHO, but Trump is trying to withdraw from it,” Paal said, continuing to try and undermine the President’s actions.
“The gap between rhetoric and action is wide,” he later said, when asked if he thought the U.S. would act against China’s one-China principle.
Paal also encouraged Taiwan to “keep a low profile” amidst the dispute and said he thinks Tsai “is maintaining the basic official line of status quo” for the time being:
Taiwan, in my view, should stick to advocating its own interests, including international participation and acknowledgement, autonomy at home, lessons in good governance, especially concerning epidemics, and sound economics. None of those is compatible with becoming a spear-head for America’s brooding conflict with China.
If US officials want to send videos to Taiwan ceremonies, why would Taiwan want to reject them? If the US wants to send the 7th fleet into Taiwan’s waters, in the absence of a Chinese mainland attack, Taiwan should ask why and to what purpose?
Jin added: “The rise of China depends on our own economic development. As long as we stay on track, no outside force can stop us from growing stronger. It is just a matter of time before China surpasses the US in terms of comprehensive national strength. From this perspective, no matter what card the US plays, it cannot change the general trend of China. So, practically speaking, the Taiwan card is useless.”
Jin continued, trying to downplay potential U.S. effectiveness in dealing with Taiwan and asserting a reluctance to act by the U.S.:
“The island of Taiwan has been used by Washington as a chess piece to contain China’s development. The US used to have a bottom line, but now it is becoming increasingly radical due to fears of a rising China. Washington is not as confident as it was. It once believed that it would undoubtedly win the game with China. But now it has become scared and is using all the tools at its disposal to contain China. As US elites’ hostility toward China deepens, they might possibly cross China’s bottom line.
“Given Tsai’s intention to change the status quo, the cross-Straits situation could become increasingly risky,” Jin concluded.
“Actually, the Chinese central government can launch attacks whenever it wants and the result will be in favor of the mainland. Within the first island chain, the Chinese mainland faces no rivals. “
- "The Data Is Likely To Be Horrific": Previewing The Worst Jobs Report In US History
“The Data Is Likely To Be Horrific”: Previewing The Worst Jobs Report In US History
Tyler Durden
Thu, 06/04/2020 – 23:11Tomorrow’s jobs report will be one for the history books: with a record 19% Unemployment, and an additional 7 million job losses added to the 20 million from last month, the labor picture will be far worse than anything observed before in US history, eclipsing the darkest days of the Great Depression.
Indeed, as NewsSquawk writes in its payrolls preview, “the data is likely to be horrific, although it tells us what we already know.” So will stocks close green? Probably, since the extent of the pandemic gloom has already been heavily discounted by the market which is expecting a miraculous V-shaped recovery, and instead traders’ focus is on the direction and speed of travel. Furthermore, there is little in the BLS report that will offer any forward-looking insight – that will depend on progress regarding the reopening of economies, and official support measures. With that said, a ‘solid’ ADP report which was much better than expected stoked a rally in risk assets, which resulted in significant curve steepening and equity upside along the lines of a reflation trade, offering hope that the economy may be more resilient than feared (the more likely explanation is that the ADP report was once again massively wrong).
Meanwhile, as US data surprises have improved over the last two weeks, and risk assets seem more asymmetrically sensitive to ‘re-opening and recovery’ developments, progress on treatments, testing and tracing, as well as stimulus from global policymakers; this has underpinned the recent rally in the S&P 500 despite historically stretched p/e valuations, negative headline risk (US/China), and a limited appetite in Washington for another hefty fiscal injection.
Here’s what Wall Street expects tomorrow, courtesy of NewsSquawk.com:
- Nonfarm Payrolls exp. -8.25mln (range -17mln to -1.7mln), prev. -20.5mln);
- Unemployment rate exp. 19.8% (range: 17.0-27.0%), prev. 14.7%;
- U6 unemployment prev. 22.8%;
- Participation prev. 60.2%;
- Private payrolls exp. -7.5mln, prev. -19.5mln;
- Manufacturing payrolls exp. -0.4mln, prev. -1.3mln;
- Government payrolls prev. -0.98mln;
- Average earnings M/M exp. +1.0%, prev. +4.7%; Average earnings Y/Y exp. +8.4%, prev. +7.9%;
- Average workweek hours exp. 34.3hrs, prev. 34.2hrs.
TREND RATE:
Backward-looking non-farm payroll trend-rates offer little insight in this environment. Updates on how the US labor market is progressing will likely be seen first in the weekly jobless claims/continuing claims data, regional prints and anecdotal reports from corporations bringing workers back from furlough (uncertainty remains over how many workers will be recalled) rather than the BLS Employment Situation Report. At present, analysts are eyeing how soon weekly claims can fall below the arbitrary 1mln level (it is estimated to do so around the end of June), and then the evolution of joblessness; Fed voter Kaplan expects the unemployment rate to fall to 10-11% by the end of this year, and back beneath 7.0% by the end of 2021, assuming consumers are willing to resume activity. The Fed will make economic projections in June, and although they will be subject to large caveats, they will still be useful as a barometer to gauge how quickly progress is being made in lowering unemployment in the months ahead, and by extension, what further support the economy needs.
UNEMPLOYMENT RATE:
According to Morgan Stanley, the unemployment rate will move up from 14.7% to 17.0% in May, a stronger than consensus forecast, and a number which according to the bank will likely peak in unemployment rate for this cycle. In reality, as we noted last month, the shadow unemployment rate, which includes people absent from work for other reasons, is much higher (closer to 25.5% in April). There is considerable uncertainty as to how high the shadow unemployment rate could be due to compositional and categorization noise. For example, some people that were absent from work for other reasons are counted as employed, but are presumed to be unemployed. The Bureau of Labor Statistics (BLS) can re-categorize this at any time, which could lift the unemployment rate to as high as 25%, in our view.
PARTICIPATION RATE:
The participation rate is expected to remain unchanged at 60.2%, after declining 2.5% in April. There is downside risk to the unemployment rate if labor force participation moves lower. For example, if participation declines 20bp to 60.0%, the unemployment rate would be 16.7% instead of 17.0%. The flows from employment to outside the labor force are higher than ever before, due to the provision under the CARES Act that does not require workers to actively seek work to qualify for unemployment insurance benefits.
INITIAL JOBLESS CLAIMS:
The high frequency weekly numbers offer a mixed signal: initial jobless claims data corresponding to the BLS jobs report survey period is yet to show that the easing of lockdown measures has resulted in any large scale return to work for furloughed workers (note: the data does not count those claiming the new Pandemic Unemployment Assistance Benefits). The corresponding continuing claims report, however, surprised by falling for the first time since the pandemic, suggesting that the reopening of states was in fact pushing businesses to rehire some of the people let go when the virus hit.
WAGES:
The sharp rise seen in April’s earnings metrics is a quirk due to the data not adjusting for those on low incomes who lost jobs – these people are removed from the sample, resulting in a higher average wage of those that remain in employment. The sharp rise is therefore not a positive, and if unemployment remains elevated, there will be pressure on wage growth during the recovery. As MS further explains, in the April Payrolls report, job losses were broadly based across sectors but the incidence of unemployment fell most heavily on lower-wage segments of the labor market. This created a compositional bias in the data that caused a +4.7%M increase in earnings. Layoffs in May are expected to be more evenly distributed across the pay scale.
Consumers’ appraisal of the job market was mixed, but there were signs of stabilisation, according to the Conference Board’s gauge. Whether consumers re-emerge from the pandemic with confidence to return to work will depend on stronger testing, tracing and quarantine measures needed to give consumers confidence to engage in activity; additionally, how quickly the case count declines, how soon economies can reopen, and how soon hiring picks up. For now, consumers’ short-term earnings outlook is stable, but they will likely need – and are still expecting – more fiscal
support over the coming 12-months.STIMULUS CLIFF:
Recent government stimulus has not merely offset consumers’ lost earnings, in many cases it has exceeded them, and balances in checking accounts that had fewer than USD 5,000 of funds 12-weeks ago now have between 30-40% more money in them given minimal economic activity taking place, according to Bank of America, while BEA data last week showed the savings rate surging to a record high. Whether Americans draw savings and resume consumption in the months ahead will be a function of how confident they ultimately are that a ‘second wave’ more disruptive than the first can be avoided, particularly amid some messaging from lawmakers averse to more fiscal largesse. However, it is worth being cognizant of a potential ‘stimulus cliff’; weekly federal unemployment benefits will end in July, and there seems to be a lack of political will to extend it amid concerns of ballooning deficits. The US is still expected to follow-up with further stimulus possibly in June, likely sized around the USD 1trln mark – significantly smaller than USD 3trln in the bill that the House recently passed. And while the fiscal support might not contain another round of cheques to Americans, there could be ‘back to work bonuses’ incentivising a return to work.
BUSINESS SURVEYS
The manufacturing ISM report saw the employment sub-index pickup by 4.6 points to 32.1. But the ISM said employees returning to work in late May will positively impact the index in June. Meanwhile, the non-manufacturing ISM report showed employment conditions improving to 31.8 from 30.0, in contraction for the third straight month, with no industry reporting a rise in employment. Comments from respondents include: “Furloughed as much staff as possible to reduce costs due to COVID-19” and “Terminations, furloughs, hourly reductions [and] forced vacations.”
ADP:
ADP reported 2.76mln jobs were lost from the US economy in May, better than the 9mln of losses that the Street was expecting; the prior was also revised up to -19.56mln from the initially stated -20.24mln. This decline would be less than has been implied by the 12.2mln initial jobless claims registered between April and May, according to Pantheon Macroeconomics, but is consistent with the 3.1mln increase in continuing claims in that window. “This suggests that the re-hiring of people in states beginning to reopen was very substantial, even though reported job postings on Indeed fell further between the two surveys,” and “presumably, most people were simply rehired by email, text or phone call.” Pantheon reminds us that the ADP measure is generated by a model which incorporates macro variables as well as official payroll data from the previous month, in addition to the information gleaned from firms which use ADP’s payroll processing services. “It’s possible that ADP’s numbers are unrepresentative for May, or that the model is unreliable given the step-shift in the state of the labour market, but the safest approach probably is to assume that Friday’s official payroll numbers will be much less bad than the current consensus, -8mln, and June payrolls likely will increase substantially.”
CHALLENGER JOB CUTS:
Challenger announced US-based employers intend to cut 397,016 jobs in May (209,147 directly a result of COVID), easing from April’s total of 671,129. “Although we saw a significant drop in May over April, we are still in record territory and the cumulative number of cuts since the pandemic began is staggering,” Challenger said, “as states and cities re-open, we can expect to see these numbers decrease as more people return to work. But many lost jobs will not return soon, if ever.”
- Students Demand Lax Grading For Black Students. University Agrees…
Students Demand Lax Grading For Black Students. University Agrees…
Tyler Durden
Thu, 06/04/2020 – 22:45Authored by Jessica Custodio via Campus Reform,
Students at the University of Washington are demanding that black students be given leniency on finals because they are too “busy fighting for [their] rights to sit down and study.”
The university is advising professors to do just that.
An online petition calls for laxed grading and accommodations, specifically for Black students. So far, the petition has amassed more than 26,000 signatures.
“…give Black students a break! We are already DISPROPORTIONATELY impacted by this pandemic in terms of health care access and financial hardship. Now add state-sanctioned violence, how do you expect us to enter finals in this headspace?!” reads the petition.
“You need to encourage and demand professors to accommodate their black students during this time. If UW truly understands our pain, UW will be a part of alleviating it,” the petition continues. “We can’t sit back and watch as injustices unfold before our eyes. We don’t have the privilege that white and non-black students do to ignore what’s happening and stay at home to study for finals,” the petition added.
“We are busy fighting for our rights and for the rights of future black children and students to sit down and study. The least UW could do is demand professors to accommodate us during this time”
“I recognize that this institution and others across the country were not built to serve marginalized students, specifically Black students. Still to this day, institutions such as UW, do not serve Black students to the same capacity that white students benefit from,” student government president Kelty Pierce told The Daily.
A template to help professors announce these accommodations has been circulating on social media, reading “Dear Students, I am writing to you to offer accommodations for black students in this class during the end of this class and finals.”
“Many black students are not just using this time to cope emotionally, but to fight on the front lines of these protests and actively work and take action on what has been happening to the black community.” it continues.
Nicole McNichols, UW Psychology Professor provided Campus Reform with a copy of the email she sent to her own students.
“I sent this on Sunday before I knew about the petition,” McNichols said. “Obviously, I support the petition and absolutely believe the accommodations it requests should be honored by all faculty. Students need all of the support and compassion we can afford to give them right now.”
The email sent by McNichols to her students reads, “I wanted to reach out and acknowledge the incredible grief, fear, and loneliness that I know many of you are experiencing in light of recent (and not so recent) events. These are frightening times and I know that many of you are struggling emotionally as our country suffers not only from a pandemic but also from abhorrent racism, overwhelming violence, and palpable rage. These events are terrible and it is completely understandable to feel scared and alone right now.”
“Last, I think we all could use a break right now as these times certainly call for compassion. Given this, there will be a following change to the course policies. First, the remaining homework chapters are being put into review mode. Everyone will receive full points. Second, I have decided to drop everyone’s lowest exam score. This means that you may opt-out of taking Exam 3 if you just don’t feel up to it, (or if you [are] happy with your scores from exam 1 and 2), the email added.”
UW Senior Director of Media Relations Victor Balta directed Campus Reform to a message that was sent to all instructors Monday asking them “to consider that while we are together as a community, some are being affected more than others.”
“I think the statement clearly lays out a couple of examples of what instructors could provide to their students, such as extra time to finish assignments or a ‘final-examination optional’ approach,” said Balta.
In the message, the university told professors “in these final weeks of the quarter, as assignments become due and exams are taken, to be especially responsive to the needs that your students, especially those who are members of the Black community, may have for accommodations as we conclude the school year.”
Accommodations might include extra time to finish assignments or providing a ‘final examination optional’ pathway, for example,” the memo continued.
- Robots And Social Distancing Will Revolutionize Restaurants In Post-COVID World
Robots And Social Distancing Will Revolutionize Restaurants In Post-COVID World
Tyler Durden
Thu, 06/04/2020 – 22:25Prior to the COVID-19 outbreak, the trend was in place for artificial intelligence and automation to displace tens of millions of jobs over this decade. Replacing workers with robots has certainly been thrown into hyperdrive in a post-corona world.
Strict social distancing enforced by some countries has now given way to reduced forms of distancing in daily life. This is precisely what is happening in South Korea, with some bars and restaurants reopening.
At Coffee Bar K in Seoul, a robo-bartender has replaced a human, can make perfect cocktails in the fraction of the time, reported Reuters.
Coffee Bar K’s Robo-bartender The bar is encouraging customers to return, promoting its use of robots preparing drinks in a contactless environment, as a bid to attract patrons and increase sales.
“Since this space is usually filled with people, customers tend to feel very anxious,” human bartender Choi Won-woo said. “I think they would feel safer if the robot makes and serves the ice rather than if we were to do it ourselves.”
Down the street, a robot arm shakes up drinks for thirsty consumers at the Cafe Bot Bot Bot coffee bar. Manager Kim Tae-wan said customers feel much safer with robots handling their drinks than humans.
Cafe Bot Bot Bot’s drink robot A post-corona world will be filled with many challenges for bars and restaurants. The most difficult question for operators and managers is how to instill enough confidence in people to bring them back.
One way to do this is by automating the back and front end of the restaurant. Allowing robots to prepare drinks and food in a contactless environment in the future and will drive confidence among patrons.
Robots to replace bartenders, cooks, and waiters is already here:
- MGM Seeks To Replace 2,000 Workers With Robots By 2020
- America’s First Robot Bar Opens In Vegas: “Perfect Pours Every Time”
- Minimum-Wage Blowback – Fast Food Burger-Flipping Robot Works For $3 An Hour
Concentrating on the front end of the restaurant. Operators and managers will likely have to readjust the dining floor with social distancing plexiglass dividers at tables, ultraviolet thermal body scanner at the entrance, and increasing online delivery via food lockers.
NYC Brooklyn Chop House plexiglass dividers 
ultraviolet thermal body scanner 
Brooklyn Dumpling Shop food locker Another way to boost sales and save the collapsing restaurant industry is to install plexiglass bubbles, called Plex’Eat, which are suspended from the ceiling and sit around a patron’s head. At the same time, they have dinner, ensuring social distancing and a reduction in virus transmission inside the facility. This is what they look like:
Plex’Eat While robots and social distancing measures seem radical, and quite frankly absurd, they could be the new standard for restaurants and bars in a post-corona world. However, there’s a trade-off — the automation part of this will lead to permeant job loss to some degree.
- The June 4 Tiananmen Square Massacre: Five Truths That Still Aren't Widely Known
The June 4 Tiananmen Square Massacre: Five Truths That Still Aren’t Widely Known
Tyler Durden
Thu, 06/04/2020 – 22:05Following the sudden death of a beloved political reformer, Hu Yaobang, 200,000 students gathered at Tiananmen Square on April 22, 1989, to await the hearse carrying Hu’s body – but it never arrived. The mass of students were angered, and their burning desire for freedom could be contained no more.
For the next few weeks, Tiananmen Square was occupied by these student protesters, who aimed at making reality their dream of ridding the country of communist tyranny and bringing democratic reform to China. Their non-violent demonstration perhaps brought a glimmer of hope … until the army moved in. Although martial law was declared on May 20 that year, what caused the army to suddenly go on a killing rampage on June 4?
L: Thousands of Chinese gather on June 2, 1989, in Tiananmen Square around “The Goodness of Democracy,” demanding democracy despite martial law in Beijing. (CATHERINE HENRIETTE/AFP via Getty Images). R: “The Goddess of Democracy,” a 10-meter replica of the Statue of Liberty created by students from an art institute to promote the pro-democracy protest against the Chinese government. (TOSHIO SAKAI/AFP via Getty Images)
1. Mass-Murdered by the Chinese Regime
At least 10,454 people were mass-murdered by the Chinese communist regime on Tiananmen Square, according to an unnamed source from the Chinese State Council. The figure is far greater than the “official” fatality count of 200.
On June 4, 1989, students were gunned down in droves and “mown down” by tanks. “APCs (Armored personnel carriers) then ran over bodies time and time again to make ‘pie’ and remains collected by bulldozer. Remains incinerated and then hosed down drains,” reads part of a declassified statement, which was obtained by Alan Donald, Britain’s ambassador to China in 1989.
It’s still unconfirmed how many more were massacred during and after the students’ unarmed protest.
Waving banners, high school students march in Beijing streets near Tiananmen Square on May 25, 1989, during a rally to support the pro-democracy protest against the Chinese regime. (CATHERINE HENRIETTE/AFP via Getty Images)
2. The Ringleader Is Still Alive
In addition to rolling over the students with tanks, the army fired high-explosive shells that expand on impact, also known as dum-dum bullets, (forbidden by the Geneva Convention) to kill the students in the most harm-inflicting way possible.
The question remains—what kind of a human being would order such a brutal mass murder of freedom-seeking civilians?
Former leader of the Chinese Communist Party Jiang Zemin (Feng Li/Getty Images)
Former paramount leader of the party Deng Xiaoping was impressed with Jiang Zemin’s iron-fisted proposition to use the army to crack down on the students, and promoted him from Party Chief of Shanghai to General Secretary of the Chinese Communist Party days before the massacre, giving him free rein to do as he liked.
Jiang Zemin, the mastermind behind the massacre, ordered the army to carry out his bloody strategy on June 4. The “gate of heavenly peace” was suddenly turned into hell on Earth.
Taken care of by others, an unidentified foreign journalist (2nd-R) is carried out from the clash site between the army and students on June 4, 1989, near Tiananmen Square. (TOMMY CHENG/AFP via Getty Images)
3. Ruthless Abuse of Power
The Tiananmen Square Massacre was just the start of Jiang’s ruthless abuse of power. He went on to commit the most heinous crimes that couldn’t bear the light of day. In the bloody wake of the massacre, Jiang became Deng’s ideal heir for the next Party Chief, a position Jiang secured in 1993.
Jiang, a Marxist hardliner and ex-senior spy for the KGB’s Far-East Bureau, had only begun to show his true colors with how he dealt with the protesting students and went on to orchestrate even bloodier campaigns. In 1999, Jiang sought to “eradicate” Falun Gong—a popular spiritual practice—after the number of people practicing it rose some 100 million, outnumbering the then 70 million Party members, according to state-run reports at the time.
Falun Gong practitioners doing the group exercise in Guangzhou, China, in 1998. (Minghui)
Under Jiang’s rule, an adroit misinformation campaign inundated China, turning public opinion against Falun Gong by subjecting the spiritual practice to extreme vilification—including the infamous Tiananmen Square “self-immolation” hoax, which successfully deceived the nation—paving the way for Jiang’s next phase: to forcibly “transform” or “eliminate” the meditators who refused to give up the practice.
In response to Jiang’s genocidal policy, believed to have caused a widespread yet unascertainable amount of state-approved killings, including forced organ harvesting, over 209,000 lawsuits have since been filed against Jiang, making him the most sued dictator in history.
Falun Gong practitioners at a rally in front of the Chinese embassy in New York City on July 3, 2015, to support the global effort to sue Jiang Zemin. (Larry Dye/The Epoch Times)
4. Horrifying Accounts Kept Secret
A Blacklock’s Reporter obtained secret telex messages concerning horrifying accounts of what really happened on Tiananmen Square that day via access-to-information laws.
“An old woman knelt in front of soldiers pleading for students; soldiers killed her,” the Canadian embassy in Beijing reported at the time.
Blacklock’s writes: “A boy was seen trying to escape holding a woman with a 2-year old child in a stroller, and was run over by a tank”; “The tank turned around and mashed them up”; “Soldiers fired machine guns until the ammo ran out.”
An unbelievable amount of bullets were fired on civilians at Tiananmen that “they ricocheted inside nearby houses, killing many residents.”
“The embassy described the killings as ‘savage,’” according to Blacklock’s Reporter.
“They are now entering a period of vicious repression during which denunciations and fear of persecution will terrorize the population,” reads another cable obtained.
Chinese onlookers run away as a soldier threatens them with a gun on June 5, 1989, as tanks took position at Beijing’s key intersections next to the diplomatic compound. (CATHERINE HENRIETTE/AFP via Getty Images)
Diplomats added that some 1,000 executions took place following the massacre, but an exact figure is unconfirmed. “It was probably thought that the massacre of a few hundreds or thousands would convince the population not to pursue their protests. It seems to be working,” reads a statement by the diplomats.
The secret British cable, obtained by news website HK01, reveals more detail about the crimes of the 27 Army of Shanxi Province on the day.
“27 Army ordered to spare no one and shot wounded SMR soldiers. Four wounded girl students begged for their lives but were bayoneted. A 3-year-old girl was injured but her mother was shot as she went to her aid as were six others who tried.”
“A thousand survivors were told they could escape via Zhengyi Lu but were then mown down by specially prepared M/G (machine gun) positions.”
Ailing student hunger strikers from Beijing University receive first aid treatment under a makeshift tent set up on May 17, 1989, at Tiananmen Square as students enter the 5th day of a marathon hunger strike as part of a mass pro-democracy protest against the Chinese government. (CATHERINE HENRIETTE/AFP via Getty Images)
5. “June 4”: A Highly Taboo Subject in China Today
Despite Hong Kong lighting up every evening on June 4 in an annual candlelight vigil to commemorate the victims of the massacre, Chinese mainlanders across the border are without such freedom of speech. Talking about the Tiananmen Square Massacre, or even mentioning “June 4,” or “6.4,” could have one disappear.
In 2007, Zhang Zhongshun, a lecturer from Yantai University, showed his class a video of the massacre he obtained from an overseas website. He was subsequently jailed for three years by Laishan City Court on Feb. 28, 2008.
Tens of thousands of people hold candles during a vigil in Hong Kong on June 4, 2018, to mark the 29th anniversary of the 1989 Tiananmen crackdown in Beijing. (ANTHONY WALLACE/AFP via Getty Images)
“I imagined that the worst case would just be that the university president would criticize me in front of my colleagues in a meeting. I would not have thought that the communist regime would imprison me,” Zhang told The Epoch Times in an interview after his release from the detention.
“Is it illegal even if I include a historical event into my lecture?” he asked.
A student displays a banner with one of the slogans chanted by the crowd of some 200,000 pouring into Tiananmen Square on April 22, 1989, in Beijing in an attempt to participate in the funeral ceremony of former Chinese Communist Party leader and liberal reformer Hu Yaobang. His death in April triggered an unprecedented wave of pro-democracy demonstrations. The April-June 1989 movement was crushed by Chinese troops in June when army tanks rolled into Tiananmen Square June 4, 1989. (CATHERINE HENRIETTE/AFP via Getty Images)
Who’d dare raise this for discussion in China knowing the consequences? This year marks the 31st anniversary of the Tiananmen Square Massacre. Will the current Chinese leaders redress the issue and bring Jiang Zemin to justice for his litany of crimes? Only time will tell.
- "It's Pretty Obvious This Will End Badly": In Historic Reversal, Grantham's GMO Goes Short US Stocks
“It’s Pretty Obvious This Will End Badly”: In Historic Reversal, Grantham’s GMO Goes Short US Stocks
Tyler Durden
Thu, 06/04/2020 – 21:45With retail investors taking over the extremely illiquid market, resulting in crazy intraday swings where the horde of robinhood retail traders alone can send a stock soaring (and tumbling)…
… many veteran investors are throwing in the towel on what is emerging as the most furiously ridiculous rally in history in what is now better known as “Jay’s market” (with 73% of Wall Street claiming that the market is only up due to the artificial gimmick of the Fed’s balance sheet explosion and not due to fundamental factors). And with one after another investing legend such as Warren Buffett, Stanley Druckenmiller, David Tepper boycotting the artificial rally, and either selling or pulling out, today GMO’s Jeremy Grantham became the latest to bail on what Bank of America recently called a “fake market.”
In a letter to GMO investors, Grantham writes that “we have never lived in a period where the future was so uncertain” and yet “the market is 10% below its previous high in January when, superficially at least, everything seemed fine in economics and finance. And if not “fine,” well, good enough. The future paths include many that could change corporate profitability, growth, and many aspects of capitalism, society, and the global political scene.”
Jeremy Grantham. In short, the veteran value investor known for calling several of the biggest market turns of recent decades admits he has lost his faith in an upside case – unlike the retail daytrading army – and his sense of direction in a world of record uncertainty “which in some ways seems the highest in my experience” and as a result “in terms of risk and return – particularly of the worst possible outcomes compared to the best – the current market seems lost in one-sided optimism when prudence and patience seem much more appropriate.“
Grantham also highlights the obvious: that the market and the economy have never been more disconnected, and points out that while “the current P/E on the U.S. market is in the top 10% of its history… the U.S. economy in contrast is in its worst 10%, perhaps even the worst 1%…. This is apparently one of the most impressive mismatches in history.“
As a result of this total loss of coherence driven by trillions in central bank liquidity that have propelled a massive wedge between fundamentals and stock prices, GMO, the Boston fund manager Mr Grantham co-founded in 1977, cut its net exposure to global equities in its biggest fund from 55% to just 25%, near the lowest levels it reported during the global financial crisis, according to a separate update from GMO’s head of asset allocation, Ben Inker.
That decision, according to the FT, slashed GMO’s Benchmark-Free Allocation Fund exposure to US equities from a net 3-4% to a net short position worth about 5% of the $7.5bn portfolio, said Inker, perhaps the first time the fund has turned net short US stocks since the crisis. This, after GMO loaded up on stocks during the sell-off but has since cut offloaded its exposure to the US market following the unprecedented 40% rally in the past 2 months.
“The Covid-19 pandemic “should have generated enhanced respect for risk and it hasn’t. It has caused quite the reverse,” Grantham told the Financial Times. He noted that trailing price-earnings multiples in the US stock market were “in the top 10 per cent of its history” while the US economy “is in its worst 10 per cent, perhaps even the worst 1 per cent”, echoing what he said in his quarterly letter.
And while markets seem to be taking all the negative news in stride, Grantham is worried that the wave of devastation that is coming is unlike anything experienced before:
At GMO we dealt with three major events prior to this crisis, and rightly or wrongly, we felt “nearly certain” that sooner or later we would be right. We exited Japan 100% in 1987 at 45x and watched it go to 65x (for a second, bigger than the U.S.) before a downward readjustment of 30 years and counting. In early 1998 we fought the Tech bubble from 21x (equal to the previous record high in 1929) to 35x before a 50% decline, losing many clients and then regaining even more on the round trip. In 2007 we led our clients relatively painlessly through the housing bust. In all three we felt we were nearly certain to be right. Japan, the Tech bubbles, and 1929, which sadly I missed, were not new types of events. They were merely extreme cases akin to South Sea Bubble investor euphoria and madness. The 2008 event also was easier if you focused on the U.S. housing euphoria, which was a 3-sigma, 100-year event or, simply, unique. We calculated that a return trip to the old price trend and a typical overrun in those extreme house prices would remove $10 trillion of perceived wealth from U.S. consumers and guarantee the worst recession for decades.All these events echoed historical precedents. And from these precedents we drew confidence.
But this event is unlike all those. It is totally new and there can be no near certainties, merely strong possibilities. This is why Ben Inker, our Head of Asset Allocation, is nervous and this is why you are nervous, or should be.
While the uncertainties are indeed large, one can triangulate a sufficiently material dose of “certainty” about what is coming, and as Grantham explains further, it is not pretty, especially with the US economy already on the back foot heading into the crisis:
We had U.S. and global problems looming before the virus: an increasingly disturbed climate causing global floods, droughts, and farming problems; slowing population growth, in the developed world, soon to be negative; and steadily slowing productivity gains, especially in the developed world, and therefore a slowing GDP trend. In the U.S., our 3%+ a year trend is down to, at best, 1.5% in my opinion. It is closer to a 1% maximum in Europe. We had, as mentioned, top 10% historical P/Es in the U.S. and much the highest debt level ever in the U.S. for both corporations and peacetime government. So, after a 10-year economic recovery, this would have been a perfectly normal time historically for a setback.
And then the virus hit.
Simultaneously, it is causing supply and demand shocks unlike anything before. Ever. It is generating a much faster economic contraction than that of the Great Depression. And unlike 1989 Japan, 2000 Tech (U.S.), and 2008 (U.S. and Europe), it is truly global. The drop in GDP and rise in unemployment in four weeks have equaled what took one to four years to reach in the Great Depression and were never reached in the other events. Rogoff & Reinhart, Harvard Professors who wrote the definitive analysis of the 2008 bust, agree that this event is indeed completely different and suggest it will take at least 5 years to regain 2019 levels of activity. But this is a guess. We really don’t know how long it will take. Nearly certain is that a V-shaped recovery looks like a lost hope. The best possible outcome would be that there will be, almost miraculously, billions of doses of effective vaccine by year-end. But most viruses have never had a useful vaccine and most useful vaccines have taken well over five years to develop and when developed have been only partially successful. Yes, this time there will be an enormous effort with unprecedented spending. But still, a leading vaccine expert says quick success would be like “drawing successfully to several inside straights in a row.” And even if all works out well with a vaccine there will remain deep economic wounds.
Meanwhile, as the world waits for a vaccine, and buys stocks confident one is imminent, the “bankruptcies have already started (Hertz on May 22nd) and by year-end thousands of them will arrive into a peak of already existing corporate debt. It will need spectacular management, which it may get. But it may not. Throwing money – paper and electronic impulses – at the problem can help psychology and, particularly, the stock market, where extra stimulus money can end up but does not necessarily put people back to work; there will be up to 20% unemployment for at least a moment.”
In response to this historic economic collapse, central banks’ unprecedented stimulus efforts have “temporarily overwhelmed” underlying economic realities but “it’s hard to believe that will continue.”
And when it stops, watch out below: Grantham told the FT in an interview that after seeing markets price in “total recovery” over recent weeks, “my confidence that this will end badly is increasing.”
Speaking as protests against police brutality and racism filled the streets of US cities, Grantham said previous outbreaks of social instability had had few lasting effects on the US economy, but “there are more things going wrong than normal“.
However, the value investing legend’s most dire prediction was that “if you look back in two to three years and this market turns around and drops 50%, the history books will say ‘That looked like one of the great warnings of all time. It was pretty obvious it was destined to end badly,” Grantham said, adding: “If it does end badly the history books are going to be very unkind to the bulls.” For the sake of an entire generation of Robinhooders who will lose everything if there is a 50% crash, one hopes Grantham is wrong.
Finally, Grantham also chimed in on the “most important question in finance right now”, revealing that he was proud of not having “made a fuss about inflation” in 20 years of writing his widely followed letters, but said that record amounts of monetary easing from central banks had now created the possibility of inflationary pressures.
“With a generous stimulus program in many countries you can just about daydream about inflation for the first time in 30 years.”
To this, all we can add is that in the very near future that daydream will become a nightmare.
- The Staggering "Powell Bubble" In Just One Amazing Chart
The Staggering “Powell Bubble” In Just One Amazing Chart
Tyler Durden
Thu, 06/04/2020 – 21:44With three in four finance professionals convinced that Fed is behind the current rally thanks to an unprecedented firehose of liquidity which is anywhere between $8 and $12 trillion based on asset purchases, backstops, and guarantees, there is no denying that what we are experiencing now is a continuation of the bubble spawned by Bernanke in 2008, nursed by Yellen and now desperately defended by the same Powell who back on October 23, 2012 said “I think we are actually at a point of encouraging risk-taking… investors really do understand now that we will be there to prevent serious losses.”
So how does one quantify or visualize just how big the “Powell Bubble” is? While there are many ways to represent the bubble spawned by the Fed across all asset classes which have become the receptacle of the Fed’s unlimited liquidity torrent, but a fascinating one was proposed today by Bloomberg’s Eddie van der Walt who writes that “raw material and equity prices have become severely disconnected” adding that “a correction will probably entail both lower stocks and higher commodity prices.”
As the Bloomberg commodity analyst notes, the Nasdaq is trading at a 152x multiple of the Bloomberg Commodity Index, surpassing the highs seen during the Dot Com bubble by almost a factor of two!
In other words, the bulk of newly created liquidity has flooded into stocks even as commodities – which tend to be a far better representation of the overall economic state – languish. The average ratio since the end of 2001 has been nearer 37. That divergence stems from the Nasdaq approaching record highs set earlier this year while commodities languish near pandemic-crisis lows.
As van der Walt concludes, “And while the tech-heavy shares in the Nasdaq aren’t big consumers of industrial metals and oil, this matters because it shows just how disconnected stock prices have become from the real economy. Something has got to give.”
He’s absolutely right, but that “something” won’t give without an existential fight from the Fed’s Powell: while we excerpted from his comments above, below is all one needs to know courtesy of the Oct 2012 FOMC Minutes, in which Powell explained precisely what is going on:
The market in most cases will cheer us for doing more. It will never be enough for the market. Our models will always tell us that we are helping the economy, and I will probably always feel that those benefits are overestimated. And we will be able to tell ourselves that market function is not impaired and that inflation expectations are under control. What is to stop us, other than much faster economic growth, which it is probably not in our power to produce?
I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.
Incidentally, for those who want to fight the Fed, well there’s your pair trade: short the Nasdaq and go long the Bloomberg commodity index.
- NYC Pushes $1.1 Billion Cut To NYPD Budget As Ninth Night Of Demonstrations Begins
NYC Pushes $1.1 Billion Cut To NYPD Budget As Ninth Night Of Demonstrations Begins
Tyler Durden
Thu, 06/04/2020 – 21:34Update (1730ET): As the ninth night of demonstrations began, Americans gathered in Minneapolis, New York and elsewhere for what were mostly peaceful protests, as the decision to charge all the officers involved in restraining Floyd has assuaged public anger somewhat.
Bloomberg reports that it has been largely peaceful in most cities so far. Gov Cuomo urged protesters in NYC to get tested for COVID, while the mayor urged them to protest during the day.
Washington and Los Angeles lifted their curfews, while a bipartisan pair of lawmakers asked for a “briefing” on violence at the protests.
NYC’s Police Commissioner Dermot Shea replied that the city “absolutely” doesn’t need the military to come help suppress the violence.
Asked by CNN if he thought statements by the president criticized as divisive – that the authorities needed to “dominate” protesters– were helpful, Shea said, “No, I don’t.”
Meanwhile, the push to cut police department budgets his beginning with NYC Comptroller calling for a $1.1 billion reduction in spending on the NYPD over the next four years. Given the drop in local tax revenue, we imagine that many departments – though mostly urban departments that probably could use the manpower, while suburbs continue their longtime trend of overpolicing.
President Trump weighed in with a tweet.
The Radical Left Democrats new theme is “Defund the Police”. Remember that when you don’t want Crime, especially against you and your family. This is where Sleepy Joe is being dragged by the socialists. I am the complete opposite, more money for Law Enforcement! #LAWANDORDER
— Donald J. Trump (@realDonaldTrump) June 4, 2020
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* * *
Update (1315ET): Not only is Washington DC Mayor Muriel Bowser scrapping a curfew for Thursday night (since there were no arrests among the peaceful protesters who gathered in the city, she’s also calling for all national guard troops from other states to be withdrawn from the capital district immediately.
In addition to the beefed up national guard presence, Washington has seen a number of federal agents deputized to serve on the front lines.
Yesterday, the mayor vowed to “push back” against an alleged attempt by the White House to subvert control of the Metropolitan Police Department, which reports to the Mayor of DC.
* * *
Update (0940ET): The AP just published new information about the officer who was attacked in Brooklyn. The officer was on an anti-looting patrol when he was attacked. The attacker was shot, as were two officers who were with the victim. The suspect is n critical condition after being “shot multiple times”.
All three wounded officers are, fortunately, expected to survive, said Police Commissioner Dermot Shea.
“What we know at this point and time is that it appears to be a completely, cowardly, despicable, unprovoked attack on a defenseless police officer and thank God we aren’t planning a funeral right now,” Shea said.
It was one of several attacks on on officers in recent days, including a driver who plowed into a police sargeant trying to stop looting in the Bronx, and another cop who was hit in the head with a brick.
* * *
A movement inspired by another in a long line of heinous police killings in the US, and instead of walking away with a slap on the wrist, all of the officers involved with the ill-fated arrest have now all been arrested themselves, and charged with murder, or abetting murder. But still the protests won’t stop, and instead, thousands of angry Europeans have opted to join their American ‘comrades’, and in so doing vent their frustrations following months of restrictive lockdowns.
A bunch of anarchists in Greece hurled molotov cocktails at the US embassy in Athens.
Riots and protests over police killings started because the cops who killed Eric Garner and Michael Brown walked away with only administrative punishments, and both got to keep their badges. This time around, the movement has a different goal: abolish “white supremacy” around the world.
Remember when an army of media pundits criticized the Occupy Wall Street movement for its ‘vague’ agenda? Well, it appears the those who continue to return to the streets night after night have only one real agenda: venting their rage on the cops, feds and national guardsmen, by pelting them with bricks and even shooting them. By the New York Times’ count, Wednesday was the ninth night of demonstrations, and while most of the major American newspapers heralded the night as ‘largely peaceful’, they mostly neglected to mention that, amid all the enthusiasm over the new charges brought by Keith Ellison, somebody walked up to a cop in Brooklyn last night without provocation and stabbed him in the neck. Two cops were also shot during a struggle with the suspect, the New York Post reported. It’s unclear whether the officer stabbed in the neck survived. The two who were shot reportedly had non-life-threatening injuries.
The NYP said the motive for the assault remains unclear, and an investigation is ongoing.
Elsewhere in Brooklyn, cops rejected calls from protesters at the Barclays center to “take a knee”, as hundreds chanted from behind a fence. As the NYT reported, “they were not having it.”
AP figures put the number of arrests over the week-long spree of unrest to be over 10,000 nationwide as of Thursday morning.
The phenomenon of deputizing all available federal officers to protect the area around the White House continued Wednesday night, as reporters claimed to encounter BoP corrections officers, DEA agents and others (we wonder if the fish and wildlife agents were out there too).
Outside Brooklyn, where the alliance between blacks and the white middle class gentrifiers who pushed them out of their homes has proven notably toxic, violence last night was minimal, as protests remained largely peaceful. Several horses were apparently allowed to join the rally in the Mission District last night.
A large group of peaceful protesters sat near the intersection of 86th Street and East End Avenue, the closest they are legally allowed to assemble near Gracie Mansion, the mayor’s official residence. For a time, the NYT said, the only sound to be heard was the birds and helicopters flying overhead.
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Cops in midtown Manhattan enforced the city’s curfew, and loaded those captured during a “mass arrest” onto police vans for transportation.
The protestors who were detained are now being loaded up onto a prisoner bus by the NYPD on E 50th and 3rd Ave. pic.twitter.com/PBwtK9ztIx
— Kevin Rincon (@KevRincon) June 4, 2020
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This cyclist went down particularly hard.
Marchers in Washington DC, roused by the earlier curfew but subdued by the rainfall, were greeted by a wider perimeter around the White House, as well as more officers, though demonstrations remained largely peaceful. Somebody passed out sandwiches. Another person gave out cookies.
The situation was very different in Portland, Ore., widely known across the US as the city with the most antifas per 100,000 residents, as all the white hipsters who populate the city’s coffee shops, accompanied, presumably, by groups of “outside agitators”, once again turned violent after dark, after a daytime rally that drew more than 10,000 people.
“We have to collectively come together to stop those who are holding our city with violence…Every night, we are using all our resources and it is still not enough,” said Portland Police Chief Jami Resch.
Among the many controversies to erupt this week, the NYT is facing backlash for publishing an op-ed by Sen. Tom Cotton calling for the US to “send in the army” to restore order to the streets. One of the NYT’s most visible reporters claimed the op-ed “puts black reporters in danger”.
Running this put Black @nytimes staffers in danger. In solidarity with my colleagues who agree. pic.twitter.com/UfkZkE1xvj
— Jenna Wortham (@jennydeluxe) June 3, 2020
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We’d love to hear an explanation of that logic.
- Brazil Now Home To World's Third-Largest Death Toll After Another Record Daily Jump: Virus Updates
Brazil Now Home To World’s Third-Largest Death Toll After Another Record Daily Jump: Virus Updates
Tyler Durden
Thu, 06/04/2020 – 21:28Summary:
- Brazil passes Italy to claim world’s third-worst death toll
- Architect of Sweden’s no-lockdown strategy says he has no regrets, and doesn’t plan to change approach
- NY to allow drive-in, drive thru graduations
- Italy sees more good numbers
- Pakistan reports record jump
- NYC won’t allow outdoor dining until next month
- Florida reports most new cases since April for 2nd straight day
- Global cases top 6.5 mil
- Deaths top 485k
- Hong Kong sees another alarming cluster
- China allows foreign airlines to apply to return to service
- Russia, Mexico, Brazil all see alarming jump in cases, deaths
- Experts say Russia likely underestimating deaths in St. Petersburg by considerable margin
- Backlash to the hydroxychloroquine backlash intensifies
* * *
Update (2115ET): As the bodies pile up and the prospect of a military takeover that would make Tom Cotton’s call to send in the army look like pacifism looms large over Brazilian civil society, the country’s public health officials have just confirmed that Brazil’s death toll has surpassed Italy’s.
Brazil’s indigenous population has been particularly hard hit, as the outbreak strains health care resources in remote areas in Amazon region.
To get a sense of how quickly the situation is deteriorating, deaths caused by the virus have climbed five-fold in the past month, according to Yahoo News.
Many epidemiologists had hoped remote locations might protect the tribes, but the virus, which first took hold in Brazil’s cosmopolitan state capitals of Sao Paulo and Rio de Janeiro, is increasingly devastating remote areas of the country. Brazil’s coronavirus death toll climbed by 1,437 fatalities on Thursday, a new daily record, bringing Brazil’s total to 34,021. Confirmed cases surged another 30,925 to 614,941, as Brazil remains the country with the second-most confirmed cases behind the US.
* * *
Update (1422ET): Las Vegas has reopened, with stringent controls to prevent new infections.
Las Vegas has been open for 45 minutes. pic.twitter.com/v3wcjYBcKe
— Ed Komenda (@ejkomenda) June 4, 2020
In other news, more promising data have been reported out of Italy today.
JUST IN: Italy reports 177 new cases of coronavirus and 88 new deaths.
Total of 234,013 cases and 33,689 deaths.
— Norbert Elekes (@NorbertElekes) June 4, 2020
Pakistan also reported a new record jump in cases:
NEW: Pakistan reports 4,688 new cases of coronavirus, 85,264 cases in total.
Pakistan’s largest daily increase by far.
— Norbert Elekes (@NorbertElekes) June 4, 2020
Yesterday, the architect of Sweden’s lockdown strategy, state epidemiologist Anders Tegnell, inadvertently set off a rush by proponents of the lockdown approach to declare victory in the public debate by claiming Tegnell had admitted his approach was flawed and that he would be backing away from the strategy. But in a press briefing on Thursday, the state scientist stood by the country’s approach, and admitted that while he would have made certain adjustments if he knew at the beginning what he now knows, he has no plans to change tack, Politico reports.
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Update (1240ET): After pulling back curfews and taking other steps to accommodate and encouraging both peaceful demonstrations (that widely violated the city’s social distancing rules) and violence and looting, Mayor de Blasio said Thursday that he likely wouldn’t allow restaurants to reopen for outdoor dining until next month, virtually guaranteeing that even more small businesses will change.
The mayor is preparing for the June 8 start of “Phase One” reopening and said he anticipates reaching the second phase in July.
For the restaurants that survive, at least the city’s Transportation and Planning Departments will help create “curbside restaurants” to allow eateries to convert adjacent parking spots into more seating for the first time. No permits will be needed to certify the street-side restaurants, de Blasio said.
“The restaurant industry is the wellspring for hundreds of thousands of New Yorkers,” de Blasio said. More then 184,000 of the city’s 274,000 food and beverage industry workers have lost their jobs due to the forced shutdown of the city. While de Blasio’s plan sounds nice on paper, in our experience, most NYC restaurants don’t have much – if any – space for patron parking.
By comparison, both neighboring Connecticut and New Jersey have already OK’d restaurants to reopen for limited outdoor dining.
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Update (1120ET): As deaths and new cases reported in Florida over the last few days have increased, we warned that the market would eventually wake up to the uptick in new deaths and cases in certain states. The state reported its largest daily gain in six weeks yesterday as the number of cases neared 60k. Now, on Thursday, public health officials in the state have reported another multiweek high. Florida reported 1,317 new COVID-19 cases over the last day, the highest level since April 17.
New numbers released by the Florida Department of Health officials Thursday show the state has a total of 60,183 cases, and a death toll that on Thursday climbed to 2,607. Hospitalizations across the state increased to 10,652.
US stocks sold off a little on the news, suggesting investors are starting to worry again about a recurrence of the virus.
More than half of the state’s cases are concentrated in Miami-Dade, Broward, Palm Beach and Monroe counties in the southern part of the state.
Both Florida…
…and Georgia…
Source: New York Times
…have seen cases reported Thursday at 2x the level from the day before.
Meanwhile, in New York State, Gov Cuomo revealed that the state had expanded its testing capacity closer to its target, with the state now clocking 50k tests per day.
Watch his press briefing below:
Giving my daily press briefing now. Watch Live: https://t.co/54mzDp8WjG
— Andrew Cuomo (@NYGovCuomo) June 4, 2020
The governor who helped perpetuate racist police tactics in his state by killing a push to legalize recreational marijuana – removing much of the pretext cops often use to unnecessarily stop young black and brown men also urged protesters to get tested for COVID-19, while adding that he stands with the protesters for “meaningful” reform.
This is a moment for national change. For reform.
Change comes when it’s demanded by the people.
I stand with the peaceful protesters for effective, meaningful reform.
— Andrew Cuomo (@NYGovCuomo) June 4, 2020
Is that going to include reforming your state’s drug laws, Governor?
Finally, after NJ and Conn. moved to allow schools to hold graduation ceremonies starting in July, Cuomo said.
Is Andrew Cuomo out of his mind-if you R peacefully protesting, wear a mask – but for graduation – drive in & drive through only… and we will keep evaluating. Then proceeds to talk about his own child’s graduation and is going to give her his watch to prove how much he cares. pic.twitter.com/fdolP0G2TP
— PatriotsDontSleep (@PatriotsDontSlp) June 4, 2020
Some couldn’t help but let out a justified groan.
* * *
While investors have been too distracted by the violence and unrest unfolding in the streets of the US (and now several European cities, with more unrest expected in Hong Kong) to care much about the coronavirus outbreak. We suspect this shift in focus has helped fuel the market’s astonishing rally over the last two weeks.
There’s no question that the US has been transfixed by the tumult sparked by the police murder of George Floyd, even as the violence and looting has mostly hurt black communities and black-owned small businesses, while the legal system has dutifully proceeded with the prosecution of all four officers involved in the killing.
Investors ignore these developments at their own peril: because over the last few days, a surge in new cases and deaths reported in Russia, Brazil and Mexico has breathed new life into the international outbreak, even as many Americans speculate that perhaps President Trump had a point when he said the virus might run its course by the summer, lockdown or no lockdown.
More experts cast doubt on Russia’s figures as its case total hit 441,108, as St Petersburg recorded 1,400 more deaths than average in May, according to official statistics cited by the Times of London, which which suggest that the government may have deliberately suppressed the true number of deaths. Officials say 177 people died last month of Covid-19 in St Petersburg, Russia’s second-biggest city. The majority of the “excess” deaths were likely to have been a result of pneumonia caused by coronavirus, even though many were labeled simply as pneumonia.
Globally, coronavirus cases topped 6.5 million as of Thursday morning, while deaths neared 400k, at 386,464.
According to figures released Thursday morning, Russia’s total number of infections passed 440,000 cases, while deaths continue to mount. The coronavirus death tolls in Brazil and Mexico have soared to new daily records, with 1,349 and 1,092 confirmed deaths reported over the past day, even as the countries begin to ease lockdown restrictions. Brazil now has more than 32,000 deaths, while Mexico ha more than 11,000.
NBC News reports that the jump in deaths in Brazil has been driven by Brazil’s indigenous populations, through which the virus is spreading quickly, with deaths caused by the disease increasing more than five-fold in the past month.
At least two US senators have accused China of hiding potentially critical data from the WHO, data that could have changed the course of the outbreak abroad, even as a Chinese officias deny reports about the WHO’s frustrations with prying early data from Chinese experts.
As backlash to the hydroxychloroquine backlash intensifies, a new study published by the NEJM claimed the drug “proved ineffective” for that purpose in a study that tested people who were “in close contact with the disease”. We’re not sure what that means. However, the Lancet’s decision to retract a warning about hydroxychloroquine elicited a triumphant editorial from WSJ, which outlines the history of how bias appears to have tinged the world’s interpretation of these studies.
France’s Bastille Day military parade is set to be replaced by a ceremony on the Place de la Concorde square in central Paris, President Emmanuel Macron’s office announced on Thursday, angering millions of French citizens, who enthusiastically celebrate the dawn of the first French Republic every year.
China appears to have turned the other cheek after the US officially barred the return of Chinese airlines running flights in the US, China’s aviation authority said that 95 foreign airlines that have suspended services in the country can now apply to resume flights. We’re curious to see which airlines will get the green light.
While the UK continues to resist pressure to start reopening its borders, Spanish Tourism Minister Reyes Maroto said that all restrictions to border crossings with France and Portugal will be lifted beginning on June 22.
Hong Kong confirmed five new cases on Thursday, all of which it claimed were imported. But that number belies the alarm that prompted the evacuation of some tenants from a Sha Tin building after six people living in the building had tested positive “preliminarily”. We’re waiting to hear more on that.
Pakistan, meanwhile, registered its highest single-day rise in coronavirus cases for the third consecutive day on Wednesday, with 4,801 new cases taking the country’s total tally to 85,264.
- Looters, Lockdowners, & The Law
Looters, Lockdowners, & The Law
Tyler Durden
Thu, 06/04/2020 – 21:25Authored by Jeffrey Tucker via The American Institute for Economic Research,
“Coronavirus hasn’t been a thing since Friday,” said a friend.
“The new story is racism.”
Following American media culture can make one’s head spin.
For three months, all we heard was the danger to life and civilization presented by a novel virus. Millions will die! Few will be spared! There will be unprecedented suffering unless we completely shatter the normal functioning of life. Lock down, shelter in place, and stand six feet apart – very strange exhortations never before heard in the modern history of annual viruses or any public policy in many lifetimes.
All of it enforced by the police power. The same police power that eventually landed on the neck of George Floyd.
They screamed that we had to close schools, shopping centers, sports, and only allow “essential” business to function even if tens of millions lose their jobs, because lives – lives that the police power has utterly disregarded during the protests – are just that important. Lockdown required that the law change on a dime, in violation of every legal precedent, every slogan in American civic mythology, and contradicting the whole of what made America great.
In three days in mid-March 2020, everything we previously believed had to end because we had to implement a new experiment in social control as cobbled together by “public health officials” some 14 years ago. They sat around for a decade and a half, bored and waiting to use the new way to combat viruses. Any old virus would do so long as it was a slow news day. COVID-19 was as good an excuse as any. Out was every foundational belief in liberty, property, and free association, in the blink of an eye.
That was 75 days ago. People were surprisingly compliant, but what could they do? They were scared, thanks to media frenzy, and they weren’t allowed out of their houses to protest in any case. When they did defy the orders to protest in front of capitol buildings, instead of staying home and watching CNN, they were derided by CNN as disease spreaders and enemies of public health.
I’m looking at the headlines today and all the news on the coronavirus is below the fold or in its own section. It’s all about the protests, riots, and looters. Racism.
Trump is screaming for a crackdown while the media demands justice for police brutality. As for social distancing, this was absolutely yesterday’s news. Now a new ethos has taken hold: gather in the largest possible groups to demand social justice. And loot.
Absolute hymns to the glory of protestors and even rioters are the rule of the day, as if the public health threat of COVID-19 is so last week. “Each night, tens of thousands exercise their right to assemble in protest and millions of Americans follow along at home,” writes the New York Times rhapsodically and correctly, failing to point out that this same venue said the opposite about lockdown protestors a few weeks ago.
Weeks! Is it an indication of the extremely short attention span of the American public or a demonstration of the sheer cynicism of media culture?
Meanwhile, on the corona front – yes that still exists even if you have to dig for information on it – states are still (still!) gradually ending the lockdown with cockamamie rules: you can sit (or stand) in bars but you can’t stand (or sit). Customers can buy things but not try on clothing. People can buy perfume but not spray on samples. In daycare facilities, the kids can play together in groups of more than 10 and they must stay apart, even though there is near zero threat to the kids from the virus.
These states that are imposing these crazy rules are four days behind the times. You look at the protests and you see free people doing what they believe they should do in the face of injustice. Many wanted to do this months ago but they were prohibited by law. The law eventually had to acquiesce to people’s sense of their human rights.
Why states do not instantly and immediately end all restrictions they wrongly imposed indicates the sheer stupidity of public policy, and the myth that it can ever be scientific. Instead we get curfews, even in the city that never sleeps.
The same governments that were only recently controlling your movements to protect you from a virus are now blasting people with tear gas.
As for lockdown “science,” the Centers for Disease Control keeps lowering its infection fatality rate. It’s becoming normalized like any virus: bad but not the end of the world. Best treated by medical professionals, not politicians – as we long knew until very recently.
The lockdown carnage from missed cancer diagnostics and forgone elective surgeries are only now presenting themselves. Then there are the 100 thousand wrecked businesses, the 40 million unemployment, the blown budgets of every government, the scary monetary policies. SWAT teams were entering bars to arrest people — in the name of health. Churches were shuttered on Easter. No restaurants, no shopping, no sports, no theaters, no gyms, no outdoor activities. We were all treated like animals, and told to cage ourselves in our homes. And so on it went for 75 days.
It’s hard to imagine a better recipe for social unrest.
Then the protests began. They were about the death of George Floyd, an unemployed man but they were also what he represented: the overwhelming presence of state violence in all of our lives.
Then the looting started. That too should not be a surprise. Lockdowners and looters use the same method (violence) to destroy property and commerce. One class of criminals learns from another class of criminals. It’s copycat criminology.
Now, as if to take that next step on the Road to Serfdom, all major cities have curfews.
Based on the speed and duplicity of the news cycle, we can predict with confidence that within six months, you won’t find a single person in public life willing to defend the lockdown. And yet it was this event that laid the foundation for the rest of the tragic unfolding of events that is wrecking this country.
There should be justice. There should be compensation. Political heads should metaphorically roll, along with the “public health officials” who advised them. And then we need a completely new direction: one that rejects the unscientific use of state force to battle a disease, recognizes the wisdom of the Bill of Rights and freedom, and treats people with the dignity that is inherent to every human life.
If we understand this desperate need – if we see what went wrong these months and the right way forward – we can rebuild. If we do not, the destruction and rights violations will continue.
- Visualizing The Power And Frequency Of Earthquakes
Visualizing The Power And Frequency Of Earthquakes
Tyler Durden
Thu, 06/04/2020 – 21:05The surface of our planet is in a constant state of creation and destruction as the plates of the Earth collide. It is this movement of the Earth’s crust that causes earthquakes, sending tremors throughout the world.
Today’s graphic by Visual Capitalist is inspired by a classic USGS diagram that tracks the scale and frequency of earthquakes.
Shifting Foundations
Earthquakes occur because the crust of the Earth is made up of several plates. The boundaries of these plates create faults that can run into one another.
Earthquakes describe both the mechanism that causes a sudden stress release along plate boundaries and also the ensuing ground shaking.
They occur when stress builds up along a tectonic fault. This stress causes the two surfaces of the fault, which had previously been stuck together due to friction, to suddenly move, or slide, releasing energy in the form of seismic waves.
Measuring an Earthquake’s Impact
There are three factors to assess the impact of Earthquakes – magnitude, energy, and intensity.
Magnitude is a number most commonly associated with the Richter scale, describing the size of an Earthquake on a scale from 0 to 10 – the latter of which is the maximum motion recorded by a seismograph. Each increase by one on the scale represents a tenfold increase in the amplitude. There are over a million tremors around the planet each year, but it’s not until an earthquake reaches a magnitude of 4 that humans can typically feel it.
Another way to measure the size of an earthquake is by how much energy it releases. The amount of energy radiated by an earthquake is a measure of the potential for damage to man-made structures.
An earthquake releases energy at various frequencies, and in order to calculate accurately, you have to include all frequencies of shaking for the entire event. Some research suggests technology could harness this energy for power generation.
Intensity describes the severity of an earthquake with a qualitative evaluation of its effects on the Earth’s surface and on the built environment. An earthquake may have a high magnitude but if a city or landscape experiences little damage, it can be said that the intensity is low. The Modified Mercalli Intensity Scale measures this intensity.
The World’s Largest Earthquakes by Magnitude
Prior to the development and use of seismographs, around 1900, scientists could only estimate magnitudes, based on historical reports of the extent and severity of damage.
Earthquakes are a fact of life on Earth and mark distinct moments in history. One would think given our knowledge of earthquakes, that humans would avoid these locations – however, the very faults of the Earth also create its greatest advantages.
Living with Your Faults
It’s extremely common to find human settlements along the fault lines where earthquakes occur most frequently. Some could say that this is because these decisions were made before a complete understanding of science enabled us to know the potential risks involved.
However, a recent scientific study reveals that there may be more to the pattern than previously thought. Tectonically active plates may have produced greater biodiversity, more food, and water for our human predecessors.
Certain landscape features formed by tectonic processes such as cliffs, river gorges, and sedimentary valleys create environments that support access to drinking water, shelter, and an abundant food supply.
This inherent problem reveals that humans are more connected to their environments than previously thought. It comes down to a question of how well humans can adapt their lifestyle and built environments to a dynamic planet.
Now let’s worry about the asteroids…
- Blain: The Tragedy Of HSBC
Blain: The Tragedy Of HSBC
Tyler Durden
Thu, 06/04/2020 – 20:45Authored by Bill Blain via MorningPorridge.com,
“A waiter, again unbidden, brought the chessboard and the current issue of The Times, with the page turned down at the chess problem.”
While America burns, the dollar tumbles, stock markets soar, Germany announces a massive bailout programme which dwarfs the pennies Italy desperately needs, the ECB gets ready for another money dump, and UK politicians grumble about queues… life goes on…
There is something deeply tragic about yesterday’s announcements from HSBC and Standard Chartered supporting the imposition of China’s Security Law in Hong Kong. We can all act shocked and damn them for supping with the devil, but neither bank had any real choice but to make the unpalatable decision to support the unsupportable. Both know their futures depend too much on China’s patronage to survive without kow-towing.
Yesterday, they each wrote the first lines of the final few paragraphs of their own obituaries.
10-years ago I wrote in the Porridge why HSBC was my top bank stock. I said something along the lines of while other banks will remain vulnerable, HSBC had the franchise, strength and depth to survive and thrive. Its dividend policy was strong and would provide dull, boring, predictable returns for the long-term. The Long-term is so over.
Read the comments following any article about the two Hong Kong banks this morning and are they full of earnest virtue signalling from angry clients who say they will close their accounts. I will probably switch mine.. but only because now there is zero chance the service will get any better.
Timing is everything. I laughed out loud at a post on Linked-In from HSBC claiming leadership in ESG matters and Green funding. Really… this is not the time for HSBC to be bragging about its ethical credentials.
The sad reality is HSBC has become a patron of the Chestnut Tree Café – the bar where the purged characters from 1984 spend their last few months in isolation, irrelevancy and waiting for the axe to fall. HSBC and Standard Chartered’ future is window dressing the new Hong Kong. HSBC has become as yesterday as Deutsche Bank.
It could have been so different.
In the early 2000s HSBC’s tag line was The World’s Local Bank. The Hexagon Logo dominated airports and appeared everywhere. Its ambition was to generate one third of its profits from each of the main global markets; Asia, Europe and North America. By market capitalisation it was the largest bank on the planet. When it bought US sub-prime credit lender Household in 2002, it was a clear signal the bank was on the move with expansion plans everywhere.
I joined HSBC in 2002. It was a bit of a shock after 10 years at an aggressive but highly innovative US investment bank.
HSBC people were lovely. They were friendly, they were nice. Yet, they were fiercely tribal and regional in their mindset. There was a cadre of International Officers who’d been drilled in the HSBC tau of things since they joined straight from school. The regarded outside hires as mere hired hands. You could not argue with the IOs – they knew best. And then there were the old Hong Kong hands, trading hotshots from Hong Kong who knew even better. They’d been big fish in the small pool that was then Asia. They couldn’t grasp that Wall Street and City traders swam in much larger more aggressive oceans. The firm was naturally hierarchical in the way only a thoroughly English bank could be – even though its DNA was broadly Presbyterian Scots!
Yet, the bank failed to make much a mark on the global markets. It owned multiple diverse and unconnected business, united only by the logo. The way the bank’s independently minded German operation operated had nothing to do with the London hub. The Paris operation delighted in doing things differently. Asia had little interest in what New York or London were doing. It sold global clients a grand vision of access to Asia – but any second rate US firm knew more of the top Asian accounts.
Successive waves of hired guns were hired to enliven its sub-par investment banking activities, but without much enthusiasm from across the firm which remained siloed. The senior management were good, knew the issues and the bank– they were some of the best in the business. But they were trying to run an enormous bloated bureaucracy of dissimilar banking businesses, investment and commercial banking operations, consumer banking around the globe, an Asian franchise, while trying to grow new businesses in areas they perceived the bank understrength. They faced pushback from local fiefdoms, and became jacks of all and masters of nothing.
The crunch came following the global financial crisis in 2007/08. HSBC was the only UK bank that avoided disaster and bailout. (So did Barclays, but by the skin of their teeth and some dubious chicanery which Amanda Stavely will no-doubt shortly reveal in court.) Household went from being an inspired purchase to toxicity overnight – and dragged the whole North American operation down. A succession of banking scandals in Latin America followed – HSBC discovering to their shock that putting the logo on a Mexican bank did not suddenly cleanse it of endemic corruption and drug money laundering.
The result was a bank that was no longer managed from growth and the future, but in order to placate the regulators.
This is the critical lesson of HSBC. The brand was brilliant but hollow. Its’ businesses were individually good, but collectively poor. Rationalising them into a strong single force was a massive ask – and would have required more than the best banking management on the planet. But that management was totally focused on placating the regulators to avoid them purging the bank. At one time the board seriously feared the US SEC might close them down as more South American scandals came to light.
While US banks thrived through the 20-Teens HSBC plodded and became more bloated. Its ambitions a global bank vanished like an early morning mist. It contracted. Asia’s share of profitability – to be blunt, Hong Kong savers – rose through 80%. It became classically squeezed in its home market. The levels of dissatisfaction with its consumer banking division means it’s among the most complained about banks.
I figured out how bad things were a few years ago when I walked into the Premier Branch of HSBC at its Canary Wharf Global HQ a few years ago. No one greeted me. There were last week’s papers sprawled across a table, and dead pot plant in the corner coated in dust. I pressed the desk bell, and a bored looking girl sauntered out to tell me to go downstairs to the public branch because she was too busy to help. I sold all my stock soon after.
Except that it is, it wasn’t the fault of senior management. They tried. But the bureaucracy won. Banks run to please regulators rather than customers seldom thrive. Across the bank the middle management are shuffling papers and waiting for the a long-delayed axe to fall as cuts are finally enacted.
It’s a shame. The Home for Scottish Bank Clerks will join the list of other banks that once were contenders…..
- Note To Rioting Americans: A Guide To Safe & Profitable Looting
Note To Rioting Americans: A Guide To Safe & Profitable Looting
Tyler Durden
Thu, 06/04/2020 – 20:25Continuing our series of Public Service Announcements for America’s rioting class (parts one and two here), tonight we are focusing on your safety.
Here’s Babylon Bee’s guide on being prepared for safe and profitable rioting.
PLEASE READ:
1. LOOK OUT FOR SWEET LOOT. We got purses, we got cell phones, we got cheesecake, shoes, Legos…
2. FOLLOW OTHER RIOTERS INTO STORES. If you just run into a store by yourself you might get shot.
3. HAVE A BUDDY. Those new 4K TVs are freaking heavy man.
4. STAY SAFE — But also throw bricks at police.
* * *
In case you didn’t realize by now, this is humor in the face of our nation’s ugliness.
- 'A Child Mob Is In Charge Of The NYT': Cotton Slams Paper Of Record After Op-Ed Turmoil
‘A Child Mob Is In Charge Of The NYT’: Cotton Slams Paper Of Record After Op-Ed Turmoil
Tyler Durden
Thu, 06/04/2020 – 20:12Update (2003ET): A ‘child mob’ is in charge of the New York Times according to Senator Tom Cotton (R-AK), who appeared on Fox News to discuss the paper’s internal civil war in which young, ‘woke’ staff are revolting over Cotton’s Op-Ed calling for the military to support US police forces during civil unrest, while older NYT staff argue that divergent opinions from their own deserve a platform.
“My Op-Ed doesn‘t meet the New York Times‘ standards,” said Cotton. “It far exceeds their standards, which are normally full of left-wing, sophomoric drivel,” he added.
Cotton then slammed the paper’s editor and publisher for flip-flopping on their decision to stand behind publishing Cotton’s commentary, only to fold like a cheap suit “in the face of the woke mob of woke kids that are in their newsroom.”
“The New York Times has run editorials from Vladimir Putin, Recep Erdogan, by the Taliban – no problem there. But run one editorial from Tom Cotton on a position that’s supported by 58% of the American people – that we have a duty to protect our citizens’ lives and livelihoods, well, ‘we’re gonna have to review our processes and we’re gonna cut the number of Op-Eds that we run,’ said Cotton.
“A child mob truly is in charge at the New York Times tonight.“
.@SenTomCotton reacts to @NYTimes bowing to the “woke mob” and saying that his Op-Ed did not meet their standards: “It far exceeds their standards.” pic.twitter.com/SIy8hHJQYP
— Benny (@bennyjohnson) June 4, 2020
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While the New York Times self-immolates over the Tom Cotton Op-Ed – which they now say “did not meet its standards due to a rushed editorial process,” a new Morning Consult poll shows that 58% of voters – including 48% of Democrats, say they support the use of US troops to supplement city cops amid the protests.
The Tom Cotton New York Times op-ed represents the view shared by 58% of Americans overall, and 48% of *Democrats.* https://t.co/ulr7tWoRfG
— Essential Cernovich (@Cernovich) June 4, 2020
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Clearly the Times is far too woke for their own good.
2. The New York Times confirms that the editor of its editorial page @JBennet did not read the Tom Cotton op-ed before it was published
To not review an op-ed written by a US Senator at a time of heightened tensions (or any other time) is malpracticehttps://t.co/vwVoWCLPFg pic.twitter.com/Z9o8Jl3Zuj
— Yashar Ali 🐘 (@yashar) June 4, 2020
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A long-simmering culture war at the New York Times, once the undisputed national paper of record, has burst into public view on Thursday as a group of young “woke” staffers at the paper denounced the opinion section’s decision to publish a column penned by GOP Sen. Tom Cotton urging President Trump to call in the military to restore order in cities across the US where violence and looting have broken out.
By now, more police officers have been killed since George Floyd’s murder after a Minneapolis police officer kneeled on his neck, cutting off circulation. An autopsy report blamed the officer’s decision to pin Floyd to the ground by his throat as the cause of death. The office is now facing second degree murder and manslaughter charges. But leftists continue to insist that all opposition to the looting in violence is a fascist dog whistle. Whether you think Cotton is an incorrigible fascist, or you agree with his position, the notion that a small but vocal minority of the body politic is pushing for the active suppression of political speech.
In a twitter thread, NYT columnist Bari Weiss – who has frequently attracted the ire of the “woke”/DSA/Bernie Bro faction, which hates “neoliberals” just as much as it hates “conservatives” (aka fascists, since everybody who isn’t a “democratic” socialist is a fascist, in their view) – explains the division between the younger “woke” reporters/staffers, and the older liberals, with executive editor Dean Baquet, the paper’s first black executive editor, caught in the middle.
The civil war inside The New York Times between the (mostly young) wokes the (mostly 40+) liberals is the same one raging inside other publications and companies across the country. The dynamic is always the same. (Thread.)
— Bari Weiss (@bariweiss) June 4, 2020
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The Old Guard lives by a set of principles we can broadly call civil libertarianism. They assumed they shared that worldview with the young people they hired who called themselves liberals and progressives. But it was an incorrect assumption.
— Bari Weiss (@bariweiss) June 4, 2020
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Perhaps the cleanest example of this dynamic was in 2018, when David Remnick, under tremendous public pressure from his staffers, disinvited Steve Bannon from appearing on stage at the New Yorker Ideas Festival. But there are dozens and dozens of examples.
— Bari Weiss (@bariweiss) June 4, 2020
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I’ve been mocked by many people over the past few years for writing about the campus culture wars. They told me it was a sideshow. But this was always why it mattered: The people who graduated from those campuses would rise to power inside key institutions and transform them.
— Bari Weiss (@bariweiss) June 4, 2020
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I’m in no way surprised by what has now exploded into public view. In a way, it’s oddly comforting: I feel less alone and less crazy trying to explain the dynamic to people. What I am shocked by is the speed. I thought it would take a few years, not a few weeks.
— Bari Weiss (@bariweiss) June 4, 2020
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Here’s one way to think about what’s at stake: The New York Times motto is “all the news that’s fit to print.” One group emphasizes the word “all.” The other, the word “fit.”
— Bari Weiss (@bariweiss) June 4, 2020
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W/r/t Tom Cotton’s oped and the choice to run it: I agree with our critics that it’s a dodge to say “we want a totally open marketplace of ideas!” There are limits. Obviously. The question is: does his view fall outside those limits? Maybe the answer is yes.
— Bari Weiss (@bariweiss) June 4, 2020
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If the answer is yes, it means that the view of more than half of Americans are unacceptable. And perhaps they are. https://t.co/2zltJkLXE3
— Bari Weiss (@bariweiss) June 4, 2020
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Of course, many of the NYT reporters and staffers who denounced the op-ed also denounced their colleague’s take. One reporter even said the very decision to print the op-ed put the paper’s black reporters “in danger”.
Finally: Running this puts Black people, including Black @nytimes staff, in danger. pic.twitter.com/12UpKlcsAb
— Taffy Brodesser-Akner (@taffyakner) June 4, 2020
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In a post weighing in on the debate, the Columbia Journalism Review argued that Cotton’s views shouldn’t have been published because it was “built on lies”. However, the sections of the paper that it described as lies weren’t lies at all, but descriptions of the chaos across the country, recounted with perhaps a touch of hyperbole. But leftists frequently test the bounds of what’s believable, like when they accuse crime reporters of “spreading false narratives” when they report on black-on-black crime statistics.
The problem with this idea of the Times as an open forum for views of all stripes — no matter how abhorrent — is that by opening the door to all “operative opinion” (as a member of the Opinion section described it to me a couple of years ago), the Times becomes a platform for those who are hostile to its core values and at direct odds with the New York Times Company mission to “seek the truth and help people understand the world.”
The core problem with Cotton’s column, it seems to me, isn’t that its arguments are painful or dangerous (though they are those things too). It’s that it’s built on lies. “This week, rioters have plunged many American cities into anarchy, recalling the widespread violence of the 1960s,” it begins, before trotting out hyperbolic (and false) phrases like “the riots were a carnival for the thrill-seeking rich as well as other criminal elements,” “orgy of violence,” and “cadres of left-wing radicals like Antifa infiltrating protest marches.”
Recent days have been marked by looting and violence. But the violence has sometimes been prompted by the police themselves, and the incidents getting the most attention have been isolated to a few commercial districts. The areas around the protests (to say nothing of the entirety of “American cities”) have been relatively calm and peaceful. As Davey Alba, a Times reporter who covers misinformation, pointed out on Twitter, the paper’s news side has already reported how promoting claims of unbridled urban unrest is part of the “untruths, conspiracy theories, and other false information…running rampant online” and being pushed by Trump and his allies.
Remember: These are the same people who forced their employers to describe riots as “protests” and looters as “demonstrators” leading to jarring headlines like “Violence and looting rage as George Floyd protests lead to clashes with cops in several states”.
The notion that we can trust them to be arbiters of the truth as simply laughable.
- Japan's Three Decades Of Depressive Stimulus Schemes
Japan’s Three Decades Of Depressive Stimulus Schemes
Tyler Durden
Thu, 06/04/2020 – 20:05Authored by Richard Salsman via The American Institute for Economic Research,
he New York Times reports optimistically that “Japan Approves Fresh $1.1 trillion Stimulus to Combat Pandemic Pain.” As the Times elaborates, Japan’s “record stimulus of 117 trillion yen ($1.09 trillion), which will be funded partly by a second extra budget, followed another 117 trillion yen ($1.09 trillion) package rolled out last month. The new package takes Japan’s total spending to combat the virus fallout to 234 trillion yen ($2.18 trillion), or about 40% of gross domestic product.” “The packages (this year) took the size of the budget to a record 160 trillion yen, with new bond issuance making up 56.3% of annual budget revenue and raising the spectre of more bond issues later to offset falling tax income.”
It’s a “record stimulus,” the Times gushes. Very exciting stuff! Surely it will work!?
But why would any of it help “combat” a “virus fallout” or “stimulate” Japan’s economy? By “economy” do we not, as economists, refer to output, the production of goods and services, to real GDP at the least? If so, how can deficit spending create wealth? There is no evidence for that.
The “fresh” part of the Times’ headline is best translated as “recent” because for the past three decades, amid various crises, Japan has adopted literally dozens of alleged “stimulus” schemes – including not just massive deficit spending but rate-cutting, a zero-interest rate policy (ZIRP), “QE” (central bank monetization of public debts), and even direct purchases of private debt and equity securities. None of these programs has ever been proved to improve Japan’s economic-financial performance. Indeed, its performance has eroded amid the cascade of higher spending.
Japan’s economic-financial performance peaked in 1989-1991 and periodic revivals aside, it has stagnated since, amid degeneration in public finances. The causes of the peak and subsequent “lost decades” are worth recalling. In the late 1980s the Bank of Japan (BoJ), on the advice of leading economists, interpreted the decade as artificial, a mere “bubble,” and set out to “pop” it with punitive interest-rate hikes. The BoJ inverted the yield curve, which is a recession signal in part because it makes credit intermediation (“borrowing short, lending long”) unprofitable.
After the BoJ-authored yield curve inversion, Japan’s real GDP decelerated from growth of 9.4% in 1988 to only 4% in 1989; by 1993 GDP was contracting. Industrial production also decelerated, from 7.4% in 1988 to only 3.5% in 1989 before contracting by 13% between 1991 and 1993. Today Japan’s industrial production index remains 12% below its 1991 peak. The NIKKEI equity index also crashed after the BoJ’s policy assault, by 60% from the end of 1989 to mid-1992. The index low in 2009 was 80% below the 1989 peak; today the index remains 46% below its 1989 peak.
One could say the BoJ certainly “succeeded” in its mission to combat the supposed artificiality of Japan’s economic-financial performance in the 1980s; since then, Japan’s policymakers have dutifully followed the advice of Keynesians like Paul Krugman, implementing dozens of “stimulus schemes;” in effect, they’ve tried to artificially revive Japan’s economy, not by deregulating it, not by cutting tax rates or restraining growth in government but by massive public deficit spending.
Figure One illustrates the dramatic shift in Japan’s public finances after 1990. In the fifteen years prior to 1990, growth in public spending and tax revenues closely tracked; new debt issuance was limited and even declined between 1982 and 1990. Since then, however, spending growth has far outpaced growth in tax revenues, due mainly to tax rate hikes and a stagnant economy. Deficit spending and new debt issuance have been preferred – the genuine Keynesian prescription.
Decades of chronic deficit spending have boosted Japan’s public leverage (debt-to-GDP ratio). Figure Two shows debt is now 235% of GDP, up from 175% in 2010, 125% in 2000, 64% in 1990, and 50% in 1980. Having boosted its policy rate in the late 1980s to fight a “fake” prosperity, the BoJ has since cut the rate dramatically. For a quarter century the rate has been below 1%, not, it seems, to “stimulate” the economy (or lending) but to enable the Treasury to borrow more affordably. The BOJ has been politically dependent, serving mainly Japan’s deficit spenders.
Surely one might expect that eventually this stupendous, multi-decade deficit-spending would “stimulate” Japan’s economy or equities. But mostly Keynesians (and some monetarists) would expect it. Adherents of Saysian economics, in contrast, would not expect it; indeed, they’d predict that vast increases in public spending and borrowing would more probably impede prosperity.
Table One contrasts Japan’s performance over the past three “lost decades” (1990-2020) and the prior three decades of robust growth (1960-1990). Public debt has grown 5.8% p.a. in the three decades since 1990 while public leverage has increased 4.2% p.a.; meanwhile, real GDP has grown only 1.0% p.a., the NIKKEI has risen by only 0.4% p.a., and industrial production has contracted. So much for Japan’s “stimulus.” The Keynesian prescription has been worse than useless. It’s been harmful. Yet the more it fails, the more its adherents insist on still larger doses of deficit spending.
In the three decades prior to 1990, before Keynesian policy advice became dominant in Japan, the nation enjoyed robust and sustainable economic growth amid fiscal rectitude. Table One makes clear that Japan’s public debt and public leverage increased by only 2.6% p.a. and 2.0% p.a., respectively, while real GDP grew 6.4% p.a., industrial output grew 7.2% p.a., and the NIKKEI advanced 5.5% p.a. In each case pre-1990 performance outpaced post-1990 performance. The difference is due mainly to the tragic suspicion of prosperity which took hold in Japan in the late 1980s, and to later adoption of so-called “stimulus” schemes, which, I argue, are depressive:
Many economists believe public spending and money issuance create wealth or purchasing power. Not so. Our only means of obtaining real goods and services is from wealth creation — production. Under barter no one comes to market expecting to buy stuff without also offering stuff. A monetary economy does not alter this key principle. What we spend must come from income, which itself must come from producing. Say’s Law teaches that only supply constitutes demand; we must produce before we demand, spend or consume. Demand is not a mere desire to spend but desire plus purchasing power.
Believers in “stimulus” also claim that government spending entails a magical “multiplier” effect on aggregate output, unlike most private sector spending. They tout a government’s greater “propensity to consume.” But consuming is the opposite of producing. Welfare states certainly consume and redistribute wealth. They divide it up. But math teaches that nothing – wealth included – can be multiplied by division. The so-called “multipliers” imagined by today’s economists are, in fact, divisors. Many studies have verified the principle.
To see why “stimulus” truly depresses, consult the basics. The creation of public money and public debt is not the creation of wealth; it is not food, clothing, shelter, energy or the like. Even privately generated money and debt, which reflect the needs of trade and lengthy production chains, represent, facilitate and circulate wealth but are not themselves wealth. Meanwhile, the savings borrowed by governments are unavailable to productive enterprises, and when a government creates fiat money beyond what money holders demand, the money loses purchasing power, which boosts the cost of living. These are not roads to prosperity.
A tragically wrong public policy should be abandoned, not emulated. Sadly (and tragically), the U.S. since 2001 has been copying Japan’s approach, with a lag of a decade or so. What some here called “unorthodox” fiscal-monetary policy was first “normalized” in Japan. The two nations differ in some important ways, including demographically, but that does not nullify the laws of economics (or of public finance). The U.S. and Japan are old welfare states that can’t afford what they’re doing; nonetheless, their politicians can’t seem to succeed electorally without persisting in their profligacy. Japan’s history signals the likely outcome for copycats: prolonged stagnation.
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