Jul 06

Today’s News 6th July 2020

  • UAE In Drastic Government Shake-Up Seeking More "Swift & Agile" COVID Economy
    UAE In Drastic Government Shake-Up Seeking More “Swift & Agile” COVID Economy

    Tyler Durden

    Mon, 07/06/2020 – 02:45

    We’ve never heard of a government shake-up this big being first announced on social media, but on Sunday United Arab Emirates vice president and prime minister, Sheikh Mohammed bin Rashid Al Maktoum shocked his country as well as Gulf-watchers by unveiling on Twitter a sweeping government restructuring. 

    Sheikh Mohammed said said in Arabic: “The aim… is a government that can more quickly make decisions and deal with changes and more adeptly seize opportunities in dealing with this new stage in our history; a swift and agile government,” according to an Al Jazeera translation.

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    The drastic restructuring is being reported as ostensibly due to the threat of severe economic impact of the coronavirus pandemic, and includes the goal of permanently transforming half of all government service centers into remote, online platforms. 

    About half of all UAE’s federal agencies are to be merged with an apparent aim of reducing unnecessary bureaucracy and increasing centralization for the sake of more rapid speed in decision-making.

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    VP Mohammed bin Rashid Al Maktoum with Crown Prince of the Emirate of Abu Dhabi Mohammed bin Zayed.

    Here are some of the shake-up highlights and new appointments as well as reappointments, as reported in Al Jazeera:

    • The head of Abu Dhabi’s national oil company ADNOC, Sultan al-Jaber, was named as industry and advanced technology minister and Abdullah al-Marri was appointed economy minister.
    • The energy and infrastructure ministries were merged under a single portfolio to be headed by current energy minister Suhail Al Mazrouei.
    • The Federal Water and Electricity Authority, Emirates Post, Emirates General Transport Corp, and Emirates Real Estate Corp were placed under the Emirates Investment Authority.
    • The economy ministry got two ministers of state – Ahmed Belhoul for business and small and medium enterprises, and Thani al-Zeyoudi for foreign trade. Omar al-Olama was named minister of state for digital economy and artificial intelligence.
    • A woman was named to head the nascent Emirates Space Agency. Sarah al-Amiri is currently leading the UAE’s Hope Probe to Mars, which will launch this month from Japan with the goal of providing a new look at the planet’s climate and atmosphere.

    The county’s central bank had issued dire numbers related to the local and global impact of the coronavirus, forecasting the oil-rich UAE economy would contract by 3.6% this year.

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    “As the drop in economic activity is expected to be followed by sharp contractions in the subsequent quarters, non-energy growth contraction is projected at (minus)-4.1% for 2020,” the central bank had said in its first-quarter report.

    “While recovery of economic activity is projected to commence in the second half of the year, recovery of economic sentiment will hinge on deploying policy support measures,” it said.

  • Netherlands "Justice" Is Totally Corrupt: MH17 Case As Example
    Netherlands “Justice” Is Totally Corrupt: MH17 Case As Example

    Tyler Durden

    Mon, 07/06/2020 – 02:00

    Authored by Eric Zuesse via the Saker Blog,

    On Friday, July 3rd, the judge in the Netherlands court case against Russia as having fired a Buk missile that brought down the Malaysian Airlines plane that Ukrainian Air Traffic Control had instructed to fly over Ukraine’s civil-war zone on 17 July 2014, ruled out any consideration of evidence from Russia.

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    Judge Hendrik Steenhuis “refused to allow Russian military intelligence to reveal where the missile was located between 1987 and July 17, 2014, when the Dutch prosecution claims the missile was fired by a Russian military crew at MH17,” as John Helmer reported on Friday. The Dutch prosecutor says that that Buk missile was fired by Russia’s Government, not by Ukraine’s Government, and that it was owned by Russia and had been maintained by Russia ever since having been manufactured in Russia in 1986, and the Dutch judge announced that he refuses to consider Russia’s evidence to the contrary.

    Russia’s Government alleges that it can provide evidence that that missile did not, in fact, bring the airliner down, and that, instead, it was brought down by two Ukrainian Air Force jets that fired directly at and into the airliner’s pilot, but previously the Dutch court had ruled out any consideration of such evidence, though even the Dutch Government’s own investigation included and buried the following information, as I reported just a few days ago on June 24th:

    The Dutch Government’s 279-page investigative findings on the “Crash of Malaysia Airlines flight MH17” were published in October 2015, and reported, on page 84, (under 2.13.2 “Crew autopsy”) that “First Officer Team A … During the body scan of the First Officer’s body, over 120 objects (mostly metal fragments) were detected. The majority of the fragments were found in left side of the upper torso.” Then, it reported, on page 85 (under 2.13.3) “the First Officer, from Team A, who was operating the aeroplane at the time of the crash.”

    (Note that they buried this crucial information, instead of saying clearly that “The pilot’s upper left torso, immediately to the left of the area of the fuselage that had been shot out, had 120 objects that were mostly metal fragments.”) (Here is a closer picture of that side-panel on the left side of the fuselage, to the pilot’s immediate left, and here is that side-panel shown back on the airliner, so that one can see that this firing had to have been done from below, shooting upward into the pilot.)

    This crucial physical finding, that the pilot’s corpse had been loaded with “over 120 objects (mostly metal fragments),” is entirely consistent with the side-panel’s having been shot through by bullets, which would have been coming from a Ukrainian military jet and aimed upward, directly at the pilot. That marksman had to have been highly proficient in order to hit the pilot so accurately with so many bullets.

    Nothing else was found to be shot through with anything like such an intensity of “mostly metal fragments,” but only the pilot’s upper left torso. This, alone, is virtually conclusive proof that a Ukrainian military jet plane had fired directly at the pilot in order to bring down this civilian plane. (More will be cited here, in #2 below.)

    All of this evidence was entirely buried and ignored by the Dutch Government, revealed deep in the report, and only in sub-clauses, instead of in any direct sentences. Furthermore: “There have been two or three pieces of fuselage that have been really pockmarked with what almost looks like machine-gun fire, very very strong machine-gun fire.” This remarkable statement comes not from Haisenko, but from one of the first OSCE investigators who arrived at the scene of the disaster. Go to https://www.youtube.com/watch?v=7ze9BNGDyk4  and you will see it. [But, now, it has been removed. Here is the information on that video. That video was titled “OSCE monitor mentions bullet holes in MH17”.]

    That evidence is consistent with the Dutch Government’s having found (but buried) that the pilot’s corpse had been riddled with “metal fragments.”

    The matter which was being addressed on July 3rd was strictly concerning which Government owned and operated that Buk missile (which Russia has always contended did not bring down that plane).

    Previously, when Ukraine’s Government authorized Holland’s Government to investigate and rule on what caused the MH17 to be shot down, Holland’s Government signed onto a secret agreement with Ukraine’s Government that included a provision allowing Ukraine’s Government to block and prevent any finding from being issued that would implicate Ukraine’s Government in having shot it down. Holland’s Government violates its own Freedom of Information law by refusing to make public what that secret agreement says. However, at the time when the existence of the agreement slipped through into mention by a Ukrainian news-site on 8 August 2014, that news-report said “As part of the four-party agreement signed on August 8 between Ukraine, the Netherlands, Belgium and Australia [all of which nations are allies of the United States and are cooperating with its new Cold War against Russia], information on the investigation into the disaster Malaysian ‘Boeing-777’ will not be disclosed.”

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    Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

  • Johnstone: Seriously, Get The Hell Out Of Afghanistan
    Johnstone: Seriously, Get The Hell Out Of Afghanistan

    Tyler Durden

    Mon, 07/06/2020 – 00:00

    Authored by Caitlin Johnstone via Medium.com,

    With overwhelming bipartisan support, the House Armed Services Committee has added a Liz Cheney-spearheaded amendment to the National Defense Authorization Act (NDAA) which throws severe roadblocks in the Trump administration’s proposed scale-down of US military presence in Afghanistan and Germany.

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    As The Intercept’s Glenn Greenwald notes, both parties advancing the amendment cited in their arguments the completely unsubstantiated intelligence leak that was recently published by credulous mass media reporters alleging that Russia has paid bounties to Taliban fighters for killing the occupying forces in Afghanistan. Yet another western imperialist agenda once again facilitated by unforgivably egregious journalistic malpractice in the mass media.

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    Every aspect of this development is enraging.

    The mass media have continued to add to their mountain of Gish gallop fallacies promoting this narrative with a new Daily Beast report citing former senior Taliban figure Mullah Manan Niazi who asserts that “The Taliban have been paid by Russian intelligence for attacks on U.S. forces — and on ISIS forces — in Afghanistan from 2014 up to the present.” The Beast’s own article admits that its source has severe conflicts of interest and is believed to be a CIA asset by Taliban leadership, and that Niazi provided no evidence of any kind for his claim or any further details whatsoever.

    These flimsy, poorly-sourced allegations are being hammered into mainstream liberal consciousness on a daily basis now in the exact same way the discredited Russiagate psyop was, and just like with Russiagate the narrative they are being used to shape helps advance military expansionism and new cold war escalations which just so happen to fit perfectly into pre-existing geostrategic agendas of planetary domination.

    The way mainstream news outlets consistently refuse to account for a fact so obvious and indisputable as intelligence agencies being known liars should by itself be enough to discredit the entire institution of mass news reporting. Yet here we are with these reports being treated as established fact throughout the entire political/media class and down through the entire population of propagandized rank-and-file citizenry.

    The Afghanistan Papers established conclusively that the occupation has been unwinnable and without a clear picture of what winning would even look like from the very beginning, and that this fact has been hidden from the world by systematic deceit for two decades. The revelation was in the news for a day and then quickly memory holed without having any meaningful impact on the dominant narrative about Afghanistan, and now the mainstream consensus is that even trying to reduce the number of troops there is a hazardous and outlandish notion.

    This is because the mainstream consensus is shaped not by facts, but by narrative. We see this in the way the fact-filled Afghanistan Papers have played no role in shaping the dominant narrative about what should be done about the nineteen-year occupation, and we see it in the way the fact-free “bounty” narrative is shaping public opinion and determining US foreign policy. The propagandists who manufacture consent for imperialist agendas understand that truth and facts play far less of a role in what the propagandized consider important than does mindless repetition and emotion.

    The Empire Files has an absolutely phenomenal mini-documentary on the Afghanistan occupation which came out the other day, and everyone should watch it. Abby Martin quickly breaks down the geostrategic, resource control, and military-industrial complex agendas which are advanced by this interminable war, the deceit and depravity which went into initiating and maintaining it, and the devastating toll it has taken on the Afghan people. I strongly encourage my readers to give it a view when you get the chance.

    The continued Afghanistan occupation is like if the police stormed a house, shot a bunch of people, realized they got the wrong house and they’d never find the guy they were looking for by staying there, stayed anyway, moved in, and then years later said they can’t move out because they heard a rumor that the neighbors are trying to make them leave.

    In a sane world it would be the violent invasion and occupation of sovereign nations which elicits outrage and opposition from elected officials and intense skepticism and critical reporting from prominent journalists. In today’s propaganda-maddened society we get the exact opposite: the invasions and occupations are treated as the normal default position and any attempt to end them is regarded as outlandish.

    This cannot continue. We must find a way to awaken from the brainwashing and force it to end. Anyone who works to prevent this from happening is an enemy of human progress.

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    Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics onTwitter, checking out my podcast on either Youtube, soundcloud, Apple podcasts or Spotify, following me on Steemit, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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  • California Enters Deadly Wildfire Season With Over Half Of Inmate Firefighters Under COVID Lockdown
    California Enters Deadly Wildfire Season With Over Half Of Inmate Firefighters Under COVID Lockdown

    Tyler Durden

    Sun, 07/05/2020 – 23:30

    As California’s deadly wildfire season approaches, over half of the state’s inmate firefighters are currently unavailable to serve the northern half of the state, after prison officials placed 12 of the state’s 43 inmate fire camps on lockdown thanks to a giant COVID-19 outbreak at a Lassen County prison – which serves as the training center for the Conservation Camp Program.

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    Prisoners from the McCain inmate crew from San Diego, Calif., prepare to clear brush from a road on Oct. 11, 2017 in Calistoga, Calif. Ben Margot:AP
     

    Approximately 2,200 California inmates serve on the front lines of the state’s increasingly frequent and destructive blazes, according to the Sacramento Bee. Overall, the program has 3,100 inmates stationed at minimum security facilities across 27 counties.

    To put it in context, Cal Fire has approximately 6,500 year-round employees, which swells to around 9,000 during fire season. Inmates earn between $2 and $5 per day, plus $1 per hour while fighting a fire.

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    As of Friday, at least 220 inmates at Susanville prison located 120 miles north of Lake Tahoe tested positive for COVID-19 over the past two weeks, prompting the California Department of Corrections to halt movement in and out of the prison – which includes sending inmates to the conservation camps, according to the state prison system spokesman, Aaron Francis.

    Until the lockdown lifts, only 30 of the state’s 77 inmate crews are available to fight a wildfire in the north state, prison officials said.

    California’s incarcerated firefighters have for decades been the state’s primary firefighting “hand crews,” and the shortage has officials scrambling to come up with replacement firefighters in a dry season that is shaping up to be among the most extreme in years. The state is hunting for bulldozer crews and enlisting teams that normally clear brush as replacements. –Sacramento Bee

    That said, just one of the inmate firefighters have tested positive as of Friday, according to Francis.

    The reduced manpower will create an enormous challenge for the state, should any large fires break out this year.

    “To have that many (conservation camps) locked down, there are only a few camps left in the north that are going to be able to fight fires,” said retired corrections officer Mike Hampton, who served as the fire camp system’s union president according to the Bee. “That’s going to hamper them.”

    “All of a sudden we start losing inmates, you can’t replace them with high-risk inmates,” Hampton added. “That defeats the purpose of the program. The whole purpose of the program is to fight fires and save the state money. You put high-risk inmates in there, that defeats the safety standpoint for the citizens out there.”

    Identified by their orange fire uniforms, inmates typically do the critically important and dangerous job of using chainsaws and hand tools to cut firelines around properties and neighborhoods during wildfires.

    Each crew has 17 inmates. They’re supervised in the field typically by a Cal Fire captain, but sometimes a correctional officer will go with them on out-of-county assignments, or on local assignments located near residential areas.

    California Department of Forestry and Fire Protection officials acknowledged losing inmate hand crews to the disease outbreak is going to pose a significant challenge this summer. –Sacramento Bee

    In order to cope with the shortfall, state fire officials are expanding the use of seasonal firefighters, creating new crews, and working with multiple agencies to secure more aircraft and bulldozers. Cal Fire employees have also been approved to serve on the state’s “fuels crews” teams, which create fire breaks by clearing brush and other flammable materials surrounding communities, according to Amy Head, a Battalion Chief and Cal Fire spokeswoman. 

    State and federal officials, along with the National Guard and California Conservation Corps have all been tapped to help find more firefighters, the Bee reports.

    “We’re doing our best to plan ahead,” said Head. “Thankfully, we haven’t had anything too big to deal with yet.”

    Inmate shortage began years ago

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    The Bee also notes that the number of inmates available to fight fires has been “steadily decreasing in recent years” – as only low-level felons are eligible to participate, which state officials have been diverting to county custody or releasing them back into the public.

    The department has reduced the overall population of the prison system by almost 10,000 inmates since March. The majority of releases were of people whose terms were already ending, though the state also expedited the release of 3,500 inmates who were near the end of their sentence. The prison system also has suspended intake from county jails, contributing to the decreased number of people held by the state, Francis said.

    Typically, 90 inmate fire crews are available to fight fires in Northern California, but there were just 77 assigned to the region this year — and that was before the pandemic hit. –Sacramento Bee
     

    “This is a result of natural attrition, expedited releases, and sentencing reform changes that took place prior to the COVID-19 pandemic,” Francis told the Bee in an email.

    Read the rest of the report here.

  • Why Texas Governor Abbott's "Face Mask"-Order Is Not What It Seems
    Why Texas Governor Abbott’s “Face Mask”-Order Is Not What It Seems

    Tyler Durden

    Sun, 07/05/2020 – 23:00

    Authored by Daniel McAdams via The Ron Paul Institute for Peace & Prosperity,

    Today Texas Governor Greg Abbott (R) issued yet another executive order on the coronavirus outbreak – while the Texas state legislature continues slumbering while collecting paychecks for no work.

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    The mainstream media, predictably, is mis-reporting the executive order as a “statewide face covering requirement for Texans.”

    It is no such thing. However, it is worded in such an obtuse manner that this misinterpretation of the executive order will likely be universal in Texas.

    Here is the important part of the order:

    Every person in Texas shall wear a face covering over the nose and mouth when inside a commercial entity or other building or space open to the public, or when in an outdoor public space, wherever it is not feasible to maintain six feet of social distancing from another person not in the same household; provided, however, that this face-covering requirement does not apply to the following…

    That comma after the word “space” is essential. It establishes “outdoor public space” as a clause within the sentence, meaning both indoor AND outdoor are covered by the exception “wherever it is not feasible to maintain six feet of social distancing.” This is critically important, as it means even in stores or other indoor spaces masks are not required as long as it is possible to “social distance.” That would include every grocery store and reasonably-sized commercial establishment.

    In other words, this order was purposely written to be misinterpreted! Perception is 99 percent of reality, particularly among county and local officials who will mis-read this (probably intentionally) as a green light to crack down hard. Abbott is not mandating face masks outdoors or even indoors or even in commercial entities. But his order is worded in such a purposely weasel-like manner that it will be universally accepted and reported as such. It is already being so reported.

    Section Sec. 418.014.C of the Texas legal code states that a governor-declared state of emergency can only last for 30 days. The governor has the authority to extend that state of emergency, but he is subject to the actions of the legislature. As the code states.

    “The legislature by law may terminate a state of disaster at any time. On termination by the legislature, the governor shall issue an executive order ending the state of disaster.”

    Texas Lt. Governor Dan Patrick loves to bluster about being a champion of civil liberties, recently blasting the hapless Dr. Fauci to earn red meat political points. But unfortunately then it comes to actually standing up for Texans who are seeing their livelihoods destroyed, who are seeing their civil liberties trampled, who are seeing an out-of-control governor ruling by decree in a manner that would have made King George blush, he’s “all hat, no cattle” as we say here in Texas.

    In Texas the Lt. Governor wields extraordinary power over the state’s legislative body and could call the Texas Senate back into session to begin the process of ending Governor Abbott’s insane power grab.

    But thus far that former radio personality has done little more than preen in front of the microphone.

    As we very clearly explain in today’s Ron Paul Liberty Report, the reason for the “spike” in Texas covid cases is a massive ramping up in testing (“Come one come all, it’s free!!!!!”) and an extraordinary re-definition of what it means to be “covid positive” that was implemented by Texas Department of State Health Services (DSHS) in mid-May. Texas county and local officials expressed concern that ramping up testing and lowering the threshold to declaring “probable” covid cases (with no testing) as actual “covid cases” would lead to a mass spike in Texas. Turns out they were right.

    Classifying all those seeking delayed surgeries and other medical procedures as “covid cases” even if not sick only makes the situation in Texas seem worse.

    Many honest Texas officials saw the “second wave” spike coming because they saw how the game was being rigged. But Abbott fell for it and he has declared war on Texans and on liberty.

    This is not rocket science. Politics is at play in the “second wave” coronavirus in Texas and elected officials are either too dense or too corrupt to take a stand for truth.

  • Western Supermarkets Drop Coconut Goods Picked By Slave Monkeys
    Western Supermarkets Drop Coconut Goods Picked By Slave Monkeys

    Tyler Durden

    Sun, 07/05/2020 – 22:30

    People for the Ethical Treatment of Animals (PETA) Asia investigators found Thailand’s major coconut milk producers are forcing monkeys to pick coconuts as slave laborers. After the report emerged, major Western supermarket chains have removed coconut water and oil from their store shelves that are connected with these farms.

    Eight farms were noted in the report. Two in focus are Aroy-D, and Chaokoh, which have dozens of monkeys picking upwards of 1,000 coconuts each, per day. It was found these two farms supply coconut products to Giant Food, Food Lion, Stop & Shop, and Hannaford in the U.S.

    PETA said Walgreens Boots Alliance had dropped products from Aroy-D and Chaokoh: 

    After hearing from PETA, Walgreens Boots Alliance has pledged to not stock Aroy-D or Chaokoh, and not knowingly sell any own-brand coconut food and drink products of Thai origin in their 9,277 Walgreens and 250 Duane Reade stores in the U.S. and 2,758 Boots stores in the U.K. and Thailand, and Morrisons has suspended its supply of Chaokoh products pending an investigation and Ocado, Waitrose, and Co-op have committed to never knowingly stocking any products from suppliers that use monkey labour. – PETA said on its website 

    Following PETA’s report, 15,000 stores worldwide have abandoned products from Thailand’s major coconut milk producers the employ monkeys. 

    PETA released disturbing images of the coconut picking monkeys:

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    h/t PETA Asia 

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    h/t PETA Asia 

    Undercover PETA video of the coconut farms:

    All lives matter – even, in this case, monkeys forced into slave labor in Thailand.  

  • Prins: "We're Living In A Permanent Distortion"
    Prins: “We’re Living In A Permanent Distortion”

    Tyler Durden

    Sun, 07/05/2020 – 22:00

    Via Greg Hunter’s USAWatchdog.com,

    Three time best-selling book author Nomi Prins says long before the Covid 19 crisis, the global economy was faltering big time.  The Fed stepped in with the start of massive money printing in late 2019 to save the day. 

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    Prins explains, “We were already in crisis mode as I mentioned at the end of my last book going into 2019.”

    “What did we see at the end of 2019?  We saw this pivot, and I call it phase two. . . . Central banks had pivoted to easing mode. . . . Come September, October, November and December, the Fed is producing repo operations.  Those are short-term lending operations that are supposed to be the purview of the banks . . . . The Fed is not supposed to get involved, but it did.  The Fed had all kinds of excuses.  It said it was not QE, but it was. . . . The debt at the end of 2019 for the world was three times GDP.  For every $3 borrowed, only $1 of economic activity occurred.  That’s what we started 2020 with.  Throw a pandemic into that . . . and you have a long drawn out financial and economic crisis.”

    Now, the money printing has gone into overdrive to save the system from the virus crisis.  The social and economic damage, according to Prins, is profound and not going away.  Prins points out,

    “We are not going to pay back this debt, and this is global.  Nobody is even considering trying to pay back the debt that has been created.  Let’s think about why that debt has been created.  It’s not just because the economy slowed down.  That’s one reason and kind of an excuse.  The reality is the Fed is on steroids, and other central banks are on steroids . . . throughout the world in a larger number and larger magnitude than in the wake of the financial crisis of 2008.  This means all this new debt created is even cheaper than the debt created going into the 2008 crisis.  So, more debt, created more cheaply, means less incentive to pay it back and more incentive to push it down the road and grow it.  You’ve got this snowball of debt rolling down this high mountain, and it’s rolling and growing and getting bigger.  The mountain, which is the main street economy, is coming down as the snow ball is coming down, and the main street economy itself, that foundation, is really shaky. . . . How does this end?  It ends with us, the foundation, which is the main street economy, by both that snowball of debt and the avalanche of the mountain.  That’s going to be a multi-decade problem.”

    Prins says this next stage has a brand new name and explains,

    “I call this a ‘Permanent Distortion.’  I have not used this term in prior books, but I am using it because . . . the disconnect between financial assets, equity markets and the real economy . . . has become massive…

    There is going to be this endless supply of artificial stimulation into the markets. . . . Former New York Fed President Bill Dudley said the Fed’s balance sheet is going to $10 trillion.  That’s what I have been saying, and now he finally said it.  That’s not going away anytime soon.  That’s not being unwound anytime soon.  That becomes permanent lift to financial assets. . . . In the wake of that, less real capital gets used for infrastructure, research and development, growth and retooling the economy and getting jobs into this new period.”

    Prins says gold prices are going to “follow the expansion of the Fed’s balance sheet.”  It is that simple, and Prins predicts,

    “As we saw in the wake of the financial crisis of 2008, gold and silver will have the ability to go up quite substantially as the Fed’s book increases in size, which we know it is going to do.  We have been told that multiple times by many different words by Federal Reserve Chairman Jerome Powell.”

    In closing, Prins says, “We are continuing to drive up asset bubbles where we don’t have the real economy to back it up…” 

    “The more this ‘Permanent Distortion’ gets bigger, the more the likelihood the next crisis will happen… and it will be from a higher height.  It will be from a larger bubble, a bigger snowball accelerating downward more quickly.  I don’t think we are out of this crisis.  I think the markets are going to have a bumpy ride as the economy has a bumpier ride.”

    Join Greg Hunter as he goes One-on-One with three time best-selling author Nomi Prins.

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  • Low-Income Households Crushed By Covid Inflation Shock
    Low-Income Households Crushed By Covid Inflation Shock

    Tyler Durden

    Sun, 07/05/2020 – 21:30

    As The Fed continues to flood the system with money – insisting that inflation is merely a boogeyman and it is doing everything in its power to support the middle class, Bloomberg has found that inflation due to coronavirus is real, and is disproportionately hammering poor households.

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    Due to higher grocery and housing costs for the bare necessities during the pandemic lockdown, the study found that the bottom 10% of households by income currently face inflation of 1.5%, while those in the top 10% face 1%. Meanwhile, the official overall average in May was 0.1%.

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    According to the report, the difference is primarily due to changes in consumption habits during the pandemic – as households have been forced to buy more food, which has shot up in price, while spending less on recreational activities and transportation. 

    “In a period of protest and increasing anger about inequality, the differential inflation rate experienced by low- and high-income households is a concern,” said Bloomberg Economics’ Björn van Roye and Tom Orlik.

    The suggestion the virus is less disinflationary than many economists believe poses a challenge for the Federal Reserve which is eyeing a slower inflation rate than that experienced by lower earners, who are instead facing a steady erosion of their purchasing power. –Bloomberg

    “Taken together with concerns about central banks bailing out investors ahead of firms and workers, and the benefits rich, asset-owning households gain from quantitative easing, it adds to the sense that central banks are unintentional contributors to the problem of inequality,” they added.

    Meanwhile, adding insult to injury, CCN points out that blue-collar workers are more likely to contract the virus, adding “If you can’t work remotely and you haven’t been laid off, chances are you’re headed into work and putting yourself at risk every day.”

    Looking a bit more closely at spending habits during the pandemic, Opportunity Insights, which contributed to Bloomberg‘s report, found that those in the top income quartile had a significant decline in spending of 53%, while those in the bottom quartile spent virtually the same.

    High-income households cut spending primarily because of health concerns rather than a loss of income or purchasing  power. Spending fell most  on  services  that require in-person interaction and thereby carry a risk of COVID-19 infection, such as transportation  and  food services.

    The pattern of spending reductions during this recession differs sharply  from that of prior recessions, during which spending on services remained essentially unchanged while spending on durable goods (e.g., new appliances or cars) fell sharply. –Opportunity Insights

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    Opportunity Insights also found that small businesses in the most affluent zip codes lost over 70% of their revenue due to COVID-19, vs. 30% in the least affluent (low rent) zip codes. Meanwhile, reopenings have had little impact on economic activity, as illustrated by Colorado – which reopened on May 1, vs. New Mexico, which reopened on May 16.

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    And while stimulus payments significantly increased consumer spending – particularly among low-income households, they didn’t lead to large gains for businesses hardest-hit by the pandemic – small businesses in affluent areas.

    Even more surprising is that Opportunity Insights found that $500 billion in PPP loans had virtually no impact on employment rates.

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    Which begs the question: is there a vaccine for ineffective fiscal policy? (we already know that the only solution to failed monetary policy is much more of it).

  • Senate Bill Would Ban Federal Use Of Facial Recognition Systems
    Senate Bill Would Ban Federal Use Of Facial Recognition Systems

    Tyler Durden

    Sun, 07/05/2020 – 21:00

    Submitted by Sovereign Man Explorer

    This Week’s Intelligence

    Senate bill would ban federal use of facial recognition systems

    What happened:

    A bill in the Senate would issue a presumptive ban on the use of any facial recognition systems by any federal agencies.

    That means unless a government agency or bureau is specifically authorized by Congress, they cannot deploy real time facial recognition surveillance or use it to identify people in photos and video later.

    The bill would also keep certain federal funds from city and state law enforcement who use biometric surveillance, like facial recognition.

    What this means:

    Facial recognition technology is too easy to abuse. The government is supposed to go through due process before investigating citizens.

    Even just learning the identity of someone is supposed to require reasonable suspicion that a crime has been committed.

    But facial recognition is a pre-emptive “search” revealing the identity of anyone on camera.

    And in addition to the due process concerns, facial recognition is a good way to quell dissent and protest from anyone afraid of being identified and targeted by the government for speaking out.

    * * *

    Colorado Police Reform bill on its way to ending qualified immunity

    What happened:

    A bill has passed the Colorado Senate which would end qualified immunity in the state.

    If the bill becomes law, it would mean police could be sued and charged for crimes they commit while acting in their official capacity as police officers.

    The bill also requires officers to intervene if a colleague is committing a crime or face possible charges themselves.

    It also permanently strips officers of their certification to be police officers if they are convicted or plead guilty to any excessive force violations.

    What this means:

    Qualified immunity is the legal doctrine that protects police from legal consequences if they claim they thought their actions were legal and necessary to do their job.

    To hold police accountable essentially requires a matching precedent that says a specific behavior or incident of brutality is not protected.

    Ending qualified immunity is a good first step towards holding police to the same legal standards as everyone else.

    * * *

    New Mexico Supreme Court says governments can snoop bank records

    What happened:

    The third party doctrine is used by the federal government to spy on anyone they want without a warrant.

    The idea is once a citizen gives information to a third party like a bank or internet provider, they have voluntarily given it away.

    The New Mexico Supreme Court just extended that power to state governments.

    So now it isn’t just the feds who can dig through your records without a warrant. State agencies and grand juries can do the same.

    What this means:

    Genius. The government forces banks to collect information on customers. And that means the customers have “voluntarily” handed that information to the bank.

    So of course then the bank can “voluntarily” give your information to the government.

    Of course this is all absurd mental gymnastics which trample the intention of privacy protections.

    But this is how the government operates. And little hole in your rights will be exploited, until the right no longer exists at all.

    * * *

    Biological male wins vote for Female District Leader in New York City

    What happened:

    For about 100 years, the Democratic Party in New York City has elected one male and one female party leader in each district.

    This is not a government position, but an unpaid internal party role. It was a feminist idea to allow women to gain a foothold in politics.

    But now a biological male identifying as a woman has been elected to the Female District Leader position in Queens, New York City.

    For the first time since the position was created, the district will have no natural born female representation in the party.

    What this means:

    We are into freedom. Frankly, what someone wants to do with their own body is their own business.

    But it’s hard to ignore the effects this has on natural born women with an XX chromosome.

    Feminists have long been warning that the gender issue would meld into a sex issue, and women would lose protections in areas like competitive sports, and privacy.

    Apparently, all it takes to be a woman is to declare it.

  • Texas Sees Record Jump In COVID-19 Hospitalizations: Live Updates
    Texas Sees Record Jump In COVID-19 Hospitalizations: Live Updates

    Tyler Durden

    Sun, 07/05/2020 – 20:45

    Summary:

    • Texas sees record jump in hospitalizations
    • California reports jump in daily cases
    • Taj Mahal closed until further notice
    • India draws nearer to Russia amid another record jump in cases
    • World sees record jump in COVID-19 cases
    • Florida reports 9,999 new cases
    • Arizona sees roughlt 3,500 new cases
    • South Africa sees record jump in new cases
    • US reports 53k cases for Sunday
    • WHO cancels hydroxychloroquine trials
    • Russia cases near 700k
    • Japan sees another 277 new cases

    * * *

    Update (1900ET): Texas saw daily hospitalizations reach a fresh record high on Sunday as 8,181 patients with the virus were admitted to hospitals around the state, even as the number of new COVID-19 cases reported declined day-over-day.

    Texas reported 3,449 new confirmed cases of COVID-19 Sunday, after a record high of 8,258 Saturday.

    State health officials also reported 29 additional deaths, bringing the totals to 2,637 deaths and 195,239 confirmed cases, per state data.

    Officials in cities like Austin are pushing Gov Abbott to return control to municipalities to allow some places to implement new stay-at-home orders, a measure the governor has resisted despite making mask-wearing mandatory. Mayor Steve Adler, a Democrat, said as much on CNN’s “State of the Union” Sunday as he warned that hospitals have been facing a crisis and ICUs could be overrun in as few as 10 days. A few counties warned that their ICUs had been overwhelmed over the last couple of days, and hospitals in Houston have already needed to transport some patients 50 miles away. In the Houston area, Democratic Harris County Judge Lina Hidalgo claimed a stay-at-home order is needed.

    * * *

    Update (1435ET): California reported another 5,410 new cases (+2.1%) on Sunday (remember, the cases are reported with a 24 hour delay). The positivity rate was 6.3%, down slightly from the rates seen on Thursday and Friday.

    The new cases brought the state’s total case count count climbed to  260,155

    The state also reported 17 deaths on Saturday…

    …which means mortality continues to trend lower across the state.

    * * *

    Update (1430ET): Already, it looks like India reported another record (or near record) total of new cases on Sunday.

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    The post-lockdown surge in the world’s second-most-populous nation took India’s total tally to more than 673,000 cases and 19,268 deaths, moving India closer to surpassing badly-hit Russia, the world’s third-most infected nation.

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    …officials have announced that the Taj Mahal, India’s most popular tourist attraction and one of the seven wonders of the modern world, won’t reopen any time soon.

    “The Taj Mahal, which is in the Taj Ganj police station jurisdiction, is a ‘containment zone’,” a document released by Agra’s District Magistrate Prabhu N Singh stated late Sunday.

    Containment zones are where high infection rates have been detected, with all activity except essential services halted.

    * * *

    The world celebrated America’s independence by reporting 212,000 new cases of the Coronavirus yesterday, with roughly half that total came from the US, India and Brazil alone.

    Data from Johns Hopkins put the number at 207k:

    JHU put the number of cases confirmed in the US yesterday at 52,391, with 7.6% of tests coming back positive.

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    Source: JHU

    The last record high in the US arrived on July 3, when 57,549 people tested positive for the first time.

    Following studies showing hydroxychloroquine can be effective at mitigating symptoms in patients if taken early enough in the life of the infection, the WHO said yesterday that it planned to discontinue trials of the Trump-approved malaria drug, along with a combination HIV drugs known as lopinavir/ritonavir in hospitalised patients with COVID-19 after the medications failed to reduce mortality.

    This comes almost exactly a month after the WHO decided to resume trials of the drug.

    Worldwide cases have reached 11.23 million while 6.04 million patients have recovered, according to the latest Johns Hopkins University tally. The number of deaths worldwide hit more than 530,000.

    Already, Arizona and Florida have reported their case numbers for the last 24 hours, with both states seeing a minor retreat from the all-time highs in daily case numbers.

    As of Sunday, coronavirus cases are on the rise in 34 states over the past week, with 12 seeing an increase of more than 50%. Three states, Kentucky, New Hampshire and Vermont, are reporting a decline in cases.

    Florida reported 9,999 new coronavirus cases Sunday, coming one day after the state set a record for most cases in a single day with a total of 11,458 new cases, which also surpassed New York’s previous single-day high of 11,434, which was recorded in mid-April.

    Arizona reported 3,536 new cases, and 4 deaths, bringing its total confirmed to 98,089 1,809 coronavirus-related deaths, according to the state’s latest numbers.

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    New York, meanwhile, saw another 533 new cases and 8 fatalities.

    He also confirmed the state would move on to phase 3 tomorrow.

    Internationally, the Philippines reported its biggest jump in new cases with 2,434, taking its total count to 44,254, the health ministry said.

    South Africa is reporting more than 10,000 new confirmed coronavirus cases for the first time in a single day, bringing the country’s total confirmed cases to more than 187,977, by far the most of any country in Africa.

    South Africa also has surpassed the deaths of 3,000 people in the outbreak.

    As more of the Middle East rolls back restrictions, Saudi Arabia’s coronavirus cases have surpassed 200,000 and neighboring UAE has 50,000, with the number of new cases climbing after both countries fully lifted curfews last month.

    Russia reported 6,736 new cases, bringing its total to 681,251, with 134 new deaths bringing its death toll to 10,161. India saw its biggest surge in COVID-19 cases, with 24,850 new cases and 613 deaths in the last 24 hours. The country’s tally of infections rose to 673,165 as the death toll increased to 19,268, according to health ministry data.

    FInally, Japan reported 277 new coronavirus cases Sunday morning, bringing the country’s total number of cases to 20,234 (19,522 on land and 712 on the Diamond Princess cruise ship).

  • Top Economist Warns No Recovery Until 2022, Stock Market Correction Ahead 
    Top Economist Warns No Recovery Until 2022, Stock Market Correction Ahead 

    Tyler Durden

    Sun, 07/05/2020 – 20:30

    It remains to be seen if the US economy even began anything that could realistically be called a “recovery” in June. After all, virus cases are surging, states are pausing or reversing reopening plans, and retail foot traffic has stalled. The “V-shaped recovery” hype in which jobs and economic growth will surge to 2019 levels ahead of the election is nothing more than propaganda hogwash from the Trump administration.

    Christophe Barraud, the chief economist of the broker-dealer Market Securities, recently told Business Insider that the economy wouldn’t revert to 2019 growth activity levels until at least 2022, adding that, “it will take a long time for life to return to normal.” 

    “Even if there is a vaccine by the end of the year, it likely wouldn’t be distributed until 2021, leaving a long time for the US to grapple with the virus,” he said. 

    Barraud said the recovery phase of the economy might not be seen until 2022 or after, and also said for Europe, recovery might not be seen until 2023.

    Barraud is ranked one of Bloomberg’s top economic forecasters for the last decade. His forecasts for the US, Europe, and China have been mostly accurate. So when he indicates the probabilities of a V-shaped recovery in the US are low for this year – readers should take note.

    Barraud said the stock market is priced for perfection, a lot of things have to go right at current valuations. He warns of a correction in equities as uncertainties increase over the shape of the recovery. 

    “Markets are not pricing in a lot of risks,” he said, adding that the latest sugar high in the economy is due to massive fiscal spending. 

    We noted last week that the economy could be headed for a fiscal cliff if the next round of stimulus doesn’t arrive by early August. 

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    Barraud said around August – markets should focus on the presidential election.

    “That could lead people to take some profits, and market structure might revert back to what it looked like before coronavirus,” Barraud said. 

    He also said dismal corporate earnings and a second virus wave could result in investors locking in gains for the year ahead of the election. 

    “At this point, people look a little optimistic about EPS for next year,” said Barraud, adding that analysts and investors are expecting a V-shaped recovery and aren’t pricing in the potential risks, such as increased taxes, that could come as a result of the presidential election in November. 

    “The market could react because, at this point, there is no room for disappointment,” he warned.  

    Barraud said with no imminent coronavirus vaccine – there is “still some time for a second wave, which would be very damaging” to the economy and derail the recovery, resulting in a further deterioration of the jobs market. 

    We noted Sunday morning, with the unemployment level sill at Great Depression levels, the stock market is set for a rude awakening as nearly 3 million jobs in June, up from 1.6 million in February, have been eliminated from the economy. 

    Permanent Job Loss (inverse) vs. S&P500

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    “My advice would be to be cautious from August, maybe take some protection,” Barraud said. 

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    In a separate piece, he recently said the global trade recovery would be much slower than the market is anticipating.  

    It appears a lot of disappointments are ahead. 

  • Jim Bovard: Old Coins Taught Me To Never Trust The Government
    Jim Bovard: Old Coins Taught Me To Never Trust The Government

    Tyler Durden

    Sun, 07/05/2020 – 20:00

    Authored by Jim Bovard via The Libertarian Institute,

    Old coins vaccinated me against trusting politicians long before I grew my first scruffy beard. I began collecting coins when I was eight years old in 1965, the year President Lyndon Johnson began eliminating all the silver in new dimes, quarters, and half dollars. LBJ swore that there would be no profit in “hoarding” earlier coins “for the value of their silver content.” Wrong, dude: silver coins are now worth roughly fifteen times their face value.

    History had always enthralled me, and handling old coins was like shaking hands with the pioneers who built this country. I wondered if the double dented 1853 quarter I bought at a coin show was ever involved in Huckleberry Finn–type adventures when “two bits” could buy a zesty time. I had a battered copper two-cent piece from 1864, the same year that Union general Phil Sheridan burned down the Shenandoah Valley where I was raised. Some of the coins I collected might now be banned as hate symbols, such as Indian Head pennies and Buffalo nickels (with an Indian portrait engraved on the front).

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    In the era of this nation’s birth, currency was often recognized as a character issue—specifically, the contemptible character of politicians. Shortly before the 1787 Constitutional Convention, George Washington warned that unsecured paper money would “ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”

    But as time passed, Americans forgot the peril of letting politicians ravage their currency. In 1933, the US had the largest gold reserves of any nation in the world. But fear of devaluation spurred a panic, which President Franklin Roosevelt invoked to justify seizing people’s gold to give himself “freedom of action” to lower the dollar’s value. FDR denounced anyone who refused to turn in their gold as a “hoarder” who faced ten years in prison and a $250,000 fine.

    FDR’s prohibition effectively banished from circulation the most glorious coin design in American history—the twenty-dollar Saint-Gaudens Double Eagle gold piece. I was captivated by early American coin designs, especially those featuring idealized female images emblazoned with the word liberty. I was unaware that George Washington refused to allow his own image on the nation’s coins because it would be too “monarchical.” Until 1909, there was an unwritten law that no portrait appear on any American coin in circulation. That changed with the hundredth anniversary of the birth of Abraham Lincoln, whom the Republican Party found profitable to canonize on pennies.

    By the mid-twentieth century, American coinage had degenerated into paeans to dead politicians. Portraits of Franklin Roosevelt, John F. Kennedy, and Dwight Eisenhower were slapped onto coins almost as soon as their pulses stopped. This reflected a sea change in values as Americans were encouraged to expect more from their leaders than from their own freedom.

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    The Double Eagle, which was designed by sculptor Augustus St. Gaudens, is widely considered to be the most beautiful US coin ever minted.

    Coin dealing helped me recognize early on that a government promise is not worth a plug nickel. From 1878 onwards, the US Mint printed silver certificates, a form of paper currency. My 1935 silver certificate stated: “This certifies that there is on deposit in the Treasury of the United States of America One Dollar in Silver Payable to the Bearer on Demand.” But in the 1960s, that became inconvenient so the government simply nullified the promise.

    On August 15, 1971, President Richard Nixon announced that the US would cease paying gold to redeem the dollars held by foreign central banks. The dollar thus became a fiat currency—something which possessed value solely because politicians said so. Nixon assured Americans that his default would “help us snap out of the self-doubt, the self-disparagement that saps our energy and erodes our confidence in ourselves.” Regrettably, this particular treachery was not included on the list of indictable offenses that the House Judiciary Committee enacted a few years later.

    After Nixon’s declaration of economic martial law, I lost my enthusiasm for squirreling away one memento from each mint and each year in the Whitman blue coin folders that permeated many 1960s childhoods. I shifted from collecting to investing, hoping that old coins would be a good defense against Nixon’s “New Economics.” Prices for pristine coin specimens were far higher and more volatile than the value of some of the barely legible slabs of metal I previously amassed. A single blemish could slash the value of a rare coin by 80 percent (same problem I had with some manuscripts I’ve submitted over the years).

    Coin values were pump primed by the Federal Reserve’s deluge of paper dollars to create an artificial boom to boost Nixon’s reelection campaign and supplemented by wage and price controls that wreaked havoc. Inflation almost quadrupled between 1972 and 1974, and I soaked up the cynicism and outrage prevailing in coin investment and hard money newsletters. I poured most of the money from the jobs I did during high school into rare coins. Because rare coins were appreciating almost across the board, it was difficult not to be lucky in a rising market. The biggest peril was the endless scam artists seeking to fleece people with false promises of lofty gains or fraudulent grading of rare coins—a pox that continues to this day.

    After graduating high school in 1974, I began working a construction job. When I got laid off, I saw it as a sign from God (or at least from the market) to buy gold. Investment newsletters and political debacles convinced me the dollar was heading for a crash. I sold most of my rare coins and plunked all my available cash into gold and also took out a consumer finance loan at 18 percent to purchase even more. That interest rate was the gauge of my blind confidence. Nixon’s resignation in August 1974 did wonders to redeem my gamble.

    My coin and gold speculations helped pay for my brief stints in college, with some greenbacks left over to cover living expenses during my first literary strikeouts. I eventually shifted into journalism and migrated to the Washington area.

    Two weeks after I moved into a shabby group house in the District of Columbia in 1983, I pawned the last gem of my coin collection—the 1885 five-dollar gold piece that my Irish American grandmother had given me fifteen years earlier. She was a dear sweet lady who would have appreciated that her gift helped cover the rent for a few more weeks until I finally consistently hit solid paydirt later that year. (Thanks, Reader’s Digest!)

    Wheeling and dealing with coins inoculated me against Beltway-style agoraphobia—a pathological dread of any unregulated market. The market set the price for 1950 Jefferson nickels coined in Denver based on the relatively small mintage chased by growing legions of young collectors. Nixon boosted the price of milk after the dairy lobby pledged $2 million in illegal contributions. It was nuts to permit politicians to control prices when there was no way to control politicians. Having watched coin values whipsaw over the prior decade, I recognized that value was subjective. The test of a fair price is the voluntary consent of each party to the bargain, “the free will which constitutes fair exchanges,” as Senator John Taylor wrote in 1822. Seven years ago, President Barack Obama, talking about how the government was losing money minting the lowest denomination coin, declared, “The penny, I think, ends up being a good metaphor for some of the larger problems we got.” Actually, the collapse of our currency’s value is a curse, not a metaphor. The dollar has lost 85 percent of its purchasing power since Nixon closed the gold window.

    For a century, American coinage and currency policies have veered between “government as a damn rascal” and “government as a village idiot.” I remain mystified how anyone continues trusting their rulers after the government formally repudiates its promises. But I still appreciate old coins with beautiful designs that incarnated the American creed that no man has a right to be enshrined above anyone else.

  • How Deutsche Bank Helped Con The Public Into Believing In Wirecard
    How Deutsche Bank Helped Con The Public Into Believing In Wirecard

    Tyler Durden

    Sun, 07/05/2020 – 19:30

    More reporting on the Wirecard situation has emerged over the long weekend in the US, and none of it is flattering.

    As a court-appointed administrator begins the process of managing what’s left of Wirecard through the insolvency process, while doing the best the government can to compensate shareholders who were deceived by the onetime fintech darling, WSJ reports that the (now former) COO, Jan Marsalek, has disappeared, with many suspecting that the longtime COO – who probably knows where many of the bodies are buried – has gone on the run as German prosecutors seek to question hi,.

    His motives aren’t too difficult to discern: With CEO Markus Braun out on bail, it’s likely that Marsalek, who’s suspected of playing a critical role in maintaining the company’s complex shell game with the “Asian third-parties” which helped Wirecard conceal its accounting fraud, even from the auditors who apparently never bothered to actually check these accounts.

    When the FT reported last year that most of Wirecard’s actual profits were generated by its opaque Asian businesses, the company denied it, with CEO Markus Braun insisting this was “simply not true”.  But once again, it appears the FT reporters were spot-on, as an appendix to to KPMG’s damning third-party report obtained exclusively by the FT purports to show.

    Per the FT, Wirecard’s core business in Europe and the Americas has been lossmaking for years, which means the only Wirecard subsidiaries worth any money are those tied to the company’s most opaque operations, which might make it more difficult to sell the business lines that aren’t impacted by the fraud, and which still have value (theoretically, at least).

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    Some background: German payments group collapsed into insolvency last month after revealing that €1.9 billion ($2.1 billion) in cash in its accounts actually “didn’t exist”, exposing the “highly profitable” payments company and lender as a fraud.

    According to its EY-audited financial reports, between 2016 and 2018 Wirecard generated operating margins of around 22% and almost doubled annual earnings before interest and taxes to €439 million. However, these profits appear to have existed largely on paper, according to the section of the KMPG report (which has already been made public, though the appendix has not) obtained by the FT. The businesses in question are WC’s payments business in Europe and Asia, and its credit card business in Europe and North America. Not only were these businesses lossmaking, but they’ve become increasingly money-losing in recent years.

    During this time, Wirecard contended that its opaque Asian business more than offset these losses. But now it appears that 2/3rds of that businesses profits were completely imaginary. The company’s activities outside Asia haven’t actually generated a profit since 2016.

    Wirecard’s court-appointed administrator Michael Jaffé is facing a difficult task as he tries to manage the sale of a few profitable business lines in WC’s banking and payments businesses. As more damning information comes to light, a sale of Wirecard’s subsidiaries needs to happen within weeks or they will lose any remaining value. “Wirecard has very few physical assets, and the risk is that many of its clients will switch to rivals soon,” said an anonymous source quoted by the FT. That source also claimed that the legal claims against Wirecard’s former management and its auditor (EY)  said one of the people, adding that Wirecard’s legal claims against its former management and its accountant may be more valuable than its remaining operating business.

    Several buyers have expressed interest, including – most notably – Deutsche Bank, which maintains it is best positioned to integrate Wirecard’s legit businesses into its existing operations.

    In an extraordinary example of how banks can sometimes abuse the “Chinese Wall” that’s supposed to exist between the stock analysts and the investment bankers, Deutsche Bank, over the course of a year, hedged all of its loan exposure (some $300 million in loans to both Wirecard and its (now former) chief executive, Markus Braun) to Wirecard. Meanwhile, its independent investment-management unit (DWS) piled into Wirecard’s shares, and DB’s analysts issued at least one “buy” rating on the DAX component’s shares.

    As Wirecard’s shares eclipsed those of Germany financial champions like Deutsche Bank and Commerzbank (which WDI would later replace as a component of the DAX), the financial establishment in the country went from treating Wirecard like a pariah or a novelty (the company got its start providing payments infrastructure to adult entertainment sites and other shadier corners of the Internet) to a true national champion.

    One of DB’s most egregious decisions involving Wirecard was hiring Andreas Loetscher, the Ernst & Young partner who oversaw several audits of Wirecard’s results, as chief accounting officer. Loetscher is now under investigation by German authorities.

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    Source: BBG

    When the FT, published its first story alleging certain ‘accounting irregularities’ at Wirecard (the first in a series led by intrepid investigative reporter Dan McCrum) DB’s investment bankers immediately started worrying about the bank’s exposure should the company’s shares (against which all of DB’s loans were collateralized).

    At Deutsche Bank, some executives grew alarmed, including Garth Ritchie, the head of investment banking at the time. Ritchie’s skepticism had arisen in part from conversations with hedge-fund clients that had conducted their own research into the firm’s workings, and who had been betting against the stock. His unit oversaw a 150 million-euro loan to Braun that was secured by Wirecard shares, so if the shares fell, the bank could lose a lot of money.

    Risk managers led by Stuart Lewis, Deutsche Bank’s chief risk officer, were also worried. The lender had agreed to provide around 120 million euros to Wirecard as part of that firm’s revolving credit facility, but the payments company was expanding very rapidly and Deutsche Bank didn’t fully understand all the factors at play. They reduced their exposure and increased their hedge in the wake of the FT story.

    When Wirecard approached DB about a merger last spring, the bank courteously declined. As its bankers sold off chunks of its Wirecard exposure, they made sure to do so quietly, so as not to spark a market panic that the biggest bank in Germany was getting cold feet on Wirecard. When SoftBank stepped up and invested €900 million in a complicated capital injection, DB’s analysts upped their rating on Wirecard stock to buy from hold, and projected 20% upside.

    Later that year, when SoftBank got cold feet and started looking for a way out of its partnership with Wirecard, DB declined to help underwrite a convertible bond sold by Wirecard as part of the deal last spring. And while the bank did underwrite a €500 million bond deal for Wirecard in September, the entire inventory of debt was sold on to investors. The bank was more than happy to underwrite this debt and sell it on to yield-starve institutions despite having declined to underwrite a more complicated debt security for fear of getting stuck with too much of the product on its books, according to BBG.

    When Wirecard shares sold off last fall, DWS doubled down. Yet, by the time Wirecard spiraled into insolvency in the spring, a margin loan to CEO Braun was off the bank’s books. But DB apparently helped Braun find another lender in the form of German bank Oldenburgische Landesbank, a small regional lender backed by private equity investors including Apollo Global Management.

    Although DB is among a group of 15 lenders owed some €1.6 billion by Wirecard, its actual exposure is closer to €70 million, assuming the credit facility was 90% drawn down. Commerzbank, ABN Amro and ING are each owed twice as much.

    And here’s the kicker: With Wirecard headed for insolvency, Deutsche Bank is now considering buying Wirecard’s banking operations, which have been ringfenced from the rest of the company by BaFin. After all that, DB could walk away with the only profitable business in the entire toxic company at a substantial discount. And with the explicit help of BaFin, the German securities regulator that actively protected Wirecard by attacking the FT and its reporters and even going so far as to bar short-selling in Wirecard shares. Most analysts believe that the company’s lending business will be worthless soon if clients go elsewhere. That should set the stage for DB to acquire the business at a substantial discount.

    In summary, DB basically did more than any other member of the German establishment (perhaps aside from BaFin) to legitimize Wirecard. Now, DB is set to become one of the biggest beneficiaries of the company’s historic collapse.

  • 67 Shot, 13 Fatally, Over Fourth of July Weekend In Chicago: Police
    67 Shot, 13 Fatally, Over Fourth of July Weekend In Chicago: Police

    Tyler Durden

    Sun, 07/05/2020 – 19:00

    Authored by Jack Phillips via The Epoch Times,

    At least 67 people were shot, including 13 fatally, over the Independence Day weekend in Chicago, according to authorities.

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    Nine of the weekend’s victims were minors, and two children died, officials told Fox32. That includes 14-year-old boy who was among four people who were killed in the South Side neighborhood Englewood on Saturday evening.

    The victims were at a large gathering on the street at around 11:35 p.m. on South Carpenter Street. Four males then approached the group and began shooting, police said, adding that the 14-year-old boy was shot in the back before he was taken to Comer Children’s Hospital, where he was later pronounced dead.

    The three other males, who were not identified, were pronounced dead at the scene and at the University of Chicago Medical Center, police said.

    In the same incident, an 11-year-old boy suffered a bullet graze wound, and a 15-year-old boy was shot in the abdomen. They were taken to the Comer hospital, and both are currently in fair condition, authorities said.

    Officials said a 7-year-old girl was shot in the head while standing on the sidewalk at her grandmother’s house during a Fourth of July celebration at 7 p.m. in Austin on the West Side, according to The Associated Press.

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    “Tonight, a 7-year-old girl in Austin joined a list of teenagers and children whose hopes and dreams were ended by the barrel of a gun,” Mayor Lori Lightfoot wrote on Twitter on Saturday.

    “As a city, we must wrap our arms around our youth so they understand there’s a future for them that isn’t wrapped up in gun violence.”

    In the incident, according to police, suspects emerged from a vehicle and started shooting. No suspects have been apprehended.

    Chicago Police Chief of Operations Fred Waller told NBC5 that the violence against children needs to end.

    “You gotta be tired of this,” he said.

    “Chicago’s heart is broken again. Austin’s heart is broken again … I’m tired of this.”

    Meanwhile, in a later incident at around 2:15 a.m. on Sunday in the South Side, a 21-year-old man was shot to death while standing on the sidewalk, police said. An hour before that, a woman was shot and five men were injured when a person opened fire at a crowd setting off fireworks in the West Side’s Lawndale neighborhood.

    Commenting on the latest violence, president Trump tweeted that shootings are significantly also in NYC “where people are demanding that @NYGovCuomo & @NYCMayor act now. Federal Government ready, willing and able to help, if asked!”

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  • China New Car Sales Crash 37% In 4th Week Of June
    China New Car Sales Crash 37% In 4th Week Of June

    Tyler Durden

    Sun, 07/05/2020 – 18:30

    June does not appear to be shaping up to be the month where Chinese auto sales “bounce back”. Dealing with recessionary headwinds pre-Covid, the world’s largest auto market has been decimated by the effect of the pandemic and doesn’t look to be leading the world to any type of meaningful recovery any time soon.

    Overnight the China Passenger Car Association said that retail car sales were down 37% YOY for the 4th week of June.

    Average daily sales were down to 51,627 during June 22-27. This is a 6% sequential fall from the same week in May, indicating little respite or improvement from the pressure of the coronavirus pandemic on the industry. PCA blamed “seasonal factors” for the drop, which is a funny way to say “Chinese-borne virus ravaging the entire planet”. 

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    This also paints an ugly picture for June’s new car sales number, since we reported about 3 weeks ago that the first week in June was also off to an ugly start. In that article, we noted that retail car sales fell 10% year over year – but more importantly 20% from the same period in May – in the first week of June.

    June’s interim data comes after what looked like the beginning of a rebound for the industry in May, to the extent that we can trust the numbers coming out of Beijing. This news comes despite better than expected results in May, where sales showed a 12% increase year over year. 

    According to The Detroit Bureau, premium and luxury passenger car retail sales led the charge in May, rising 28% last month compared with year-ago results. Those vehicles accounted for 1.61 million of the month’s 2.14 million vehicles sold.

    The China Association of Automobile Manufacturers, or CAAM, had predicted an 11.7% jump for May, including commercial vehicle sales in its results. Predictions for June look ominous: the CPCA has said that June sales will decline in part because June 2019 was such a strong month for the industry.

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    Meanwhile, the Chinese government is attempting to spur demand with new policies aimed at enticing buyers, according to Bloomberg, citing an unnamed automotive industry group in China. 

    Recall, we have recently noted that U.S. auto manufacturers are also teeing up sizeable incentives to get buyers back into showrooms. Europe is following suit, with Volkswagen starting a sales initiative to revive demand, including improved leasing and financing terms. 

    Outlook for the year in China remains less-than-optimistic. The CAAM predicts that sales will drop 15% to 25% for the year, depending on whether or not the country is able to further slow the spread of the virus.

    June’s full retail vehicle sales data should be available in days. 

  • State Dept Warns Top US Firms To Replace Supply Chains Exposed To China's Xinjiang
    State Dept Warns Top US Firms To Replace Supply Chains Exposed To China’s Xinjiang

    Tyler Durden

    Sun, 07/05/2020 – 18:15

    Now that the Senate has joined the House in its condemnation of China’s National Security Law, and on Thursday passed by unanimous consent a bipartisan bill to impose sanctions on Chinese officials who threaten Hong Kong’s limited autonomy, as well as the banks and firms that do business with them, we eagerly await when (and perhaps, if) Trump will sign the legislation into law (according to a WSJ report from Thursday, the White House hasn’t responded to a request for comment over whether the president will support the bill).

    And since it is unlikely that Trump will object to the veto-proof law – after all, the last thing he wants is to be seen as easy on China ahead of the election – on Friday, the State Department warned top American companies including Walmart, Apple and Amazon over risks faced from maintaining supply chains associated with human rights abuses in China’s western Xinjiang region, according to a letter seen by Reuters on Thursday. 

    “It is critical that U.S. companies and individuals be aware of the large-scale human rights abuses perpetrated by the PRC government in Xinjiang,” Keith Krach, Undersecretary of State for economic growth, energy and the environment wrote on July 1 according to Reuters. “Businesses should evaluate their exposure to the risks that result from partnering with, investing in, and otherwise providing support to companies that operate in or are linked to Xinjiang,” he said in the letter which was sent to trade groups.

    The warning comes at a time when the United States has been ratcheting up pressure on China over that country’s treatment of Muslim Uighurs in Xinjiang and Beijing’s new national security law for Hong Kong. It also follows a U.S. government advisory sent out on Wednesday which said that companies doing business in Xinjiang or with entities using Xinjiang labor could be exposed to “reputational, economic, and legal risks”.

    Naturally, China was hardly impressed by the latest escalation, and when he was asked about the U.S. government’s warnings over supply chain risks linked to Xinjiang, Chinese foreign ministry spokesman Zhao Lijian said that allegations of forced laboer were fabrications.

    “Some people in the U.S. keep on saying they care about ethnic minorities in Xinjiang while also taking all kinds of measures to oppress Xinjiang companies,” he said at a daily news conference in Beijing.

    As Reuters further notes, in a call with reporters, Krach said the complex nature of supply chains was making companies vulnerable to potential risks and urged them to be more vigilant. He did not say how many U.S. companies might have been entangled in such supply chains.

    The real question, of course, is not Xinjuang, but how far will the US push China, and how long before all China-based supply chains receive a similar warning, resulting in an unprecedented hit to global trade. In any event, the bottom line is clear: US corporations are now under the clock to shifting most if not all Chinese supply chains away from the country. Needless to say, the inflationary consequences of such a transition – which will take years to complete and billions of dollars to be optimized – can not be underscored enough. And since this is happening at a time of global demand-side deflation, the most likely outcome will be a brutally painful burst of stagflation which could last for years.

  • "Concept Incubator" Envisages Babies Being Grown At Home In A Pod
    “Concept Incubator” Envisages Babies Being Grown At Home In A Pod

    Tyler Durden

    Sun, 07/05/2020 – 18:00

    Authored by Paul Joseph Watson via Summit News,

    A “concept incubator” envisages a dystopian future where babies are grown inside sophisticated electronic pods which completely replace the womb and pregnancy.

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    The promotional video for the baby pod stresses how parents will be able to focus on other things like work while the pod baby is taken care of by the machine.

    “Parents would be able to live their lives normally,” states the promo, as if having a baby naturally is abnormal.

    “It has a dock to insert food,” states the promo as a woman is shown pouring green gunk into a canister. There’s also a “microphone” attached so people can “speak to the foetus.”

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    The pod, which thankfully is just an “idea” at this stage, was *birthed* by students at Product Design Arnhem.

    According to Tech Insider, the arrival of the pod baby is “only a matter of time” because it is not that different from lambs already being grown inside “biobags.”

    Responses on Twitter to the pod baby concept were not overly enthusiastic.

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    The happy clappy promotional video did not make mention of the fact that this all sounds like some horrific dystopian hybrid of Aldous Huxley’s Brave New World and a plot from Black Mirror.

    Huxley’s 1932 classic portrayed a soft form of totalitarianism where children are biologically engineered from birth in test tubes where each one is given a predestined course in life which is dependent on the conditioning techniques used on its decanted embryo.

    While the “concept incubator” falls far short of that scenario, it does promote the idea of dehumanizing the baby by removing the mother from the process entirely.

    As we have previously highlighted, the tech elite seems to be obsessed with further atomizing human beings by making them do literally everything from within the confines of a pod, whether that be living, exercising, working, or eating.

    Since the coronavirus outbreak, numerous restaurants have announced that they’ll be enclosing diners within pods or greenhouses, despite the fact that they will obviously overheat in summer.

    “Transparent corrals for beach-goers. Dining pods. Clear boxes for students. The demand for plexiglass protective shields has never been higher,” announced the Wall Street Journal this week.

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  • Musk Tweets Link To "Limited Edition" Short Shorts At Tesla's Online Store
    Musk Tweets Link To “Limited Edition” Short Shorts At Tesla’s Online Store

    Tyler Durden

    Sun, 07/05/2020 – 17:45

    In what is becoming the ultimate display of hubris – or perhaps a purposeful distraction from the Ghislaine Maxwell photograph that is making its way around the internet faster than coronavirus is spreading across the world – Elon Musk Tweeted out on Sunday afternoon that Tesla would now be selling “short shorts”, in what is a continuing dig at short sellers.

    Recall, last week, Musk took a swipe at both the SEC – again referring to them as the “Shortseller Enrichment Commission” and possibly suggesting that the regulator fellate him – and short sellers.

    “Who wears short shorts,” Musk tweeted last week, antagonizing short sellers. And in a separate exchange, Musk seemed to offer his approval for a pair of short shorts, with gold trim, that had the phrase “S*** Elon’s C***” on them. 

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    Musk took what was a stupid joke to begin with, laden with hubris and perhaps other mind-altering ego-droppings, and doubled down on it on Sunday, when he Tweeted out that “Limited edition short shorts now available” at the Tesla store.

    He posted a link to the store, which shows actual short shorts for sale.

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    “Only $69.420!!” Musk Tweeted, doing his best impression of a middle schooler laughing uncomfortably while shooting root beer out of their nose and onto their Dungeons and Dragons board the first time they hear a sex joke. 

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    “Celebrate summer with Tesla Short Shorts. Run like the wind or entertain like Liberace with our red satin and gold trim design. Relax poolside or lounge indoors year-round with our limited-edition Tesla Short Shorts, featuring our signature Tesla logo in front with ‘S3XY’ across the back. Enjoy exceptional comfort from the closing bell,” the product description says.

    Meanwhile, Musk continues to bicker with journalist Ken Klippenstein, as we laid out in our article this morning, regarding the details of his relationship with Jeffrey Epstein and Ghislaine Maxwell, if any. 

    But, at least he can do so knowing another day has gone by where he has “bested” short sellers.

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  • 80% Of NYC Restaurants Couldn't Afford June Rent
    80% Of NYC Restaurants Couldn’t Afford June Rent

    Tyler Durden

    Sun, 07/05/2020 – 17:45

    The majority of restaurant owners around the city did not pay their entire rent in June, with 36% skipping out on it altogether, as the coronavirus pandemic continues to make it harder for eateries to survive, a new survey found according to Commercial Observer.

    The nonprofit New York City Hospitality Alliance surveyed 509 restaurateurs around the city and found four out of five didn’t pay the full June rent. Of those, 90% said they paid half or less last month.

    “Rent is putting enormous financial pressure on restaurants, bars and clubs after four near-fatal months of economic disaster in which many have already shuttered for good,” said Andrew Rigie, executive director of the NYC Hospitality Alliance

    “Pre-pandemic, it was incredibly difficult to run a successful restaurant,” added Rigie. “These conditions, the longer that it goes on, is going to make it more and more challenging for small businesses to ever recover. The vast majority of small businesses will not be able to pay back months of missed rent.”

    As the report further notes, the survey also found that landlords have been unwilling to give restaurants a break: 60% of restaurant owners said their landlords refused to give them deferments during the pandemic, while only 10% were able to renegotiate their leases. In total 73% of landlords — also under economic stress — refused to waive rent payments for their restaurants, bars and clubs in June, the poll found.

    “Our small businesses urgently need support on rent, so government officials, landlords and banks need to work together to find a solution. Whether it’s direct rent subsidies, deferring rent and extending payment schedules to the back end of lease agreements, and other creative ideas, we are in the midst of a rent crisis and need action now,” Rigie said adding that restaurant owners are “hanging on by a thread and they’re exhausting their personal savings in the hope of one day getting their business up and running again.”

    Even with the challenges and debts piling up, owners said most aren’t looking to close up shop.

    “The idea of walking away right now is not something that most folks want to do,” said Karl Franz Williams, the owner of Harlem’s 67 Orange Street cocktail bar who was able to get a rent break from his landlord. “They want to figure out how to make it through. [Owning a restaurant is] not something most of us are doing just for the fun of it.”

    Emergency restrictions put in place to curb the spread of the coronavirus forced restaurants and bars to switch to take-out and delivery models since late-March. Owners dealt with a significant drop in revenue and were forced to lay off thousands of workers.

    The city began to ease restrictions in June as the number of cases dropped and last week restaurants and bars were allowed to start outdoor service. While that has helped, Rigie said that most of the extra funds generated from outdoors sales immediately went to rent and other expenses.

    And as the number of people infected with coronavirus began spiking in other states around the country, Gov. Andrew Cuomo indefinitely postponed the return of indoor dining around the city this week, which was scheduled to start on July 6. Rigie said the move could cause more restaurants to permanently shutter.

    Willimas said the return of indoor dining likely won’t be the shot in the arm for restaurants most people think it will be. He owns an eatery in New Haven, Ct., The Anchor Spa, which has been allowed to start indoor dining but the spot is still doing 30 percent of its pre-COVID-19 sales.

    “We’re not back yet, we’re still struggling and indoor dining is not the end-all,” he said. “There’s still a lot of trepidation of being inside a small space.”

    Plus, landlords and other debtors will think it’s business as usual once indoor dining returns and will come to collect debts, Williams said. And re-opening indoor seating too soon could be the death knell for many businesses if a second-wave hits.

    “The only thing worse than delaying restaurants opening indoors is to have them re-open and then shut down shortly thereafter because of a spike of COVID cases,” Rigie said. “While there’s an urgency to start opening and generating revenue, there’s a great fear that it can result in a spike of coronavirus and that would further devastate the industry and make it more unlikely that these businesses will ever recover.”

    What would be a bigger help than returning indoor dining for owners would be for the government to step in with either rent subsidies, deferrals or other methods to keep restaurants alive, Rigie said.

    “We need all levels of government, the banks, the landlords and the commercial tenants to come together and figure out how to deal with this situation,” he said. “We just can’t keep ignoring it.”

    “We’re eager to work with lawmakers and industry leaders on any tangible plans that provide immediate relief to struggling restaurants and nightlife venues across the city before it’s too late.”

    Another form of relief would be to extend take-out and delivery alcohol sales along with the cap of third-party delivery fees implemented during the pandemic until months after the epidemic finally wanes, Williams said.

    “Everything is uncertain right now, we don’t know if there’s going to be another wave,” he said. “That’s why I really hope that our elected officials will make some of the things that they’ve given us more permanent. Running your business in a total state of insecurity, where you don’t know what’s going to happen, is not a way to run your business.”

     

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