Aug 09

Today’s News 9th August 2020

  • China's Indo-Pacific Neighbors Stand Up To Its Hegemonic Ambitions
    China’s Indo-Pacific Neighbors Stand Up To Its Hegemonic Ambitions

    Tyler Durden

    Sat, 08/08/2020 – 23:00

    Authored by Tahir Aslam Gora via The Epoch Times,

    After finding itself cornered over the handling of the novel coronavirus, appropriately named the “CCP virus,” China is embracing an offensive mode globally.

    The Chinese foreign ministry has now instructed its ambassadors to aggressively defend its interests and reputation, even if at the cost of diplomatic niceties. Following what has been named “wolf warrior” diplomacy, these diplomats are now actively pushing the Chinese regime’s agenda by employing the tools of attacks, fake news, propaganda, and conspiracy theories.

    However, countries around the world, instead of being cowed down, are now standing up to this diplomatic offensive and China’s hegemonic ambitions.

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    Nowhere is this shift more pronounced than with China’s neighbors in the Indo-Pacific. For years, being at the receiving end of Beijing’s assertiveness in territorial disputes, threats of economic coercion, and an aggressive push into their markets, countries of the Indo-Pacific are now making their voices heard.

    Utilizing the opportunity offered by Beijing’s CCP virus cover-up, these countries are now demanding answers from China, re-aligning their defense postures, and coordinating with like-minded allies.

    Australia, which for years, has had a prosperous trade relationship with China and flourishing people-to-people contact, is now willing to take on the growing brazenness from Beijing. Alarmed by the growing Chinese influence in Australia’s neighborhood of the South Pacific, Prime Minister Scott Morrison’s government since coming to power last year has attempted to contain Beijing by offering economic assistance and infrastructure development, combined with growing political outreach to the Pacific island states.

    On top of that, Canberra on July 1 announced the most significant upgrade for its armed forces in decades, by unveiling defense spending worth around $187 billion. The advanced capabilities that Australian defense forces are expected to take on are a long-range anti-ship missile system and hypersonic weapons. These signal a change in Australia’s strategic thinking, in line with the deteriorating security environment in the Indo-Pacific.

    Australia is not just recalibrating its posture, but also coordinating with its allies. Following the virtual summit between Morrison with his Japanese counterpart Shinzo Abe on July 9, both countries agreed to facilitate joint military exercises and other activities of their defense forces in each other’s countries. Moreover, in a move that will certainly rile China, both leaders also agreed that Taiwan should participate in the World Health Organization as an observer. China considers Taiwan a renegade province.

    The Japan–Australia summit followed the ninth round of the Trilateral Defense Ministers’ Meeting between Japanese Defense Minister Taro Kono, U.S. Defense Secretary Mark Esper, and Australian Minister of Defense Linda Reynolds on July 7. The defense ministers in their meeting pointed out other disturbing trends in the Chinese offensive in the South China Sea—“the continued militarization of disputed features, dangerous or coercive use of coast guard vessels and ‘maritime militia,’ and efforts to disrupt other countries’ resource exploitation activities.”

    Over the last few years, Beijing has persisted in its use of this militia, primarily because there has not been a military response from any of the concerned powers. Most recently, Beijing used this tactic against Indonesia in January 2020 to ingress into the country’s Exclusive Economic Zone by 70 nautical miles in a show of strength. However, as Beijing continues to push the envelope, Jakarta has demonstrated that it’s no longer willing to be a docile witness to the former’s antics.

    While the CCP virus provided the necessary impetus for many of China’s neighbors to be vocal, Beijing’s invocation of the national security law in Hong Kong, a former British colony, has given the much-required thrust to the “Five Eyes” countries to push back. In a rare joint statement in May 2020, four members of the alliance—the United States, UK, Australia, and Canada—censured China for imposing the national security law and defended Hong Kong as a “bastion of freedom.”

    Meanwhile, Australia and Canada have announced a review of their ties to Hong Kong. Likewise, the UK has confirmed that it will open a pathway for citizenship for Hong Kong residents with the right to a British National (Overseas) passport.

    Most recently, the fifth member, New Zealand, following a consultation call between the Five Eyes’ foreign ministers on July 8, announced a review of ties with Hong Kong, including a reappraisal of extradition arrangements, controls on exports, and a travel advisory for its nationals.

    Re-alignment caused by the Chinese aggressiveness is not just limited to its neighbors. In Europe, which has been touted by Beijing as the continent receiving the windfall from China’s ambitious infrastructure connectivity project, the Belt and Road Initiative, the consensus is emerging to counter China.

    Most recently, a new coalition of legislators from 16 European countries and the European Union was set up called the Inter-Parliamentary Alliance on China. It describes itself as “an international cross-party group of legislators working towards reform on how democratic countries approach China.” One of its recent most high-profile campaigns urged the member countries to review extradition treaties with Hong Kong.

    This push on political issues is matched by a growing squeeze on Chinese technology companies, which for years have had free rein in markets around the world by offering cheaper low-quality alternatives—hardware and software. However, it appears that Beijing’s hegemonic pursuits may have been nipped in the bud. Following India’s ban of more than 50 Chinese apps, the United States is contemplating a similar move. Besides, the United States, the UK, too, has made up its mind, as evident from its decision to exclude Huawei from its 5G network. France, too, is taking steps to restrict Huawei’s role in its telecom network.

    Even as the global community is united in its response to tackling the mess created by the CCP virus pandemic, Beijing is evidently on a different trip as its actions in Ladakh, the South China Sea, Taiwan, and Hong Kong demonstrate. U.S. officials have already described China as the “most dangerous military rival.” Unless Beijing takes steps to correct its mistakes, dial down its rhetoric, and address the disputes, it’s likely that this growing surge of anti-China sentiment may turn into a tsunami.

  • World's Top Epidemiologists – Masks Don't Work!
    World’s Top Epidemiologists – Masks Don’t Work!

    Tyler Durden

    Sat, 08/08/2020 – 22:55

    Authored by John Miltimore via The Foundation for Economic Education,

    Denmark boasts one of the lowest COVID-19 death rates in the world. As of August 4, the Danes have suffered 616 COVID-19 deaths, according to figures from Johns Hopkins University.

    That’s less than one-third of the number of Danes who die from pneumonia or influenza in a given year.

    Despite this success, Danish leaders recently found themselves on the defensive. The reason is that Danes aren’t wearing face masks, and local authorities for the most part aren’t even recommending them.

    This prompted Berlingske, the country’s oldest newspaper, to complain that Danes had positioned themselves “to the right of Trump.”

    “The whole world is wearing face masks, even Donald Trump,” Berlingske pointed out.

    This apparently did not sit well with Danish health officials.

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    From left to right: Professor Henning Bundgaard, Tamara van Ark, Anders Tegnell | Composite image by FEE (Rigshospitalet, Wikimedia Commons)

    They responded by noting there is little conclusive evidence that face masks are an effective way to limit the spread of respiratory viruses.

    “All these countries recommending face masks haven’t made their decisions based on new studies,” said Henning Bundgaard, chief physician at Denmark’s Rigshospitale, according to Bloomberg News.

    Denmark is not alone.

    Despite a global stampede of mask-wearing, data show that 80-90 percent of people in Finland and Holland say they “never” wear masks when they go out, a sharp contrast to the 80-90 percent of people in Spain and Italy who say they “always” wear masks when they go out.

    Dutch public health officials recently explained why they’re not recommending masks.

    “From a medical point of view, there is no evidence of a medical effect of wearing face masks, so we decided not to impose a national obligation,” said Medical Care Minister Tamara van Ark.

    Others, echoing statements similar to the US Surgeon General from early March, said masks could make individuals sicker and exacerbate the spread of the virus.

    “Face masks in public places are not necessary, based on all the current evidence,” said Coen Berends, spokesman for the National Institute for Public Health and the Environment.

    “There is no benefit and there may even be negative impact.”

    In Sweden, where COVID-19 deaths have slowed to a crawl, public health officials say they see “no point” in requiring individuals to wear masks.

    “With numbers diminishing very quickly in Sweden, we see no point in wearing a face mask in Sweden, not even on public transport,” said Anders Tegnell, Sweden’s top infectious disease expert.

    The top immunologists and epidemiologists in the world can’t decide if masks are helpful in reducing the spread of COVID-19. Indeed, we’ve seen organizations like the World Health Organization…

    …and the CDC go back and forth in their recommendations…

    For the average person, it’s confusing and frustrating. It’s also a bit frightening, considering that we’ve seen people denounced in public for not wearing a mask while picking up a bag of groceries.

    The truth is masks have become the new wedge issue, the latest phase of the culture war. Mask opponents tend to see mask wearers as “fraidy cats” or virtue-signalling “sheeple” who willfully ignore basic science. Mask supporters, on the other hand, often see people who refuse to wear masks as selfish Trumpkins … who willfully ignore basic science.

    There’s not a lot of middle ground to be found and there’s no easy way to sit this one out. We all have to go outside, so at some we all are required to don the mask or not.

    It’s clear from the data that despite the impression of Americans as selfish rebel cowboys who won’t wear a mask to protect others, Americans are wearing masks far more than many people in European countries.

    Polls show Americans are wearing masks at record levels, though a political divide remains: 98 percent of Democrats report wearing masks in public compared to 66 percent of Republicans and 85 percent of Independents. (These numbers, no doubt, are to some extent the product of mask requirements in cities and states.)

    Whether one is pro-mask or anti-mask, the fact of the matter is that face coverings have become politicized to an unhealthy degree, which stands to only further pollute the science.

    Last month, for example, researchers at Minnesota’s Center for Infectious Disease Research and Policy responded to demands they remove an article that found mask requirements were “not based on sound data.”

    The school, to its credit, did not remove the article, but instead opted to address the objections critics of their research had raised.

    The ethics of medicine go back millennia. 

    The Hippocratic Oath famously calls on medical practitioners to “first, do no harm.” (Those words didn’t actually appear in the original oath; they developed as a form of shorthand.)

    There is a similar principle in the realm of public health: the Principle of Effectiveness.

    Public health officials say the idea makes it clear that public health organizations have a responsibility to not harm the people they are assigned to protect.

    “If a community is at risk, the government may have a duty to recommend interventions, as long as those interventions will cause no harm, or are the least harmful option,” wrote Claire J. Horwell Professor of Geohealth at Durham University and Fiona McDonald, Co-Director of the Australian Centre for Health Law Research at Queensland University of Technology.

    “If an agency follows the principle of effectiveness, it will only recommend an intervention that they know to be effective.”

    The problem with mask mandates is that public health officials are not merely recommending a precaution that may or may not be effective.

    They are using force to make people submit to a state order that could ultimately make individuals or entire populations sicker, according to world-leading public health officials.

    That is not just a violation of the Effectiveness Principle. It’s a violation of a basic personal freedom.

    Mask advocates might mean well, but they overlook a basic reality: humans spontaneously alter behavior during pandemics. Scientific evidence shows that American workplaces and consumers changed the patterns of their travel before lockdown orders were issued.

    As I’ve previously noted, this should come as no surprise: Humans are intelligent, instinctive, and self-preserving mammals who generally seek to avoid high-risk behavior. The natural law of spontaneous order shows that people naturally take actions of self-protection by constantly analyzing risk.

    Instead of ordering people to “mask-up” under penalty of fines or jail time, scientists and public health officials should get back to playing their most important role: developing sound research on which people can freely make informed decisions.

    See the World Health Organization’s Latest Guidelines on Masks and COVID-19…

  • South Dakota Gov Reportedly Made 'Replica' Of Mt Rushmore With President Trump Added On
    South Dakota Gov Reportedly Made ‘Replica’ Of Mt Rushmore With President Trump Added On

    Tyler Durden

    Sat, 08/08/2020 – 22:30

    The nationwide fervor that gripped college students, and a coalition of other “marginalized” groups, comprising the American “anti-neocolonial” coalition, has seemingly dimmed. Just the other day, it seems, Democratic politicians were desperately talking out of both sides of their mouths as “activists” demanded the destruction – via legal or, seemingly just as often, illegal, means – of monuments like Mt. Rushmore.

    But in a New York Times story published Saturday afternoon (just in time to run in the Sunday edition, probably on A1), the paper accuses South Dakota Gov. Kirsti Noem, one of the most outspoken governors in the country when it comes to resisting social distancing measures, of trying to supplant Vice President Mike Pence on the GOP ticket in November.

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    Despite dedicating two of its most prolific White House reporters (Maggie Haberman and Jonathan Martin, whose bylines appear on the piece, entitled “How Kristi Noem, Mt. Rushmore and Trump Fueled Speculation About Pence’s Job”) to the story, the NYT could only come up with anonymously sourced rumor and some vaguely plausible, previously unreported meetings to substantiate a story about perceived plot to oust Pence – a plot that probably never really existed.

    There’s been no end to infighting both within the White House and across the GOP and Democratic political establishments over the past 4 years – that goes without saying.

    But it seems like the NYT’s fixation on Noem, the paper’s fury over the governor’s opposition to things like mandatory mask laws, and the sick, liberal obsession with destroying Mt. Rushmore, have agglomerated into what will undoubtedly become a must-click NYT story.

    And they say Zero Hedge reporting is “conspiratorial”…

    Here’s the NYT:

    WASHINGTON — Since the first days after she was elected governor of South Dakota in 2018, Kristi Noem had been working to ensure that President Trump would come to Mount Rushmore for a fireworks-filled July 4 extravaganza.

    After all, the president had told her in the Oval Office that he aspired to have his image etched on the monument. And last year, a White House aide reached out to the governor’s office with a question, according to a Republican official familiar with the conversation: What’s the process to add additional presidents to Mount Rushmore?

    So last month, when the president arrived in the Black Hills for the star-spangled spectacle he had pined for, Ms. Noem made the most of it.

    Introducing Mr. Trump against the floodlit backdrop of his carved predecessors, the governor played to the president’s craving for adulation by noting that in just three days more than 125,000 people had signed up for only 7,500 seats; she likened him to Theodore Roosevelt, a leader who “braves the dangers of the arena”; and she mimicked the president’s rhetoric by scorning protesters who she said were seeking to discredit the country’s founders.

    In private, the efforts to charm Mr. Trump were more pointed, according to a person familiar with the episode: Ms. Noem greeted him with a four-foot replica of Mount Rushmore that included a fifth presidential likeness: his.

    But less than three weeks later, Ms. Noem came to the White House with far less fanfare — to meet not with Mr. Trump, but with Vice President Mike Pence. Word had circulated through the Trump administration that she was ingratiating herself with the president, fueling suspicions that there might have been a discussion about her serving as his running mate in November. Ms. Noem assured Mr. Pence that she wanted to help the ticket however she could, according to an official present.

    She never stated it directly, but the vice president found her message clear: She was not after his job.

    The notion that Pence’s place on the ticket is in jeopardy doesn’t seem to be based on much more than speculation surrounding the campaign’s reaction to the national poll numbers, which the NYT continuously cites as the basis for all the personal grudges and office gossip frequently splayed across the pages of America’s “Paper of Record”. However, Pence’s approval ratings among registered Republicans remains huge, even if his standing among moderates isn’t, and he has continuously proven his utility to the administration, along with his adeptness at playing the role of the president’s straight man.

    Liberals have this image in their heads of the Trump administration as this snake pit, where everyone is immediately replaceable, and individual standing really all depends on the president’s daily whims. We suspect this is a deliberately facile oversimplification.

    Around the 15th paragraph, the story involves into an exploration of Noem’s ascendance within Trump’s inner circle, which has apparently ruffled some feathers (shocker).

    Senator Tom Cotton of Arkansas was in New Hampshire late last month, Senator Rick Scott of Florida is angling to take over the Senate Republican campaign arm to cultivate donors, and Representative Liz Cheney of Wyoming is defending Dr. Anthony S. Fauci, the government’s leading expert on infectious disease, while separating herself from Mr. Trump on some national security issues.

    At the same time, Secretary of State Mike Pompeo is attempting to shore up his conservative credentials by pushing a hard line on China, and Senators Ted Cruz of Texas and Rand Paul of Kentucky are attempting to reclaim their standing as fiscal hawks by loudly opposing additional spending on coronavirus relief.

    Drawing less attention, but working equally hard to burnish her national profile, is Ms. Noem. The governor, 48, has installed a TV studio in her state capitol, become a Fox News regular and started taking advice from Mr. Trump’s former 2016 campaign manager, Corey Lewandowski, who still has the president’s ear.

    Next month, she’ll address a county Republican dinner in Iowa.

    “There seems like there might be some interest on her part — it certainly gets noticed,” Jon Hansen, a Republican state representative in South Dakota, said of Ms. Noem’s positioning for national office.

    Aside from a small number of large clusters at meat-processing plants or other large critical facilities – one of which was misleadingly labeled “the worst outbreak in the country” by CNN – South Dakota has reported just 9,371 cases among its population of roughly 885,000 people.

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    South Dakota’s rate of transmission is higher than some states, but lower than others, including several of its neighbors. But we suspect this won’t be the last hit piece on the state’s governor tied to her ambition and popularity – two qualities that the NYT says should be ‘celebrated’ in women, so long as it’s the right woman, ie one who subscribes to all of the NYT’s orthodoxies.

  • Social Media Imposing Modern-Day 'Hays Code' On Political Speech
    Social Media Imposing Modern-Day ‘Hays Code’ On Political Speech

    Tyler Durden

    Sat, 08/08/2020 – 22:00

    Authored by Kalev Leetaru via RealClearPolitics.com,

    Social media companies continued to assert their power over the political sphere this week, with Twitter temporarily suspending the Trump campaign’s ability to post until it removed a clip of a Fox News interview with the president regarding COVID-19.

    When the Democratic National Committee reposted the video to debunk it, Twitter similarly banned the DNC from tweeting until it too deleted the footage.

    With Twitter seemingly unbothered by the implications of suspending a presidential campaign’s account just 12 weeks before the election, what might the future hold as control of our public squares is increasingly centralized?

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    Twitch became the first social media platform to formally suspend a presidential candidate’s account this past June when it deleted two of President Trump’s campaign rally videos for violations of its “hateful conduct” rules.

    In doing so, it emphasized the divide between physical and virtual campaigning. At an in-person rally a candidate can present the policy proposals he or she believes supporters want.

    Virtual rallies, however, are policed by an army of moderators enforcing ever-changing acceptable speech policies, forcing politicians to self-censor or risk deletion from the online world that increasingly shapes elections.

    In the case of this week’s ban, the story is all the more remarkable because the video in question was actually a cable TV interview with the nation’s leader, meaning that social platforms were in effect banning a major news organization’s reporting. As news is increasingly consumed through social media, the upshot is that the online platform’s acceptable speech rules are being applied to traditional news outlets.

    Additionally, rather than link the video to an outside fact check, Facebook simply deleted it as “a violation of our policies around harmful COVID misinformation” while Twitter forced the campaign to delete the post as a “violation of the Twitter Rules on COVID-19 misinformation.”

    Both companies cited as the offending statement Trump’s claim that children have “much stronger immune systems” than adults and thus “they don’t have a problem” when infected. While oversimplifying, Trump’s claims are not that far removed from those of CDC Director Robert Redfield and infectious disease expert Dr. Anthony Fauci, who have cited the pathogen’s significantly reduced severity in children in their calls to safely reopen schools this fall.

    While more measured than the “immunity” claimed by Trump, the gist of his statement — that COVID-19’s impact on children appears to be less severe than its effect on older Americans — aligns with the public statements of his medical advisers.

    Moreover, when Elon Musk tweeted in March that “kids are essentially immune,” Twitter clarified that his tweet did not violate its COVID-19 rules. To this date, Musk’s tweet carries no warnings or fact-checking statements from Twitter refuting it or adding additional context to his claims. Why is Musk’s assertion permissible but Trump’s is banned? Given that both are imprecise summaries of current scientific knowledge, where does Twitter draw the line?

    In many ways, social media platforms have become modern-day incarnations of the Hays Code that governed Hollywood from the 1930s to 1960s, establishing “morality” standards and enforcing them with an army of censors. By shaping popular culture through its control of movies, the Hays Code ensured that generations of Americans were presented an idealized world of benevolent public institutions, including police and politicians whose good works were spotlighted and any wrongdoing was punished. Moreover, as an extrajudicial speech regulation, studios could modify the rules and exempt content at will, much as social platforms do today.

    The Hays Code’s influence came from the fact that the studio system was largely centralized, meaning a small number of companies largely controlled what audiences saw. While niche independent studios could set their own rules, the dominance of the major studios ensured the code had an outsized effect over entertainment speech, the same as Twitter and Facebook’s rules are far more influential than those of upstarts like Parler.

    Nearly a century later, lawmakers are once again awakening to the power of centralized speech controls by turning to social media companies to impose constraints traditionally prohibited under the First Amendment.  Twenty state attorneys general demanded this week that Facebook considerably narrow its speech rules to outlaw anything the government sees as “hate speech.” While the government itself cannot ban most speech, this novel approach suggests it may be legal for the government to instead ask private companies to ban speech it dislikes, nominally complying with the First Amendment by outsourcing the banning process.

    Instagram previewed the impact even subtle algorithmic tweaks can have when, over the last few months, searches for Trump on its platform yielded no negative hashtags, while searches for Joe Biden displayed numerous anti-Biden results. While the company claims this was merely a bug that affected other political hashtags as well, it reminds us of the power socials have in shaping the public debate by hiding or emphasizing negative news about political candidates.

    As platforms embrace the concept of applying their rules to major news outlets, traditional journalism will no longer act as a bulwark against the power of Silicon Valley. Wikipedia ruled last month that Fox News was no longer a reputable source for political and scientific articles and can now be referenced “only when there are additional sources to corroborate or if it is clearly marked as opinion or biased.” This movement is likely to accelerate if Washington turns its sights on regulating Silicon Valley, with platforms almost certain to ban or suppress news coverage and commentary describing them as monopolies.

    With just under three months until the election, Twitter sees nothing wrong with suspending a major presidential campaign’s ability to post. What happens as platforms increasingly embrace their ability to take such steps? Election integrity advisers have for years warned of the dangers of “deep fakes” being released in the days just before an election. While that threat hasn’t materialized yet, we have the very real possibility of social platforms banning a politician the day before an election as a major story breaks, preventing him from responding and undermining public trust in the outcome.

    Despite disappearing half a century ago, the impact of the Hays Code is still felt today in the way it shaped Hollywood’s portrayal of institutions like the police.

    How will we look back half a century from now on the social censorship of today? Will we see it as a momentary experiment that was quickly reversed or will it too shape the course of society for decades?

  • Inside One Of Big Brother's 'Location Harvesting' Contractors, Which Tracks 'Hundreds Of Millions' Of Phones
    Inside One Of Big Brother’s ‘Location Harvesting’ Contractors, Which Tracks ‘Hundreds Of Millions’ Of Phones

    Tyler Durden

    Sat, 08/08/2020 – 21:30

    A Virginia-based software company founded by two US military veterans with backgrounds in intelligence has been tracking hundreds of millions of mobile phones across the world, according to documents reviewed by the Wall Street Journal.

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    The company, Anomaly Six LLC, draws location data from over 500 apps – partly through their proprietary software development kit (SDK) which they’ve paid to embed directly in some of the apps, while the company gets location data from partner providers. The SDK allows the company to obtain a user’s location if they have allowed the apps in question to access the phone’s GPS coordinates.

    App publishers often allow third-party companies, for a fee, to insert SDKs into their apps. The SDK maker then sells the consumer data harvested from the app, and the app publisher gets a chunk of revenue. But consumers have no way to know whether SDKs are embedded in apps; most privacy policies don’t disclose that information. Anomaly Six says it embeds its own SDK in some apps, and in other cases gets location data from other partners. –Wall Street Journal

    Anomaly Six holds contracts with several branches of the US Government – although they told the Journal that they ‘restrict the sale of US mobile phone movement data to nongovernmental, private sector clients,’ according to the report. Private sector clients – typically marketing companies or others in the advertising space – buy and sell geolocation data, sometimes ‘reselling it to government agencies or contractors‘ according to the report.

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    And as the Journal notes, in the case of Anomaly Six, “the direct collection of such data by a business closely linked to US national security agencies is unusual.“

    Founded by defense-contracting veterans who spent most of their careers in close contact with government agencies, tailored their operation to interface with national-security, according to interviews and court records.

    “Anomaly Six is a veteran-owned small business that processes and visualizes location data sourced from mobile devices for analytics and insights,” the company told The Journal in response to questions for the article. “We leverage detailed location data from numerous first-party sources to provide insights into groups, behaviors, and patterns.”

    The company acknowledges the “intense scrutiny” surrounding government access to private location data – but insists they aren’t breaking any laws, and that the data it peddles is ‘commercially available.’

    Anomaly Six said it would support regulation to require more disclosure by apps of how data is collected and used. The exact apps the company partners with couldn’t be determined and the company declined to comment, citing confidentiality agreements. The partnerships between data brokers and app makers are typically closely held trade secrets within the world of commercial-data sales. -WSJ

    Calls for greater transparency

    Marketing expert and founder of the Location Based Marketing Association, Asif Khan, says government access to harvested consumer location data has been a longstanding problem for the industry – and has insisted that app-makers provide greater transparency with consumers regarding how their data is used once collected.

    “You could argue that the government has the right, just like any commercial entity, to buy the data, if the data is available from a commercial supplier,” said Khan, adding “But you also need to be able to clearly say ‘this data could be used by government.’”

    “I think the average consumer doesn’t have a clue,” he added.

    That said, the data harvested from apps typically doesn’t link to the name of the cellphone owner. Instead, devices are typically identified using an alphanumeric code. Still, the movement patterns of a specific phone over time (such as where it is every night) can allow analysts to deduce who owns it.

    Consumers world-wide are often in the dark about governments’ acquisition and use of such data. Despite collecting data from consumer apps, Anomaly Six doesn’t have a privacy policy on its website, nor is it registered as a data broker in California, where a state law passed in 2018 typically requires companies to detail how they are acquiring and using consumer data. The company says it doesn’t meet the definition of a data broker under California law and isn’t required to register. The California attorney general’s office didn’t respond to a request for comment.

    According to interviews with numerous people in the industry, there is little regulation in the U.S. about the buying and selling of location data, leading to what one industry veteran called “the Wild West.” Consumers have come to expect free apps, and app makers have turned to selling user data to pay for the costs of developing and running the software, people familiar with the industry. -WSJ

    Anomaly Six and its founders been sued by a competitor, Babel Street, which provides social-media monitoring services to the intelligence community and law-enforcement agencies. Of note, two founders of Anomaly Six are former Babel Street employees who left in 2018, according to the lawsuit.

    The lawsuit, filed two years ago, offers insight into the secretive world of location harvesting products used by the US government.

    Anomaly Six founder Brandan Huff had managed Babel Street’s relationship with the Defense Department. His co-founder, former Army contractor Jeffrey Heinz, also manage Babel Street’s relationships with the DOJ, US Cyber Command, civilian federal agencies and the intelligence community according to court records.

    For example, one of Babel Street’s products, “Locate X,” provides access to the location records of millions of cell phones harvested from consumer apps. Babel claims their two ex-employees sought to build a competing product.

    Babel Street doesn’t publicly advertise Locate X and binds clients and users to secrecy about even its existence, according to contracts and user agreements reviewed by the Journal. Developed with input from U.S. government officials, according to court records, Locate X is widely used by military intelligence units who work on gathering “open source” intelligence, or information taken from publicly available sources. Babel Street also has contracts with the Department of Homeland Security, the Justice Department, and many other civilian agencies, federal contracting data shows. Babel Street didn’t respond to a request for comment. -WSJ

    What’s more, both Babel Street and Anomaly Six products can be used to combine traditionally gathered intelligence – such as social media data, satellite imagery, confidential human sources, consumer data from the private sector and intercepted communications, according to interviews with people familiar with the process as well as documents reviewed by the Journal.

    The data is combined into what’s known as a “pattern of life” analysis, which allows for a deeper understanding of a potential intelligence target’s habits which can possibly be used to predict future behavior.

    “It’s really alarming to learn about companies like this that claim to have years’ worth of location data from all over the world. Revelations like this just keep coming,” said Georgetown University law professor Laura Moy, who directs the school’s Communications & Technology Law Clinic.

    “Users have no idea that when they install a weather app, a game, or any other innocuous-seeming app that their private location data is going to be harvested and sold. Apparently that’s what’s happening here, and we have no transparency into the practice.”

  • 'TwitTok?': Twitter Reportedly Joins Growing List Of Potential TikTok Suitors
    ‘TwitTok?’: Twitter Reportedly Joins Growing List Of Potential TikTok Suitors

    Tyler Durden

    Sat, 08/08/2020 – 21:29

    The ideological battle over the fate of TikTok is provoking fist fights in the Oval Office, and a scramble among the country’s biggest tech firms to see if they might be able to come up with a workable pitch that would allow them to win approval to buy the US operations (along with New Zealand, Australia and Canada, and possibly more) of the popular Chinese-owned social media platform – the only real obstacle to a deal at a time when corporate credit is essentially free.

    It’s becoming increasingly obvious that the app, which the Trump Administration is threatening to shut down in the US over fears of a “national security threat” (Chinese law forces all Chinese companies to cooperate with state security forces, provoking fears that ByteDance, TikTok’s owner, might be compelled to set up a pipeline of Americans’ private information straight to Beijing), has become perhaps the biggest political football at a time of intense strain in the bilateral relationship.

    But amid the chaos and the geopolitical posturing of the leaders of the world’s two largest economies, America’s tech giants apparently see an opportunity, however unlikely, to circumvent opposition to further tech-industry mergers and seal what very well might be the last major merger in the industry for quite some time.

    And with the world headed into a period of protracted slowdown, companies might as well take advantage of the free money, and lock in that future EPS growth while they can.

    Pursuing TikTok would be an interesting choice for Twitter, mostly because the company once owned Vine, a popular video-sharing app that has been described as a direct forbear to TikTok. Twitter shut down Vine a few years back, a move that was widely denounced as a mistake by the app’s many rabid fans.

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    Since anti-trust scrutiny is such a hot issue in the world of big tech right now, it seems every company that has reportedly engaged in “talks” about the prospects for a deal has a reason for why it might assuage regulators and lawmakers and convince both Congress and the White House to agree to the deal. Being the smallest of the three major companies rumored to be potential suitors, Twitter obviously has the best case from a purely anti-trust standpoint (although it seems reporters keep coming up with excuses for why Microsoft or Facebook could still make it work).

    Plus, Twitter’s comparatively tiny $29 billion market cap means it would likely need help from outside investors – a great opportunity for Sequoia and the other big VC firms who backed ByteDance who reportedly were in talks about a deal to bring TikTok into the US under their purview. The deal would have valued TikTok at $50 billion, according to unconfirmed reports.

    Because it is much smaller, Twitter has reasoned that it would be unlikely to face the same level of antitrust scrutiny as Microsoft or other potential bidders, said people familiar with the discussions.

    Twitter would almost certainly need help from other investors if it does buy TikTok. The company has far less financial firepower than other major tech players, though it does have high-powered investors such as private-equity firm Silver Lake. Twitter started making a consistent profit in the past couple of years, but reported a $1.23 billion loss in the latest quarter. Twitter reported $7.8 billion in cash and short-term investments as of June, compared with more than $136 billion for Microsoft.

    If a deal does ultimately come together, it would reshape Twitter. Although Twitter allows users to upload videos, the app’s focus is on short messages of text and images.

    Like we said above, if ByteDance does successfully sell TikTok, it could be the last major tech M&A deal for some time that’s (IPOs, fortunately for investment bankers, have nothing to do with anti-trust). We wouldn’t be surprised if every big player takes a sniff.

  • CIA Stuns In Saying "No Evidence" TikTok Giving Its Data To China
    CIA Stuns In Saying “No Evidence” TikTok Giving Its Data To China

    Tyler Durden

    Sat, 08/08/2020 – 21:00

    Authored by Jason Ditz via AntiWar.com,

    Chinese app TikTok remains under fire by President Trump, with allegations that their being Chinese means China could access their user data, making it a serious problem. President Trump is set to ban TikTok next month.

    US officials see this as something China is bound to do with their apps, because Edward Snowden’s leaks showed this is exactly what the US did with its many apps and their user data. And yet did it happen?

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    Image: Reuters

    The latest report out of the CIA says no. While they said it is possible for China to access such user data, because of course it is, they confirmed that there is no evidence that any such things ever happened with TikTok.

    According to The New York Times on Friday:

    But when the C.I.A. was asked recently to assess whether it was also a national security problem, the answer that came back was highly equivocal.

    Yes, the agency’s analysts told the White House, it is possible that the Chinese intelligence authorities could intercept data or use the app to bore into smartphones. But there is no evidence they have done so, despite the calls from President Trump and Secretary of State Mike Pompeo to neutralize a threat from the app’s presence on millions of American devices.

    TikTok had already said they’d done nothing wrong, faulting Trump’s ban as denying them due process. 

    They promise to “pursue all remedies available to us.” With US tensions toward China growing, it’s likely they’ll try to limit remedies.

  • FTC Weighs In On Mystery Seeds From China, Citing Two Online Shopping Scams As Potential Motives
    FTC Weighs In On Mystery Seeds From China, Citing Two Online Shopping Scams As Potential Motives

    Tyler Durden

    Sat, 08/08/2020 – 20:30

    Days ago, we wrote that the U.S. had finally started to identify some of the mystery seeds being shipped from China, apparently randomly, to U.S. citizens. 

    While the Department of Agriculture was able to identify “14 types of plants” that the seeds belonged to, including cabbage, hibiscus, lavender, mint, morning glory, mustard, rose, rosemary and sage, the question still remained as to why these seeds were being sent. 

    On Friday, the Federal Trade Commission weighed in on the phenomenon for the first time and offered their take. First, they reminded people (in all capital letters): “DON’T PLANT THE MYSTERY SEEDS”. They also postulated that the seeds could be part of a scheme to prove that items were shipped from China from online orders that were ultimately never fulfilled:

    Did you order something and get seeds or other junk instead? If that’s you, dispute the charges for the thing you didn’t get. We hear that some sellers might be sending stuff so they can show payment companies the tracking numbers to prove they delivered something to you. So: tell the payment service you used (PayPal, for example), and your credit or debit card company right away that you got seeds, never got anything, or got something other than what you ordered. If the seller tries to use a tracking number to prove it delivered, point out anything to show that it’s not credible — maybe a weight listed that’s different from the package you got, or a different delivery address.

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    The FTC also wrote about a scam where, because someone sends you something unordered, it allows them to give themselves a good review under your time. 

    You might have read about the “brushing” scam. In this one, somebody sends you stuff, unordered, because it lets them give themselves a great review in your name. Annoying, but whatever, right? Nope. More than annoying. It could mean that the scammers have created an account in your name, or taken over your account, on online retail sites. Or even created new accounts (maybe lots of them) in other names tied to your address. Letting them post lots of seemingly-real reviews. So keep an eye on your online shopping accounts. If you spot activity that isn’t yours, report it to the site right away, and think about changing your password for that site.

    Finally, the FTC encourages people to contact the government if such packages are received. 

    Recall, it was about two weeks ago that we highlighted a mysterious trend that was sweeping the U.S.: citizens were receiving unsolicited packages of seeds, with return addresses from China, for apparently no reason at all.

    Art Gover, a plant science researcher at Penn State University said the “risk is low” of the plants being involved in biological warfare, but that the seeds “can be troublesome because they can introduce problematic weeds and diseases”.

    Lisa Delissio, a professor of biology at Salem State University in Massachusetts, said: “If any of the unidentified seeds turned out to be invasive species, they could displace native plants and compete for resources and cause harm to the environment, agriculture or human health.”

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    Bernd Blossey, a professor in the department of natural resources at Cornell University commented: “Obviously planting rosemary or thyme in your garden isn’t something that will endanger our environment. But there may be other things in there that have not been identified yet. Any time you gain something unknown, my suggestion is burning them, not even throwing them in the trash.”

    In our prior report, we suggested the mailings could be some sort of agricultural warfare brewing between the U.S. and China – where agriculture remains a key point of trade tensions – and where a cold war of sorts appears to be bubbling up under the surface. 

    After multiple reports in the U.S. media regarding the seeds, China’s Foreign Ministry responded last week by saying that China Post (the country’s state owned mail service) “has strictly followed regulations that ban the sending and receiving of seeds,” according to Bloomberg.

    Further, Chinese Foreign Ministry spokesman Wang Wenbin says that the parcels were “forged” and “not from China”. China has supposedly requested that the U.S. mail the seeds back to China so they could investigate further.

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    We noted last week that the response is anything but re-assuring. We’re not postmaster generals but we find the idea of being able to forge mailing labels – and get products to their final destination – in this day and age where even the decrepit U.S. postal service is mostly digital, as a difficult one. 

    The Washington State Department of Agriculture wrote about the phenomenon on their Facebook page on July 24, 2020 and said that the seeds are being shipping in packaging that identifies the contents as jewelry. Similar advisories have been issued in Virginia, Utah, Kansas, Arizona and Louisiana.

    Facebook users have been adding photos in the comments section of the post sharing photographs of seeds they have received from China. “It’s not a joke. I got some the other day!!!” one user commented, stating that the package identified the contents as a “Rose flower stud earring”.  

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    “Look’s like it’s all across the country,” stated an Indiana resident who also received seeds in the mail unsolicited. 

    At least 40 residents in Utah were said to have been mailed the unsolicited packages, according to the Daily Mail. The Kansas  Department of Agriculture and the Arizona Department of Agriculture also addressed the phenomenon, as did the Louisiana Department of Agriculture and Forestry, who said: 

    “Right now, we are uncertain what types of seeds are in the package. Out of caution, we are urging anyone who receives a package that was not ordered by the recipient, to please call the LDAF immediately. We need to identify the seeds to ensure they do not pose a risk to Louisiana’s agricultural industry or the environment.”

    There had been similar reports from Virginia’s Department of Agriculture and Consumer Services. “The seeds have yet to be identified, but officials speculate that the seeds may be of an invasive plant species and are advising residents not to use them,” Fox News reported.

    “Taking steps to prevent their introduction is the most effective method of reducing both the risk of invasive species infestations and the cost to control and mitigate those infestations,” VDACS wrote in a press release.

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    Twitter is also littered with reports of people receiving these seeds:

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    The Washington State Department of Agriculture has advised people on its Facebook page:

    1) DO NOT plant them and if they are in sealed packaging (as in the photo below) don’t open the sealed package.

    2) This is known as agricultural smuggling. Report it to USDA and maintain the seeds and packaging until USDA instructs you what to do with the packages and seeds. They may be needed as evidence.

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    Anyone who has received seeds in the mail can report them to the United States Department of Agriculture by visiting their website here. The site says:

    If individuals are aware of the potential smuggling of prohibited exotic fruits, vegetables, or meat products into or through the USA, they can help APHIS by contacting the confidential Antismuggling Hotline number at 800-877-3835 or by sending an Email to SITC.Mail@aphis.usda.gov.

    USDA will make every attempt to protect the confidentiality of any information sources during an investigation within the extent of the law.

  • US Passes 5 Million Coronavirus Cases, Brazil Passes 3 Million: Live Updates
    US Passes 5 Million Coronavirus Cases, Brazil Passes 3 Million: Live Updates

    Tyler Durden

    Sat, 08/08/2020 – 20:00

    Summary:

    • US passes 5 million cases
    • Brazil passes 3 million COVID cases
    • Global cases (per JHU): 19,481,330, deaths: 723,599.
    • Texas reports new cases, deaths; extends March emergency declaration
    • Trump signs executive order extending COVID relief
    • South Africa crosses 10k deaths
    • US reports 1.2% increase in confirmed cases
    • Arizona reports 1,054 new cases
    • US deaths top 160k
    • Florida reports another 187 deaths, cases climb
    • NY cases top 700
    • Hong Kong cases top 4,000
    • Germany “R” rate hits highest in 10 days
    • Denmark says may asks citizens to wear masks more frequently

    * * *

    Update (1945ET): Just hours after Brazil passed a similar, but much smaller, milestone, the data gurus at Johns Hopkins have reported that the number of confirmed cases in the US has surpassed 5 million, the highest tally of any country by a margin of 2 million cases (the next closest is Brazil, with 3 million, and India, with 2 million).

    The US reported its millionth case on April 28, more than three months after its first case. The country passed two million cases on June 10, three million on July 7, and four million on July 23.

    The single-day tally peaked on July 16, with 75,697, and has been slowly declining since then, though a second wave did push a handful of hard hit Sun Belt states to experience a later peak in June.

    * * *

    Update (1830ET): Texas reported 247 COVID-19 deaths since yesterday, bringing the state’s death total to 8,343. It also reported 6,959 new cases, bringing the state’s total to

    Hospitalizations dropped 193 to 7872.

    Gov. Greg Abbott has extended the disaster declaration originally issued March 13. The order makes a variety of state resources available to combat the pandemic.

    “Renewing this disaster declaration will provide communities with the resources they need to respond to COVID-19,” Abbott said in a statement. “I urge Texans to remain vigilant in our fight against this virus.”

    The world is approaching 20 million cases, with 19,781,205 confirmed as of Saturday night, according to Worldometer (which lumps in all “probable” and “asymptomatic” cases). JHU put the global number at 19,481,330. Global deaths are 723,599.

    * * *

    Update (1815ET): President Trump has signed an executive order extending some coronavirus relief for families and individuals (like enhanced unemployment benefits and the eviction moratorium).

    But that’s not the only major COVID-related news Saturday evening. A couple of days after India surpassed the critical 2 million case milestone, Brazil has become the second country (after only the US) to pass 3 million confirmed cases. But passing 100,000 deaths is just as big of a deal: only the US and Brazil have more than 100k deaths.

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    Here’s more on the Brazil situation from the Inquirer.net:

    The nation of 210 million people has been reporting an average of more than 1,000 daily deaths from the pandemic since late May and reported 905 for the latest 24-hour period.

    The Health Ministry said there had been a total of 3,012,412 confirmed infections with the new coronavirus — death and infection tolls second only to the United States. And as in many nations, experts believe that both numbers are severe undercounts due to insufficient testing.

    In a tribute to COVID-19 victims Saturday morning, the non-governmental group Rio de Paz placed crosses on the sand on the famed Copacabana beach Saturday and released 1,000 red balloons into the sky.

    “It’s very sad. Those 100,000 represent various families, friends, parents, children”, said Marcio do Nascimento Silva, a 56-year-old taxi driver who lost his children in the pandemic and joined the tribute.

    “We reach that mark (100,000) and many people seem to not see it, both among the government and our people. They are not just numbers but people. Death became normal “, Silva said.

    President Jair Bolsonaro — who himself reported being infected — has been a consistent skeptic about the impact of the disease and an advocate of lifting restrictions on the economy that had been imposed by state governors trying to combat it. He has frequently mingled in crowds, sometimes without a mask.

    “I regret all the deaths, it’s already reaching the number 100,000, but we are going to find a way out of that”, Bolsonaro said in a Thursday night Facebook transmission.

    South Africa, meanwhile, reported 301 more coronavirus deaths on Saturday, bringing the total to 10,210. Africa’s most industrialized country has reported 553,188 cases, the most in Africa, and the fifth-highest tally in the world.

    California reported 7,371 new cases on Saturday, more than the 14-day average of 7,171, bringing its statewide total to 545,787. Deaths rose by 178 to 10,189, compared with an increase of 142 for the prior day.

    * * *

    Update (1435ET): Now that Arizona and California have reported their latest numbers (both states saw a continued slowdown in new cases), JHU and BBG have published their first preliminary estimate of new cases in the US over the last day. With 59,202 new cases (+1.2%) added, equivalent to the average pace from the last week, it looks like cases continue to trend lower, while deaths were over 1,000 again.

    Arizona reported 1,054 new cases (+0.6%), compared with an average 0.9% in the previous seven days. The total for the state is 186,107 cases. Another 56 deaths were reported, compared with 78 the previous day. The positive test rate was 12.5% compared with 15.7% the day before.

    * * *

    It’s official: The US has passed 160,000 confirmed deaths, according to figures reported by state health authorities and catalogued by Bloomberg, Johns Hopkins and other data providers. According to BBG & JHU, the US added 59,202 new cases (+1.2% ),  on par with the average daily over the previous seven days. Some 1,256 deaths were reported yesterday, the fourth consecutive day with more than 1,000, but fewer than the 1,842 reported the previous day. America has now confirmed 4,941,635 cases (plus thousands more logged as ‘probable’ ones, and potentially millions of “asymptomatic” cases that will never be documented) and 161,347 deaths (plus thousands that have probably gone uncounted).

     

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    Source: NYT

    Of course, every time US deaths pass a big, round number, progressives come out with the pitchforks and conveniently try to “remind” indoctrinate the public to believe these deaths are Trump’s fault, and his alone.

    One day after Gov Andrew Cuomo bucked the national Democratic trend and declared that schools in New York would be allowed to reopen, New York reported 703 new cases, a 0.2% rise, which is in line with the average increase from the prior weeks (and months). NY’s state of spread has more or less plateaued at between 500 and 750 cases per day, with few exceptions. Additionally, the state reported five more deaths, the same number as the day before. Total hospitalizations in the state that had been the center of the U.S. outbreak remained low, at 573.

    In Florida, health officials reported 187 COVID-19 deaths on Saturday, along with the highest single-day total of new cases in a week with 8,502 cases, though the 7-day average for cases continued to move lower.

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    Now, 8,238 people have died and 526,577 people have been infected with the virus. The state’s positivity rate declined slightly, but was mostly steady at 9.9.

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    It’s been three consecutive days of increases in both COVID-19 cases and deaths as both seem to bounce back after the hurricane (though we sincerely doubt the hurricane’s tour stopped people from succumbing to the virus).

    Florida reported a record 257 deaths on July 31, when the state’s outbreak appeared to peak.

    As we await case and death data from the rest of the US, here’s what else is happening in COVID-19 news world-wide.

    Vietnam’s health ministry reported 21 new cases Saturday, of which 20 cases were linked to the coastal city of Danang, and one case was imported. After a lengthy stretch of no infections and deaths, the country has confirmed 353 infections tied to the Danang July 25 outbreak. Vietnam has a total of 810 cases with 10 deaths.

    Amid a non-stop flurry of vaccine news out of the US, Europe, China and Russia, Tianjin-based CanSino Biologics, one of the most closely-watched (in the west, and China) Chinese vaccine projects. The company said Saturday it may test its coronavirus vaccine on pregnant women to study its ability to protect groups most vulnerable to virus. The Chinese company, which was the first in the world to start human testing of vaccines against the virus in March, “may include pregnant women and look at the shot’s ability to protect” young people during future clinical trials, said CanSino founder Yu Xuefeng during a webinar hosted by Hillhouse Capital on Saturday.

    More signs of slowdown in Iran after deaths and cases surged in the country’s latest wave: single-day deaths fell to the lowest in six weeks with 132, with the number of new cases at a month-low of 2,125. Iran now has 18,264 confirmed deaths and 324,692 infections, with many, many more of both  suspected.

    Belgium, which has emerged as a hotspot in Europe’s nascent “second wave”, said on Saturday that 768 more infections have been detected, after 858 the day before. Five more deaths were reported, bringing the total number of fatalities to 9,866.

    Hong Kong reported 69 new cases Saturday, pushing its total north of 4,000. Indonesia posted 2,277 new infections, lifting its tally above 123,500.

    Meanwhile, in Denmark, where the country’s committee of experts leading its response have disagreed on the efficacy of masks, said the country likely won’t reopen nightclubs – as it had planned – due to an increase in cases. Prime Minister Mette Frederiksen said Danes may also have to get used to wearing face masks in public (at the moment, they are not mandatory, though Danes are asked to wear them on public transit).

    Starting Saturday, Germany will test all returning travelers as the country’s “R” value climbs to 1.16 on Friday, its highest level in a week-and-a-half.

    Here’s how the worst outbreaks in the world are progressing, per JHU:

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  • Deceit And Demagoguery In Montgomery County, Maryland
    Deceit And Demagoguery In Montgomery County, Maryland

    Tyler Durden

    Sat, 08/08/2020 – 20:00

    Authored by James Bovard via The American Institute for Economic Research,

    Across the nation, politicians and bureaucrats have invoked the COVID pandemic to seize dictatorial power to ban activities they disapprove. One of the most brazen examples recently occurred in super-lefty Montgomery County (MoCo), Maryland, where local health czar Travis Gayles announced last Friday that he would impose a $5,000 fine and up to a year in prison on private school teachers that teach students in person between now and October 1. 

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    New COVID cases have plummeted in MoCo and are at very low levels. Gayles justified banning private schools in part because of rises in COVID transmission rates elsewhere in Maryland, the District of Columbia, and Virginia. Apparently, as long as there are any positive COVID test results within 300 miles, letting teachers teach is too risky.

    Maryland as a whole has been through the Covid wave and now deaths have plummeted. 

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    On Monday, Gov. Larry Hogan overturned Gayles’ decree, ruling that the “blanket closure mandate imposed by Montgomery County was overly broad and inconsistent with the powers intended to be delegated to the county health officer… As long as schools develop safe and detailed plans that follow CDC and state guidelines, they should be empowered to do what’s best for their community.” Hogan declared, “This is a decision for schools and parents, not politicians.”

    On Wednesday, Gayles issued a new dictate claiming that local health officers are entitled to “take any action or measure necessary to prevent the spread of communicable disease” and “issue, when necessary, special instructions for control of a disease or condition.” Gayles claims that as long as more than 8 people test positive for COVID in Montgomery County each day, he is entitled to shut down all private schools at least until October 1. 

    In a closed video briefing for county employees on May 28, Gayles continually invoked “science and data” like a righteous priest invoking God and the Bible to sanctify scourging his enemies.

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    Travis Gayles

    What does it require to justify boundless power in a county of a million people? A COVID positive rate of 0.000008%.

    Surprise – the dictatorship will last forever – or at least until the Democratic political machine that runs the county decides it can profit from loosening the tourniquet it imposed that helped destroy more than 50,000 jobs and countless small businesses. 

    Montgomery County is suffering from epidemic levels of sexually-transmitted diseases including Hepatitis C and chlamydia. If Gayles has the right to shut down schools based on the 0.000008% rate, the same standard would justify invoking STD numbers to outlaw all sex between unmarried adults. But MoCo would never do that because sexual activity, unlike other private learning, is a freedom that progressives champion. 

    Gayles justified his school shutdown dictate:

    “The purpose of what we’re doing is to keep kids safe.”

    According to Gayles and other MoCo politicians, nothing matters except politicians’ self-proclaimed good intentions. 

    But the school shutdowns have profoundly disrupted lives and are increasingly blighting learning. A recent Wall Street Journal analysis headlined, “The Results Are In for Remote Learning: It Didn’t Work,” noted,

    “In many places, lots of students simply didn’t show up online, and administrators had no good way to find out why not… Soon many districts weren’t requiring students to do any work at all, increasing the risk that millions of students would have big gaps in their learning.” 

    The Center on Reinventing Public Education found that the vast majority of school districts did not require any live teaching over video. An analysis by the Centers for Disease Control (CDC) noted that only “one in three school districts expected teachers to provide instruction, track student engagement, or monitor academic progress for all students.” But since teachers in most places continued collecting full pay, the shutdown is wildly popular with teachers unions. 

    Montgomery County politicians and school officials have endlessly invoked “closing the achievement gap” to justify boosting school spending (and property taxes). But school shutdowns are devastating minorities. The CDC warned last month that “the lack of in-person educational options disproportionately harms low-income and minority children.” 

    An analysis by McKinsey and Company consultants estimated that if schools were entirely online until January, on average white students would lose 6 months of learning, Hispanic students 9 months, Black students 10 months and low-income students more than a year during the time school buildings have closed for the pandemic,” the Baltimore Sun reported.

    Many parents are desperate to get their children back to learning at full speed and are seeking private alternatives to shuttered public schools. Private schools have taken extreme measures to assure the safety of returning students, installing plexiglass shields, banning field trips, restricting time in hallways, and minimizing unnecessary contact. In comments last week, Gayles brushed off their efforts as “niche issues.” Bureaucrats have always considered freedom a niche nuisance. 

    After controversy erupted over the shutdown order, the County Council held a session “really showing its hatred of private schools,” Washington Examiner columnist Tim Carney, a Catholic father of six kids, observed. Carney tweeted, “Montgomery County Councilman Craig Rice said that ‘racism’ was behind the efforts to reopen nonpublic schools–because the bureaucrat who tried to close them is a black doctor.” Carney summarized Rice’s argument:

    “The county shouldn’t allow private schools the same liberty it allowed public schools (whether to reopen) because ‘affluent’ people are more willing to expose their own kids to infection than others are.” 

    Unfortunately, Rice did not bother explaining the “achievement gap” between local public schools and private schools (many of which spend far less per student). These are the same local politicians who cheered on local mass protests over the George Floyd killing in stark violation of “shelter-at-home” orders at the same time they continue outlawing church services.

    While private teaching is considered inherently too risky to permit, Montgomery County announced this week that massage parlors would be permitted to reopen. Local massage parlors are perennially getting busted because Asian masseuses provide more services to patrons than state law permits. But masseuses providing “happy endings” to male customers is apparently less of a public health peril than an adult standing in front of a group of plexiglassed students explaining algebra. 

    MoCo politicians pretending to take the high road have actually turned local children into “revenue hostages.” Gayles’ shutdown order expires on October 1 – one day after local public schools report their expected enrollment, which will largely determine how much subsidies they receive. Keeping private schools shut down could result in tens of millions of additional tax dollars for the school system even if those kids never show up for a single class – simply because parents will not have the opportunity to notify the county of plans to withdraw their kids for private schools. 

    The Montgomery County fight has brought out the usual Twitter mobs proclaiming that any government official who fails to prohibit all purportedly risky activity is to blame for any resulting illnesses or deaths. A Twitter user named TeachersAreNotYourSacrificialLambs responded to Hogan’s action:

    “He now owns it. Every Maryland private school illness, hospitalization, and death now falls squarely on his shoulders. He. Owns. It.”

    A self-described “progressive democrat” Twitter user railed at Hogan:

    “Why does he want dead children & school staff in Maryland?… Gov Larry just part of the #GOPDeathCult.”

    This is typical of how the COVID shutdowns and lockdowns have been scored: politicians are applauded for everything they ban while enjoying zero liability for the vast collateral damage they inflict. Many MoCo school nurses are concerned about the harm from shutdowns of school-based health centers that effectively serve as primary care providers for many low-income families. The CDC cited studies on pandemics that showed “a strong association between length of quarantine and Post Traumatic Stress Disorder symptoms, avoidance behavior, and anger.” Maybe the champions of perpetual shutdowns will solve that problem by making antidepressants mandatory for all children?

    Politicians and bureaucrats who claim a right to outlaw all risks ignore the risk of tyranny. Gayles and other MoCo politicians sneer at their critics as if they were unwashed deplorables incapable of understanding “science.” But their school shutdown policy is simply Political Science 101, using deceit and demagoguery to seize more power.

  • 'Broke And Unemployed' Hunter Biden Slapped With $450K Tax Lien – Which Was 'Resolved' In Six Days
    ‘Broke And Unemployed’ Hunter Biden Slapped With $450K Tax Lien – Which Was ‘Resolved’ In Six Days

    Tyler Durden

    Sat, 08/08/2020 – 19:30

    For a guy claiming to be broke and unemployed in January in order to avoid paying child support, Hunter Biden was able to ‘resolve’ a $450,000 tax lien in mid-July, just six days after it was issued.

    Although Biden claimed that he was broke, he was living in a $12,000-per-month Hollywood Hills rental home and spotted driving a $129,000 Porsche Panamera in Beverly Hills. After a judge ordered Biden to turn over his financial records and travel to Arkansas for a deposition, the former lobbyist agreed to settle the case with Roberts. –Washington Free Beacon

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    While fighting with his baby mama, an Arkansas stripper, Biden said in a court filing “I attest that I am unemployed and have had no monthly income since May 2019,” adding “I currently have significant debts (in part as a result of obligations arising from my divorce which was final in April 2017).”

    According to the Washington Free Beacon, “The younger Biden owed $238,562.76 in state income taxes from 2017 and $215,328.16 in state income taxes from 2018, according to records from the District of Columbia’s Office of Tax and Revenue. The District of Columbia filed a $453,890 lien against him on July 9.“

    Yet, six days later on July 15, Hunter was released from the tax lien, as confirmed to the Beacon by a spokesman for DC’s Office of the Chief Financial Officer after the “tax issue was resolved.”

    Harvey Bezozi, a tax expert who specializes in large-scale tax debt negotiations, said the only way to get a lien released is to pay the settlement in full—often through a payment plan, penalty abatement, or other compromise with the government—or to prove the lien was filed in error. He said liens can take months or years to resolve.

    “It drags on,” he said. “Six days had to be some kind of expeditious kind of process for this.” -Washington Free Beacon

    This isn’t the first time Hunter has dodged taxes. In 2018, he was slapped with a $112,805 tax lien, which was resolved this March according to the Beacon.

    Biden came under scrutiny over his lucrative positions with foreign entities – reportedly raking in over $50,000 per month sitting on the board of directors for Ukrainian energy giant Burisma, and serving on the board of BHR Partners – “a $1.5 billion private equity arm of Chinese investment fund Bohai Capital,” according to the report.

    According to Biden’s lawyer, he no longer sits on either board.

    Not just Hunter…

    The Beacon also reports that the Biden family has been hit with multiple tax liens over the last several decades.

    James Biden has had at least five tax liens filed against him between 1995 and 2015, including one for $589,095 filed in 2015 and released one year later. Frank Biden, another brother of the presidential candidate, has had at least three liens for unpaid income taxes. He said in 2011 that a $32,500 lien in Kentucky stemmed from his struggle with alcohol addiction and was being paid off through a monthly plan, according to the Broward Palm Beach New Times. Joe Biden’s sister Valerie and her husband John Owens have faced at least five tax liens, including one for $229,749 in 1990.

    Lucky for the Bidens, they’re in the club…

  • Modern Monetary Theory Is Playing With Fire
    Modern Monetary Theory Is Playing With Fire

    Tyler Durden

    Sat, 08/08/2020 – 19:00

    Authored by Ethan Yang via The American Institute for Economic Research,

    Like it or not Stephanie Kelton is an economist whose ideas are making a huge splash in the world of economic thinking. She currently serves as a professor at Stony Brook University but more notably served as the Chief Economist on the Senate Budget Committee as well as the senior economic advisor to the Bernie Sanders presidential campaign. This background should give you some insight into her latest book, titled The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. 

    Published in 2020, this book may be the flagship literature of Modern Monetary Theory (MMT), as it is not only accessible to the average person but also well-written. Perhaps that is also what makes this book rather dangerous as it combines rigorous theoretical concepts with rather deceptive analogies about how these ideas might work, and a decent amount of progressive political talking points. 

    It is part textbook, part persuasion, and part manifesto. Despite my disagreements with the content, I must admit that it is a thought-provoking piece of literature that provides insight on what may be a very real economic idea to be reckoned with in the near future. 

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    The Myth Surrounding Deficits 

    Dr. Kelton starts off her book with a basic point about the way the federal government works. Contrary to the way most politicians talk about the federal budget, there is nothing necessarily wrong with running a deficit and accumulating debt. Economists can debate to what extent debt accumulation and spending are healthy but a basic tenet of MMT is the universal truth that the United States government can spend money it doesn’t have. Kelton writes 

    “What if the federal budget is fundamentally different than your household budget? What if I showed you that the deficit bogeyman isn’t real? What if I could convince you that we can have an economy that puts people and the planet first? That finding the money is not the problem?”

    The foundation for MMT is the idea that the federal government is different from a household in that it does not need to raise money before spending it, that it can accumulate debt without any constraints on its fiscal capabilities. The United States government can and has routinely printed money it wishes to spend even though it may not physically possess it, such as the most recent stimulus checks in response to COVID-19.

    With a yes or no vote the federal government has spent trillions of dollars that have not been generated from tax revenue or borrowing money. This is possible because the government is a money supplier. It has a monopoly on currency production and can print as much money as it desires. 

    Whether or not it should spend more than it brings in with taxes is another debate entirely. The core foundation of MMT is the fact that a sovereign currency issuer like the United States, Japan, or Australia can continue to print money and therefore never run out. Under this logic, budget deficits are simply imaginary constraints; the real constraints to spending lie elsewhere.

    Dealing With Inflation 

    This shift in understanding as described by Kelton is that 

    “MMT clarifies what is economically possible and thus shifts the terrain of policy debates that get hamstrung over questions of financial feasibility.”

    In a way, governments around the world essentially practice MMT in a limited capacity as they print the money they don’t have to use in complicated monetary maneuvers. However, Kelton and MMT advocates believe that we should take this way of thinking to its limits. She extols the possibility of building new infrastructure, improving healthcare, and essentially funding a whole slew of projects that would otherwise be impossible without excessive taxation. 

    Essentially we can have our cake and eat it too, getting more government services without higher taxes. Obviously one of the main concerns with this idea is that inflation would skyrocket if we simply pumped trillions of dollars into the economy. If inflation gets out of control, the country will follow in the steps of Weimar Germany, Venezuela, and Zimbabwe, dooming us to economic collapse. Kelton addresses this concern by clarifying 

    “Do I believe the solution to all our problems is to simply spend more money? No, of course not. Just because there are no financial constraints on the federal budget doesn’t mean there aren’t real limits to what the government can (and should) do. Every economy has its own internal speed limit, regulated by the availability of real productive resources.”

    Powerful economies like the United States can afford to print and spend more money than a country like Haiti. MMT doesn’t necessarily posit that poor countries can print themselves to prosperity, more so that all countries with sovereignty over their currency can increase their potential by printing more money. Policymakers also need to be cognizant of what she refers to as “slack” in the economy which would be underutilized resources and opportunities. If there is enough “slack” in the economy, printing money will not result in inflation as productivity would increase with the money supply. 

    The main problem with this premise, however, is trusting politicians and bureaucrats to make these incredibly sophisticated decisions. How could one know how much capital exists in the economy and what the correct amount of money to print in proportion to economic growth will be? This is a knowledge problem that needs to be reckoned with before we embark on this highly theoretical trip to the monetary unknown. 

    The Sovereignty of Currency

    Kelton reminds us that the idea of balanced budgets and deficit constraints may have been important in the past when we were on the gold standard but now that we have moved into the world of fiat currency these restrictions no longer apply. This is again true; however, she believes we should take the idea to its logical extreme.

    To explain the importance of monetary sovereignty she explains that 

    “In addition to the United States, countries like the United Kingdom, Japan, Canada, and Australia enjoy a high degree of monetary sovereignty… Some nations have weakened their monetary sovereignty, either by pegging their exchange rates (e.g. Bermuda, Venezuela, Niger), abandonment of their national currencies (e.g., all nineteen countries in the Eurozone, Ecuador, Panama), or by borrowing heavily in US dollars or other foreign currencies (e.g. Ukraine, Argentina, Turkey, Brazil). Doing any of these things compromises a nation’s monetary sovereignty and diminishes policy flexibility.” 

    By diminishing their monetary sovereignty, these countries have lost their capacity to print money in order to execute policies like stimulus spending during economic downturns and financing more government programs. 

    She adds that 

    “Most developing countries are at the weaker end of the sovereignty spectrum…That’s because most poorer developing nations rely on imports to meet vital social needs.”

    Although this is certainly correct, whether or not this is the reason why some countries are poor or whether or not increased government spending will be more helpful in developing countries is another debate to be had. Whether or not that is a good thing would depend on whether one sees government intervention as the source of prosperity rather than the private sector. Does the government have a significant role to play in directing the economy like the Soviet Union or should it simply guarantee life, liberty, and property so that its enterprising citizens are free to prosper in a way they choose? 

    Lastly, if countries with strong currencies decide to do as Kelton says and start printing trillions of dollars to finance projects even if it’s proportional to inflation what message will that send to users of the currency? An article in Forbes warns that 

    “These numbers are so large that they no longer have any meaning; they are simply abstractions,”

    “Pointing to warnings made by former Fed chairman Paul Volcker that “it is a governmental responsibility to maintain the value of the currency they issue. And when they fail to do that, it is something that undermines an essential trust in government.”

    “After you throw a few trillion dollars around, people start to believe that it’s all a big joke.” 

    Perhaps the United States can get away with a COVID-19 stimulus bill and maybe we can afford to finance a round of infrastructure improvements by printing a few trillion dollars. But what about the next round of repairs, the next crisis, the next pressing issue our government is called upon to address? Can we just keep printing more money and is this sustainable? These are some of the ultimate questions that proponents of MMT must address if this theory is ever to be viewed as sustainable. 

    The Role of Taxes 

    One of the immediate questions one may have when presented with a monetary system that proposes to pay for everything with the printing press, and that budgets are now irrelevant, is why should we keep paying taxes? 

    Kelton is very upfront with her view of taxation, which isn’t to raise funds for programs as the government is already the sole provider of currency. It is as she writes,

    “To get the population to do all that work, the government imposes taxes, fees, fines, or other obligations. The tax is there to create a demand for the government’s currency. Before anyone can pay the tax someone has to do the work to earn the currency.”

    Kelton contends that money was first distributed by the government. In order to make it worth something, the government imposed taxes so that people could exchange them for government services and also work to earn the government’s money. Government is therefore responsible for creating the medium of exchange that society uses to conduct trade and also incentivizing people to conduct useful activity. 

    According to Kelton taxes serve four essential purposes: 

    1. To incentivize work by creating demand and scarcity for money

    2. To manage inflation by taking money out of the economy 

    3. To redistribute income 

    4. To discourage negative activity like smoking and carbon emissions 

    In this view, taxes do not exist to support the operations of the state through a democratic process agreed upon by the electorate, but to simply exercise the levers of power. 

    The conventional theory of money and taxes is that money arose as a convenient medium of exchange amongst individuals in the marketplace desiring a universal system of value exchange. That productive activity exists regardless of government and taxation is a process in which the government either forcefully or consensually takes from the population to fund generally agreed upon public services such as raising a military. 

    These are two fundamentally contrasting views of the role of the state; one positing that it is the central component that enables civilized life and the other holding that it is an entity that is supported by the fruits of a civilized society and is, therefore, a humble servant. 

    Some Thoughts on MMT

    Aside from the concerns with the monetary aspects of MMT such as controlling inflation, maintaining confidence in our currency, and embarking on an unprecedented experiment in monetary theory, I am most concerned with the political economy surrounding MMT. 

    Kelton contends that such policies will create a “people’s economy” where politicians and not the Federal Reserve will make monetary decisions. Where we will not have to abide by the traditional constraints created by budgets, interest rates, and so on. On this topic, AIER has written extensively on why we should not politicize the Federal Reserve and monetary policy more generally.

    Kelton also makes the case for a federal jobs guarantee financed almost entirely by printed money. She contends that such a program would help alleviate job disruption brought about by technological advancement, recessions, and industry disruptions brought about by free trade. This will cost an obscene amount of money combined with the other promises she makes to fix infrastructure, fund Social Security, and provide free college, fund a Green New Deal, and so on. 

    How can we know this will fit within the appropriate spending to economic growth ratio that she keeps reminding us is the real consideration we should be making? Furthermore, a federal jobs guarantee alongside all the other government programs she advocates for will crowd out productivity from the private sector. Large government programs such as a jobs guarantee will not only artificially divert labor and capital from productive sectors, but it will also drive up inflation when countless individuals are being given checks for government jobs that may not be adding any value to the economy. 

    If the country embraced MMT, there would be massive concerns with cronyism as politicians would be unleashed to give virtually as much money to their friends as possible. There will be a populist tug of war over the printing press as the different political interests attempt to supercharge their favorite spending habits. The electorate, emboldened by the prospect of simply enriching itself with the printing press will trap politicians in a position where the one who promises to print the most money wins. We don’t need to look any further than the current welfare state to see this in action. If this happens then the careful management of the money supply and inflation which Kelton holds as the main concern with making MMT work will be broken in short order. 

    Finally, there is a question about the very role of government. Kelton contends that MMT will make it more democratic. I believe that unchaining the state from the constraints of budgets and taxation will make it more despotic. Whatever the government can give, it can also take. MMT seems to favor one that can give endlessly and take everything. 

    When we look to the state, do we see a deity to kneel before? Or do we see a government instituted among men, deriving its just powers from the consent of the governed? A government that will live and serve within the means that which we democratically assign to it. 

    Kelton may be right that the old mechanisms of the gold standard, balanced budgets, and debt may be instruments of the past in the face of MMT and fiat currency. However, they also provide a service that goes beyond money and finance. That is maintaining a government that is prudent, humble, and sustainable. 

    Conclusion 

    Stephanie Kelton’s book is well-written and serves as an accessible insight into the world of Modern Monetary Theory. Although I have many objections, I found it a great read nonetheless, especially knowing that this is a field of economic thought that may be much more relevant in the near future. There are parts of the book that are essential pieces of economic knowledge that define the modern state, some that are questionable premises, and some that are blatant political talking points. As a contribution to economic thought, I find it to be rather questionable. It also features circular logic, as well as bait-and-switch style arguments. As an accessible insight into an increasingly relevant monetary theory and the world of public finance, I believe the book does just that.

  • Navarro And Mnuchin Get Into "Knock Down, Drag Out" Oval Office Brawl Over TikTok Ban
    Navarro And Mnuchin Get Into “Knock Down, Drag Out” Oval Office Brawl Over TikTok Ban

    Tyler Durden

    Sat, 08/08/2020 – 18:30

    In other TikTok-related news, the Washington Post published a lengthy report delineating what was going on inside the West Wing as Trump laid down the executive order, and others who have an interest in getting the deal done.

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    As Microsoft, under the impression it had the ‘all-clear’, moved ahead with the talks, only to be stymied by Beijing’s fury over Trump’s executive order, which soured the optics of the situation and would have made a sale of TikTok look like a concession on China’s part, others stepped in to intercede with President Trump, who was once again calling the shots while his advisors battled for his ear.

    After a succinct refresher on the history of the Trump Administration’s national security concerns regarding TikTok, WaPo identifies VCs with a major investment in ByteDance who stepped in to intercede on the Chinese giant’s behalf, as big-time Silicon Valley dealmakers tried to get closer to the president.

    TikTok is considered one of the biggest technological success stories to come out of China. People around the world use the app to make short videos about their lives, pets and dance moves. Parent company ByteDance CEO Zhang Yiming calls it a “window” into the world.

    TikTok has 100 million U.S. users, many of whom are under 25 years old. Its success has drawn interest from prominent investors, including Sequoia Capital, a leading Silicon Valley venture capital firm. In 2014, its China arm made a prescient $35 million investment in TikTok’s parent company, giving it a stake that today is reportedly valued at more than $800 million. TikTok’s owner also acquired Musical.ly in 2017 for $1 billion, making it even more attractive to young users.

    But with that success came scrutiny. TikTok was first identified as a potential national security threat in summer 2019, when U.S. officials approached ByteDance about concerns regarding its acquisition.

    That turned into a formal national security investigation this year. It was led by the Committee on Foreign Investment in the United States (CFIUS), an interagency body that screens foreign investment transactions for national security risks and recommends to the president on security grounds whether certain proposed acquisitions should be rejected.as well as completed acquisitions reversed.

    In TikTok’s case, the app has been downloaded more than 175 million times in the United States, and like other apps accesses copious amounts of sensitive personal data, including Internet and browsing activity, location data and search histories. That information is potentially available to the Chinese government under a national intelligence law that requires any Chinese company to “support, assist and cooperate with state intelligence work.”

    The news of the investigation sent shudders through the halls of Sequoia Capital. Global managing partner Doug Leone took the lead on advocating for TikTok with the Trump administration, telling people he could use his influence with Trump to help the company, according to a person familiar with the discussions who spoke on the condition of anonymity to describe a private conversation. Leone and his wife have given $100,000 to Trump’s reelection bid, and Leone sits on the president’s task force for reopening the economy, according to public records.

    As Trump’s anger simmered over the past two weeks, with periods of silence regularly punctuated by threats of a ban, the China trade hawk faction stepped up to try and push back against the horde of wealthy VCs seeking to dissuade Trump from pursuing the ban.

    The hawks accused the finance guys of being dangerously sympathetic to the CCP, and ignoring the good of the country for the sake of the bottom line. Things (reportedly) got heated, and Pete Navarro and Steve Mnuchin got into what was described as a “knock down, drag out fight”.

    In front of Trump, trade adviser Peter Navarro and other aides late last week, Treasury Secretary Steven Mnuchin began arguing that the Chinese-owned video-sharing service TikTok should be sold to a U.S. company. Mnuchin had talked several times to Microsoft’s senior leaders and was confident that he had rallied support within the administration for a sale to the tech giant on national security grounds.

    Navarro pushed back, demanding an outright ban of TikTok, while accusing Mnuchin of being soft on China, the people said, speaking on the condition of anonymity to discuss private discussions freely. The treasury secretary appeared taken aback, they said.

    The ensuing argument — which was described by one of the people as a “knockdown, drag-out” brawl — was preceded by months of backroom dealings among investors, lobbyists and executives. Many of these stakeholders long understood the critical nature of establishing close connections with key figures in the Trump administration.

    Of course, this isn’t the first time Navarro has reportedly “fought” somebody during a meeting, according to the American press. Remember that time he almost beat up Dr. Fauci?

  • David Stockman: The Biggest Threat To Your Prosperity And What You Can Do
    David Stockman: The Biggest Threat To Your Prosperity And What You Can Do

    Tyler Durden

    Sat, 08/08/2020 – 18:00

    Authored by David Stockman via Doug Casey’s International Man,

    If you want to understand America’s dangerously deepening travails, you have to start at the Federal Reserve’s Eccles Building…

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    After a 30-year rolling coup d’etat, its occupants have imposed a regime of destructive falsification on America’s financial, economic, political, and social life.

    It has become the heart of mushrooming darkness taking prosperity, liberty, and democracy down for the count.

    How do we get 50 million unemployed… the stock market at record highs… companies trashing their balance sheets to buy back stock and do vastly overpriced M&A deals… doctors and politicians savaging the economy and the livelihoods of millions… and Washington going incontinent on the fiscal front?

    The answer is simple:

    the rapidly-spreading dysfunction is rooted in the giant financial fraud embedded in the Federal Reserve’s $7 trillion balance sheet.

    The latter is blissfully taken for granted by the politicians and C-suites of corporate America and desperately insisted upon by the unhinged gamblers of Wall Street.

    Even if you believe that a regular infusion of money is needed to catalyze the wheels of capitalist growth (we don’t), there is absolutely no economic logic that says the central bank’s balance sheet should grow by orders of magnitude faster than GDP over an extended period of time.

    If the robustly growing GDP of 1987 needed $5 of central bank money per $100 of GDP, there is no reason why that ratio should have differed in 2008 or 2020.

    But it did and does.

    In June 1987, the nominal GDP was $4.8 trillion, and by all current estimates, it clocked in at $19.4 trillion in June 2020. That’s a 4.1X expansion over 33 years.

    In contrast, the Federal Reserve’s balance sheet stood at about $240 billion on the eve of Greenspan’s arrival at the Eccles Building in August 1987 and clocked in at $7.2 trillion at the end of Q2 2020. That’s a 30X gain.

    Since the early 2000s and the dotcom crash, it has only gotten far worse. The chart below of the Fed’s balance sheet and GDP is indexed to 100 as of January 2003. It tells you all you need to know.

    During the past 17 years, the Fed’s balance sheet (purple line) has risen to 983% of its starting value, even as GDP (red line) has risen to only 192%.

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    What was fostered in the vast area between the two lines above was excess liquidity, debt, speculation, and malinvestment. This was accompanied by a complete breakdown of financial discipline in all sectors of American society.

    These long-term growth factors are not even in the same zip code or planet—and the massive excess of the Federal Reserve’s balance sheet versus GDP did not happen like a tree falling silently in an empty forest.

    On the contrary, it turned the financial and economic world upside down. That’s because the effect was to systematically suppress the cost of debt and speculation and drastically inflate the value of financial assets. As a result, everyone got false price signals and changed their behavior accordingly:

    • Wall Street investors became leveraged speculators;

    • Corporate business builders become financial engineers;

    • Middle-class households became debt slaves living hand-to-mouth on borrowed money; and

    • Washington’s politicians became free lunch spendthrifts piling on public debt like there was no tomorrow.

    The Fed is now a rogue institution that comprises a clear and present danger to the future of prosperity and liberty in America.

    The tragedy is that the clueless speculators on Wall Street, and the politicians of Washington who are riding the most egregiously inflated financial bubble ever, don’t even get the joke.

    So what happens next?

    We’d say nothing very pleasant.

    *  *  *

    The truth is, we’re on the cusp of a economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.

  • "Leave, You Are All Killers!" Protesters Storm Multiple Government Ministries In Beirut
    “Leave, You Are All Killers!” Protesters Storm Multiple Government Ministries In Beirut

    Tyler Durden

    Sat, 08/08/2020 – 17:30

    The expected protests and riots have broken out in Beirut at the end of a week in which families mourned the over 150 killed in Tuesday’s blast centered on the port, which it’s now been revealed was the result of years of negligence by authorities who allowed 2,750 metric tons of ammonium nitrate to be unsafely stored right alongside a large stash of impounded fireworks. 

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    Like the years-long banking crisis, the government is seen as directly responsible for this week’s epic tragedy, also given the lengthy paper trail showing multiple officials and entities begged the government to do something about the explosive substance stored so near a densely populated area.

    But Lebanese now taking to the streets this weekend could care less about the fine points buck passing among the political class as now a tsunami of rage is being unleashed, additionally as the economy is in shambles with record unemployment.

    On Saturday local TV stations showed footage of thousands of protesters occupying at least four government ministry buildings in downtown Beirut.

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    An estimated ten thousand clashed with police, which reportedly involved shots fired, in mayhem that also left at least one police officer dead.

    And Reuters reports that the country’s banking sector remains target of the people’s rage:

    “Lebanese protesters stormed government ministries in Beirut and trashed the offices of the Association of Lebanese Banks on Saturday, TV footage showed, as shots were fired in growing protests over this week’s devastating explosion,” according to the report.

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    Martyr’s Square on Saturday, via AFP.

    Already the growing number of injuries are an indicator of just how fierce this round of protests promises to be:

    The Red Cross said it had treated 117 people for injuries on the scene while another 55 were taken to hospital. A fire broke out in central Martyrs’ Square.

    Dozens of protesters broke into the foreign ministry where they burnt a framed portrait of President Michel Aoun, representative for many of a political class that has ruled Lebanon for decades and that they say is to blame for its deep political and economic crises.

    It appears that going into the night the ministries now “taken over” the protesters include the Foreign Affairs, Environment, and Energy ministry buildings, as well as the Ministry of Economy.

    Chants of “the people want the fall of the regime” as well as the burning of portraits of top Lebanese leaders and politicians, such as of President Michel Aoun could be observed during mass demonstrations at Martyr’s Square.

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    Responding to the pressure and popular anger, Prime Minister Hassan Diab called for early parliamentary elections and a two month transition period.

    “We cannot get out of this crisis without early parliamentary elections,” Diab said in a televised address.

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    Reuters describes further of Saturday’s mayhem in the streets:

    The protesters said their politicians should be hanged and punished over their negligence that they say led to Tuesday’s gigantic explosion that killed 158 people and injured more than 6,000.

    The protesters chanted , reprising a popular chant from the Arab Spring uprisings of 2011. They held posters saying “Leave, you are all killers”.

    Lebanon is still at the height of abanking and currency crisis which previously saw unprecedented restrictions put on patrons of banks: they couldn’t draw from their own savings accounts on fears of a run on cash (specifically the dollar), and had strict controls put on external transfers out of the country. This as the local Lebanese lira had effectively collapsed.

    Lebanese officials estimate that the explosion resulted in between three and five billion dollars worth of destruction, and many thousands of people left homeless given whole buildings were destroyed.

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    One thing is for certain: expect much more protests and unrest to come.

  • More Than 84,000 Mail In Ballots Disqualified In New York City Primary
    More Than 84,000 Mail In Ballots Disqualified In New York City Primary

    Tyler Durden

    Sat, 08/08/2020 – 17:00

    If this is foreshadowing for the national election, November could wind up being total chaos.

    Mail in ballots belonging to more than 84,000 Democrats in New York City who were seeking to vote in the presidential primary were disqualified according to newly released data from the Board of Elections.

    According to the NY Post, the city received 403,103 mail in ballots for the June 23 Democratic primary and the certified results on Wednesday confirmed that only 318,995 of these ballots were counted. 

    The 84,108 ballots that were not counted represented 21% of the total mail-in ballots.

    The ballots were disqualified for things like arriving late, lacking a postmark or failing to include the signature of the voter. Roughly 30,000 mail-in ballots from Brooklyn alone were invalidated, the Post reported.

    The report describes the Postal Service as “woefully underprepared” to handle and process an “avalanche” of mail-in ballots that were distributed and encouraged for use as a result of the coronavirus pandemic. The state had paid for pre-paid envelopes to make it easier to vote during the pandemic. 

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    The disaster has now turned into a legal mess, with a federal judge ruling Monday that “thousands of voters” were disenfranchised because of “tardy mailing and processing” of the ballots. Lawyer Arthur Schwartz said: “A 26 percent invalidation rate is astounding. It’s very troubling. The envelope with directions for the signature was so poorly designed.”

    The court is now fighting with the Board of Elections over whether ballots received by June 25 should be counted.

    Doug Kellner, co-chair of the state Board of Elections, had suggested reforms to the ballot but was “blown off” by the BOE back in November. He has urged proper staffing at polling places for November to keep lines short and to tally absentee ballots quicker than the six weeks it took for the primaries. 

    “Add new capacity to process the applications in a timely manner now. Do not wait for a backlog from which you can never recover,” Kellner suggested.

    He concluded, in his notes to the BOE: “To those voters who did not have an opportunity to cast their ballots in the primary election, we should apologize for not doing more. Elected officials and others warned that we were not deploying sufficient resources to mail out absentee ballots in a timely manner, and in hindsight, we could have done more to address the problem.”

  • Kodak Government Deal On Verge Of Collapse: DFC Says "Recent Allegations Of Wrongdoing Raise Serious Concerns"
    Kodak Government Deal On Verge Of Collapse: DFC Says “Recent Allegations Of Wrongdoing Raise Serious Concerns”

    Tyler Durden

    Sat, 08/08/2020 – 16:30

    Ever since Reuters reported last week that Kodak had granted its Chairman, Jim Continenza, some 1.75 million options (in what appears to be less than an “arms-length deal” and as the result of what was called an “understanding” with the Board of Directors), just one day before the infamous $765 million loan from the government was announced on July 28, which was meant to transform the one-time photography titan (since bankrupt) into a China supply-chain alternative to produce pharmaceutical products in Rochester and at the company’s facility in St. Paul, Minnesota, and which sent its stock price from $2 to $60 in two days….

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    … making the Kodak chairman richer by tens of millions overnight, the stench of impropriety was spreading, sparking demands from Democrats for a probe of potential backroom dealings between the Trump administration and Continenza, and culminating with an alleged SEC probe last week into the legitimacy of the deal.

    And now, just ten days later, it appears that the entire deal is on the verge of collapse with the government’s International Development Finance Corporation tweeting late on Friday that…

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    … the same IDFC which on July 28 released a statement quoting Continenza as saying: “Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”

    Trump, too, had hailed the development. “I want to congratulate the people in Kodak,” he said at a press briefing. “They’ve been working very hard.” It was Trump’s encouragement that sparked the furious rally in KODK stock and a frenzied scramble by Robinhood traders to buy up every share they could find, even if as the chart below show, the euphoria has clearly peaked.

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    Peter Navarro, director of the Office of Trade and Manufacturing Policy, tweeted that he is very disappointed that last week’s deal with Kodak was tarnished by allegations.

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    Last Friday, Kodak announced that it will appoint a special committee to conduct an internal review of the process surrounding the company’s agreement, although if the IDFC is indeed putting the deal on hold that may well be moot; the only question is whether any insiders and funds that liquidated stock and generated impressive overnight profits will be forced to clawback their gains.

  • Trump Signs Executive Orders On Coronavirus Relief, Payroll Tax
    Trump Signs Executive Orders On Coronavirus Relief, Payroll Tax

    Tyler Durden

    Sat, 08/08/2020 – 16:13

    With the ‘swamp’ fighting over pork as unemployed Americans die on the vine, President Trump on Saturday announced sweeping executive actions aimed at coronavirus relief – after stimulus Congressional stimulus talks broke down once again last week.

    The new orders will:

    • Eliminate the payroll tax
    • Extend unemployment benefits by $400 per week, down from $600
    • Defer student loan repayments through the end of the year
    • Extend protections against evictions

    The administration is also looking at cuts to income taxes for lower and middle-income individuals, as well as cuts capital gains taxes.

    Update (1640ET): As anticipated, President Trump has announced that he will be signing executive orders to eliminate the payroll tax, extend a block on evictions, and continue to provide supplemental unemployment benefits.

    Earlier:

    President Trump will be making a major announcement on Saturday which many believe to be linked to rumors of an executive order covering pandemic stimulus funds and other measures.

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    On Friday evening, Trump said that if a bipartisan agreement isn’t reached on stimulus legislation, he’s prepared to sign executive orders.

  • TikTok Plans To Sue White House Over 'National Security' Ban
    TikTok Plans To Sue White House Over ‘National Security’ Ban

    Tyler Durden

    Sat, 08/08/2020 – 16:00

    NPR News, the closest thing we have to a CCP mouthpiece in the US, has gotten a rare scoop: TikTok owner ByteDance is planning to sue the Trump Administration over its executive order barring TikTok & Tencent’s WeChat from the US market by mid-September.

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    The lawsuit, which will be filed in an American court (the Southern District of California, to be exact), alleges that Trump’s executive order is unconstitutional because it didn’t allow TikTok enough time to respond, while also alleging that Trump’s claims that TikTok is a “national security threat” are “baseless”.

    TikTok is planning to sue the Trump administration, challenging the president’s executive order banning the service from the United States.

    The video-sharing app hugely popular with the smartphone generation TikTok will file the federal lawsuit as soon as Tuesday, according to a person who was directly involved in the forthcoming suit but was not authorized to speak for the company. It will be filed in the U.S. District Court for the Southern District of California, where TikTok’s American operations are based, the person said.

    NPR has learned that the lawsuit will argue that the president’s far-reaching action is unconstitutional because it failed to give the company a chance to respond. It also alleges that the administration’s national security justification for the order is baseless, according to the source.

    “It’s based on pure speculation and conjecture,” the source said. “The order has no findings of fact, just reiterates rhetoric about China that has been kicking around.”

    The White House declined to comment on the expected litigation, but defended the president’s executive order. “The Administration is committed to protecting the American people from all cyber related threats to critical infrastructure, public health and safety, and our economic and national security,” according to White House spokesman Judd Deere.

    Fortunately, the American legal system prioritizes the ‘rule of law’, so much so that it’s one of the few jurisdictions in the world where foreign companies can sue the domestic government and stand a reasonable chance of winning. They can’t say the same about courts in China.

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