Feb 192021
 
 February 19, 2021  Posted by at 9:31 am Finance Tagged with: , , , , , , , , , , , ,  53 Responses »


Ito Shinsui Snowy night 1923

 

Mutations Made Coronavirus 8 Times More Infectious Than Original (RT)
Pfizer, Moderna Vaccines Make 3x Less Antibodies vs South African Strain (RT)
130 Countries Have Not Received A Single Covid Vaccine Dose (G.)
Florida Ranks 11th Lowest In Covid Deaths Per Capita Among Seniors (Blaze)
FBI, US Attorney In Brooklyn Probing Cuomo Admin On Nursing Homes (TU)
The Myth of Andrew Cuomo the Competent, Steady Statesman (Jac.)
De Blasio Says Threatening Phone Call To Lawmaker Is ‘Classic Andrew Cuomo’ (F.)
Texas Was “Seconds And Minutes” From Complete Disaster (ZH)
The Failure Of The Texas Power Grid Is Worse Than You Think (Fed.)
Beleaguered Texas Hospitals With No Water Evacuate Patients (Fox4)
The Slippery Slope from Censoring ‘Disinformation’ to Silencing Truth (RI)
Trump’s Former Fixer Cohen Interviewed By Manhattan DA’s Office (R.)
Biden Privately Tells Governors: Minimum Wage Hike Likely Isn’t Happening (Pol.)
Greece in Talks with the UK to Create Tourism Corridor (GR)
Why Vitamin D Probably Still Can’t Cure Covid-19 (Gideon)

 

 

 

 

Our daily good news segment.

Mutations Made Coronavirus 8 Times More Infectious Than Original (RT)

New research has found that a mutation in the spike protein of SARS-CoV-2, present in variants from the United Kingdom, South Africa, and Brazil, can make the virus up to eight times more infectious than the original. The new research into the D614G mutation on the spike protein in SARS-CoV-2, present in all the latest variants currently plaguing healthcare systems the world over, was led by researchers at New York University, the New York Genome Center, and Mount Sinai. “Confirming that the mutation leads to more transmissibility may help explain, in part, why the virus has spread so rapidly over the past year,” said Neville Sanjana, assistant professor of biology at NYU, who added that the mutation has reached “near universal prevalence” among the coronavirus variants spreading across the globe.

The Mount Sinai researchers injected a virus with the D614G mutation into human lung, liver, and colon cells and compared it against cells from the original strain detected in Wuhan at the start of the pandemic. They found a whopping eight-fold increase in transmissibility between the two strains, with the mutated spike protein making the virus more resilient to being split by other proteins in the human immune system, highlighting the importance of continued vaccine research and development to combat this hardier version. “…[O]ur experimental data was pretty unambiguous – the D614G variant infects human cells much more efficiently than the wild type,” said Zharko Daniloski, a postdoctoral fellow in Sanjana’s lab at NYU and the study’s co-first author.

Thankfully, however, the mutation has not yet been linked to more intense progression of Covid-19 leading to more severe forms of the disease or an increase in hospitalization. On the other hand, this does pose another issue: the current generation of vaccines were developed based on the original Wuhan-variant spike protein structure, highlighting the need for booster vaccines or even annual vaccination programs to halt the spread of the coronavirus for good.

Read more …

More good news.

Pfizer, Moderna Vaccines Make 3x Less Antibodies vs South African Strain (RT)

Vaccines developed by US companies Pfizer/BioNTech and Moderna are producing fewer antibodies against the coronavirus mutation that has emerged in South Africa, according to studies reported in the New England Journal of Medicine. A lab study jointly conducted by Pfizer/BioNTech and researchers at the University of Texas in Galveston showed that the neutralization of the South African strain “was weaker by approximately two thirds,” but concluded that it was “unclear what effect” that would have on protection the vaccine provided from the disease. This is according to the letter by the researchers published on Wednesday in NEJM, the oldest US medical journal.

Another study conducted by Moderna and the National Institute of Allergy and Infectious Diseases – whose head, Dr. Anthony Fauci, is the Biden administration’s “coronavirus czar” at the moment – showed “reductions by a factor of 2.7” in the titers of neutralizing antibodies against the variant known as the B.1.351 – and by a factor of 6.4 when pitted against the full range of South African mutations. “Protection against the B.1.351 variant conferred by the mRNA-1273 vaccine remains to be determined,” says the letter from the Moderna/NIAID researchers, also published by NEJM on Wednesday. Moderna said it is working on booster shots if needed. Pfizer and BioNTech are also preparing to develop an update or a booster shot if needed, according to a statement cited by Bloomberg.

In a statement released in January, ahead of the study’s review, they said the performance of their vaccine was “slightly lower” against the South African strain when compared to other mutations, but that “small differences in viral neutralization observed in these studies are unlikely to lead to a significant reduction in the effectiveness of the vaccine.” South Africa has halted the vaccination with Astra Zeneca’s formula after a study showed it didn’t work as well in preventing Covid-19 caused by the mutant strain. President Cyril Ramaphosa took the Johnson & Johnson vaccine on Wednesday.

Read more …

We’re on a roll.

130 Countries Have Not Received A Single Covid Vaccine Dose (G.)

The UN secretary general, António Guterres, has sharply criticised the “wildly uneven and unfair” distribution of Covid vaccines, saying 10 countries have administered 75% of all vaccinations and demanding a global effort to get all people in every country vaccinated as soon as possible. The UN chief told a high-level meeting of the UN security council on Wednesday that 130 countries had not yet received a single dose of vaccine. “At this critical moment, vaccine equity is the biggest moral test before the global community,” said. Guterres called for an urgent global vaccination plan to bring together those with the power to ensure equitable vaccine distribution – scientists, vaccine producers and those who can fund the effort.

He called on the world’s major economic powers in the Group of 20 to establish an emergency taskforce to establish a plan and coordinate its implementation and financing. He said the taskforce should have the capacity “to mobilise the pharmaceutical companies and key industry and logistics actors”. Guterres said Friday’s meeting of the Group of Seven major industrialised nations – the United States, Germany, Japan, Britain, France, Canada and Italy – “can create the momentum to mobilise the necessary financial resources”. Thirteen ministers addressed the virtual council meeting organised by Britain on improving access to Covid vaccinations, including in conflict areas.

[..] China’s foreign minister, Wang Yi, criticised the growing “immunity divide” and called on the world to “come together to reject ‘vaccine nationalism,’ promote fair and equitable distribution of vaccines, and, in particular, make them accessible and affordable for developing countries, including those in conflict”. At the WHO’s request, he said, China will contribute 10m doses of vaccines to Covax “preliminarily”. China has donated vaccines to 53 developing countries including Somalia, Iraq, South Sudan and Palestine, which is a UN observer state. It has also exported vaccines to 22 countries, he said, adding that Beijing has launched research and development cooperation on Covid with more than 10 countries.

Read more …

Schools open. No mask mandate. Make of it what you will.

Florida Ranks 11th Lowest In Covid Deaths Per Capita Among Seniors (Blaze)

There’s a reason why the Biden regime is trying to attack Florida Gov. Ron DeSantis and create an illusion of a disproportionate viral crisis in the state. With no declared emergency restrictions in place at the state level since last September, the fact that Florida is doing better than the national average completely exposes the lie of lockdown and masks having any effect whatsoever on the fixed natural progression of the virus. Dr. Fauci is suggesting a novel scientific principle – that schools can’t reopen until Congress passes yet another “stimulus” bill. Yet in Florida, schools have been open all year, and the state’s excess deaths for 2020 rank the 16th lowest in the nation, according to a new analysis. What’s more, the Sunshine State, which is regarded as God’s waiting room for seniors, experienced the 11th lowest per capita rate of COVID deaths for seniors in 2020.

A new analysis conducted by RationalGround.com and exclusively obtained by TheBlaze collated CDC excess death data for 49 states (excluding North Carolina, which has incomplete data) and ranked the states from smallest to largest increase in excess deaths from 2019 to 2020. As we have seen in study after study, there is absolutely zero correlation between non-pharmaceutical interventions, such as business and school closures or mask mandates, and a lower rate of excess deaths. According to the CDC’s excess death table, there was a 16.9% national average increase in all-cause mortality in 2020 over 2019.


Given the loose way we count COVID deaths, it will take quite some time to sort out how many of those deaths are due to COVID and how many are due to the panic, anxiety, lockdowns, and missed care, but what is clear is that there is no correlation between the political measures taken by a state and fewer all-cause deaths. Florida, which is the third largest state, has the 16th lowest increase in all-cause deaths, and all of the states that had fewer excess deaths than Florida are much smaller and are mostly states with lower population density. California, on the other hand, ranked No. 40.

Read more …

I have no high hopes.

Did CNN just ban one Cuomo from interviewing the other?

FBI, US Attorney In Brooklyn Probing Cuomo Admin On Nursing Homes (TU)

The FBI and the U.S. attorney’s office in Brooklyn have launched an investigation that is examining, at least in part, the actions of Gov. Andrew M. Cuomo’s coronavirus task force in its handling of nursing homes and other long-term care facilities during the pandemic, the Times Union has learned. The probe by the U.S. attorney’s office in the Eastern District of New York is apparently in its early stages and is focusing on the work of some of the senior members of the governor’s task force, according to a person with direct knowledge of the matter who is not authorized to comment publicly. Last March, as the virus began spreading in New York, Cuomo issued a news release listing the 13 initial members of his coronavirus task force, which has been headed by Linda Lacewell, an attorney and former chief of staff for Cuomo.

Lacewell is the superintendent of the state Department of Financial Services. Other task force members include state health Commissioner Howard Zucker, Secretary to the Governor Melissa DeRosa and Beth Garvey, counsel to the governor. “As we publicly said, DOJ (Department of Justice) has been looking into this for months,” said Richard Azzopardi, a spokesman for the governor. “We have been cooperating with them and we will continue to.” Azzopardi did not disclose whether any members of the administration have been interviewed or if they have been served with any subpoenas. John Marzulli, a spokesman for the U.S. attorney’s office in Brooklyn, on Wednesday afternoon said he could not “confirm or deny” whether the office has initiated an investigation.

Nearly three weeks after the governor’s task force was announced last year, the state health department issued an order directing nursing homes and other long-term care facilities that they must accept residents who were being discharged from hospitals even if they were still testing positive for the infectious disease, as long as they were able to care for them properly. That directive, which was rescinded less than two months later, has been the focus of a firestorm of criticism directed at Cuomo’s administration, including allegations that the order — which the governor said was based on federal guidance — had contributed to the high number of fatalities of nursing home residents in New York. That assertion was largely dismissed in a report by the Department of Health that was released in July.

Read more …

“Even if Cuomo never sinks low enough to lose reelection next year — given his enormous war chest and New York’s horrific campaign finance laws, it’s still an unlikely scenario..”

The Myth of Andrew Cuomo the Competent, Steady Statesman (Jac.)

Even if Cuomo never sinks low enough to lose reelection next year — given his enormous war chest and New York’s horrific campaign finance laws, it’s still an unlikely scenario — he will never again be the governor feted by Ellen and celebrated by self-described “Cuomosexuals.” He’s not getting another Emmy. His moment is over. What happened? In some sense, this has been slow-building. For months, more and more people have been waking up to the fact that the popular, media-created conception of Cuomo was nonsensical. More than 45,000 people have died of COVID-19 in New York State, the second highest absolute death toll in America, just trailing California. (California is more than twice as large, so New York maintains a far higher rate of death.)

Cuomo, like Trump, downplayed the pandemic in its earliest days and issued a shutdown order for New York far too late, defying the opinions of experts and other elected officials. It was the nursing home issue, however, and the subsequently botched vaccine rollout that began to trigger a much-deserved reevaluation of his legacy, which is one of arrogance, secrecy, and failure. Last March, Cuomo ordered nursing homes to accept coronavirus patients who had been discharged from hospitals instead of directing them to large temporary facilities that had a surplus of beds. This decision likely contributed to outbreaks in nursing homes, which the state oversees.

Unlike most other states in America, if not all of them, Cuomo’s New York decided to keep a highly skewed count of nursing home deaths, only tallying those who died while physically in facilities. If you were a nursing home resident who got infected in a home, became sick there, and were transferred to a hospital dying, you were not a part of the official Department of Health tally. Confirming the suspicions of health care experts and many journalists, the state attorney general revealed in a January report that the Department of Health had undercounted nursing home deaths by as much as 50 percent. Shortly after, Cuomo was forced to revise the tally far higher, increasing it by more than 60 percent.

Last week, it was revealed that the Cuomo administration had purposefully withheld nursing home data from lawmakers for months out of fear the Department of Justice, under Donald Trump, would investigate. Several legislators have contemplated calling for Cuomo’s impeachment. In a rage, Cuomo called up a leftist assembly member from Queens, Ron Kim, and threatened to “destroy” his career. This is just the news that has grabbed the most headlines. Cuomo is a Clintonian Democrat with a lust for austerity, and he has been quietly slashing and burning New York’s social safety net since the pandemic arrived last year. The City University of New York, which educates a largely working-class and nonwhite student body, has faced severe budget cuts, as have local public schools and social services.

Read more …

The more I read about Cuomo, the more he resembles a character in a Scorsese movie.

De Blasio Says Threatening Phone Call To Lawmaker Is ‘Classic Andrew Cuomo’ (F.)

Compounding a month of bad press for New York Gov. Andrew Cuomo, New York City Mayor Bill de Blasio said Thursday morning that he believes the state lawmakers who claimed Cuomo threatened to “destroy” his career after he publicly criticized his administration’s handling of Covid-19 in nursing homes. De Blasio—who has had a publicly contentious relationship with the governor since the start of the coronavirus pandemic—painted Cuomo as a bully during a Thursday interview with MSNBC’s “Morning Joe.” The mayor said he believes New York State Assemblyman Ron Kim’s account of the phone call because “a lot of people in New York State have received those phone calls.”

“It’s a sad thing to say … but that’s classic Andrew Cuomo,” said de Blasio, explaining he’s heard complaints like Kim’s “many, many times.” Representatives for Cuomo did not immediately respond to a request for comment from Forbes, though the governor’s Senior Advisor Richard Azzopardi released a statement accusing Kim of “lying about his conversation with Governor Cuomo.” “At no time did anyone threaten to ‘destroy’ anyone with their ‘wrath’ nor engage in a ‘coverup,’” said Azzopardi, describing a “long, hostile” relationship between the two men. The comments come a day after revelations that Cuomo’s handling of nursing home death data is now under federal investigation.

“The bullying is nothing new,” said de Blasio. “I believe Ron Kim and it’s very, very sad. No public servant, no person who is telling the truth should be treated that way. But, the threats, the belittling, the demand that someone change their statement right that moment … Many, many times I’ve heard that.” Kim said he received an angry phone call from the governor last week after he publicly accused Cuomo of obstructing justice by withholding data on nursing home deaths. According to Kim, Cuomo threatened that he could “destroy” him if he did not help “cover up” comments made by Secretary to the Governor Melissa DeRosa, who stirred controversy earlier this month by suggesting the state had purposefully delayed releasing the full Covid-19 death toll in long-term care facilities because of concerns about a potential federal investigation.

Read more …

Something tells me you should go talk to the old time engineers who’ve worked on the grid all their lives. That’s where the stories are, not in politics.

Texas Was “Seconds And Minutes” From Complete Disaster (ZH)

As natural gas fired plants, utility scale wind power and coal plants tripped offline due to the extreme cold brought by the winter storm, the amount of power supplied to the grid to be distributed across the state fell rapidly. At the same time, demand was increasing as consumers and businesses turned up the heat and stayed inside to avoid the weather. “It needed to be addressed immediately,” said Bill Magness, president of ERCOT. “It was seconds and minutes [from possible failure] given the amount of generation that was coming off the system.” With energy prices exploding to record highs, and with demand soaring, grid operators had to “act quickly” to cut the amount of power distributed, Magness said, because if they had waited, “then what happens in that next minute might be that three more [power generation] units come offline, and then you’re sunk.”

Magness said on Wednesday that if operators had not acted in that moment, the state could have suffered blackouts that “could have occurred for months,” and left Texas in an “indeterminately long” crisis. In other words, the millions of households left without power – in some cases for days – were sacrificing for the greater good. So by manually shutting down entire parts of the grid, ERCOT avoided the worst case scenario: one where demand for power overwhelms the supply of power generation available on the grid, causing equipment to catch fire, substations to blow and power lines to go down.

If the grid had gone totally offline, the physical damage to power infrastructure from overwhelming the grid would take months to repair, said Bernadette Johnson, senior vice president of power and renewables at Enverus, an oil and gas software and information company headquartered in Austin. “As chaotic as it was, the whole grid could’ve been in blackout,” she said. “ERCOT is getting a lot of heat, but the fact that it wasn’t worse is because of those grid operators.” If that had occurred, even as power generators recovered from the cold, ERCOT would have been unable to quickly reconnect them back to the grid, Johnson said.

And since nobody can disprove a negative, one just has to take them at their word that dozens of people died so that millions more could live… or something. Grid operators would have needed to slowly and carefully bring generators and customers back online, all the while taking care to not to cause more damage to the grid. It’s a delicate process, Johnson explained, because each part of the puzzle — the generators producing power, the transmission lines that move the power and the customers that use it — must be carefully managed. “It has to balance constantly,” she said. “Once a grid goes down, it’s hard to bring it back online. If you bring on too many customers, then you have another outage.”

Read more …

A disaster long in the making.

The Failure Of The Texas Power Grid Is Worse Than You Think (Fed.)

[..] Yes, some coal plants closed because of freezing temperatures and some natural gas pipelines froze. But as Jason Isaac of the Texas Public Policy Foundation explains in our pages today, the main problem with the Texas power grid isn’t that renewables failed or that fossil fuels failed. It’s that the grid itself has been made unstable by state and federal subsidies that distort the energy market and prevent the buildup of reliable power generation. Subsidies for renewables and fossil fuels have been around for a long time in Texas, supported by both Democrats and Republicans. For as much as Texas has a reputation as a deep-red oil and gas state, it was under Republican Gov. Rick Perry that billions were spent on wind turbines and transmission lines in West Texas, spurred on by massive tax credits for wind producers.

The same thing happened at the federal level when George W. Bush was governor of the state. In the months to come, there will be lengthy and bitter debates about who was responsible for this fiasco. The obvious partisan arguments are already out in the open. If any actual reforms come out of these debates, they will have to begin with an acknowledgment that the way things have been done for decades in Texas has not worked. That much, at least, is now painfully undeniable. For example, goosing the wind and solar industries with billions in tax credits in a state that produces almost a third of America’s fossil fuel energy was perhaps unwise and imprudent.

In hindsight, it looks like cronyism. So do the subsidies for fossil fuels, even if they are not as extravagant as subsidies for renewables. Maybe all of that was a bad idea from the beginning, and maybe it’s time to cut it out. Hardship like what Texas is going through right now can bring clarity. And in the teeth of this winter storm, the entire energy industry, with its high-powered lobbyists and its billions in taxpayer subsidies, is beginning to look like every other elite institution in America: a corrupt and parasitic enterprise whose failures come at the expense of ordinary Americans—in this case, people who are now trying to stay alive in their own homes.

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“Emergency rooms were crowded “due to patients being unable to meet their medical needs at home without electricity..”

Beleaguered Texas Hospitals With No Water Evacuate Patients (Fox4)

After a deadly blast of winter weather overwhelmed the electrical grid and left millions of Texans without power, hospitals in the state are also facing the additional stress of water shortages, crowded emergency rooms and even being forced to evacuate patients. Record-low temperatures damaged infrastructure and pipes, seriously jeopardizing drinking water systems in the Lone Star state. Authorities in Texas ordered 7 million people — a quarter of the population of the nation’s second-largest state — to boil tap water before drinking it. Some hospitals, already contending with COVID-19 patients and vaccine distribution, were also impacted by the winter storm’s havoc on state power grids and utilities. In Austin, hospitals dealt with a loss in water pressure and heat.

St. David’s South Austin Medical Center said Wednesday night that it had lost water pressure from the City of Austin. Since water feeds the facility’s boiler, the hospital was also losing heat. Hospital officials were working to evacuate some patients to other area facilities and said they were distributing bottles and jugs of water to patients and employees. Officials added that they were working with the city to secure portable toilets. “Because this is a statewide emergency situation that is also impacting other hospitals within the Austin area, no one hospital currently has the capacity to accept transport of a large number of patients,” said David Huffstutler, CEO of St. David’s South Austin Medical Center.

In southwest Austin, officials with Ascension Seton Southwest Hospital said they too were facing intermittent issues with water pressure, the Austin American-Statesman reported. The hospital was rescheduling elective surgeries to preserve bed capacity and personnel as a result. At Houston Methodist, two of its community hospitals did not have running water but still treated patients, with most non-emergency surgeries and procedures canceled for Thursday and possibly Friday, spokeswoman Gale Smith told the Associated Press. Emergency rooms were crowded “due to patients being unable to meet their medical needs at home without electricity,” Smith said. She added that pipes had burst in Methodist’s hospitals but were being repaired as they happened.

Read more …

“Then they came for me—and there was no one left to speak for me.”

The Slippery Slope from Censoring ‘Disinformation’ to Silencing Truth (RI)

“If liberty means anything at all, it means the right to tell people what they do not want to hear.” – George Orwell. This is the slippery slope that leads to the end of free speech as we once knew it. In a world increasingly automated and filtered through the lens of artificial intelligence, we are finding ourselves at the mercy of inflexible algorithms that dictate the boundaries of our liberties. Once artificial intelligence becomes a fully integrated part of the government bureaucracy, there will be little recourse: we will be subject to the intransigent judgments of techno-rulers. This is how it starts. Martin Niemöller’s warning about the widening net that ensnares us all still applies.

“First they came for the socialists, and I did not speak out—because I was not a socialist. Then they came for the trade unionists, and I did not speak out— because I was not a trade unionist. Then they came for the Jews, and I did not speak out—because I was not a Jew. Then they came for me—and there was no one left to speak for me.” In our case, however, it started with the censors who went after extremists spouting so-called “hate speech,” and few spoke out—because they were not extremists and didn’t want to be shamed for being perceived as politically incorrect.

Then the internet censors got involved and went after extremists spouting “disinformation” about stolen elections, the Holocaust, and Hunter Biden, and few spoke out—because they were not extremists and didn’t want to be shunned for appearing to disagree with the majority. By the time the techno-censors went after extremists spouting “misinformation” about the COVID-19 pandemic and vaccines, the censors had developed a system and strategy for silencing the nonconformists. Still, few spoke out. Eventually, “we the people” will be the ones in the crosshairs.At some point or another, depending on how the government and its corporate allies define what constitutes “extremism, “we the people” might all be considered guilty of some thought crime or other. When that time comes, there may be no one left to speak out or speak up in our defense.

Read more …

The MSM will be pushing this for all they’re worth.

Trump’s Former Fixer Cohen Interviewed By Manhattan DA’s Office (R.)

The Manhattan District Attorney’s Office and a newly hired high-profile litigator interviewed Donald Trump’s former lawyer, Michael Cohen, on Thursday, as part of a criminal probe of the former president’s business dealings, said two people familiar with the investigation. The interview came after Mark Pomerantz, who has extensive experience in white-collar and organized crime cases, joined District Attorney Cyrus Vance Jr.’s team investigating the Trump family business. Pomerantz started on Feb. 2 as special assistant district attorney, said Danny Frost, a spokesman for Vance. Pomerantz’s hiring is part of a flurry of recent activity in Vance’s investigation, including the issuance in recent days of roughly a dozen new subpoenas, according to the sources.

One of those went to Ladder Capital Finance LLC, a major creditor used by Trump and his company, the Trump Organization, to finance the former president’s commercial real estate holdings, the sources said. Vance’s office has also conducted interviews with Ladder’s staff, one source familiar with the matter said. The district attorney’s office has said little publicly about the probe, but noted in court filings that it was focused on “possibly extensive and protracted criminal conduct” at the Trump Organization, including alleged falsification of records, and insurance and tax fraud. It is the only known criminal inquiry into Trump’s business practices.

Separately, New York state Attorney General Letitia James is leading a civil probe into whether Trump’s company falsely reported property values to secure loans and obtain economic and tax benefits. Ladder issued the loans on several of Trump’s big commercial holdings, including a $160 million mortgage on the Trump Building, a skyscraper in Manhattan’s financial district.

Read more …

He knew this a long time ago. But dangling the sausage gets votes.

Biden Privately Tells Governors: Minimum Wage Hike Likely Isn’t Happening (Pol.)

When Joe Biden met with a group of mayors and governors last week he bluntly told them to get ready for a legislative defeat: his proposed minimum wage hike was unlikely to happen, he said, at least in the near term. “I really want this in there but it just doesn’t look like we can do it because of reconciliation,” Biden told the group, according to a person in the room. “I’m not going to give up. But right now, we have to prepare for this not making it.” The comments, which were confirmed by two other people familiar with the conversation, were the furthest Biden has gone in conceding the coming axing of the $15-an-hour minimum wage provision from his first major legislative package.


And they suggest that the president is more inclined to manage the fallout of it not being included than to pursue long-shot, political-capital consuming efforts to fight for its insertion. Sitting in the Oval Office with Republican and Democratic elected officials last Friday to advocate for his $1.9 trillion Covid relief package, he didn’t hide his skepticism. “Doesn’t look like we can do it,” he said of the minimum wage hike. For weeks now, the White House has been trying to manage expectations on the feasibility of advancing a $15-an-hour minimum wage provision through a broader “rescue” package. Biden first suggested it might not make it into the final Covid relief bill in an interview with CBS prior to the Super Bowl, noting his belief that the Senate parliamentarian would determine it did not jibe with budgetary rules that allow a bill to pass with just 51 votes in the Senate.

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I still wonder what the legal status is of requiring people be vaccinated with a vaccine whose producer says it doesn’t prevent the spread of the virus. And then on the basis of that, allowing them into your country without testing etc., where they can spread the virus.

If you would let people fly in to an island, and they would stay there, that’s one thing. You could monitor them, trace them. But Greek tourism is based on people traveling a lot, island-hopping etc.

Greece in Talks with the UK to Create Tourism Corridor (GR)

Soon, vaccinated British citizens may be able to travel to Greece without any restrictions whatsoever, according to Greek Minister of Tourism Haris Theoharis. Greece has entered into preliminary discussions with the UK regarding tourism, Theoharis stated, and may allow vaccinated travelers from the UK into the country this summer without being tested for the coronavirus first. Inoculated tourists may also be able to avoid Greece’s mandatory seven-day quarantine once they arrive in the country. Those who have been vaccinated and hope to enter Greece may have to present a vaccine certificate, or vaccine passport, in order to skip the strict anti-virus measures currently in place in the country.

Currently, all those entering Greece must present a negative PCR test for the coronavirus, within 72 hours of their flight, before entry is allowed. In addition to the PCR test, visitors from the UK must also now take a rapid test upon arrival to Greece. Employing nearly one in five Greeks, tourism is one of the most important sectors of the country’s economy. Greece welcomes around 4 million visitors from the UK each year. The Mediterranean country hopes that opening up a tourist corridor with the UK for the summer will bring a much-needed boost to Greece’s economy, which has suffered a great deal due to travel restrictions and strict anti-virus measures. Greek tourism took a giant plunge in the third quarter of 2020 due to the Covid-19 pandemic, according to the Hellenic Statistical Authority (ELSTAT).

In total, in the first nine months of last year, the accommodation sector had revenues of only 1.89 billion euros, when last year in the corresponding period revenues were 6.15 billion euros — representing a staggering loss of 4.26 billion euros. When discussing the outlook for Greece’s tourism sector in the summer of 2021, Greek PM Kyriakos Mitsotakis stated to Reuters: “I am a realist, but I am also cautiously optimistic that we will do much better than last year.” The potential deal with the UK may well add to Mitsotakis’ optimism for a successful tourist season this year. The country has already struck a deal with Israel, which will allow vaccinated travelers from the Mediterranean country to enter Greece without coronavirus restrictions.

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Saved this for last because I would like some comments. Did anyone ever state vit. D was a cure for Covid? We sure did not. This epidemiologist appears to take studies on giving people already in hospital large doses of vit. D, to claim it’s useless. This is exactly how HCQ was discredited. But do chime in.

Why Vitamin D Probably Still Can’t Cure Covid-19 (Gideon)

There are many scientific questions that have come up during the pandemic. We’ve investigated the efficacy of hydroxychloroquine, looked into school closures, and even checked to see whether spectacles could protect you from getting Covid-19 (the jury is still out on that one). But perhaps the most consistent question that has been asked, over and over again, is whether vitamin D supplements can treat coronavirus effectively. The allure is understandable — vitamin D is cheap, relatively safe, and there’s some evidence that it can help with the common cold, which is often caused by coronaviruses similar to SARS-CoV-2. If it worked, it could make an enormous difference in the lives of people with Covid-19 and at a very low cost.

Sadly, this has inspired endless shoddy studies that have meant that the question of whether vitamin D works for Covid-19 wasn’t answered very well (or at all) the last time I wrote about it in October 2020. This makes the recent headlines all the more understandable. A study was put up on SSRN — a preprint server run by The Lancet — a few weeks ago that purported to show a 60% decrease in mortality for people with Covid-19 who were given calcifediol (a metabolite of vitamin D) compared to a control group given treatment as usual. With such impressive-sounding results, the study soon went viral on Twitter and has been reported in news outlets around the world. If supplements really could prevent 60% of Covid-19 deaths, it would be a research finding that could literally change the course of the pandemic.

Unfortunately, as with most of the previous research, the evidence is much shakier than you might expect given the glowing headlines. Even more than a year into all of this, we still don’t really know if vitamin D does anything for Covid-19 at all.

Read more …

 

 

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Jan 052021
 
 January 5, 2021  Posted by at 10:32 am Finance Tagged with: , , , , , , , ,  37 Responses »


Camille Pissarro The Boulevard Montmartre at Night 1897

 

Julian Assange: Imminent Freedom (Craig Murray)
Mexican President Promises Asylum For Julian Assange (RT)
Nurse Dies Following Vaccination With Pfizer’s COVID19 Shot In Portugal (RT)
Cheap Hair Lice Drug May Cut Risk Of COVID19 Death By 80 Percent (NYP)
The Lab-Leak Hypothesis (Baker)
US May Cut Some Moderna Vaccine Doses In Half To Speed Rollout (R.)
Putin Pushes Plan To Roll Out COVID “Immunity Passports” In Russia (ZH)
Greek Orthodox Church To Defy Lockdown By Opening For Epiphany (G.)
Tourism Tumbles To 1990 Levels As Pandemic Halts Travel (ZH)
Giving Up the Ghost (Kunstler)

 

 

Yesterday’s refusal to extradite Julian Assange is great news, but no-one really knows what it means. Craig Murray was one of the few allowed inside the courtroom, and he’s optimistic Assange will be out on bail by tomorrow. Let’s cling to that for now.

 

 

 

 

“I should be very surprised if Julian is not released on Wednesday pending the appeal.”

Julian Assange: Imminent Freedom (Craig Murray)

It has been a long and tiring day, with the startlingly unexpected decision to block Julian’s extradition. The judgement is in fact very concerning, in that it accepted all of the prosecution’s case on the right of the US Government to prosecute publishers worldwide of US official secrets under the Espionage Act. The judge also stated specifically that the UK Extradition Act of 2003 deliberately permits extradition for political offences. These points need to be addressed. But for now we are all delighted at the ultimate decision that extradition should be blocked. The decision was based equally on two points; the appalling conditions in US supermax prisons, and the effect of those conditions on Julian specifically given his history of depression.

The media has concentrated on the mental health aspect, and given insufficient attention to the explicit condemnation of the inhumanity of the US prison system. I was the only person physically present in the public gallery inside the court, having been nominated by John Shiption to represent the family, aside from two court officials. I am quite sure that I again noted magistrate Baraitser have a catch in her throat when discussing the inhumane conditions in US supermax prisons, the lack of human contact, and specifically the fact that inmates are kept in total isolation in a small cage, and are permitted one hour exercise a day in total isolation in another small cage. I noted her show emotion the same way when discussing the al-Masri torture evidence during the trial, and she seemed similarly affected here.

Julian looked well and alert; he showed no emotion at the judgement, but entered into earnest discussion with his lawyers. The US government indicated they will probably appeal the verdict, and a bail hearing has been deferred until Wednesday to decide whether he will be released from Belmarsh pending the appeal – which court sources tell me is likely to be held in April in the High Court. I should be very surprised if Julian is not released on Wednesday pending the appeal. I shall now be staying here for that bail hearing.

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Could be for only 3 years.

Mexican President Promises Asylum For Julian Assange (RT)

Mexico’s president has offered asylum to WikiLeaks founder Julian Assange, hours after a British judge refused to extradite Assange to the US to face espionage charges. “Assange is a journalist and deserves a chance, I am in favor of pardoning him,” President Andres Manuel Lopez Obrador told reporters on Monday, saying “we’ll give him protection.” “Our tradition is protection,” Obrador added. [..] Were Assange to take Lopez Obrador up on his offer, he would likely have to weigh the president’s promise of protection against the fact that Obrador could be voted out of office in 2024, when his six-year term concludes.


Since taking office, Lopez Obrador has pursued an idiosyncratic foreign policy. On one hand, the left-wing president sheltered Bolivian President Evo Morales following a right-wing coup in 2019 and refused to follow the lead of the US and its allies in Latin America and recognize opposition leader Juan Guaido as Venezuela’s interim president last year. On the other hand, Lopez Obrador has been largely supportive of US President Donald Trump’s administration. The Mexican leader tightened up security at his southern border when Trump railed against Central American migrant “caravans” entering the US via Mexico, and was repaid by Trump during negotiations with OPEC last year, when the US President intervened to help Mexico avoid cuts to oil production.

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One single death doesn’t have much meaning.

Nurse Dies Following Vaccination With Pfizer’s COVID19 Shot In Portugal (RT)

Health authorities in Portugal are investigating the sudden death of a pediatric surgery assistant in Porto, who was reportedly in “perfect health” when she received the Pfizer vaccine against the coronavirus. Identified on Monday as Sonia Azevedo, 41, the mother of two worked as a surgical assistant at the Instituto Portugues de Oncologia (IPO), an oncology hospital in Porto. She was among the 538 healthcare workers at IPO who received their first dose of the Pfizer-BioNTech vaccine last Wednesday. Azevedo had dinner with her family on New Year’s Eve, and was found dead in bed the following morning.


“I want to know what caused my daughter’s death” her father Abilio told the Portuguese tabloid Orreio da Manha. He described her as a “well and happy” person who “never drank alcohol, didn’t eat anything special or out of the ordinary.” Azevedo was so proud to be among the first to receive the vaccine, she changed her Facebook profile picture to reflect that. “Covid-19 vaccinated,” she wrote under a selfie with her face mask on. “We don’t know what happened. It all happened quickly and with no explanation,” Azevedo’s daughter Vania Figueiredo told the paper. “I didn’t notice anything different in my mother. She was fine. She just said that the area where she had been vaccinated hurt, but that’s normal…”

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Ivermectin goes mainstream. “But we have to do more testing”.

Cheap Hair Lice Drug May Cut Risk Of COVID19 Death By 80 Percent (NYP)

A simple treatment for COVID-19 could be cheaper than 20 bucks — and familiar to most grade school nurses. Head lice drug ivermectin is being explored as a potential treatment for the coronavirus following a promising new study that showed an 80% reduction in hospitalized COVID-19 patient deaths. Just 8 out of 573 patients who received ivermectin passed away, compared to the 44 individuals out of 510 who died after being given a placebo. An earlier study of the antiparasitic prescription drug, which costs between $17 and $43 for a course of treatment, according to GoodRx, revealed promising results in April — by removing all viral RNA within 48 hours of a single dose.

Liverpool University virologist Andrew Hill has called the new study “transformational” in the search for a coronavirus therapy. His findings, based on data from over 1,400 patients, were made public in a video posted to YouTube in which Hill discusses his results in a previously aired livestream. The research currently awaits peer review prior to publishing. “If we see these same trends observed consistently across more studies, then this really is going to be a transformational treatment,” said Hill. However, critics have called Hill’s study conclusion premature, urging further research before declaring ivermectin an effective treatment — citing other buzzed-about methods that ultimately failed to deliver, such as hydroxychloroquine and tocilizumab.

“All we have are observational studies and clinicians’ opinions,” said University of Sydney professor Andrew McLachlan, the Daily Mail reported. “Many of the current studies have low numbers of participants, weak study designs, and inconsistent (and relatively low) ivermectin dosing regimes, with ivermectin frequently given in combination with other drugs.”

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Long piece on all options.

The Lab-Leak Hypothesis (Baker)

What happened was fairly simple, I’ve come to believe. It was an accident. A virus spent some time in a laboratory, and eventually it got out. SARS-CoV-2, the virus that causes COVID-19, began its existence inside a bat, then it learned how to infect people in a claustrophobic mine shaft, and then it was made more infectious in one or more laboratories, perhaps as part of a scientist’s well-intentioned but risky effort to create a broad-spectrum vaccine. SARS-2 was not designed as a biological weapon. But it was, I think, designed. Many thoughtful people dismiss this notion, and they may be right. They sincerely believe that the coronavirus arose naturally, “zoonotically,” from animals, without having been previously studied, or hybridized, or sluiced through cell cultures, or otherwise worked on by trained professionals.

They hold that a bat, carrying a coronavirus, infected some other creature, perhaps a pangolin, and that the pangolin may have already been sick with a different coronavirus disease, and out of the conjunction and commingling of those two diseases within the pangolin, a new disease, highly infectious to humans, evolved. Or they hypothesize that two coronaviruses recombined in a bat, and this new virus spread to other bats, and then the bats infected a person directly — in a rural setting, perhaps — and that this person caused a simmering undetected outbreak of respiratory disease, which over a period of months or years evolved to become virulent and highly transmissible but was not noticed until it appeared in Wuhan.

There is no direct evidence for these zoonotic possibilities, just as there is no direct evidence for an experimental mishap — no written confession, no incriminating notebook, no official accident report. Certainty craves detail, and detail requires an investigation. It has been a full year, 80 million people have been infected, and, surprisingly, no public investigation has taken place. We still know very little about the origins of this disease. Nevertheless, I think it’s worth offering some historical context for our yearlong medical nightmare. We need to hear from the people who for years have contended that certain types of virus experimentation might lead to a disastrous pandemic like this one. And we need to stop hunting for new exotic diseases in the wild, shipping them back to laboratories, and hot-wiring their genomes to prove how dangerous to human life they might become.

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The drug itself is not experimental enough?!

US May Cut Some Moderna Vaccine Doses In Half To Speed Rollout (R.)

The U.S. government is considering giving some people half the dose of Moderna’s COVID-19 vaccine in order to speed vaccinations, a federal official said on Sunday. Moncef Slaoui, head of Operation Warp Speed, the federal vaccine program, said on CBS’ “Face the Nation” that officials were in talks with Moderna and the Food and Drug Administration about the idea. Moderna’s vaccine requires two injections. “We know that for the Moderna vaccine, giving half of the dose to people between the ages of 18 and 55, two doses, half the dose, which means exactly achieving the objective of immunizing double the number of people with the doses we have,” Slaoui said. “We know it induces identical immune response” to the full dose, he added.


The U.S. Centers for Disease Control and Prevention said it had administered 4,225,756 first doses of COVID-19 vaccines in the country as of Saturday morning and distributed 13,071,925 doses. The U.S. has also approved a vaccine from Pfizer, which like Moderna’s requires two shots. Vaccinations have fallen far short of early targets, as officials had hoped to have 20 million people vaccinated by the end of the 2020. Slaoui said he was optimistic vaccinations would continue to accelerate. He rejected the suggestion that officials should prioritize giving more people a single shot, rather than holding back doses for the second shot, saying that cutting Moderna vaccine doses in half was “a more responsible approach that would be based on facts and data.” Slaoui said it would likely not be known until late spring whether vaccinated people can still spread the disease to others.

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Vaccination iron curtain?!

Putin Pushes Plan To Roll Out COVID “Immunity Passports” In Russia (ZH)

As Russian President Vladimir Putin ramps up his aggressive campaign to stamp out COVID-19 once and for all (as Russia races to vaccinate its most vulnerable citizens while striking deals to supply “Sputnik V” to developing markets the world), the embattled president has just raised the possibility of distributing ‘immunity passports’, an idea that has gained traction around the world since the dawn of the pandemic. According to an RT report, the Russian government is considering the development and distribution of documents verifying whether individuals have been vaccinated. China has already road-tested technology transmitting people’s COVID status via smartphone apps, and it’s widely suspected that Beijing will impose some version of immunity passports, if they haven’t already.

In a series of instructions to officials, published at the end of 2020, President Vladimir Putin ordered policymakers “to consider issuing certificates to people who have been vaccinated against Covid-19 infections using Russian vaccines…or the purpose of enabling citizens to travel across the borders of the Russian Federation and those of other countries.” Russia’s Prime Minister, Mikhail Mishustin, has been charged with implementing the recommendations, and is set to report back on January 20. For once, Putin and American billionaire Bill Gates will be seeing eye to eye, as support for “immunity passports” grows not just among governments (even in “liberal democracies” like Canada), but the private sector as well. As RT reminds us, the IATA has voiced support for “immunity passports” as a strategy for hastening the revival of air travel.

The International Air Transport Association, which represents 290 airlines across the world, has supported the idea of vaccine passports, and is developing its own digital system to track who has been immunized against the virus. Passengers may be expected to present equivalent documents before being allowed to board planes in the future. Immunizations with the Russian-made Sputnik V vaccine, the first to be registered for the prevention of Covid-19 anywhere in the world, have been taking place in growing numbers in the capital and across the country. More than 70 centers in Moscow are now offering jabs, and at least 800,000 people have received their first dose.

Remember, once they arrived, people might soon find “Immunity Passports” will become a permanent facet of their lives: even after the COVID-19 pandemic ends, they could be used to offer evidence that a traveler has been vaccinated – not just for COVID-19, but for any other diseases, or even perhaps mutated forms of COVID-19. Critically, as we noted previously, if we are going to live in a world where vaccines are mandatory for travel, who is to say that every nation on Earth is going to acknowledge the validity of every other vaccine. The Mainstream Media makes it seem as though just getting any vaccine with some sort of paperwork to back it up should be good enough, but this is unlikely to be true.

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The church is powerful in Greece.

Greek Orthodox Church To Defy Lockdown By Opening For Epiphany (G.)

The Greek Orthodox church has announced it will defy government lockdown orders aimed at curbing the spread of coronavirus and open places of worship to mark Epiphany this Wednesday. After an emergency session of the holy synod, its governing body, senior clerics said they would press ahead as planned and celebrate the baptism of Christ on 6 January. “The synod does not agree with the new government measures regarding the operation of places of worship and insists on what was originally agreed with the state,” the ecclesiastical body said in a statement. “It asks that the aforementioned decision be absolutely respected by the state without further ado taking into consideration … that all the foreseen hygiene measures were upheld by clerics in thousands of churches across Greece.”

The announcement, which flies in the face of new week-long restrictions on movement, is the most open act of defiance yet by the powerful institution. Before the holiday season Athens’ centre-right government had said it would relax curbs and permit all places of worship to conduct services, albeit with limited congregations, on Christmas Day, New Year’s Day and the Epiphany. But with the country’s health system under pressure after a surge in coronavirus cases, the administration rescinded the decision at the weekend saying restrictions eased over the festive period would be reimposed to facilitate the reopening of schools on 11 January. Greece has been in lockdown since 7 November.

How the prime minister, Kyriakos Mitsotakis, who kicked off the new year with a cabinet reshuffle earlier on Monday, will react to the decision remains to be seen. The sight of worshippers breaching restrictions that have caused consternation, not least in the retail sector, would fuel further controversy. Epidemiologists have called for even tougher curbs if a second wave of the pandemic is to be brought under control in a country that, while faring better than most, has recorded 140,099 coronavirus cases and 4,957 Covid-19 deaths to date.

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This bloated industry can do with some less.

Tourism Tumbles To 1990 Levels As Pandemic Halts Travel (ZH)

While few industries have been spared by the impact of the COVID-19 pandemic, even fewer have been hit as hard as the tourism sector. As 2020 drew to a close with severe limitations to travel still in place, the World Tourism Organization (UNWTO) expects international arrivals to have declined by 70 to 75 percent compared to the previous year. As Statista’s Felix Richter writes, that equates to a decline of around 1 billion international arrivals, bringing the industry back to 1990 levels.

Prior to the coronavirus outbreak, the global tourism sector had seen almost uninterrupted growth for decades. Since 1980, the number of international arrivals skyrocketed from 277 million to nearly 1.5 billion in 2019. As Statista’s chart above shows, the two largest crises of the past decades, the SARS epidemic of 2003 and the global financial crisis of 2009, were minor bumps in the road compared to the COVID-19 pandemic. Looking ahead, most experts don’t expect a full recovery in 2021, which started off with many countries still battling the second wave of the pandemic. According to the UNWTO’s estimates, it will take the industry between 2.5 and 4 years to return to pre-pandemic levels of international tourist arrivals.

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“Persistent rumor has the president laying out a royal flush of deadly information about his antagonists, enough to make heads explode among the formerly cocksure and vaporize the narrative they’ve been running for four years.”

Giving Up the Ghost (Kunstler)

Things are shaking loose. Secrets are flying out of black boxes. Shots have been fired. The center is not holding because the center is no longer there, only a black hole where the center used to be, and, within it, the shriekings of lost souls. Will the United States go missing this week, or fight its way out of the chaos and darkness? Whatever occurs in this strange week of confrontation, Joe Biden will not be leading any part of it. Where has he been since Christmas? Back to hiding in the basement? Did the American people elect a ghost? Even if this storm blows over, could Joe Biden possibly claim any legitimacy in the Oval Office? And then what happens with the rest of the story — which is an epic economic convulsion sharper than the Great Depression — as time is unsuspended and the year 2021 actually unspools?

Only the bare outlines of this week’s fateful game are visible. Mr. Trump has not conceded the election. An action will play out in congress under rarely-used constitutional rules as to how the electoral college votes are awarded to whom. The rancor around this action is already epic. Few of the political players are beyond suspicion of dark deals and shifty allegiances. Persistent rumor has the president laying out a royal flush of deadly information about his antagonists, enough to make heads explode among the formerly cocksure and vaporize the narrative they’ve been running for four years. A whole lot of people are converging in the nation’s capital at midweek, maybe even the touted million. It is a moment, possibly, not unlike the Bastille in Paris, 1789. They will be clamoring right outside Congress as the electoral vote ceremony proceeds. If the battle is not joined in the chamber, it’s a little hard to believe the crowd will just heave a million sighs, trudge back to their cars, and drive quietly home.

Senator Ted Cruz has come up with a pretty sound plan: a ten-day emergency audit of the balloting with an electoral commission consisting of five Senators, five House Members, and five Supreme Court Justices — to consider and resolve the disputed returns. The proposal is based on the 1877 procedure for resolving the contested Hayes-Tilden election. “Once completed, individual states would evaluate the Commission’s findings and could convene a special legislative session to certify a change in their vote, if needed,” the proposal stated. Naturally, the Democratic Party’s news media handmaidens denounced it as “embarrassing” — which raises the question: who exactly will be embarrassed if the plan goes ahead?

Read more …

 

 

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Aug 142020
 


Marlon Brando screentest 1951

 

US Obesity Epidemic Threatens Effectiveness of Any COVID Vaccine (KHN)
Israeli Hospital Trials Fast Saliva Test for COVID-19 (R.)
The Pandemic and Medicare for All (TMI)
NYC Is Dead Forever. Here’s Why (Altucher)
What Kamala Harris Really Thinks of WikiLeaks (Lauria)
Some Questions About Kamala Harris’ Eligibility (NW)
China’s Banks At Risk As $500 Billion In Non-Performing Loans Revealed (SCMP)
China’s Debt Collectors Flourish As Consumers Flounder (R.)
US Seizes $2 Million From Terror-Linked Cryptocurrency Accounts (CNBC)
United Arab Emirates Sells Out Palestine For Israel (EI)
Experts Debunk Claims of GMO Crops Success (OffG)
Ford Is Slashing 10,000 Jobs, 6 Factories In Europe (ZH)
7 Million Jobs At Risk, European Airlines Could See “Further Declines” (ZH)
Volume of Greek Air Traffic Plunged 74.3% in 2020 (GR)

 

 

I was reading a piece by law professor John Eastman yesterday, before the entire left stumbled over each other to condemn it. I was thinking in my innocence that it’s interesting to know if questions over who’s a “natural born citizen” in America have ever truly been settled by politics or courts.

But I’m naive, and it’s attack time. They will defend Kamala Harris with all they got, with the entire MSM serving as their bullhorns. Which means Trump and his people have no choice but to go after her with all they got. Still, remembering the Obama birther fiasco, do they really want to die on this hill? Can’t we just leave it to the court system and legal experts? Or simply answer Eastman’s questions?

It’s all among signs of things to come between here and Nov. 3. Bill Barr yesterday promised that a first news flash from the Durham investigation into Russiagate origins will come out today, and that all of it will before Nov. 3. US elections are really just entertainment. Opium for the masses. Clickbaits, drama, anger, scandal. And I always thought it should be about people.

 

 

Not much movement in the numbers. We’re stuck in a broken record, with no progress anywhere. Not good.

 

 

 

 

 

 

 

 

 

 

 

 

There are 328 million Americans. 74 million of them are children. That leaves 254 million adults, of which 107 million are obese, or 42%. 42.4% have a BMI over 30. 9% are morbidly obese.

From this point of view, COVID is hardly the worst threat to either the people or the health care system. Or, to put it another way, it’s the people themselves that are the threat to the health care system.

Again, take high fructose corn syrup out of the diet, and you solve a huge chunk of that problem. Ban stuff that kills people, or make it much harder to get.

US Obesity Epidemic Threatens Effectiveness of Any COVID Vaccine (KHN)

For a world crippled by the coronavirus, salvation hinges on a vaccine. But in the United States, where at least 4.6 million people have been infected and nearly 155,000 have died, the promise of that vaccine is hampered by a vexing epidemic that long preceded COVID-19: obesity. Scientists know that vaccines engineered to protect the public from influenza, hepatitis B, tetanus and rabies can be less effective in obese adults than in the general population, leaving them more vulnerable to infection and illness. There is little reason to believe, obesity researchers say, that COVID-19 vaccines will be any different. “Will we have a COVID vaccine next year tailored to the obese? No way,” said Raz Shaikh, an associate professor of nutrition at the University of North Carolina-Chapel Hill.

“Will it still work in the obese? Our prediction is no.” More than 107 million American adults are obese, and their ability to return safely to work, care for their families and resume daily life could be curtailed if the coronavirus vaccine delivers weak immunity for them. In March, still early in the global pandemic, a little-noticed study from China found that heavier Chinese patients afflicted with COVID-19 were more likely to die than leaner ones, suggesting a perilous future awaited the U.S., whose population is among the heaviest in the world. And then that future arrived.

As intensive care units in New York, New Jersey and elsewhere filled with patients, the federal Centers for Disease Control and Prevention warned that obese people with a body mass index of 40 or more — known as morbid obesity or about 100 pounds overweight — were among the groups at highest risk of becoming severely ill with COVID-19. About 9% of American adults are in that category. As weeks passed and a clearer picture of who was being hospitalized came into focus, federal health officials expanded their warning to include people with a body mass index of 30 or more. That vastly expanded the ranks of those considered vulnerable to the most severe cases of infection, to 42.4% of American adults.

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More rapid testing. Good. Bring it. Test yourself everyday at breakfast.

Israeli Hospital Trials Fast Saliva Test for COVID-19 (R.)

A newly developed saliva test aims to determine in less than a second whether or not you are infected with the novel coronavirus, Israel’s largest medical center said Thursday. Patients rinse their mouth with a saline wash and spit into a vial. This is then examined by a small spectral device that, in simple terms, shines light on the specimen and analyzes the reaction to see if it is consistent with COVID-19. With machine learning it gets more accurate over time. Eli Schwartz of the Center for Geographic Medicine and Tropical Diseases at Sheba Medical Center, who is leading the trial, said it was easier to use than PCR swabs commonly used to detect COVID-19.


“So far we have very promising results in this new method which will be much more convenient and much cheaper,” he said. The center said in an initial clinical trial involving hundreds of patients, the new artificial intelligence-based device identified evidence of the virus in the body at a 95% success rate. Amos Panet, an expert in molecular virology at Jerusalem’s Hebrew University, said he would like to see more data and comparisons with existing tests before making a final judgment. The amount of virus present in saliva increases as patients get sicker, he said, and a big challenge is to detect in “people who are borderline.” “It will be a game changer only if we see validation of this technology against the current technology,” he said.

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Would M4A benefit the obese and hence diabetic? A long time ago, someone said: we’re raising a generation of blind amputees. How would a health care system deal with that?

The Pandemic and Medicare for All (TMI)

When the novel coronavirus first arrived in the United States, it spurred on remarkable message discipline among America’s political class. The consensus that emerged on both sides of the aisle dictated that no matter what happened, Americans ought to be glad they do not live in a country with socialized medicine. At the final Democratic presidential debate on March 15, former Vice President Biden pointed to COVID numbers in Italy as evidence that not only was Medicare for all not a solution to the crisis, but it would put the country at greater risk. “With all due respect for Medicare for all, you have a single-payer system in Italy,” the former vice president said. “It doesn’t work there. It has nothing to do with Medicare for all. That would not solve the problem at all.”

Weeks later, in early April, Center for American Progress president Neera Tanden echoed the sentiment in a Twitter spat with a Medicare for All supporter. “You might want to check out the death rate in France before you think the form of health system is the answer here,” she tweeted. Not long after, the Washington Post ran an op-ed by former George W. Bush speechwriter Marc Thiessen declaring the COVID-19 pandemic was “an indictment of socialized medicine.” “If you think today’s pandemic bolsters the case for socialized medicine, then ask yourself a simple question: If you came down with a serious case of COVID-19, would you rather be in an Italian hospital or an American one?” the piece opens, before lauding Biden’s debate answer.

Such arguments were never fair — the pandemic was only just starting in the United States, while COVID-19 had indeed rampaged across Europe, there were contributing factors like years of austerity and a lack of supply chain redundancy in the modern globalized economy. But now, just a few months later, these arguments completely and utterly fail. New infections are still surging in the U.S. while countries with national health care programs have long since gotten a handle on the virus. On Tuesday, the U.S. reported more new COVID cases in a single day than Italy, France, and the U.K. reported last month combined, and roughly 45 percent of their total deaths.

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Nice account from James Altucher. is he just getting old, or is New York really beyond salvation?

NYC Is Dead Forever. Here’s Why (Altucher)

People say, “NYC has been through worse” or “NYC has always come back.” No and no. First, when has NYC been through worse? Even in the 1970s, and through the 80s, when NYC was going bankrupt, and even when it was the crime capital of the US or close to it, it was still the capital of the business world (meaning: it was the primary place young people would go to build wealth and find opportunity), it was culturally on top of its game – home to artists, theater, media, advertising, publishing, and it was probably the food capital of the US. NYC has never been locked down for five months. Not in any pandemic, war, financial crisis, never. In the middle of the polio epidemic, when little kids (including my mother) were going paralyzed or dying (my mother ended up with a bad leg), NYC didn’t go through this.

This is not to say what should have been done or should not have been done. That part is over. Now we have to deal with what IS. In early March, many people (not me), left NYC when they felt it would provide safety from the virus and they no longer needed to go to work and all the restaurants were closed. People figured, “I’ll get out for a month or two and then come back.” They are all still gone. And then in June, during rioting and looting a second wave of NYC-ers (this time me) left. I have kids. Nothing was wrong with the protests but I was a little nervous when I saw videos of rioters after curfew trying to break into my building. Many people left temporarily but there were also people leaving permanently. Friends of mine moved to Nashville, Miami, Austin, Denver, Salt Lake City, Austin, Dallas, etc.

Now a third wave of people are leaving. But they might be too late. Prices are down 30-50% on both rentals and sales no matter what real estate people tell you. And rentals soaring in the second and third-tier cities. I’m temporarily, although maybe permanently, in South Florida now. I also got my place sight unseen. Robyn was looking at listings around Miami and then she saw an area we had never been to before. We found three houses we liked. She called the real estate agent. Place #1. Just rented that morning 50% higher than the asking price. Place #2. Also rented (New Yorkers – “they came from New York for three hours, saw the place, got it, went back to pack.”). Place #3. “Available.” “We’ll take it!” The first time we physically saw it was when we flew down and moved in. “This is temporary, right?” I confirmed with Robyn. But…I don’t know. I’m starting to like the sun a little bit. I mean, when it’s behind the shades. And when I am in air conditioning.

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All US politics is united against Julian Assange.

What Kamala Harris Really Thinks of WikiLeaks (Lauria)

During a September 2017 U.S. Senate Intelligence Committee debate on an intelligence bill a line was inserted that said WikiLeaks “resembles a non-state hostile intelligence service” and that the U.S. “should treat it as such.” “This language would help investigators secure the authorization needed to surveil those U.S. citizens thought to be associated with WikiLeaks,” a McClatchy report quoted a government lawyer as saying. “You need to show that someone is an agent of a foreign power,” said the lawyer, Robert Deitz, who held senior legal positions at the Pentagon, the CIA and the National Security Agency. “It’s possible that Assange has colleagues in this country that they need to focus on,” McClatchy quoted Deitz as saying, “noting that such action can only be done under court order.”

The non-state hostile agency phrase was directly lifted from a scurrilous speech by Mike Pompeo in his first address as CIA director. The language survived the committee and made it into the bill voted on by the full Senate. But before it did two senators raised objections to it. One was Ron Wyden of Oregon. The other was Sen. Kamala Harris of California, the presumptive Democratic vice presidential candidate in November’s election. According to the McClatchy report, “Harris declared that she is ‘no supporter of WikiLeaks,’ which she said had done ‘considerable harm’ to the United States. But the clause on the group is ‘dangerous’ because it ‘fails to draw a bright line between WikiLeaks and legitimate news organizations that play a vital role in our democracy,’ according to her remarks for the record.”

Harris left no doubt that she is an enemy of WikiLeaks, as is her running mate, Joe Biden, who agreed it was more like a high-tech terrorist organization that Daniel Ellsberg’s release of the Pentagon Papers. Harris made clear she cared only about establishment media (which almost universally undergirds aggressive U.S. foreign policy) and was worried about it getting caught up in a WikiLeaks dragnet. She said she wants a “bright line” between publications such as The New York Times and WikiLeaks. Except, there can be no such legal line drawn as both establishment papers, like the Times, and WikiLeaks have done the exact same thing: possessed and published classified material.

Because there is no legal distinction, the Obama administration, which desperately wanted to indict WikiLeaks publisher Julian Assange, backed away citing its “New York Times problem.” The Trump administration had no such qualms and had Assange arrested in April 2019 and indicted on conspiracy to commit computer intrusion and 17 counts of the Espionage Act. The only bright line that can be drawn is political: a decision by the Department of Justice to not prosecute big media but to prosecute WikiLeaks for the same “crime”, which conflicts with First Amendment press freedoms. This is what Harris was calling for: Protect the state-managed corporate media but go after a serious publication that dares to reveal crimes of the U.S. government, which Harris wants to protect. In other words, for the same activity, the Times is afforded First Amendment protections, but WikiLeaks is not.

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There are questions one can’t ask.

Some Questions About Kamala Harris’ Eligibility (NW)

The fact that Senator Kamala Harris has just been named the vice presidential running mate for presumptive Democratic presidential nominee Joe Biden has some questioning her eligibility for the position. The 12th Amendment provides that “no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.” And Article II of the Constitution specifies that “[n]o person except a natural born citizen…shall be eligible to the office of President.” Her father was (and is) a Jamaican national, her mother was from India, and neither was a naturalized U.S. citizen at the time of Harris’ birth in 1964. That, according to these commentators, makes her not a “natural born citizen”—and therefore ineligible for the office of the president and, hence, ineligible for the office of the vice president.

“Nonsense,” runs the counter-commentary. Indeed, PolitiFact rated the claim of ineligibility as “Pants on Fire” false, Snopes rated it simply “False,” and from the other side of the political spectrum, Conservative Daily News likewise rated it “False.” All three (and numerous others) simply assert that Harris is eligible because she was born in Oakland—and is therefore a natural-born citizen from location of birth. The 14th Amendment says so, they all claim, and the Supreme Court so held in the 1898 case of U.S. v. Wong Kim Ark. But those claims are erroneous, at least as the Citizenship Clause of the 14th Amendment was originally understood—an error to which even my good friend, renowned UCLA School of Law professor Eugene Volokh, has fallen prey.

The language of Article II is that one must be a natural-born citizen. The original Constitution did not define citizenship, but the 14th Amendment does—and it provides that “all persons born…in the United States, and subject to the jurisdiction thereof, are citizens.” Those who claim that birth alone is sufficient overlook the second phrase. The person must also be “subject to the jurisdiction” of the United States, and that meant subject to the complete jurisdiction, not merely a partial jurisdiction such as that which applies to anyone temporarily sojourning in the United States (whether lawfully or unlawfully). Such was the view of those who authored the 14th Amendment’s Citizenship Clause; of the Supreme Court of the United States in the 1872 Slaughter-House Cases and the 1884 case of Elk v. Wilkins; of Thomas Cooley, the leading constitutional treatise writer of the day; and of the State Department, which, in the 1880s, issued directives to U.S. embassies to that effect.

The Supreme Court’s subsequent decision in Wong Kim Ark is not to the contrary. At issue there was a child born to Chinese immigrants who had become lawful, permanent residents in the United States—”domiciled” was the legally significant word used by the Court. But that was the extent of the Court’s holding (as opposed to broader language that was dicta, and therefore not binding). Indeed, the Supreme Court has never held that anyone born on U.S. soil, no matter the circumstances of the parents, is automatically a U.S. citizen.

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I’ve said it often before: none of this means much without also tallying shadow banks’ numbers.

China’s Banks At Risk As $500 Billion In Non-Performing Loans Revealed (SCMP)

China’s top banking regulatory official said on Thursday that the country’s banks have to deal with 3.4 trillion yuan (US$489.5 billion) worth of non-performing loans in 2020 – flagging a big risk for the banking system in the world’s second-largest economy. The total marks a hefty increase from 2.3 trillion yuan in 2019, and the value of bad loans could be even higher in 2021. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said in an interview with the official Xinhua News Agency that the increase in non-performing loans (NPLs) – loans in default or close to default – will put huge pressure on the country’s banks, especially small and regional ones.

“As many loans are rolled over [in 2020], some problems will only emerge next year,” Guo was quoted by Xinhua as saying, adding that a rebound in bad loans is “inevitable” since the coronavirus shock has adversely affected so many companies. The warning by Guo, who is also the Communist Party secretary at the People’s Bank of China, came at a time when many of the country’s small banks are facing a moment of reckoning after years of undisciplined balance sheet expansion, as well as instances of fraud and corruption. Meanwhile, Guo said, Chinese banks have improved their loan structure – with more lending going toward manufacturing, infrastructure, technology and small businesses.

Guo added that Chinese banks are now being told to enhance their support of small businesses. In addition, he said he will encourage banks to invest more in corporate bonds. According to official statistics from Guo’s agency, the NPL ratio in China was among the lowest in the world. The ratio for Chinese commercial banks rose 0.03 percentage points in the second quarter to 1.94 per cent at the end of June. But hidden bad loans, if exposed, could easily wipe out bank profits and erode capital bases. In the first half of this year, the combined profits of Chinese banks dropped for the first time in more than a decade – falling 9.4 per cent to 1 trillion yuan in the first half of the year, government data shows.

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So, question is: who are the shadow banks’ debt collectors? Vinnie the Kneecapper and his friends?

China’s Debt Collectors Flourish As Consumers Flounder (R.)

It’s not a good sign for any economy when debt collectors are booming and in China right now, the industry is on a hiring spree. Whole Scene Asset Management, a debt recovery firm based in the southern province of Hunan, plans to double staff numbers to 400 people this year as it expands into new cities. “Debt collection companies have been mushrooming,” said company founder Zhang Haiyan. “And with bad loans growing this year, everyone is adding new hands.” Rival Bricsman is also hiring – hoping to boost headcount of around 1,000 by 400-500 this year after landing a deal to collect delinquent consumer loans for China Minsheng Bank (600016.SS), people with knowledge of the matter said, declining to identified as they were not authorised to talk to media.

Bricsman, which is based in the eastern province of Jiangsu and counts other large banks amongst its clients, did not respond to a request for comment. As increasing numbers of consumers struggle with lost income in an economy battered by the coronavirus and U.S-China tensions, a burgeoning wave of non-performing loans is sparking concern among lenders – both at specialist consumer financing firms and traditional banks – and even among debt collectors. China is the midst of “an unfolding debt crisis”, says Joe Zhang, a business consultant and until last month vice chairman at the country’s largest debt collector YX Asset Recovery. The delinquency rate for consumer debt is climbing and collecting on those loans has become much harder, he added, estimating that at some weaker non-bank consumer lenders, soured loans may account for 30% to 50% of their portfolios.

[..] Chinese consumer debt has ballooned over the past five years, fuelled in part as banks scrambled to issue credit cards, with outstanding debt for bank-issued cards doubling to 17.6 trillion yuan ($2.5 trillion). Internet-based consumer financing, which is only lightly regulated, has also grown – by a dizzying 400 times to nearly 8 trillion yuan since 2014, according to the Guanghua School of Management. And Chinese household debt – including mortgages and unsecured consumer loans – has swollen to levels equivalent to nearly 60% of GDP, up from 18% in 2008, the peak of the global financial crisis.

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300 anonymous accounts?!

US Seizes $2 Million From 300 Terror-Linked Cryptocurrency Accounts (CNBC)

The Justice Department said it dismantled an elaborate cyber campaign used by overseas terror organizations to finance their operations and seized $2 million from more than 300 cryptocurrency accounts in what it described as the largest-ever seizure of its kind. The Justice Department said three overseas terrorist groups — al-Qassam Brigades, Hamas’ military wing; al-Qaeda and the Islamic State of Iraq and the Levant, also known as ISIS — used cryptocurrencies and social media to raise funds for their terror campaigns. “It should not surprise anyone that our enemies use modern technology, social media platforms and cryptocurrency to facilitate their evil and violent agendas,” Attorney General William Barr said in a release.


“As announced today, we will seize the funds and the instrumentalities that provide a lifeline for their operations whenever possible,” he added. “Terrorist networks have adapted to technology, conducting complex financial transactions in the digital world, including through cryptocurrencies. IRS-CI special agents in the DC cybercrimes unit work diligently to unravel these financial networks,” Secretary of the Treasury Steven Mnuchin said in a release. In one of the cases, the U.S. secretly took over websites that were operated by al-Qassam Brigades and monitored those who thought they had opened up their cyber wallets to the terror group but instead donated money to an account controlled by the U.S. government, according to court documents unsealed Thursday in the District of Columbia.

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Successfully dividing the Arab world’s support for Palestinians.

United Arab Emirates Sells Out Palestine For Israel (EI)

The United Arab Emirates and Israel have agreed to full normalization of relations, bringing their decades-long clandestine dealings proudly into the open. The so-called “Abraham Accords” sealing the deal were brokered by US officials. The deal is named for “the father of all three great faiths,” David Friedman, the US ambassador to Israel, told reporters at the Oval Office on Thursday. Religious and cultural tolerance is often used by Arab states and Israel to mask their efforts to normalize ties. Painting conflict in the region as stemming from a lack of understanding among religions is also a way to obscure its true origin: Israel’s violent dispossession of Palestinians and ongoing military occupation and steady ethnic cleansing of their land.

In exchange for normalization, Israel agreed to suspend plans to annex large swaths of the occupied West Bank “and focus its efforts now on expanding ties with other countries in the Arab and Muslim world,” according to the joint statement. However, this is spin. In reality, it was the United States that put Israel’s annexation plans on ice weeks ago. In fact, Prime Minister Benjamin Netanyahu reaffirmed his commitment to annexation shortly after the announcement of the agreement. The UAE is merely using the American-imposed freeze as an opportunity to bring its secret ties with Israel dating back to the 1990s into the open. These secret relations have included military and intelligence cooperation and even joint military exercises.

[..] Relations between Israel and Gulf States including Saudi Arabia and the UAE are founded on a mutual enmity towards Iran. Liquidating Palestinian rights and bypassing the Palestinian issue is seen as key to building up this anti-Iran alliance under American oversight. Annexation, moreover, would only be a formal rubber stamp for what Israel has been doing on the ground for decades: stealing land, forcibly displacing Palestinians and building colonies in flagrant breach of international law. This violent colonization has never ceased and will not stop as a result of this agreement.

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India is Monsanto’s wet dream.

Experts Debunk Claims of GMO Crops Success (OffG)

On 6 July 2020, an article extolling the benefits of genetically modified (GM) crops appeared on the BloombergQuint website based on an interview with Dr Ramesh Chand, a member of the key Indian Government think tank Niti Aayog (National Institution for Transforming India) . On 17 July, another piece that placed a positive spin on GM crops and gene-editing technology (Feeding 10 Billion People will Require Genetically Modified Food) appeared on the same site. According to Prof Andrew Paul Gutierrez, Dr Hans R Herren and Dr Peter E Kenmore, internationally renowned agricultural researchers, the pieces reported “sweeping unsupported claims” about the benefits of and need for genetically modified organisms (GMOs) and related technologies in agriculture in India.

The three academics felt that “a responsible and factual response” was required and have written a letter – containing what could be described as the definitive analysis of Bt cotton in India – to Dr Ramesh Chand, Dr Rajiv Kumar (Niti Aayog Vice Chancellor) and Dr Amitabh Kant (Niti Aayog CEO). Chand is reported as saying that there is no credible study to show any adverse impact of growing Bt cotton in the last 18 years in the country (India’s only officially approved GM crop). This is simply not the case. Moreover, Gutierrez et al argue that all of the credible evidence shows any meagre increases in cotton yield after the introduction of Bt cotton in 2002 were largely due to increases in fertiliser use. Before proceeding, it is pertinent to address the claim that ‘feeding 10 billion people will require genetically modified food’.

If we take the case of India and its 1.3 billion-plus population, it has achieved self-sufficiency in food grains and has ensured that, in theory at least, there is enough food available to feed its entire population. It is the world’s largest producer of milk, pulses and millets and the second-largest producer of rice, wheat, sugarcane, groundnuts, vegetables and fruit. However, food security for many Indians remains a distant dream. Hunger and malnutrition remain prevalent. But that is not because farmers don’t produce enough food. These problems result from other factors, including inadequate food distribution, social and economic policies, inequality and poverty. It is a case of ‘scarcity’ amid abundance (reflecting the situation globally). India even continues to export food while millions remain hungry. Productivity is not the issue.

And while proponents say GM will boost productivity and help secure cultivators a better income, this too ignores crucial political and economic contexts; with bumper harvests, Indian farmers still find themselves in financial distress. India’s farmers are not experiencing hardship due to low productivity. They are reeling from the effects of neoliberal policies and years of neglect. It’s for good reason that the calorie and essential nutrient intake of the rural poor has drastically fallen. Yet the pro-GMO lobby has wasted no time in wrenching these issues from their political contexts to use the notions of ‘helping farmers’ and ‘feeding the world’ as lynchpins of its promotional strategy.

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Everything travel related is getting hammered. There is no telling when it all will be back, or if it ever will. Bailing out the firms involved seems an awful waste of money. You do that for firms that have a future, not those that have a past.

Ford Is Slashing 10,000 Jobs, 6 Factories In Europe (ZH)

The auto industry continues to grapple with one of the worst recessions ever for the notoriously capital intensive sector. Ford, which feels like it has been in the midst of a yearslong “restructuring” that has never fully panned out or ended (and has involved numerous CEOs), continues to make major changes to its global personnel to try and find the right mix for its business going forward. This means that 10,000 positions are now being cut across Europe, the automaker disclosed yesterday. Ford is also going to be reducing the number of its plants in Europe to 17 from 23, the company revealed in a JP Morgan conference presentation on Wednesday.

In a slide called “Ford Euope: Road to Sustainable Profitability”, the company also disclosed it would be discontinuing underperforming vehicles, like its C-MAX and Grand C-Max. The company also plans on “leveraging” its relationship with VW. The company says it is on track to deliver on its 2020-2021 CO2 targets without credits or penalties and 13 new electic vehicles will be on sale by the end of 2020, up from just 5. This news comes days after it was announced that Ford would be replacing its CEO on relatively short notice. Ford said days ago it had tapped Jim Farley to replace a relatively still-newly appointed Jim Hackett as CEO. Hackett replaced former CEO Mark Fields and, for the most part, has failed to inspire confidence during his tenure at Ford.

Ford is currently in the middle of an $11 billion restructuring that is supposed to help to accelerate its development of new vehicles, including hybrids and EVs. Hackett had only just started with Ford back in 2017 and has said he will retire effective October. General Motors is following with a C-suite shakeup of its own, as its CFO leaves after just two years to work at a fintech startup. The company announced earlier this week that John Stapleton, GM North America chief financial officer, has been named its acting global chief financial officer, effective Aug. 15, after the resignation of the company’s current CFO, Dhivya Suryadevara.

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Isn’t that what we wanted? Less flying, less pollution?

7 Million Jobs At Risk, European Airlines Could See “Further Declines” (ZH)

The International Air Transport Association (IATA) published a new report Thursday that warns the virus-induced downturn will continue to pressure air passenger numbers, employment and economies across Europe. IATA said passenger flights are expected to decline by 60% in 2020, resulting in millions of job losses in the aviation and tourism industries. IATA issued a similar warning of what has been announced by airlines, of which, complete recovery in passenger demand might not be seen until 2024. “The near-term outlook for recovery in Europe remains highly uncertain with respect to the second wave of the pandemic and the broader global economic impact it could have. Passenger demand in Europe is expected to recover gradually and will not reach 2019 levels until 2024. -IATA

IATA’s job loss estimate was increased by 17% from its June report, from 6 million to 7 million, mostly because the highly anticipated V-shaped recovery has failed to materialize. “It is desperately worrying to see a further decline in prospects for air travel this year, and the knock-on impact for employment and prosperity. said Rafael Schvartzman, IATA’s Regional Vice President for Europe. Schvartzman said, “It shows once again the terrible effect that is being felt by families across Europe as border restrictions and quarantine continue. It is vital that governments and industry work together to create a harmonized plan for reopening borders.”

If another wave of the virus were to hit Europe, justifying nationwide lockdowns, it could intensify the recession. Though the German tabloid newspaper Bild has said: “There will be no second hard lockdown in Europe because that would lead to a monster recession that would not be accepted by the population.”

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20% of Greek GDP is tourism. So are at least 20% of jobs.

Volume of Greek Air Traffic Plunged 74.3% in 2020 (GR)

A report came out on Thursday confirming the worst fears of Greek economic experts, stating that the country had seen a drop of 74.3% in the number of passengers who had traveled through their airports so far this year. This amounts to only 9 million air travelers who had used airports in the country so far in 2020, a staggering drop of almost three-quarters of its business. The number of international visitors coming into Greek airports this year so far amounts to 1,126,429, a stunning decrease from last year’s banner tourism season, which saw a total of 4,096,657 international arrivals. Although very disappointing, the numbers did not come as a shock to any in the sector, due to the punishing effects of travel bans imposed on many nations because of the coronavirus pandemic.


According to Greek media reports, the Civil Aviation Authority, or CAA, reported the precipitous drop in business in the first seven months of this year relative to the numbers seen in 2019. For the month of July 2020 alone, the high season for summertime travel to the country, passenger traffic at Greek airports had decreased 72.6%. During the month of July, a total of only 2,722,854 million passengers came through Greece’s airports; in that same period, there was a precipitous drop of 72.5% in the number of foreign arrivals. This means that there were fewer passengers overall in the first seven months of 2020 than there had been in the month of July only in 2019.

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Jun 302020
 
 June 30, 2020  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , ,  36 Responses »


Pablo Picasso The dream 1951

 

China’s Military Becomes First To Use Experimental Coronavirus Vaccine (SCMP)
California, Texas See Record COVID-19 surges, Arizona Clamps Down (R.)
Norwegian Air Cancels 97 Boeing MAX And Dreamliners, Claims Compensation (R.)
Europe’s Recovery Fund: An Instrument of Class War (Varoufakis)
We Digitized the Mob, and There’s No Place to Hide (Miele)

 

 

As we approach the end of the first half of 2020, I’m seriously rethinking how to cover COVID19 going forward. The past five months have been intense in that regard, and at a certain point you need to wonder how useful such time-consuming work still is. For a long time I had the hope and belief that “we” would be able to halt the spread of the coronavirus, if only because that was -and is- the only sensible way to deal with a new pathogen about which very little is known, other than that it is potentially deadly.

But despite a huge number of actions, including lockdowns in many countries and societies, the infection numbers only keep rising. And at this point is is entirely unclear how countries like the US and Brazil will ever be able to get rid of the virus.

The consequences will be grave, albeit different in different places. We will see overwhelmed healthcare systems in some countries and states, while others will remain relatively unscathed, at least for a while. Ironically, in a world used to so much travelling it’s even useful to wonder what good it does to do a lockdown well. How long can New Zealand keep its borders closed?

As for healthcare, there was a report that it will take four years for the UK’s NHS to recover from COVID19, and that based on what they have experienced so far, while there is still plenty room for second or third waves, and/or any unforeseeable extra pressure.

Tourism as we’ve known it will never recover, at least not on a timescale that is meaningful to us. That whole industry needs a great reset. That is of course also true for airlines, plane manufacturers et al. As it is for the entire hospitality industry. People will be cautious when going out, the fear of infection rules supreme, as demonstrated again by this report from NBER, Fear, Lockdown, and Diversion, which shows it wasn’t the lockdowns that did the most damage.

This paper examines the drivers of the collapse using cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries. Comparing consumer behavior within the same commuting zones but across boundaries with different policy regimes suggests that legal shutdown orders account for only a modest share of the decline of economic activity (and that having county-level policy data is significantly more accurate than state-level data).


While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry.

But I have to admit, over the past few days, when I was silent, I’ve become ever more worried by the American political and societal situation than by coronavirus. The images of people with guns standing outside of their homes, the stories of police and mob violence, shootings in “police-free” zones, it all starts to smell like a civil war.

While I wasn’t writing, I was reading all the more from both sides of aisle, and whatever they may still have had in common appears to disappear rapidly. The hunt for Trump continues unabated with yet another anonymous and unsourced tale about RussiaRussia, while the right is organizing to counter what they see as lawlessness across the nation.

Frank Miele, in a article below, quotes Bobby Kennedy, speaking after MLK was shot:

“The victims of the violence are black and white, rich and poor, young and old, famous and unknown. They are, most important of all, human beings whom other human beings loved and needed. No one — no matter where he lives or what he does — can be certain who will suffer from some senseless act of bloodshed. And yet it goes on and on. Why? What has violence ever accomplished? What has it ever created? … No wrongs have ever been righted by riots and civil disorders. … [A]n uncontrolled, uncontrollable mob is only the voice of madness, not the voice of the people.”

That sounds like a voice of reason that is sorely needed by the country right now. But does anyone see any of those? Ideally, Trump and Biden would get together on live TV to ask their supporters to please calm down. But I don’t see that happening in the present climate either. It’s become too polarized, fed by media and their business models.

I’m just trying to make sense of it all. Trying to find a way out of the mess, a way forward. But right now I’m mostly just thinking that Independence Day could turn into an incredibly messy affair. Or any other day between now and the election.

 

 

 

 

US has fifth day in a row with over 40,000 new cases

 

 

 

 

 

 

 

 

 

 

Key line: “The candidate is yet to start phase three trials, which would confirm whether it could protect recipients from infection.”

China’s Military Becomes First To Use Experimental Coronavirus Vaccine (SCMP)

China has approved military use of an experimental coronavirus vaccine developed by the People’s Liberation Army and a Chinese pharmaceutical company, in a first for the armed forces of any country. The vaccine, identified as Ad5-nCoV, was jointly developed by a team at the Academy of Military Medical Sciences, led by Major General Chen Wei, and Tianjin-based company CanSino Biologics. It is the first time that a vaccine candidate for Covid-19, the disease caused by the coronavirus, has been authorised for use for the military of any nation. CanSino said on Monday that the candidate had been through two phases of clinical trials, which indicated it was safe and there was “relatively high” immune response to the antigen.

The candidate is yet to start phase three trials, which would confirm whether it could protect recipients from infection. The military has approved its use for a year but it has not been authorised for civilian purposes. Adding Ad5-nCoV to the People’s Liberation Army’s catalogue of special drugs means that it can be deployed in major outbreaks. It is based on an Ebola vaccine that was developed by Chen but did not go into mass production. Scientists are racing to find an answer to the coronavirus that has already infected more than 10 million people and killed over 500,000. New cases continue to surge in the United States and India, with the US confirming more than 40,000 new cases for the third straight day on Monday.

According to the World Health Organisation, clinical trials are under way for 17 vaccine candidates, seven of which have been developed in China. One candidate developed by Oxford University and AstraZeneca is in phase three studies. Phase one and two studies typically test if a candidate is safe and whether it can generate an immune response from the recipients, but vaccines must complete all three sets of trials to be licensed. CanSino said it completed phase two trials on June 11, but the company has not yet released data from the study. [..] Many Chinese candidates are planning phase three trials in other countries as the spread of the coronavirus in China is too limited to test the efficacy of the vaccine. CanSino reached an agreement with Canadian government to conduct phase three trials there but details of the studies have not been revealed.

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We’ll see anti-police protests and anti-lockdown protests all at the same time.

California, Texas See Record COVID-19 surges, Arizona Clamps Down (R.)

California and Texas both marked record spikes in new COVID-19 infections on Monday, a Reuters tally showed, as Los Angeles reported an “alarming” one-day surge in America’s second-largest city that put it over 100,000 cases. Los Angeles has become a new epicenter in the pandemic as coronavirus cases and hospitalizations surge there despite California Governor Gavin Newsom’s strict orders requiring bars to close and residents to wear masks in nearly all public spaces. “The alarming increases in cases, positivity rates and hospitalizations signals that we, as a community, need to take immediate action to slow the spread of COVID-19,” Barbara Ferrer, director of public health for Los Angeles County, said in a statement announcing the sharp rise.


“Otherwise, we are quickly moving toward overwhelming our healthcare system and seeing even more devastating illness and death,” Ferrer said. Los Angeles Mayor Eric Garcetti announced a “hard pause” on when movie theaters, theme parks and other entertainment venues can reopen. Los Angeles County is the biggest movie theater market in the United States. Los Angeles County said its beaches will be closed for the Independence Day weekend and fireworks displays will be banned.

 

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is there a better example of the future of tourism?

Norwegian Air Cancels 97 Boeing MAX And Dreamliners, Claims Compensation (R.)

Norwegian Air has cancelled orders for 97 Boeing aircraft and will claim compensation from the U.S. plane maker for the grounding of the 737 MAX and for 787 engine troubles that hit its bottom line, the Oslo-based carrier said on Monday. The airline cancelled 92 of the 737 MAX jets, five 787 Dreamliners and so-called GoldCare service agreements related to both aircraft, just as Boeing on Monday began a crucial set of flight tests of the 737 MAX in an effort to gain regulatory approval for it to return to the skies.


“Norwegian has in addition filed a legal claim seeking the return of pre-delivery payments related to the aircraft and compensation for the company’s losses related to the grounding of the 737 MAX and engine issues on the 787,” the airline said. Norwegian did not specify the amount it would seek to claim from Boeing, which it had been in talks with about compensation, and was not immediately available for comment. Boeing said it was working with Norwegian on a path forward in a challenging time as it was with other operators but it would not comment on commercial discussions.

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Nothing has changed in Europe.

Europe’s Recovery Fund: An Instrument of Class War (Varoufakis)

Europe was never the battlefield on which the frugal North clashed with the profligate South. Instead, every European country has been the battlefield where a vicious class war is fought by a transnational oligarchy-without-frontiers training its armour against the weaker residents of every country, every region, every community. COVID-19, and the European Union’s response to it, only magnifies the human costs of this unremitting class war. All talk of a North-South clash is founded on a gigantic lie, that is based on many small truths, conveniently hiding from Europeans’ gaze the class war that diminishes their life prospects.

The crisis of financialisation in 2008 intensified Europe’s class war massively, holding a majority of Northern and Southern Europeans behind and leaving Europe, including its capitalist class, much weakened in relation to the rest of the world — the United States and China in particular. Twelve years on, COVID-19 gives this crisis a new, violent spin. The weak are weakened much, much more while Europe as a whole falls further and further behind the United States and China. While the EU’s leadership and bureaucracy have been quite active in the past three months, producing one impressive-sounding policy announcement after the next, the sum of their actions boost the class war that enfeebled Europe over the past decade and weakened a majority of Europeans everywhere.

[..] Rumours that Covid-19 caused the EU to lift its game are grossly exaggerated. Good people who took heart from the news that, however reluctantly, the EU has embraced common debt in a bid to further the cause of pan-european solidarity, will soon be deeply disappointed. Behind the heroic pronouncements and the triumphant propaganda lurks a sordid truth: The class war against Europe’s weaker people is escalating. And so is Europe’s descent into global irrelevance.

It all began with the quiet death of the Eurobond. Eurobonds, as advocated by DiEM25, would perform a simple task: They would automatically convert any new Italian, Spanish or Greek public debt (due to the impact of the pandemic on public revenues and expenses) into European debt (in the same way that US Treasury Bills absorb the costs of a recession in Missouri and Wisconsin). But, once the Eurobond was killed off by the Eurogroup in early April, it is now a given that the gigantic increase in national budget deficits will be followed by equally sizeable austerity in every country — a euphemism for the intensification of the class war that depletes the already atrophied incomes of the majority in each of our countries.

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Excellent piece, what ever side you’re on.

We Digitized the Mob, and There’s No Place to Hide (Miele)

The most shocking aspect of the wave of rioting and destruction that has been unleashed on many of our American cities in the wake of George Floyd’s death is not that there is an underlying discontent with the rate of progress in racial equality. That is understandable. What is not is the way that mayors, governors and members of Congress have not just tolerated, but endorsed, mob violence as an acceptable weapon of social change. Growing up in the turbulent 1960s, I was given a very specific warning by my mother: If you ever get caught up in a mob, get out of it as soon as possible because a mob has no brain. It just has emotion — and whether that emotion is anger, hatred or even joyful exuberance, it cannot be controlled.

We saw that in Minneapolis following the death of George Floyd while in police custody. People with a brain were outraged by what they saw. They wanted to protest, to speak out, and to demand justice. But when they came together in the streets, they discovered how quickly protest can transform into riot, and how demands for justice can be used to justify injustice. The basic premise of justice, after all, is recompense, making sure that wrongdoers pay a price for their crime. Yet there was no recompense in burning the businesses of innocent bystanders. There was no justice in stealing TVs and PlayStations. This was just brainless mob violence. It was shameful and it should have been easily condemned by the politicians, news media and celebrities who were not part of the mob.

That’s what would have happened in the 1960s. When Martin Luther King Jr. was murdered, leading to riots across America in 1968, Bobby Kennedy appealed for peace amidst “this mindless menace of violence in America which again stains our land and every one of our lives.” The parallel is exact. A black man is unjustly murdered. The nation is outraged. Riots ensue. The only part that is missing today is a respected grown-up like Kennedy who would condemn the violence and recognize that “[i]t is not the concern of any one race.” As Kennedy said,

“The victims of the violence are black and white, rich and poor, young and old, famous and unknown. They are, most important of all, human beings whom other human beings loved and needed. No one — no matter where he lives or what he does — can be certain who will suffer from some senseless act of bloodshed. And yet it goes on and on. Why? What has violence ever accomplished? What has it ever created? … No wrongs have ever been righted by riots and civil disorders. … [A]n uncontrolled, uncontrollable mob is only the voice of madness, not the voice of the people.”

What a refreshing expression of common sense, and what a contrast it offers to the bleating appeasers from the Democratic Party today who have bent a knee in obeisance to the mob, to the rioters, to the monument defacers, to the statue topplers. But it’s not just the Democrats who have bowed to the “voice of madness.” Most Republicans are right there with them. So too are corporate entities such as Intel and Amazon, and sporting organizations such as the NFL and NASCAR. For their part, news outlets such as CNN and MSNBC are promoting the riots and the cleansing of American history that is being pushed by Black Lives Matter. The question is why?

It is easy to understand why someone surrounded by the mob surrenders to its power, but those corporate boardrooms are far from the fray and well-protected from the torches and Molotov cocktails. So why have they turned their backs on law and order and embraced the mob? What has changed since the 1960s that makes it so much harder for leaders in government, business and culture to condemn violence and lawlessness? The answer will not surprise you, but it should scare you. Somewhere along the way, we digitized the mob. The few dozen people surrounding a statue are not the problem. The few hundred people confronting police are not the problem. The few thousand people looting stores and throwing rocks are not the problem. The mob on the street is not the problem. The mob on the street is the symptom.

The millions of people acting without moral restraint, without reason and without fear of consequences on the Internet are the problem. Indeed, the digital mob is the unintended consequence of the Internet itself. Connecting the world via technology was supposed to encourage communication, understanding and a breaking down of barriers. Instead it has resulted in a world divided into silos, special interests, identity groups. We tend to seek out those we have the most in common with and to block, ban or troll those who are unlike us. We feel safety in numbers, and from that safety is often bred outright contempt for those who think differently.

Read more …

 

 

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I’ll close today with a series of clips of an interview yesterday with Michael Fynn’s attorney Sidney Powell, who’s going to be an important voice in the run-up to November 3, whether you agree with her or not. Stay safe.

 

 

 

 

 

 

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Jun 222017
 
 June 22, 2017  Posted by at 9:35 am Finance Tagged with: , , , , , , , , , ,  2 Responses »


Paul Klee Analysis of Various Perversities 1922

 

The Little Putsch That Could Beget a Great Big Coup (Stockman)
US Should Mind Its Own Business; It Shouldn’t Be In Syria (Ron Paul)
US Is A “Second Tier” Country (ZH)
America Grows Older And More Ethnically Diverse (BBG)
The Wheels Come Off Uber (Yves Smith)
Oil Prices ‘Like A Falling Knife’ (CNBC)
The Rise of a Prince Ends Doubts Over Saudi Arabia’s Direction (BBG)
Canada’s Housing Bubble Will Burst (BBG)
Rehousing Of Grenfell Tower Families In Luxury Block Gets Mixed Response (G.)
China NPL Prices Up 30% as New Gold Rush Gets Under Way (BBG)
Strong Interest, Low Price For NPLs of Greece’s Eurobank (K.)
Greeks Skeptical About Benefits, Prospects of EU (K.)
Greek Tourism Minister Says Arrivals Will Top 30 Million This Year (K.)

 

 

Davis is getting upset. He’s offering a free copy of his Trump book to every American at the link.

The Little Putsch That Could Beget a Great Big Coup (Stockman)

Let’s start with two obvious points about the whole Russia fiasco… Namely, there is no “there, there.” First off, the president has the power to declassify secret documents at will. But in this instance he could also do that without compromising intelligence community (IC) “sources and methods” in the slightest. That’s because after Edward Snowden’s revelations in 2013, the whole world was put on notice — and most especially Washington’s adversaries — that it collects every single electronic digit that passes through the worldwide web and related communications grids. Washington essentially has universal and omniscient SIGINT (signals intelligence). Acknowledging that fact by publishing the Russia-Trump intercepts would provide new knowledge to exactly no one. Nor would it jeopardize the lives of any American spy or agent (HUMINT).

It would just document the unconstitutional interference in the election process that had been committed by the U.S. intelligence agencies and political operatives in the Obama White House. That pales compared to whatever noise comes out of Langley (CIA) and Ft. Meade (NSA). And I do mean noise. Yes, I can hear the boxes on the CNN screen harrumphing that declassifying the “evidence” would amount to obstruction of justice! That is, since Trump’s “crime” is a given (i.e. his occupancy of the Oval Office), anything that gets in the way of his conviction and removal therefrom amounts to “obstruction.” Given that he is up against a Deep State/Democratic/Neoconservative/mainstream media prosecution, the Donald has no chance of survival short of an aggressive offensive of the type I just described. But that’s not happening because the man is clueless about what he is doing in the White House.

And he’s being advised by a cacophonous coterie of amateurs and nincompoops. So he has no action plan except to impulsively reach for his Twitter account. That became more than evident — and more than pathetic, too — when he tweeted out an attack on his own Deputy Attorney General, Rod Rosenstein. At least Nixon fired Elliot Richardson (his Attorney General) and Bill Ruckelshaus (Deputy AG): “I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt.” Alone with his Twitter account, clueless advisors and pulsating rage, the Donald is instead laying the groundwork for his own demise. Were this not the White House, this would normally be the point at which they send in the men in white coats with a straight jacket.

[..] Even Senator John Thune, an ostensible Swamp-hating conservative, had nothing but praise for Special Counsel Robert Mueller, that he would fairly and thoroughly get to the bottom of the matter. No he won’t! Mueller is a card-carrying member of the Deep State who was there at the founding of today’s surveillance monster as FBI Director following 9/11. Since the whole $75 billion apparatus that eventually emerged was based on an exaggerated threat of global Islamic terrorism, Russia had to be demonized into order to keep the game going — a transition that Mueller fully subscribed to.

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“One thing that I am concerned about – because I’ve seen it happen so often over the years, are false flags.”

US Should Mind Its Own Business; It Shouldn’t Be In Syria (Ron Paul)

RT: Australia halted its cooperation. How significant is this development? Why did they do it? Ron Paul: I think that is good. Maybe wise enough, I wish we could do the same thing – just come home. It just makes no sense; there’s a mess over there. So many people are involved, the neighborhood ought to take care of it, and we have gone too far away from our home. It has been going on for too long, and it all started when Obama in 2011 said: “Assad has to go.” And now as the conditions deteriorate …it looks like Assad and his allies are winning, and the US don’t want them to take Raqqa. This just goes on and on. I think it is really still the same thing that Obama set up – “Get rid of Assad” and there is a lot of frustration because Assad is still around and now it is getting very dangerous, it is dangerous on both sides.

One thing that I am concerned about – because I’ve seen it happen so often over the years, are false flags. Some accidents happen. Even if it is an honest accident or it is deliberate by one side or the other to blame somebody. And before they stop and think about it, then there is more escalation. When our planes are flying over there and into airspace where we shouldn’t be, and we are setting up boundaries and say “don’t cross these lines or you will be crossing our territory.” We have no right to do this. We should mind our own business; we shouldn’t be over there, when we go over there and decide that we are going to take over, it is an act of aggression, and I am positively opposed to that. And I think most Americans are too if they get all the information they need.

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“..the US received its lowest marks in the categories of “tolerance and inclusion” and “health and wellness.“

US Is A “Second Tier” Country (ZH)

Most Americans’ idea of happiness involves lounging by the water or on a beach somewhere. But it turns out, human happiness can flourish even in freezing climates far from the equator. To wit, the Social Progress Imperative, a US-based nonprofit, released the results of its annual Social Progress Index report, which purports to rank countries based on the overall wellbeing of their citizens. Four Scandinavian countries – Denmark, Finland, Iceland and Norway claimed the top spots, while the US placed 18th out of 128, leaving it in what the SPI defines as the “second-tier” of countries based on citizens’ wellbeing, according to Bloomberg. Luckily, being “second-tier” doesn’t seem that bad, according to a definition found in the report. “Second-tier countries demonstrate “high social progress” on core issues, such as nutrition, water, and sanitation.

However, they lag the first-tier, “very high social progress” nations when it comes to social unity and civic issues. That more or less reflects the U.S. performance. (There are six tiers in the study.)” “We want to measure a country’s health and wellness achieved, not how much effort is expended, nor how much the country spends on healthcare,” the report states. In a nod to the controversy surrounding President Donald Trump’s anti-immigrant rhetoric, as well as his efforts to repeal and replace Obamacare, the report noted that the US received its lowest marks in the categories of “tolerance and inclusion” and “health and wellness.” America’s “tolerance” score has been sliding since 2014, around the time that several high-profile shootings of unarmed black men ignited the “Black Lives Matter” movement, sparking a national conversation about the prevalence of racism in US society.

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Just very slowly.

America Grows Older And More Ethnically Diverse (BBG)

The United States is growing older and more ethnically diverse, a trend that could put strains on government programs from Medicare to education, the Census Bureau reported Thursday. Every ethnic and racial group grew between 2015 and 2016, but the number of whites increased at the slowest rate — less than one hundredth of 1% or 5,000 people, the Census estimate shows. That’s a fraction of the rates of growth for non-white Hispanics, Asians and people who said they are multi-racial, according to the government’s annual estimates of population. President Donald Trump’s core support in the racially divisive 2016 election came from white voters, and polls showed that it was especially strong among those who said they felt left behind in an increasingly racially diverse country.

In fact, the Census Bureau projects whites will remain in the majority in the U.S. until after 2040. “Even then, (whites) will still represent the nation’s largest plurality of people, and even then they will still inherit the structural advantages and legacies that benefit people on the basis of having white skin,” said Justin Gest, author of “The New Minority,” a book about the 2016 election. The Census Bureau reported that the median age of Americans — the age at which half are older and half are younger — rose nationally from just over 35 years to nearly 38 years in the years between 2000 and 2016, driven by the aging of the “baby boom” generation. The number of residents age 65 and older grew from 35 million to 49.2 million during those 16 years, jumping from 12% of the total population to 15%.

That’s a costly leap for taxpayers as those residents move to Medicare, government health care for seniors and younger people with disabilities, which accounted for $1 out of every $7 in federal spending last year, according to the Kaiser Family Foundation. By 2027, it will cost $1 out of every $6 of federal money spent. Net Medicare spending is expected to nearly double over the next decade, from $592 billion to $1.2 trillion, the KFF reported.

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Excellent take-down from Yves.

The Wheels Come Off Uber (Yves Smith)

Not surprisingly, the financial press has been all ago about the drama of Travis Kalanick’s forced departure from Uber’s CEO position yesterday, and has focused on getting salacious insider details of his ouster. That means journalists largely ignored what ought to be the real story, which is whether Uber has any future. I anticipate that Hubert Horan will offer a longer-form treatment of this topic. Hubert had already documented, in considerable detail in his ten-part series, how Uber has no conceivable path to profitability. Its business model has been based on a massive internal contradiction: using a ginormous war chest to try to achieve a near-monopoly position in a low-margin, mature business that is fragmented geographically and locally.

Monopolies and oligopolies are sustainable only when certain factors are operative: the ability to attain a superior cost position through scale economies, which include network effects, or barriers to entry, such as regulations, very high skill levels, or high minimum investment requirements. Neither of these apply in the local car ride business. Even if Uber were able to drive literally every competing cab operator in the world out of business due to its ability to continue its predatory pricing, once Uber raised prices to a level where it achieved profits, new entrants (or revived old entrants) would come in. Uber will thus never be able to charge the premium prices (in excess of the level for a traditional taxi operator to be profitable) for the very long period necessary for Uber to merely be able to recoup the billions of dollars it has burned, mainly in subsidizing the cost of rides, let alone to achieve an adequate return on capital.

And that’s before you get to the fact that systematically much higher prices would mean fewer fares. The developments of the last few months mean Uber’s decay path is sure to accelerate. I’ve been following the business press for over 30 years. I can’t think of a single case where even an established, profitable business with an established franchise has had so many top level positions vacant, and for such bad reasons. As reader vidimi quipped, “With no CEO, CFO, COO, and CIO, uber is coming very close to becoming a self-driving company.” And that’s not even a full list. World-class communications expert Rachel Whetstone, who is recognized as a key force in rebuilding the Tories’ brand in the UK, quit in April.

The heads of engineering departed for failing to disclose a previous sexual investigation; the head of product and growth was forced out over a sexual impropriety at a company function. And in a scandal that will have a much longer tail, Uber’s former head of its Waymo driverless car unit, Anthony Levandowski, has had his case involving alleged theft of intellectual property from Google referred to the Department of Justice. Kalanick was deeply involved in Levandowski sudden exodus. It seems implausible that Kalanick didn’t know Levandowski was making off with Google files. If the case does lead to a criminal prosecution, it is hard to see how Kalanick could escape scrutiny as a potential criminal co-conspirator.

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Just in case you were wondering why King Salman named a new crown prince…

Oil Prices ‘Like A Falling Knife’ (CNBC)

Oil prices could be poised to fall below $40 a barrel before too long, according to an analyst at Energy Aspects, as the commodity appeared set to post its largest price slide in the first half of the year for the past two decades. “This is like a falling knife right now, I genuinely haven’t seen sentiment this bad ever,” Amrita Sen, the co-founder and chief oil analyst at Energy Aspects, told CNBC on Wednesday. “We have had clients emailing saying they have been trading this for 20 or 30 years and they have never seen something like this,” she added. Oil prices have tumbled more than 20% his year, marking its worst performance for the first six months of the year since 1997 and putting the commodity in bear market territory.

The ongoing decline in prices appears to have stemmed from investors discounting evidence of robust compliance by OPEC and non-OPEC producers with a deal to curtail a global supply overhang. Prices took a fresh leg lower in the previous session – dipping 2% – as new signs of rising output from Nigeria and Libya, the two OPEC members exempt from a deal to cut production. Output from the 14-member exporter group ticked higher in May due to rising production in Nigeria, Libya and Iraq, raising concerns about OPEC’s effort to shrink global stockpiles of crude oil. OPEC and other producers have committed to keeping 1.8 million barrels a day off the market through March. Libya’s oil production rose more than 50,000 barrels per day to 885,000 bpd. Meanwhile, exports of Nigeria’s benchmark Bonny Light crude oil are set to rise by 62,000 barrels per day in August.

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Absolutely. He’s the War Prince.

The Rise of a Prince Ends Doubts Over Saudi Arabia’s Direction (BBG)

With the anointment of Prince Mohammed bin Salman as heir to the Saudi throne, any doubts over the continuation of policies that have shaken up the Middle East have gone. Western diplomats already referred to the 31-year-old as “Mr. Everything,” because of his control over most aspects of domestic, foreign and defense affairs. His elevation ends a behind-the-scenes struggle for power and answers the question of what would happen to his plans for Saudi Arabia when King Salman, now 81, dies or steps aside. The most ambitious of these, Vision 2030, seeks to recalibrate the economy to end the country’s near-total dependence on oil revenue. But internationally, there are also ramifications. Last month, the prince again raised the stakes in the regional rivalry with Iran, saying that dialog was “impossible” as they fight a proxy war in Yemen.

He also led a multi-nation effort to isolate neighboring Qatar, causing a rift among fellow members of the Gulf Cooperation Council. That also looks set to turn into another long and potentially fruitless test of wills as Iran and Turkey come to Qatar’s aid. “The switch offers him the legitimacy and consensus of becoming the next king and that will validate his vision, his plans and his policies,” said Sami Nader, head of the Beirut-based Levant Institute for Strategic Affairs. “There were a lot of question marks about the future of Saudi Arabia and the transition. Now this debate has ended.” Widely known as MBS, he was made crown prince just after dawn in Riyadh, displacing his older cousin, Mohammed bin Nayef, who was also stripped of his post as interior minister in charge of domestic security forces and counter-terrorism policy.

The move was neither a shock nor a coup, and it means he could be running the kingdom for decades to come. What’s more, his tough approach to the intractable problems of the Middle East would appear to mesh well with U.S. President Donald Trump, who visited Saudi Arabia last month. Trump called the new crown prince Wednesday to offer congratulations on his elevation, the White House said in a statement. Trump and the prince “committed to close cooperation to advance our shared goals of security, stability, and prosperity across the Middle East and beyond,” according to the statement. The problem is what comes next. On Tuesday, the U.S. Department of State questioned Saudi Arabia’s justification at striking out at Qatar by cutting it off from diplomatic and transport links.

The bombing campaign in Yemen aimed at destroying the rebel Houthi forces that Saudi Arabia sees as proxies for Iran, meanwhile, appears to have no end in sight. Two years later, it has become bogged down, bloody and increasingly unpopular. “On the foreign policy side he’s also embroiled Saudi Arabia in Yemen and Qatar without an exit strategy,” said James Dorsey at Singapore’s Nanyang Technological University. These aren’t changes of direction for Saudi Arabia, but “what he has done is to stretch up a notch and put some very sharp edges on it, and at this point those are backfiring.”

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Any Canadian with a substantial mortgage who’s not actively trying to sell right now…..

Canada’s Housing Bubble Will Burst (BBG)

Canadian home sales fell the most in five years last month. That didn’t stop an increase in prices, which were up 18% nationwide from a year earlier. When you consider that most houses are leveraged assets, this represents huge gains for homeowners. While leverage can help boost performance on the way up, it becomes very dangerous on the way down. Leverage can turn even the best investments into poor ones when things go wrong, as losses are amplified. Equity can get wiped out pretty quickly on an overleveraged asset. Canadian real estate has been on fire for years. The housing price data there has made the U.S. real estate market during the boom of the mid-2000s look mild. The Federal Reserve Bank of Dallas puts out a global housing price index for more than 20 countries every quarter. Using this data, I looked at the real house price index data for Canada and compared it with the same data in the U.S. going back to 1975. Here’s this relationship from 1975 through the end of 2005:

Although there were some divergences in the early and late 1980s, both housing markets essentially ended up in the same place after 30 years. Now let’s add in the most recent data to see how things have unfolded since:

An enormous divergence occurred in 2006, when U.S. housing prices really began to soften, while Canadian price barely skipped a beat. This makes any differences in the past look like blips. The rise in Canadian real estate prices has been relentless. The U.S. housing market peaked in late 2006. Since then, based on this index, U.S. housing prices are still down almost 13% from their peak through the end of 2016. In that same time frame, Canadian housing prices are up 56%. From the 2006 peak, it took until late 2012 for real estate in the U.S. to bottom. We’ve since witnessed a 19% recovery from what was a 27% decline nationwide, on average. While the U.S. real estate downturn lasted almost six years, Canada’s housing market experienced just a 7% drawdown that lasted less than a year. And house prices in Canada reclaimed those losses in about a year and a half. Canadian housing has also outpaced its neighbors to the south since the 2012 bottom in U.S. real estate, with a 30% gain in that time.

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You can’t even blame these people. It’s the whole crazy idea of cities and governments blowing housing bubbles on purpose, that’s what’s wrong here.

Rehousing Of Grenfell Tower Families In Luxury Block Gets Mixed Response (G.)

Two miles south of the charred skeleton of Grenfell Tower is a large complex of sleek new apartments that some of those displaced by last week’s inferno will soon be able to call home. Kensington Row’s manicured lawns, clipped trees and burbling fountains are a haven from the rumbling traffic of two busy London thoroughfares, and its spacious, air-conditioned foyers a relief from June’s oppressive heatwave. Four unfinished blocks house the 68 flats purchased by the Corporation of London for families who lost their homes in Grenfell Tower. Workmen had been instructed not to talk to the media, but one said there was now a rush to complete the building work. “It’s a brilliant idea,” he said of the resettlement plan. Among those exercising dogs and small children, the views were more mixed. “It’s so unfair,” said Maria, who was reading the news in the Evening Standard with two neighbours.

She bought her flat two years ago for a sum she was unwilling to disclose. “We paid a lot of money to live here, and we worked hard for it. Now these people are going to come along, and they won’t even be paying the service charge.” Nick, who pays £2,500 a month rent for a one-bedroom flat in the complex, also expressed doubts about the plan. “Who are the real tenants of Grenfell Tower?” he asked. “It seems as though a lot of flats there were sublet. Now the people whose names are on the tenancies will get rehoused here, and then they’ll rent the flats out on the private market. And the people who were actually living unofficially in the tower at the time of the fire won’t get rehoused. “I’m very sad that people have lost their homes, but there are a lot of people here who have bought flats and will now see the values drop. It will degrade things. And it opens up a can of worms in the housing market.”

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When your bad debt is in a bubble, I guess you got it made?! Or should that be: you should be afraid?

China NPL Prices Up 30% as New Gold Rush Gets Under Way (BBG)

Bad loans are rapidly becoming the latest hot commodity in China as more domestic and foreign investors rush into the market and bid up prices. Non-performing loan prices have risen more than 30% this year, according to distressed investor Belos Capital Asia. The average selling price of NPLs has climbed to around 50 cents on the dollar in the past two years, from 30 cents, said Victor Jong, a partner in the deals and business recovery services unit of PricewaterhouseCoopers in Shanghai. Such a high level is “very rare” in international markets, Jong said. “There are just too many buyers grabbing a limited supply of NPLs,” said Hanson Wong, CEO of Belos Capital in Hong Kong. “At these prices, it’s pretty hard for these NPLs to be profitable.” Distressed investors are increasing as Chinese authorities encourage market-oriented ways to resolve lenders’ mounting piles of non-performing debt amid slowing economic growth.

A jump in valuations of real estate, which often act as underlying assets for secured loans, has boosted the debt’s recovery prospects. Combined with a surge in money supply, this has lifted bad-loan prices even in some less-developed regions of China, according to domestic distressed debt investor Bald Eagle Asset Management. Foreign investors including Oaktree Capital, Lone Star, Goldman Sachs and PAG have bought China NPLs in the current cycle that began in 2014, according to a March report from PwC. Non-performing loans at the country’s lenders jumped 61% in the past two years to 1.58 trillion yuan ($231 billion) at the end of March. In the previous NPL cleanup in China, between 2001 and 2008, secured debt was typically sold at 20 cents on the dollar, and unsecured creditors got back only 5 cents, said Wang Yingyi, a partner at Bald Eagle in Beijing.

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Looks like Greece should try China’s bad debt recipe.

Strong Interest, Low Price For NPLs of Greece’s Eurobank (K.)

The loans portfolio put up for sale by Eurobank is attracting strong investment interest but low offers as the lender begins the process for the transfer of nonperforming loans. This is a portfolio valued at €2.8 billion which has attracted the interest of about 20 investment funds in the data room, illustrating the strong leverage the NPL market commands, partly due to the banks’ commitment to reducing their bad loans by 40% by the end of 2019. The portfolio that Eurobank is selling includes debt from consumer loans and credit cards that have gone unpaid for years, most for at least a decade – i.e. since before the financial crisis broke.

Eurobank has made all the necessary moves for the collection of part of the €2.8 billion, without getting a great response. Therefore the prices in the market are expected to be particularly low for the portfolio, with estimates speaking of just 5% of the original value. Market professionals note that Eurobank’s effort to recover part of the dues just before the opening of the portfolio’s sale, offering debtors a haircut of up to 95% without any significant results, means that the price will likely drop below 5% too.

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Greeks are still stuck in the mindset of being proud to be deemed worthy of being a full member of the EU. So much so that they can’t see they’re not.

Greeks Skeptical About Benefits, Prospects of EU (K.)

As the European Union’s cohesion faces being sorely test by the upcoming Brexit negotiations and other challenges, Greeks appear increasingly skeptical about the benefits and prospects of the EU, according to a new study by London-based international policy institute Chatham House and research company Kantar. 74% of Greeks are worried about the outlook for the EU, according to the survey which was carried out on a sample of 1,000 people in 10 European countries: Britain, Belgium, Germany, Greece, Spain, France, Italy, Austria, Hungary and Poland.

The Greek figure was almost double the research average of 38%. Greeks were also significantly more downbeat than their counterparts, with 60% declaring themselves to be pessimistic compared to a research average of 40%. An even larger proportion of Greeks, 80%, said they believed more members of the bloc would follow Britain’s lead and decide to break away from the Union in the next 10 years. Predictably, following seven years of belt-tightening imposed by foreign creditors, a significant proportion of Greeks (67%) said that austerity was the EU’s biggest failure. 73% of Greeks believe that the decision of Britain to leave the EU will weaken the Union.

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A debt colony AND a tourist colony. With most of the best assets sold off to foreigners.

BTW, both Greeks and tourists would be much better off if Greece had its own currency and could lower daily prices.

Greek Tourism Minister Says Arrivals Will Top 30 Million This Year (K.)

The tourism sector is showing genuine signs of growth this year that suggest it will be the main driver of the Greek recovery, as it will help state revenues, the private economy, the country’s current accounts and employment. The government is for the first time speaking of 30 million arrivals in 2017. Bank of Greece data show that in the first four months of the year travel receipts increased by 2.4% or 23 million euros year-on-year, reaching 997 million euros. This increase was thanks to the 3.2% rise in arrivals and not average spending per trip, which posted a 0.8% decline. This means the 4.8% drop in travel receipts during the first quarter was offset in April, when arrivals rose 12% and receipts 11.3% annually. This positive picture is expected to have continued in May.

Retail sector representatives are looking forward to cashing in on the increase in arrivals, to offset the losses resulting from Greek households’ ever shrinking disposable incomes. Based on the bookings picture, turnover in retail commerce could rise by up to 5% this year. Addressing a conference organized by the Panhellenic Exporters Federation, Tourism Minister Elena Kountoura said that the data of the first five months point to an increase in arrivals, revenues, nights stayed and occupancy rates. They also show an increase in bookings for the summer ranging between 15 and 70%, depending on area, which led to her conclusion that Greece will have more then 30 million tourists this year after welcoming 28 million in 2016 and 26 million in 2015. The growth in tourism is also reflected in employment and commerce. The number of unemployed registered last month dropped by 56,820 people from April to 913,518, mainly thanks to the rise in seasonal employment in tourism and commerce.

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May 152017
 
 May 15, 2017  Posted by at 8:18 am Finance Tagged with: , , , , , , , , ,  1 Response »


Fred Stein Ballfield NY 1946

 

Global Property Bubble Is Ready To Pop (MF)
3 Cities Push Canada To Another Record On House Prices (HPo)
Cyber Attack Aftershocks Disrupt Devices Across Asia on Monday (R.)
Lessons From Last Week’s Cyberattack (Microsoft)
The World Is Getting Hacked. Why Don’t We Do More to Stop It? (NYT)
Peak China: Chinese Data Misses Across The Board (ZH)
Why India Is Cool Towards China’s Belt And Road (SCMP)
China’s Silk Road Summit: India Skips, Warns Of “Unsustainable Debt” (ZH)
Number of Chinese Tourists Visiting Greece to Rise 10-Fold (BBG)
New Zealand Slashes Chinese Tourism Forecast, Denting Outlook (BBG)
Fed Officials Test New Argument for Tightening: Protect the Poor (BBG)
Marc Cohodes, The Scourge Of Home Capital, Reveals His Latest Short (ZH)
Eyes on Euro Fighter Macron (K.)
Germany Will Not Rush Into Euro Area Fiscal Union (CNBC)
What Germany Owes Namibia For Genocide (Econ)

 

 

Only real question: will they all fall together like dominoes?

Global Property Bubble Is Ready To Pop (MF)

Ever since interest rates were slashed to near zero in the wake of the financial crisis, the world has gone property mad. Residential house prices from Abu Dhabi to Zurich have spiralled as hot money travelled the world looking for a home. For those who got in early it has been incredibly rewarding, even if – whisper it – stock markets have actually done far better. The global property bubble cannot blow much bigger. The best we can hope is that it deflates slowly… but it could burst. Property is still going crazy in China, where prices have been pumped up by yet another bout of government stimulus. Guangzhou, close to Hong Kong on the Chinese mainland, leapt a whopping 36% in the past 12 months, according to Knight Frank. Prices rose around 20% in Beijing and Shanghai, as well as in Toronto, Canada.

Seoul in South Korea continues to boom, as does Sydney and Stockholm, both up 10.7% over the last year. Berlin (8.7%), Melbourne (8.6%) and Vancouver (7.9%) are also performing strongly. In most other global cities, property is finally starting to slow. Hong Kong rose a relatively modest 5.3% while Singapore grew 4%, and thereafter price hikes trail away. Half of the 41 countries in the report grew by less than 2%, while nearly one in three saw prices fall, by up to 8.3%. Prime central London was the world’s raciest property market but is now leading the charge in the other direction, falling 6.4%. Former hotspots Zurich, Moscow and Istanbul fell 7% or more over the last 12 months. Cheap money has driven prices ever higher for eight years but is finally losing traction, as affordability is stretched again. Interest rates cannot go any lower and could start rising if the US Federal Reserve continues to tighten. Regulatory authorities are looking to rein in overheated markets, with China only the latest to tighten borrowing requirements. The glory days are over.

Investing in property has one major benefit over stocks and shares – you can leverage up borrowing money to fund your purchase. Thereafter, the advantages are all one way. First, you can trade stocks online within seconds, whereas offloading property can take months (longer in a market crash). You can invest small amounts, rather than the hundreds of thousands of dollars, pounds, euros, yen or renminbi you need to buy a decent property these days. If you buy an investment property you have the effort of doing up and maintaining it, finding tenants, and paying a host of local taxes. You don’t have any of that nonsense with stocks. Best of all, you can invest quickly and easily in a wide spread global stocks, sectors and markets.

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Greater fools and empty bags.

3 Cities Push Canada To Another Record On House Prices (HPo)

Home prices in Canada rose for the 15th straight month in a row in April, according to the Teranet-National Bank house price index, which once again hit its highest levels ever. But virtually all the strength seen over the past year came from just three cities — Toronto, Hamilton and Victoria. The index, which tracks repeat sales of single-family homes over time, found Toronto led the way, with the price index rising 2.6% in April. The city has seen prices jump 7.3% since the start of the year, and 26.3% in the past 12 months. Nearby Hamilton, which is experiencing spillover from Toronto’s housing boom, saw its price index rise 2% in April and 23% over the past year. Vancouver, which as recently as a year ago was showing the fastest price growth in the country, is now showing signs of slowing.

The price index fell 0.1% in April, and compared to a year ago, prices are up 9.7%, slower than the national average of 13.4%. Many market experts say Vancouver’s foreign buyer tax has pushed buyers to other cities, including to Victoria, where the price index rose 1.5% in April, and 19% over the past year. “Based on the cooldown in home sales that began early last year, we expect the Vancouver growth rate to fall much lower over the next few months,” wrote David Madani, senior Canada economist at Capital Economics. But Madani expects Toronto to experience a similar cooling. He noted that the city saw a sudden, 30% spike in new home listings in April. That’s “further evidence that the surge in house price inflation is close to a peak and will drop back sharply before the end of this year,” he wrote in a client note.

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So far not so bad. But if the next generation of the attack has no killswitch that can be triggered, anything is possible.

Cyber Attack Aftershocks Disrupt Devices Across Asia (R.)

Asian governments and businesses reported some disruptions from the WannaCry ransomware worm on Monday but cybersecurity experts warned of a wider impact as more employees turned on their computers and checked e-mails. The ransomware that has locked up hundreds of thousands of computers in more than 150 countries has been mainly spread by e-mail, hitting factories, hospitals, shops and schools worldwide. While the effect on Asian entities appeared to be contained on Monday, industry professionals flagged potential risks as more systems came online across the region. Companies that were hit by the worm may be wary of making it public, they added.

“We’re looking at our victims’ profiles, we’re still seeing a lot of victims in the Asia-Pacific region. But it is a global campaign, it’s not targeted,” said Tim Wellsmore, Director of Threat Intelligence, Asia Pacific at cybersecurity firm FireEye. “But I don’t think we can say it hasn’t impacted this region to the extent it has some other regions.” Michael Gazeley, managing director of Network Box, a Hong Kong-based cybersecurity firm, said there were still “many ‘landmines’ waiting in people’s in-boxes” in the region, with most of the attacks having arrived via e-mail.

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Microsoft blames the NSA, and for good reason, but…

Lessons From Last Week’s Cyberattack (Microsoft)

[..] this attack provides yet another example of why the stockpiling of vulnerabilities by governments is such a problem. This is an emerging pattern in 2017. We have seen vulnerabilities stored by the CIA show up on WikiLeaks, and now this vulnerability stolen from the NSA has affected customers around the world. Repeatedly, exploits in the hands of governments have leaked into the public domain and caused widespread damage. An equivalent scenario with conventional weapons would be the U.S. military having some of its Tomahawk missiles stolen. And this most recent attack represents a completely unintended but disconcerting link between the two most serious forms of cybersecurity threats in the world today – nation-state action and organized criminal action.

The governments of the world should treat this attack as a wake-up call. They need to take a different approach and adhere in cyberspace to the same rules applied to weapons in the physical world. We need governments to consider the damage to civilians that comes from hoarding these vulnerabilities and the use of these exploits. This is one reason we called in February for a new “Digital Geneva Convention” to govern these issues, including a new requirement for governments to report vulnerabilities to vendors, rather than stockpile, sell, or exploit them. And it’s why we’ve pledged our support for defending every customer everywhere in the face of cyberattacks, regardless of their nationality. This weekend, whether it’s in London, New York, Moscow, Delhi, Sao Paulo, or Beijing, we’re putting this principle into action and working with customers around the world.

We should take from this recent attack a renewed determination for more urgent collective action. We need the tech sector, customers, and governments to work together to protect against cybersecurity attacks. More action is needed, and it’s needed now. In this sense, the WannaCrypt attack is a wake-up call for all of us. We recognize our responsibility to help answer this call, and Microsoft is committed to doing its part.

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…Microsoft itself carries part of the blame as well. It doesn’t support XP, but does ask for a lot of money for patches.

The World Is Getting Hacked. Why Don’t We Do More to Stop It? (NYT)

The attack was halted by a stroke of luck: the ransomware had a kill switch that a British employee in a cybersecurity firm managed to activate. Shortly after, Microsoft finally released for free the patch that they had been withholding from users that had not signed up for expensive custom support agreements. But the crisis is far from over. This particular vulnerability still lives in unpatched systems, and the next one may not have a convenient kill switch. While it is inevitable that software will have bugs, there are ways to make operating systems much more secure — but that costs real money.

While this particular bug affected both new and old versions of Microsoft’s operating systems, the older ones like XP have more critical vulnerabilities. This is partly because our understanding of how to make secure software has advanced over the years, and partly because of the incentives in the software business. Since most software is sold with an “as is” license, meaning the company is not legally liable for any issues with it even on day one, it has not made much sense to spend the extra money and time required to make software more secure quickly. Indeed, for many years, Facebook’s mantra for its programmers was “move fast and break things.”

[..] If I have painted a bleak picture, it is because things are bleak. Our software evolves by layering new systems on old, and that means we have constructed entire cities upon crumbling swamps. And we live on the fault lines where more earthquakes are inevitable. All the key actors have to work together, and fast. First, companies like Microsoft should discard the idea that they can abandon people using older software. The money they made from these customers hasn’t expired; neither has their responsibility to fix defects. Besides, Microsoft is sitting on a cash hoard estimated at more than $100 billion (the result of how little tax modern corporations pay and how profitable it is to sell a dominant operating system under monopolistic dynamics with no liability for defects).

At a minimum, Microsoft clearly should have provided the critical update in March to all its users, not just those paying extra. Indeed, “pay extra money to us or we will withhold critical security updates” can be seen as its own form of ransomware. In its defense, Microsoft probably could point out that its operating systems have come a long way in security since Windows XP, and it has spent a lot of money updating old software, even above industry norms. However, industry norms are lousy to horrible, and it is reasonable to expect a company with a dominant market position, that made so much money selling software that runs critical infrastructure, to do more.

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tick tick tick.

Peak China: Chinese Data Misses Across The Board (ZH)

Following months of warnings that China’s economy is slowing down as a result of not only a collapse in China’s credit impulse but also tighter monetary conditions, as well as rolling over loan growth which has pressured both CPI and PPI – i.e., the global “reflation trade” – as the following chart from Bloomberg’s David Ingels shows…

… and culminating over the weekend with a warning in no uncertain terms from Citi, which said that at least four key economic indicators are “starting to wave red flags” among which:
• The Markit PMI is starting to turn over
• China’s Inflation Surprise Index – a leading indicator to global inflation metric – has posted a recent sharp drop
• China’s import trade has likewise tumbled after surging recently
• Chinese Iron Ore imports into Qingado port have plunged

… moments ago China’s National Bureau of Statistics validated the mounting fears, when it reported misses across all key economic categories for the month of April, as follows:
• Retail Sales 10.7% Y/Y, Exp. 10.8%, Last 10.9%
• Fixed Asset Investment 8.9% Y/Y, Exp. 9.1%, Last 9.2%
• Industrial Output 6.5% Y/Y, Exp. 7.0%, Last 7.6%
• Industrial Production YTD 6.7% Y/Y, Exp. 6.9%, Last 6.8%

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Big meeting, Putin, Erdogan et al, but not India, US, Germany and more. Shaky.

Why India Is Cool Towards China’s Belt And Road (SCMP)

It is one of the most imaginative and ambitious programmes ever to be rolled out by a government. It represents a broad strategy for China’s economic cooperation and expanded presence in Asia, Africa and Europe, and has been presented as a win-win initiative for all participating nations. But for India, the connotations of China’s Belt and Road Initiative” are somewhat different. A flagship programme and the most advanced component of the initiative, the China-Pakistan Economic Corridor (CPEC), passes through Pakistan-occupied Kashmir, a region that belongs to India and is under the control of Pakistan. As a country acutely conscious of its own sovereignty-related claims, China should have no difficulty in appreciating India’s sensitivities in this regard.

While investment in the Gwadar port, roads and energy projects is reported to have increased from US$46 billion to US$55 billion, CPEC lacks economic justification for China and its geopolitical drivers cause legitimate anxieties in India. The Belt and Road plan is a practical economic strategy for China’s objectives to connect the region, seek new growth engines for its slowing economy, utilise its surplus capacity, and develop and stabilise its western regions. It may also bring benefits to partner countries. However, it also has a strategic and political agenda which remains opaque. Apart from the CPEC, India also has misgivings about the manner in which the Belt and Road Initiative is being pursued in its neighbourhood. For instance, the development of ports under Chinese operational control as part of the Maritime Silk Road strategy has raised concerns in India which need to be addressed.

India has repeatedly conveyed its strong objections regarding the CPEC to China. The Belt and Road plan is a Chinese initiative rather than a multilateral enterprise undertaken after prior consultation with potential partner countries, and India has not endorsed it. There is an expectation in India that China will take India’s sensitivities into account while formulating its plans. Clearly, there is room for closer consultations between China and India on the objectives, contours and future directions of the Belt and Road. However, India has considered synergy-based cooperation on a case-by-case basis, where its interests for regional development converge with that of other countries, including China.

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India’s right, the Silk road is financed with Monopoly money.

China’s Silk Road Summit: India Skips, Warns Of “Unsustainable Debt” (ZH)

Alas, the meticulously scripted plan to showcase China’s growing economic and trade dominance did not go off quite as smoothly as Xi had planned. First, just hours before the summit opened, North Korea launched its latest ballistic missile, provoking Beijing and further testing the patience of China, its chief ally. Ironically, the United States had complained to China on Friday over the inclusion of a North Korean delegation at the event. Then, in a sign that China’s rampant, credit-fuelled growth is making some just a little uncomfortable, some Western diplomats expressed unease about both the summit and the plan as a whole, seeing it as an attempt to promote Chinese influence globally according to Reuters. They are also concerned about transparency and access for foreign firms to the scheme.

Australian Trade Minister Steven Ciobo said Canberra was receptive to exploring commercial opportunities China’s new Silk Road presented, but any decisions would remain incumbent on national interest. Responding to criticism, Xi said that “China is willing to share its development experience with all countries” and added “we will not interfere in other countries’ internal affairs. We will not export our system of society and development model, and even more will not impose our views on others.” But the biggest surprise was India, the world’s fastest growing nation and the second most populous in the world, which did not even bother to send an official delegation to Beijing and instead criticised China’s global initiative, warning of an “unsustainable debt burden” for countries involved.

Indian foreign ministry spokesman Gopal Baglay, asked whether New Delhi was participating in the summit, said “India could not accept a project that compromised its sovereignty.” India is incensed that one of the key Belt and Road projects passes through Kashmir and Pakistan. The nuclear-armed rivals have fought two of their three wars over the disputed region, Reuters notes. “No country can accept a project that ignores its core concerns on sovereignty and territorial integrity,” Baglay said. Furthermore, he also warned of the danger of debt. One of the criticisms of the Silk Road plan is that host countries may struggle to pay back loans for huge infrastructure projects being carried out and funded by Chinese companies and banks. “Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities,” Baglay said.

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Really, Brussels, Washington, you think it’s a good idea to let China buy up Greece? No security jiggers at all?

Number of Chinese Tourists Visiting Greece to Rise 10-Fold (BBG)

Fosun International, the Chinese conglomerate that’s part of a venture to transform the former Athens airport site into one of the biggest real-estate projects in Europe, is now turning its attention to Greek tourism. Fosun wants to use its stake in tour operator Thomas Cook to start building vacation packages specifically for the vast Chinese market, Senior Vice President Jim Jiannong Qian said in a May 4 interview in Athens. The Chinese government predicts 1.5 million of its citizens will start vacationing in Greece in the medium term. Tourism accounted for over one-quarter of Greece’s GDP in 2016, according to the Greek Tourism Confederation. Visitor numbers in 2016 reached 28.1 million, up 7.6% from 2015. Tourists generated €13.2 billion in travel receipts, according to the Bank of Greece. Of these travelers, 150,000 came from China, Beijing says.

“Greece is a very safe place for visitors,” said Qian who is also president of Fosun’s Tourism and Commercial Group. There are also good opportunities for tourism investments in Greece, he said. Fosun is in discussions to buy existing hotels and resorts, or for the construction of new ones, in Greece by its fully owned portfolio company Club Med. An increase in Chinese visitors to Greece would eventually lead to direct flights from Beijing and Shanghai to Athens, Qian said. The 54 year-old Qian said the situation in Greece has changed since the company first invested in Athens-based luxury goods retailer Folli Follie Group in 2011. “Greece’s economy is recovering now and can also deliver very good opportunities for foreign investors,” he said. “We look at the figures from retail sales and of the tourism sector,” and see the improvement.

Fosun, which manages €64.3 billion in total assets globally, has invested more than €200 million in Greece through its direct holding in Folli Follie and indirectly through Thomas Cook and Club Med, Qian said. “If you can help the economy grow, for example if we have the package product for Greece, then we create more jobs for restaurants, for retail stores, for taxi drivers.” The company, the biggest private Chinese company that invests in Europe, owns German lender Hauck & Aufhaeuser and Portuguese insurance company Fidelidade, and doesn’t rule out an investment in the Greek banking sector if an opportunity arises in the future, Qian said, refuting reports that the group has already made a bid to acquire shares in Greek banks. Fosun has already placed a bid for the acquisition of National Bank of Greece’s insurance unit National Insurance, and according to Qian, has no money ceiling when it comes to investments, as long as the opportunity is worth it.

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Rerouted trips to Greece?

New Zealand Slashes Chinese Tourism Forecast, Denting Outlook (BBG)

New Zealand has slashed its forecast for Chinese tourist spending over the next six years, denting growth expectations for its biggest foreign-exchange earner. Spending by Chinese tourists will rise to NZ$3.73 billion ($2.5 billion) by 2022 from NZ$1.65 billion last year, according to the Ministry of Business, Innovation and Employment’s latest annual forecasts. That’s 30% less than the NZ$5.32 billion expected in last year’s projections. “There is significant geopolitical risk around the China market,” the ministry said in the report, published Friday, adding that indicators like early-2017 visa approvals were “suggesting a short-term slowing in the market.” The downward revision indicates overall revenue from tourists won’t grow as quickly as previously expected, and that Australia will remain the biggest source of tourist dollars until 2021. Last year, officials forecast China would take the top ranking in 2017.

Tourism, which last year overtook dairy as New Zealand’s top export, has been growing faster than expected. Visitor numbers surged to 3.5 million in 2016, four years sooner than had been envisaged in 2014, and are projected to jump to 4.9 million by 2023. Still, the uncertainty around China “adds some risk to both China’s and the national forecast numbers,” the ministry said in its latest report. The slower forecast trajectory for Chinese spending growth reflects fewer visitors and less spending per day than projected 12 months ago. Arrivals from China are expected to reach 812,000 in 2022. That’s less than the 921,000 estimated in last year’s report. Average spending per day is forecast to be NZ$343 in 2022 rather than the NZ$394 estimated a year ago. As a result, total foreign visitor spending will rise to NZ$15.3 billion in 2023, according to the forecasts. The 2016 prediction was that spending would rise to NZ$16 billion by 2022.

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As if we needed any more evidence that credibility is the least of their worries.

Fed Officials Test New Argument for Tightening: Protect the Poor (BBG)

To protect the poorest Americans, should central bankers raise interest rates faster? At least one of them is making that argument. During a speech last month, Federal Reserve Bank of Kansas City President Esther George said she was “not as enthusiastic or encouraged as some when I see inflation moving higher” because “inflation is a tax and those least able to afford it generally suffer the most.” She was referring in particular to rental inflation, which she said could continue rising if the Fed doesn’t take steps to tighten monetary conditions. And while the idea of inflation as a tax that hits the poor the hardest is not a new one, its role in the current debate over what to do with interest rates marks a bit of a twist from recent years.

Widening disparities in income and wealth have over the past several years permeated national politics and helped fuel the rise of populist movements around the developed world. Against this backdrop, there has been a growing body of research, some of it produced by economists at central banks, backing the idea that easier monetary policy tends to be more progressive. That work, set against the notion that a stricter approach toward containing inflation has the best interests of the lowest-income members of society at heart, is thrusting Fed policy makers toward the center of a debate they usually like to leave to politicians. It’s becoming more contentious as Fed officials seek to declare victory on their goal of maximum employment even while the percentage of prime working-age Americans who currently have jobs is still nowhere close to the peaks of the previous two economic expansions.

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“The company, with the unfortunate Toronto Ticker “BAD”..”

Marc Cohodes, The Scourge Of Home Capital, Reveals His Latest Short (ZH)

Having single-handedly hounded Home Capital Group – the company which we predicted in 2015 would be “ground zero” for any potential Canadian financial crisis, and has emerged as the Canada’s equivalent to the infamous New Century which in 2007 presaged the upcoming global financial crisis – into near oblivion, noted chicken-farmer and short-seller, Marc Cohodes, over the weekend revealed the full details behind his latest short thesis: Canadian oil and gas service provider, Badger Daylighting. Badger, for those unfamiliar, is a company which uses a technique called hydrovac excavation, in which pressurized water and a powerful vacuum are used to expose buried pipes and cables. The company, with the unfortunate Toronto Ticker “BAD”, already had a bad day on Friday when it revealed earnings and revenues that badly missed consensus expectations.

Insult was added to injury after Cohodes, who most recently gained prominence for his short bet on Home Capital Group, previewed pages of a negative presentation on Badger to his Twitter feed Friday, saying that the shares are overvalued and that there are low barriers to entry. As a result, BAD shares plunged as much as 28% to C$22 in Toronto, the biggest intraday decline since November 2006, after previously dropping 4.8% YTD. To be sure, on Friday Badger CEO Paul Vanderberg, without in depth knowledge of Cohodes’ thesis, responded to Cohodes saying “my focus on that is really not to focus on it” during the earnings call and adding that “I don’t agree with the thesis.” Obviously, especially since neither he nor anyone else had seen or read it.

Chief Financial Officer Jerry Schiefelbein also responded, saying Badger is working to train new workers and managers on how to operate more efficiently, which should help reduce costs. He said the company’s first-quarter sales were “pretty good” following a couple of tough years. As for Cohodes’ criticism about low barriers to entry, Schiefelbein was quoted by Bloomberg saying tat Badger’s size gives it an advantage over mom-and-pop shops that would seek to compete with the company. Badger can tackle bigger projects for municipalities, has safety systems that larger customers require and it can move assets to markets where there is more demand, he said. “It’s not just digging holes in the ground.”

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Only interesting if his French backers want something Germany doesn’t. But then they all want the eurozone.

Eyes on Euro Fighter Macron (K.)

Macron has taken over from Francois Hollande hoping to reform not just his own country but the euro as well. “We must collectively recognize that the euro is incomplete and cannot last without major reforms,” he said during a speech at Humboldt University in Berlin this January. “It has not provided Europe with a full international sovereignty against the dollar on its rules, it has not provided Europe with a natural convergence between the different member-states.” The centrist politician warned that without reform the euro may be obsolete in 10 years. He has proposed a series of changes to improve the single currency, with the centerpiece being a budget for the eurozone that will be monitored by the European Parliament and backed by borrowing capacity so that it can finance investments, provide emergency loans via the European Stability Mechanism and help eurozone members if they suffer significant economic shocks.

Macron has also suggested the pooling of debt in the eurozone through the issuing of eurobonds, which are anathema to German conservatives. “The establishment of this budget will have to come with a convergence agenda for the eurozone, an anti-dumping agenda that will set common rules for fiscal and social matters,” added Macron in a message to his German hosts that proceeded to become clearer during his speech. “In a monetary union, a country’s success cannot be sustainably achieved to the detriment of another, which is a limit of the competitiveness approach, because competitiveness is always about comparing yourself with a neighbor,” he said. “The difficulties of one are always the problems of all.” Although Macron admits that France must carry out its own labor, market and education reforms and respect fiscal targets, his words are a direct attempt to overturn the logic and policy that has dictated the eurozone’s response to its crises since 2010 and to shape how its overall approach will evolve from this point onward.

In doing so, Macron is taking the fight to Germany, which previous French presidents failed to do. “When you look at the situation, the dysfunctioning of the euro is good news for Germany, I have to say. You benefit from this dysfunctioning,” he told his audience in Berlin. “[The] euro today is a sort of weak Deutschmark, which favors the German industry,” he added. These are views that have rarely been aired publicly by key players in the eurozone and it is little surprise that the initial response from Berlin was to suggest that Macron has enough on his plate at home to be focusing on euro reform. “German support cannot replace French policymaking,” was Merkel’s first comment on the subject after Macron comfortably won last Sunday’s vote in France.

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But Schäuble on Friday said transfers were needed. You need a fiscal union to make that work.

Germany Will Not Rush Into Euro Area Fiscal Union (CNBC)

Now what? “More Europe” say those who believe that problems were caused by an inadequate integration process that allowed policy mistakes by incompetent national governments. To avoid similar mistakes in the future, they are now urging a unified fiscal policy to complete the monetary union. That is what the French call the “fuite en avant” – a semiotic delight roughly translated as fleeing from an unsolvable problem. Here is what that problem looks like: The fiscal union implies a euro area federal state with a common management of public finances. The area’s budget, public debt financing, tax policies, transfer payments, etc. would be managed by a euro area finance ministry. That would also require harmonization of labor, health care and education policies, and a whole range of other social welfare programs. Institutionally, this integration drive cannot stop at the finance ministry. There would also have to be a euro area executive and legislative authority to exercise administrative and democratic controls over tax and spend decisions.

[..] How could Germany, with a budget surplus last year of 0.8% of GDP and the public debt of 68.3% of GDP, accept a fiscal union with Spain running the euro area’s largest budget deficit of 4.5% of GDP and a public debt of 100% of GDP? France and Italy have similar public finance profiles. Last year, France had a second-largest euro area budget deficit of 3.4% of GDP and a public debt of 96% of GDP. During the same period, Italy ran a budget deficit of 2.4% of GDP and a public debt of 133% of GDP. This means that half of the euro area economy (France, Italy and Spain), with serious structural problems of public finances, would become part of a de-facto federal state with a fiscally sound Germany. Hard to imagine, isn’t it? And yet, that’s the program that the new French President Emmanuel Macron will apparently discuss Monday when he visits German Chancellor Angela Merkel in Berlin.

France, Italy and Spain already know the answer. Chancellor Merkel is relieved and delighted that the most dangerous anti-EU parties in France and The Netherlands lost the recent elections, but her government is firmly opposed to the euro area fiscal union. German public opinion fully shares that position. And German media of all political stripes are having a field day lampooning the idea that German taxpayers should be asked to pay for countries that cannot control their debts and deficits. This is also an awkward moment to even talk about the call on the German public purse while the country is gearing up for general elections on Sept. 24, 2017. The best that Germany can offer, under these circumstances, is a strict enforcement of existing euro area fiscal rules: Budget deficits limited to 3% of GDP and the gross public debt to 60% of GDP. About half of the euro area members are now falling far short of these criteria.

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Will the rich world ever come clean? No.

What Germany Owes Namibia For Genocide (Econ)

On October 2nd 1904 General Lothar von Trotha issued what is now notorious as “the extermination order” to wipe out the Herero tribe in what was then German South West Africa, now Namibia. “Within the German borders every Herero, with or without a gun, with or without cattle, will be shot,” his edict read. During the next few months it was just about carried out. Probably four-fifths of the Herero people, women and children included, perished one way or another, though the survivors’ descendants now number 200,000-plus in a total Namibian population, scattered across a vast and mainly arid land, of 2.3m. The smaller Nama tribe, which also rose up against the Germans, was sorely afflicted too, losing perhaps a third of its people, in prison camps or in the desert into which they had been chased.

A variety of German politicians have since acknowledged their country’s burden of guilt, even uttering the dread word “genocide”, especially in the wake of the centenary in 2004. But recent negotiations between the two countries’ governments over how to settle the matter, the wording of an apology and material compensation are becoming fraught. Namibia’s 16,000 or so ethnic Germans, still prominent if not as dominant as they once were in business and farming, are twitchy. The matter is becoming even more messy because, while the German and Namibian governments set about negotiation, some prominent Herero and Nama figures say they should be directly and separately involved—and have embarked on a class-action case in New York under the Alien Tort Statute, which lets a person of any nationality sue in an American court for violations of international law, such as genocide and expropriation of property without compensation.

The main force behind the New York case, Vekuii Rukoro, a former Namibian attorney-general, demands that any compensation should go directly to the Herero and Nama peoples, whereas the Namibian government, dominated by the far more numerous Ovambo people in northern Namibia, who were barely touched by the wars of 1904-07 and lost no land, says it should be handled by the government on behalf of all Namibians. The Namibian government’s amiable chief negotiator, Zedekia Ngavirue, himself a Nama, has been castigated by some of Mr Rukoro’s team as a sell-out. “Tribalism is rearing its ugly head,” says the finance minister, who happens to be an ethnic German.

The German government says it cannot be sued in court for crimes committed more than a century ago because the UN’s genocide convention was signed only in 1948. “Bullshit,” says Jürgen Zimmerer, a Hamburg historian who backs the genocide claim and says the German government is making a mess of things. “They think only like lawyers, not about the moral and political question.” “None of the then existing laws was broken,” says a senior German official. “Maybe that’s morally unsatisfactory but it’s the legal position,” he adds.

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Apr 052015
 
 April 5, 2015  Posted by at 11:01 am Finance Tagged with: , , , , , , , , ,  6 Responses »


Underwood&Underwood Chicago framed by Gothic stonework high in the Tribune Tower 1952

For the second time in three years, I’m fortunate enough to spend some time in New Zealand (or Aotearoa). In 2012, it was all mostly a pretty crazy touring schedule, but this time is a bit quieter. Still get to meet tons of people though, in between the relentless Automatic Earth publishing schedule. And of course people want to ask, once they know what I do, how I think their country is doing.

My answer is I think New Zealand is much better off than most other countries, but not because they’re presently richer (disappointing for many). They’re better off because of the potential here. Which isn’t being used much at all right now. In fact, New Zealand does about everything wrong on a political and macro-economic scale. More about that below.

I’ve been going through some numbers today, and lots of articles, and I think I have an idea what’s going on. Thank you to my new best friend Grant here in Northland (is it Kerikeri or Kaikohe?) for providing much of the reading material and the initial spark.

To begin with, official government data. We love those, don’t we, wherever we turn our inquisitive heads. Because no government would ever not be fully open and truthful. This is from Stuff.co.nz, March 19 2015:

New Zealand GDP grew 3.3% last year

New Zealand’s economy grew 3.3% last year, the fastest since 2007 before the global financial crisis, Statistics NZ said. Most forecasts expect the economy to keep growing this year and next, although slightly more slowly than in the past year. For the three months ended December 31, GDP grew 0.8%, in line with Reserve Bank and other forecasts. That was led by shop sales and accommodation.

That sounds great compared to most other nations. But then we find out where the alleged growth has come from (I say alleged because other data cast a serious doubt on the ‘official’ numbers):

The economy grew a revised 0.9% in the September quarter, down from 1% reported earlier. Retail and accommodation increased 2.3% in the December 2014 quarter, buoyed by a 15% increase in international tourist spending, as reported on Wednesday. New Zealand household spending also increased 0.6%. [..]

“Spending by Chinese, US, and UK visitors all increased in 2014, though Australians spent less.” Australia is New Zealand’s biggest tourism market, but the New Zealand dollar has been high against the Australian currency, trading at A96.5c on Thursday. The exchange rate was under A80c at the start of 2013. Total visitor spending last year hit $7.4 billion, up 13% on the previous year. [..]

(Note: $1 US = $1.3156 NZ today.)

Increased banking activity was reflected in a 1.1% rise in financial services this quarter, while housing investment rose 5.2%.

[..] The figures also showed the first fall in real incomes since the middle of 2012. The inflation-adjusted purchasing power of disposable income was down 0.5% in the December quarter.

We’ll get back to housing in a bit. And by all means, keep those last few numbers in mind: while the economy ostensibly grew by 3.3%, disposable income was down. That’s what you call a warning sign.

But let’s focus first on tourism and especially on China. While overall tourist spending rose 15% in 2014, as part of a later quote in this article we will even see that “tourism from China was up 40% in the first two months of this year from a year ago..”

Still, that cannot make up for that other big trade with China, exports, in particular of New Zealand’s biggest industry, dairy, and the second biggest, timber. There things are not looking nearly as rosy. And after reading the next piece, I’m wondering how the economy could possibly have grown by 3.3%. More from Stuff.co.nz, dated March 25:

Dairy Slump Hits New Zealand Exports To China

New Zealand posted a small trade surplus of just $50 million in February with dairy exports down heavily, especially to China, New Zealand’s top export market. Some economists had expected a monthly surplus of about $350 million. The trade shortfall for the year ended February 2015 was a deficit of $2.2 billion. Exports to China have boomed in the past few years, but melted down last year as dairy product prices plunged. Total exports to China in February were down more than 36% on the same month last year.

China remains New Zealand’s biggest export market, worth almost $9b in the past year, just slightly ahead of Australia. But the trend for exports to China has been falling for the past year, and is down 45% from the peak in late 2013. In fact, it has returned to levels seen in 2012. [..] Total exports were worth $3.9b for the month, just barely ahead of monthly imports which were also about $3.9b.

So sure, the 3.3% was over 2014, and this piece concerns this year. But it also says ‘the trend for exports to China has been falling for the past year,’ and ‘..The trade shortfall for the year ended February 2015 was a deficit of $2.2 billion..’ and that can only leave me wondering again what real GDP growth was. This is from RadioNZ, April 3:

Export Drop Rattles Companies

Confidence among manufacturers and exporters has taken a hit with export sales in February down 27% compared with a year ago. A survey found net confidence – which includes measures of cash flow, profitability, investment, staff and sales – fell into negative territory for the first time since April 2013. Net confidence was minus 13, down from 21 in January. The sample of Manufacturers and Exporters Association members covered companies with combined annual sales of $178 million, with 68% of those from exports. Association president Tom Thomson said currency volatility was the biggest issue for exporters, with the big jump in the US dollar forcing up the price of some raw materials.

Now I’m wondering which raw materials this fine man has in mind. See, I can imagine currency volatility being a bit of a drag, but not too much for New Zealand manufacturers, because as far as I can see the country’s exporters don’t seem to import much in the way of raw materials. The main exports, as I said, are dairy and timber, with a bit of meat thrown in, none of which require raw materials imports, and what the US dollar drives up in there would help New Zealand more than hurt it. That the New Zealand dollar itself has gained vs various other currencies, while true, is a whole other story.

New Zealand’s dairy industry has been thrown together since the start of the century in co-op Fonterra, good for 30% of global dairy exports – most dairy farmers are shareholders (mind you, no country the size of New Zealand should ever even think of exporting 30% of the world’s anything, of course, unless it’s something unique on the planet and it comes in small quantities). Fonterra’s by far biggest clients are the lactose-intolerant Chinese, who import about all the milkpowder – for their babies – they can lay their hands on, following a domestic tainted milk scandal a few years back. Still, to establish your biggest industry around one single client is obviously a very risky venture. And now there’s the added problem of dropping prices. The New Zealand Herald, April 2:

World Dairy Prices Slide 10.8% On Supply Concerns

International dairy prices continued to reverse gains made early this year at this morning’s GlobalDairyTrade (GDT) auction, putting downward pressure on Fonterra’s $4.70 a kg farmgate milk price forecast and raising concerns about next season’s likely payout. The GDT price index fell by 10.8% compared with the last sale a fortnight ago, when prices dropped by 8.8%. Big falls were recorded for the key products of wholemilk powder – down 13.3% to US$2,538 a tonne, skim milk powder – down 9.9% to US$2,467/tonne.

That 10.8% price drop occurred in just 2 weeks. There can be no doubt that if your economy depends so much on one sector and one client, you’re vulnerable. Probably as much as oil producers, who saw their prices drop more, but who mostly have higher profit margins. What hasn’t helped New Zealand dairy farmers is the Russian ban on EU milk products; these will now have to be sold on world markets. What won’t help either is the recent lifting of EU milk quotas, which will bring a huge flood of additional milk on the market. A market that is already drowning in milk. RadioNZ, April 2:

World ‘Awash With Milk’

The Government is blaming a slump in milk prices on the world market being awash with milk. But New Zealand First leader Winston Peters said National’s economic policies and the high value of the New Zealand dollar were not helping dairy farmers. In the Global Dairy Trade auction prices dropped 10.8% overnight to $US2746 a tonne, the second fall in a fortnight. Mr Peters said he predicted the fall and it was a sign of rural areas lagging behind. “I’ve been saying it for a long long time – what you’ve got is a fixation with Auckland, hollowing out the provincial economies and sucking all the attention and money to Auckland and that is not going to go on any longer.”

Mr Peters said New Zealand had a free market system that no other country followed and he would legislate to control the exchange rate, similar to Singapore’s system. “The one country that’s not devaluing at the moment is New Zealand – every other economy has. [..] Economic Development Minister Steven Joyce firmly rejected that idea. “Well, with the greatest respect to Winston I am old enough, and so is he, to remember the last time we tried to set the exchange rate in this country and it wasn’t that successful…

“What he is basically saying is that he would legislate, presumably, to put the exchange rate at a level it won’t naturally go and that means effectively increasing costs for the consumer and decreasing costs for exporters.” [..] Meanwhile, the Fonterra Shareholders Council said some frustrated farmers were considering leaving the co-operative due to the price slump.

For more than a few farmers, the situation has already proved too much. NZ Herald, Jan 11:

Stress Too Much For Farmers

At least four farmers have taken their lives since Fonterra cut its milk payout forecast for the coming season. On December 10, the dairy giant dropped its payout forecast for 2014-15 to an eight-year low of $4.70 a kilogram of milk solids. That’s nearly half the $8.40 paid in the 2013-14 season and is estimated to mean an income drop for farmers of $6.6 billion. Federated Farmers dairy industry group vice-chairman Kevin Robinson confirmed to the Herald on Sunday that it was aware of the December deaths. “There’s been discussion through Federated Farmers email about them,” he said.

Several industry experts blame high levels of rural debt for increased stress on farmers. In total, 14 farmers have taken their lives in the past six months, Chief Coroner Judge Neil MacLean said. The most recent four deaths were also confirmed by Te Aroha farmer Sue McKay, the administrator of a private Facebook-based support group. She added: “I also know some local hospitals have a number of farmers in them from attempted suicide. If there’s three in one ward alone, there will be more in other hospitals.”

Whole milk powder prices were down 11% in the month and 52% lower than a year earlier. Cheese also dropped 5% over the month.

But New Zealand also has a whole different side. If anything could explain the 3.3% GDP growth number for 2014, I’m guessing it must be this: a real estate bubble that would put most of Charles Ponzi’s heirs to shame. Not 10 years ago, mind you, Americans, but today. Will they never learn, you ask? No, they will have to have their faces pushed squarely through the stucco walls. And they’ll probably still have hope for a recovery when they come out at the other side. NZ Herald, April 5:

Hot Properties: Auckland Valuations Out Of Date Within Months

Council valuations are already out of date, with homes selling in Auckland’s overheated property market on average for more than 15% above their figure of six months ago. And previously unfashionable suburbs have recorded some of the biggest spikes as desperate buyers look for their first home. Mt Roskill made the biggest jump in the Real Estate Institute figures, which are based on Auckland sales in February and compared against capital valuations made in July last year. The valuations, which do not involve a property inspection or include chattels, were made public on October 1.

Even suburbs among the 10 with lowest rises, such as Remuera and Te Atatu Peninsula, were up 13%. Properties sold by Bayleys Real Estate last month included a West Harbour home bought for $700,000 more than its capital valuation of $900,000 and a Glendowie home with a capital value of $1.13m that sold for $1.575m. An Avondale home sold for $590,000 — $130,000 above valuation.

REINZ chief executive Colleen Milne wasn’t surprised because city fringe suburbs were now out of reach for many. The hot market made it hard for capital values to keep up, Milne said. “There has been a 19.9% median movement in Auckland in the last 18 months. I thought the CVs seemed to be quite appropriate at the time, but the whole thing is just supply and demand — we have a lack of houses,” she told the Herald on Sunday.

A ‘19.9% median movement in Auckland in the last 18 months’ is about 13.25% per year, a doubling time of just over 7 years. Auckland apartment prices in the Trade.me graph below, which covers February 2014-February 2015, would double every 3-4 years.

It must be an Anglo-Saxon disease. You can see it in London, in Sydney, Melbourne, New York, Toronto. The new normal way to make your failing economy look ‘healthy’ is to sell assets to any rich foreigner or investment fund who comes knocking, no matter what the consequences, short term or long term. In all these cities, young people can forget about buying a home, that allegedly government supported dream.

And everyone but the rich are pushed out ever further into the boondock burbs. It’s a ‘policy’ that kills cities, of necessity. Cities need people, real people, all people, poor and rich and old and young, that have grown up where they live, they love where they live, they are interested in making it look good and feel good. This is an ongoing and organic process, because cities are alive, and yes, you can kill them. But that’s for another story.

Back to New Zealand’s reality for the vast majority of people, who will never be able to fork over 100s of 1000s of dollars for a house. People like the workers in the timber industry, who see slowing Chinese demand translated into job cuts both for those who cut the trees and those who transport them.

Again, a dumb idea to base a whole industry around one client, but the men and women who did the job were just glad they had work. And now they don’t anymore. Jobs that in all likelihood will never come back again. China won’t have another debt-financed growth spurt, and there are no other candidates waiting on the horizon.

And that’s all a big shame. New Zealand is not poor, but it’s by no means as rich as Australia or Canada or Germany or the US. What it does have is the potential to be largely self-sufficient. A potential that is being squandered in order to play with the big boys of globalized trade.

New Zealand has only 4.5 million citizens, one third of which live in Auckland. It has vast tracts of productive land that are now used to feed export oriented cows and American pines, neither of which are even native. It could have a great shoe industry, plenty of leather, and a textile industry, plenty of wool. But New Zealand, like everyone else, imports such basic needs from China. While having scores of unemployed people. When will that light go off?

The country’s prime minister since 2008, John Key, used to work at Merrill Lynch and the New York Fed, and that sort of background guarantees valiant efforts to sell anything in the country that’s not bolted down, and take an axe to what is. It also guarantees zero initiative to become self-sufficient.

But then there are many tragic countries and societies in the world who all suffer from the same maladie. I’ll leave you with some reflections by the man who I’m told is New Zealand’s best business writer, Bernard Hickey in the NZ Herald:

New Zealand’s Economic Winds Of Change

Chaos theory calls it the butterfly effect. It’s the idea that a butterfly flapping its wings in the Amazon could cause a tornado in Texas. The New Zealand economy has plenty of its own butterflies changing the weather for GDP growth, jobs, interest rates, inflation and house prices. [..] One of the flappiest at the moment is the global iron ore price.

It’s barely noticed here but it’s an indicator of growing trouble inside our largest trading partner, China, and it is knocking our second-largest partner, Australia, for six. It fell to a 10-year low of almost US$50 a tonne this week and is down from a peak of more than US$170 a tonne in early 2011.

China embarked on an infrastructure spree after the global financial crisis. Over the three years to 2013, China poured 6.4 gigatonnes of concrete, which was more than was poured in the US in the entire 20th century. All that concrete needed reinforcing with steel and China didn’t have enough iron ore and coking coal to make it. That building boom created a glut of apartments and debt, which China now needs to digest. [..]

.. iron ore production in Australia has only now ramped up to its peak levels. Weak demand met high supply to produce a price slump. This all may seem irrelevant to New Zealand, but it’s not. The Australian dollar has fallen in response to the iron ore crash, while New Zealand’s dollar has remained strong because our economy is humming along, thanks to building surges in Christchurch and Auckland and plenty of spending and investment.

That divergence between the Australasian economies drove the New Zealand dollar to a record high of well over AUD$98 this week. Dollar parity would make all those winter holidays on the Australia Gold Coast and trips to shows in Sydney and Melbourne cheaper and generate a fierce headwind for manufacturing exporters and tourism businesses here that sell to Australians.

President Xi has reinforced the contrasting effects of the changes in China on Australia and New Zealand by encouraging consumers and investors to spend more of China’s big trade surpluses overseas. Tourism from China was up 40% in the first two months of this year from a year ago, and there remains plenty of demand from investors in China for New Zealand assets.

The dark side of this tornado in New Zealand after the flapping of the butterfly’s wings in China was felt in Nelson this week. The region’s biggest logging trucking firm, Waimea Contract Carriers, was put into voluntary administration owing $14m, partly because of a slump in log exports to China in the past six months.

That’s because New Zealand’s logs are now mostly shipped to China to be timber boxing for the concrete being poured in its new “ghost” cities. The Chinese iron ore butterfly has flapped and now we’re seeing Gold Coast winter breaks become cheaper and logging contracts rarer.