- France, UK, Germany Plea For Iran To Reverse Course On Advanced Centrifuge Expansion
France, UK, Germany Plea For Iran To Reverse Course On Advanced Centrifuge Expansion
Tyler Durden
Tue, 12/08/2020 – 01:00Days ago Iran announced its intent to install more advanced uranium-enriching centrifuges to expand its nuclear program, which it still maintains is for peaceful domestic energy purposes, giving approval through an act of parliament in a move seen as aimed toward gaining more leverage ahead of expected talks with the incoming Biden administration on relieving sanctions and restoring US participation in the JCPOA nuclear deal.
The IAEA nuclear watchdog confirmed this in a recent statement: “In a letter dated 2 December 2020, Iran informed the Agency that the operator of the Fuel Enrichment Plant (FEP) at Natanz ‘intends to start installation of three cascades of IR-2m centrifuge machines’ at FEP,” the IAEA told member states.
But now European signatories of the 2015 JCPOA are urging Iran not to go through with it, saying they they are deeply “alarmed” it could backfire in terms of Biden’s reported willingness to drop sanctions.
Iran nuclear facility, via Reuters France, Germany and Britain said in a joint statement that Iran must remain “serious” about “preserving space for diplomacy”. The expanded centrifuges, they said, could have the opposite effect.
“Iran’s recent announcement to the IAEA that it intends to install an additional three cascades of advanced centrifuges at the Fuel Enrichment Plant in Natanz is contrary to the JCPoA and deeply worrying,” the countries added.
Here are the details of what the Islamic Republic plans to do according to a leaked confidential report revealed by Reuters:
A confidential International Atomic Energy Agency report obtained by Reuters said Iran plans to install three more cascades, or clusters, of advanced IR-2m centrifuges in its enrichment plant at Natanz, which was built underground apparently to withstand any aerial bombardment.
Iran’s nuclear deal with major powers says Tehran can only use first-generation IR-1 centrifuges, which refine uranium much more slowly, at Natanz and that those are the only machines with which Iran may accumulate enriched stocks.
The fear is that it could also put Biden under greater domestic public pressure, but especially pressure by national security state hawks, to not pursue restoration of the JCPOA.
“Such a move would jeopardise our shared efforts to preserve the JCPOA and also risks compromising the important opportunity for a return to diplomacy with the incoming U.S. administration,” France, Germany and Britain added in their statement.
All of this also comes as Trump has reportedly given Pompeo a ‘green light’ to target Iran in various ways (presumably with kind of covert action alongside ally Israel that led to the death of Iranian nuclear scientist Mohsen Fakhrizadeh), but short of any action that might spark a major war.
- China & The US Are Facing Off In The Third World
China & The US Are Facing Off In The Third World
Tyler Durden
Mon, 12/07/2020 – 23:40Authored by Hal Brands, op-ed via Bloomberg.com,
During the Cold War, the Third World was a superpower battleground, as the U.S. and Soviet Union jockeyed for position across the globe. Today, the developing regions are once again an arena for rivalry, this time between the U.S. and China.
As the President Donald Trump era ends, Washington seems, somewhat fortuitously, to have mostly avoided the danger that China might divide it from other advanced democracies in Europe and the Asia-Pacific. Yet the struggle for the Third World is only beginning, and Beijing possesses sizable advantages as well as vast ambitions.
If the global periphery is moving to the center of the U.S.-China rivalry, that’s partially because the status of the democratic core is no longer as precarious as it was only recently. As late as 2019 and even the beginning of 2020, the combination of Chinese economic leverage and self-destructive U.S. behavior under Trump threatened to drive deep wedges in the Western world. It seemed possible that large swaths of Europe might opt for neutrality between America and China, or even become technologically dependent on Beijing. That danger hasn’t vanished, but it has become less acute.
By deepening its domestic repression, pressuring a democratic Taiwan, and coercing countries that criticized or resisted the Chinese Communist Party, Beijing created a wave of diplomatic blowback. China’s favorability ratings have plummeted in Europe and East Asia, and the European Union has labeled it a “systemic rival.” More and more advanced democracies have opted, implicitly or explicitly, to avoid using the Chinese telecommunications giant Huawei in their critical digital infrastructure.
The providential irony of the Trump era is that a presidency often characterized by efforts to fragment the democratic world is ending with the gradual creation of a democratic coalition to resist Chinese influence.
Unfortunately, the situation is different in the developing regions, namely Central and Southeast Asia, Africa, the Middle East and Latin America. During the Cold War, the Third World was a strategic vulnerability for the U.S., because the blend of ideological radicalism, post-colonial ferment and economic underdevelopment made these regions receptive to communist influence.
Conditions have changed enormously, and the term “Third World” has fallen out of favor. (“Developing countries” or “emerging markets” are often the preferred nomenclature, even though those labels obscure vast differences in current status and future prospects.) But the nations of these regions still constitute a challenging strategic landscape for Washington.
Generally speaking, these countries are less developed than U.S. treaty allies in Europe and the Asia-Pacific, which makes the offer of Chinese loans (even predatory ones) or low-cost digital infrastructure more attractive. Democratic governance is less robust, and political corruption is more prevalent in the former Third World than in the West, creating entry points for Chinese influence.
Thanks to their historical experience of colonialism and foreign intervention (sometimes at the hands of Washington), developing nations tend to favor the norm of nonintervention in the internal affairs of other states, and are less inclined to condemn the authoritarian abuses of the Chinese Communist Party. The quest for influence in the global south is thus at the heart of Beijing’s geopolitical strategy.
Because Third World countries are so numerous, their support is crucial in Beijing’s effort to control or coopt international bodies from the United Nations Human Rights Council to the International Telecommunications Union. These institutions may not sound like strategic prizes, but they play a crucial role in setting the norms and standards of the global system.
Similarly, the Belt and Road Initiative aims to weave economic, diplomatic, technological and eventually military ties connecting China to much of the developing world. From Beijing’s perspective, building a sphere of influence in the global south is a path to achieving geopolitical parity with the U.S.
U.S. officials appreciate the danger. During the Trump years, high-ranking officials including Secretary of State Rex Tillerson and National Security Adviser John Bolton publicly described the perils of neo-imperialism with Chinese characteristics. The creation of the U.S. International Development Finance Corporation represents an initial response to China’s global economic offensive. Other leading democracies, such as Australia and Japan, have deepened their own engagement with the countries of the South Pacific and Southeast Asia.
Yet Chinese loans and infrastructure projects crisscross the globe, the Digital Silk Road is drawing countries into Beijing’s technological embrace, and Beijing’s diplomatic influence is still expanding rather than contracting.
For the foreseeable future, China’s Third World challenge will be a strategic reality, one that requires a concerted and creative response.
Enhanced U.S. coordination with Japan, Australia and the EU would allow leading democracies to more strategically deploy their combined resources to strengthen Third World growth and infrastructure. A democratic tech coalition geared toward facilitating and financing the adoption of non-Chinese telecommunications technology, for example, would reduce the allure of devil’s bargains with Huawei and its 5G network.
Covid-19, meanwhile, offers an opportunity to unveil a generous program for vaccine distribution in the developing regions, something that would be a moral good, as well as a way of offsetting the vaccine diplomacy that Beijing is already practicing.
Over time, Washington and its allies should also emphasize good governance and democratic reform in the developing world, because progress in that area will make it harder for China to cut deals with autocratic or kleptocratic leaders. And while promoting positive engagement is the best guarantee of U.S. influence, Washington and its friends should also highlight — whether publicly or quietly — the more exploitive aspects of Beijing’s behavior in the global south, from resource extraction, to the promotion of illiberal rulers, to a standoffish approach to debt relief.
The U.S. mostly has President Xi Jinping to thank for the world’s major democracies becoming more aligned in their views of the Chinese challenge. Yet the geography of great-power competition is shifting, and succeeding in the developing world will require more than good luck.
- Pope Frances Will Make 'High Risk' Official Visit To Iraq In March
Pope Frances Will Make ‘High Risk’ Official Visit To Iraq In March
Tyler Durden
Mon, 12/07/2020 – 23:20The Vatican has announced that Pope Francis plans to break his 15-month hiatus from international travel, a delay which was also largely to blame on the coronavirus pandemic, by visiting Iraq in the Spring of 2021.
It’s being widely reported as a surprising and “risky” trip given the tense security situation there, also as COVID-19 infections spike globally. It’s planned for March 5-8.
According to the official announcement Monday, “He will visit Baghdad, the plain of Ur, linked to the memory of Abraham, the city of Erbil, as well as Mosul and Qaraqosh in the plain of Nineveh,” said the Vatican Press Office.
Pope Francis with Sheikh Ahmad el-Tayeb, grand imam of Egypt’s al-Azhar mosque. Image source: CNS This was prompted by both an Iraqi government invitation and the desire of the local Catholic Church, represented in the Chaldean church. It’s expected that Pope Frances could during the trip declare ‘new martyrs’ or saints who were the victims of what’s remembered as the 2010 Baghdad Church Massacre.
During that al-Qaeda linked attack 58 Chaldean Catholics were killed after an hours-long hostage standoff in a Baghdad church. Over 100 churches and monasteries throughout the country were attacked in terrorist incidents during the US-occupation period.
The as yet unpublished Pope’s itinerary for the Iraq visit will “take into consideration the evolution of the worldwide health emergency.” He’ll be the first Pope to ever visit the country.
Pope Francis will travel to Iraq in March 2021.
He will be the first pope to ever visit the country, which is still recovering from the devastation inflicted by the Islamic State. https://t.co/l0KBWqdtJd
— Catholic News Agency (@cnalive) December 7, 2020
https://platform.twitter.com/widgets.js
He’s expected to emphasize that the ancient Christian presence in Iraq remains essential. Before the US invasion of Iraq to remove Saddam Hussein in 2003, there were an estimated one million to up to 1.4 million Christians in the country, mostly Catholic and Orthodox.
However, after 2017 estimates are commonly at a much reduced 300 to 400 thousand.
During 2014 through 2016 ISIS also drove many Christians out of the Nineveh Plains region near Mosul. While many families have returned to their villages in the area, the bulk either went to other cities in Iraq like Erbil or Baghdad, but many fled the country altogether.
Mosul also once had a sizeable minority Christian presence of 100,000 or more, but in the past years has been completely liquidated of Christians.
- The IMF's Net-Zero Fairy Tale
The IMF’s Net-Zero Fairy Tale
Tyler Durden
Mon, 12/07/2020 – 23:00Submitted by Rupert Darwall, senior fellow of the RealClear Foundation and author of THE CLIMATE NOOSE. Submitted by Real Clear Energy,
With Britain, France, the European Union, and now America (soon to be under Joe Biden’s leadership) piling onto the net-zero bandwagon, you’d think that some objectivity about the economic costs and consequences about such absolutist carbon-emission policies would be in order. Traditionally, the International Monetary Fund (IMF) could be relied upon as a source of sound economic advice. No longer.
Under its previous managing director, Christine Lagarde, and now its current one, Kristalina Georgieva, the IMF has traded economic integrity for green wokery – thus giving governments license to push radical green policies in the false belief that there are few or no downsides.
Covid-19 has put what might be called green millenarianism on steroids. In July, Georgieva told an interviewer that the pandemic presents a once-in-a-lifetime opportunity to be part of a transformation necessary for human survival: “you don’t like the pandemic, you’re not going to like the climate disaster.” A characteristic of climate millenarianism is over-hyping of the potential damage of climate change while at the same time claiming that avoiding this damage will cost next to nothing. Thus in its most recent World Economic Outlook, the IMF implies that potentially catastrophic climate change can be avoided with a green fiscal stimulus amounting to 1 percent of GDP and carbon taxes of between $10 to $40 a ton in 2030.
The IMF’s analysis is riddled with errors and omissions. It correctly notes that renewable energy is more labor-intensive than generating energy from fossil fuels. As the American Enterprise Institute’s Mark Perry notes, in 2019 it took 5.2 workers in wind and an astonishing 45.8 in solar to produce the same amount of electricity as one worker in nuclear, natural gas, and coal generation. That’s more jobs in wind and solar, yes, but poorly paid ones – a critical dimension of employment that the IMF entirely neglects.
The IMF also implies that renewable energy is less capital-intensive (“reallocation of activity from high- to low-carbon sectors could therefore be more positive (less negative) for employment than investment”). This shows how little the IMF understands about the energy sector. Wind and solar are intermittent power sources, so keeping the grid stable and the lights on requires investment in parallel generating capacity. This makes renewables extremely capital-inefficient. Consider the U.K. Without renewables, the U.K. would require 22 gigawatts (GW) of new capacity to replace old coal and nuclear. With renewables, 50 GW is required – 28 GW more than without. Switching to renewables more than doubles the investment requirement.
Economic progress and rising living standards have come from capitalism’s ability to produce more from less, through constantly improving capital and labor productivity. Widespread adoption of renewables throws this process into reverse. It is the opposite of progress. President-Elect Biden’s promised 10 million new clean energy jobs can be more than met, Perry calculates, by switching to 100% solar energy – but as he points out, “those energy jobs will come at a high price in the form of higher energy costs for consumers and businesses, less dependable electric power, more blackouts, a reduction of jobs in energy-intensive sectors, reduced economic growth and an erosion of the nation’s prosperity.”
To derive its conclusion that net-zero would be the economic equivalent of a flea bite on global growth, the IMF uses general equilibrium modelling, which can be useful in understanding the effects of, say, a tax change, and mapping its effects throughout an economy. But equilibrium, a concept borrowed from Newtonian physics, implies regularity and stationarity, a system returning to a stable growth path as external forces unwind – conditions that don’t pertain when economies undergo forcible structural transformation lasting decades, and of a severity not seen outside wartime or the centrally planned economies of the Soviet era. The methodological assumptions of equilibrium are violated by the economic process that the method aims to model, thus rendering the IMF’s conclusions worthless.
The most misleading claim that the IMF has seeded into public discourse concerns fossil fuel subsidies. “Fossil fuels are now massively under-priced,” the IMF asserts, with global energy subsidies amounting to $4.7 trillion in 2015, equivalent to 6.3% of global GDP. These aren’t your grandfather’s subsidies in the form of cash payments to oil producers, which is what the green lobby would like us to believe: end the subsidies, transfer the cash to clean tech, and all will be well.
In fact, the IMF acknowledges that producer subsidies are “relatively small.” Rather, the IMF’s elastic definition of subsidy includes a $40 per ton carbon tax, speculative estimates of deaths caused by local air pollution as well as deaths from road accidents, and the cost of traffic delays. The epidemiology of PM2.5 – microscopic particles that make up an air pollution tranche – is highly uncertain, something that the IMF researchers acknowledge. A British government report concedes that unlike with smoking and lung cancer, there is no actual group of individuals whose deaths are attributable to air pollution alone. Indeed, a 2012 study analyzing data across 100 American cities found no evidence that PM2.5 concentrations had any causal impact on increasing mortality rates.
Also problematic is the value of a statistical life assumptions used by the IMF, which are several times the actual willingness of both individuals and countries to spend money on improving health. For the U.S., local air pollution makes up around one-half the IMF’s diesel “subsidy,” and traffic congestion around three-fourths of the gasoline “subsidy.”
Improvements to engine technology mean that modern autos are astonishingly clean. In urban centers with the most modern diesel vehicles, the exhaust can be cleaner than the intake air. The IMF would have us believe that the tailpipe is the sole source of vehicular PM2.5. According to a recent study, non-exhaust emissions are now believed to constitute the majority of primary particulate matter from road transport. Pollution from tire wear can be 1,000 times worse than what comes out of the tailpipe, and with their heavy batteries, electric vehicles will cause more air pollution from tire wear.
The same goes for road congestion. Fossil fuels don’t cause it; vehicles do. If the IMF is against road transportation, it should say so.
As it is, the IMF’s treatment of fossil fuel subsidies is no more than a highly sophisticated hit job. Every fairy tale needs a villain. And living happily ever after only happens in fairy tales – or in net-zero reports.
- Swedish Central Bank Governor Slams Expansion Of QE, Gives 6 Reasons Why
Swedish Central Bank Governor Slams Expansion Of QE, Gives 6 Reasons Why
Tyler Durden
Mon, 12/07/2020 – 22:44Two weeks ago, the oldest central bank in the world, Sweden’s Riksbank stunned the world when it unveiled 40% more QE than consensus had been expecting. Specifically, the Riksbank announced that it was expanding its quantitative easing program to 700 billion kronor ($82 billion), which was 200 billion kronor more than its earlier target. To be sure, with the Riksbank having locked itself in after Governor Stefan Ingves said just a few years prior that its “experiment” with negative rates was officially over, expanding QE was the only available option unless the central bank was willing to gamble with its credibility (and until there is a far greater crisis when negative rates will be unavoidable, damn the soaring house prices).
And while most Swedish central bankers were on board with the decision, there was at least one who hopefully sees the writing on the wall: that central banks will be able to superglue the falling house of cards for only a few more years (effectively echoing the BIS’ latest warning).
In a jarring break with the central bank consensus, Riksbank Deputy Governor Martin Floden presented a “long list of objections to the proposed decision” to expand QE through to the end of 2021, he said in minutes from the Nov 25 policy discussion, and noting that “it is the list as a whole that leads me to enter a reservation.”
Below we summarize his six objections (the full text is below):
- First, it’s unlikely that further purchases will be able to push down already low bond yields to noticeably lower levels, and that
- ” a promise today for larger asset purchases will not make monetary policy more expansionary in the near term.”
- Second, it’s “uncertain whether asset purchases in the autumn of 2021 will make monetary policy more expansionary then.”
- Third, “communication concerning a comprehensive purchasing program until the end of 2021 may generate more uncertainty than clarity”
- Fourth, “the actors and markets” that the Riksbank can directly affect are still not in such an acute crisis situation as they were in the spring
- Fifth, “the most important mechanism is that central banks, via asset purchases, are able to remove risk from the markets.” And since this mechanism hardly works if the Riksbank purchases government securities with short maturities, Floden doesn’t consider purchases of treasury bills to be an effective measure
- Sixth, uncertainty over developments in the near term is high, bank needs “to take a new monetary policy decision to purchase more in the near term”
He concluded that “instead of expanding the programme, I advocate that we communicate clearly that we will ensure that the level of interest rates remains low for a long time to come.” He was overruled.
Floden’s Minutes excerpt is below:
The Riksbank’s measures throughout the pandemic have been important and have resulted in a low level of interest rates and continued access to credit for companies and households. The consequences of the pandemic will impede the Swedish economy for a long time to come. The Riksbank therefore needs to ensure that the level of interest rates remains low for many years. In this way, monetary policy will facilitate an economic recovery, which will contribute to inflation ultimately rising towards the target of 2 per cent.
So far, I agree with the reasoning behind the proposed monetary policy decision in the draft Monetary Policy Report. Nevertheless, my objections to the proposed decision are many.
I will now present a long list of objections to the proposed decision. But the length of the list is not a good indication of how far from the proposed decision I stand. No point on my list would alone justify a reservation to the proposed decision. It is the list as a whole that leads me to enter a reservation. In addition, my opinion is that I have the same view of the need for a continued expansionary policy as the rest of the Executive Board. My reservation thus concerns how we can best design monetary policy to achieve this.
First, the Riksbank has already decided on a comprehensive purchase programme, running until mid-2021. The programme has had a positive impact on interest rates and lending. Yields on safe assets, such as government bonds, are low at all maturities. For example, the yield on all government bonds with maturities up to 10 years is negative and thus lower than our policy rate. The yield curve is thus low and flat. Additionally, yields on riskier and less liquid assets are also low. For example, yields on mortgage and corporate bonds are lower than before the pandemic. This is contributing to low lending rates to both households and companies. My assessment is that the repo rate sets a boundary for how low all of these rates can fall. In my opinion, it is unlikely that further purchases will be able to push the rates down to noticeably lower levels. I therefore deem that a promise today for larger asset purchases will not make monetary policy more expansionary in the near term.
Second, I consider it uncertain whether asset purchases in the autumn of 2021 will make monetary policy more expansionary then. When our previously-announced purchase programme expires in mid-2021, the Riksbank will own a large proportion of Swedish nominal government bonds and have a large holding of mortgage bonds. The Riksbank will also be a significant actor in the fairly illiquid secondary markets for municipal and corporate bonds, as well as real government bonds. I therefore consider it likely that the Riksbank will be able to hold yields on these assets at low levels by only buying assets to compensate for redemptions, or at least by purchasing new assets to a lesser extent than is now proposed in the draft decision. I do not rule out the possibility that substantial asset purchases may be justified but I do not see it as a main scenario.
Third, I consider that communication concerning a comprehensive purchasing programme until the end of 2021 may generate more uncertainty than clarity. It is good that central banks are transparent and provide guidance on their policy rules and future plans. But the Riksbank is now a major actor on the bond markets. At present, it is not possible to predict how purchases next autumn will affect these markets. Instead of promising purchases of a certain magnitude, I think that our communication should focus on what we wish to achieve. Consequently, I would rather see us communicating that, for a long time to come, we will keep the repo rate low, ensure that the level of interest rates otherwise remains low, and make sure that lending continues to function. The tools we need to use to achieve this and the possible purchase sums that will be relevant can be assessed on an ongoing basis. Increased asset purchases may hold the level of interest rates down if risk, liquidity or term premia start to rise. But if the level of interest rates as a whole needs to be pushed down from the current level, it would probably be better to cut the repo rate instead.
Fourth, there are situations in which we can inspire confidence by demonstrating strong initiative and preferring to do too much rather than too little. It was important that the Riksbank acted rapidly and forcefully with major support programmes at the outbreak of the pandemic in the spring. The pandemic is now getting worse again and some sectors are being very badly impacted, but the actors and markets that the Riksbank can directly affect are still not in such an acute crisis situation as they were in the spring. Our asset purchases must be balanced both against the undesirability of a central bank dominating the markets and excessively affecting price mechanisms – for example by generating abnormally low risk premia – and against large purchases leading to increased credit and, above all, interest rate risk on the Riksbank’s balance sheet.
Fifth, I do not consider purchases of treasury bills to be an effective measure. There are various hypotheses around how and why quantitative easing works. Easing presumably acts via several different mechanisms and in different ways depending on the economic situation and institutional conditions. But perhaps the most important mechanism is that central banks, via asset purchases, are able to remove risk from the markets. This mechanism hardly works if the Riksbank purchases government securities with short maturities. These securities are liquid and secure, and lack term premia. Among other things, this can be seen by the way they are already being traded at rates that are lower than the Riksbank’s repo rate. If our ambition is to bring short-term market rates for safe assets down, this can best be achieved by cutting the repo rate.
Sixth, uncertainty over developments in the near term is high. The spread of infection has increased substantially in recent weeks and new restrictions have been introduced. I therefore consider it positive that we are laying down a plan for asset purchases in the first quarter of next year that remains extensive. I advocate the same purchase plan for the first quarter of next year as in the proposed decision, with the exception of the SEK 10 billion intended for the purchases of treasury bills. However, conditions on the financial markets can change rapidly, in which case new measures may be needed from the Riksbank. The Riksbank therefore also needs to be prepared to adjust monetary policy before the next ordinary monetary policy meeting. But the expanded programme does not make us better equipped to react if conditions change in the near term. We are now making decisions on the rate of purchases for the first quarter in 2021. Consequently, we need to take a new monetary policy decision to purchase more in the near term, regardless of whether or not we expand the programme today.
Instead of expanding the programme, I advocate that we communicate clearly that we will ensure that the level of interest rates remains low for a long time to come. In more concrete terms, this would involve us keeping to the previously announced programme of asset purchases for SEK 500 billion until the middle of next year and communicating our preparedness, even in the near term, either to extend the purchase programme, cut the repo rate or otherwise react to developments that otherwise would jeopardise the expansionary impact of monetary policy
- Chinese FX Reserves Soar Most In 7 Years As Beijing Starts To Intervene Against The Soaring Yuan
Chinese FX Reserves Soar Most In 7 Years As Beijing Starts To Intervene Against The Soaring Yuan
Tyler Durden
Mon, 12/07/2020 – 22:37A little over five years since China’s 2015 devaluation, which sparked an avalanche of FX reserve liquidation as Beijing scrambled to halt a tsunami of capital outflows which at one point culminated in a furious wave of bitcoin buying by Chinese residents, China is once again adding FX reserves at a blistering pace.
Around the same time that the Chinese National Bureau of Statistics overnight reported a surge in exports and a record trade surplus, the PBOC also reported that at the end of November, China’s Forex reserves jumped to $3.178 trillion, beating estimates of $3.15 trillion, and the highest number since August 2016.
And, at $50.5BN, this was also the biggest monthly increase in FX reserves since November 2013.
And just like the rapid collapse in yuan reserves in the 2015-2017 period was a result of Beijing’s scramble to sell dollar assets and halt the plunge in the yuan and stem the tidal wave of capital outflows, with the recent surge in FX reserves, it appears that China’s authorities are finally pushing back on yuan appreciation which has reached a level where concerns about imported deflation are starting to emerge. Furthermore, while a chunk of the jump in reserves was likely based on valuation adjustments and FX rate changes as a SAFE spokeswoman said, it is likely that the bulk was the result of USD-buying intervention.
As Bloomberg’s Simon Flint writes, it will be interesting to see just how the authorities slow the pace of yuan appreciation: will they use the daily yuan official fixing, intervention, or further announcements of capital outflow liberalization, to slow the pace of yuan appreciation – should dollar weakness persist in the coming months.
That said, there is always a caveat when dealing with Chinese reserve data: as Flint cautions, these estimates are based on valuation-adjustments can be flawed as we don’t know the exact composition of China’s reserves. Nor is it clear whether China revalues securities within its portfolio on a monthly basis. To get the cleanest picture of Chinese capital flows, it’s best to wait for the SAFE dataset on “cross-border RMB flows” which is Goldman’s preferred FX flow measure and which gives a far more definitive picture of what’s really happening behind China’s opaque capital firewall.
Still, with the Chinese yuan soaring in the past 6 months as the dollar has plunged, and fast approaching where it was around the time of the August 2015 devaluation…
… it is only a matter of time before Beijing will have no choice but to aggressively intervene in the currency market, sending the dollar blasting off in the opposite direction.
- This Is Going To Be The Worst Winter For The US Economy In Modern Times
This Is Going To Be The Worst Winter For The US Economy In Modern Times
Tyler Durden
Mon, 12/07/2020 – 22:20Authored by Michael Snyder via TheMostImportantNews.com,
We already knew that this was going to be the worst winter for the U.S. economy since the Great Depression of the 1930s, but now a new round of lockdowns threatens to rip the guts out of hundreds of thousands of small businesses all around the country. As I write this article, 33 million people are under “stay-at-home orders” in California alone. With each passing day, state governments are implementing even more new restrictions, and those new restrictions are going to increasingly choke the life out of economic activity in this nation.
The good news is that most of the corporate giants have enough resources to weather another round of lockdowns, but countless small businesses do not.
In San Francisco, some small businesses that have served the city for generations now find themselves on the edge of extinction…
“I’ve been walking around the city nonstop talking to small businesses owners and every story is sadder than the next,” said Rory Cox, the founder of the newly-formed San Francisco Small Business Alliance. “Everyone is like, ‘I wake up every day and I don’t know how much longer I can do this. I had 60 employees but now all I have is six, or now it’s only me.’ These are family businesses, these are moms and dads, brothers and sisters. I feel firmly we’re the backbone of the city. And they’re destroying us, they’re ripping us apart, they’re tearing out the heart and soul of the city.”
Traditionally, small businesses have been the primary engine of job growth in the United States, but now they are laying off workers in droves once again.
So far this year, more than 70 million Americans have filed new claims for unemployment benefits, and this unprecedented tsunami of job losses was caused by the original round of lockdowns.
Now a new wave of lockdowns is upon us, and there is going to be extreme economic pain all over America.
Sometimes it can be mind numbing to talk about the millions upon millions of Americans that are now in horrifying financial distress, but each one of those individuals has a name…
Tina Morton recently faced a choice: Pay bills — or buy a birthday gift for a child? Derrisa Green is falling further behind on rent. Sylvia Soliz has had her electricity cut off.
Unemployment has forced aching decisions on millions of Americans and their families in the face of a rampaging viral pandemic that has closed shops and restaurants, paralyzed travel and left millions jobless for months.
As I discussed the other day, the Aspen Institute is estimating that up to 40 million Americans could be facing eviction in 2021 because they have gotten behind on rent or mortgage payments.
We have never seen anything like this before in all of American history. We are literally murdering the economy, and most of the politicians that are doing this don’t seem to care. Perhaps their jobs are secure, but there are millions of others that haven’t been able to find a new job after being laid off months ago. In fact, the percentage of “long-term unemployed workers” as a share of all those that are unemployed is now the highest it has been during this entire pandemic…
In November, the number of workers jobless for at least 27 weeks — economists’ barometer for “long-term” unemployment — grew by 385,000 to 3.9 million.
That accounts for 37% of all unemployed workers — up from a third in October and 19% in September.
And of course most of those that are still working are just barely scraping by from month to month.
According to a survey that was just released, nearly tw0-thirds of Americans say that they are living paycheck to paycheck at this point…
In a year still ravaged by the coronavirus pandemic and its economic fallout however, it appears many will be struggling through the most festive part of 2020. A survey finds over 60 percent of Americans say they’re now living paycheck-to-paycheck as the year draws to a close.
The poll of over 2,000 Americans, commissioned by Highland Solutions, wanted to see how spending habits and personal finances in the U.S. are holding up during the pandemic. Their results find 63 percent of respondents have cut back on their spending due to COVID. Six in 10 say they’re doing it to be more cautious, but 49 percent add it’s because of losing income at work.
Now this new wave of lockdowns is going to push millions more struggling Americans into poverty once they lose their jobs.
I feel especially bad for those that have pouring blood, sweat and tears into their small businesses for years only to have them utterly destroyed by politicians like California Governor Gavin Newsom. What one small business owner named Robert Carroll had to say about the new lockdowns in California will stay with me for a very long time…
“We have basically been left with no options and essentially no hope for the future,” wrote Robert Carroll, the owner of the bar Sodini’s in Redwood City. “We understand COVID-19 is serious, and dangerous, however in this scenario it’s not only dangerous to our health, but our financial and mental wellbeing as well. People need to decide for themselves what risks to take, we don’t take risks at Sodini’s, we insist on masks and distancing, all we want is a CHANCE to maintain our business. If you’ve never had a dream taken away and there’s nothing you can do about it, it’s the worst feeling in the world.”
Even in the most wildly optimistic scenario imaginable, it is hard to imagine how we could possibly avoid the most painful winter for the U.S. economy since the Great Depression of the 1930s.
Perhaps that is why corporate insiders are now selling stocks at the fastest pace that we have seen in almost four years.
Corporate insiders absolutely nailed the two short-term peaks in the market that we witnessed earlier this year, and now they seem to think that an even larger move down is coming.
But ultimately what we are heading into is not just another temporary economic setback. Sadly, the truth is that our entire system has started the process of completely melting down.
The COVID pandemic has greatly accelerated matters, but we were going to get to this point one way or another eventually.
Now a day of reckoning is upon us, and this winter is going to be very dark, very cold and very, very bitter.
* * *
Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.
- India Faces Mass Hospitalizations As Mystery Disease Strikes
India Faces Mass Hospitalizations As Mystery Disease Strikes
Tyler Durden
Mon, 12/07/2020 – 22:00As coronavirus continues to spread across the world, a mysterious illness has been detected in India, with hundreds of people admitted to local hospitals and at least one dead.
New Delhi Television Limited (NDTV) reports that nearly 400 people have contracted a mystery illness that has emerged in Eluru, India. At least one person died on Dec. 5. Local health officials are baffled and have yet to find the source of the illness.
Source: AP Those who contracted the mysterious illness in the city, which is in the state of Andhra Pradesh, experienced seizures, loss of consciousness, and nausea over the weekend.
At least one dead and hundreds hospitalised in India’s Eluru town from an unidentified illness, with symptoms including seizures, dizziness, nausea, and headaches pic.twitter.com/IwaO1WcksC
— TRT World Now (@TRTWorldNow) December 7, 2020
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This comes as Andhra Pradesh is one of the worst-affected states of COVID-19. Doctors ruled out that none of the patients were infected with the virus.
“All patients have tested negative for Covid-19,” Dolla Joshi Roy, the district surveillance officer of Eluru’s West Godavari District, told CNN, adding that about 180 patients out of the 300 who were admitted to the hospital have been discharged. At the same time, the rest are “stable.” She said the patient who died had similar symptoms to the others but then had a fatal but unrelated cardiac arrest.
Andhra Pradesh’s Health Department published a notice that the patients’ initial blood tests didn’t detect any viral infection, such as dengue or chikungunya.
Government authorities are now testing water samples in Eluru for possible contamination after many of the patients said they received water from a similar source.
“The cause is still unknown but still we are doing all kinds of testing, including testing food and milk,” said Roy
The mass hospitalization over the weekend has prompted a special team of doctors to arrive in the city early this week to conduct an investigation about possible sources of the illness.
To find out the root causes for such sudden illness in Eluru, Andhra Pradesh, the GoI is in continuous discussion with State Authorities and the @MoHFW_INDIA, has deployed a Central Team of 3 Doctors to visit the region tomorrow and submit a preliminary report by evening. pic.twitter.com/8Ri0Vq9rB1
— G Kishan Reddy (@kishanreddybjp) December 7, 2020
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- Another Airline Announces 'COVID Passports' Will Be "Essential" For Travel
Another Airline Announces ‘COVID Passports’ Will Be “Essential” For Travel
Tyler Durden
Mon, 12/07/2020 – 21:40Authored by Steve Watson via Summit News,
Yet another airline has announced that it sees so called ‘COVID passports’, proof that travellers have been vaccinated and/or tested negative for coronavirus, as “essential” for them to be able to travel.
Lance Gokongwei, President and CEO of Cebu Pacific, the largest budget airline in the Philippines, made the comments to reporters Monday.
“We do think that’s essential, especially as we open up international travel,” Gokongwei said, adding that there are “different vaccines and I think we have to work on a single, global COVID passport so that each country respects the passport.”
Gokongwei also stated that without fears of the virus spreading being allayed by vaccination and herd immunity, “there’s nothing to be spoken about.”
“That has to be the number one priority: to get vaccines in the hands in as much of the global population as possible, and then connecting this to a COVID passport,” he urged.
Watch:
Alex Jones: “The globalists are getting a bioweapon ready to lockdown the internet, and bring in world government – not now but very soon…” – June 2018
Several other airlines have indicated that proof of vaccination, through ‘COVID passports’, will become mandatory in order to fly.
Testing of the passports has already begun in some airports with specific airlines.
In addition, the world’s largest air transport lobby group is developing a global ‘COVID travel pass’ app designed to link vaccination status and coronavirus test results to a person’s travel documents.
Another ‘COVID passport’ type system known as the CommonPass, sponsored by the World Economic Forum, is under development.
A further ‘COVID passport’ app called the AOKpass from travel security firm International SOS is currently undergoing trials between Abu Dhabi and Pakistan.
Hundreds of Tech companies are scrambling over themselves to develop these COVID passport systems. Anyone still labeling this a ‘conspiracy theory’ is either wilfully ignorant or just plain uninformed.
- Wall Street Gears Up To Trade Water Futures As Scarcity Fears Surge
Wall Street Gears Up To Trade Water Futures As Scarcity Fears Surge
Tyler Durden
Mon, 12/07/2020 – 21:20Freshwater is an ultimate essential resource for the human race – the loss of it would be fatal for hundreds of millions.
For years we’ve outlined the coming water wars (see: here & here) not just in the US but across the world.
Starting this week, water will be joining crude, copper, soybeans, and other commodities traded on US exchanges, which suggests potential water scarcity problems could be nearing.
Farmers, hedge funds, and municipalities will soon be able to trade water contracts linked to the $1.1 billion California spot water market, according to Bloomberg, citing Chicago-based CME Group.
Water contracts will help users manage risk and better align supply and demand. They were first announced in September as wildfires ravaged western states.
“Climate change, droughts, population growth, and pollution are likely to make water scarcity issues and pricing a hot topic for years to come,” said RBC Capital Markets managing director and analyst Deane Dray. “We are definitely going to watch how this new water futures contract develops.”
Tim McCourt, global head of equity index and alternative investment products at CME, said billions of people around the world live in areas where water scarcity is a major problem.
“The idea of managing risks associated with water is certainly increased in importance,” McCourt said.
Bloomberg notes the contracts are based on the Nasdaq Veles California Water Index and will be “financially settled,” as opposed to physical delivery of the resource. The index started two years ago and sets a weekly benchmark spot price for California’s water rights. Each contract size is equivalent to 10 acre-feet of water, equal to approximately 3.26 million gallons.
Patrick Wolf, senior manager and head of product development at Nasdaq, said the new contracts will give farmers a “best guess” at how much water would cost months from now.
Clay Landry, managing director at consulting firm Westwater Research, which provides data to calculate the water index, said large and small agriculture businesses would be some of the first to trade the contracts.
“Without this tool, people have no way of managing water supply risk,” Landry said. “This may not solve that problem entirely, but it will help soften the financial blow that people will take if their water supply is cut off.”
We may live on a “blue planet,” but with 3% of all of our water is fresh, and much of it is inaccessible – Wall Street has understood the coming scarcity of water and potential wars that could be fought over it.
- Chicago Teachers Union Tweets Reopening Schools Would Be "Racist, Sexist, And Misogynistic"…And Then Deletes It!
Chicago Teachers Union Tweets Reopening Schools Would Be “Racist, Sexist, And Misogynistic”…And Then Deletes It!
Tyler Durden
Mon, 12/07/2020 – 21:00UPDATE: After getting pummeled on Twitter, the CTU attempts a backpedal. No one’s buying it…
Fair enough. Complex issue. Requires nuance. And much more discussion. More important, the people the decision affects deserve more. So we’ll continue give them that.
Appreciate the feedback of those truly in the struggle.
— ChicagoTeachersUnion (@CTULocal1) December 6, 2020
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“…in the struggle.”
They couldn’t even scrub the Marxism out of their climb-down. Perhaps keeping Chicago’s public schools closed until the teachers union is dissolved is the wise way to go.
* * *
As PJMedia’s Bryan Preston detailed earlier, The Chicago Teacher Union unleashed this pearl on an unsuspecting world Sunday.
Since we knew they would delete it, we preserved it in digital amber.
Chicago Teachers Union really doesn’t want its teachers to have to go back work.
The union offered no explanation, evidence, or any other factual support for its hot take, probably figuring that including the three magic words would just do the trick on their own. But they’re not, and the tweet is being given its due even after the CTU attempted to get rid of it.
Is this a real account? Wow
— Jeremy Frankel (@FrankelJeremy) December 6, 2020
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Bro pic.twitter.com/dcIAJlIqBS
— Smittie™ GE.D (honors) (@smittie61984) December 6, 2020
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No, the push to open schools is about actually giving a shit about children…rooted in months of data showing rates among students are lower than community transmission rates, while rates among teachers remain equal w/ in-person schooling. There is no excuse.
— Nathan Hill (@nj_hill) December 6, 2020
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This might be the worst take I’ve ever seen in my entire life
— Tucker Italiano (@TuckerItaliano) December 6, 2020
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Tough to argue with that.
The city has been in a tussle over when to reopen the schools for months. The union is obviously taking the position that “Never” would be a good time, as its viewpoint is based purely on politics, and even according to the people behind the critical race theory money machine, the -isms involved here will never ever go away. Ever. That would kill their golden Marxist goose. So…never reopen the schools, according to the Chicago Teachers Union.
Imagine if all of the time spent teaching #CriticalRaceTheory or other woke issues to high school students was instead dedicated to teaching basic construction, auto mechanic or excel skills?
How much more valuable would a high school diploma be?
— Ian Martiszus 🇺🇸 (@IanFelipeSays) December 6, 2020
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We can no longer imagine such a thing. A Biden administration will only make it all worse.
Mayor Lori Lightfoot, who is a black woman, is now saying the public schools will reopen in January. But that’s in the dead of winter, which won’t help the COVID hospitalization rate.
Is Lightfoot racist, sexist, or a misogynist, CTU? Please show your work.
Another fact the CTU might consider but will undoubtedly ignore is the fact that the science demonstrates clearly that schools are not COVID vectors. Even Dr. Fauci has seen the light on that.
The CTU’s take must be based on something else.
The resistance to reopen schools is rooted in gold-bricking.
— President Elect Bono Estente (@BonoEstente) December 6, 2020
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We have a winner! And another. Seriously, the CTU tweet earned an epic ratio before they tried scrubbing it from the face of the earth.
The push to keep schools closed is rooted in anti-science rhetoric, racism, and classism.
— NYC Mom in favor of Science – #OpenSchools (@angrybklynmom) December 6, 2020
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teachers unions are a plague upon this country and its education system.
— J̴̮ͯͨ̚o̶͔̟̰̻ͮͧ̋ͬ̀h̹͔̟̹ͪ͗͋͌ͪ͟ǹ͕̲̠͔̝̋ͯ̄͂̂ͮ́͡🇹🇼 (@revjohnclose) December 6, 2020
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I’m a teacher and this is embarrassing.
— Jason Anger (@AnonymousEduca4) December 6, 2020
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The push to keep the schools closed is rooted in greed, the lust for power, and sheer laziness.
— Zuub Chudloogie (@WiFi_Ed) December 6, 2020
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For whatever it’s worth, Twitter didn’t slap any kind of “disputed” or “missing context” tag on the CTU’s tweet.
- For The First Time In 10 Years Companies Will Sell More Stock Than They Buy Back
For The First Time In 10 Years Companies Will Sell More Stock Than They Buy Back
Tyler Durden
Mon, 12/07/2020 – 20:40For US corporations, the “teens” decade – the years from 2010 to 2019 – was a historic “get rich quick” boom for management when buybacks emerged as the most powerful force levitating stocks (and equity-linked compensation) as companies collectively issued trillions in debt and used the proceeds to repurchase over $10 trillion worth of their own shares, in the process dramatically lifting the stock market and reducing the number of outstanding shares (we called it a slow-motion MBO) and pushing the S&P’s earnings per share ever higher even when there was no actual earnings growth simply because the number of shares declined year after year.
All of that changed in 2020 when thanks to covid, central banks made a triumphal return to their core competency of propping up stocks at all costs (just moments ago we reported that the BOJ is now the single-biggest owner of Japanese stocks) and by injecting over $20 trillion in liquidity in 2020, a rate of over $1.2 billion every hour, buybacks were no longer required to push markets higher and preserve the biggest asset bubble ever created. What also changed is that since buybacks were no longer needed, with the Fed and its central bank peers backstopping all risk assets, buybacks reversed and for the first time since 2010, in 2020 companies will sell more stock than they buy back.
As Bloomberg reports, “while American firms normally repurchase way more stock than they sell, this year has been different, as offerings by everyone from Snowflake Inc. to Warner Music Group Corp. flooded the market with shares.” It’s not just growth stocks that are rushing to capitalize from the market’s peak euphoria phase, which according to Goldman has seen positioning so “extremely stretched” it is currently in the 98th percentile in history:
As Bloomberg notes, companies that were hurt most during the pandemic, from airlines to cruise lines, are also rushing to raise cash and shore up balance sheets. And they are finding plenty of willing buyers.
The result is that amid the flood of equity offerings, both initial and secondary, companies have announced plans to raise about $510 billion via share offerings in 2020, up 50% from last year, according to data compiled by EPFR. This means that for the first time since the 2009 crisis, that amount of stock sales matches the amount that companies announced they’d remove via buybacks and takeovers. For context, over the past decade an average of $3 was bought back (thanks to ultra cheap debt) for every $1 raised.
Normally, the reduction in buybacks would be a flashing red alert as the largest source of stock demand was no longer there. However, this is anything but “normal times”, as central banks are now injecting such an unprecedented firehose of liquidity into markets – not the economy – even the BIS is shocked.
It’s also the case that normally, such a flood of selling would hit stocks simply due to excess supply. But, yet again, in this bizarro centrally-planned freakshow of a “market” nobody has any idea what will happen as Randy Frederick, VP of trading and derivatives for the Schwab Center for Financial Research, freely admits: “corporate demand is one component that drives the market higher that is no longer relevant in this risk-on atmosphere. On its own, I would not say it makes the market go down, but it might cause the market to flatten out and not go much higher.” Or it could just send stocks soaring even more; the reality is that we now live in a centrally-planned world where corporate actions no longer impact prices – those are only influenced by fund flows – and as such the surge in stock offerings could merely accelerate the melt up. Ultimately, it’s all what central banks decide.
One thing we do know is that the explosion in offerings is finally increasing the total pool of stocks (another trend that normally pressures stock prices at market tops in the past, but again, this is anything but normal). The S&P 1500 Index divisor, a proxy for outstanding shares, has risen 0.2% this year, its first increase in 10 years according to Bloomberg data.
Yet another warning sign: while the boom in IPOs underscores “a robust market” according to Bloomberg, the increase in share counts could also be viewed as an indication companies are “selling high,” with valuations too attractive to resist – while being too rich to justify buybacks (or simply refusing to take a gamble to issue debt and repurchase stock at a time when the airline industry can’t get a bailout due to its chronic stock repurchases in the past decade). To be sure, at 22 times earnings, the S&P 500 trades near the highest multiple since the dot-com era.
“Obviously when the market is at an all-time high, you want to issue shares now, because the shares are worth a lot more than they would be if the market was tanking,” EPFR analyst Winston Chua told Bloomberg. “Looking at the market broadly, companies are not being supportive of share prices.“
Luckily, markets no longer exist as they have been completely replaces as policy tools for activist central planners armed with money printers. It’s also why skeptics who rely on logic and fundmentals are proven wrong again and again: “There’s a lack of an incremental buyer out there, so that’s a negative, and it still signals some caution as companies let the cash accumulate,” said Mike Bailey, director of research at FBB Capital Partners. Which is true, but one just has to spin the data ever so slightly to represent it in a bullish light, as Bailey does next: “The flip side is, you are building more pressure for companies to really drop the hammer and start to buy back stock next year and into 2022.”
That’s the scenario envisioned by Goldman chied strategist David Kostin: In 2021, he expects net share repurchases will double to $300 billion and equity issuance will fall from this year’s record high, his team forecast. After all, he has to use fundamentals to justify his 4,300 price target – saying “buy because central banks got your back” would be frowned upon.
Of course, for the skeptics out there who are screaming this is idiocy pure and simple, you are right… at least based on empirical data. As Bloomberg notes, Corporate actions on equities showed a close inverse relationship with the market’s performance. During the two decades through 2015, companies boosted net equity demand in 15 different years, 12 of which saw the S&P 500 gain, a study by EPFR showed. In the five years when corporate supply increased, the equity benchmark fell 60% of the time.
But – once again – this is anything but normal times: we now live in a world where central banks have just one purpose: to keep stocks rising even higher because the moment the game of musical chairs stops, it’s all over.
That said, there is a silver lining: companies are once again very cash rich. The new listings on U.S. exchanges have raised more than $150 billion this year. Even firms recently left for dead such as Airbnb – it rents out apartments during the worst pandemic the world has seen in a century – just filed to sell as much as $2.6 billion to cap one of the busiest years ever. Other companies planning listings include food delivery service DoorDash and video-game company Roblox.
“In every cycle, when we say, ‘OK, that was the deal the market rolled over on,’ and all of a sudden everyone’s pulled in their horns,” said Arthur Hogan, chief market strategist at National Securities Corp. “I don’t think we’re there yet, but certainly the number of deals has been pretty historic,” he added. “Companies that shouldn’t be coming out come out and there’s always a tipping point.”
Yes Art, but thanks to Jerome Powell and his central-planning friends, “this time continues to be different.”
- "It's Panic Porn Clickbait" – Media Scare-Stories About Hospitals Are Misleading
“It’s Panic Porn Clickbait” – Media Scare-Stories About Hospitals Are Misleading
Tyler Durden
Mon, 12/07/2020 – 20:40You can’t turn on your TV, flip open your tablet, or scroll your social media feed today without being bombarded by horrifying stories of over-worked nurses and doctors and throat-grabbing headlines about COVID-driven hospitalizations amid the casedemic.
Time to panic?
Perhaps not, as El Gato Malo (@boriquagato) notes in the following information-full twitter thread: while it’s disappointing to see that we are back in the “media scare stories about hospitals” stage, the good news is that, just like last time, this is simply not the case.
They either have no idea what they are saying or are seeking to mislead…
Let’s look.
That’s a scary headline. It’s also a false one.
We have data on this (and so would they if they bothered to get any)
Idaho: (as of 12/4) 57% of inpatient beds used, 14.6% covid. 74% overall ICU
90% of inpatient beds and ICU is normal. even 100% ICU is normal. 57% is staggeringly low, like OMG we’re all going out of business low.
Calling that overwhelmed is outlandish.
ICU of 74% is also low.
Even 100% ICU is not “full”, since all can flex to 125% – it’s federal mandate.
Most ICU’s can flex to 150-200% – they just do not leave the beds staffed when they are not needed. it’s too expensive.
Hospitals are like airlines or hotels: they seek to be full, not empty; building capacity you do not use is how you lose money.
But hey, maybe they got PA right, huh?
Nope.
17% covid, 73% all beds, 82% all ICU.
Those are all low numbers, esp for this time of year. dec and jan are peak flu and pneumonia season.
Well, maybe Texas?
Nope.
15% covid, 73% all beds, 82% ICU. again, all low numbers.
And hey, if you do not believe me, go read the article linked below – the TX hospital CEO’s will tell you the same…
Everyone is freaking out about Texas hospitals except for the people who actually run Texas hospitals.
This pretty much tells you everything you need to know about the panic patrol and their relationship to facts.
It’s hard to get much clearer than this:
But TX children’s hospital CEO mark wallace gave it a shot:
“There is not a scenario, in my opinion, where the demand for our beds … would eclipse our capability,” he continued.
“I cannot imagine that. I just cannot.”
Seems like a classic case of “them that’s scared don’t know and them that know ain’t scared.”
Side with them that know.
This is not rocket science guys, it’s hospital admin 101. You can always find some 2nd year resident having a meltdown and get a scare quote. it’s why so many docs wash out of hospital practice.
But these are low numbers, not high.
There is no “crisis” in US hospitals, nor was there last time. Even perennial basket case NYC was never overwhelmed – they never used javits nor the hospital ship.
Pics like this are used to scare you…
Then you discover it’s from 2018… in Pennsylvania.
Huh.
There were a zillion stories like this in 2018. It was all over NYC, you just did not notice them because it’s not really a big deal. this sort of thing happens all the time.
And it happens all over: “california hospitals are a war zone of flu patients”
Again, from 2018. Remember panicking about it? Yeah, me neither.
It’s like the whole world, egged on by media and government seeking to frighten and inflame rather than inform has lost all historical perspective this year.
They are telling it like it ain’t.
It’s panic porn clickbait.
There is no excuse for reporting like this in an age when anyone can check this tool in seconds and see the actual figures.
I suggest you all bookmark it – use it to check the stories you’re being told.
The sanity you save may be your own.
* * *
- G7 Finance Ministers "Strongly Support" Regulation Of Cryptocurrencies
G7 Finance Ministers “Strongly Support” Regulation Of Cryptocurrencies
Tyler Durden
Mon, 12/07/2020 – 20:20With bitcoin trading at fresh all time highs, if just shy of $20,000 for the time being, it was only a matter of time before the establishment renewed its calls for regulation of cryptos, especially now that official central bank digital currencies are in the process of being rolled out to enable instantaneous deposits from central banks (i.e., freshly printed currency which has no matching liability) to end-consumers in hopes of finally sparking one massive inflationary conflagration.
That changed today when G7 finance ministers and central bankers confirmed there is “strong support across the G7 on the need to regulate digital currencies” the Treasury Department said in a statement on Monday after a virtual meeting of the officials.
As Reuters adds, German Finance Minister Olaf Scholz issued a sharply worded statement after the meeting, underscoring his concerns about authorizing the launch of Facebook’s Libra cryptocurrency – which was recently renamed to Diem – in Germany and Europe.
“A wolf in sheep’s clothing is still a wolf,” he said. “It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed.” He added: “We must do everything possible to make sure the currency monopoly remains in the hands of states.”
Oddly enough, he had no similar negative comments about digital currencies that are endorsed by central banks. In other words, digital currencies backed by central banks, good; but bitcoin and other cryptos not backed by a central bank, bad.
Steven Mnuchin hosted the 12th meeting of the G7 finance officials this year related to the COVID-19 pandemic as Washington prepares to hand over the presidency of the G7 to Britain next month. The G7 finance officials discussed ongoing responses to “the evolving landscape of crypto assets and other digital assets and national authorities’ work to prevent their use for malign purposes and illicit activities,” Treasury said.
“There is strong support across the G7 on the need to regulate digital currencies,” the G7 statement said, and reiterated support for a G7 joint statement on digital payment in October, which said digital payments could improve access to financial services and cut inefficiencies and costs, but should be “appropriately supervised and regulated.”
In other words, the only cryptocurrency that will be permitted is one which is backstopped by a central bank.
G7 finance officials also discussed domestic and international economic responses to the COVID-19 pandemic, and strategies to achieve a robust global recovery, the statement said.
As we showed previously, while not nearly front-page news, the push for central bank-backed digital currencies continues, and according to a recent timeline for the ISO20022 standard, the rollout is expected to take place some time in 2022-2023, once both SFIFT and FedWire adopt the new standard.
- The BIS Issues A Dire Warning: "We Are Moving From The Liquidity To The Solvency Phase Of The Crisis"
The BIS Issues A Dire Warning: “We Are Moving From The Liquidity To The Solvency Phase Of The Crisis”
Tyler Durden
Mon, 12/07/2020 – 20:10There are three certainties in life: death, taxes and the BIS – the central banks’ central bank – warning about excesses from monetary policy (the most recent amusing example of this was last October when as we wrote, “Fed Announces QE4 One Day After BIS Warns QE Has Broken The Market“). Actually, to this list of 3 certainties we can add one more: central banks roundly ignoring the warnings from the central bank mothership.
That, however, does not prevent the BIS from continuing this trend of warnings, and today the Basel-based organization did just that when in its Quarterly Review publication it cautioned that the surge in financial markets following COVID-19 vaccine breakthroughs and the U.S. election has left asset prices increasingly stretched.
Sounding surprisingly similar to Goldman, which as we reported earlier today issued an almost identical warning, when it observed that its sentiment indicator is now +2.0 standard deviations above average…
… which has left positioning extremely stretched and represents a 98th percentile reading since 2009…
… the BIS’ quarterly report on Monday noted how credit markets and some of world’s biggest stock markets had surpassed their pre-pandemic levels despite the significant degree of uncertainty that still remains over the pandemic as it continues to spread.
The BIS’ perpetual skeptic, Claudio Borio, who is also Head of the BIS Monetary and Economic Department, said a rally had been justified by the vaccine news and ongoing fiscal and monetary stimulus, but there were also signs of an overshoot.
“A certain amount of daylight between risky asset valuations and economic prospects appears to persist,” Borio said diplomatically in his latest warning that markets and equities are disconnected, adding that “questions about overstretched valuations” had already been present before the coronavirus crisis.
As regular readers know, the views of the Basel-based BIS – which was profiled here in 2015 in “Meet The Secretive Group That Runs The World” – are often watched by economists as the world’s top central bankers take part in its behind-closed-doors meetings. They are then summarily ignored because whereas the BIS has been preaching a return to monetary orthodoxy for the past decade, that is no longer possible for central banks which have boldly entered the global Minsky Moment with helicopter money in tow.
In any case, Borio said one of the developments it was particularly wary of was the rapid easing of stress in corporate credit markets, which recently culminated in record low junk bond yields, a paradox considering that corporate leverage hit record highs, yet perfectly understandable in light of the Fed’s backstop of the entire corporate bond market.
And in a dire warning that got virtually no airplay today, Borio made the following stunning announcement to reporters. “We are moving from the liquidity to the solvency phase of the crisis.”
Translation: it’s about to get much worse, only because central banks will ignore all the warnings, they will double down on the same failed policies, pushing leverage to even record-er highs, yields to even record-er lows, and sparking a propagation of zombies the likes of which have never before been seen.
“We should be expecting more bankruptcies going forward yet credit spreads are quite low by historical standards, and indeed while banks are pricing risk more carefully we don’t see the same in capital markets.”
One almost sensed the futility in Borio’s comments when he said that with $17.5 trillion worth of bonds now carrying negative yields many money managers were being pushed into riskier and riskier assets.
Well, WHOSE FAULT IS THAT MR CHIEF HEAD OF THE MONETARY DEPARTMENT AT THE CENTRAL BANKS’ CENTRAL BANK?
Of course, Bortio wouldn’t bring himself to admitting that the very same central banks he is “supposed” to advise are ignoring his warnings and recommendations – and are instead flooding the market with trillions in stimulus which does not flow into the economy but merely makes asset holders richer beyond their wildest imagination – as that would mean that someone, clearly not the BIS, is now in charge of monetary and economic advice at central banks.
Which also means that the BIS is no longer relevant, having been upstaged by its constituent members.
Maybe for his next quarterly report, Borio and his BIS colleagues can write a lengthy report discussing just who or what is now in control of global monetary policy, because the BIS’ track record has merely devolved to publishing quarterly warning after warning that everyone now openly ignores and flaunts.
In his parting words absolution to the helicopter money insanity that has taken over, Borio had no choice but to admit that – despite his misgivings – he has to side with the central banks: “The outlook is rather uncertain and you would rather err on the side of doing too much as opposed to doing too little.”
Brilliant… just ignore that the entire world is now on the verge of a financial cliff where the next crash will not only wipe away hundreds of trillions in wealth and destroy confidence in central banks and fiat money, but abolish the voodoo “science” that is modern economics that keeps people like Borio employed.
It will be for the best.
- Virginia County Rebels Against Gov. Northam's Lockdown Restrictions – Declares Itself "First Amendment Sanctuary"
Virginia County Rebels Against Gov. Northam’s Lockdown Restrictions – Declares Itself “First Amendment Sanctuary”
Tyler Durden
Mon, 12/07/2020 – 20:00Campbell County, Virginia has rejected Democratic Governor Ralph Northam’s coronavirus restrictions – declaring itself a “First Amendment sanctuary” in a resolution which makes it the first locality in the state to openly resist Northam’s orders.
The County Board of Supervisors unanimously approved the measure last week in response to Northam’s pre-Thanksgiving limits on public gatherings to 25 people or fewer, as well as an extension on the state’s mask mandate to include children over the age of five. Restaurants are also prohibited from selling alcohol after 10 p.m.
Campbell County’s resolution requests that the sheriff’s department refuse to assist any official – state or federal – in “attempting to enforce the unconstitutional order of the Governor.”
The rebellious decision echoes a 2019 measure in which the county (which voted 71% for Trump in the 2020 election) declared itself a “Second Amendment sanctuary” as one of several counties and cities which passed similar measures rejecting new gun-control laws in the commonwealth, according to WAVY.
A group known as the Virginia Constitutional Conservatives has played a vital role in the latest push to reject statewide guidelines, drafting a template resolution online that proposes bold provisions for constitutional officers to follow.
The template calls for local law enforcement to arrest “any State Police officer, State Health Agent, or Federal Agent” who attempts to enforce the governor’s order and for commonwealth’s attorneys “not prosecute the unconstitutional mandates prohibiting the people’s right to peaceably assemble.” Failure to follow these clauses “will result in the immediate removal of County funding.” –WAVY
The resolution approved by Campbell County’s board excludes language threatening budgets of sheriff’s departments and local prosecutors.
Matt Cline, a supervisor who represents the County’s Concord district, called Northam’s order yet another example of government overreach.
“The governor’s order restricts the First Amendment and this resolution is in support of the rights of the citizens. Local businesses are struggling, these are real problems, not a political issue,” Cline said last Wednesday. “It isn’t right or left, these are real problems, just as covid is real.”
“It’s important to note what’s not in this resolution as well,” he added. “It doesn’t say be cavalier, or that covid is a hoax. And it doesn’t say don’t wear a mask. It’s the responsibility of the individual.”
Campbell, located near Lynchburg, has had an average of 16 new COVID-19 cases per day in the last week out of its population of 55,000 according to the state’s health department.
- Ahead Of Trump Vaccine EO, Pfizer & Moderna Claim Inability To Supply Further Doses Until Mid-2021
Ahead Of Trump Vaccine EO, Pfizer & Moderna Claim Inability To Supply Further Doses Until Mid-2021
Tyler Durden
Mon, 12/07/2020 – 19:56Update (2000ET): Shortly after WaPo broke the story about Pfizer, a Moderna spokesperson said a similar story – that it has deals with many other countries and will not be able to provide any further vaccines to the US until Q2 at the earliest.
* * *
One can’t help but sense a pattern here. Having claimed (and been forced to retract) that it did not benefit from the Trump administration’s Operation Warpspeed program to accelerate development of a COVID vaccine, Pfizer tonight told The White House that the CEO would not be attending the COVID vaccine summit (after leaking data early to the Biden administration), and now tonight, The Washington Post (of all outlets) reports that, Pfizer has told the Trump administration it cannot provide additional doses of its coronavirus vaccine until late June or early July because other countries have rushed to buy up its supply.
The government purchased 100 million doses of Pfizer’s vaccine with an option to purchase another 500 million.
But, WaPo claims that, according to multiple individuals familiar with the situation, Trump administration officials passed when Pfizer offered in late summer to sell the U.S. government additional doses of its Covid-19 vaccine.
In a statement, Pfizer said that “any additional doses beyond the 100 million are subject to a separate and mutually acceptable agreement,” and that “the company is not able to comment on any confidential discussions that may be taking place with the U.S. government.”
Pfizer spokeswoman Amy Rose declined to confirm or deny the information and said that beyond the first 100 million doses the U.S. has secured, a separate agreement would have to be reached.
“The company is not able to comment on any confidential discussions that may be taking place with the U.S. government,” Rose said.
However, while WaPo attempted to play up the panic and position the blame, Gen. Paul Ostrowski, who oversees logistics for Operation Warp Speed, the government’s initiative to expedite vaccine development, said:
“I’m not concerned about our ability to buy vaccines to offer to all of the American public,” adding that “it’s clear that Pfizer made plans with other countries. Many have been announced. We understand those pieces.”
Additionally, a spokeswoman for the Department of Health and Human Services said,
“We are confident that we will have 100 million doses of Pfizer’s vaccine as agreed to in our contract, and beyond that, we have five other vaccine candidates.”
The market is down modestly in the after-hours after this news…
But, one wonders why this pattern is occurring? Having been baptized in the fire of the last four years of deceit, we wonder if the possibility of a fast-mutating virus could mean that the much-heralded vaccines won’t stop the spread of the virus as effectively as everyone has hailed; and so, again – with pure speculation – one wonders if this move by Pfizer (through WaPo) is giving Biden some cover for when it all goes pear-shaped in H1 2021 (after the 100 days of mask-wearing), enabling him to blame Trump for lack of preparedness?
In other news that broke today, Fox News reports that President Trump is expected to sign an executive order Tuesday that will ensure all Americans have access to the coronavirus vaccine before the U.S. government begins aiding nations around the world.
Senior administration officials told Fox News Monday that the president will reemphasize to the American people that the “priority has been an America First approach,” during a vaccine summit at the White House Tuesday.
The official said that the executive order is “clear and is directing that we prioritize access to the American people before working with partners and allies to provide access to the vaccine.”
So, one other possibility is that this is simply a negotiating ploy by Pfizer, knowing the EO will put pressure on them to deliver.
- The Federalist Destroys Attempted Debunking Of Late-Night Ballot Malarkey In Georgia
The Federalist Destroys Attempted Debunking Of Late-Night Ballot Malarkey In Georgia
Tyler Durden
Mon, 12/07/2020 – 19:45After explosive video was presented during a Georgia state Senate hearing which clearly shows a handful of election workers in Atlanta waiting for observers and the press to leave, before producing several containers of ballots for a late-night vote-counting party, a group called Lead Stories published a “hoax alert” which falsely claims to have debunked the footage.
The “hoax alert” was peddled by the Washington Post, Newsweek and others – and among other things states that government officials told them that the ballots were in “containers — not suitcases,” and that “party observers were never told to leave because counting was over for the night.”
Nevermind the fact that Lead Stories breathlessly believes claims made by government officials – The Federalist‘s Mollie Hemingway just obliterated the entire ‘fact check,’ proving that the video hasn’t been debunked whatsoever.
First – Party officials claim observers were never told that counting was over for the night.
False: Georgia GOP Chairman David Shafer “has consistently said that’s what happened at State Farm Arena, beginning hours after the election.”
That claim, which he has repeated consistently, is backed by sworn affidavits from two Republican observers, who further allege they were kept an unreasonable distance from the ballots even while they were at State Farm Arena, making it completely impossible to meaningfully do their jobs. (The video, which shows the room from four different angles, fully supports the claim that poll watchers were kept away from meaningful observation of ballot handling.)
The observers say that they arrived for their observation jobs around 8 p.m. They say in the first half of the 10 o’clock hour, a woman with blonde braids who appeared to be a supervisor “yelled out” to those present in the room that they would stop working for the night and would resume in the morning. The Republican poll watchers said they asked Fulton County Elections Spokesperson Regina Waller questions about the status of the ballot count multiples times but that she refused to answer. –The Federalist
According to Lead Stories, however, “There was never an announcement made to the media and other observers about the counting being over for the night and them needing to leave, according to [Frances Watson, chief investigator for the Georgia Secretary of State], who was provided information by the media liaison, who was present.” Lead Stories doesn’t name this “media liaison,” however according to the affidavits, it was Regina Waller – the Fulton County public affairs manager for elections.
As The Federalist‘s Hemingway notes:
OK, so on the one hand you have sworn affidavits from observers saying that supervisors told ballot counters to go home for the evening shortly after 10 p.m. and a video showing everyone leaving en masse at that time. And on the other hand, you have two government officials promising that no one was told that counting was over.
Hemingway further points out that ABC News reported ballot counters were sent home at the same time GOP observers say everyone was told counting had stopped.
So, GOP poll watchers and the MSM reported that counting was delayed.
And it wasn’t just ABC that reported counting was being delayed. Many media outlets reported on counting delays. See, for example, “Fulton County stopped counting absentee ballots for the night.”
Local NBC journalists on site that night independently confirmed “they were told counting was done for the night” and given no indication it would continue before the next morning. The Atlanta Journal-Constitution even reported of a “plan” to stop scanning ballots at the same time the poll watchers said things were shut down… –The Federalist
Second claim – A designated election observer was sent by Secretary of State Brad Raffensperger’s office
Misleading: While Newsweek – and later Lead Stories – claim that while partisan observers may not have been present for the vote count, an “unnamed state election board monitor was present.”
A state election board monitor, who asked for his name not to be used due to safety concerns, told Lead Stories on the phone on December 3, 2020, that he was present at the vote counting location beginning at 11:52 p.m., after leaving briefly at earlier in the evening. He then stayed until about 12:45 a.m., when the work that night was completed.
The deputy chief investigator for the secretary of state’s office was present beginning at 12:15 a.m. November 4, he said. –Newsweek
Yet, the monitor was there for less than an hour – from 11:52 p.m. on election night to 12:45 a.m. – which means that nobody was observing the count for over an hour after the ballots began being scanned at 10:35 p.m.
So you have the contemporaneous media report about the closing + the fact that GOP observers left, believing the counting to be over for the night.
Seems pretty clear that—regardless of who fesses up to making the announcement or not—it was a thing that happened.
— David Reaboi (@davereaboi) December 7, 2020
https://platform.twitter.com/widgets.js
So, the Lead Stories ‘fact check’ actually reveals that the monitor wasn’t present for much of the time in question. Meanwhile, the Secretary of State’s monitor “is the subject of an affidavit from another witness, devoted exclusively to concerns about the monitor’s conduct prior to the late hours on election day, according to a member of the Trump team. The claims include that he was sleeping on the job and staring at his phone.”
Read the rest of the report here.
- Bank Of Japan Is Now The Biggest Owner Of Japanese Stocks With $434 Billion Portfolio
Bank Of Japan Is Now The Biggest Owner Of Japanese Stocks With $434 Billion Portfolio
Tyler Durden
Mon, 12/07/2020 – 19:25The Japanification of Japan continued to boldly go where no other central bank lunatic has gone before, with this surreal one-way voyage crossing a historic milestone in November when according to estimates by Shingo Ide, equity strategist at NLI Research Institute, the Bank of Japan – which unlike most developed central banks long ago dropped any pretense of not manipulating equity markets and has been buying ETFs and REITs for over a decade – took over as the biggest owner of the nation’s stocks, with the total value of its holdings climbing above a record 45 trillion yen.
On the back of massive ETF purchases to prop up the Japanese stock market amid the pandemic this year combined with subsequent valuation gains, the value of the BOJ’s Japanese equity portfolio has hit 45.1 trillion yen, $434 billion, in November.
That, according to Bloomberg, marks the first time that the central bank’s holdings have eclipsed those of the other Japanese market whale, the world’s largest pension fund the Government Pension Investment Fund, whose equity holdings Ide estimated at 44.8 trillion yen last month.
What this also means is that by matching the purchases of the country’s largest pension fund, the BOJ is effectively backstoping the country’s retirement system which would be insolvent had the BOJ not propped up the country’s equities which is where a substantial portion of retirement “wealth” is parked since JGBs yield next to nothing.
To be sure, regardless of which Japanese whale is bigger, the massive presence of these two public entities in public “capital markets” (where independent price discovery no longer exists) has raised concerns over their influence on market prices. The combination of “a state-run institution, the BOJ, and the country’s representative public pension fund, the GPIF, buying up local equities feels distorted,” said Satoshi Okumoto, chief executive officer at Fukoku Capital Management, quoted by Bloomberg. We are confident that Satoshi realizes that without the “distorted” buying by these institutions, the Nikkei and Topix would be a fraction of its current value… and he would most likely be out of a job.
Realizing that allocating capital to Japan’s zero-yielding bonds is a losing proposition, the GPIF increased its equity market presence in 2014 when it doubled its allocation target for local stocks to 25% as part of an effort to increase returns through a shift into riskier assets. The BOJ’s ETF purchases started in earnest in 2010 (the BOJ had been purchasing equities previously as well but with nowhere near the same “dedication”) and accelerated later as part of Governor Haruhiko Kuroda’s unprecedented stimulus package aimed at revitalizing the economy.
As shown below, the BOJ further ramped up its support program this year as the coronavirus outbreak sent equity markets tumbling, saying in March it could potentially purchase 12 trillion yen worth of Japan ETFs this year, double its annual target. After a few months of heavy buying the pace has slowed back down, and it’s likely the total for 2020 will fall short of the new theoretical limit, although we are confident the BOJ will more than make up for it over the long-term.
Even at the current pace, however, “the gap between the BOJ and GPIF’s stock holdings will widen further,” according to NLI’s Ide, especially if share prices continue to rise: the benchmark Topix climbed 11% in November while the Nikkei 225 Stock Average surged 15% in its best month since 1994. That pushed unrealized gains on the BOJ’s stock purchases to over 10 trillion yen at one point in November, according to Ide.
Amusingly, Japanese strategists took time to remind readers that central banks never sell the stocks they have bought: “The BOJ has never taken profits on its holdings and only continues to build its holdings in ETFs,” said Takashi Ito, a strategist at Nomura. The GPIF, meanwhile, “has to sell equities when prices are high to adjust the weight of stock holdings within its portfolio.”
Yet as the BOJ loads up on even more stocks, it “could face more scrutiny” over whether it needs to continue buying equities when prices are elevated like they are presently, said NLI’s Ide. BOJ Governor Kuroda has repeatedly said that the ETF purchases are needed as part of monetary stimulus to reach the BOJ’s inflation target, an excuse which in light of events in the past decade is as laughable as it is stupid now that even shoeshine boys know that the only mandate central banks have is to make sure stocks never drop and the business cycle remains dead.
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