Dec 172020

Vincent van Gogh Self-Portrait with Straw Hat Aug-Sep 1887


Assange Spoke to US State Dept to Stop Publication of Unredacted Cables (Sp.)
Julian Assange Has Formally Requested a Pardon From President Donald Trump (GP)
Pfizer To Assess Report About ‘Serious Allergic Reaction’ To Vaccine (RT)
First Glitches Emerge In COVID-Vax Rollout (ZH)
An App Could Catch 98.5% Of All COVID19 Infections. Why Isn’t It Available? (G.)
Grand County Coroner Raises Concern On Deaths Among COVID Cases (CBSDenver)
A Record 61% Of Restaurants, 35% Of Small Businesses Can’t Pay December Rent (ZH)
Where Americans Splurged & Where They Cut Back (WS)
Congress to Pass $17 Billion Bailout of Airline Shareholders & Bondholders
Cuomo v. Cuomo (Turley)
AOC: Nancy Pelosi Needs To Go (IC)
Amistad To Sue Zuckerberg For Using ‘Dark Money’ To Fund ‘Massive’ Fraud (RT)
Enter Trump: America’s First Shadow President (Tracey)
Unicef To Feed Hungry Children In UK For First Time In 70-Year History (G.)





The recording is new, but what it says is not. We’ve known for years that Assange was trying to prevent material from coming out. The key would appear to be that Guardian “journalists” David Leigh and Luke Harding wanted to write Assange’s biography, and he declined. They then published the encryption key in a book, out of spite, to damage him. The wrong guy is in Belmarsh today.

Let’s hope James O’Keeffe gets this through to Trump.

“So the material, there is an encrypted version of the materials on the internet somewhere that we do not control. One doesn’t actually need to convey the material itself, one only needs to convey the location of the material and its encryption key”, the WikiLeaks co-founder explains to Johnson.

Assange Spoke to US State Dept to Stop Publication of Unredacted Cables (Sp.)

Julian Assange has been accused of endangering US interests and assets by “recklessly” publishing unredacted US State Department diplomatic cables. The charges are denied by both by WikiLeaks and the many journalists who note that Assange ‘meticulously’ redacted documents and sought to minimise possible harm while exposing illegal actions. Audio recordings of a 2011 conversation between Julian Assange and Hillary Clinton’s State Department, published by Project Veritas, provide new insight into the extent with which the WikiLeaks publisher sought to minimise harm from the potential release of unredacted US diplomatic cables, by actors working against the express wishes of the transparency organisation.

“So the situation is that, we have intelligence that the State Department database archive of 250,000 diplomatic cables, including the classified cables, is being spread around. […] To the degree that we believe that within the next few days, it will become public and we’re not sure what the timing could be, imminently or within the next few days to a week. And, there may be some possibility to stop it”, Assange is heard explaining to Cliff Johnson, an attorney with the US State Department. “Who would be releasing these cables?” Johnson asks, “Is this WikiLeaks?”. “No,” Assange explains, adding, “We would not be releasing them. This is Daniel Domscheit-Berg, a previous employee that we suspended last August”.

The problem was that Domscheit-Berg was apparently sharing the link of the full unredacted diplomatic cables, which had been copied from the WikiLeaks website, and which could be found online. Ordinarily, the file with the full unredacted cables would have been useless as it was encrypted and would likely require years of highly-sophisticated computing to break the password through what is known in tech circles as the “brute force” method. However, the password to the encrypted file was entrusted by Assange to Guardian journalist David Leigh, who, by his own account, kept pressing the Australian born-journalist for access to the entirety of the 250,000 documents. Leigh and fellow Guardian journalist Luke Harding would in February 2011 reveal the password to the world by publishing the key as the title of one of the chapters in their book WikiLeaks: Inside Julian Assange’s War on Secrecy.

“[D]oes that mean that [Daniel Domschit-Berg] now [has] the ability…, without your control or authorisation, to make this as available as they want?” Johnson asks. “That’s correct”, Assange replies, adding “and there there’s no attempted redaction programme and no attempted harm minimisation.” “In case there are any individuals who haven’t been warned, they should be warned”, Assange stresses. Assange also explains the possibility of tracking down the encrypted files from the internet, potentially before people start using the encryption key revealed by Leigh and Harding. However, he explains that doing so is beyond the capability of WikiLeaks but that he was prepared to assist the State Department by urging other people to provide all the locations of the encrypted files. “[W]e have been calling the State Department and the embassy for over a day, trying to explain the urgency, and they have not called back other than this call”, Assange explains.

“Well, I appreciate what you’ve told us Mr Assange”, Johnson replies.


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Julian Assange Has Formally Requested a Pardon From President Donald Trump (GP)

People from across the political spectrum have called on President Trump to pardon the WikiLeaks founder, citing the importance of the freedom to publish. Assange’s fiancé Stella Morris, the mother of his two young children, has previously called for a pardon — but a formal request was not filed with the White House until this week. Assange is imprisoned in the United Kingdom pending a decision about his extradition to the United States where he faces charges under the Espionage Act for his publication of the Iraq and Afghan War Logs. If convicted he could face a maximum sentence of 175 years for the “crime” of publishing material that the US government did not want the population to know. In 2018, President Trump’s attorneys quietly made a case in defense of WikiLeaks throughout legal filings responding to a lawsuit filed by Democrat Party donors who alleged that the campaign and former advisor Roger Stone conspired with Russians to publish the leaked Democratic National Committee emails.

Their assessment was correct. Buried within hundreds of pages of case filings, in a motion filed in October 2018, Trump lawyer Michael A. Carvin argued that under section 230 of the Communications Decency Act (47 U.S.C. § 230), “a website that provides a forum where ‘third parties can post information’ is not liable for the third party’s posted information.” “That is so even when even when the website performs ‘editorial functions’ ‘such as deciding whether to publish,’” the filing contends. “Since WikiLeaks provided a forum for a third party (the unnamed ‘Russian actors’) to publish content developed by that third party (the hacked emails), it cannot be held liable for the publication.” This defense holds true for the war log releases that Assange has been charged for publishing.

“In addition, the First Amendment generally denies the government power to punish truthful speech,” Carvin wrote. He added that privacy cannot justify these violations of core First Amendment norms. The filing then refers to the 1989 case of Florida Star v. B.J.F., in which it was determined that “punishing truthful publication in the name of privacy” is an “extraordinary measure.” The formal pardon request comes on the heels of a viral claim from a Trump ally that the president would be pardoning the publisher. While he ended up retracting his statement, claiming he had faulty sources, it was clear that it was a move that people from both sides of the political spectrum support. The tweet gained over 75,000 “likes” on Twitter in about an hour, before being retracted.

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And also: “anaphylactic shock suffered by multiple healthcare workers in the UK..” [..] The UK also reported a “possible allergic reaction” in a third recipient..

Pfizer To Assess Report About ‘Serious Allergic Reaction’ To Vaccine (RT)

A healthcare worker in Alaska has reportedly been hospitalized with a serious allergic reaction after taking Pfizer’s Covid-19 vaccine. They had no reported history of drug allergies, unlike others who’ve suffered such reactions. The afflicted individual remains in the hospital on Wednesday after suffering a powerful reaction Tuesday, three sources who had seen official reports of the victim’s health told the New York Times. The workplace or residence of the health worker have not been disclosed, nor have any more details about their health status been released, and it’s not clear if they had other, non-medical allergies, one of the sources explained.

Pfizer is “working with local health authorities” to assess the details of the report about a “potential serious allergic reaction,” the company told RT in a statement on Wednesday, pledging to “closely monitor all reports suggestive of serious allergic reactions following vaccination” and “update labeling language if needed.” They also added that “there were no safety signals of concern identified in our clinical trials, including no signal of serious allergic reactions associated with the vaccine.” The reaction was reportedly similar to the anaphylactic shock suffered by multiple healthcare workers in the UK, where the Pfizer-BioNTech jab was approved earlier this month. One of the stricken British women had a history of egg allergies, though the manufacturer has insisted there are no egg-related ingredients in its formula, and the other was said to be allergic to certain medications.

The UK also reported a “possible allergic reaction” in a third recipient, though the incident was not described in detail. UK health authorities have warned people with any history of “anaphylaxis to a vaccine, medicine, or food” away from getting the Covid-19 shot, and suggested that facilities set up to administer the vaccine be equipped with “resuscitation equipment” – guidance echoed in Pfizer’s own prescribing information. While the company did not report any allergic reactions among clinical trial participants, individuals with medical allergies and anyone who had ever suffered a “severe adverse reaction associated with a vaccine” were specifically excluded from the trials, and doctors were advised to watch for such reactions so the allergic could be routed out of the studies.

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“..roughly 900,000 fewer doses would be delivered next week than were shipped this week.”

We could roll out Vitamin D, HCQ and Ivermectin. We know much more about those than about the vaccine. But we now contend that they need to be studied more, not the vaccine.

First Glitches Emerge In COVID-Vax Rollout (ZH)

A healthcare worker in Alaska was hospitalized on Tuesday with a ‘serious allergic reaction’ after receiving Pfizer’s COVID-19 vaccine, according to the New York Times. The person, who had no known drug allergies, was still in the hospital on Wednesday morning under observation, according to the report. It is unknown whether they suffer from any other types of allergies. The Alaska resident’s reaction was reportedly similar to anaphylactic reactions two heal workers in Britain experience after receiving the Pfizer-BioNTech vaccine last week – both of whom have recovered. Of note, they both had a history of severe allergies. One, a 49-year-old woman, is allergic to eggs (which Pfizer says are not in their vaccine). The other, a 40-year-old woman is allergic to several different medications. Both routinely carry EpiPenn-like devices in case of reactions.

“After the workers in Britain fell ill, authorities there initially warned against giving the vaccines to anyone with a history of severe allergic reactions. They later clarified their concerns, changing the wording from “severe allergic reactions” to specify that the vaccine should not be given to anyone who has ever had an anaphylactic reaction to a food, medicine or vaccine. That type of reaction to a vaccine is “very rare,” they said.” -NYT. No serious adverse effects were reported during Pfizer’s US trial involving over 40,000 participants, aside from aches, fevers and other ‘minor’ side effects. As Bloomberg notes, the first hiccups in the distribution of Pfizer’s vaccine are just beginning – including a holdup on the delivery of 3,900 shots to two states, and the announcement that roughly 900,000 fewer doses would be delivered next week than were shipped this week.

“Four delivery trays of the Pfizer-BioNTech SE vaccine were pulled back from delivery to California and Alabama this week and sent back to the company because they were colder than anticipated, according to Gustave Perna, the army general who serves as Operation Warp Speed’s chief operations officer. Each of the trays can likely be used to vaccinate 975 people. Pfizer has said its formula needs to be stored at 70 degrees below zero Celsius, the equivalent of negative 94 degrees below zero Fahrenheit. These trays were found to be much colder, according to Perna.” -Bloomberg. “We were taking no chances,” said Perna during a Wednesday news briefing.

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Not sure how this would work, but let’s hear it from you.

An App Could Catch 98.5% Of All COVID19 Infections. Why Isn’t It Available? (G.)

In late September, researchers at MIT announced that they had developed an algorithm that can accurately detect Covid-19 infections over the phone. When participants in their study produced a forced cough, MIT said their AI algorithm successfully detected 98.5% of Covid-19 infections with patients who have a cough and 100% of asymptomatic cases. If released in the form of an app, the technology could mean instant Covid-19 testing anytime, any place. As they wrote in their peer-reviewed article: “AI techniques can produce a free, non-invasive, real-time, anytime, instantly distributable, large-scale Covid-19 asymptomatic screening tool to augment current approaches in containing the spread of Covid-19. Practical use cases could be for daily screening of students, workers and public as schools, jobs and transport reopen, or for pool testing to quickly alert of outbreaks in groups.”

The impact of this technology would be huge. Currently, test results can take a week to be processed. Testing delays and shortages are due to things like strains on the supply chain providing swabs and chemicals, as well as the pressures on lab technicians processing high volumes of tests. And the test only tells you if you were positive at the time, not whether you are positive now, which can lead to a false sense of security. A smartphone-based, instant Covid-19 test would be a game changer and would save countless lives. The developers say they intend to make the technology available as an app, pending regulatory approval, but there is no clear timeline for when it might be released to the public.

People treated like infants

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“..two of their five deaths related to COVID-19 were people who died of gunshot wounds..”

Grand County Coroner Raises Concern On Deaths Among COVID Cases (CBSDenver)

The Grand County coroner is calling attention to the way the state health department is classifying some deaths. The coroner, Brenda Bock, says two of their five deaths related to COVID-19 were people who died of gunshot wounds. Bock says because they tested positive for COVID-19 within the past 30 days, they were classified as “deaths among cases.” “It’s absurd that they would even put that on there,” she said. “Would you want to go to a county that has really high death numbers? Would you want to go visit that county because they are contagious. You know I might get it, and I could die if all of a sudden one county has a high death count. We don’t have it, and we don’t need those numbers inflated.”

The state health department says the Centers for Disease Control and Prevention requires them to report people who’ve died with COVID-19 in their systems because it’s crucial for public health surveillance.Colorado provides death data related to COVID-19 in two ways: Deaths due to COVID-19: This is based on CDC coding of death certificates where COVID-19 is listed as the cause of death or a significant condition contributing to death. Deaths among COVID-19 cases: This reflects people who died with COVID-19, but COVID-19 may not have been the cause of death listed on the death certificate. CDPHE explains that they are required to report deaths among COVID-19 cases to the CDC.

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When we wake up, the world will have changed beyond recognition.

A Record 61% Of Restaurants, 35% Of Small Businesses Can’t Pay December Rent (ZH)

According to the latest Alignable Rent Poll, it’s becoming increasingly difficult for small businesses everywhere to pay their rent in full and on time, given the latest COVID resurgences. The need for more federal funding is also becoming more pronounced for many of these businesses, according to the poll. These findings are based on the most recent Alignable Rent Poll conducted among 9,204 small business owners from 11/21-11/23/2020. Several B2C industries are devastated – 61% of restaurants can’t pay their rent this month. That’s up 19% from 42% in November. 35% of U.S. small businesses couldn’t pay their rent this month, up 3% from 32% in November. Beauty salons (46%) and travel/hospitality businesses (43%) round out the Top 3 most-affected businesses, but many others are in trouble.

Looking at demographics, minority-owned businesses are suffering the most, as 49% of them reported that they could not afford their rent in December. That figure is 5% higher than it was in November. Women-owned businesses are also struggling (38% of those have not paid their rent, up 3% from 35% last month). Overall, 35% of small business owners reported that they couldn’t make rent this month (up 3% from 32% in November). For minority-owned businesses, the struggle is even more pronounced: nearly half (49%) report being unable to cover their rent in December. That figure jumped 5% from 44% in November. For women-owned businesses, 35% couldn’t make rent in November and now that percentage is up to 38% in December.

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Only large chains will survive.

Where Americans Splurged & Where They Cut Back (WS)

Retail sales in November fell 1.1% from October, the second month in a row of declines, and they even fell with restaurants and bars removed from the total. Sales at nonstore retailers, the placeholder for ecommerce, eked out a new record. This is the second month now of what I called a month ago Stimulus Fatigue. But wait… the Pandemic-induced switch from services – such as airline tickets, concert tickets, hotel bookings, and haircuts – to goods – such as food & beer at home, bicycles, and consumer electronics – is still on. In November, retail sales of $547 billion (seasonally adjusted) were still up 4.1% from November last year, according to the Census Bureau this morning. And for the 11-month period, they were essentially flat ($5.70 trillion), despite the collapse in March and April:

The metric of “retail sales” measures the sale of “goods” at various establishments and online. It doesn’t measure the sale of “services,” such as airline tickets, insurance, or healthcare services. During the Pandemic, consumers splurged on durable goods and food at home like never before, as free money flooded over them from the government, and as they cut back on other spending, such as plane tickets, payments on mortgages and student loans in forbearance, and on rent, protected by the eviction bans. A refinancing boom, triggered by record low mortgage interest rates, allowed consumers to extract cash from their homes and lower their mortgage payments. Part of this money from the government, and money not spent, and money extracted from the home was spent on goods, and part of it was used to pay down credit cards, whose balances have plunged 10.3% from a year ago.

[..] The once iconic retail institution of department stores – in their heyday, many of them were locally owned – has been obviated by events including the internet. For Americans, department stores have outlived their usefulness. For mall landlords, they’ve turned into a nightmare. The #1 and # 2 mall landlords – Simon Property Group and Brookfield Property – have ganged up to buy J.C. Penney out of bankruptcy, apparently to control the decline of their malls.Since the peak in December 2000, department store sales have collapsed by 55%, despite two decades of inflation and population growth, and the Pandemic has merely accelerated the process:

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Propping up zombies. Favorite pastime.

Congress to Pass $17 Billion Bailout of Airline Shareholders & Bondholders (WS)

Airlines in the US will get another $17 billion taxpayer-funded bailout if the $748 billion “bipartisan” stimulus proposal that the four most senior Congressional leaders are discussing this afternoon makes it into law. There is a commitment now to pass something. Many items that either party wanted but that the other refused to yield on have been trimmed out of this proposal, including the $1,200 stimulus checks. But their airline bailout is in it. Democrats and Republicans may not agree on much of anything these days, but they both love to bail out airline shareholders and bondholders. And that’s what this is – dressed up as payroll protection and airline support program.

The Democratic-backed $2.2 trillion stimulus package that the House passed at the end of September but that was not taken up by the Senate included $25 billion to bail out airline shareholders and bondholders. The airline industry has been lobbying with all its might to get this money. So now, it looks like they will have to make do with $17 billion. This new bailout comes on top of the original stimulus bill, which was passed in March and which came with $25 billion in so-called payroll support for the airlines, an additional $25 billion in loans for passenger airlines, and over $10 billion in grants and loans for cargo airlines and aviation contractors. The payroll protection provisions expired on September 30, under the assumption that by then the airlines would be operating more or less back at normal.

[..] The number of passengers going through TSA checkpoints to enter the secured areas at US airports through December 14 has dropped sharply since late November. The chart shows the number of TSA checkpoint screenings in 2020 (red) and 2019 (green) per day (thin lines) and the seven-day moving averages (bold lines):

Airline shareholders feel the money. And taxpayers feel the pain. This rally comes as revenues at the largest airlines have collapsed by 60% to 70%, and as debt has piled up in previously unthinkable amounts, and as airlines continue to report huge losses and – despite massive capacity cuts and layoffs – dizzying “daily cash burn” figures. Taxpayer money props up those shares and is a basic transfer of wealth from the American public to airline shareholders and to airline bondholders. This is the same industry where the top four airlines — Delta, United, American, and Southwest — willfully blew, wasted, burned, and annihilated $45 billion on share buybacks since 2012 to enrich their shareholders, including their own executives:

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Another story that must be buried.

Cuomo v. Cuomo (Turley)

There remains a blackout on the sexual harassment allegations against Democratic Gov. Andrew Cuomo by most major media outlets. Putting aside the striking lack of interest in comparison to the allegations raised against Justice Brett Kavanaugh, the controversy from that confirmation fight could raise difficult questions for Cuomo who not only insisted that Dr. Christine Blasey Ford must be believed but demanded that Kavanaugh take a polygraph examination. It is not clear if Cuomo will now follow his own standard and take a polygraph examination arranged by others. During the Kavanaugh hearing, various Democratic leaders publicly insisted that “women must be believed” when raising sexual harassment allegations and declared Kavanaugh guilty before either he or Ford actually testified.

Senator Maxie Hirono publicly stated that Kavanaugh was not even entitled to any presumption of innocence. Indeed, Hirono insisted that men needed to “just shut up” and accept the allegations. The view that “women must be believed” changed the minute that Joe Biden was accused of sexual assault and then refused to allow the review of his papers held under seal at the University of Delaware. Suddenly, figures like Nancy Pelosi and Gov. Gretchen Whitmer insisted that they believed Biden without any review such papers or even speaking with the alleged victim (a former Biden staffer). Ethics experts like Richard Painter attacked those who suggested that the accuser might be telling the truth as endangering the election. Others like Rep. Iihan Omar, Linda Hirschman, and Lisa Bloom found an even more startling resolution: they stated that Biden was clearly a rapist, but they would still vote for him.

The allegations raised by former Biden aide Lindsey Boylan are notably easier to confirm. She stated “Yes, [Cuomo] sexually harassed me for years. Many saw it, and watched. I could never anticipate what to expect: would I be grilled on my work (which was very good) or harassed about my looks. Or would it be both in the same conversation? This was the way for years.” These are not allegations that are decades old with few, if any, witnesses. Boylan worked for the governor’s administration from 2015 to 2018 and says that there were many witnesses. Notably, the Kavanaugh hearing was in 2018.

[..] The strongest case against Cuomo may be Cuomo. In the Kavanaugh hearing, Cuomo declared Kavanaugh clearly guilty. He publicly declared “The confirmation of Judge Kavanaugh to the Supreme Court is a sad day for this country, and it will haunt us for as long as he is on the court. Today 50 senators put partisan politics over the sanctity of the highest court in the nation. In November, the American people get to respond and make their voices heard. In New York, we will not waver and will not back down. To Dr. Christine Blasey Ford and all survivors of sexual assault, we believe you and we will fight for you. The sham FBI investigation and the bigger sham, this confirmation process, have energized us to fight even harder for our shared vision for a better future for all.”

Joe Biden voting machines 2007

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That will be appreciated.

AOC: Nancy Pelosi Needs To Go (IC)

Rep. Alexandria Ocasio-Cortez believes the Democratic Party needs new leadership, telling The Intercept in an interview that it’s time for House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer to go. But the left, she said, currently has no plan on how to fill the subsequent leadership vacuum. “If you create that vacuum, there are so many nefarious forces at play to fill that vacuum with something even worse,” she told Jeremy Scahill during an interview aired Wednesday on Intercepted this week. Pelosi cruised to reelection in a virtual caucus vote last month and will face a full House floor vote for the speakership in January. She’s expected to remain speaker but has almost no room for error, after a disastrous performance in the general election cost the caucus at least a dozen seats.

With a single-digit majority, she can only afford to lose a handful of Democratic votes on the House floor or else she’ll be short of the required 218, which would then throw the contest back to the caucus. The rest of Pelosi’s octogenarian leadership team, Majority Leader Steny Hoyer and Majority Whip James Clyburn, has held these top positions for over a decade and won their slots without any opposition. On the Senate side, Schumer won reelection unanimously. Ocasio-Cortez argued that there are no viable alternatives for House or Senate leadership at the moment because the caucus’s current leaders spent a number of years concentrating power without any “real grooming of a next generation of leadership.”

“A lot of this is not just about these two personalities, but also about the structural shifts that these two personalities have led in their time in leadership,” Ocasio-Cortez said. “The structural shifts of power in the House, both in process and rule, to concentrate power in party leadership of both parties, frankly, but in Democratic Party leadership to such a degree that an individual member has far less power than they did 30, 40, 50 years ago.” This dynamic is what pushes the “really talented members of Congress that do come along” to leave or run for statewide office instead. But Pelosi has also indicated that this upcoming term could be her last, “and the left isn’t really making a plan for that either,” Ocasio-Cortez added. “So I do think that it’s something that we really need to think about.”

Tulsi Gabbard Patriot Act

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“..Zuckerberg’s money “purchased machines – Dominion and otherwise – and Zuckerberg’s funding was contributed to Secretaries of State.”

Amistad To Sue Zuckerberg For Using ‘Dark Money’ To Fund ‘Massive’ Fraud (RT)

Mark Zuckerberg poured cash into an “ecosystem” that caused widespread fraud in the 2020 presidential contest, election integrity watchdog the Amistad Project has alleged. The group will file suit against the Facebook CEO. The lawsuit, based on a report authored by the organization, will claim that Zuckerberg used $500 million of “dark money” to unlawfully tip the scales in battleground states that Democrat Joe Biden won by narrow margins, said Mark Serrano, a Trump 2020 campaign adviser who runs a communications firm that handles media relations for the Amistad Project. The lawsuit is expected to be filed by today in the District Court for the District of Columbia and will cover alleged election irregularities that took place in Wisconsin, Pennsylvania, Michigan, Arizona, and Georgia.

According to Serrano, the legal complaint takes aim at “the ecosystem” that caused “fraud on a massive level to take place” during the 2020 contest. He accused Zuckerberg of using his vast financial resources and influence to undermine the presidential election in the months leading up to, and continuing after, November 3. “A billionaire, Mark Zuckerberg, was allowed in the counting room because he funded it, and the American people were kicked out.” The lawsuit announcement coincided with the release of a report by the Amistad Project which outlines how Zuckerberg allegedly used private funding to “improperly” influence the election outcome. Amistad Project director Phill Kline said during a press conference on Wednesday that Zuckerberg funneled huge amounts of money into charities and nonprofits that lobbied officials and carried out other partisan activities that impacted the 2020 results.

“He paid for election judges, purchased drop boxes, contrary to state laws,” Kline said, adding that Zuckerberg’s money “purchased machines – Dominion and otherwise – and Zuckerberg’s funding was contributed to Secretaries of State.” This injection of hundreds of millions of dollars into the election by Zuckerberg and others “violated state election laws and resulted in an unequal distribution of funding that deprived voters of both due process and equal protection,” according to a press release issued by the Amistad Project.

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“How could a country with a mystically-endowed “exceptional” nature — the “shining city on a hill,” Ronald Reagan once proclaimed — be said to retain its “exceptional” status if its elections are, as Trump vigorously maintains, structurally and systematically fraudulent?”

Enter Trump: America’s First Shadow President (Tracey)

The Electoral College formally convened this week, and with it expired the last faint hope of Donald Trump retaining the presidency. While the outcome had never been in real doubt, Trump and innumerable Republican boosters had for six weeks kept up the mirage of frantic irresolution, with Trump issuing a daily barrage of ALL-CAPS tweets claiming that despite what you might have heard, he’d actually won. In any event, all states have now ratified their results without serious incident, and the hucksterish post-election litigation efforts undertaken by Trump’s various sundry representatives have predictably gone nowhere. Yesterday, Republican senate leader Mitch McConnell even declared Biden the “president-elect” and now the Democrat is faithfully filling his forthcoming administration with a cast of characters drawn directly from the pits of the Washington, DC Democratic Party professional class — the same people whom he openly campaigned on rehabilitating and restoring to power.

The election is well and truly over, whatever toothless protestations may continue to arise. What’s far from over, however, is the political influence of Trump. No one can say with total certainty what he’ll do when he eventually leaves office; no one can even say exactly on what terms he’s going to leave. But in just over a month now, we may face a scenario that would be a first in modern US history: an aggrieved former president making a competing claim to the presidency and refusing in perpetuity to acknowledge the reality of his defeat. In other words, a “shadow” president. Trump’s lack of compunction about doing something like this would seem to solidify his position as the most thoroughgoing “post-exceptionalist” president since at least World War II.

That is, he is entirely unmoved by the kind of bipartisan “American exceptionalism” dogma that had previously bound together the elite US political class, across partisan lines. It’s the dogma which holds that, in short, the US possesses a singular uniqueness that sets it apart in all of world history. Often blended together with notions of Christian providence, it ascribes the very foundations of the US Constitutional order with a kind of divine import. But over the last four years, Trump has thrown these old assumptions into doubt. For one thing, the Constitution certainly makes no provision for a “shadow” president. How could a country with a mystically-endowed “exceptional” nature — the “shining city on a hill,” Ronald Reagan once proclaimed — be said to retain its “exceptional” status if its elections are, as Trump vigorously maintains, structurally and systematically fraudulent?

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The failure of all failures. Why do we let it happen? Because there’s no money to be made feeding children. We never escaped the Middle Ages, or the Industrial Revolution. We’ve been standing still for centuries.

Unicef To Feed Hungry Children In UK For First Time In 70-Year History (G.)

Unicef has launched a domestic emergency response in the UK for the first time in its more than 70-year history to help feed children hit by the Covid-19 crisis. The UN agency, which is responsible for providing humanitarian aid to children worldwide, said the coronavirus pandemic was the most urgent crisis affecting children since the second world war. A YouGov poll in May commissioned by the charity Food Foundation found 2.4 million children (17%) were living in food insecure households. By October, an extra 900,000 children had been registered for free school meals. Unicef has pledged a grant of £25,000 to the community project School Food Matters, which will use the money to supply 18,000 nutritious breakfasts to 25 schools over the two-week Christmas holidays and February half-term, feeding vulnerable children and families in Southwark, south London, who have been severely impacted by the coronavirus pandemic.

The food delivery firm Abel & Cole will also provide 1.2 tonnes of fruit and veg worth £4,500 to include in the boxes. The founder and chief executive of School Food Matters, Stephanie Slater, said: “We’re so grateful to Unicef for providing this timely funding. The response to our summer breakfast boxes programme has shown us that families are really struggling and many were facing the grim reality of a two-week winter break without access to free school meals and the indignity of having to rely on food banks to feed their children. “By providing our breakfast boxes, families know that their children will have a great start to the day with a healthy nutritious breakfast.

“Our breakfast boxes programme has also shown us that the threshold for free school meal eligibility is too low to capture all the families in need of support. That’s why we’re getting behind the national food strategy call for an extension to free school meal eligibility. “We cannot continue to rely on civil society to fill the hunger gap as too many children will miss out on the nutrition they need to thrive.”

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Feb 212018
 February 21, 2018  Posted by at 8:06 pm Finance Tagged with: , , , , , , , , , , , ,  10 Responses »

J.J. Grandville ‘A Comet’s Journey’, Illustration from ‘Un Autre Monde’ 1844


Oxfam. I’m wondering if I should warn this is not for the faint of heart, or say don’t read on an empty stomach. If so, hereby. I know I found it hard.

The first and foremost thing the BBC last week felt its audience should know about the sleaziest scandal to come out of Britain in quite some time -and that’s saying something- is that an actress had turned her back on the aid organization. Your news in bite-size pre-chewed headlines.

While a guy who ‘served’ Oxfam in Bosnia claims it’s nobody’s business if he visited the local hookers in his spare time. The head office even specifically refuses to ban staff from doing that. Not violating a staff member’s civil liberties trumps a question like what drives desperate women -girls- into prostitution that same staff member pays for with money donated to aid desperate people.

Someone at the Dutch Oxfam/Novib office complained that his British colleagues should have provided more information, sooner, because now his branch suffers from the scandal (fewer donations). A branch that knew about it at least as far back as 2012, and passed on the info to the Dutch Foreign Ministry and Accounting Office. Who looked at potential -financial- damage in their country, found none, and located a carpet to sweep it under.

The only right choice for us, and our governments, would seem to be to cancel all donations to Oxfam, because apparently nobody connected to the organization is able to figure out who the actual victims are here. They instead portray themselves as the victims.

Of all people, its own chief executive feels a need, when responding to accusations of child sex abuse concerning his organization, to paint himself -and Oxfam- as victims. ‘Anything we say is being manipulated. We’ve been savaged’ . How does that guy hold on to that job?

Charities like Oxfam receive donations to help those people who have fallen victim to the conditions that exist where they live, be they manmade or due to natural disaster. Obviously, if Oxfam cannot (will not) even correctly identify these victims, it has no reason to exist.

Of course Oxfam announces more internal investigations when these accusations come out, but it’s too late. They’ve hush-hushed all previous such investigations, and there’s no reason to believe that won’t happen again. Oxfam has covered up the issues for a long time, likely decades, and if they can no longer cover things up -like now-, they try and make things look like incidents, stand-alone occurrences. This is a pattern.


Of course there are many people involved in international aid who are pure -enough- souls with the best intentions, but that’s simply not enough: sexual predation has infiltrated its ranks to such a degree, and management has refused to take the only appropriate steps against its perpetrators for so long, that sex abuse has become Oxfam’s middle name. And that very much includes child sex abuse.

I’ve been reading a lot about the story over the past 10 days, and one of the things that stand out is that the typical first reaction is to cover up whatever nastiness it is that surfaces, out of fear that donations would suffer. Instead of thinking about the people Oxfam is supposed to help, for which it receives those donations, and put their interests first. That is a death sentence for any aid organization. And rightly so.

It’s quite simple when you think about it: if we allow Oxfam to continue to exist, we accept that the aid we pay for through donations is sold to victims for sex. If you say, as many people do, that shutting down Oxfam will ‘only’ be bad for those in need who rely on it for aid, then that’s what you promote: aid for sex.

Through the many articles I’ve read I’ve seen people finger Oxfam for sex abuse in Haiti, Chad, South Sudan, Ivory Coast, the Philippines, Bangladesh and Nepal. Ten to one that is but a partial list. Other aid organizations cover even more territory. There are specific accusations, just through these articles, from 1999, 2004, 2012, 2015 and 2017. That too is but a partial list.


Let’s see if I can make a coherent story of all this without turning it into an entire book (would not be a problem). Here’s from The Independent, with a headline that takes us right where we need to be:


Oxfam Told Of Aid Workers Raping Children In Haiti A Decade Ago

Aid agencies including Oxfam were warned that aid workers were sexually abusing children in Haiti a decade ago, The Independent can reveal. Children as young as six were being coerced into sex in exchange for food and necessities, according to a damning report by Save the Children, which called for urgent action including the creation of a global watchdog. Its research exposed abuse linked to 23 humanitarian, peacekeeping and security organisations operating in Haiti, Ivory Coast and what was then Southern Sudan. “Our own fieldwork suggests that the scale of abuse is significant,” the report concluded.

“Every agency is at risk from this problem … existing efforts to keep children safe from sexual exploitation and abuse are inadequate.” It identified “every kind of child sexual abuse and exploitation imaginable”, including rape, prostitution, pornography, sexual slavery, assaults and trafficking. One 15-year-old girl in Haiti told how “humanitarian men” exposed themselves and offered her the equivalent of £2 to perform a sex act. “The men call to me in the streets and they ask me to go with them,” said another Haitian girl. “They do this will all of us young girls.”

A six-year-old girl described being sexually assaulted and a homeless girl was given a single US dollar by a “man who works for an NGO” before being raped and severely injured, while boys were also reportedly raped. When asked why the abuse was not reported, children said they feared losing aid, did not trust local authorities, did not know who to go to, felt powerless or feared stigma and retaliation. “The people who are raping us and the people in the office are the same people,” said one girl in Haiti.

Ironically, that report is from Save the Children. Ironic because just today the Telegraph had this:

The former chief executive of Save the Children resigned after he admitted making “unsuitable and thoughtless” comments to three young female members of staff, it emerged on Tuesday. Justin Forsyth, who is now deputy executive director at Unicef, “apologised unreservedly” to the women after sending them text messages commenting on how they looked and what they were wearing. Mr Forsyth’s resignation from Save the Children came just four months after Brendan Cox, a friend of Mr Forsyth and former chief strategist at the charity, quit following separate allegations of sexual misconduct.

Mr Forsyth and Mr Cox worked together at Oxfam and later again as advisors to Gordon Brown in Downing Street. Mr Cox, the widower of the late Jo Cox who was murdered in 2016, admitted at the weekend that he had caused the women “hurt and offence”. Neither Mr Forsyth nor Mr Cox were subject to a formal disciplinary hearing. Save the Children said on Tuesday night that trustees had carried out two internal investigations into the complaints against Mr Forsyth in 2011 and 2015.

Save the Children admitted on Tuesday that it dealt with 193 child protection and 35 sexual harassment cases last year, which led to 30 dismissals.

It’s by no means just Oxfam. But they’re a major player. In more ways than one, unfortunately. Oxfam has some 2,500 staff and 31,000 volunteers through the world. Its annual budget is about half a billion dollars.

Another ‘interesting’ pattern to emerge is that the perpetrators, even if they are penalized, seemingly seamlessly float between aid organizations: get kicked out in one place, start afresh a few months later at the next. This article from IRIN is about the Belgian guy with whom the latest scandal surfaced.

He lived in a splendid $2000 a month Oxfam-sponsored villa in Haiti right after the 2010 earthquake, when most locals didn’t even have a roof over their heads, and threw sex-parties there. None of that hurt him much; he lost his Oxfam job, though only after many years of complaints, but just kept going (and denies just about all):

The man at the centre of a sexual exploitation scandal at aid agency Oxfam was dismissed by another British NGO seven years earlier for similar misconduct, IRIN has found. A former colleague reveals that Roland van Hauwermeiren was sent home from his job in Liberia in 2004 after her complaints prompted an investigation into sex parties there with young local women. Despite this, van Hauwermeiren was recruited by Oxfam in Chad less than two years later and went on to work for them in Haiti, and then in Bangladesh for Action contre la Faim.

The Swedish government’s aid department, alerted in 2008, also missed an opportunity to bring his behaviour to light and even went ahead that year to fund Oxfam’s Chad project, under his management, to the tune of almost $750,000. [..] Seeing the Times article about van Hauwermeiren, Swedish civil servant and former aid worker Amira Malik Miller was shaken to read about the Haiti case, which pertained to alleged parties and orgies in 2011, seven years after her own experiences of him in Liberia. She couldn’t believe he was still active in the aid world, especially after she had blown the whistle on him and his colleagues, not once but twice.

“Oh my God, he’s been doing this for 14 years,” she remembers thinking. “He just goes around the system… from Liberia to Chad, to Haiti, to Bangladesh. Someone should have checked properly,” she told IRIN. On two previous occasions, she thought she had done enough to stop his predatory behaviour. Malik Miller told IRIN how her initial complaints way back in 2004 led to van Hauwermeiren being pushed out of his job as Liberia country director of UK charity Merlin, a medical group now merged with Save the Children. An internal investigation into sexual exploitation and misconduct led to his departure, several Merlin staff members confirmed.

And that was just for warming up. An interesting voice in the whole narrative is that of Australian professor Andrew MacLeod, who worked with the Red Cross in Bosnia and the UN Emergency Co-ordination Centre in Pakistan. From the Times:


UN Staff Responsible For 60,000 Rapes In A Decade

Andrew MacLeod, who was chief of operations at the UN’s Emergency Co-ordination Centre, said that “predatory” abusers used development jobs to get to vulnerable women and children. He estimated that 60,000 rapes had been carried out by UN staff in the past decade, with 3,300 paedophiles working in the organisation and its agencies. “There are tens of thousands of aid workers around the world with paedophile tendencies, but if you wear a Unicef T-shirt nobody will ask what you’re up to,” he told The Sun. “You have the impunity to do whatever you want. It is endemic across the aid industry across the world.”

More Andrew McLeod, via the Daily Mail:

I was first alerted to it in 1996 while working in former Yugoslavia with the International Committee of the Red Cross. People would talk about a nightclub called Florida 2000, in the Bosnian city of Zenica, where girls of 14 and 15 were working as prostitutes. These children were being trafficked into Bosnia from neighbouring Moldova by individuals working for the UN and Bosnian police. They were used exclusively for the sexual gratification of UN staff. Such lurid rumours seemed difficult to credit at first, but when a UN peacekeeper called Kathryn Bolkovac tried to investigate, she was swiftly demoted and then fired. Her story was turned into a film, Whistleblower, in 2010, starring Rachel Weisz.

There is so much opportunity for abuse and so little to stop it that jobs in international aid actively attract sexual predators who benefit from the artificial power the aid industry confers upon them. [..] Senior figures in the UN and some of our best known charities have known for decades that this problem was rampant. They should have put in place systems for training, prevention, protection and prosecution. By failing to do so they were committing an offence. They were party to child sex crime. They did nothing, and they should face charges. If they’re not worried – they should be.

From the same article:

A middle-aged man who persistently hangs around the gates of a British primary school as children are leaving will attract the wary attention of teachers, parents and, pretty soon, the police. But the same man lurking outside a school in the Democratic Republic of Congo, for example, will be quite safe. Especially if he is wearing a T-shirt bearing the logo of Unicef, Save the Children, Oxfam or any other internationally-renowed aid organisations. Almost 20 years ago, the UK’s National Criminal Intelligence Service, warned that due to better policing and safe-guarding strategies and an international crackdown on child sex tourism, predatory paedophiles were turning their attention to the developing world.

And the best way of gaining access to children? Work for a children’s charity in some place where paedophilia is ignored or difficult to police. Everyone working in the international aid industry needs to be aware of the scale of sexual abuse – happening on their watch and often involving their personnel – of vulnerable people, especially children. Those who deny it are either lying through their teeth, or have their heads buried so far in the sand that their ignorance is deliberate.

And if you think government investigations would solve anything, here’s how Britain’s Charity Commission deals with things:

The Charity Commission has been forced to defend its own investigations after Oxfam’s former head of safeguarding claimed she told the watchdog women were being coerced into sex for aid. Helen Evans said she was “extremely concerned” by the response to concerns she raised while heading the charity’s global efforts to protect staff and beneficiaries from 2012 to 2015.

While appealing for more resources from management to deal with a rising number of allegations, Ms Evans told how in a single day she was told of a woman being coerced into sex in exchange for aid, another aid worker having sex with a beneficiary and a member of staff being struck off for abuse. “There has been a lot of coverage about Oxfam and how shocking and surprising this is – it isn’t,” she told Channel 4 News.

“I went in 2015 to the Charity Commission, I went back again in 2017. Everything I’m saying today, the Charity Commission knew, so why is the Government saying this is a surprise?” Ms Evans had emailed Oxfam’s chief executive, Mark Goldring, warning that data being gathered from staff “increasingly points to a culture of sexual abuse within some Oxfam officers” but a face-to-face meeting was cancelled in 2014.

So far we’ve encountered Oxfam, Save the Children, Doctors without Borders (MSF) and the UN (including its children’s fund Unicef). But that’s by no means the whole story. Try this on for size from Agence France Presse:

Oxfam is not the first non-governmental organisation to be accused of abuse. Previous revelations spurred the United Nations in 2002 to issue special measures for all its staff and others, including aid workers under UN contract, based on a policy of zero tolerance. The issue came to public attention in 2002 after allegations of widespread abuse of refugee and internally displaced women and children by humanitarian workers and peacekeepers in West Africa.

In refugee camps in Guinea, Liberia, and to a lesser extent Sierra Leone, dozens of male aid workers, often locals, were suspected of having exchanged money or gifts for sex with young refugee girls aged between 13 and 18. “It’s difficult to escape the trap of those (NGO) people, they use the food as bait to get you to have sex with them,” an adolescent in Liberia was quoted as saying in a report from the UN refugee agency. More than 40 agencies and organisations and nearly 70 individuals were mentioned in the testimonies taken from 1,500 children and adults for the UN report [..]

It’s everywhere, the pedophile rot. And the cover-ups, the industry approach, the aid as big business. And that can only lead to ever more misery. Because aid should never become an industry.

I touched on that about a year ago in one of many articles on our efforts for refugees and homeless in Greece. When it comes to scrutiny of aid organizations, you shouldn’t expect much if anything from governments. They’re part of the same industry.

Politicians find it much easier to fork over their constituents’ cash to ‘recognized’ aid organizations than to investigate them. They have a vested interest in letting the system roll on without disturbing it.


The Automatic Earth Still Helps Greeks and Refugees

[..] NGOs, as I’ve written before, have become an industry in their own right, institutionalized even. As someone phrased it: we now have a humanitarian-industrial complex. Which in Greece has received hundreds of millions of euros and somehow can’t manage to take proper care of 60,000 desolate souls with that.

I’ve even been warned that if I speak out too clearly about this, they may come after Konstantinos and his people and make their work hard and/or impossible. This is after all an industry that is worth a lot of money. Aid is big business. And big business protects itself.

Still, if we’re genuinely interested in finding out how and why it is possible that hundreds of millions of taxpayer euros change hands, and people still die in the cold and live in subhuman conditions, we’re going to have to break through some of the barriers that the EU, Greece and the iNGOs have built around themselves.

If only because European -and also American- taxpayers have a right to know what has made this ongoing epic failure possible. And of course the first concern should be that the refugees have the right, encapsulated in international law, to decent and humane treatment, and are not getting anything even remotely resembling it. Refugees Deeply quotes ‘a senior aid official’ (they don’t say from what) anonymously saying that €70 out of every €100 in aid is wasted.

But the Oxfam scandal, spreading as it is across the entire aid’ industry’, is many times worse than letting refugees freeze on islands. Or is it? Isn’t it perhaps the exact same thing, that changes appearance between places but remains always the same in essence?

Oxfam must go. It’s been found painfully wanting for too long and on too many occasions. It’ll be a useful deterrent for all other groups. The managers of which, who often make hundreds of thousands of dollars if not more, must also go. They’ve all either known or should have known for many years. The buck stops with them.

The aid itself may stop too in some places, at some times, but when you can only hand out aid when you’re ready to accept that it will be traded for sex with often underaged children, you’re losing big time, and you’re never going to turn that around. Institutionalization can only be halted when walls are broken down, up to and including their foundations.


The aid organizations that cause all these problems have one thing in common: they’re large, large enough to become like, look like, industries. The ones that have expensive offices in A locations because that’s where their major donors are, and executives who make salaries like the executives at those donors.

That’s simply the wrong scale. In all the countries where these organizations operate, and where they bring their depraved sex-crazed staff, there are other, smaller, local organizations too. Who most often don’t have anything like those issues, who often exhibit the exact opposite behavior: people helping people without looking for anything in return. I know this from my experiences in Greece since 2015.

It’s when you scale up the humanity that exists in many, if not most, people, that things go awry and the vermin creeps in. When things become so large that managers are hired, you can be sure that most of the money donated for aid will be burned in a bonfire of politicians, businessmen and, as we now know, pedophiles.

Oxfam gets $500 million a year or so. The EU has pumped over €1 billion into Greece, and probably as much into Italy as well, to ‘solve’ the refugee situation. That Brussels doesn’t want to solve, and neither do Athens or Rome, for fear that it will encourage more refugees to come.

So they make the people they purport to help, miserable, and they put a huge price sticker on that misery posing as help, for the taxpayer to pay. Like this, for instance -from my same article above:


[..] every refugee who, before the EU-Turkey deal, passed through Greece on his/her way to Europe, cost the EU €800. For a family of 5 that adds up to €4,000, which would have been more than enough to pay for transport, stay at decent hotels and eat in normal restaurants for the duration of their trip (7-10 days). Suffice it to say, that was not what they got.

After the EU-Turkey deal made it impossible for refugees to leave Greece, €15,000 has been spent per capita. That is €75,000 per family of 5, more than enough to rent a villa on the beach, hire a butler and eat gourmet food for 8 months. Instead, the refugees are stuck in old abandoned factories with no facilities, in old tents in the freezing cold and in the rain, and forced to eat a dirt poor version of rice with chickpeas and lentil soup.

It won’t be easy to stop this insanity, but it can be done. Refuse to dole out money to organizations that have been accused of abuse. Refuse to give any organization more than $1 million. Support many small organizations insteads. Humanitarian aid does not scale up well. To say the least.

It’ll be cost-effective as well. It’ll take more effort to locate the right people, but given that $70 out of every $100 in donations is wasted by large aid organizations today, there’s a huge win lurking right there. You just need to find people who are better at all this than the ones who made that disaster possible.

Then, fire any manager who has not acted in the past on complaints. Establish a system that promises to put anyone in jail against whom credible complaints have been filed.

There are thousands of those walking around right now working for organizations funded by you and me directly, and by our taxes too, free to abuse another girl or little boy, and then another one tomorrow, or a mother who needs to feed her child(ren) because her home has been swept away by floods or bombs.

And make this the number one issue for the UN (yeah, I know, that same UN), to discuss and control as per tomorrow morning. Get multiple countries’ military to deliver what Oxfam did before, and make sure all soldiers understand what’ll happen to them at the first sign of abuse, of money, of people, anything at all.

There are many things out there that we can’t control, but this one we can. Because, as I said, in all locations where aid is needed, there are local people available to deliver it without trying to abuse, centralize, institutionalize it, profit from it, or turn it into a business. Just keep aid donations so small it’s not interesting to do any of those things.

At the UN level, I’m thinking Jimmy Carter. He’s the only man I can conjure up who has the integrity to clean up this mess. I know, one is a very small number. But Carter will know others. Big job, but doable. After all, we can’t very well have the worst of our own societies run rampant in places where people are defenseless against them.

Oh wait, that right there is another reason why our governments like the way things are going, just fine, isn’t it? Oxfam allows them (us) to export their perverts.

Well, screw that. We’re better than our governments.

To summarize: right now, your donation to Oxfam literally pays for pedophiles to go rape children across the world. Not every penny or dollar (they need their shiny offices too), but that’s not the point: your dollars keep the aid industry, the system, and therefore the opportunity for the abuse going. Is that what you want?



Feb 132018

Camille Corot Study for “The Destruction of Sodom” 1843


We Are Sitting On A “Full Tank Of Gas” (Roberts)
‘Whistleblower’ Alleges VIX Manipulation, Urges Regulatory Probe (R.)
How A 5% Mortgage Rate Would Roil The US Housing Market (CNBC)
Interest-Only Loan Cash Flow Crunch Sparks Fears Of Fire Sales (AFR)
These Bonds Should Make ECB Hawks Apoplectic With Rage (BBG)
China Real Estate Under Pressure (BBG)
Greece Rocked By Claims Drug Giant Novartis Bribed Former Leaders (G.)
Greece Is a Turkey, and the Market’s Going to the Dogs (BBG)
An Englishman’s Home Is an Unreliable Pension Plan (BW)
Charities Face Crackdown On ‘Horrific’ Culture Of Sexual Exploitation (Ind.)
Unicef Admits Failings With Child Victims Of Sex Abuse By Peacekeepers (G.)



“Individuals just simply refuse to act “rationally” by holding their investments as they watch losses mount.”

We Are Sitting On A “Full Tank Of Gas” (Roberts)

Yea….it’s that psychology thing. Individuals just simply refuse to act “rationally” by holding their investments as they watch losses mount. This behavioral bias of investors is one of the most serious risks arising from ETFs as the concentration of too much capital in too few places.

But this concentration risk in ETF’s is not the first time this has occurred: In the early 70’s it was the “Nifty Fifty” stocks, Then Mexican and Argentine bonds a few years after that; “Portfolio Insurance” was the “thing” in the mid -80’s; anything was a great investment in 1999; Real estate has been a boom/bust cycle roughly every other decade, but 2006 was a doozy; Today, it’s ETF’s and Bitcoin.

Risk concentration always seems rational at the beginning, and the initial successes of the trends it creates can be self-reinforcing. Until it goes in the other direction. While the sell-off last week was not particularly unusual, it was the uniformity of the price moves which revealed the fallacy “passive investing” as investors headed for the door all at the same time. Such a uniform sell-off is indicative of what we have been warning about for the last several months. For price chasing investors, last week’s plunge should serve as a warning. “With everyone crowded into the ‘ETF Theater,’ the ‘exit’ problem should be of serious concern. Unfortunately, for most investors, they are likely stuck at the very back of the theater.

I warned of this previously: “At some point, that reversion process will take hold. It is then investor ‘psychology’ will collide with ‘margin debt’ and ETF liquidity. It will be the equivalent of striking a match, lighting a stick of dynamite and throwing it into a tanker full of gasoline. When the ‘herding’ into ETF’s begins to reverse, it will not be a slow and methodical process but rather a stampede with little regard to price, valuation or fundamental measures. Importantly, as prices decline it will trigger margin calls which will induce more indiscriminate selling. The forced redemption cycle will cause catastrophic spreads between the current bid and ask pricing for ETF’s.

As investors are forced to dump positions to meet margin calls, the lack of buyers will form a vacuum causing rapid price declines which leave investors helpless on the sidelines watching years of capital appreciation vanish in moments. Don’t believe me? It happened in 2008 as the ‘Lehman Moment’ left investors helpless watching the crash.” “Over a 3-week span, investors lost 29% of their capital and 44% over the entire 3-month period. This is what happens during a margin liquidation event. It is fast, furious and without remorse.” Make no mistake we are sitting on a “full tank of gas.”

Read more …

No! “The flaw allows trading firms with advanced algorithms to move the VIX up or down by simply posting quotes on S&P options..”

‘Whistleblower’ Alleges VIX Manipulation, Urges Regulatory Probe (R.)

A scheme to manipulate Wall Street’s fear gauge, VIX, poses risk to the entire equity market and costs investors hundreds of millions of dollars a month, a law firm on behalf of an “anonymous whistleblower” told U.S. financial regulators and urged them to investigate before additional losses are suffered. The Washington-based law firm which represents an anonymous person who claims to have held senior roles in the investment business, told the Securities and Exchange Commission and Commodity Futures Trading Commission on Monday that he discovered a market manipulation scheme that takes advantage of a widespread flaw in the Chicago Board Options Exchange (CBOE) Volatility Index (VIX).

The CBOE Volatility Index measures the cost of buying options and is the most widely followed barometer of expected near-term stock market volatility. “The flaw allows trading firms with advanced algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital,” it said in a letter. Those bets against volatility unraveled last week as the benchmark S&P 500 and the Dow Jones Industrial Average suffered their biggest respective percentage drops since August 2011. Investors using exchange-traded products linked to the VIX were pummeled and two banks, Credit Suisse and Nomura, said they would terminate two exchange traded notes that bet on low volatility in stock prices.

Read more …

Try 6%, 7%.

How A 5% Mortgage Rate Would Roil The US Housing Market (CNBC)

Mortgage rates are now at their highest level in four years and poised to move even higher. The timing couldn’t be worse, as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale. Add it all up, and affordability is starting to hurt. The average rate on the popular 30-year fixed is now right around 4.50%, still low when looking historically, but buyers over the past six years have gotten more used to rates in the 3% range. Mortgage rates have not been at 5% since 2011. A 5% rate would cause more than a quarter of today’s homebuyers to slow their plans, according to a Redfin survey of 4,000 consumers at the end of last year. Just 6% said they would drop their plans to buy altogether.

About one-fifth of consumers said 5% rates would cause them to move with more urgency to purchase a home, fearing rates would rise even further. Another fifth said they would consider more affordable areas or just buy a smaller home. Despite rate concerns, the bigger issue for buyers is changes to tax laws that had lowered the cost of homeownership. Specifically, the deduction on property taxes is now limited to $10,000. While that does not affect homeowners in the majority of the country, it does hit those in high-cost states like New York, New Jersey and Illinois, and those in higher-priced housing markets like California. Some have claimed that higher rates and the new tax law will put downward pressure on home prices, alleviating some of the current sticker shock, but other factors are fighting that assertion.

“Tight credit, lack of inventory and high demand are the major factors that tell us there’s no housing bubble, despite rapid price increases,” said Redfin’s chief economist, Nela Richardson. “There are still many more buyers than the current housing supply can support, with no major relief in sight.”

Read more …

From Australia. Check interest-only where you live. Big Threat.

Interest-Only Loan Cash Flow Crunch Sparks Fears Of Fire Sales (AFR)

Interest-only property investors seeking to switch their loan to principal and interest may be forced to sell because of lenders’ tough new serviceability requirements. A typical borrower paying 4.5% on a $400,000 loan will have to prove to their lender they can meet repayments for a 7.25% loan, or an increase in annual repayments from $18,000 to more than $32,700. The higher serviceability rates have been introduced after many investors took out their loans and are forcing borrowers to try and sell their properties, despite markets beginning to soften. It’s worse for many self-managed super fund investors who bought investment properties and are boxed in from making bigger payments because of annual caps on the size of their contributions. Real estate agents are warning the cash flow crunch is causing mortgage stress to rapidly spread from one-time mining boom towns and the outer suburbs into prestigious inner suburbs.

“Clients are ringing to say they need to refinance and their next call is that they need to sell,” said Andrew Fawell, director of Beller Property Group. Mr Fawell, whose business covers inner Melbourne within 10 kilometres of the central business district, has been asked to value four potential mortgagee property sales in the past month after having none in the past two years. “Many investors who bought two or three apartments with, in many cases, only 10% deposit with cheap interest-only loans are beginning to feel the heat,” Mr Fawell said. “These numbers will get a lot worse as investors find it harder to service their debt.”

The potential problem arises for many three- to five-year fixed rate loans that have reached the end of their terms and the much stricter regime introduced by the Australian Prudential Regulation Authority. Many borrowers deposited only 10%. In recent years most major lenders have introduced a 7.25% “floor for serviceability” for investor and owner-occupier loans, which is the minimum rate at which the bank will assess a home loan. Serviceability is the lenders’ assessment of the borrowers’ capacity to afford the loan and takes into account possibly higher future interest rates. It is usually assessed by a review of income and fixed commitments over the life of the loan and potential rental income.

Read more …

The ECB supports those parties that don’t need it.

These Bonds Should Make ECB Hawks Apoplectic With Rage (BBG)

This is tapering? With the economic recovery well under way in Europe the European Central Bank has cut its government bond purchases by two-thirds. Fair enough. However, it is not reining in its involvement in company debt. The securities now comprise about 20% of monthly purchases, up from 7% at the start of the program in mid-2016. The total amount could top €200 billion ($244 billion) before quantitative easing ends. If it had any self-knowledge the ECB should be aware of the problems it’s creating. The fact that, by its purchases, it has soaked up all the liquidity in the secondary market and has had to turn to the primary market should be a warning sign. The central bank’s growing involvement in company borrowing should be causing ructions among the hawks on the Governing Council, who seem alive to the dangers of being late in withdrawing stimulus.

Yet their silence is deafening. Through QE the ECB has invested in over 230 individual companies, and with an average maturity of 5.6 years it’s impossible to see them as being exposed only in the short term. Performance has been decent – spreads have tightened on about three-quarters of its holdings. The odd misstep, such as having to liquidate Steinhoff or German fertilizer maker K+S bonds when they fell below investment grade, can be overlooked. The knock-on effect of such largess is that corporate bond spreads have had a seemingly unending streak of achieving record lows. Support for credit markets in times of strife is one thing. But driving outsized performance isn’t just storing up trouble for an individual company or investor for the future, it’s a reckless refusal to allow financial discipline to inform the decision making of actors in the financial system.

[..] The surge of demand for additional tier one bank capital is another particularly worrying phenomenon. Investors face a total loss if the issuing bank’s capital ratios fall below regulatory requirements. Raiffeisen Bank was able in January to issue an AT1 perpetual bond at 4.5%, having issued a similar 6.125% AT1 security in June. Though there was a one-notch credit-rating upgrade, that can hardly justify such an enormous improvement. And 4.5% can never be enough compensation for the risk of getting completely wiped out.

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Now Beijing wants to push rental housing. Easier to control?

China Real Estate Under Pressure (BBG)

While all eyes are on China’s stocks rout after the U.S. swoon, there’s a troubled sector that’s garnering fewer headlines but will have broader reverberations – real estate. Chinese property stocks slumped last week, dragged down not just by the global sell-off but by worries this may be the year when housing finally takes a hit. To date, Beijing’s crackdown on risk amid soaring household debt has had little effect on prices. December data showed values in small cities continued to rise, while they were mostly flat in top-tier conurbations like Guangzhou, Shenzhen and Beijing. There are several reasons, though, why the 13-year rally in house prices must end at some point. First, banks are making borrowing tough, not only raising costs for home loans but also restricting supply, especially in major centers such as Beijing and Shenzhen, under a semi-official mortgage quota.

Even last year’s stars, the second- and third-tier cities that led price gains, may fade as China curtails easy home loans that were intended to help soak up a glut of property. Downpayments there ranged between 20 and 30%, compared with 40 to 80% in top-tier locations, according to Credit Suisse. As the curbs bite, mortgage lending has started to decline. (The other plank of household debt, consumer lending, has been an even bigger problem, surging 180% last year, according to Credit Suisse.) Second, perhaps further down the line, a property tax is looming. Finance Minister Xiao Jie indicated this might happen as early as 2020. When President Xi Jinping exhorted people to remember that houses are for living, not speculation, real estate investors must have grown nervous; a tax will make them quake.

With few investment options available to individuals beyond the volatile stock market and wealth-management products (more and more of which are being banned), it’s no surprise that as much as 25% of the demand for real estate is speculative, according to Bloomberg Economics. Third, there’s the more immediate threat to real estate prices of a supply-side push by Beijing. The government is starting to shift from tamping down demand to promoting new housing. Among measures the government is promoting, according to BNP Paribas economist Chen Xingdong, is encouraging homes where the government and buyers share property rights, and even allowing state-owned firms to sell apartments to their employees. The government is also encouraging the growth of a rental market. While much of the current stock of rental housing is of poor quality, that’s likely to change.

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And only now does this reach European media. The upshot: Novartis pulled the same stunt in South Korea.

Greece Rocked By Claims Drug Giant Novartis Bribed Former Leaders (G.)

The Greek prime minister, Alexis Tsipras, has called for parliament to investigate whether two of his predecessors and eight former ministers accepted bribes from the Swiss drugmaker Novartis, after allegations of industrial-scale bribery involving senior politicians. The former PMs Antonis Samaras and Panagiotis Pikrammenos, the governor of the Bank of Greece and the EU’s migration commissioner were all identified as alleged beneficiaries of bribes in a report compiled by anti-corruption prosecutors with the help of US authorities. Novartis is alleged to have bribed politicians to approve overpriced contracts and to have made payments to thousands of doctors as part of concerted efforts to boost sales between 2006 to 2015.

The claims have rocked Greek society since coming to light last week. One serving government minister claimed the kickbacks surpassed €50m and resulted in costs of more than €4bn to the Greek public health system. The deputy justice minister, Dimitris Papangelopoulos, said it was “the biggest scandal since the establishment of the Greek state” almost 200 years ago. Widening the net on Monday, Tsipras said it was imperative there could be no cover-up. “We will make use of every power afforded by national and international law to recover the money stolen from the Greek people down to the last euro,” the leftist leader told MPs in his Syriza party. “We will do everything we can to reveal the truth.”

MPs will vote on establishing a committee of inquiry later this month. Only parliament has the power to investigate politicians for alleged infractions during their term in office. The allegations have been rebutted vehemently by the accused. The report’s reliance on three unnamed witnesses – who are currently under government protection – has been especially criticised, and legal experts contend that the claims would not stand up in court. The EU commissioner Dimitris Avramopoulos demanded that the identity of the witnesses be revealed and expressed his “disgust” at what he said were fabrications created by “sick minds”. He stands accused of purchasing 16m anti-flu vaccines from Novartis while health minister between 2006 and 2009. [..] Novartis has faced similar investigations in recent years. Last year South Korea fined the company $48m for offering kickbacks to doctors.

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Just as Greece starts selling bonds again, it faces increasing competition,

Greece Is a Turkey, and the Market’s Going to the Dogs (BBG)

Greece almost makes it look easy. It issued a new €3 billion ($3.7 billion) seven-year bond on Thursday, at a very healthy 3.5% yield, stepping into a briefly open window for raising money during the most torrid week for markets in years. The security is now trading very close to 4%. Ouch. The benefits of going ahead with the sale went to Greece rather than to investors. With a €6 billion order book there was no lack of demand – but there is buyer’s remorse now. It’s the first sovereign syndicated new issue to perform badly in Europe so far this year. This could make it troublesome for the region’s other governments to bring deals on top of an already-heavy regular auction schedule. Greece may just be one turkey, but investor demand is going to become a lot pickier.

And there’s plenty to choose from. Governments have been crowding out the syndicated new issue market even more this year, comprising 26.5% of deals versus an already-strong 23% at this stage in 2017. If supra-nationals and agencies are included then half of all new syndicated deals are from an official institution. It’s a curious result, given that the European new-issue market is supposed to be much more about companies. For example, the European Financial Stability Facility – created to fund Greece’s bailout – has already issued half of its €28 billion annual plan. The EFSF has come three times in 2018 with €13.5 billion in maturities ranging from 6 to 23 years. That is an almost indecent rush to complete its annual funding schedule as early as possible. It’s smart for the issuer – less so for the investor.

Borrowers can try to front-load sales in a low-rate environment, but with more central banks getting comfortable with tightening, investors are not going to play that game unless the yield is generous. It’s an increasing struggle, given that the German benchmark 10-year yield has risen sharply since the mid-December lows of 30 basis points. The yield famine is easing up.

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What a shame: too late!

An Englishman’s Home Is an Unreliable Pension Plan (BW)

“A man’s house is his castle,” Sir Edward Coke wrote back in the 17th century. These days, Britons are relying on their properties not just for refuge but also to fund their retirements. It’s a strategy that could backfire badly. Along with the rest of the world, the U.K. has an aging population: a growing number of retirees are being supported by a shrinking pool of workers. The U.K.’s dependency ratio – calculated by adding together the over 65s and under 15s, then dividing by the working-age population and multiplying by 100 – will rise to 60% by 2027. That’s up from 55% in 2017 and from 54% in 1997. As the pyramid grows more inverted, how does the top-heavy non-working cohort propose to finance a life of leisure and superannuation? By releasing the equity they expect to have accumulated in their homes once they’re ready to hit the golf course.

One in five Brits agreed with the statement “when I retire, I plan to sell my house, downsize and live off the profit,” according to a survey commissioned by pension consultants LCP from polling firm YouGov. That gamble seems unwise. In recent years home values, like global stock markets, only ever seemed to increase. But, again as with global stock markets, the notion of ever-rising prices has taken something of a beating recently. According to a report published on Monday, U.K. house prices posted their first annual decline in six years in January. Moreover, with wage growth in recent years failing to keep pace with either rising property prices or inflation, it’s become harder for those of working age to get on the housing ladder in the first place. And the percentage of under 34s who own their own homes has slumped in the past decade.

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This is so sick it makes one silent.

Charities Face Crackdown On ‘Horrific’ Culture Of Sexual Exploitation (Ind.)

British charities are facing a government crackdown to combat the “horrific” sexual exploitation exposed at Oxfam, amid concerns about a wider culture of abuse. All British charities working overseas have been ordered to provide “absolute assurances” that they are protecting vulnerable people and referring complaints to authorities. Oxfam’s deputy chief executive resigned during crisis talks with the Government, saying she took “full responsibility” for the alleged use of prostitutes by senior staff in Haiti. But aid workers told The Independent sexual misconduct against both locals and staff remains “widespread” in humanitarian agencies and called for wholesale reforms.

Penny Mordaunt, the International Development Secretary, has written a letter to all UK charities working overseas demanding “absolute assurance that the moral leadership, the systems, the culture and the transparency needed to fully protect vulnerable people are in place”. “It is not only Oxfam that must improve,” she said. “My absolute priority is to keep the world’s poorest and most vulnerable people safe from harm. In the 21st century, it is utterly despicable that sexual exploitation and abuse continues to exist in the aid sector.” The Department for International Development (Dfid) has created a new unit dedicated to reviewing safeguarding in the aid sector and stopping “criminal and predatory individuals” being employed by other charities.

[..] “Oxfam made a full and unqualified apology – to me, and to the people of Britain and Haiti – for the appalling behaviour of some of their staff in Haiti in 2011, and for the wider failings of their organisation’s response to it,” said Ms Mordaunt. “They spoke of the deep sense of disgrace and shame that they and their organisation feel about what has happened, and set out the actions they will now take to put things right and prevent such horrific abuses happening in future.“

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It’s not just Oxfam, it’s an industry-wide culture.

Unicef Admits Failings With Child Victims Of Sex Abuse By Peacekeepers (G.)

The UN’s children’s agency has admitted shortcomings in its humanitarian support to children who allege that they were raped and sexually abused by French peacekeepers in Central African Republic. A statement by Unicef Netherlands is the first public acknowledgement of the agency’s recent failure to provide support to some of the victims of alleged abuse by peacekeepers in the African nation. It comes as the aid sector and the UN face increasing scrutiny for their failings in managing internal sexual misconduct by their own staff. Unicef was given the task of overseeing the support for children who said they had been abused by peacekeepers.

But in March last year, an award-winning investigation by Swedish Television’s Uppdrag Granskning (Mission Investigate) revealed that some of the children supposedly in the UN’s care were homeless, out of school and forced to make a living on the streets, despite UN assurances that they would be protected. Unicef’s representative in CAR told the programme that the children were in the agency’s assistance programme for minors and were being supported. He said he was not aware that some were on the streets. But earlier this month – ahead of a Dutch screening of the programme – Unicef Netherlands admitted to the Dutch television programme Zembla that Unicef had failed in its duty to help some of the alleged victims. But it said that since the programme had first aired, it had taken steps to locate the children featured in the programme and provide them with support.

Marieke van Santen, of Zembla, said she found the Swedish film “astonishing” because the children who were interviewed were known to Unicef, yet they were not being cared for. Van Santen said: “It is quite shocking to realise that not only once but twice UN agencies have failed to help these victims.” The statement from Unicef Netherlands was welcomed by Karin Mattisson, a reporter for Mission Investigate. “I hope it makes a difference to the children and gives them strength. They have said they were failed,” said Mattisson.Several boys who testified to having been sexually assaulted by French soldiers were living rough, Mattisson found, while a girl, who became pregnant at the age of 14 by a Congolese peacekeeper and had later found out she was HIV-positive, was out of school looking after her baby. Another boy, aged eight, who was too traumatised to be interviewed, was in an orphanage. “I hope they live up to this statement,” she said. “When we investigated the UN and Unicef it was a long journey into their culture of silence.”

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