Apr 212020
 


Gordon Parks Muhammad Ali in training 1966

 

There are times when you think: now things must be easy to comprehend, but as it turns out, they are still not. Let me try once more. See, I was thinking it must have become much easier to gauge the impact in the US of COVID19 when I published the graph below from TheNewAtlantis.com a few days ago. That the stories about seasonal flu etc. at least should be dead and buried, because, well, just look at the graph.

No such “luck”. That warped comparison keeps on rearing its head. The graph is plenty clear about it, however. In a period of about 3 weeks, COVID19 obliterated all other causes of death far behind.

 


click to enlarge in new tab

 

 

I have followed the progress of the virus since early January, so plenty of graphs are available. Below are those from Worldometer and SCMP, starting February 20.

On February 2, the US had 5 cases and zero deaths. Then we get to the graphs.

On February 20, there were 75,750 global cases, 74,500 of which were in China. There were 2,130 deaths, of which just maybe 10 were outside China.

The US had fewer than 15 cases and zero deaths.

 


 

 

One month later, things had changed quite dramatically, or so it seemed.

On March 20, there were 250,000 global cases and over 10,000 deaths. Cases had tripled, deaths had almost quintupled. Italy had overtaken China in most fatalities, from zero a month earlier.

The US had emerged “on the forefront”. It now had 10,400 cases and 150 deaths. Yes, that is just one month ago, 32 days to be exact.

 


 

 

Today, on April 21 2020, you would hardly recognize the situation as it was on February 20 or March 20.

There are now over 2,500,000 cases and over 172,000 deaths.

The US has become the frontrunner, and by a very large margin. It has over 800,000 cases and over 43,000 deaths.

From those 10,400 cases and 150 deaths 32 days ago.

Moreover, of those 43,000 deaths, almost half, 20,000, died in just the past 7 days.

And it’s at this point that people want to call the peak.

 


 

Investor John Hussman developed a model from early February which he’s been updating ever since. His model followed (or actually, predicted) actual numbers quite well:

Apr 15 (637,716 cases, 30,826 deaths): Assuming sustained containment efforts, the “optimistic” projection (my adaptive model) suggests that U.S. daily new cases may have peaked. This does NOT mean these efforts can now be abandoned. Most U.S. fatalities are still ahead, and we still lack capacity to test/track/trace.

 

 

But 5 days ago, John started getting worried:

Apr 16 (667,801, 32,917): This isn’t good. U.S. fatalities just jumped off book. We shouldn’t see 31,000 yet.

Apr 18 (735,076, 38,903): So much for the optimistic scenario. We’re way off book. I had hoped this was just a one-time adjustment. Understand this:

PEAK daily new cases in a containment scenario is also PEAK infectivity if containment is abandoned at that moment.

 

 

 

I’ve long said that people are social animals, and you cannot -and shouldn’t- keep them apart for too long. But at the same time, containment measures in case of epidemics go back a very long way in history. And it’s very well for people to develop models that appear to show that the virus will do whatever it can until it no longer does, and it will soon disappear even if we didn’t do anything to prevent it from spreading.

But those are still just models, just like the one John Hussman developed. And until they are proven, which takes time, the actual numbers we have now speak loudly. Globally, we went from 250,000 to 2,500,000 cases in one month, and from 10,000 fatalities to 172.000. In the US in that same month we went from 10,400 cases to over 800,000 and from 150 deaths to 43,000.

“PEAK daily new cases in a containment scenario is also PEAK infectivity if containment is abandoned at that moment”, says Hussman. Of course everybody wants their freedom back. But at what price? If you don’t, because you can’t, know what the price will be, are you still willing to pay that price?

What I mean is, everyone’s trying to call a peak, but for most that’s merely because they want there to be a peak. The numbers don’t really say that; they may seem to do, but that’s just over 1,2 or 3 days at best. While half of all US fatalities have been over the past 7 days.

If the peak has really already occurred, we will not know it until about 10-14 days from now. So the only thing we can do is to wait that long. Perhaps it would be a good idea to listen to what those have to say who are so enthusiastically labeled “heroes” all over the globe, the doctors, nurses and other frontline caretakers.

If they are indeed your heroes, and that’s not just some empty phrase, listen to what they have to say about the pressure on them, on the system they work in, on the numbers of cases and deaths they see themselves confronted with.

But also listen when they say things you may not like to hear. If anybody deserves a relaxation of a lockdown, and of pressure overall, surely it must be them, before you.

Guess it’s too much to ask that perhaps you may have learned some lessons lately, about things that you don’t need to do but that you always did. Or to ask you if you heard the birds singing louder in the bluer skies this morning.

Just out of curiosity: Did you know that Anne Frank spent 2 whole years locked down behind a wall?

 

 

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Apr 142020
 


John M. Fox Garcia Grande newsstand, New York 1946

 

Getting A Coronavirus Test In Wuhan: Fast, Cheap And Easy (R.)
South Korea Confirms 111 Cases Of Coronavirus Reinfection (KT)
How Coronavirus Almost Brought Down The Global Financial System (Tooze)
US Coronavirus Death Toll Tops 23,000 (R.)
New York, California, Other States Plan For Reopening As Crisis Eases (R.)
30 Union Members Die, Rest Risk Their Lives So Americans Can Eat Meat (HuffPo)
North America Meat Plant Workers Fall Ill, Walk Off Jobs (R.)
Smithfield Shuts US Pork Plant Indefinitely, Warns Of Meat Shortages (R.)
White House Seeks To Lower Farmworker Pay To Help Agriculture Industry (NPR)
In Mea Culpa, Macron Extends France’s Lockdown Until May 11 (R.)
A French Disaster (Guy Millière)
Older People Being ‘Airbrushed’ Out Of British Virus Figures (BBC)
Québec To Ramp Up Care Home Inspections After 31 Die In Montréal Facility (R.)
Brazil Likely Has 12 Times More Coronavirus Cases Than Official Count (R.)
China Tightens Russian Border Checks, Approves Experimental Vaccine Trials (R.)
China Big Tech Moves Into Healthcare (R.)

 

 

It’s been a few days, but leafing through today’s news, it seems obvious that incompetence once again rules the day. Macron is the first to say he’s sorry for that. Sort of. Still, we should not lose sight of the fact that, as I wrote recently in Little Managers, we don’t elect our ‘Leaders’ to solve pandemics. The best I can do for you is we elect them to make us feel rich, which is why they focused for far too long, as the pandemic already raged, on their economies.

• Over the past 24 hours, the U.S. reported 27,243 new cases of coronavirus and 1,555 new deaths, raising total to 587,752 cases and 23,765 dead.

 

 

1,934,128
Cases 1,862,584 (+ 72,011 from yesterday’s 1,790,573)

120,437
Deaths 114,982 (+ 5,328 from yesterday’s 109,654)

 

 

 

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

 

 

From Worldometer – NOTE: mortality rate for closed cases is at 21% !-

 

 

From SCMP:

 

 

From COVID19Info.live:

 

 

 

 

I would certainly pay $37 for a test if it were available. And reliable.

Getting A Coronavirus Test In Wuhan: Fast, Cheap And Easy (R.)

Coronavirus tests can be difficult to come by in many countries including in hard-hit parts of the United States and Britain, but in Wuhan, the Chinese epicentre of the pandemic, they are fast, cheap and easy to get. My colleagues and I had just arrived in the central city where the novel coronavirus emerged in humans late last year, and as a foreigner I was told that I was required to take a nucleic test to prove that I was free of the potentially deadly flu-like virus. A government official escorted me to the test site, a table outside the entrance of a shuttered hotel. A single medical worker sat there, dressed in a zipped-up hazmat suit and goggles.

She asked for my personal details and told me to sit. She then stuck a swab down my throat, nearly triggering a gag, and then it was over. “You’ll get your results in about one and a half days,” the official said. The test, while not pleasant, took less than three seconds. Wuhan is testing liberally as it tries to get back up and running after lifting a 76-day lockdown last week. The term “nucleic acid test” has become a familiar one in the city of 11 million people, where many companies are asking workers to present test results before they can return to work, although it is not mandatory. At one Wuhan hospital, people only need to spit into a test tube. That test costs 260 yuan ($37) and results are available by mobile app. Since Feb. 21, 930,315 tests have been carried out in Wuhan, according to government data.

“Testing is a good thing,” said Zhao Yan, a emergency medicine doctor and vice president of Wuhan’s Zhongnan Hospital told reporters on a government-organised trip last week. “If you’re an enterprise with 500 employees and you want to start working again, you test everybody.” Across China, officials are simplifying and speeding up the process to obtain a nucleic acid test, even though questions persist about its accuracy. Some Chinese doctors have pushed to raise requirements for discharging hospitalised patients from two negative nucleic acid tests to three. Cities including Beijing have required some arriving travelers to present test results when entering. China has not yet indicated it will require testing for large swathes of the population.

Read more …

There go the dreams of reopening your economy.

South Korea Confirms 111 Cases Of Coronavirus Reinfection (KT)

South Korea has confirmed 111 cases of coronavirus reinfection (as of Sunday noon) with most cases reported in Daegu and North Gyeongsang Province, two epicenters of the domestic outbreak. Jung Eun-kyeong, director of Korea Centers for Disease Control and Prevention (KCDC), said on Sunday the organization was exploring possible causes of reinfection. “For now it is uncertain what led to reinfection  revived virus that survived treatment or fresh exposure to the virus after recovery,” Jung said. The director said an extensive research was under way and the KCDC would share the result with WHO and other nations battling coronavirus.

Earlier health authorities here have said the virus was highly likely to have been reactivated, instead of the people being reinfected, as they tested positive again in a relatively short time after being released from quarantine. They also said the COVID-19 virus may remain latent in certain cells in the body and attack the respiratory organs again once reactivated. A COVID-19 patient is deemed fully recovered after showing negative results for two tests in a row within a 24-hour interval. The country’s COVID-19 infections reported 32 additional virus cases, bringing total infections to 10,512.

Read more …

Oh no. No sirree. The system is bringing itself down, not the virus. This is like you take a house so decrepit that it should long have been condemned, and then you blame a storm when it finally collapses.

How Coronavirus Almost Brought Down The Global Financial System (Tooze)

In the third week of March, while most of our minds were fixed on surging coronavirus death rates and the apocalyptic scenes in hospital wards, global financial markets came as close to a collapse as they have since September 2008. The price of shares in the world’s major corporations plunged. The value of the dollar surged against every currency in the world, squeezing debtors everywhere from Indonesia to Mexico. Trillion-dollar markets for government debt, the basic foundation of the financial system, lurched up and down in terror-stricken cycles. On the terminal screens, interest rates danced. Traders hunched over improvised home workstations – known in the new slang of March 2020 as “Rona rigs” – screaming with frustration as sluggish home wifi systems dragged behind the movement of the markets.

At the low point on 23 March, $26tn had been wiped off the value of global equity markets, inflicting huge losses both on the fortunate few who own shares, and on the collective pools of savings held by pension and insurance funds. What the markets were reacting to was an unthinkable turn of events. After a fatal period of hesitation, governments around the world were ordering comprehensive lockdowns to contain a lethal pandemic. Built for growth, the global economic machine was being brought to a screeching halt. In 2020, for the first time since the second world war, production around the world will contract. It is not only Europe and the US that have been shut down, but once-booming emerging market economies in Asia. Commodity exporters from Latin America and sub-Saharan Africa face collapsing markets.

[..] What Europe and the US have succeeded in doing is to flatten the curve of financial panic. They have maintained the all-important flow of credit. Without that, large parts of their economies would not be on life support – they would be stone dead. And our governments would be struggling with a financial crunch to boot. Maintaining the flow of credit has been the precondition for sustaining the lockdown. It is the precondition for a concerted public health response to the pandemic. During major crises, we are reminded of the fact that at the heart of the profit-driven, private financial economy is a public institution, the central bank. When financial markets are functioning normally, it remains in the background.

But when they threaten to break down, it has the option of stepping forward to act as a lender of last resort. It can make loans, or it can buy assets from banks, funds or other businesses that are desperate for cash. Because it is the ultimate backer of the currency, its budget is unlimited. That means it can decide who sinks and who swims. We learned this in 2008. But 2020 has driven home the point as never before.

Read more …

Where are Dr. Fauci’s 200,000 deaths?

US Coronavirus Death Toll Tops 23,000 (R.)

U.S. deaths from the novel coronavirus topped 23,000 on Monday, according to a Reuters tally, as officials said the worst may be over and the outbreak could reach its peak this week. The United States, with the world’s third-largest population, has recorded more fatalities from COVID-19 than any other country. There were a total of nearly 570,000 U.S. cases as of Monday with over 1.8 million reported cases globally. Deaths reported on Sunday numbered 1,513, the smallest increase since 1,309 died on April 6. The largest number of fatalities, over 10,000, was in New York state with the concentration in and around New York City, the most populous U.S. city with about 8.4 million people.


Wyoming reported its first coronavirus death on Monday, the final U.S. state to report a fatality in the outbreak. Sweeping stay-at-home restrictions to curb the spread of the disease, in place for weeks in many areas of the United States, have taken a painful toll on the economy. With businesses closed and curbs on travel, officials and lawmakers are debating when it might be safe to begin reopening some sectors. The Trump administration has indicated May 1 as a potential date for easing the restrictions while urging caution.

Read more …

Stop planning. Make sure you get it right first.

New York, California, Other States Plan For Reopening As Crisis Eases (R.)

Ten U.S. governors on the east and west coasts banded together on Monday in two regional pacts to coordinate gradual economic reopenings as the coronavirus crisis finally appeared to be ebbing. Announcements from the New York-led group of Northeastern governors, and a similar compact formed by California, Oregon and Washington state, came as President Donald Trump declared any decision on restarting the U.S. economy was up to him. New York Governor Andrew Cuomo said he was teaming up with five counterparts in adjacent New Jersey, Connecticut, Delaware, Pennsylvania and Rhode Island to devise the best strategies for easing stay-at-home orders imposed last month to curb coronavirus transmissions. Massachusetts later said it was joining the East Coast coalition.


“Nobody has been here before, nobody has all the answers,” said Cuomo, whose state has become the U.S. epicenter of the global coronavirus pandemic, during an open conference call with five other governors. “Addressing public health and the economy: Which one is first? They’re both first.” The three Pacific Coast states announced they, too, planned to follow a shared approach for lifting social-distancing measures, but said they “need to see a decline in the rate of spread of the virus before large-scale reopening” can take place. The 10 governors, all Democrats except for Charlie Baker of Massachusetts, gave no timeline for ending social lockdowns that have idled the vast majority of more than 100 million residents in their states. But they stressed that decisions about when and how to reopen non-essential businesses, along with schools and universities, would put the health of residents first and rely on science rather than politics.

Read more …

How on earth do you get this so wrong?

30 Union Members Die, Rest Risk Their Lives So Americans Can Eat Meat (HuffPo)

Never has so much been asked of America’s grocery store and meatpacking workers. They are working through a pandemic, getting sick and in some cases even dying so that others can put food on the table. Most of them are doing it for lower wages than other essential workers who continue to do their jobs as coronavirus cases balloon. Many who risk their health each day have been relaying their fears and frustrations to the United Food and Commercial Workers, which represents 1.3 million workers in the U.S. and Canada and is one of the largest private-sector unions in the country.

Marc Perrone, the UFCW’s president, told HuffPost that the union is working hard to keep up with its members’ concerns, as well as those of nonunion workers now highly interested in organizing. For many in the latter category, the pressure of recent weeks has stripped away any sense that they are paid fairly and protected adequately on the job. “We have more leads than we’ve ever had as a union,” Perrone said. “The question is … are we at the tipping point yet? This pandemic ripped gaping holes in the system. Is it going to change the way workers can unify together to make a move?”

The UFCW has emerged as one of the most important labor unions in the coronavirus crisis because of where it represents workers: in grocery stores, meatpacking and processing plants and pharmacies. Few private-sector unions outside of health care would have so many members continuing to clock in because their work is so crucial to the lives of others. The work seems to have come at a steep cost already. The union is still gathering data on infections and deaths among its membership, but Perrone said that around 30 people appear to have died since the pandemic began. In some cases, he cautioned, a COVID-19 diagnosis has not been confirmed yet.

Read more …

Better get some other protein supply in.

North America Meat Plant Workers Fall Ill, Walk Off Jobs (R.)

At a Wayne Farms chicken processing plant in Alabama, workers recently had to pay the company 10 cents a day to buy masks to protect themselves from the new coronavirus, according to a meat inspector. In Colorado, nearly a third of the workers at a JBS USA beef plant stayed home amid safety concerns for the last two weeks as a 30-year employee of the facility died following complications from the virus. And since an Olymel pork plant in Quebec shut on March 29, the number of workers who tested positive for the coronavirus quintupled to more than 50, according to their union. The facility and at least 10 others in North America have temporarily closed or reduced production in about the last two weeks because of the pandemic, disrupting food supply chains that have struggled to keep pace with surging demand at grocery stores.


According to more than a dozen interviews with U.S and Canadian plant workers, union leaders and industry analysts, a lack of protective equipment and the nature of “elbow to elbow” work required to debone chickens, chop beef and slice hams are highlighting risks for employees and limiting output as some forego the low-paying work. Companies that added protections, such as enhanced cleaning or spacing out workers, say the moves are further slowing meat production. Smithfield Foods, the world’s biggest pork processor, on Sunday said it is indefinitely shutting a pork plant that accounts for about 4% to 5% of U.S. production. It warned that plant shutdowns are pushing the United States “perilously close to the edge” in meat supplies for grocers.

Read more …

The size of this “industry” is bearable only because we keep it hidden.

Smithfield Shuts US Pork Plant Indefinitely, Warns Of Meat Shortages (R.)

Smithfield Foods, the world’s biggest pork processor, said on Sunday it will shut a U.S. plant indefinitely due to a rash of coronavirus cases among employees and warned the country was moving “perilously close to the edge” in supplies for grocers. Slaughterhouse shutdowns are disrupting the U.S. food supply chain, crimping availability of meat at retail stores and leaving farmers without outlets for their livestock. Smithfield extended the closure of its Sioux Falls, South Dakota, plant after initially saying it would idle temporarily for cleaning. The facility is one of the nation’s largest pork processing facilities, representing 4% to 5% of U.S. pork production, according to the company.


South Dakota Governor Kristi Noem said on Saturday that 238 Smithfield employees had active cases of the new coronavirus, accounting for 55% of the state’s total. Noem and the mayor of Sioux Falls had recommended the company shut the plant, which has about 3,700 workers, for at least two weeks. “It is impossible to keep our grocery stores stocked if our plants are not running,” Smithfield Chief Executive Ken Sullivan said in a statement on Sunday. “These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers.” Smithfield said it will resume operations in Sioux Falls after further direction from local, state and federal officials. The company will pay employees for the next two weeks, according to the statement.

Read more …

Stupid is as stupid does. Come autumn, you’re going to need food. Underpaying essential workers will not help. Raise their wages, and you may even attract a few Americans.

White House Seeks To Lower Farmworker Pay To Help Agriculture Industry (NPR)

New White House Chief of Staff Mark Meadows is working with Agriculture Secretary Sonny Perdue to see how to reduce wage rates for foreign guest workers on American farms, in order to help U.S. farmers struggling during the coronavirus, according to U.S. officials and sources familiar with the plans. Opponents of the plan argue it will hurt vulnerable workers and depress domestic wages. The measure is the latest effort being pushed by the U.S. Department of Agriculture to help U.S farmers who say they are struggling amid disruptions in the agricultural supply chain compounded by the outbreak; the industry was already hurting because of President Trump’s tariff war with China.


“The administration is considering all policy options during this unprecedented crisis to ensure our great farmers are protected, and President Trump has done and will do everything he can to support their vital mission,” a White House official told NPR. The nation’s roughly 2.5 million agricultural laborers have been officially declared “essential workers” as the administration seeks to ensure that Americans have food to eat and that U.S. grocery stores remain stocked. Workers on the H-2A seasonal guest-worker program are about 10% of all farmworkers. The effort to provide “wage relief” to U.S. farmers follows an announcement Friday by the USDA to develop a program that will include direct payments to farmers and ranchers hurt by the coronavirus. Trump said Friday that he has directed Perdue to provide at least $16 billion in relief.

Read more …

Well, at least he did it. Where are the others?

In Mea Culpa, Macron Extends France’s Lockdown Until May 11 (R.)

French President Emmanuel Macron on Monday announced he was extending a virtual lockdown to curb the coronavirus outbreak until May 11, adding that progress had been made but the battle not yet won. Following Italy in extending the lockdown but announcing no immediate easing of restrictive measures as in Spain, Macron said the tense situation in hospitals in Paris and eastern France meant there could be no let-up in the country. Since March 17, France’s 67 million people have been ordered to stay at home except to buy food, go to work, seek medical care or get some exercise on their own. The lockdown was originally scheduled to end on Tuesday.

“I fully understand the effort I’m asking from you,” Macron told the nation in a televised address at the end of the lockdown’s fourth week, adding the current rules were working. “When will we be able to return to a normal life? I would love to be able to answer you. But to be frank, I have to humbly tell you we don’t have definitive answers,” he said. Schools and shops would progressively reopen on May 11, Macron said. But restaurants, hotels, cafes and cinemas would have to remain shut longer, he added. International arrivals from non-European countries will remain prohibited until further notice. Macron, whose government has faced criticism over a shortage of face masks and testing kits, said that by May 11, France would be able to test anyone presenting COVID-19 symptoms and give nonprofessional face masks to the public.

Macron also said he had asked his government to present this week new financial aid for families and students in need. Acknowledging his country had not been sufficiently prepared early on to face the challenges posed by the outbreak of the new coronavirus, Macron appeared to seek a humble tone in contrast to the war-like rhetoric of his previous speeches. “Were we prepared for this crisis? On the face of it, not enough. But we coped,” he said. “This moment, let’s be honest, has revealed cracks, shortages. Like every country in the world, we have lacked gloves, hand gel, we haven’t been able to give out as many masks as we wanted to our health professionals.”

The French, long accustomed to being told their high taxes paid for the “best healthcare in the world,” have been dismayed by the rationing of critical drugs, face masks and equipment and have watched with envy the situation in neighbouring Germany. Macron’s acknowledgment of the shortcomings was broadly well-received. “It’s not every day you hear a president offer a mea culpa and dare say ‘we have no definitive answers.’ Reassuring and necessary sincerity,” analyst Maxime Sbaihi of the think tank GenerationLibre said.

Read more …

You have to read this to believe it. Mind you, I read a note earlier that said 200 flights came into to Heathrow yesterday from all over the globe, including China, Italy, Spain, whose passengers were barely checked if at all.

A French Disaster (Guy Millière)

On April 9, in France, one of the three European countries most affected by COVID-19 — the others being Spain and Italy, 1,341 people died from the Chinese Communist Party virus. For Italy, the main European country affected so far, the figure on April 9 was 610 deaths; for Spain 446, and for Germany 266. While the pandemic has been stabilizing in Italy and Spain — and in Germany seems contained — in France it seems still expanding. Extremely bad decisions taken by the authorities created a situation of contagion more destructive than it should have been. The first bad decision was that, in contrast to European Union fantasies, borders apparently do matter. France never closed them; instead it allowed large numbers of potential virus-carriers to enter the country.

Even when it became clear that in Italy the pandemic was taking on catastrophic proportions, France’s border with Italy remained open. The Italian government, by contrast, on March 10, prohibited French people coming to its territory or Italians going to France, but to date, France has put no controls on its side of the border. The situation is the same on France’s border with Spain, despite the terrifying situation there. Since March 17, it has been virtually impossible to go from France to Spain, but coming to France from Spain is easy: you just show a police officer your ID. The same goes for France’s border with Germany. On March 16, Germany closed its border with France, but France declined to do the same for its border with Germany.

When, on February 26, a soccer match between a French team and an Italian team took place in Lyon, the third-largest city in France, 3,000 Italian supporters attended, even though patients were already flocking to Italy’s hospitals. France never closed its airports; they are still open to “nationals of EEA Member States, Switzerland, passengers with a British passport, and those with residence permits issued by France” and healthcare professionals. Earlier, until the last days of March, people arriving from China were not even subject to health checks. French people in Wuhan, the city where the pandemic originated, were repatriated by a military plane, and, upon their arrival in France, were placed in quarantine. While Air France interrupted its flights to China on January 30, Chinese and other airlines departing from Shanghai and Beijing continue to land in France.

French President Emmanuel Macron summarized France’s official position on the practice: “Viruses do not have passports,” he said. Members of the French government repeated the same dogma. A few commentators reminded them that viruses travel with infected people, who can be stopped at borders, and that borders are essential to stop or slow the spread of a disease, but the effort was useless. Macron ended up saying that the borders of the Schengen area (26 European states that have officially abolished all passport and border control with one another) could not be shut down and raged at other European leaders for reintroducing border checks between the Schengen area member countries. “What is at stake,” he said, seemingly more concerned with the “European project” than with the lives of millions of people, “is the survival of the European project.”

[..] by the end of March, most doctors and caregivers still had no masks. Several doctors fell ill. As of April 10, eight have died from COVID-19 and several others are in critical condition. On March 20, the government’s spokeswoman, Sibeth N’Diaye, incorrectly said that “masks are essentially useless”. At the end of February, France had almost no tests available, and no means of manufacturing them. The government decided to buy tests from China, but by March 19, the number of tests was still insufficient. While Germany performed 500,000 screening tests per week, France was only able to only perform 50,000. Rather than admit that tests were unavailable, or that the government had mismanaged situation, the France’s minister of health, Olivier Veran, announced that large-scale screening was useless, and that France had chosen to “proceed differently”.

Read more …

“..92 homes in the UK reported outbreaks in one day. [..] 2,099 care homes in England have so far had cases of the virus.”

Older People Being ‘Airbrushed’ Out Of British Virus Figures (BBC)

Many older people are being “airbrushed” out of coronavirus figures in the UK, charities have warned. The official death toll has been criticised for only covering people who die in hospital – but not those in care homes or in their own houses. It comes after the government confirmed there had been virus outbreaks at more than 2,000 care homes in England. Meanwhile, scientific advisers for the government will meet later to review the UK’s coronavirus lockdown measures. The evaluation will be passed to the government – but ministers have said it was unlikely restrictions would change.

On Monday, the UK’s chief medical adviser said he would like “much more extensive testing” in care homes due to the “large numbers of vulnerable people” there. Prof Chris Whitty told the daily Downing Street coronavirus briefing on that 92 homes in the UK reported outbreaks in one day. The Department of Health and Social Care later confirmed 2,099 care homes in England have so far had cases of the virus. The figures prompted the charity Age UK to claim coronavirus is “running wild” in care homes for elderly people. “The current figures are airbrushing older people out like they don’t matter,” Caroline Abrahams, the charity’s director, said.

Ms Abrahams said the lack of personal protective equipment (PPE) and testing is leading to the spread of coronavirus across the care home sector. “We were underprepared for this, we are playing catch-up on getting enough PPE and testing, I’m wondering if the needs of care homes were taken seriously early on,” she said. She joined industry leaders from Marie Curie, Care England, Independent Age and the Alzheimer’s Society in writing a letter to Health Secretary Matt Hancock demanding a care package to support social care through the pandemic. They have also called for a daily update on deaths in the care system.

Read more …

“The home charges up to C$10,000 a month for each resident,..”

Care homes, nursing homes are a major issue. Stories abound from the UK, France, Belgium, Holland, Canada about elderly people being left alone and untested, and their subsequent COVID19 deaths not counted.

Québec To Ramp Up Care Home Inspections After 31 Die In Montréal Facility (R.)

The Quebec government on Monday said it was putting the safety and general conditions of the province’s 2,600 long-term care and nursing home facilities under the microscope following the deaths of 31 people in a single home for the elderly since March 13. Police and the coroner’s office are investigating the deaths at the Residence Herron, a 139-unit home in Montreal, which has been put under provincial control. Quebec Premier François Legault said health officials had only been informed that the nursing home had a shortage of staff, but not that dozens of residents had died. “[Health officials] didn’t know before Friday night that there were 31 deaths,” Legault told reporters on Monday. “We knew that there were a few deaths, but surely not 31.”


Only five deaths are confirmed to have been caused by COVID-19, with the rest under investigation. Legault blamed the situation on “major negligence” over the weekend and said the facility’s management had not cooperated when authorities first tried to probe reports of problems. “I think that what happened in the month of March was that suddenly many of their residents got the COVID-19, many of the employees decided to leave,” he said. The residence is located on Montreal’s West Island and is owned and operated by Katasa Group, which owns six other retirement homes. The home charges up to C$10,000 a month for each resident, according to the Montreal Gazette. The private nursing home touts itself as having “an enviable reputation in the field of residences for retirees in need of special care,” according to its website.

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Until further- convincing- notice, make that Brazil and every other country.

Brazil Likely Has 12 Times More Coronavirus Cases Than Official Count (R.)

Brazil likely has 12 times more cases of the new coronavirus than are being officially reported by the government, with too little testing and long waits to confirm the results, according to a study released on Monday. Researchers at a consortium of Brazilian universities and institutes examined the ratio of cases resulting in deaths through April 10 and compared it with data on the expected death rate from the World Health Organization. The much higher-than-expected death rate in Brazil indicates there are many more cases of the virus than are being counted, with the study estimating only 8% of cases are being officially reported.


The government has focused on testing serious cases rather than all suspected cases, according to the consortium, known as the Center for Health Operations and Intelligence. The center and medical professionals have also complained of long wait times to get test results. Health Minister Luiz Henrique Mandetta has said that it is difficult to distribute tests in Brazil because of the size of the country but acknowledges that testing needs to improve. Officially, Brazil’s coronavirus death toll rose to 1,328 on Monday, while the number of confirmed cases hit 23,430, according to health ministry data. As of last Thursday, Brazil had had around 127,000 suspected cases and carried out just short of 63,000 tests, ministry figures indicate. A health ministry official on Monday said more than 93,000 tests are still being processed for results.

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Russia is not doing well.

China Tightens Russian Border Checks, Approves Experimental Vaccine Trials (R.)

China has approved early-stage human tests for two experimental vaccines to combat the new coronavirus as it battles to contain imported cases, especially from neighbouring Russia, the new “front line” in the war on COVID-19. Russia has become China’s largest source of imported cases, with a total of 409 infections originating in the country, and Chinese citizens should stay put and not return home, the state-owned Global Times said in an editorial. “Russia is the latest example of a failure to control imported cases and can serve as a warning to others,” said the paper, which is run by the Communist Party’s People’s Daily. “The Chinese people have watched Russia become a severely affected country… This should sound the alarm: China must strictly prevent the inflow of cases and avoid a second outbreak.”


China’s northeastern border province of Heilongjiang saw 79 new cases of imported coronavirus cases on Monday. All the new cases were Chinese citizens travelling back into the country from Russia, state media said on Tuesday. They formed the bulk of new cases on the Chinese mainland, which stood at 89. Heilongjiang’s provincial authority said on Tuesday that it had established a hotline to reward citizens for reporting illegal immigrants crossing into the province. According to a notice, people supplying verified information about illegal cross-border crimes will be granted 3,000 yuan. Those who apprehend the illegal immigrants themselves and hand them over to the authorities will be given 5,000 yuan. As of Tuesday, China had reported 82,249 coronavirus cases and 3,341 deaths. There were no deaths in the past 24 hours.

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The robots, like the doctors, are on Big Pharma’s payroll.

China Big Tech Moves Into Healthcare (R.)

China’s biggest corporate showdown has kicked off. Alibaba, Tencent and Ping An Insurance dominate e-commerce, video games and insurance respectively. Now the trio, worth a combined $1 trillion-plus in market capitalisation, is converging on healthcare. Before Covid-19 hit, China’s medical system suffered from chronic under-investment. Healthcare expenditure, of which the government accounts for over half, was just 5.2% of GDP in 2017, data from the World Health Organization show, far lagging 17% in the United States. A big problem is a shortage of general practitioners, resulting in threadbare primary care. It’s geographically unbalanced too; medical resources are concentrated in wealthier urban areas.

Top-tier hospitals, representing just 8% of the country’s total, received nearly half of all patients in 2016, according to research cited by China Renaissance. Alibaba and Ping An, as well as the Tencent-backed WeDoctor, see potential for profit in filling the gaps left by overstretched, overcrowded hospitals. All three offer cheap online consultations, which have spiked in the wake of the coronavirus outbreak. They are racing to develop all-encompassing apps offering diagnosis, prescriptions, referrals, appointment bookings, 1-hour drug delivery and even insurance.

Ping An’s Good Doctor is ahead for now. The app, run by a Hong Kong-listed subsidiary, has 67 million monthly active users as of the end of last year, thanks to a sizable team of in-house doctors and a network of partner hospitals and pharmacies. But Alibaba is beefing up its healthcare arm, also listed in Hong Kong, by reshuffling its pharmaceutical business and appointing a new chief executive. Tencent’s ubiquitous messaging app, WeChat, too has rolled out features like Covid-19 heat maps and hospital appointment bookings. It owns an undisclosed stake in WeDoctor, which is now looking to raise up to $1 billion in a Hong Kong initial public offering this year …

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Jun 122015
 
 June 12, 2015  Posted by at 11:07 am Finance Tagged with: , , , , , , , , , ,  1 Response »


Jack Delano Main street intersection, Norwich, Connecticut 1940

Peak America: Our Run Is Over (Paul B. Farrell)
American Dreaming, From G1 to Bilderberg (Pepe Escobar)
US Is Still Drowning In Mortgage Debt (MarketWatch)
The Warren Buffett Economy – Why Its Days Are Numbered-Part 3 (Stockman)
Myopic US Policies Pave Way For China’s Dominance (MarketWatch)
China’s Answer to Europe’s Needs (Bloomberg)
The World’s Worst Investment Bubble Will Burst Soon (MarketWatch)
Demands On Greece Will Yield The Opposite Of What They Promise (FT)
Varoufakis: ‘Contrary To Stubborn Rumours, We Never Gambled’ (Bloomberg)
Greek Pension Mess Shows There’s No Easy Way Out of Impasse (Bloomberg)
German Government Consulting On What To Do If Greece Goes Bankrupt (Reuters)
Keeping Greece in the Euro May Have Nothing to Do With … Euros (Bloomberg)
EU Issues Final Warning To Greece As Last-Ditch Talks Achieve Nothing (AEP)
IMF To Alexis Tsipras: ‘Do You Feel Lucky, Punk?’ (Guardian)
The Slow Transformation Of The IMF (Rochon)
Stupidity Is The Biggest Problem In The Housing Debate (Pickering)
A Bitcoin Start-Up Has Made Exchanging Currency Free (CNBC)
Italian Statistics Agency Validates Citizens Income Proposal (M5S)

“..our internecine political conflicts prevent us from delivering on the braggadocio..”

Peak America: Our Run Is Over (Paul B. Farrell)

Peak America? Yes. We’re on the downside? Yes. Not exceptional? No. The questions come up a lot lately. In a Time magazine review of his new book “Superpower: Three Choices for America in the World,” foreign policy expert Ian Bremmer asks the blunt ones: “What role does President Barack Obama believe America should play in the world? His words and his actions tell different stories,” says Bremmer. Bottom line, “words aside, Obama’s deeds suggest he’s not acting so much as reacting to crises as they appear.” In his earlier best-seller, “Every Nation for Itself: What Happens When No One Leads the World?” Bremmer saw America’s spliting apart as a reflection of a global trend. He sees us living in a new “G-Zero, the new world order in which no single country or durable alliance of countries can meet the challenges of global leadership … What happens when the G-20 doesn’t work and the G-7 is history?”

The big question: “Have we hit Peak America?” asked the elite Foreign Policy magazine last year. Yes. The cover was a mess, total confusion, chaos, fragmentation. Yes, everything’s peaking. We talk a good game about exceptionalism. But our internecine political conflicts prevent us from delivering on the braggadocio. In “Superpower” Bremmer predicts even more fragmentation in America, reflecting our extreme political and cultural partisan conflict, plus Big Oil’s battle over climate science and carbon emissions. And across the world, it’s every nation for Itself. Prediction: America will peak with the 2016 election. Not just because of the insanity of 20 GOP presidential candidates. Truth is most are hustlers, not presidential timber.

Jeb Bush flip-flopping on his brother’s foreign policy was total incoherence. Rand Paul? Marco Rubio? Long shots. Hillary Clinton? Not incoherent, just running silent. The only coherent candidate is Bernie Sanders. Too good to be true. So special-interest billionaires will do everything possible to use him to destroy Clinton. No good news ahead. After the presidential election drama, no matter who’s elected, chaos, fragmentation and incoherence will accelerate. The delusional Federal Reserve and its bubble economy will finally collapse onto Wall Street’s overinflated stock market, confirming Jeremy Grantham’s forecast that the 2016 election will trigger a 50% drop, plunging America and the world into an economic recession, worse than 2007-08, with GDP near the flat line.

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“Washington factions were blaming Germany for making the West lose Russia to China, while adult minds in the EU – away from the Bavarian Alps – blamed Washington.”

American Dreaming, From G1 to Bilderberg (Pepe Escobar)

What’s the connection between the G7 summit in Germany, President Putin’s visit to Italy, the Bilderberg club meeting in Austria, and the TTIP – the US-EU free trade deal – negotiations in Washington? We start at the G7 in the Bavarian Alps – rather G1 with an added bunch of “junior partners” – as US President Barack Obama gloated about his neo-con induced feat; regiment the EU to soon extend sanctions on Russia even as the austerity-ravaged EU is arguably hurting even more than Russia. Predictably, German Chancellor Angela Merkel and French President Francois Hollande caved in – even after being forced by realpolitik to talk to Russia and jointly carve the Minsk-2 agreement.

The hypocrisy-meter in the Bavarian Alps had already exploded with a bang right at the pre-dinner speech by EU Council President Donald Tusk, former Prime Minister of Poland and certified Russophobe/warmonger: “All of us would have preferred to have Russia round the G7 table. But our group is not only a group (that shares) political or economic interests, but first of all this is a community of values. And that is why Russia is not among us.” So this was all about civilized “values” against “Russian aggression.” The “civilized” G1 + junior partners could not possibly argue whether they would collectively risk a nuclear war on European soil over a Kiev-installed ‘Banderastan’, sorry, “Russian aggression.” Instead, the real fun was happening behind the scenes.

Washington factions were blaming Germany for making the West lose Russia to China, while adult minds in the EU – away from the Bavarian Alps – blamed Washington. Even juicier is a contrarian view circulating among powerful Masters of the Universe in the US corporate world, not politics. They fear that in the next two to three years France will eventually re-ally with Russia (plenty of historical precedents). And they – once again – identify Germany as the key problem, as in Berlin forcing Washington to get involved in a Prussian ‘Mitteleuropa’ Americans fought two wars to prevent. As for the Russians – from President Putin and Foreign Minister Lavrov downwards – a consensus has emerged; it’s pointless to discuss anything substantial considering the pitiful intellectual pedigree – or downright neo-con stupidity – of the self-described “Don’t Do Stupid Stuff” Obama administration policy makers and advisers. As for the “junior partners” – mostly EU minions – they are irrelevant, mere Washington vassals.

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It’s all still propped up. In essence, market manipulation.

US Is Still Drowning In Mortgage Debt (MarketWatch)

The percentage of homes underwater — where the home is worth less than the mortgage — has been dropping as the housing market has recovered, but more than 4 million U.S. homeowners owe the bank at least 20% more than their homes are worth, totaling $579 billion of so-called negative equity, according to real estate company Zillow. “Homeowners who remain underwater will likely be the toughest to free from negative equity,” says Zillow chief economist Stan Humphries. The rate of underwater homeowners is much higher among the homes with the least value, according to Zillow, which uses data from credit bureau TransUnion. More than 25% of those who own the least valuable third of homes were upside down, compared with about 8% of the most valuable third of homes.

In Atlanta, 46% of low-end homeowners were underwater, compared with 10% of high-end homeowners. In Baltimore, 32% of low-end homeowners were in negative equity, compared with 9% of those who own the highest-value homes. The good news: There were 15 million homes in negative equity at the peak of the housing crisis. The national negative equity rate dropped to 15.4% of all homes with mortgages in the first quarter, down from rate 18.8% the same period last year. The rate of negative equity improved in all of the 35 largest housing markets in the first quarter of 2015, “a sign that the country is continuing to recover from the lax lending rules and subsequent housing market bust of the last decade,” the report says.

Millions of Americans are so far underwater, it’s likely they may not re-gain equity for up to a decade or more at these rates,” Humphries says. Because negative equity is concentrated so heavily at the lower end of the market, it prevents potential first-time buyers from finding affordable homes for sale, he adds. “Owners of those homes can’t move up the chain because they’re stuck underwater in the entry-level home they bought years ago. The logjam at the bottom is having ripple effects.”

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That $50 trillion zombie.

The Warren Buffett Economy – Why Its Days Are Numbered-Part 3 (Stockman)

During the last 27 years the financial system has ballooned dramatically while the US economy has slowed to a crawl—–a divergent trend that has intensified with the passage of time. For instance, since Q4 2000, nominal GDP has expanded by just 70% compared to a 140% gain in market finance (i.e. the value of non-financial corporate equity plus credit market debt per the Fed’s Flow Of Funds report). As a consequence, and as we previously demonstrated, the ratio of finance to economic output has soared to nearly 540% of national income compared to a historic norm of about 200%. Had even the stabilized ratio of 240% that the Volcker sound money policy had put in place by 1986, for example, remained at the level, total credit market debt and equity finance would be $50 trillion lower than today’s gargantuan $93 trillion total.

Even when you purge the cumulative price inflation out of the above picture, the story does not remotely add-up. That is, while real median household income has not gained at all since the late 1980s, and thus currently stands at just 1.03X of its 1987 value, the GDP deflator-adjusted value of corporate equities and credit market debt outstanding stands at 8.0X and Warren Buffett’s real net worth at 19.0X. Needless to say, that’s not capitalism at work; its central bank driven bubble finance. So the question remains why did the Fed expand its balance sheet by 22X over the past 27 years (from $200 billion to $4.5 trillion)? After all, the empirical result was a sharp slowing of main street growth, a massive financialization of the US economy and monumental windfalls to financial speculators who surfed on the $50 trillion bubble.

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“..when governors like Sam Brownback of Kansas or Scott Walker of Wisconsin slash spending on education and withhold infrastructure investment, they are serving the long-term interests of China rather than their own citizens”

Myopic US Policies Pave Way For China’s Dominance (MarketWatch)

The Republican governors who are reducing taxes and slashing government spending are no doubt keeping their wealthy campaign donors happy. But when governors like Sam Brownback of Kansas or Scott Walker of Wisconsin slash spending on education and withhold infrastructure investment, they are serving the long-term interests of China rather than their own citizens. Trapped in the short-term objectives of their myopic ideology, these governors, as well as the Republican majorities in Congress, are hastening the decline of the U.S. as a world hegemon, and speeding the day when China will fashion a truly world empire.

Even as this country founders with a misguided fiscal retrenchment that will leave it ill-equipped to face global competition in coming decades, China is spending hundreds of billions on highways, rail lines, and pipelines to knit together a Eurasian landmass that a longstanding theory of geopolitics sees as the key to a genuine world empire. When the high-speed rail network and web of pipelines being feverishly constructed by China makes the land transport of resources more economical than sea transport, the containment policy followed by naval powers — first Britain, then the U.S.— will no longer work.

This is the daunting thesis advanced by University of Wisconsin historian Alfred McCoy, who sees China fulfilling the geopolitical destiny first described by British geographer Halford Mackinder in January 1904 in an impactful presentation to the Royal Geographical Society. “If China succeeds in linking its rising industries to the vast natural resources of the Eurasian heartland, then quite possibly, as Sir Halford Mackinder predicted on that cold London night in 1904, ‘the empire of the world would be in sight,’” McCoy wrote in a blog post this week. In Mackinder’s view — which has come to be known as the Pivot of History or Heartland Theory — it is the “world island” comprising Europe, Asia and Africa that is destined by geography to become the dominant world empire.

Though Mackinder’s forecast has taken longer than expected due to two world wars, the Russian Revolution and the Sino-Soviet split, China is now making good on the potential he described, McCoy says. “After decades of quiet preparation, Beijing has recently begun revealing its grand strategy for global power, move by careful move,” McCoy writes. “Its two-step plan is designed to build a transcontinental infrastructure for the economic integration of the world island from within, while mobilizing military forces to surgically slice through Washington’s encircling containment.”

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The old dream of the big continent. But what happens when China’s economy halts?

China’s Answer to Europe’s Needs (Bloomberg)

Although Budapest and Beijing are separated by 6,000 miles, they’ve just agreed to become much closer. In a quiet ceremony held last weekend, Hungary became the first European country to sign onto China’s New Silk Road initiative, a multi-billion dollar program to build up infrastructure and trade along the land and maritime routes of the ancient Silk Road that stretched across Asia and Europe. Right now, Hungary’s participation probably won’t have an impact beyond its own borders. But as others countries follow its lead, China’s economic and political relationship with Europe will likely undergo a dramatic shift – one that may not be to the European Union’s liking.

The Chinese government’s interest in Europe isn’t new. In recent years, it has made substantial investments in Greek port facilities, and agreed to help finance the development of high-speed rail service between Belgrade and Budapest. In both cases, China wanted to simplify the logistics of exporting to European markets. In return, it offered something to the countries in question: help building infrastructure, and easier access to Chinese markets (assuming they could figure out something to export back). The novelty of the New Silk Road initiative is that China is now pursuing far deeper partnerships as part of a comprehensive political strategy. Previously, policy makers in Beijing tended to treat, say, an investment in Tajikistan as a discrete exchange – you get a pipeline, we get gas.

Under the New Silk Road framework, it’s part of an explicit effort to expand Chinese influence across Eurasia – one step toward earning primacy for China on the global stage. Beijing hasn’t denied having vast ambitions for a program it expects to spur $2.5 trillion in annual trade by the end of the decade. In March, Xinhua, China’s official state news wire, announced the purpose of the program is nothing less than to “change the world political and economic landscape.” According to an analysis by Barclays, China’s economy will benefit enormously from opening up new markets for its excess capacity. For example, China’s massive state-owned sector currently earns an average return on investment of just over 4%. In contrast, Barclays estimates the average return for Chinese firms on New Silk Road infrastructure projects to be between 10 and 15%.

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It’s like a vaudeville act: Xi and Li playing with fire.

The World’s Worst Investment Bubble Will Burst Soon (MarketWatch)

Investment bubbles always look so obvious in hindsight. But when you’re in the middle of one, it’s hard to fight the crowd, even if that little voice in your head tells you to run for the hills. Why? Bubbles produce compelling narratives that give people reasons to believe. The Internet is changing everything. Housing prices never go down. Tulips are the most precious commodity on God’s green Earth, etc. Now the same thing is happening again in China, a market that has had one huge bubble burst only recently. The Shanghai Composite index briefly topped 6,000 in October 2007 only to plummet to just above 1,700, a sickening 70% plunge in only 12 months.

But a mere seven years later, Shanghai is above 5,000 again, and the bulls say more gains lie ahead, even though China’s economy is slowing dramatically and some valuations already are stratospheric. They’re counting on China’s central bank to keep cutting rates. It already has reduced them three times in the past six months. Sound familiar? Also, the Chinese government has eased trading restrictions on foreign investors. On Tuesday, index provider MSCI said it “expects to include China A shares in its global benchmarks” once it works out some issues with Chinese regulators.

A flood of institutional money would presumably follow. Indeed, mutual fund company Vanguard said last week it would gradually increase the number of mainland China-traded A shares in its Emerging Markets Stock Index Fund and ETF. This macro “story” has powered Shanghai 150% higher in the past 12 months. Shenzhen and other mainland markets with riskier, more speculative stocks have nearly tripled. With the animal spirits unleashed, average Chinese investors are piling in. In a reverse of what happened in the U.S. in the 2000s, Chinese investors fleeing a busted housing market have thrown their money into stocks. Talk about going from the wok to the fire!

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“Other eurozone countries insisted that restructuring must not happen in 2010, and to the extent it was for their benefit, they should share the burden.”

Demands On Greece Will Yield The Opposite Of What They Promise (FT)

The creditor demands and Greek counterproposals cover the primary (before interest) budget surplus, tax rates and pension payments, and a host of structural reforms. As you contemplate the list, it is worth shoving the details to one side and asking a more basic question: why do the creditors bother? What does it matter to Brussels, Frankfurt, Berlin and Washington whether the leftwing radicals in Athens adopt economic policies that the creditors claim are better for Greece? Why can’t the Greeks be left to sink or swim on their own? Of the answers that could be thought up to this question, many are illegitimate. They include the feeling that Greece need to be punished for being a deceitful troublemaker in Europe’s midst.

Also, the anti-democratic view that if the people make a bad choice the technocrats had better protect them against themselves. The only legitimate justification for the creditors’ insistence on specific policies is that these may be necessary for them to get their money back. Even there, the legitimacy is not clear-cut. Only 10% of the rescue loans financed Greek spending – the rest went to pay back outstanding debt that should have been restructured instead. Other eurozone countries insisted that restructuring must not happen in 2010, and to the extent it was for their benefit, they should share the burden. But for what it’s worth, the creditors’ interest in getting their money back makes the primary surplus by far the most important negotiation point.

The other demands can be justified only insofar as they are needed to reach a legitimate primary surplus target, otherwise not. But the creditors show a galling unwillingness to realise that by now, tightening Greece’s primary balance will make them less, not more, likely to get their money back. It is worth repeating the debt arithmetic we drew up last week. A plausible assumption is a fiscal multiplier (the effect of budget tightening on the economy) of 1.5 and a second-round effect of a GDP loss on the budget of one-third (it would be interesting to know which numbers the creditors use).

That means to achieve a given consolidation, measures twice as large have to be put in place, and the economy will shrink by three times the amount. Athens now seems to have accepted the creditors’ demand for a 1% of GDP primary surplus this year – from the 2/3% deficit the creditors’ currently expect. So to achieve that one-and-two-thirds percentage point improvement, fiscal measures have to be taken worth 3.33% of GDP – not, as many seem to think, one-and-two-thirds. And the economy will be 5% smaller than it would otherwise be.

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There is no clearer sign of how the EU has deteriorated than having certified nut Tusk speak on its behalf.

Varoufakis: ‘Contrary To Stubborn Rumours, We Never Gambled’ (Bloomberg)

Greece was told to stop fighting creditors’ demands and sign a deal that will avert a default as officials plan for a worsening of the crisis. Diplomatic niceties evaporated in Brussels on Thursday as European Union President Donald Tusk rebuked Greek Prime Minister Alexis Tsipras for dragging his feet on a debt agreement and the IMF’s team walked out of negotiations. Greek stocks tumbled. At a meeting of euro-area government staffers late Thursday, Greece was given less than 24 hours to come up with firm proposals to end the impasse, two officials present said. Policy makers are now examining all scenarios if Greece refuses to compromise, including the possibility that the country could eventually leave the currency, said the officials.

“There is no more time for gambling,” Tusk told reporters in Brussels on Thursday. “The day is coming, I am afraid, that someone says the game is over.” Greek banks fell as much as 8.1% and traded 7.1% lower at 11:30 a.m. in Athens. Greek bank stocks have lost more than 50% since the previous government of Antonis Samaras began to unravel in December. The Athens Stock Exchange Index, which has lost 24% since then, dropped as much as 4.2% on Friday. Standing on the brink of economic ruin, a reality check awaited Greece. The trio of lenders that hold the key to the country’s fate have run out of patience with what they see as delaying tactics and mixed messages of a leader elected to end an era of austerity.

“The ball is very much in Greece’s court,” IMF spokesman Gerry Rice told reporters in Washington. “There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.” Greece is ready to speed up talks as its creditors have demanded and is aiming to reach an agreement in the next few days, government spokesman Gabriel Sakellaridis said in an e-mail on Thursday as Finance Minister Yanis Varoufakis pushed back against Tusk’s criticism. “Contrary to stubborn rumours, we never gambled,” Varoufakis said on Twitter.

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It shows that no-one can be expected to overhaul the whole edifice in 5 months while they’re ordered to draft new troika plans every single day.

Greek Pension Mess Shows There’s No Easy Way Out of Impasse (Bloomberg)

To find out why Greece’s pension system is tying negotiators up in knots, look no further than Maria Kounani, 59, a mother of two, single parent and early retiree. The maker of sewing patterns applied for a reduced pension last year, when the business where she’d worked for 20 years struggled with unpaid orders. To qualify for a full pension she needed to work another 10 years. She opted for early retirement, the only real choice she says she had, and one Greece’s creditors say is undermining the pension system. “I did it because no one is hiring me,” Kounani said. “They’re not even hiring my daughter who’s 39.” As Greek pensions remain a key sticking point in talks with creditors, cases like Kounani show why there are no simple ways out.

For creditors, the pension system is still too generous. For the Greek government, it’s a system struggling to cope after five years of recession and dwindling contributions in a nation with the European Union’s highest unemployment. In the first quarter, the rate was 26.6% overall and 30.6% for women. An aging population and an €8 billion hit to pension finances because of the largest sovereign debt restructuring in history in 2012 hasn’t helped. “If you have a new contribution system and a new system of calculating pensions and a person loses her job, she falls out of the system,” said Jens Bastian, an economist and a former member of the EC’s Greek task force. “That’s a macro issue that no number of pension system reforms can fix.” [..]

In parliament on June 5, Tsipras called the proposals from creditors “unrealistic” and said no lawmaker could agree to demands such as removing a stipend from the lowest-paid pensioners. Tsipras has agreed to merge funds to cut costs and close loopholes that allow early retirement. He blamed five years of austerity for weakening the system, saying fund reserves fell by €25 billion through the 2012 debt swap and high unemployment. In the last five years, pensions fell as much as 48%, Tsipras said, while 45% of recipients get pensions that are below the poverty threshold. Kounani gets a provisional payment of €420 a month and will get a final pension disclosed to her next year. She hopes it will be a little more than what she gets now, so that there’s a bit left over after paying her rent of €360 a month.

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As of that’s news. All parties must do this.

German Government Consulting On What To Do If Greece Goes Bankrupt (Reuters)

The German government is holding “concrete consultations” on what to do in the case of a bankruptcy of the Greek state, German newspaper Bild said, citing several people familiar with the matter. This includes discussions about introducing capital controls in Greece if the crisis-stricken country goes bankrupt, Bild said in an advance copy of an article due to be published on Friday. It said a debt haircut for Greece was also being discussed, adding that government officials were in close contact with the ECB on that.

The German government did not, however, have a concrete plan of how it would react if Greece goes bankrupt and much would have to be decided on an ad-hoc basis, Bild cited the sources as saying. Earlier on Thursday, the International Monetary Fund dramatically raised the stakes in Greece’s stalled debt talks, announcing that its delegation had left negotiations in Brussels and flown home because of major differences with Athens.

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Obviously.

Keeping Greece in the Euro May Have Nothing to Do With … Euros (Bloomberg)

The need to keep Greece firmly in the bosom of the West has always underpinned decisions about its European role. Greece became the 10th member of what’s now the EU in 1981 – joining before Spain and Austria. For 26 years, until Bulgaria joined in 2007, it shared no land border with another EU member. It adopted the euro in 2001, only then to reveal less than a decade later its finances weren’t in order. Merkel’s words were an echo of what Truman told Congress in 1947. That’s when he got approval for military and economic aid to prevent Greece from falling under the influence of the Soviet Union during its 1946-49 civil war. ‘‘Should we fail to aid Greece and Turkey in this fateful hour, the effect will be far-reaching to the west as well as to the east,” Truman said.

“We must take immediate and resolute action.” The Greeks joined NATO in 1952, three years before the Federal Republic of Germany and the same time as Turkey, uniting two traditional enemies under one umbrella. The aid Greece received under the Truman Doctrine and then the Marshall Plan bankrolled years of growth. Greek leftists chafed at the U.S. influence. The military regime, or junta, in 1967 to 1974 was seen as sponsored by the U.S. Truman’s statue, erected in 1963 by grateful Greek Americans, was defaced, attacked and toppled regularly over the years to protest U.S. policies in Greece and the region.

As Tsipras prepared to meet Merkel in Brussels on Wednesday evening, his foreign minister, Nikos Kotzias, told a gathering at Oxford University that now is the time to decide whether the pursuit of security, prosperity and freedom will prevail over the focus on numbers and profit margins. “Nowadays the role of geopolitics is more important than before,” Kotzias said. “Our world is in the midst of a conflict between its current needs and the future demands.” The EU “needs to learn to see beyond the end of its nose, as we say in Greece,” he said. “To manage our future not as a momentary action, nor as a shareholders’ meeting that thinks with an horizon of quarterly earnings.”

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Debt restructuring is inevitable, so let’s get it done.

EU Issues Final Warning To Greece As Last-Ditch Talks Achieve Nothing (AEP)

The European Union has warned Greece in the clearest language to date that its patience is exhausted and the country will be abandoned to its fate unless it accepts creditor demands in short order. Donald Tusk, the EU’s president, said the radical-Left Syriza government must stop spinning out the negotiations and face hard choices before Greece spirals irrevocably into default. “There is no more time for gambling. The day is coming, I’m afraid, that someone says that the game is over,” he said. The blunt language came as the International Monetary Fund pulled its officials out of the talks, citing a failure to break the deadlock after four months of wrangling. “There are major differences between us in most key areas. There has been no progress in narrowing these differences,” it said.

Greek prime minister Alexis Tsipras failed to secure any substantive concessions during two days of stormy talks with key power-brokers in Brussels, including German Chancellor Angela Merkel and French president Francois Hollande. Mrs Merkel tried to put the best gloss on events, insisting that Greece had agreed to work “full steam ahead” to break the impasse. Yet her assurances belie the reality that Syriza and Europe’s creditor powers are no closer to a deal as bankruptcy looms. The Greek interior ministry has ordered regional governors and mayors to transfer all cash reserves to the central bank as an emergency measure. The mounting worry is that the government may not be able to meet its bill for salaries and pensions this month. The economy is sliding deeper into recession and tax revenues are falling short.

Bizarrely, the Athens stock market soared 8.2pc in a wave of euphoria, swept by unsubstantiated rumours of a breakthrough that left Greek officials scratching their heads. The Piraeus Bank and Eurobank both jumped 19pc, while yields on two-year Greek debt plummeted 135 basis points to 23.8pc. Markets may have misjudged the political choreography of the talks in Brussels. It is understood that Mr Tsipras chose to acquiesce in what insiders deem to be a “negotiating charade” in order to show willingness and avoid blame at home if the showdown ends in rupture, and even in Greece’s ejection from the euro. It does not mean that Athens has ditched its fundamental demand for debt restructuring, an end to austerity and a comprehensive solution that puts Greece on a viable economic path.

“They tell us that there will be plenty of money for the next year or two if we sign on the dotted line and accept the Memorandum,” said one official. “The creditors are taking this to the wire because they think we are scared – and we are scared – but we cannot accept these terms because they solve nothing,” he said. Syriza has proposed a debt swap that would let it borrow from the eurozone bail-out find (ESM) to repay €27bn of liabilities to the ECB, a rotation from one creditor to another. This would have the effect of stretching maturities and averting a default to the ECB in July. The plan has so far been rejected out of hand by Brussels.

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The extent to which the press shows any true insight in what’s going on is painfully limited. They see no fundamental difference between selling a second hand car and negotiating about abject poverty of half a country.

IMF To Alexis Tsipras: ‘Do You Feel Lucky, Punk?’ (Guardian)

“You’ve got to ask yourself one question. Do I feel lucky? Well, do ya, punk?” The lines spoken by Clint Eastwood in Dirty Harry sprang to mind when the International Monetary Fund (IMF) announced that it had called its Greek negotiating team home from talks in Brussels. The IMF’s message was short and brutal. There were still major differences between Greece and its creditors. There was no progress in narrowing those differences. The two sides were well away from an agreement. So much, then, for the talk earlier this week that a deal is close. Shares across Europe surged on hopes that a resolution to the crisis was at hand, but that optimism was punctured by the news from Washington. The IMF, clearly, has had enough.

It was unimpressed by Greece’s decision to bundle up all four of the debt repayments due this month and is frustrated by the unwillingness of Alexis Tsipras, the Greek prime minister, to cross its two “red line” issues – pensions and labour-market reform. This, then, is the IMF holding the gun to Alexis Tsipras’s head. It feels like a pivotal moment, the point where the creditors are saying “take it or leave it” and the Greeks have to decide whether the IMF really means it. Up until now, the view in Athens has been that the troika – made up of the IMF, the European Central Bank and the European commission – has been bluffing.

The view has been that there is always room for a bit more haggling, always time to cut a better deal that would avoid the need to make the changes to pensions, VAT and collective bargaining being demanded in exchange for fresh financial assistance. Greece has reached this conclusion for a number of reasons. It thinks European politicians will be wary of anything that might push Greece out of the single currency, because that would be a setback to the idea that Europe only ever moved forward. It believes that Angela Merkel will be willing to compromise for fear that a Grexit would push Tsipras into the willing arms of Vladimir Putin. And it is convinced that the reforms being demanded by the troika are wrong-headed and will impose more pain on a population that has suffered enough.

For their part, the creditors say Greece is not serious about reform, with the IMF noting that the Greek government is contributing 10% of GDP to pensions against an EU average of 2%. Put simply, they know Greece is running out of money and wants to stay in the euro. They are fed up with Tsipras acting like he is the one holding the .44 Magnum and they are threatening to pull the trigger. This movie climaxes next week.

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“We are left with the conclusion that IMF leaders just don’t seem to be reading their own research.”

The Slow Transformation Of The IMF (Rochon)

In recent years, the IMF research department has even espoused and given empirical support to a wide range of socially oriented economic policies, what many would call left-friendly. Today, there is no doubt the research department at the IMF has drifted somewhat away from its right-of-centre pulpit, in a series of important policy shifts. Of course, there remain important differences between what trained economists at the IMF are writing (the analysis) and what the political leaders of the IMF, like its director Christine Lagarde, are espousing publicly (the policies). Nowhere is this more evident for instance than the advice given to Greece. We are left with the conclusion that IMF leaders just don’t seem to be reading their own research. As economist Francesco Saraceno has clearly demonstrated, the IMF has gone on record with the following analytical conclusions:

1. Expansionary fiscal policy, with a focus on public investment, is basically a “free lunch.” Given the large impact of public expenditures, particularly in recessions, austerity programs are harmful and should be replaced by higher government spending. In fact, austerity the IMF argued, could not work. Concern over public debt is overrated;

2. Labor-market flexibility (for instance, reduction in wages; decreases in union participation) do not foster economic growth; they just are another element in a regressive income distributive regime, along with financial globalization;

3. Countries should actively manage their capital accounts, and even reverse the trend for even more deregulated financial flows;

4. Sustained and stable economic growth is achieved through a progressive income distribution, with redistributive efforts having no discernible negative impact on the economic performance. This argument is virtually a rejection of the efficiency-income egalitarianism trade-off behind the neoliberal discourse and “trickle-down” policies.

At first glance, these policies can appear to be quite progressive, and in many respects they are. Ignored by the mainstream of the profession and discarded by leaders and institutions around the globe, these policies have at one time or another, all been actively promoted by progressive economists, as well as by some progressive political parties and organizations.

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Australia.

Stupidity Is The Biggest Problem In The Housing Debate (Pickering)

Recent comments by Prime Minister Tony Abbott and Treasurer Joe Hockey highlight the biggest problem with Australia’s housing debate: pure unfettered stupidity. Faced with a social issue that requires real solutions and hard decisions; the federal government has instead stuck its head in the sand and hopes it will just go away. Reserve Bank governor Glenn Stevens was having none of it yesterday, declaring that the Sydney market had become “crazy” and a genuine “social problem”. It was strong language from a normally circumspect public servant. “What is happening in housing in Sydney I find acutely concerning for a host of reasons,” Stevens told the Economic Society of Australia yesterday. “I think some of what’s happening is crazy, but we [the RBA] have a national focus and so that just increases the complexity.”

If Stevens believes that a market has gone ‘crazy’ then there’s a good chance it went past that point long ago. It’s been well documented how slow the RBA was to endorse the use of macroprudential policies — particularly given the swift action of the Reserve Bank of New Zealand. The data itself suggests that current dynamics in the Sydney property market are unprecedented over the past few decades. The only comparable episode, in the early 2000s, resulted in real Sydney dwelling prices falling to such an extent that they didn’t pass their 2003 peak for another decade. Earlier this month, Treasury secretary John Fraser warned that the Sydney property market was “unequivocally” in a bubble. Nevertheless, Hockey and Abbott won’t have a bar of it.

“The starting point for a first home buyer is to get a good job that pays good money,” Hockey said earlier this week. “Then you can go to the bank and borrow money.” “If housing were unaffordable in Sydney, no one would be buying it.” It’s a simplistic view of the world that suits the ideological foundations of a party famed for its usage of three-word slogans. If only life was that simple. In the Sydney property market it is no longer enough to simply find yourself a good job. An individual can earn between $80,000 and $90,000 in Sydney while renting and make minimal progress towards saving up for a housing deposit. Increasingly younger Australians are relying on their parents or grandparents for financial support either directly through rent-free living or via cash handouts. Misguided housing policy has created an intergenerational property market in which the wealth of one’s parents is the single best indicator of whether you can enter the market.

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It’ll be an uphill battle.

A Bitcoin Start-Up Has Made Exchanging Currency Free (CNBC)

A bitcoin start-up has launched a service that will allow people to carry out foreign exchange transactions for free, dodging the expensive commission often charged by major financial institutions. Bitreserve, a company founded last year by CNET and salesforce.com co-founder Halsey Minor, allows people to convert bitcoin into normal currencies and precious metals. The start-up used to charge a 0.45% commission for bitcoin-to-dollar transactions, but has now cut its fees entirely. The move is likely to give it an edge in the hotly contested “fintech” market where a number of companies such as U.K.-based Transferwise are contesting the currency transfer and mobile payments space.

Users of the platform will be able to make currency exchanges in eight major currencies: euros, dollars, pounds, yuan, yen, pesos, rupees, swiss francs. People will also have the ability to convert the currencies into gold, silver, platinum and palladium, depending on the market price. Bitreserve offers the mid-market rate for currencies. “Those in society who can least afford it have to spend so much for things that are so commonplace,” Anthony Watson, president and chief operating officer of Bitreserve, told CNBC by phone. “If you look at Mexican immigrants, they send approximately $30 billion home every year and they pay just under $3 billion for the privilege of sending that money home. That is 10% and that is disgusting.”

Bitreserve’s service comes with a catch however – you have to own bitcoin to use the service in order to make an initial deposit and then convert it to another asset. Plus, when users receive money, they can only spend it in bitcoin. This could put it at a disadvantage to other companies that allow people to sign up with bank accounts and send money for still a small commission.

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Most of Europe -excluding, Italy, Greece- in effect have a citizens income already. So why not make it a European law?

Italian Statistics Agency Validates Citizens Income Proposal (M5S)

The Citizens’ Income is the priority for ltaly. ISTAT, the Statistics Agency, has verified that the cost to implement this would be €14.9 billion. The M5S has found the resources to finance this – by cutting wasteful spending, and Europa is demanding that we implement this. The only thing missing is the willingness of the parties to discuss and approve it in Parliament. The Citizens’ Income is being discussed right now in the Senate Committee and we are callling on the President of the Senate, Grasso, to get together with the group leaders and Alberto Airola to get our Citizens’ Income draft law onto the agenda for the floor of the Senate as soon as possible (as set out in Art. 53 section 3 of the Senate Regulations). Each day that is lost is another slap in the face to each of the 10 million Italians living below the poverty line. No one must be left behind. Citizens’ Income now!

“This morning in the Senate’s Labour Committee, the President of ISTAT and various members of the Statistics Agency spoke to the Committee and presented a report containing an in-depth financial analysis about our proposed law for a Citizens’ Income. In the last few months we have been attacked in so many ways and we have heard unfounded criticism coming from people in different political parties stating that the cost of our proposal was more than 30 billion. But now it’s ISTAT that is confirming the validity of our proposal! According to the ISTAT report presented to the Senate, the income support in this package would cost €14.9 billion, which is €600 million less than the estimate we had in our initial model.

It’s worth noting that even ISTAT reckons that the M5S’s proposal for a Citizens’ Income turns out to be the most comprehensive proposal under discussion. This is because there is no distribution of resources to those who are not experiencing serious financial difficulties. In fact, the money is targeted at the 2,759,000 families (about 10 million people) with an income that is below the poverty line defined by Eurostat: €780. ISTAT adds that the Citizens’ Income is a measure that “tends to create a solid network of social protection, and fills in certain gaps that could be found in the welfare system. It highlights the difference between youth poverty and the situation of young people living on their own.“

Thanks to the savings verified by ISTAT, it is possible to free up further resources by taking additional actions like: strengthening the Job Shops, and promoting the creation of new enterprises and innovative start-ups. There are no longer any excuses. We are now calling on the President of the Senate, Grasso, to get together with the group leaders and Alberto Airola to get our Citizens’ Income draft law onto the agenda for the floor of the Senate as soon as possible (as set out in Art. 53 section 3 of the Senate Regulations). Thus let Pietro Grasso keep to his commitments, respect the regulations and take immediate steps. With the Citizens’ Income, nobody gets left behind.”

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