Whitehead: America Is On The Brink Of A Nervous Breakdown

Authored by John Whitehead via The Rutherford Institute,

“As nightfall does not come at once, neither does oppression. In both instances, there is a twilight when everything remains seemingly unchanged. And it is in such twilight that we all must be most aware of change in the air – however slight – lest we become unwitting victims of the darkness.”

– Supreme Court Justice William O. Douglas

Yet another shooting.

Yet another smear of ugliness, hatred and violence.

Yet another ratcheting up of the calls for the government to clamp down on the citizenry by imposing more costly security measures without any real benefit, more militarized police, more surveillance, more widespread mental health screening of the general population, more threat assessments and behavioral sensing warnings, more gun control measures, more surveillance cameras with facial recognition capabilities, more “See Something, Say Something” programs aimed at turning Americans into snitches and spies, more metal detectors and whole-body imaging devices at so-called soft targets, more roaming squads of militarized police empowered to do more stop-and-frisk searches, more fusion centers to centralize and disseminate information to law enforcement agencies, and more government monitoring of what Americans say and do, where they go, what they buy and how they spend their time.

All of these measures play into the government’s hands.

All of these measures add up to more government power, less real security and far less freedom.

As we have learned the hard way, the phantom promise of safety in exchange for restricted or regulated liberty is a false, misguided doctrine that has no basis in the truth.

Things are falling apart.

When things start to fall apart or implode, ask yourself: who stands to benefit?

In most cases, it’s the government that stands to benefit by amassing greater powers at the citizenry’s expense.

Unfortunately, the government’s answer to civil unrest and societal violence, as always, will lead us further down the road we’ve travelled since 9/11 towards totalitarianism and away from freedom.

With alarming regularity, the nation is being subjected to a spate of violence that not only terrorizes the public but also destabilizes the country’s fragile ecosystem, and gives the government greater justifications to crack down, lock down, and institute even more authoritarian policies for the so-called sake of national security without many objections from the citizenry.

Clearly, America is being pushed to the brink of a national nervous breakdown.

This breakdown – triggered by polarizing circus politics, media-fed mass hysteria, racism, classism, xenophobia, militarization and militainment (the selling of war and violence as entertainment), a sense of hopelessness and powerlessness in the face of growing government corruption and brutality, and a growing economic divide that has much of the population struggling to get by—is manifesting itself in madness, mayhem and an utter disregard for the very principles and liberties that have kept us out of the clutches of totalitarianism for so long.

Yet there is a method to this madness.

Remember, authoritarian regimes begin with incremental steps. Overcriminalization, surveillance of innocent citizens, imprisonment for nonviolent—victimless—crimes, etc. Bit by bit, the citizenry finds its freedoms being curtailed and undermined for the sake of national security. And slowly the populace begins to submit.

No one speaks up for those being targeted.

No one resists these minor acts of oppression.

No one recognizes the indoctrination into tyranny for what it is.

Historically this failure to speak truth to power has resulted in whole populations being conditioned to tolerate unspoken cruelty toward their fellow human beings, a bystander syndrome in which people remain silent and disengaged—mere onlookers—in the face of abject horrors and injustice.

Time has insulated us from the violence perpetrated by past regimes in their pursuit of power: the crucifixion and slaughter of innocents by the Romans, the torture of the Inquisition, the atrocities of the Nazis, the butchery of the Fascists, the bloodshed by the Communists, and the cold-blooded war machines run by the military industrial complex.

We can disassociate from such violence.

We can convince ourselves that we are somehow different from the victims of government abuse.

We can continue to spout empty campaign rhetoric about how great America is, despite the evidence to the contrary.

We can avoid responsibility for holding the government accountable.

We can zip our lips and bind our hands and shut our eyes.

In other words, we can continue to exist in a state of denial.

Whatever we do or don’t do, it won’t change the facts: the nation is imploding, and our republic is being pushed ever closer to martial law.

As Vann R. Newkirk II writes for the Atlantic:

Trumpism demands that violence be solved by local militarization: increased security at schools, the arming of teachers, and now, the adoption of guns in places intended quite literally to be sanctuaries from the scourges of the world. Taken altogether, what Trumpism seems to intend is the creation—or perhaps the expansion—of the machinery of a police state

In facing what appears to be a rising tide of violence—a tide that Trump himself elevates and encourages—the prescription of arms merely capitulates to the demands of that bloodshed. The purpose of political violence and terrorism is not necessarily to eliminate or even always to create body counts, but to disempower people, to spread the contagion of fear, to splinter communities into self-preserving bunkers, and to invalidate the very idea that a common destiny is even possible. Mandates to arm people accelerate this process. They inherently promote the idea that society cannot reduce the global level of harm, and promote the authoritarian impulses of people seeking order.

Where Newkirk misses the point is by placing the blame squarely on the Trump Administration.

This shift towards totalitarianism and martial law started long before Trump, set in motion by powers-that-be that see the government as a means to an end: power and profit.

As Paul Craig Roberts, former Assistant Secretary of the Treasury, recognized years ago, “Adolf Hitler is alive and well in the United States, and he is fast rising to power.”

Roberts was not comparing Trump to Hitler, as so many today are wont to do.

Rather, he was comparing the American Police State to the Nazi Third Reich, which is a far more apt comparison.

After all, U.S. government agencies—the FBI, CIA and the military—have fully embraced many of the Nazi’s well-honed policing tactics and have used them repeatedly against American citizens for years now.

Indeed, with every passing day, the United States government borrows yet another leaf from Nazi Germany’s playbook: Secret police. Secret courts. Secret government agencies. Surveillance. Censorship. Intimidation. Harassment. Torture. Brutality. Widespread corruption. Entrapment. Indoctrination. Indefinite detention.

These are not tactics used by constitutional republics, where the rule of law and the rights of the citizenry reign supreme. Rather, they are the hallmarks of authoritarian regimes, where the only law that counts comes in the form of heavy-handed, unilateral dictates from a supreme ruler who uses a secret police to control the populace.

The empowerment of the Gestapo, Germany’s secret police, tracked with the rise of the Nazi regime in much the same way that the rise of the American police state corresponds to the decline of freedom in America.

How did the Gestapo become the terror of the Third Reich?

It did so by creating a sophisticated surveillance and law enforcement system that relied for its success on the cooperation of the military, the police, the intelligence community, neighborhood watchdogs, government workers for the post office and railroads, ordinary civil servants, and a nation of snitches inclined to report “rumors, deviant behavior, or even just loose talk.”

In other words, ordinary citizens working with government agents helped create the monster that became Nazi Germany. Writing for the New York Times, Barry Ewen paints a particularly chilling portrait of how an entire nation becomes complicit in its own downfall by looking the other way:

In what may be his most provocative statement, [author Eric A.] Johnson says that ‘‘most Germans may not even have realized until very late in the war, if ever, that they were living in a vile dictatorship.’’ This is not to say that they were unaware of the Holocaust; Johnson demonstrates that millions of Germans must have known at least some of the truth. But, he concludes, ‘‘a tacit Faustian bargain was struck between the regime and the citizenry.’’ The government looked the other way when petty crimes were being committed. Ordinary Germans looked the other way when Jews were being rounded up and murdered; they abetted one of the greatest crimes of the 20th century not through active collaboration but through passivity, denial and indifference.

Much like the German people, “we the people” have become passive, polarized, gullible, easily manipulated, and lacking in critical thinking skills.  Distracted by entertainment spectacles, politics and screen devices, we too are complicit, silent partners in creating a police state similar to the terror practiced by former regimes.

Can the Fourth Reich happen here?

It’s already happening right under our noses. Much like the German people, “we the people” are all too inclined to “look the other way.”

In our state of passivity, denial and indifference, here are some of the looming problems we’re ignoring:

Now these are not problems that you can just throw money at, as most politicians are inclined to do.

These are problems that will continue to plague our nation—and be conveniently ignored by politicians—unless and until Americans wake up to the fact that we’re the only ones who can change things.

We’re caught in a vicious cycle right now between terror and fear and distraction and hate and partisan politics and an inescapable longing for a time when life was simpler and people were kinder and the government was less of a monster.

Our prolonged exposure to the American police state is not helping.

As always, the solution to most problems must start locally, in our homes, in our neighborhoods, and in our communities.

We’ve got to refrain from the toxic us vs. them rhetoric that is consuming the nation.

We’ve got to work harder to build bridges, instead of burning them to the ground.

We’ve got to learn to stop bottling up dissent and disagreeable ideas and learn how to work through our disagreements without violence.

We’ve got to de-militarize our police and lower the levels of violence here and abroad, whether it’s violence we export to other countries, violence we glorify in entertainment, or violence we revel in when it’s leveled at our so-called enemies, politically or otherwise.

For starters, we’ll need to actually pay attention to what’s going on around us, and I don’t mean by turning on the TV news. That will get you nowhere. It’s a mere distraction from what is really going on. In other words, if you’re watching, that means you’re not doing. It’s time to get active.

  • Pay attention to what your local city councils are enacting.

  • Pay attention to what your school officials are teaching and not teaching.

  • Pay attention to whom your elected officials are giving access and currying favor.

Most of all, stop acting like it really matters whether you vote for a Republican or Democrat, because in the grand scheme of things, it really doesn’t.

While you’re at it, start acting like citizens who expect the government to work for them, rather than the other way around. While that bloated beast called the federal government may not listen to you without a great deal of activism and effort brought to bear, you can have a great—and more immediate—impact on your local governing bodies.

This will mean gathering together with your friends and neighbors and, for example, forcing your local city council to start opposing state and federal programs that are ripping you off. And if need be, your local city council can refuse to abide by the dictates that continue to flow from Washington, DC. In other words, nullify everything the government does that is illegitimate, egregious or blatantly unconstitutional.

Finally, remember that when you strip away all of the things that serve to divide us, we’re no different underneath: we all bleed red, and we all suffer when violence becomes the government’s calling card.

As I make clear in my book Battlefield America: The War on the American People, the oppression and injustice—be it in the form of shootings, surveillance, fines, asset forfeiture, prison terms, roadside searches, and so on—will come to all of us eventually unless we do something to stop it now.

Unless we can learn to live together as brothers and sisters and fellow citizens, we will perish as tools and prisoners of the American police state.

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Russia “Ready To Shoot Down” U.S. Spy Plane Behind Attacks On Airbase, Says Defense Official

A Russian defense official has doubled down on prior claims that the United States was behind a prior massive drone attack against Khmeimim Air Base near Latakia (alternately Hmeimim), which has further come under sporadic waves of attack by small armed drones which have appeared increasingly sophisticated. 

Vladimir Shamanov, head of the lower parliamentary house’s defense committee and a former airborne troops commander, warned, according to a translation of his Tuesday statement by Russian Market:

In case of another U.S. drone attack on Russian Military Base in Syria, Russia is ready to shoot-down that plane

The threat was made against an American spy plane possibly being in the area near Syria to coordinate any future attack. Last week the Kremlin said, based on new intelligence provided by the Russian defense ministry, that a major attack on Khmeimim last January was coordinated by a US P-8 Poseidon surveillance plane

US P-8 Poseidon surveillance plane

The nighttime January 8th attack which involved 13 unmanned aerial vehicles (UAVs) in total — 10 approached Khmeimim while 3 attempted an attack on the naval facility in Tartus. That significant attack came after a prior New Year’s eve drone assault actually damaged Russian jets parked at the airbase. 

Last weekend President Putin himself addressed the uptick in drone attacks especially over just the past two months while in discussions with the leaders of Germany, France and Germany in Istanbul, according to TASS

Terrorists continue attacks in Idlib, with dozens of drones shot down near the Russian military base in the country in the past two months or so, Russian President Vladimir Putin told reporters after a four-party summit on Syria held in Istanbul on Saturday.

“Russia reserves the right to support the Syrian government if terrorists carry out provocations from the Idlib zone,” Putin said. “Quite recently – I have informed my counterparts – artillery strikes were delivered from the Idlib zone in the direction of Aleppo. In the recent six weeks to two months, our air defense has shot down 50 aerial vehicles near our base in Hmeymim.”

Though at the Istanbul summit the Russian president stopped short of blaming the U.S. for coordinating the attacks — something that Pentagon officials have vehemently denied — the words came just days after Russian Deputy Defense Minister Colonel General Alexander Fomin went public with details of a Russian intelligence report at a plenary session of the Beijing Xiangshan Forum on security last Thursday: “Thirteen drones moved according to common combat battle deployment, operated by a single crew. During all this time the American Poseidon-8 reconnaissance plane patrolled the Mediterranean Sea area for eight hours,” the deputy defense minister said. 

These latest threats “to shoot down that plane” also follow the mistaken downing of a Russian Ilyushin-20 reconnaissance plane in mid-September with 15 crew members on board after Israel launched a massive attack on Syrian government targets. Following the incident, for which Israel expressed regret, Russia had vowed an “adequate response” and effectively declared a “no-fly zone” in the area of its assets in Syria, and further moved forward with transferring S-300 air defense systems to the Syrian government. 

With Russia’s heightened rhetoric of late, it appears to be anticipating the next potential major incident over the skies of Syria — only this time Moscow has raised the stakes as it vows to follow through on attacking American or other foreign aircraft behind attacks on Russian bases and aircraft in Syria. 

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Pepe Escobar Blasts Brazil’s Bolsanaro: “Welcome To The Jungle”

Authored by Pepe Escobar via ConsortiumNews.com,

A troubling new era has begun in Brazil with the election on Sunday of the far-right Jair Bolsonaro as president…

Bolsonaro: Leader of trashy jihad.

It’s darkness at the break of (tropical) high noon.

Jean Baudrillard once defined Brazil as “the chlorophyll of our planet”. And yet a land vastly associated worldwide with the soft power of creative joie de vivre has elected a fascist for president.

Brazil is a land torn apart. Former paratrooper Jair Bolsonaro was elected with 55.63 percent of votes. Yet a record 31 million votes were ruled absent or null and void. No less than 46 million Brazilians voted for the Workers’ Party’s candidate, Fernando Haddad; a professor and former mayor of Sao Paulo, one of the crucial megalopolises of the Global South. The key startling fact is that over 76 million Brazilians did not vote for Bolsonaro.

His first speech as president exuded the feeling of a trashy jihad by a fundamentalist sect laced with omnipresent vulgarity and the exhortation of a God-given dictatorship as the path towards a new Brazilian Golden Age.

French-Brazilian sociologist Michael Lowy has described the Bolsonaro phenomenon as “pathological politics on a large scale”.

His ascension was facilitated by an unprecedented conjunction of toxic factors such as the massive social impact of crime in Brazil, leading to a widespread belief in violent repression as the only solution; the concerted rejection of the Workers’ Party, catalyzed by financial capital, rentiers, agribusiness and oligarchic interests; an evangelical tsunami; a “justice” system historically favoring the upper classes and embedded in State Department-funded “training” of judges and prosecutors, including the notorious Sergio Moro, whose single-minded goal during the alleged anti-corruption Car Wash investigation was to send Lula to prison; and the absolute aversion to democracy by vast sectors of the Brazilian ruling classes.

That is about to coalesce into a radically anti-popular, God-given, rolling neoliberal shock; paraphrasing Lenin, a case of fascism as the highest stage of neoliberalism. After all, when a fascist sells a “free market” agenda, all his sins are forgiven.

The Reign of BBBB

It’s impossible to understand the rise of Bolsonarism without the background of the extremely sophisticated Hybrid War unleashed on Brazil by the usual suspects. NSA spying – ranging from the Petrobras energy giant all the way to then President Dilma Rousseff’s mobile phone – was known since mid-2013 after Edward Snowden showed how Brazil was the most spied upon Latin American nation in the 2000’s.

The Pentagon-supplicant Superior War College in Rio has always been in favor of a gradual – but surefire – militarization of Brazilian politics aligned with U.S. national security interests. The curriculum of top U.S. military academies was uncritically adopted by the Superior War College.

The managers of Brazil’s industrial-military-technological complex largely survived the 1964-1985 dictatorship. They learned everything about psyops from the French in Algeria and the Americans in Vietnam. Over the years they evolved their conception of the enemy within; not only the proverbial “communists”, but also the Left as a whole as well as the vast masses of dispossessed Brazilians.

This led to the recent situation of generals threatening judges if they ever set Lula free. Bolsonaro’s running mate, the crude Generalito Hamilton Mourao, even threatened a military coup if the ticket did not win. Bolsonaro himself said he would never “accept” defeat.

This evolving militarization of politics perfectly meshed with the cartoonish BBBB (Bullet, Beef, Bible, Bank) Brazilian Congress.

Congress is virtually controlled by military, police and paramilitary forces; the powerful agribusiness and mining lobby, with their supreme goal of totally plundering the Amazon rainforest; evangelical factions; and banking/financial capital. Compare it with the fact that more than half of senators and one third of Congress are facing criminal investigations.

The Bolsonaro campaign used every trick in the book to flee any possibility of a TV debate, faithful to the notion that political dialogue is for suckers, especially when there’s nothing to debate.

After all, Bolsonaro’s top economic advisor, Chicago Boy Paulo Guedes – currently under investigation for securities fraud – had already promised to “cure” Brazil by bearing the usual gifts: privatize everything; destroy social spending; get rid of all labor laws as well as the minimum wage; let the beef lobby plunder the Amazon; and increase the weaponizing of all citizens to uber-NRA levels.

No wonder The Wall Street Journal normalized Bolsonaro as a “conservative populist” and the “Brazilian swamp-drainer”; this fact-free endorsement ignores that Bolsonaro is a lowly politico who has only passed two pieces of legislation in his 27 lackluster years in Congress.

WhatsApp Me to the Promised Land

Even as large misinformed masses progressively became aware of the massive Bolsonaro campaign manipulative scams on WhatsApp – a tropical post-Cambridge Analytica saga; and even as Bolsonaro pledged, on the record, that opponents would have only two options after Sunday’s elections, jail or exile, that was still not enough to arrest Brazil from inexorably slouching towards a dystopian, militarized BET (Banana Evangelical Theocracy).

In any mature democracy a bunch of businessmen – via black accounting – financing a multi-tentacle fake news campaign on WhatsApp against the Workers’ Party and Lula’s candidate Haddad would qualify as a major scandal.

WhatsApp is wildly popular in Brazil, much more than Facebook; so it had to be properly instrumentalized in this Brazilian remix of Cambridge Analytica-style Hybrid War.

The tactics were absolutely illegal because they qualified as undeclared campaign donations as well as corporate donations (forbidden by the Brazilian Supreme Court since 2015). The Brazilian Federal Police started an investigation that now is bound to head the same way of the Saudis investigating themselves on the Pulp Fiction fiasco in Istanbul.

The fake news tsunami was managed by the so-called Bolsominions. They are a hyper-loyal volunteer army, which purges anyone who dares to question the “Myth” (as the leader is referred to), while manipulating content 24/7 into memes, viral fake videos and assorted displays of “Bolso-swarm” ire.

Consider Washington’s outrage at Russians that may have interfered in U.S. elections allegedly using the same tactics the U.S. and its comprador elites used in Brazil.

Smashing the BRICS

Crushing the BRICS (Russian presidency)

On foreign policy, as far as Washington is concerned, Reichskommissar Bolsonaro may be very useful on three fronts.

The first one is geo-economic: to get the lion’s share of the vast pre-salt reserves for U.S. energy giants.

That would be the requisite follow-up to the coup de grace against Dilma Rousseff in 2013, when she approved a law orienting 75 percent of oil wealth royalties towards education and 25 percent to health care; a significant U.S.$ 122 billion over 10 years.

The other two fronts are geopolitical: blowing up the BRICS from the inside, and getting Brazil to do the dirty work in a Venezuela regime change ops, thus fulfilling the Beltway obsession on smashing the Venezuela-Cuba axis.

Using the pretext of mass immigration from Venezuela to the Brazilian stretch of the Amazon, Colombia – elevated to the status of key NATO partner, and egged on by Washington – is bound to count on Brazilian military support for regime change.

And then there’s the crucial China story.

China and Brazil are close BRICS partners. BRICS by now essentially means RC (Russia and China), much to the disgust of Moscow and Beijing, which counted on Haddad following in the footsteps of Lula, who was instrumental in enhancing BRICS geopolitical clout.

That brings us to a key point of inflexion in the rolling Hybrid War coup, when the Brazilian military became convinced that Rousseff’s cabinet was infiltrated by agents of Chinese intel.

Still, China remains Brazil’s top trade partner – ahead of the U.S., with bilateral trade reaching $75 billion last year. In parallel to being an avid consumer of Brazilian commodities, Beijing has already invested $124 billion in Brazilian companies and infrastructure projects since 2003.

Chicago Boy Guedes has recently met with Chinese diplomats. Bolsonaro is bound to receive a top Chinese delegation right at the start of his mandate. On the campaign trail, he hammered that “China is not buying in Brazil, China is buying Brazil”. Bolsonaro might attempt to pull a mini-Trump sanction overdrive on China. Yet he must be aware that the powerful agribusiness lobby has been profiting immensely from the U.S.-China trade war.

A mighty cliffhanger is guaranteed to come at the 2019 BRICS summit, which will take place in Brazil: picture tough guy Bolsonaro face to face with the real boss, Xi Jinping.

So what is the Brazilian military really up to? Answer: the Brazilian “Dependency Doctrine” – which is a true neocolonial mongrel.

On one level, the Brazilian military leadership is developmentalist, geared towards territorial integration, well-patrolled borders and fully disciplined, internal, social and economic “order.” At the same time they believe this should all be carried out under the supervision of the “indispensable nation.”

The military leaders reason that their own country is not knowledgeable enough to fight organized crime, cyber-security, bio-security, and, on the economy, to fully master a minimal state coupled with fiscal reform and austerity. For the bulk of the military elite, private foreign capital is always benign.

An inevitable consequence is to see Latin American and African nations as untermenschen; a reaction against Lula’s and Dilma’s emphasis on the Union of South American Nations (UNASUR) and closer energy and logistical integration with Africa.

Can’t Rule Out Military Coup

Despite this there is internal military dissent – which could even open a possible way towards the removal of Bolsonaro, a mere puppet, to the benefit of the real thing: a general.

When the Workers’ Party was in power, the Navy and the Air Force were quite pleased by strategic projects such as a nuclear submarine, a supersonic fighter jet and satellites launched by Made in Brazil rockets. Their reaction remains to be seen in the event Bolsonaro ditches these techno-breakthroughs for good.

The key question may be whether there is a direct connection between the cream of the crop of Brazilian military academies; the “dependency generals” and their psyops techniques; different evangelical factions; and the post-Cambridge Analytica tactics deployed by the Bolsonaro campaign. Would it be a nebula congregating all these cells, or is it a loose network?

Arguably the best answer is provided by war anthropologist Piero Leirner, who conducted deep research in the Brazilian Armed Forces and told me, “there’s no previous connection. Bolsonaro is a post-fact. The only possible connection is between certain campaign traits and psyops.” Leirner stresses, “Cambridge Analytica and Bannon represent the infrastructure, but the quality of information, to send contradictory signals and then an order resolution coming as a third way, this is military strategy from CIA psyop manuals.”

Brazilian Military: Keeping an eye on Bolsonaro. (Wikimedia Commons)

There are cracks though. Leirner sees the arch of disparate forces supporting Bolsonaro as a “bricolage” which sooner or later will disintegrate. What next? A sub-Pinochet General?

Why Bolsonaro is not Trump

In The Road to Somewhere; The Populist Revolt and the Future of Politics, David Goodhart shows that the driving force behind populism is not the fascist love of an ultra-nation. It’s anomie – that feeling of a vague existential threat posed by modernity. That applies to all forms of Right populism in the West.

Thus we have the opposition between “Somewheres” and “Anywheres”. We have “Somewheres” that want their nations’ democracy to be enjoyed only by the “home” ethnicity, with the national culture not contaminated by “foreign” influences.

And we have “Anywheres” who inhabit the roootless postmodern vortex of multiculturalism and foreign travel for business. These are a demographic minority – but a majority within political, economic, educational and professional elites.

This leads Goodhart to make a crucial distinction between populism and fascism – ideologically and psychologically.

The standard legal distinction can be found in German constitutional law. Right populism is “radical” – thus legal. Fascism is “extreme,” thus illegal.

Trump being labeled a “fascist” is false. Bolsonaro in the West has been labeled “The Tropical Trump.” The fact is Trump is a Right populist – who happens to deploy a few policies that could even be characterized as Old Left.

The record reveals Bolsonaro as a racist, misogynist, homophobic, weaponizing thug, favoring a white, patriarchal, hierarchical, hetero-normative and “homogenous” Brazil; an absurdity in a deeply unequal society still ravaged by the effects of slavery and where the majority of the population is mixed race. Besides, historically, fascism is a radical bourgeois Final Solution about total annihilation of the working class. That makes Bolsonaro an outright fascist.

Trump is even mode moderate than Bolsonaro. He does not incite supporters to literally exterminate his opponents. After all, Trump has to respect the framework of a republic with long-standing, even if flawed, democratic institutions.

That was never the case in the young Brazilian democracy – where a president may now behave as if human rights are a communist, and UN, plot. The Brazilian working classes, intellectual elites, social movements and all minorities have plenty of reasons to fear the New Order; in Bolsonaro’s own words, “they will be banned from our motherland.” The criminalization/dehumanization of any opposition means, literally, that tens of millions of Brazilians are worthless.

Talk to Nietzsche

The sophisticated Hybrid War rolling coup in Brazil that started in 2014, had a point of inflexion in 2016 and culminating in 2018 with impeaching a president; jailing another; smashing the Right and the Center-Right; and in a post-politics-on-steroids manner, opening the path to neo-fascism.

Bolsonaro though is a – mediocre – black void cipher. He does not have the political structure, the knowledge, not to mention the intelligence to have come so far, our of the blue, without a hyper-complex, state of the art, cross-border intel support system. No wonder he’s a Steve Bannon darling.

In contrast, the Left – as in Europe – once again was stuck in analog mode. No way any progressive front, especially in this case as it was constituted at the eleventh hour, could possibly combat the toxic tsunami of cultural war, identity politics and micro-targeted fake news.

They lost a major battle. At least they now know this is hardcore, all-out war. To destroy Lula – the world’s foremost political prisoner – the Brazilian elites had to destroy Brazil. Still, Nietzsche always prevails; whatever doesn’t kill you makes you stronger. The vanguard of global resistance against neo-fascism as the higher stage of neoliberalism has now moved south of the Equator. No pasarán.

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The ‘Other Singularity’ – China Factory To Build Robots That Make Other Robots

Swiss engineering firm ABB announced plans on Saturday for a $150 million factory in Shanghai, China filled with robot-assembling robots, according to Reuters

The factory will be located near ABB’s China robotics campus, and is set to open at the end of 2020 if all goes well. It will produce robots for use in China, as well as for export elsewhere in Asia. China is ABB’s second largest market after the United States. 

“Shanghai has become a vital center for advanced technology leadership – for ABB and the world,” said ABB CEO Ulrich Spiesshofer in an announcement. 

With the expansion, ABB is banking on Chinese robots sales defying concerns over trade tensions with the United States that some fear could dent demand for electronics, auto parts and other items that require automated manufacturing and robots.

China is expanding its robot workforce, as wages for human workers there rise and the country seeks to compete with lower-cost countries via greater automation. In 2017, one of every three robots sold in the world went to China, which purchased nearly 138,000 units, ABB said. –Reuters

ABB’s new factory will span 75,000 sqft, and will employ specialized software designed to allow humans and robots to work side-by-side without injuries, according to the company, which added that its YuMi robots will be deployed on several of the small parts assembly processes required to make an ABB robot. 

ABB, whose industrial robots are used, among other things, to build automobiles as well as to assemble electronic devices, will build robots for numerous industries at the Shanghai factory, a spokesman said.

It did not give a new employee count for the factory, but said it will boost robotics employment that now sits at more than 2,000 ABB workers in China. –Reuters

Meanwhile, ABB rival Kuka which was bought in 2016 by China’s Midea, has been rapidly expanding its robo-presence throughout China – building a “robot park” near Hong Kong in the city of Shunde. 

Will the robot building robot factory require security guards? 

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Paul Craig Roberts Asks “Is America Finished?”

Authored by Paul Craig Roberts,

The refusal of the Democratic Party and the military/security complex to accept the results of the 2016 US presidential election and the misuse of their positions of power to prevent Donald Trump from exercising presidential powers is a revolutionary step, well described by Angelo Codevilla here:

In 2010, Claremont Institute Senior Fellow Angelo Codevilla reintroduced the notion of “the ruling class” back into American popular discourse. In 2017, he described contemporary American politics as a “cold civil war.” Now he applies the “logic of revolution” to our current political scene.

It has unfolded faster than foreseen. Its sentiments’ spiraling volume and intensity have eliminated any possibility of “stepping back.”

The Democratic Party and the millions it represents having refused to accept 2016’s results; having used their positions of power in government and society to prevent the winners from exercising the powers earned by election; declaring in vehement words and violent deeds the illegitimacy, morbidity, even criminality, of persons and ideas contrary to themselves; bet that this “resistance” would so energize their constituencies, and so depress their opponents’, that subsequent elections would prove 2016 to have been an anomaly and further confirm their primacy in America. The 2018 Congressional elections are that strategy’s first major test. Regardless of these elections’ outcome, however, this “resistance” has strengthened and accelerated the existing revolutionary spiral.

Read more here…

Americans are now so polarized that they “no longer share basic sympathies and trust, because they no longer regard each other as worthy of equal consideration.” Codevilla blames the progressives and their attitude of moral superiority, but his explanation is independent of who is to blame. I blame both sides. The Constitution and our civil liberties took a major hit from the “conservative” Republican regime of George W. Bush.

The consequence has been to weaponize government for use against the domestic adversary. In other words, unity has departed us. The absence of unity makes it easy for the ruling oligarchy to achieve its material interests at the expense of the welfare of the American people. Indeed, it is amazing to find progressives aligned with the military/security complex to block Trump from normalizing relations with Russia.

The provocations of Russia, which have been ongoing since the Clinton regime, have reached unprecedented levels under the neoconservative regimes of Obama and Trump. The conflict that has been orchestrated is good for the $1,000 billion annual budget of the military/security complex at the cost of maximizing the chance of nuclear war. The demonizations of Russia, Putin, China, and Iran are so extreme as to have convinced Russia and China that Washington intends war.

For Russia, Trump’s withdrawal from the intermediate range missile treaty (INF) confirms that an attack on Russia is being prepared. Intermediate range missiles cannot reach the US. The treaty gave safety to Russia and Europe, which is why Washington’s claim that Russia is violating the treaty is absurd. The only reason for Washington to withdraw from the treaty is to be able to place intermediate range nuclear missiles on Russia’s borders that would substantially increase the likelihood of success of a US first strike against Russia.

This apparently is not clear to the American people, media, and Congress, but it is clear to the Russians.

Mikhail Gorbachev, who negotiated the INF Treaty with President Reagan, stated the war threat succintly:

“It looks as if the world is preparing for war.”

It is also very clear to the Russian government. A top official, Andrei Belousov, declared:

“Yes, Russia is preparing for war, I have confirmed it. We are preparing to defend our homeland, our territorial integrity, our principles, our values, our people – we are preparing for such a war.”

Putin himself finally found tough words. A country that attacks Russia will be obliterated, “will die like dogs,” and “go to Hell.”

As demonization of Russia is part of the Democrats’ demonization of Trump – “Putin stooge,” “Putin agent,” or, in the words of former CIA Director John Brennan, “traitor” – the American people are too disunited to take a stand against conflict with Russia that serves the agendas of the military/security complex and the neoconservatives’ ideology of US world hegemony.

As it is impossible for Russia to accept US intermediate range nuclear missiles on Russia’s border, war is close at hand.

China also sees war on the horizon. China’s president has ordered the military to “prepare for war.”

The recklessly irresponsible policy of the US government toward Russia and China is leading to nuclear war.

Perhaps the European governments, Washington’s compliant stooges, will finally wake up and refuse to participate in Washington’s orchestrated conflict. If not, the Doomsday Clock will have to be moved to one second before doom.

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Mystery Polio-Like Illness Spreading; Baffled CDC Under Fire; “Doesn’t Appear To Be Transmissible”

The CDC has confirmed another 10 cases of Acute Flaccid Myelitis (AFM), the mystery illness that’s been paralyzing children across the country, bringing this year’s total number of cases to 72. AFM has been reported in 24 states, while there have been 396 confirmed cases from August 2014 through October 2018 according to the CDC

Erin Olivera with her son Lucian (CNN)

While the CDC still doesn’t know the cause of AFM, the risk factors, long-term effects, or why the number of cases spiked beginning in 2014, the agency has learned the following:  

  • Most patients are children.
  • The patients’ symptoms have been most similar to complications of infection with certain viruses, including poliovirus, non-polio enteroviruses, adenoviruses, and West Nile virus.
  • All of the AFM cases have tested negative for poliovirus.
  • Enteroviruses most commonly cause mild illness. They can also cause neurologic illness, such as meningitis, encephalitis, and AFM, but these are rare.
  • CDC has tested many different specimens from AFM patients for a wide range of pathogens (germs) that can cause AFM. To date, no pathogen (germ) has been consistently detected in the patients’ spinal fluid; a pathogen detected in the spinal fluid would be good evidence to indicate the cause of AFM since this condition affects the spinal cord.
  • The increase in AFM cases in 2014 coincided with a national outbreak of severe respiratory illness among people caused by enterovirus D68 (EV-D68). Among the people confirmed with AFM, CDC did not consistently detect EV-D68 in every patient. During 2015, CDC did not receive information about large EV-D68 outbreaks in the United States, and laboratories reported only limited EV-D68 detections to CDC’s National Enterovirus Surveillance System (NESS). During 2016, CDC was informed of a few localized clusters in the United States. Learn more about EV-D68.

In a CBS This Morning interview Tuesday, CDC director Dr. Robert Redfield said that while the agency still doesn’t know what causes AFM, “it doesn’t appear to be transmissible from human to human,” adding “[the] CDC’s been working very hard on this, since 2014, to try to understand causation and etiology. As we sit here today, we don’t have understanding of the cause. We are, you know, continuing to strengthen our efforts, working in partnership with state and territorial health departments, and academic experts to try to figure this out.”

“I’ve recently asked again to put together a task force to really try to look at where we’re at, and what else could we do to try to solve this problem. The good news is that it doesn’t appear to be transmissible from human to human. We don’t see clustering in families,” Redfield said. “I do think that this is a new occurrence in the United States, the AFM. Our – our suspicion is it’s caused by a single agent. That’s the dominant disease that we’re confronting right now.” 

The CDC has come under fire for their response to AFM. 

“Frustrated and disappointed — I think that’s exactly how most of us feel,” said Dr. Keith Van Haren, one of the CDC advisers on AFM and an assistant professor of neurology at the Stanford University School of Medicine.

Van Haren and other doctors who care for these children say the agency has been slow to gather data and to guide pediatricians and emergency room physicians on how to diagnose and treat the children struck with the disease, acute flaccid myelitis.

This is the CDC’s job. This is what they’re supposed to do well. And it’s a source of frustration to many of us that they’re apparently not doing these things,” said Dr. Kenneth Tyler, a professor and chair of the department of neurology at the University of Colorado School of Medicine and another adviser to the CDC on AFM. –CNN

Frustrated healthcare professionals weigh in

AFM is rare – with less than one in a million people contracting it annually – however the number of suspected cases has been on the rise, frustrating healthcare professionals across the country.

“We really don’t know what is causing it in some kids now, and there definitely needs to be more research,” said Texas ER Doctor, Eric Higginbotham, adding “Some of these kids recover from it,” he says. “Some kids, once they have that nerve damage, there is really not a way to heal that. So, they stay in this weakened condition.

The CDC really seems to be out of sync with the conclusions that most scientists are coming to. We feel like we’re not being listened to,” said Dr. Keith Van Haren – CDC adviser and assistant professor of neurology at Stanford. “We don’t understand how the CDC has arrived at the place where they’re at.”

“This is a mystery so far, and we haven’t solved it yet, so we have to be thinking broadly,” said Dr. Nancy Messonnier, the CDC’s director of Immunization and Respiratory Diseases at the press briefing this month, adding that although enteroviruses can cause AFM, it’s not clear whether they are the main culprit. 

Messonnier told CNN: “AFM is a destructive disease of the neurological system. If this virus was causing this damage, we’d expect to be able to find the virus in the spinal fluid of most of these patients, and we’re not,” adding “We cannot explain these three peaks of disease in [2014, 2016 and 2018] by enterovirus, and so the way that sort of any discriminating scientist would do, we’re trying to think more broadly and make sure that we’re not missing something.”

The CDC will meet next week with medical experts to discuss treatment considerations, according to Messonnier. 

 

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Rickards: China’s Debt Bomb Is Ready To Explode

Authored by James Rickards via The Daily Reckoning,

The great Chinese growth slowdown has been proceeding in stages for the past two years. The reason is simple. Much of China’s “growth” (about 25% of the total) has consisted of wasted infrastructure investment in ghost cities and white elephant transportation infrastructure.

That investment was financed with debt that now cannot be repaid. This was fine for creating short-term jobs and providing business to cement, glass and steel vendors, but it was not a sustainable model since the infrastructure either was not used at all or did not generate sufficient revenue.

China’s future success depends on high-value-added technology and increased consumption. But shifting to intellectual property and the consumer means slowing down on infrastructure, which will slow the economy.

In turn, that means exposing the bad debt for what it is, which risks a financial and liquidity crisis. China started to do this last year but quickly turned tail when the economy slowed. Now the economy has slowed so much that markets are collapsing.

But doesn’t China have over $1 trillion of reserves to prop up its financial system?

On paper, that’s true. But in reality, China is “short” U.S. dollars. The Chinese may have $1.4 trillion of U.S. Treasury securities in its reserve position, but they need those assets possibly to bail out their banking system or defend the yuan.

Meanwhile, the Chinese banking sector, which in many ways is an extension of the state, owes $318 billion in U.S. dollar-denominated deposits of commercial paper.

From a bank’s perspective, borrowing in dollars is going short dollars because you need dollar assets to back up those liabilities if the original lenders want their money back. For the most part, the banks don’t have those assets because they converted the dollar to yuan to prop up local real estate Ponzis and local corporations.

There’s not much left over to bail out the corporate, individual and real estate sectors.

This is all part of a global “dollar shortage” attributable to Fed tightening, both in the forms of higher rates but also a reduction in base money.

A dollar shortage seems implausible in a world where the Fed printed $4.4 trillion. But while the Fed was printing, the world borrowed over $70 trillion (on top of prior loans), so the dollar shortage is real. The math is inescapable.

So the Chinese debt bomb that has been a long time in the making is finally getting ready to explode. The economy is slowing, debt is exploding and the trade war with Trump has hurt China’s exports needed to earn dollars to pay the debts.

The defaults are beginning to pile up. Several large corporations and regional governments have defaulted recently.

China’s leaders have panicked at the slowdown and have started the credit flow again with lower interest rates, higher bank leverage and more debt-financed, government-directed infrastructure spending.

Of course, this solution is strictly temporary. All it does is postpone the day of reckoning and make the debt crisis worse when it does arrive.

With every passing day, a Chinese financial collapse draws closer. The rest of the world will not escape the consequences.

When the crisis strikes in full force, possibly in 2019, the rest of the world will not be spared.

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Hundreds Of Google Employees Plan Walkout Over Accused Sexual Deviant’s $90 Million Exit Package

Over 200 Google employees will participate in a company-wide walkout Thursday after the New York Times reported that the company paid a $90 million exit package to Android mobile software creator, Andy Rubin, despite sacking 48 people over sexual harassment claims over the last 24 months. 

The Times report claimed that Rubin coerced a woman into performing oral sex in a hotel room in 2013, and granted his severance package in 2014 after the allegations came to light.

What Google did not make public was that an employee had accused Mr. Rubin of sexual misconduct. The woman, with whom Mr. Rubin had been having an extramarital relationship, said he coerced her into performing oral sex in a hotel room in 2013, according to two company executives with knowledge of the episode. Google investigated and concluded her claim was credible, said the people, who spoke on the condition that they not be named, citing confidentiality agreements. Mr. Rubin was notified, they said, and Mr. Page asked for his resignation. –NYT

And as the Times notes: “Google could have fired Mr. Rubin and paid him little to nothing on the way out. Instead, the company handed him a $90 million exit package, paid in installments of about $2 million a month for four years, said two people with knowledge of the terms. The last payment is scheduled for next month.” 

Google, meanwhile, fired 13 senior managers out of the 48 fired for misconduct, according to BuzzFeed, and “None of these individuals received an exit package.”

“Personally, I’m furious,” said one Google employee who requested anonymity. “I feel like there’s a pattern of powerful men getting away with awful behavior towards women at Google‚ or if they don’t get away with it, they get a slap on the wrist, or they get sent away with a golden parachute, like Andy Rubin. And it’s a leadership of mostly men making the decisions about what kind of consequences to give, or not give.” –BuzzFeed

While Google attempted damage control last Thursday with an all-hands meeting, frustrated employees in a group for woman engineers “began upvoting a post on an internal Google forum that suggested employees stage a walkout.” By Monday morning, hundreds of co-workers had upvoted it according to a current employee, while those committing to Thursday’s walkout has swelled to over 200. 

Don’t be evil? 

Thursday’s walkout is the latest in a series of internal protests by Google’s outraged Silicon Valley employees. In recent months, employees have revolted over revelations that the Mountain View, CA company was helping the Department of Defense develop drone warfare technology as part of “Project Maven.” Separately, thousands of employees signed a letter opposing the company’s censored search engine they have been developing for the Chinese government, code-named “Dragonfly.” 

Google has promised to cancel the Maven contract after a dozen employees quit in protest, however CEO Sunday Pichai maintains that the company will continue to explore opportunities in China. 

Employees participating in this movement for increased transparency and ethics within Google have presented management with petitions, made demands for greater employee oversight into product decisions made by management, and even quit their jobs in protest of Google’s decisions. Increasingly, employees have been signing their names to a spreadsheet, refusing to participate in screening interviews for potential new hires at Google as a form of protest.

“Some people are definitely talking about joining that now because of the latest harassment and abuse stories,” the anonymous Google employee said. –BuzzFeed

Meanwhile, there have reportedly been internal deliberations about the possible removal of senior executives mentioned in the Times story over their own inappropriate workplace romances. According to BuzzFeed, “A source familiar with those discussions noted that some employees are unhappy that the “old guard” at Google still remains in positions of importance at the company, pointing to cofounder Sergey Brin, who had a consensual extramarital relationship with an employee; Senior Vice President of Corporate Development David Drummond, who fathered a child with a junior employee; and Google X director Richard DeVaul, whose alleged sexual harassment of a prospective hire was detailed in the Times.

Last week Rubin tweeted “The New York Times story contains numerous inaccuracies about my employment at Google and wild exaggerations about my compensation,” adding “Specifically, I never coerced a woman to have sex in a hotel room. These false allegations are part of a smear campaign.”

Would the New York Times do that?  

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A Brief History Of Leftist Political Violence This Year

Authored by Daniel Greenfield via Sultan Knish blog,

On September 9, Rudy Peters, the Republican running for Congress in the 15th District in California, was attacked by a knife-wielding man shouting, “F___ Trump”.

The attacker, Farzad Fazeli, an Iranian Clinton supporter, had previously posted, “Don Trump won’t clean his own house, so he’s too dirty to know right from wrong. Impeach/incarcerate him before more children die. P.S. complacency is worse than being the shooter.”

The next month, Shane Mekeland, a Republican running for the Minnesota House of Representatives, suffered a concussion after being punched in the face at a restaurant. “You f____g people don’t give a s___ about the middle class,” his assailant had shouted at him.

Mekeland is back on the campaign trail, while still recovering from the assault. “The media and the likes of Maxine Waters, Hillary, and Eric Holder as of late is driving this behavior,” he warned.

“If you see anybody from that cabinet in a restaurant, at a department store, at a gasoline station, you get out and you create a crowd. And you push back on them, and you tell them they’re not welcome anymore, anywhere,” Rep. Maxine Waters had urged an angry leftist mob.

Eric Holder, Obama’s attorney general and a possible 2020 candidate, had urged, “When they go low, we kick them.” He had tweeted at Democrats, urging them to, “Use the rage.”

Hillary Clinton had told CNN, “You cannot be civil with a political party that wants to destroy what you stand for, what you care about.”

Senator Hirono had refused to condemn the harassment of Republicans, telling CNN, “This is the kind of activism that occurs and people make their own decisions. If they violate the law, then they have to account for that.”

That same month, also in Minnesota, State Rep. Sarah Anderson, a Republican, was punched by a man when she tried to stop him from vandalizing her campaign signs.

Also in October, Kristin Davison, the campaign chief for Adam Laxalt, the Republican candidate for governor in Nevada, was left with pain and bruises after a confrontation with a Democrat operative. Her alleged assailant faces a charge of misdemeanor battery.

Three violent attacks on Republican political figures in just one month alone earned almost no coverage in the media.

Instead the media egged it on. Even the country’s leading leftist papers urged greater displays of rage.

October editorials, columns and op-eds in the New York Times included headlines such as, “Get Angry, and Get Involved,” “Tears, Fury or Action: How Do You Express Anger?”, “Fury Is a Political Weapon And Women Need to Wield It.”

The explosion of violence against Republicans in October was the culmination of a climate of crazed hatred, which lead to death threats, and when those were unaddressed, to actual physical violence.

In the two months from May to June, 30 Republican members of Congress were attacked or threatened.

These included, Christopher Michael McGowan who warned Rep. Bob Goodlatte’s staff, “I am not making a joke. I will kill him.” It included Steve Martan, a “pacifist”, who threatened to shoot Rep. Martha McSally.

E. Stanley Hoff was arrested for leaving a message for Rep. Steve Stivers warning the Ohio Republican, “We’re coming to get every g_____n one of you and your families. Maybe the next one taken down will be your daughter.”

Messages aimed at Rep. Tom Garrett threatened, “This is how we’re going to kill your wife”, and “This is what I’m going to do to your daughters.”

And Rep. David Kustoff was nearly run off the road.

In the middle of June, James Hodgkinson, a passionate Bernie Sanders supporter, opened fire at a Republican charity baseball practice, seriously wounding Rep. Steve Scalise, and Zack Barth, an aide to Rep. Roger Williams. Even though Hodgkinson had a hit list of conservative Republicans, Rep. Mo Brooks, South Carolina Rep. Jeff Duncan and Arizona Rep. Trent Franks, Rep. Jim Jordan, Tennessee Rep. Scott DesJarlais and Virginia Rep. Morgan Griffith, the FBI denied that it was a political assassination.

In August, Carlos Bayon was arrested for threatening House Majority Whip Steve Scalise and House Republican Conference Chairwoman Cathy McMorris Rodgers. “We are not going to feed them sandwiches, we are going to feed them lead,” he declared.

Law enforcement found bomb and assassination manuals in Bayon’s house.

Around the same time, DeReal Finklin, a registered Democrat, was charged for sending death threats to Rep. Christopher H. Smith. DeReal had also posted, “Anybody outside of my blood in Monmouth or Ocean County on my Facebook account, you are dead.”

In June, Laurence Wayne Key, a Democratic Party of Marin County volunteer, was arrested for threatening to kill Rep. Brian Mast’s three children.

“I’m going to find the Congressman’s kids and kill them. If you’re going to separate kids at the border, I’m going to kill his kids,” the Planned Parenthood supporter threatened.

In Florida, in June, Steve St. Felix was charged with threatening to kill Rep. Jose Felix Diaz.

“Ill kill your ass and you better not show up to the next rec meeting,” St. Felix, who can be seen grinning widely in his booking photo, warned.

In July, in Tennessee, Clifton Ward was indicted for threatening to kill Rep. Diane Black. In New York, Martin Astrof allegedly tried to run over one of Rep. Lee Zeldin’s campaign workers who had been recognized for feeding rescue workers at Ground Zero after 9/11.

Ian Nicholas Nix was arrested for threatening to kill South Carolina state Rep. Steven Long. Nix called Long “right-wing scum” and warned him, You’re a ____ dead man.”

Also in July, a man who threatened to chop up Senator Rand Paul and his family with an axe was arrested.

After months of this, the media did not relent. It poured more fuel on the fire. The death threats of summer then became the violent assaults of fall.

The media called this “activism”. It denounced Republicans for warning of “angry mobs”.

And now the very same media has suddenly decided that threatening and assaulting people whose politics you disagree with is wrong. As long as the political figures being assaulted are Democrats.

But it doesn’t work that way.

Democrats and their media allies have sanctioned violence against Republicans. They’ve defended harassment and even assaults as activism. They have embraced and celebrated hate groups. The mob culture they have brought forth is fundamentally changing the rules of American politics.

Once political terror is unleashed, it can’t be controlled or compartmentalized.

Leftists, who have written a bloody history of political terror from Europe to South America, from the Middle East and across Asia, and right back to America, ought to know that better than anyone else.

The Left has made it its mission to destroy America. This is what destroying a country looks like.

In academia, there is glib talk of overturning Western civilization. But without civilization, there is only savagery.

The mad toll of death threats and assaults, of shootings and harassment was unleashed by the Left. The hectoring media has made millions from it. Fortunes have poured into the war chests of radical Democrats. They can make it stop. Or they can go on feeding the beast while blaming conservatives.

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Hong Kong Condos Begin Underwater Journey As 20% Drop Results In Negative Equity

Hong Kong homeowners who bought flats in the last several months have seen their value decline as much as 20% in a matter of weeks, according to HSBC, sending values into negative equity which had only left the region in early 2017, reports the South China Morning Post

Hong Kong’s famously expensive property market has started to feel the strain lately from a fall in demand caused by rising interest rates, a struggling stock market and fears about the impact of the US-China trade war.

Negative equity occurs when a home loan exceeds the market value of the property, and has not been seen in Hong Kong since early 2017. –SCMP

“Theoretically, buyers who obtained a mortgage of 90 per cent of the flat’s value will fall into negative equity once home prices have dropped more than 10 per cent,” said Chief Vice-President at mReferral Mortgage Brokerage Services, Sharmaine Lau.  

The largest losses are likely to be flat owners who paid sky-high prices for tiny apartments in older tenaments, according to industry watchers, who add that banks tend to become very conservative in valuing such properties when the real estate market takes a turn for the worse. 

“Lower valuations will first apply to flats that have less marketability. Banks’ valuations, which are supported by surveyors, are made in line with market conditions,” said Cushman and Wakefield head of valuation and advisory services for the Asia-Pacific region, Chiu Kam-kuen. 

Meanwhile, SCMP was able to find apartments at older housing developments which are now valued at HSBC far below their recent selling prices. 

A 234 square foot unit at 36-year-old Lee Bo Building in Tuen Mun, which was sold for HK$3.82 million on October 8, is now valued 20 per cent lower at HK$3.08 million. In North Point, a 128 square foot unit at 41-year-old Yalford Building, sold on August 29 for HK$3.1 million, is also valued a fifth lower now by the bank, at HK$2.48 million.

In Kowloon, a 210 square foot unit at 34-year-old Hong Fai Building in Cheung Sha Wan sold for HK$3.87 million on June 20 is already down about 13 per cent, according to HSBC, at HK$3.38 million.

The spectre of negative equity is only going to get worse, according to Louis Chan, Asia-Pacific vice-chairman and chief executive for residential sales at Centaline Property.

“More homeowners will fall into negative equity next year as flat prices may decline by 10 per cent,” he said. –SCMP

The precipitious drop may force companies such as the Hong Kong Mortgage Corporation (HKMC) to adjust their mortgage insurance program in light of market developments. 

Under the programme, buyers of flats worth less than HK$4.5 million can get mortgage loans of up to 90 per cent of the unit’s value, capped at HK$3.6 million, while for flats priced between HK$4.5 million and HK$6 million the maximum loan-to-value ratio is 80 per cent, capped at HK$4.8 million.

In the first quarter of 2018, HKMC said 6,955 applicants secured HK$26.86 billion in home loans under the mortgage insurance programme. In 2017, a total of HK$32.3 billion in mortgages were granted to 8,829 applicants, up from HK$24.6 billion of 7,145 successful in 2016. –SCMP

Negative equity reached its peak in Hong Kong in 2003 following an outbreak of Severe Acute Respiratory Syndrome (SARS) which sent already-teetering home values plummeting. According to the HKMA, over 105,000 households found themselves in negative equity at the time – all of which were above water as of the first quarter of last year.

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