Jun 212020
 


Lewis Wickes Hine 12-year-old newsie, Hyman Alpert, been selling 3 years, New Haven CT 1909

 

Trump Makes Triumphant Return To Campaign Rallies (JTN)
Trump’s Tulsa Rally Was Just Another Sad Farce (G.)
Over A Third Of Americans Think Civil War Is Likely (ZH)
Judge Says Bolton ‘Gambling With National Security’ But Won’t Block Book (JTN)
Lawyer Says Bolton ‘Utterly Powerless’ To Stop Book’s Circulation (JTN)
Manhattan Prosecutor Steps Down, Ending Stand-Off With AG Barr (R.)
US Travel Industry Revenues To Plummet By Half a Trillion In 2020 (F.)
Nearly Half Of Americans Consider Selling Home As COVID Crushes Finances (ZH)
Greece Urges UK To Return Parthenon Marbles (G.)

 

 

I’m a bit later than usual today, I couldn’t resist taking a walk in the almost deserted city of Athina. It’s terrible for a lot of people I know who work in hospitality, but the quiet is appealing at the same time. Here’s a photo I took just around the corner:

 

 

I brought up a possible civil war in the US yesterday, and just about everything I read appears to rhyme with that idea. Trump held his first meeting last night in Tulsa, and all too predictably the MSM says it was awful and nobody showed up, while the right wing press calls it a “triumphant return”. Nobody cares about news anymore, everything has turned into opinion.

It’s been well over 4 years since I started noticing -and writing about- that the NYT, WaPo et al began to publish 10+ anti-Trump stories every single day, and that got me labeled as a Trump supporter. No use saying that I’m not, and never have been, even Nicole, bless her heart, said: yes you are!

Like I am too stupid to know what I support, or maybe I’m a closet Trumpian. It’s that whole idea of if you don’t comply with the narrative and parrot CNN etc., you must be against them. And it’s true that I dislike CNN very much, for adopting a 24/7 anti-Trump business model, but that is not the same as supporting Trump. A news channel should provide us with news, not a political opinion.

I would almost hope Joe Biden wins (not going to happen) because that would mean the end of CNN. I often think Trump and Jerry Zucker have a secret deal that requires Trump to say 100 crazy things per day and CNN to “report” on all of them and invent 100 more as they go along.

But, you know, only half the country now reads the NYT and WaPo, the so-called liberal half. There once was a time when both halves did, but that is no longer an option. There is more money in one-sided and overblown opinion. The country’s best newspapers have sold their souls to Dr. Faust.

The headlines at Britain’s Guardian this morning pretty much sum up the entire story:

• Donald Trump: President sows division and promises ‘greatness’ at Tulsa rally flop

• US president’s much hyped return turned to humiliation when he failed to fill arena in Republican stronghold of Oklahoma

• Don’t call it a comeback: rally was just another sad farce

• ‘Kung flu’ President uses racist term to describe Covid-19

• ‘Saving our country’: An event for Trump’s true believers

And people who read things like the Guardian, NYT, WaPo, keep on eating it up. They buy these papers, they take out subscriptions, just to get their daily fill of anti-Trump “news”. I personally think that is extremely sad, and dangerous to boot. But if and when I say that, I will be labeled a Trump supporter again.

Because that is the easy way out for the Orange Man Bad crowd. Just as it will be, mind you, for all those out there who are going to take a bite out of Joe Biden’s dementia. We should all be able to do better. We should all be able to see that this is not about two old white guys, and that they have much more in common with each other than they have with you or me.

But in the present environment, try saying you’re not partisan and you’ll be labeled “partisan” for saying it. That’s why I brought up the civil war thing yesterday. The liberal press absolutely loves the fact that some grandma on TikTok made kids in Korea order 1000s of tickets for Tulsa and then not show up. The same press that wouldn’t know TikTok from a hole in the ground.

Meanwhile, has anyone at all pondered what the outcome will be for a Joe Biden rally? Oh my Lord, the excitement! Be still my heart. Bring an extra set of underwear.

If the TikTok fake tickets thing happened to a Joe Biden “event”, you know who would be blamed? Russia.

 

 

Worldometer reports new cases for June 20 (midnight to midnight GMT+0) at + 181,005 .

My count 6AM EDT to 6AM EDT (a bit more today) based on Worldometer numbers is 159,182.

 

 

 

 

New cases past 24 hours in:

• US + 33,388
• Brazil + 31,571
• Russia + 7,889
• India + 15,545

 

 

Cases 8,945,774 (+ 159,182 from yesterday’s 8,786,592)

Deaths 467,306 (+ 4,150 from yesterday’s 463,156)

 

 

 

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

 

 

From Worldometer:

 

 

From COVID19Info.live:

 

 

 

 

 

 

 

Just the News is John Solomon’s new outlet.

Trump Makes Triumphant Return To Campaign Rallies (JTN)

After months of coronavirus, racial strife and economic calamity, President Trump returned Saturday night to the campaign trail with a extravagant stadium event in Tulsa, Okla., vowing to win re-election on behalf of a “silent majority” of Americans drowned out by polls, media pundits and protesters. n”You are warriors,” a smiling Trump declared as he waved and gave fist pumps to an audience of thousands who braved fears about contagion, a lawsuit that failed to stop the events and protests outside the arena.


“I stand before you today to declare the silent majority is stronger than ever before,” Trump said to cheers. “Five months from now we’re going to defeat sleepy Joe Biden. … We are going to stop the radical left, and we’re going to build a future of safety and opportunity for Americans of every race color, religion and creed.” Seeking to address the recent rioting and protests caused by police killings, Trump portrayed himself and the GOP as best suited to bring racial healing and quell the violence. “Republicans are the party of liberty, equality and justice for all. We are the party of Abraham Lincoln, and we are the party of law and order,” he told the crowd.

Read more …

“You got punked by several hundred thousand TikTok users, organized by a grandmother in Fort Dodge, Iowa. Mary Jo Laupp was apparently so upset by the original date and place of Trump’s rally – the city where one of America’s worst racist massacres took place, in 1921 – that she asked people to sign up for the rally and not show up. Laupp only joined TikTok earlier this year, but her call connected with thousands of K-Pop fans who are what Trump might call a silent majority.”

Trump’s Tulsa Rally Was Just Another Sad Farce (G.)

There have been so many reasons to feel embarrassed about Donald Trump. There was the time he paid off a porn star. There was the time he lied about the size of his inauguration crowd. The time he talked about the big water around Puerto Rico. The time he thought you could kill the coronavirus by injecting yourself with bleach. But nothing truly comes close to the embarrassment of his so-called comeback rally in Tulsa, Oklahoma, on Saturday. It was so toe-curlingly cringeworthy, such a crushing humiliation. There are 80s pop bands who have enjoyed greater comebacks than Donald Trump. To understand how much of his insides will always melt at the thought of that Tulsa rally, it’s worth quoting Trump’s fine words just before he boarded Marine One at the White House.


“The event in Oklahoma is unbelievable,” he boasted. “The crowds are unbelievable. They haven’t seen anything like it. And we will go there now. We’ll give a, hopefully, good speech. We’re going to see a lot of great people, a lot of great friends. And pretty much, that’s it. OK?” We really haven’t seen anything like that. For a man who loves peddling superlatives, this was the worst measure of his oh-so-sad popularity. The lowest point in electoral incompetence. The saddest campaign fiasco. The event in Oklahoma was literally unbelievable if you believe that the Trump campaign is competent, and that Trump himself is actually popular. That’s the weird thing about our populist president: his approval ratings have never cracked 50% and are now stuck firmly in the low 40s. Perhaps that’s why he’s trailing Joe Biden by double-digits in recent polls.

Read more …

Think perhaps I shouldn’t have raised the spectre of civil war yesterday?

Over A Third Of Americans Think Civil War Is Likely (ZH)

No one would have ever fathomed, that America – the greatest country in the world – with “the greatest economy ever” – could even be on the cusp of a civil war. Except for Peter Turchin, who predicted a decade ago in the scholarly journal Nature that America would “suffer a period of major social upheaval” starting around the year 2020. As race-driven/anti-police protests flourish nationwide – one-in-three Americans are warming up to the idea the country is on the brink of another civil war, according to Rasmussen Reports. The latest findings found 34% of respondents said the country would experience a second civil war within five years, and that includes 9% of those who said it’s very likely. Rasmussen noted, “This compares to 31 percent and 11 percent respectively two years ago.”

When examining between party lines, 40% of Republicans said civil war was “on the horizon,” while 28% of Democrats concurred. Around 38% of Independent voters said a civil war is possible in the next five years. The survey of 1,000 likely U.S. voters was conducted on June 11 and 14 by Rasmussen Reports, also asked respondents about local governments and protesters removing Confederate monuments. Rasmussen said: “39 percent) of all voters believe the removal of Confederate symbols, names, and monuments throughout the country honoring those who fought in the first civil war will help race relations. Twenty-seven percent (27 percent) disagree and think it will hurt race relations instead.”

“These numbers are reversed from August 2017 when 28% said the removal of the symbols would help race relations, while 39% thought it would hurt instead. Little changed is the 28% who think the removal of public traces of the Confederacy will have no impact,” it noted. Rasmussen continued, “Women and those under 40 are more supportive of the current anti-police protests and the anti-Confederacy drive than men and older voters.” “Younger voters worry most about another civil war… Just 29 percent of blacks believe the current protests will lead to long-term, meaningful racial change in America, compared to 35 percent of whites and 48 percent of other minority voters,” it said.

Chaos in America’s inner cities have been brewing for some time – and was due to erupt, according to Turchin. He looked at “declining wages, wealth inequality and exploding national debt” as social pressures that affected national stability. His model showed that the U.S. would reach a “boiling point” in 2020 — none of this should come as a surprise to Zero Hedge readers. So does civil war become a self-fulfilling prophecy with a third of Americans believing severe domestic turmoil is ahead?

Read more …

How about a $1 billion fine for Simon and Schuster? For sending out 10,000 copies while the case was pending?

Judge Says Bolton ‘Gambling With National Security’ But Won’t Block Book (JTN)

A federal judge on Saturday declined to block the publication of former national security adviser John Bolton’s tell-all book about the Trump White House, dealing a blow to the Trump administration’s efforts to halt what they claimed was a book full of classified information. U.S. District Judge Royce Lamberth in a decision issued Saturday declared that the government “failed to establish that an injunction will prevent irreparable harm,” noting that the book was already in widespread circulation even prior to formal publication. But Lamberth also slammed Bolton for “gambl[ing] with the national security of the United States” and “expos[ing] his country to harm” by ordering the publication of the book “without written authorization and without notice to the government.”


Bolton’s lawyers had argued yesterday that their client was “powerless” to stop the book’s dissemination throughout media and society. Copies of the manuscript have already been delivered to journalists, book reviewers and other media outlets around the country. Lamberth in his ruling agreed, writing that “by the looks of it, the horse is not just out of the barn—it is out of the country.”

Read more …

He couldn’t even stop himself from writing, it, I tells ya. It was divine intervention.

Lawyer Says Bolton ‘Utterly Powerless’ To Stop Book’s Circulation (JTN)

A lawyer for former national security adviser John Bolton on Friday argued before a district judge that his client is “utterly powerless” to stop the widespread circulation of his tell-all book, urging the court to dismiss the Trump administration’s attempt to halt publication of the book. The administration has sued to block the release of the book, arguing it contains classified information that necessitates the use of prior restraint, a high bar for governments to clear under First Amendment jurisprudence. In addition to arguing that the book’s material is suitable for publication, attorney Charles Cooper told Judge Royce Lamberth of the D.C. District Court that “the horse is out of the barn” on the matter of the book’s becoming part of the public record. Numerous journalists and media outlets around the country have already received advance copies of the account.


“This isn’t really a judicial proceeding,” Cooper told Lamberth. “It doesn’t actually have as its purpose convincing you to order John Bolton to do something that he is utterly powerless to do, and that you are utterly powerless to force him to do,” namely pull the book from general circulation. Justice Department lawyer David Morrell urged Lamberth to direct Bolton to halt publication “and further dissemination” of the book prior to further review. Morrell said Bolton committed a “flagrant breach” of proper protocol in seeking to publish the alleged classified material. Bolton’s attorneys in an earlier filing had urged Lamberth to toss the suit, claiming that the memoir – which reveals alleged incidents witnessed by Bolton during his tenure at the White House from April 2018 to September 2019 – is protected speech under the First Amendment.

Read more …

Again: the left’s new hero is a Trump campaign contributor.

Manhattan Prosecutor Steps Down, Ending Stand-Off With AG Barr (R.)

A stand-off over the independence of one of the country’s most important prosecutor’s offices ended on Saturday when Geoffrey Berman agreed to step down as U.S. Attorney for the Southern District of New York, the office that had been investigating President Donald Trump’s personal lawyer, Rudolph Giuliani. Berman’s confirmation of his departure came after Attorney General William Barr told him he had been fired by Trump at Barr’s request, and that Berman’s hand-picked No. 2, Deputy U.S. Attorney Audrey Strauss, would become Acting U.S. Attorney until a permanent replacement is installed. Under Strauss’ leadership, Berman said the office could continue its “tradition of integrity and independence.”


Berman’s office, which is known for prosecuting the most high profile terrorism cases, Wall Street financial crimes and government corruption, has not shied from taking on figures in Trump’s orbit. It oversaw the prosecution of Michael Cohen, Trump’s former personal lawyer, indicted two Giuliani associates and launched a probe into Giuliani in connection with his efforts to dig up dirt on Trump’s political adversaries in Ukraine. Giuliani has not formally been accused of any wrongdoing. The standoff with Berman follows the latest in a series of moves by Barr that critics say are meant to benefit Trump politically and undermine the independence of the Justice Department. It also comes as Trump has sought to purge officials perceived as not fully supporting him. In recent weeks he has fired a series of agency watchdogs, including one who played a key role in Trump’s impeachment earlier this year.

Read more …

Stay at Herm.

US Travel Industry Revenues To Plummet By Half a Trillion In 2020 (F.)

Travel spending in the United States will fall by more than a half-trillion dollars this year and likely won’t recover to 2019 levels until 2024. That’s according to a new economic analysis of the impact of the COVID-19 pandemic and government steps to constrict personal and business interactions in an effort to fight the disease’s spread. The dire forecast was prepared for the U.S. Travel Association, a Washington lobby group, by Tourism Economics. Both the USTA and the Air Line Pilots Association on Thursday went public with new requests for federal assistance. The analysis projects that companies providing travel related services – airlines, hotels, restaurants, attractions and more – will take in $505 billion less in revenue by the end of this year than they did in 2019.


Last year U.S. travel spending topped $1.1 trillion, an all-time high. This year the same group is forecast to take in 45 percent less revenue, or around $622 billion. Furthermore, the forecast for 2020 shows that while travel spending in the U.S. on travel in 2021 should rise 37.5 percent over this year’s total spending to around $855 billion, that still would leave the U.S. travel industry 24 percent smaller in terms of revenues in 2021 than it was in 2019. The recovery in travel spending is then forecast to continue in 2022 and 2023, but at a slower pace. The forecast 14.2 percent growth in travel spending in 2022 would take total spending to just shy of a trillion dollars: 976 billion.

Read more …

Would it be really stupid if I ask who’s going to buy them?

Nearly Half Of Americans Consider Selling Home As COVID Crushes Finances (ZH)

As the virus pandemic has metastasized into an economic downturn, tens of millions of Americans have lost their jobs and are struggling to service mortgage payments. New research offers a glimpse into struggling households, discovers out of the 2,000 American homeowners polled, over half (52%) of respondents say they’re routinely worried about making future mortgage payments and nearly half (47%) considered selling their home because of the inability to service mortgage payments. The study, conducted by OnePoll and the National Association of Realtors, determined 81% of respondents had experienced unexpected financial stress due to the virus-induced recession. Over half (56%) reduced spending so they could service mortgage payments.

Since mid-March, or about the time when the lockdowns began, nearly half (47%) of homeowners have explored alternative ways of making money. About two-thirds of respondents (64%) started side projects, while 53% sold valuables to supplement income. “The swift and unprecedented impact of COVID-19 left many people in a financial emergency, and we want to make sure struggling homeowners know they have relief options, especially during Homeownership Month,” said the National Association of Realtors President Vince Malta. “Realtors and lenders can identify programs and aid designed to help meet loan obligations. Acting quickly may help homeowners stay in their homes and keep the money they have already invested into it,” Malta said.

From clothing (71%) and take-out (66%) to streaming TV services (46%) and groceries (45%), respondents said their spending habits had been significantly reduced so they could service mortgage payments. In a separate report, more than 4 million homeowners are in mortgage forbearance plan – representing 7.54% of all mortgages, delinquencies are set to surpass the great recession, which peaked at 10%.

Read more …

Broken record. Give them back, you twits.

Greece Urges UK To Return Parthenon Marbles (G.)

The New Acropolis Museum was purpose-built to host the one thing every Greek government will always agree on: the Parthenon marbles being returned from London. On Saturday, as the four-storey edifice marked its 11th anniversary, Athens reinvigorated the cultural row calling the British Museum’s retention of the antiquities illegal and “contrary to any moral principle”. “Since September 2003 when construction work for the Acropolis Museum began, Greece has systematically demanded the return of the sculptures on display in the British Museum because they are the product of theft,” the country’s culture minister Lina Mendoni told the Greek newspaper Ta Nea.

“The current Greek government – like any Greek government – is not going to stop claiming the stolen sculptures which the British Museum, contrary to any moral principle, continues to hold illegally.” For years, she said, the museum had argued that Athens had nowhere decent enough to display Phidias’ masterpieces, insisting that its stance was “in stark contrast” to the view of the UK public. In repeated polls, Britons have voiced support for the repatriation of the carvings, controversially removed from the Parthenon in 1802 at the behest of Lord Elgin, London’s ambassador to the Sublime Porte. “It is sad that one of the world’s largest and most important museums is still governed by outdated, colonialist views.” Greece’s centre-right administration has vowed to step up the campaign to win back artworks that adorned the frieze of the Periclean showpiece ahead of the country’s bicentennial independence celebrations next year.

Within weeks of his election, Kyriakos Mitsotakis, Greece’s prime minister, told the Observer Athens was prepared to allow treasures that had never travelled abroad to be exhibited in London in exchange for the marbles being reunited with “a monument of global cultural heritage”. Well-placed government officials have not excluded the EU pressing for the return of the antiquities as part of an overarching Brexit deal. The row was injected with renewed rancour when the British Museum’s director, Hartwig Fischer, described their removal from Greece as “a creative act”. Half of the 160-metre frieze is in London, with 50 metres in Athens and other pieces displayed in a total of eight other museums across Europe.

Read more …

 

 

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https://twitter.com/CarpeDonktum/status/1274537090261430275

 

 

 

My man. My Main man.

Robert Allen Zimmerman is 79 years old.

But his brain has just been born.

 

Three miles north of purgatory –
one step from the great beyond
I prayed to the cross, and I kissed the girls,
and I crossed the Rubicon.

Bob Dylan

 

 

Support the Automatic Earth in virustime.

 

May 092020
 


Tomb of the diver, Paestum c480 BCE

 

Ugly US Jobs Data Hides As Much As It Reveals (R.)
How Australia Got On Top Of COVID19 (SMH)
South Korea’s COVID19 Exceptionalism (Atl.)
South Korea Backtracks On Reopening After COVID19 Cases Jump (NW)
Enough With the Phoney ‘Lockdown’ Debate (Kay)
UK To Place All Incoming Travellers Under 14-Day Quarantine (R.)
COVID19 Death Rate Sinking? Data Reveals A Complex Reality (DW)
Want To Be More Like Sweden? What If We Already Are? (Mish)
Velociraptors Still On The Loose? No Reason Not To Reopen Jurassic Park (McS)
The Bailout Miscalculation That Could Crash the Economy (Taibbi)
Wall Street-Friendly Lawmakers Sought Bailout For Shady Lenders (HuffPo)
Auto Production Collapses By 99% In Mexico and Brazil (R.)
Our Utter Incompetence Actually Helps Us (Kunstler)
What Did Joe Biden Know About Michael Flynn? (York)
Andrew McCabe’s Bizarre CNN Interview (Turley)

 

 

•The US recorded 1,635 #coronavirus deaths in the past 24 hours, bringing the total to 77,178, with a confirmed total of 1,283,829 cases

 

 

• Brazil today now 10,199, total near 150k
• Mexico 23% jump to 1,982, new high
• India today 3,362, small decrease after large increase
• Pakistan 1,791 new high
• Iran recent increasing trend continues 1,556
• Kuwait 641, Qatar 1,311 both new highs

 

 

 

Cases 4,032,763 (+ 98,052 from yesterday’s 3,934,711)

Deaths 276,677 (+ 5,582 from yesterday’s 271,095)

 

 

 

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

 

 

From Worldometer Deaths among Closed cases is down to 17%. That still needs to come down much more.

 

 

From SCMP:

 

 

From COVID19Info.live:

 

 

 

 

Total nonfarm payroll employment fell by 20.5 million in April, according to the Bureau of Labor Statistics, bringing the unemployment rate to 14.7%.

That is the highest rate and largest month-over-month increase since the report began in its current form in 1948.

Ugly US Jobs Data Hides As Much As It Reveals (R.)

April really was the cruelest month. Over 20 million Americans lost their jobs, according to the Bureau of Labor Statistics, bringing the unemployment rate to an eye-popping 14.7% – the highest since at least the 1940s. But the headline number leaves out much of the Covid-19 economic story. The report makes for grisly – if unsurprising – reading. The economy shed roughly a decade of job gains. The figure dwarfs the 8.7 million jobs lost in the Great Recession that lasted from December 2007 to June 2009 and suggests an annualized second-quarter GDP contraction north of 30% is possible. It represents the highest recorded losses in the report’s seven-decade history, and includes the wipeout of almost half of the country’s leisure and hospitality jobs.

Comparing this to previous crises and slumps is of limited use, because the United States has never intentionally shut off almost 30% of its economy before. But other things are different too. For one, Friday’s figure doesn’t necessarily paint an accurate income picture. Federal stimulus has added $600 a week to jobless benefits, making them, on average, actually higher than normal salaries in a majority of states, according to the New York Times. This is only temporary and the levels vary by state, but it’s still a huge difference from previous crises. The $1,200 one-off payments made to many Americans also mean households, overall, might not see income decline as much as the depressing statistics would suggest.

Just as the record lows in unemployment before Covid-19 didn’t give a full picture, the highs present a similar problem. The headline unemployment figure leaves out workers who aren’t looking for jobs. And it classifies over 18 million workers as being on temporary layoff – but it’s impossible to know whether they will be rehired. After the lockdown, demand may remain depressed because people are scared to, say, go to restaurants or spend much at all. Jobless figures during the decade-plus expansion didn’t account for the low quality of jobs, limited benefits, and low labor-force participation rate. Unfortunately, Friday’s statistics mostly make clear what was already known – that the U.S. economy is in an induced coma – without giving clues on how or when it will wake up.

Read more …

In a nutshell: by ignoring the WHO.

How Australia Got On Top Of COVID19 (SMH)

It got really serious for Greg Hunt while he was at the cricket. It was a Saturday morning, February 1, while Australia’s Health Minister was watching his 10-year-old son play that he got the message. In between phone calls and text messages, Hunt was cheering his boy on as he walked laps around the Balnarring cricket oval on his home turf of Victoria’s Mornington Peninsula. “We now have sustained human-to-human transmission outside Wuhan,” read the message from Australia’s Chief Medical Officer, Brendan Murphy, as Hunt recalls it. “I think we are going to have to close the border to China.” It’s a morning that Hunt says he remembers clearly. The government was already on high alert.

It had been 12 days since Murphy had informed Hunt he was invoking the Biosecurity Act to list the novel coronavirus as a disease of pandemic potential. Behind closed doors, Prime Minister Scott Morrison had already told the national security committee of the cabinet that he’d resolved to “respect the medical advice” as the guiding principle in any response to the epidemic that was spreading in China. Now it was time to act. Hunt immediately connected with Morrison and Murphy on a three-way phone call. Murphy set out the facts and advised: “There’s a very strong risk of this spreading to Australia.” “Are you recommending that we close the border to China?” the Prime Minister asked. Yes, came Murphy’s answer. It was announced at 5pm that same day. It was to be, in Hunt’s words, “almost the biggest, one-day decision a government had made in 50 years”.

Beijing, predictably, put on a show of anger. The Chinese embassy gave Canberra a stern lecture, called Australia “xenophobic” and demanded compensation for Chinese students who were inconvenienced. The Australian government realised that something was badly wrong with the World Health Organisation, or WHO, around this time. The Geneva-based UN organisation kept insisting that there was no cause for countries to ban travel from China. Many nations, Britain and Canada among them, were trusting enough to take its advice. Australia wasn’t the first to shut down arrivals from China. The US and Singapore had done it a day earlier. Taiwan had barred tourists from China’s mainland earlier still, on January 26.

Australian officials since have reflected privately that, if Canberra had been watching China as closely as Taiwan does – and with as much scepticism of its official announcements – Australia would have acted at the same time. Taiwan is the standout global success story in managing COVID-19 to date. It’s an island with roughly the same population as Australia but only six deaths. Australia’s death toll is approaching 100. Taiwan’s restrictions on movement weren’t much more drastic than Australia’s but it moved sooner. Taiwan also was smart enough to put no faith in the WHO. Indeed, Beijing has barred Taiwan from membership of the WHO. Which, in this case, hasn’t done Taiwan any harm whatsoever.

Canberra announced other border closures in short order – Iran, Italy, South Korea. But then it paused before finally banning all foreign arrivals after March 19. Was it a mistake to wait so long? Should Australia have followed its China ban with a global ban sooner?

Read more …

What comes before the fall?

South Korea’s COVID19 Exceptionalism (Atl.)

By the end of February, South Korea had the most COVID-19 patients of any country outside China. New confirmed cases were doubling every few days, and pharmacies were running out of face masks. More than a dozen countries imposed travel restrictions to protect their citizens from the Korean outbreak, including the U.S., which had, at the time, recorded an official COVID-19 death toll low enough to count on one hand. But just as South Korea appeared to be descending into catastrophe, the country stopped the virus in its tracks. The government demanded that the Shincheonji Church turn over its full membership list, through which the Ministry of Health identified thousands of worshippers. All were ordered to self-isolate.

Within days, thousands of people in Daegu were tested for the virus. Individuals with the most serious cases were sent to hospitals, while those with milder cases checked into isolation units at converted corporate training facilities. The government used a combination of interviews and cellphone surveillance to track down the recent contacts of new patients and ordered those contacts to self-isolate as well. Within a month, the Korean outbreak was effectively contained. In the first two weeks of March, new daily cases fell from 800 to fewer than 100. (This morning, the nation of 51 million reported zero new domestic infections for the third straight day.) On April 15, the country successfully held a national parliamentary election with the highest turnout in three decades, without triggering another wave.

South Korea is not unique in its ability to bend the curve of daily cases; New Zealand, Australia, and Norway have done so, as well. But it is perhaps the largest democracy to reduce new daily cases by more than 90 percent from peak, and its density and proximity to China make the achievement particularly noteworthy. [..] In mid-March, the U.S. and South Korea had the same number of coronavirus-caused fatalities—approximately 90. In April, South Korea lost a total of 85 souls to COVID-19, while the U.S. lost 62,000—an average of 85 deaths every hour. That the U.S. population is approximately six times larger than South Korea’s does little to soften the horror of the comparison.

Read more …

Uh-oh….

South Korea Backtracks On Reopening After COVID19 Cases Jump (NW)

Despite recently reopening businesses amid an impressive decline in new coronavirus case, the South Korean government has issued a nationwide health advisory for bars and nightclubs to close down for 30 more days after health officials tracked 13 new cases to a single person who attended five nightclubs and bars in the country’s capital city of Seoul. “We believe we will have another community infection,” said Vice Health Minister Kim Gang-lip at a Friday press briefing. “The spread took place in enclosed and crowded spaces. Transmission with no known source of infection can lead to a widespread cluster infection and that is why the government is not letting its guard down.”

The man in question had no symptoms when he visited the nightspots. He eventually tested positive on Wednesday and gained admittance to a hospital in Suwon, a city south of Seoul, according to the UPI wire service. Officials think he may have come in contact with over 1,500 people during his night out. City officials are now using CCTV and credit card records to help identify visitors and are encouraging them to self-isolate and immediately report any coronavirus symptoms to local hospitals. With a decline in new cases, South Korea has allowed places of worship, museums venues, recreational facilities and nightclubs to recently resume business. The country’s high schools begin reopening next week and its lower schools will gradually reopen throughout May.

However, similar to the reopening plans of many U.S. states, South Korea has said it will pull back on and reverse reopenings if new cases emerge. While the number of coronavirus cases in South Korea originally exploded in late February and early March, the country’s Ministry of Health worked hard to conduct rigorous contact tracing, contacting anyone who had attended venues where patients with confirmed cases of coronavirus had gone. Using a combination of interviews and cellphone surveillance, anyone in proximity to these patients and their neighbors were widely tested and all encouraged to self-quarantine.

Read more …

People lock themselves down.

Enough With the Phoney ‘Lockdown’ Debate (Kay)

The skeptics who argue that lockdowns “don’t work” usually will support this claim by ticking off nations that have succeeded in fighting COVID-19 without imposing harsh government restrictions. But when you parse the actual data, what you find is that these tend to be high-trust, high-education, high-information societies—such as in Scandinavia and East Asia—where official lockdowns haven’t been necessary precisely because a critical mass of people have effectively locked themselves down on their own. If, say, spring-breakers in Miami were as conscientious and disciplined as, say, most office workers in Stockholm or Tokyo, the state’s governor wouldn’t have had to clear the beaches. But they’re not, so he did. Such spectacles tell us a lot about college students, but not much about lockdowns.


The crowdsourced aspect of lockdowns is bad news and good news. It’s bad news because getting all of society’s actors on the same page will take many months. And so we won’t be able to get our economies up and running on anything like the speedy timeline that most self-styled lockdown opponents are seeking. But it’s good news because a slower, crowdsourced form of lockdown lifting will be subject to a whole slew of negative feedback mechanisms whereby outbreaks naturally lead to corrections. And so we can avoid the problem, depicted in Ferguson’s graphs, by which sudden quantum shifts in centralized policy yield behavioural spikes whose catastrophic effects set off an endless wave of epidemiological boom and bust.

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This should have been a January headline. Now all the clusters are in place.

UK To Place All Incoming Travellers Under 14-Day Quarantine (R.)

British Prime Minister Boris Johnson will announce on Sunday that all travellers coming to the United Kingdom will be quarantined for a fortnight, The Times reported. “Passengers arriving at airports and ports including Britons returning from abroad, will have to self-isolate for 14 days,” the newspaper said, adding that travellers will have to provide the address sat which they will self-isolate on arrival. Travellers from Ireland, the Channel Islands and the Isle of Man will be exempt, as will lorry drivers bringing crucial supplies, the report added.


The authorities will carry out spot checks and those found to be breaking the rules are to face fines of up to 1,000 pounds or even deportation, the report added. According to The Times, travellers will have to fill in a digital form with details of where they plan to self-isolate themselves for the duration of the quarantine. The measures will help reduce the “transmission of the virus as we move into the next phase of our response,” the report said, citing a government source. The measures are expected to come into force in early June.

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The all-cause death number. Hot potato.

COVID19 Death Rate Sinking? Data Reveals A Complex Reality (DW)

When is a COVID-19 death counted as a COVID-19 death? The answer is not as straightforward as one might think, because different countries have different methods for determining a COVID-19 case or declaring COVID-19 as a deceased person’s cause of death. Some countries, like Spain, carry out post-mortem COVID-19 tests, while in others like Germany, the UK, or Turkey it not a common practice. Belgium, for example, counts all coronavirus deaths outside hospitals in its daily statistics: This means the country includes people suspected of having died of coronavirus, without a confirmed positive test result, whereas countries like Italy only count deaths in hospitals. Spain only recently started to count non-hospitalized, coronavirus-related deaths from some regions.

Why is the all-cause death number relevant? There are a few essential lessons we can learn from all-cause death data. According to many scientific experts, it is the only unbiased information we can trust to measure the real impact of the pandemic, and create policies to minimize its effects. The number of people dying of COVID-19 is huge, but it still is not the leading cause of death in many countries. People are more reluctant to go to hospitals because they fear contagion, or simply do not want to burden the health system further. However, a scenario in which the leading causes of death, such as heart disease or cancer, increase by even 5% could translate into hundreds of thousands of people.


David Spiegelhalter, Professor of Public Understanding of Risk from the University of Cambridge, notes the differences in each country: “I would say the all-cause death number is the really unbiased measure of the impact of this epidemic. And it’s the one I look up far more closely,” he told DW. Data collected by DW both on all-cause deaths and COVID-19 deaths shows: Thousands more people are dying directly or indirectly due to COVID-19 than the official numbers suggest. DW’s data analysis focused on Spain, England and Wales, but indicates a pattern present in other countries too.

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Success breeds success.

Want To Be More Like Sweden? What If We Already Are? (Mish)

Unlike most of the rest of the world, Sweden did not mandate coronavirus lockdowns. Instead, most measures were voluntary, but it did cutoff access to nursing homes after a surge in deaths. It has been an experiment worth monitoring. And for weeks, many in the US have been clamoring for the US to be “more like Sweden”. But what do the results really show and what is Sweden saying now? Please note the head of Sweden’s no-lockdown coronavirus plan said the country’s Heavy Death Toll ‘Came as a Surprise’ “We never really calculated with a high death toll initially, I must say,” said epidemiologist Anders Tegnell. “We calculated on more people being sick, but the death toll really came as a surprise to us.”

The deniers will point out that about half of Sweden’s deaths came from nursing homes as if those deaths don’t matter. When it comes to per-capita counts, the US is remarkably like Sweden. This can be portrayed two ways. • See, the lockdowns didn’t help. • Based on population density, Sweden is a total disaster. You should not compare a tiny Nordic country to the US but there it is anyway, for those clamoring to be more like Sweden. On a fatality rate basis, we better hope the US does not become more like Sweden. Clearly Sweden is not the success story widely claimed. Unfortunately, people will look at these charts, continue to make inane flu comparisons and continue to tout Sweden’s success. The one area of attack left open is whether or not the US approach was economically justified. I will not address that question because I will not change anyone’s mind.

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“And will some of the employees returning to work have their limbs torn off and tossed into the air like a juggler tossing bowling pins? Undoubtedly.”

Velociraptors Still On The Loose? No Reason Not To Reopen Jurassic Park (McS)

Hello, Peter Ludlow here, CEO of InGen, the company behind the wildly successful dinosaur-themed amusement park, Jurassic Park. As you’re all aware, after an unprecedented storm hit the park, we lost power and the velociraptors escaped their enclosure and killed hundreds of park visitors, prompting a two-month shutdown of the park. Well, I’m pleased to announce that, even though the velociraptors are still on the loose, we will be opening Jurassic Park back up to the public!

Now, I understand why some people might be skeptical about reopening an amusement park when there are still blindingly fast, 180-pound predators roaming around. But the fact of the matter is, velociraptors are intelligent, shifty creatures that are not going to be contained any time soon, so we might as well just start getting used to them killing a few people every now and then. Some might argue that we should follow the example of other parks that have successfully dealt with velociraptor escapes. But here at Jurassic Park, we’ve never been ones to listen to the recommendations of scientists, or safety experts, or bioethicists, so why would we start now?

As some of you know, Dr. Ian Malcolm, our lead safety consultant, had recommended that we wait until the velociraptors have been located and contained before reopening the park, so he wasn’t thrilled when we told him the news. I believe his exact words were “you were so preoccupied with whether you could reopen the park, you didn’t stop to think whether you should.” Talk about a guy on a high horse.

That said, you’ll be pleased to know that, rather than double down on our containment efforts, we’ve decided to dissolve the velociraptor containment task force altogether, and focus instead on how we can get people back into the park as quickly as possible. So rather than concentrating on so-called life-saving measures like “staying in designated safe areas” or “masking your scent,” we’ll be focusing on the details that will get our customers really excited, like a wider selection of fun hats, a pterodactyl-shaped gondola ride to the top of the island, and a brand new Gordon Ramsay designed menu at the Cretaceous Cafe.

In addition to satisfying our customers, the decision to reopen the park is also about allowing the furloughed employees of Jurassic Park to get back to the work they love. Could we have continued to pay their salaries for several months until we got the velociraptor situation under control? Definitely. We’re the wealthiest nature preserve on the planet after all. And will some of the employees returning to work have their limbs torn off and tossed into the air like a juggler tossing bowling pins? Undoubtedly. But we’re confident that with a few safety precautions put in place, we’ll be able to keep the level of workplace injuries and deaths just below levels that would elicit widespread public outrage.

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Do these people really not understand securitization? To skip a few steps, US housing would collapse without these “miscalculations”. There’s now talk of a federal agency to take over for the “servicers”. Another bottomless pit.

The Bailout Miscalculation That Could Crash the Economy (Taibbi)

When Donald Trump signed the $2 trillion CARES Act rescue on March 27, there was immediate praise across the political spectrum for section 4022, concerning homeowners in distress. Under the rule, anyone with a federally-backed mortgage could now receive instant relief. Forbearance, the law said: “…shall be granted for up to 180 days, and shall be extended for an additional period of up to 180 days at the request of the borrower.” Essentially, anyone with a federally-backed mortgage was now eligible for a six-month break from home payments. Really it was a year, given that a 180-day extension could be granted “at the request of the borrower.” It made sense. The burden of having to continue to make home payments during the coronavirus crisis would be crushing for the millions of people put out of work.

If anything, the measure didn’t go far enough, only covering homeowners with federally-backed (a.k.a. “agency”) mortgages. Still, six months or a year of relief from mortgage payments was arguably the most valuable up-front benefit of the entire bailout for ordinary people. Unfortunately, this portion of the CARES Act was conceived so badly that it birthed a potentially disastrous new issue that could have severe systemic ramifications. “Whoever wrote this bill didn’t have the faintest fucking clue how mortgages work,” is how one financial analyst put it to me. When homeowners take out mortgages, loans are bundled into pools and turned into securities, which are then sold off to investors, often big institutional players like pension funds.

Once loans are pooled and sold off as securities, the job of collecting home payments from actual people and delivering them to investors in mortgage bonds goes to companies called mortgage servicers. Many of these firms are not banks, and have familiar names like Quicken Loans or Freedom Mortgage. The mortgage servicing business is relatively uncomplicated – companies are collecting money from one group of people and handing it to another, for a fee – but these quasi-infamous firms still regularly manage to screw it up. “An industry that is just… not very good,” is the generous description of Richard Cordray, former head of the Consumer Financial Protection Bureau. Because margins in the mortgage service business are relatively small, these firms try to automate as much as possible. Many use outdated computers and have threadbare staffing policies.

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Fully bipartisan.

Wall Street-Friendly Lawmakers Sought Bailout For Shady Lenders (HuffPo)

A bipartisan group of House Financial Services Committee members asked the Federal Reserve in an April letter to extend an emergency loan program to a host of controversial financial firms that offer high-interest loans to low-income Americans. In other words, firms that offer Americans high-interest loans want a low-cost loan from the government. All 14 signatories of the April letter are recipients of campaign contributions this election cycle from the political action committee of the American Financial Services Association, or AFSA, which represents subprime lenders’ interests in Washington.

“It’s bad on the substance to have the Federal Reserve be lending to subprime consumer and small business lenders,” Graham Steele, a former Democratic counsel on the Senate Banking Committee, who now runs Stanford School of Business’ Corporations and Society Initiative. “It doesn’t look good when the members asking for that kind of bailout for these companies are also funded by those predatory lenders.” Writing to Federal Reserve Chairman Jerome Powell, the lawmakers encouraged the Fed to expand eligibility for loans from its Term Asset-Backed Securities Loan Facility, or TALF, for “non-bank lenders and fintech platforms.” “Non-bank lenders” issue loans that are less regulated than loans made by traditional banks, but they are also willing to take greater risks. And “fintech platforms” are a kind of non-bank lender that operate online and through mobile apps.

The House members – seven Democrats and seven Republicans – were responding to a letter that the AFSA sent to Congress appealing for its members to become eligible for the program. In late March, the Fed reinitiated TALF, a program it created to shore up consumer lenders after the 2008 financial crisis, to address the economic fallout from the public health response to the COVID-19 pandemic. The Fed has said that every financial institution is eligible for the emergency loans, but it will not bail out some riskier forms of credit. In the letter, the House members make clear that they specifically want TALF to include loans issued by “installment” lending firms that the program currently excludes. Those firms offer high-interest loans for low-income borrowers to pay off in installments.

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My first reaction is: that’s great, half a million fewer cars! Than I realize of course I’m not supposed to think that. “Bad, bad” for the economy!

Auto Production Collapses By 99% In Mexico and Brazil (R.)

Auto production in Mexico and Brazil, Latin America’s top producers, plunged by an unprecedented 99% in April as a result of the coronavirus crisis, with the two countries building a total of just 5,569 vehicles. In normal times, Mexico and Brazil produce over half a million cars a month combined. The industry accounts for hundreds of thousands of jobs and several percentage points of their respective countries’ gross domestic products. “The situation is difficult and dramatic,” Luiz Carlos Moraes, president of Brazil’s automakers association, told reporters.


The statements on production, made on Friday by Mexico’s Inegi statistics association and Brazil’s Anfavea automakers association, are the first available window into the sheer extent of the crisis for automakers in Latin America. The coronavirus pandemic is putting jobs in peril and raising questions about the sustainability of the industry’s international supply chains, much of which go back to China. The poor results may also be used by auto executives to obtain government aid. Both countries have so far avoided layoffs but much hinges on when production can restart and whether there will be any demand for cars once that happens. Mexico could tentatively restart production on May 18, while Brazil’s top automakers are eyeing a June restart.

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Jim quoted Comey in his headline -“I sent them”-, I changed that to a Strzok quote.

Our Utter Incompetence Actually Helps Us (Kunstler)

“Our utter incompetence actually helps us,” declared Deputy Assistant Director of the FBI Peter Strzok to his confidante (10,000 text messages) and paramour, FBI attorney Lisa Page, when he discovered on January 4, 2017, that the agency had omitted to close the barren Crossfire Razor case against General Michael Flynn. There you have a perfect summary of the fantastic hubris at work in the agency-gone-rogue under then-FBI Director Jim “I sent them” Comey days before the swearing-in of a president somehow mistakenly elected by bamboozled voters — or so the thinking apparently went at the highest level there. Or what passed for thinking.

General Flynn, you see, having been anathematized by Barack Obama, and black-spotted by the so-called Interagency (i.e. the giant hairball of competing spy shops set up after the 9/11 fiasco), was about to assume the pivotal job of White House National Security Advisor, and it was known that he was fixing to change things up with all that. He had been director of one such shop, the Defense Intelligence Agency, for a few years and he had a fair idea just how lawlessly debauched the Intel Community had grown under CIA Director John Brennan and Director of National Intelligence James Clapper, not to mention Mr. Comey, and they all knew that.

So, General Flynn had to go, and then get squeezed hard to somehow rat-out his boss, the incoming President Trump, against whom the Interagency had nothing but a dossier of already discredited oppo research baloney courtesy of the Clinton campaign. The pretext was some conversations General Flynn had with Russian Ambassador Sergey Kislyak a few weeks before the inauguration. The FBI cooked up a “narrative” that it was criminal misbehavior for a duly appointed incoming NSA to confab with foreign diplomats – a completely specious notion, of course. The Interagency’s errand boys in the press ran with that preposterous story, and the inconsolable cohort of Hillary voters herding up to form “the Resistance” went along with the gag out of sheer, crazed bitterness.

Attorney General William Barr neatly disposed of that yarn Thursday in his remarkable chat with Catherine Herridge of CBS News (transcript here), saying: “[H]e [General Flynn] was the designated national security adviser for President-Elect Trump, and was part of the transition, which is recognized by the government and funded by the government as an important function to bring in a new administration. And it is very typical, very common, for the national security team of the incoming president to communicate with foreign leaders.”

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Obama will be implicated.

What Did Joe Biden Know About Michael Flynn? (York)

It takes a little digging, but there’s a Joe Biden connection deep inside the documents released as part of the Justice Department’s decision to drop charges against former national security adviser Michael Flynn. It is this: Sally Yates was Barack Obama’s Deputy Attorney General, and as such she played a key role in the Flynn investigation. She told special counsel Robert Mueller’s prosecutors in September 2017 that she did not know about the transition phone call between Flynn and Russian ambassador Sergey Kislyak until she was told about it by…President Barack Obama.

It happened on January 5, 2017. Yates was in a group that went to the Oval Office to brief Obama on the findings of the Intelligence Community investigation into Russian campaign meddling. The meeting had all the administration’s top national security officials: FBI Director James Comey, CIA Director John Brennan, National Intelligence chief James Clapper, national security adviser Susan Rice, and other National Security Council officials. “After the briefing, Obama dismissed the group but asked Yates and Comey to stay behind,” a memo of Yates’ interview read. “Obama started by saying he had ‘learned of the information about Flynn’ and his conversation with Kislyak about sanctions.” Yates was totally blindsided. “At that point, Yates had no idea what the president was talking about,” the interview write-up said.

What does that have to do with Biden? The interview notes made no mention of the vice president. But think back to one of the stranger moments in the Trump-Russia investigation: Rice, on January 20, 2017, at almost the exact minute the Obama administration left office, sent an email to herself documenting the January 5 meeting. This is how it began: “On January 5, following a briefing by IC leadership on Russian hacking during the 2016 presidential election, President Obama had a brief follow-on conversation with FBI Director Jim Comey and Deputy Attorney General Sally Yates in the Oval Office. Vice President Biden and I were also present.”

Oh — so Biden was there, too. The Rice memo-to-self always appeared to be an oddly-timed effort to cover for Obama. “President Obama began the conversation by stressing his continued commitment to ensuring that every aspect of this issue is handled by the intelligence and law enforcement communities ‘by the book,’ Rice wrote. “The president stressed that he is not asking about, initiating or instructing anything from a law enforcement perspective. He reiterated that our law enforcement team needs to proceed as it normally would by the book.” Got that? By the book.

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” In this story, McCabe is not a news analyst. He is news. Instead of pressing him on these conflicts and allegations, he was allowed to rage against Trump, Barr, and Flynn. It is a new twist on echo journalism. McCabe the CNN analyst was echoing his own false account and calling it news analysis.”

Andrew McCabe’s Bizarre CNN Interview (Turley)

CNN host John Berman interviewed McCabe. CNN has long used McCabe to give analysis on a host of Trump-related stories despite being fired by Trump, ridiculed for his prior bias, and referred (by career officials) for possible criminal charges. This interview, however, was even more remarkable. The documents released in the Flynn case referred to McCabe and his alleged misconduct. He was not asked about any of the specific allegations against him. Instead, he gave a revisionist history that quickly crossed into fantasy. McCabe told Berman that, in December 2016, they were considering the closure of the investigation involving Flynn but that it was a “close question.” We have previously discussed this history.

On January 4, 2017, the FBI’s Washington Field Office issued a “Closing Communication” indicating that the bureau was terminating “CROSSFIRE RAZOR” — the newly disclosed codename for the investigation of Flynn. CROSSFIRE RAZOR was formed to determine whether Flynn “was directed and controlled by” or “coordinated activities with the Russian Federation in a manner which is a threat to the national security” of the United States or a violation of federal foreign agent laws. The FBI investigated Flynn and various databases and determined that “no derogatory information was identified in FBI holdings.” Due to this conclusion, the Washington Field Office concluded that Flynn “was no longer a viable candidate as part of the larger CROSSFIRE HURRICANE umbrella case.”

After Strzok intervened to stop the closure of the investigation, he texted FBI lawyer Lisa Page “Razor still open. :@ but serendipitously good, I guess. You want those chips and Oreos?” Page replied “Phew. But yeah that’s amazing that he is still open. Good, I guess.” Strzok replied “Yeah, our utter incompetence actually helps us. 20% of the time, I’m guessing :)” So McCabe was left unchallenged in saying that at that time there was a close question as to whether to close Crossfire Razor when his investigators found nothing. Nothing. That made it a close question for McCabe whether to continue to investigate the incoming Trump National Security Adviser.

What McCabe stated next was truly incredible. He told Berman that he then learned that Flynn has arranged “surreptitious meetings” with the Russians. He explained that this was akin to investigating someone for drug dealing and then learning about his meeting with drug dealers. The problem is that there was no evidence of a crime of any kind against Flynn. Moreover, this was not a “surreptitious” meeting. There was no reason for McCabe to know about the communications of the incoming National Security Adviser with foreign officials. It was not “surreptitious.” Flynn reportedly told the transition team about the call and that the Russians wanted to talk after the newly imposed sanctions against them. It is not “surreptitious” just because McCabe did not know about it and he did not reach out to the Transition Team.

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We try to run the Automatic Earth on people’s kind donations. Since their revenue has collapsed, ads no longer pay for all you read, and your support is now an integral part of the process.

Thank you.

 

 

 

 


“Yesterday, upon the stair,
I met a man who wasn’t there!
He wasn’t there again today,
Oh how I wish he’d go away

Last night I saw upon the stair,
A little man who wasn’t there,
He wasn’t there again today
I think he’s from the CIA.

– Hughes Mearns et al

 

 

Support the Automatic Earth in virustime.

 

Feb 262019
 


Salvador Dali The Feeling of Becoming 1931

 

Bubble-Era Home Mortgages Are A Disaster Waiting To Happen (Jurow)
18 Reasons Why Australian Property Prices Will Fall Further (AFR)
Imports by China, Emerging Asia Plunge Most Since 2008 (WS)
Debt Roars Back in China, Deleveraging Is Dead (BBG)
With 10-to-1 Leverage, Shadow Banks Fuel China’s Huge Stock Boom (BBG)
Paul Volcker Is Worried About the ‘Culture of the Financial System’ (Fortune)
Rising Level Of Corporate Debt A Risk To Global Economy – OECD
Germany & Netherlands The Only Real Euro Winners (RT)
Jeremy Corbyn: We’ll Back A Second Referendum To Stop Tory No-Deal Brexit (G.)
UK and US Agree Post-Brexit Derivatives Trading Deal (G.)
Judge Threatens To ‘Shut Down’ Cancer Patient’s Lawyer in Monsanto Case (G.)
Concrete Is Tipping Us Into Climate Catastrophe. It’s Payback Time (Vidal)

 

 

“..almost one-third of these delinquent owners had not paid the mortgage for at least five years..”

Bubble-Era Home Mortgages Are A Disaster Waiting To Happen (Jurow)

Remember all those sub-prime mortgages that blew up in 2007 and popped the housing bubble? The widely-held consensus is that millions of them were foreclosed as housing markets cratered. [..] The truth is these mortgages are still dangerous and could soon undermine the housing recovery. Collectively, loans from the bubble period that were not guaranteed by Fannie Mae or Freddie Mac were called non-agency securitized mortgages. Researcher Black Box Logic had an enormous database of non-agency loans until it was sold to Moody’s three years ago. At the peak of the buying madness — November 2007 — its database showed 10.6 million loans outstanding with a total balance of $2.43 trillion.

In 2016, Fitch Ratings first published a spreadsheet showing what percentage of these loans had been delinquent for more than three-, four-, or five years. Here is an updated table showing the 10-worst states and how the number of deadbeat borrowers has soared.

In 2012, just 2% of all these delinquent borrowers had not paid for more than five years. Two years later that number had skyrocketed to 21%. Why? Mortgage servicers around the country had discontinued foreclosing on millions of delinquent properties. Homeowners got wind of this and realized they could probably stop making payments without any consequences whatsoever. So they did. Take a good look at the figures for 2016. Nationwide, almost one-third of these delinquent owners had not paid the mortgage for at least five years.

In the worst four states, more than half of them were long-term deadbeats. Notice also that four of the other states were those you would not expect to have this rampant delinquency — North Dakota, Massachusetts, Vermont, and Maryland. Another way to gauge the extent of the problem is to look at the major metros with the highest delinquency rate. Here is a table of the 10 metros with the worst delinquency rate in early 2016, taken from Black Box Logic’s database.

Within the last two years, important graphs and tables showing the extent of the delinquency mess have disappeared from reports issued regularly by Fannie Mae, mutual fund provider TCW, and data provider Black Knight Financial Services. According to a TCW spokesperson, the graph is no longer published in the firm’s Mortgage Market Monitor because there did not seem to be much demand for it. Really? This graph had appeared in their report for years and showed the extremely high percentage of modified non-agency loans where the borrower had re-defaulted. Meanwhile, the omitted Fannie Mae table also showed the rising percentage of modified Fannie Mae loans that had re-defaulted. Its last published table showed re-default rates of almost 40%. Do you think these important omissions are just coincidence?

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25% in 2019 alone?!

18 Reasons Why Australian Property Prices Will Fall Further (AFR)

The housing market has taken a turn for the worse moving deeper into the decline of a debt-financed asset bubble, possibly driving house prices to fall by as much as 25 per cent in 2019 on nominal terms, according to housing bear and analyst LF Economics. The group made up of Lindsay David and Philip Soos, who have authored books on boom and bust in housing markets, lists 18 factors that are putting extreme pressure on the Sydney and Melbourne markets. Their baseline prediction is a 15 per cent to 20 per cent fall in prices just in 2019 although 25 per cent is possible.

One of the main factors driving the pressure is $120 billion worth of interest-only loans that are transitioning to principal and interest loans between now and 2021. “Banks and regulators have already softened their stance on these borrowers, allowing some greater time to sell or extending the interest-only period ,” LF Economics said in a new report “Let The Bloodbath Begin”. “Nevertheless, with debt repayments rising anywhere between 20 [per cent] to 50 per cent upon conversion, many recent borrowers will be placed under considerable financial stress.”

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Question: how are the shadow banks linked to international trade?

Imports by China, Emerging Asia Plunge Most Since 2008 (WS)

Imports by China and other emerging Asian economies in December plunged to the lowest level in two years, in the steepest one-month plunge since 2008, after having already plunged in November, according to the Merchandise World Trade Monitor, released on Monday by CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs. For November and December combined, imports by China and other Emerging Asian Economies plunged 13%, the steepest two-month plunge since November and December 2008 (-18%). In point terms, it was the largest plunge in the data going back to 2000. “Emerging Asia” includes China, Hong Kong, India, South Korea, Indonesia, Malaysia, Taiwan, Thailand, the Philippines, Pakistan, and Singapore. But China is by far the largest economy in the group, and by far the largest importer in the group.

The fact that imports into Emerging Asia are plunging is a sign of suddenly and sharply weakening demand in China. This type of abrupt demand-downturn was clearly visible in the double-digit plunge in new-vehicle sales in China over the last four months of 2018, plunging demand in many other sectors in China, and record defaults by Chinese companies. When it comes to China, “plunge is no longer an exaggeration. So the US trade actions against China – the variously implemented, threatened, or delayed tariffs – was largely geared toward hitting exports by China to the US. But it was imports that plunged! Exports from Emerging Asia too dropped in November and December, but not nearly as brutally as imports, down by 6.7% over the two months combined. And these drops were not all that unusual in the export index:

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Xi has lost control. There are reports about him being replaced, but that would be way into the future, if it happens.

Debt Roars Back in China, Deleveraging Is Dead (BBG)

For almost two years, the question has lingered over China’s market-roiling crackdown on financial leverage: How much pain can the country’s policy makers stomach? Evidence is mounting that their limit has been reached. From bank loans to trust-product issuance to margin-trading accounts at stock brokerages, leverage in China is rising nearly everywhere you look. While seasonal effects explain some of the gains, analysts say the trend has staying power as authorities shift their focus from containing the nation’s $34 trillion debt pile to shoring up the weakest economic expansion since 2009.

The government’s evolving stance was underscored by President Xi Jinping’s call for stable growth late last week, while on Monday the banking regulator said the deleveraging push had reached its target. “Deleveraging is dead,” said Alicia Garcia Herrero, chief Asia Pacific economist at Natixis in Hong Kong. Investors reacted positively to the official remarks, with the more than 30 brokerages listed in Shanghai and Shenzhen up by the 10 percent daily limit on Monday, according to data compiled by Bloomberg. Industrial & Commercial Bank of China Ltd., the world’s biggest lender by assets, rose 6.3 percent.

[..] China’s overall leverage ratio stood at 243.7 percent at the end of 2018, with corporate debt reaching 154 percent, household borrowings at 53 percent and government leverage at 37 percent, according to Zhang Xiaojing, deputy head of the Institute of Economics at the Chinese Academy of Social Sciences. Before that, the nation’s leverage ratio climbed at an average 12 percentage points each year between 2008 and 2016. China’s total debt will rise relative to GDPthis year, after a flat 2017 and a decline in 2018, Wang Tao, head of China economic research at UBS in Hong Kong, predicted in a report this month. While Wang cautioned that “re-leveraging” may increase concerns about China’s commitment to ensuring financial stability, investors have so far cheered the prospect of easier credit conditions.

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The shadows reign supreme in China.

“..a rally that added more than $1 trillion to stock values since the start of 2019.”

With 10-to-1 Leverage, Shadow Banks Fuel China’s Huge Stock Boom (BBG)

Eager to pile into the world’s most-volatile major stock market with 10-to-1 leverage? China’s shadow bankers are happy to help – and that has the nation’s policy makers worried. Just hours after China’s CSI 300 Index notched a 6 percent surge on Monday, its biggest gain in more than three years, the country’s securities regulator warned of a rise in unregulated margin debt and asked brokerages to increase monitoring for abnormal trades. The China Securities Regulatory Commission’s statement followed a pickup in advertising by margin-finance platforms, which operate with little to no supervision and offer far more leverage than the country’s regulated securities firms.

While margin debt in China is much lower today than when it helped precipitate a market collapse in 2015, investors are taking on leverage quickly as they chase a rally that added more than $1 trillion to stock values since the start of 2019. The risk is that a sudden reversal would force leveraged traders to sell, exacerbating volatility in a market that posted bigger swings than any of its peers over the past 30 days. That prospect may unnerve Chinese policy makers, who have a history of trying to protect the nation’s 147 million individual investors from outsized losses. “If the market continues to go up, the situation will get worse and so will the risks,” said Yang Hai, an analyst at Kaiyuan Securities Co. in Shanghai. “Under the current regulatory scope, investors have to shoulder risks themselves.”

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Finally someone talks to Volcker and he doesn’t say anything.

Paul Volcker Is Worried About the ‘Culture of the Financial System’ (Fortune)

Former Federal Reserve chairman Paul Volcker has some serious fears about the banking industry. And he believes supporting regulators to combat those fears is imperative. Speaking to analyst Mike Mayo in a CFA Enterprising Investor interview published on Monday, Volcker said that he’s “concerned” about the current “culture of the financial system, banking in particular.” He told Mayo that banks have been dominated by “how much profit the firm (and you) make.” And he believes that the focus on profitability could ultimately affect corporate oversight. “What’s the role of directors in keeping culture under control?” he asked. “Can the directors of a big bank really do an effective job of overseeing an institution? Or do they see their job as protecting the CEO who they appointed?

Or maybe the CEO appointed them, so there is a certain amount of built in mutual interest in ducking emphasis on internal controls.” Volcker, who served as Fed chairman during the Carter and Reagan administrations, has been one of the more vocal supporters of controlling and regulating banks. He’s the namesake for the Volcker Rule, which aims at limiting banking activity and bank interaction with hedge funds and private equity funds. It also puts the onus on banks to protect customers. In his interview with Mayo, Volcker talked about the importance of banks protecting their customers. He said that a right and good banking culture is one where “the customer comes first.” The issue, however, is that banks sometimes fail in doing that, Volcker said.

Read more …

No kidding.

Rising Level Of Corporate Debt A Risk To Global Economy – OECD

The global economy faces escalating risks from rising levels of corporate debt, with companies around the world needing to repay or refinance as much as $4tn (£3.1tn) over the next three years, according to the OECD. Sounding the alarm over the scale of the debt mountain built up over the past decade since the last financial crisis, the Paris-based Organisation for Economic Co-operation and Development found that global company borrowing has ballooned to reach $13tn by the end of last year – more than double the level before the 2008 crash. Nearly the equivalent of the entire US Federal Reserve balance sheet – roughly $4tn – will need to be repaid or refinanced over the coming years, the report said. However, the task is complicated by cooling economic growth from trade tensions and a slower rate of expansion in China ..

Financial market investors have grown increasingly concerned that high debt levels in the US could turn a looming slowdown for the world’s largest economy into a full-blown recession. High debt levels in several other nations as the Federal Reserve raises interest rates has also rattled financial markets in recent months. According to research from the Economist Intelligence Unit, a potential meltdown in the US bond market is the second biggest risk to the world economy after the US-China trade standoff, amid a combination of global economic headwinds “more wide-ranging and complex than at any point since the great recession”. The IMF has previously warned of gathering “storm clouds” for the world economy, including from trade tensions and heightened levels of debt – particularly in China.

Read more …

.. since 1999, Germans on average cumulatively richer by $26,120. Italians poorer by $84,000.

Germany & Netherlands The Only Real Euro Winners (RT)

The eurozone’s single currency, the euro, has been a serious drag on the economic growth of almost every member of the bloc, according to a study by German think tank, the Centre for European Politics (CEP).
Germany and the Netherlands, however, have benefited enormously from the euro over the 20 years since its launch, the study showed. The currency triggered credit and investment booms by extending the benefits of Germany’s low interest-rate environment across the bloc’s periphery. However, those debts became hard to sustain after the 2008 financial crisis, with Greece, Ireland, Spain, Portugal and Cyprus forced to seek financial aid as growth slowed and financing became scarce.

According to CEP, over the entire period since 1999, Germans were on average estimated to be cumulatively richer by €23,000 ($26,120) than they would otherwise have been, while the Dutch were €21,000 ($23,850) wealthier. To compare, Italians and French were each €74,000 ($84,000) and €56,000 ($63,600) poorer, respectively. The survey did not include one of Europe’s fastest-growing economies, Ireland, due to a lack of appropriate data. [..] In the first few years after its introduction, Greece gained hugely from the euro but since 2011 has suffered enormous losses,” the authors wrote, explaining that over the whole period, Greeks were each €190 ($216) richer than they would have been.

The study concluded that since the loser countries could no longer restore their competitiveness by devaluing their currencies, they had to double down on structural reforms. Spain was highlighted as a country that was on track to erase the growth deficit it had built up since the euro’s introduction. “Since 2011, euro accession has resulted in a reduction in prosperity. Losses reached their peak in 2014. Since then, they have been falling steadily,” said the report, adding: “The reforms that have been carried out, are paying off.”

Read more …

Corbyn should have been much more concerned about his credibility. This late in the game, does it even matter anymore?

Jeremy Corbyn: We’ll Back A Second Referendum To Stop Tory No-Deal Brexit (G.)

Jeremy Corbyn has finally thrown his party’s weight behind a second EU referendum, backing moves for a fresh poll with remain on the ballot paper if Labour should fail to get its own version of a Brexit deal passed this week. The decision to give the party’s backing to a second referendum follows a concerted push by the shadow Brexit secretary, Sir Keir Starmer, and deputy leader, Tom Watson, who fear any further delay could have led to more defections to the breakaway Independent Group (TIG), whose members all back a second referendum. Although the move has delighted MPs who are backing the People’s Vote campaign, Corbyn is likely to face determined opposition from dozens of MPs in leave seats if the party whips to back a second referendum, including a significant number of frontbenchers.

The former shadow minister Lucy Powell said she believed at least 25 MPs would vote against any whip to back a second referendum, meaning that it would face an uphill struggle to pass the Commons without significant Conservative support. A private briefing sent to Labour MPs on Monday night and seen by the Guardian makes it clear that Labour’s policy would be to include remain as an option in any future referendum. “We’ve always said that any referendum would need to have a credible leave option and remain,” the briefing said. “Obviously at this stage that is yet to be decided and would have to be agreed by parliament.”

The briefing also makes it clear that the party would not support no deal being included on the ballot paper. “There’s no majority for a no-deal outcome and Labour would not countenance supporting no deal as an option,” the briefing says. “What we are calling for is a referendum to confirm a Brexit deal, not to proceed to no deal.”

https://twitter.com/i/status/1100294356706168832

Read more …

No matter how big the political mess,

UK and US Agree Post-Brexit Derivatives Trading Deal (G.)

The US has lent its backing to Britain to protect the City from losing trillions of pounds of complex financial derivatives business after Brexit, warding off a potential banking industry land grab by the EU. In a joint announcement heralded as a sign of the special relationship between the UK and the US, the two countries said they would take every step to ensure the continued trading of derivatives across the Atlantic under every Brexit eventuality. Derivatives are financial contracts widely used by companies to manage risks, ranging from hedging against changes in central bank interest rates to fluctuations in commodity prices. Brexit threatens to unpick trading in the UK, even with the US, as City banks currently operate under EU rules while Britain is a member of the bloc.

Under the steps announced by the Bank of England, the Financial Conduct Authority and the US Commodity Futures Trading Commission, firms working in the US and the UK will continue to meet the requirements required to operate in both countries, even if Britain leaves the EU without a deal. London and New York sit at the centre of the world’s multitrillion-pound derivatives market, with the US and the UK controlling 80% of the $594tn (£454tn) a year business – worth more than five times world GDP. About a third of the £230tn of derivatives contracts traded in the UK every year come from US companies, more than any other jurisdiction. The development comes as Brussels prepares rules that would force clearing houses – financial institutions key to the trading of derivatives – outside the EU to come under the supervision of its regulators.

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This is getting awfully close to class justice. Monsanto has hundreds of the top lawyers, and what do the plaintiffs have?

Judge Threatens To ‘Shut Down’ Cancer Patient’s Lawyer in Monsanto Case (G.)

Monsanto is facing its first federal trial over allegations that its Roundup weedkiller causes cancer, but a US judge has blocked attorneys from discussing the corporation’s alleged manipulation of science. In an extraordinary move in a packed San Francisco courtroom on Monday, US judge Vince Chhabria threatened to sanction and “shut down” a cancer patient’s attorney for violating his ban on talking about Monsanto’s influence on government regulators and cancer research. “You’ve completely disregarded the limitations that were set upon you,” the visibly angry judge said to attorney Aimee Wagstaff, threatening to prevent her from continuing. “If you cross the line one more time … your opening statement will be over … If I see a single inappropriate thing on those slides, I’m shutting you down.”

The unusual conflict in the federal courtroom has fueled concerns among Monsanto’s critics that the trial may be unfairly stacked against the plaintiff, Edwin Hardeman, a 70-year-old Santa Rosa man who alleges that his exposure to Roundup over several decades caused his cancer. Building on longstanding allegations, Hardeman’s lawyers and other critics have argued that Monsanto has for years suppressed negative studies and worked to promote and “ghostwrite” favorable studies about its herbicide to influence the public and regulators.

In a blow to the plaintiffs, Chhabria this year approved Monsanto’s request to prohibit Hardeman’s attorneys from raising allegations about the corporation’s conduct, saying issues about its influence on science and government were a “significant … distraction”. That means jurors must narrowly consider the studies surrounding Roundup’s cancer risks, and if they rule that Monsanto caused Hardeman’s illness, then in a second phase the jury would learn about the company’s conduct when assessing liability and punitive damages.

[..] Wagstaff told the Guardian last week before trial began that the limitations on evidence in the first phase meant the “jury will only hear half of the story”. “The jury will hear about the science, but they won’t get to hear about how Monsanto influenced it,” she said. “The jury won’t have a complete understanding of the science. If we win without the jury knowing the complete science, that’s a real problem for Monsanto.” Chhabria repeatedly interrupted Wagstaff’s opening statement Monday morning, reminding jurors that her comments did not constitute evidence and should be taken with a “grain of salt”. He also asked her to speed up when she was introducing Hardeman and his wife and discussing how they first met in 1975.

Wagstaff spoke in detail about the research on cancer and glyphosate, about some of Monsanto’s involvement in studies, and about the company’s communications with the Environmental Protection Agency. [..] The restrictions on testimony about Monsanto’s conduct and alleged manipulation of science is likely to be a major detriment to Hardeman and future plaintiffs, said Jean M Eggen, professor emerita at Widener University Delaware Law School. “It was a brilliant move on the part of the defendant Bayer to try to keep [out] all of that information,” she said. “And it may pay off for them.”

Read more …

We paved paradise. Which is a much wider and bigger issue than just a climate one.

Concrete Is Tipping Us Into Climate Catastrophe. It’s Payback Time (Vidal)

Because of the heat needed to decompose rock and the natural chemical processes involved in making cement, every tonne made releases one tonne of C02, the main greenhouse warming gas. Including the new Crossrail line through London, the building of Britain’s four largest current construction projects will, if completed, together emit more than 10m tonnes of CO2 – roughly the same amount as a city the size of Birmingham, or what 19 million Malawians emit in a year. Nearly 6% of all UK greenhouse gas emissions, and up to 8% of the world’s, are now sourced from cement production. If it were a country, the cement industry would be the third largest in the world, its emissions behind only China and the US.

So great is its carbon footprint that unless it is transformed and made to adopt cleaner practices, the industry could, on its own, jeopardise the whole 2015 Paris agreement which aims to hold worldwide temperatures to a 2C increase. To bring it into line, the UN says its annual emissions need to fall about 16% in the next 10 years, and by far more in the future. While some of the biggest cement companies have reduced the carbon intensity of their products by investing in more fuel-efficient kilns, most improvements gained have been overshadowed by the massive increase in global cement and concrete production. Population increases, the urban explosion in Asia and Africa, the need to build dams, roads and houses, as well as increases in personal wealth have stoked demand.

Read more …

Apr 092018
 


Keith Haring Retrospect 1989

 

Longtime and dear friend of the Automatic Earth, professor Steve Keen, wrote an article recently that everyone should read (that goes for everything Steve writes). It’s hard to select highlights, but I’ll give it a try. Steve explains where our housing markets went off the rails, what (short-sighted) interests politicians have in subverting them, and, something rarely addressed, why housing markets are unlike any other markets (the turnover of existing properties is financed with newly created money)

He then suggests some measures that might counter this subversion, with a twang of It’s a Wonderful Life nostalgia thrown in. That nostalgia, which will be seen by many as outdated and a grave mistake in these ‘modern times’, instead makes a lot of sense. We might even say it’s the only way to get back on our feet. It resides in the idea that money-circulating building societies, rather than money-creating banks should be in charge of the housing market.

Because it’s not supply and demand that rule the market today, it’s available debt (credit). And banks can, and will, always create more debt at the stroke of a keyboard. That is, until they can’t, and then house prices must and will of necessity fall off a cliff. In Steve’s words: “..mortgage credit causes house prices to rise, leading to yet more credit being taken on until, as in 2008, the process breaks down. And it has to break down, because the only way to sustain it is for debt to continue rising faster than income.

Still, it left me with a big question. But I’ll ask that at the end; here’s Steve first.

 

The Housing Crisis – There’s Nothing We Can Do… Or Is There?

[..] the UK data is remarkable, even in the context of a worldwide trend to higher levels of leverage. Between 1880 and 1980, private debt in the UK fluctuated as a percentage of GDP, but it never once reached 75% of GDP. But in 1982, both household and corporate debt took off. In 1982, total private debt was equivalent to 61% of GDP, split equally between households and corporations. 25 years later, as the global financial crisis unfolded, private debt was three times larger at 197% of GDP, again split 50:50 between households and corporations.

The key changes to legislation that occurred in 1982 is the UK let banks muscle into the mortgage market that was previously dominated by building societies. This was sold in terms of improving competition in the mortgage market, to the benefit of house buyers: allegedly, mortgage costs would fall. But its most profound impact was something much more insidious: it enabled the creation of credit money to fuel rising house prices, setting off a feedback loop that only ended in 2008.

Building societies don’t create money when they lend, because they lend from a bank account that stores the accumulated savings of their members. There’s no change in bank deposits, which are by far the largest component of the money supply.

However, banks do create money when they lend, because a bank records a loan as their asset when they make an identical entry in the borrower’s account, which enables the property to be bought. This dramatically inflates the price of housing, since, as the politicians themselves acknowledge – housing supply is inflexible, so prices increase far more than supply.

The supply side of the housing market has two main factors: the turnover of the existing stock of housing, and the net change in the number of houses (thanks to demolition of old properties and construction of new ones). The turnover of existing properties is far larger than the construction rate of new ones, and this alone makes housing different to your ordinary market. The demand side of the housing market has one main factor: new mortgages created by the banks.

Monetary demand for housing is therefore predominantly mortgage credit: the annual increase in mortgage debt. This also makes housing very different to ordinary markets, where most demand comes from the turnover of existing money, rather than from newly created money.

We can convert the credit-financed monetary demand for housing into a physical demand for new houses per year by dividing by the price level. This gives us a relationship between the level of mortgage credit and the level of house prices. There is therefore a relationship between the change in mortgage credit and the change in house prices. This relationship is ignored in mainstream politics and mainstream economics. But it is the major determinant of house prices: house prices rise when mortgage credit rises, and they fall when mortgage credit falls. This relationship is obvious even for the UK, where mortgage debt data isn’t systematically collected, and I am therefore forced to use data on total household debt (including credit cards, car loans etc.).

Even then, the correlation is obvious (for the technically minded, the correlation coefficient is 0.6). The US does publish data on mortgage debt, and there the correlation is an even stronger 0.78—and standard econometric tests establish that the causal process runs from mortgage debt to house prices, and not vice versa (the downturn in house prices began earlier in the USA, and was an obvious pre-cursor to the crisis there).

None of this would have happened – at least not in the UK – had mortgage lending remained the province of money-circulating building societies, rather than letting money-creating banks into the market. It’s too late to unscramble that omelette, but there are still things that politicians could do make it less toxic for the public.

The toxicity arises from the fact that the mortgage credit causes house prices to rise, leading to yet more credit being taken on until, as in 2008, the process breaks down.

And it has to break down, because the only way to sustain it is for debt to continue rising faster than income. Once that stops happening, demand evaporates, house prices collapse, and they take the economy down with them. That is no way to run an economy.

Yet far from learning this lesson, politicians continue to allow lending practices that facilitate this toxic feedback between leverage and house prices. A decade after the UK (and the USA, and Spain, and Ireland) suffered property crashes – and economic crises because of them – it takes just a millisecond of Internet searching to find lenders who will provide 100% mortgage finance based on the price of the property.

This should not be allowed. Instead, the maximum that lenders can provide should be limited to some multiple of a property’s actual or imputed rental income, so that the income-earning potential of a property is the basis of the lending allowed against it.

 

Two smaller points first: Steve doesn’t mention the role of ultra-low rates. Which is a huge factor leading the process. Second, he says his proposals will “..transition us from a world in which we treat housing as a speculative asset rather than what it really is, a long-lived consumption good”. I wonder if perhaps we should take this a step further.

We don’t see land as a consumption good either, or water sources. They are assets that belong to a given community. Or should. So shouldn’t buildings be too? A building society (or some local equivalent, It’s a Wonderful Life style) in a community can’t, won’t lend out money to build homes that serve the interests of the owner, but hamper those of the community. But now I sound even more commie than Steve for many, I know.

 

On to my main point: if you return mortgage lending to money-circulating building societies, rather than money-creating banks, who’s going to create the money? Don’t let’s forget that a huge part of our present money supply comes from those banks, and much of that from the mortgage loans they issue. Steve may well have thought about this (was he afraid to ask?), and I’d be curious to see his views.

Inflation/deflation is a function of money supply x money velocity (MxV). There are multiple ways to define this, and discuss it, but in the end this remains valid.

This is what the US money supply (stock) has done over the past 30-odd years

 

 

And here is the Case/Shiller home price index for the US over roughly that period. The correlation is painfully clear. Except maybe for that drop in 2008, but the Fed caught that one. Can’t let the money supply fall off a cliff.

 

 

And why can’t we afford to let the money supply fall off a cliff? Because money velocity already has:

 

 

How dramatic that fall has been is perhaps even clearer on a shorter time-frame.

 

 

We can say that MV = GDP, or we can make it a bit more complex with MV=PT, where P is prices and T is transactions (or national output), and people can say that this is just one of many ways to define inflation, but when you have a drop in velocity as steep as that one, and you combine it with the rise in money supply we saw, the danger should be obvious.

We have made our economies fully dependent on banks creating loans out of thin air. Which is a ridiculous model, and as Steve says: “That is no way to run an economy”, but we still have. And if and when home prices start to fall, and fewer people buy homes, the money supply will first stop rising, and then start falling, and we will have the mother of all deflations.

If you take the MV = GDP formulation, GDP will go down right with the money supply, unless velocity (V) soars. Which it can’t, because people are maxed out on those mortgages. They can’t spend. If you go with MV=PT, then if money supply falls, so will prices. Unless transactions (output) is demolished, but that will just kill off velocity even more. Why many people see inflation in our future is hard to gauge.

 

We could, presumably, get our central banks to pump ginormous amounts of money into our societies, but where are they going to put it? Not into our banks(!), which wouldn’t create all those loans anymore, as It’s a Wonderful Life takes over that role, taking the banks and their present role down with it.

Because it’s starting to get obvious that the present ‘system’ is set to go down big time, since as Steve put it:the only way to sustain it is for debt to continue rising faster than income, and we all know where that goes, we can advocate a version of controlled demolition, but who would lead that?

The banks are the most powerful party at the table right now, and controlled demolition of what we have today, as sensible as it may be for society at large, is not for them. Which makes this not only a financial problem, but a political one too: where does power reside. Down the line, it doesn’t even seem to matter much who gives out the loans, there will be very few takers.

Let’s just say we’re open to suggestions. But they better be good.

 

 

Apr 012018
 


Rembrandt van Rijn Christ and St Mary Magdalene at the Tomb 1638

 

US Homes Become ATMs Again (MW)
The Housing Crisis – There’s Nothing We Can Do… Or Is There? (Steve Keen)
Fear is Back (MW)
The S&P’s 200-DMA: Why It Ain’t No Maginot Line (Stockman)
Trump Renews Amazon Attack, Says ‘Post Office Scam’ Must Stop (BBG)
Senator Warren, In Beijing, Says US Is Waking Up To Chinese Abuses (R.)
Yanis Varoufakis: ‘Greece Is A Debtors’ Prison’ (G.)
Emmanuel Macron On France’s AI Strategy (Wired)
Conservationists Call For Urgent Action To Fix ‘America’s Wildlife Crisis’ (G.)
More Poachers Than Rhinos Killed In India Reserve (BBC)

 

 

There’s nonsense and then there’s nonsense. Staying in your home is now a “huge expansion of retirement options”: “We’ve seen a huge expansion of the types of retirement options people have. One is aging in place and retrofitting your house.”

US Homes Become ATMs Again (MW)

As interest rates rise, fewer households refinance their mortgages. And the refinances that do get done are often very different than those initiated during low-rate periods. “When rates are low, the primary goal of refinancing is to reduce the monthly payment,” wrote researchers for the Urban Institute in a recent report. “But when rates are high, borrowers have no incentive to refinance for rate reasons. Those who still refinance tend to be driven more by their desire to cash out.” “Cashing out” is shorthand for taking out a new mortgage that’s bigger than the remaining balance on the old one and using the money that makes up the difference for discretionary purchases.

As of the fourth quarter of last year, the share of all refinances that were cash-outs rose to the highest since 2008, according to Freddie Mac data. Rates have churned higher since the presidential election in late 2016, though they spent much of 2017 reversing the immediate post-election surge. It’s not clear whether the overall volume of cash-out refinances is rising. Right now they’re making up a bigger share of the pie because traditional lower-monthly-payment refis are plunging. Tapping into home equity is often a good way for owners to consolidate or manage other, more expensive, forms of debt like high-interest credit cards or bills for higher education.

“As people stay in their homes longer we see people reinvesting in their homes by using equity to update their homes and do repair work,” said Rick Sharga, executive vice president for Carrington Mortgage Holdings and an industry veteran. That’s especially true for older Americans, he added. “We’ve seen a huge expansion of the types of retirement options people have. One is aging in place and retrofitting your house.”

Read more …

Housing markets need ever more private debt. So then does the overall economy.

The Housing Crisis – There’s Nothing We Can Do… Or Is There? (Steve Keen)

The supply side of the housing market has two main two factors: the turnover of the existing stock of housing, and the net change in the number of houses (thanks to demolition of old properties and construction of new ones). The turnover of existing properties is far larger than the construction rate of new ones, and this alone makes housing different to your ordinary market. The demand side of the housing market has one main factor: new mortgages created by the banks. Monetary demand for housing is therefore predominantly mortgage credit: the annual increase in mortgage debt. This also makes housing very different to ordinary markets, where most demand comes from the turnover of existing money, rather than from newly created money.

We can convert the credit-financed monetary demand for housing into a physical demand for new houses per year by dividing by the price level. This gives us a relationship between the level of mortgage credit and the level of house prices. There is therefore a relationship between the change in mortgage credit and the change in house prices. This relationship is ignored in mainstream politics and mainstream economics. But it is the major determinant of house prices: house prices rise when mortgage credit rises, and they fall when mortgage credit falls. This relationship is obvious even for the UK, where mortgage debt data isn’t systematically collected, and I am therefore forced to use data on total household debt (including credit cards, car loans etc.).

Even then, the correlation is obvious (for the technically minded, the correlation coefficient is 0.6). The US does publish data on mortgage debt, and there the correlation is an even stronger 0.78—and standard econometric tests establish that the causal process runs from mortgage debt to house prices, and not vice versa (the downturn in house prices began earlier in the USA, and was an obvious pre-cursor to the crisis there).

None of this would have happened – at least not in the UK – had mortgage lending remained the province of money-circulating building societies, rather than letting money-creating banks into the market. It’s too late to unscramble that omelette, but there are still things that politicians could do make it less toxic for the public. The toxicity arises from the fact that the mortgage credit causes house prices to rise, leading to yet more credit being taken on until, as in 2008, the process breaks down. And it has to break down, because the only way to sustain it is for debt to continue rising faster than income. Once that stops happening, demand evaporates, house prices collapse, and they take the economy down with them. That is no way to run an economy.

Yet far from learning this lesson, politicians continue to allow lending practices that facilitate this toxic feedback between leverage and house prices. A decade after the UK (and the USA, and Spain, and Ireland) suffered property crashes – and economic crises because of them – it takes just a millisecond of Internet searching to find lenders who will provide 100% mortgage finance based on the price of the property. This should not be allowed. Instead, the maximum that lenders can provide should be limited to some multiple of a property’s actual or imputed rental income, so that the income-earning potential of a property is the basis of the lending allowed against it.

Read more …

Fear is needed.

Fear is Back (MW)

The Dow and the S&P 500 halted a record-setting streak of quarterly wins at nine, and the clearest reason why may be explained by the VIX index, widely known as Wall Street’s “fear gauge.” The Dow Jones Industrial Average posted a quarterly decline of more than 2.3%, snapping the longest streak of quarterly gains for the blue-chip average since an 11-quarter rally that ended in the third quarter of 1997. The S&P 500 index booked a 1.2% quarterly fall, ending its longest such stretch since the first quarter of 2015.

There are perhaps a host of reasons for the surcease of such a lengthy bullish run for the most prominent equity benchmarks: The Federal Reserve’s normalization of monetary policy, with the central bank lifting rates for the fifth time this month since December 2015; Intensifying uncertainty in the makeup and agenda of President Donald Trump’s administration, underscored by a number of high-profile departures; and the intensification of trade-war fears, after the president imposed duties on steel and aluminum imports and leveled more targeted tariffs at the world’s second-largest economy: China.

However, the surge in the Cboe Volatility Index VIX is perhaps the most correlated with the market’s downtrend. According to WSJ Market Data Group, the VIX posted its biggest quarterly rise, up 81% since it jumped in the third-quarter of 2011 following Standard & Poor’s historical downgrade of the U.S. credit rating and European debt-crisis jitters.

Read more …

Rhyme and repeat.

The S&P’s 200-DMA: Why It Ain’t No Maginot Line (Stockman)

For the last five years the S&P 500 has been dancing up its ascending 200-day moving average (200-DMA), bouncing higher repeatedly whenever the dip-buyers did their thing. Only twice did the index actually break below this seeming Maginot Line: In August 2015, after the China stock crash, and in February 2016, when the shale patch/energy sector hit the wall. As is evident below, since the frenzied peak of 2873 on January 26, the index has fallen hard twice—on February 8 (2581) and March 23 (2588). Self-evidently, both times the momo traders and robo-machines came roaring back with a stick-save which was smack upon the 200-DMA.

But here’s the thing. The blue line below ain’t no Maginot Line; it’s just the place where the Pavlovian dogs of Bubble Finance have “marked” the charts. And something is starting to smell. In fact, it’s starting to smell very much like an earlier go-round when Pavlov’s 200-DMA barkers had enjoyed a prolonged ascent – only to find an unexpected cliff-diving opportunity at the end. We refer to the nearly identical five year run-up to the March 2000 top at 1508 on the S&P 500. Back then, too, the 200-DMA looked invincible, and had only been penetrated by the August 1998 Russian bankruptcy and the Long Term Capital Management meltdown a month later.

Indeed, the bounce from the October 8, 1998 interim bottom of 960 was nearly parabolic, rising by 57% to the March 2000 top. That latter point might sound vaguely familiar. That’s because the rebound from the February 11, 2016 interim bottom (1829) to the January 26th top (2873) this year was, well, 57%!

Read more …

This is going to cost Amazon.

Trump Renews Amazon Attack, Says ‘Post Office Scam’ Must Stop (BBG)

President Donald Trump lit into Amazon.com Inc. for the second time in three days with a pair of Twitter messages that said the online retailer “must pay real costs (and taxes) now!” The president on Saturday claimed, citing reports he didn’t specify, that the U.S. Postal Service “will lose $1.50 on average for each package it delivers for Amazon” and added that the “Post Office scam must stop.” Amazon has said the postal service, which has financial problems stretching back for years, makes money on its deliveries. Amazon shed $53 billion in market value on Wednesday after Axios reported that the president is “obsessed” with regulating the e-commerce giant, whose founder and chief executive officer, Jeff Bezos, also owns the Washington Post newspaper.

Those losses were pared on Thursday, the final day of a shortened trading week, even as Trump tweeted that Amazon was using the postal service as its “Delivery Boy.” White House spokeswoman Lindsay Walters said on Thursday that while the president was displeased with the e-commerce giant, and particularly instances where third-party sellers on the site didn’t collect sales tax, there were no administrative actions planned against Amazon “at this time.” Still, Brad Parscale, who’s managing Trump’s 2020 presidential campaign, hinted in a tweet late Thursday that the administration may act to raise Amazon’s postal costs. “Once the market figures out that a single @usps rule change will crush @amazon’s bottom line we will see,” Parscale wrote.

Amazon.com and the Washington Post have been regular punching bags for Trump. In July, the president mused about whether the newspaper was “being used as a lobbyist weapon” to keep Congress from looking into Amazon’s business practices. He echoed that comment on Saturday, saying the Post “is used as a ‘lobbyist’ and should so REGISTER.” [..] While full details of the agreement between Amazon and the U.S. Postal Service are unknown – the mail carrier is independently operated, and strikes confidential deals with retailers – David Vernon, an analyst at Bernstein Research who tracks the shipping industry, estimated in 2015 that the USPS handled 40% of Amazon’s volume the previous year.

He estimated at the time that Amazon pays the postal service $2 per package, which is about half what it would pay UPS or FedEx. A sudden increase in postal rates would cost Amazon about $2.6 billion a year, according to a report by Citigroup from April 2017. That report predicted UPS and FedEx would also raise rates in response to a postal service hike. Citigroup also said that the “true” cost of shipping packages for the USPS is about 50% higher than its current rates, leading some editorial writers to conclude that Amazon was receiving the type of subsidy cited in Trump’s Thursday tweet.

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Wait, wasn’t she supposed to be the anti-Trump?

Senator Warren, In Beijing, Says US Is Waking Up To Chinese Abuses (R.)

U.S. policy toward China has been misdirected for decades and policymakers are now recalibrating ties, Senator Elizabeth Warren told reporters during a visit to Beijing amid heightened trade tensions between the world’s two largest economies. Warren’s visit comes as U.S. President Donald Trump prepares to implement more than $50 billion in tariffs on Chinese goods meant to punish China over U.S. allegations that Beijing systematically misappropriated American intellectual property. The Massachusetts Democrat and Trump foe, who has been touted as a potential 2020 presidential candidate despite rejecting such speculation, has said U.S. trade policy needs a rethink and that she is not afraid of tariffs.

After years of mistakenly assuming economic engagement would lead to a more open China, the U.S. government was waking up to Chinese demands for U.S. companies to give up their know-how in exchange for access to its market, Warren said. “The whole policy was misdirected. We told ourselves a happy-face story that never fit with the facts,” Warren told reporters on Saturday, during a three-day visit to China that began on Friday. “Now U.S. policymakers are starting to look more aggressively at pushing China to open up the markets without demanding a hostage price of access to U.S. technology,” she said.

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A poisonous political climate.

Yanis Varoufakis: ‘Greece Is A Debtors’ Prison’ (G.)

Yanis Varoufakis is back. He, of course, would say he never went away, but in Greece’s hurly-burly world of politics his is a name prone to triggering toxic reaction. Abroad, the shaven-headed economist is feted as the man who took on Europe’s establishment. At home, the former finance minister is seen, on both left and right, as a reckless incarnation of all that was wrong with Greece at the height of its struggle to remain in the eurozone. In Athens and Brussels, his confrontational style is still blamed for the price the debt-stricken country had to pay to be bailed out in the summer of 2015. Although his resignation now seems a long time ago, the sight of Varoufakis launching his own party in Greece has unleashed emotions that have run the gamut from enthusiasm to anger and disdain.

Media reaction has been cool; so, too, has that of politicians. None of which seems to bother him in the least. “Nobody believes the systemic media in Greece, and they’re all bankrupt,” he told the Observer with typical defiance, days after announcing his new venture in a packed Athens theatre. “To those who say I cost the country, and I’ve heard €30bn, €86bn, €100bn and even €200bn… I say I cost exactly zero. The troika [of creditors] cost Greece two generations and continue to impose cost.” At 57, in his leather bomber jacket and boots, Varoufakis clearly relishes his anti-establishment role and believes the birth of his European Realistic Disobedience Front, AKA MeRA25, is not a moment too late. Greece, almost nine years after the eurozone crisis erupted, is still condemned to being a debtors’ colony, he says.

[..] MeRA 25 has been working behind the scenes for a year now. Its plan is to contest the European elections in May 2019, although Varoufakis acknowledges Tsipras may elect to call a general election before that. After almost a decade under international surveillance, Athens will exit its third international rescue programme – the biggest sovereign bailout in global financial history – in August. With his popularity compromised under the weight of enforcing measures he once vehemently opposed, Tsipras may opt to capitalise on the success of finally exiting the programme and economic oversight. “We have travelled the whole country and held rallies in all major towns,” says Varoufakis, adding that politicians are already expressing interest in jumping ship.

Far from being saved, Varoufakis believes Greece’s future has been put on hold. If anything, he argues, it is in for an even tougher time because Europe has elected to tackle its debt problem by taking the “extend and pretend” approach of prolonging repayment timetables and condemning the country to decades of further austerity. More pension cuts and tax hikes loom, legislated by MPs at the behest of the EU and IMF. Short of measures to stop the rot, Varoufakis quips that he sees Greece becoming another Kosovo, “with beautiful beaches, only it’s a protectorate emptied of its young people. Every month 15-20,000 young Greeks leave. Everywhere I go, I meet them.”

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Macron knows what’s best for you. He’s your big brother.

Emmanuel Macron On France’s AI Strategy (Wired)

I want to create an advantage for my country in artificial intelligence, directly. And that’s why we have these announcements made by Facebook, Google, Samsung, IBM, DeepMind, Fujitsu who choose Paris to create AI labs and research centers: this is very important to me. Second, I want my country to be part of the revolution that AI will trigger in mobility, energy, defense, finance, healthcare and so on. Because it will create value as well. Third, I want AI to be totally federalized. Why? Because AI is about disruption and dealing with impacts of disruption. For instance, this kind of disruption can destroy a lot of jobs in some sectors and create a need to retrain people. But AI could also be one of the solutions to better train these people and help them to find new jobs, which is good for my country, and very important.

I want my country to be the place where this new perspective on AI is built, on the basis of interdisciplinarity: this means crossing maths, social sciences, technology, and philosophy. That’s absolutely critical. Because at one point in time, if you don’t frame these innovations from the start, a worst-case scenario will force you to deal with this debate down the line. I think privacy has been a hidden debate for a long time in the US. Now, it emerged because of the Facebook issue. Security was also a hidden debate of autonomous driving. Now, because we’ve had this issue with Uber, it rises to the surface. So if you don’t want to block innovation, it is better to frame it by design within ethical and philosophical boundaries. And I think we are very well equipped to do it, on top of developing the business in my country.

But I think as well that AI could totally jeopardize democracy. For instance, we are using artificial intelligence to organize the access to universities for our students That puts a lot of responsibility on an algorithm. A lot of people see it as a black box, they don’t understand how the student selection process happens. But the day they start to understand that this relies on an algorithm, this algorithm has a specific responsibility. If you want, precisely, to structure this debate, you have to create the conditions of fairness of the algorithm and of its full transparency. I have to be confident for my people that there is no bias, at least no unfair bias, in this algorithm.

I have to be able to tell French citizens, “OK, I encouraged this innovation because it will allow you to get access to new services, it will improve your lives—that’s a good innovation to you.” I have to guarantee there is no bias in terms of gender, age, or other individual characteristics, except if this is the one I decided on behalf of them or in front of them. This is a huge issue that needs to be addressed. If you don’t deal with it from the very beginning, if you don’t consider it is as important as developing innovation, you will miss something and at a point in time, it will block everything. Because people will eventually reject this innovation.

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“..more than 150 US species have already become extinct while a further 500 species have not been seen in recent decades..”

Conservationists Call For Urgent Action To Fix ‘America’s Wildlife Crisis’ (G.)

An extinction crisis is rippling though America’s wildlife, with scores of species at risk of being wiped out unless recovery plans start to receive sufficient funding, conservationists have warned. One-third of species in the US are vulnerable to extinction, a crisis that has ravaged swaths of creatures such as butterflies, amphibians, fish and bats, according to a report compiled by a coalition of conservation groups. A further one in five species face an even greater threat, with a severe risk of being eliminated amid a “serious decline” in US biodiversity, the report warns. “America’s wildlife are in crisis,” said Collin O’Mara, chief executive of the National Wildlife Federation. “Fish, birds, mammals, reptiles and invertebrates are all losing ground. We owe it to our children and grandchildren to prevent these species from vanishing from the earth.”

More than 1,270 species found in the US are listed as at risk under the federal Endangered Species Act, an imperiled menagerie that includes the grizzly bear, California condor, leatherback sea turtle and rusty patched bumble bee. However, the actual number of threatened species is “far higher than what is formally listed”, states the report by the National Wildlife Federation, American Fisheries Society and the Wildlife Society. Using data from NatureServe that assesses the health of entire groups of species on a sliding scale, rather than the case-by-case work done by the federal government, the analysis shows more than 150 US species have already become extinct while a further 500 species have not been seen in recent decades and have possibly also been snuffed out.

Whole classes of creatures have suffered precipitous drops, with 40% of freshwater fish species in the US now vulnerable or endangered, a third of bat species experiencing major declines in the past two decades and amphibians dwindling from their known ranges at a rate of about 4% a year. The true scale of the crisis is probably larger when species with sparse data, or those as yet unknown to science, are considered. “This loss of wildlife has been sneaking up on us but is now like a big tsunami that is going to hit us,” said Thomas Lovejoy, a biologist at George Mason University. Lovejoy was consulted on the study and said it “captures the overall degradation of American nature over recent decades, rather than little snapshots”.

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The future of wildlife conservation?! in 2015, park guards shot dead more people than poachers killed rhinos.

More Poachers Than Rhinos Killed In India Reserve (BBC)

A census in India’s Kaziranga National Park has counted 2,413 one-horned rhinos – up 12 from 2015. The Unesco World Heritage Site, in Assam state, is home to two-thirds of the world’s population of the species. The census is carried out every three years. It is an incredible conservation success story given the fact that there were only a few hundred rhinos in the 1970s, says the BBC’s South Asia editor Anbarasan Ethirajan. However, the conservation effort has not been without controversy. The government has in recent years given the park rangers extraordinary powers to protect the animals from harm – powers usually only given to soldiers intervening in civil unrest. About 150 rhinos have been killed for their horns since 2006, but in 2015, park guards shot dead more people than poachers killed rhinos.

[..] The census total given is an estimate, with authorities cautioning that the population could be bigger than that counted because some animals were concealed by tall grasses and reeds. This vegetation is usually burnt down to encourage its regeneration but this was hampered by unseasonal rains, said reports. It could mean the census is carried out again next year. Since its foundation in 1905, Kaziranga has had great success in conserving and boosting animal populations. As well as being a haven for one-horned rhinoceroses, the park was declared a tiger reserve by the Indian government, and is also home to elephants, wild water buffalo and numerous bird species. The endangered South Asian river dolphin also lives in the rivers that criss-cross the park.

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Oct 192014
 
 October 19, 2014  Posted by at 10:50 am Finance Tagged with: , , , , , , , , , ,  1 Response »


Edwin Rosskam Service station, Connecticut Ave., Washington, DC Sep 1940

Low Oil Price Means High Anxiety For OPEC As US Flexes Its Muscles (Observer)
Germany’s Tough Medicine Risks Killing Off The European Project (Observer)
Why The Eurozone’s Woes Have Become The World’s Problem (Observer)
Under-30s Being Priced Out Of The UK (Observer)
Britain’s Five Richest Families Worth More Than Poorest 20% (Guardian)
UK Mortgage Battle Hots Up As Banks Prepare To Slash Rates (Guardian)
Why Abenomics Failed: There Was A “Blind Spot From The Outset” (Zero Hedge)
Richard Feynman On The Social Sciences (Tavares)
Orwell Was Only Wrong About The Date (Scott Stantis)
Struggle Against Extinction: The Pictures That Capture The Story (Observer)
The Age Of Loneliness Is Killing Us (Monbiot)
Human Extinction? Not So Much (Ecoshock)
White Rhino Dies In Kenya: Only Six Animals Left Alive In The World (Observer)
Radiation Levels At Fukushima Rise To Record Highs After Typhoon (RT)
Oxfam Calls For Troops In Africa As Ebola Response Is Criticized (Observer)
Ebola Deaths In Liberia ‘Far Higher Than Reported’ (Observer)

Saudi Arabia vs its former partners, but still with the US, in a long established protection racket.

Low Oil Price Means High Anxiety For OPEC As US Flexes Its Muscles (Observer)

During a week of turmoil on the global stock markets, the energy sector played out a drama that could have even bigger consequences: a standoff between the US and the Opec oil-producing nations. While pension holders and investors watched aghast as billions of pounds were lost to market gyrations, a fossil-fuel glut and a slowing global economy have driven the oil price down to a level that could save the world $1.8bn a day on fuel costs. If this is some consolation for households everywhere after last week’s hit on stock market wealth, it means pain for the Opec cartel, composed mainly of Middle East producers. Opec’s 12-member group has largely controlled the global price of crude oil for the past 40 years, but the US’s discovery of shale oil and gas has dramatically shifted the balance of power, to the apparent benefit of consumers and the discomfort of petrostates from Venezuela to Russia.

The price of oil has plummeted by more than a quarter since June but will Opec, which holds 60% of the world’s reserves and 30% of supplies, cut its own production to try to lift prices? Or will the cartel allow a further slide from the current price – in the mid-$80s per barrel – in the hope of making it impossible for US drillers to make a profit from their wells, and so driving them out of business? Saudi Arabia – Opec powerhouse and traditional ally of Washington – and other rich Gulf nations have been building up their cash reserves and have shown themselves willing to slash prices in a bid to retain market share in China and the rest of Asia. The US, the world’s biggest oil consumer, has relied in the past on Saudi to keep Opec price rises relatively low. But now it has the complicating factor of protecting its own huge shale industry.

Even US oil producers see the political benefits of abundant shale resources and the resultant downward pressure on prices. Rex Tillerson, chief executive of Exxon Mobil, the biggest US oil company, said recently that his country had now entered a “new era of energy abundance” – meaning it is no longer dependent on the politically unstable Middle East. So there will be understandable tension next month when the ruling Opec body meets in Vienna and its member states fight over what to do. The cartel would like to reassert its authority over oil prices but some producing countries, such as Saudi, can withstand lower crude values for much longer than others, and the relative costs of production vary wildly between nations.

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That’s what I’m hoping for.

Germany’s Tough Medicine Risks Killing Off The European Project (Observer)

Beppe Grillo, the comedian-turned-rebel leader of Italian politics, must have laughed heartily. No sooner had he announced to supporters that the euro was “a total disaster” than the currency union was driven to the brink of catastrophe once again. Grillo launched a campaign in Rome last weekend for a 1 million-strong petition against the euro, saying: “We have to leave the euro as soon as possible and defend the sovereignty of the Italian people from the European Central Bank.” Hours later markets slumped on news that the 18-member eurozone was probably heading for recession. And there was worse to come. Greece, the trigger for the 2010 euro crisis, saw its borrowing rates soar, putting it back on the “at-risk register”. Investors, already digesting reports of slowing global growth, were also spooked by reports that a row in Brussels over spending caps on France and Italy had turned nasty.

With China’s growth rate continuing to slow, and US data showing the world’s largest economy was not as immune to the turmoil as many believed, it was time to head for the hills. Wall Street slumped and a month of falls saw the FTSE 100 lose 11% of its value. In the wake of the 2008 global financial crisis, voters backed austerity and the euro in expectation of a debt-reducing recovery. But as many Keynesian economists warned, this has proved impossible. More than five years later, there are now plenty of voters willing to call time on the experiment, Grillo among them. And there seems to be no end to austerity-driven low growth in sight. The increasingly hard line taken by Berlin over the need for further reforms in debtor nations such as Greece and Italy – by which it means wage cuts – has worked to turn a recovery into a near recession.

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Given Europe’s size, they always were.

Why The Eurozone’s Woes Have Become The World’s Problem (Observer)

Forget the economic threat posed by Ebola. Pay scant heed to the risk that the Chinese property bubble is about to be pricked. Take with a pinch of salt the risk that an imminent rise in US interest rates will trigger a wave of disruption across the fragile markets of the emerging world. In the end, the explanation for last week’s plunge on global financial markets comes down to one word: Europe. That’s not to say none of the other factors matter. Global pandemics, all the way back to the Black Death in the 14th century, have always been economically catastrophic. The knock-on effects of America starting to jack up the cost of borrowing are uncertain, but potentially problematical. The dangers facing policymakers in China as they seek to move the economy towards lower but better balanced growth are obvious. But it is the worsening condition of the eurozone that has spooked markets in the past couple of weeks.

The problem can be broken down into a number of parts. The first problem is that recovery in Europe appears to have been aborted. A tentative recovery began in the middle of 2013, but appears to have run into the sand. Technically, the eurozone has been in and out of recession since 2008. In reality, the story of the past six years has been of a deep slump followed by half a decade of flatlining. Until now, markets have been able to comfort themselves with the fact that the core of the eurozone – Germany – has been doing fine. Recent evidence has shown that the slow growth elsewhere in Europe, in countries such as France and Italy, is now having an effect on Germany. Exports and manufacturing output are suffering, not helped by the blow to confidence caused by the tension in Ukraine. That’s problem number two.

Until now, opposition from Berlin and the still influential Bundesbank in Frankfurt has made it impossible for the European Central Bank to fire its last big weapon: quantitative easing. The slowdown in Germany should make it easier for the ECB’s president, Mario Draghi, to begin cranking up the electronic printing presses, but are markets impressed? Not really. They are coming to the view that monetary policy – using interest rates and QE to regulate the price and quantity of money – is maxed out. The third facet of the problem is concern that Draghi’s intervention will be too little, too late, and that Europe is condemned to years of nugatory growth.

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This is as crazy and disgraceful as the over 50% youth unemployment in southern Europe.

Under-30s Being Priced Out Of The UK (Observer)

Britain is on the verge of becoming permanently divided between tribes of haves and have-nots as the young increasingly miss out on the opportunities enjoyed by their parents’ generation, the government’s social mobility tsar claim. The under-30s in particular are being priced out of owning their own homes, paid lower wages and left with diminishing job prospects, despite a strong economic recovery being enjoyed by some. Those without the benefits of wealthy parents are condemned to languish on “the wrong side of the divide that is opening up in British society”, according to Alan Milburn, the former Labour cabinet minister who chairs the government’s Commission on Social Mobility. In an illustration of how the less affluent young have been abandoned, Milburn notes that even the Saturday job has become a thing of the past. The proportion of 16- to 17-year-olds in full-time education who also work has fallen from 37% to 18% in a decade.

Milburn spoke out in an interview with the Observer as tens of thousands of people, including public sector workers such as teachers and nurses opposed to a below-inflation 1% pay offer from the government, protested in London, Glasgow and Belfast about pay and austerity on Saturday. The TUC, which organised the protests under the slogan “Britain Needs a Pay Rise”, said that between 80,000 and 90,000 people took part in the London march. Speaking on the eve of the publication of his final annual report on social mobility to ministers before the general election, Milburn demanded urgent action by the state and a change in direction by businesses. He said that only a radical change would save a generation of Britons buffeted by an economic downturn and condemned by a fundamental change in the labour market that left them without hope of better lives.

In a strikingly downbeat intervention, Milburn said: “It is depressing. The current generation of young people are educated better and for longer than any previous one. But young people are losing out on jobs, earnings and housing. “This recession has been particularly hard on young people. The ratio of youth to adult unemployment rates was just over two to one in 1996, compared to just under three to one today. On any definition we are nowhere near the chancellor’s objective of “full employment” for young people. Young people are the losers in the recovery to date.”

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Britain as a mirror to the world.

Britain’s Five Richest Families Worth More Than Poorest 20% (Guardian)

The scale of Britain’s growing inequality is revealed by a report from a leading charity showing that the country’s five richest families now own more wealth than the poorest 20% of the population. Oxfam urged the chancellor George Osborne to use Wednesday’s budget to make a fresh assault on tax avoidance and introduce a living wage in a report highlighting how a handful of the super-rich, headed by the Duke of Westminster, have more money and financial assets than 12.6 million Britons put together. The development charity, which has opened UK programmes to tackle poverty, said the government should explore the possibility of a wealth tax after revealing how income gains and the benefits of rising asset prices had disproportionately helped those at the top. Although Labour is seeking to make living standards central to the political debate in the run-up to next year’s general election, Osborne is determined not to abandon the deficit-reduction strategy that has been in place since 2010.

But he is likely to announce a fresh crackdown on tax avoidance and measures aimed at overseas owners of high-value London property in order to pay for modest tax cuts for working families. The early stages of the UK’s most severe post-war recession saw a fall in inequality as the least well-off were shielded by tax credits and benefits. But the trend has been reversed in recent years as a result of falling real wages, the rising cost of food and fuel, and by the exclusion of most poor families from home and share ownership. In a report, a Tale of Two Britains, Oxfam said the poorest 20% in the UK had wealth totalling £28.1bn – an average of £2,230 each. The latest rich list from Forbes magazine showed that the five top UK entries – the family of the Duke of Westminster, David and Simon Reuben, the Hinduja brothers, the Cadogan family, and Sports Direct retail boss Mike Ashley – between them had property, savings and other assets worth £28.2bn.

The most affluent family in Britain, headed by Major General Gerald Grosvenor, owns 77 hectares (190 acres) of prime real estate in Belgravia, London, and has been a beneficiary of the foreign money flooding in to the capital’s soaring property market in recent years. Oxfam said Grosvenor and his family had more wealth (£7.9bn) than the poorest 10% of the UK population (£7.8bn). Oxfam’s director of campaigns and policy, Ben Phillips, said: “Britain is becoming a deeply divided nation, with a wealthy elite who are seeing their incomes spiral up, while millions of families are struggling to make ends meet. “It’s deeply worrying that these extreme levels of wealth inequality exist in Britain today, where just a handful of people have more money than millions struggling to survive on the breadline.”

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Chasing the last few suckers left.

UK Mortgage Battle Hots Up As Banks Prepare To Slash Rates (Guardian)

The battle to tempt mortgage customers with attractive deals is heating up again as major lenders put more rate cuts into action. Barclays is preparing to offer what it said are some of its lowest ever rates, including a three-year fixed rate at 2.29%, a five-year fix at 2.85% and a 10-year fix at 3.49%. All of these deals are aimed at people with 40% deposits and come with a £999 fee. Barclays is also cutting the rate on its innovative family springboard mortgage, which helps people with only a 5% deposit get on the property ladder by allowing their parents to put some money into a savings account which is then linked to the mortgage. The savings money is later released back to their parents with interest, provided that the mortgage payments are kept up to date. The rate on a three-year fixed family springboard deal, which has no application fee, is to be slashed from 3.79% to 2.99%.

The bank is also cutting rates on deals aimed at people with deposits of 10%, 15%, 20% and 30% in what will be the seventh consecutive round of reductions to its range. Barclays said its “never seen before” rate cuts will come into place early this week and they are likely to be around for only a limited period. Meanwhile, a new 0.99% deal from HSBC will be launched on Monday. HSBC has said the product, which is available for borrowers with a 40% deposit, has the lowest rate it has ever offered. The 0.99% deal is in effect a 2.95% discount off HSBC’s 3.94% standard variable rate (SVR), which lasts for two years. In theory, HSBC could decide to increase its SVR within the two-year discount period, which would mean the rate would move above 0.99% but the borrower would still get a rate of 2.95% below whatever the new SVR rate was for the two years after initially taking out the deal.

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Exactly what I’ve always said all the time about Abenomics. It should be held up as an example for all of our stimulus measures.

Why Abenomics Failed: There Was A “Blind Spot From The Outset” (Zero Hedge)

Ever since Abenomics was announced in late 2012, we have explained very clearly that the whole “shock and awe” approach to stimulating the economy by sending inflation into borderline “hyper” mode in a country whose main problem has to do with an aging population demographic cliff and a global market that no longer thinks Walkmen and Sony Trinitrons are cool and instead can find all of Japan’s replacement products for cheaper and at a higher quality out of South Korea, was doomed to failure. Very serious sellsiders, economists and pundits disagreed and commended Abe on his second attempt at fixing the country by doing more of what has not only failed to work for 30 years, but made the problem worse and worse.

Well, nearly two years later, or roughly the usual delay before the rest of the world catches up to this website’s “conspiratorial ramblings”, the leader of the very serious economist crew, none other than Goldman Sachs, formally admits that Abenomics was a failure, and two weeks after Goldman also admitted that now Japan is informally (and soon officially) in a triple-drip recession, begins the scapegoating process when in a note by its Naohiko Baba, it says that Abenomics failed because all along it was based on two faulty “misconceptions and miscalculations.” Ironically, the same “misconceptions and miscalculations” that frame the Keynesian “recovery” debate in every insolvent developed world country which is devaluing its currency to boost its exports and economy, when in reality all it is doing is propping up its stock market, allowing the 1% of the population to cash out and leaving the 99% with the economic collapse that inevitably follows.

So what happened with Abenomics, and why did Goldman, initially a fervent supporter and huge fan – and beneficiary because those trillions in fungible BOJ liquidity injections made their way first and foremost into Goldman year end bonuses – change its tune so dramatically?

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Bit of a loose argument, since Feynman never specifically talked about economics, but point taken.

Richard Feynman On The Social Sciences (Tavares)

Looking back at his own experience, Feynman was keenly aware of how easy our experiments can deceive us and thus of the need to employ a rigorous scientific approach in order to find the truth. Because of this, he was highly critical of other sciences which did not adhere to the same principles. The social sciences are a broad group of academic disciplines concerned with the study of the social life of human groups and individuals, including anthropology, geography, political science, psychology and several others. Here is what he had to say about them in a BBC interview in 1981:

“Because of the success of science, there is a kind of a pseudo-science. Social science is an example of a science which is not a science. They follow the forms. You gather data, you do so and so and so forth, but they don’t get any laws, they haven’t found out anything. They haven’t got anywhere – yet. Maybe someday they will, but it’s not very well developed. “But what happens is, at an even more mundane level, we get experts on everything that sound like they are sort of scientific, expert. They are not scientists. They sit at a typewriter and they make up something like ‘a food grown with a fertilizer that’s organic is better for you than food grown with a fertilizer that is inorganic’. Maybe true, may not be true. But it hasn’t been demonstrated one way or the other. But they’ll sit there on the typewriter and make up all this stuff as if it’s science and then become experts on foods, organic foods and so on. There’s all kinds of myths and pseudo-science all over the place.

“Now, I might be quite wrong. Maybe they do know all these things. But I don’t think I’m wrong. See, I have the advantage of having found out how hard it is to get to really know something, how careful you have about checking your experiments, how easy it is to make mistakes and fool yourself. I know what it means to know something. “And therefore, I see how they get their information. And I can’t believe that they know when they haven’t done the work necessary, they haven’t done the checks necessary, they haven’t done the care necessary. I have a great suspicion that they don’t know and that they are intimidating people by it. I think so. I don’t know the world very well but that’s what I think.”

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Amen. Word.

Orwell Was Only Wrong About The Date (Scott Stantis)

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Wildlife Photographer of the Year exhibition.

Struggle Against Extinction: The Pictures That Capture The Story (Observer)

Toshiji Fukuda went to extraordinary lengths to photograph an Amur tiger, one of the world’s rarest mammals, in 2011. He built a tiny wooden hut overlooking a beach in Russia’s remote Lazovsky nature reserve, on the Sea of Japan, and spent the winter there. Fukuda was 63 at the time. “Older people have one advantage: time passes more quickly for us than the young,” he said later. Possession of such resilience was fortunate because Fukuda had to wait seven weeks for his only glimpse of an Amur tiger, which resulted in a single stunning image of the animal strolling imperiously along the beach below his hide. “It was as if the goddess of the Taiga had appeared before me,” he recalled.

In recognition of the photographer’s efforts, Fukuda was given a key award at the 2013 Wildlife Photographer of the Year exhibition, an annual event that has showcased the best images taken of the planet’s rarest animals and habitats and which has taken on an increasingly important role in recording their fates. This year’s exhibition, which opens on Friday, is the 50th such exhibition – to be held, as usual, at the Natural History Museum – and a recent study of past winning images has revealed the unexpected twists of fortune that have affected the world’s wildlife. Some animals, which appeared to be doing well, have plummeted towards extinction. Others, which seemed to be doomed, have bounced back. “It still seems to be very much a matter of hit or miss whether a threatened species recovers or instead continues to dwindle towards extinction,” said the museum’s curator of mammals, Roberto Portela Miguez.

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” … a life-denying ideology, which enforces and celebrates our social isolation. The war of every man against every man – competition and individualism, in other words – is the religion of our time…”

The Age Of Loneliness Is Killing Us (Monbiot)

What do we call this time? It’s not the information age: the collapse of popular education movements left a void filled by marketing and conspiracy theories. Like the stone age, iron age and space age, the digital age says plenty about our artefacts but little about society. The anthropocene, in which humans exert a major impact on the biosphere, fails to distinguish this century from the previous 20. What clear social change marks out our time from those that precede it? To me it’s obvious. This is the Age of Loneliness. When Thomas Hobbes claimed that in the state of nature, before authority arose to keep us in check, we were engaged in a war “of every man against every man”, he could not have been more wrong. We were social creatures from the start, mammalian bees, who depended entirely on each other. The hominins of east Africa could not have survived one night alone. We are shaped, to a greater extent than almost any other species, by contact with others. The age we are entering, in which we exist apart, is unlike any that has gone before.

Three months ago we read that loneliness has become an epidemic among young adults. Now we learn that it is just as great an affliction of older people. A study by Independent Age shows that severe loneliness in England blights the lives of 700,000 men and 1.1m women over 50, and is rising with astonishing speed. Ebola is unlikely ever to kill as many people as this disease strikes down. Social isolation is as potent a cause of early death as smoking 15 cigarettes a day; loneliness, research suggests, is twice as deadly as obesity. Dementia, high blood pressure, alcoholism and accidents – all these, like depression, paranoia, anxiety and suicide, become more prevalent when connections are cut. We cannot cope alone.

Yes, factories have closed, people travel by car instead of buses, use YouTube rather than the cinema. But these shifts alone fail to explain the speed of our social collapse. These structural changes have been accompanied by a life-denying ideology, which enforces and celebrates our social isolation. The war of every man against every man – competition and individualism, in other words – is the religion of our time, justified by a mythology of lone rangers, sole traders, self-starters, self-made men and women, going it alone. For the most social of creatures, who cannot prosper without love, there is no such thing as society, only heroic individualism. What counts is to win. The rest is collateral damage. British children no longer aspire to be train drivers or nurses – more than a fifth say they “just want to be rich”: wealth and fame are the sole ambitions of 40% of those surveyed.

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Why anyone would want to do Guy McPherson the honor of talking about his loony tunes is beyond me, but here goes. Nicole gets mentioned.

Human Extinction? Not So Much (Ecoshock)

The case against going extinct soon due to extreme climate change & human impacts.

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The sadness is unspeakably deep.

White Rhino Dies In Kenya: Only Six Animals Left Alive In The World (Observer)

An endangered northern white rhino has died in Kenya, a wildlife conservancy has said, meaning only six of the animals are left alive in the world. Suni, a 34-year-old northern white, and the first of his species to be born in captivity, was found dead on Friday by rangers at the Ol Pejeta Conservancy near Nairobi. While there are thousands of southern white rhinos in the plains of sub-Saharan Africa, decades of rampant poaching has meant the northern white rhino is close to extinction. Suni was one of the last two breeding males in the world as no northern white rhinos are believed to have survived in the wild. Though the conservancy said Suni was not poached, the cause of his death is currently unclear. Suni was born at the Dvur Kralove Zoo in Czech Republic in 1980. He was one of the four northern white rhinos brought from that zoo to the Ol Pejeta Conservancy in 2009 to take part in a breeding programme.

Wildlife experts had hoped the 90,000-acre private wildlife conservancy, framed on the equator and nestled between the snow capped Mount Kenya and the Aberdare mountain range, would offer a more favourable climate for breeding. The conservancy said in a statement: “The species now stands at the brink of complete extinction, a sorry testament to the greed of the human race. “We will continue to do what we can to work with the remaining three animals on Ol Pejeta in the hope that our efforts will one day result in the successful birth of a northern white rhino calf.” Suni’s father, Suit, died in 2006 of natural causes, also aged 34.

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” … levels of the radioactive isotope cesium are now at 251,000 becquerels per liter, three times higher than previously-recorded levels.”

Radiation Levels At Fukushima Rise To Record Highs After Typhoon (RT)

The amount of radioactive water near the Fukushima Daiichi nuclear plant has risen to record levels after a typhoon passed through Japan last week, state media outlet NHK reported on Wednesday. Specifically, levels of the radioactive isotope cesium are now at 251,000 becquerels per liter, three times higher than previously-recorded levels. Cesium, which is highly soluble and can spread easily, is known to be capable of causing cancer. Meanwhile, other measurements also show remarkably high levels of tritium – another radioactive isotope of hydrogen. Samples from October 9 indicate that there are 150,000 becquerels of tritium per liter in the groundwater near Fukushima, according to Japan’s JIJI agency. Compared to levels recorded last week, that’s an increase of more than 10 times.

Additionally, “materials that emit beta rays, such as strontium-90, which causes bone cancer, also shattered records with a reading of 1.2 million becquerels, the utility said of the sample,” JIJI reported. Officials blamed these increases on the recent typhoon, which resulted in large amounts of rainfall and injured dozens of people on Okinawa and Kyushu before moving westward towards Tokyo and Fukushima. While cesium is considered to be more dangerous than tritium, both are radioactive substances that authorities would like to keep from being discharged into the Pacific Ocean in high quantities. For now, extra measures to contain the issue are not on the table, since “additional measures have been ruled out since the depth and scope of the contaminated water leaks are unknown, and TEPCO already has in place several measures to control the problem, such as the pumping of groundwater or walls to retain underground water,” according to the IANS news service.

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A shocking number: “There are some 3,700 Ebola orphans.”

Oxfam Calls For Troops In Africa As Ebola Response Is Criticized (Observer)

Anger is growing over the “inadequate” response to the Ebola epidemic this weekend with the World Health Organisation’s Africa office accused of incompetence and world governments of having failed. Aid charities and the president of the World Bank are among the critics, declaring that the fight against the virus is in danger of being lost. On Saturday Oxfam took the unusual step of calling for troops to be sent to west Africa, along with funding and medical staff, to prevent the Ebola outbreak becoming the “definitive humanitarian disaster of our generation”. It accused countries that did not commit military personnel of “costing lives”. The charity said that there was less than a two-month window to curb the spread of the virus but there remained a crippling shortfall in logistical support. Several African countries have for the last decade been suffering severe shortages of homegrown medics thanks to a “brain drain” to countries such as Britain, which rely on foreign workers.

The executive director of frontline medical charity Médecins Sans Frontières, Vickie Hawkins, said national and global health systems had failed. “We are angry that the global response to this outbreak has been so slow and inadequate. “We have been amazed that for months the burden of the response could be carried by one single, private medical organisation, while pleading for more help and watching the situation get worse and worse. When the outbreak is under control, we must reflect on how health systems can have failed quite so badly. But the priority for now must remain the urgent fight against Ebola – we simply cannot afford to fail.” The worst outbreak on record has claimed 4,500 lives, out of 8,914 recorded cases since the start of the year, mostly in Liberia, Sierra Leone and Guinea. The true number is agreed to be higher. There are some 3,700 Ebola orphans.

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There should be no doubt about this. Too many reasons for too many people to play it down.

Ebola Deaths In Liberia ‘Far Higher Than Reported’ (Observer)

The true death toll from the Ebola epidemic is being masked by chaotic data collection and people’s reluctance to admit that their loved ones had the virus, according to one of west Africa’s most celebrated film-makers. Sorious Samura, who has just returned from making a documentary on the crisis in Liberia, said it is very clear on the ground that the true number of dead is far higher than the official figures being reported by the World Health Organisation. Liberia accounts for more than half of all the official Ebola deaths, with a total of 2,458. Overall, the number of dead across Liberia, Sierra Leone and Guinea has exceeded 4,500. Samura, a television journalist originally from Sierra Leone, said the Liberian authorities appeared to be deliberately downplaying the true number of cases, for fear of increasing alarm in the west African country.

“People are dying in greater numbers than we know, according to MSF [Médecins sans Frontières] and WHO officials. Certain departments are refusing to give them the figures – because the lower it is, the more peace of mind they can give people. The truth is that it is still not under control.” WHO has admitted that problems with data-gathering make it hard to track the evolution of the epidemic, with the number of cases in the capital, Monrovia, going under-reported. Efforts to count freshly dug graves had been abandoned. Local culture is also distorting the figures. Traditional burial rites involve relatives touching the body – a practice that can spread Ebola – so the Liberian government has ruled that Ebola victims must be cremated. “They don’t like this burning of bodies,” said Samura, whose programme will air on 12 November on Al Jazeera English. “Before the government gets there they will have buried their loved ones and broken all the rules.”

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