Month: August 2020

Authored by Allen Zhong via The Epoch Times,

The U.S. Supreme Court on Friday rejected a request to halt the construction of the border wall along the US-Mexico border.

In a 5-4 ruling on ideological lines, with five conservatives in the majority and four liberals in dissent, the court declined the request from two groups, the Sierra Club and Southern Border Communities Coalition. Sierra Club is an environmental group. The Southern Border Communities Coalition says it advocates for people living in border areas.

The case has its origins from when President Donald Trump had declared a national emergency in February 2019 to build the border wall along the southern border after the Congress provided only $1.375 billion for the border wall construction, far less than the $5.7 billion requested by the administration. The White House then identified an extra $6.7 billion from other government accounts to fund the border wall construction, including $2.5 billion from Defense Department, $3.6 billion from military construction funds, and $600 million from the Treasury Department’s assets forfeiture fund.

The case before the Supreme Court involves just the $2.5 billion in Defense Department funds. The American Civil Liberties Union (ACLU), a left-leaning legal group, had launched the lawsuit on behalf of the two groups. The non-profit organization has said it will seek to tear down sections of the wall that were built with the money.

The Supreme Court had allowed the funds to be allocated in July 2019, granting an emergency request filed by the Trump administration. But the groups said in court papers that circumstances had changed since the court’s earlier ruling.

The court’s four liberal justices dissented, saying they would have prohibited construction while a court challenge continues after a federal appeals court ruled in June that the administration had illegally sidestepped Congress in transferring the Defense Department funds.

“The Court’s decision to let construction continue nevertheless I fear, may operate, in effect, as a final judgment,” Justice Stephen Breyer wrote in a brief dissent (pdf) for the four liberals.

As the Wall goes up, illegal crossings go down. This past week we built over 10 miles of Wall at our Southern Border. We now have 256 miles of NEW Wall and we are on track to have 300 miles completed by the end of August! pic.twitter.com/AWl0dYfY1w

— Donald J. Trump (@realDonaldTrump) July 30, 2020

Building the southern border wall is a major promise of Trump’s 2016 campaign. Trump said on Thursday that 256 miles of new wall has been built and there will be another 44 miles expected to be finished by the end of August.

“As the Wall goes up, illegal crossings go down,” the president touted in a Twitter post.

For months the US has been in a full court diplomatic press on fellow UN Security Council members in an attempt to ensure that a UN arms embargo against Iran does not expire. 

The embargo on selling conventional weapons to Iran is set to end October 18, and is ironically enough part of the 2015 nuclear deal brokered under Obama, which the Trump administration in May 2018 pulled out of.

But now Pompeo vows the US will “take necessary action” — no doubt meaning more sanctions at the very least, and likely military action at worst. He told the Senate Foreign Relations Committee this week that “in the near future… we hope will be met with approval from other members of the P5.”

And he followed with:

“In the event it’s not, we’re going to take the action necessary to ensure that this arms embargo does not expire,” he said.

“We have the capacity to execute snapback and we’re going to use it in a way that protects and defends America,” Pompeo told the committee further.

Speaking to the Senate Foreign Relations Committee, Secretary of State Mike Pompeo continued to call on the world to accept extending the UN arms embargo against Iran. The embargo is scheduled to expire on October 18.

But it’s clear at this point that the UN is not intent on extending the embargo. Russia for one has promised as much. Both Russia and China also have recent weapons deals in the works with the Islamic Republic.

Summary:

• Florida deaths top 7k
• Poland suffers 3rd record jump in COVID-19 cases
• Germany sees “R” rate hit 1.06
• Tokyo reports 472
• Russia hopes to start mass vaccinations in October

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For the next few days, the COVID-19 pandemic won’t be the only major disaster unfolding in the Sun Belt: Hurricane Isais is headed straight for Miami-Dade, the worst-hit county in the worst-hit state.

To be sure, as we pointed out yesterday, hospitalizations and single-day case tallies, and daily positivity percentages appear to finally be declining across the Sun Belt.

However, deaths have continued to climb. In the US, COVID-19 daily deaths topped 1,000 – another 1,353 deaths, to be exact – for the fifth consecutive day of fatalities over 1,000. for the fifth straight day, even as the shuttering of testing sites in some parts of the state has caused positivity numbers to decline.

According to the latest data published by Bloomberg and JHU on Saturday morning, the US added 66,545 new virus cases on Friday, a 1.5% increase, compared with the daily average increase of 1.6%. Total cases were 4,561,511.

On Saturday, Florida reported 179 new deaths, snapping a 4-day streak of record daily death numbers, while also pushing the state’s death toll past 7k to 7,022.

Fla also reported another 9,642 cases (+2%), lower than the 2.3% average increase over the prior week. The state’s total is now 480,028.

Governor Ron DeSantis has declared a state of emergency as the storm nears, and many state-run testing facilities have been closed.

Meanwhile, in Europe and Asia, new case numbers continued to climb.

Public health officials in Tokyo announced 472 new cases on Saturday, a new record for Japan’s capital city, according to NHK public television, which quoted Tokyo officials as saying such. The number of cases reported out of the capital megacity topped 400 for 2 days in a row.

Tokyo Gov Yuriko Koike has said Tokyo could declare its own state of emergency if the situation continues to worsen, however, the central government says there is still no need to do so nationally, despite a record spike in several cities around the nation.

As thousands of protesters gathered in Berlin to campaign against the government reimposing economically-painful COVID-19 restrictions – with some claiming the hysteria surrounding the virus, Germany recorded 864 new infections in the 24 hours through Saturday morning. A spate of smaller outbreaks has kept the infection rate above the key threshold of 1.0 for eight consecutive days. The most recent reading put the “R” rate at 1.06.

After reporting its lowest death rate in five days, Russian health officials announced Saturday that the government is preparing to start mass vaccinations against the virus, with health workers and teachers first in line for innoculation said Health Minister Mikhail Murashko said.

A vaccine has reportedly been developed by Moscow’s Gamaleya Institute (with help from the Russian Direct Investment Fund) and has completed clinical trials and the authorities are preparing to register it with regulators. It will be used for the vaccinations.

Russia hopes to start the mass vaccination program in October. Meanwhile, below is the latest chart from JHU showing the 5-day-moving averages for the ten worst-impacted countries in the world.

Poland reported its highest number of new coronavirus cases for a third day in a row on Saturday, with 658 new cases confirmed, according to the Health Ministry. 5 new deaths were also reported. The country has reported a total of 46,346 coronavirus cases and 1,721 deaths.

Poland’s prime minister hasn’t ruled out tightening some social distancing restrictions if the situation continues to worsen.

Authored by Charles Hugh Smith via OfTwoMinds blog,

The self-sustaining recovery is a fantasy that’s evaporated.

What looks like a powerful, can’t-lose rally to newbies is recognized as distribution by old hands. In low-volume markets (as in the past few months), insiders holding large positions can’t dump all their shares at once or the price of the stock would plummet due to the thinness of the bid.

The only way to get top-dollar for one’s overvalued shares is to play distribution games: sell a little each day on the upticks, and buy back shares when they threaten to drop below the key support levels followed by trading algos.

When insiders have finished distributing their shares to naive and trusting bagholders at the top, then the price can flush lower with a velocity that shocks the complacent bagholders who saw only the inevitability of an endless rally rather than the inevitability of a collapse of bubble valuations.

Stocks are priced for a V-shaped recovery and/or $1 trillion in federal giveaways per month. Neither is possible. The V-shaped recovery hopes were based on $6 trillion in federal/Federal Reserve stimulus washing over the nation, boosting household incomes and opening spigots of cash for enterprises and local governments.

The basic idea was to give the economy a needed shot of adrenaline to get to to the point where a recovery would be self-sustaining: companies would hire back laid-off workers, people would start borrowing and over-consuming again, sales and income tax revenues would return to pre-pandemic levels, etc.

The self-sustaining recovery is a fantasy that’s evaporated. The spike in activity was all the giveaways being spent. Now that most of the free-money programs are expiring, there’s no more stimulus to spend.

As for budgeting another trillion or two for future infrastructure projects: what few proponents of infrastructure spending realize is the number of companies and skilled workers capable of getting this work done is limited. You can create the cash out of thin air but you can’t conjure up experienced welders, crane operators, etc. to get the work done or the complex operational skills required to manage these large, complicated projects.

Also overlooked is the fact that most of these companies and workers are already busy, and it takes years to train new workers with the requisite skills.

So what’s left to support the can’t-lose rally? The promise of trillions of dollars more given directly to households and enterprises and local governments, at a run-rate of a trillion a month. Anything less won’t be enough.

And then there’s the line of dominoes that are toppling:

Distribution isn’t a rally.

*  *  *

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*  *  *

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President Trump’s insistence that the White House will ban the social-media app TikTok from the US triggered a wave of hysteria among users of the app: whatever will the American teens who built enormously valuable brands sharing dance videos on the app do now? They were just hanging out wit the Kardashians! What are they supposed to do now?!

TikTok influencers pulling up at McDonalds for job interviews after the ban #tiktokban #RIPtiktok pic.twitter.com/pssVP4xj78

— KØDEX (@MoreKODEX) August 1, 2020

China’s still-largely-state-controlled corporate sector has enough exposure to the vicissitudes of survival in the ultra-competitive, heavily scrutinized, anti-trust addled world of big tech that the leaders of Bytedance know that this kind of pressure is simply untenable. For TikTok to survive, ByteDance would need to play the administration’s game.

Earlier this week, reports about a group of VCs bidding as much as $50 billion for the non-China business had emerged. Then Friday afternoon, Fox Business – and then the New York Times, and a gaggle of other media orgs – confirmed that Microsoft was in talks to buy the social media platform.

In an age of burgeoning anti-trust sentiment, such a deal seemingly made little sense for Microsoft, but such a takeover would seemingly ameliorate the administration’s national security concerns, at the very least. Which is probably why what came next triggered such an intense response.

Late last night, President Trump told the White House press corp during an impromptu briefing aboard Air Force One that “we’re banning [TikTok]”.

“As far as TikTok is concerned, we’re banning them from the United States,” Trump told the reporters, adding that he could use emergency economic powers or an executive order.

Was it a glaring example of Trump trying to deliberately undermine Microsoft, perhaps in retaliation against Bill Gates for his support for the WHO (and criticism of Trump)?

Many of the president’s critics probably felt inclined to suspect such foul play. But as it turns out, it looks like Trump’s threats have had the desired effect, and ByteDance is now reportedly ready to let go of TikTok, passing 100% control to Microsoft in a deal that would see the app brought completely under the control of the American tech giant.

Here’s more from Reuters:

China’s ByteDance has agreed to divest the U.S. operations of TikTok completely in a bid to save a deal with the White House, after President Donald Trump said on Friday he had decided to ban the popular short-video app, two people familiar with the matter said on Saturday.

ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp would take over TikTok in the United States, the sources said.

Some ByteDance investors that are based in the United States may be given the opportunity to take minority stakes in the business, the sources added.

The White House did not respond to a request for comment on whether Trump would accept ByteDance’s concession. ByteDance in Beijing did not respond to a request for comment.

Under ByteDance’s new proposal, Microsoft will be in charge of protecting all U.S. user data, the sources said.

The plan allows for another U.S. company other than Microsoft to take over TikTok in the United States, the sources added.

Microsoft did not respond to a request for comment.

In the end, it looks like Trump was simply using the bully pulpit to ensure America’s national security priorities are respected by the market.

Authored by Addison Wiggin via The Daily Reckoning,

Real quick, grab a $100 bill from your wallet.

OK, humor me, any bill will do. What do you see?

I’d tell you what I see, but when I grab my Book Book, which serves as both a phone case and a wallet, there’s no cash in it. There rarely ever is. Please, keep that in mind for today’s foray into inductive reasoning.

I saw this makeshift sign over the weekend:

Seen at the Walgreens three miles from my house.

“At the airport. Very sparse here, ghost town,” reads an email from a colleague’s mom, “No coins.”

One of Agora Financial’s publishers, Doug Hill, had a similar experience flying to San Francisco last week for a meeting with a private equity fund. He couldn’t get accurate change for a pop rag he wanted to read. No coins.

“With the partial closure of the economy,” Federal Reserve Chairman, Jerome Powell says, “the flow of funds through the economy has stopped.”

Economically-speaking, the national coin shortage is a physical reminder of how slowly the nation’s economy has been; ‘velocity of money’ hit roughly zero.

“We are working with the Mint and the Reserve Banks,” Mr. Powell contends. ”As the economy re-opens, we are starting to see money move around again.”

Fair enough. What else is he going to say?

Back to the Benjamin burning a hole in your wallet. On it, you’ll see digits… a serial number for each bill.

As those bills are returned to the Federal Reserve from their journey around the country, the bills that have gotten too wrinkled, torn or worn thin get their serial numbers retired. The paper gets shredded.

Here’s what I was thinking while watching the film on Netflix the other day:

Wouldn’t it just be easier, and less expensive, if the Fed didn’t have to go through all the trouble of reclaiming and decommissioning the paper? Why not just track the serial numbers electronically?

Anyway, while fact checking the coin shortage story, a USA Today reporter included this little nugget: A Facebook post form including “a sign from a Texas-based grocery store chain H-E-B asking shoppers to use a debit card, credit card or correct change, if possible, due to the shortage.

The posts then warn against the potential of the U.S. becoming a ‘cashless society’.”

The Daily Reckoning has been on this “cashless society” story for some time.

Ideally, a cashless society is no big deal.

As I mentioned, I rarely hold cash if ever. Over the weekend, I got a haircut and didn’t leave a tip because my Book Book was dry.

But it’s not an ideal world.

And the mind does wander to dark places, doesn’t it?

Our own Jim Rickards has argued that elites are pushing for the cashless society so they can “herd” us all into “the digital pens.” Then they can impose negative interest rates on us.

But there’s another angle to the cashless society that hasn’t gotten much attention:

What if the powers that be can “cancel” people with unpopular political opinions?

The Walgreen’s sign says I can pay with credit, debit or gift card. I can use Apple Pay or Google Wallet. But here’s where the story gets spooky…

Ever since Mark Zuckerburg got summoned to appear before a Congressional committee over his backroom dealings with Cambridge Analytica prior to the 2016 election, Facebook is not so friendly to folks who don’t think like they do.

Google followed Facebook’s lead. We have reps at each place. Under their guidance, we try to abide by their rules. But the rules can, and have changed, without warning. It’s their platform, they make the rules. “You don’t like the rules,” their attitude goes, “you don’t have to post with us.”

Then there’s the federal government…

According to the U.S. Treasury site, since the pandemic began the Treasury has issued “more than 140 million Economic Impact Payments worth $239 billion to Americans by direct deposit to accounts at financial institutions, Direct Express card accounts, and by check.”

A prepaid card from the Treasury. Why not?

My kids, who strangely enough qualify, could hypothetically still use the card to procure sundries at the Walgreens down the street.

But what if, hypothetically again, that card doesn’t work because their dad is an ornery son of a b$tch who got in a spat with some readers over the Black Lives Matter movement… and some government bureaucrat didn’t like what I said?

That is, what if suddenly my EIP card doesn’t work at Walgreens anymore?

Or what if Facebook or Google don’t like what I write? What if Apple doesn’t like me either?

Hmm…I use gmail. I use a Mac. I shop at iTunes. I use my credit and debit cards for everything. I never have cash in my Book Book.

Boy, going down this rabbit hole is frightening. Good thing none of it could ever happen… right?

Gold is perhaps the best defense against negative interest rates and the cashless society.

“U.S. Africa Command has been told to plan to move,” AFRICOM commander Army Gen. Stephen Townsend said in a new statement.

Part of the fallout to Trump’s controversial order to move some 12,000 troops from Germany in a major historic draw down which has angered a number of Congressional leaders, including charges that the US has somehow “handed over” Europe to America’s superpower rivals like Russia and China, is that US Africa Command’s fate as well as other key command headquarters are in the balance. 

US Africa Command has been headquartered in Stuttgart, Germany since 2008, but as part of the Pentagon troop withdraw it too will have to move.

AFRICOM said in a statement late this week that it “will look first at options elsewhere in Europe, but also will consider options in the United States” as it plans its move, which the statement noted is “likely take several months”.

It should be noted that AFRICOM has grown increasingly controversial in recent years given the seeming explosion of US bases, especially drone and special forces bases, on the African continent over the past decade. There’s an estimated multiple dozens of bases, most established only the past few years.

Many African leaders have noted that it’s an uninvited, unwanted presence, which hearkens back to the 19th century “scramble for Africa” and new colonialism. 

Also caught in the fallout of Trump’s Germany troop draw down of 12,000 out of 36,000 American troops is that Germany has long been home to another key command. Special Operations Command Europe, also based in Stuttgart, will be moving to Mons in Belgium, according to prior Pentagon statements. 

Now map where the US has put its Africom bases. https://t.co/YmwpeN4sWr

— Our Hidden History (@OurHiddenHistry) September 2, 2017

A portion of the withdrawn troops are expected to move to other NATO states such as Belgium and Italy, while others are expected to return to bases in the United States.