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[Markets] YouTube Deletes Viral Video Claiming Dr. Fauci Spewing 'Absolute Propaganda' About COVID-19 YouTube Deletes Viral Video Claiming Dr. Fauci Spewing 'Absolute Propaganda' About COVID-19

One thing that should be abundantly clear by now is that any thoughts, opinions, or speculation which challenges the official narratives regarding COVID-19 will be promptly silenced by Silicon Valley, under the guise of protecting the public - which apparently can't be trusted to absorb information and form their own opinions.

The most recent example of censored wrongthink is a new documentary, Plandemic, which features former chronic fatigue researcher Judy Milkovits, who claims that Dr. Anthony Fauci - head of the  National Institute of Allergy and Infectious Diseases (NIAID) - is spewing 'absolute propaganda' about COVID-19.

In the video, Mikovits claimed Fauci perpetrated propaganda that led to the deaths of millions of people in the past. She also raised questions about how COVID-19 deaths are being counted.

However, one of her biggest beefs against Fauci dates to the battles for credit over the discovery of HIV in the early 1980s.

In the video, Mikovits claimed she isolated HIV from the saliva and blood of patients in France but that Fauci was involved in delaying research so a friend could take credit, which allowed the HIV virus to spread. These claims are not proven. They were also disseminated in April by Robert F. Kennedy Jr. Kennedy alleged on the Children’s Health Defense website (where he is chairman) -Heavy

Google's YouTube is currently playing whack-a-mole with a 25 minute promotional vignette for the documentary which has gone viral - deleting new versions seemingly as fast as they pop up. The original version had over 1.6 million views when it was censored.

Facebook, however, hasn't deleted it (yet):

As noted by Heavy's Jessica McBride, Mikovits has a new book out, Plague of Corrpution, which currently has 4.5 / 5 stars on Amazon.

Mikovits, who has a new book out, was featured in the first vignette released to promote the movie. Her controversial career in the scientific community has been punctuated by an arrest, lawsuit, retracted research study, allegations against Fauci and clashes with the founders of the Whittemore Peterson Institute for Neuro-Immune Disease, which is located in Reno, Nevada. -Heavy

Mikovits has claimed that she published a "blockbuster" study which revealed that "the common use of animal and human fetal tissues were unleashing devastating plagues of chronic diseases," and that the "minions of Big Pharma" have been waging war against her to destroy her "good name, career and personal life."

In the Plandemic video, Mikovits makes other claims, including that patents are a conflict of interest, and she criticizes the concept of mass vaccines. “They will kill millions, as they already have with their vaccines,” she said, stressing she was not anti-vaccine. She claims there is a financial incentive in COVID-19 strategies to not use natural remedies in order to push people to use vaccines.

Mikovits co-wrote a book called Plague: One Scientist’s Intrepid Search for the Truth about Human Retroviruses and Chronic Fatigue Syndrome (ME/CFS), Autism, and Other Diseases and claims 30% of vaccines are contaminated with retroviruses. The book contains a forward from Robert F. Kennedy Jr. The book was No. 2 on the Amazon bestseller list on May 6. -Heavy

Plandemic has received both praise and criticism, however Google thinks it's best if you leave the thinking to them.

Read more about Mikovits here.

Tyler Durden Thu, 05/07/2020 - 12:45
Published:5/7/2020 11:54:16 AM
[Markets] Everyone Knows The Gov't Wants A "Controlled" Weimar Everyone Knows The Gov't Wants A "Controlled" Weimar

Authored by Jeffrey Snider via Alhambra Investments,

There are two parts behind the inflation mongering. The first, noted yesterday, is the Fed’s balance sheet, particularly its supposedly monetary remainder called bank reserves. The central bank is busy doing something, a whole bunch of something, therefore how can it possibly turn out to be anything other than inflationary?

The answer: the Federal Reserve is not a central bank, not really. What it “prints” are, as Emil Kalinowski likes to call them, the equivalent of laundromat tokens (I wonder if they’re even that useful). Even Jay Powell knows this, but he’s absolutely thrilled that so many people believe otherwise.

When grasped by the dark specter of deflation, what better way (according to an Economist) to get out of it than to make people think you’re being monetarily reckless; therefore, he’s not about to correct the record as to what QE really is. As Paul Krugman once put it, credibly promise to be irresponsible.

It’s the “credible” part that goes lacking. Thus, the parade of counterexamples – “Japan 2001. America 2008. Japan 2013. Europe 2015” – each one unanswered by any inflationary breakout. Has the whole world just forgot about QQE? It’s still ongoing seven years later!

The other part or half of what’s driving fears is fiscal, governmental in general. Come hell or high water, it is told, the feds as opposed to the Fed are going to drive inflation. Why? Because, as legend has it, that’s the way you “pay down” massive debt loads. You go nuts borrowing and then, quietly, ambiguously, you screw your lenders (bond holders) by devaluing the currency.

Occasionally, as the kids say, they say the quiet part out loud.

working paper just released (but not edited) by the Chicago branch of the Federal Reserve does just that. A taste:

The current low interest rate environment limits the Federal Reserve’s ability to stabilize the economy, while the large public debt curtails the efficacy of fiscal interventions by inducing expectations of costly fiscal adjustments. A solution to this impasse is a coordinated fiscal and monetary strategy aiming at creating a controlled rise of inflation to wear away a targeted fraction of debt. Under our coordinated strategy, the fiscal authority introduces an emergency budget with no provisions on how it will be balanced, while the monetary authority allows a temporary increase in inflation.

See!!, bond vigilantes will scream. We told you that’s what they’re up to!

Sorry, folks, this isn’t actually a surprise nor is it the matter for debate since everyone knows that’s what politicians want. It won’t make one bit of difference what authorities want to do, under cover or right out in the open, it’s what they actually can do.

And it’s just not all that much when it comes to the monetary system.

Controlled inflation, by the way, is not a new concept, either (obviously). Lost deep within the minutiae of the flurry of programs brought on by the Great Depression is something called the Thomas Amendment to FDR’s Agricultural Adjustment Act of 1933 (better known as the Farm Relief Bill).

Not just the Thomas Amendment, it was actually called the Thomas Inflation Amendment because it included a number of legal provisions which would force the costs of all manner of produce to be set (read: increased) by the diktat of federal government agencies. American farms and farmers had, like industry, been equally ravaged by deflationary prices.

But that wasn’t all, the amendment would have required the Federal Reserve to buy, at the President’s request, another $3 billion in federal government bonds (super QE) beyond those already purchased while also giving Roosevelt added authority to further lower the gold content of the dollar (statutory approval for official devaluation, meaning default, having  been given just a few months earlier).

There was more: authority to put silver on par with gold, or at any ratio in between that possible extreme and where it was priced at the time; legal approval for the Fed to issue greenbacks, $3 billion of them, to finance the bond purchases rather than use reserve bank credit (bank reserves).

On May 13, 1933, in Britain’s The Economist these provisions were soundly condemned as going way too far:

The passage of the Thomas amendment by both houses of Congress has answered the question of whether we are going to have inflation. The only topic of conversation in New York during the past week has been ‘inflation.’ It is evident that the tide of inflationary sentiment is running at full flood.

Both The Economist article and one published in BusinessWeek four days later referred to “controlled inflation”, with the former quite negative on the theory, charging, “the country has exchanged a President with little effective power for a ‘currency dictator.’”

The latter, BusinessWeek, was far more sanguine:

This inflation is different. It contains controls that can be used to prevent a runaway…

Disagreement over the wisdom behind the amendment was fierce, but the foreseeable result, inflation, was widely viewed as a foregone conclusion.

As noted yesterday, on the contrary, there was none to be found anywhere – not until the mid-sixties under very different underlying (not deflationary) circumstances.

It wasn’t up to authorities to create it, no matter how much they wanted to or how willing they were to just tear up tradition and exceed political limits. The monetary power for inflation, or deflation, as the case would be, rested within the banking system which, contrary to “recovery” expectations, wasn’t recovering.

This undercurrent would persist for decades. Though the New Deal raised the budget deficit to extreme proportions, World War II would take them even further. And still no inflation.

Fearing it anyway, because central bankers through history have continuously proved how little they understand their jobs, the Federal Reserve by the time of America’s entry into WWII, wounded and weakened by its disastrous performance throughout the decade before, was made subservient to the Treasury Department. Its primary task had been whittled down to little more than bond market policeman; beginning in 1942, enforcing a ceiling on UST yields by promising to buy bonds at predetermined prices.

And yet, even that much was never required. Low interest rates persisted; the Fed, as I recalled a few years ago, never much more than a bystander and spectator as the banking system feared liquidity and deflation regardless of the government’s condition, intent, or disposition. You can’t credibly promise to be irresponsible when everyone, including Treasury, knows you’re toothless.

If you understand why interest rates had only gone lower in the thirties you can easily understand why they didn’t just surge one day in the forties or even fifties. Yes, the Fed kept a ceiling on long rates from ’42 to ’51, but in all that time the central bank rarely had to intervene in the market; none at all over the final years. There was no artificially constrained bond bear lurking underneath.

What ended this bond “bull” market was the same thing which would end up balancing the federal government’s books. Growth and opportunity, not inflation.

Thus, the question before us today isn’t really about inflation, either, it’s whether the debt being further piled on to defeat deflation (which has zero chance of succeeding at that) simply tightens the deflationary trap that much more.

Just like all these previous periods in history. “Japan 2001. America 2008. Japan 2013. Europe 2015.” Everyone 2020.

I’ll get to Japan in the nineties hopefully at some point this week. That’ll finish up the major episodes of this un-killable interest rate fallacy.

Tyler Durden Thu, 05/07/2020 - 12:20
Published:5/7/2020 11:28:03 AM
[Markets] What Will Schools Look Like After COVID? What Will Schools Look Like After COVID?

Authored by Daisy Luther via The Organic Prepper blog,

If you’ve been wondering what it will look like when the kids go back to school, one school in Quebec has released their new guidelines and they’re shocking.

Apparently, schools are going to look a lot like prison camps.

This is another example of how things will not just “go back to normal.” Everything is changing, including life for our children.

Here are the guidelines one school has laid out.

Schools in Quebec, Canada are reopening on May 19th and one school released its guidelines. This list was submitted by a parent to the Facebook page, Kate for Education. The school was not named for the privacy of the parent. (All emphasis is mine.)

  • To minimize movement, we forecast assigning students to classes nearest the Berlin Street entrance (on all 3 floors if needed only);

  • Once assigned to a class, students will spend their entire day (including lunchtime) in their assigned seats;

  • Students must expect to be regrouped based on the number of students returning;

  • Students must not expect to return to their regular class with their classmates;

  • Your child may not be with the same teachers as before as several members of our staff will not be returning to school;

  • Teachers not returning to school will continue working and keeping close contact with students remotely from home as recommended by the government;

  • Activities completed while in school will not be evaluated or graded;

  • No physical materials will be transported back and forth between home & school;

  • Students must include a mini garbage and recycling bag with their lunch in order to collect their personal garbage and dispose of it at home;

  • All students must bring in their personal, labeled, and filled water bottle as water fountains won’t be available;

  • Sharing of ALL items (pencils, pens, sharpeners, wax crayons, rulers, toys) is not permitted;

  • When weather permits, recess breaks will be held outdoors and will entail of walking outside safely distanced from one another in a prearranged pattern;

  • Gatherings (groups of students together) will not be permitted;

  • Limited travel throughout the school by all during the day;

  • Bathroom visits will be monitored/escorted so that proper disinfection by our caretakers can follow before another student uses the facilities;

  • As per government recommendations, masks and gloves will not be provided;

  • Students are certainly welcomed to bring these items from home. They are also invited to carry their own personal disinfecting wipes with them if they wish;

  • Lockers will no longer be used. Students will place their spring/summer jackets behind the chair they will be using & their school bags under their assigned desks;

  • There will be no cafeteria service or Home & School pizza & frozen yogurt days.

  • There will be no physical activity taking place in the gym, no art classes (although art and craft projects can be promoted as home suggestions), no library periods, and no drama classes;

  • No fundraisers or after school activities will take place;

  • Parent volunteers will not be permitted in school;

  • We recommend your child brings a book or two of interest from home to read;

  • Students with fever or flu-like symptoms will be returned home.




Lest it sound as though this is a total outlier, here is the guidance from another school – it’s similar but not quite as harsh. And here are documents from the Minister of Education outlining the guidelines to be followed by the schools.

And did you notice there are quite a few inconsistencies? Kids can’t take anything back and forth from school. You know, except for their lunches, their garbage, their water, their PPE, and some books to read. That stuff doesn’t count as gong back and forth and clearly, is germ-free.

This sounds more like a prison for dangerous offenders than a nurturing place for children to learn and grow.

It’s important to note that returning is not mandatory for the rest of this school year. Teachers will still be available for online learning if parents wish to keep their children home.

I simply cannot fathom treating children in this way. If a home school parent had similar rules for their children, Family Services would immediately be at their door for the radical mistreatment of their offspring. The fact that the government can not just allow but order the public school system to abide by guidelines is utter madness. This is not right and it is not healthy, mentally, physically, or psychologically.

This setting seems like it would be psychologically damaging.

Imagine the culture of fear this creates for children. When you drum into a child the constant worry that others might be infectious, how do you expect that child to learn to communicate with others, make friends, and enjoy learning? This is how you make children afraid of human contact.

Active children will be miserable. If you think the number of diagnoses for ADHD and similar behavioral issues is high now, just wait until energetic 7-year-olds are forced to sit in the same chair all day and then walk in a properly distanced around a playground, past all the fun stuff like swings and slides.

If their work isn’t even graded or evaluated, what could possibly be the point of returning to school?

I guess there’s one point.

If you want a population of worker bees who will quietly submit to authority and distance themselves completely from the influence of others, this is how you produce that population. You drum into them that they can’t even choose when to go to the bathroom, that they can’t congregate with others, and that they must remain seated with their hands strictly kept to themselves at all times.

I wonder if the monitoring of the bathroom will be similar to what was discussed in this article or if somebody will actually go with them. And if so, isn’t an adult being alone in the bathroom with a child pretty inappropriate?

You teach them that every single moment is structured and supervised. You teach them to walk only in orderly formation – no skipping, no running, no playing.

And just think, all this time public school parents were worried about homeschooled kids not being properly “socialized” with others.

Would you ever allow your child to be subjected to these conditions?

We don’t know exactly what the conditions will be like when kids return to school in the United States, but it wouldn’t be a stretch of the imagination to expect something similar to this, particularly in harder-hit regions of the country.

I wouldn’t subject my kids to this horrible setting for any reason. I’ve always tried to be open-minded regarding the homeschooling vs. public schooling debate – one of my kids graduated from a public high school and the other was homeschooled. But I urge any parent who is able to stay home not to send their children back to school if it’s going to be more like a prison camp. Continue if you can at all to educate them at home and let them play outside, paint beautiful pictures, and do science projects.

Let them be children, for crying out loud.

Would you send your kids back to school if school looked like the guide above?

Tyler Durden Wed, 05/06/2020 - 19:05
Published:5/6/2020 6:22:16 PM
[Entertainment] Mother’s Day book picks by Delia Owens, Jennifer Weiner, Kiley Reid and more We asked 16 authors to pick their favorite books about mother-child relationships. Published:5/6/2020 2:49:11 PM
[World] 13 Hilarious Books to Read If You Need a Good Laugh E-comm: 13 Hilarious Books to Read If You Need a Good LaughWe love these products, and we hope you do too. E! has affiliate relationships, so we may get a small share of the revenue from your purchases. Items are sold by the retailer, not...
Published:5/6/2020 6:16:30 AM
[Markets] Did FBI Operative's Lie Launch Flynn Investigation, And Did IG Horowitz Run Cover? Did FBI Operative's Lie Launch Flynn Investigation, And Did IG Horowitz Run Cover?

For those who haven't been paying attention, recently unsealed materials in the case against former Trump National Security Advisor Mike Flynn all but prove that the FBI set him up with a perjury trap (a 'squeeze' which even Bloomberg's Eli Lake says 'undermines the rule of law').

And as the case against Flynn continues to unravel, perhaps the most important dots have been connected by investigative researcher @JohnWHuber, better known as "Undercover Huber" on Twitter, who makes a cogent argument that Stefan Halper - the portly spy who the FBI used to conduct espionage on the Trump campaign during the 2016 US election - may have sparked the Flynn investigation after lying to the FBI.

What's more, IG Michael Horowitz's report makes no mention of the lie, or the recently-learned fact that the FBI tried to close the Flynn case, dubbed 'Crossfire Razor', in Jan. 2017, only for agent Peter Strzok to go 'off the rails' and demand it not be closed.

Thread by Undercover Huber

Continued (emphasis ours):

  • According to the IG, Stefan Halper (referred to as “Source 2”) met with the Crossfire Hurricane team twice (in Aug 11 and 12, 2016) and told them “he had been previously acquainted with @GenFlynn”. *This was immediately before the FBI opened a case on Flynn on Aug 15, 2016*
  • The IG report is silent on anything Source 2 might have said specifically about Flynn. It’s also silent on the fact the Washington Field Office of the FBI tried to close the Flynn case on 01/04/2017. Both are going to be important in a second.
  • We now know from the FBI’s draft “Electronic Communication” dated 01/04/2017 (trying to close the Flynn CI case, stopped by Strzok at the direction of Comey, McCabe or both) confirms the “CH” team “contacted an established FBI CHS to query about” Gen Flynn & held a “debriefing”
  • Except that story is a *lie*. Halper wasn’t at that event. He witnessed nothing, because he wasn’t there. And the cab ride almost certainly didn’t happen either, because @RealSLokhova says she was picked up from the event by her Husband. And she’s willing to say that under oath.
  • There are multiple pictures of that Cambridge Seminar event (attended by about 20 people). Flynn was there, as was Richard Dearlove (former head of MI6), and Christopher Andrew (then mentor of @RealSLokhova and “unofficial” historian of MI5). But Halper wasn’t. Not in any photos.
  • Halper’s lawyers never challenged that statement. Even when the federal Judge dismissed @RealSLokhova’s case (for other reasons), he did not challenge that claim, only saying that “even assuming it was false” that Halper “attended” the dinner, it wasn’t defamatory to claim he did
  • And the FBI trying to close the case on Flynn is great evidence Halper’s “attendance” at this event so he could see this suspicious cab ride is false. The FBI never tried to interview @RealSLokhova, or anyone at the dinner. Why? Because it would have proven their own source lied.
  • FYI, WaPo, WSJ and NYT have all published stories claiming that Halper attended that Feb 2014 event. None have any evidence that’s true. All the stories are anonymously sourced to Halper or Halper’s buddies. There never will be any evidence Halper was there, because he wasn’t.
  • So when Halper told the FBI that he was “previously acquainted” with Flynn, and “witnessed” this suspicious cab ride, HE WAS LYING TO THE FBI. And at the time, he was a paid Confidential Human Source - the only one cited in the @carterwpage
     FISA, other than Steele.

    That’s big.

  • But what’s arguably bigger is WHEN Halper told this lie about Flynn. When else could Halper claimed to have been “acquainted” with Flynn if not this Feb 2014 dinner (the only time Flynn attended the Cambridge seminar Halper helped organize)?

  • Now, maybe Halper told the FBI about the dinner after the CI case was opened. But that’s NOT in the IG report, despite Halper’s other meetings with the FBI being in there. In fact the IG report says nothing about Halper and Flynn, other than what I quoted

  • In addition, FBI’s Jan 4, 2017 draft Closing EC doesn’t say when this “debriefing” with Halper happened  either. The wording sort of implies it was after the case was opened, but never says it

    So it is possible that a lie from Halper actually triggered opening the case on Flynn?

  • What else did the FBI have? Their own laughable “predicate” appears to be that Flynn worked for Trump, attended an RT dinner (at the time, @RepAdamSchiff
     had previously appeared on RT!), and was “linked” to Russians (Er, he was the former head of DIA under “Russian reset” Obama)

  • Ah, but all of those things were already true between Aug 1 and Aug 10, 2016, which is when the FBI opened cases on Page, Papadopoulos and Manafort - BUT NOT FLYNN. That didn’t happen until Aug 15. He’s the odd one out.

  • Flynn obviously already worked for Trump. He already had these “links”, and he’d already attended the RT dinner long ago. The thin gruel of Russian “links” and working for Trump was enough to open cases on all the others, but NOT Flynn.

  • But what did the FBI have extra before they opened the case? Stefan Halper telling them about being “previously acquainted” with Flynn - which almost certainly refers to that Feb 2014 Cambridge dinner, where he was never “acquainted” with Flynn at all.

  • Oh, & even if Halper told this lie *after* the case was opened on Flynn, the FBI mustn’t have found it credible because they never tried to properly investigate it, and then even tried to close the case anyway. So that means at best the lie came between Aug 15, 2016 & Jan 4, 2017

  • What else was happening between Aug 16 & Jan 17? Oh yeah, the FBI was using a person they should have suspected of lying to dirty people up - Halper - as a CHS wearing a wire on @carterwpage, @GeorgePapa19 and others, AND relying on Halper as “Source #2” in the FISA warrant apps

  • Then, incredibly after their own source lies to them about Flynn to dirty him up, the FBI have the audacity to charge Flynn with lying to them! Corrupt dirty cops isn’t an adequate description. And for all we know, Halper is STILL on Wray’s FBI books as a paid confidential source

  • Finally, IG Horowitz blew this line of inquiry, and didn’t mention anything about the FBI trying to close the case on Flynn in Jan 2017. Horowitz also admitted hasn’t seen any evidence that any of Halper’s information was ever corroborated during his entire time as an FBI source

  • Durham can do what the IG didn’t, and solve this mystery quite easily with a few interviews and record checks.

    Or, the DOJ/USG can keep Halper on his retainer and ignore this. Either way, we’ll know what’s up


Tyler Durden Sun, 05/03/2020 - 14:25
Published:5/3/2020 1:28:04 PM
[Culture] Terry Teachout recommends (Scott Johnson) With time on our hands, we are revisiting books and movies that may be seen in the light cast by the Wuhan virus or the lockdowns responding to it. Samuel Pepys’s Diaries, Daniel Defoe’s Journal of the Plague Year and Albert Camus’s The Plague come to mind. A stray reference to Anne Frank prompted me to pull down my copy of her diary along with Francine Prose’s excellent Anne Frank: Published:5/3/2020 8:26:47 AM
[Markets] Johnstone: Biden Is Everything The Democrats Are Johnstone: Biden Is Everything The Democrats Are

Authored by Caitlin Johnstone via,

Joe Biden is not an “imperfect candidate” for the Democrats.

He is the perfect candidate, because he’s everything the party is: Demented. Decrepit. Bloodthirsty. Corrupt. Cronyistic. Authoritarian. Reactionary. Rapey.

He is exactly what they deserve. He is exactly what they are.

Joe Biden is the Democrat’s Democrat. He is the perfect representative of the party. They should even take it a step further and replace that donkey with Joe Biden.

Biden is to the Democrats as Trump is to the Republicans. Everyone’s just wearing their true face now.


If you’re willing to sacrifice all principles, all sanity and all morality to get rid of Trump, what exactly is the point of getting rid of Trump?


We know Biden is a liar. He’s been pinged for lying his whole career. Everyone is trying to undermine the victim’s character in order to discredit her while ignoring Joe’s character. We know he lies. He also has a history of unwanted sexual advances. His story is not credible.


Nobody actually believes that Biden didn’t sexually assault Tara Reade. Nobody’s actually confident that Creepy Uncle Hair Sniffer isn’t a rapist, they’re just pretending they are. I can understand saying “It’s possible but unproven”, but saying it’s false is so gross and dishonest.

They’re accusing Reade of lying for partisan reasons, when in reality that’s exactly what they are doing: they’re pretending they believe Handsy Joe Biden is incapable of shoving his fingers into a woman without her consent, and they are lying. Out of pure partisan loyalty.


It’s funny how refusing to support a literal dementia patient who has been credibly accused of rape for the world’s most powerful elected office is a very, very normal thing to do, yet people are acting like it’s bizarre and freakish.


Which looks more likely to you? (A) That Reade seeded a bunch of vicious lies about Senator Joe Biden in the 1990s with the intention of someday sabotaging his presidential bid in the distant future for some reason, or (B) that a powerful man sexually assaulted a woman?


It’s so weird how Joe Biden is a spent piece of leftover 1970s beltway flotsam made of plastic donor class dinner parties and AIPAC lobbying but everyone’s all pretending they like him as a person and stuff.


There are no fact-based and intellectually robust arguments for working within the establishment to manifest revolutionary agendas, but there are a lot of highly effective intellectually dishonest arguments for why it’s okay for you to pretend otherwise and go back to sleep.


“They destroyed the economy over a virus, but the narrative about the virus is completely fake!”

Perhaps. But so is the narrative about “the economy”.


Terence McKenna once said “We are led by the least among us. The least intelligent, the least noble, the least visionary.” Can’t think of a better illustration of this than having Donald Trump versus Joe Biden competing for the most powerful elected office on the planet.


Hey remember when Trump provoked a missile retaliation that led to scores of injured US soldiers by assassinating Iran’s top military commander for no legitimate reason, lied about the whole thing, and then suffered no consequences or political repercussions of any kind? Good times.


Democrats are so fucking stupid and ridiculous that the Krassenstein brothers are still a thing.


All of humanity’s worst atrocities have been legal. Genocide. Slavery. Torture. The fact that you can squint at the imprisonment and extradition of a journalist for exposing US war crimes in such a way that makes it look “legal” does not mean it isn’t unforgivably evil.


It’s always about power. Power comes before everything, including profit, which is why you see escalations against nations who’d be very profitable to continue trading with and why critics of US foreign policy are attacked far more aggressively than critics of its domestic policy.

Manipulators understand that wealth control is a means to power and not an end in itself; that’s why you see things like Zuckerberg hurting his own profit margins by making changes to Facebook which make the platform less fun to use but shore up establishment narrative control.

Power trumps profit every time. Manipulators are driven ultimately by the desire to control as many humans as possible to the greatest extent possible. Money is a useful tool for accomplishing that, but in a pinch they’ll swap it out for military/police force or censorship etc.

Wealth is a narrative construct and can be gained or lost or made obsolete in a new narrative paradigm. Elite manipulators understand that it’s hard, nonconceptual control over hard, nonconceptual objects that gives them their actual alpha status over the rest of the humans.


“A newly democratized media environment has made it difficult for people to distinguish fact from fiction.”

‘Oh no! What do we do?’

“Censor everyone except authoritative news sources.”

‘Authoritative news sources? Like who?’

“The ones who lied about Russiagate and all the wars.”


As a general rule, indie media should not attack other indie media. If you’re not punching up, you’re punching down.


People ask me “Well, what should we do? How do we fix this thing?” And of course my only possible answer is, “Do what I’m doing! Or your version of it.” Of course I’m doing the thing I think we should do to solve the problems of our species. Why would I be doing anything else?


Revolution is an inside job. This is not an egoically pleasing fact, but it is a fact. It’s much more fun for egoic mind to believe both the problem and the solution exists in other people, but in reality the changes you can make in yourself will have far greater effects on the world.

There are vast, vast depths within all of us, and we are capable of making vast, vast changes to those depths. We are in fact far more capable of doing this than we are of changing the outside world through force of will. And interestingly when we do this, we do change the world. And we do it far more efficaciously than we can by trying to will it to conform with the noises in our babbling thinky brain.

*  *  *

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

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Tyler Durden Sat, 05/02/2020 - 23:00
Published:5/2/2020 10:25:29 PM
[Markets] Warren Buffett says Fed's Jerome Powell belongs on same 'pedestal' as Paul Volcker Berkshire Hathaway Chairman and Chief Executive Warren Buffett on Saturday had high praise for the Federal Reserve's handling of the market turmoil that accompanied the deepening of the coronavirus crisis in March, comparing Chairman Jerome Powell with the late Paul Volcker, who was credited with taming runaway inflation in the late 1970s and early 1980s. "He and Jay Powell couldn't seem more different in temperament..but Jay Powell, in my view, and the Fed board belong up there on the pedestal" with him, Buffett said in remarks at Berkshire's annual meeting, being held online this year due to the COVID-19 pandemic. Buffett said the Fed's muscular response to a Treasury market that had nearly frozen and other financial turmoil in March was crucial to averting deeper carnage. Conditions were sparking fear and "fear is the most contagious disease you can imagine," Buffett said, with conditions approaching a "total freeze" in credit markets before the Fed took action. Every company that issued bonds in late March and April should write a thank-you letter to the Fed, he said, because the issuance couldn't have taken place if the central bank hadn't acted with "unprecedented speed and determination." While nobody knows exactly what the consequences will be of the Fed's massive expansion of its balance sheet, "we do know the consequences of doing nothing and that's would have been the tendency of the Fed in many years past." Buffett said such incidents illustrated why Berkshire Hathaway carries a large chunk of cash, including a hefty chunk of Treasury bills. While it doesn't necessarily need a pile as large as what's now on the books, it does want to be prepared for a scenario where there isn't a Fed that acts as aggressively and, any case, doesn't want to depend not only on the "kindness of strangers but on the kindness of friends." Published:5/2/2020 6:24:10 PM
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Published:5/2/2020 12:22:31 PM
[Markets] Why Didn't The Constitution Stop This? Why Didn't The Constitution Stop This?

Authored by Robert Wright via The American Institute for Economic Research,

The genius of the U.S. Constitution is that the Framers, especially James Madison and Alexander Hamilton, saw it as a constraint on bad policymaking.

Given the number of really bad policies that various US governments and officials, from school boards to POTUS, have implemented, especially recently, it is high time to restore weakened or lost Constitutional restraints against arbitrary rule.

Five forces threaten Americans with destruction:

1) nature;

2) foreign powers;

3) the national government;

4) state and local governments;

5) themselves.

The threat from 3, 4, and 5 is double-edged, meaning that Americans can be harmed by the actions of those forces as well as by their inaction.

The national government, for example, can harm Americans by being insufficiently prepared for natural catastrophes and foreign incursions, as with Hurricanes Katrina and Rita and the 9/11 attacks. It can also harm Americans, though, by doing too much, as with the invasion of Iraq and the way-too-long occupation of Afghanistan. (Relying too much on FEMA instead of states or private initiatives may be another example, but less clear cut than the needless wars.)

The national and state governments are supposed to check each other’s power, so that if one overreaches, the other can thwart it. We usually think about this in terms of “states’ rights” but in fact federalism, as the concept is sometimes called, runs both ways: the states should check the national government when necessary but the national government should also check the power of the states when they overreach, as they sometimes do.

Advocates of states’ rights often cite the Tenth Amendment, which reads in its entirety “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Because the word “expressly” does not occur before “delegated” in the ratified version of the amendment, however, it is among the weakest parts of the Constitution.

Traditionally, though, the states retained primary control of so-called “police powers,” the powers that form the legal basis for the economic lockdowns that have imprisoned most Americans for over a month now. Books have been written about this stuff so obviously I cannot relate all the details and nuances involved but ultimately they matter little in the present case. The key point is that police powers, national, state, or local, do not provide carte blanche to governments. Specifically, the Constitution constrains state police powers in numerous ways.

Importantly, courts see Constitutional rights as tradeoffs between conflicting interests. So while the Constitution says that the national and state governments cannot infringe individual speech rights, they can pass laws that make it illegal for an individual, for example, to falsely yell “fire” in a crowded theater. The notion is that the property and natural rights of the theatergoers trump the free speech rights of the liar.

Similar restrictions apply to the right of assembly. All Americans have the right to assemble with other Americans for any lawful purpose but state police powers, the positive duty of states to protect the physical safety of assemblers and non-assemblers, mean that governments may restrict assemblies through permit systems.

Similar arguments are made to defend the pistol permit systems common in many states. They are bogus but show how far courts go to balance one person’s rights with those of others. If you believe that gun control laws should be followed because they are laws passed by democratically elected representatives you have missed the point of the Constitution, which, again, is to constrain policymakers, to protect individual Americans from the national and state governments and also other Americans.

Just because a majority wants some policy doesn’t mean that that policy is a good idea, after all. I imagine at one point in March 2020 a majority of Americans might have thought it a good idea to deport, tax, infect, or maybe even kill Chinese-Americans in order to make “them” pay for what “they” did to “us.” (I don’t want to link to evidence of that … just look at your social media feeds if you need evidence.) That is a typically ugly human reaction to trauma but one that would have been proven empirically wrong as well as morally bankrupt and economically inane (sunk costs). Thankfully, the Constitution remained strong enough to prevent that horror.

It did not, however, prove strong enough to prevent state governments from taking their police powers too far. They engaged in fancy word play to hide the fact that they acted without a shred of precedent. What they imposed is not a quarantine, which constrains the movement of sick people, nor a cordon sanitaire, which locks people into an afflicted area, nor a protective sequestration, which locks people out of an unafflicted area. Instead, they have implemented partial martial law (military rule essentially) by imprisoning Americans in their own homes without due process of law and stolen their property by shuttering their businesses. (Some recompense has been attempted but of course only bluntly and at a cost to all taxpayers, including those in states that did not shutter most businesses.)

Remember, just because a state has general police powers doesn’t mean it can do whatever it wants, whenever it wants, simply because its actions are popular, or passed into law, or urged by some scientist. Imagine, for example, if some executive thought everyone ought to drink bleach, crazy as that seems, and actually mandated it. Would you do it? (Hint: Don’t do it! Even if some guy in a suit or lab coat tells you that you must.) What if some leader believed that the coronavirus is spread primarily by clothing and mandated that we all go naked in public, except for our masks and gloves of course? Or if one thought an EMP (electromagnetic pulse) would solve the problem (and destroy all computers in the process)?

Any promulgation that violates the Constitution, in any way, shape, or form, is null and void. A federal judge has the authority to declare any state law or executive order unconstitutional and demand that it be revoked. Judges generally give governments broad leeway to protect “public health” but the policies must be rational and they must weigh the rights of all involved parties. Historically, many government epidemic responses never got litigated because the crises passed before suits could be brought and because quarantines, cordons, and sequestrations can make rational sense in specific situations. But, again, state governments for some reason have tried to combat the novel coronavirus with novel policies that come with huge negative side effects for everyone — workers, consumers, and taxpayers — and that have and will continue to cause deaths, minimization of which is the ostensible goal of lockdown policies.

Why draconian lockdown rules have not yet been deemed unconstitutional I still do not know, but the fact that a former federal judge who teaches at Harvard apparently does not know the difference between a quarantine and a lockdown might provide a clue.

Another clue might come from the fact that the courts, like the rest of the country, are run by the people most at risk of dying from COVID-19. But at least lawsuits have finally begun to be filed in significant numbers

Once a federal court (especially SCOTUS, from which there is no appeal) declares a law unconstitutional, as SCOTUS has often done to state laws throughout US history, the political dynamic changes dramatically. States must comply or face that other side of federalism, where the U.S. government has the duty to protect American citizens from their own state governments under the 14th Amendment, one of the Constitution’s strongest.

The national government has intervened before, most dramatically during the Civil War, but as recently as the Civil Rights Movement. In 1957, President Dwight D. Eisenhower federalized the National Guard of Arkansas in order to enforce federal court rulings in Little Rock. Arkansas duly passed laws, highly popular laws, mandating the “social distancing” of people with different skin tones, but that did not matter because the federal government has to weigh all the Constitutional rights of all Americans. No matter what.

Similarly, President Lyndon B. Johnson federalized the Alabama National Guard in 1965 to protect peaceful protestors marching from Selma to Montgomery from Alabama state troopers. No joke, look it up.

Federalization of state military forces has plenty of precedent: Trump has already federalized some national guard units to help with coronavirus relief efforts in Washington, California, and New York (not to enforce lockdowns) and to “protect” the southern border, something that every president since Ronald Reagan, including President Barack Obama, has done. Richard Nixon federalized some units too, in 1970 in response to a US postal strike. President George Washington himself led federalized militia troops to put down a federal tax rebellion in western Pennsylvania in 1794.

If National Guard troops refused to follow the President’s orders, things could get ugly very quickly but hopefully matters will not come to that. After all, nobody (yet) wants to drag people from their homes, only to allow those who wish to engage in lawful commercial intercourse to do so, just like those students in Little Rock only wanted an equal education and those marchers simply wanted to exercise their First Amendment rights.

In a sense, then, Trump was right when he claimed that he has the authority to force states to re-open their economies, provided a federal judge declares state lockdowns unconstitutional and state governments refuse to comply with his or her order. 

In that scenario, the Constitution itself can be blamed for causing a spike in COVID-19 deaths should one occur after reopening.

We will not be trading off lives for lucre at that point, we will be trading off lives for liberty, just as I argued at the outset of the crisis. Now, let a politician say that we must give up the Constitution to save one life. I dare him or her!

Tyler Durden Sat, 05/02/2020 - 00:00
Published:5/1/2020 11:19:24 PM
[Markets] Our Inevitable Collapse: We Can't Save A Fragile Economy With Bailouts That Increase Fragility Our Inevitable Collapse: We Can't Save A Fragile Economy With Bailouts That Increase Fragility

Authored by Charles Hugh Smith via OfTwoMinds blog,

By bailing out the sources of systemic fragility with trillions of dollars, the Fed has shifted the risk to the entire financial system and the nation's currency.

That the global economy is fragile is painfully obvious to all. What is less obvious is the bailouts intended to "save" the fragile economy actively increase its fragility, setting up an inevitable collapse of the entire precarious system.

Systems that are highly centralized, i.e. dependent on a handful of nodes that are each points of failure--are intrinsically fragile and prone to collapse. Put another way, systems in which all the critical nodes are tightly bound are prone to domino-like cascades of failure as any one point of failure quickly disrupts every other critical node that is bound to it.

Ours is an economy in which capital, wealth, power and control are concentrated in a few nodes of the network/ecosystem we call "the economy." A handful of corporations own the vast majority of the media, a handful of banks control most of the lending and capital, a handful of hospital chains, pharmaceutical companies and insurers control healthcare, and so on.

Control of digital technologies is even more concentrated, in virtual monopolies: Google for search and Youtube, etc. and Facebook / Instagram and Twitter for social media, Microsoft and Apple for operating systems and services derived from OS, and so on.

The vast majority of participants in the economy are tightly bound to these concentrated nodes of capital and power, and these top-down, hierarchical dependencies generate fragility.

When unexpectedly severe variability and volatility occur, the disruption of a few nodes brings down the entire system. Thus the disruption of the subprime mortgage subsystem--a relatively small part of the total mortgage market and a tiny slice of the global financial system--nearly brought down the entire global financial system in 2008 because the GFS is a tightly bound system of centralized concentrations of capital, power and control.

Currently, we're seeing the fragility of a meat production system that has concentrated ownership and production of meatpacking into a relatively few nodes on which the entire food supply chain is totally dependent.

And so what's the status quo "fix" when this intrinsically fragile system comes apart? Increase its fragility by bailing out the most tightly bound, dominant nodes. This is what the monopoly on creating currency, the Federal Reserve, is doing on a vast scale.

Rather than reducing the fragility of the system, the Federal Reserve is increasing the fragility, guaranteeing a collapse of not just the financial system but the currency as well.

To better understand systemic fragility, we turn to Nassim Taleb's description of antifragile systems. For those who haven't read Taleb's book Antifragile: Things That Gain from Disorder, here is a partial definition: Nassim Taleb: A Definition of Antifragile and its Implications:

"Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure , risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better. This property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, good recipes, the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance...even our own existence as a species on this planet.

And we can almost always detect antifragility (and fragility) using a simple test of asymmetry: anything that has more upside than downside from random events (or certain shocks) is antifragile; the reverse is fragile.

We have been fragilizing the economy, our health, political life, education, almost everything... by suppressing randomness and volatility. Much of our modern, structured, world has been harming us with top-down policies and contraptions (dubbed 'Soviet-Harvard delusions' in the book) which do precisely this: an insult to the antifragility of systems. This is the tragedy of modernity: as with neurotically overprotective parents, those trying to help are often hurting us the most.

Given the unattainability of perfect robustness, we need a mechanism by which the system regenerates itself continuously by using, rather than suffering from, random events, unpredictable shocks, stressors, and volatility."

Does our financial system advance via unexpected shocks, extreme volatility, unknown unknowns and ceaseless variability? You're joking, right? The smallest perturbation in any node brings the system to the edge of collapse. Exhibit #1 is last Fall's spot of bother in the obscure financial node known as the repo market. This relatively modest part of the financial system almost triggered a stock market crash, and so the monopoly on creating currency, the Fed, immediately printed hundreds of billions of dollars to bail out every single player in the repo market--all behind the scenes, of course, lest the extreme fragility of the entire over-leveraged, speculative contraption become visible.

Making an incredibly fragile system more fragile via bailing out every node of concentrated capital, power and control guarantees the entire rotten structure will collapse. As I have often pointed out here, risk cannot be made to disappear, it can only be shifted. By bailing out the sources of systemic fragility with trillions of dollars, the Fed has shifted the risk to the entire financial system and the nation's currency.

Simply put: the only possible output of Fed bailouts is the complete collapse of the entire financial system, including the currency the Fed is creating with such abandon.

*  *  *

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Tyler Durden Fri, 05/01/2020 - 16:39
Published:5/1/2020 3:46:46 PM
[Markets] Will Depression II Dictate Trump's Fate? Will Depression II Dictate Trump's Fate?

Authored by Patrick Buchanan via,

As of April 30, the coronavirus pandemic has killed 61,500 Americans in two months and induced the worst economic collapse since the Great Depression.

And if history is our guide, the economic crisis, which has produced 30 million unemployed Americans in six weeks, may prove more enduring, ruinous and historic than the still-rising and tragic death toll.

The Spanish flu of 1918-1919, the deadliest pandemic in modern history, infected an estimated 500 million people worldwide, a third of the planet’s population, and killed an estimated 20 million to 50 million victims, including 675,000 Americans.

“Adjusting for the difference in the size of the American population then and now,” writes Chronicles columnist Roger McGrath, “that number will be equivalent to two million deaths today.”

Yet, the Spanish flu did not shut America down.

As the Spanish flu hit and spread in 1918, the U.S. raised, trained and equipped an army of 4 million men, sent 2 million soldiers to France, broke Gen. Erich Ludendorff’s army, and turned the tide in favor of the Allies.

By December 1918, Doughboys were arriving in New York harbor — having sailed home from Europe’s battlefields on flu-infested transports.

As the scourge continued to take its toll, Woodrow Wilson sailed to Europe, participated for months in the Paris Peace Conference, returned, went on a national train tour to sell his Paris treaty and League of Nations, and suffered a stroke.

In September 1919, Gen. Pershing led his victorious troops in victory parades in New York City and Washington. This writer’s father, a teenager then, was in the D.C. crowd.

In the history books of the 1950s, World War I, Wilson and the Senate battle over the treaty he brought home and U.S. membership in the League of Nations loomed far larger than the Spanish flu that had killed as many U.S. soldiers as the Kaiser’s armies.

But the Great Depression, to which our current crash is now being compared, did not last for just a year like the Spanish flu.

The Depression lasted from the stock market crash in October 1929 to the eve of World War II.

Economically, it was devastating. Unemployment during the 1930s never fell below 14%. In 1937, it was back up to 17%.

At the bottom of the Depression, the stock market had lost 90% of its value, and the GDP had fallen 50%. Not until the end of FDR’s second term, in 1940, when the U.S. began to gear up for the war, did America really begin to pull out of it.

FDR’s New Deal, however, while it did not cure the Depression, was a historic political triumph for both the president and his party.

From 1930 through 1946, Democrats controlled both houses of the Congress every year, elected and reelected FDR four times and gave him a 46-state landslide in 1936, losing only Maine and Vermont.

What this suggests is that the economic devastation we have brought upon ourselves to battle the pandemic may prove more lasting and historic in its impact than the terrible losses of human life to COVID-19.

Politically, the Depression worked for the Democratic Party like no other event in history. After the Crash of 1929 under Herbert Hoover, the GOP held the House and Senate for only four of the next 50 years.

From 1932 to 1968, the GOP lost the presidency in seven of nine elections. Only Dwight Eisenhower’s two terms in the 1950s interrupted a 36-year reign of the Democratic Party in the White House.

Richard Nixon broke the Democratic dominance and took back the White House for the Republicans in 1968. But it would still take another dozen years before the GOP won control of either house of Congress.

President Trump predicts a V-shaped recovery, the greatest boom in U.S. history. But it is well to recall what happened to the GOP when it failed to deliver in the last Depression.

Just as the Civil War was the defining event of the 19th century, giving us 13 Republican presidents from Lincoln to Hoover and only two Democrats — Grover Cleveland and Wilson — how and when we emerge from this new Depression may tell us which party not only wins 2020 but also dominates the new era.

And as one sees the growing divisions along political lines, with conservatives and populists calling for the country to be opened up, and liberals and Democrats calling for continued sheltering in place, both seem to realize the stakes.

Democrats may proclaim that they are eager to see the pandemic come to a swift and early end and the economy to return quickly to the robust state it was in last February.

But the cold political interests of the Democratic Party today are what they were in Hoover’s time, to pray that the president fails, and fails badly, so that they inherit the estate.

Tyler Durden Fri, 05/01/2020 - 13:43
Published:5/1/2020 12:46:05 PM
[Markets] "It's A Crock Of S**t!" - Here's Why Bill Blain Is Furious This Morning "It's A Crock Of S**t!" - Here's Why Bill Blain Is Furious This Morning

Authored by Bill Blain via,

I am deeply uneasy about what’s happening in financial markets.

The Coronavirus has completely turned the global economy on its head. It will create the most profound changes to the way we live and our future prospects – we are all beginning to realise that. There is not going to be a V-Shaped recovery. Many lives will be shattered and ruined in its wake.

Yes, what I saw yesterday confirms two terrible truths we’ve long denied: 

1) The system was already rotten to its very core before Coronavirus triggered the coming depression. This was coming and is overdue. 

2) Those responsible for that rotten core will likely walk away richer, while the poor working men and women that struggle, scrimp and suffer spending their lives working for them will inevitably get poorer. 

What has made me so angry?


Boeing has launched an extremely successful multi-tranche $25 billion bond deal. The issue solves all its immediate funding needs. It enables the company to walk away from difficult bailout discussions. It claims its access to market capital demonstrates it’s soundness - which is utter bollchocks - and that it doesn’t need a government rescue. The issue of moral hazard for government is avoided. Boeing will survive – for time being – as is. 

It’s a crock of s**t. 

The bond deal was snapped up by investors. It does offer a small increase in yield if its downgraded to junk, and an 5.15% yield on the 10-year tranche. Buyers are unconcerned the company is haemorrhaging money, has been downgraded to the cusp of junk, faces massive lawsuits over the B-737 Max, has comprised on quality and safety, is laying staff off in droves, and is seeing orders cancelled around the globe. 

Nope… Investors love it. 

They wanted to buy – even though it looks to be priced very aggressively for a company with such obvious crisis emblazoned across it. The brutal reality is investors know Boeing is such a central part of the US Military-Industrial-Aerospace complex, with so many other contractors and jobs dependent upon it, that the US government has no choice but to backstop it. It’s the industrial equivalent of Too-Big-To-Fail.

The get-out-of-jail-card is there in plain sight – The Fed’s QE Infinity programme can buy as much toxic Boeing bonds as the market cares to lob at them. As we know from the Taper-Tantrum a few years back, bond holders have an infinite put back to the Fed. As long as it was investment grade back in March it qualifies for the Fed… No one cares about the economic reality facing the company. 

It fills me with great sadness. 

What happened to the concept of the free hand of markets ensuring the efficient allocation of capital to good companies? This deal screams MORAL HAZARD – yet the whole street has bought it.

So much for ESG and the importance of socially aware investment and good governance. The Street should hang our heads in shame...

Boeing illustrates everything that was once great but is now rotten about our Western economy: 

It was once a good solid plane maker. It built the aircraft that allowed global airlines to develop, grow and innovate new routes and services. Regional travel, tourism and business travel all exploded in the wake of the Boeing aircraft that enabled it. The B-737 regional jet and the B-747 Jumbo really did make the world smaller and brought it to everyone’s door. 

Then it bought MacDonald-Douglas. The rival smaller planemaker pulled off the coup of the century, buying Boeing with Boeing’s money as the joke went. Its executives took over. The brilliant Boeing engineers were ousted by McD cost accountants. Cost cutting trumped engineering every time. The company moved to Chicago – away from its Seattle roots. 

The last decent plane Boeing made was the innovative, fuel-efficient, composite Dreamliner. It cost $25 bln plus to develop – and it will take decades to recoup the money through clever accounting. (It may never make a real profit.) The plan had then been to develop a successor for the venerable B-737 which airlines and the environmental lobby would have loved: a fuel efficient lightweight city-to-city hopper. It never happened.

Instead the C-Suite cut costs and saved money. Their market was secure, a duopoly with Airbus and 3-4 year order books, happy that airlines had little choice but keep buying whatever crud they offered. 

As interest rates fell Boeing borrowed more and more from market, using it to buyback stock. The stock soared. Executives received enormous bonuses and stock option packages. Workers saw salary and conditions cut. Quality fell. The C-Suite decided not to invest in new aircraft development – they simply further extended the B-737, making the once slim thoroughbred of the skies into a fat, bloated unstable and unsafe lump of flying metal. 346 people paid the ultimate price for Boeing compromising safety. 

Today Boeing has no aircraft on its books any airline really wants. Its new B-777x is years late and utterly pointless in this new environment. There have been very few new Dreamliner orders – the whole programme may have lost money. Across the globe airlines are retrenching. It could be years before air travel recovers. 

Boeing is textbook corporate failure. 

Yet because of the perception Governments will now intervene freely in “free markets”, it’s been able to snub a “strings-attached” government rescue, take market money, and is still backstopped. 

This really is the end of Capitalism... The rolling raucus sound you hear from the hills in North London is the sound of Karl Marx laughing his head off in Highgate Cemetery. 

Tyler Durden Fri, 05/01/2020 - 08:34
Published:5/1/2020 7:44:52 AM
[Markets] Escobar: Thinking Beyond Planet-Lockdown Escobar: Thinking Beyond Planet-Lockdown

Authored by Pepe Escobar via The Asia Times,

Between the unaccountability of elites and total fragmentation of civil society, Covid-19 as a circuit breaker is showing how the king – systemic design – is naked. 

We are being sucked into a danse macabre of multiple complex systems “colliding into one another,” producing all kinds of mostly negative feedback loops.   

What we already know for sure, as Shoshana Zuboff detailed in “The Age of Surveillance Capitalism,” is that “industrial capitalism followed its own logic of shock and awe” to conquer nature. But now surveillance capitalism “has human nature in its sights.” 

In “The Human Planet: How We Created the Anthropocene,” analyzing the explosion in population growth, increasing energy consumption  and a tsunami of information “driven by the positive feedback loops of reinvestment and profit,” Simon Lewis and Mark Maslin of University College, London, suggest that our current mode of living is the “least probable” among several options. “A collapse or a switch to a new mode of living is more likely.” 

With dystopia and mass paranoia seemingly the law of the (bewildered) land, Michel Foucault’s analyses of biopolitics have never been so timely, as states across the world take over biopower – the control of people’s life and bodies. 

David Harvey, once again, shows how prophetic  was Marx, not only in his analyses of industrial capitalism but somehow – in “Grundrisse: Foundations of the Critique of Political Economy” – even forecasting the mechanics of digital capitalism: 

Marx, Harvey writes, “talks about the way that new technologies and knowledge become embedded in the machine: they’re no longer in the laborer’s brain, and the laborer is pushed to one side to become an appendage of the machine, a mere machine-minder. All of the intelligence and all of the knowledge, which used to belong to the laborers, and which conferred upon them a certain monopoly power vis-à-vis capital, disappear.”

Thus, adds Harvey, “the capitalist who once needed the skills of the laborer is now freed from that constraint, and the skill is embodied in the machine. The knowledge produced through science and technology flows into the machine, and the machine becomes ‘the soul’ of capitalist dynamism.” 

Living in ‘Psycho-Deflation

An immediate – economic – effect of the collision of complex systems is the approaching New Great Depression. Meanwhile, very few are attempting to understand Planet Lockdown in depth – and that goes, most of all, for post-Planet Lockdown. Yet a few concepts already stand out. State of exception. Necropolitics. A new brutalism. And, as we will see, the new viral paradigm.

So, let’s review some the best and the brightest at the forefront of Covid-19 thinking. An excellent road map is provided by “Sopa de Wuhan” (“Wuhan Soup’), an independent collection assembled in Spanish, featuring essays by, among others, Giorgio Agamben, Slavoj Zizek, Judith Butler, David Harvey, South Korean Byung-Chul Han and Spaniard Paul Preciado.

The last two, along with Agamben, were referenced in previous essays in this running series, on the Stoics,  Heraclitus,  Confucius, Buddha and Lao Tzu, and contemporary philosophy examining The City under The Plague

Franco Berardi, a 1968 student icon now professor of philosophy in Bologna, offers the concept of “psycho-deflation” to explain our current predicament. We are living a “psychic epidemic … generated by a virus as the Earth has reached a stage of extreme irritation, and society’s collective body suffers for quite a while a state of intolerable stress: the illness manifests itself at this stage, devastating in the social and psychic spheres, as a self-defense reaction of the planetary body.” 

Thus, as Berardi argues, a “semiotic virus in the psycho-sphere blocks the abstract functioning of the economy, subtracting bodies from it.” Only a virus would be able to stop accumulation of capital dead in its tracks: “Capitalism is axiomatic, works on a non-verified premise (the necessity of unlimited growth which makes possible capital accumulation). 

Every logical and economic concatenation is coherent with this axiom, and nothing can be tried outside of this axiom. There is no political way out of axiomatic Capital, there’s no possibility of destroying the system,” because even language is a hostage of this axiom and does not allow the possibility of anything “efficiently extra-systemic.”

So what’s left? “The only way out is death, as we learned from Baudrillard.” The late, great grandmaster of simulacrum was already forecasting a systemic stall back in the post-modernist 1980s.  

Croatian philosopher Srecko Horvat , in contrast, offers a less conceptual and more realist hypothesis about the immediate future: “The fear of a pandemic is more dangerous than the virus itself. The apocalyptic images of the mass media hide a deep nexus between the extreme right and the capitalist economy. Like a virus that needs a living cell to reproduce itself, capitalism will adapt itself to the new 21st century biopolitics.”   

Workers disinfecting street in Tehran during Covid-19 pandemic, March 19, 2020. (Tasnim News Agency, CC BY 4.0, Wikimedia Commons)

For the Catalan chemist and philosopher Santiago Lopez Petit, coronavirus can be seen as a declaration of war: “Neoliberalism unabashedly dresses up as a war state. Capital is scared,” even as “uncertainty and insecurity invalidate the necessity of the same state.” Yet there may be creative possibilities when “obscure and paroxistic life, incalculable in its ambivalence, escapes algorithm.” 

Our Normalized Exception 

Giorgio Agamben caused immense controversy in Italy and across Europe when he published a column in late February on “the invention of an epidemic.” He later had to explain  what he meant. But his main insight remains valid: The state of exception has been completely normalized. 

And it gets worse“A new despotism, which in terms of pervasive controls and cessation of every political activity, will be worse that the totalitarianisms we have known so far.”  

Agamben redoubles his analyses of science as the religion of our time: “The analogy with religion is taken literally; theologians declared that they could not clearly define what is God, but in his name they dictated rules of conduct to men and did not hesitate to burn heretics. Virologists admit they don’t know exactly what is a virus, but in its name they pretend to decide how human beings shall live.”     

Cameroonian philosopher and historian Achille Mbembe, author of two indispensable books, “Necropolitics” and “Brutalisme,”has identified the paradox of our time“The abyss between the increasing globalization of problems of human existence and the retreat of states inside their own, old-fashioned borders.”   

Mbembe delves into the end of a certain world, “dominated by giant calculation devices,” a “mobile world in the most polymorphous, viral and near cinematic sense,” referring to the ubiquity of screens (Baudrillard again, already in the 1980s) and the lexicography, “which reveals not only a change of language but the end of the word.” 

Here we have Mbembe dialoguing with Berardi – but Membe takes it much farther: “This end of the word, this definitive triumph of the gesture and artificial organs over the word, the fact that the history of the word ends under our eyes, that for me is the historical development par excellence, the one that Covid-19 unveils.” 

The political consequences are, inevitably, dire: “Part of the power politics of great nations does not lie in the dream of an automated organization of the world thanks to the manufacturing of a New Man that would be the product of physiological assemblage, a synthetic and electronic assemblage, and a biological assemblage? Let’s call it techno-libertarianism.”

This is not exclusive to the West: “China is also on it, vertiginously.” 

This new paradigm of a plethora of automated systems and algorithmic decisions “where history and the word don’t exist anymore is in frontal shock with the reality of bodies in flesh and bones, microbes, bacteria and liquids of all sorts, blood included.”

Rendering of Open Cobalt 3D hyperlinks connecting five virtual spaces. (Julian Lombardi, CC BY-SA 3.0, Wikimedia Commons)

The West, argues Mbembe, chose a long time ago to “imprint a Dionysiac course to its history and take the rest of the world with it, even if it doesn’t understand it. The West does not know anymore the difference between beginning and ending. China is also on it. The world has been plunged into a vast process of dilaceration where no one can predict the consequences.”      

Mbembe is terrified by the proliferation of “live manifestations of the bestial and viral part of humanity,” including racism and tribalism. 

This, he adds, conforms our new viral paradigm. 

His analysis certainly dovetails with Agamben’s: “I have a feeling that brutalism is going to intensify under the techno-libertarianism drive, be it under China or hidden under the accoutrements of liberal democracy. Just like 9/11 opened the way to a generalized state of exception, and its normalization, the fight against Covid-19 will be used as a pretext to move the political even more towards the domain of security.”

“But this time”, Mbembe adds, “it will be a security almost biological, bearing with new forms of segregation between the ‘immunity bodies’ and ‘viral bodies’. Viralism will become the new theatre for fractioning populations, now identified as distinct species.”

It does feel like neo-medievalism, a digital re-enacting of the fabulous “Triumph of Death” fresco in Palermo. 

Poets, Not Politicians 

It’s useful to contrast such doom and gloom with the perspective of a geographer. Christian Grataloup, who excels in geo-history, insists on the common destiny of humanity (here he’s echoing Xi Jinping and the Chinese concept of “community of shared destiny”): “There’s an unprecedented feeling of identity. The world is not simply an economic and demographic spatial system, it becomes a territory. Since the Great Discoveries, what was global was shrinking, solving a lot of contradictions; now we must learn to build it up again, give it more consistence as we run the risk of letting it rot under international tensions.”        

It’s not the Covid-19 crisis that will lead to another world – but society’s reaction to the crisis. There won’t be a magical night – complete with performances by “international community” pop stars – when “victory “will be announced to the former Planet Lockdown. 

What really matters is a long, arduous political combat to take us to the next level. Extreme conservatives and techno-libertarians have already taken the initiative – from refusal of any taxes on the wealthy to support the victims of the New Great Depression to the debt obsession that prevents more, necessary public spending.   

In this framework, I propose to go one step beyond Foucault’s biopolitics. Gilles Deleuze can be the conceptualizer of a new, radical freedom. Here is a delightful British series that can be enjoyed as if it were a serious Monty Python-ish approach to Deleuze. 

Foucault excelled in the description of how meaning and frames of social truth change over time, constituting new realities conditioned by power and knowledge. 

Deleuze, on the other hand, focused on how things change. Movement. Nothing is stable. Nothing is eternal. He conceptualized flux – in a very Heraclitean way. 

New species (even the new, AI-created Ubermensch) evolve in relation with their environment. It’s by using Deleuze that we can investigate how spaces between things create possibilities for The Shock of the New. 

More than ever, we now know how everything is connected (thank you, Spinoza). The (digital) world is so complicated, connected and mysterious that this opens an infinite number of possibilities.

Already in the 1970s, Deleuze was saying the new map – the innate potentially of newness – should be called “the virtual.” The more living matter gets more complex, the more it transforms this virtual into spontaneous action and unforeseen movements. 

Deleuze posed a dilemma that now confronts us all in even starker terms. The choice is between “the poet, who speaks in the name of a creative power, capable of overturning all orders and representations in order to affirm difference in the state of permanent revolution which characterizes eternal return: and that of the politician, who is above all concerned to deny that which ‘differs,’ so as to conserve or prolong an established historical order, or to establish a historical order which already calls forth in the world the forms of its representation.”    

The time calls for acting as poets instead of politicians.

The methodology may be offered by Deleuze and Guattari’s formidable “A Thousand Plateaus” – significantly subtitled “Capitalism and Schizophrenia,” where the drive is non-linear. We’re talking about philosophy, psychology, politics connected by ideas running at different speeds, a dizzying non-stop movement mingling lines of articulation, in different strata, directed into lines of flight, movements of deterritorialization. 

The concept of “lines of flight” is essential for this new virtual landscape, because the virtual is conformed by lines of flight between differences, in a continual process of change and freedom. 

All this frenzy, though, must have roots – as in the roots of a tree (of knowledge). And that brings us to Deleuze’s central metaphor; the rhizome, which is not just a root, but a mass of roots springing up in new directions. 

All this frenzy must have roots. (StockSnap from Pixabay)

Deleuze showed how the rhizome connects assemblies of linguistic codes, power relations, the arts – and, crucially, biology. The hyperlink is a rhizome. It used to represent a symbol of the delightful absence of order in the internet, until it became debased as Google started imposing its algorithms. Links, by definition, always should lead us to unexpected destinations. 

Rhizomes are the antitheses of those Western liberal “democracy” standard traits – the parliament and the senate. By contrast, trails – as in the Ho Chi Minh trail – are rhizomes. There’s no masterplan. Multiple entryways and multiple possibilities. No beginning and no end. As Deleuze described it, “the rhizome operates by variation, expansion, conquest, capture, offshoot.” 

This can work out as the blueprint for a new form of political engagement –as the systemic design collapses. It does embody a methodology, an ideology, an epistemology and it’s also a metaphor. The rhizome is inherently progressive, while traditions are static. As a metaphor, the rhizome can replace our conception of history as linear and singular, offering different histories moving at different speeds. TINA (“There is no alternative”) is dead: there are multiple alternatives. 

And that brings us back to David Harvey inspired by Marx. In order to embark onto a new, emancipatory path, we first have to emancipate ourselves to see that a new imaginary is possible, alongside a new complex systems reality.

So let’s chill – and de-territorialize. If we learn how to do it, the advent of the New Techno Man in voluntary servitude, remote-controlled by an all-powerful, all-seeing security state, won’t be a given.  

Deleuze: a great writer is always like a foreigner in the language through which he expresses himself, even if it’s his native tongue. He does not mix another language with his own language; he carves out a non pre-existent foreign language within his own language. “He makes the language itself scream, stammer, murmur. A thought should shoot off rhizomatically – in many directions. 

I have a cold. The virus is a rhizome. 

Remember when Trump said this was a “foreign virus?”

All viruses are foreign – by definition. 

But Trump, of course, never read “Naked Lunch” by Grandmaster William Burroughs. 

Burroughs: “The word is a virus.”

Tyler Durden Fri, 05/01/2020 - 00:20
Published:4/30/2020 11:42:57 PM
[Markets] No Junk Debt Is Too Risky: Thank You Fed No Junk Debt Is Too Risky: Thank You Fed

Authored by Mike Shedlock via MishTalk,

The Fed hasn’t even started buying corporate bonds. Yet the mere perception of Fed backing helps risky firms borrow anew.

Please consider How Fed’s Bailout Changed Everything.

This was no secret on Wall Street. Surgery Partners’s majority owner, the buyout firm Bain Capital, had loaded so much debt onto the company’s books that when it went to the market last year to refinance maturing bonds, investors demanded a 10% interest rate to compensate them for the risk. The debt was rated CCC -- eight levels below investment grade.

So by late March, with the economic effects of the outbreak in full force, frantic investors braced for default, pushing the price of those bonds below 55 cents on the dollar.

But then the Federal Reserve did something it had never done before. It pledged to buy risky corporate debt as part of its emergency financing package for the economy. The move was so aggressive and sparked a rally that was so powerful and broad-based that today those bonds are all the way back up near par value, and Surgery Partners was able to raise another $120 million from loan investors earlier this month.

Moral Hazard 

This is yet another example of Fed-sponsored moral hazards. 

The Fed encourages extremely risky behavior then bails out the risk takers.

Carnival Deemed Too Big to Fail, Rescued by the Fed

As noted in Carnival Deemed Too Big to Fail, Rescued by the Fed, What constitutes "too big to fail" keeps getting smaller and smaller. 

Third Major Transfer From the Middle Class to the Wealthy

Meanwhile, this moral hazard bailout is the Third Major Transfer From the Middle Class to the Wealthy in 20 years.

50% of the US Says Their Financial Situation is Getting Worse

That 50% of the US Says Their Financial Situation is Getting Worse is shocking in only one sense. Why is the number so low? 

Millennials finally caught an upswing. And for the second time in 12 years had the rug yanked from under them.

The boomers, those with assets and not in the poor house, get bailed out by the Fed again. 

Thank You Fed. 

Tyler Durden Wed, 04/29/2020 - 11:30
Published:4/29/2020 10:35:27 AM
[Markets] "How To End The Lockdown" Is The Only Story In Town "How To End The Lockdown" Is The Only Story In Town

Authored by Sam Leith via,

"Yikes,” I thought this morning. “My profession is trying to kill us.”

The front pages - as they now had been for a few days - were full of the “dilemma” facing the Prime Minister: to ease or end lockdown or to keep it going. Explainers neatly carved the cabinet into “hawks” and “doves”. I know that we should resist the temptation for journalists to peer into the linty navel of journalism itself, but bear with me: in this case it could really matter.

If we do end or ease the Covid lockdown, it probably won’t end up being on the advice of epidemiologists or even economists - it’ll be because the way the media shapes the story brings an irresistible pressure to bear.

“How we end lockdown” is now the main topic of conversation. And though there’s a range of views represented in the conversation, the fact that we’re having the conversation at all creates its own momentum.

The idea of the Overton Window - a term minted to describe the range of acceptable opinion within a given community - is relevant here.

At present the parameters of the debate are “stay the same”, which is by default the extreme left-hand curtain on the Overton Window, and “open everything back up for business” which is by default the other end of the scale: meaning that “moderate opinion” is, rhetorically at least, somewhere in the middle.

Why are we having this debate now? It’s because we need to have a debate and that’s the only one in town. That applies to social media as well as the so-called MSM — and there’s an argument that the news reflects public impatience as much as it shapes it. But with “stay as we are” as the dreary old fixed option at one end of the scale, the moderate middle will only be pulled further out as contrarians and freethinkers push the other end of the window further and further in the hope of having something fresh to say.

I don’t make, or pretend to make, any judgment on the science. It may, for all I know, be the case that we should long since have galloped out of lockdown and even now be handshaking and air-kissing our way back to prosperity. But, for all I know, it could equally well be the case that we should continue doing exactly, but exactly, what we’re doing now for the next six months. And if the latter is, objectively, the case, it’s going to be near to impossible for politicians to argue for it — and to keep arguing for it.

The problem I point to isn’t to do with virology. It’s narratological: it’s to do with the shape of storytelling and the weird metabolism of the media cycle. News has its own imperatives, and they are nearly completely independent of the real world. Every news editor’s question is: “How do we take the story on?” The answer can never be: “We can’t.” If there are no new facts, there’s got to be a new analysis, a new spin, a new controversy, a new debate. A story big enough to stay on the front page needs to find a way of staying on the front page.

We are simply incapable of running a front page that reads: “Same as yesterday.”

It’s close to unthinkable. Indeed, we’d unthinkingly risk lives to avoid it. We all hear a lot about news media’s inbuilt negativity bias (“if it bleeds it leads”). But what you might call the stuff happening bias — the very reason news is called news — is dismayingly easy to forget or discount.

That’s why, as crime reporters know, a week or two into a high-profile missing persons investigation where there are no new developments, the story tends to pivot to asking questions about “flaws in the investigation”. Then we move onto wild theories, monstering suspects with weird hair and all the rest of it. The Daily Express has spent more than 10 years splashing Madeleine McCann despite little or no new information coming to light.

With Covid, we had the calls for lockdown and the arguments about that. We had the lockdown itself. We had the stuff about Blitz spirit, and the debate about whether the stuff about Blitz spirit was appropriate or not. We had the righteous howl-rounds shaming people playing frisbee in the park or walking on the Brecon Beacons. We had the righteous howl-rounds shaming the police for being too mean to people playing frisbee in the park or walking on the Brecon Beacons. Then we got hung up on death statistics. As they went up, and up, they fed the beast excellently. But now that the curve is flattening, they’re getting a bit ho-hum: 400-odd citizens dying of one disease in 24 hours? Not such a big deal when we had 800 two weeks ago. “How do we take the story on?”

We had, as all that petered out, the beginnings of the blame-game: did the government act too slowly? Was Dominic Cummings on the wrong committee? And if you don’t think that stuff affects government, I have a bridge going cheap. Why else is Matt Hancock plucking round-numbered testing ambitions out of the air and making himself a hostage to them? Why else did we announce that we were spending zillions on “game-changing” home tests before we discovered they didn’t work? Why else did we get flares sent up about headline-friendly, household-name companies like Dyson being hired to make ventilators — which, again, turned to be a distinctly half-cocked initiative? Why else, as the bodies mount up in morgues, is Downing Street spending its time issuing detailed denials of Sunday Times articles?

I kind of knew something was up when I was asked, as a freelance, to contribute to a feature on what I’m most looking forward to doing once lockdown was over. Y’know: go to the pub, fly to Malaga, give my old mum a hug, have a fight at a football match or what have you. And I got this request on week one or week two of lockdown. The following day another outlet asked me to contribute to a near-identical feature. Everyone’s done one of those by now.

I remember thinking even then: guys, you’re shooting your bolts a bit early on all this. If you run all your lockdown features in the first two weeks, what‘s going to be next? It’s the same for all media. We’ve already burned through Grayson Perry’s art class, Kirstie Allsop’s craft class, Jamie’s bloody tin can recipes. We’ve winkled out Vera Lynn. We’ve had the Rolling Stones playing a Zoom gig. Every books page has run its “shelf isolation” feature on lockdown comfort-reading. Every cookery page has done its make-your-own sourdough.

The idea that lockdown might be boring — might, in fact, need to go on for much, much longer than it retains its novelty value — is scary to many of us but it’s really, really scary to news and features editors. And that means it’s scary to politicians. Which means that, one way or another, and whatever the papers tell you, what happens over the next few weeks isn’t going to be guided by the logic of science or economics, but by the logic of narrative.  That logic is the logic of the small child in the back of a car kicking the front seat and saying: “Are we there yet?”

And that’s something all of us should find really, really scary.

Tyler Durden Wed, 04/29/2020 - 03:10
Published:4/29/2020 2:31:48 AM
[Entertainment] BC-US--Apple Books-Top-10 The top 10 Apple Books on the iTunes Store for week ending 4/26/2020 Published:4/28/2020 4:58:53 PM
[Markets] A Violent "Slingshot" Higher: CTAs Flip From -69% Short To +100% Long On Close Above 2901 A Violent "Slingshot" Higher: CTAs Flip From -69% Short To +100% Long On Close Above 2901

As BMO noted earlier today, when looking at the ongoing daily low-volume levitation in stocks, "there is a real risk the optimism is getting ahead of itself and equities are vulnerable to disappointment with the results of the reopening." For now, however, the path of least resistance - and arguably the max pain trade - remains higher, due to the pent up optimism from the gradual reopening of the global economy (similar to the perpetual hope that was Trump's Phase 1 trade deal with China for much of 2019) and as Nomura's Charlie McElligott writes this morning, the global stock market "is breathing an ongoing sigh of relief with rolling lockdown unwinds/reopening plan releases around the globe: in the past 72 hrs, Italy, Spain, Belgium, France, Switzerland, Norway and Germany have updated details on relaxation of restrictions; in the U.S., Ohio, Mississippi, Colorado, Hawaii and New York all began announcing initial “easing” steps of stay-at-home orders." All of this is contributing to a buoyant risk-asset move - with EU Banks and Autos again rallying powerfully = further pain-trade for these crowded “Cyclical” shorts -  while the prior multi-month FTQ bid in US Dollar is incrementally “leaking” out with another large down day in DXY, as we noted in our market wrap.

As also noted previously, earlier in the session we saw WTI Crude and Gold powerfully hit with WTI front futures smashed yet again on more June contract selling from ETFs and Index products headlines as now S&P GSCI is also rolling from June to July in a race to the death vs USO and the negative feedback loop thereafter, but as McElligott points out, "this new escalation of the US Dollar weakness actually caused Commodities rally off lows—before CL1 now again under pressure as US traders get back to work."

Meanwhile, with stocks now solidly in "positive gamma" territory...

... the Nomura strategist notes "the return of heavy overwriter (vol selling) flows in US Equities, a trend that has accelerated in recent weeks, and has helped normalize US Equities single name- and index- Vols", and now, with the VIX curve term-structure too normalizing yesterday from the multi-month inversion in the front-end (i.e. again upwardly-sloping), Charlie believes that "it is likely that the return of systematic roll-down participants will further escalate the repricing / compression of Vol even lower."

Focusing on the last point of normalizing/compressing Vol, something which McElligott has previously called a "Crash DOWN, Crash UP" cycle, he points out that "it matters as a second-order slingshot in dictating a mechanical RE-LEVERAGING across the Vol Target universe into re-establishing or growing their Equities positions."

There is no clearer example of this than today's Nomura QIS CTA Model, which estimates that the CTA position in S&P 500 futs would flip from “-69% Short” to a “+100% Long” on the close above 2901 (right on top of spot), with Charlie adding "that anecdotally on these days where the model indicates a “flip” potential, said buying to cover and go long is likely already part of the flow creating the current move (ES1 +1.2%)"

Source: Nomura QIS

This CTA reversal would come in conjunction with Nomura's analysis of Vol Control funds, as we estimate an incremental “re-buy” of +$14.5B of US Equities off the lows over the past 1m for these mechanical products.

One place where this equity "slingshot" hurts the most is the "pain" for the shorts with Cyclical Equities where yesterday was yet another performance bleeder, as US shorts again significantly outperforming longs as we noted in our Monday EOD wrap, thus Charlie's "1Y Price Momentum" factor market neutral strategy was again hammered -2.8% yesterday and now -13.5% MTD—particularly boosted by the “bear-steepening” in UST curves as a macro catalyst (which was fueled by not just the +++ risk-asset move and well-subscribed UST front-end issuance, but also the $24B of new US high-grade paper brought yday).

Why are shorts getting steamrolled? As the Nomura strategist explains, the extreme positioning/crowding resulting from the Covid flight to safety into the “Everything Duration” / “Slow-flation” barbell longs (Secular Growth and MinVol / Defensives), in conjunction with the seasonality of the “April Momentum Reversal,” the rolling “whatever it takes” moments for both Central Banks and Governments, as well as Equities’ ability to pull-forward good news (i.e. COVID-19 curve flattening, reopening plans) "all made for this painful set-up in the folks’ short-books—exactly as laid-out in my March 31st note “WATCH YOUR CYCLICAL-BETA SHORTS INTO APRIL’S “MOMENTUM REVERSAL” SEASONALITY, “PEAK COVID” PULL-FORWARD, MONPOL EASING AND FISCAL STIMULUS.”

Tyler Durden Tue, 04/28/2020 - 09:49
Published:4/28/2020 8:56:43 AM
[Markets] "This Is The Final Leg": Hugh Hendry Takes A Break From Retirement To Reveal His Latest Market Thoughts "This Is The Final Leg": Hugh Hendry Takes A Break From Retirement To Reveal His Latest Market Thoughts

In September 2017, Hugh Hendry stunned the world when, out of the blue one of the best investors of his generation shut down his hedge fund Eclectica (his farewell letter can be found is here) disgusted with how broken and impossible to navigate capital markets had become as a result of central bank intervention and retired to the warm embrace of St Barts, even though it was clear he still had much left to say about the investing process.

And so, after keeping a low profile for nearly three years, overnight the contrarian investor penned a lengthy tweetstorm from his his brand new twitter account, touching on all the latest market development and laying out some of his latest investing ideas. Below, we have aggregated his thoughts for the benefit of all those curious what the Scotsman thinks about when he is not pursuing his retirement interests which according to this twitter profile include "luxury real-estate, mentoring, and paddle-surfing."

Never one to disappoint, Hendry reverts to his macro roots, discussing the fate of gold and the dollar in the helicopter money regime, what it would take for the S&P to hit 10,000, whether the entire VIX regime is now inverted due to central bank backstops, and asks the "two key questions": are we transcending from a bull market in fear to a bull market in WTF!? And will QE infinity differ from its previous vintages by driving risk asset volatility levels higher??

Hendry also touches on an old favorite topic, namely hyperinflation, a thesis which he thinks "needs stock prices to fall further and vol to rise in the conventional manner."  But his most topical observation is what are the core criteria that will allow MMT - i.e., that fusion of the Fed and Treasury known as "helicopter money"...

you can print as many dollars as you damn well please, as long as the yield curve doesn’t steepen and the dollar doesn’t rally precipitously…you’re good to go and MMT is dope.

... as the alternative is game over. As usual, his stream of consciousness answers, right or wrong, are fascinating.

The full stream is reproduced below:

I have spent last few weeks reminiscing about the launch of The Eclectica Fund way back in 2002. Our principal objective back then was to secure the flexibility of a macro mandate to capture the emerging bull market in gold. The chart is not vol. adjusted but provides context.

It's remarkable how little time i allocated to the trade. We did make 50pc in the first calendar year, 2003, but then retreated as it traded flat vs the total return from the SPX 2004/6. But I do kick myself at missing the final explosive moves to the all time high 2009/12.

I've had a long sabbatical. If you remember my mantra from 2005 became, "if you fear inflation, buy bonds!" The reasoning being that gold would lack an explosive pulse higher without first an economic calamnity. 2008 proved our thesis and our bond-like positioning hit jackpot.

Today however, "if you fear inflation then you should buy more gold". It is simple. The Fed is trying to debase the $ to help the economy. Will it help? Maybe. Will it help the stock market? Probably. Will it help gold? Definitely. This is the final leg that i envisaged in 2002.

So gold's got your back. My only grumble is that it reverts to a short volatility asset at the most inopportune moments like October 2008. Many good men, myself included, then missed the real action. So don't underestimate the emotional energy you're gonna need to hold onto this.

I say this because unusual things are happening and I'm saying "what if the bull market in fear has peaked and we find ourselves in a bull market of WTF!?" I traded at start of April a long Aug / Short Oct Vix. I'm small offside. But a 12pc equity rally and vol is up! WTF!?

I'm fomenting the idea that negative interest rates beget negative oil prices beget negative volatility. The causation is of course totally false but its a cute thing to say nevertheless. Let's see if i can do better?

The probabilities are high that gold proves rewarding as long as you can carry it for the duration of the journey. If you are willing to accept lower, much lower probabilities, then maybe there are even better trades that are insanely convex and have no counterparty risk.

What I want to say is that 2 universal truths might be in the process of changing or flipping around. First, that option skew might change - deep OTM equity puts are typically 2x more expensive than their call equivalents; always have been but not ordained to stay that way. I think today’s policy response could create the opposite dynamic. Difficult trade to structure selling deep OTM SPX puts to buy 2x more calls without risking bankruptcy. Sure trade at cash SPX 1700 but naked and have to experience the nightmare of every point below 1700…no way

I traded this in Japan in 2013 Sold deep OTM Nikkei put, bought an even deeper OTM put, sold an ATM call spread and bought 15pc OTM call. Or at least I think i did. But the older vintages of QE encouraged volatility to fall, not rise, and we never burst through the inertia.

The trade was therefore before its time but I am probably one of the few risk managers anywhere with the experience of running a big options/futures book that was seeking higher equity prices and higher volatility – just ask all the Japanese vol traders that I enriched…

Second, I think the futures curve for VIX is going to trade in backwardation; that the carry from short selling future volatility versus spot to a gullible public that was only too willing to pay almost anything to protect themselves against the next deflationary event has gone.

The key questions: are we transcending from a bull market in fear to a bull market in WTF!? And will QE infinity differ from its previous vintages by driving risk asset volatility levels higher??

The key is the dollar. It is to the Fed what the punitive gold reparations of the 1920 Paris Peace Accord were to the German Reichsbank and German stock prices. Which is to say that the Fed are going to have to issue many more trillions of dollars to stop the USD moving higher.

We were wrong. All of us. It was never going to be about soulless creditors rolling over and simply enriching debtors via paying them higher and higher wages like Henry Ford. No; changes, BIG changes, in major price regimes always begin with currency debasements.

And, remember that the dollar short is ALWAYS the largest short position. Foreign mismatching of dollar asset/liabilities is always the imperative justification to devalue the dollar to bail-out the rest-of-the-world and it always sets the stage for risk asset prices to recover.

It’s just that a 35% fall from the highs of the greatest bull market ever has precipitated c. $8trillion in global fiscal response and probably 5x that in its monetary equivalent if we consider swap lines etc with not a day passing where that figure seems like an understatement. And then you look at the charts and to quote Raoul Pal, who else cause he seems omnipresent, but the blinking dollar hasn’t blinked; not an inch, its barely sold off at all…that’s downright frightening.

And so here is where it gets really cookie for I believe you can’t forecast a risk recovery that witnesses the SPX reclaim its all time high. No. If that’s your mindset you have to imagine 2x or why not 3x? The SPX at 10,000 now that is a WTF idea!?

And I’m tiring now but I just don’t see that outcome materialising unless we see another profound, I want to say debilitating, decline in the SPX below 1700. That’s why I don’t like the gold trade on its own without some kind of long vol trade to cushion if not enrich the journey.

So maybe sell dollar cross or treasury vol as these are the naval plimsoll lines of MMT: you can print as many dollars as you damn well please, as long as the yield curve doesn’t steepen and the dollar doesn’t rally precipitously…you’re good to go and MMT is dope.

So we know the critical lines, the levels that absolutely must not be crossed, they, the authorities, and us, we all know it. The Fed has to, and will do, everything in its powers to flatten the yield curve and prevent the dollar appreciating from here.

And the consequences of their actions will be to becalm volatility in these assets making them a good source to fund, in the first instance, equity volatility, as I think the hyperinflation thesis needs stock prices to fall further and vol to rise in the conventional manner.

But should this happen I would want to buy those incredibly cheap Dec 21 3000 calls and forget about funding via selling OTM puts; but I’m getting way to far ahead of see what confinement does?

Hendry concludes with some "regional" observations, including what Hendry's "macro volatility trade at World’s End for years" has been, and which nonetheless are just as interesting:

Where are all the customers’ yachts? I got to tell you that they seem to be en-route to St Barts. No cases of the virus in over a month on the island and from my vantage point, over-looking the sea, there isn’t a day that passes without another mega yacht sailing past my house.

The island is hard, almost impossible, to reach, unless you can charter a boat or your very own private jet. But where else would you rather stay if money is no option? The island is on the same time zone as NYC and it has the holy trinity of no debt, no taxes and no crime,

And you can still finance the purchase of properties here with 20 year €uro loans fixed for less than 2%! That’s not going to last forever…St Barts has been my macro volatility trade at World’s End for years

Like my German industrialist forefathers - I have no German ancestry ! although my name is derived from the German word hug meaning heart, mind and spirit - but markets, bankers and investors are always slow to recognise a transition to higher prices caused by currency debasement/

When i was younger i read all  those stories of international investors – the smart ones – hoovering up hard, cash producing German assets, funded by bankers who severely underestimated the potential for increases in interest rates that would make their loan books worthless...

Yet here we are 100 years later and my friend, who works in a restaurant, just secured 1.35PC fixed for 20 years! These loans are sure to become worthless as the pendulum finally  swings from the creditor to the debtor community. Maybe we’re all bank robbers now…WTF!!

Still want more? Then listen to the following 12 minute podcast Hendry recorded last week, and where every sentence seems to seep with nostalgia for the Scott's  glory investing days.

Who knows, maybe if the market remains volatile enough, Hugh will come emergy from retirement for another try?




Tyler Durden Sat, 04/25/2020 - 13:25
Published:4/25/2020 12:40:23 PM
[Markets] Buffett, Zimbabwe, & What You Must Know About 'Zeros' In The Years Ahead Buffett, Zimbabwe, & What You Must Know About 'Zeros' In The Years Ahead

Authored by MN Gordon via,

Billionaire investor and American folk hero Warren Buffett’s been lying low.  This is a change from the 2008-09 financial crisis.  Back then he eagerly supplied cash to Goldman Sachs and Bank of America in exchange for high interest rates and warrants.  But not now.

Instead of making deals, Buffett says he’s “…drinking a little more Coca-Cola” to ward off coronavirus.  Yet is that really all he’s doing?  Buffett admirer Bill Ackman doesn’t think so.  Ackman – who’s been aggressively buying stocks – thinks the Oracle of Omaha has a few tricks up his sleeve.  When recently asked:

“Ackman said he suspected his mentor was quietly putting his $125 billion in cash to work buying stocks.  He was keeping a low profile to make sure the stocks stayed cheap while he is buying.  ‘After he invests that $100 billion and change,’ Ackman says, ‘he’ll let everybody know.”’

Maybe so.  And good for Buffett and Ackman.  If they want to put billions of dollars into stocks right now, good on them.

Most people have bigger fish to fry at the moment than buying stocks.  They’ve lost their jobs.  Their constitutional rights have been trampled on by the authorities for their own protection.

 Hence, Howard Buffett – Warren’s dad – offers far superior insights into what’s going on…

The elder Buffett, who hasn’t been among the living for over a half-century, was a member of the U.S. House of Representatives in the 1940s and early 1950s.  He was a Republican back when Republicans had principles.  According to Howard Buffett’s wife:

“He considered only one issue when deciding whether or not to vote for a bill: ‘Will this add to, or subtract from, human liberty?”

Money and Freedom

With the exception of Thomas Massie, today’s Representatives failed to consider Howard Buffett’s one issue when they voice voted on the CARES Act.  And only a few bothered when voting on this week’s Interim Economic Stimulus Package.  Thus, with trillions of dollars in government bailouts underway, and the resultant servitude of Americans, we’ll take a moment to consider another Howard Buffett insight.

This insight is fundamental, and almost elementary in nature.  But it is lost on practically all of today’s government officials.  In his 1948 article, Human Freedom Rests on Gold Redeemable Money, Representative Buffett opened as follows:

“Is there a connection between Human Freedom and A Gold Redeemable Money?  At first glance it would seem that money belongs to the world of economics and human freedom to the political sphere.

“But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty.

“Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom.”

Representative Buffett went on to connect the relationship between money and freedom; that without a redeemable currency, the individual’s freedom to sustain himself or move his property is dependent on the goodwill of politicians.  Buffett also points out that paper money systems always end in collapse and economic chaos.  And that a gold standard restricts government spending and gives people greater power over the public purse.

Since Representative Buffett’s writing, the consequences of irredeemable paper money that he warned about have become increasingly pressing.  Moreover, the CARES Act, and its massive escalation of printing press money, has finally brought us to the critical stage.

At the moment, the pressures of deflation are mounting.  Oil demand has collapsed, taking the price of oil negative.  Many businesses are toast.  Unemployment claims are off the charts, with 26 million in five weeks.  Mortgage delinquencies are piling up like cow pies at a dairy farm.  And hopes for a V-shaped recovery have vanished.

To offset these deflationary pressures the Fed’s emitting vast quantities of printing press money.  The Fed’s balance sheet is rocketing towards $10 trillion by the end of the year.  The objective is to bailout credit markets, bailout businesses, levitate the stock market, pay for unemployment checks, and whatever else, to avoid massive defaults on the U.S. economy.

Helicopter money is also being dropped on consumers.  This is prescription for massive inflation…though the timing is uncertain.

With all this money printing, and in the absence of corresponding production, deflation will at some point give way to inflation.  To understand what’s in store in the years ahead we’ll juxtapose the plight of money over the last 100 years between the U.S. and our neighbors to the south.

Pesos and Dollars

Currencies, both north and south of the Rio Grande, ain’t what they use to be.  Several generations ago they were as reliable as a rooster’s call at dawn.  Now they’re as crooked as a politician’s spine.  We know this not by reading the history books, nor by hearsay, but by the honest, verifiable, silver dollar and silver peso we’re holding in our hands.

One coin, the Peace Dollar, is a United States silver dollar minted in 1921.  At the time of its mint, one coin equaled one dollar and each dollar contained 0.77344 troy ounces of silver.  The other coin, the 1922 Un Peso, is a Mexican silver peso.  At the time of its mint, one coin equaled one peso, and each peso contained 0.3856 troy ounces of silver.

The exchange rate was real simple.  Based on their silver content, two pesos equaled one dollar.  Nowadays, both pesos and dollars are merely paper promissory notes issued by their country’s central banks.  The value of pesos and dollars are derived by their government’s track record of stewardship, the size of their country’s military, and the international currency market’s perception of their government’s ability to make payments on their debt.

Today it takes roughly 24.77 pesos to buy one dollar.  As you can see, the Mexican government has been less upright in managing its currency than the U.S. government has over the last 100 years.  More importantly, when you use silver as the measuring stick, the picture dramatically changes for both dollars and pesos.

It took about $1.29 to buy an ounce of silver in the 1920s, while today it takes about $15.17 to buy an ounce of silver.  This means silver presently costs 1,076-percent more in dollar terms than it did in the 1920s.  In pesos, however, it’s a downright disgrace.  It took 2.58 pesos to buy an ounce of silver in 1922, while today it takes 375.76 pesos to buy an ounce of silver.  Astonishingly, in peso terms, silver now costs 14,464-percent more than it did in the 1920s.

Price inflation in the U.S., while insidious, has been much more subtle than in Mexico.  Yet with the Fed’s present efforts to destroy the dollar to save the economy, there could be a swift transition from subtle price inflation to a more hyper price inflation.

No doubt, the peso will be trashed along with the dollar.  But residents of Mexico have been through this repeatedly since 1980.  Just last week, for example, Fitch downgraded Mexico’s sovereign rating to one notch above junk (i.e. BBB-).

The point is, Mexicans have a better understanding of zeros than Americans do.  Over the next several years, however, it’s likely Americans will come to understand zeros too…as the relentless forces of inflation ravage the economy.

What You Must Know About Zeros in the Years Ahead

The way zeros work when money is being destroyed by governments is the same way mold spores work on wet drywall.  They multiply.  They make an unwanted appearance at the back of all prices.

When visiting relatives in Mexico City we get to experience the proliferation of zeros first hand.  During one visit in 2004 the exchange rate was roughly 10-to-1.  You could buy 10 pesos for $1.  The conversion was real simple…just the way we like it.

We could quickly discern if the peso price was fair in terms of our well established dollar reference point.  For example, if a merchant quoted a price of 10 pesos for a can of Coca-Cola (Warren Buffett’s drink of choice), we could quickly cover up the zero on a 10 peso note with our thumb and recognize the price as being $1; generally the equivalent of what we’d pay in the USA.  And 500 pesos for a nice pair of handcrafted leather shoes was merely $50; a bargain.

This may seem irrelevant, especially with oil prices being negative.  But at some point over the next several years the U.S. economy’s going to become oversaturated with the trillions of dollars of Fed printing press money.  Deflation will give way to inflation.

At first, as prices rise, economists at the government’s statistical bureaus will mistake it for an economic boom and recovery.  By the time it’s clear that price inflation has taken hold, it will be too late to stop.  That’s when Americans will come to understand zeros…as they show up at the back of consumer prices.

Your $3 cup of coffee at Starbucks will cost $30.  The $1 can of Coca-Cola will cost $10.  The $50 pair of shoes will cost $500.  And so on and so forth.

In fact, an inflation rate of 1,000 percent is all it takes to add a single zero to the back all prices.  This may seem extreme, but it’s really not.  When inflation goes hyper, 1,000 percent is actually quite tame.

Hyperinflation in Weimar Germany reached rates of more than 30,000 percent per month in 1923.  Prices doubled every few days.  Zeros were everywhere.  But that’s nothing…

Hyperinflation in Zimbabwe from 2007 to 2009 peaked at 79 billion percent per month – that’s a lot of zeros.  And in Hungary, in 1946, daily inflation exceeded 200 percent.  This equates to an annual inflation rate of over 13 quadrillion percent; prices doubled every 15 hours.  Now that’s too many zeros to count.

And if you’re eager to have your $350,000 mortgage inflated away to a relative $35,000, we caution you to think again.  Over time your burden will be lessened.  But the initial pinch – when consumer prices jump and wage growth lags – will be brutal.

Perhaps if you can make it through the initial squeeze you’ll make out okay.  Though any benefit you garner will be overwhelmed by the chaos and social disorder the inflation wreaks.  For example, that $1 million IRA you saved up over a 40 year career would be quickly reduced to a purchasing power of $100,000.  It would be like a zero was lopped off the back of your life savings.

Indeed, Howard Buffett was right all along.  This is how zeros work when governments conspire to destroy money.

Tyler Durden Sat, 04/25/2020 - 12:10
Published:4/25/2020 11:15:32 AM
[Markets] No, This Is Not Another 1929, 1973, 1987, 2000, Or 2008 No, This Is Not Another 1929, 1973, 1987, 2000, Or 2008

Authored by Charles Hugh Smith via OfTwoMinds blog,

Basing one's decisions on analogs from the past is entering a fool's paradise of folly.

Like addicts who cannot control their cravings, financial analysts cannot stop themselves from seeking some analog situation in the past which will clarify the swirling chaos in their crystal balls. So we've been swamped with charts overlaying recent stock market action over 1929, 1987, 2000 and 2008--though the closest analogy is actually the Oil Shock of 1973, an exogenous shock to a weakening, fragile economy.

But the reality is there is no analogous situation in the past to the present, and so all the predictions based on past performance will be misleading. The chartists and analysts claim that all markets act on the same patterns, which are reflections of human nature, and so seeking correlations of volatility and valuation that "worked" in the past will work in 2020.

Does anyone really believe the correlations of the past decade or two are high-probability predictors of the future as the entire brittle construct of fictional capital and extremes of globalization and financialization all unravel at once?

Here are a few of the many consequential differences between all previous recessions and the current situation:

1. Households have never been so dependent on debt as a substitute for stagnating wages.

2. Real earnings (adjusted for inflation) have nevet been so stagnant for the bottom 90% for so long.

3. Corporations have never been so dependent on debt (selling bonds or taking on loans) to fund money-losing operations (see Netflix) or stock buybacks designed to saddle the company with debt service expenses to enrich insiders.

4. The stock market has never been so dependent on what amounts to fraud--stock buybacks--to push valuations higher.

5. The economy has never been so dependent on absurdly overvalued stock valuations to prop up pension funds and the spending of the top 10% who own 85% of all stocks, i.e. "the wealth effect."

6. The economy and the stock market have never been so dependent on central bank free money for financiers and corporations, money creation for the few at the expense of the many, what amounts to an embezzlement scheme.

7. Federal statistics have never been so gamed, rigged or distorted to support a neofeudal agenda of claiming a level of wide-spread prosperity that is entirely fictitious.

8. Major sectors of the economy have never been such rackets, i.e. cartels and quasi-monopolies that use obscure pricing and manipulation of government mandates to maximize profits while the quality and quantity of the goods and services they produce declines.

9. The economy has never been in such thrall to sociopaths who have mastered the exploitation of the letter of the law while completely overturning the spirit of the law.

10. Households and companies have never been so dependent on "free money" gained from asset appreciation based on speculation, not an actual increase in productivity or value.

11. The ascendancy of self-interest as the one organizing directive in politics and finance has never been so complete, and the resulting moral rot never more pervasive.

12. The dependence on fictitious capital masquerading as "wealth" has never been greater.

13. The dependence on simulacra, simulations and false fronts to hide the decay of trust, credibility, transparency and accountability has never been so pervasive and complete.

14. The corrupt linkage of political power, media ownership, "national security" agencies and corporate power has never been so widely accepted as "normal" and "unavoidable."

15. Primary institutions such as higher education, healthcare and national defense have never been so dysfunctional, ineffective, sclerotic, resistant to reform or costly.

16. The economy has never been so dependent on constant central bank manipulation of the stock and housing markets.

17. The economy has never been so fragile or brittle, and so dependent on convenient fictions to stave off a crash in asset valuations.

18. Never before in U.S. history have the most valuable corporations all been engaged in selling goods and services that actively reduce productivity and human happiness.

This is only a selection of a much longer list, but you get the idea. Basing one's decisions on analogs from the past is entering a fool's paradise of folly.

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Tyler Durden Sat, 04/25/2020 - 11:20
Published:4/25/2020 10:38:48 AM
[Markets] How The "West Point Mafia" Runs Washington How The "West Point Mafia" Runs Washington

Authored by Danny Sjursen via,

Every West Point class votes on an official motto. Most are then inscribed on their class rings. Hence, the pejorative West Point label “ring knocker.” (As legend has it, at military meetings a West Pointer “need only knock his large ring on the table and all Pointers present are obliged to rally to his point of view.”) Last August, the class of 2023 announced theirs: “Freedom Is Not Free.” Mine from the class of 2005 was “Keeping Freedom Alive.” Each class takes pride in its motto and, at least theoretically, aspires to live according to its sentiments, while championing the accomplishments of fellow graduates.

But some cohorts do stand out. Take the class of 1986 (“Courage Never Quits”). As it happens, both Secretary of Defense Mark Esper and Secretary of State Mike Pompeo are members of that very class, as are a surprisingly wide range of influential leaders in Congress, corporate America, the Pentagon, the defense industry, lobbying firms, big pharma, high-end financial services, and even security-consulting firms. Still, given their striking hawkishness on the subject of American war-making, Esper and Pompeo rise above the rest. Even in a pandemic, they are as good as their class motto. When it comes to this country’s wars, neither of them ever quits.

Once upon a time, retired Lt. Gen. Douglas Lute (Class of ’75), a former US Ambassador to NATO and a senior commander in Iraq and Afghanistan, taught both Esper and Pompeo in his West Point social sciences class. However, it was Pompeo, the class of ’86 valedictorian, whom Lute singled out for praise, remembering him as “a very strong student—fastidious, deliberate.” Of course, as the Afghanistan Papers, released by The Washington Post late last year, so starkly revealed, Lute told an interviewer that, like so many US officials, he “didn’t have the foggiest notion of what we were undertaking in Afghanistan.” Though at one point he was President George W. Bush’s “Afghan war czar,” the general never expressed such doubts publicly and his record of dissent is hardly an impressive one. Still, on one point at least, Lute was on target: Esper and Pompeo are smart, and that’s what worries me (as in the phrase “too smart for their own good”).

Esper, a former Raytheon lobbyist, had particularly hawkish views on Russia and China before he ever took over at the Pentagon and he wasn’t alone when it came to the urge to continue America’s wars. Pompeo, then a congressman, exhibited a striking pre–Trump era foreign policy pugnacity, particularly vis-à-vis the Islamic world. It has since solidified into a veritable obsession with toppling the Iranian regime.

Their militarized obsessions have recently taken striking form in two ways: The secretary of defense instructed US commanders to prepare plans to escalate combat against Iranian-backed militias in Iraq, an order the mission’s senior leader there, Lt. Gen. Robert “Pat” White, reportedly resisted; meanwhile, the secretary of state evidently is eager to convince President Trump to use the Covid-19 pandemic, now devastating Iran, to bomb that country and further strangle it with sanctions. Worse yet, Pompeo might be just cunning enough to convince his ill-informed, insecure boss (so open to clever flattery) that war is the answer.

The militarism of both men matters greatly, but they hardly pilot the ship of state alone, any more than Trump does (whatever he thinks). Would that it were the case. Sadly, even if voters threw them all out, the disease runs much deeper than them. Enter the rest of the illustrative class of ’86.

As it happens, Pompeo’s and Esper’s classmates permeate the deeper structure of imperial America. And let’s admit it, they are, by the numbers, an impressive crew. As another ’86 alumnus, Congressman Mark Green (R-TN), bragged on the House floor in 2019, “My class [has] produced 18 general officers…22-plus presidents and CEOs of major corporations…two state legislators…[and] three judges,” as well as “at least four deans and chancellors of universities.” He closed his remarks by exclaiming, “Courage never quits, ’86!”

However, for all his gushing, Green’s list conceals much. It illuminates neither the mechanics nor the motives of his illustrious classmates; that is, what they’re actually doing and why. Many are key players in a corporate-military machine bent on, and reliant on, endless war for profit and professional advancement. A brief look at key ’86ers offers insight into President Dwight D. Eisenhower’s military-industrial complex in 2020—and it should take your breath away.


The core group of ’86 grads cheekily refer to themselves as “the West Point Mafia.” And for some, that’s an uplifting thought. Take Joe DePinto, CEO of 7-Eleven. He says that he’s “someone who sleeps better at night knowing that those guys are in the positions they’re in.” Of course, he’s an ’86 grad, too.

Back when I called the academy home, we branded such self-important cadets “toolbags.” More than a decade later, when I taught there, I found my students still using the term. Face facts, however: those “toolbags,” thick as thieves today, now run the show in Washington (and despite their busy schedules, they still find time to socialize as a group).

Given Donald Trump’s shady past—one doesn’t build an Atlantic City casino-and-hotel empire without “mobbing it up“—that “Mafia” moniker is actually fitting. So perhaps it’s worth thinking of Mike Pompeo as the president’s latest consigliere. And since gangsters rarely countenance a challenge without striking back, Lieutenant General White should watch his back after his prudent attempt to stop the further escalation of America’s wars in Iraq and Iran in the midst of a deadly global pandemic. Worse yet for him, he’s not a West Pointer (though he did, oddly enough, earn his Army commission on the very day that class of ’86 graduated). White’s once promising career is unlikely to be long for this world.

In addition to Esper and Pompeo, other Class of ’86 alums serve in key executive branch roles. They include Vice Chief of Staff of the Army Gen. Joseph Martin, the director of the Army National Guard, the commander of NATO’s Allied Land Command, the deputy commanding general of Army Forces Command, and the deputy commanding general of Army Cyber Command. Civilian-side classmates in the Pentagon serve as: deputy assistant secretary of the Army for installations, energy, and environment; a civilian aide to the secretary of the Army; and the director of stabilization and peace operations policy for the secretary of defense. These Pentagon career civil servants aren’t, strictly speaking, part of the “Mafia” itself, but two Pompeo loyalists are indeed charter members.

Pompeo brought Ulrich Brechbuhl and Brian Butalao, two of his closest cadet friends, in from the corporate world. The three of them had, at one point, served as CEO, CFO, and COO of Thayer Aerospace, named for the “father” of West Point, Colonel Sylvanus Thayer, and started with Koch Industries seed money. Among other things, that corporation sold the Pentagon military aircraft components.

Brechbuhl and Butalao were given senior positions at the CIA when Pompeo was its director. Currently, Brechbuhl is the State Department’s counselor (and reportedly Pompeo’s de facto chief of staff), while Butalao serves as under secretary for management. According to his official bio, Butalao is responsible “for managing the State Department on a day-to-day basis and [serving as its] Chief Operating Officer.” Funny, that was his exact position under Pompeo at that aerospace company.

Still, this Mafia trio can’t run the show by themselves. The national security structure’s tentacles are so much longer than that. They reach all the way to K Street and Capitol Hill.


Before Trump tapped Pompeo to head the CIA and then the State Department, he represented Wichita, Kansas, home to Koch Industries, in the House of Representatives. In fact, Pompeo rode his ample funding from the political action committee of the billionaire Koch brothers straight to the Hill. So linked was he to those fraternal right-wing energy tycoons and so protective of their interests that he was dubbed “the congressman from Koch.” The relationship was mutually beneficial. Pompeo’s selection as secretary of state solidified the previously strained relationship of the brothers with President Trump.

The ’86 Mafia’s current congressional heavyweight, however, is Mark Green. An early Trump supporter, he regularly tried to shield the president from impeachment as a minority member of the House Oversight and Reform Committee. The Tennessee representative nearly became Trump’s secretary of the Army, but ultimately withdrew his nomination because of controversies that included his sponsoring gender-discrimination bills and commenting that “transgender is a disease.”

Legislators like Green, in turn, take their foreign policy marching orders from the military’s corporate suppliers. Among those, Esper, of course, represents the gold standard when it comes to “revolving door” defense lobbying. Just before ascending the Pentagon summit, pressed by Senator Elizabeth Warren during his confirmation hearings, he patently refused to “recuse himself from all matters related to” Raytheon, his former employer and the nation’s third-largest defense contractor. (And that was even before its recent merger with United Technologies Corporation, which once employed another Esper classmate as a senior vice president.) Incidentally, one of Raytheon’s “biggest franchises” is the Patriot missile defense system, the very weapon being rushed to Iraq as I write, ostensibly as a check on Pompeo’s favored villain, Iran.

Less well known is the handiwork of another ’86 grad, longtime lobbyist and CNN paid contributor David Urban, who first met the president in 2012 and still recalls how “we clicked immediately.” The consummate Washington insider, he backed Trump “when nobody else thought he stood a chance” and in 2016 was his senior campaign adviser in the pivotal swing state of Pennsylvania.

Esper and Urban have been close for more than 30 years. As cadets, they served in the same unit during the Persian Gulf War. It was Urban who introduced Esper to his wife. Both later graced The Hill’s list of Washington’s top lobbyists. Since 2002, Urban has been a partner and is now president of a consulting giant, the American Continental Group. Among its clients: Raytheon and 7-Eleven.

It’s hard to overstate Urban’s role. He seems to have landed Pompeo and Esper their jobs in the Trump administration and was a key go-between in marrying class of ’86 backbenchers and moneymen to that bridegroom of our moment, The Donald.


Another ’86er also passed through that famed military-industrial revolving door. Retired Col. Dan Sauter left his position as chief of staff of the 32nd Army Air and Missile Defense Command for one at giant weapons maker Lockheed Martin as business developer for the very systems his old unit employed. Since May 2019, he’s directed Lockheed’s $1.5 billion Terminal High Altitude Area Defense (THAAD) program in Saudi Arabia. Lockheed’s THAAD systems have streamed into that country to protect the kingdom, even as Pompeo continually threatens Iran.

If such corporate figures are doing the selling, it’s the Pentagon, naturally, that’s doing the buying. Luckily, there are ’86 alumni in key positions on the purchasing end as well, including a retired brigadier general who now serves as the Pentagon’s principal adviser to the under secretary for acquisition, technology, and logistics.

Finally, there are other key consultants linked to the military-industrial complex who are also graduates of the class of ’86. They include a senior vice president of Hillwood—a massive domestic and international real estate development company, chaired by Ross Perot Jr.—formerly a consultant to the government of the United Arab Emirates. The Emiratis are US allies in the fight against Pompeo’s Iranian nemesis and, in 2019, awarded Raytheon a $1.5 billion contract to supply key components for its Air Force missile launchers.

Another classmate is a managing partner for Patriot Strategies, which consults for corporations and the government but also separately lands hefty defense contracts itself. His previous “ventures” included “work in telecommunications in the Middle East…and technical security upgrades at U.S. embassies worldwide.”

Yet another grad, Rick Minicozzi, is the founder and CEO of Thayer Leader Development Group (TLDG), which prides itself on “building” corporate leaders. TLDG clients include: 7-Eleven, Cardinal Glass, EMCOR, and Mercedes-Benz. All either have or had ’86ers at the helm. The company’s CEO also owns the Thayer Hotel located right on West Point’s grounds, which hosts many of the company’s lectures and other events. Then there’s the retired colonel who, like me, taught on the West Point history faculty. He’s now the CEO of Battlefield Leadership, which helps corporate leaders “learn from the past” in order to “prepare for an ever-changing business landscape.”


Don’t for a moment think these are all “bad” people. That’s not faintly my point. One prominent ’86 grad, for instance, is Lt. Gen. Eric Wesley, the deputy of Army Futures Command. He was my brigade commander at Fort Riley, Kansas, in 2009 and I found him competent, exceptionally empathetic, and a decidedly decent man, which is probably true of plenty of ’86ers.

So what exactly is my point here? I’m not for a second charging conspiracy or even criminal corruption. The lion’s share of what all these figures do is perfectly legal. In reality, the way the class of ’86 has permeated the power structure only reflects the nature of the carefully crafted, distinctly undemocratic systems through which the military-industrial complex and our political world operate by design. Most of what they do couldn’t, in fact, be more legal in a world of never-ending American wars and national security budgets that eternally go through the roof. After all, if any of these figures had acted in anything but a perfectly legal fashion, they might have run into a classmate of theirs who recently led the FBI’s corruption unit in New Jersey—before, that is, he retired and became CEO of a global security consulting firm. (Sound familiar?)

And that’s my point, really. We have a system in Washington that couldn’t be more lawful and yet, by any definition, the class of ’86 represents one giant conflict of interest (and they don’t stand alone). Alums from that year are now ensconced in every level of the national security state: from the White House to the Pentagon to Congress to K Street to corporate boardrooms. And they have both power and a deep stake, financial or otherwise, in maintaining or expanding the (forever) warfare state.

They benefit from America’s permanent military mobilization, its never-ending economic war footing, and all that comes with it. Ironically, this will inevitably include the blood of future West Point graduates, doomed to serve in their hopeless crusades. Think of it all as a macabre inversion of their class motto in which it’s not their courage but that of younger graduates sent off to this country’s hopeless wars that they will never allow to “quit.”

Speaking of true courage, lately the only exemplar we’ve had of it in those wars is Gen. “Pat” White. It seems that he, at least, refused to kiss the proverbial rings of those Mafia men of ’86.

But of course, he’s not part of their “family,” is he?

*  *  *

Danny Sjursen is a retired U.S. Army major and former history instructor at West Point. He served tours in Iraq and Afghanistan, and now lives in Lawrence, Kansas. He has written a memoir of the Iraq War, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of the Surge, and his forthcoming book, Patriotic Dissent: America in the Age of Endless War, is available for pre-order. Follow him on Twitter at @SkepticalVet and check out his podcast "Fortress on a Hill."

Tyler Durden Fri, 04/24/2020 - 23:55
Published:4/24/2020 11:06:56 PM
[Markets] What Will Post-COVID Look Like On TV And In The History Books What Will Post-COVID Look Like On TV And In The History Books

Authored by Denis Rencourt via The Ron Paul Institute for Peace & Prosperity,

Difficult situation: There is no way the government can simply walk back from what it did with COVID-19...

It imposed draconian general-population lockdown measures, and closed down the economy, irrespective of the domestic consequences, for a viral respiratory disease that all the recent studies are convergently saying is no worse than a seasonal flu.

How will the government representatives and enablers respond when the dust settles?

They will hold onto the absurd. They will hide the harm of the lockdown (violence, economy, jobs, subservience training...). They will claim that they beat the coronavirus when it slows, and then claim that any resurgence would have been worse had they not intervened; all contrary to known science and the accumulating empirical data, of course.

And ordinary citizens who bought into the lie will continue to protect the government by going berserk when challenged that it was a lie: Surely they were right to enjoy the new circumstances at home and to police their neighbours.

If there are fewer deaths than the artificial predictions then the government will claim that it saved lives, millions of lives.

The low death count right now (even counting every possible death that is not a proven suicide or murder) and the stubbornly normal magnitude of the total mortality rate are problems for the government, since these figures suggest that there really never was a pandemic worthy of the military-scale response.

In fact, the darn thing is not particularly contagious or fatal. It is not a deathly virulent disease by usual standards. Sweden presently has far fewer confirmed COVID-19 deaths per-million-inhabitants than Belgium, Spain, Italy, France, UK, and The Netherlands, without any lockdown; and it estimates that one third of its citizens have already been infected and are now immune.

But governments will argue that their lockdowns prevented infection and death, in time for a vaccine to save the remaining elderly and vulnerable individuals. Since the disease is no plague, their vaccine will "work": There is no real challenge. They will be able to hide the harm from the vaccine and claim that they are vigilantly protecting humanity.

On the contrary, the government should not be allowed to take credit for anything except the mess it has made.

But they will not fund research that examines their mess. Only researchers that go along will be funded and promoted, as always.

The entire episode will be a lot like when they take us into a war. It is the same modus operandi, media-show and all.

We will be proud survivors of "The Coronavirus War".

We will have actively engaged in this war (by staying at home), will have won the war; and will have vowed to win all such future wars.

And the government will fabricate such a war whenever it “needs” to perturb or rearrange global finance structures, or take out a geopolitical or annoying national foe. In this case, the synchronous and unprecedented negative price of oil may not be a mere accident of “supply and demand”. Only the USA can print the de facto global currency at will and without limit, for now. Others must endure, while relying on limited reserves.

Tyler Durden Fri, 04/24/2020 - 05:30
Published:4/24/2020 4:30:35 AM
[Markets] The Margin: These are the most popular books people are reading as they quarantine at home In honor of World Book Day, here are the types of books flying off online shelves — outdoor survival tips, classic literature, and children’s academic workbooks.
Published:4/23/2020 3:57:29 PM
[Entertainment] Best-Sellers-Books-USAToday Best-Sellers-Books-USAToday Published:4/23/2020 11:56:49 AM
[Markets] All Eyes Turn To The Biggest "Make Or Break" Event Of The Day All Eyes Turn To The Biggest "Make Or Break" Event Of The Day

Now that the latest initial claims reports is in the history books, revealing that a record 26.5 million people have been let go in the past five years, which is over 10 times the prior worst five-week period in the last 50-plus years...

Source: Bloomberg

... the most important event today is the long-awaited European Council summit which is taking place via videoconference this afternoon, where as Jim Reid writes, the big question will be over how the idea of a European Recovery Fund is financed. Yesterday, Bloomberg News reported that the Commission would propose a €2 trillion plan that would in part use the bloc’s 7-year multi-annual budget with a €300bn recovery fund included, but also establish a new temporary financing mechanism that would raise up to €320bn. However, this could prove controversial given the issuance of joint debt, to which northern member states - most notably the Netherlands and Germany - are strongly reluctant.

Commenting on today's "make or break" event, Rabobank's Michael Every recaps the above, saying that "a temporary €300bn recovery fund is being discussed along with a €200bn recovery and resilience facility, €R50bn in repurposed cohesion funds, and two €200bn funds “to protect the EU’s internal markets”. And that appears to be it, even though somehow this is €2trn in some headlines."

Alas, as with everything European, there is nothing but chaos as the world looks to Europe for some comfort. As Every continues, Italy which yesterday announced that its fiscal deficit will be 10% of GDP in 2020 even though there is precious little stimulus taking place, and which will almost certainly be downgraded to junk as soon as Friday, is now willing to avoid the debt mutualiation issue and instead favour ultra-long maturity or perpetual bond issuance, and "one wonders how the Usual Suspects in northern Europe will feel about that compromise."

But the real kicker is the following: the total confusion over what Europe hopes to actually achieve:

I won’t allow myself to get sucked into the classic Euro game of mind-stultifying fudge, acronyms, and deck-chair rearranging. Instead, I will quote Bloomberg directly: “

The ‘roadmap’ EU Council President Charles Michel distributed to national delegations ahead of the video conference contained no details on the amount, the specific objectives, the time frame or the nature of the investment needed to get the bloc back on track. Leaders aren’t expected to reach a decision this week and a final package may not be ready for at least six months, according to a French official.”

SIX MONTHS?! And then action on a scale that looks completely out of kilter with the economic damage being wrought. Euro-committees are all very fine and good, and I am always told they work best when in a genuine crisis (or only in a crisis) – but where is The King when you need him? He appears to have left the building.

Meanwhile, as DB's Jim Reid continues, "if we saw a full agreement today that would be a surprise but progress and something that Italy can sign up to will be the key." At the same time, DB economists do expect an eventual agreement on a recovery fund, noting that "it would be a positive surprise if the important details were agreed today, since the question of burden sharing is politically complex and the ECB’s purchases are absorbing market pressure for now."

According to them, the things to watch out for are: the size, speed and structure of the fund, even though joint bonds are unlikely for obvious reasons due to the Northern states current lack of desire to go down that route.

We’ve also seen increasing speculation around grants recently, which could be the principle means of buying solidarity, but that would also lead to tough debates around the ratio of grants to loans within the Recovery Fund and eligibility for the

Finally, here is a summary primer courtesy of RanSquawk on what to expect today, even if the most accurate expectations out of the EU summit is the usual one: disappointment.

The EU27 are poised to sign off on the plans concocted by EZ finance ministers, and brainstorm on a long-term recovery plan. Leaders have signalled a general will for a larger coordinated fiscal response, albeit views seem to differ. Officials noted that the North fears that their financial positions will be contaminated by debt mutualisation in the future due to decisions taken by the South. The European Council is expected to discuss the size of a European Recovery Fund alongside other financing tools. The virtual meeting will be chaired by EU Council President Michel at 1400BST, although the lack of detailed proposals could see another impasse or delay in talks.

EU RECOVERY FUND: The Council President said the Fund should be established as soon as possible to kick-start economy once lockdown measures are eased, but officials note of a large divide between member states on the size and whether it should consist of only grants or solely loans. Consensus on a Recovery Fund this week has been heavily downplayed, with officials pointing to more clarity in June or July. In terms of the nuances, Spain is to propose a EUR 1.5tln recovery fund backed by perpetual bonds to finance the recovery of the worst-hit countries in grants and not loans, to avoid rising debt. France has backed the principals in Spain’s proposal but noted a physical meeting will be needed for a formal decision, potentially before Summer – President Macron previously said there is no choice but to set up a joint EUR 400bln recovery fund. Sources said the European Commission is reportedly seeking EUR 320bln in the market to finance the regional recovery, whilst later reports noted that the Commission is floating a EUR 2.2tln plan for economic recovery.

EUROGROUP FALLOUT: At the Eurogroup meeting, Finance Ministers agreed on a EUR 540bln rescue package which consists of:

  • ESM CREDIT LINE (up to 2% of Euro Area GDP): This will be immediately available for member states with “light” conditionality. The size could be up to USD 240bln should all countries tap the maximum available. This also opens the door to Outright Monetary Transactions (OMT) by the ECB, which allows the Central Bank to purchase unlimited debt from the worst-hit regions, albeit some analysts have suggested that the OMT programme has already been made redundant by the ECB's new PEPP.
  • FIRMING EIB ACTIVITIES (up to 1.6% of Euro Area GDP): The European Investment Bank could support EUR 200bln of company financings, with emphasis on SMEs.
  • SHORT-TIME WORK SCHEME (0.8% of Euro Area GDP): The EUR 100bln scheme was drafted to aid protect jobs and workers hit by the pandemic in the form of loans on “favourable” terms.

CORONABOND: The common debt issuances pursued namely by Spain and Italy was not included in the Eurogroup’s draft document after experiencing pushback by several larger members, vehemently from Austria, Germany and Netherlands. However, Italy seems to be erring towards a compromise on the issue. Italian PM Conte, at a Senate hearing on Tuesday, signalled open-mindedness towards the ESM credit line and an alternative fund as a substitute to Eurobonds. Desks note that this should reduce tail risks for a roadblock.

ITALY’S DILEMMA: PM Conte set a high bar for success in negotiations for a post-virus response as domestic pressure builds at the epicentre of the European outbreak. Desks note that the PM will need a win to confine the rising Eurosceptics whilst fending off opposition parties waiting to muster support from any failures. Despite Conte’s more recent sanguine tone regarding a Coronabond compromise, participants believe the PM could be tempted to walk away from the table, having had battled for weeks on a Euro-wide debt instrument. Meanwhile, domestic pushback could arise from a compromise of just ESM lines – potentially paving a way for a change in government. It’s also worth noting that S&P will be reviewing Italy’s sovereign debt on Friday; the agency will be eyeing the outcome of negotiations. Credit Suisse believes that the survival of the Euro could be at risk if EU leaders fail to understand the difficultly in Italy’s economical and political landscapes.

Tyler Durden Thu, 04/23/2020 - 10:54
Published:4/23/2020 9:56:32 AM
[Entertainment] Feast Your Eyes on the Top 20 Books to Read in 2020 E-Comm: Top 20 Books to Read in 2020We love these products, and we hope you do too. E! has affiliate relationships, so we may get a small share of the revenue from your purchases. Items are sold by the retailer, not...
Published:4/23/2020 6:32:37 AM
[Markets] GM And Ford Are One Step Closer To Losing Billions On Used Car Price Plunge GM And Ford Are One Step Closer To Losing Billions On Used Car Price Plunge

The finance arms of Ford and GM are inching closer to billion dollar losses as a result of a plunge in used car prices. 

While the impact has been expected for several weeks, the plunge in used car prices has worsened, with prices falling "faster and steeper" than analysts had predicted. We had pointed out worries about used car pricing just days ago. 

Mid-month data from Manheim showed that the used vehicle value index had fallen 11.8% for the first 15 days of April, a decline on a record setting pace, according to Bloomberg

JP Morgan analyst Ryan Brinkman said on Monday: "The real losers of the development are likely the captive-finance subsidiaries of automakers like GM and Ford, and the rental-car companies. If prices finish the second quarter 10% lower than envisioned, losses could total $3 billion at GM Financial and $2.8 billion at Ford Credit."

Jennifer Laclair, the chief financial officer of Ally Financial Inc., said on an earnings call: “What we’re seeing right now is essentially the market is illiquid -- and that’s the physical auctions as well as the digital auctions.”

They had been expecting a 5% to 7% drop in used car prices. And they may not be the only ones way off base. Recall, we reported days ago that GM was only bracing for a 4% drop in prices. 

The collapse is coming as a result of used vehicle auctions grinding to a halt - along with the rest of the country - and vehicles piling up at places where buyers and sellers transact secondhand cars, according to Bloomberg.

A price drop in used vehicles could be another headwind for automakers and their lending units, which could be forced to write down the value of lease contracts that had previously assumed vehicles would retain more value. GM, for example, has $30.4 billion worth of leased vehicles on its books at the end of last year. Every 100 bps it has to raise its estimate for depreciation costs the company $304 million.

Joel Levington, a credit analyst with Bloomberg Intelligence said: "GM assumed a 4% decline in residual values this year. If the 10% drop Manheim has seen recently persists, depreciation expense could counter the $1.9 billion that GM Financial earned in pretax profit last year."

A similar headwind could be felt by rental car companies, who would likely get less money from selling their used fleet of vehicles, which are also sitting idly by as the pandemic paralyzes the nation. 

Hertz, Avis and Enterprise have all sought help from the Treasury Department for loans, tax breaks and other types of support.

Hamzah Mazari, a Jefferies analyst, said: "For Hertz and Avis, every 1% increase in fleet costs saps about $20 million from earnings before interest, taxes, depreciation and amortization."

Dale Pollak, an executive vice president of Cox Automotive said: “Six months from now, there will be huge, if not unprecedented, levels of wholesale supply in the market. Cars are coming in, but they aren’t selling. Today’s huge supply of wholesale inventory suggests supplies will be even larger in the months ahead.”

Tyler Durden Thu, 04/23/2020 - 05:30
Published:4/23/2020 4:54:31 AM
[Open Threads] Not sick, just tired open thread

I’m out of time and low on sleep, so blogging will have to wait until tomorrow — but feel free to comment here by following the Dan Crenshaw debate rules. I am one of those fortunate people who’s almost never bored. Between books, the internet, knitting, housekeeping, blogging, dog walking,

The post Not sick, just tired open thread appeared first on Bookworm Room.

Published:4/22/2020 9:54:44 PM
[Entertainment] Apple Books Top 10 Apple Books Top 10 Published:4/21/2020 5:39:45 PM
[Markets] Eric Peters: 'Fed Isn't Just Delaying The Inevitable Reckoning...It's Making It Worse' Eric Peters: 'Fed Isn't Just Delaying The Inevitable Reckoning...It's Making It Worse'

As investors in the US and around the world confront the fact that the Federal Reserve is never really out of ammo, One River Asset Management Founder Eric Peters joined Erik Townsend for an interview on Townsend's weekly MacroVoices podcast, which features in-depth interviews with portfolio managers and prominent figures in the wealth-management industry.

Markets finally rebounded last week after the fastest, most brutal selloff in modern history, a selloff that was inspired by the realization that half the world would need to stop to prevent millions from dying and hospitals from being absolutely overwhelmed like they were in Wuhan.

Fueling the enthusiasm, late last week, just before Peters' interview, the Fed unleashed its latest program: a $2.3 trillion program that expanded liquidity to small businesses and municipalities alike - or at least that's how Jay Powell marketed it.

With the Fed's balance sheet on its way to $6 - and then $8 - trillion, Townsend asked Peters what he suspects will be the ultimate result of Powell & Co's repeated interventions in credit markets, interventions that the market has come to depend on, especially now.

Whether or not the central bank's decision is setting us up for an even more dramatic reversal later on no longer seems like a matter of speculation. The rapidity with which the market unraveled in March - erasing three years' worth of artificially inflated gains in three weeks - is evidence of what happens when artificial supports finally give way, leaving chaos in their wake.

But at this point, actually swallowing the medicine is almost too painful a prospect to contemplate. Peters pointed out that it wasn't just stocks that crashed. At points, corporate debt and gold have gotten hammered - the selling hasn't been constrained to stocks.

The fact that the market was only 25% shows just how potent the Fed's market interventions have been: Peters believes the drawdone in US equity benchmarks would have been "at least 50%" and possibly as much as 80% if the central bank had sat on its hands.

So you have a very leveraged economy. And all of a sudden, because of this catalyst (meaning the virus), people needed to gross down quickly. And so you had way too many people selling essentially everything, which is why you saw not only stocks fall but you saw bonds fall, you saw gold fall. Everything fell all at the same time. And if the Fed had not come in and drawn a line underneath that with the policies that they implemented, we would have seen a crash that was far worse than what we’ve seen. I think we had the US equity market fall 35% from the highs or something like – it may sound dramatic, but it was only down 25% on the year. So I think, just unambiguously, we would have been down at least 50% and perhaps 80% had the Fed not done what it did.

Why? Well, the logic behind Peters' supposition is pretty straightforward: the central bank's massive liquidity injections led virtually every private market participant to become a buyer.

And when the shock came and everybody turned to sell, the people at the controls suddenly realized - oh wait - there's nobody to sell to. So the Fed needed to step in.

After all: "If everyone is overleveraged and they all need to gross their books down in one way or another at the same time, there literally is not a buyer. There is just no buyer. There is no strong hand out there. There is only one hand and that was the Fed."

"So that’s what they did."

And again, these losses aren't really an exact reflection of the virus's impact on economic fundamentals and therefore corporate earnings...this is simply a reaction, like the release of a slingshot. Because the truth is, the Fed set the stage for this reversal ten years ago in the aftermath of the crisis. As Townsend and Peters discussed, the outbreak was merely a catalyst for losses that probably would have been inevitable.

Though the coronavirus was probably about as bad as it gets for equity bulls.

Listen to the whole interview below:

Tyler Durden Sun, 04/19/2020 - 20:10
Published:4/19/2020 7:28:40 PM
[Markets] Singapore Oil Trading Giant Files For Bankruptcy After Hiding $800 Million In Losses, Secretly Selling Loan Collateral Singapore Oil Trading Giant Files For Bankruptcy After Hiding $800 Million In Losses, Secretly Selling Loan Collateral

Last weekend we reported that one of Singapore's biggest and most iconic - and extremely secretive - oil traders, Hin Leong Trading, whose website reported the company's revenue surpassed $14 billion back in 2012, was on the verge of collapse as the company's banks had frozen letters of credit for the firm - a death sentence for any commodity merchant - over its ability to repay debt; as a result, the firm appointed advisers this week to help negotiate with banks for more time to resolve its finances.

After pointing out the perplexing lack of high-profile blow-ups in the current commodity crush (as a reminder back in 2016 when oil dropped less than it has now, the Glencores and Trafiguras of the world were this close to collapse), we explained the critical nature of L/Cs...

Letters of credit are a critical financial backstop for commodity traders, used as way of financing critical short-term trade. A bank issues the so-called L/C on behalf of the buyer as a guarantee of payment to the seller. Once the goods have exchanged hands, the buyer repays the lender.

... and said that Hin Leong had "suddenly found itself without providers of L/Cs - for reasons still not exactly known - without which it is effectively paralyzed as it needs to front cash for any transactions, something no modern commodity merchant can afford to do."

One week later we may have found the reason: according to a Bloomberg report, the son of the "legendary" founder of Hin Leong said the Singapore oil trader hid about $800 million in losses racked up in futures trading, suggesting a much bigger hole in the company’s finances than many expected, even if it explains why the banks scrambled to cut off the giant company's funding.

Not only that but the Singapore commodity giant was also involved in the oldest trick in the commodity trader's book: liquidation of pledged collateral to obtain critical funding. According to Evan Lim, the son of company founder Oon Kuin "OK" Lim, the company also sold some of the million of barrels of refined products it had used as collateral to secure loans from its banks, Bloomberg adds citing an April 17 email sent by the shipping affiliate of Hin Leong, notifying recipient parties of proposed moratorium proceedings.

As Bloomberg notes, the downfall of Hin Leong Trading, one of the biggest and most secretive forces in the world of physical fuel-oil trading, whose markets include crude oil, feedstock, middle distillates, petrochemicals, biofuel, mogas, naphtha, fuel oil, LPG, asphalt, base oil and lubricants, shows "the depth of the fallout from the dramatic drop in oil prices so far this year as a consequence of the Saudi-Russia price war and the coronavirus pandemic."

It also suggests that we have finally found our first mega casualty from the coronacommoditycrisis (a long overdue offset to Pierre Andurand who managed to reverse just in time and to generate record profits in the past month having gone short oil): as a result of cooking its books and collateral shortfall, Hin Leong faces a significant shortfall between the oil stocks it held and the inventories pledged to its banks. That potentially means huge losses for the banks which provided the merchant with billions in loans as the collateral they thought they have as a guarantee isn’t there.

In what may be the most brutal case of cooking one's books since Enron, the founder's son, also known as Evan Lim, said he was unaware of the reason for losses suffered over some years and his father had instructed Hin Leong’s finance department to omit them from its financial statements; all this was disclosed in an email sent by Ocean Tankers Ltd., the group's shipping arm which owns a fleet of more than 130 tankers, signed by the son and his sister Lim Huey Ching.

Completing the picture, just hours earlier, Hin Leong and Ocean Tankers both filed for court protection from creditors on Friday as the former struggles to repay its debts. Both companies are solely owned by the Lim family.

While Bloomberg focuses on the plight of the commodity trading giant, noting that "the trader’s financial distress has rocked the tightly-knit trading community in Singapore" and is "raising speculation that the privately-held company could be the latest casualty of the historic collapse in oil prices triggered by the coronavirus" the bigger question is whether this collapse will be systemic enough to send shockwaves among Singapore's banks, some of the most levered in the world, and one of the world's last remaining spot to launder money which is why so many Chinese have opened Singapore bank accounts in recent years.

The deception was simple: Hin Leong posted a positive equity of $4.56 billion and net profit of $78 million in the period ended October 31, according to the Bloomberg sources. But Hin Leong told its creditors this month that total liabilities reached $4.05 billion as of early April, while assets were just $714 million, leaving a hole of at least $3.34 billion.

The balance sheet of the company showed no equity at all as of April 9, 2020, and warned that “figures obtained from the company are subject to verification”.

What is even more bizarre, is that the company had used an otherwise reputable auditor, with Hin Leong Trading accounts for the financial year ending October 31, 2019 were audited by Deloitte & Touche LLP. The auditor didn’t flag any problems, according to people familiar with the matter. Meanwhile the banks too, were apparently unaware of the gross fraud taking place right under their noses, begging the question just what is the use of banker diligence?

That said, while auditors should have caught the accounting fraud, even they would have had trouble catching the company's secret liquidation of pledged collateral. As noted above, Lim’s son said his father sold a substantial part of the company’s inventories even those used as collateral for banks loans. As a result, he said there was a large shortfall of oil inventories compared with the amount that had been pledged to secure the credit lines.

It also explains why as recently as last weekend, the banks had pulled their letters of credit.

Altogether, Hin Leong is said to owe almost $4 billion to more than 20 banks including HSBC, who will now scramble to figure out just how massive their loan losses are.

Meanwhile, the company which is not just a giant commodity trader and one of Asia's largest suppliers of ship fuel, or bunkers, but co-owns oil storage unit Universal Terminal with PetroChina, and whose bunkering arm, Ocean Bunkering Services Ltd., was ranked the third-largest shipping fuel supplier in Singapore last year, is no more. Founder Lim Oon Kuin, known to many in the industry as OK Lim, will be resigning from all executive roles in Hin Leong, the Xihe Group and related companies as of April 17, Bloomberg sources reported. He will also step down as director and managing director of Ocean Tankers.

Meanwhile, the banks will be fighting with other creditors for whatever scraps are leftover: both Hin Leong and Ocean Tankers filed for protection from its creditors under Section 211B of Singapore’s Companies Act.

One unexpected consequence of the company's sudden bankruptcy, is that with a record 160MM barrels of oil loaded up on tankers to ease the global commodity glut, Singapore may suddenly lose its place as the world's tanker "parking lot." While traditionally Singapore has had massive spare oil storage capacity which explains photos such as shits one...

... it is Hin Leong's Universal Terminal that has storage capacity of 2.33 million cubic meters and is the largest independent petroleum storage terminal in Singapore and one of the biggest independent storage facilities worldwide. But now that the company is bankrupt, the ability of tankers to store their holdings in the terminal is suddenly in limbo, which means that storing oil on sea may suddenly become far more complicated.

Hin Leong's Universal Terminal with storage capacity of 2.33 million cubic meters is the largest independent petroleum storage terminal in Singapore and one of the biggest independent storage facilities worldwide. Source: Hin Leong

Last week, before we know the extent of the company's financial debacle - and fraud - we concludes that "it is unclear what will happen to the Singapore commodity trading giant if it is unable to find banks that will backstop its operations." Well, we now know - game over - which makes the second part of our forecast especially applicable: "should the firm become insolvent, the downstream cascade for companies in the Pacific Rim could be devastating." We now wait to see if we were correct again.

Tyler Durden Sun, 04/19/2020 - 14:20
Published:4/19/2020 1:26:37 PM
[Markets] "Lethal For Bullion Banks" - The Looming $600 Trillion Derivatives Crisis "Lethal For Bullion Banks" - The Looming $600 Trillion Derivatives Crisis

Authored by Alasdair Macleod via,

The powerful forces of bank credit contraction are at the heart of a rapidly evolving financial crisis in global derivatives, whose gross value is over $600 trillion; an unimaginable sum. Central banks are on course to destroy their currencies through unlimited monetary expansion, lethal for bullion banks with fractionally reserved unallocated gold accounts, while being dramatically short of Comex futures.

This article explains the dynamics behind the current crisis in precious metal derivatives, and why it is the observable part of a wider derivative catastrophe that is caught in the tension between contracting bank credit and infinite monetary inflation.


One of the scares at the time of the Lehman crisis was that insolvent counterparties risked collapsing the whole over-the-counter derivative complex. It was for this reason that AIG, a non-bank originator of many derivative contracts, had to be bailed out by the Fed. By a mixture of good judgement and fortune a derivative crisis was averted, and by consolidating some of the outstanding positions, the gross value of OTC derivatives was subsequently reduced.

According to the Bank for International Settlements, in mid-June last year all global OTC contracts outstanding were still unimaginably large at $640 trillion, a massive sum in anyone’s book. It is unlikely to have changed much by today. But in bank balance sheets only a net figure is usually shown, and you have to search the notes to financial statements to find evidence of gross exposure. It is the gross that matters, because each contract bears counterparty risk, sometimes involving several parties, and derivative payment failures could make the payment failures now evident in disrupted industrial supply chains look like small beer.

Deutsche Bank’s 2019 balance sheet gives us an excellent example of how they are accounted for in commercial banks. It conceals derivative exposure under the headings “Trading assets” and “Trading liabilities” on the balance sheet. You have to go into the notes to discover that under Trading assets, derivative financial instruments total €80.848bn, and under Trading liabilities, derivative financial instruments total €81.910bn, a difference of €1.062bn This is relatively trivial for a bank with a balance sheet of €777bn.

But wait, there is another table that breaks derivative exposure down even further into categories, and it turns out the earlier figures are consolidated totals. The true total of OTC derivatives and exchange traded derivatives to which the bank is exposed is €37.121 trillion. That is nearly thirty-five thousand times the €1.062bn netted difference in the balance sheet. And when you bear in mind that valuing OTC derivatives is somewhat subjective, or as the cynics say, mark to myth, it invalidates the valuation exercise.

Clearly, by taking the mildest of a positive approach to derivatives held as assets, and a slightly more conservative approach to valuing derivatives on the liabilities side, that 35,000:1 leverage at the balance sheet level can make an enormous difference.

Now let us take our imagination a little further. A large number of these derivatives will have commercial entities as counterparties, businesses that have been shut down by the coronavirus since the balance sheet date. With the German economy already heading into recession before the coronavirus closed down much of the global economy, Deutsche Bank’s risk of losses arising from its derivative position could turn out to be in the trillions, not the one billion netted difference shown on the balance sheet.

Not only is there the emergence of counterparty failures to deal with, but there are ever-changing fair values, which will particularly reflect interest rate spreads increasing for Deutsche Bank’s €30.25 trillion interest rate-linked derivatives. We cannot know whether it is net positive or negative for shareholders. And with balance sheet gearing of assets 22 times larger than share capital very little change could wipe them out.

Deutsche Bank is not alone in presenting derivative risk in this manner: it is the elephant in many bank boardrooms. As a weak link, Deutsche is a relevant illustration of risks in the banking system. Since the Lehman crisis, its senior management has been on the back foot, retreating from businesses they could neither control nor understand. They have also made very public mistakes in precious metals, which is our next topic.

Gold derivatives in crisis

While a struggling bank like Deutsche provides us with a laboratory experiment for how a derivative virus can kill a bank, we are now seeing it kill off bullion banks in real time. A rising gold price, out of the control normally imposed by expandable derivatives, has effectively gone bid only in any size. We are told this is due to COVID-19 shutting mines and refineries and disrupting logistics, and so is purely temporary. The LBMA and CME which runs Comex have been issuing calming statements and even announced the introduction of a new 400-ounce gold futures contract alleged to ease the supply shortage.

In short, the gold derivative establishment is panicking. The swaps position on Comex shows why.

With their net short position in very dangerous territory, Comex swaps are badly wrongfooted at a time when the Fed and other central banks have announced unlimited monetary inflation, signalling a paradigm shift in the relationship between sound and unsound money. For ease of reference and to understand their relevance, a swap dealer is defined by the Commodity Futures Trading Commission, which collates the figures, as follows:

An entity that deals primarily in swaps for a commodity and uses the futures markets to manage or hedge risks associated with those swap transactions. The swap dealer’s counterparties may be speculative traders, like hedge funds, or traditional commercial clients that are managing risk arising from their dealings in the physical commodity.

Therefore, a swap dealer is one that operates across derivative markets, and typically will trade in London forwards as well as on Comex. In a nutshell, it describes a bullion bank’s trading desk.

In a further piece of disinformation this week, Jeff Christian, head of CPM Group, in an obviously staged interview for MacroVoices claimed that traders in London were forced by their banks to cover trading risk in the futures market as a condition of their funding. The implication was shorts on Comex are matched to longs in London’s forward market and therefore not a problem. This may be true of an independent trader looking for arbitrage opportunities between markets but is not how it works in a bank.

The mechanics of gold derivative trading

A bank which has bullion business will almost certainly have a trading desk and be a member of the LBMA. Look at it from a banker’s point of view. The bank has business flows in gold, which requires access to the market and a dealing capability. He will employ one or more gold traders with acknowledged expertise to manage the desk. As a profit centre and because a skilled trader will require it, he will give the desk discretionary trading limits and monthly or quarterly profit targets. Part of the deal with the desk is profits will be struck net of the cost of funding the book, usually a reference to Libor, which is effectively the marginal cost to the bank of expanding its credit to back the dealers’ positions.

When the gold desk has established a profitable track record, the banker will be eager to raise the trading desk’s position limits. For bullion banking this has been going on for years, and while individual trading desks come and go, traders now have a large degree of dealing autonomy. It is not, as Mr Christian misinforms us, just a covered arbitrage business between forwards in London and futures in America.

The LBMA lists twelve market makers, all of which are well-known banks. There are thirty-one other banks, some of which run trading desks which take positions. It is worth noting that dealing in gold is normally one of many banking and trading activities undertaken by an LBMA member bank, including forex trading with which this activity is very similar.  All of them are funded by the expansion of bank credit, which is the point of having a banking licence.

Turning to Comex, according to CTFC data there are a maximum of 28 swap dealers which recently have been active in gold futures, either with long or short positions. These numbers tie in nicely with the likely number of trading desks and designated market makers in the banks which are LBMA members.

An LBMA member bank will have physical bullion business and is likely to offer allocated and unallocated accounts to customers. Since the point of banking is to operate a fractional reserve-based customer service, a bullion bank discourages allocated (custodial) accounts, usually by making them an expensive way for customers to hold bullion. Unallocated accounts, which under fractional reserve banking will be a multiple of gold or gold derivatives in the possession of the bank, becomes the bank’s standard customer offering.

One of the benefits of LBMA membership is it gives a bullion bank access to paper markets, so that it can replace physical bullion held against unallocated client accounts with long positions for forward settlement, positions that can be rolled and rolled without ever having to take delivery. Another benefit is access to leased gold from central banks which store bullion in the Bank of England’s vault.

One can begin to see why dealings between LBMA members are so significant, recently hitting 60 million ounces a day, the equivalent of 1,866 tonnes. This represents dealings between LBMA members only and excludes dealings between a member and a non-member. In the distant past they were included in LBMA estimates, which inflated the numbers even further by a factor of about five times.

All this is done on minimum bullion liquidity, which when you take away central bank gold, physical ETF custodial bullion, as well as bullion owned or allocated to miscellaneous institutions, family offices and private individuals stored in London bullion vaults, is not the 8,326 tonnes claimed in a recent LBMA press release designed to calm the markets, but is almost certainly significantly less than a thousand tonnes.

Clearly, running long positions for forward settlement has become a substitute for backing unallocated accounts with a fractional amount of physical metal. While the trading books in London keep the plates spinning in their dangerously geared operation, the profit opportunities on Comex have become a separate matter instead of just a hedging facility.

Officially described as speculators, but better described as suckers, gold and silver futures are the medium for a repeating cycle whereby market makers supply them contracts by drawing on the ability of their banks to create bank credit out of thin air. Once the suckers run out of buying power, the market makers pull the rug out from under them, taking out their stop-loss points. It has been an immensely profitable exercise for swap dealers.

Fortunately for swap dealers, the suckers have short memories. Until last year, it was a frequently repeated exercise, leading to a blasé attitude. Corruption among traders had become rife and they began to be caught spoofing and rigging the fix against bank customers. Dealers were sacked, fined and jailed. Deutsche Bank were fined and forced out of the twice-daily fix. A JPMorgan trader pleaded guilty last August to manipulating the precious metals markets for nine years. Another with the same firm had pleaded guilty the previous October. In the past five years federal prosecutors have brought twelve spoofing cases against sixteen defendants, most pleading guilty.

This corruption is typical of end-of-cycle behaviour, when the derivative ringmasters in precious metals believe they have risen above the law. The point behind the current crisis unfolding in the gold derivative markets is the scam has fully run its course, and the bankers in charge of bullion desks will be increasingly concerned of the reputational damage.

How the ending of the gold derivative scam started

In the past, bullion banks always managed to put a lid on open interest, returning it from an overbought 600,000 contracts to under 400,000 contracts, in the process getting an even book or exceptionally going long, ready for the next pump-and-dump cycle. But then something changed. Last year, the pump-and-dump schemes of the bullion banks’ trading desks went awry, with open interest rocketing to nearly 800,000 contracts by January this year. After several failed attempts, in June 2019 gold had broken above $1350, which encouraged the speculators to chase the price up even further. The interest rate outlook then softened along with the global economy, and by early September, with open interest threatening to rise above the historically high 650,000 level, the Fed was forced to inject inflationary liquidity into the US banking system through repos. At its peak on 23 January 2020, the sum of all short positions on Comex was the equivalent of 2,488 tonnes of gold, worth $125bn. The suckers were finally breaking the banks, who held the bulk of the shorts. This can be seen in the chart below of Comex open interest:

It was imperative that the position be brought under control, and accordingly, it appears that central banks, presumably at the behest of the Bank of England, arranged for gold to be leased to the bullion banks to ease liquidity pressures. And then trading desks were hit by a perfect storm.

The coronavirus put large swathes of the global economy into lockdown, disrupting payment chains in industrial production. This meant that formerly solvent businesses now face collapse and are turning en masse to their banks for liquidity. The bankers’ natural instinct is no longer the pursuit of profit, but fear of losses, and they now have an overwhelming desire to contract outstanding bank credit. In a panic, the Fed cut the Fed funds rate to the zero bound and promised unlimited liquidity support in a desperate attempt to avoid a deflationary spiral. Meanwhile, our swaps traders in gold futures were caught record short, the worst possible position for them given the evolving situation.

The coup de grâce has now come from their banking superiors. Despite the efforts of the Fed to persuade them otherwise, bankers in their lending have become strongly risk-averse and know they will be forced to commit bank credit to failing corporations against their instincts. For this reason, they are taking every opportunity to reduce their balance sheet exposure to other activities. One of the first divisions to suffer is bound to be bullion bank desks running short positions, synthetic in London and actual on Comex, which are wholly inappropriate at a time of massive monetary inflation.

It is this last pressure that has led to an unusual combination of collapsed open interest, shown in the chart above, and rising gold prices, accompanied by a persistent premium of $40 or more over the spot price in London. Clearly, there is good reason for the LBMA and the CME to panic. If the gold price rises much further, there will be bullion desks, managing shorts on Comex and fractionally reserved positions in London, at risk of bankrupting their employers.

The Comex contract, which anchors itself to physical gold through the option of physical delivery at expiry, will face enormous challenges when the active June contract expires at the end of next month. At expiry, the speculators have a chance to obtain delivery. Normally, when the spot price is lower than the future, only the insane would insist on delivery at the higher price. But with very low availability of bullion and price premiums for delayed delivery common, London is being rapidly drained of physical liquidity as well. It is like a good old-fashioned one-two boxing combination: first the Comex market is delivered a body-blow, and then the LBMA gets an uppercut.

Many central banks who have stored their earmarked gold at the Bank of England will be unhappy as well, having leased their gold in the expectation it would stabilise the bullion market. They will not do it again for an interesting reason: gold leasing rates have turned strongly negative, with the two-month rate currently minus 3.7%. No sensible entity is going to pay a lessor to lease its gold and will want leased gold returned instead. Therefore, the availability of gold for leasing is now cut off and gold already leased will need to be returned if delivered to the lessors, or unencumbered if it remained in the Bank of England’s vaults as is the normal leasing practice.

Gold liquidity in London will then disappear entirely, at which point those with a claim to custodial gold will hope that their property rights remain protected.

Broader implications of the failure of gold derivatives

This article has gone into some detail why Comex and the LBMA face their current difficulties, and why liquidity is vanishing. For any bank with large unallocated gold liabilities, bearing in mind they are fractionally reserved mostly against derivatives instead of bullion, these problems are likely to lead to their withdrawal from the market. ABN-Amro is already reported to have closed its customers’ accounts, having forced them to sell positions, and other banks will surely follow.

The gold derivative market is probably the largest foreign exchange cross after the US dollar euro. But it is also the most fundamental of all monetary exchange markets. The relationship was famously captured in John Exter’s inverse pyramid, which showed how the world’s credit obligations were all supported on a diminishingly small apex of gold.

The liquidity pressures that result from banks trying to reduce their balance sheets also affects other derivative markets, and from our discourse on Deutsche Bank’s balance sheet, we can see that the whole banking system is in a very precarious position with respect to derivatives. While we survived the Lehman crisis with only one investment bank failing, the collapse of industrial production of goods and services due to lockdowns to control the spread of the coronavirus will almost certainly lead to multiple bank failures. Bankers are staring into an abyss.

For central banks, monetary inflation is everywhere the solution. Bank rescues, payment chain failures, the furloughing of millions of employees, helicopter money to bail out whole populations, money to bail out governments, money to support all categories of financial assets: the list is endless in scope and infinite in quantity. The survival of the global financial system is at stake. If it survives, state-issued money will have been destroyed. But then what is the point of owning financial assets valued in valueless currency?

While this process of monetary destruction would have reasonably been expected to evolve over time, the coronavirus has accelerated it. The fate of the $640 trillion derivative mountain recorded by the Bank for International Settlements is sealed and will be settled through bank bankruptcies and state-directed elimination. In observing the train wreck that is precious metal derivative markets, we are at Act 1 Scene 1 of a rapidly-evolving and dramatic derivatives tragedy.

Tyler Durden Sat, 04/18/2020 - 07:00
Published:4/18/2020 6:17:04 AM
[Markets] As The Bottom 60% Lose Lives & Livelihoods, The Fed & The Top 10% Cheer Market Rebound As The Bottom 60% Lose Lives & Livelihoods, The Fed & The Top 10% Cheer Market Rebound

Authored by Charles Hugh Smith via OfTwoMinds blog,

If you have any doubt that the Fed and Wall Street will some day be dismantled, please re-read this "real life in America" list again.

The pandemic is a stark, brutal spotlight on income/wealth inequality in America: while the top 10% who own the majority of the nation's wealth cheer the Federal Reserve's relentless pimping of the stock market, the bottom 60%--America's vast underclass of low-paid, marginalized, gig-economy, Amazon warehouse precarious proletariats (precariats)-- are losing their livelihoods and tragically, their lives as the pandemic ravages the ranks of those who cannot work at home and those whose health is impaired by the ceaseless struggle to survive in Unequal America.

The inequality isn't just in wealth and income; it's in what that wealth and income can buy-- stability, security and better health. While there are plenty of wealthy Americans in poor health, there's no getting past the reality that those with big incomes, 7-figure net worths and gold-plated healthcare insurance paid by their employer or family-owned enterprise can afford to be gym rats, hire personal trainers, get regular dental care, eat costly delicacies from Whole Foods (Whole Paycheck to precariats)--in other words, everything needed (including the financial security that enables a good night's sleep) to be slim and healthy.

America's vast Underclass is dying in the pandemic because their health is impaired by inequality.

As long as there are plenty of precariats earning less than $30,000 a year to walk their dog, empty Mom's bedpan, ship their order from an Amazon "fulfillment center," a.k.a. 21st century sweatshop, deliver their groceries from Whole Foods, drive their Uber ride, clean their McMansions, etc., the top 10% could care less about inequality in America.

Like the Fed, their focus is on the stock market, their free money machine: thanks to the Fed, your wealth doubles or triples without actually having to produce any value at all.

The excuse is the wealth effect: the Fed's pimping of the top 10%'s free money machine gives the top 10% the financial "animal spirits" confidence to buy, buy, buy services that create all those precariat jobs.

Here's a brief primer for all the top 10%ers who have no idea of what life is like for America's 60% Underclass:

1. Income is insecure as shift/hours per week/gigs are all uncertain.

2. When you are at your job, you're overloaded with work: the pressure never lets up.

3. You have long commutes, long hours.

4. There are insufficient rewards and recognition for your labors: low pay, no stock options, supervisors pressured to fire people, not praise them.

5. There's no trust or community at work; you're either competing for miserable pay in the gig economy, or you work with a constantly shifting mix of people. There's no trust or support.

6. Every day is an object lesson in unfairness: all you see are workers being treated unfairly while invisible bosses skim huge paychecks or millions/billions in stock options.

7. You cannot value or have pride in your work because the product/service is garbage, as defined and dictated by your overlords, who care only about maximizing profit by whatever means are available, i.e. lowering quality and hiding this from customers.

8. There are few avenues for advancement, unless you want to become a slave-driving crew chief for another lousy dollar or two an hour.

9. There's no way to get ahead, as your wobbly paycheck barely covers expenses, and any savings are wiped out by dental emergencies, car repairs, desperation-soaked loans to relatives, etc.

10. The constant overwork and all the anxieties of economic insecurity have undermined your health.

If you have any doubt that the Fed and Wall Street will some day be dismantled, please re-read this "real life in America" list as many times as needed to break through the obsession with the free money machine of a Fed-pimped euphoric stock market.

The pandemic might yet have a positive consequence if America's vast Underclass eventually decides that enough is enough.

*  *  *

My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
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Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

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

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

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Tyler Durden Fri, 04/17/2020 - 16:20
Published:4/17/2020 3:42:56 PM
[Markets] Overcapacity / Oversupply Everywhere: Massive Deflation Dead Ahead Overcapacity / Oversupply Everywhere: Massive Deflation Dead Ahead

Authored by Charles Hugh Smith via OfTwoMinds blog,

The price of a great many assets will crash, out of proportion to the decline in demand.

Oil is the poster child of the forces driving massive deflation: overcapacity / oversupply and a collapse in demand. Overcapacity / oversupply and a collapse in demand are not limited to the crude oil market; rather, they are the dominant realities in the global economy.

Yes, there are shortages in a few high-demand areas such as PPE (personal protective equipment), but across the entire spectrum of global supply and demand, there is nothing but a vast sea of overcapacity / oversupply and a systemic decline in demand as far as the eye can see.

Here's a partial list of commodities that are in Overcapacity / oversupply:

1. Overvalued assets

2. Overpriced income streams (as income craters, so will the asset generating the income)

3. Labor: low-skill everywhere, high-skill in sectors experiencing systemic collapse in demand

4. AirBnB and other vacation rental properties

5. Overpriced flats, condos and houses

6. Overpriced rental apartments

7. Overpriced commercial office space

8. Overpriced retail space

9. Overpriced used vehicles

10. Overpriced collectibles

I think you get the idea.

Should China restart its export factories, then almost everything being manufactured will immediately be in oversupply, as the global export sector was plagued with mass overcapacity long before the Covid-19 pandemic crushed demand.

Incomes will crater as revenues and profits crash, small businesses close their doors, never to re-open, local governments tighten spending, and whatever competition still exists will relentlessly push the price of labor, goods and services lower.

Globalization has generated hyper-specialization in local and regional economies, stripping them of resilience. Fully exposed to the demand flows of a globalized class of consumers with surplus discretionary income, regions specialized in tourism, manufacturing, commodity mining, etc.

All these regions are now facing a structural collapse of global demand, and they have no diversified local economy to cushion the blow to jobs, incomes, profits and tax revenues.

Thousands of small business that could barely squeak through a 20% decline in revenues are facing a 50% or more decline as far as the eye can see. With costs such as rent, labor, fees, taxes and healthcare at nosebleed levels, an enormously consequential number of small businesses globally cannot survive more than a modest, brief drop in revenues, as their costs remain high even as their sales plummet: costs are sticky, profits slide quickly to zero and beyond.

What's scarce:

1. low-risk, high-yield assets

2. Low-cost hedges against the collapse of asset valuations

3. Investment income streams that survive the collapse of demand and asset valuations

Here is a weekly chart of crude oil (WTIC). Note the weakening of price as the global economy slowed in 2018-2019, the modest rise as the Federal Reserve began "not QE" printing of currency in September 2019, and the complete collapse as oil producers jockeyed for control via crushing price wars/over-production and global demand plummeted.

This is the future of vast swaths of the global economy: labor, commodities, assets, goods and services, and the tax revenues that are skimmed from the private sector, will all crash as supply far exceeds demand.

The price of a great many assets will crash, out of proportion to the decline in demand. Only the global top 10% can afford to buy pricey vacation homes, for example, and as the top 10% own 90% of the assets that are melting away like ice cubes in Death Valley, when their ability and willingness to buy assets they can no longer afford vanishes, the market price of those assets can fall 90% or even to zero.

You'll know this moment has arrived when you see once-expensive sailboats and pleasure craft abandoned and drifting, as the owners can no longer afford the dock fees and can't sell the craft. To quote Jackson Browne: Don't think it won't happen just because it hasn't happened yet.

*  *  *

My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

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

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

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Tyler Durden Fri, 04/17/2020 - 11:40
Published:4/17/2020 10:44:12 AM
[Markets] Can "Sickcare" Survive The Pandemic? Can "Sickcare" Survive The Pandemic?

Authored by Charles Hugh Smith via OfTwoMinds blog,

Like the rest of the financialization machine, sickcare was never sustainable.

What was once known as healthcare in the U.S. has largely been replaced by sickcare: healthcare was focused on restoring and maintaining health and was owned and managed by community-based non-profit hospitals.

Sickcare is focused on extracting the maximum revenues and profits from managing the chronically ill, and is owned by Corporate America. Sickcare, by its very nature, stripmines the entire nation to maximize its profits, and does so dishonestly, with obtuse billing, overbilling, prescriptions for costly medications whose side effects and efficacy have been gamed/obscured, and so on.

Since sickcare profits from chronic illness, America is now chronically ill. Since sickcare profits from over-medicating patients, America is now chronically over-medicated.

As Jim Kunstler observed, sickcare is a racket, which Jim defines: "By racket, I mean an enterprise organized explicitly to make money dishonestly." Ruin Nation.

There are still vestiges of healthcare in the U.S., but these are being undermined, marginalized or eliminated by the financialization machinery of sickcare. Financialization is the disease that has consumed America, hollowed it out and left it unable to discern the consequences of a financial system that has become neofeudal, parasitic and predatory. One such consequence has been the slow decay of healthcare and its transformation into sickcare.

A correspondent who is a physician recently explained the structure of sickcare.

1. Businessmen understand healthcare is the best industry to financialize:

A. it sells a product that generates its own demand

B. is run by no-nothing doctors who let their worldview get in the way of maximizing shareholder value

C. is a direct conduit to the holy grail--Federal dollars

2. Businessmen get on board

3. Businessmen begin applying business principles to healthcare

4. Businessmen kick cranky doctors off board who get in the way

5. Businessmen hollow out health system as they extract every nickel in value; compensation, no bid contracts, feather bedding

When the inevitable pandemic hits, their hollow organizations don't have the resources to cope, even though that is their core function--remember, this pandemic is NOT a 'black swan,' black swans come out of no where. This was perfectly predicable and there was plenty of warning.

6. The lack of credibility in leadership accelerates the pandemic effects. The doctors who could lead have been marginalized so they can only have impact on the tactical side, rather than in leadership.

Look for wholesale leadership changes with maximal visibility among major health systems as they bring in outsiders to try to re-assert their credibility.

Spoiler Alert: It won't work.

These hospitals are gaslighting their staff that previously recommended levels of PPE (personal protective equipment) was overkill and that the staff can do just as well with reduced levels of protection.

The staff smell the fire and are behaving accordingly.

No sign of leaders doing personal care in reduced PPE.

Do they not teach leadership in B-school anymore? If you don't share the risk with your troops (the more intimately, the better) you lose credibility. If there ever is an actual reckoning, the leaders are going to regret not emptying a few bedpans.

I have come to the conclusion that our nation and society is no longer nimble enough to survive.

That's sickcare in a nutshell. 

Like the rest of the financialization machine, sickcare was never sustainable.

The pandemic is merely the catalyst that is stripping away the PR illusions that have cloaked the looting, the fraud, the racketeering and profiteering, and the betrayal of everything healthcare once stood for.

*  *  *

My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

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

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

*  *  *

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

Tyler Durden Thu, 04/16/2020 - 14:25
Published:4/16/2020 1:35:30 PM
[Markets] The "Unsinkable" US Economy Strikes A Pandemic Iceberg – The Map Ahead The "Unsinkable" US Economy Strikes A Pandemic Iceberg – The Map Ahead

Authored by Patrick Hill via,

The ‘unsinkable’ Titanic was designed to withstand a breach of four compartments, ensuring the ship would stay afloat.  On the evening of April 14, 1912, the ship hit an iceberg, breaching five compartments, and within two and half hours, the vessel sank.  Many investors think the U.S. economy, like the Titanic, is unsinkable as well. Yet, we have discovered the economy can sink when the most vulnerable sector of our economy is hit – the consumer. The country has been severely damaged by a pandemic iceberg aimed right at the consumer.  Never in the history of our country have we shut down 25% of economic output in a few weeks. In just three short weeks, millions of people are out of work or furloughed with millions more to come.  Goldman Sachs expects an unemployment rate of 16% or higher, levels not seen since the Great Depression.  The Michigan Survey of Consumer Sentiment dropped to 71.0 for April from March’s 89.1, the largest drop on record. Consumers are sheltering in place, not going to work, or buying at stores, causing spending to drop precipitously as concerns about job security soar.

How did consumers become so vulnerable to a loss of income, job security, and standard of living?  It started at least eleven years ago. During the Great Recession, corporations and banks received federal bailout dollars close to $900 billion to help move bad loans off their books, shift mortgages to the Fed, and make low-interest loans available to companies.  Consumers received no relief for the reduction of the value of their homes, triggering millions of foreclosures, with 50% or more losses to savings and retirement plans. Millions of homeowners lost significant amounts of equity in their homes. Household wealth declined by $16.4 trillion dollars at the trough of the Great Recession in 2009. Corporations and the wealthy who owned corporate stocks were bailed out and consumers were not made whole. Thus, the working class started the eleven year economic recovery in a weak financial position.

Since 2009 the working class has not enjoyed the fruits of a growing economy the way the top 1% has benefited.  Wages for the bottom 80% have stagnated over the past eleven years.

Source: RIA, 4/2/20

Those people in the bottom 70% have been left out of the increase in wealth as well, while most of the asset creation has gone to the top 30%.

Source: Federal Reserve – 7/2018

Due to a lack of income and wealth creation, many consumers turned to credit cards to sustain their standard of living.  Sales for trucks and SUVs soared in 2019, saddling consumers with long term auto loans, some with ‘negative equity’ from a previous unpaid loan rolled into the new loan for more extended periods of time.  Auto loan delinquencies had been increasing prior to the present pandemic.  

Do consumers have at least some savings to fall back on in the event of a financial emergency? No.  A survey of adults found that 41% of workers would only have enough savings to make payments for three months if they lost their job.

Source: Morning Consult, The Wall Street Journal, The Daily Shot – 4/6/20

Six weeks ago, the COVID -19 pandemic arrived in the U.S.  The experts told policymakers the only way to contain the infection rate, and resulting deaths was to deploy social distancing programs forcing the closure of most businesses except for essential services.  Epicenter states like California and Washington quickly called for ‘shelter in place’ programs.  The virus began to strike significant population centers like New York City and Detroit.  Unemployment reports show 16.7 million workers were either furloughed or unemployed just in the last three weeks. There are many more uncounted unemployed as some workers have given up trying to apply for assistance on congested websites, and others have not yet applied. The weekly claims number will continue to rise in the weeks ahead.

Dr. Anthony Fauci, the lead epidemiologist of the White House pandemic committee, has announced that the U.S. infection peak may be in sight. Inflection rates have begun to fall in some big cities, so the flattened curve may be in place by May. However, six states have not imposed lock downs opening a considerable risk of a major infection wave.  Reports from California are encouraging as experts forecast, at present rates, not all corona virus hospital beds will be needed.  California Governor Newsom expects a peak in May. However, he does not expect to end the shelter-in-place policy for some months.

The following diagram shows how the first peak wave in April – May resulted in a flattened curve as a result of social distancing.  The National Academy of Sciences released a report sent to the White House recommending social distancing programs be kept in place longer than planned because of a high probability of a second wave of infection. The second wave is likely to peak in the winter of 2020.  Researchers are working to develop an antibody test to see if people have been exposed and recovered from the virus, which will clear them for social activity.  A vaccine is being tested on humans today but is at least 14 – 18 months away from general distribution. Los Alamos Labs released a report recommending that due to the rapid speed of the infection a combined vaccine and antibody testing program will require the participation of 83% of the population to contain the virus finally.

Sources: FIPhysician – Patrick Hill – 4/8/20

When will people return to work on a large scale? Most people will be reluctant to return to stores or work until they are vaccinated or otherwise assured that others are not contagious. When can we expect all workers to return to work?  Health authorities are planning to clear workers in essential industries already traveling to the office or plant. Next, other workers will need to be cleared for work by taking an antibody test to show if they have had the virus and have recovered or they have been vaccinated. All of these virus programs need to be deployed on a national scale for millions to be tested or vaccinated.  Based on the present chaotic handling of pandemic logistics, we think testing and vaccination programs will take a long time to reach 83% of the population

Experts predict the earliest date for a preventative rollout is July of 2021. The delay in a rollout will mean a slow, steady rise of limited economic activity into 4th Quarter 2021.  Due to the economic damage from social distancing forcing many businesses to close and high unemployment, consumer spending will be capped. Reduced consumer spending will be a huge drag on economic recovery. In the meantime, the economy will fall into a deep recession from the massive unemployment levels. Corporations are trying to survive debt payments or find loans, and small businesses are caught in a bureaucracy to get crucial SBA loans. During the next 18 months, the markets will be highly volatile, responding to rumors, ideas, and policies that have yet to be funded or implemented. Even those programs which are funded are riddled in bureaucracy and not able to live up to their objectives.

Consumers are in shock at the speed of their job losses and financial security. Many will probably suffer a kind of pandemic induced Post-Traumatic Stress Disorder (PTSD) that will take months if not years to recover from fully.  While many workers went to homes that were safe, others went back to homes that were abusive or situations of high stress with children.  There may be workers who, as a result of the trauma of social distancing, may not be able to return to work.

Corporations will learn from the huge ‘work from home’ experiment how to use workers remotely, reduce the number of workers to get a job done, and as a result, likely will install automation software. It is unlikely that job creation will return to pre-pandemic levels any time soon.

After an 18 month recovery from the pandemic, Great Depression level economic consequences are likely to take much longer to fix. The virus has unveiled a weak economy, particularly for the middle class.  The pandemic has triggered a set of downward falling financial and credit market dominoes. 

Prior to the pandemic, corporations had the highest debt level to GDP in the last 20 years.  Companies spent over $1 trillion in stock buybacks in 2019, missing the opportunity to invest in new product development, increase wages, increase productivity, or save the money for an unexpected event. Unemployment is soaring, businesses have huge debt expense overhead, consumers are burdened with student loan, credit card, and auto debt, limiting a full economic recovery.

Productivity is at new 30 year lows, requiring investments in productivity enhanced systems and services to allow companies to become profitable again.  Small businesses, accounting for 60% of all employment, are facing tight budgets, with most only having enough funding to stay in business for a month or two months before shutting down.  Federal Reserve liquidity programs fueled market speculation to historic heights driving stock market valuations to levels not seen since 2000. Ned Davis Research notes that market valuations are at least 20% overvalued by stock buybacks alone.

A Map Ahead

Congress has passed an aggressive set of pandemic bills to bail out the airlines, provide sick leave to workers, small business loans, and immediate $1,200 checks to adults. The collection of bills totaling a record $3.1 trillion in aid will result in providing a cushion for many workers and businesses for at least the first wave of the virus infections into this summer. States and city governments are to receive $400 billion in support funding.  They provide 8.5% of GDP, so funding their operations is crucial to the economy.  Our country will have millions of workers dependent on checks from the government, increasing federal budget deficits while corporations will be reluctant to hire employees back until demand returns.

More rescue funds totaling $250 billion are already being discussed in Congress to help small businesses.  Small businesses report major problems in obtaining SBA loans due to terrorist and money laundering audits delaying approvals for funding as much as 30 days. Fifty percent of all small businesses have less than one month of cash buffer days. Many small businesses may be forced to shut down their business due to these delays. The Federal Reserve has just announced $2.3 trillion for small and medium businesses and to buy corporate bonds including corporate junk-rated bonds. For small businesses that can hang on, this new Fed funding will help but only if they can access the funds in time. Already, some restaurant businesses are shutting their doors for good after losing 90% of their revenue in the last month, and not seeing a profitable opportunity in running a delivery-only service.

The most critical factor in getting the economy growing again is consumer spending, which drives 70% of GDP.  For the week ending April 1st the following chart shows credit card and debit card spending compared to the same week in 2019. Many sectors experienced almost a complete stop in spending while grocery, e-commerce, video conferencing, and food delivery spending surged.

Sources: Ernst Research, New York Times – 4/11/20

So, how is consumer demand likely to build in a recessionary environment?  Here is a list of types of workers that will be employed and provide emerging demand: 

  • Knowledge workers will be the first consumers to feel comfortable spending as they are already receiving regular paychecks while working from home.  These workers are in Internet services, software, telecom, office jobs in e-Commerce, or financial services. They will be comfortable increasing spending early in the economic cycle.

  • Healthcare workers are in demand as healthcare providers will need to see patients on a returning basis, yet have discovered how to perform telemedicine appointments for simple diagnosis and treatment.  The healthcare worker group would include doctors, nurses, technicians, and office staff.  Home nurses will likely be needed as well as the population continues to age or for recovery of COVID – 19 patients. Companies that specialize in telemedicine services, employing software engineers and health care technicians will likely see their business continue as cost cutting by health care providers will make lower cost telemedicine a more cost effective alternative to office visits. Drug company workers such as scientists, biochemists, biostatisticians will be in demand as researchers look for treatment medications, testing, and vaccine alternatives. Drug store workers such as pharmacists and retail clerks will be in demand to keep drug stores open. Mask, ventilator, and medical supply company workers will see firm demand for their skills as well.

  • City emergency services workers including police, firefighters, communications workers, and other community support services staff will be kept on by cities even with tight budgets. State government workers in similar roles will be in demand as well.  Tax revenues are already forcing state and local governments to layoff non-essential workers.

  • Grocery store clerks, managers, cashiers and butchers will be needed. Food processors such as meat, chicken, and turkey packers will be working to hold onto staff.  Food suppliers, including farmers, dairy farm managers, farmworkers, and ranchers, are required to provide food products. Food wholesalers run by managers, and logistics staff and truckers bringing the food to grocery stores will continue to be working

  • Warehouse, fulfillment, and expediting workers will see job growth as many traditional retailers do not survive, leaving fewer alternatives for many consumers but to purchase merchandise online.  Amazon and Walmart plan on hiring hundreds of thousands of workers in warehousing, fulfillment, and expediting. Workers in traditional retail will continue to see job prospects dim. Many mall landlords report up to 50% of their tenants are not paying their rent for April.  If the reduction in consumer spending continues for a year, it is likely that most of these mall stores will close, and many mall districts close down.  Malls often use major department stores as anchor stores to bring in consumers and create floor traffic for smaller mall tenants.  Now, with department stores under siege like Macy’s, JC Penny, Kohls, and others, malls will lose their customer base.

  • Owners and workers at small businesses that will be successful in obtaining government loans, and survived limited sales for 18 months will be critical to the economy Those companies that are inventive during the lockdown will likely come out of the gate first. For example, one enterprising barber set up a ‘virtual hair cutting business’ over the Internet.  She sets up a Zoom session with the client, she cuts a wig on a mannequin and then supervises the cutting of a proxy cutter on her client. Grocery stores are offering ‘senior hours’ when doors open for seniors to do shopping right after the store has been disinfected.  Fabric stores are offering mask kits or willing to make masks and sell them for just their labor cost.  Owners that shift their business to demand created by the crisis and do so in a supportive manner will likely fare well. Restaurants are running special ‘curb’ delivery options for patrons to call in or order over the Internet, then pick up their order at the curb. The patron stays in their car, and they receive the food all boxed up, sign the credit card receipt and drive off with the meal.

Manufacturing in the U.S. was already in economic contraction before the pandemic from tariffs and slowing global demand. Manufacturers will be slow to rehire production workers. These workers will be last to come back to work as they need setup time for plant equipment, establishing new rules for safety and disinfecting their workplace. The key issue will be how soon market demand will come back for their products to make manufacturing runs profitable.

Teachers have been working online as most K – 12 districts have closed schools.  The districts look to open in the fall, yet tax revenues are likely to decline, and schools may need to cut back on staffing.  Higher education institutions with strong demand for admissions will likely weather the crisis well, particularly if they have well-funded endowments.  Smaller colleges dependent on campus face to face learning may be challenged in bringing students back to school.

The last workers to begin consuming in a major way are those who were most vulnerable during the pandemic in travel, airline, hotel, restaurant, or related services. These  hourly workers, with little savings, living on unemployment checks will try to ‘hold on’ until hiring resumes.  Upper middle-class consumers and visitors from other countries should start to travel when the ‘pandemic’ is clear. Still, it will take time for travelers to become comfortable again in their safety.

Will the $1,200 checks jump-start the economy?  No.  A Bankrate survey found that nearly a third of people said the check would sustain financial well-being about a month:

Source: Bankrate – 3/30/20

Over the next 18 months, Americans are likely to see steep declines in employment and income. Financial markets will be volatile based on rumors and news headlines about the virus as well as the coming Presidential election.  The election will not end the economic uncertainty as federal deficits to pay for a continuing series of bailouts and stimulus packages will put extreme pressure on the Federal Reserve, credit, debt, and stock markets. After the virus situation stabilizes, the economy can begin to grow. But, the financial damage to household income and wealth will be worse than the Great Recession. Consumer demand based on workers returning to their offices, factories, and restaurants will be uneven, difficult to predict, and slow in returning.  We expect the economy to go through a dramatic transformation as whole sectors shift to meet demand, or decline replaced by new major consumer and services industries.  

We need to look to ourselves to solve pandemic induced economic problems.  The excesses of the past that have created the highest level of wealth and income inequality since 1929, and have not worked to build and economy that works for all Americans.   The Federal Reserve has created no moral hazard for executives to speculate in stocks by buying junk corporate bonds.  Executives allocated profits and used more debt to goose the price of their company stock and increase their wealth.  Trillions of dollars that could have been spent on increasing productivity, raising wages for workers, and innovation were wasted.  Speculation, debt, and short term focus on wealth building for the 1% put consumers in a vulnerable economic position.  

We must return to the values that built an economy that works for all.  Labor needs to have equal economic power with capital. Corporate decisions must be made based on responsibility to all the people from a long term perspective. The pandemic has made the lack of a labor safety net manifest to everyone. Americans, under capitalism, built the most innovative, self-renewing, wealth building economy in the world.  It is the American spirit of entrepreneurship combined with invention, self-sacrifice, equal opportunity, and creativity that will build the businesses of the futureThese new businesses will adjust to new social realities and pave the way for workers to gain job security and become confident enough to spend at robust levels.

Tyler Durden Thu, 04/16/2020 - 12:55
Published:4/16/2020 12:05:32 PM
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[Markets] German Lawyer Who Criticized Lockdown Arrested, Taken To Psych Ward German Lawyer Who Criticized Lockdown Arrested, Taken To Psych Ward

Authored by Paul Joseph Watson via Summit News,

A German medical lawyer who criticized the coronavirus lockdown law was arrested and taken to a psychiatric ward, where she says she was violently abused by authorities.

Beate Bahner published a press release on April 3rd decrying the German lockdown laws as “flagrantly unconstitutional, infringing to an unprecedented extent many of the fundamental rights of citizens.”

“These measures are not justified by the Infection Prevention Act, hurriedly amended just a few days ago,” she asserted.

“Long-term restrictions on leaving home and meeting others, based on high-death-rate modelled scenarios, which fail to take account of actual critical expert opinions, and the complete shutdown of businesses and shops with no proof that they pose any risk of infection, are thoroughly unlawful.”

Bahner called for a nationwide protest on Easter Sunday to “end the tyranny at once,” before Heidelberg Police announced that they would seek to prosecute her for inciting Germans to break the law.

On April 13th, Bahner called her sister from Heidelberg’s Klinik fur Allgemeine Psychiatrie describing what happened to her.

After claiming she was “suspiciously” followed by a car, Bahner says she asked another motorist to call the police only for the police to show up, handcuff her and push her to the ground “with massive force.”

After being driven to the psychiatric facility, Bahner says she was treated like a terrorist.

“I asked to be allowed to sit down and was shown to a bench. Then I asked to have the handcuffs taken off, since it was actually I who had requested police protection,” she recounted.

“But instead, I was thrown to the floor again, having my head hurled onto the stone floor from a meter height, which nobody reacted to.Then I was forced to spend the night lying on the floor in some high-security Guantanamo psychiatric clinic…there was no toilet, no sink, though they did allow me water, and there was a bell I could ring, though they ignored it after the third time I pressed it.”

The lawyer was charged for incitement yesterday, with her attorney sounding the alarm bell over her treatment.

“I shouldn’t have to add Bahner’s claims of very grave abuse have untoward connotations of the darkest chapters of German history,” he said.

“The mere fact she claimed to have been so badly abused was what prompted me to write to you. Bahner is in the company of over 50 well-known experts in criticising the nationwide lockdown; I would be glad to furnish you with a list of their names. If it really is the case lawyers critical of government measures can now be intimidated using the state legal apparatus or psychiatry, and can be professionally and socially destroyed, then it is five minutes to midnight in this country.”

Bahner has won three cases in the Federal Constitutional Court and written five books on German medical law.

*  *  *

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Tyler Durden Thu, 04/16/2020 - 02:00
Published:4/16/2020 1:02:54 AM
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[Markets] A Letter To The Inhabitants Of The Future Dystopia Whose Birth Pangs We're Experiencing A Letter To The Inhabitants Of The Future Dystopia Whose Birth Pangs We're Experiencing

Authored by James Corbett via,

“The lamps are going out all over Europe, we shall not see them lit again in our life-time.”

- WWI conspirator Edward Grey

I do not write these words for my contemporaries. We are the damned. It is our lot now to watch as the lamp of liberty is extinguished, our burden to bear witness to the final flickering of the flame of freedom.

No, I don’t write these words for my peers; I write them for those yet to come. The inhabitants of that future dystopia whose birth pangs we are experiencing. The remnant of once-free humanity who might - through some miracle I can’t even imagine—come across this electronic message in a bottle.

I know that it’s almost hopeless. That the chance of these words surviving the coming internet purge are slim at best. That even if—against all odds—this message does wash up on your digital shores, that the chance of these words being understood by you is even slimmer. Not because you don’t understand English, but because you no longer use these words I’m writing: Freedom. Humanity. Individual.

Still, I am here to record the end of an era. So I will press on in the hope against hope that someone, somewhere in that future Digital Dark Age will have eyes to see and ears to hear.

The darkness is descending.

Let there be no mistake: We all know this.

It means that the Corona World Order has arrived.

Some are suggesting that the current crisis is the end of globalization, or that it will wipe out the New World Order altogether... but they are wrong.

In fact, this crisis is the globalists’ dream, and what we are witnessing is the birth of a totalitarian control grid the likes of which could scarcely have been imagined before this pandemic panic kicked off.

Welcome to the Corona World Order.

Oh, sure, some still deny it. But they are only fooling themselves. They’re afraid to admit that it’s true. Many are still under the old conditioning that told them to bleat “conspiracy theorist” at anyone questioning authority.

We have a name for that kind: “sheep.” Or, sometimes, “sheeple.” The masses in our day are kept in the pen by the jackbooted sheepdogs of the police state and led along by the political puppets who act as their shepherds. Occasionally a wise old-timer in the flock cottons on to the game, but the shepherd has only ever fleeced the flock before, so he resigns himself to his fate. Why struggle? It’s mostly painless.

Never did the sheeple suspect that some day the shepherds would lead them to the slaughter.

It is a term of derision, of course. “Sheeple.” But I like to think that it doesn’t just speak to our stupidity. It speaks to a naivety, an innocence. We are trusting and gentle creatures by nature. Peaceable. Cooperative. That is nothing to be scorned. If it weren’t for the predators in our midst, our failings could even be counted as virtues.

But I am not here to say that. I am here to say this: Resist! Struggle! Fight!

You are not cogs in a machine, despite what the shepherds of your day may be telling you. You are free and beautiful human beings. You are not born under the authority of another. You choose how you live your life, not some bureaucrat, not some police robot, not some “immunity checkpoint” algorithm or QR code.

You do not need permission to buy or to sell or to assemble or to speak your mind or to leave your house. You are not an “asymptomatic carrier” of whatever virus your misleaders are telling you to be afraid of. You do not have to shelter in place because someone in a white lab coat told you to.

I want you to understand that, once upon a time, the government didn’t have the right to know where you were, who you were meeting with, what you were buying and what you were doing 24/7. Hell, the government didn’t even have the ability to do that.

I need you to know that there was a time when you could leave your house when you wanted. Travel where you wanted. Buy and sell as you saw fit. Meet your neighbors. Rally. Protest. Party.

Live. As free human beings are meant to live.

Oh, what am I saying? These words. This language. It makes no sense to you anymore, does it? These concepts don’t exist in your time, do they?

You go where you are told to go. You stay home when you are told to stay home. You shut up when you are told to shut up. You think what you are told to think.

I can’t blame you, after all. You’re trusting and naive and peaceful. Like a sheep.

But oh how I weep for what you have become. I tried to avert it. Please believe me. I really tried.

But the lamp of liberty is being extinguished. And I am bearing witness.

I don’t know if history is something you study anymore, but UK Foreign Secretary “Sir” Edward Grey made his observation about the lamps “going out all over Europe” at the end of the so-called “Twelve Days,” the period during the summer of 1914 in which the mainstream history books tell us that the British government was trying to avoid a World War. We are asked to believe that this prescient remark proved Grey to be a sage diplomat, wracked with grief over the pain and suffering that was about to be unleashed upon the world.

But this is history-by-the-winners of the worst kind. In truth, Grey was himself one of the conspirators that was actively working to bring the First World War about. What’s more, the source of this quotation is in fact Grey himself; it was first recorded in Grey’s own post-war memoir. Any tears shed by Grey over the extinguishing of those lamps were crocodile tears, to be sure.

One can well imagine that we will be told some years hence that Bill Gates made a similarly portentous remark at the onset of this corona crisis. Gazing out the window of his $147.5 million dollar, 66,000 square foot “Xanada 2.0” mansion at the then-epicenter of the US outbreak in Washington State, Gates’ post-coronavirus memoir will no doubt tell us that he remarked to an underling that “The lights are going out all across the globe, we shall not see them lit again in our lifetime.”

But his memoir will no doubt fail to inform us that he was smirking as he said it.

To my children, or my children’s children, or whatever remnant of once-free humanity happens to unearth these words in that God-forsaken future we are goose-stepping into: I’m sorry. I failed you. We all failed you.

But remember this: As long as the blood of your forebears flow through your veins, the lamp of human freedom shall not be extinguished forever.

Let it shine, dear sheep. Let it shine.

Tyler Durden Tue, 04/14/2020 - 16:20
Published:4/14/2020 3:23:43 PM
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[Markets] What To Look For In Bank Earnings: All Eyes On Loan Losses What To Look For In Bank Earnings: All Eyes On Loan Losses

Tomorrow JPMorgan and Wells Fargo will usher in a historic earnings cycle, one which will see S&P500 earnings plunge the most since the (first) financial crisis...

... which in turn is a walk in the park compared to the -30% EPS crash expected in Q2...

... and unlike prior quarters, nobody will care about bank FICC revenues or Net Interest Income. Instead investors will care about only one thing: how much money will U.S. banks lose on loans because of the coronavirus recession.

JPMorgan will kick it off tomorrow morning ahead of the bell, and investors will closely watch comments from CEO Jamie Dimon, especially after his recent ominous investor letter in which he warned that what is coming will "at a minimum include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008", in his first earnings call since suffering a heart attack. Wells Fargo reports right after and then Bank of America, Goldman Sachs and Citigroup all follow on Wednesday.

And, as noted above, instead of the income statement - where any Q1 gains are expected to be a wash compared to the massive damage suffered across bank balance sheets - investors will seek answers on just how bad the recession will be, include provisions and net charge-offs, the effects of accounting rule shifts known as CECL, or Current Expected Credit Loss, and banks’ capital return plans, particularly regarding dividends as well as when stock buybacks may return.

To be sure, Wall Street estimates have changed dramatically from a month ago, when analysts called for big bank earnings per share to rise in the first quarter from a year earlier by an average of 2%. Now they see declines ranging from 14% to 42%.

That, as Reuters notes, is not just because the impact of the global pandemic is changing and hard to quantify, but also because of a new accounting standard that requires banks to estimate losses for the lifetime of loans and set aside money now to cover them. Those estimates have to be justified to regulators and auditors, and be credible to investors. But they ultimately rely on judgment: a pessimistic management team could decide to take much bigger provisions than optimistic peers at a rival bank, even if they have similar loan books.

To show the difficulty in guessing how that might play out, UBS analysts created a table showing two outcomes for earnings per share: one with usual loss reserves, and another that was about one-third lower, based on their assumptions about the new rule.

"And, the truth is we’re probably going to be very wrong,” lead analyst Saul Martinez said in an interview. “The risk is that it is higher."

“The first quarter is the history, the second quarter the mystery,” said Bloomberg Intelligence analyst Alison Williams.

Investors may prioritize setting “some kind of level for provisions versus stress-tested losses,” while assessing how much customers have drawn down commercial and industrial loans, and how much of soaring delinquencies may turn into realized losses, she said. Capital markets may be strong, Williams added, but “much of that is fueled by trends through mid-February.” Dimon’s remarks will be important even as his recent annual letter offered a “bit of a preview,” Williams said.

Last week, Goldman analysts cut their estimates for big banks for all of 2020 by 40% this week, all due to additional loan-loss provisions. Other issues affecting earnings essentially cancel each other out, they said.

While the uncertainty about bank results also reflects uncertainty about the coronavirus, the new accounting standard add another layer of mystery for banks. Although they have more insight about the financial stress of their borrowers, and therefore more insight about the economy, they do not have a crystal ball about the coronavirus.

This puts bank executives in a pedestal reserved traditionally for central bankers: they will have to be mindful that they could send shockwaves through markets if investors believe they are predicting a protracted and horrid recession, or alternatively, are being blaze and not taking the risks seriously enough.

“It is going to be a tricky balancing act,” said Martinez.

Analysts will also be eager to ask bank executives about assumptions they used for the new accounting standard, known as CECL, for Current Expected Credit Losses, and pronounced like the name Cecil. It has been in the works for a decade but only recently started being implemented.

Across the board, investors will probably “look through first-quarter earnings and focus on credit quality, the second true-up of the CECL loan loss reserves and net interest margin compression,” RBC analyst Gerard Cassidy said via email. Bank stocks have “certainly discounted the expected decline in earnings in 2020,” Cassidy said. Now, investors want to be reassured that "this downturn for the banks will only be an earnings issue and not a balance sheet issue similar to the 2008-2009 financial crisis."

Addressing the CECL issue, Morgan Stanley analyst Betsy Graseck writes that she is baking in a 6-31% increase in reserves from "day 2" CECL estimates in 1Q20. As a reminder, CECL (Current Expected Credit Loss) is the new accounting standard for loan loss reserves which requires life of loan reserving estimates. CECL kicked off January 1, 2020, and will require management teams to estimate life of loan losses for their loan books as of March 31.

While Day 1 CECL estimates are known, the biggest question from investors going into the 1Q20 print likely is: how big will Day 2 reserve build be? Given the uncertainty of the virus trajectory and length of “stay-at-home” directives, street estimates for day 2 CECL charges are very wide.

Morgan Stanley bases its CECL Day 2 estimates on a 10% probability of the most severe stress test that the banks have ever done, the 2018 stress test. This drives a 6-31% increase in reserves across the bank's coverage, takes up reserve / loan ratios by a median 17bps, and takes down 1Q20 EPS by about ~1/3. That said, banks may well opt for a higher charge, especially if they are looking for a slower economic recovery than we are.

At the macro level, analysts will want to know how high bankers expect unemployment to go, how that will affect consumer loan delinquencies, and how much exposure they have to oil companies and sectors that have seen business vanish, like airlines, hotels and restaurants. And they will also inquire about how effective government stimulus programs have been, and why so many banks have been leery of participating in the PPP small business rescue program.

Spending by the Federal Reserve and Treasury Department could keep loan losses from being as high as in prior recessions, said Wells Fargo bank analyst Mike Mayo. He described the first quarter as the most difficult one to predict since the peak of the global financial crisis in late-2008.

“You have the biggest accounting change to impact loan loss reserving coming in the quarter that needs the biggest change in loan loss reserves,” he said.

The three most important things to watch for with bank earnings will be “credit, credit and credit,” Mayo told Bloomberg last week in a phone interview. “Investors want to know about impacts to industries,” including credit draw-downs, losses and provisions. They’ll also want to hear about the degree of relief banks are offering borrowers, particularly regarding small business lending and mortgage forbearance, he said.

“The only line items bank investors will care about this season are the ones pertaining to credit,” with provisions and net charge-offs determining how bank stocks will trade, Vital Knowledge founder Adam Crisafulli wrote in a note. Commentary about capital return will also be key, he said, as “investors assume buybacks will be resumed in the second half (they’ve been voluntarily suspended until the end of June) while dividends continue.”

Comparing results with expectations will be particularly challenging this quarter, Cassidy said, as analysts and investors alike will be “in the dark” on first-quarter and full-year earnings estimates, due to the difficulties in assessing the collapse in the U.S. economy from containing Covid-19 and the impacts from CECL.

“Missing first-quarter EPS estimates by 20%-30% is not likely to be a big deal but posting a meaningful bottom line loss due to a significant increase in the loan loss provision would be a cause for concern,” Cassidy said.

Going back to the banks reporting tomorrow, JPMorgan is likely to “once again weather the storm better than peers given its diversified franchise and risk management prowess,” Barclays analyst Jason Goldberg wrote in a note.

Relative to the prior quarter, Goldberg expects a larger balance sheet, driven by draw-downs and deposit growth; lower net interest rate margin, or NIM; seasonally higher fee income from trading; greater costs and a higher loan loss provision, along with more mortgage volume. In credit cards, he sees continued year-over-year growth, but also reserve build. Other key factors Goldberg will watch include Dimon’s health, the outlook for trading and expenses, and strategies for consumer branches and credit cards.

One final point: heading into earnings, JPMorgan quietly announced it would "temporarily" halt the issuance of new loans and would substantially hike its mortgage lending standards - minimum FICO score of 700, minimum down payment to 20% - for one simple reason: to limit exposure to the coming default wave that will cripple small and medium business and devastate household income for quarters to come. Anything that Dimon says to twist that JPM is hunkering down ahead of what Bloomberg called the "Biggest Wave Of Defaults In History" will be nothing more than self-serving spin.

Tyler Durden Mon, 04/13/2020 - 23:45
Published:4/13/2020 10:49:14 PM
[Markets] Coronavirus Socialism: Power To 'Some' People Coronavirus Socialism: Power To 'Some' People

Authored by Patrick Watson via,

When (hopefully soon) we all get out of coronavirus lockdown and try to resume normal life, we will probably find a different “normal.”

The best-case outcome: scientists discover a “magic bullet” treatment that quickly restores the most serious cases to health. We could then ease restrictions and get on with business.

But more likely, any such treatment is months away and a vaccine probably a year away, so many precautions will have to stay in place. We won’t see large gatherings and crowded restaurants anytime soon.

But we’ll see something else: a radically different economic structure.

The US has never been truly “capitalist” but at least it had a free market façade. Thanks to the coronavirus, the façade is now crumbling.

We will come out of this further from capitalism and closer to socialism. We know this because a leading capitalist said so.

Photo: Needpix

Shoved Left

Back in January, about the time Chinese authorities quarantined Wuhan, the world’s billionaires gathered in Davos, Switzerland, as they do each year.

CNBC interviewed JPMorgan Chase (JPM) CEO Jamie Dimon on January 22. Asked about the Democratic presidential candidates, Dimon said he preferred a moderate, not a socialist. He went on:

Capitalism is the greatest thing that ever happened to mankind. I think that people who haven’t read history books about socialism really should… Once you have governments taking control of businesses it ends up in corruption…

If you’re talking about governments controlling corporations that’s socialism. You can do it in a small way or a big way. The small way is to put a commissar on your board remember the old Russian commissars could sit in the room or do it through regulatory or stuff like that the other way is that they actually own the company. Look at all the other countries and they start to take over the oil companies and the steel companies and utility companies.

And the banks. The banks start making loans not to good companies not because they are properly allocating capital to its highest and best use but to keep that factory open. The bridge to nowhere to make sure the mayor doesn’t lose jobs in his town and once you do that you will have an eroding society. (full transcript)

As I wrote at the time (see Socialism Is Coming But Not the Way You Think), Dimon actually loves misallocating capital. His bank routinely makes “bridge to nowhere” loans and does so happily as long as it gets repaid with interest.

So if those activities define socialism, Jamie Dimon is a very confused billionaire. He professes to love capitalism, but his actions say otherwise.

My point back then was that the US-China “Phase 1” trade deal was nudging the US toward some kind of socialism. I didn’t expect the coronavirus would soon shove us that same direction. Yet it is.

Photo: Flickr

Collectivized Production

Two months after Jamie Dimon said socialism doesn’t work because governments can’t properly allocate capital, Congress allocated $2.2 trillion via the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Note, left-leaning Democrats didn’t do this alone. The bill was as bipartisan as it gets.

The CARES Act does some useful things. It will help workers and small businesses who had to close down to stop the virus from spreading.

But that’s not all. The new law gives the Treasury Department $454 billion to invest in a “special purpose vehicle” jointly with the Federal Reserve. The Fed will then allocate (or perhaps misallocate, to use Dimon’s favorite word) that money in loans to private businesses.

But in fact, it’s way more than $454 billion. Here’s how two economists described the arrangement in a Wall Street Journal article (my emphasis in bold).

The expectation is that the central bank will leverage this money 10 to 1, enabling it to lend up to $4.54 trillion to companies.

That sum is more than all U.S. commercial and industrial loans outstanding at the end of 2019 ($2.35 trillion) plus all the new corporate bonds issued during 2019 ($1.41 trillion).

Thus, if this capital is all deployed by the Fed, and at rates that will surely crowd out private capital, all capital allocation in the U.S. in 2020 will be done by the Federal Reserve System, not by the capital market. This is the largest step toward a centrally planned economy the U.S. has ever taken.

Will the Treasury-Fed partnership wisely allocate this money? We don’t know yet, but the plan is exactly what Jamie Dimon says won’t work. Quoting him again:

…The banks start making loans not to good companies not because they are properly allocating capital to its highest and best use but to keep that factory open. The bridge to nowhere to make sure the mayor doesn’t lose jobs in his town.

Keeping factories open and avoiding job losses is the CARES Act’s entire point, and government, not private lenders, will decide how to do it.

Maybe this centrally-planned financing will find the “highest and best use” Dimon thinks it should, but we don’t know that yet. We do know that private companies will get money from taxpayers, and taxpayers will bear the loss if those companies don’t repay it. The government might get equity in those companies, too.

In other words, we are (for now, at least) collectivizing the means of production. Mao Zedong would be pleased.

Photo: Flickr

Power to Some People

If, like Jamie Dimon, you fear socialist misallocation, Bernie Sanders should be the least of your worries. It’s already happening on a massive scale and President Trump, not Sanders, signed the bill.

We were heading that direction anyway; the coronavirus sped up the process. And where it will lead isn’t clear yet. But it won’t be anything you can plausibly call “capitalism.”

More likely, we will get even more state-enforced corporatism, with socialized losses and privatized profits.

Tyler Durden Mon, 04/13/2020 - 22:16
Published:4/13/2020 9:21:24 PM
[Markets] Caitlin Johnstone Rages "This Absolute Bullshit Would Not Be Possible Without Propaganda" Caitlin Johnstone Rages "This Absolute Bullshit Would Not Be Possible Without Propaganda"

Authored by Caitlin Johnstone via,

So as of right now it’s Trump versus Biden. An incompetent plutocrat president selling himself as an anti-establishment people’s champion while simultaneously advancing garden variety Republican sociopathy, versus a warmongering authoritarian who is too demented to string a coherent sentence together and who is looking more and more credibly to be a rapist.

Needless to say, this is absolute bullshit.

How did we get here? How did we get to the point where the electoral contest to run the most powerful government on the planet is between a racist demented right-wing authoritarian warmongering rapist and another racist demented right-wing authoritarian warmongering rapist? How in the hell did this bullshit happen?

There are a number of factors, including anonymous and unsubstantiated “leaks” from the US intelligence community regarding Russian support for the Bernie Sanders campaign and a shockingly coordinated maneuver by Democratic Party leadership (including former president Obama) to sabotage Sanders in the late hours before Super Tuesday.

But the primary factor by far was domestic mass media propaganda. Propaganda during the primary season of course, with the billionaire press showing a very clear and undeniable bias against Bernie Sanders from the very beginning of the race. Had the Sanders campaign received a normal quality and quantity of mass media coverage for a candidate of his stature, he would doubtless have received far more support than he did. To deny that biased media messaging has an effect would be the same as denying that advertising, a trillion-dollar industry, has an effect.

But it goes so very much deeper than that. The influence of mass media propaganda upon the Democratic primary race was not limited to the propaganda that was employed during the actual contest; it’s been setting the foundation for it since long before that.

Without having been raised in a media environment that is saturated with establishment propaganda, it would never occur to anyone in a million years to describe a violent authoritarian extremist like Joe Biden as a “moderate”. It would never occur to anyone to think of this crazy wingnut as “electable”. It would certainly never occur to anyone that he should be running on the platform of what passes for America’s political left wing.

Joe Biden has been a horrible, evil politician since long before his rape allegations went mainstream and his brain started turning to porridge. If people could gaze with fresh, unmanipulated eyes upon someone who’s dedicated his entire political career to neoliberal exploitation at home and neoconservative mass murder abroad, someone who openly boasts about authoring the foundational documents of the USA PATRIOT Act, someone who promises rich donors that “nothing fundamentally will change” if he’s elected and who they know from experience can be taken at his word, it would never occur to them that this is someone who should be running for any elected office anywhere, let along within spitting distance of the most powerful one in the world.

It is only by the ability of the mass media to manufacture the illusion of normality that this bullshit has been made possible. The way the plutocratic class controls the mass media has given them the ability to persuade people to believe that freakish extremism is normal and healthy objections to oligarchic malfeasance is freakish extremism.

This is the case not just with this bullshit US presidential race, but with all bullshit everywhere. A world where powerful governments attack, destroy, starve and undermine weaker governments which refuse to bow to their interests, a world where the wealthy continue to steal more and more wealth from an increasingly impoverished working class and use the leverage that wealth gets them to steal more, a world where governments demand more and more opacity for themselves and more and more transparency from ordinary people, a world where police are becoming increasingly militarized and speech is becoming increasingly restricted, a world where the response to a global pandemic is not to rally together and overcome but to advance pre-existing authoritarian agendas and manufacture support for new cold war escalations against China.

None of this bullshit would have been possible without all of us having been raised in an atmosphere of mass-scale obfuscation and manipulation. None of us would ever accept such a world without having been manipulated into it, which is why they have done exactly that.

We will not collectively use the power of our numbers to force a change to this oppressive status quo until we can find some way to break free of our psychic bondage to the establishment propaganda machine, and we will not find a way to do that until we change something deep within ourselves about our relationship as a species to mental narrative. But as things get increasingly weird and unpredictable, gaps will open up in our preexisting patterns. When patterns degrade to the point of unpredictability, anything becomes possible.

We are at an adapt-or-die point as a species, and we’ll need to break free of the bullshit to make the jump. Hell, we just might make it.

*  *  *

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

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Tyler Durden Mon, 04/13/2020 - 21:25
Published:4/13/2020 8:45:30 PM
[Markets] This Is The 'Supercut' Video President Trump Just Played In The White House Press Briefing This Is The 'Supercut' Video President Trump Just Played In The White House Press Briefing

This is the controversial 'supercut' of media talking heads and journalists criticizing President Trump that was just played in his Monday night press briefing, which turned out to be one for the history books.

Reporters in the room immediately tried to get Trump to admit he used White House resources to finance what they - not Trump - described as a 'campaign' video. This led to Trump jousting with CBS's Paula Reid in a debate that ranks among one of the most memorable of Trump's first term.

Trump explained that the montage was simply thrown together quick by a couple of White House staffers, who have hundreds more clips - even better clips, in some cases - that they could have used, Trump said.

Tyler Durden Mon, 04/13/2020 - 18:45
Published:4/13/2020 5:54:57 PM
[Markets] The Road To Perdition Is Paved With Evil Intentions, Part 1: The Fed's Pimping Of Asset Bubbles Exposed The Road To Perdition Is Paved With Evil Intentions, Part 1: The Fed's Pimping Of Asset Bubbles Exposed

Authored by Jim Quinn via The Burning Platform,

“Suckers think that you cure greed with money, addiction with substances, expert problems with experts, banking with bankers, economics with economists, and debt crises with debt spending”

- Nassim Nicholas Taleb, The Bed of Procrustes: Philosophical and Practical Aphorisms

“Globalization has created this interlocking fragility. At no time in the history of the universe has the cancellation of a Christmas order in New York meant layoffs in China.”

– Nassim Nicholas Taleb

As we continue our national lockdown suicide cult to hell, I find myself getting angrier and angrier at the pathetic leadership displayed by politicians, government bureaucrats, so called medical “experts”, and intellectual yet idiot academics displaying their ignorance of facts, reality, history, and humanity. My nature is to be skeptical of everything I read or am told.

I most certainly disregard everything communicated to me by politicians, world leaders, central bankers, corporate CEOs, CNBC talking heads, the mainstream corporate fake news media, and lately – self-proclaimed medical experts who have distinguished themselves by not seeing the danger coming, downplaying the danger, not being prepared for the danger, incompetently handling the danger and righteously proclaiming the nation had to be brought to a full stop because their terribly flawed models said so.

That leaves very few people to trust. I’m not a financial expert. I’m not a political expert. I’m not a religious expert. I’m not a medical expert. But I do know how to think critically and question the basis of every narrative being spun in the world today. I do trust the intentions and intelligence of a number of clear eyed truthful writers, thinkers, investors, commentators and bloggers that include: Nassim Taleb, Ron Paul, Kyle Bass, Chris Martenson, John Hussman, Jim Kunstler, John Mauldin, Jim Grant, Tucker Carlson, Dave Collum, Mike Kreiger, Lew Rockwell, Glenn Greenwald, Harald Malmgren, along with dozens of other thoughtful honest thinkers.

This is where it gets challenging. Chris Martenson and John Hussman both warned about the seriousness of this coronavirus before anyone began to take it seriously, in early February, when virtually no one was paying attention. They have supported the measures taken by the government to stop the spread of the virus, while many others have condemned the dictatorial implementation of this national lockdown.

I do not understand the either/or nature of the debate. The coronavirus (aka China flu) is a nasty, highly contagious virus that has impacted the entire world. The Chinese covered up the nature and extent of the virus, resulting in a worldwide pandemic. Despite allocating billions to the CDC over the decades, they proved to be incompetent, unprepared and to make up for their disastrous failures they terrified the nation into a complete national shutdown with their apocalyptic death models, which are proving to have overestimated deaths by a factor of 500%.

To make matters worse they blatantly lied to the American people that wearing face masks would not protect them in any way. That lie has resulted in thousands of additional deaths, but we still tout the advice of these proven liars. Media mouthpieces for the Party use NYC and Northern NJ as their illustration of what is happening everywhere, when that is a complete lie.

These two areas have 46% of the confirmed cases and more than half the deaths, but make up only 9% of the nation’s population. That means in the other 48 states less than 0.1% of their population has a confirmed case. And for that our so-called leaders shut down the country and purposely manufactured a 2nd Great Depression.

The scare tactic death total was 2.2 million if we did nothing. In their own “expert” narrative, if we followed all social distancing protocols perfectly, the death toll would be 110,000 to 220,000. The country hasn’t followed the protocols perfectly and now their worthless models are saying 60,000 deaths – soon to be downgraded to 50,000. These are death figures on par with deaths from the annual flu.

In addition, it seems the number of deaths attributed to flu and pneumonia have been far lower than previous years, since the onset of the Chinese coronavirus. Considering instructions from the CDC to use coronavirus as the cause of death no matter what pre-condition or other disease the person had, it is highly likely the number of deaths attributed to coronavirus are being overstated on purpose, to support the narrative of leaders who overreacted and destroyed our economy.

At first, I didn’t think this virus was being used as a cover for a larger hidden crisis, but after observing the disgracefully grotesque actions taken by despotic politicians and gutless puppet central bankers, I’m convinced this manufactured crisis is being used by the corporate fascists to cover up their financial fraud, destroy small businesses, further enslave the plebs in debt, institute martial control, institute digital currency, while electronically tracking our every movement. And the worst part is the majority have gone along with every government mandate like docile sheep being led to slaughter.

America is devolving into a totalitarian state before our very eyes and we obeyingly confine ourselves in our homes watching Netflix, heeding the “expert” dictums of Fauci and Birx as gospel, and waiting for $1,200 to be electronically inserted into our empty bank accounts, as our recompense for losing our jobs and going further into debt to Wall Street banks. As Huxley pointed out almost ninety years ago, we were on a path towards an efficient totalitarian state, and we’ve finally arrived. Are you loving your servitude?

“A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.”

– Aldous Huxley – Brave New World

Whether this virus spread due to bat soup, a military bio-lab in Wuhan, or as a plot by the Deep State, the end result is the same. The financial system was choking on debt from September onward, with the Federal Reserve lackeys desperately resuscitating repos nightly, and frantically undoing the extremely modest tightening they had done in the prior year. The critical thinking financial minds knew something was seriously wrong under the hood of this aging jalopy.

The monetary heroin provided by the feeble minded IYI Powell and his deceitful cronies like Kashkari, was a green light for the Wall Street cabal to buy stocks hand over fist, driving prices and valuations to all-time highs in mid-February. But those in the know bailed out of the markets as the dullards were lured in at the top once again. The ruling class needed a convenient excuse for the inevitable crash and subsequent bailout they would engineer for themselves. Ron Paul, as usual, sees it clearly.

“Even the bad guys are admitting it, and that is they made these dire predictions so that they could go ahead and destroy peoples’ civil liberties and spend a lot of money and make up an excuse on why the stock market actually went down — all kinds of things by having this coronavirus event blown way out of proportion.”

– Ron Paul

I really don’t care how this Chinese virus was released into the world, but I do care about how it has been exploited by authoritarians to gain more control and power over our economy, our pathetic excuse for a free market financial system, surveillance technology, and our daily lives. This is the worst time in history for libertarian minded Austrian economic theory believers, as government is violently repressing our liberties and freedoms, while unelected fascist bankers make a mockery of financial markets by bailing out and enriching their corporate benefactors.

I’ve been suspect of the one-party D.C. establishment since the pre-written, ironically named, Patriot Act was jammed down our throats a month after the 9/11 inducing War on Terror crisis was used to create a surveillance state rivalling Orwell’s worst nightmare. The Wall Street/Federal Reserve created 2008/2009 financial collapse crisis was manipulated by the oligarchs to extract trillions from the American public, while allowing themselves to rig the markets in their favor, and leaving future generations with hundreds of trillions in unpayable debt – ensuring their impoverishment and debt enslavement. The politicians and central bank academics know who butters their bread.

“In poor countries, officials receive explicit bribes; in D.C. they get the sophisticated, implicit, unspoken promise to work for large corporations” 

- Nassim Nicholas Taleb, The Bed of Procrustes: Philosophical and Practical Aphorisms

The infringements and outright destruction of our Constitutionally guaranteed freedoms, along with our ability to earn a living, over the last month, is mind boggling to anyone with a functioning brain. Luckily for the Deep State overlords running this country, decades of public-school indoctrination and tens of thousands of hours of media propaganda drilled into their brains have left the vast majority of the nation dumbed down and infantilized. They need to be told how to think and what to do.

Anyone paraded on the boob tube and proclaimed as an “expert” by the media talking heads is believed by the gullible masses. It doesn’t matter they have been proven incompetent and wrong in everything they have said and done. A crisis built upon fear of the unknown is perfectly suited for the corporate fascists to scare the sheep and herd them into pens, awaiting slaughter, with masks firmly in place.

Here’s what we know for a fact. Fauci and Birx have been government bureaucrats for decades. He has been in charge of preparing the country for infectious diseases since 1984. His organization was completely unprepared, with faulty tests and not taking the situation seriously in February. He lied about the benefits of masks, making him responsible for thousands of deaths. These two civil servants were nameless government bureaucrats two months ago and now they are medical expert superstars, even though their predictions have proven to be complete and utter bullshit.

Now they resort to rewriting history and taking credit for the far lower number of deaths than they declared a certainty two weeks ago. They are both liars and incompetent. In the real world, when we had jobs, they would be fired. But their fear mongering benefited the corporate fascists and banking cabal. They make a few hundred thousand dollars a year in their government jobs today. After this manufactured crisis ends, with the oligarchy richer and more powerful than ever, these tools will be richly rewarded with lucrative books deals, highly paid Board positions with drug companies, and paid $200,000 per speech, to executives of Wall Street banks. Ask Bernanke and Yellen about their lucrative lives after doing the bidding of the ruling elite.

“Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions.”

- Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

“The simpler, the better. Complications lead to multiplicative chains of unanticipated effects.”

- Nassim Nicholas Taleb, Antifragile: Things That Gain From Disorder

The combination of bureaucrats, who suffer no consequences for being unprepared, slow to react, incompetent, and consistently wrong in predicting the future, with politicians and central bankers who overreact by throwing trillions of dollars into a bottomless pit of corruption, fraud and recklessness, has caused and will cause unintended consequences that will bring the entire edifice of embezzlement crashing down. Just as the 300-page Patriot Act was sitting in a drawer waiting for the right crisis to come along, the 800-page, again ironically named, $2.2 trillion CARES Act was already written by corporate lobbyists waiting for the next crisis.

It’s a potpourri of mega-corporation goodies and bailouts for terribly run companies who spent the last decade wasting trillions of dollars buying back their stock with cheap debt provided by the Fed. The crumbs for the little people and dying small businesses is being distributed in a sloth-like manner, while the corporate and banking pigs have been gorging themselves at the government/ Fed trough for a month.

The $1,200 pittance per taxpayer and $600 unemployment supplement have yet to be disbursed, as 17 million Americans were thrown out of work by government mandate in the last three weeks. Small businesses have been taken out into a dirt field and shot in the back of the head by government bureaucrats. As usual, the SBA loan scheme has been a complete mess, with the Wall Street banks balking until they got a bigger slice of the pie and the government computer system crashing.

Filing for unemployment claims has been a torturous ordeal, as state computer systems are decades old and can’t handle the volume. But the little guy need not worry. They can keep running up their credit card balance, paying the 20% interest to JP Morgan, while Jamie Dimon and his fellow robber barons borrow at 0.25% from the Fed and sell their worthless junk bonds to Jerome and his minions for full value. It’s good to be kings of the world.

Charles Hugh Smith captures the essence of the greatest scam in the history of the world, as the Federal Reserve has gone all in, desperately attempting to delay the inevitable financial collapse of their debt ponzi scheme, so their Wall Street puppeteers can abscond with a few trillion more before pulling the plug:

That the Fed’s pimping of asset bubbles and liquidity has created the greatest wealth inequality in a century is ignored by the self-serving, tone-deaf political/financial “leadership” because the wealth asymmetry has greatly enriched the “leaders,” their cronies and the army of technocrat flunkies who do all the real work to keep the rackets functioning. All this wealth wasn’t earned via the creation of value; it was skimmed / embezzled from the bottom 95% via high costs, junk fees, penalties, interest rates and taxes, all set by monopolies and cartels unburdened by competition, accountability or transparency.”

Anyone with a few brain cells can see the desperation of these acts, as these academics, who have never worked a day in the real world, only know how to do one thing – throw more debt at every bubble they created by throwing debt at the previous bubble they created.

The Federal Reserve has destroyed our financial markets, eliminated price discovery, rewarded the most reckless scumbags with bailouts, sold their black souls to propping up the stock market, crushed the savings of senior citizens, and have pushed income inequality to such extreme levels, they have ensured the hangry citizens of this country will eventually be coming for them with pitchforks and torches. Lampposts will be decorated with the carcasses of bankers once this financial scam implodes in a spectacular final liquidation.

In Part 2 of this article I will reflect on the absurdity of this national lockdown and ponder when this farce will end in a violent upheaval blowback in the faces of the globalists.

*  *  *
The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation.

Tyler Durden Mon, 04/13/2020 - 18:05
Published:4/13/2020 5:18:01 PM
[Markets] There's No Going Back Now There's No Going Back Now

Authored by Charles Hugh Smith via OfTwoMinds blog,

What I see is a global collapse of intangible capital that is invisible to most people.

It's only natural that the conventional expectation is a return to the pre-pandemic world is just a matter of time. Whether it's three months or six months or 18 months, "the good old days" will return just as if we turned back the clock.

I think the situation is much more akin to being injured. Since I worked for decades in construction, I've had numerous potentially serious injuries, including slipping off roofs, being perched on ladders that fell, my finger sliced open by a steel stud, high winds peeling a heavy sheet of plywood off a stack and sending it flying into me, etc.

Immediately after impact, your first instinct is to assess how badly you're injured. Of course we all hope we're not seriously hurt, but the initial adrenaline-fueled relief can be misleading: we might have suffered internal injuries that we can't feel.

That's the global situation: we want to assure ourselves the injury is minor and we'll be back on our feet in no time, but I think the financial-economic injuries are severe and to some branches of global capital and labor, fatal.

Those in power around the world crave one thing above all else: control. If you can't control the situation and key assets, then what good is your supposed power? If you can't control the situation and key assets, your power is illusory.

Those in power cannot completely control the forces unleashed by the pandemic. The tide has turned, and everyone trying to return their corner of the world to its pre-pandemic conditions is swimming against the tide--or shoveling sand against the tide, if you prefer that analogy. In either case, they will exhaust themselves and the tide will continue on, regardless of their titanic efforts to print money and maintain control of their populaces.

In my recent book, Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World, I focused on intangible capital, which includes all the forms of capital that cannot be commoditized and purchased for cash like goods and services. Intangible capital includes social capital, social stability, a diverse, resilient local economy and control of one's own capital.

What I see is a global collapse of intangible capital that is invisible to most people. This includes confidence, trust in institutions and a complacent sense that the tide is carrying us all to greater prosperity.

The tide has reversed, and the key dynamics are income, net worth and costs. As I explained in The New (Forced) Frugality (March 28, 2020), incomes are falling and will continue to fall. Since income is the foundation of asset valuations, asset values will also fall. This will reverse the "wealth effect" that supported the enormous increases in spending and borrowing globally.

When our net worth is rising, we feel wealthier and are more likely to borrow and spend more, confident that our rising wealth will support the debt and higher expenditures. When our assets are declining in value, we feel poorer and are less likely to borrow and spend.

Income is fragile and prone to instant decay, while costs are extremely resistant to declines.

Consider stock valuations: the core driver is profit, which is revenues minus costs. As revenues drop and costs rise, profits vanish literally overnight. That sudden erosion of profits is global, and it will affect companies previously perceived as bulletproof. Facebook and Google depend on advertising, and with the global economy in free-fall, what's the point in wasting scarce cash on marketing? Essentially no one needs a $1,000 iPhone or a $40,000 Tesla. Aspirational spending is as fragile as income.

Consider real estate: commercial real estate is based on the income generated by enterprises renting space. If businesses fold or stop paying rent, the value of the property falls accordingly.

Even residential real estate is intimately connected to income: as household incomes plummet, the number of potential buyers plummets, too. Institutional buyers of houses base the value on rental income, just like commercial property. As household income plummets, fewer people can afford sky-high rents, and so supply exceeds demand and rents will fall accordingly.

Consider bonds: the value of any bond, government or corporate, is based on the yield paid to the owner. While the general expectation is that yields will fall to zero because central banks are buying bonds, this may be less of a guarantee than generally assumed. The volume of bonds being issued may well exceed central bank buying, and yields (and interest rates) will rise despite central bank intervention.

The world depends on expanding debt to pay for government services and private-sector spending. Debt is also dependent on income; lenders who issue loans to households and enterprises with faltering income are very likely to lose money as these marginal borrowers default.

As income falls, lending dries up, as lenders cannot afford to risk making loans to people and businesses that are practically guaranteed to default. This is especially true for borrowers who are already burdened by existing debts.

As incomes decline, asset values decline and borrowing dries up. Once borrowing dries up, spending dries up, and enterprises and governments must cut payrolls by any means available: don't replace retiring employees, cut wages and benefits, and eliminate overtime and bonuses.

As stock values fall, so do the value of employee stock options--another example of the reverse wealth effect.

Meanwhile, costs will continue rising as cash-strapped governments eventually seek more tax revenues and supply-chain shocks lead to higher prices.

We cannot go back to the pre-pandemic side of the river of time, and it's dangerous to focus on returning to a time that has already been lost. We cannot go back, we can only go forward.

*  *  *

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Tyler Durden Mon, 04/13/2020 - 11:40
Published:4/13/2020 10:46:21 AM
[Markets] 9/11 Truth: Under Lockdown For Nearly Two Decades 9/11 Truth: Under Lockdown For Nearly Two Decades

Authored by Max Parry via The Unz Review,

“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary” 

- H.L. Mencken

As the global pandemic grips world attention, completely unnoticed by mainstream media was the release of a final report of an academic study pertaining to another previously calamitous event of international significance.

On March 25th, the conclusion of a four year investigation by researchers at the University of Alaska Fairbanks was published which determined that the collapse of World Trade Center Building 7 on September 11th, 2001 was not caused by fire. The peer-reviewed inquiry was funded by Architects & Engineers for 9/11 Truth, a nonprofit organization composed of more than 3,000 building architects and engineers who are a signatory to the group’s formal appeal calling for a new investigation into the three — not two — WTC skyscrapers destroyed on 9/11. The researchers infer that the collapse of Building 7 was actually the result of a controlled demolition:

“The principal conclusion of our study is that fire did not cause the collapse of WTC 7 on 9/11, contrary to the conclusions of NIST (National Institute of Standards and Technology) and private engineering firms that studied the collapse. The secondary conclusion of our study is that the collapse of WTC 7 was a global failure involving the near-simultaneous failure of every column in the building.”

With or without a pandemic, it is likely corporate media would have ignored the study anyway, just as they have anything that contradicts the official story of 9/11. However, it is notable that many have drawn parallels between the COVID-19 outbreak and the 9/11 attacks based on the widespread changes to daily life as a result of the crisis going forward. Already there is talk of nationwide lockdowns as a “new normal” with many rightly expressing concerns over civil liberties, press freedoms, the surveillance state, and other issues just as there were following 9/11. By the same measure, a false dichotomy is being established by political gatekeepers in order to silence those who dare challenge the official account as to how the coronavirus began. It is a stigmatization that is all too familiar to those who have never believed the conventional narrative that 19 Arab hijackers loyal to Osama bin Laden armed only with box-cutters were solely responsible for the attacks on the World Trade Center and the Pentagon on that fateful day.

There is a common misconception that to believe in so-called “conspiracy theories” is to somehow lose sight of the bigger picture or systemic problems. Behind this phenomenon is a mistakenly presumed conflict between understanding the broader, overarching system versus the sinister motives of those in power who administer it?—?when they are inextricably linked. Political scientist Michael Parenti, who drew the ire of many of his fellow left-wing colleagues for his work on the Kennedy assassination, refers to it in his lecture “Understanding Deep Politics” as a perceived incompatibility between “the structural and the functional.” The anti-conspiracists wrongly assume that the more impersonal or wider the lens, the more profound an analysis. By this logic, the elite are absolved of conscious intent and deliberate pursuit of nefarious self-interest, as if everything is done by incidental chance or out of incompetence. Not to say efficacy applies without exception, but it has become a required gesture to disassociate oneself from “conspiracies” to maintain credibility?—?ironically even by those who are often the target of such smears themselves.

This applies not only to mainstream media and academics, but even leading progressive figures who have a mechanical, unthinking resistance to assigning intent or recognizing the existence of hidden agendas. As a result, it disappears the class interests of the ruling elite and ultimately assists them in providing cover for their crimes. With the exception of the Kennedy assassination — coincidentally the subject of a new epic chart-topping song by Bob Dylan — nowhere has there been more hostility to ‘conspiracism’ than regarding the events of 9/11. Just as they assailed Parenti, David Talbot and others for challenging the Warren Commission’s ‘lone gunman’ theory, leading figures on the left such as Noam Chomsky and the late Alexander Cockburn railed against the 9/11 Truth movement and today it is often wrongly equated with right-wing politics, an unlikely trajectory given it occurred under an arch-conservative administration but an inevitable result of the pseudo-left’s aversion to “conspiracies.” If polls are any indication, the average American certainly disagrees with such elitist misleaders as to the believability of the sham 9/11 Commission findings, yet another example of how out-of-touch the faux-left is with ordinary people.

A more recent example was an article by left-wing journalist Ben Norton proclaiming that to call 9/11 a false flag or an “inside job” is “fundamentally a right-wing conspiracy”, in complete disregard of the many dedicated truther activists on the left since its inception. Norton insists the 9/11 attacks were simply “blowback”, or an unintended consequence of previous U.S. foreign policy support for the mujahideen in Afghanistan against the Soviets during the 1980s which later gave birth to Al-Qaeda and the Taliban. Norton argues “Al-Qaeda’s unofficial strategic alliance with the US eventually broke down” resulting in 9/11 as retaliation, completely overlooking that Washington was still supporting jihadist factions during the 1990s in Bosnia (two of which would be alleged 9/11 hijackers) and Kosovo in the Yugoslav wars against Serbia, even while the U.S. was ostensibly pursuing bin Laden for the bombings of two U.S. embassies in Africa in 1998 and the USS Cole in 2000.

A 1997 Congressional document by the Republican Policy Committee (RPC) throws light on how Washington never discontinued its practice in Afghanistan of using jihadist proxies to achieve its foreign policy goals in the Balkans. Although it was a partisan GOP attack meant to discredit then-U.S. President Bill Clinton, nevertheless the memo accurately presents how the U.S. had “turned Bosnia into a Militant Islamic Base”:

“In short, the Clinton administration’s policy of facilitating the delivery of arms to the Bosnian Muslims made it the de facto partner of an international network of governments and organizations pursuing their own agenda in Bosnia: the promotion of Islamic revolution in Europe. That network not only involves Iran but Brunei, Malaysia, Pakistan, Saudi Arabia, Sudan (a key ally of Iran), and Turkey, together with front groups supposedly pursuing humanitarian and cultural activities. For example, one such group about which details have come to light is the Third World Relief Agency (TWRA), a Sudan-based, phoney humanitarian organization which has been a major link in the arms pipeline to Bosnia. TWRA is believed to be connected with such fixtures of the Islamic terror network as Sheik Omar Abdel Rahman (the convicted mastermind behind the 1993 World Trade Center bombing) and Osama Bin Laden , a wealthy Saudi émigré believed to bankroll numerous militant groups…”

It was also in Bosnia where a raid was conducted in 2002 by local police at the Sarajevo branch of a Saudi-based purported charitable organization, Benevolence International Foundation, which was discovered to be a front for Al-Qaeda. Seized on the premises was a document, dubbed the “Golden Chain”, which listed the major financial sponsors of the terrorist organization to be numerous Saudi business and government figures, including some of Osama bin Laden’s own brothers. By the 9/11 Commission Report’s own admission, this same fake Islamic charity “supported the Bosnian Muslims in their conflict with Serbia” at the same time as the CIA.

It cannot go without mentioning that the common link between Al-Qaeda and subsequent extremist groups like ISIS/Daesh and Boko Haram is the doctrine of Wahhabism, the puritanical sect of Sunni Islam practiced in the Kingdom of Saudi Arabia and founded in the 18th century by Muhammad ibn Abd al-Wahhab, the religious leader who formed an alliance with the founder of the first Saudi state, Muhammad bin Saud, whose descendants make up the House of Saud royal family. The ultra-orthodox teachings of Wahhabism were initially rejected in the Middle East but reestablished by British colonialism which aligned with the Saud family in order to use their intolerant strain of Islam to undermine the Ottoman empire in a divide-and-conquer strategy. In a speech to the House of Commons in 1921, Winston Churchill admitted the Saudis to be “intolerant, well-armed and bloodthirsty.”

This did not stop the British from supporting the House of Saud so long as it was in the interest of Western imperialism, an unholy alliance which continues to this day. However, U.S.-Saudi relations did come under scrutiny when the infamous 28 redacted pages of the December 2002 report of the “Joint Inquiry into Intelligence Community Activities before and after the Terrorist Attacks of September 11, 2001” conducted by the Senate and House Select Committees on Intelligence were finally disclosed in 2016. The section revealed not only the numerous U.S. intelligence failures in the lead-up to the attacks but the long suspected culpability of Saudi Arabia, whose nationals were not the focus of counterterrorism because of Riyadh’s status as a U.S. ally. The declassified pages show that some of the hijackers, 15 of them Saudi citizens, received financial and logistical support from individuals linked to the Saudi government, which FBI sources believed at least two of which to be Saudi intelligence officers. One of those Saudi agents received large payments from Princess Haifa, the wife of Saudi Prince Bandar bin Sultan, a stipend from the latter’s bank account which inevitably went from the go-betweens to the sleeper cell.

President George W. Bush and Prince Bandar bin Sultan at Bush’s ranch in Crawford, Texas in 2002

A key member of the House of Saud and then-Saudi Ambassador to the U.S., Prince Bandar has such a long and close relationship to the Bush family he was given the nickname “Bandar Bush.” For obvious reasons, when the congressional joint inquiry report was first published in 2003, the 28-page portion on the Saudi ties to the attacks was completely censored at the insistence of the Bush administration. Yet the Bush family’s connection to the Gulf state kingdom is not limited to the ruling monarchy but includes one of the petrodollar theocracy’s other wealthiest families—?the bin Laden family itself. While Michael Moore’s film Fahrenheit 9/11 mostly whitewashed the real conspiracy of 9/11 it did reveal that numerous unquestioned members of the bin Laden family were given special treatment and suspiciously evacuated on secret flights out of the U.S. shortly after the attacks in coordination with the Saudi government.

The Bush-bin Laden connection goes all the way back to the beginning of George W. Bush’s business career prior to his political involvement in 1976 with the founding of an oil drilling company, Arbusto Energy, whose earliest investors included a Texas businessman and fellow reservist in the Texas Air National Guard, James R. Bath, who oddly enough was the American liaison for Salem bin Laden, Osama’s half brother. To put it differently, the bin Laden family and its construction fortune helped finance Bush’s start in the oil industry, a relationship that would continue through the 1990s with Harken Energy, later the recipient of an offshore oil contract in Iraq’s reconstruction alongside Dick Cheney’s Halliburton. The Bush dynasty’s financial ties to both the Saudi royals and bin Laden family went on as co-investors in the Carlyle Group private equity firm where the elder Bush’s previous government service contacts were exploited for financial gain. In fact, on the morning of 9/11, Bush Sr. just happened to be attending a Carlyle business conference where another bin Laden sibling was the guest of honor in what we are supposed to believe is another astounding coincidence. Just days later, Shafiq bin Laden would be spirited off on a chartered flight back to Saudi Arabia in an exodus overseen by Prince Bandar himself.

Osama bin Laden himself also got an evacuation of sorts when the U.S. invaded Afghanistan in 2001. It was legendary Pulitzer Prize-winning journalist Seymour Hersh who first reported that bin Laden and thousands of other Al-Qaeda and Taliban fighters were suspiciously allowed to escape to Pakistan in an evacuation dubbed the ‘airlift of evil.’ This was corroborated in a leaked 2009 Hillary Clinton State Department email published by WikiLeaks regarding a Senate report on the Battle of Tora Bora and bin Laden’s escape where Clinton advisor Sidney Blumenthal is shown discussing the controversial airlift as having been requested by Pakistani President Pervez Musharraf and approved by Secretary of Defense Donald Rumsfeld and Vice President Dick Cheney — but don’t dare call it a conspiracy:

“Gary Berntsen, the head of the CIA armed operation in eastern Afghanistan, is a major source for the report. I am in contact with him and have heard his entire story at length, key parts of which are not in his book, Jawbreaker, or in the Senate report. In particular , the story of the Kunduz airlift of the bulk of key AQ and Taliban leaders, at the request of Musharaff and per order Cheney/Rumsfeld, is absent.”

Could it have anything to do with just a few years earlier the Taliban visiting Texaswhen Bush was Governor to discuss with the Unocal Corporation the construction of a gas pipeline through Afghanistan into Pakistan? It is also well known that the Pakistani government and its Inter-Services Intelligence Agency (ISI) had supported the Taliban for decades and during the 1980s had been the CIA’s main conduit for supplying arms to the Afghan mujahideen, including bin Laden and Ayman al-Zawahiri’s Maktab al-Khidamat, the organizational precursor to Al-Qaeda. As shown in the documentary 9/11: Press for Truth, little in their relations changed in the years between the Afghan-Soviet war and 9/11, as ISI director Mahmud Ahmed was reportedly busted wiring $100,000 to alleged hijacker ringleader Mohamed Atta not long before the WTC attacks. Throughout 2001 both before and after 9/11, General Ahmed had repeatedly visited the U.S. and met with top Pentagon and Bush administration officials, including CIA Director George Tenet, making Prince Bandar not the only figure to have been caught financing the operation and where a direct line can be drawn between the White House and the hijackers.

While Bandar has thus far eluded justice, one year after the release of the 28 pages a lawsuit was filed on behalf of the families of the victims against the government of Saudi Arabia which presented new evidence that two years prior to the attacks in 1999, the Saudi Embassy paid for the flights of two Saudi agents living undercover in the U.S. to fly from Phoenix to Washington “in a dry run for the 9/11 attacks” where they attempted to breach the cockpit and test flight security. This means the Saudi government was likely involved in planning the attacks from the very beginning, in addition to providing the subsidies and patsy hijacker personnel for the smokescreen of blaming Al-Qaeda and making bin Laden the fall guy, whose links to 9/11 are tenuous at best. After all, the “confession” from supposed planner Khalid Sheikh Mohammed was extracted only after his being water-boarded 183 times while bin Laden himself initially denied any role in the attacks before questionable videos were released of his admittance.

The Saudi nationals who participated in the hijacking rehearsal were posing as students. However, the Sunni dictatorship was not the only country conducting a mass espionage operation in the U.S. prior to 9/11 under such a front. In the first half of 2001, several U.S. federal law enforcement agencies documented more than 130 different instances of young Israelis impersonating “art students” while aggressively trying to penetrate the security of various government and military facilities as part of a Mossad spy ring. Several of the Israelis were found to be living in locations within the near vicinity of the hijackers as if they were eavesdropping on them. The discovery of the Israeli operation raised many questions, namely whether Mossad had advanced knowledge or involvement in 9/11. Ironically, Fox News of all places was one of the few outlets to cover the story in a four-part series which never re-aired and was eventually scrubbed from the network website.

The Israeli “art student” mystery never gained traction in the rest of the media, much like another suspicious case in the “Dancing Israelis”, a smaller group of Mossad spies posing as furnishing movers who were arrested in New Jersey on the morning of 9/11 taking celebratory pictures with the twin towers burning in the background of the Manhattan skyline. The five men were not only physically present at the waterfront prior to the first plane impact but found with thousands of dollars in cash, box-cutters, fake passports, and Arab clothing after they were reported for suspicious behavior and intercepted at the Lincoln tunnel heading into Manhattan. Initially misreported as Arabs by the media, the men were connected to Mossad by an FBI database and held for five months before their deportation to Israel while the owner of the front moving company fled to Jerusalem before further questioning. It should be noted that if Israel were to have participated in a ‘false flag’ attack on the U.S., it would not have been the first time. During the Six-Day War in 1967, the Israeli Air Force and Navy launched an unprovoked attack on the USS Liberty, a U.S. Navy spy ship that was surveilling the Arab-Israeli conflict from international waters in the Mediterranean, an “accidental” assault which killed 34 Americans in an attempt to blame Egypt and provoke U.S. intervention.

If Israel turned out to be co-conspirators with the Saudis, it too is not as unlikely a scenario as it may seem. Wrongly assumed to be sworn enemies, it is an open secret that the two British-created states have maintained a historical covert alliance since the end of World War I when the first monarch of the modern Saudi state, King Abdulaziz Ibn Saud, defeated his rival the Sharif of Mecca who opposed the Balfour Declaration. Authored by British Foreign Secretary Lord Balfour and presented to Zionist leader Baron Rothschild, the 1917 letter guaranteed a Jewish homeland in Palestine by colonization with European Jews. Once Sharif was out the way, the Zionist movement had the green light to move forward with its colonial project. Although Ibn Saud publicly opposed Zionism, behind the scenes he negotiated with them through an intermediary in his advisor, British agent St. John Philby, who proposed a £20 million compensation to the Saudi king for delivering Palestine to the Jews.

Ibn Saud communicated his willingness to compromise in a 1940 letter from Philby to Chaim Weizmann, the president of the World Zionist Organization and later the first Israeli president. However, Philby himself was an anti-Zionist and sabotaged the plan by leaking it to other Arab leaders who voiced their vehement opposition and it was only after this exposure that the Saudi king claimed to have turned down the bribe, something the Zionists would only solicit if they thought he would accept. Ever since, the ideologies of Saudi Wahhabism and Israeli Zionism have been center to the West’s destabilization of the Middle East which contrary to misperceptions was not uniquely plagued by conflict historically more than the Occident until the West nurtured Salafism and Zionism. Predictably, discussing either the Saudi or Israeli role in 9/11 has been strictly forbidden in corporate media, since both are among Washington’s geo-strategic allies and each hold immense lobbying power over large media institutions.

Less than five months after 9/11, Bush notoriously declared the nations of Iran, Iraq and North Korea as comprising an “axis of evil” in his 2002 state of the union address. In reality, the phrase is better suited to describe the tripartite of Saudi Arabia, Israel, and the U.S. government itself who are likely the real trio of conspirators behind 9/11. The infamous choice of words were attributed to neoconservative pundit and Bush speechwriter, David Frum, who claimed to have taken inspiration from Franklin D. Roosevelt’s “a date that will live infamy” speech given the day after the Japanese bombing of Pearl Harbor in 1941. It was a continuation of a theme present in the manifesto of the neoconservative cabal authored one year prior to 9/11?—?“Rebuilding America’s Defenses” by the Project for the New American Century (PNAC) think tank, whose members included Dick Cheney, Donald Rumsfeld, Paul Wolfowitz and Jeb Bush. The strategic military blueprint called for a massive increase in U.S. defense spending in order to “fight and decisively win multiple, simultaneous major theatre wars”before ominously predicting:

“The process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event — like a new Pearl Harbor.

Ten members of PNAC would be subsequently appointed to positions in the Bush White House where their vision of a “new Pearl Harbor” conveniently materialized. Then again, there is plenty of evidence that Pearl Harbor itself was a ‘false flag’, or that U.S. intelligence and President Franklin D. Roosevelt had foreknowledge of an impending Japanese attack on the naval base in Oahu, Hawaii, on December 7th, 1941. As pointed out by the film Loose Change, it is probable that Roosevelt allowed it to happen on purpose in order to win public support for a U.S. entry into the European theatre of World War II, a move opposed by a majority of Americans prior to the ‘surprise’ Japanese attack. Given what is known about Pearl Harbor and the abandoned Operation Northwoods, which proposed both fabricating and committing terrorist attacks on civilian aircraft to be pinned on Fidel Castro in order to justify a U.S. invasion of Cuba in 1962, there are no grounds to assume that such false flag operations were ever phased out of military procedure before 9/11 or since.

Loose Change also made a useful historical analogy between 9/11 and the Reichstag fire, the 1933 arson attack on the German parliament building that occurred a month after Adolf Hitler was inaugurated as Chancellor and pinned on a 24-year old half-blind Dutch communist named Marinus van der Lubbe. While there is no denying the incident was used a pretext by the Nazi regime to consolidate power and suspend law and order, there is still a heated debate between historians as to whether van der Lubbe was the real culprit. However, it was coincidentally in 2001 when a group of historians uncovered evidence that a Nazi stormtrooper who died under mysterious circumstances in 1933 had previously confessed to prosecutors that members of Hitler’s Storm Detachment had set fire to the edifice under orders from paramilitary leader Karl Ernst, lending credence to the widely held suspicion that it was a Nazi-engineered ‘false flag’ all along.

Most Americans are unaware that a similar coup d’etat nearly took place during the same year in the United States in an attempt to remove President Franklin D. Roosevelt and install an authoritarian government modeled on Fascist Italy and Nazi Germany as part of a scheme hatched by an inner circle of right-wing bankers otherwise known as the the ‘Business Plot.’ It was a conspiracy that only became public after it was heroically thwarted by a whistleblower in decorated Marine Corps veteran turned anti-imperialist, Major General Smedley Butler, after he was recruited to form the junta. Incredibly, one of the prominent business figures implicated in the putsch was none other than future Connecticut Senator Prescott Bush, George H.W. Bush’s father and George W. Bush’s grandfather, who at the time was the director and shareholder of a bank owned by German industrialist and prominent Nazi financier Fritz Thyssen seized by the U.S. government under the Trading with the Enemy Act.

After his transformation, in 1935 Smedley Butler famously penned War is a Racketand there is perhaps no better phrase that would sum up the so-called ‘War on Terror’ today. Not only did the American Reichstag fire of 9/11 trigger a domestic police state transformation that overrode the U.S. constitution in an American equivalent of the 1933 Enabling Act and the Heimatschutz (“homeland protection”) defense forces with the passing of the USA-Patriot Act and founding of the Department of Homeland Security, but it fulfilled the prophecy of political scientist Samuel Huntington’s The Clash of Civilizations in a face-off between Islam and Christianity abroad. The prediction that religion and culture would be the primary source of geopolitical conflict in the post-Cold War world was an apocalyptic paradigm envisioned by right-wing orientalist philosophers like Huntington and Bernard Lewis which the PNAC neocon ideologues put into practice. Today, the ongoing COVID-19 crisis appears likely to have similar broad and long-term political, social and economic consequences and those who have doubts about the official explanation for the pandemic can hardly be blamed for their distrust given this history unless the lessons of 9/11 have gone unlearned.

Tyler Durden Thu, 04/09/2020 - 23:20
Published:4/9/2020 10:29:15 PM
[Markets] Former Baltimore Mayor Pugh Headed For Alabama Prison Former Baltimore Mayor Pugh Headed For Alabama Prison

Convicted former Baltimore Mayor Catherine Pugh has been assigned to an Alabama women's prison, expected to report to jail by the end of April, reported CBS Baltimore, citing new court documents. 

Pugh was sentenced on February 27 to three-years after pleading guilty to tax evasion and fraud-related charges to the "Healthy Holly" children's book scandal. She was expected to report to prison on April 13, has since received an extension until April 27 so she could spend time with her niece. 

According to the court documents, Pugh has pending state perjury charges, which are expected to be resolved before she reports to prison. However, the COVID-19 pandemic has disrupted the court system in Baltimore and pushed the hearing out to May 14. Pugh's attorney is asking the court to delay when she reports to federal prison until early June: 

"To require the Defendant to surrender to BOP [Bureau of Prisons] custody in Alabama, only to then have to be immediately returned to Maryland for the final adjudication of her state law charges, serves no legitimate purpose, unduly burdens the United States Marshals Service in having to unnecessarily transport the Defendant back to Maryland, could cause undue delays in the state court proceedings, and frustrates the Defendant's access to BOP programs that she can benefit from while serving her sentence in a designated facility," Pugh's attorney Andy White wrote in a filing. 

Court documents said Pugh was assigned to the Federal Correctional Institution in Aliceville, Alabama, a medium-security federal prison. Her attorney argues against her assignment to the facility, indicating it violates recommendations in the First Step Act. White says Pugh would preferably spend her sentence in West Virginia.

"An extension of the current surrender date would allow the Defendant time to petition the BOP to change her designation to a facility consistent with the First Step Act's requirement that BOP' place [a] prisoner in a facility as close as practicable to the prisoner's primary residence, and to the extent practicable, in a facility within 500 driving miles of that residence,'" White wrote.

The 70-year-old's political unraveling began in March 2019 when The Baltimore Sun uncovered a shady deal she made with the University of Maryland Medical System, where she sat on the board of directors, to purchase upwards of 100,000 copies of her Healthy Holly books for $500,000. By April 2019, the FBI and IRS raided her home, and days later, she went missing. Prosecutors say the former mayor netted $850,000 off the book deal. 

Pugh is a veteran Democratic politician that became mayor in 2016 and resigned in May 2019. Now she's headed to federal prison for hard time. 

Tyler Durden Thu, 04/09/2020 - 13:05
Published:4/9/2020 12:24:43 PM
[Entertainment] Best-Sellers-Books-USAToday Best-Sellers-Books-USAToday Published:4/9/2020 12:24:43 PM
[Entertainment] Kelly Clarkson's Sweetest Family Moments Prove She Was Born to Be a Mom Kelly Clarkson, Kids, River Rose Blackstock, Remington Alexander BlackstockThis past year has been one for the books for Kelly Clarkson. Between premiering The Kelly Clarkson Show this past September, perfecting new music and being a judge on NBC's The...
Published:4/9/2020 7:31:52 AM
[Markets] We Won't Be Getting "Back To Normal"... Not Soon... Not Ever! We Won't Be Getting "Back To Normal"... Not Soon... Not Ever!

Authored by Daisy Luther via The Organic Prepper blog,

When will we get back to normal?

If you yearn for the days before COVID-19 swept across the planet, I regret to inform you that those days are gone.

This isn’t a warm and fuzzy blog post telling you that everything is going to be all right. If you’re looking for reassurance that “we’ve got this,” I’m afraid I can’t provide it. This article wasn’t written to console or coddle you, so if that’s what you’re seeking, you’re going to want to stop reading right now.

If, however, you want a reality check on what I believe we’re really facing, I’m not going to hold back. You’ve been warned.

We’re not even halfway through.

You may have seen some optimistic reports recently that the “worst” is behind us. It would certainly be lovely if that’s the case, but in my opinion, this ordeal is just getting started. I wrote an article previously about how long we could expect our current state of lockdown to last using the timelines of China and Italy as points of comparison, and based on that, we are 17 days in as of the writing of this article on April 8.

The lockdown of Wuhan is expected to last 77 days. If our own timeline continues to echo that of China, then we’re not even halfway there. We have at least 2 months left and this doesn’t include any new clusters when the lockdowns are totally lifted or any second waves. We’ve barely begun living in our current state of purgatory and this will continue (and most likely worsen) for quite some time.

So if you’re seeing this as a little break after which you’ll pick up with your life exactly where you left off, you’re going to be extremely disappointed. You need to adapt now because if you don’t, the future is going to be very hard on you mentally.

Use this time to think about the changes you can make to meet the needs of your family. Learn new skills, practice old ones, and get your head in the game.

The supply chain may never be the same.

Nearly every store in America (the ones that are still open, anyway) has glaring bare spots on their inventory. Who would have expected paper products to be the “gold” of our apocalypse? There was an original run on supplies back in early March when the general public realized, “Hey, this is for real!” and razed store shelves bare. Even though preppers already had most of their supplies put back by the time this happened, we were no less vilified by the media as panicked shoppers got into physical altercations over toilet paper and macaroni.

Government officials told everyone to “calm down” and “just shop for the week.” They promised that if we did, everything would be back in stock in no time. Many of us knew even then that this wasn’t true. The ports in California were empty of shipping containers from China where many of our essential goods are produced. There’s no inventory with which to replenish the inventory.

It’s been more than a month since that first shopping frenzy and unfortunately, supplies are still limited in most parts of the country. A reasonably-sized package of toilet paper can’t be had for love or money, nor can one easily locate cleaning wipes, paper towels, 20-pound bags of rice, and bottles of bleach. Other supplies are available, but sparsely and often in limited quantities: meat, eggs, butter, dried goods like pasta and rice, and canned goods. Prices have approximately doubled on many items.

Don’t expect this to clear up any time soon. Abundant inventory may well be a thing of the past. Many of the products sold in American stores are made in China. Even much of our meat that is a “product of the USA” is processed in China. Obviously, China is going to replenish its own inventory before exporting goods to us. Here’s a list of goods that we import from China that we may not be receiving in the same quantities in the future.

As well, the days of just “running to the store” to replace things or pick up a single ingredient are gone. Now, in many parts of the country, you have to walk through a cordoned off maze to enter a Walmart or Costco store. Only a certain number of people can be there at a time. Shopping means you’re risking your own health if someone else is ill, or you are ill and don’t realize it, you’re risking the health of others. It’s no longer quick, easy, inexpensive, or pleasant in any way.

And the generous offerings of days gone by are disappearing. In some areas, the store may have things you want but because the government there doesn’t consider them “essential,” you won’t be allowed to buy them. Ordering online may soon be your only option for things like craft supplies, clothing, decorative items, and shoes. And even when you order online, it may take quite some time before the goods arrive. Amazon has said it is prioritizing necessities, leaving people with uncertain shipping times.

And it could get even worse. What happens if the US Postal Service stops running? A House committee has warned the USPS could actually be forced to cease operations by June. So, if you think it’s hard to get supplies now, just wait.

The rules will get more restrictive and violence will ensue.

Every state with some form of movement restriction (lockdown for lack of a better word) has its own set of rules which are handed down by the respective governors in the form of an executive order. Some states are more restrictive than others and a small handful of states have no restrictions whatsoever.

The other difference between states is the methods of enforcement. Some states have the rules on the books but do little to enforce them. Others are levying fines. One municipality in Louisiana found it amusing to announce the beginning of the curfew with the Purge siren, terrifying people who were already on edge.

Don’t expect this gentle approach to continue. While I don’t think we’ll go full-Wuhan and weld people into their apartments, our Constitutional rights are already being trampled in numerous ways.

Texas and Florida have checkpoints where they’re testing travelers for health problems, escorting them to quarantine, or turning them away. Rhode Island police went so far as to go door-to-door with the National Guard, searching for “New Yorkers” who had fled the virus in their home state.

Most states have closed non-essential businesses and schools for the foreseeable future. Local authorities are beginning to crack down on groups of people and innocent Americans risk being questioned when they leave their homes to walk the dog or go to the store. Last week, thousands of Americans considered essential workers were given “travel papers” to show the authorities if they’re stopped when they are going to work. Travel papers. In the United States of America.

If you can’t satisfy the requirements laid out by your state or local government, you could face fines and even misdemeanor charges for breaking stay-at-home orders. (source)

Expect as the rules and enforcement efforts become more stringent for people to balk. As the money being dished out by the government dwindles to a trickle and as promises made by the government get broken, people will become more and more desperate.

Imagine. Your ability to make a living was suddenly taken away through no fault of your own. You’re all but under house arrest. Your government is threatening you with fines, incarceration, and even possible violence. Your family is hungry and you have nothing to feed them. What would you do in that situation?

There’s virtually no way this continues without violence ensuing, either out of rebellion or hunger or possibly both. Fewer and fewer police officers are available to respond as more of them get diagnosed with COVID-19. In New York City, nearly ten thousand first responders are ill. When you put all this together, it’s a recipe for violent crime.

The economy will be devastated.

We’re already watching our economy get destroyed right in front of our eyes. Never in history – including the Great Depression – have so many Americans been unemployed. And the fact that they all became unemployed at once is even worse. By the end of March, 7.1 million people had filed for unemployment due to COVID-19.

Many of the people who lost their jobs are the ones who are least able to afford it – hourly workers. Those who work at or around minimum wage are less likely to have a savings account to see them through the rough spot.

Then there’s the fact that the government appears to have lied. Others who became unemployed were initially told they qualified, but now the application process is proving impossible. Gig workers, such as drivers for Uber, Lyft, and Doordash, are being asked to supply pay stubs, something they just don’t have. It just isn’t how it works.

Those who have applied are waiting weeks to hear back from state unemployment programs. Their applications will likely be rejected, leaving them without any income for an indefinite amount of time. The advice for these workers?

A spokesperson for the New York State Department of Labor says the guidance requires workers who are not usually eligible for unemployment benefits to apply to state programs, get rejected, and then apply again for the federally funded pandemic assistance. (source)

So for all the big talk about making unemployment easy to get and simple to apply for, it isn’t working out that way at all for many people.

And of course, the economic issues are bigger than that. Small businesses are in big trouble. Those who are not able to find a way to operate during these difficult times still have overhead and bills. They have rent and utilities for their place of business. Many have inventory payments that were due net-30.  Restaurants that can’t make the conversion to takeout and delivery, fitness studios, gyms, clothing stores, and many more independent businesses may never reopen after the government-imposed hiatus.

One by one, families across America are looking at disappearing income, higher prices, and with shelter-in-place orders nearly everywhere, no real way to seek new employment. Unemployment, if and when it comes, is only a short term solution. If ever there as a chance to usher in Universal Basic Income and see people welcome it with open arms, this crisis would be it. Of course, UBI brings with it many problems, not the least of which is a lord-and-serf relationship and a slippery slope toward the social credit system, also brought to us by China just like the COVID-19 outbreak.

Right now we’re looking at short-term effects, but we will feel the effects of this situation for a very long time. In fact, it’s likely to change the economy forever.

As the economy continues to plummet because people are only purchasing the bare necessities, we’ll see other issues arise. How will you pay your rent or mortgage if your job qualifications are in a field that is now considered a luxury? How will you keep your utilities on when you’re not making any money? How will you feed your family, keep a roof over your head, pay for medical care, and maintain a vehicle?

If you’ve never been through personal financial hardship before, you could be in for a terrible reality check when the cost of your most basic essentials is out of reach. But many of us have been there. We can tell you that it often makes you feel powerless – it’s difficult and humiliating, but you can get through it.

If you’re a business owner, how will you keep operating if you have no working capital? How can you hire people if you don’t know whether you’ll be able to keep them on board for more than a couple of pay periods? How can you buy more inventory and can you even acquire that inventory anymore?  Will you be able to get the parts you need to repair items if you run a repair service business?

As you can see, there are more questions than answers. (source)

We’re just at the beginning of this bumpy ride, and there’s really no place that it leads except to an economic depression even worse than the one that took place in the 1920s.

We’ll never “get back to normal.”

For all the people wondering when we’re going to get back to normal, I’m very sorry to say, the answer to that is “never.”

There are jobs lost that are never coming back. Businesses that were successful may never reopen, and if they do, unless they can pivot to cater to necessities, they won’t last long in an economy with widespread unemployment.

And medically speaking, we are a long way from “normal” too.

Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, told a coronavirus press briefing on Monday that the world may never return to the “normal” that was known before the outbreak.

…”When we get back to normal, we will go back to the point where we can function as a society,” he said.  He continued, “If you want to get back to pre-coronavirus, that might not ever happen in the sense that the threat is there.” (source)

What’s more, the virus will be back for another wave.

Fauci said Sunday that people must be prepared for a resurgence next year, which is why officials fighting the pandemic are pushing for a vaccine and clinical trials for therapeutic interventions so “we will have interventions that we did not have” when this started. (source)

We could be looking at on and off periods of social distancing for eighteen months to two years before this is over. Here’s what the models suggest:

Under this model, the researchers conclude, social distancing and school closures would need to be in force some two-thirds of the time—roughly two months on and one month off—until a vaccine is available, which will take at least 18 months (if it works at all). They note that the results are “qualitatively similar for the US.”

Eighteen months!? Surely there must be other solutions. Why not just build more ICUs and treat more people at once, for example?

Well, in the researchers’ model, that didn’t solve the problem. Without social distancing of the whole population, they found, even the best mitigation strategy—which means isolation or quarantine of the sick, the old, and those who have been exposed, plus school closures—would still lead to a surge of critically ill people eight times bigger than the US or UK system can cope with…

…How about imposing restrictions for just one batch of five months or so? No good—once measures are lifted, the pandemic breaks out all over again, only this time it’s in winter, the worst time for overstretched health-care systems.

And what if we decided to be brutal: set the threshold number of ICU admissions for triggering social distancing much higher, accepting that many more patients would die? Turns out it makes little difference. Even in the least restrictive of the Imperial College scenarios, we’re shut in more than half the time.

This isn’t a temporary disruption. It’s the start of a completely different way of life. (source)

For the foreseeable future, it appears that this is our life.

What will the future look like?

At this point, it’s pretty difficult to imagine what a future filled with waves of a pandemic virus, a devastated economy, and great loss will look like.

But some of the things we can expect are intermittent periods of social distancing, periods of interaction. Businesses like restaurants, movie theaters, bars, malls, travel experiences, and sports venues will never be the same and if they survive, will only be able to operate intermittently.

Homeschooling will be a long-term thing – children will not be able to be in a regular school setting during outbreaks.

We’re going to be looking at an entirely different world, one full of six-foot distances, immunity passports, and dystopian tracking methods using our phones.

One particularly unsettling possibility is a picture is painted by Technology Review.

We don’t know exactly what this new future looks like, of course. But one can imagine a world in which, to get on a flight, perhaps you’ll have to be signed up to a service that tracks your movements via your phone. The airline wouldn’t be able to see where you’d gone, but it would get an alert if you’d been close to known infected people or disease hot spots. There’d be similar requirements at the entrance to large venues, government buildings, or public transport hubs. There would be temperature scanners everywhere, and your workplace might demand you wear a monitor that tracks your temperature or other vital signs. Where nightclubs ask for proof of age, in future they might ask for proof of immunity—an identity card or some kind of digital verification via your phone, showing you’ve already recovered from or been vaccinated against the latest virus strains.

We’ll adapt to and accept such measures, much as we’ve adapted to increasingly stringent airport security screenings in the wake of terrorist attacks. The intrusive surveillance will be considered a small price to pay for the basic freedom to be with other people.

As usual, however, the true cost will be borne by the poorest and weakest. People with less access to health care, or who live in more disease-prone areas, will now also be more frequently shut out of places and opportunities open to everyone else. Gig workers—from drivers to plumbers to freelance yoga instructors—will see their jobs become even more precarious. (source)

Never let a good crisis go to waste, right?

This is necessarily how it’s going to happen – it’s only one possible scenario of the many unpalatable futures that are currently emerging. None of them are scenarios that embrace freedom or the joy of anonymity.

The life we knew is not coming back. But it’s better to know this and begin to think about how to mitigate these changes. Think about how you can earn a living, how you can teach your children about freedom in an unfree world, and how you can resist being a figure on a screen, constantly monitored for a spike in temperature.

And who knows? Maybe Americans will return to their independent ways and say, “No more.”  But the changes that took place after 9/11 suggest otherwise. Unless a fearful populace can be convinced that freedom is more important than safety, this will lead to more restrictions and some kind of Pandemic Patriot Act 2.0.

We don’t know what’s coming, but it will be different.

Facing uncertainty is always difficult. But by focusing on the things you can do, it can be managed.

I can’t tell you exactly what the future holds. But I can tell you that the lives we lived prior to COVID-19 are not going to re-emerge like nothing ever happened. And every day the lockdowns continue lessens the possibility of that even more.

You need to accept that now so you can best figure out how to navigate the post-COVID world that awaits. This doesn’t mean you’ll never be able to be happy again. It doesn’t mean you’ll lose everything. It means that things are going to be different and if you don’t accept that, your acclimation period will be dangerously long. As Selco always says, the sooner you understand the new rules, the better off you’ll be.

Things will be different.

We will adjust. We will adapt. We will survive.

Tyler Durden Wed, 04/08/2020 - 20:00
Published:4/8/2020 7:18:36 PM
[Markets] Government To Decide What Items Are Essential Purchases And What Things You're Not Allowed To Buy Government To Decide What Items Are Essential Purchases And What Things You're Not Allowed To Buy

Authored by Daisy Luther via The Organic Prepper blog,

Living under lockdown restrictions, prevalent in nearly every state, is about to get a whole lot worse. The government in the United States and Canada has decided to take away the guesswork in the stores that are still open and decide for you what’s “essential” and what’s not.

When I have gone to the store to pick up groceries (I’m still getting fresh produce while I can), I also like to pick up a couple of things that are pleasant diversions: magazines, a crossword puzzle book, coloring pencils, some craft supplies. It’s nice to have some things that are enjoyable on hand to keep lockdown from feeling so grim and torturous. If the store is already open, getting a sunny yellow pillow for the living room is a pick-me-up, not a frivolous jaunt to a place I wasn’t already going. When we had a birthday in the family, we even picked up a few small gifts on our regular trip to the grocery store to provide a sense of normalcy.

But the days of getting a random item to brighten a family member’s day may be numbered. The government (at least in some places) wants to make this already unpleasant time as dismal as possible for us all.

Vermont has started a worrisome trend.

Vermont has decided to choose for you what is essential and what is not, banning the sale of non-essential items at stores like Target, Walmart, and Costco.

The Agency of Commerce and Community Development (ACCD) is directing large “big box” retailers, such as Walmart, Target and Costco, with in-store sales of food, beverage and pharmacy, as well as electronics, toys, clothing, and the like to cease in-person sales of non-essential items in order to reduce the number of people coming into the stores.

“Large ‘big box’ retailers generate significant shopping traffic by virtue of their size and the variety of goods offered in a single location,” said Agency of Commerce and Community Development Secretary Lindsay Kurrle.  “This volume of shopping traffic significantly increases the risk of further spread of this dangerous virus to Vermonters and the viability of Vermont’s health care system. We are directing these stores to put public health first and help us reduce the number of shoppers by requiring on-line ordering, delivery and curbside pickup whenever possible, and by stopping the sale of non-essential items.” (source)

Retailers are asked to close certain areas of the stores, rope them off to deny access, or pull non-essentials from their shelves.

What’s considered non-essential?

The Burlington Free Press reports the following items have been deemed non-essential purchases:

  • Arts and crafts items.

  • Beauty supplies.

  • Carpet and flooring.

  • Clothes.

  • Consumer electronics.

  • Entertainment (books, music, movies).

  • Furniture.

  • Home and garden.

  • Jewelry.

  • Paint.

  • Photo services.

  • Sports equipment.

  • Toys.

So a store you’re already at is telling you that grabbing some hand lotion to soothe your dry, cracked skin from the constant application of hand sanitizer is non-essential? Getting a book to read while you’re locked down is against the rules? You can’t do a home improvement project while you’re stuck at home?

I fail to see how this is going to stop the spread of a coronavirus if the shopper is already at the store and the employees are also already at the store.

In fact, it seems to me that this would be helpful to our gasping and dying economy. But what would I know? Dinesh Iyer, Assistant Professor of Management at Rutgers School of Business-Camden, says the stores don’t need our frivolous little purchases.

“I think the economy can wait,” he said. “Most corporations have access to debt and finances that are not available to the common folk.”

Corporations can “leverage their assets and tide through difficult times” by borrowing larger sums of money at lower interest rates and more frequently than you or I can,” he said.

“We have an opportunity to do all the things around the house that we have been putting off, spend time with family, learn a new skill,” Iyer said.

He even cautions against online shopping.

“The online shopping can wait,” Iyer said. “But if you must, you can always add the items of interest to your wish-list. And after the crisis, if you still need it, go for it. In the meantime, conserve the resources. You will be saving lives.” (source)

It’s rather curious how Iyer thinks us “common folk” will be able to do those things around the house and learn new skills without the supplies to do so.

One of the most alarming things is that garden supplies are considered non-essential.

Of all the times in the world you need most to plant a garden, now is the time. But in Vermont’s directive, even the sale of garden supplies is non-essential.

…showrooms and garden sections of large home improvement centers should be closed.  (source)

And readers shared this photo from a store in Vermont.

The government of Vermont says that it isn’t really accurate.

 Recent pictures circulating on social media appear to be from a box store which has roped off access to “non-essential” areas of the store, per guidance from ACCD, with various seed packets behind the roped-off section.  As stated above, agricultural seeds have been deemed “essential” in Vermont per the Governor’s executive order, however a homeowner’s access to seeds has been modified to meet the Governor’s executive order.

We’re hoping that retailers and consumers alike restrict in-person shopping to items that need to be purchased in-person and are of a time sensitive nature. While the state recognizes the importance of gardening as a source of food for many Vermonters, the ability to browse for seeds and purchase them in person doesn’t outweigh the risk of spreading the virus. Retailers can continue to make seeds available online, delivery and curbside. (source)

Okay. You can just buy them online…or can you?

Buying seeds online isn’t an option either.

Almost every seed company readers in the preparedness community have tried to make purchases from has said, sorry, but we’re just selling to commercial operations this year.

Johnny’s Select Seeds has the following announcement on their home page:

Here’s what you can expect as of March 31st, 2020:

  • At this time, we are accepting new orders only from commercial farmers shipping to the U.S. and Canada and international wholesale customers. We plan to resume taking orders from all customers on April 14th. This restriction applies to all orders placed via our website, phone, and email. This was a difficult decision and we apologize for the inconvenience.

  • Commercial Farmers only: Please login to your website account before placing your order or call our contact center at 1-877-564-6697 for assistance. If you have forgotten your password, you can find information on resetting your password here.

  • Orders placed with our standard shipping option prior to March 31st, 2020 may experience a shipment delay of 5–10 days. Commercial orders placed on or after March 31st, 2020 may experience a shipment delay of 1–2 days.

  • You may experience a longer than usual response time when you phone in your order, call on us to answer growing questions, or email us to make inquiries.

  • We have closed our retail store in Winslow, Maine, and will not be hosting farm tours until further notice.

We remain honored that you have chosen Johnny’s. Whether you have been buying from Johnny’s for 25 years or this is your first order, please know that we care deeply about helping you through the challenges of this coronavirus outbreak. Call or email us if you need growing advice or help finding products. (source)

So…you can’t get seeds from your local Walmart garden center if you’re in Vermont and you can’t order seeds from seed stores. Good luck with that garden you were hoping would help see you through this disaster unless you’ve already got seeds put back from previous years.

What can we expect?

I think it’s extremely likely that Vermont’s idea will catch on and spread across the country. Just like lockdowns began in a couple of areas then spread state by state, don’t be surprised when this trend does also. The province of Ontario in Canada has just closed all their hardware stores and is limiting purchases only to curbside pick-up. Here’s what you need to be prepared to see:

  • Don’t expect that you’re going to be able to pop over to Lowes or Home Depot to pick up seedlings – or even seeds – for your summer garden.

  • Don’t expect that you’ll be able to replace your children’s flipflops or sandals for the summer regardless of the growth of their feet – this could be considered “non-essential.”

  • Don’t expect to be able to replace clothing for growing children – at least not in person.

  • Don’t expect to get any summer toys for the kids to play with while they’re in the back-yard – non-essential.

  • Don’t expect to be able to buy a bigger size of pants because you ate all your quarantine candy. You’re going to have to squeeze yourself into your old pants.

  • Don’t expect to be able to get the fabric to make masks – remember? Craft supplies are non-essential.

Really, don’t expect anything. Because for some reason, it seems like governments want to make an already difficult and stressful time even worse by taking away the possibility for any kind of pleasant past-time unless you already have all the supplies you need for that.

This senseless crackdown not only makes things even more unpleasant, but it takes away even more streams of revenue for struggling businesses. And more than that, it’s limiting our ability to be as self-reliant as possible, leaving people to fight it out at the grocery store for dwindling resources with few options for creating our own food supplies.

Those living in Vermont have unfortunately missed their window for anything but mail order. For the rest of us, if there are some things you were hoping to get – be it new curtains, paint for the living room, tile for the bathroom, pots for your container garden, or the supplies to make a new chicken coop – you’d better get it now before your state follows the lead of Vermont.

Tyler Durden Tue, 04/07/2020 - 23:40
Published:4/7/2020 10:47:49 PM
[Markets] The Lockdown Wouldn't Be So Devastating If Our Economy Wasn't So Rigged, Brittle, & Exploitive The Lockdown Wouldn't Be So Devastating If Our Economy Wasn't So Rigged, Brittle, & Exploitive

Authored by Charles Hugh Smith via OfTwoMinds blog,

An economy of rackets designed to enrich the few at the expense of the many is brittle because self-serving rackets snuff out competition, accountability and transparency.

What's remarkable about the lockdown isn't the hue and cry about the economic damage--it's the absence of any critical curiosity as to how our economy became so fragile that only the wealthiest contingent can survive a few weeks on savings or rainy-day funds.

A healthy, resilient economy would be able to survive a few weeks of lockdown without a multi-trillion dollar bailout of every racket in the land. A society that wasn't threadbare financially and socially would be able to function and accept individual sacrifices for the common good.

Rather than being organized to serve the common good, our economy and social order is little more than overlapping rackets: rigged "markets" operated by quasi-monopolies to enrich the few at the expense of the many; brittle bureaucracies bound by thousands of pages of mindless "compliance" and exploitive neofeudal structures in which debt-serfs are paid just enough to service their debt but not enough to afford skyrocketing costs for housing, healthcare, higher education, childcare, junk fees and taxes.

While everyone is busy screaming about the damage done by the lockdown, nobody's asking why costs are so high that few can survive a few weeks on their own means. Nobody dares look at the soaring costs imposed by cartels and monopolies (including government and government-funded rackets such as healthcare and higher education) because it might shine a light on the money-trough they're feeding from. (Crush every racket but mine...)

If costs weren't so crushing, more households and enterprises might have savings. Empires don't collapse because everyone ran out of money; they collapse when the costs exceed earnings.

Put another way, the skyrocketing costs of self-serving sclerotic complexity, a.k.a. convoluted inefficiencies imposed by institutions which lack any accountability, far exceed the gains in productivity and resource mining needed to pay for the productivity-draining complexity.

As for innovation--please don't make us laugh. All the rackets work overtime to avoid being disrupted by the forces of productivity and transparency. Just look at higher education: all the technology was available a decade ago to radically reduce the costs of effective education, (as I outlined in my 2012 book The Nearly Free University), but the higher education cartel fought to maintain its monopoly on credentials, squandering hundreds of billions of dollars on layers of administrators and self-glorifying buildings.

I've been explaining How Healthcare Is Dooming the U.S. Economy for years. Now it's becoming too obvious to deny. Sickcare Will Bankrupt the Nation (March 21, 2011).

Just as Wall Street destroyed the private-sector mortgage market by financializing it, healthcare has been destroyed by Corporate America's financialization of what was once for the common good, turning it into a hollowed-out profit machine for the few at the expense of the luckless serfs who have no choice but to serve the Financial Nobility. (You can pick any health insurer you want--but there's only two, heh, and their prices are the same: Kafkaesque in their opaque complexity, and high enough to bankrupt all but the wealthiest.)

An economy of rackets designed to enrich the few at the expense of the many is brittle because self-serving rackets snuff out competition, accountability and transparency. As I noted in The Convergence of Marx, Orwell and Kafka (July 25, 2012), Marx understood that predatory, parasitic Monopoly Capitalism melts any social norms that restrict its dominance into air, while Kafka understood that the the more powerful and entrenched the bureaucracy, the greater the collateral damage rained on the innocent, and the more extreme the perversion of justice.

Orwell understood that the State's ontological imperative is expansion, to the point where it controls every level of governance, markets and society. Once the State escapes the control of the citizenry, it is free to exploit them in a parasitic predation that is the mirror-image of Monopoly Capital. For what is the State but a monopoly of force, coercion, data manipulation and the neofeudal enforcement of crony-capitalist private monopolies on powerless serfs?

Neofeudal exploitation has hollowed out the economy, leaving a fragile, brittle shell of rackets, self-serving cartels and institutions that have squandered the public's trust in their greedy rush to accumulate as much private wealth as they can before the whole rotten corrupt structure collapses under its own weight.

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Tyler Durden Tue, 04/07/2020 - 19:00
Published:4/7/2020 6:14:48 PM
[World] BOOK REVIEW: ''Redhead by the Side of the Road'

After more than 20 books, Anne Tyler still finds ways to challenge herself. 

Her new novel, “Redhead By the Side of the Road,” is, of course, set in her longtime home of Baltimore and features the family and romantic entanglements and other narrative touches Tyler fans know well. But the ... Published:4/7/2020 1:41:18 PM

[Entertainment] The top 10 Apple Books on the iTunes Store The top 10 Apple Books on the iTunes Store Published:4/7/2020 11:43:04 AM
[Entertainment] 10 Books Celebrities Love Ecomm: April 2020 Celebrity Book ClubWe love these books, and we hope you do too. E! has affiliate relationships, so we may get a small share of the revenue from your purchases. Items are sold by the retailer, not E!. Need a...
Published:4/6/2020 6:08:02 PM
[Markets] How Generals Fueled 1918 Flu Pandemic To Win Their World War How Generals Fueled 1918 Flu Pandemic To Win Their World War

Authored by Gareth Porter via,

Just like today, brass and bureaucrats ignored warnings, and sent troops overseas despite the consequences.

The U.S. military has been forced by the coronavirus pandemic to make some serious changes in their operations. But the Pentagon, and especially the Navy, have also displayed a revealing resistance to moves to stand down that were clearly needed to protect troops from the raging virus from the start.

The Army and Marine Corps have shifted from in-person to virtual recruitment meetings. But the Pentagon has reversed an initial Army decision to postpone further training and exercises for at least 30 days, and it has decided to continue sending new recruits from all the services to basic training camps, where they would no doubt be unable to sustain social distancing.

On Thursday, the captain of the aircraft carrier USS Theodore Roosevelt, on which the virus was reportedly spreading, was relieved of command. He was blamed by his superiors for the leak of a letter he wrote warning the Navy that failure to act rapidly threatened the health of his 5,000 sailors.

Secretary of Defense Mark Esper justified his decision to continue many military activities as usual by declaring these activities are “critical to national security.” But does anyone truly believe there is a military threat on the horizon that the Pentagon must prepare for right now? It is widely understood outside the Pentagon that the only real threat to that security is the coronavirus itself.

Esper’s decisions reflect a deeply ingrained Pentagon habit of protecting its parochial military interests at the expense of the health of American troops.

This pattern of behavior recalls the far worse case of the U.S. service chiefs once managing the war in Europe. They acted with even greater callousness toward the troops being called off to war in Europe during the devastating “Spanish flu” pandemic of 1918, which killed 50 million people worldwide.

It was called the “Spanish flu” only because, while the United States, Britain and France were all censoring news about the spread of the pandemic in their countries to maintain domestic morale, the press in neutralist Spain was reporting freely on influenza cases there. In fact, the first major wave of infections in the United States came in U.S. training camps set up to serve the war.

Abundant documentary evidence shows that the 1918 pandemic actually began in Haskell County, Kansas, in early 1918, when many residents came down with an unusually severe type of influenza. Some county residents were then sent to the Army’s Camp Funston at Ft. Riley, Kansas, the military’s largest training facility, training 50,000 recruits at a time for the war. Within two weeks, thousands of soldiers at the camp became sick with the new influenza virus, and 38 died.

Recruits at 14 of 32 large military training camps set up across the country to feed the U.S. war in Europe soon reported similar influenza outbreaks, apparently because some troops from Camp Funston had been sent there. By May 1918, hundreds of thousands of troops, many of whom were already infected, began boarding troopships bound for Europe, and the crowding onboard the ships created ideal conditions for the virus to explode further.

In the trenches in France, still more U.S. troops continued to be sickened by the virus, at first with milder illness and relatively few deaths But the war managers simply evacuated the sick and brought in fresh replacements, allowing the virus to adapt and mutate into more virulent and more lethal strains.

The consequences of that approach to the war became evident after the August 27 arrival in Boston harbor, when visitors brought a much more virulent and lethal strain of the virus; it quickly entered Boston itself and by September 8, had appeared at Camp Devens outside the city. Within ten days, the camp had thousands of soldiers sick with the new strain, and some of those infected at the camp boarded troops ships for Europe.

Meanwhile the lethal new strain spread from Camp Devens across the United States through September and October, ravaging one city after another. From September onward, the U.S. command in France, led by Gen. John Pershing, and the war managers in the War Department in Washington, were well aware that both U.S. troops already in Europe and the American public were suffering vast numbers of severe illnesses and death from the pandemic.

Nevertheless, Pershing continued to call for large numbers of the replacements for those stricken at the front lines, as well as for new divisions to launch a major offensive late in the year. In a message to the War Department on September 3, Pershing demanded an additional 179,000 troops.

The internal debate that followed that request, recounted by historian Carol R. Byerly, documents the chilling indifference of Pershing and the military bureaucracy in Washington to the fate of American troops they planned to send to war. After watching the horror of lethally-infected soldiers dying of pneumonia in the infected camps, acting Army Surgeon General Charles Richard strongly advised Army Chief of Staff Peyton March in late September against sending troops from the infected camps to France until the epidemic had been brought under control in the surrounding region, and March agreed.

Richard then asked for stopping the draft calls for young men heading for any camp known to be already infected. March wouldn’t go that far, and although the October draft was called off, it was to resume in November. The War Department acknowledged the heavy toll the pandemic was taking on U.S. troops in October 10, informing Pershing that he would get his troops by November 30, “if we are not stopped on account of Influenza, which has now passed the 200,000 mark.”

Richard then called for troops to be quarantined for a week before being shipped to Europe, and that the troopships carry only half the standard number of troops to reduce crowding. When March rejected those moves, which would have made it impossible for him to meet Pershing’s targets, Richard then recommended that all troop shipments be suspended until the influenza pandemic was brought under control, “except such as are demanded by urgent military necessity.”

But the chief of staff rejected such a radical shift in policy, and went to the White House to get President Woodrow Wilson’s approval for the decision. Wilson, obviously recognizing the implications of going ahead under the circumstances, asked why he refused to stop troop transport during the epidemic. March argued that Germany would be encouraged to fight on if it knew “the American divisions and replacements were no longer arriving.”Wilson then approved his decision, refusing to disturb Pershing’s war plans.

But the decision was not carried out fully. The German Supreme Command had already demanded that the Kaiser accept Wilson’s 14 points, and the armistice was signed on November 11.

The disastrous character of the U.S. elite running the First World War is clearly revealed with the astonishing fact that more American soldiers were killed and hospitalized by influenza (63,114) than in combat (53,402). And an estimated 340,000 American troops were hospitalized with influenza/pneumonia, compared with 227,000 hospitalized by Germans attacks.

The lack of concern of Washington bureaucrats for the well-being of the troops, as they pursue their own war interests, appears to be a common pattern—seen too, in the U.S. wars in Vietnam, Afghanistan and Iraq. Now it has been revealed once again in the stunningly callous response of the Pentagon to the coronavirus pandemic crisis.

In the 1918 war, there was no protest against that cold indifference, but there are now indications that the families of soldiers put being at risk are expressing their anger about it openly to representatives of the military. In a time of socio-political upheaval, and vanishing tolerance for the continuation of endless war, it could be a harbinger of accelerated unraveling of political tolerance for the war state’s overweening power.

*  *  *

Gareth Porter is an independent journalist and winner of the 2012 Gellhorn Prize for journalism. He is the author of numerous books, including Manufactured Crisis: The Untold Story of the Iran Nuclear Scare (2014), and The CIA Insiders Guide to Iran (2020),  co-written  with John Kiriakou.

Tyler Durden Mon, 04/06/2020 - 02:00
Published:4/6/2020 1:07:06 AM
[Markets] COVID-19 & China's Colossal Cover-Up COVID-19 & China's Colossal Cover-Up

Authored by Giulio Meotti via The Gatestone Institute,

We have been paying dearly for China's lies.

"This is one of the worst cover-ups in human history, and now the world is facing a global pandemic," said Rep. Michael T. McCaul, the ranking Republican member of the House Foreign Affairs Committee, before the US intelligence community concluded, in a classified report to the White House, that China has concealed the origin and extent of the catastrophic global coronavirus outbreak.

The Chinese Communist Party's "failure has unleashed a global contagion killing thousands", wrote Cardinal Charles Maung Bo, president of the Federation of Asian Bishops' Conferences, on April 1. "As we survey the damage done to lives around the world, we must ask who is responsible?"

"... there is one government that has primary responsibility for what it has done and what it has failed to do, and that is the CCP [Chinese Communist Party] regime in Beijing. Let me be clear — it is the CCP that has been responsible, not the people of China... Lies and propaganda have put millions of lives around the world in danger... In recent years, we have seen an intense crackdown on freedom of expression in China. Lawyers, bloggers, dissidents and civil society activists have been rounded up and have disappeared."

One more person has just disappeared: Ai Fen, a Chinese physician who was head of the emergency department at Wuhan Central Hospital, had worked with the late Dr. Li Wenliang. Ai, who claimed that her bosses silenced her early warnings about coronavirus, appears to have vanished. Her whereabouts, according to 60 Minutes Australia, are unknown. The journalists who saw what happened inside Wuhan have also disappearedCaixin Global reported that the laboratories which sequenced the coronavirus in December were ordered by Chinese officials to hand over or destroy the samples and not release their findings.

"If I had known what was to happen, I would not have cared about the reprimand, I would have fucking talked about it to whoever, where ever I could", Ai Fen said in an interview in March. Those were her last recorded words.

There is no record at all, however, about how this pandemic began. Wet market? A cave full of batsPangolins? Or a bio-weapons laboratory? No foreign doctors, journalists, analysts or international observers are present in Wuhan. Why, if the virus came out of a wet market or a cave, did China suppress inquiries to such an extent? Why, in December, did Beijing order Chinese scientists to destroy proof about the virus? Why did Chinese officials claim that US soldiers brought the virus to Wuhan? Why should it be scandalous that a US President calls a virus that began in China a "Chinese virus"?

Who announced on January 11 that Wuhan's wet market was the origin of this epidemic? The Chinese regime. It was later discovered that the first known case of coronavirus traced back to November 17, 2019.

The same Chinese regime later claimed that this coronavirus "may not have originated in China". What respected scientist or institution can now trust anything that comes out of China?

Many leading scientists have dismissed the claim that the Covid-19 virus was an engineered pathogen. This conclusion was seemingly based on the fact that Wuhan has two major virus research labs: the Wuhan Center for Disease Control and Prevention, which is apparently less than a mile from the market, and the Wuhan Institute of Virology, a biosafety level 4 (BSL-4) laboratory, handling the world's most deadly pathogens, located just seven miles from the market. The story was immediately and emphatically trashed as a "conspiracy theory".

Those scientists claim that the virus likely originated among wildlife before spreading to humans, possibly through a food market in Wuhan. They say that, through genetic sequencing, they have identified the culprit for Covid-19 as a bat coronavirus. End of story? Science, thankfully, begins by asking questions and then seeking answers.

Bats were not, it seems, sold at Wuhan's wet market. The Lancet noted in a January study that the first Covid-19 case in Wuhan had no connection to the market. The Lancet's paper, written by Chinese researchers from several institutions, detailed that 13 of the 41 first cases had no link to the market. "That's a big number, 13, with no link," commented Daniel Lucey, an infectious disease specialist at Georgetown University. So how did the epidemic start?

"Now it seems clear that [the] seafood market is not the only origin of the virus, but to be honest we still do not know where the virus came from now", notes Bin Cao, pulmonary specialist at Capital Medical University, and the corresponding author of the Lancet article.

US Secretary of State Mike Pompeo has said that China's Communist Party is withholding information about the coronavirus.

If we do not know, it is necessary be open to all possibilities.

"Less than 300 yards from the seafood market is the Wuhan branch of the Chinese Center for Disease Control and Prevention" wrote David Ignatius of the Washington Post.

"Researchers from that facility and the nearby Wuhan Institute of Virology have posted articles about collecting bat coronaviruses from around China, for study to prevent future illness. Did one of those samples leak, or was hazardous waste deposited in a place where it could spread?".

"Collecting viruses" presumably does not exclude the possibility of a "leaked virus". Worse, if China is not able to protect its laboratories, it needs to be held accountable and made to pay for the devastating global damage.

"Experts know the new coronavirus is not a bioweapon. They disagree on whether it could have leaked from a research lab", stated The Bulletin of the Atomic Scientists. Professor Richard Ebright of Rutgers University's Waksman Institute of Microbiology, and a major biosecurity expert, agreed with the Nature Medicine authors' argument that the coronavirus was not manipulated by humans. But Ebright does think it possible that the Covid-19 started as an accidental leak from a laboratory, such as one of the two in Wuhan, which are known to have been studying bat viruses:

"Virus collection or animal infection with a virus having the transmission characteristics of the outbreak virus would pose substantial risk of infection of a lab worker, and from the lab worker, the public."

Ebright has also claimed that bat coronaviruses are studied in Wuhan at Biosafety Level 2, "which provides only minimal protection" compared with the top BSL-4.

"We don't know what happened, but there are a lot of reasons to believe that this indeed was a release of some sort", China expert Gordon Chang said to Die Weltwoche.

"No one has been able to study it. How can you say it's not a release from a lab if you can't go to the lab? Indeed, we have seen Beijing do its best to prevent virologists and epidemiologists from actually going to Wuhan. The World Health Organization team went to Wuhan for like half a day with only part of the team."

That is another major problem. The potential major investigator of the Wuhan coronavirus pandemic's origin, the World Health Organization (WHO), is now accused of being "China's coronavirus' accomplice". As late as January 14, the WHO quoted Chinese health officials claiming there had been no human transmissions of the coronavirus within the country yet.

China poses a biosecurity risks for the entire planet. One year before the first coronavirus case was identified in Wuhan, US Customs and Border Protection agents at Detroit Metro Airport stopped a Chinese biologist with three vials labeled "Antibodies" in his luggage. According to an unclassified FBI tactical intelligence report obtained by Yahoo News:

"Inspection of the writing on the vials and the stated recipient led inspection personnel to believe the materials contained within the vials may be viable Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS) materials."

Why is China trafficking in dangerous viruses in the first place?

According to Yanzhong Huang, a senior fellow for Global Health at the Council on Foreign Relations:

"A safety breach at a Chinese Center for Disease Control and Prevention lab is believed to have caused four suspected SARS cases, including one death, in Beijing in 2004. A similar accident caused 65 lab workers of Lanzhou Veterinary Research Institute to be infected with brucellosis in December 2019. In January 2020, a renowned Chinese scientist, Li Ning, was sentenced to 12 years in prison for selling experimental animals to local markets".

In February, Botao Xiao and Lei Xiao, from Guangzhou's South China University of Technology, wrote in a research paper:

"In addition to origins of natural recombination and intermediate host the killer coronavirus probably originated from a laboratory in Wuhan. Safety level [sic] may need to be reinforced in high risk biohazardous laboratories".

Xiao later told the Wall Street Journal that he had withdrawn the paper because it "was not supported by direct proofs".

Chinese laboratory mistakes have happened before. By 2010, researchers published as fact: "The most famous case of a released laboratory strain is the re-emergent H1N1 influenza-A virus which was first observed in China in May of 1977 and in Russia shortly thereafter". The virus may have escaped from a lab attempting to prepare a vaccine in response to the U.S. swine flu pandemic alert.

In 1999 the most senior defector in the US from the Soviet biological warfare program, Ken Alibek, revealed that Soviet officials concluded that China had suffered a serious accident at one of its secret biological plants, causing two major epidemics of fever that had swept China in the late 1980s. "Our analysts", Alibek stated in his book, Biohazard, "concluded that they were caused by an accident in a lab where Chinese scientists were weaponizing viral diseases".

In 2004, the World Health Organization disclosed that the latest outbreak of "severe acute respiratory syndrome" (SARS) in China involved two researchers who were working with the virus in a Beijing research lab. The WHO denounced Chinese breaches of safety procedures, and director of the Center for Disease Control and Prevention, Li Liming, resignedScience magazine also stated that "for the third time in less than a year, an outbreak of SARS seems to have originated from a failure in laboratory containment".

Moreover, three years ago, when China opened the laboratory in Wuhan, Tim Trevan, a Maryland biosafety specialist, told Nature that he worried about the safety of the building because "structures where everyone feels free to speak up and openness of information are important." Free speech and open information: exactly what Chinese regime fought against in December and January.

A Chinese video about a key researcher in Wuhan, Tian Junhua, which was released a few weeks before the outbreak in Wuhan, shows Chinese researchers handling bats that contained viruses. In the video (produced by China Science Communication, run by the China Association for Science and Technology), Tian says:

"I am not a doctor, but I work to cure and save people... I am not a soldier, but I work to safeguard an invisible national defense line".

Tian is also reported as having said:

"I can feel the fear: the fear of infections and the fear of getting lost. Because of the fear, I take every step extremely cautiously. The more scared I feel, the more care I take in executing every detail. Because the process of you finding the viruses is also when you can be exposed to them the easiest. I do hope these virus samples will only be preserved for scientific research and will never be used in real life".

For a month, the Chinese Communist Party, instead of fighting the contagion, did everything possible to censor all information about the Covid-19 outbreak. After President Xi Jinping declared "a people's war" on the epidemic on January 20, Chinese security services pursued 5,111 cases of "fabricating and deliberately disseminating false and harmful information". The Chinese Human Rights Defenders documented several types of punishment, including detention, disappearance, fines, interrogations, forced confessions and "educational reprimand".

After that, China lied about the real number of deaths. There are photographs of long lines of stacked urns greeting family members of the dead at funeral homes in Wuhan. Outside one funeral home, trucks shipped in 2,500 urns. According to Chinese official figures, 2,548 people in Wuhan have died of the Covid-19. According to an analysis by Radio Free Asia, seven funeral homes in Wuhan were each handing out 500 funeral urns containing remains for 12 days, from March 23 to the traditional tomb-sweeping festival of April 5, a time that would indicate up to 42,000 urns, or ten times higher than the official figure.

In February, it was reported that Wuhan crematoriums were working around the clock to cope with the massive influx of infected bodies. Wuhan's officials are apparently pushing relatives of the victims to bury the dead "quickly and quietly".

"Natural virus" does not exclude its fallout from a laboratory where pathogens are collected and studied. The Nature Medicine authors "leave us where we were before: with a basis to rule out [a coronavirus from] a lab construct, but no basis to rule out a lab accident", Professor Ebright commented.

"Debate may rage over which center it is, but at this point it seems undeniable that a center has been directly involved with research on viruses, although not necessarily on the creation of a virus" wrote Father Renzo Milanese, a longtime Catholic missionary in Hong Kong.

"In other words, the virus passed from a research center in Wuhan early on. More importantly there is also no question that the authorities were aware of the dangerousness of the virus, that they did not inform anyone and that they tried to keep the facts hidden".

US Senator Josh Hawley has introduced a resolution calling for an international investigation into China's handling of the spread of the virus. According to Hawley:

"The Chinese Communist Party was aware of the reality of the virus as early as December but ordered laboratories to destroy samples and forced doctors to keep silent. It is time for an international investigation into the role their cover-up played in the spread of this devastating pandemic".

Admitting a fault, as the Japanese did after the Fukushima nuclear accident in 2011, might be one way for a country to be accepted again by the international community. Censoring, denying and covering up, as China is doing, will not.

"China claims that the deadly virus did not escape from its biolab," said a China specialist with the Population Research Institute, Steven W. Mosher.

"Fine. Prove it by releasing the research records of the Wuhan lab".

Tyler Durden Sun, 04/05/2020 - 23:00
Published:4/5/2020 10:01:42 PM
[Markets] The Jackpot Chronicles Scenario 1: Force Majeure The Jackpot Chronicles Scenario 1: Force Majeure

Authored by Mark Jeftovic via,

This is the second instalment of The Jackpot Chronicles: Four Possible Post-Coronavirus Scenarios.

Force Majeure means:

a chance occurrence or superior force that renders a contract unenforceable and frees all parties from their obligations under it.

We are frequently told that there exists some manner of “Social Contract” to which we are implicitly bound by virtue of being alive. This implied Social Contract confers legitimacy upon the institutions that order our world, the national governments, the central banks, the miltary and police. And by extension certain communication outlets and media are endowed with a status of official curators over the narratives around institutional power.

Under the Force Majeure Scenario, the first of four possible Coronavirus aftermaths posited in “Welcome to the Jackpot”, the overwhelming or superior force is not the pandemic itself, but rather the collapse of the debt supercycle, the monetary system that derives from it, and the structure of nation states that are burgeoned by it.

The last time we were here, when a systemic crisis has shaken the foundation of the social order, the policy response was favourable to one party of the social contract at the expense of the others.

The GFC, which I now call GFC 1.0 or GFC ‘08, saw the financialized class, those closest to the monetary spigots of the Central Banks enjoy accelerating prosperity as their asset values rose, whilst the rest of the population endured stagnation and a steadily increasing cost-of-living (which mainstream commentators refused to acknowledge as inflation).

The policy response from the last crisis has led us directly, in a straight line to this one. The only surprise being the exact nature of the catalyst which would pop the Everything Bubble, and perhaps the ferocity with which the air began to let out once it did.

The signs were certainly there that we were nearing some kind of archetypical “shoeshine boy”moment or phenomenon. Complacency in passive investing, extreme overabundance in the unicorn population, the fact that there exists (existed) an entire industry around arbitraging long term leases with short term rentals via AirBnB, there was a sense of Roaring 20’s around it all and all those vile contrarians were wondering “just how long can this go on?”

Stacking additional layers of arbitrage, using leverage, atop a unicorn, could only occur at or near the peak of an Everything Bubble

Under Force Majeure the public begins to understand that the people who populate institutions are just that, people. Despite specialized training perhaps, they are not endowed with any superhuman intellect or wisdom. Success within the matrix of the institutional elite comes from proxemics and adroitly navigating the system itself, not much more.

“An era can be considered over when its basic illusions have been exhausted”

- Arthur Miller

An era like this comes to an end when the public realizes that their betters aren’t intellectually superior but rather institutionally privileged. Now facing an existential crisis of their own making, they are completely out of touch with the public mind and out of their depth to deal with it.

Then The System Finally Comes Unglued. Now what?

The central banks and national governments have fired their bazookas in unison yet despite a typical relief rally in the form of a standard issue dead cat bounce, reality continues to insist on asserting itself. On a recent Jelly Donuts podcast, Grant Williams talks about forthcoming GDP numbers coming off 30% “truly apocalyptic”.

Yet, the incumbent institutional custodians will continue to deny reality and to discredit themselves, what will it look like then the populace comes to realize that the old social order, and the institutions that curate it are being deprecated?

Ontario Premier Doug Ford recently advised citizens who couldn’t pay their looming rent bills at the first of the month to simply “not pay”. He later tried walking that back, but when this sentiment gets writ large, with governments printing money and sending out cheques, what happens when people and businesses simply decide not to pay their taxes either?

Can political leaders say, with a straight face, that citizens should stiff their landlords or mortgage lenders but not the State?

And if the State can simply print up money and send out cheques, why do we need taxes anyway? Have we arrived at full MMT?

All of the central bank and fiscal stimulus portends a secular shift from deflation to inflation and I don’t think very many people understand what that means.
It means a whole lot of broken clocks are gonna be right for once, but at a time it counts the most.

Twitter financial commentator and humorist @RudyHavenstein nails it…

Now, every company that levered up on debt to buy back their own shares over the last 10 years wants a bailout. Grant Williams points out in Things That Make You Go Hymm that the airline industry spent 47B on buybacks since 2010, they want a 50B bailout.

Source: Grant Williams, Things That Make You Go Hymm March 22/2020

What the chart, right, doesn’t show is the total dollar amount spent by the airlines on buying back their own shares between 2010 and 2019.

That number is $47.3 billion (of which American Airlines – whose negative cumulative free cash flow between those dates was $7.9 bln – contributed $13 bln).

Even the private jet industry wants a bailout.

And what will public citizens get? Those whose businesses have been ordered to close, whose jobs have already been lost? They’ll get a check for $1,200, or a tax deferral until August. Bfd.

Charles Hugh Smith’s books speak a lot about this type of secular wane in institutional relevancy, which we discussed on our podcast once and it bears repeating here:

MJ: when I look at  Pathfinding [Our Destiny] like part seven where where we’re talking about what the way forward looks like, that it’s outside of the control of the of the establishment, that it’s outside of the system I get this sense that for society to flourish and adapt around this and evolve. I guess that’s the key word, we’re going do this around the institutionalized hierarchies.

They’re not going to get religion one day, we’re not going to elect the right candidate, we’re not going to have the right party gain power that’s suddenly going to say “I read this great book by Charles Hugh Smith and this is how we’re going to do it”.

It’s going to be something like institutionalized hierarchies will just lose more and more relevance as these new social and business and financial configurations start gaining more and more relevance.

CHS: That’s an excellent point and I think if anything I didn’t emphasize that enough. That really what we’re talking about is kind of like hacking the system in in the old time sense that a hack was a workaround. It wasn’t like you were breaking into the system to steal something, you’d created a workaround for a kludgy system that just didn’t work anymore.

And so I think you’re absolutely right, it’s going to be working around us and and Bitcoin is one example of how workarounds are manifesting and of course the status quo is going try to suppress those and/or co-opt them but what we’re really talking about is when systems fail at a systemic level you can’t reform them. You’re not going to make a policy tweak that’s going to fix higher education or the health care system. It just isn’t going work.

People are going to start working around that and they’re going be starting to pay cash for for medical care from pop up providers or remote physicians. Or there’s lots of different solutions to that in education. What I see the model that’s going to emerge whether people like it or not and is that students are going to start taking control of their own education and they’re going start organizing their own education.

They don’t need this bloated structure that charges them $70,000 a year and so that’s where technology, the internet and networking has really enabled a whole suite of solutions that basically bypass all the institutions that now hold the wealth and power, that have all this as you say institutionalized lethargy as as their their model.

It’s actually quite an exciting time but for those who are dependent on the system within these institutions it’s a very disturbing time

Under Force Majeure as the institutions become understood to be out of touch with both the causes and remedies to the immediate crisis, they begin to signal their own hypocrisy and irrelevancy more intensely.

It will not be long before citizens will face the dilemma of continuing to observe the edicts of their governments, whose policies inexorably stripped them of their ability to weather any kind of economic speed bump. They will come to realize that despite what the government decrees, especially if that means keeping their businesses closed or their jobs on hold for much longer, they may be better off working around that.

That’s when myriad alternative economies and ecosystems will explode, black markets, grey markets, Local Exchange Currencies, private blockchains, invisible agoras.

As governments at all levels teeter on insolvency and their ability to control their own populace everywhere or to be in a position to guarantee security and order, I could envision neighbourhood watch groups morphing into localized militias. I would anticipate an explosion in private security and ex-military contractors.

Don’t be surprised to see Facebook resurrect their Libra, either under that monicker or some rebranded version as the large corporations, the ones that have revenues larger than most national GDPs begin to reassert some of their plans which may have been impeded earlier.

However it plays out, the key points to bear in mind are that:

  • It would be a mistake to think of the next 20 years as a linear, albeit accelerated version of the previous 20 years (a la Chris Martenson)

  • We are about to undergo a change in secularity from deflation to inflation (a la Grant Williams, Peter Schiff and many others)

  • The incumbent institutions of the fiat currency era are about to be swept away, akin to the way the royal houses of Europe were after World War 1 (the last major “Force Majeure” transition period that comes to mind for me).

It will all be very reminiscent of Neal Stephenson’s “Snow Crash”

Tyler Durden Sun, 04/05/2020 - 18:00
Published:4/5/2020 5:07:36 PM
[Columns] Coronavirus and the Common Good

Long before the onset of the pandemic, some of the journalists and politicians on the American right began speaking of the "common good." Back in 2005, Rick Santorum titled one of his books It Takes a Family: Conservatism and the Common Good. More recently, last October Sohrab Ahmari wrote that the common good should replace individual autonomy—i.e., freedom—as the touchstone of a new conservatism. The following month, Marco Rubio told an audience at Catholic University that a "common-good capitalism" would promote dignified work for all and incentivize businesses to reinvest "enough" of their profits to create jobs in the United States.

The post Coronavirus and the Common Good appeared first on Washington Free Beacon.

Published:4/3/2020 4:46:52 AM
[Markets] "Borders Matter" - Austria's COVID-19 Chronicles "Borders Matter" - Austria's COVID-19 Chronicles

Authored by Elisabeth Sabaditsch-Wolff via The Gatestone Institute,

Week 1 in a country in complete shutdown. Austria has been at the forefront of forcing its citizens to "shelter in place" by enacting measures so severe that even the country's elderly cannot remember anything similar.

To snuff out a virus that originated in China in November and has since made its way around the world, roughly a month ago, the Austrian government, led by Chancellor Sebastian Kurz, thankfully heeded a dire warning by Israeli Prime Minister Benjamin Netanyahu, took hard a look at Austria's neighboring country, Italy, and immediately enacted a first set of measures, followed by the drastic rules mentioned above, that were first extended until April 13 and stepped up on March 30.

The new measures include wearing compulsory masks when grocery shopping, which, in due course, will be extended to the wearing masks when outdoors at any time. In addition, vulnerable men and women, that is, those whose immune systems are compromised, are required to stay home, with their salaries covered by the government. The chancellor warned the population that "what we are witnessing right now is the quiet before the storm" and added that if measures are loosened, they will start with the opening of shops and some restaurants; universities and schools will follow at the very end of this process. Schools in Austria are therefore unlikely to reopen before the fall, although there are already extensive courses online.

Noteworthy findings turned up, however, such as what public issues matter and what do not:

Borders matter. 

For many years, Europeans have been told by their leaders that borders could not be closed to curb illegal migration due to the Schengen Agreement, to the detriment of security in European countries. Suddenly, with the numbers of COVID-19 deaths rising, and with the spread of the virus traced across Europe, border controls, barriers and other measures were swiftly introduced. The United States followed suit in closing its borders with Canada and Mexico. Strict border security helps to stop the virus from spreading. In the 14th century, Polish King Casimir III knew what to do in order to save his country from the plague, which had spread from China to Europe and killed countless millions of people. Poland was less affected by the plague because King Casimir isolated his country, closed borders and quarantined the border regions. Border security is health security.

Freedom of speech matters. 

The Austrian government has installed a "ministry of truth" in the office of the chancellor, staffed by police cadets. In times of crisis, the search for the truth is more challenging than ever. Abundant propaganda, fake news and rumors are disseminated, even by the governments (here and here). But a cow remains a cow even if it is called a sheep. The Austrian government and the UK government have set up special task forces to weed out so-called fake news and "'defend the country' from misinformation" with respect to anything concerning Covid-19.

Andreas Unterberger, Austria's most widely read political blogger, notes:

"It is absolutely stunning that a large police unit has now started to officiate in the Chancellery....The government acts as if it were in possession of the absolute truth amid a sea of lies and half-truths. On the contrary, the opposite is true... whenever a government got its hands on truth control, it has massively abused it within a very short time to gag and ban critical and oppositional voices. Once they have the power to control opinion, it is a massive temptation for those in power to use it in the self-interest of a government. The government ministers fail to realize the most important connection: the more a government carries out opinion control, the more people inevitably trust alternative sources of information, and not the government officials or those financed by the government."

Sadly, not just the government but also Amazon, has discreetly eliminated a sizeable list of books from its listing, citing "dubious" information or even "conspiracy theories" on the defense against or even cure for Covid-19. Who decides what is a conspiracy theory? Amazon? Where has the marketplace of ideas disappeared to? Where, in fact, is the marketplace?

Sovereignty and nationalism matter. 

The president of the American Freedom Alliance, Karen Siegemund, notes:

"Notice how each country – country! – took upon itself its right to sovereign action to protect its citizens.
Italy imposed quarantines; Austria closed its borders and implemented various restrictions on gatherings and mandated closures of entertainment venues, restaurants etc. Even Germany has now closed its borders.
Borders in the context of Europe is an astounding thing, and it's heartbreaking that it took a virus, and the deaths it's left in its wake, rather than the years-long invasions for [the countries] to assert sovereignty, and to finally, finally, turn to protecting their citizens.

"'Europe' in the form of the European Union has been silent. The United Nations does not even seem to be speaking out although, in a rational world they would -- and should -- be calling for "Crimes against humanity" charges to be brought against China. That silence under these circumstances is simply further proof of the UN's uselessness at best, and of the EU's utter irrelevance.

"It is nations putting the health, safety and security of their people above all else that will stem the spread of this virus; the nightmare is that it took this pandemic to wake governments up to the primacy of their people as the core of their responsibility."

Leadership matters. 

Whether the greatly differing measures taken by continental Europe or those in the United Kingdom are successful remains to be seen, but leadership in times of crisis is crucial. In the UK, it is prime minister Boris Johnson who on March 3 launched a four-step plan to combat the outbreak in the UK, later backing away from herd immunity. New and tough measures, including a lockdown, were later implemented. In Austria, Chancellor Sebastian Kurz exhibited tough leadership. It is too early to assess whether the government is taking the "right" steps; however, remaining calm and in control are key to garnering support even among his critics. Kurz is adept at team-building, by including all members of his government as well as by keeping the political opposition informed. This approach has led to bi-partisan support for all implemented measures. In the United States, President Donald J. Trump has been personally leading an extremely popular daily televised press briefing with members of his Covid-19 task force.

Receding into the background have been topics such as climate change, Greta Thunberg, and Fridays for Future. Health measures have clearly taken precedence over kids cutting school. Nevertheless, many have always been adept at "never letting a crisis go to waste" (Rahm Emanuel) and at using one to do things that could not be done before; they will probably be back to doing their best to see what they can land in their "dream catcher".

Armed forces matter. 

Germany has mobilized its military to assist in maintaining public order, with German Minister of Defense Annegret Kramp-Karrenbauer reassuring Germans that "in these difficult times, the citizens can rely on their Bundeswehr." Despite being financially starved in recent years, the Austrian armed forces were mobilized early on in the crisis to assist the Ministry of Foreign Affairs in repatriating Austrians from abroad, providing support in logistical tasks such as stocking grocery stores, and relieving police by protecting foreign embassies in Vienna. The move proved right the rejection of the 2013 referendum to end conscription and introduce a professional army.

Civil vigilance matters. 

A particularly worrisome trend is having politicians using crises to increase the power of the state -- a terrifying thought. Although in this instance, people actually did need to be quarantined to prevent the rolling spread of the virus, the widespread lockdowns in the United StatesEurope and in Israel -- which, in Austria's case, took place after unprecedented accelerated parliamentary discussion -- are likely bound for even more debate after the return to normalcy. Also potentially problematic is the British Coronavirus Bill, which "will enable the police and immigration officers to detain a person, for a limited period, who is, or may be, infectious and to take them to a suitable place to enable screening and assessment". In a different situation, the words "may be" could be ominous in their broadness. For now, however, we should be thankful to our governments for trying to contain a runaway virus to which we have no immunity until some form of limiting its medical and economic harm can be found.

Tyler Durden Fri, 04/03/2020 - 01:35
Published:4/3/2020 12:43:34 AM
[] Trump: China's official coronavirus death toll data seems to be a little on the light side Published:4/1/2020 7:07:29 PM
[Markets] In Groundbreaking Move, Fed Excludes Treasurys From Leverage Ratio Rule: Here's What That Means In Groundbreaking Move, Fed Excludes Treasurys From Leverage Ratio Rule: Here's What That Means

For the past few weeks, most of Wall Street's Fed watchers and STIR experts such as Zoltan Pozsar and Marc Cabana had lamented that one trick the Fed could pull to ease the tension in the Treasury market and to potentially unlock hundreds of billions in new lending capacity among US commercial banks, was to exclude Treasuries and deposits from the Fed's much maligned Supplementary Leverage Ratio Rule, which forces banks to hold ultra safe Treasuries and/or deposits on their books (which are traditionally viewed by the Fed as less risky than loans) or else suffer a G-SIB capital surcharge.

Specifically, the Fed's supplementary leverage ratio applies to financial institutions with more than $250 billion in total consolidated assets, and requires them to hold a minimum ratio of 3%, measured against their total leverage exposure, with more stringent requirements for the largest and most systemic financial institutions.

As we showed in November, JPMorgan's aggressive dumping of Treasurys is why the bank's GSIB surcharge was the highest across all US banks despite being widely seen as the safest US commercial bank.

Well, after trying pretty much everything else, including unleashing unlimited QE, expanding swap lines, opening unlimited repos to both domestic Dealers and Foreign central banks, and restarting the entire Lehman alphabet soup toolkit, on Wednesday after the close, the Fed did just that, and announced that to ease strains in the Treasury market resulting from the coronavirus and increase banking organizations' ability to provide credit to households and businesses, the Fed announced a temporary change to its supplementary leverage ratio rule, which would exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the rule for holding companies, and will be in effect until March 31, 2021.

Explaining the move, the Fed argued that as a result of the dramatic increase in deposits observed in recent weeks as investors dumped risky assets, banks may be limited in their abilities as "financial intermediaries and to provide credit to households and businesses." The change to the supplementary leverage ratio should therefore "mitigate the effects of those restrictions and better enable firms to support the economy."

Liquidity conditions in Treasury markets have deteriorated rapidly, and financial institutions are receiving significant inflows of customer deposits along with increased reserve levels. The regulatory restrictions that accompany this balance sheet growth may constrain the firms' ability to continue to serve as financial intermediaries and to provide credit to households and businesses. The change to the supplementary leverage ratio will mitigate the effects of those restrictions and better enable firms to support the economy.

The Fed also said that "financial institutions have more than doubled their capital and liquidity levels over the past decade and are encouraged to use that strength to support households and businesses."

However, to make sure that the expanded balance sheet capacity is not used by banks simply to accelerate stock buybacks, it explicitly stated that "the Board is providing the temporary exclusion in the interim final rule to allow banking organizations to expand their balance sheets as appropriate to continue to serve as financial intermediaries, rather than to allow banking organizations to increase capital distributions, and will administer the interim final rule accordingly."

Finally, as explained above, whereas the supplementary leverage ratio "generally applies to financial institutions with more than $250 billion in total consolidated assets" and requires them to hold a minimum ratio of 3 percent, measured against their total leverage exposure (with more stringent requirements for the largest and most systemic financial institutions), the SLR change would temporarily decrease tier 1 capital requirements of holding companies by approximately 2 percent in aggregate.

Translation: what the Fed is effectively granted banks some 2% in balance sheet capacity to use as they see fit, as long as it is not for buybacks, eligible capital which they can - and likely will - use to buy more Treasurys knowing they can then just flip those Treasurys back to the Fed with a profit. Sure enough, Treasury yields immediately dumped after the news...

... although they have since rebounded. Why?

Perhaps because the market took one look at the recent usage of the Fed's repo facilities where any ongoing SLR stresses would have emerged, as Dealers would be forced to pledge more Treasurys to the Fed in exchange for reserves. Instead... crickets: not only have Dealers virtually stopped parking Treasuries at either the overnight or term repo facility...

... but today saw the second "no bid" repo operation ever, as not a single Treasury or MBS was pledged to the Fed in return for cash.

Why? It is not immediately clear what prompted Dealers to shun the Fed's repo operation, although some have speculated that faced with a choice of parking safe assets at the Fed which paying a modest interest payment, or selling the paper to the Fed as part of the massive unlimited repo, virtually everyone has chosen the second option.

It could also mean that as a result of the meteoric changes observed in the banking system in recent days, the SLR ratio is no longer the bottleneck that either the Fed or strategists think it is.

Instead one possible reason for the operation is to make sure banks have the capacity to lend out the $350BN in loans to small and medium businesses under the Fed's $2 trillion fiscal stimulus which as a reminder will start being funded as soon as this Friday, and the Fed's SLR easing provides banks with the needed space to expand their balance sheets to accommodate all the incremental loans. Finally, for those who believe that as a result of this Fed action, the US economy will somehow soar, please remember that loans are not a function of supply but demand, and the last thing on cash-strapped Americans' minds right now  is how to get even deeper in debt.

Tyler Durden Wed, 04/01/2020 - 17:43
Published:4/1/2020 5:05:27 PM
[Markets] Johnstone: People's Skepticism About COVID-19 Is The Fault Of The Lying Mass Media Johnstone: People's Skepticism About COVID-19 Is The Fault Of The Lying Mass Media

Authored by Caitlin Johnstone via,

Coronavirus disinformation is the hot topic of the day, with pressure mounting on social media platforms to censor incorrect information about the virus and mainstream news outlets blaring dire warnings every day about the threat posed by the circulation of false claims about the pandemic.

“As fast as the coronavirus has raced around the globe, it has been outpaced by a blinding avalanche of social media sorcery and propaganda related to the pathogen, much of it apparently originating in Russia,” the Washington Post editorial board . 

“As always when it comes to its relations with the West, Moscow’s main currency is disinformation, and it spends lavishly.”

This would be the same Washington Post who falsely assured us that the Bush administration had provided “irrefutable” proof that the government of Iraq had weapons of mass destruction. The same Washington Post who falsely assured us that Russian hackers had penetrated the US electricity grid to cut off heat during the winter, and who circulated a McCarthyite blacklist of alternative media outlets designated “Russian propaganda” compiled by a group of anonymous internet trolls. The same Washington Post whose sole owner is a literal CIA contractor yet never discloses this brazen conflict of interest when reporting on the US intelligence community as per standard journalistic protocol.

If outlets like The Washington Post had done a better job of consolidating their reputation as a reliable news source instead of constantly deceiving their readers about very important matters, people would believe them instead of believing a “blinding avalanche of social media sorcery” (and web wizardry and internet incantations and electronic enchantments and net necromancy).

We’re seeing these urgent warnings about coronavirus disinformation and misinformation from mainstream outlets who’ve sold the public lies about war after war, election after election, status quo-supporting narrative after status quo-supporting narrative.

“Here’s How to Fight Coronavirus Misinformation” reads a headline by The Atlantic, whose editor-in-chief Jeffrey Goldberg once assured us that “the coming invasion of Iraq will be remembered as an act of profound morality,” and whose star writer is David “Axis of Evil” Frum.

“China and Russia have seized on the coronavirus outbreak to wage disinformation campaigns that seek to undermine the U.S. and its handling of the crisis, rather than addressing public criticism of their own struggles with the pandemic,” warns The New York Times, who played a leading role in the disinformation campaign to build support for the Iraq invasion and who aggressively pushed crazy-making Russia hysteria (including famously retracting its bogus “17 intelligence agencies” claim).

So it is understandable that people are suspicious and looking to alternate sources for answers. The outlets which are warning them about the dangers of this virus and defending massive, unprecedented changes which have an immense impact on the lives of ordinary people have an extensive and well-documented history of lying about very important things. People are aware of this, in their own ways and to varying degrees, and it doesn’t help that all the usual suspects are behaving in a way that feels uncomfortably familiar.

“This pandemic will be more consequential than 9/11. It probably already is. People just don’t realize it, because they still think — still feel — that once this is all over we’ll go back to the way things used to be. We won’t,” says The Bulwarkfounder Bill Kristol was also the founder of the wildly influential think tank Project for a New American Century (PNAC). PNAC famously argued a year before the 9/11 attacks that the massive worldwide increase in US military interventionism they were promoting at the time would not be possible without “some catastrophic and catalysing event — like a new Pearl Harbor”. All of which miraculously came to pass.

I personally believe there’s enough evidence that this virus is sufficiently dangerous to justify many of the significant precautions nations have been taking (though of course we must oppose and be vigilant against government overstepping into authoritarianism). The statistics are still very blurry and unreliable, but the mountains of testimonies by rank-and-file medical staff pouring in from areas where the outbreak is bad constitute enough anecdotal evidence for me to believe that this virus can very easily overwhelm our healthcare systems if we don’t collectively take drastic measures to contain it.

That said, I certainly can’t cast blame on people who believe the threat the virus poses is being greatly exaggerated. Not because I think they’re right, but because you don’t blame a population who’s been constantly lied to for their disbelief in what they’re being told by the very political/media class which has been lying to them. It’s not the fault of the rank-and-file public that they’re believing conspiratorial narratives, erroneous Facebook memes, right-wing pundits and the US president over the mainstream press; it is the fault of the mainstream press themselves.

I’ve taken a lot of flack in conspiracy circles lately for my relatively normie stance on Covid-19, but I also can’t really take it personally because it isn’t really their fault. Not everyone has the time and the resources to independently comb through many disparate bits of information about a single topic and synthesize a lucid understanding of what’s going on; that’s meant to be the job of the press, but since they’ve neglected to do their job time and time again they lack the credibility to demand that people believe what they’re reporting.

So I never join in the loud finger-wagging and aggressive demonization of those who express doubt in what’s really going on with this thing. I’ll leave that to those of a more mainstream bent, since they seem to enjoy it so much. As for myself, I will continue pointing out that the reason misinformation is so readily believed is the same as the reason Trump’s criticisms of the mainstream press are so readily believed: they have absolutely earned their garbage reputation.

The whole reason the world is the way it is right now is because people have been manipulated by the media-controlling class into accepting an absolutely insane status quo as normal. That’s the only reason anyone believes it makes sense for so few to have so much while so many have so little, for trillions of dollars to be poured into military expansionism and wars which benefit no one but the rich and powerful, for the environment to be destroyed to make a few more millionaires into billionaires, for a demented right-wing racist warmonger to be running against another demented right-wing racist warmonger for the most powerful elected office on the planet.

The big lies happen once in a while, but these little lies of normalizing our insane status quo happen every single day. On some level everyone is aware, however dimly, that our society is crazy and needs to change drastically, and so they are also aware that this is the opposite of the message they receive every day from the “authoritative” narrative-makers. The crazier things get, the more this awareness will necessarily grow, and the less people will trust the billionaire media whose only purpose is to maintain the status quo upon which its owners have built their respective kingdoms.

You can’t blame people for being distrustful when you make them that way. The people screaming the loudest about disinformation right now are the ones most responsible for it.

*  *  *

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

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Tyler Durden Wed, 04/01/2020 - 14:30
Published:4/1/2020 1:37:30 PM
[Society] One Millennial’s Guide to COVID-19: 8 Ways to Embrace Our New Normal

Millennials have spent their formative years reading self-help books and binge-watching lifestyle video blogs. We are students of the Enneagram, Myers-Briggs, and DiSC personality tests.... Read More

The post One Millennial’s Guide to COVID-19: 8 Ways to Embrace Our New Normal appeared first on The Daily Signal.

Published:4/1/2020 11:13:48 AM
[Markets] Pandemic-Related Unemployment And Shutdowns Are A Recipe For Social Unrest Pandemic-Related Unemployment And Shutdowns Are A Recipe For Social Unrest

Authored by J.D.Tuccille via,

Could the stalled economy we've inflicted on ourselves in our frantic efforts to battle the COVID-19 pandemic lead to civil disorder? History suggests that's a real danger.

Around the world, high unemployment and stagnant economic activity tend to lead to social unrest, including demonstrations, strikes, and other forms of potentially violent disruptions. That's a huge concern as forecasters expect the U.S. unemployment rate in the months to come to surpass that seen during the depths of the Great Depression.

"We're putting this initial number at 30 percent; that's a 30 percent unemployment rate" in the second quarter of this year as a result of the planned economic shutdowns, Federal Reserve Bank of St. Louis President James Bullard told Bloomberg News on March 22. Gross Domestic Product, he adds, is expected to drop by 50 percent.

Unlike most bouts of economic malaise, this is a self-inflicted wound meant to counter a serious public health crisis. But, whatever the reasons, it means businesses shuttered and people without jobs and incomes. That's risky.

"Results from the empirical analysis indicate that economic growth and the unemployment rate are the two most important determinants of social unrest," notes the International Labour Organisation (ILO), a United Nations agency that maintains a Social Unrest Index in an attempt to predict civil disorder based, in part, on economic trends. "For example, a one standard deviation increase in unemployment raises social unrest by 0.39 standard deviations, while a one standard deviation increase in GDP growth reduces social unrest by 0.19 standard deviations."

Why would economic shutdowns lead to social unrest? Because, contrary to the airy dismissals of some members of the political class and many ivory-tower types, commerce isn't a grubby embarrassment to be tolerated and avoided—it's the life's blood of a society. Jobs and businesses keep people alive. They represent the activities that meet demand for food, clothing, shelter—and that develop and distribute the medicine and medical supplies we need to battle COVID-19.

President Donald Trump may be overly optimistic when he hopes to have the country, including areas hard-hit by the virus, "opened up and just raring to go by Easter," but he's not wrong to include the economy in his calculations.

By contrast, New York Gov. Andrew Cuomo's insistence that "if it's public health versus the economy, the only choice is public health," sounds fine and noble. But it reflects an unrealistic and semi-aristocratic disdain for the activities that make fighting the pandemic possible at all—and that keep social unrest at bay.

While the ILO has tried to quantify the causes of social unrest, its researchers certainly aren't the first to make the connection between angry, unemployed people and trouble in the streets.

At the height of the Great Depression, when U.S. unemployment hit a peak of 24.9 percent, Franklin Delano Roosevelt's administration saw make-work programs such as the Civilian Conservation Corps (CCC) as a means of getting the jobless—especially young men—safely into "quasi-military camps often far from home in the nation's publicly owned forests and parks," Joseph M. Speakman wrote for the Fall 2006 issue of Prologue Magazine, a publication of the U.S. National Archives and Records Administration.

"Bringing an army of the unemployed into 'healthful surroundings,' Roosevelt argued, would help to eliminate the threats to social stability that enforced idleness had created," Speakman added.

The program mostly workedat least, it confined revolts to the camps themselves, where they were suppressed by Army officers. Those same officers commanded the men when they were drafted and dispatched to even more remote destinations with the coming of World War II.

In fact, the connection between unemployment, stagnant economies, and social unrest is so clear that an important indicator for a large underground economy is relative peace prevailing alongside a chronically high unemployment rate.

If 21 percent of the workforce "were jobless, Spain would not be as peaceful as, barring a few demonstrations, it has so far been, say economists and business leaders," the Financial Times noted in 2011. Sure enough, researchers found that off-the-books businesses and jobs thrived in Spain—accounting for the equivalent of a quarter of GDP at one point—keeping people employed and defusing tensions.

Bullard of the Fed doesn't propose shipping the jobless off to the wilderness—at least, not yet—and he doesn't seem inclined to rely on the black market to keep people fed, warm, and healthy. Instead, to defuse the impact of the social-distancing shutdowns of normal economic activity, he calls for lost income to be replaced by unemployment insurance and other payments that would make displaced workers and business owners whole.

He better be right that government checks—drawing on money from the thin air and not generated by an economy that has largely halted, I'll note—can offset the pain of lost jobs and businesses, because the first wave of the unemployment he predicts is already here.

"In the week ending March 21, the advance figure for seasonally adjusted initial claims was 3,283,000, an increase of 3,001,000 from the previous week's revised level," the United States Department of Labor announced on Thursday, March 26.

"This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series."

Those disturbed by such economic collapse include public health professionals who take COVID-19 very seriously.

"I am deeply concerned that the social, economic and public health consequences of this near total meltdown of normal life—schools and businesses closed, gatherings banned—will be long lasting and calamitous, possibly graver than the direct toll of the virus itself," wrote David L. Katz, former director of Yale University's Yale-Griffin Prevention Research Center, in The New York Times last week.

"The stock market will bounce back in time, but many businesses never will. The unemployment, impoverishment and despair likely to result will be public health scourges of the first order."

Unemployment, impoverishment, and despair are frightening outcomes in themselves. They're also a recipe for social unrest that will afflict even those of us who weather both the pandemic and the accompanying economic storm.

Tyler Durden Tue, 03/31/2020 - 18:05
Published:3/31/2020 5:30:27 PM
[Entertainment] US-Apple-Books—Top-10 US-Apple-Books—Top-10 Published:3/31/2020 11:28:17 AM
[] Those plastic bag bans aren't looking so good right now Published:3/30/2020 9:51:46 AM
[Markets] Blain: "Don't Be Fooled... April Is Going To Hurt" Blain: "Don't Be Fooled... April Is Going To Hurt"

Authored by Bill Blain via,

“Damn, he was good. Came out of nowhere. Hit us with a full broadside, cut across our tail and took out our rudder. Damn fine gunnery.”

According to the press, China is experiencing normal traffic jams, while the major threat is reinfection from the West, so borders are locked shut. They are anticipating business as usual. They are in for a shock. 

JP Morgan are on the wires saying markets have made their lows, and although it will be volatile, its time to “average into oversold markets.”

In my opinion… they are fools

I suspect this is going to be a very very bad week for markets. 

April is going to hurt. Last week’s rumbustious rally on the back of kitchen sink government fiscal promises, QE infinity and “the boys will be home by Chistmas” market optimisim, is going to be crushed. The flow is about to get much worse, in a trifecta of economic, business and virus news. 

We are about to learn a sharp brutal lesson about expectations versus reality:

  • There is no swift end in sight. The UK has been warned to expect months of distancing. Trump isn’t reopening the economy for Easter - he’s closing America down till May.

  • Oil prices have crashed below $20. 

  • Rising economic damage, business failures, and confirmation of massive unemployment – especially in US – will come to fore in this week’s data and numbers through the month. Government support packages will take months to become established – months the markets don’t have.

  • Aside from a few ultra-high Investment grade cash-rich corporates, there is a massive industrial scramble for cash underway. Anyone able to raise cash should lift any offer – before a slew of downgrades and defaults closes credit markets completely. 

  • Emerging Market economies were pummelled by dollar strength, are now about to be devasted by the global virus demand shock, and as virus countermeasures hits already unstable nations could well plunge into chaos. 

  • Market chartists will tell you optimistic bear rallies are a standard part of every market crash – and the bottom will be retested a number of times. 

  • There is still pain to come. There are a large number of investors - both institutional want-to-be’s (like JP Morgan) who buy the stimulus and are thinking there are easy returns to be made after such a large “correction”, and retail buyers who are fearful their retirement savings have been shattered who are willing to shake the dice. They can’t quite believe what’s happened, don’t compute the scale of the economic shock, and won’t face up to a changed world till they take more pain.

If any of these are positive reasons to sustain last week’s rally, feel free to explain in the comments section of the Morning Porridge below. 

A number of good analysts suggest the chances of a swift recovery are better than the bleak headlines suggest. They quote issues like obvious market opportunities will swiftly attract smart money – which is true, and the natural resilience of capitalist economies in the face of economic catastrophe – which was once true. 

I hope they are right, but I wonder about human economic behaviour – which tends not to have read Rational Expectations economic text-books. What tends to happen is at the individual agent level, where they seek to maximise personal gain by arbitraging distortions like government bailouts and free money in unexpected ways. 

Not every entrepreneur will use a government guaranteed loan to tide over their business – some may use them to wreck the competition, enrich themselves, invest in risk, or act in a thousand other ways. Market distortions and interventions have unintended consequences which ultimately prove negative – a lesson governements and central banks have been trying to ignore for the last decade of monetary distortion and experimentation. 

(If you don’t believe me, explain why thousands of corporates spent the last decade buying back their stock instead of investing in new productive capacity and new product innovation?)

Get ready for a long-haul of increasingly dire economic news. A month - at least - of Lockdown helplessness, as corporates and individuals scramble for cash, struggle to obtain funds and face unmeetable demands for rent, mortgages, and to pay off debts. It’s going to be brutal. 

Is there any good news? 

Perhaps in the virus itself – but this isn’t about the Wuhan flu. It’s about the economy. In the absence of real data in many countries due to the lack of testing, we’re forced to make guesses. But the trends are showing infections rise (as testing kicks in) and a falling mortality percentage. The pace of mortality deaths is declining – as was expected to happen as lockdowns lower the R transmission rate and the all-important “critical cases in hospital” curves. We will find out how successful its’ been in coming days. 

On the other hand, the first obituaries of coronavirus victims are appearing; including a number of fit, middle aged men, demonstrating the random nature in terms of victims and symptoms. 

To tell a story: after struggling with the disease for over a week, a fit chap in his late fifties I know in London ended up in Hospital, (and fortunately got better quickly once given oxygen and sent home). Meanwhile his partner and her daughter are showing zero symptoms and feel absolutely fine (although badly traumatised by his illness), despite all being cooped up together in a London flat.

The virus storm will likely escalate across North-West Europe and the US this week, while plateaus across Italy and Spain are expected. Will Europe reopen as quickly as China – unlikely because there has been less testing, less source tracing and very little real information to base decisions upon. 

Don’t be fooled – as markets were last week – that there is an easy and quick answer to this crisis. However, there are definitely investment opportunities out there. The trick is grabbing them and holding on through the coming storm..

Tyler Durden Mon, 03/30/2020 - 10:35
Published:3/30/2020 9:51:46 AM
[Markets] What Happens As State And Local Tax Revenues Crater? What Happens As State And Local Tax Revenues Crater?

Authored by Charles Hugh Smith via OfTwoMinds blog,

We can anticipate a federal bailout of pension funds and one-time aid to state and local governments, but bailouts won't repair the eroding foundations of tax revenues.

As we all know, the federal government can "print" money but state, county and city governments cannot. The Treasury can sell bonds to fund deficit spending, and the Federal Reserve can create currency out of thin air to buy the bonds, so federal spending can increase even as tax revenues crash.

State, county and city governments do not have this printing press. Yes, states and counties can sell municipal bonds for infrastructure projects, but they can't sell bonds to support General Fund (i.e. everyday government services) expenditures.

As a result, massive declines in State, county and local tax revenues are already baked in as sales and payroll taxes drop and capital gains taxes--an essential source of revenues for many states--are set to collapse along with the stock market.

Longer term, the other primary source of tax revenues--property taxes--will fall off a cliff as the commercial real estate bubble and Housing Bubble #2 implode later this year. Lower sales, lower employment and lower profits all undermine the fundamentals of real estate, and the institutionalization of remote work and education will gut demand for commercial space.

Real estate transactions are also sources of transfer taxes and capital gains, and as values plummet so will transfer taxes and capital gains.

Every locale has a different mix of tax revenues, but since all sources will fall sooner or later, no state or local government will escape the decline in revenues. Sales (excise) and payroll tax revenues will fall first, and capital gains will vanish as stock market losses replace gains.

In states like California that depend heavily on capital gains taxes, the holes being blown in budgets will be catastrophic. Roughly 10% of all General Fund revenues in California flow from capital gains--over $15 billion in the previous fiscal year. As noted in the California State Revenue Estimate 2019-2020:

"The amount of capital gains revenue in the General Fund can vary greatly from year to year. For instance, in 2007, capital gains contributed $10.9 billion to the General Fund. By 2009, the contribution from capital gains had dropped to $2.3 billion. For 2018, capital gains are forecast to contribute $15.7 billion to General Fund revenue--the highest amount ever."

Were this to drop to previous recession-era lows, that would open a $13 billion hole in tax revenues, completely erasing the state's $8 billion "rainy day fund" and leaving a $5 billion deficit--a sum that will only increase as sales and payroll taxes decline.

Once Silicon Valley Unicorns, Big Tech and zombie corporations start laying off highly paid staff, income tax revenues will crater as well. As the California State Revenue Estimate 2019-2020 explains:

"The highest-income Californians pay a large share of the state's personal income tax. For the 2016 tax year, the top 1 percent of income earners paid just under 46 percent of personal income taxes. This percentage has been greater than 40 percent in 12 of the past 13 years. Consequently, changes in the income of a relatively small group of taxpayers can have a significant impact on state revenues."

Many states and counties are increasingly dependent on a dominant revenue source which may well prove to be an Achilles Heel. California has increasingly come to depend on income taxes from high earners (who also garner most of the capital gains as well):

"In 1950-51, sales tax revenue made up over 50 percent of General Fund revenues while personal income tax revenue made up just more than 11 percent. That relationship has changed dramatically over time, and, for 2019-20, personal income tax makes up 68.8 percent of all General Fund revenues."

A steep decline in tax revenues isn't the end of the pain for local government. Public-sector pension funds heavily invested in stocks are absorbing shattering losses that will have to be compensated by higher contributions by cash-strapped taxpayers. If bond yields rise despite central bank interventions, bond holdings could crash along with stocks.

We can anticipate a federal bailout of pension funds and one-time aid to state and local governments, but bailouts won't repair the eroding foundations of tax revenues. Sales: down. Income: down. Capital gains: down. Vehicle sales: down. Fuel taxes: down. Property taxes: down, once bubble valuations crash to earth.

Cash-strapped taxpayers, many of whom may have lost their jobs, will be in no mood to absorb enormous tax increases to fund insiders, cronies and vested interests.

The gravy train of state and local government spending has just been derailed. The declines in tax revenues will be too steep and too enduring to support the magical-thinking hope that a V-shaped recovery will make all the blown budgets whole next quarter, much less next year.

*  *  *

My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

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

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

*  *  *

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

Tyler Durden Mon, 03/30/2020 - 09:05
Published:3/30/2020 8:21:11 AM
[Markets] The New (Forced) Frugality The New (Forced) Frugality

Authored by Charles Hugh Smith via OfTwoMinds blog,

There are only two ways to survive a decline in income and net worth: slash expenses or default on debt.

In post-World War II America, the cultural zeitgeist viewed frugality as a choice: permanent economic growth and federal anti-poverty programs steadily reduced the number of people in deep economic hardship (i.e. forced frugality) and raised the living standards of those in hardship to the point that the majority of households could choose to be frugal or live large by borrowing money to enable additional spending. Either way, rising income and net worth would raise all ships, frugal and free-spending alike.

For everyone above the bottom 20%, frugality was viewed as a sliding scale of choice: if you couldn't increase your income fast enough, then borrow whatever money you needed. If you chose to be frugal, in moderation (i.e. clipping coupons and shopping for the cheapest airline seats, etc.) this was viewed as admirable fiscal prudence; if pushed beyond moderation then it was dismissed as counter to the American spirit of everlasting expansion: tightwad is not an endearment.

Thus none of us immoderately frugal folks ever fit in. Our frugality raised eyebrows and drew derogatory exhortations from indebted free-spenders to "get out there and live a little," i.e. blow hard-earned money on aspirational gewgaws or status-enhancing fripperies, including the oh-so-precious "experiences" that have now replaced gauche physical markers of status-climbing.

We are now entering a new era of forced frugality in which incomes and net worth stagnate or decline while the cost of living rises and borrowing is no longer frictionless.

To say that these changes will shock the system is putting it mildly. Here's the key dynamic in forced frugality: income can drop precipitously without any ratcheting to slow the decline, but costs only ratchet higher, or decline by nearly imperceptible degrees; that is, costs are "sticky" and refuse to slide down as easily as income.

The second key dynamic in forced frugality is the tightening of lending and the rising cost of borrowed money. When lenders could assume that almost every household's income would increase as a byproduct of ceaseless economic expansion, and assets such as stocks, bonds and houses would always increase in value (any spots of bother are temporary), then the odds of a nasty default (in which the borrower stiffs the lender--no monthly payments to you, Bucko)--were low.

But once incomes and asset valuations are more likely to fall than rise, the door to lending slams shut. Why would lenders extend loans to households and enterprises that are practically guaranteed to default? Any lender that self-destructive would soon be stripped of their capital and solvency.

The general assumption is that since central banks are buying bonds, interest rates for borrowers can only go down. This assumption is misguided. The base assumption of all lenders is that a very thin layer of borrowers will default. Once this layer thickens, it makes no sense to lend to everyone who can fog a mirror.

Unwary lenders are about to learn a very painful lesson about the creditworthiness of supposedly solvent middle-class households: since income isn't "sticky," households that had high credit scores for years can quite suddenly default on their loans once their incomes plummet.

As for the borrower's assets, those too can plummet in value, leaving the lender with zero collateral or an asset for which there is no buyer, regardless of the appraised value.

The income/assets slope is greased while the cost slope is on a resistant ratchet. Income can slide down effortlessly while costs stubbornly refuse to fall.

The net result of this dynamic is forced frugality. For the first time in decades, households and enterprises cannot count on a resumption of growth in a few months and higher incomes and asset valuations.

To the dismay of living-large-on-debt households and enterprises, the only way to get more than you have now will be to save, save, save cash. Earning more from one's labor will be difficult, as will reaping easy speculative gains from simply owning assets.

The debt-free frugal may be forgiven for indulging in a bit of schadenfreude toward those who scorned frugality in favor of living large in the moment. Now who's living large? Not the extremely frugal, because squandering money gives them no pleasure, and they prefer the anti-status "status" of old cars and trucks, tools that have lasted decades and assets that look like everyone else's except they're debt-free.

As for income--those who control and invest their own capital and labor, the class I've long called mobile creatives--will have far more opportunities than those chained to the monoculture plantations of corporate cartels and government agencies squeezed by collapsing tax revenues.

A great many people who reckoned moderate frugality was more than enough will discover it no longer suffices. A great many other people who reckoned they were rich enough to spurn frugality will discover their income no longer covers their expenses and so expenses will have to be slashed and burned to the ground.

And many frugal people who did the best they could with limited income will find that even extreme frugality can't fix a decline in income.

An economy-wide reckoning of what's essential is just starting. Netflix subscription? Gym membership? Fast food takeout a couple times a week? No, no and no. A thousand no's as there are only two ways to survive a decline in income and net worth: slash expenses or default on debt. Both are toxic to "growth" in spending and debt.

*  *  *

My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

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

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

*  *  *

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

Tyler Durden Sun, 03/29/2020 - 12:15
Published:3/29/2020 11:19:17 AM
[Literature] Locked down with Shakespeare (Scott Johnson) Paul Cantor is Clifton Waller Barrett Professor of English at the University of Virginia and author of Shakespeare’s Roman Trilogy: The Twilight of the Ancient World. He is also a brilliant student of American popular culture, as documented in three books that compile his essays on the subject. Professor Cantor is the author, most recently, of the Modern Age essay/review “Shakespeare and classical antiquity,” just posted by the Intercollegiate Studies Published:3/29/2020 7:15:52 AM
[Markets] The West Needs To Wake Up To China's Duplicity The West Needs To Wake Up To China's Duplicity

Authored by Giulio Meotti via The Gatestone Institute,

The Chinese Communist Party is the "central threat of our times", US Secretary of State Mike Pompeo astutely said in January. Back then, coronavirus was already spreading throughout China and over the world; the Communist Party's attempt to hide the epidemic proved that Pompeo was more than right.

"My concern is that this cover-up, this disinformation that the Chinese Communist Party is engaged in, is still denying the world the information it needs so that we can prevent further cases or something like this from recurring again", Pompeo added this week.

Had China responded to the outbreak three weeks earlier than it did, cases of coronavirus could have been reduced by 95%, according to a study by the University of Southampton. In those three weeks, China was busy hiding the truth. According to Steve Tsang, director of the University of London's SOAS China Institute, "It is the cover-up of the Communist Party for the first two months or so which created conditions to generate a global pandemic".

Chinese leaders, however, seemed obsessed only with the sustainability of their totalitarian regime, and as eager to silence any criticism as they have been in the past. Since January, the evidence of China's deliberate cover-up of the coronavirus in Wuhan has become a matter of public record. The Chinese government censored and detained brave doctors and whistleblowers who attempted to sound the alarm. One of China's richest entrepreneurs, Jack Ma, recently disclosed that China hid at least one-third of the coronavirus cases.

China has been able to grow into a superpower because it adopted economic practices from the West. No other country ever achieved such rapid economic and social progress for such a sustained period of time. However, hopes placed by the West in the Chinese market also nourished a dangerous mirage. We in the West thought that a modernizing China with a rising GDP would also democratize and come to respect transparency, pluralism and human rights. Instead, the mirage turned into a disaster as we watched China become even more of a "totalitarian state".

The nature of the Chinese regime -- its ban on the free press and all critical voices; the absolute domination of the Communist Party over social, spiritual and economic actors; imprisoning minorities and crushing freedom of conscience -- is also contributing to the emergence of this public health disaster. The cost, in terms of human lives and world's GDP, is immense.

The Chinese government's complicity in the pandemic is now an opportunity for the West to reevaluate its ties to Beijing. According to Guy Sorman, a French-American expert on China:

"Like useful idiots, we have not only helped the Party prosper but, even worse, we have given up on our humanitarian, democratic, and spiritual values in doing so."

"It is time", stated the American columnist, Marc A. Thiessen, "to immunize our economy and national security from our dependence on a deceitful regime".

China is waging a double information war: one abroad and one for its own public, both led by the Chinese authorities with President Xi Jinping at its head. They apparently see the West as weak and submissive. We have been.

China seems to believe that it is rising, while the West is in decline. "We find ourselves in what Germans call a Systemwettbewerb, a 'competition of systems' between liberal democracies and China's authoritarian state capitalism, which is increasingly projecting its absolute claim to power beyond its borders", said Thorsten Benner, co-founder and director of the Global Public Policy Institute in Berlin. The Cold War with Russia was clearer.

"We had an ideological and security antagonist who was not an economic competitor. There was a Chinese wall between the economies of the West and the Soviet Union. Today, we are confronted with an opponent who is a powerful economic competitor and intricately involved in the political economy of the West. At the same time, we also depend on cooperation with China on transnational issues such as climate change and pandemics. China's authoritarian state capitalist system with its hegemonic ambitions is by far the most difficult strategic challenge the West has faced to date".

According to historian Niall Ferguson, "China today poses a bigger economic challenge than the Soviet Union ever did". The Soviet Union could never rely on a dynamic private sector, as China is doing. In some markets -- such as technology -- China is already ahead of the United States. Not only that; the Chinese economy, the world's second-largest, is more closely integrated with the West than the Soviet one ever was. China's totalitarian one-party rule allows greater personal freedoms, at least at the moment, than the Soviet Union did. The coronavirus epidemic is, in fact, partly a consequence of the freedom of movement Chinese citizens enjoy.

China has also been able to convince much of the West that it is not an enemy. Beijing's goal has appeared to be to try to draw the West -- and the rest of the world -- into its economic and ideological orbit. China opened markets in the West while it offered to its own people a kind of devil's bargain: give up your ideas and principles and you will enjoy material improvement and societal security. Meanwhile, China became an industrial and technological behemoth, a feat the Soviet Union could only dream about.

Consider, for instance, pharmaceuticals. According to Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations, Chinese companies supply the US with more than 90% of its antibiotics, vitamin C and ibuprofen, as well as 70% of acetaminophen and 40-45% of heparin. The US was never dependent on the Soviet Union for that.

In an article in Xinhua, one of the Chinese Communist Party's mouthpieces, Beijing threatened to halt pharmaceutical exports, after which the US would be "plunged into the mighty sea of coronavirus". The Xinhua article was actually entitled, "Be bold: the world owes China a thank you."

Fox News host Tucker Carlson was right to blast members of the American elite for selling out their country to Chinese economic interests.

China's leaders are probably hoping that you cannot challenge a powerhouse that is selling you most of your vital medications.

Italy, a country hit hard by China's coronavirus pandemic, is now at the center of a strategic Chinese propaganda campaign. Beijing has sent doctors and supplies to Italy and is doing the same all over Europe. In Italy, you can see posters saying, "Go, China!" ["Forza China!"] China is trying to buy our silence and complicity. Sadly, that is already taking place. In February, while some Italian officials (on the political right) were urging Prime Minister Giuseppe Conte to quarantine schoolchildren in the north who were just returning from holidays in China, Italy's highest officials were busy trying to please Beijing. Italy's President, Sergio Mattarella; Minister for Culture, Dario Franceschini, and Minister for Foreign Affairs, Luigi Di Maio, hosted a concert in Rome for "Italian-Chinese friendship". China's President Xi Jinping warmly thanked them.

China is not helping at this point out of "solidarity". The Chinese regime is now seeking to portray itself as the world's savior. Beijing, at the beginning of the pandemic, did not care about the lives of even its own people: it was busy censoring the news.

"Hidden behind declarations of solidarity, China plans to buy out our troubled companies and infrastructure", according to Germany's leading newspaper, BildItaly was the first G-7 country to sign up for China's global investment program, a deal that rightly raised concerns in the US. China seems to be ready to continue its expansion into the Italy's economy and strategic interests.

China's Communist Party also seems to be at war with the free flow of information internationally. The regime, in the most sweeping media ejection from China since the death of Mao Zedong, recently expelled US journalists. Beijing has also tried to shift the blame for the pandemic to the US by saying that coronavirus originated with US military personnel in Wuhan. Lijian Zhao, spokesman for China's Foreign Ministry, posted statements to that effect on Chinese social media and Twitter. The coronavirus crisis is now a battleground for Chinese propaganda.

The paradox is that the Global Times, a media outlet of the Chinese Communist Party, spreads false anti-US propaganda on Twitter, which is banned in China. Twitter, meanwhile, banned the website Zero Hedge, for publishing an article linking a Chinese scientist to the outbreak of coronavirus. Twitter also unfortunately decided that China's Communist Party does not violate the rules of social media by spreading lies against the US.

Already a few years ago, in 2013, a secret Chinese Communist Party directive known as Document No. 9 called for the rejection of seven Western ideas, such as "Western constitutional democracy", "universal values" of human rights, Western-inspired notions of media independence and civic participation, ardently pro-market "neo-liberalism," and "nihilist" criticisms of the Party's questionable past. Targets to combat included "Western embassies, consulates, media operations and nongovernmental organizations". Huang Kunming, the Party's propaganda chief, attacks "some Western countries who use their technological advantages and dominance of discourse that they have accumulated over a long period to peddle so-called 'universal values'". China's Education Minister Yuan Guiren, a former president of Beijing Normal University, threw in: "Never let textbooks promoting Western values appear in our classes".

In speeches and official documents, the President Xi talks about a struggle between "socialism with Chinese characteristics" and "Western anti-China forces" with their "extremely malicious" ideas of freedom, democracy and human rights. The West seems to be their target. According to a new study by the International Republican Institute:

"The Chinese Communist Party... is employing a unique set of tactics in the economic and information domains that undermines many developing countries' democratic institutions and future prosperity as their dependence on China grows."

China evidently understands how to use Western media for its own propaganda. "The Vatican and the Western business elite", wrote Michael Brendan Dougherty, "once instrumental in the West's winning the Cold War, have been brought to heel by the Chinese Communist party". The Chinese regime has succeeded where the Soviet regime failed. Last December, a six-year-old girl in London preparing Christmas cards found a message inside: "We are foreign prisoners in Shanghai Qingpu Prison China, forced to work against our will", read the handwritten note. "Please help us and notify human rights organization". Western capitalism has even become complicit with Chinese slavery.

Western brands are not alone in caving in out of fear of "offending" the Communist Party. Western culture has been eagerly submitting itself to self-censorship about China. "The West is so tolerant, passive, accommodating and naive towards Beijing," said Liao Yiwu, a Chinese writer exiled in Berlin.

"Westerners look at China with incredulous eyes, they are seduced like an old man in front of a young girl. Everyone trembles before Chinese omnipotence. Europe shows all its weakness. It does not realize that the Chinese offensive threatens its freedom and values".

China's embassy in the Czech Republic is now financing a study course at Charles University, the most prestigious in the country. British universities are today largely dependent on Chinese students; conservative estimates put their combined tuition fees at about $1.75 billion. Australia is now even more reliant, with 200,000 Chinese students. If they go back to China or if Chinese donations stop coming to these faculties, they stand to lose about $4 billion.

The 1,500 branches of the Confucius Institute that China's regime has established in 140 countries offer language and "cultural" programs. However, according to Matt Schrader, a China analyst with the Alliance for Securing Democracy, these institutes are "propaganda tools". Last October, Belgium banned the head of Confucius Institute in Brussels, Xinning Song, after security services accused him of spying for Beijing.

In 2013, when the University of Sydney shut down a talk by Tibet's Dalai Lama on campus, many saw the university's links to Chinese interests as being involved in the lobbying efforts to stop the previously approved event. Topics such as Tibet, Taiwan independence, or the dissident Nobel Peace Prize laureate Liu Xiaobo, are taboo.

According to a Bloomberg report, China is also infiltrating Europe's political landscape by supporting political parties and inviting politicians to China. President Xi, taking his ideological battle abroad, even donated a statue of Karl Marx to his German hometown Trier on the 200th anniversary of Marx's birth.

Beijing, unsurprisingly, has been using Western multilateral institutions to its own advantage. As Michael Collins detailed in a report for the Council on Foreign Relations, Beijing has expanded its presence in the World Health Organization. "China's WHO contributions have grown by 52% since 2014 to approximately $86 million", Collins states.

"This is largely due to China's increase in assessed contributions which are based on a country's economic development and population. However, China has also slightly increased voluntary contributions from $8.7 million in 2014 to approximately $10.2 million in 2019".

Like the former Soviet Union, China now seems to be building a giant apparatus of control. They call it the "Internet police". Try to imagine the former East Germany's secret police, the Stasi, using the most advanced surveillance system in the world: This is China in 2020.

Communist dictatorships always end up following the same script. The Soviet writer Boris Pasternak was awarded the Nobel Prize for Literature but the communist regime prevented him from receiving it. In China, literary critic, writer, poet, and human rights activist Liu Xiaobo was awarded Nobel Prize for Peace but was never able to receive it: he died under guard in a Chinese hospital. The Soviet Union had forced-labor camps just as China does. Chinese dissident Harry Wu, who endured 19 years in jail, compared the Chinese camps (laogai) to the Soviet gulag and Nazi concentration camps.

In the Soviet Union, writers, politicians, generals and doctors who were silenced and executed under Stalin, were later "rehabilitated" by the Soviet leaders after Stalin's death. The Chinese Communist Party just "exonerated" Dr. Li Wenliang who warned about the coronavirus outbreak. He was accused of "making false comments and disturbing the social order", then forced to recant, and soon after, at the age of 33, died of the disease. It is a shameful attempt by the Chinese officials to whitewash their own image.

In a column last week for the Spanish daily El Pais, the Nobel Laureate Mario Vargas Llosa wrote about coronavirus:

"Nobody seems to be warning that none of this could have happened in the world if popular China were a free country and democratic rather than a dictatorship".

Vargas Llosa then likened the epidemic outbreak to Russia's Chernobyl disaster during the Soviet era. Both dictatorships censored and silenced information about the crises. In response, Beijing's regime not only called Vargas Llosa "irresponsible", but also banned his books from Chinese e-book platforms. Vargas Llosa has warned Western "fools" not to believe in China, "the free market with a political dictatorship", and that "what happened with the coronavirus should open the eyes of the blind".

The risk now is that, instead of Chernobyl which led, in part, to Soviet Union's downfall, China's communist regime will enjoy reinforcement -- especially if, due to the coronavirus crisis, the American people in November fail to support the first president in the last 40 years who has openly challenged China.

The Western dream of a "renaissance of the Chinese nation" has now turned into a globalized nightmare. Hundreds of millions across the world are in lockdown; thousands are dead; the economies of Western countries are paralyzed, with some on the verge of collapse. Empty shops and streets are commonplace.

This might be what analysts call "the end of liberal order". China's communists today are more capitalist than Marxist, at least at the state level. President Xi has adopted "market Leninism" - mixing a state-run economy with a "terrifying form of totalitarianism". The West needs to wake up to China's duplicity.

Tyler Durden Sun, 03/29/2020 - 07:00
Published:3/29/2020 6:15:45 AM
[Markets] COVID-19 Is Forcing The World To Re-Think The Idea Of "Monetary Value" COVID-19 Is Forcing The World To Re-Think The Idea Of "Monetary Value"

Authored by Matthew Ehret via The Strategic Culture Foundation,

Western society has long been gripped by a deep seeded belief in money. Trillions of dollars of bank notes tied to ever-growing mountains of un-payable national debts has taken on a life of its own over the years. As the post-1971 years rolled by, society increasingly lost a sense that this human invention called “money” was created to serve humanity rather than rule it, and with that lost sense, money became an idol of worship.

Decades of this modern religion have resulted in an incredibly tragic situation: a disproportionate wealth distribution in the hands of the 0.1%, an over-bloated services/consumer driven economy, increased rates of poverty and despair internationally as well as a dismal loss of vital skills, and productive capacity once enjoyed by advanced industrial nations just four decades ago. Vital infrastructure built up during the 1930s-1960s has been permitted to decay through simple neglect while un-payable debts have reached record highs.

Then like a thief in the night, the illusion was ripped away.

The Confused Response to the Crisis

This ripping away took the form of an international pandemic which has resulted in western nations’ economies grinding to a halt with a new $2 Trillion government emergency spending bill unveiled on March 24. The Washington Post reports that this bill will authorize “hundreds of billions of dollars sent to Americans in the form of checks as a way to flood the country with money in an effort to blunt the dramatic pullback of spending that has resulted from the coronavirus outbreak.”

Governments across the Trans-Atlantic have also announced national interventions into banks and private industry in order to force production quotas of vital equipment like ventilators, masks and other medical necessities to meet the increased demand. Banks in Spain have been nationalized (albeit only “temporarily”) to force finance to act in accordance with the needs of society. In America, the Defense Authorization Act and broader War Powers Act passed by President Trump gives the executive broad powers to take over vital industries if needed in order to mobilize the nation to respond to the crisis.

This renewal of national sovereign powers breaks all of the monetary “laws of the neoliberal order” and with that defiance of globalization, a genuine positive potential for a paradigm shift is visible...

...but something vital is still missing.

This “missing something” is clearly demonstrated by the continued obsession with money as new bailouts of the collapsing speculative banks have now risen to a $1 trillion/day overnight repo loan to collapsing banks which is added to the $1 Trillion 14 week loans offered every week that will dramatically increase the $9 trillion already emitted since helicopter money began in earnest in September 2019. With the mass panic and economic shutdown instigated by COVID-19, markets have lost over 30% of their value and fears of a new great depression have spread far and wide. Rather than impose serious bank regulation like Glass-Steagall to break up the commercial from speculative banks as was done in 1933, the American government has merely unleashed unlimited money printing. This bipolar response is akin to trying to stop a raging fire with a combination of water and gasoline.

We thus find that the greatest crisis facing humanity is not caused by the market crisis, or even the coronavirus per se, but rather society’s profound inability to understand the source of real from fictitious value.

What is REAL Value? Lincoln and FDR Revisited

“The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power.”

These words were uttered by none other than America’s 16th president Abraham Lincoln as he fought to take federal control of credit vis a vis the “greenbacks” that not only allowed him to win the war of secession but also construct the greatest infrastructure and industrialization programs of history driven by the trans continental railway. The dramatic success of Lincoln’s “American System” not only saved the union, but spread successfully across the world from Japan’s Meiji restoration, Russia’s trans Siberian rail development, Bismarck’s Zollverein in Germany and Sadi Carnot’s France. This powerful spread of what German economist Friedrich List called “the American System of Political Economy” nearly annihilated the money-worshipping system of Adam Smith’s Free Trade doctrine from the earth and only failed in this task via a plenitude of London-directed assassinations, and a couple of imperially-orchestrated wars and revolutions along the way.

The world spun out of control between the murder of the “last Lincoln republican” William Mckinley in 1901 and the orchestrated meltdown of the U.S. economy known as the great depression of 1929.

Amidst this dark period, Franklin Roosevelt called for the Democrats to claim the legacy of Lincoln from the corrupt republican party and faced a Wall Street-backed coup d’etat, survived a freemasonic assassination attempt and subverted a City of London-orchestrated bankers’ dictatorship… all in his first year in office. During his March 4, 1933 inaugural address, the president rallied the American people saying:

“I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.”

As I have outlined in my recent paper How to Crush a Bankers’ Dictatorship, FDR took control of credit in a similar manner as Lincoln by forcing the Federal Reserve to obey a national mandate for the first time since the private bank was set up in 1913. He did so by imposing his ally Mariner Eccles into the position of Chairman who understood that money had to create infrastructure and industrial growth in order to acquire any claim to having actual “value”. This was a stark break from the “hands off/laissez-faire” policy of President Hoover and his JP Morgan-run cabinet. FDR also emitted Lincoln-styled productive credit through the Reconstruction Finance Corporation (RFC) to fuel the New Deal. The RFC issued over $33 billion in low-interest loans by the end of the war (more than all private banks combined).

Describing his moral philosophy of political economy, FDR stated:

“We seek not merely to make government a mechanical implement, but to give it the vibrant personal character that is the very embodiment of human charity. We are poor indeed if this nation cannot afford to lift from every recess of American life the dread fear of the unemployed that they are not needed in the world. We cannot afford to accumulate a deficit in the books of human fortitude.”

What is missing today

Today’s America is confronting an existential crisis similar to that which both Lincoln and Franklin Roosevelt battled in their time. Just as the proto-deep state of 1865 ran Lincoln’s assassination from Montreal Canada, and took over the White House minutes after FDR’s untimely death in 1945, today’s deep state has attempted in vain to overthrow President Trump while successfully undermining the political viability of other “outsiders” like Bernie Sanders and Tulsi Gabbard.

The difference is that today’s crisis combines elements of all previous crises of 1861-1865, 1929-1933 and 1938-1945: the very real new threat of chaos and civil war within, NATO-led wars with China and Russia without and economic collapse across the entire trans-Atlantic bubble economy. The other difference is located in the current presidency’s inability to FOCUS with a clear mind on principled solutions to this multi-faceted crisis while instead finding itself trapped within contradictory impulses.

While FDR and Lincoln understood that VALUE was located the physically productive forces of labor which sustained and improved the lives of people and gave the constitution’s pre-amble a real living character, today’s American leadership has displayed a far greater ignorance to this basic fact of life. The vital difference between “need” vs “want” which has been obscured by decades of free market ideology has resulted in a loss of moral judgment necessary to properly put out the fires threatening to unleashing civil war, chaos and fascist global government “solutions” across the Trans Atlantic today.

The new multipolar alliance led by Russia and China have demonstrated what modern day New Deal policies can do. The Belt and Road Initiative as well as the Strategic Eurasian Partnership, Polar Silk Road and bold space exploration projects all reflect the type of principles of win-win cooperation and long term planning that characterized both FDR and Lincoln earlier. The Health Silk Road announced earlier this week by President Xi Jinping provides a brilliant maneuver to tackle the COVID-19 pandemic under a non-Malthusian worldview. This Multipolar Alliance exists as a form of a life raft for anyone wishing to escape the fate of the Titanic and embark on a new epoch of growth and cooperation.

The question is: Do western powers have the ability to act according to a scientific (and moral) standard of value by aligning with this multipolar alliance or will they choose to remain in Orwell’s dystopic cage and succumb to a fate which Lincoln, FDR and other great leaders gave their lives to prevent?

Tyler Durden Sat, 03/28/2020 - 22:05
Published:3/28/2020 9:13:48 PM
[Markets] Escobar: Why Is France Hiding A Cheap And Tested Virus Cure? Escobar: Why Is France Hiding A Cheap And Tested Virus Cure?

Authored by Pepe Escobar via The Asia Times,

The French government is arguably helping Big Pharma profit from the Covid-19 pandemic...

What’s going on in the fifth largest economy in the world arguably points to a major collusion scandal in which the French government is helping Big Pharma to profit from the expansion of Covid-19. Informed French citizens are absolutely furious about it.

My initial question to a serious, unimpeachable Paris source, jurist Valerie Bugault, was about the liaisons dangereuses between Macronism and Big Pharma and especially about the mysterious “disappearance” – more likely outright theft – of all the stocks of chloroquine in possession of the French government.

Respected Professor Christian Perronne talked about the theft live in one of France’s 24/7 info channels: “The central pharmacy for the hospitals announced today that they were facing a total rupture of stocks, that they were pillaged.”

With input from another, anonymous source, it’s now possible to establish a timeline that puts in much-needed perspective the recent actions of the French government.

Let’s start with Yves Levy, who was the head of INSERM – the French National Institute of Health and Medical Research – from 2014 to 2018, when he was appointed as extraordinary state councilor for the Macron administration. Only 12 people in France have reached this status.

Levy is married to Agnes Buzy, who until recently was minister of health under Macron. Buzy was essentially presented with an “offer you can’t refuse” by Macron’s party to leave the ministry – in the middle of the coronavirus crisis – and run for Mayor of Paris, where she was mercilessly trounced in the first round on March 16.

Levy has a vicious running feud with Professor Didier Raoult – prolific and often-cited Marseille-based specialist in communicable diseases. Levy withheld the INSERM label from the world-renowned IHU (Hospital-University Institute) research center directed by Raoult.

In practice, in October 2019, Levy revoked the status of “foundation” of the different IHUs so he could take over their research.

French professor Didier Raoult, biologist and professor of microbiology, specializes in infectious diseases and director of IHU Mediterranee Infection Institute, poses in his office in Marseille, France. Photo: AFP/Gerard Julien

Raoult was part of a clinical trial that in which hydroxychloroquine and azithromycin healed 90% of Covid-19 cases if they were tested very early. (Early, massive testing is at the heart of the successful South Korean strategy.)

Raoult is opposed to the total lockdown of sane individuals and possible carriers – which he considers “medieval,” in an anachronistic sense. He’s in favor of massive testing (which, besides South Korea, was successful in Singapore, Taiwan and Vietnam) and a fast treatment with hydroxychloroquine. Only contaminated individuals should be confined.

Chloroquine costs one euro for ten pills. And there’s the rub: Big Pharma – which, crucially, finances INSERM, and includes “national champion” Sanofi – would rather go for a way more profitable solution. Sanofi for the moment says it is “actively preparing” to produce chloroquine, but that may take “weeks,” and there’s no mention about pricing.

A minister fleeing a tsunami

Here’s the timeline:

  • On January 13, Agnes Buzyn, still France’s Health Minister, classifies chloroquine as a “poisonous substance,” from now on only available by prescription. An astonishing move, considering that it has been sold off the shelf in France for half a century.

  • On March 16, the Macron government orders a partial lockdown. There’s not a peep about chloroquine. Police initially are not required to wear masks; most have been stolen anyway, and there are not enough masks even for health workers. In 2011 France had nearly 1.5 billion masks: 800 million surgical masks and 600 million masks for health professionals generally.

  • But then, over the years, the strategic stocks were not renewed, to please the EU and to apply the Maastricht criteria, which limited membership in the Growth and Stability Pact to countries whose budget deficits did not exceed 3% of GDP. One of those in charge at the time was Jerome Salomon, now a scientific counselor to the Macron government.

  • On March 17, Agnes Buzyn says she has learned the spread of Covid-19 will be a major tsunami, for which the French health system has no solution. She also says it had been her understanding that the Paris mayoral election “would not take place” and that it was, ultimately, “a masquerade.”

What she does not say is that she didn’t go public at the time she was running because the whole political focus by the Macron political machine was on winning the “masquerade.” The first round of the election meant nothing, as Covid-19 was advancing. The second round was postponed indefinitely. She had to know about the impending healthcare disaster. But as a candidate of the Macron machine she did not go public in timely fashion.

In quick succession:

  • The Macron government refuses to apply mass testing, as practiced with success in South Korea and Germany.

  • Le Monde and the French state health agency characterize Raoult’s research as fake news, before issuing a retraction.

  • Professor Perrone reveals on the 24/7 LCI news channel that the stock of chloroquine at the French central pharmacy has been stolen.

  • Thanks to a tweet by Elon Musk, President Trump says chloroquine should be available to all Americans. Sufferers of lupus and rheumatoid arthritis, who already have supply problems with the only drug that offers them relief, set social media afire with their panic.

  • US doctors and other medical professionals take to hoarding the medicine for the use of themselves and those close to them, faking prescriptions to indicate they are for patients with lupus or rheumatoid arthritis.

  • Morocco buys the stock of chloroquine from Sanofi in Casablanca.

  • Pakistan decides to increase its production of chloroquine to be sent to China.

  • Switzerland discards the total lockdown of its population; goes for mass testing and fast treatment; and accuses France of practicing “spectacle politics.”

  • Christian Estrosi, the mayor of Nice, having had himself treated with chloroquine, without any government input, directly calls Sanofi so they may deliver chloroquine to Nice hospitals.

  • Because of Raoult’s research, a large-scale chloroquine test finally starts in France, under the – predictable – direction of INSERM, which wants to “remake the experiments in other independent medical centers.” This will take at least an extra six weeks – as the Elysee Palace’s scientific council now mulls the extension of France’s total lockdown to … six weeks.

If joint use of hydroxychloroquine and azithromycin proves definitely effective among the most gravely ill, quarantines may be reduced in select clusters.

The only French company that still manufactures chloroquine is under judicial intervention. That puts the chloroquine hoarding and theft into full perspective. It will take time for these stocks to be replenished, thus allowing Big Pharma the leeway to have what it wants: a costly solution.

It appears the perpetrators of the chloroquine theft were very well informed.

Bagged nurses

This chain of events, astonishing for a highly developed G-7 nation proud of its health service, is part of a long, painful process embedded in neoliberal dogma. EU-driven austerity mixed with the profit motive resulted in a very lax attitude towards the health system.

As Bugault told me, “test kits – very few in number – were always available but mostly for a small group connected to the French government [ former officials of the Ministry of Finance, CEOs of large corporations, oligarchs, media and entertainment moguls]. Same for chloroquine, which this government did everything to make inaccessible for the population.

They did not make life easy for Professor Raoult – he received death threats and was intimidated by ‘journalists.’

And they did not protect vital stocks. Still under the Hollande government, there was a conscious liquidation of the stock of masks – which had existed in large quantities in all hospitals. Not to mention that the suppression of hospital beds and hospital means accelerated under Sarkozy.”

This ties in with anguished reports by French citizens of nurses now having to use trash bags due to the lack of proper medical gear.

At the same time, in another astonishing development, the French state refuses to requisition private hospitals and clinics – which are practically empty at this stage – even as the president of their own association, Lamine Garbi, has pleaded for such a public service initiative: “I solemnly demand that we are requisitioned to help public hospitals. Our facilities are prepared. The wave that surprised the east of France must teach us a lesson.”

Bugault reconfirms the health situation in France “is very serious and will become even worse due to these political decisions – absence of masks, political refusal to massively test people, refusal of free access to chloroquine – in a context of supreme distress at the hospitals. This will last and destitution will be the norm.”

Professor vs president

In an explosive development on Tuesday, Raoult said he’s not participating in Macron’s scientific council anymore, even though he’s not quitting it altogether. Raoult once again insists on massive testing on a national scale to detect suspected cases, and then isolate and treat patients who tested positive. In a nutshell: the South Korean model.

That’s exactly what is expected from the IHU in Marseille, where hundreds of residents continue to queue up for testing. And that ties in with the conclusions by a top Chinese expert on Covid-19, Zhang Nanshan, who says that treatment with chloroquine phospate had a “positive impact,” with patients testing negative after around four days.

The key point has been stressed by Raoult: Use chloroquine in very special circumstances, for people tested very early, when the disease is not advanced yet, and only in these cases. He’s not advocating chloroquine for everyone. It’s exactly what the Chinese did, along with their use of Interferon.

For years, Raoult has been pleading for a drastic revision of health economic models, so the treatments, cure and therapies created mostly during the 20th century, are considered a patrimony in the service of all humanity.“That’s not the case”, he says, “because we abandon medicine that is not profitable, even if it’s effective. That’s why almost no antibiotics are manufactured in the West.”

On Tuesday, the French Health Ministry officially prohibited the utilization of treatment based on chloroquine recommended by Raoult. In fact the treatment is only allowed for terminal Covid-19 patients, with no other possibility of healing. This cannot but expose the Macron government to more accusations of at least inefficiency – added to the absence of masks, tests, contact tracing and ventilators.

On Wednesday, commenting on the new government guidelines, Raoult said, “When damage to the lungs is too important, and patients arrive for reanimation, they practically do not harbor viruses in their bodies any more. It’s too late to treat them with chloroquine. Are these the only cases – the very serious cases – that will be treated with chloroquine under the new directive by [French Health Minister] Veran?” If so, he added ironically, “then they will be able to say with scientific certainty that chloroquine does not work.”

Raoult was unavailable for comment on Western news media articles citing Chinese test results that would suggest he is wrong about the efficacy of chloroquine in dealing with mild cases of Covid-19.

Staffers pointed instead to his comments in the IHU bulletin. There Raoult says it’s “insulting” to ask if we can trust the Chinese on the use of chloroquine. “If this was an American disease, and the president of the United States said, ‘We need to treat patients with that,’ nobody would discuss it.”

In China, he adds, there were “enough elements so the Chinese government and all Chinese experts who know coronaviruses took an official position that ‘we must treat with chloroquine.’ Between the moment when we have the first results and an accepted international publication, there is no credible alternative among people who are the most knowledgeable in the world. They took this measure in the interest of public health.”

Crucially: if he had coronavirus, Raoult says he would take chloroquine. Since Raoult is rated by his peers as the number one world expert in communicable diseases, way above Dr. Anthony Fauci in the US, I would say the new reports represent Big Pharma talking.

Raoult has been mercilessly savaged and demonized by French corporate media that are controlled by a few oligarchs closely linked to Macronism. Not by accident the demonization has reached gilets jaunes (yellow vest) levels, especially because of the extremely popular hashtag #IlsSavaient (“They knew”), with which the yellow vests stress that French elites have “managed” the Covid-19 crisis by protecting themselves while leaving the population defenseless against the virus.

That ties in with the controversial analysis by crack philosopher Giorgio Agamben in a column published a month ago, where he was already arguing that Covid-19 clearly shows that the state of exception – similar to a state of emergency but with differences important to philosophers – has become fully normalized in the West.

Agamben was speaking not as a doctor or a virologist but as a master thinker, following in the steps of Foucault, Walter Benjamin and Hannah Arendt. Noting how a latent state of fear has metastasized into a state of collective panic, for which Covid-19 “offers once again the ideal pretext,” he described how, “in a perverse vicious circle, the limitation of freedom imposed by governments is accepted in the name of a desire for security that was induced by the same governments that now intervene to satisfy it.”

There was no state of collective panic in South Korea, Singapore, Taiwan and Vietnam – to mention four Asian examples outside of China. A dogged combination of mass testing and contact tracing was applied with immense professionalism. It worked. In the Chinese case, with the help of chloroquine. And in all Asian cases, without a murky profit motive to the benefit of Big Pharma.

There hasn’t yet appeared the smoking gun that proves the Macron system not only is incompetent to deal with Covid-19 but also is dragging the process so Big Pharma can come up with a miracle vaccine, fast. But the pattern to discourage chloroquine is more than laid out above – in parallel to the demonization of Raoult.

Tyler Durden Sat, 03/28/2020 - 09:35
Published:3/28/2020 8:44:02 AM
[Markets] Suspending The Constitution: Police State Uses Crises To Expand Its Lockdown Powers Suspending The Constitution: Police State Uses Crises To Expand Its Lockdown Powers

Authored by John Whitehead via The Rutherford Institute,

“That was when they suspended the Constitution. They said it would be temporary. There wasn’t even any rioting in the streets. People stayed home at night, watching television, looking for some direction. There wasn’t even an enemy you could put your finger on.”? Margaret Atwood, The Handmaid’s Tale

You can always count on the government to take advantage of a crisis, legitimate or manufactured.

This coronavirus pandemic is no exception.

Not only are the federal and state governments unraveling the constitutional fabric of the nation with lockdown mandates that are sending the economy into a tailspin and wreaking havoc with our liberties, but they are also rendering the citizenry fully dependent on the government for financial handouts, medical intervention, protection and sustenance.

Unless we find some way to rein in the government’s power grabs, the fall-out will be epic.

Everything I have warned about for years—government overreach, invasive surveillance, martial law, abuse of powers, militarized police, weaponized technology used to track and control the citizenry, and so on—has coalesced into this present moment.

The government’s shameless exploitation of past national emergencies for its own nefarious purposes pales in comparison to what is presently unfolding.

It’s downright Machiavellian.

Deploying the same strategy it used with 9/11 to acquire greater powers under the USA Patriot Act, the police state—a.k.a. the shadow government, a.k.a. the Deep State—has been anticipating this moment for years, quietly assembling a wish list of lockdown powers that could be trotted out and approved at a moment’s notice.

It should surprise no one, then, that the Trump Administration has asked Congress to allow it to suspend parts of the Constitution whenever it deems it necessary during this coronavirus pandemic and “other” emergencies.

It’s that “other” emergencies part that should particularly give you pause, if not spur you to immediate action (by action, I mean a loud and vocal, apolitical, nonpartisan outcry and sustained, apolitical, nonpartisan resistance).

In fact, the Department of Justice (DOJ) has been quietly trotting out and testing a long laundry list of terrifying powers that override the Constitution.

We’re talking about lockdown powers (at both the federal and state level): the ability to suspend the Constitution, indefinitely detain American citizens, bypass the courts, quarantine whole communities or segments of the population, override the First Amendment by outlawing religious gatherings and assemblies of more than a few people, shut down entire industries and manipulate the economy, muzzle dissidents, “stop and seize any plane, train or automobile to stymie the spread of contagious disease,” reshape financial markets, create a digital currency (and thus further restrict the use of cash), determine who should live or die…

You’re getting the picture now, right?

These are powers the police state would desperately like to make permanent.

Specifically, the DOJ wants to be able to indefinitely detain American citizens without trial. The DOJ also wants to be able to pause court proceedings and suspend the statute of limitations on criminal and civil cases.

Both signify a clear violation of every right espoused in the Constitution, including habeas corpus.

Habeas corpus, a fundamental tenet of English common law that guards against arbitrary and lawless state action, does not appear anywhere in the Bill of Rights. Its importance was such that it was enshrined in the Constitution itself. And it is of such magnitude that all other rights, including those in the Bill of Rights, are dependent upon it. Without habeas corpus, the significance of all other rights crumbles.

The right of habeas corpus was important to the Framers of the Constitution because they knew from personal experience what it was like to be labeled enemy combatants, imprisoned indefinitely and not given the opportunity to appear before a neutral judge. Believing that such arbitrary imprisonment is “in all ages, the favorite and most formidable instrument of tyranny,” the Founders were all the more determined to protect Americans from such government abuses.

Translated as “you should have the body,” habeas corpus is a legal action, or writ, by which those imprisoned unlawfully can seek relief from their imprisonment. Derived from English common law, habeas corpus first appeared in the Magna Carta of 1215 and is the oldest human right in the history of English-speaking civilization. The doctrine of habeas corpus stems from the requirement that a government must either charge a person or let him go free.

While serving as President, Thomas Jefferson addressed the essential necessity of habeas corpus. In his first inaugural address on March 4, 1801, Jefferson said, “I know, indeed, that some honest men fear that a republican government cannot be strong; that this government is not strong enough.” But, said Jefferson, our nation was “the world’s best hope” and, because of our strong commitment to democracy, “the strongest government on earth.” Jefferson said that the sum of this basic belief was found in the “freedom of person under the protection of the habeas corpus; and trial by juries impartially selected. These principles form the bright constellation which has gone before us, and guided our steps through an age of revolution and reformation.”

Throughout the twentieth century, the importance of the right of habeas corpus has repeatedly been confirmed by the U.S. Supreme Court. Yet 200-plus years after America’s founders risked their lives to secure their freedoms, we find ourselves right back where we started, with a government determined to strip us of every vestige of our freedoms.

The DOJ’s latest request to Congress is merely a signal that the police state is ready to step out of the shadows, with the current national emergency being a convenient cover for their dastardly deeds.

Bear in mind, however, that these powers the Trump Administration, acting on orders from the police state, are officially asking Congress to recognize and authorize barely scratch the surface of the far-reaching powers the government has already unilaterally claimed for itself.

Unofficially, the police state has been riding roughshod over the rule of law for years now without any pretense of being reined in or restricted in its power grabs by Congress, the courts or the citizenry.

As David C. Unger, observes in The Emergency State: America’s Pursuit of Absolute Security at All Costs:

“For seven decades we have been yielding our most basic liberties to a secretive, unaccountable emergency state – a vast but increasingly misdirected complex of national security institutions, reflexes, and beliefs that so define our present world that we forget that there was ever a different America. ... Life, liberty, and the pursuit of happiness have given way to permanent crisis management: to policing the planet and fighting preventative wars of ideological containment, usually on terrain chosen by, and favorable to, our enemies. Limited government and constitutional accountability have been shouldered aside by the kind of imperial presidency our constitutional system was explicitly designed to prevent.”

This rise of an “emergency state” that justifies all manner of government tyranny in the so-called name of national security is all happening according to schedule.

The civil unrest, the national emergencies, “unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters,” the government’s reliance on the armed forces to solve domestic political and social problems, the implicit declaration of martial law packaged as a well-meaning and overriding concern for the nation’s security: the powers-that-be have been planning and preparing for such a crisis for years now, not just with active shooter drills and lockdowns and checkpoints and heightened danger alerts, but with a sensory overload of militarized, battlefield images—in video games, in movies, on the news—that acclimate us to life in a police state.

Whether or not this particular crisis is of the government’s own making is not the point: to those for whom power and profit are everything, the end always justifies the means.

The seeds of this present madness were sown several decades ago when George W. Bush stealthily issued two presidential directives that granted the president the power to unilaterally declare a national emergency, which is loosely defined as “any incident, regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the U.S. population, infrastructure, environment, economy, or government functions.

Comprising the country’s Continuity of Government (COG) plan, these directives (National Security Presidential Directive 51 and Homeland Security Presidential Directive 20), which do not need congressional approval, provide a skeletal outline of the actions the president will take in the event of a “national emergency.”

Mind you, that national emergency can take any form, can be manipulated for any purpose and can be used to justify any end goal—all on the say so of the president.

Just what sort of actions the president will take once he declares a national emergency can barely be discerned from the barebones directives. However, one thing is clear: in the event of a national emergency, the president will become a dictator because while the COG directives ensure the continuity of executive branch functions, they do not provide for repopulating or reconvening Congress or the Supreme Court.

Thus, a debilitating attack would give unchecked executive, legislative and judicial power to the executive branch and its unelected minions. The country would then be subjected to martial law by default, and the Constitution and the Bill of Rights would be suspended.

Originally devised as a plan for quickly restoring constitutional government, the COG concept arose during the Cold War. The fear was that a nuclear strike would paralyze the federal government.

These concerns continued into the 1980s.

Under President Ronald Reagan, an elaborate plan was created in which three teams consisting of a cabinet member, an executive chief of staff and military and intelligence officials would practice evacuating and directing a counter nuclear strike against the Soviet Union from a variety of high-tech, mobile command vehicles. If the president and vice president were both killed, one of these teams would take control, with the ranking cabinet official serving as president.

Among those Reagan handpicked to advise an inexperienced and potentially incompetent successor in a time of crisis were Congressman Dick Cheney and Donald Rumsfeld, then a business executive with G. D. Searle & Co. At least once a year during the 1980s, Cheney and Rumsfeld vanished on top-secret training missions, where each of the teams practiced evacuating and directing a counter nuclear strike against Russia.

This all changed after the attacks of September 11, 2001, when it became clear that the assumptions that drove COG planning during the Cold War no longer applied: there would be no warning against a so-called “terrorist” attack. Thus, instead of relying on part-time bureaucrats and evacuation schematics, the Bush administration permanently appointed executive officials, stationed outside the capital, to run a shadow government.

The U.S. military has reportedly already been given standby orders under COG for this present coronavirus pandemic.

The plans for the shadow government administered by those who run the Deep State are more elaborate than many realize. Massive underground bunkers the size of small cities are sprinkled throughout the country for the government elite to escape to in the event of a national emergency. Mount Weather, near Bluemont, Va., is one of a number of such facilities. Built into the side of a mountain, this bunker contains, among other things, a hospital, crematorium, dining and recreation areas, sleeping quarters, reservoirs of drinking and cooling water, an emergency power plant and a radio/television studio.

There is also an Office of the Presidency at Mount Weather, which regularly receives top-secret national security information from all the federal departments and agencies. This facility was largely unknown to everyone, including Congress, until it came to light in the mid-1970s. Military personnel connected to the bunker have refused to reveal any information about it, even before congressional committees. In fact, Congress has no oversight, budgetary or otherwise, on Mount Weather, and the specifics of the facility remain top-secret.

What is the bottom line here?

We are, for all intents and purposes, one crisis away from having a full-fledged authoritarian state emerge from the shadows, at which time democratic government will be dissolved and the country will be ruled by an unelected bureaucracy. 

This is exactly the kind of mischief that Thomas Jefferson warned against when he cautioned, “In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

Power corrupts.

Absolute power corrupts absolutely.

Thus far, we have at least pretended that the government abides by the Constitution.

Those who wrote our Constitution sought to ensure our freedoms by creating a document that protects our God-given rights at all times, even when we are engaged in war, whether that is a so-called war on terrorism, a so-called war on drugs, a so-called war on illegal immigration, or a so-called war on disease.

The attempts by each successive presidential administration to rule by fiat merely plays into the hands of those who would distort the government’s system of checks and balances and its constitutional separation of powers beyond all recognition.

Remember, these powers do not expire at the end of a president’s term. They remain on the books, just waiting to be used or abused by the next political demagogue.

So, too, every action taken by Trump and his predecessors to weaken the system of checks and balances, sidestep the rule of law, and expand the power of the executive branch of government has made us that much more vulnerable to those who would abuse those powers in the future.

Although the Constitution invests the President with very specific, limited powers, in recent years, American presidents (Trump, Obama, Bush, Clinton, etc.) have claimed the power to completely and almost unilaterally alter the landscape of this country for good or for ill.

The Trump Administration’s willingness to circumvent the Constitution by leaning heavily on the president’s so-called emergency powers constitutes a gross perversion of what limited power the Constitution affords the executive branch.

The powers amassed by each successive president through the negligence of Congress and the courts—powers which add up to a toolbox of terror for an imperial ruler—empower whomever occupies the Oval Office to act as a dictator, above the law and beyond any real accountability.

As law professor William P. Marshall explains,every extraordinary use of power by one President expands the availability of executive branch power for use by future Presidents.” Moreover, it doesn’t even matter whether other presidents have chosen not to take advantage of any particular power, because “it is a President’s action in using power, rather than forsaking its use, that has the precedential significance.”

In other words, each successive president continues to add to his office’s list of extraordinary orders and directives, expanding the reach and power of the presidency and granting him- or herself near dictatorial powers.

This abuse of presidential powers has been going on for so long that it has become the norm, the Constitution be damned.

We no longer have a system of checks and balances.

“The system of checks and balances that the Framers envisioned now lacks effective checks and is no longer in balance,” concludes Marshall.

“The implications of this are serious. The Framers designed a system of separation of powers to combat government excess and abuse and to curb incompetence. They also believed that, in the absence of an effective separation-of-powers structure, such ills would inevitably follow. Unfortunately, however, power once taken is not easily surrendered.”

All of the imperial powers amassed by Barack Obama and George W. Bush and now Trump—to kill American citizens without due process, to detain suspects (including American citizens) indefinitely, to strip Americans of their citizenship rights, to carry out mass surveillance on Americans without probable cause, to wage wars without congressional authorization, to suspend laws during wartime, to disregard laws with which he might disagree, to conduct secret wars and convene secret courts, to sanction torture, to sidestep the legislatures and courts with executive orders and signing statements, to direct the military to operate beyond the reach of the law, to establish a standing army on American soil, to operate a shadow government, to declare national emergencies for any manipulated reason, and to act as a dictator and a tyrant, above the law and beyond any real accountability—have become a permanent part of the president’s toolbox of terror.

These presidential powers—acquired through the use of executive orders, decrees, memorandums, proclamations, national security directives and legislative signing statements and which can be activated by any sitting president—enable past, president and future presidents to operate above the law and beyond the reach of the Constitution.

Think on this: the presidential election is right around the corner.

Suddenly, the improbable possibility of any incumbent president attempting to extend the police state’s stranglehold on power by using current events to justify postponing or doing away with an election—forfeiting the people’s rights to govern altogether—and establishing a totalitarian regime seems less far-fetched than it did even a few years ago.

The emergency state is now out in the open for all to see. Unfortunately, “we the people” refuse to see what’s before us. Most Americans, fearful and easily controlled, would sooner rouse themselves to fight for that last roll of toilet paper than they would their own freedoms.

This is how freedom dies.

We erect our own prison walls, and as our rights dwindle away, we forge our own chains of servitude to the police state.

Be warned, however: once you surrender your freedoms to the government—no matter how compelling the reason might be for doing so—you can never get them back.

As I make clear in my book Battlefield America: The War on the American People, no government willingly relinquishes power.

If we continue down this road, there can be no surprise about what awaits us at the end.

The America metamorphosing before our eyes is almost unrecognizable from the country I grew up in, and that’s not just tragic—it’s downright terrifying.

Tyler Durden Sat, 03/28/2020 - 00:05
Published:3/27/2020 11:11:45 PM
[Markets] All The Craziest Things About America Are Being Highlighted By This Virus All The Craziest Things About America Are Being Highlighted By This Virus

Authored by Caitlin Johnstone via,

“Corona is a black light and America is a cum-stained hotel room,” comedian Megan Amram colorfully tweeted a couple of weeks ago. Her observation has only grown more accurate since.

The corporate cronyism of America’s political system has been highlighted with a massive kleptocratic multitrillion-dollar corporate bailout of which actual Americans are only receiving a tiny fraction. Instead of putting that money toward paying people a living wage to stay home during a global pandemic, the overwhelming majority of the money is going to corporations while actual human beings receive a paltry $1,200 (which they won’t even be getting until May at the earliest) at a time of record-smashing unemployment.

America’s capitalism worship has been highlighted with Wall Street Journal headline “Dow Soars More Than 11% In Biggest One-Day Jump Since 1933” running at the exact same time as “Record Rise in Unemployment Claims Halts Historic Run of Job Growth — More than 3 million workers file for jobless benefits as coronavirus hits the economy”. Stocks are booming, Amazon is surging, and mountains of wealth are being transferred to sprawling megacorporations, while actual human beings are terrified of what the future holds.

America’s joke of a healthcare system is being highlighted as uninsured COVID-19 patients are racking up $35,000 medical bills and even insured COVID-19 patients are looking at out-of-pocket expenses in excess of $1,300. Combine this with the millions of Americans getting thrown off of employer-provided health insurance and you’re looking at a huge number of people who will avoid getting tested and avoid treatment as much as possible. Both heads of America’s two-headed one-party system have spent decades forcefully creating this dynamic.

America’s income and wealth inequality is being highlighted in a nation suffering from all of the above problems while most Americans were already unable to afford a mere $1,000 emergency expense. A one-time $1,200 payment to a population already stretched that thin guarantees that millions will be plunged into crushing debt and destitution in a nation with a historically unprecedented billionaire class raking in even more unearned wealth.

The insanity of America’s war machine has been highlighted as awareness grows during a global health emergency that government military spending negatively impacts government healthcare spending and the US has the most bloated military budget on the planet. Now as journalist Max Blumenthal explains this war machine’s escalating hostility toward China is causing Americans to needlessly die of the virus.

America’s fake political system has been highlighted as the Democratic Party’s presumptive nominee completely vanished for a week and then returned to deliver an embarrassing string of befuddled interviews upon his return, reminding the nation once again that the Democrats are running an actual, literal dementia patient for the most powerful elected office in the world. Biden will of course be running against an incoherent reality TV star who only last week decided that the virus is indeed a real problem which needs to be seriously addressed, and who now already wants to begin rolling back the inadequate measures his administration implemented far too late. The debates between two men who don’t understand what they’re doing and can’t string a sentence together between them will soon be broadcast around the world for all of civilization to behold.

America’s lying mass media are being highlighted with propagandistic lines that would make Kim Jong Un blush, like The New York Times claiming today that “the American medical system is unsurpassed and its public health system has a reputation as one of the finest in the world”. We can safely expect US media to get even more demented as they expands their hysteria-inducing new cold war propaganda campaign against Russia to China as well.

America’s murderous sanctions machine has been highlighted as the US continues ramping up its economic warfare against Iranian civilians, with thousands already dead and potentially millions to follow due to Tehran’s inability to access necessary equipment, medicine and resources during the pandemic. The Trump administration has not eased the sanctions during the outbreak, and has in fact added to them, because killing Iranian civilians has always been the goal. Secretary of State Mike Pompeo has gone on record to say that the objective is to make Iranian civilians so miserable and desperate that they overthrow their own government.

So basically everything crazy about America is being amplified to absurd caricatures of its own insanity and highlighted for everyone to see. There’s a lot of ugliness coming out into the light as a result of this virus, which may end up being one of its few perks for everyone. As they say of both viruses and governments, sunlight is the best disinfectant.

*  *  *

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Tyler Durden Fri, 03/27/2020 - 22:05
Published:3/27/2020 9:19:13 PM
[Markets] COVID-19 Is Not Even Close To America's Biggest Problem COVID-19 Is Not Even Close To America's Biggest Problem

Authored by Bryce Buchanan via,

The COVID-19 pandemic can be used to illustrate two problems that are both more destructive than the virus.  

The problems relate to how Americans view the role of government in their lives and to the belief that government money can always fix problems. 

Let's look at the money issue first.  

The immediate reaction of our government to the virus threat was to spend massive amounts of money.  The latest news is that politicians plan to "boost" the economy with nearly two trillion dollars in spending and loans.  "The package is coming in at about 10% of GDP.  It's very large," says Larry Kudlow.  For a plan of this size to sound like a good idea, you need to ignore some important economic facts.

Our country has unbelievable levels of debt, and our debt is rising rapidly.  The numbers are staggering.  The debt clock shows U.S. debt at $23 trillion (nearly 110% of the GDP) and unfunded liabilities of $77 trillion.  That's a conservative estimate.  Boston University economist Laurence Kotlikoff, an expert on the national debt, says, "The true size of our fiscal problem is $222 trillion...20 times bigger than the official debt."  He says, "The government has gone out of its way to run up a Ponzi scheme and keep evidence of that off the books by using language to make it appear that we have a small debt."

We are on the Titanic, headed for the debt iceberg.  In brief moments of clear vision, we see the iceberg and know we must change course to avoid disaster.  But a self-imposed fog allows us to pretend things are fine.  Do not look away.  Look directly at this problem.  It's real.  Things that are unsustainable cannot be sustained.  Reality always bats last. 

There is also an important moral dimension to new spending programs.  The government has spent all of its income and much more, so we should think of new spending programs as simply more debt being piled onto our children and grandchildren.  The required first sentence of any new spending bill should be, "Our current consumption is more important to us than any burden we will place on future generations, therefore let's place this much more debt on them."

It is immoral to ignore the burden of the deficit on future generations.  We are digging a hole for them that they will never get out of.  Government debt is a government claim on future incomes.  It is an unpaid tax bill.

You can make the case that big deficit spending is warranted to protect current and future citizens in a time of war.  Some level of spending is warranted in the fight against this virus.  But look at the big picture of government expansion over the last several decades as the administrative state grew and the deficit exploded.  Does it make you a caring person if you propose "free health care" for everyone, including illegal aliens?  No, it makes you a dangerous fool.

In the socialist dream world, there will never be a day of reckoning for government debt.   Stephanie Kelton, an economic adviser to Bernie Sanders, said, "If you control your own currency and you have bills that are coming due, it means you can always afford to pay the bills on time.  You can never go broke; you can never be forced into bankruptcy."

Governments that have tried this approach have ended up with money that looks like this 50-trillion-dollar bill from Zimbabwe.  It's real paper money.  But this $50 trillion wouldn't buy much.  In Venezuela, the inflation rate is around 53 million percent.  That means everything costs more every day.  And with socialist destruction of the economy, there are far fewer things to buy.  This kind of money does help with the toilet paper shortage, though.

Governments can create money, but creating money does not create wealth.  Wealth comes from productivity.  Putting ink on small pieces of paper does not make wealth.  You can visualize this fact quite easily.  Imagine that our government officials keep businesses closed "to protect us from the virus," but they send everyone large checks every month.  Our benevolent leaders made sure we had lots of money, so we are all taken care of, right?

Without productive people, the true engine of wealth, Atlas would shrug, and the world would fall into its natural state, which is poverty.  Anything that destroys productivity also destroys prosperity.  That is why socialism has never worked and never will.  The socialist utopian delusion is that people like Bernie and Alexandria Ocasio-Cortez can manage taxing and spending in such a way that everything people really need will be free.  Alarming numbers of young people have this delusion. 

Unless you are new to this planet, or are blind to reality, you understand that government bureaucracies are an inefficient and expensive way to provide anything. 

Politicians themselves don't have the ability to "provide" material things.  They can only transfer money or borrow money.  Said another way, they can take the productive accomplishments of one group and give them to another group, or they can borrow from our children to pay for current consumption.  That's it.  They buy votes in one of these two ways. 

Let's now discuss how Americans view the role of government in their lives and see how it relates to the current crisis.  

When our nation was young, citizens accepted both the pleasures and the perils of liberty.  They enjoyed the right to direct their own lives and accepted the resulting responsibilities.  The government was small and far away.  The explicit goal of the Founders was to keep it small because the sphere of liberty shrinks as the size of government grows.  Self-reliance was considered an important virtue.  Children may expect others to take care of them, but adults do not. 

People in need were helped by their neighbors.  Charity has always been a big part of the American spirit.  The goal of charity was to restore people to self-reliance.  The lesson in Aesop's fable "The Grasshopper and the Ants" was an integral part of American values.  The story shows the wisdom of preparing to take care of yourself in hard times.

In 200 years, Americans have moved a long, long way from self-reliance toward government dependence.  President Franklin Roosevelt did more to move the citizens in the direction of government dependency than any other president.  Yet look at what he said in 1935, when everyone could see that Roosevelt's big spending programs were not ending the Great Depression.  In his State of the Union speech, he said:

The burden on the Federal Government has grown with great rapidity[.] ... The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon [government] relief induces a spiritual disintegration fundamentally destructive to the national fiber.  To dole our relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.  It is inimical to the dictates of a sound policy.  It is in violation of the traditions of America[.] ... The Federal Government must and shall quit this business of relief.

Has the "national fiber" been "fundamentally destroyed"?  Has self-reliance been replaced by acceptance of dependence?  Ask Americans these questions: whose responsibility is it to take care of people when they are old?  Whose responsibility is it to take care of children if the father doesn't care about doing it?  Who should be responsible for educating children?  Who should pay the bills when someone loses his job?  I think a very small number of people would say family members or charities should take responsibility.  These duties have been taken over by massive, inefficient government bureaucracies. 

Early Americans expected the government to leave them alone.  Many present-day Americans expect the government to take care of them. 

The assumption that the government will take care of your needs is "a narcotic, a subtle destroyer of the human spirit."  If you have the childlike attitude that someone (government) should take care of you, it changes how you prepare for future problems.  This attitude is why 25% of Americans do not even have a savings account, and 40% say they would have trouble paying an unexpected expense of $400.

Americans are not prepared for trouble, and trouble is here.

Americans are Aesop's grasshopper in winter.  This will greatly magnify the economic crisis caused by the current shutdown of productive activity.  If economic activity is smothered for too long, many businesses will not survive.  "Helicopter money" dropped by the government will not fix this problem.

President Trump understands that America's productive engine needs to be switched on as soon as possible.  That will help, but the debt explosion and the increasing dependence on government are much more dangerous to our Republic than the Wuhan virus.

Tyler Durden Fri, 03/27/2020 - 18:05
Published:3/27/2020 5:11:57 PM
[Entertainment] Best-Sellers-Books-USAToday Best-Sellers-Books-USAToday Published:3/26/2020 5:18:23 PM
[Markets] Is There Wasteful Spending In The Coronavirus Stimulus Bill? (Spoiler Alert: Bigly!) Is There Wasteful Spending In The Coronavirus Stimulus Bill? (Spoiler Alert: Bigly!)

Authored by Adam Andrzejewski via,

Last night, the U.S. Senate unanimously passed a $2 trillion “Phase III” emergency aid package to help America recover from the coronavirus lockdown. Previous phases provided funds for testing and paid family leave.

Not one U.S. Senator voted against the legislation: 96-0. Twice during the first hour of Senate debate, two “final” versions were distributed. No one had time to read the final language.

Our organization at posted an official summary of the legislation’s supplemental $340 billion surge to emergency funding here.

The Republican majority Senate and Leader Mitch McConnell (R-KY) introduced their 250-page version of this coronavirus aid relief and economic security act a week ago. It eventually became the $2 trillion, 883 page CARES Act – Coronavirus Aid, Relief, and Economic Security Act (H.R.748).  

Two days ago, in the ramp up to negotiations, House Democrats and Speaker Nancy Pelosi introduced the “Take Responsibility For Workers and Family’s Act” (H.R.6379) – a $2.5 trillion, 1,404 page coronavirus response.

Our auditors dug deeply into McConnell’s Senate bill and compared it to Pelosi’s House bill. While half the nation was “sheltered in place,” here’s what lawmakers — in both parties — considered “essential spending” for coronavirus recovery:

  • $25 million in the Senate bill went to the John F. Kennedy Center For The Performing Arts in Washington, D.C. During the past ten years, the center received $68.3 million in federal grants (2010-2019). The Kennedy Center has total assets of $557 million. The Pelosi bill earmarked $35 million.

  • $75 million in the Senate bill funded the Corporation For Public Broadcasting. Why does National Public Radio and Big Bird get a coronavirus subsidy? The Pelosi bill allocated $300 million.

  • $1.2 billion in the Pelosi bill to require airlines to purchase expensive “renewable” jet fuel. It was $200 million per year in grants (2021-2026) to “develop, transport, and store sustainable aviation fuels that would reduce U.S. greenhouse gas emissions.” The Senate bill eliminated this provision.

People of good will can debate each of these goals, but is it truly emergency spending? For example, what is the public purpose for the Smithsonian Institute receiving an additional $7.5 million in this time of crisis? Both bills provided these funds.

While governors begged for vital medical supplies, the spending packages each contained massive increases even in obscure, small agencies.

An earmarked $1.1 billion in the Pelosi bill would have more than doubled the budgets of The Institute of Museum and Library Services and the National Endowment of the Arts and the Humanities. The Senate bill provided funding of $200 million.

  • $500 million in the Pelosi bill to The Institute of Museum and Library Services (FY2019 budget: $230 million). This agency is so small that it doesn’t even employ an inspector general. The Senate bill provided $50 million.

  • $600 million in the Pelosi bill to National Endowment of the Arts and the Humanities (FY2019 budget: $253 million) – In 2017, our study showed eighty-percent of all non-profit grant-making flowed to well-healed organizations with over $1 million in assets. The Senate bill provided $150 million.

Many projects included in the Pelosi bill were stripped in the Senate bill: a $25 billion bailout of the Post Office; requiring federal agencies to use minority banks; and expanded collective bargaining rights for federal employees.

However, even the Senate bill significantly strengthened private-sector unionizing. If a business takes a coronavirus stabilization loan, then they must “remain neutral in any union organizing effort for the term of the loan.”

A quick spotlight on agencies receiving coronavirus recovery in the Senate bill includes:

  • $88 million to the Peace Corps for “evacuating volunteers and U.S. direct hires from overseas.” The agency just fired all of their 7,300 volunteers working in 61 countries on March 15. The Pelosi bill allocated $90 million.

  • $250 million to the Internal Revenue Service (IRS). The subsidy would cover “taxpayer services,” “enforcement,” and “operations support.” The Pelosi bill provided $602 million.

  • $350 million to the State Department for “migration and Refugee Assistance.” This funding would help minimize the virus spread in vulnerable populations. The Pelosi bill earmarked $300 million.

  • $400 million to the federal Election Assistance Commission to assist the states with “election security grants.” The Pelosi bill provided $4 billion.

  • $30.8 billion to the Department of Education for “state Fiscal Stabilization Fund” that provides grants to support of elementary and secondary education ($13.5 billion), Higher Ed ($14.25 billion), and State flexibility grants ($3 billion). The Pelosi bill asked for $50 billion.

We reached out to Leader McConnell and Speaker Pelosi for comment.

“The coronavirus epidemic endangers every aspect of American life, and Democrats believe that this historic emergency requires a full-spectrum response to protect our economy and our democracy.”

- Spokesperson Henry Connelly on behalf of Speaker Nancy Pelosi

During the past three years, Republicans and Democrats have helped drain the U.S. Treasury from the left and the right. Our national debt increased from $10 trillion (2008) to $19.6 trillion (2016) to $23.6 trillion (2020).

Coronavirus responses will drive the national debt much higher.

Now, leaders in both parties must honor the sacrifices of American workers and families in a lockdown and safeguard the fiscal health of the country.

Tyler Durden Thu, 03/26/2020 - 18:05
Published:3/26/2020 5:18:23 PM
[Entertainment] Washington Post paperback bestsellers A snapshot of popular books. Published:3/25/2020 8:51:01 AM
[Markets] "Helicopter Money": This Is The Game-Changer Geo-Politically "Helicopter Money": This Is The Game-Changer Geo-Politically

Authored by Charles Hugh Smith via OfTwoMinds blog,

The collateral supporting the global mountain of debt is crumbling as speculative bubbles deflate.

A great many freebies are being tossed in the Helicopter Money basket. That households experiencing declines in income need immediate support is obvious, as is the need to throw credit lifelines to small businesses. But beyond those essentials, the open-ended nature of Helicopter Money has unleashed a frenzy of political favors and giveaways that have little to do with helping households and everything to do with rewarding favored cronies, cartels and interest groups.

As Gordon Long and I explain, the short-term "pain relief" of Helicopter Money won't cure the economy's financial disease; rather, it will act as a catalyst for longer-term disruption and decline.

None of the giveaways being discussed address the core causes of our systemic financial disease:

-- Erosion of real-world collateral supporting the ever-growing mountains of debt and leverage

-- Diminishing returns on monetary stimulus (Federal Reserve financial cocaine no longer generates euphoria)

-- Domino-like disruption of global supply chains and global demand

-- Stagnating purchasing power of labor

-- The use of debt to keep up with the soaring costs of essentials (rent, healthcare. childcare) and aspirational goods (iPhones) and services (vacations)

-- Repricing of risk and risk assets

The stability of the entire system is increasingly fragile and brittle. The abuse of money-printing--creating currency to benefit bloated, inefficient, parasitic, predatory institutions, cartels and monopolies--is further eroding already-decaying confidence in monetary and fiscal authorities and policies.

The collateral supporting the global mountain of debt is crumbling as speculative bubbles deflate. What happens to margin debt when the $300 stock falls to $100? What happens to the $1 million mortgage when the decaying bungalow's value falls from $1.2 million to $400,000?

The inevitable result of creating currency is excess of the creation of goods and services is a decline in purchasing power which we experience as inflation / shrinkflation (getting lower quality and less quantity even though the price has remained the same).

This loss of putchasing power has been masked by bogus statistical tricks and shrinkflation, but as the Helicopter Money trillions flood through the economy and global supply chain disruptions cause prices to rise, the usual bag of tricks will no longer be enough to hide the higher costs and declining purchasing power.

Then there's the psychological impact of the reverse wealth effect as households and enterprises see their net worth and income dropping. The confident euphoria required to borrow and spend freely has evaporated and will not be returning, regardless of how much currency is created and distributed.

Gordon and I discuss these topics in this 37-minute video:

If you missed our three-part series:

*  *  *

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Tyler Durden Tue, 03/24/2020 - 05:00
Published:3/24/2020 4:13:20 AM
[Markets] SoftBank Sells $41 Billion In Assets To Finance More Stock Buybacks SoftBank Sells $41 Billion In Assets To Finance More Stock Buybacks

SoftBank's shift from long-term 'vision' to short-term 'survival' is now complete.

After the infamous string of blowups that hammered both SoftBank's private investments as well as its $100 billion 'Vision Fund', which consisted mostly of money from the Saudis and Abu Dhabi most notoriously the collapse of the WeWork IPO as the unicorn's valuation evaporated, triggering the ouster of its founder-CEO, a string of other executives, and a sudden spiral that ended with an emergency rescue package that narrowly saved WeWork from imminent bankruptcy.

Now, under pressure from activist Paul Singer's Elliott Management and a handful of other investors, and with the reputation of Chairman Masa Son likely forever tarnished, it appears SoftBank is taking direct steps to shore up its plunging stock price via - what else? - share buybacks.

This, at a time when companies, particularly American companies, are facing tremendous public backlash against plans to buyback stock, which has even gotten tangled up in the battle over the second part of the White House's economic plan.

Mirroring, in an ironic way, the forced deleveraging of Chinese conglomerates like Anbang, HNA & Dalian Wanda, SoftBank announced on Monday that it would start selling off some of the crown jewels, including some of its stake in Alibaba, to shore up its balance sheet and prop up its share price.

The company earmarked up to $18 billion for share buybacks, and another $23 billion to redeem debt and build up cash reserves on Monday, two weeks after announcing share buybacks of roughly $4.5 billion. The move would allow SoftBank to repurchase up to 45% of its shares outstanding, and the planned buyback is more than twice the size of the $20 billion or so that Elliott had pushed for.

The action "reflects the firm and unwavering confidence we have in our business," Son said.

The company is also hoping to pull $3 billion of rescue capital from WeWork, claiming that investigations into WeWork allow SoftBank to pull the funds.

Though most of the money will be used for stock buy backs, some will go down to pay the company's massive $173 billion debt pile (though more than half of that debt sits on the books of SoftBank subsidiaries).

SoftBank’s debtholders are getting restive as well. On a consolidated basis, SoftBank had about ¥19 trillion yen ($173 billion) in debt as of the end of last year, although more than half was held by subsidiaries like Sprint, which SoftBank said it wasn’t on the hook for.

Soon after SoftBank announced its first share buyback on March 12, credit rater S&P Global downgraded the company’s outlook to negative, saying the move raised questions about SoftBank’s commitment to financial soundness. In recent days, as global credit markets have tanked, the prices of some of SoftBank’s bonds plummeted as well, while the price of a financial instrument offering protection against potential bankruptcy, known as a credit default swap, rose.

SoftBank also said it has hired an outside firm to search for three new independent directors to improve transparency and governance.

But given Masa Son's reputation, and his still-formidable fortune and reputation, we can't help but wonder if all of this is merely a ruse, as Masa Son, irritated by the encroachment of activists, prepares a long-shot bid to try and take the company - or at least a scaled-back version of the company a la Rupert Murdoch's new Fox News - private.

It's really his only option if he ever hopes to run SoftBank with the level of autonomy he enjoyed before the WeWork fiasco.

Tyler Durden Mon, 03/23/2020 - 20:25
Published:3/23/2020 7:42:38 PM
[Health] A few recommendations for pandemic reading

These are a few great books that will remind us that we are not living through the end of the world. Thankfully, we’re living in the good times. I’ve read all of these books and can highly recommend them as perfect reading material to help bring perspective to current events:

The post A few recommendations for pandemic reading appeared first on Bookworm Room.

Published:3/23/2020 5:12:18 PM
[Markets] Welcome To Sweatshop Amerika! - The Next Bailout Will Be Our Last Welcome To Sweatshop Amerika! - The Next Bailout Will Be Our Last

Authored by Mike Whitney via The Unz Review,

Imagine if the congress approved a measure to form a public-private partnership between the US Treasury and the Federal Reserve. Can you imagine that?

Now imagine if a panicky and ill-informed Congress gave the Fed a blank check to bail out all of its crooked crony corporate and Wall Street friends, allowing the Fed to provide more than $4.5 trillion to underwater corporations that ripped off Mom and Pop investors by selling them bonds that were used to goose their stock prices so fatcat CEOs could make off like bandits.

Imagine if all that red ink from private actors was piled onto the national debt pushing long-term interest rates into the stratosphere while crushing small businesses, households and ordinary working people.

Now try to imagine the impact this would have on the nation’s future.

Imagine if the Central Bank was given the green-light to devour the Treasury, control the country’s “purse strings”, and use nation’s taxing authority to shore up its trillions in ultra-risky leveraged bets, its opaque financially-engineered ponzi-instruments, and its massive speculative debts that have gone pear-shaped leaving a gaping black hole on its balance sheet?

Well, you won’t have to imagine this scenario for much longer, because the reality is nearly at hand. You see, the traitorous, dumbshit nincompoops in Congress are just a hairs-breadth away from abdicating congress’s crucial power of the purse, which is not only their greatest strength, but also allows the congress to reign in abuses of executive power by controlling the flow of funding. The power of the purse is the supreme power of government which is why the founders entrusted it to the people’s elected representatives in congress. Now these imbeciles are deciding whether to hand over that authority to a privately-owned banking cartel that has greatly expanded the chasm between rich and poor, incentivized destructive speculation on an industrial scale, and repeatedly inflated behemoth asset-price bubbles that have inevitably blown up sending stocks and the real economy into freefall. The idea of merging the Fed and the Treasury first appeared in its raw form in an article by former Fed chairman Ben Bernanke and Janet Yellen in the Financial Times. Here’s a short excerpt from the piece:

“The Fed could ask Congress for the authority to buy limited amounts of investment-grade corporate debt… The Fed’s intervention could help restart that part of the corporate debt market, which is under significant stress. Such a programme would have to be carefully calibrated to minimize the credit risk taken by the Fed while still providing needed liquidity to an essential market.” (Financial Times)

The Fed is not allowed to buy corporate debt, because it is not within its mandate of “price stability and full employment”. It’s also not allowed to arbitrarily intervene in the markets to pick winners and losers, nor is it allowed to bailout poorly-managed crybaby corporations who were gaming the system to their own advantage when the whole deal blew up in their faces. That’s their problem, not the Fed’s and not the American taxpayer’s.

But notice how Bernanke emphasizes how “Such a programme would have to be carefully calibrated to minimize the credit risk taken by the Fed”. Why do you think he said that?

He said it because he anticipates an arrangement where the new Treasury-Fed combo could buy up to “$4.5 trillion of corporate debt” (according to Marketwatch and BofA). And the way this will work, is the Fed will select the bonds that will be purchased and the credit risk will be heaped onto the US Treasury. Apparently Bernanke and Yellen think this is a “fair” arrangement, but others might differ on that point.

Keep in mind, that in the last week alone, investors pulled a record $107 billion out of corporate bonds which is a market which has been in a deep-freeze for nearly a month. The only activity is the steady surge of redemptions by frantic investors who want to get their money back before the listing ship heads for Davey Jones locker. This is the market that Bernanke wants the American people to bail out mainly because he doesn’t want to submerge the Fed’s balance sheet in red ink. He wants to find a sucker who will take the loss instead. That’s where Uncle Sam comes in, he’s the target of this subterfuge. This same theme pops up in a piece in the Wall Street Journal. Check it out:

“At least Treasury has come around to realizing it needs a facility to provide liquidity for companies. But as we write this, Mr. Mnuchin was still insisting that Treasury have control of most of the money to be able to ladle out directly to companies it wants to help. This is a recipe for picking winners and losers, and thus for bitter political fights and months of ugly headlines charging favoritism. The far better answer is for Treasury to use money from Congress to replenish the Exchange Stabilization Fund to back the Fed in creating a facility or special-purpose vehicles under Section 13(3) to lend the money to all comers. “(“Leaderless on the Econom”, Wall Street Journal)

I can hardly believe the author is bold enough to say this right to our faces. Read it carefully: They are saying “We want your money, but not your advice. The Fed will choose who gets the cash and who doesn’t. Just put your trillions on the counter and get the hell out.”

Isn’t that what they’re saying? Of course it is. And the rest of the article is even more arrogant:

“The Fed can charge a non-concessionary rate, but the vehicles should be open to those who think they need the money, not merely to those Treasury decides are worthy.” (Huh? So the Treasury should have no say so in who gets taxpayer money??) The looming liquidity crisis is simply too great for that kind of bureaucratic, politicized decision-making. (Wall Street Journal)

Get it? In other words, the folks at Treasury are just too stupid or too prejudiced to understand the subtleties of a bigass bailout like this. Is that arrogance or what?

[ZH: The Fed just unveiled a corporate-bond-buying program (both primary and secondary markets)]

This is the contempt these people have for you and me and everyone else who isn’t a part of their elitist gaggle of reprobates. Here’s a clip from another article at the WSJ that helps to show how the financial media is pushing this gigantic handout to corporate America:.

“The Federal Reserve, Treasury Department and banking regulators deserve congratulations for their bold, necessary actions to provide liquidity to the U.S. financial system amid the coronavirus crisis. But more remains to be done. We thus recommend: (1) immediate congressional action …. to authorize the Treasury to use the Exchange Stabilization Fund to guarantee prime money-market funds, (2) regulatory action to effect temporary reductions in bank capital and liquidity requirements… (NOTE–So now the banks don’t need to hold capital against their loans?) .. additional Fed lending to banks and nonbanks….(Note -by “nonbanks”, does the author mean underwater hedge funds?)…

We recommend that the Fed take further actions as lender of last resort. First, it should re-establish the Term Auction Facility, used in the 2008 crisis, allowing depository institutions to borrow against a broad range of collateral at an auction price (Note–They want to drop the requirement for good Triple A collateral.) … Second, it should consider further exercising its Section 13(3) authority to provide additional liquidity to nonbanks, potentially including purchases of corporate debt through a special-purpose vehicle” (“Do More to Avert a Liquidity Crisis”, Wall Street Journal )

This isn’t a bailout, it’s a joke, and there’s no way Congress should approve these measures, particularly the merging of the US Treasury with the cutthroat Fed. That’s a prescription for disaster! The Fed needs to be abolished not embraced as a state institution. It’s madness!

And look how the author wants to set up an special-purpose vehicle (SPV) so the accounting chicanery can be kept off the books which means the public won’t know how much money is being flushed down the toilet trying to resuscitate these insolvent corporations whose executives are still living high on the hog on the money they stole from credulous investors. This whole scam stinks to high heaven!

Meanwhile America’s working people will get a whopping $1,000 bucks to tide them over until the debts pile up to the rafters and they’re forced to rob the neighborhood 7-11 to feed the kids. How fair is that?

And don’t kid yourself: This isn’t a bailout, it’s the elitist’s political agenda aimed at creating a permanent underclass who’ll work for peanuts just to eek out a living.

Welcome to Sweatshop Amerika!

Tyler Durden Mon, 03/23/2020 - 10:05
Published:3/23/2020 9:09:59 AM
[Books] Napoleon: Not So Bad After All (John Hinderaker) Let’s take a break from COVID-19 and talk books. Last year I read Andrew Roberts’ biography of Winston Churchill, and enjoyed it. I didn’t realize that he also wrote a biography of Napoleon Bonaparte in 2014 until one of my daughters gave it to me for Christmas. It is a terrific book–long, at 800 pages, but so absorbing that it could easily have been longer. I actually enjoyed Napoleon more Published:3/22/2020 7:39:56 PM
[Markets] Martial Law In The US: How Likely Is It, & What Will Happen? Martial Law In The US: How Likely Is It, & What Will Happen?

Authored by Robert Richardson via,

The march towards martial law is something that is often ignored by the general public, often labeled as Quackery or something belonging on conspiracy websites. But what’s happening in this country is exactly what our founders warned us about, and martial law is something they took very, very seriously.

What is martial law?

If you’re looking for a definition, then Martial Law basically means using state or national military force to enforce the will of the government on the people.

Under a declaration of martial law, Constitutional freedoms and liberties are suspended, and civilians are no longer entitled to their civil rights. It basically allows the government, or a tyrannical politician, to shred the Constitution and impose its will through military force.

History of Martial Law in the United States of America

“Those that fail to learn from history, are doomed to repeat it.”

- Winston Churchill

In one way or another, there have always been tyrants who have used the power of government to suppress and control the public. But if we are looking for specific examples of Martial Law being used inside the United States, we don’t have to look very hard or far to find them.

Using the strictest definition of the term, we can see the roots of martial law in America take hold during the lead up to the Revolutionary war. Although there were many reasons for the war, including resistance to taxes imposed by the British parliament, the main catalyst was England’s decision to use military troops to enforce everyday law throughout the colonies.

The beginning of the end? The Civil War Ushers in a Strong Central Government through Martial Law Enforcement

Flash forward a hundred years, and many of the most egregious examples of martial law can be found throughout the civil war. While today’s history books largely ignore the real reasons for the war or the many atrocities committed by President Lincoln, the facts of what really happened cannot be disputed.

The reason we have lost so many of our liberties can be tied directly to the civil war.

On September 15, 1863, President Lincoln imposed Congressionally-authorized martial law. While history contends the war was fought to end slavery, the truth is, Lincoln by his own admission never really cared about freeing slaves. In fact, Lincoln never intended to abolish slavery, his main interest was centralizing government power and using the federal government to exert complete control over all citizens. The abolishment of slavery was only a byproduct of the war. It actually took the 13th amendment to end slavery, since Lincoln actually only freed Southern slaves, not slaves in states loyal to the Union.

During the Civil War, Lincoln continually violated the Constitution, in some cases suspending the entire Constitution that he swore to uphold.  

  • He suspended the writ of Habeas Corpus without the consent of congress.

  • He shut down newspapers whose writers displayed any dissent to Union policy or spoke out against him.

  • He raised troops without the consent of Congress.

  • He closed courts by force.

  • He even imprisoned citizens, newspaper owners,and elected officials without cause and without a trial.

Our founders were very wary of using the military to enforce public policy, and concerns about this type of abuse date back to, and largely influenced, the creation of the Constitution. The founders continually warned about using military force to uphold law and order; unfortunately, most Americans are rather ignorant of history and are even more ignorant to what our founders intended when they created the Constitution and the Bill of Rights.

What will happen under Martial law?

The actual words martial law will probably never be used.

The first thing you will likely see is a declaration of a “State of Emergency”. This may be done nationally, in cases of war or a large-scale terrorist attacks; or it may happen locally, as witnessed in the wake of Hurricane Katrina.

In August of 2005, New Orleans was declared a disaster area and a state of emergency was declared by the governor. This allowed state officials to order evacuations and forcefully remove residents from their homes, suspend certain laws, confiscate firearms, and suspend the sale of items like liquor, firearms, and ammunition.

In the aftermath of Hurricane Katrina, New Orleans police, the U.S. Marshals office, and the Louisiana National Guard forcibly confiscated over 1,000 legal firearms from law-abiding citizens.

Depending on the reasons behind the declaration you may also see:

  • The suspension of the Constitution, probably starting with the first and second amendment.

  • Confiscation of firearms; it has happened and it will happen again.

  • Suspension of Habeas corpus: Imprisonment without due process and without a trial.

  • Travel Restrictions, including road closures and possibly, even quarantine zones.

  • Mandatory Curfews and Mandatory Identification.

  • Automatic search and seizures without a warrant.

When can Martial Law be enacted?

When Martial Law can be enacted is a pretty touchy subject, largely because our founders never intended the federal government or a standing army be permitted to take such actions. Unfortunately, most people accept these unconstitutional activities and are more than willing to give up their essential liberties in exchange for peace of mind and not having to think for themselves.

This is something Benjamin Franklin warned about when he famously wrote,
“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

How likely is martial law in the United States?

Let’s face it, this country is a ticking time bomb. From widespread social unrest, crime, and violence to a growing national debt which includes an entire subset of our population that depends on government assistance to exist, the writing is on the wall: Trouble is Coming.

In my opinion, we are already under a form of martial law. The founders never intended standing armies policing the citizens of the United States; sadly that is exactly what we have.

Drones, armored vehicles with high power weapons, tanks, and battlefield helicopters are no longer something that you see on some foreign battlefield; it’s now standard operating procedure at police stations throughout the country. Our federal government has poured billions of dollars into militarizing and taking over our country’s local police forces, in what can only be described as a domestic military force or standing army meant to enforce federal law.

President Bush Expands Martial Law Authority

On September 29, 2006, President George W. Bush signed the John Warner National Defense Authorization Act (NDAA) for Fiscal Year 2007 (H.R. 5122). The law expanded the President’s authority to declare Martial Law under revisions to the Insurrection Act and actually allowed the President to take charge of National Guard troops without state governor authorization.

While certain aspects of the bill were rolled back in 2008, President Obama used the 2012 NDAA to further strengthen the Executive offices ability to declare Martial Law and added provisions that would allow military troops to detain U.S. citizens without a trial.

President Obama Forms National Police Task Force; Uses Social unrest as Justification.