Jan 152022
 January 15, 2022  Posted by at 10:00 am Finance Tagged with: , , , , , , ,  55 Responses »

Johannes Vermeer The geographer 1668-69


Omicron Wave of COVID-19 Has Peaked in UK (ET)
What’s Really Going On With Covid Deaths Data? (BBC)
Face Masks Make People Look More Attractive, Study Finds (G.)
Australia Minister Says Djokovic ‘Talisman’ Of Anti-vaccine Sentiment (ABC)
Australian Minister Says Risk Of ‘Civil Unrest’ Behind Djokovic Cancellation (G.)
Senator Plans To Introduce ‘FAUCI Act’ After Doctor Called Him A ‘Moron’ (Fox)
GE Halts Covid Mandate For Employees After Supreme Court Decision (BG)
YouTube Suspends And Demonetizes Dan Bongino Over ‘Mask Fascists’ Content (PM)
Dog Gone (Kunstler)
How To Read The US Paper For Peace For Our Time (Helmer)
Putin’s Challenge To Western Hegemony – The 2022 Edition (Tooze)
To Save Time, Biden To Ship 500 Million Free Masks Directly To Landfill (BBee)



“There needs to be a complete lockdown of vaxxed people until we can figure out what the hell is going on..”








That’s settled then.

“Meanwhile, UK media report wall-to-wall…tennis players, No.10 parties, a playboy Prince and his uniforms …and occasionally repeat their masters’ fantasy mantra ‘Russian aggression’.”

Omicron Wave of COVID-19 Has Peaked in UK (ET)

The Omicron wave of COVID-19 has peaked in the UK and cases are starting to decrease in all age groups and in almost all regions in the country, a British scientist said on Jan. 13. Tim Spector, professor of genetic epidemiology at King’s College London and the lead scientist on the ZOE COVID Study app, said data suggests the Omicron wave has peaked, with hospitalisation, deaths, and early data on the severity of the Omicron variant all “looking positive.” He said COVID-19 symptoms are now “for the first time this winter more common than colds and flu and are indistinguishable.” According to data from the ZOE COVID Study, 52.5 percent of people experiencing new cold-like symptoms are likely to have symptomatic COVID-19, an increase from last week’s 51.3 percent.

According to ZOE data, there are currently 183,364 new daily symptomatic cases of COVID-19 in the UK on average, a clear decrease of 12 percent from 208,471 reported last week. Among people who have received at least two vaccine doses, there are currently 83,699 new daily symptomatic cases, a decrease of 11 percent from 93,540 new daily cases reported last week. The study found that cases are dropping in all regions apart from the northeast, but even there the increase is already slowing and should start dropping soon. New daily symptomatic cases are also going down in all age groups, with cases among the over-75s plateauing at low levels. Spector said this is a “reassuring sign” that the more vulnerable group has been spared from the worst of the Omicron wave. He said he does not expect these rates to go down to zero, but he thinks Omicron “will probably continue to circulate at manageable levels in the population until late spring.”

Read more …

The BBC trying to fess up to the WITH or FROM. But they claim it’s not just the numbers that go up with Omicron, it’s also the percentages?! Really? Why?

What’s Really Going On With Covid Deaths Data? (BBC)

Covid deaths are rising sharply in the UK, but an increasing proportion of these are actually due to something else, BBC analysis suggests. That’s because some people die with Covid rather than from it. The Omicron wave is driving rising infections, which means more people will catch it and some will get sick. Deaths will inevitably increase too, but not all will be “true” Covid ones. Others will be people who happened to test positive. There are a number of ways we monitor the number of deaths connected to Covid. The most prominent is the daily count of anyone who has died within 28 days of testing positive. For the vast majority of those people, Covid has been the primary cause of their death. But there has always been a minority who died from another cause.

And with Omicron infecting so many people, there is a higher likelihood of people dying from an unrelated reason in the month after testing positive than there has been in the past. Doctors registering a death record what may have contributed to it, and what most likely caused it. If Covid contributed in some way, that’s a death “involving Covid”. The number of these deaths has tracked the daily death count closely throughout most of the pandemic. During autumn and the run-up to Christmas, only about 15% of deaths involving Covid in England and Wales did not list Covid as the cause. In the week after Christmas, that rose to 22%. And in the coming weeks “we might expect that to rise further” says Cambridge statistician Prof Sir David Spiegelhalter “reflecting the very high levels of people with coronavirus”.

About 4.3 million people in the UK have coronavirus at the moment – a historically high level – and four times more than at the start of December. So the number of people who might happen to test positive for coronavirus in the month before their death is likely to be on the rise too. This wasn’t as much of an issue when fewer people had coronavirus. But at the moment you might expect to see, very roughly, about 55 of these “coincidental” Covid deaths a day, based on the roughly 2,000 people who die each day in the winter months – and the nearly 6% of people in the UK who have tested positive in the past four weeks (mostly young people at lower risk of dying).

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Brilliant idiocy.

Face Masks Make People Look More Attractive, Study Finds (G.)

There have been precious few positives during the Covid pandemic but British academics may have unearthed one: people look more attractive in protective masks.Researchers at Cardiff University were surprised to find that both men and women were judged to look better with a face covering obscuring the lower half of their faces. In what may be a blow for producers of fashionable coverings – and the environment – they also discovered that a face covered with a disposable-type surgical mask was likely to be deemed the most appealing. Dr Michael Lewis, a reader from Cardiff University’s school of psychology and an expert in faces, said research carried out before the pandemic had found that medical face masks reduced attractiveness because they were associated with disease or illness.

“We wanted to test whether this had changed since face coverings became ubiquitous and understand whether the type of mask had any effect,” he said. “Our study suggests faces are considered most attractive when covered by medical face masks. This may be because we’re used to healthcare workers wearing blue masks and now we associate these with people in caring or medical professions. At a time when we feel vulnerable, we may find the wearing of medical masks reassuring and so feel more positive towards the wearer.” The first part of the research was carried out in February 2021 by which time the British population had become used to wearing masks in some circumstances. Forty-three women were asked to rate on a scale of one to 10 the attractiveness of images of male faces without a mask, wearing a plain cloth mask, a blue medical face mask, and holding a plain black book covering the area a face mask would hide.

The participants said those wearing a cloth mask were significantly more attractive than the ones with no masks or whose faces were partly obscured by the book. But the surgical mask – which was just a normal, disposable kind – made the wearer look even better. “The results run counter to the pre-pandemic research where it was thought masks made people think about disease and the person should be avoided,” said Lewis. “The pandemic has changed our psychology in how we perceive the wearers of masks. When we see someone wearing a mask we no longer think ‘that person has a disease, I need to stay away’. “This relates to evolutionary psychology and why we select the partners we do. Disease and evidence of disease can play a big role in mate selection – previously any cues to disease would be a big turn-off. Now we can observe a shift in our psychology such that face masks are no longer acting as a contamination cue.”

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Both the OZ government and their citizens try to hide their failures and cowardice behind Djokovic.

Australia Minister Says Djokovic ‘Talisman’ Of Anti-vaccine Sentiment (ABC)

Lawyers for Novak Djokovic say Immigration Minister Alex Hawke has erroneously cancelled his visa on the grounds the tennis star is seen as a “talisman of a community of anti-vaccine sentiment”. In an application lodged with the Federal Circuit Court last night, and released online by the Federal Court today, Djokovic’s lawyers argue the visa cancellation is legally invalid. The world men’s number one was this afternoon taken to detention at Melbourne’s Park Hotel after spending several hours meeting with his lawyers. They are disputing Mr Hawke’s decision to cancel the visa on the grounds that Djokovic’s “presence in Australia may cause an increase in anti-vaccination sentiment, in effect because he may be perceived by some as a talisman of a community of anti-vaccine sentiment, leading to various negative consequences”.

Mr Hawke’s reasons for the decision, emailed to Djokovic’s lawyers last night and published by the court this morning, say his presence in Australia poses a health risk because it could encourage fewer people to get vaccinated and boosted. The minister argues it could also lead to an increase “in civil unrest of the kind previously experienced in Australia with rallies and protests which may themselves be a source of community transmission”. Djokovic’s legal team argues the minister failed to consider that his detention and forced removal from Australia may also foster anti-vaccination sentiment. They also argue that the minister “cited no evidence that supported his finding that Mr Djokovic’s presence in Australia may ‘foster anti-vaccination sentiment’, and it was not open to the minister to make that finding”.

Their final argument is that it was not open to the minister to make a finding “concerning Mr Djokovic’s ‘well-known stance on vaccination'”. The court documents show Mr Hawke received health advice showing Djokovic would be of “low” risk of transmitting the virus, and the risk of transmission at the Australian Open would be “very low” given the additional controls at the tournament. The Federal Court will hear Djokovic’s appeal against his visa cancellation on Sunday at 9.30am AEDT. The court set a timetable for dealing with the case during a brief Saturday morning administrative hearing. Djokovic’s lawyers agreed to file their outline of submissions by midday. Lawyers representing Mr Hawke will have until 10pm to file their written response.

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Just saying what he think his voters like to hear.

Australian Minister Says Risk Of ‘Civil Unrest’ Behind Djokovic Cancellation (G.)

Tennis champion Novak Djokovic, who has been described as a risk to “civil unrest” and a “talisman of anti-vaccination sentiment”, may never get the chance to defend his Australian Open title, facing a three-year ban from the country ahead of a last-ditch court challenge to stay. Australia’s immigration minister, Alex Hawke, personally cancelled the unvaccinated world No 1’s visa, arguing his presence in Australia could incite “civil unrest” and encourage others to eschew vaccination against Covid-19. Djokovic faces a federal court hearing Sunday morning, Australia time, which will determine whether the minister acted unreasonably in rescinding his visa. Documents filed in the court reveal the minister’s reasons sent to Djokovic as justification for cancelling his visa.

Hawke said he accepted Djokovic’s recent Covid-19 infection meant he was a “negligible risk to those around him”, but that he was “perceived by some as a talisman of a community of anti-vaccine sentiment”. “I consider that Mr Djokovic’s ongoing presence in Australia may lead to an increase in anti-vaccination sentiment generated in the Australian community, potentially leading to an increase in civil unrest of the kind previously experienced in Australia with rallies and protests which may themselves be a source of community transmission. “Mr Djokovic is … a person of influence and status.

“Having regard to … Mr Djokovic’s conduct after receiving a positive Covid-19 result, his publicly stated views, as well as his unvaccinated status, I consider that his ongoing presence in Australia may encourage other people to disregard or act inconsistently with public health advice and policies in Australia.”

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“..the Financial Accountability for Uniquely Compensated Individuals (FAUCI) Act..“

Senator Plans To Introduce ‘FAUCI Act’ After Doctor Called Him A ‘Moron’ (Fox)

U.S. Sen. Roger Marshall, R-Kan., published White House chief medical adviser Anthony Fauci’s unredacted financial records and accused him of being misleading when he told the Senate his financial disclosure forms were publicly available. While Fauci’s financial disclosure documents can be requested from the National Institute of Health, they aren’t listed in the same searchable database as many other federal officials. Fauci is “more concerned with being a media star and posing for the cover of magazines than he is being honest with the American people and holding China accountable for the COVID pandemic that has taken the lives of almost 850 thousand Americans,” Marshall told Fox News Digital in a statement.

“Just like he has misled the American people about sending taxpayers dollars to Wuhan, China, to fund gain-of-function research, about masks, testing, and more, Dr. Fauci was completely dishonest about his financial disclosures being open to the public — it’s no wonder he is the least trusted bureaucrat in America,” Marshall continued. “At the end of the day, Dr. Fauci must be held accountable to all Americans who have been suing and requesting for this information but don’t have the power of a Senate office to ask for it,” the Kansas Republican said, adding that for “these reasons” he is planning on “introducing the FAUCI Act so financial disclosures like these are made public and are easily accessible online to every American.”

Marshall’s office obtained the doctor’s most recent disclosure after filing an Office of Government Ethics request with the National Institutes of Health (NIH). While Fauci’s financial disclosures are technically open to any member of the public who requests them, the records are not listed in an easily-accessible public database, and it can take months for a request to be fulfilled. The Center for Public Integrity submitted a request for Fauci’s financial disclosures with the NIH in May 2020, but did not receive the information until August of that year. When the organization did receive it, it was produced under the Freedom of Information Act and came back partially redacted.

The NIH is currently being sued for the production of Fauci’s financial records by watchdog organization OpenTheBooks.org. Fauci had told the Senate during his Tuesday hearing that his financial disclosures were publicly available online after Marshall had pointed out they are not. The two officials verbally sparred, culminating with Fauci calling Marshall — a fellow medical doctor — a “moron” and sparking headlines. Marshall announced that he would be introducing the Financial Accountability for Uniquely Compensated Individuals (FAUCI) Act after the doctor called the sitting U.S. senator a “moron.”

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I’m reading this thinking what an incredible mess they’ve managed to make of it.

GE Halts Covid Mandate For Employees After Supreme Court Decision (BG)

Following the Supreme Court’s decision to block President Biden’s vaccine-or-testing rule for large companies, General Electric said it would suspend the implementation of the mandate for its employees. The Boston-based maker of jet engines, wind turbines, and medical scanners confirmed the decision Friday via e-mail. GE is the first major company to announce a halt after the court’s decision to block the centerpiece of Biden’s push to boost COVID-19 vaccinations. GE holds a number of government contracts, so its 56,000 employees in the US originally fell under a separate vaccination mandate for federal contractors. The company paused that requirement in December — after a federal judge temporarily blocked the rule from going into effect — and then planned to comply with the vaccine-or-testing mandate for private employers. The federal mandate would have applied to all private employers with more than 100 employees, covering some 84 million workers in the United States.

[..] GE employees could still be required to be vaccinated under the rule that applies to federal contractors, which is in legal limbo. The Biden administration has said it would not enforce the federal contractor mandate until the court challenges are resolved. When GE was planning to roll out the vaccination policy, it ran into early stumbles with the employee union in Lynn, which has about 1,200 members. Justin Richards, a business agent for IUE-CWA Local 201, said at the time that employees felt that they didn’t have enough time to collectively bargain over the consequences of the mandate. It wasn’t clear what would happen if they failed to meet the deadline, and being terminated, laid off, or furloughed have different impacts on the status of health care benefits or severance packages, he said.

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Nothing to do with you liking Bongino or not. It’s about how much you like your own freedom.

YouTube Suspends And Demonetizes Dan Bongino Over ‘Mask Fascists’ Content (PM)

Conservative commentator Dan Bongino has been suspended by YouTube for questioning “mask fascists.” The Bongino Report announced on Twitter on Friday that the platform suspended Bongino for violating the site’s COVID-19 misinformation policy. “YouTube just suspended Dan’s channel for daring to question the mask fascists. I guess they were waiting for an apology from us. But that’s not quite how it worked out for them. Here’s Dan’s email to ‘Coco’ at YouTube telling them to plant a big wet kiss on his ass,” The Bongino Report tweeted Friday.The Post Millennial reached out to Bongino, who said: “I was anxiously waiting for YouTube to show us all who they are, and they finally did. Tyrants always show their true colors. I’m immediately going to post some of the content that got us suspended when the suspension is over, and I’m daring them to do something about it.”

Bongino also published his email to YouTube. “I was sent your email about YouTube’s suspension of my channel. If I said I was surprised here. I’d be lying,” Bongino said. “We knew it was just a matter of time before the tyrannical, free-speech hating, bullshit, big tech sh*thole you work for, would try to silence us. I anxiously waited for this moment however, as I’ve said on my show many times,” Bongino continued. “Thankfully, I’m one of the investors in Rumble, a video platform that respects free-speech. As a matter of fact, I have more than double the number of followers there, than on your sh*t platform.” “So here’s my deal to you, and there will be NO negotiation. After your ‘suspension’ I will immediately post content questioning why masks have been totally ineffective in stopping this pandemic. I dare you to do something about it,” he continued. “Respectfully Kiss My Ass, Dan Bongino,” ends Bongino’s email to YouTube.

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“..Vlad Putin, election-meddler supreme, is fixing to invade Ukraine, we’re told. Obviously, that would interfere with “Joe Biden’s” plan to make Ukraine America’s fifty-first state.”

Dog Gone (Kunstler)

[..] shall it be a foreign war or a civil war? Isn’t that the question? From the looks of things around “Joe Biden’s” White House, where a weird concrete fortification is being hoisted up on the north lawn as I write, it looks like they’re planning for action on the home front, perhaps a full-out assault by the lurking forces of white supremacy — painted savages in horned head-dresses screaming MAGA-MAGA-MAGA as they loot Dr. Jill’s walk-in closet. The Attorney General, Mr. Garland, has been warning us about this Satanic host of backward-facing demons. They breed like botflies in the red state hills and hollers, swarm and buzz in the school board meetings, caress their AR-15s in prostrate worship of their Trump bobbleheads, scheming to deprive BIPOCs of their votes.

They’d like to tie Democracy to the back bumper of a Ford Alpha F-150, drag it over seven miles of broken Southern Comfort bottles, and feed whatever’s left to the hogs. They must be stopped! Except… what if they fail to materialize? Maybe a foreign war would play better on social media and The View. Our arch-enemy, Vlad Putin, election-meddler supreme, is fixing to invade Ukraine, we’re told. Obviously, that would interfere with “Joe Biden’s” plan to make Ukraine America’s fifty-first state. When Sec’y of State Tony Blinken mentioned that to Sergei Lavrov, the Russian foreign minister blew mineral water through his nose all over the conference table. Would a friendly little tussle over that sad-sack country lift America’s animal spirits… like, get the economy firing on all cylinders?

Roust up all those work-force dropouts who disdain fine jobs waiting for them in the Amazon warehouses and the fry-lanes of Mickey-D? Put the brakes on all this fentanyl snorting…? All this porn-watching…? Turn around America’s long sickening slide into its own Hollywood fantasy of the zombie apocalypse? Well, I must be frank: probably not. Probably only hasten America’s journey to the political pits of hell (and Ukraine’s to its special sub-hell). What would be our strategy in this war over Ukraine? Arm Ukraine with the all the latest US gee-whiz fighting gear and let them have a go at the Russian army poised along the border of Donetsk and Luhansk Oblasts? That’ll work, I’m sure. Call it Operation Russian Roulette, only with a bullet in every chamber.

You see, it is not a generally-accepted fact among world military professionals that Ukraine has — how you say? — a well-disciplined, experienced fighting force. I hope that does not offend. If that doesn’t seem like a viable game-plan, do “Joe Biden,” Tony Blinken, and Lloyd Austin really suppose we would transport x-number of US troop divisions six thousand miles from Kansas to slug it out with those Russian divisions poised at the edge of their own homeland? Have a look at the world map and contemplate the logistical picture. Not so favorable for us, wouldn’t you agree? A long way to re-supply our boys, gals, and theys in uniform with fresh Kit-Kat bars.

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“Or else, Lavrov also told Antony Blinken, the US Secretary of State, the US will have war with Russia.”

How To Read The US Paper For Peace For Our Time (Helmer)

Sergei Lavrov, Russia’s Foreign Minister, announced on Thursday evening the US should now produce on paper its proposals for reducing the risk of war. Or else, Lavrov also told Antony Blinken, the US Secretary of State, the US will have war with Russia. Enough “arrogance of the highest degree”, and “foaming at the mouth”, Lavrov told Blinken. That “the Secretary of State of a serious state declares such things” is – Lavrov left the expletive unsaid. “We hope that the promises made now in Geneva and Brussels will be fulfilled. They concerned the fact that the United States and NATO would put their proposals ‘on paper’. We have clearly and repeatedly explained to them that we need to have an article-by-article reaction to our documents. If some position is not suitable, let them explain why and write ‘on paper’.

If it is suitable with amendments, then they should also be done in writing. If they want to exclude or add something – a similar request. We gave our thoughts in writing a month ago. There was plenty of time in Washington and Brussels. Both of them promised that they would put their reaction ‘on paper’.” Lavrov was waving the American piece of paper to remind that the piece of paper which British Prime Minister Neville Chamberlain displayed on September 30, 1938 (lead image), on his return from talks with German Chancellor Adolph Hitler, contained the line expressing “the desire of our two peoples never to go to war with one another again”. That turned out to be false – Hitler didn’t mean it; Chamberlain wasn’t sure but wanted his electorate to believe it, plus time to prepare.

Lavrov is announcing that Russia today knows the US intention is to go to war; and that Russia is prepared and is already on war footing on all fronts. That Sherman told Ryabkov on Monday “the United States and Russia agree that a nuclear war can never be won and must never be fought” is just as false, Lavrov has now declared — unless what follows is Sherman’s paper. On that paper there must be “legal guarantees of non-expansion of NATO to the East, legal guarantees of non-deployment of shock [nuclear] weapons in our neighbouring territories that pose a threat to Russia’s security, and in principle, the return of the configuration of the European security architecture to 1997, when the Russia-NATO Founding Act was signed. On its basis, the Russia-NATO Council was subsequently created. These are three key requirements. The rest of the proposals depend on how the conversation goes on these three initiatives.”

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“Comprehensive sanctions would be too destabilizing to global energy markets and that would blow back on the United States in a significant way.”

Putin’s Challenge To Western Hegemony – The 2022 Edition (Tooze)

As NATO meets to discuss the tension on the Russian border to Ukraine, and the papers fill with denunciations of Putin’s aggression, I still find it useful to return to the framework I developed in Crashed for analyzing the intersection of geopolitics and economics and the rise of Russia as a challenger. This framework consists of three basic propositions. The first is that though it is tempting to dismiss Putin’s regime as a hangover from another era, or the harbinger of a new wave of authoritarianism, it has the weight that it does and commands our attention because global growth and global integration have enabled the Kremlin to accumulate considerable power. The sophistication of Russian weaponry and its cyber capacity betoken the underlying technological potential of the broader Russian economy.

But what generates the cash is global demand for Russian oil and gas. And Putin’s regime has made use of this. It is reductive to think of Russia as a petrostate, but if you do indulge in that simplification you must recognize that it is a strategic petrostate more like UAE or Saudi than an Iraq, or Algeria. Russia is a strategic petrostate in a double sense. It is too big a part of global energy markets to permit Iran-style sanctions against Russian energy sales. Russia accounts for about 40 percent of Europe’s gas imports. Comprehensive sanctions would be too destabilizing to global energy markets and that would blow back on the United States in a significant way. China could not standby and allow it to happen. Furthermore, Moscow, unlike some major oil and gas exporters, has proven capable of accumulating a substantial share of the fossil fuel proceeds.

Since the struggles of the early 2000s, the Kremlin has asserted its control. In the alliance with the oligarchs it calls the shots and has brokered a deal that provides strategic resources for the state and stability and an acceptable standard of living for the bulk of the population. According to the WID-er data after the giant surge in inequality in the 1990s, Russia’s social structure has broadly stabilized. Putin’s regime has managed this whilst operating a conservative fiscal and monetary policy. Currently, the Russian budget is set to balance at an oil price of only $44. That enables the accumulation of considerable reserves. If you want a single variable that sums up Russia’s position as a strategic petrostate, it is Russia’s foreign exchange reserve. Hovering between $400 and $600 billion they are amongst the largest in the world, after those of China, Japan and Switzerland.

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“..his son Hunter being named chairman of the board of a large Ukrainian facemask conglomerate.”

To Save Time, Biden To Ship 500 Million Free Masks Directly To Landfill (BBee)

The White House is releasing new details surrounding President Biden’s plan to send free facemasks to every American. In an effort to save time, the free masks will be shipped directly to landfills nationwide. “The science tells us that wearing a high-quality mask over your nose and mouth probably might possibly help prevent COVID maybe,” said press secretary Jen Psaki. “Therefore, the President is committed to making sure every American has access to a medium-quality government mask manufactured by the lowest bidder.” “That being said, we realize that anyone who wants to wear a mask probably owns several dozen already,” Psaki continued.

“We also know that many others want your grandmother to die and thus refuse to wear masks at all. So, to save money, we’ll be shipping all masks directly to local landfills.” Joe Marsecci, chairman of the Masked Citizens Environmental Alliance, praised the Biden administration’s decision. “The decision to ship these masks directly to the landfill saves both time and money, as well as reducing carbon emissions from delivery and waste-hauling services,” Marsecci said. “The only thing more ecologically responsible would be dumping all the masks directly into the ocean.” At press time, the White House was denying reports that Biden’s plan to purchase 500 million facemasks was in any way related to his son Hunter being named chairman of the board of a large Ukrainian facemask conglomerate.

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Oct 122020

Edward Hopper The barber shop 1931



How their beloved neighbors see America, a comment by Automatic Earth commenter ByronBishop. I don’t think I need to add much. Took the title from a comment on the comment.



ByronBishop: I live in rural Canada and I do not have television, so my information on the American presidential election comes from newspapers and some online blogs. But what impresses me the most in this cycle is what good theatre it is!

It is my view that the choice for American voters is simply this: which collection of billionaires will run the country? The Democrats or Republicans? At root, their policies are not very different; their principal goal is to maintain and extend their privilege, and to continue to develop the legal and fiscal framework that supports their activities. This framework consists of, among other things, the following policies, and most crucially, broad public acceptance of the righteousness of these policies:

• To maintain very low taxes on income and capital gains, favourable treatment of dividend and interest income, and no inheritance tax

• In the financial manipulation field, improve public and regulatory acceptance of the attitude usefully articulated by JH Kuntsler as “nothing matters and anything goes”. This allows (among many other things) private equity firms to buy up useful and productive enterprises, strip out all the assets in fees and special dividends and through the sale of high-yield (and chancy) bonds, and to then release the debt-ridden hulk back into the marketplace to sink (mostly) or swim (rarely). Also supports share buybacks, collateralised debt instruments, relocation of factories to low-wage states and countries.

• Keep the American military actively working around the world, preferably using expensive armaments. Where possible avoid stationing troops in warzones as casualties provoke bad publicity. Promote demand for novel and very expensive war materiel. (Smart bombs and drones sell to government on a cost-plus basis.)

• Support the National Rifle Association, which is in fact an association of arms manufacturers and merchants with a noisy public relations arm consisting of private members defending their Second Amendment rights. Until forty years ago the Second Amendment right was the right to join a well-regulated militia, but now it is the right to have many expensive weapons in your house.

• Everyone must recognise that public healthcare is un-American. It is a moral issue: if you cannot afford healthcare you do not deserve it. Some of the highest paid executive teams in the US are in the healthcare field, while executive teams in Canadian and European countries are mostly paid on a civil service scale. Shareholders in American healthcare companies become very rich. Were healthcare to become nationalised like in Canada and most European nations, most of the private profit would be lost

• Large corporations must be permitted to manipulate share prices through buybacks and curious business practices (Boeing, the airlines), but must then be protected by bailouts if their business falters.

• The financialisation of the economy must be regulated as lightly as possible so that fees can continue to flow.

• Regulatory capture must be celebrated (under a different name). The two-way flow of personnel from regulated industries to regulatory government departments ensures that little impedes business development.

• To ensure that the courts at all levels are staffed with conservative, business-friendly judges.

• To ensure that environmental protection regulations do not unduly interfere with business operations

I do not for a moment think that the billionaires and multi-millionaires conspire to run the American system. They are not a cabal; they do not meet. Rather, theirs is an emergent system: many individuals working towards their own goals will thus help others pursuing their own goals. It is like a flock of shorebirds wheeling and swooping in perfect unison; they are not directed, but they are simply responding to the actions of their neighbouring birds.

The billionaires achieve this through owning mainstream media companies, funding think tanks and policy research institutes, and supporting lobbyist groups and public relations shills. And they have been astonished , I am sure, to discover how cheaply they can buy the support of members of Congress. Chump-change donations to campaign funding pays off in spades. Lobbyists have language ready to drop in to any bill, to achieve corporate aims. That’s how emergency support of American workers became bailouts for cruise companies, who are based offshore and pay few American taxes.

And then members of Congress have to be made part of the investing class. For example, a fabulous oil & gas play is spun off into a Special Purpose Vehicle whose success is assured, and select politicians are invited to invest in it. If they cannot afford to purchase shares a private loan is arranged and documented and subsequently repaid, all above board. The company is spectacularly successful and the “investors” score big-time and repay any loans. Didn’t George W Bush succeed in an investment in professional sports in Texas, in a similar way? And by the way, how did Senate Majority Leader McConnell amass a self-declared net worth of $10 million after a lifetime of working as a civil servant at $200k per year?

All of the rest is theatre. In this election cycle the hot-button issues are access to abortion (again), racism and social justice (again), overseas wars, China as an economic threat, Russia! Russia! Russia!, voting systems and practices, and the age and personalities of the presidential candidates. All theatre. The billionaires don’t care about any of these things, as almost none of these things personally affect them. Safe and discreet abortion is always available somewhere in the world where private jets fly. Billionaires do not ever see people of different colour or status or class unless they choose to, and then only in circumstances they control. Russia and China are opportunities, not threats. And the presidential candidates can be influenced very cheaply. A Nevada casino magnate had the American embassy moved from Tel Aviv to Jerusalem for only $25 million in campaign donations to a notoriously cheap candidate.

The one thing that most amazes me is how the billionaires can continue to convince people to vote against their own best interests, whether economic interest, social interest or even national interest. At one time they used “race” quite openly, appealing to feelings of racial superiority or to fears of being electorally overwhelmed by “those people”, whether black or brown or oriental or poor. When openly racist campaigning became no longer acceptable, some genius concluded that “abortion” would make an excellent substitute, as it can combine all of the race and class issues and can bring in all of the family values baggage as well. Few other issues can motivate such a wide cross-section of the American public, and it can motivate people on either side of the issue. With so much focus on abortion who has time to worry about the domination of government by corporate interests?

Many commentators focus on the gross inequality of incomes and wealth in the USA, and a recent report by the Rand Corporation brings this in to clear focus. They analysed the growth in incomes across the entire working population of the USA for the period from the end of World War II to the present, and they found that up until 1975 or so the increase in general prosperity in the nation was shared equally across all income groups. Starting in the mid-1970’s however, most of the increase in prosperity was arrogated by the top income earners, so that the rich got richer and no-one else shared in the good times. The astonishing figure that the Rand researchers came up with was that the top 1% has actually taken all of the $50 trillion dollars in new wealth from everyone else in the 45 year period to 2020. There is a reason why so many people feel that the American Dream has passed them by – it’s because it actually has.

The usual remedy for this sort of gross inequality of power and wealth in society is revolution. The French Revolution comes to mind, but also the Russian Revolution. I wonder what was the root cause of the great social and political upheavals in Europe in 1848? (I can’t remember.) A less frequent remedy is the rise of a genuine populist movement, one that can actually re-distribute power (and thus wealth and opportunity). As Gwnne Dyer usefully says: populism is not an ideology, it is a technique. In America, I suspect that a true populist leader could only arise at the state level, and then from outside the two main parties.

If the current polarisation in American politics continues, the states may become the primary protector of social values (progressive or conservative) and the regulations that flow from them (access to abortion, gun rights and restrictions, access to health care, role of religion in public life, etc), and it may be that a true populist, charismatic leader can emerge and accrue the political power and authenticity to restrict the ability of the elites to organise state society. And that might spread, state by state. We outsiders can only hope that our fellow citizens in the USA can get their sh!t together at some point. Watching civil unrest unfold is no fun – I have cousins in America.




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Aug 262015
 August 26, 2015  Posted by at 9:23 am Finance Tagged with: , , , , , , ,  8 Responses »

Russell Lee Hollywood, California. Used car lot. 1942

Look, it’s very clear where I stand on China; I’ve written a lot about it. And not just recently. Nicole Foss, who fully shares my views on the topic, reminded me the other day of a piece I wrote in July 2012, named Meet China’s New Leader : Pon Zi. China has been a giant lying debt bubble for years. Much if not most of its growth ‘miracle’ was nothing but a huge credit expansion, with an outsize role for the shadow banking system.

A lot of this has remained underreported in western media, probably because its reporters were afraid, for one reason or another, to shatter the global illusion that the western financial fiasco could be saved from utter mayhem by a country producing largely trinkets. Even today I read a Bloomberg article that claims China’s Q1 GDP growth was 7%. You’re not helping, boys, other than to keep a dream alive that has long been exposed as false.

China’s stock markets have a long way to fall further yet. This little graph from the FT shows why. The Shanghai Composite closed down another 1.27% today at 2,927.29 points. If it ‘only’ returns to its -early- 2014 levels, it has another 30% or so to go to the downside. If inflation correction is applied, it may fall to 1,000 points, for a 60% or so ‘correction’. If we move back 10 or 20 years, well, you get the picture.

That is a bursting bubble. Not terribly unique or mind-blowing, bubbles always burst. However, in this instance, the entire world will be swept out to sea with it. More money-printing, even if Beijing would attempt it, no longer does any good, because the Politburo and central bank aura’s of infallibility and omnipotence have been pierced and debunked. Yesterday’s cuts in interest rates and reserve requirement ratios (RRR) are equally useless, if not worse, if only because while they may provide a short term additional illusion, they also spell loud and clear that the leadership admits its previous measures have been failures. Emperor perhaps, but no clothes.

Every additional measure after this, and there will be many, will take off more of the power veneer Xi and Li have been ‘decorated’ with. Zero Hedge last night quoted SocGen on the precisely this topic: how Beijing painted itself into a corner on the RRR issue, while simultaneously spending fortunes in foreign reserves.

The Most Surprising Thing About China’s RRR Cut

[..] how does one reconcile China’s reported detachment from manipulating the stock market having failed to prop it up with the interest rate cut announcement this morning. The missing piece to the puzzle came from a report by SocGen’s Wai Yao, who first summarized the total liquidity addition impact from today’s rate hike as follows “the total amount of liquidity injected will be close to CNY700bn, or $106bn based on today’s onshore exchange rate.” And then she explained just why the PBOC was desperate to unlock this amount of liquidity: it had nothing to do with either the stock market, nor the economy, and everything to do with the PBOC’s decision from two weeks ago to devalue the Yuan. To wit:

In perspective, the PBoC may have sold more official FX reserves than this amount since the currency regime change on 11 August.

Said otherwise, SocGen is suggesting that China has sold $106 billion in Treasurys in the past 2 weeks! And there is the punchline. It explains why the PBOC did not cut rates over the weekend as everyone expected, which resulted in a combined 16% market rout on Monday and Tuesday – after all, the PBOC understands very well what the trade off to waiting was, and it still delayed until today by which point the carnage in local stocks was too much. Great enough in fact for China to not have eased if stabilizing the market was not a key consideration.

In other words, today’s RRR cut has little to do with net easing considerations, with the market, or the economy, and everything to do with a China which is suddenly dumping a record amount of reserves as it scrambles to stabilize the Yuan, only this time in the open market!

The battle to stabilise the currency has had a significant tightening effect on domestic liquidity conditions. If the PBoC wants to stabilise currency expectations for good, there are only two ways to achieve this: complete FX flexibility or zero FX flexibility. At present, the latter is also increasingly unviable, since the capital account is much more open. Therefore, the PBoC has merely to keep selling FX reserves until it lets go.

And since it can’t let go now that it has started off on this path, or rather it can but only if it pulls a Swiss National Bank and admit FX intervention defeat, the one place where the PBOC can find the required funding to continue the FX war is via such moves as RRR cuts.

Ambrose Evans-Pritchard, too, touches on the subject of China’s free-falling foreign reserves.

China Cuts Rates To Stem Crisis, But Doubts Grow On Foreign Reserve Buffer

The great unknown is exactly how much money has been leaving the country since the PBOC stunned markets by ditching its dollar exchange peg on August 11, and in doing so set off a global crash. Some reports suggest that the PBOC has already burned through $200bn in reserves since then. If so, this would require a much bigger cut in the RRR just to maintain a neutral setting. Wei Yao said the strategy of the Chinese authorities is unworkable in the long run.

If they keep trying to defend the exchange rate, they will continue to bleed reserves and will have to keep cutting the RRR in lockstep just to prevent further tightening. They may let the currency go, but that too is potentially dangerous. She said China can use up another $900bn before hitting safe limits under the IMF’s standard metric for developing states.

“The PBOC’s war chest is sizeable, but not unlimited. It is not a good idea to keep at this battle of currency stabilisation for too long,” she said. Citigroup has also warned that China’s reserves – still the world’s largest at $3.65 trillion but falling fast – are not as overwhelming as they appear, given the levels of short-term external debt. The border line would be $2.6 trillion. “There are reasons to question the robustness of China’s reserves adequacy. By emerging market standards China’s reserves adequacy is low: only South Africa, Czech Republic and Turkey have lower scores in the group of countries we examined,” it said.

It is a dangerous game they play, that much should be clear. And you know what China bought those foreign reserves with in the first place? With freshly printed monopoly money. Which is the same source from which the Vinny the Kneecapper shadow loans originated that every second grandma signed up to in order to purchase ghost apartments and shares of unproductive companies.

And that leads to another issue I’ve touched upon countless times: I can’t see how China can NOT descend into severe civil unrest. The government at present attempts to hide its impotence and failures behind the arrest of all sorts of scapegoats, but Xi and Li themselves should, and probably will, be accused at some point. They’ve gambled away a lot of what made their country function, albeit not at American or European wealth levels.

If the Communist Party had opted for what is sometimes labeled ‘organic’ growth (I’m not a big afficionado of the term), instead of ‘miracle’ Ponzi ‘growth’, if they had not to such a huge extent relied on Vinny the Kneecapper to provide the credit that made everything ‘grow’ so miraculously, their country would not be in such a bind. It would not have to deleverage at the same blinding speed it ostensibly grew at since 2008 (at the latest).

There are still voices talking about the ‘logical’ aim of Beijing to switch its economy from one that is export driven to one in which the Chinese consumer herself is the engine of growth. Well, that dream, too, has now been found out to be made of shards of shattered glass. The idea of a change towards a domestic consumption-driven economy is being revealed as a woeful disaster.

And that has always been predictable; you can’t magically turn into a consumer-based economy by blowing bubbles first in property and then in stocks, and hope people’s profits in both will make them spend. Because the whole endeavor was based from the get-go on huge increases in debt, the just as predictable outcome is, and will be even much more, that people count their losses and spend much less in the local economy. While those with remaining spending power purchase property in the US, Britain, Australia. And go live there too, where they feel safe(r).

I fear for the Chinese citizen. Not so much for Xi and Li. They will get what they deserve.