gig economy Archives - The Automatic Earth

It’s blame game time. We have plenty theories to keep you occupied with while sitting at home. I’m surprised at how many people can’t seem to face the day without such a theory. Which is fine, but at least come with evidence.

In other news: We’ll pass 1 million cases today.

• Cases 950,425 (+ 77,548 from yesterday’s 872,777)

• Deaths 48,276 (+ 5,005 from yesterday’s 43,271)

From Worldometer yesterday evening -before their day’s close-.

From Worldometer -NOTE: mortality rate for closed cases is at 19% –

From SCMP:

From COVID2019Live.info:

I guess NYC thinks their heroes are all Marvel characters who A) don’t die and B) come in droves

• More Than 1,000 New York City Police Officers Have The Coronavirus (CNBC)

More than 1,000 New York City police officers have contracted COVID-19 as emergency calls in the city hit record highs. Of the New York Police Department’s more than 36,000 employees 1,048 officers and 145 civilian employees have tested positive for COVID-19 as of Tuesday, NYPD said in a statement. The department added that 5,657 uniformed officers, or more than 15% of the force, called out sick on Tuesday. “I am worried about essential workers getting scared and not wanting to show up,” New York Gov. Andrew Cuomo said Tuesday. “That I am worried about. You know the number of police officers who are getting sick is going up.”

Officials from the Fire Department of New York told NBC News on Tuesday that 282 members, including firefighters, EMTs and civilians, have tested positive for COVID-19. At the same time, 911 call volume is hitting record daily highs, the Fire Department said. There were 6,527 medical calls to 911 placed on Monday, and over the past few days the FDNY has had to “hold” hundreds of calls, according to NBC News. This means that lower priority sick calls have to wait for ambulances. COVID-19 has infected 43,119 people in New York City and killed at least 1,096 people, according to data compiled by Johns Hopkins University.

Last month, the New York City Police Benevolent Association, or PBA, filed a complaint with the New York State Public Employee Safety and Health Bureau demanding NYPD provide adequate protective equipment, including masks and gloves, to all police officers. “No matter how this pandemic progresses, New York City police officers will remain on the front lines and will continue to carry out our duties protecting New Yorkers,” PBA President Patrick Lynch said in a statement. “The NYPD has not done enough to ensure that all of our members have protective equipment such as masks and gloves, nor does it have adequate supplies of that equipment to weather a prolonged outbreak.”

Britain has the same issue: They’re our heroes, so we don’t test them.

• Of 125,000 NHS Staff Self-Isolating, Still Just 2,000 Were Tested (Ind.)

Just 2,000 NHS frontline staff forced to stay home due to coronavirus have been tested to see if they can return to work, Downing Street has admitted. The figure – a tiny fraction of the 125,000 staff believed to be self isolating – emerged as the government faced mounting criticism for its failure to move to mass testing for Covid-19. Public Health England medical director Yvonne Doyle told a Downing Street press conference that officials hoped hundreds of thousands of staff would be tested “within the coming weeks”. But ministers were unable to give clear answers on how quickly they can ramp up antigen tests, which show whether someone has the disease. They were also unclear over the question of when the UK will see the introduction of antibody tests, which indicate if an individual has been infected and recovered.

Industry figures and scientists questioned ministers’ claims that a lack of chemicals and swabs is to blame for the UK lagging behind Germany, where as many as 70,000 are being tested every day. Unions issued a joint demand for personal protective equipment (PPE) for all frontline health and social care staff, warning that the lack of kit was “a crisis within a crisis”. And there were demands for testing to be extended to all care home staff, with one MP claiming there has been rationing of antigen tests. The UK’s death toll from the pandemic has now reached 2,352 after 563 patients who had tested positive died in hospital in one day. Among them weas 13-year-old Ismail Mohamed Abdulwahab, who reportedly died alone and without his family as he became the youngest victim in England.

Told you the virus is a timemachine. Here’s another look at your future.

• Chinese Smartphone Health Code Rules Post-Virus Life (AP)

Since the coronavirus outbreak, life in China is ruled by a green symbol on a smartphone screen. Green is the “health code” that says a user is symptom-free and it’s required to board a subway, check into a hotel or just enter Wuhan, the central city of 11 million people where the pandemic began in December. The system is made possible by the Chinese public’s almost universal adoption of smartphones and the ruling Communist Party’s embrace of “Big Data” to extend its surveillance and control over society. Walking into a Wuhan subway station Wednesday, Wu Shenghong, a manager for a clothing manufacturer, used her smartphone to scan a barcode on a poster that triggered her health code app.

A green code and part of her identity card number appeared on the screen. A guard wearing a mask and goggles waved her through. If the code had been red, that would tell the guard that Wu was confirmed to be infected or had a fever or other symptoms and was awaiting a diagnosis. A yellow code would mean she had contact with an infected person but hadn’t finished a two-week quarantine, meaning she should be in a hospital or quarantined at home. Wu, who was on her way to see retailers after returning to work this week, said the system has helped reassure her after a two-month shutdown left the streets of Wuhan empty. People with red or yellow codes “are definitely not running around outside,” said Wu, 51. “I feel safe.”

AP Photo/Olivia Zhang

Well, could be ten times that, but we’ll levae that for next week.

• More Than 1.7 Million Britons May Have Contracted COVID19 – NHS |(Ind.)

More than 1.7 million people may have contracted Covid-19 so far, according to the NHS. New figures from NHS 111 online show there were 1,496,651 web-based assessments which flagged potential coronavirus cases based on people’s symptoms between 18 March and 31 March. A further 243,543 assessments via the NHS 111 and 999 phone lines also concluded people had possibly contracted the disease. But the assessment numbers do not necessarily relate to individual people, the NHS said, as it is possible people have sought help more than once or through various channels. The data, published by NHS Digital, comes after GP practices in England were told to open over the Easter Bank Holiday to help the NHS cope with coronavirus.

Austrian supermarkets have begun handing out face masks to shoppers before they become compulsory next week to combat the fast-spreading coronavirus pic.twitter.com/Qoyt58PLxO

— Reuters (@Reuters) April 2, 2020

1) how do you make it safe health-wise?
2) how do you make it hack-wise?
3) why on earth does it have to cost $4 billion?

• Pelosi Wants ‘Vote By Mail’ Provisions In Next US Coronavirus Bill (R.)

U.S. House Speaker Nancy Pelosi said on Wednesday she wants to virus-proof the November election by including funding to boost voting by mail in the next pandemic response plan being put together by Democrats in the House of Representatives. Pelosi said at least $2 billion, and ideally $4 billion, was needed to enable voting by mail, to give citizens a safe way to vote during the coronavirus pandemic, which has killed more than 4,300 people across the United States. She noted Democrats got just $400 million for that purpose in the $2.3 trillion coronavirus stimulus bill President Donald Trump signed into law on Friday.

“Vote by mail is so important to … our democracy so that people have access to voting and not be deterred, especially at this time, by the admonition to stay home,” Pelosi told reporters. Trump told Fox News on Monday that voting by mail would hurt the Republican Party. Pelosi rejected that argument. “When I was chair of the California Democratic party many years ago, the Republicans always prevailed in the absentee ballots,” she said. “They know how to do this.” Indeed, some Democrats fear voting by mail could disenfranchise minorities and low-income voters who tend to move more frequently. The $400 million in the recent coronavirus bill is intended to help state and local officials bolster vote by mail and early voting, expand facilities and hire more poll workers.

[..] Three states – Wyoming, Hawaii and Alaska – have scrapped in-person voting for Democratic primaries on April 4, and will only permit voting by mail. Ohio pushed back its March 17 voting, setting a new date of April 28 for a primary conducted almost completely by mail, and at least eight other states pushed their primaries back to May or June.

Where was the CDC?

• Key Medical Supplies Were Shipped From US Manufacturers To Foreign Buyers (IC)

While much of the world moved swiftly to lock down crucial medical supplies used to treat the coronavirus, the U.S. dithered, maintaining business as normal and allowing large shipments of American-made respirators and ventilators to be sold to foreign buyers. The foreign shipments, detailed in dozens of government records, show exports to other hot spots where the pandemic has spread, including East Asia and Europe. American hospitals around the country are now running low on all forms of personal protective gear, such as N95 masks or purified air personal respirators, for medical staff, as well as life-saving ventilators, which pump oxygenated air into the lungs, for patients.

[..] Drive DeVilbiss Healthcare, a Pennsylvania-based health product firm that produces supplemental oxygen machines, sent at least three different shipments of respiratory equipment to Belgium in mid-February and early March. The total cargo included 14 containers weighing more than 55 tons. DeVilbiss and its owner, Clayton Dubilier & Rice, a New York-based private equity firm, did not respond to a request for comment. Pennsylvania Gov. Tom Wolf reportedly reached out to DeVilbiss later in March to support the company’s increased production of respiratory medical devices. “Our demand is unprecedented,” Tim Walsh, the company’s vice president, told WJAC, a local news station.

Vapotherm, a New Hampshire firm that produces respiratory equipment, has faced surging demand from international customers. The company has added 50 employees and a second shift to meet growing demand for its products. WMUR, a local news station, profiled Vapotherm’s role in producing lifesaving respiratory equipment used to treat the coronavirus. During the segment, Joseph Army, the chief executive of Vapotherm, told the station that he first heard from customers in Europe and Asia in response to the coronavirus. A camera shot of Vapotherm’s factory showed a box labeled “Japan.” The demand, he added, has shifted in recent weeks to domestic contracts for clients in Seattle, New York City, Georgia, and Florida.

You mean something went right? I’d still like to see proof.

• $2 Trillion CARES Act A Lifeline For Gig Workers And Freelancers (CNBC)

The $2 trillion federal stimulus package signed into law by President Donald Trump on Friday, March 27, will be a lifeline to many gig workers and freelancers. Known as the CARES Act, the law takes unprecedented steps in including the self-employed in the social safety net. It offers freelancers unemployment insurance, for which they generally don’t qualify, on a large scale for the first time. As stipulated in the House bill, it offers freelancers an additional $600 a week in unemployment insurance, bringing weekly payouts to the $800- to $900-a-week range when state benefits are added, to workers including the self-employed, for up to four months.

“It’s an amazing win, given that there is no unemployment insurance for freelancers,” says Rafael Espinal, who recently took the helm of the Freelancers Union as executive director. “This will help inject cash flow into their homes.” The stimulus package also offers the self-employed and small business owners a $10,000 advance on an Emergency Economic Injury Disaster Loan (EIDL) that does not have to be paid back, even if the borrower does not qualify for an SBA loan. The program provides loans up to $200,000.

Sole proprietors, ESOPs, cooperatives, businesses with no more than 500 employees and tribal small business concerns can apply. Under the EIDL program, administered by the U.S. Small Business Administration, applicants will not have to submit a tax return and will be evaluated based on their credit score. The SBA will provide the funding within three days of a successfully completed application as an advance payment. There is no personal guarantee required for the loans. The SBA is waiving the requirement that businesses have one year of operations prior to the disaster, but businesses are not eligible if they were not in operation on January 1, 2020. The bill authorizes $10 billion in appropriations for these loans.

Color me amazed.

• US Banks To Make Billions On Small Business Bailout (ZH)

As part of the $2 trillion fiscal stimulus package that was signed into law by Donald Trump on Friday, the Small Business Administration will offer $350 billion in loans to US small businesses meant to preserve business solvency as part of the emergency federal response to the coronavirus pandemic; the loans, part of the so-called “Paycheck Protection Program” will be offered through banks and credit unions to cash-strapped businesses employing under 500 people (it’s not clear how a company employing 500 people is a “small business” but we can assume that this is just a stealthy bailout of some not so small businesses).

To be sure, the terms of the loans are generous: the full amount of the loan will be forgiven if it is used for payroll, mortgage interest, rent or utilities in the two months after the money is received. Less will be forgiven if the employees are sacked or salaries cut. Any amount that is not forgiven will accrue interest at just 0.5% rate and the principal will come due in two years. Borrowers will need to fill out a two-page form and document that they were in business as of mid-February. Lenders will not need to wait for SBA confirmation before providing cash in hand, as soon as Friday. Businesses will be eligible to borrow the equivalent of 2.5 times their average monthly payroll with a cap of $10mm.

According to the SBA, there are 30m businesses with fewer than 500 employees in the US, employing 60m people, almost half of the private workforce. The National Federation of Independent Business, an advocacy group, says about three-quarters of its members have been affected by the crisis. Yet some may be “shocked” to learn that like in any government bailout package, the biggest winners here will not be America’s vibrant small and medium business sector, which at best will get the bare minimum cash to fund 2.5 months of payroll (this assume the pandemic will be resolved by mid-June) but – drumroll – America’s banks.

As the FT reports overnight, banks stand to make billions by overseeing the distribution of these loans as they receive processing fees, paid by the federal government, for making the loans. The fees will vary with loan size: 5% for loans under $350,000, 3% for loans under $2MM, and 1% for loans greater than $2MM. The loans will not incur a capital charge. This means that banks stand to earn as much as $17.5 billion – and $10 billion if one assumes an average rate of 3% – for doing something the government is incapable of doing: handing out hundreds of billions in loans/grants to America’s businesses in the shortest possible time.

Oh wait, the banks don’t need those billions.

• Top US Banks May Shun Small-Business Rescue Plan On Liability Worries (R.)

Top U.S. banks have threatened to give the federal government’s small-business rescue program a miss on concerns about taking on too much financial and legal risk, five people with direct knowledge of industry discussions told Reuters. Seeking to help millions of small businesses whose operations have either shut down or have been dramatically curtailed by the coronavirus pandemic, Congress last week passed a $2 trillion stimulus package that includes $349 billion aimed at small firms. Borrowers can apply for the loans through participating banks starting from Friday and until June 30. Trump administration officials have said they want the loans disbursed within days. But representatives of some big lenders, in an industry conference call on Wednesday, expressed serious reservations about participating in the scheme in its current form.

Their main concern is that the Treasury Department has said it expects lenders to verify borrower eligibility, and take steps to prevent fraud, money laundering and protect customer information under the Bank Secrecy Act, sources said. Banks are worried they could face regulatory penalties or legal costs down the line if things go awry in the haste to get money out the door, or get blamed for not moving funds fast enough if they perform due diligence the way they would in ordinary times, the sources said. After hearing the concerns, Treasury officials are considering withdrawing guidance that instructed lenders to verify borrowers had the specified number of employees on their books, and that their other costs are legitimate, according to two sources.

So where were they? Note: eevrybody knnew it was coming. Just not the timing.

• US Military Knew Years Ago That a Coronavirus Was Coming (Nation)

Despite President Trump’s repeated assertions that the Covid-19 epidemic was “unforeseen” and “came out of nowhere,” the Pentagon was well aware of not just the threat of a novel influenza, but even anticipated the consequent scarcity of ventilators, face masks, and hospital beds, according to a 2017 Pentagon plan obtained by The Nation. “The most likely and significant threat is a novel respiratory disease, particularly a novel influenza disease,” the military plan states. Covid-19 is a respiratory disease caused by the novel (meaning new to humans) coronavirus. The document specifically references coronavirus on several occasions, in one instant saying, “Coronavirus infections [are] common around the world.”

The plan represents an update to an earlier Department of Defense pandemic influenza response plan, noting that it “incorporates insights from several recent outbreaks including…2012 Middle Eastern Respiratory Syndrome Coronavirus.” Titled “USNORTHCOM Branch Plan 3560: Pandemic Influenza and Infectious Disease Response,” the draft plan is marked for official use only and dated January 6, 2017. The plan was provided to The Nation by a Pentagon official who requested anonymity to avoid professional reprisal. Denis Kaufman, who served as head of the Infectious Diseases and Countermeasures Division at the Defense Intelligence Agency from 2014 to 2017, stressed that US intelligence had been well-aware of the dangers of coronaviruses for years. (Kaufman retired from his decades-long career in the military in December of 2017.)

“The Intelligence Community has warned about the threat from highly pathogenic influenza viruses for two decades at least. They have warned about coronaviruses for at least five years,” Kaufman explained in an interview. “There have been recent pronouncements that the coronavirus pandemic represents an intelligence failure…. it’s letting people who ignored intelligence warnings off the hook.” In addition to anticipating the coronavirus pandemic, the military plan predicted with uncanny accuracy many of the medical supply shortages that it now appears will soon cause untold deaths. The plan states: “Competition for, and scarcity of resources will include…non-pharmaceutical MCM [Medical Countermeasures] (e.g., ventilators, devices, personal protective equipment such as face masks and gloves), medical equipment, and logistical support. This will have a significant impact on the availability of the global workforce.”

First we dump on Trump, and only then do we say what is really goinng wrog.

• Privatization, National Security State Left Americans Defenseless (GZ)

Donald Trump’s failure to act decisively to control the coronavirus pandemic has likely made the Covid-19 pandemic far more lethal than it should have been. But the reasons behind failure to get protective and life-saving equipment like masks and ventilators into the hands of health workers and hospitals run deeper than Trump’s self-centered recklessness. Both the Obama and Trump administrations quietly delegated state and local authorities with the essential national security responsibility for obtaining and distributing these vital items. The failure of leadership was compounded the lack of any federal power center that embraced the idea that guarding for a pandemic was at least as important to national security as preparing for war.

For decades, the military-industrial-congressional complex has force-fed the American public a warped conception of US national security focused entirely around perpetuating warfare. The cynical conflation of national security with waging war on designated enemies around the globe effectively stifled public awareness of the clear and present danger posed to its survival by global pandemic. As a result, Congress was simply not called upon to fund the vitally important equipment that doctors and nurses needed for the Covid-19 crisis. At the heart of the growing coronavirus crisis in the US is a severe shortage of N95 respirators and ventilators. Those items should have been available in sufficient numbers through the Strategic National Stockpile (SNS), which holds the nation’s largest supplies necessary for national emergencies.

But the stocks of crucial medical have not been maintained for years, largely because Congress has not provided the necessary funding. Congress has been willing to dole out load of cash after pandemics hit the US. When the H1N1 flu crisis hit the United States in 2009, and close to 300,000 Americans were hospitalized, Congress appropriated $7.7 billion in special funding, including support for building up the SNS. That allowed the stockpile to provide 85 million respirators and millions of ventilators to hospitals around the country, especially during the second half of the yearlong crisis. But since that 2009-10 crisis ended, the stockpile of such vital equipment has never been replenished.

In 2020 the stockpile holds only 12 million N95 respirators – as little as 1 percent of what is now needed by health workers – and just 16,000 ventilators, compared with the estimated 750,000 people at minimum who will need a ventilator because of the Covid-19 pandemic. These numbers are so scandalously low in relation to what is needed that senior officials Department of Health and Human Services have refused to reveal publicly how many they have in stock.

Especially in times of stress, the world is an easier place if it is in black and white.

• Biden’s False Claim on Trump’s Response to Coronavirus (FactCheck)

Former Vice President Joe Biden was wrong when he said that the Trump administration made no effort to get U.S. medical experts into China as the novel coronavirus epidemic spread there early this year. “[W]hen we were talking … early on in this crisis, we said — I said, among others, that, you know, you should get into China, get our experts there, we have the best in the world, get them in so we know what’s actually happening,” Biden, the front-runner for the Democratic presidential nomination, said at a CNN virtual town hall on March 27. “There was no effort to do that.” Except that isn’t the case. The U.S. Centers for Disease Control and Prevention tried to get into China just one week after China reported the outbreak to the World Health Organization on Dec. 31, 2019.

“On January 6, we offered to send a CDC team to China that could assist with these public health efforts,” Health and Human Services Secretary Alex Azar said at a Jan. 28 press conference. “I reiterated that offer when I spoke to China’s Minister of Health on Monday, and it was reiterated again via the World Health Organization today. We are urging China: More cooperation and transparency are the most important steps you can take toward a more effective response.” More than a week later, Azar said again at a Feb. 7 press conference that “our longstanding offer to send world-class experts to China to assist remains on the table.” At the time, the New York Times reported, “Normally, teams from the agency’s Epidemic Intelligence Service can be in the air within 24 hours.”

A team of public health experts from the WHO was allowed by Chinese authorities to visit Wuhan, where the outbreak began, later in February, according to the South China Morning Post. The team included specialists from the United States as well as Germany, Russia, Japan, Singapore, South Korea and Nigeria. Biden was correct at the town hall when he said the Trump administration had eliminated a position set up by the Obama administration, in which Biden served, to coordinate the response to pandemics like the coronavirus crisis. But he got the timing wrong, and Trump administration officials say it was a reorganization, with the responsibilities of that office falling to other individuals.

I was wondering yesterday what happened to all of the earlier stories about cures and vaccines. None seem to have aged well..

• Chinese Scientists Seeking COVID19 Treatment Find ‘Effective’ Antibodies (R.)

A team of Chinese scientists has isolated several antibodies that it says are “extremely effective” at blocking the ability of the new coronavirus to enter cells, which eventually could be helpful in treating or preventing COVID-19. There is currently no proven effective treatment for the disease, which originated in China and is spreading across the world in a pandemic that has infected more than 850,000 and killed 42,000. Zhang Linqi at Tsinghua University in Beijing said a drug made with antibodies like the ones his team have found could be used more effectively than the current approaches, including what he called “borderline” treatment such as plasma. Plasma contains antibodies but is restricted by blood type.

In early January, Zhang’s team and a group at the 3rd People’s Hospital in Shenzhen began analysing antibodies from blood taken from recovered COVID-19 patients, isolating 206 monoclonal antibodies which showed what he described as a “strong” ability to bind with the virus’ proteins. Among the first 20 or so antibodies tested, four were able to block viral entry and of those, two were “exceedingly good” at doing so, Zhang said. They then conducted another test to see if they could actually prevent the virus from entering cells [..] The team is now focused on identifying the most powerful antibodies and possibly combining them to mitigate the risk of the new coronavirus mutating. If all goes well, interested developers could mass produce them for testing, first on animals and eventually on humans.

Tucker Carlson is currently citing a report that he openly admits he can't confirm is true to question if coronavirus was made in a lab pic.twitter.com/CTxrJtw0Sh

— Andrew Lawrence (@ndrew_lawrence) April 1, 2020

This is where you say: no, it isn’t Iran…

• Texas Pastors Demand “Religious Liberty” Exemption To Stay-at-home Orders (Vox)

Last week, Harris County Judge Lina Hidalgo, who oversees the area of Texas that includes Houston, issued an order requiring “all individuals currently living within Harris County … to stay at their place of residence except for Essential Activities” (in Texas, the title “county judge” refers to the chief executive of a county government). Like many similar orders handed down by state and local officials throughout the United States, which are intended to slow the spread of the coronavirus pandemic, Hidalgo’s order closes most businesses within the county and shuts down most places where people gather in large groups. Although it allows faith leaders to “minister and counsel in individual settings, so long as social distance protocols are followed,” it requires worship services to “be provided by video and teleconference.”

That restriction on in-person worship services has sparked a lawsuit, filed by three Texas pastors and Steven Hotze, a medical doctor and anti-LGBT Republican activist whose political action committee was labeled a hate group by the Southern Poverty Law Center. These four men ask the Texas Supreme Court to strike down Hidalgo’s order, claiming, among other things, that it violates the “religious liberty” of pastors who wish to gather their parishioners together during a pandemic. Under existing precedents, the petitioner’s arguments in Hotze are not strong. They rely heavily on older US Supreme Court decisions that were effectively overruled by the Supreme Court’s later decision in Employment Division v. Smith (1990) (although it’s worth noting that Smith is very much out of favor with judicial conservatives and could, itself, be overruled by the Court’s current majority).

The Hotze petitions also essentially ask the Texas Supreme Court to place the temporary interests of a few pastors before the county’s interest in combating a deadly disease. The US Supreme Court has long held that the government may take targeted action to protect especially compelling interests — even when doing so implicates constitutional rights.

The headline feels designed to cast doubt on the man.

• Chomsky: Ventilator Shortage Exposes the Cruelty of Neoliberal Capitalism (TO)

The scale of the plague is surprising, indeed shocking, but not its appearance. Nor the fact that the U.S. has the worst record in responding to the crisis. Scientists have been warning of a pandemic for years, insistently so since the SARS epidemic of 2003, also caused by a coronavirus, for which vaccines were developed but did not proceed beyond the pre-clinical level. That was the time to begin to put in place rapid-response systems in preparation for an outbreak and to set aside spare capacity that would be needed. Initiatives could also have been undertaken to develop defenses and modes of treatment for a likely recurrence with a related virus.

But scientific understanding is not enough. There has to be someone to pick up the ball and run with it. That option was barred by the pathology of the contemporary socioeconomic order. Market signals were clear: There’s no profit in preventing a future catastrophe. The government could have stepped in, but that’s barred by reigning doctrine: “Government is the problem,” Reagan told us with his sunny smile, meaning that decision-making has to be handed over even more fully to the business world, which is devoted to private profit and is free from influence by those who might be concerned with the common good. The years that followed injected a dose of neoliberal brutality to the unconstrained capitalist order and the twisted form of markets it constructs.

The depth of the pathology is revealed clearly by one of the most dramatic — and murderous — failures: the lack of ventilators that is one the major bottlenecks in confronting the pandemic. The Department of Health and Human Services foresaw the problem, and contracted with a small firm to produce inexpensive, easy-to-use ventilators. But then capitalist logic intervened. The firm was bought by a major corporation, Covidien, which sidelined the project, and, “In 2014, with no ventilators having been delivered to the government, Covidien executives told officials at the [federal] biomedical research agency that they wanted to get out of the contract, according to three former federal officials. The executives complained that it was not sufficiently profitable for the company.”

Doubtless true. Neoliberal logic then intervened, dictating that the government could not act to overcome the gross market failure, which is now causing havoc. As The New York Times gently put the matter, “The stalled efforts to create a new class of cheap, easy-to-use ventilators highlight the perils of outsourcing projects with critical public-health implications to private companies; their focus on maximizing profits is not always consistent with the government’s goal of preparing for a future crisis.”

“The lunatic minister of health in Apartheid #Israel, the one who said #Covid_19 was a sign of #Armageddon and the #Messiah arriving in April; just confirmed positive for the virus along with his wife.”

• Israeli Doctors Demand Health Minister Be Replaced By Professional (YNet)

Israeli doctors on Sunday called on the government to replace Health Minister Yaakov Litzman with a medical professional in the wake of coronavirus crisis in the country. In an open letter some to Prime Minister Benjamin Netanyahu and his future coalition partner Benny Gantz, the heads of hospital departments and senior medical officials expressed their dissatisfaction with Litzman’s conduct during the COVID-19 epidemic and urged to replace him with someone who has the necessary experience. Netanyahu and Gantz are in the midst of unity talks in an effort to agree on a coalition government to address the coronavirus pandemic emergency.

Sources familiar with the negotiations told Ynet the replacement of Litzman is not currently on the table. “We have nothing against outgoing Health Minister Litzman and have great respect for him,” said Professor Yoram Kluger, Rambam Hospital’s chief of surgery who was behind the initiative. “But, in light of the dire state Israel’s healthcare system and an emergency on the scope of a pandemic, health workers can no longer agree to be cast aside by other considerations.”

Extremely long by Whitney Webb. And then there are at least 3 parts. Maybe somebody actually has the time to read it.

• All Roads Lead To Dark Winter (Whitney Webb & Raul Diego)

In late June 2001, the U.S. military was preparing for a “Dark Winter.” At Andrews Air Force Base in Camp Springs, Maryland, several Congressmen, a former CIA director, a former FBI director, government insiders and privileged members of the press met to conduct a biowarfare simulation that would precede both the September 11 attacks and the 2001 Anthrax attacks by a matter of months. It specifically simulated the deliberate introduction of smallpox to the American public by a hostile actor.

The simulation was a collaborative effort led by the Johns Hopkins Center for Civilian Biodefense Strategies (part of the Johns Hopkins Center for Health Security) in collaboration with the Center for Strategic and International Studies (CSIS), the Analytic Services (ANSER) Institute for Homeland Security and the Oklahoma National Memorial Institute for the Prevention of Terrorism. The concept, design and script of the simulation were created by Tara O’Toole and Thomas Inglesby of the Johns Hopkins Center along with Randy Larsen and Mark DeMier of ANSER.

The name for the exercise derives from a statement made by Robert Kadlec, who participated in the script created for the exercise, when he states that the lack of smallpox vaccines for the U.S. populace means that “it could be a very dark winter for America.” Kadlec, a veteran of the George W. Bush administration and a former lobbyist for military intelligence/intelligence contractors, is now leading HHS’ Covid-19 response and led the Trump administration’s 2019 “Crimson Contagion” exercises, which simulated a crippling pandemic influenza outbreak in the U.S. that had first originated in China. Kadlec’s professional history, his decades-old obsession with apocalyptic bioweapon attack scenarios and the Crimson Contagion exercises themselves are the subject of Part III of this series.

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Debt Rattle March 27 2020

Mar 272020

March 27, 2020 Posted by Raúl Ilargi Meijer at 10:47 am Finance Tagged with: allies, asymptomatic, bear bile, Burkina Faso, coronavirus, Covid19, depression, Dylan, Fed, gig economy, Iraq, JFK, testing, unemployment 34 Responses »

• More People Are Dying Of COVID-19 In The US Than We Know (BF)

• We Could Watch Entire Populations Vanish (IC)

• Coronavirus Could Kill 81,000 In US, Subside In June – Washington U. (R.)

• Hold The Line (M.)

• China Promotes Bear Bile As Coronavirus Treatment (NatGeo)

• Fed Balance Sheet Tops $5 Trillion For First Time (R.)

• Broward Poll Workers Test Positive For COVID-19 (L10)

• Moscow Laboratories Will Conduct 13,000 Tests For Coronavirus Every Day (Tass)

• New Zealand Coronavirus Deaths During Lockdown Could Be Just 20 – Modelling (G.)

• Coronavirus Job Losses Will Raise Mortgage Stress More Than GFC Did (ABC.au)

• France, Czechs, & Other US Allies Exit Iraq Over COVID-19 Fears (ZH)

• Spike in Unemployment Claims is Even More Horrid Than it Appears (WS)

• What Should The EU Do Now: 3-Point Plan For Averting A Depression (Varoufakis)

• Dylan Ratigan: “An Abomination Beyond Comprehension” – “Bernie Folded” (Dore)

• Muder Most Foul (Bob Dylan)

A word about testing. There are stories everywhere of people dying without even having beenn tested, and of doctors not getting permission to test. Many countries have a central body that must give permission for a test, and they often don’t until it’s too late in the game (the life). To a larg extent, this is because politicians simply failed to procure test kits. But there’s another thing: political incentives for massive and accurate testing hardly exist at all (in the short term), while incentives for not testing are obvious: you look better.

The UK testing story could change that all, with its potential finger-prick 15 minute test, but only if that test is at least 95% accurate. I know they claim it is, but we’ll have to see. There are stories about Chinese tests that are 30% accurate, and it’s easy to see why that is useless. But I was talking to someone yesterday who said: there are now tests that are fast and 70% accurate! But isn’t that useless too. No, they can do a better test with those who test negative! Yes, but the 70% applies to the positives too… So 70% means you have to retest everyone. And we haven’t even mentioned asymptomatic cases yet…

Note: we may see the first time that 100,000 new cases come within 24 hours

• Cases 542,385 (+ 55,683 from yesterday’s 486,702)

• Deaths 24,368 (+ 2,347 from yesterday’s 22,021)

From Worldometer yesterday evening (before their day’s close) US: 17,000 cases in a day

From Worldometer -NOTE: mortality rate for closed cases is at 16% –

From SCMP:

From COVID2019Live.info:

Not in the US, everywhere.

• More People Are Dying Of COVID-19 In The US Than We Know (BF)

Medical professionals around the US told BuzzFeed News that the official numbers of people who have died of COVID-19 are not consistent with the number of deaths they’re seeing on the front lines. In some cases, it’s a lag in reporting, caused by delays and possible breakdowns in logging positive tests and making them public. In other, more troubling, cases, medical experts told BuzzFeed News they think it’s because people are not being tested before or after they die. In the US, state and county authorities are responsible for collecting data on cases of COVID-19, the disease caused by the novel coronavirus, and deaths. The data is then reported to the Centers for Disease Control and Prevention.

In California, one ER doctor who works at multiple hospitals in a hard-hit county told BuzzFeed News, “those medical records aren’t being audited by anyone at the state and local level currently and some people aren’t even testing those people who are dead.” “We just don’t know. The numbers are grossly underreported. I know for a fact that we’ve had three deaths in one county where only one is listed on the website,” the doctor said. A spokesperson for the California Department of Health told BuzzFeed News in an email that “local health jurisdictions are required to report all positive COVID-19 cases to the state. In addition, when a death or impending death from COVID-19 occurs, health care facilities must immediately notify their local health jurisdiction and the state.”

[..] two of the hardest-hit areas in the nation — New York City and Los Angeles County — released guidance earlier this week encouraging doctors not to test patients unless they think the test will significantly change their course of treatment. That means that potentially more people in both places could be admitted to hospitals with severe respiratory symptoms and recover — or die — and not be registered as a coronavirus case.

Africa. Pray.

• We Could Watch Entire Populations Vanish (IC)

On March 18, Burkina Faso suffered the first confirmed Covid-19 fatality in all of sub-Saharan Africa. The victim was Rose-Marie Compaoré, the first vice president of the Sahelian nation’s parliament. Tiny, impoverished, and conflict-scarred, Burkina Faso is now West Africa’s worst-affected country, with 146 confirmed cases, including four government ministers. The U.S. ambassador to Burkina Faso, Andrew Young, has also tested positive for the disease. Burkina Faso has seen more than its share of hardships: poverty, drought, hunger, coups. But the coronavirus poses a new kind of threat to a country wracked by a war that has displaced around 700,000 Burkinabe in the last year.

Many of those people now find themselves under great physical and emotional strain, lacking proper shelter, food, and the other necessities — all of which makes them more vulnerable to the pandemic. Experts fear that Covid-19 could decimate entire settlements of Burkina Faso’s displaced, and they are bracing for devastating outbreaks in conflict zones, refugee camps, and the poorest countries in the developing world. Globally, millions of refugees and internally displaced persons, or IDPs, living in cramped, squalid conditions find themselves at risk. “When the virus hits overcrowded settlements in places like Iran, Bangladesh, Afghanistan, and Greece, the consequences will be devastating,” warned Jan Egeland, secretary general of the Norwegian Refugee Council [..] He also spoke of “carnage when the virus reaches parts of Syria, Yemen, and Venezuela where hospitals have been demolished and health systems have collapsed.”

[..] I have no reason to believe Moumoumi Sawadogo had Covid-19 when I met him eight weeks ago in Burkina Faso. After living 89 years in an arid, impoverished land on the fringe of the Sahara Desert, surviving a massacre, walking for a week and enduring hunger and homelessness, it was clear that Sawadogo was a survivor. But Covid-19 posed a different kind of danger. “These populations are already very vulnerable to diseases that are otherwise easy to treat. But that’s not the case when they have no access to water or proper sanitation or health care,” Alexandra Lamarche, senior advocate for West and Central Africa at Refugees International, told The Intercept. “We could watch entire populations vanish.”

Modelling is only as good as its initial assumptions. Which in this case come out of hot thin air.

• Coronavirus Could Kill 81,000 In US, Subside In June – Washington U. (R.)

The coronavirus pandemic could kill more than 81,000 people in the United States in the next four months and may not subside until June, according to a data analysis done by University of Washington School of Medicine. The number of hospitalized patients is expected to peak nationally by the second week of April, though the peak may come later in some states. Some people could continue to die of the virus as late as July, although deaths should be below epidemic levels of 10 per day by June at the latest, according to the analysis. The analysis, using data from governments, hospitals and other sources, predicts that the number of U.S. deaths could vary widely, ranging from as low as around 38,000 to as high as around 162,000.

The variance is due in part to disparate rates of the spread of the virus in different regions, which experts are still struggling to explain, said Dr. Christopher Murray, director of the Institute for Health Metrics and Evaluation at the University of Washington, who led the study. The duration of the virus means there may be a need for social distancing measures for longer than initially expected, although the country may eventually be able relax restrictions if it can more effectively test and quarantine the sick, Murray said. The analysis also highlights the strain that will be placed on hospitals. At the epidemic’s peak, sick patients could exceed the number of available hospital beds by 64,000 and could require the use of around 20,000 ventilators. Ventilators are already running short in hard-hit places like New York City.

The virus is spreading more slowly in California, which could mean that peak cases there will come later in April and social distancing measures will need to be extended in the state for longer, Murray said. Louisiana and Georgia are predicted to see high rates of contagion and could see a particularly high burden on their local healthcare systems, he added.

Let the caretakers talk. They need to, and we need to hear them.

• Hold The Line (M.)

As an infectious disease epidemiologist (although a lowly one), at this point I feel morally obligated to provide some information on what we are seeing from a transmission dynamic perspective and how they apply to the social distancing measures. Like any good scientist I have noticed two things that are either not articulated or not present in the “literature” of social media. I have also relied on my much smarter infectious disease epidemiologist friends for peer review of this post; any edits are from peer review. Specifically, I want to make two aspects of these measures very clear and unambiguous. First, we are in the very infancy of this epidemic’s trajectory. That means even with these measures we will see cases and deaths continue to rise globally, nationally, and in our own communities in the coming weeks.

This may lead some people to think that the social distancing measures are not working. They are. They may feel futile. They aren’t. You will feel discouraged. You should. This is normal in chaos. But this is normal epidemic trajectory. Stay calm. This enemy that we are facing is very good at what it does; we are not failing. We need everyone to hold the line as the epidemic inevitably gets worse. This is not my opinion; this is the unforgiving math of epidemics for which I and my colleagues have dedicated our lives to understanding with great nuance, and this disease is no exception. I want to help the community brace for this impact. Stay strong and with solidarity knowing with absolute certainty that what you are doing is saving lives, even as people begin getting sick and dying. You may feel like giving in. Don’t.

Second, although social distancing measures have been (at least temporarily) well-received, there is an obvious-but-overlooked phenomenon when considering groups (i.e. families) in transmission dynamics. While social distancing decreases contact with members of society, it of course increases your contacts with group (i.e. family) members. This small and obvious fact has surprisingly profound implications on disease transmission dynamics. Study after study demonstrates that even if there is only a little bit of connection between groups (i.e. social dinners, playdates/playgrounds, etc.), the epidemic isn’t much different than if there was no measure in place. The same underlying fundamentals of disease transmission apply, and the result is that the community is left with all of the social and economic disruption but very little public health benefit. You should perceive your entire family to function as a single individual unit; if one person puts themselves at risk, everyone in the unit is at risk.

This is about wildlife, not economic pessimists. Just in case you were confused.

• China Promotes Bear Bile As Coronavirus Treatment (NatGeo)

Less than a month after taking steps to permanently ban the trade and consumption of live wild animals for food, the Chinese government has recommended using Tan Re Qing, an injection containing bear bile, to treat severe and critical COVID-19 cases. It is one of a number of recommended coronavirus treatments—both traditional and Western—on a list published March 4 by China’s National Health Commission, the government body responsible for national health policy. This recommendation highlights what wildlife advocates say is a contradictory approach to wildlife: shutting down the live trade in animals for food on the one hand and promoting the trade in animal parts on the other. Secreted by the liver and stored in the gallbladder, bile from various species of bears, including Asiatic black bears and brown bears, has been used in traditional Chinese medicine since at least the eighth century.

It contains high levels of ursodeoxycholic acid, also known as ursodiol, which is clinically proven to help dissolve gallstones and treat liver disease. Ursodeoxycholic acid has been available as a synthetic drug worldwide for decades. [..] Traditional Chinese medicine practitioners typically use Tan Re Qing to treat bronchitis and upper respiratory infections. Clifford Steer, a professor at the University of Minnesota in Minneapolis, has studied the medical benefits of ursodeoxycholic acid. He knows of no evidence that bear bile is an effective treatment for the novel coronavirus. But, he says, ursodeoxycholic acid is distinct from other bile acids in its ability to keep cells alive and may alleviate symptoms of COVID-19 because of its anti-inflammatory properties and ability to calm the immune response.

Although use of bear bile from captive animals is legal in China, bile from wild bears is banned, as is the import of bear bile from other countries. According to Aron White, wildlife campaigner for the Environmental Investigation Agency (EIA)—a nonprofit based in London, England, that exposes wildlife crimes—his organization learned first about the Chinese government’s recommendations to treat COVID-19 via social media posts from illegal traders. “We were witnessing how this government recommendation was being coopted by the traffickers to advertise their illegal products as a treatment,” White says. Illegal bile from wild bears is produced in China, he says, and is also imported from wild and captive bears in Laos, Vietnam, and North Korea.

If numbers get big enough, they lose meaning.

• Fed Balance Sheet Tops $5 Trillion For First Time (R.)

The U.S. Federal Reserve’s balance sheet soared past $5 trillion in assets for the first time this week as it scooped up bonds and extended loans to banks, mutual funds and other central banks in its unprecedented effort to backstop the economy in the face of the global coronavirus pandemic. The Fed’s total balance sheet size exploded by more than half a trillion dollars in a single week, roughly twice the pace of the next-largest weekly expansion in the financial crisis in October 2008. As of Wednesday, the Fed’s stash of assets totaled $5.3 trillion, according to data released on Thursday.

The Fed bought $355 billion of Treasuries and mortgage-backed bonds in the last week in what is now an open-ended commitment to stabilize financial markets rocked by the outbreak and the halt in economic activity that has come in its wake. It also offered more than $200 billion in credit through so-called foreign currency swap lines to other central banks to allow them to pump much-needed greenbacks into their jurisdictions to help foreign borrowers stay current with their dollar-denominated liabilities.

The weekly snapshot of the Fed’s balance sheet, released each Thursday, also showed sizable demand for a pair of brand new liquidity facilities aimed at stabilizing money markets and supporting primary dealers, the banks that transact directly with the central bank. The new Primary Dealer Credit Facility had been tapped for $27.7 billion in loans as of Wednesday, while the Money Market Mutual Fund Liquidity Facility had borrowings of $30.6 billion.

Which bunch of fools decided to have that vote?

• Broward Poll Workers Test Positive For COVID-19 (L10)

Two poll workers have been positively diagnosed with coronavirus, according to a statement from The Broward County Supervisor of Elections. One of the workers was only at Precinct V011 on Tuesday, March 17, Election Day, which is located at the Martin Luther King Community Center in Hollywood. The other worked at V020 at the David Park Community Center (also in Hollywood) as well as a Weston early voting location. The supervisor said that county staff as well as other poll workers at the locations have been notified of the situation. However, voters who were at the polls in person on March 17 at either of those locations or who voted early at the Weston early voting location may “wish to take appropriate steps and seek medical advice.”

Because of western testing that may seem like a high number, but it’s not.

• Moscow Laboratories Will Conduct 13,000 Tests For Coronavirus Every Day (Tass)

The laboratories in Moscow will carry out up to 13,000 tests for the novel coronavirus per day, Deputy Mayor Anastasiya Rakova said on Thursday. “Last week, only federal laboratories were authorized to conduct tests. We have fully joined this effort, launching nine laboratories. Today we are conducting nearly 4,000 tests for the coronavirus in Moscow laboratories. In the coming week w will boost the capacity to 13,000 [tests] per day,” Rakova told a TV program hosted by Vladimir Solovyov on Rossiya-1 channel. According to Rakova, the authorities were preparing for all scenarios of how the events would unfold. “Increasing the number of people who are to be tested for the coronavirus is a necessary condition and a crucial step for stopping the spread of the virus,” she stressed.

In late December 2019, Chinese authorities notified the World Health Organization (WHO) about the outbreak of a previously unknown pneumonia in the city of Wuhan, central China. Since then, cases of the novel coronavirus – named COVID-19 by the WHO – have been reported in more than 150 countries. [..]Russia has recorded 840 coronavirus cases, with more than half of them in Moscow. Some 38 people have recovered and have been discharged from hospitals, and two people have died.

When the desire for optimist political messaging becomes fully irresponsible.

• New Zealand Coronavirus Deaths During Lockdown Could Be Just 20 – Modelling (G.)

Jacinda Ardern has implored New Zealanders to “stay local” during a four-week countrywide lockdown as modelling showed that strict measures adopted by the country could limit deaths to 0.0004% of the population – or about 20 people. Research released by Te Punaha Matatini suggested that, left unchecked, the virus could eventually infect 89% of New Zealand’s population and kill up to 80,000 people in a worst-case scenario. According to the research, intensive care beds would reach capacity within two months and the number of patients needing intensive care would exceed 10 times capacity by the time the virus peaked.

However, with the strictest suppression measures, which the country has adopted, the fatalities would drop to just 0.0004%. Hospital capacity would not be exceeded for over a year. These measures included physical distancing, case isolation, household quarantine, and closing schools and universities and would require the restrictions to remain in place until a vaccine or other treatment was developed. However, researchers noted such strategies can “delay but not prevent the epidemic”. “When controls are lifted after 400 days, an outbreak occurs with a similar peak size as for an uncontrolled epidemic,” the researchers wrote. The government has currently mandated a four-week lockdown.

Zero recognition of living in a bubble.

• Coronavirus Job Losses Will Raise Mortgage Stress More Than GFC Did (ABC.au)

As job losses continue to rise because of shutdowns in place to fight the coronavirus crisis, the number of Australians struggling to repay their mortgages is expected to lift to higher levels than seen during the global financial crisis. Credit rating agency S&P Global has warned the number of Australians falling behind on their mortgage repayments is likely to soar. “We currently expect increases in arrears to be higher than during the 2008 global financial crisis, given the wide-ranging effects on the economy stemming from the sudden disruption to economic activity,” S&P analyst Erin Kitson said. Australia avoided mass defaults during the GFC, with mortgage arrears rising to 1.69 per cent after the 2008 crisis, from a pre-crisis average of about 1.40 per cent.

The latest S&P data said mortgage arrears were 1.36 per cent in January, up from 1.28 per cent last December. Ms Kitson could not put a number on the exact number of Australian households that would be impacted by arrears but noted that many of those facing difficulty would be the self-employed. But the Federal Government’s stimulus packages and hardship relief measures from banks would limit some of the damage, Ms Kitson added. To fight the economic threat, the Government will announce a third stimulus package, expected within days. Many banks have also recently announced COVID-19 support packages that provide affected borrowers with an option to defer their repayments for up to six months.

The Reserve Bank cuts interest rates to a record low and announces a quantitative easing program for the first time in its history to help prevent a coronavirus-driven recession. And regulator, the Australian Prudential Regulation Authority (APRA), has said if a borrower who has been meeting their repayment obligations until recently chooses to take up the repayment holiday, then the bank need not classify that period as “arrears”. Other emergency measures aimed at banks include an emergency interest rate cut and $90 billion in cheap 0.25-per-cent funding for three years for small business loans.

One day the Pentagon stops all troop movements, the next day the US declares Maduro a terrorist, and the allies, want nno part of this.

Seeing your soldiers die of corona would be much too close to WWI mass Spanish flu deaths in the trenches.

• France, Czechs, & Other US Allies Exit Iraq Over COVID-19 Fears (ZH)

The United States has shown itself willing to both keep up its ‘maximum pressure’ campaign on Iran and its proxies while riding roughshod over Iraqi sovereignty by remaining in the country even as Baghdad leaders and the broader population demand a final exit. But in another sign Europe is ready to divorce itself from US aims in the region, France has abruptly withdrawn its forces from the country after being there for five years. Interestingly the prime reason given was troop safety concerns over the coronavirus outbreak, but we imagine European leaders likely now see an opportunity to make a swift and easy exit without provoking the ire of their US counterparts. International correspondents say this includes French withdrawal from six bases, with a small contingent of about 100 troops remaining in the country.

The Czech Ministry of Defense also announced the exit of its forces Wednesday, which followed a large contingent of British forces leaving last week, also on fears of coronavirus exposure during the mission. “British, French, Australian and Czech troops who were coaching Iraqi counterparts were being temporarily sent home as Baghdad had put a hold on training operations to prevent the spread of COVID-19,” reports the AFP this week. All had been there to support coalition anti-ISIL operations led by Washington. But as the US mission to defeat the Islamic State has lately become less relevant given the demise of the terror group, Washington’s focus became Iranian influence inside Iraq – far beyond the original mission scope. The US itself had been reportedly drawing down from certain bases, but is not expected to ultimately depart given the current high state of tensions with Iran-backed militias in the country.

The stimulus bill has opened access to assictance for the entire gig economy.

• Spike in Unemployment Claims is Even More Horrid Than it Appears (WS)

This morning, the US Dept. of Labor announced that 3.283 million people had filed initial unemployment claims in the week ended March 21. We were warned yesterday that today’s initial claims would be horrid. In his press conference yesterday concerning the coronavirus, California Governor Gavin Newsom said that California by itself had “just passed the 1 million mark” in unemployment claims since March 13 — and this might include claims to be reflected in the next reporting week. And it’s going to get worse. The five largest counties of the San Francisco Bay Area were the first major region in the US to go into lockdown on March 17. The State of California followed on March 20, toward the end of the unemployment-claims reporting week (through March 21), and many other states followed within days – and many of those claims were filed after this reporting week had ended. This is the mind-blowing effect what started to happen in the week ended March 21:

The report by the Department of Labor this morning listed some sectors that were particularly hard hit by “COVID-19 virus impacts”: • Services industries broadly, particularly accommodation and food services; • health care and social assistance services; • arts, entertainment and recreation; • transportation and warehousing; • manufacturing industries. However, this horrid spike in claims only shows a partial picture. Since the end of that reporting week, lockdowns have spread to many other states, and companies in those states are now struggling with how to cope. Many companies had already laid off people before the lockdowns – and this is reflected in today’s unemployment claims. But much of the fallout from those lockdowns and their secondary effects will be reflected in future reports.

The gig economy, as the US economy has been called due to the growth of business models that shift labor from employees to contract workers, is unprepared for this. Under current rules, gig workers cannot file for unemployment claims – though the stimulus package will change this. And for now, they have not filed for unemployment claims. But their hours of many have been cut, and others lost their gigs entirely. This includes musicians whose gigs were eliminated when bars, restaurants, and clubs shut down. It includers actors and singers and artists. It includes Uber and Lyft drivers whose business has dwindled. It includes self-employed vacation-rental entrepreneurs with some units on Airbnb that no one is booking because the travel industry has shut down. It includes tech workers whose projects have been put on hold. It includes instructors and coaches of all kinds – such as figure skating coaches, language coaches, and corporate coaches. And so on. Many millions of people.

The battle between getting closer together and staying further apart. Stuck between social distancing and political distancing.

• What Should The EU Do Now: 3-Point Plan For Averting A Depression (Varoufakis)

With Lives, Livelihoods and the Union on the brink, the COVID-19 pandemic is the greatest test of the European project in the history of the Union — and we are failing. Solidarity was meant to be a foundational principle of the EU. But solidarity is missing at the moment it is most needed. COVID-19 has revealed a fundamental truth: Europe is only as healthy as its sickest resident, only as prosperous as its most bankrupted. But the EU’s leadership is paralysed by its beggar-thy-neighbour – and now sicken-thy-neighbour – mindset. The price of this failure will not merely be lives lost and livelihoods destroyed. It will be the disintegration of the Union itself. In line with its Green New Deal for Europe, DiEM25 offers a 3-point plan to protect all European residents, avert an economic depression, and prevent the collapse the Union.

Our plan is premised on four basic facts.
1) Public debt will, and must, rise: The precipitous fall in private sector incomes must be replaced by government expenditure. If not, bankruptcies will destroy much of Europe’s productive capacity and, thus, deplete the tax base even further.

2) The wholesale rise in public debt must not divide us: The last euro crisis wrecked some member-states’ fiscal position while improving the fiscal position of others. The results are wildly different fiscal absorption capacities across the eurozone. If the rise in public debt is not a shared burden, the new euro crisis will destroy the last chance to hold the European Union together once the virus itself has been defeated.

3) A Eurobond is essential, but the devil is in its details: Nine eurozone governments have rightly demanded the issue of a Eurobond so that the burden of rising public debt is shared. But the most important questions remain: Which institution should issue it? And who will back it? DiEM25 believes there is only one answer: an ECB-Eurobond backed solely by the ECB.

4) A Eurobond is essential, but it is not enough: Two more interventions are needed. During the pandemic, Europe must inject directly cash into every citizen’s bank account immediately so as to prevent as many bankruptcies and lost livelihoods as possible. Once the pandemic recedes, Europe must embark upon a sizeable, effective and common green investment program so as to improve Europe’s overall capacity to bounce back.

I haven’t had time to listen to the whole thing. But I miss Dylan Ratigan.

• Dylan Ratigan: “An Abomination Beyond Comprehension” – “Bernie Folded” (Dore)

Jimmy Dore talks to Dylan Ratigan

In the midst of the corona crisis,, Bob Dylan dropped a 17-minute song, on the murder of JFK. It’s his first original song in 8 years, and also of course since getting the Nobel Prize.. And why not. For help with lyrics go here

The day that they killed him, someone said to me, ‘Son
The age of the Antichrist has only begun.’
Air Force One coming in through the gate
Johnson sworn in at 2:38
Let me know when you decide to thrown in the towel
It is what it is, and it’s murder most foul

What’s new, pussycat? What’d I say?
I said the soul of a nation been torn away
And it’s beginning to go into a slow decay
And that it’s 36 hours past Judgment Day

• Muder Most Foul (Bob Dylan)

Readership is up, but ad revenue is not. I’ve said it before, it must be possible to run a joint like the Automatic Earth on people’s kind donations. These are no longer the times when ads pay for all you read, your donations have become an integral part of it. It has become a two-way street; and isn’t that liberating, when you think about it?

Thanks everyone for your wonderful donations over the past few days.

Support us in virustime. Help the Automatic Earth survive. It’s good for you.

Debt Rattle September 11 2019

Sep 112019

September 11, 2019 Posted by Raúl Ilargi Meijer at 9:22 am Finance Tagged with: backstop, Bolton, Boris, Brexit, Cummings, ECB, gig economy, Jordan Valley, Maddow, Trump 2 Responses »

Robert Frank White Tower, New York 1948 (Frank died yesterday, aged 94)

To everyone used to receiving Automatic Earth posts in their email, I’m sorry but since Saturday they’re suddenly bouncing again en masse. This makes me very tired by now, but I’ll look for a solution. I suspect there may be a connection between this and Google accusing me of violating their rules, without telling me what rules I’m supposed to have violated.

• Trump Fires National Security Adviser John Bolton (Ind.)

• ‘You’re Fired!’ Trump Cuts Loose Of His Dog Of War (George Galloway)

• In A Fracturing World, Central Banks Still Stuck Together (R.)

• European Banks Paid ECB €23 Billion Since 2014… And Now Face Disaster (ZH)

• Brexit’s Puppet Master Has More Strings To Pull (R.)

• Ireland, Boris Johnson Both Eye Return To EU’s Original Brexit Backstop (Ind.)

• Johnson Can’t Escape The Clutches Of May’s Zombie Brexit Deal (Behr)

• Israel PM Netanyahu Vows To Annex Occupied Jordan Valley (BBC)

• Netanyahu’s Jordan Valley Annexation Pledge Is a PR Stunt (RT)

• California Passes Landmark Gig Economy Rights Bill (BBC)

• ‘One America News’ Claims Defamation In $10 Million Suit vs Rachel Maddow (ZH)

There are still people who are sad to see him go.

• Trump Fires National Security Adviser John Bolton (Ind.)

Donald Trump said he fired John Bolton, writing in a tweet he “disagreed strongly with many of his suggestions” and adding he would announce a replacement for his hawkish national security adviser sometime next week. “I informed John Bolton last night that his services are no longer needed at the White House,” the president wrote on Tuesday. “I disagreed strongly with many of his suggestions, as did others in the Administration, and therefore I asked John for his resignation, which was given to me this morning.” “I thank John very much for his service,” he added. “I will be naming a new National Security Advisor next week.” Mr Bolton then tweeted a statement of his own shortly after the president’s announcement, writing: “I offered to resign last night and President Trump said, ‘Let’s talk about it tomorrow.'”

Mr Bolton also reportedly told CNN’s Robert Costa shortly after his dismissal: “Let’s be clear, I resigned, having offered to do so last night.” The reason for Mr Bolton’s departure was not immediately clear, although it has been suggested that he disagreed with the president’s aborted plan to hold peace talks with the Taliban at Camp David this week, days before the 18th anniversary of the 9/11 attacks. Mr Bolton was also an outspoken advocate of regime change in Iran. Although Mr Trump unilaterally withdrew the United States from the nuclear deal that his predecessor Barack Obama signed with Tehran, he is known to oppose military action in the Middle East.

“So, farewell then, John Bolton. You killed a lot of folks. Thanks to God and President Trump you will kill no more.”

• ‘You’re Fired!’ Trump Cuts Loose Of His Dog Of War (George Galloway)

The blowing up of Donald Trump’s attempt to end the 18-year Afghan War was the straw which broke the camel’s back for the US president, who on Tuesday fired his national security adviser John Bolton.
Trump’s attempt to bring to a close the longest war in US history – longer, in fact, than their direct involvement in WWI, WWII and the Vietnam War put together – was to be his own “Camp David moment.” It would have mimicked both Carter and Clinton’s “triumphs” there with Arafat and Begin and Arafat and Rabin (neither of which have in fact turned out to be triumphs but were wonderful photo-ops).

Bolton’s rearguard action and the Taliban’s killing of a single US soldier there in the week of the summit brought the Camp David caper crashing down, much to the president’s fury, and prompted Secretary of State Mike Pompeo to boast that the US had killed a thousand Taliban in the previous 10 days. But it was not one damn thing, but one damned thing after another, which has caused the final forking of the “bureaucratic tape-worm” John Bolton, who has slithered through every right-wing administration in living memory.

[..] John Bolton, like so many others, was a “chicken-hawk,” always ready to fight to the last drop of somebody else’s blood. He evaded the draft during the Vietnam War because as he said himself “I didn’t want to die face down in a South East Asian rice paddy.” Nothing wrong with that, if he hadn’t continued to “support” the war and wave off to the paddy-fields the 58,000 Americans who did die, face-down, in the war he dodged. So, farewell then, John Bolton. You killed a lot of folks. Thanks to God and President Trump you will kill no more.

Kevin Lamarque | Reuters

But what if they start competing?

• In A Fracturing World, Central Banks Still Stuck Together (R.)

The last time major central banks shifted gears together, it was a cooperative move to keep the financial crisis of a decade ago from becoming a full-bore, worldwide depression. Now, a new round of global ratecutting risks taking on a competitive edge as policymakers try to stay ahead of rising trade tensions, a volatile investment climate, and a shift in the political mood from shared support for globalization to a more zero-sum battle over a slower-growing world economy.

[..] If the Fed and ECB do as expected at their upcoming meetings, BOJ officials will be torn between how a stressed financial system may respond to ever lower rates, and how Japanese exporters may be damaged if the yen rises in value as a result of the actions of those other central banks. European officials, disappointed that elected leaders haven’t spent aggressively to boost economic growth, are sparring over how much lower already negative rates can go without causing problems, how expansive other ECB programs should become, and what good any of it might do. At the Fed, policymakers are split over whether to cut a lot, a little or not at all.

In each case, officials are reckoning with the fact that their economies and financial systems have become so tied together that fully independent policymaking, insofar as it ever was possible, may be a thing of the past. “We really thought monetary policy had things under control,” and would be able to offset whatever programs elected leaders chose to pursue, even a trade war, said Tara Sinclair, an economics professor at George Washington University. “Does that work in a super low interest rate world and in a very integrated world?” when central banks may have lost much of their traditional influence over the domestic economy.

What purpose does the ECB serve?

• European Banks Paid ECB €23 Billion Since 2014… And Now Face Disaster (ZH)

Earlier this morning, there was an added wobble in European bond prices after an unconfirmed MNI report said the ECB could delay the launch of QE on Thursday and make it data dependent. While skeptics quickly slammed the story, saying it was just a clickbait by MarketNews … it does highlight just how sensitive the bond market is to an announcement of aggressive easing by the ECB when it meets on Thursday, Sept 12, where consensus generally expects a significant easing package, including a -20bp rate cut (followed by -10bp cut later on), coupled with roughly €30 billion in sovereign debt QE for 9-12 months, coupled with enhanced forward guidance.

There is just one problem: while it is unclear if any further easing by the ECB will do anything to stimulate the Eurozone economy, one thing is certain – further easing will only cripple Europe’s banks. In fact, as Goldman writes in its ECB preview, “further rate cuts are a very uncomfortable prospect for the [banking] sector” and estimates that a -20bp cut could lead to an aggregate €5.6bn (-6%) profit cut for 32 €-banks under the bank’s coverage; worse, a further -10bp cut, as per GS macro forecasts, increases the hit to -10% (-€8.3 bn). Overall, 19 banks in Goldman’s coverage face a >10% EPS cut, and 8 banks face as much as a 20% EPS hit.

Then there is Europe’s head on collision with a recession: the weakening rate outlook has been accompanied by >20% fall in €-bank shares (SX7E) since 2H18 and -4% cuts to their consensus Net Interest Incomes (for 2020E). According to Goldman, so far ~40% of the share price decline could be explained by NII cuts; the rest falls into the ‘other’ domain, “where political risk features notably.” Here is the problem in one sentence, and chart: since negative rates were introduced in 2014, European Banks have paid €23BN to the ECB!

“He is one of the smartest people I have ever worked with. He thinks several steps ahead, thrives on chaos and has sat in a bunker for three years thinking about this: so what is he going to do?”

• Brexit’s Puppet Master Has More Strings To Pull (R.)

Cummings, who alongside fellow campaigner Matthew Elliott, drove Vote Leave to victory in the 2016 referendum is cast by allies as a ruthless strategist who cares little for the conventions of traditional British politics. He provoked a row inside Westminster when he sacked a 27-year-old adviser to finance minister Sajid Javid. The adviser, Sonia Khan, was escorted by armed police from Downing Street without Javid’s knowledge. Former Prime Minister John Major cast Cummings as an overmighty “political anarchist” who should be sacked as Johnson’s de-facto chief of staff before he poisoned British politics beyond repair.

Cummings’s response? “Trust the people” – a slogan used by government advisers to cast Johnson’s Brexit-supporting team as the true servants of the people fighting a London political and financial elite that wants to thwart their will. Foreign Secretary Dominic Raab said on Monday that the United Kingdom was in dangerous territory as voters were concluding that parliament was hindering Brexit. He said the government would respect the law but that interpretations of the law can sometimes be complex. “At this point, our view is that resignation is the most likely,” U.S. investment bank JPMorgan said. “In our view, neither seeking to defy the law, nor encouraging the EU not to grant an extension, are likely to succeed.”

The Cabinet Manual, which sets out the laws, rules and conventions on the operation of government, says if the prime minister resigns on behalf of the government then Queen Elizabeth will invite the person who appears most likely to be able to command the confidence of lawmakers to serve as prime minister and form a government. A Conservative Party lawmaker said he thought Johnson would resign soon after the EU summit, ensuring that he is not blamed for any delay to Brexit. “The question is: what has Cummings got up his sleeve?” said a former Conservative adviser. “He is one of the smartest people I have ever worked with. He thinks several steps ahead, thrives on chaos and has sat in a bunker for three years thinking about this: so what is he going to do?”

“..the Northern Ireland-only backstop..”

• Ireland, Boris Johnson Both Eye Return To EU’s Original Brexit Backstop (Ind.)

The British and Irish governments are both eyeing a return to the EU’s original Brexit backstop plan, rejected by Theresa May, as a way of breaking the deadlock, reports suggest. The so-called “Northern Ireland-only” backstop was rejected by the former prime minister during talks because it put a customs and regulatory border down the Irish sea – a move strongly opposed by the DUP and many Tories. It was replaced in the withdrawal agreement by the current UK-wide backstop – which was rejected by Brexiteers for another reason: because it could tie the whole UK to the EU customs union indefinitely.

[..] In an interview with the Irish Times, Ireland’s EU commissioner Phil Hogan – who is set to be put in charge of trade talks with the UK – said the direction of travel was towards the old backstop. “Yes,” he replied when asked whether it was back on the agenda. “The taoiseach has indicated in the last 24 hours that the Northern Ireland-only backstop is quite an interesting idea to revisit.” He added: “I remain hopeful that the penny is finally dropping with the UK that there are pragmatic and practical solutions can actually be introduced into the debate at this stage – albeit at the eleventh hour – that may find some common ground between the EU and the UK.” British officials in Brussels flatly deny that there is any intention to return to the original backstop. A UK spokesperson said that “any deal must involve the abolition of the anti-democratic backstop”.

[..] A return to something resembling the Northern Ireland-only backstop could ultimately make sense politically for Mr Johnson, given he may no longer have to rely on DUP votes for a majority after a general election – if he wins a majority, as polls suggest is possible. The DUP’s opposition to a border in the Irish sea would no longer be as much of an issue. The change would also technically allow Mr Johnson to claim he had ditched the current backstop, which he has put down as a red line. Whether moving back to a Northern Ireland-only situation would be accepted by Tory Brexiteers as satisfactory is another matter.

Affable Boris vs Bullying Boris.

• Johnson Can’t Escape The Clutches Of May’s Zombie Brexit Deal (Behr)

One reason to suppose that Johnson is malleable on the detail is that on 29 March he voted for May’s deal – the same one he denounces as an affront to democracy. The hypocrisy is not surprising, but it does illuminate that tension in Johnson’s self-image, between the wannabe statesman and the Trump tribute act. One enjoys the hobnobbing with world leaders at global summits, the other is an accomplice in vandalising the architecture of a rules-based international order.

The same tension is expressed in domestic politics. There is affable Boris who thought he could charm his way to an elegant Brexit solution, unify his party and woo the country with a healing message. He was barged aside by bullying Boris who purges dissent from his party and stokes division in the country. One belongs to the old Tory party that venerated stability and reached out to liberal voters. The other leads a new revolutionary leaver party, recruiting admirers of Nigel Farage for a nationalist insurgency.

The Downing Street calculation appears to be that a majority is most easily won by stripping the Conservative party down and reassembling it as something unconservative. Johnson will run as a populist tribune, the man who would rather be “dead in a ditch” than surrender to tricky continentals and their Westminster collaborators. It might work. Current polling doesn’t offer much of a guide when the vital choices have been punted to the end of October. That doesn’t leave much time for the prime minister to tweak May’s Brexit deal and, in defiance of all the odds, persuade a hostile parliament to vote for it. But that doesn’t mean he has given up on the idea.

Election time.

• Israel PM Netanyahu Vows To Annex Occupied Jordan Valley (BBC)

Israeli PM Benjamin Netanyahu has vowed to annex part of the occupied West Bank if he is returned to office next week. He would apply “Israeli sovereignty over the Jordan Valley and northern Dead Sea”, a policy certain to be backed by the right-wing parties whose support he would need for a coalition. Palestinian diplomat Saeb Erekat said such annexation moves would “bury any chance of peace”. Israel has occupied the West Bank since 1967 but stopped short of annexation. Mr Netanyahu, who leads the right-wing Likud party, is campaigning ahead of general elections next Tuesday. Polls suggest Likud is neck-and-neck with the opposition centrist Blue and White party and may struggle to form a governing coalition.

Palestinians claim the whole of the West Bank for a future independent state. Mr Netanyahu has previously insisted that Israel would always retain a presence in the Jordan Valley for security purposes. In a televised speech the PM said: “There is one place where we can apply Israeli sovereignty immediately after the elections. “If I receive from you, citizens of Israel, a clear mandate to do so… today I announce my intention to apply with the formation of the next government Israeli sovereignty over the Jordan Valley and northern Dead Sea.” Mr Netanyahu also said he would annex all Jewish settlements in the West Bank, but this would need to wait until the publication of US President Donald Trump’s long-awaited plan for a peace agreement between Israelis and Palestinians.

“..he could be indicted as early as mid-October..”

• Netanyahu’s Jordan Valley Annexation Pledge Is a PR Stunt (RT)

Israeli leader Benjamin Netanyahu has been desperate to drum up voter support across various sections of the Israeli population as the September 17 election inches closer, and his most recent pledge to annex the Jordan Valley, a part of the occupied West Bank, is no more than yet another empty campaign promise, political and defense commentator Amir Oren told RT. “He cannot annex any inch of the occupied territories… the most important [reason] is that peace with Egypt and with Jordan is based upon the UN Security Council resolution 242 from November of 1967 forbidding the acquisition of territories by force.”

Netanyahu knows that risking the collapse of the entire regional security system is a “non-starter,” and his grand announcement is merely a “way to focus attention on himself,” Oren argued. The PR stunt is also aimed at helping Netanyahu to rebrand himself as a strong leader able to deal with the Iran ‘menace’ and the Palestinian issue, as most recently he has been making headlines for the allegations of corruption he faces. “He is trying to shift attention from his corruption scandals, he could be indicted as early as mid-October, he wants people to talk about himself as a world-class leader in league with Putin and Trump.”

The gig economy is an even hollower term than the service economy.

• California Passes Landmark Gig Economy Rights Bill (BBC)

Lawmakers in California have passed a law that paves the way for gig economy workers to get holiday and sick pay. Assembly Bill 5, as its known, will affect companies such as Uber and Lyft, which depend on those working in the gig economy. Some estimates suggest costs for those firms would increase by 30% if they have to treat workers as employees. But opponents of the bill say it will hurt those that want to work flexible hours. The business models of gig economy companies are already under strain – Uber lost more than $5bn in the last quarter alone.

Some estimates suggest that having to treat workers as employees, rather than independent contractors, could increase costs by as much as 30%. Uber and rival ridesharing service Lyft joined forces to push back again the bill. They suggested a guaranteed minimum wage of $21 per hour instead of the sweeping changes the bill would bring. But that pledge wasn’t enough to sway California’s Senate, and the state’s governor Gavin Newsom is expected to soon sign the bill into law.

High time someone takes Maddow to court, but Sputnik is not a strong point.

• ‘One America News’ Claims Defamation In $10 Million Suit vs Rachel Maddow (ZH)

Conservative television network One America News (OAN) is suing Rachel Maddow for $10 million after she referred to the network as “paid Russian propaganda”. OAN filed the defamation suit in federal court in San Diego, according to AP. OAN is a small, family owned conservative network that is based in San Diego and has received favorable Tweets from the President. It is seen as a competitor to Fox News. OAN’s lawsuit claims that Maddow’s comments were retaliation after OAN President Charles Herring accused Comcast of censorship. The suit said that Comcast refuses to carry its channel because “counters the liberal politics of Comcast’s own news channel, MSNBC.”

It was about a week after Herring e-mailed a Comcast executive when Maddow opened her show by referring to a Daily Beast report that claimed an OAN employee also worked for Sputnik News, which has ties to the Russian government. Maddow said: “In this case, the most obsequiously pro-Trump right-wing news outlet in America really literally is paid Russian propaganda. Their on-air U.S. politics reporter is paid by the Russian government to produce propaganda for that government.” Except Maddow, likely still upset from spending 3 years trying to promulgate a Russian hoax that didn’t exist, didn’t quite get her facts straight. Big surprise.

OAN said in its lawsuit that while reporter Kristian Rouz was associated with Sputnik News, he worked solely as a freelancer for them and was not a staff employee of OAN. And the lawsuit includes a statement from Rouz stating that while he has written some 1,300 articles over the past 4 and a half years for Sputnik, he has “…never written propaganda, disinformation, or unverified information.

Debt Rattle October 18 2017

Oct 182017

October 18, 2017 Posted by Raúl Ilargi Meijer at 9:14 am Finance Tagged with: Airbus, Brexit, China, Dalio, derivatives, EU, gig economy, methane, Obamacare, poverty, UBI 1 Response »

Marcel Bovis Lovers, Paris 1934

• No, China Isn’t Fixing Its Economic Flaws (BBG)

• US Senators Reach Bipartisan Deal On Obamacare, Trump Indicates Support (R.)

• Fixing Macroeconomics Will Be Really Hard (BBG)

• Carney Reveals Europe’s Potential Achilles Heel in Brexit Talks (ZH)

• Money Will Divide Europe After Brexit (R.)

• Dalio’s Fund Opens $300 Million Bet Against Italian Energy Firm (BBG)

• Boeing’s Attack on Bombardier Backfires (BBG)

• The Gig Economy Chews Up And Spits Out Millennials (G.)

• Greek Growth Data Cast Doubt On Recovery

• Debt-Ridden Greece to Spend $2.4bn Upgrading its F-16 Fighter Jet Fleet (GR)

• Canada Methane Emissions Far Worse Than Feared (G.)

• The Lie That Poverty Is A Moral Failing Is Back (Fintan O’Toole)

Antidote for the Party Congress.

• No, China Isn’t Fixing Its Economic Flaws (BBG)

In our China Beige Book, we quiz over 3,300 firms across China about the performance of their companies as well as the broader economy. Their responses reveal that much of the exuberance about China today is based on dangerous misconceptions. The first and most obvious myth is that China is actually deleveraging, as officials claim. Responses from Chinese bankers support the notion that regulators, at least for the moment, have successfully targeted certain forms of shadow financing such as wealth management products. Companies, however, don’t seem to be feeling much pressure to curb their excesses. In the second quarter, while firms reported facing moderately higher interest rates and borrowing modestly less, that only slowed the pace of leveraging instead of reversing it. And even that progress has since stalled.

Third-quarter loan applications rose, rejections fell and companies borrowed more. Interest rates at both banks and shadow financials slid. What officials are calling deleveraging – rolling back excess credit – still represents more, uneven leveraging. If the restrictions on financials do extend to companies in 2018 and deleveraging actually begins, the process could be much more traumatic for the Chinese economy than most people currently recognize. The second myth is that the Chinese economy has finally begun to rebalance away from manufacturing and investment to services and consumption. In reality, China’s stronger 2017 performance has depended almost entirely on a revival of the old economy; the improvement in both growth and jobs drew heavily upon commodities, property and, most consistently, manufacturing. Call it “de-balancing.”

[..] China hasn’t slashed overcapacity in commodities sectors. Xi has incessantly touted what he calls “supply-side reforms,” which would seem to give Chinese companies very strong incentive to report results showing such cuts. Yet for more than a year, firms have indicated the opposite. While some gross capacity has been taken offline to much fanfare, net capacity has continued to rise. From July through September, hundreds of coal, steel, aluminum and copper companies reported a sixth straight quarter of overall capacity rising, not falling.

Getting Bernie to support the same as Trump is an achievement.

• US Senators Reach Bipartisan Deal On Obamacare, Trump Indicates Support (R.)

Two U.S. senators on Tuesday reached a bipartisan agreement to shore up Obamacare for two years by reviving federal subsidies for health insurers that President Donald Trump planned to scrap, and the president indicated his support for the plan. The deal worked out by Republican Senator Lamar Alexander and Democratic Senator Patty Murray would meet some Democratic objectives, including reviving the subsidies for Obamacare and restoring $106 million in funding for a federal program that helps people enroll in insurance plans. In exchange, Republicans would get more flexibility for states to offer a wider variety of health insurance plans while maintaining the requirement that sick and healthy people be charged the same rates for coverage.

The Trump administration said last week it would stop paying billions of dollars to insurers to help lower-income Americans pay medical expenses, part of the Republican president’s effort to dismantle Obamacare, former Democratic President Barack Obama’s signature healthcare law. The subsidies to private insurers cost the government an estimated $7 billion this year and were forecast at $10 billion for 2018. Trump’s move to scuttle them had raised concerns about chaos in insurance markets. Trump hoped to make good on his campaign promise to dismantle the law when he took office in January, with Republicans, who pledged for seven years to scrap it, controlling Congress. But he has been frustrated with their failure to pass legislation to repeal and replace it.

Obamacare, formally known as the Affordable Care Act, extended health insurance coverage to 20 million Americans. Republicans say it is ineffective and a massive government intrusion in a key sector of the economy. The Alexander-Murray plan could keep Obamacare in place at least until the 2020 presidential campaign starts heating up. “This takes care of the next two years. After that, we can have a full-fledged debate on where we go long-term on healthcare,” Alexander said of the deal.

[..] Senator Bernie Sanders threw his weight behind the effort. In an interview with Reuters, Sanders said Alexander was a “well-respected figure” known for bipartisanship and that the Tennessee senator’s reputation would help propel the legislation through the Senate. Trump, during comments at the White House, suggested he could get behind the Alexander-Murray plan as a short-term solution. In remarks later at the Heritage Foundation, a conservative think tank, Trump commended the work by Alexander and Murray, but said: “I continue to believe Congress must find a solution to the Obamacare mess instead of providing bailouts to insurance companies.”

Nuff said: “Most modern econ theories posit that recessions arrive randomly, instead of as the result of pressures that build up over time.”

• Fixing Macroeconomics Will Be Really Hard (BBG)

A presentation by Blanchard and Summers provides a useful summary of how elite thinking has changed. They basically draw three lessons from the crisis: 1) the financial industry matters, 2) government should use a wider array of policies to fight recessions, and 3) recessions can last longer than expected. [..] The real sea change is the third one – the reconsideration of what recessions really are. Most modern econ theories posit that recessions arrive randomly, instead of as the result of pressures that build up over time. And they assume that recessions are short-lived affairs that go away of their own accord. If these assumptions are wrong, then most of the theories written down in macroeconomics journals over the past several decades – and most of those being written as we speak – are of questionable usefulness.

Blanchard and Summers are hardly the first to raise this possibility – economists have known for decades that recessions might not be random, short-lived events, but the idea always remained on the fringes. One big reason was simple mathematical convenience – models where recessions are like rainstorms, arriving and departing on their own, are mathematically a lot easier to work with. A second was data availability – unlike in geology, where we can draw on Earth’s whole history, reliable macroeconomic data goes back less than a century. If economic fluctuations really do have long-lasting effects, it will be very hard to identify those patterns from just a few decades’ worth of history.

If macroeconomists heed Blanchard and Summers’ advice, they will have to do harder math, and they will find better data to test their models. But their challenges won’t end there. If the economy can linger in a good or bad state for a long time, it’s almost certainly a chaotic system. Researchers have known for decades that unstable economies are very hard to work with or predict. In the past, economists have simply ignored this unsettling possibility and chosen to focus on models with only one possible long-term outcome. But if Blanchard and Summers are any indication, the Great Recession might mean that’s no longer an option.

Derivatives.

• Carney Reveals Europe’s Potential Achilles Heel in Brexit Talks (ZH)

This morning, BoE Governor Mark Carney discussed the risks of a hard Brexit during his testimony to the UK Parliamentary Treasury Committee. There was renewed weakness in Sterling during his testimony. Ironically, given the fall in Sterling, Carney explained why Europe’s financial sector is more at risk than the UK from a “hard” or “no-deal” Brexit. We wonder whether Juncker and Barnier appreciate the threat that a “no-deal” Brexit poses for the EU’s already fragile financial system? When asked does the European Council “get it” in terms of potential shocks to financial stability, Carney diplomatically commented that “a learning process is underway.” Having sounded alarm bells about clearing in his last Mansion House speech, he noted “These costs of fragmenting clearing, particularly clearing of interest rate swaps, would be born principally by the European real economy and they are considerable.”

Calling into question the continuity of tens of thousands of derivative contracts, he stated that it was “pretty clear they will no longer be valid”, that this “could only be solved by both sides” and has been “underappreciated” by Europe. Moving on to the possibility that there might not be a transition period, Carney had a snipe at Europe for its lack of preparation “We are prepared as we should be for the possibility of a hard exit without any transition…there has been much less of that done in the European Union.” Maybe it’s Europe, not the UK, that needs the transition period most.

In Carneys view “It’s in the interest of the EU 27 to have a transition agreement. Also, in my judgement given the scale of the issues as they affect the EU 27, that there will ultimately be a transition agreement. There is a very limited amount of time between now and the end of March 2019 to transition large, complex institutions and activities…If one thinks about the implementation of Basel III, we are alone in the current members of the EU in having extensive experience of managing the transition for individual firms of various derivative and risk activities from one jurisdiction back into the UK. That tends to take 2-4 years. Depending on the agreement, we are talking about a substantial amount of activity.”

Europe borrows from the future.

• Money Will Divide Europe After Brexit (R.)

The British government once hoped that the Oct. 19-20 meeting would be the moment when the Brexit negotiations could move on to discuss trade. That aspiration now seems hopeless. European leaders look set to insist on further delay until there is more progress in the first stage of talks, above all in reaching agreement on how much Britain will have to pay to settle its obligations when it leaves.

[..] If economic size and time favor the EU, the British government’s strongest card is money – one that it has played in various guises for centuries with its continental neighbors – and it is naturally reluctant to show its full hand too early. Even so May has already made an important concession. As part of the transition period of around two years that she called for in her emollient Florence speech last month, Britain would continue to pay in to the EU budget to ensure that none of the member states was out of pocket owing to the decision to leave. These net payments of around €10 billion ($11.8 billion) a year would fix the immediate problem facing the EU, the hole that would otherwise open up in its finances during the final two years of its current budgetary framework, which runs from 2014 to 2020.

But that extra money from aligning Britain’s effective date of departure with the end of the EU’s budgeting plan will not be enough, for two reasons. One is the way the EU in effect borrows from the future, by making spending commitments that it pays for later. In principle, the EU cannot borrow to pay for expenditure. But, through its accounting procedures, the EU can and does commit it to spending that will be paid for by future receipts from the member states. What this means is that even after 2020 there will still be payments due on commitments made under the current seven-year spending plan. That pile of unpaid bills, eloquently called the “reste à liquider” (the amount yet to be settled), is forecast to be €254 billion at the end of 2020.

Estimates of what Britain might owe towards this vary, but taking into account what might have been spent on British projects it could be around €20 billion. On top of that – and the second main reason why the EU is holding out for more – the EU has liabilities, notably arising from the unfunded retirement benefits of European staff estimated at €67 billion at the end of 2016, which it is expecting Britain to share. Even taking into account some potential offsets from its share of assets, Britain may face a bill of between €30 billion and €40 billion on top of the €20 billion paid during the transition period.

Biggest threat of all to Europe may be Italy’s weaknesses.

• Dalio’s Fund Opens $300 Million Bet Against Italian Energy Firm (BBG)

Bridgewater Associates is adding to its billion-dollar short against the Italian economy. The world’s largest hedge fund disclosed a $300 million bet against Eni SpA, Italy’s oil and gas giant, data compiled by Bloomberg show. Bloomberg previously reported that Ray Dalio’s firm had wagered more than $1.1 billion against shares of six Italian financial institutions and two other companies. This latest bet is the hedge fund’s second-largest against an Italian company, trailing only the $310 million against Enel SpA, the country’s largest utility. Eni’s majority holder is the Italian government via state lender Cassa Depositi e Prestiti SpA and the Ministry of Economy. The public involvement also is reflected in the government’s role in appointing the chief executive officer. Current CEO Claudio Descalzi has been at the helm since 2014 and was reconfirmed this year.

Airbus buys C Series for $1?!

• Boeing’s Attack on Bombardier Backfires (BBG)

Boeing’s diminutive Canadian rival just found itself one heck of a wingman. The world’s largest aerospace company tried to block Bombardier’s all-new C Series jet from the U.S. by complaining to the government about unfair competition. Now that move is backfiring as Boeing’s primary foe, Airbus, takes control of the Canadian aircraft – with plans to manufacture in Alabama. The deal leaves Boeing’s 737, the company’s largest source of profit, to face a strengthened opponent in the market for single-aisle jetliners, where Airbus’s A320 family already enjoys a sales lead. The European planemaker is riding to the rescue of a plane at the center of a trade dispute that soured U.S. relations with Canada and the U.K., where the aircraft’s wings are made.

“For Boeing, its decision to wage commercial war on Bombardier has arguably had some unintended negative outcomes,” Robert Stallard, an analyst at Vertical Research Partners, said in a report. “As well as damaging relations with the Canadian and U.K. governments and some major airline customers, it has now driven Bombardier into the arms of its arch competitor.” Boeing on Tuesday held firm to its stance against the C Series, saying the deal with Airbus would have “no impact or effect on the pending proceedings at all” in the trade dispute. Boeing won a preliminary victory against Bombardier last month when President Donald Trump’s administration imposed import duties of 300% on the C Series.

Self-employment as a means to hide unemployment.

• The Gig Economy Chews Up And Spits Out Millennials (G.)

Huws says the golden age for the gig economy was some time around 2013, when companies took a smaller cut and there were fewer drivers/riders/factotums to compete with. “As Deliveroo pass on all risk to the rider, there’s nothing to stop them over-recruiting in an area and flooding the city with riders, which is exactly what we saw last winter,” says Guy McClenahan, another Brighton rider (Deliveroo maintain that the hundreds of riders in the area earn on average well above the national living wage). Over time, Uber has increased the commission it takes from drivers while reducing fares. Drivers are finding themselves working much longer hours in order to make the same pay – or far less. (There are currently no time limits on how many hours Uber drivers can work a week in the UK, but the company is testing changes and says it plans to introduce limits over a 24-hour period.)

TaskRabbit, the online platform for handymen and odd jobs, which was recently bought by Ikea, took away a rate in which contractors would earn more money for repeat commissions – and buried that news in an email about introducing the option for clients to tip. [..] Huws points out that the gig economy has always existed: cash-in-hand or on-call work or people turning up at building sites or dockyards in the hope of a day’s work. But since the 2008 crash, jobs that provide a secure income have become harder to come by. It is true that the unemployment rate among 16- to 24-year-olds in the UK is 12%, while in parts of Europe it is 40%. But that doesn’t mean much if many of those people are in precarious “self-employment” – the McKinsey Global Institute estimates this may be up to 30% of working-age adults across Europe. Huws says the notion of a career is being eroded, with young people often working a patchwork of different occupations.

[..] Huws worries about something else, too: the wellbeing of gig-economy millennial workers. This kind of employment can be “really damaging for self-esteem”, she says. As Hughes and Diggle both say, crowd work can be lonely. “Especially if you’re working a double shift,” says Diggle. “Or sometimes you don’t feel human. You’re just handing a bag over and some people take the bag, don’t look at you and close the door. And then don’t tip. One day I’ll be on stage singing, and the next I’m delivering food on my bicycle and it does feel … deflating.”

A Greek recovery is mathematically impossible.

“..taxation on products increased 7.8%..”

• Greek Growth Data Cast Doubt On Recovery

Greece was in recession last year, as revised data from the Hellenic Statistical Authority (ELSTAT) showed on Tuesday that the economy shrank 0.2% compared to 2015 against a previous estimate for zero growth. Furthermore, the Foundation for Economic and Industrial Research (IOBE) forecast that 2017 will close with growth of just 1.3%, against a government estimate of 1.8%. That the way out of the crisis is proving more arduous and uncertain than many had predicted was underscored by the two sets of data released on Tuesday, with IOBE Director General Nikos Vettas warning that the recovery may turn out to be “short-term and fragile” unless the pending crucial structural reforms are implemented.

ELSTAT’s downward revision for 2016 is mainly based on consumer spending, which declined 0.3% compared to 2015, against a previous estimate in March 2017 for an increase of 0.6%. Even in March, when ELSTAT announced zero growth for 2016, the figures created a headache for Prime Minister Alexis Tsipras, who had previously said the economy had grown in 2016. Yesterday’s revision turned stagnation into recession for another year. It is also impressive that while the economy shrank 0.2%, taxation on products increased 7.8%, against a hike of 1.7% in 2015 and 0.8% in 2014. The revision also revealed that 2014 saw growth of 0.7%, against an estimate of 0.3% in March. That upward course was clearly interrupted by the January 2015 election.

IOBE undercut the government’s growth estimates for this year and next, with its president, Takis Athanasopoulos, saying, “Indeed, our economy is showing signs of improvement, but its rate remains below what is necessary for the country to leave the crisis behind it for good.” Next year IOBE anticipates growth of 2%, against an official forecast of 2.4%, putting the achievement of fiscal targets into question. The weak 1.3% recovery rate seen for this year, compared to the original 2.7% estimate of the budget and the bailout program, is according to IOBE due to the weak momentum of investments.

Wonder who pays the bill. Which is not as bas as it seems.

• Debt-Ridden Greece to Spend $2.4bn Upgrading its F-16 Fighter Jet Fleet (GR)

The United States has approved the possible sale of more than 120 upgrade kits from Lockheed Martin to the Greeks for their F-16 fighter jet fleet. The deal, worth $2.4bn, was announced as U.S. President Donald Trump met with Greek Prime Minister Alexis Tsipras in Washington, D.C. Trump, who has repeatedly criticized NATO countries for not meeting the alliance’s defense budget targets, applauded Greece for meeting the goal of each member spending two percent of their gross domestic product on their military and highlighted the F-16 upgrade plans. “They’re upgrading their fleets of airplanes – the F-16 plane, which is a terrific plane,” Trump said ahead of a bilateral meeting. “They’re doing big upgrades.”

“This agreement to strengthen the Hellenic Air Force is worth up to 2.4 billion U.S. dollars and would generate thousands of American jobs,” Trump said during his joint press conference with Tsipras. Greek Defense Minister Panos Kammenos sought later to downplay the cost of the deal for Greece. In a message on twitter he said that the cost to Greece will be 1.1 billion euros. “The ceiling in the budget for the upgrading of the F-16 is 1.1 billion euros”, he said. “The rest will come from aid programs and offsets”, he added. According to the U.S. Defense Security Cooperation Agency (DSCA) there are currently no known offsets. However, Greece typically requests offsets. Any offset agreement will be defined in negotiations between Greece and the contractor, Lockheed Martin. .

“..the type of heavy oil recovery used released 3.6 times more methane than previously believed..”

• Canada Methane Emissions Far Worse Than Feared (G.)

Alberta’s oil and gas industry – Canada’s largest producer of fossil fuel resources – could be emitting 25 to 50% more methane than previously believed, new research has suggested. The pioneering peer reviewed study, published in Environmental Science & Technology on Tuesday, used airplane surveys to measure methane emissions from oil and gas infrastructure in two regions in Alberta. The results were then compared with industry-reported emissions and estimates of unreported sources of the powerful greenhouse gas, which warm the planet more than 20 times as much as similar volumes of carbon dioxide.

“Our first reaction was ‘Oh my goodness, this is a really big deal,” said Matthew Johnson, a professor at Carleton University in Ottawa and one of the study’s authors. “If we thought it was bad, it’s worse.” Carried out last autumn, the survey measured the airborne emissions of thousands of oil and gas wells in the regions. Researchers also tracked the amount of ethane to ensure that methane emissions from cattle would not end up in their results. In one region dominated by heavy oil wells, researchers found that the type of heavy oil recovery used released 3.6 times more methane than previously believed. The technique is used in several other sites across the province, suggesting emissions from these areas are also underestimated.

UBI.

• The Lie That Poverty Is A Moral Failing Is Back (Fintan O’Toole)

By the time he died, in 1950, Bernard Shaw, as the most widely read socialist writer in the English-speaking world, had done as much as anyone to banish the fallacy that poverty is essentially a moral failing – and conversely that great riches are proof of moral worth. His most passionate concern was with poverty and its causes. He was haunted by the notorious Dublin slums of his childhood. As his spokesman Undershaft puts it in Major Barbara: “Poverty strikes dead the very souls of all who come within sight, sound or smell of it.” The question – why are the poor poor? – has a number of possible answers in the 21st century, just as it had in the late 19th. A Eurobarometer report in 2010 examined attitudes to poverty in the European Union. The most popular explanation among Europeans (47%) for why people live in poverty was injustice in society.

[..] In the preface to Major Barbara, Shaw attacks “the stupid levity with which we tolerate poverty as if it were … a wholesome tonic for lazy people”. His great political impulse was to de-moralise poverty, and his most radical argument about poverty was that it simply doesn’t matter whether those who are poor “deserve” their condition or not – the dire social consequences are the same either way. He assails the absurdity of the notion implicit in so much rightwing thought, that poverty is somehow more tolerable if it is a punishment for moral failings: “If a man is indolent, let him be poor. If he is drunken, let him be poor. If he is not a gentleman, let him be poor. If he is addicted to the fine arts or to pure science instead of to trade and finance, let him be poor … Let nothing be done for ‘the undeserving’: let him be poor. Serve him right! Also – somewhat inconsistently – blessed are the poor!”

In an era when many on the left purported to despise money and romanticised poverty, Shaw argued that poverty is a crime and that money is a wonderful thing. He recognised that there is no relationship between poverty and a supposed lack of a work ethic: Eliza Doolittle is out selling her flowers late at night in the pouring rain but she is still dirt poor. (Conversely, when she is “idle” and being kept by Higgins, she leads a life of relative luxury.) And therefore the cure for poverty can never be found in moral judgments. The cure for poverty is an adequate income. “The crying need of the nation,” he wrote, “is not for better morals, cheaper bread, temperance, liberty, culture, redemption of fallen sisters and erring brothers, nor the grace, love and fellowship of the Trinity, but simply for enough money.

And the evil to be attacked is not sin, suffering, greed, priestcraft, kingcraft, demagogy, monopoly, ignorance, drink, war, pestilence, nor any other of the scapegoats which reformers sacrifice, but simply poverty.” The solution he proposed was what he called a “universal pension for life”, or what we now call a universal basic income.