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Via Off-Guardian.org,

Despite the concise, well-intentioned and unavoidably ubiquitous nature of our previous Message, it seems some are still withholding their consent for necessary change.

Though all our Responsible Media Outlets are doing their duty, it appears some members of the public do not yet understand the reality of our situation. More distressing are the efforts of a Criminal Minority to misrepresent Policy, subvert The Message and engage in dangerous questions.

We hope the following collection – once again compiled by the good citizens at the Consent Factory – makes the nature of this new reality quite clear to all those who aren’t yet aware their lives will never be the same.

Remember, resisting the new normal will endanger your life.

One area of concern is that the powers detailed under the bill, as published, remain in force for two years … among the most draconian possible powers is for police, public health and immigration officers to detain people suspected of having Covid-19.”

UK’s emergency coronavirus bill ‘will put vulnerable at risk’, The Guardian (23rd March 2020)

People who intentionally spread the coronavirus could face criminal charges under federal terrorism laws, the Justice Department’s No. 2 official said Tuesday […] “Threats or attempts to use COVID-19 as a weapon against Americans will not be tolerated.””

Those who intentionally spread coronavirus could be charged as terrorists, Politico, (24th March 2020)

A police force has defended using a drone camera to shame people into not driving into a national park during the lockdown, while another force said it was introducing roadblocks to stop drivers heading to tourist hotspots.”

UK police use drones and roadblocks to enforce lockdown, The Guardian, (26th March 2020)

Humberside Police has created an online reporting portal where people can send details of those not following social distancing rules.”

Humberside police creates online report portal for people not social distancing, ITV news (26th March 2020)

An Austin, Texas based technology company is launching ‘artificially intelligent thermal cameras’ that it claims will be able to detect fevers in people, and in turn send an alert that they may be carrying the coronavirus.”

Surveillance Company Says It’s Deploying ‘Coronavirus-Detecting’ Cameras in US, VICE, (18th March 2020)

As the jogger struggled with police, screaming for help, she was filmed by residents who had absolutely zero sympathy for her plight. ‘What’s not fair is that you go out running, you bloody idiot!’, shouted the woman apparently filming the encounter.”

Coronavirus lockdown: Jogger resists arrest in Spain and is abused by onlookers, AS.com, (21st March 2020)

Gordon Brown has urged world leaders to create a temporary form of global government to tackle the Covid-19 pandemic … involving world leaders, health experts and international organisations that would have executive powers to coordinate the response.”

Gordon Brown calls for global government to tackle coronavirus, The Guardian, (26th March 2020)

South African police enforcing a coronavirus lockdown have fired rubber bullets towards hundreds of shoppers queueing outside a supermarket in Johannesburg … the police used whips to get the shoppers to observe social distancing rules.”

South African police fire rubber bullets at shoppers amid lockdown, The Guardian, (28th March 2020)

President Trump said Saturday he may announce later in the day a federally mandated quarantine on the New York metro region, placing “enforceable” travel restrictions on people planning to leave the New York tri-state area because of the coronavirus.”

U.S. coronavirus-related deaths double in two days, The Washington Post, (March 28th 2020)

Rhode Island police began stopping cars with New York plates Friday. On Saturday, the National Guard will help them conduct house-to-house searches to find people who traveled from New York and demand 14 days of self-quarantine.”

Rhode Island Police to Hunt Down New Yorkers Seeking Refuge, Bloomberg, (27th March 2020)

A Police force has had a surge in calls from people reporting neighbours for “going out for a second run” and “gathering in their back gardens.” … “We are getting (dozens of) calls from people who say ‘I want you to come and arrest them’.

Coronavirus: Exercise rule-breakers spark surge in police calls, BBC News, (26th March 2020)

Police with batons and guns have moved in to protect supermarkets on the Italian island of Sicily after reports of looting by locals who could no longer afford food.”

‘We have to eat’: Sicilian police crackdown on locals looting supermarkets, The Local, (29th March 2020)

The National Guard will be deployed to enforce a mile-radius coronavirus “containment area” in overwhelmed New Rochelle … the National Guard will enforce the mandated closure of ‘large gathering areas’ — including schools and houses of worship.”

National Guard deployed to NY community with nation’s ‘largest cluster’ of coronavirus, New York Post, (10th March 2020)

New York City residents who break social distancing rules will be subject to fines up to $500, Mayor de Blasio said Sunday … he also announced that NYPD and MTA workers would do checks of subway cars and force riders off cars that are too crowded.”

New Yorkers who break social distancing rules will now face fines up to $500, Politico, 29th March 2020)

Anyone who leaves their house without a reasonable excuse could spend up to 6 months in prison and face an $11,000 fine under a directive [that] gives police sweeping power to enforce restrictions designed to limit the spread of coronavirus in Australia.”

Six months in jail, $11,000 fine for leaving home without a ‘reasonable excuse’, Sydney Morning Herald, (31st March 2020)

A coronavirus app that alerts people if they have recently been in contact with someone testing positive for the virus “could play a critical role” in limiting lockdowns … but the academics say no-one should be forced to enroll – at least initially.’

Coronavirus: UK considers virus-tracing app to ease lockdown, BBC News, (3st March 2020)

As coronavirus lockdowns have been expanded globally, police across the world have been given licence to control behaviour in a way that would normally be extreme even for an authoritarian state.”

Teargas, beatings and bleach: the most extreme Covid-19 lockdown controls around the world, The Guardian, (1st April 2020)

It is likely that we are not heading towards a general deconfinement in one go and for everyone,” Prime Minister Philippe told parliament … the interior minister noted 359,000 fines for violating the lockdown had been issued since lockdown began.”

French PM warns lockdown will not be lifted ‘in one go’, France24, (1st April 2020)

Philippine President Rodrigo Duterte has warned he would order the country’s police and military to shoot dead anyone “who creates trouble” during a month-long lockdown of the island of Luzon enforced to halt the spread of the coronavirus.’

‘Shoot them dead’: Duterte warns against violating lockdown, Al Jazeera, (2nd April 2020)

French interior minister Christophe Castaner warned that “roadblocks would be set up on major highways and axes and extra police, gendarmes or soldiers dispatched to train stations and airports to verify the documents of anyone stopped out and about.”‘

Confirmed cases pass 1 million – as it happened, The Guardian, (2nd April 2020)

Around the world, police forces are testing how far to go in punishing ordinary behavior.”

How Far Should Police Go in Enforcing Coronavirus Lockdowns?, New York Times (2nd April 2020)

Western governments aiming to relax restrictions on movement are turning to unprecedented surveillance to track people infected with the new coronavirus and identify those with whom they have been in contact.”

U.S. and Europe Turn to Phone-Tracking Strategies to Slow Spread of Coronavirus, Wall Street Journal, (3rd April 2020)

If a person becomes infected, the app will automatically send a push notification to anyone they have crossed paths with in the past two weeks, to warn them of the risk of infection.”

Privacy-mad Germany turns to app to track coronavirus spread, The Local, (2nd April 2020)

Google will use its mammoth collection of mobile location data to measure whether people across the globe are following government directives …”

Google wielding its vast troves of phone-tracking data in virus fight, Politico, (4th April 2020)

A 70-year-old township man was arrested twice on Saturday after police alleged he tried to enter two different Wawa convenience stores without a mask and became belligerent … he was charged with second-degree terroristic threats during an emergency.”

Coronavirus NJ: Unmasked Toms River man, 70, arrested twice in one day at Wawa stores, app.com, (13th April 2020)

Residents in Riverside County, CA, are now required to wear face coverings and could face a fine of $1,000 per violation per day if the mandate is ignored. ‘This is a valid order and enforceable by fine, imprisonment or both,’ said Sheriff Chad Bianco.”

CALIFORNIA COUNTY FINING RESIDENTS $1,000 FOR NOT WEARING FACE MASKS IN PUBLIC, Newsweek, (7th April 2020)

A family claimed a 500-mile round Lake District trip was acceptable if they wore masks and gloves, police said. The family were criticised as “absolute idiots” and called “clowns” after the force posted about it on Twitter.’

Coronavirus: Police stop family on 500-mile Lake District trip, BBC News, (14th April 2020)

A woman in Victoria says she was left feeling “heartbroken” and like a criminal after uniformed police officers carrying weapons interrupted her father’s funeral over the Easter long weekend to enforce social distancing rules.’

‘Totally disrespectful’: police interrupt funeral while enforcing social distancing rules over Easter weekend, The Guardian, (13th April 2020)

The coronavirus pandemic has led to an unprecedented global surge in digital surveillance, researchers and privacy advocates around the world have said, with billions of people facing enhanced monitoring that may prove difficult to roll back.’

Growth in surveillance may be hard to scale back after pandemic, experts say, The Guardian, (14th April 2020)

Protesters rallied to reopen North Carolina … at least one was arrested. “You are in violation of the executive order,” said police. “You are posing a risk to public health. If you do not disperse, you will be taken and processed at Wake County jail.”

Protesters rally for NC to reopen. One woman arrested for violating governor’s order., New Observer, (14th April 2020)

Officers have become public health police, breaking up crowds at stores … the department has mobilized the Citywide All-Out Task Force, which is usually assembled to flood high-crime areas and other assignments.”

New Role for New York Police: Breaking Up Crowds at Trader Joe’s, New York Times, (14th April 2020)

A South Australian couple was hit with a hefty fine from cops for nonessential travel amid the pandemic after the pair posted vacation snaps from 2019 on Facebook … the couple was warned that if they ‘posted any more photos,’ they would “be arrested.”

Couple mistakenly fined for posting old vacation photos during coronavirus lockdown, New York Post, (14th April 2020)

Attorney Beate Bahner challenged Germany’s coronavirus regulations in the Constitutional Court and failed. Now she has been taken to a psychiatric facility.”

Coronavirus: Anwältin Beate Bahner will gegen Verordnung klagen – und landet selbst vor Gericht, Heidelberg24.com, (24th April 2020)

Ms Bahner submitted a 36-page urgent motion to the Constitutional Court regarding the unlawfulness of all 16 German federal states’ Coronavirus measures … [her] interview for “incitement to commit criminal acts” is scheduled for Wednesday 15 April.

Coronavirus lockdown: German lawyer detained for opposition, UK Column, (14th April 2020)

Police in Berlin broke up a large birthday gathering in the early hours of Monday … a 16-year-old girl was celebrating with 31 other people … all 32 party attendees [are] being investigated for criminal offenses.”

Berlin police bust 16th birthday party amid coronavirus lockdown, DW, (13th April 2020)

Extraordinary times require extraordinary measures and it is about protecting the public.”

Federal government open to new law to fight pandemic misinformation, CBC.com, 15th April 2020)

The UK’s health secretary, Matt Hancock, has suggested “something like an immunity certificate or a wristband” in the future.’

Coronavirus: Could biometric ID cards offer the UK a lockdown exit strategy?, Sky News, (10th April 2020)

Attempting to issue some kind of immunity certificate to millions of Americans would be unprecedented.”

What are ‘immunity passports’ and could they help us end the coronavirus lockdown?, The Hill, (10th April 2020)

The COVID-19 Credentials Initiative (CCI) is working on a digital certificate, [that] lets individuals prove (and request proof from others) they’ve recovered from the novel coronavirus or have received a vaccination, once one is available.”

COVID-19 ‘Immunity Passport’ Unites 60 Firms on Self-Sovereign ID Project, coindesk.com, (13th April 2020)

[T]he drones use computer vision systems to monitor temperatures and heart and respiratory rates of people from above and single out people sneezing or coughing … Draganfly also sees a possible security use around borders or critical infrastructure.”

‘Pandemic drones’ could single people out in a crowd for coughing, sneezing, or running a temperature, Business Insider, (11th April 2020)

Mobile phone tracking software could be compulsory if not enough Australians voluntarily download the application to help in coronavirus case tracing.”

Coronavirus: Mobile tracking app could be compulsory, Morrison says, 9 News, (17th April 2020)

The three-page document, entitled “what constitutes a reasonable excuse to leave the place where you live”, is designed to help police enforce the emergency restrictions that came into effect three weeks ago and are set to be extended.’

Coronavirus lockdown: Police guidelines give ‘reasonable excuses’ to go out, BBC News, (16th April 2020)

[T]here is a danger that these new, often highly invasive, measures will become the norm around the world …”

Compulsory selfies and contact-tracing: Authorities everywhere are using smartphones to track the coronavirus, Business Insider (14th April 2020)

Norway unveiled its Smittestop app, which will notify users if they have been less than 2 metres from an infected person for more than 15 minutes. “To get back to a more normal life … we all have to make an effort and use this app,” PM Solberg said. […] Developers in several European countries are working on similar apps to inform people quickly when they have been in contact with someone who is infected with the virus, as part of a pan-European privacy-preserving proximity tracing (Pepp-PT) initiative.

Coronavirus ‘under control’ in Germany, as some countries plan to relax lockdowns, The Guardian, (17th April 2020)

Officials say they routinely saw people visit the skatepark, even children accompanied by their parents, according to the San Clemente Times … city officials followed in the footsteps of other cities and filled the skatepark with 37 tons of sand.”

Coronavirus: San Clemente Fills Skatepark With 37 Tons Of Sand After Skaters Ignore ‘No Trespassing’ Signs, CBS Local, (17th April 2020)

In one [Michigan] county, anyone deemed a ‘carrier and health threat’ can be detained by police and taken to an Involuntary Isolation Facility.”

Michigan judge authorizes arresting people on suspicion of COVID-19 illness, Life Site News, (16th April 2020)

Technology firms are processing confidential UK patient information in a data-mining operation […] Palantir, founded by rightwing billionaire Peter Thiel, is working with Faculty, a UK artificial intelligence startup, to consolidate government databases.”

UK government using confidential patient data in coronavirus response, The Guardian, (12th April 2020)

‘Imagine an America divided into two classes […] “It will be a frightening schism,” a World Health Organization special envoy on Covid-19 predicted. “Those with antibodies will be able to travel and work, and the rest will be discriminated against.”’

The Coronavirus in America: The Year Ahead, The New York Times, 18th April 2020

Riots have broken out in Paris amid anger over police ‘heavy-handed’ treatment of ethnic minorities during the coronavirus lockdown.”

Riots break out in Paris amid anger at police ‘heavy-handed’ treatment of minorities during lockdown, The Daily Mail, (20th April 2020)

… law enforcers have killed 18 people in Nigeria since lockdowns began on 30 March. Coronavirus has killed 12 people, according to health ministry data.”

Coronavirus: Security forces kill more Nigerians than Covid-19, BBC News, (16th April 2020)

We call upon the degenerate few to cease endangering our new social order.

REMEMBER TO REPORT ANYONE DISPERSING ON ENDORSING MISINFORMATION OR CRITICISING THE STATE

The world is different now. Unfettered expression is a luxury of the pre-Covid society. Doubt is the weapon of the virus spreader.

Pro-Infection propaganda will not be tolerated.

Have a nice day.

While any other time the plunge of WTI prices into negative territory last Monday would have been the story of the year, the fact that the financial press has already moved on and is focusing on whatever 100-sigma event du jour has hit, merely shows just how insane 2020 has been as a decade of central planning slowly comes unglued thanks to a black swan bat trigger that has shut down the global economy and cash flows while keeping stocks just shy of all time highs.

However, before we relegate the historic oil move that sent the May WTI future as low as -$40 on Monday to the dustbin of history, there are some critical considerations that have to be considered, namely what are the implications of much lower oil prices this year for other asset classes? To address this question we will revisit some prior analyses on the shifts in flows and incomes resulting from oil price changes, especially those looking at the consequences stemming from the collapse of petrodollar mercantilism in 2016 when oil exporting nations saw their oil-linked income crater.

By itself the decline in oil prices is generating a big shift in flows and incomes across the world, albeit – at least for now – smaller than the previous big shift seen between 2014 and 2016. According to JPMorgan calculations, oil consumers had spent around $2.2tr in 2019 on crude and related products with an average oil price of $64 per barrel, and in 2020 they are likely to spend less than half of that, i.e. around $1tr with an average oil price of $34 and an assumed big reduction in demand.

This represents a hit to oil producing countries’ incomes of $1.1tr, or 1.4% of global GDP, from the combined effects of an income transfer from the oil price declines and a hit to oil demand. In contrast, in 2014, oil consumers had spent $3.4tr on crude and related products with an average oil price of $100 per barrel, and in 2016 they had spent less than half of that, i.e. $1.6tr with an average oil price of $45 per barrel during 2016. In other words there was a bigger $1.8tr or 2.2% of global GDP income transfer between oil consumers and oil producers between 2014 and 2016.

As we discussed extensively in 2016, the massive and abrupt loss of income for oil producers during the 2015/2016 OPEC crisis had an profound impact on their behavior, especially on their saving and spending. As JPM’s Nick Panigirtzoglou writes, oil exporting countries, i.e. the countries which on net export oil (Middle East, Norway, Russia, African and LatAm), had received $1.6tr from their oil exports in 2014 and saw their oil revenue being more than halved to $770bn in 2016.

These oil exporters’ revenues are typically recycled via two channels: via imports of goods and services from the rest of the world and via accumulation of financial assets mostly through SWFs and FX reserves. And since all of these transactions are mediated via the US Dollar, the resulting cycle has been known as the petrodollar mechanism (or petrodollar mercantilism), one which helped cement the dollar’s role as the global reserve currency.

Some more stats via JPMorgan: In 2014, around 84% or $1.34tr of the $1.6tr oil revenue was recycled via imports and the remaining 16% or $260bn was recycled via SWFs and FX reserves, mostly SWFs. In 2016, 117% or $900bn of the $770bn of  oil exporters’ revenues was recycled via imports of goods and services from the rest of the world, $130bn of which was funded by SWF and FX reserve decumulation.

So, between 2014 and 2016, there was not only a substantial $440bn decline in spending of goods and services by oil exporters, but also a similar decline in SWF and FX reserve accumulation. The implications for SWF/FX reserve manager asset purchases were dramatic: previous equity and bond purchases via the SWF and FX reserve managers’ vehicles of oil exporters during 2014 turned into outright sales during 2015 and 2016 as shown in Figure 4.

Well, get ready for round 2.

In 2019 oil exporting countries received around $1.1tr from their oil exports and are likely to see their revenue halved this year. Their imports of goods and services from the rest of the world would certainly decline also, but by a lot less given their already low level after severe declines during 2015 and 2016.

As a result, JPMorgan now expects that these oil exporting countries would have to sell almost $300bn of SWFs and FX reserves, or issue significant amounts of debt to fund a shortfall in oil revenues, this year to prevent their imports from falling below the $800bn level. This implies significant selling of both bonds and equities as shown in the chart above for various scenarios/assumptions about the average oil price for this year.

Said otherwise, not only will stock buybacks tumble by as much as 50% (according to Goldman and JPM estimates), but there will likely be roughly $200 billion in forced equity selling this year.

As Panigirtzoglou explains further, the impact from oil income shifts should also be felt in oil companies’ financial and capital investment. Consider that oil companies had spent close to $600bn on capital equipment in 2014, falling to $410bn in 2015 and $280bn in 2016, and then recovering to around $300bn in 2017/2018 and $330bn in 2019. JPM projects at least 20% decline in 2020 to $260bn or lower, a number that is even more aggressive than a similar forecast from Goldman Sachs, which as we noted last week, expect a roughly expects an $200BN drop in capex and a $850BN plunge in overall corporate cash spending.

As a tangent, it is easier to cut share buybacks as financial investment than capital investment. The Oil and Gas industry had spent $57bn on share buybacks in 2013, but since then buybacks were muted, averaging below $30bn per year in the years after up until 2017. The previous long retrenchment in oil companies share buybacks started reversing in 2018 by share buybacks rising to around $74bn before moderating to $65bn in 2019. It is hardly surprising that JPMorgan projects that share buybacks by oil companies will evaporate this year, thus implying a drag of around $65bn for equity markets relative to last year.

What about the flows emanating from oil consumers (i.e., the benefit from lower oil prices)?  On previous occasions JPM had noted that the previous $1.8tr windfall seen between 2014 and 2016 was most likely equally split between the residential sector, the industrial sector and the transportation sector. These economic agents had spent a portion of their total $1.1tr oil expenditure windfall eventually but with a lag, meaning that most of that windfall was saved during 2015/2016. These savings most likely took the form of bank deposits which eventually supported bond markets via the banking system deploying these excess deposits into bond markets. As a result, the oil income windfall to oil consuming industries had likely created a bullish flow into fixed income during 2015 and 2016, bigger in size than the fixed income flows resulting from the decumulation of SWF/FX reserves of oil exporting countries during these two years.

However, according to the JPM strategist, these positive bond flow dynamics emanating from oil consumers are unlikely to be repeated in the current conjuncture given the severe cash flow disruption and declines in incomes and with the  transportation sector in crisis. But even if these positive bond flow dynamics were to materialize, they would have been less significant relative to 2015/2016 given the current backdrop of unlimited central bank QE.

In summary, the decline in oil prices creates a negative flow for equity markets this year via SWF decumulation and reduced share buybacks by oil companies. That said, the material negative equity flow impulse associated with the latest unwind of petrodollar recycling, is in JPM’s view of secondary importance and is outweighed in size by other institutional or retail investor equity flows, which according to the bank are likely to increase by more than $3 trillion during the last three quarters of 2020 vs. the first quarter. Here, we disagree violently with JPM as the last thing the vast majority of the population – and even the wealthiest 0.1% – will care about is putting their money in the market when they have no idea if they will have a job or what the future holds. Needless to say, if JPMorgan is wrong and this $3 trillion in incremental purchases from institutional and retail sources fails to materialize, the bank’s forecast for new all time highs in early 2021 will be a dream that is as clogged as any pipe heading into Cushing.

Via The Strategic Culture Foundation,

The Covid-19 pandemic is unleashing obscene bailouts of Western industries and companies, as well as lifelines for billionaire business magnates.

It is grotesque that millions of workers are being laid off by corporations which are in turn receiving taxpayer funds. Many of these corporations have stashed trillions of dollars away in tax havens and have contributed zero to the public treasury. Yet they are being bailed out due to shutdowns in the economy over the Covid-19 crisis.

Why aren’t the banks and corporations being forced by governments to pay for their workers on sick leave or in lockdown?

It’s because the governments are bought and paid-for servants of the top one per cent. Some political leaders are the embodiment of the one per cent, like Donald Trump and senior members of the U.S. Congress.

The biggest orgy of funny money is seen in the U.S. where the Trump administration and Congress have approved the printing of trillions of dollars to prop up corporations and banks. Meanwhile crumbs are being thrown at millions of workers and their families.

In just five weeks, unemployment has hit a staggering 26.4 million people in the U.S. – and that’s the official figure. The real level is doubtless much higher. It is reported that the job losses have wiped out all the employment gains made over the past decade since the last financial crisis in 2008. As with the present crisis, the U.S. government arranged trillion-dollar bailouts for banks and industries back in 2008-2009. It didn’t last long until the next binge.

In truth is this is a familiar pattern over the past century where the economy is continually salvaged from ruin by the government at the expense of ordinary workers, small businesses and taxpayers.

The recurring rescue is proof that the system of private capital and supposed free markets is a myth.

The system typically privatizes profit for an elite while socializing the losses for the mass of people. It has always been a version of “socialism for the rich”.

In the distant past the salvaging of broken-down capitalism was at least conducted with a certain degree of democratization and social progress. In the New Deal era of Roosevelt in the 1930s at least government intervention went a long way to restoring workers and their rights, despite bitter opposition from capitalists. Over recent decades, however, the rescuing of capitalism has seen an ever-increasing emphasis on plying money and loans to corporations and investors while ordinary workers are neglected. This process of embezzlement reached new heights in the 2008 crash. Now under Trump the larceny has become legendary. It should be underscored though that the corruption has bipartisan endorsement from Republicans and Democrats. They are really one party beholden to big business.

As Eric Zuesse commented in an-depth analysis published in our journal this week, the Covid-19 “top-down bailout” in the U.S. will result in even more social inequality and ultimately more dysfunction in the American economy going forward.

“The outcome will therefore be economic collapse, and perhaps even revolution,” notes Zuesse.

It is indisputable that capitalism is a failed system both in the U.S. and Europe. The Covid-19 pandemic and its disastrous social impact of sickness and deaths shows that such an economy cannot organize societies based on satisfying human needs. Instead, it functions to continually enrich the already wealthy while creating ever-greater numbers of impoverished and deprived. This chronic polarization of wealth has been pointed out by many critics of capitalism, including Karl Marx, and more contemporaneously by progressive economists like Richard Wolff and Thomas Picketty.

It is fair to describe corporate capitalism (or socialism for the rich) as a pathology which produces many other pathologies, including deprivation, crime, insecurity, ecological damage, militarism, imperialism and ultimately war.

Ironically, a virus is exposing the pathological system. And it is, inevitably, forcing a cure to arise.

It’s time to abolish the parasitical system and implement something more civilized, effective, sustainable and democratic. That is the task of people organized to fight for their interests. The delusion of bailing out a failed and sick system must be shaken off once and for all.

Last week we identified a potential rent strike brewing among the working poor in New York City. Many of these folks are planning to skip out on May 01’s rent payment to their landlords:

“With so many New Yorkers unable to pay rent for the foreseeable future, the current crisis is unsustainable and demands action,” Housing Justice for All and New York Communities for Change said in a recent statement. “Many tenants have no ability to pay rent, and landlords can’t collect rent from tenants who are broke.”

Lena Melendez, a rent strike activist, said landlords “have gotten taken care of” by the government, suggesting that poor people who are quarantined in their apartments or homes do not need to pay rent because they have no money.

And of course, the virus pandemic, triggering mass quarantines and economic depression, has exposed America’s second housing crisis. We recently noted that as many as 30% of Americans with home loans – about 15 million households – could stop paying if lockdowns continued through summer. 

What’s more important at the moment is that landlords expecting May’s rent next week could be for a rude awakening. Mostly because “rent strike” searches across the internet have exploded in April. 

Many of the searches surged in Oregon, New York, Washington, Colorado, and Vermont. 

When it comes to subregions, Monterey-Salinas, California; Boise, Idaho; Lansing, Michigan; Savannah, Georgia; and Lexington, Kentucky, saw increased “rent strike” searches over the month. 

And so it begins? Rent strikes across America? Or maybe at least starting in New York City first? 

Authored by George Gilder via The American Institute for Economic Research,

With the latest reports of plummeting death rates from all causes, this crisis is over. The pandemic of doom erupted as a panic of pols and is now a comedy of Mash-minded med admins and stooges, covering their ifs, ands, and butts with ever more morbid and distorted statistics.

The crisis now will hit the politicians and political Doctor Faucis who gullibly accepted and trumpeted what statistician William Briggs calls “the most colossal and costly blown forecast of all time.”

An egregious statistical horror story of millions of projected deaths, suffused with incense and lugubrious accents from Imperial College of London to Harvard School of Public Health, prompted the pols to impose a vandalistic lockdown on the economy. It would have been an outrage even if the assumptions were not wildly astronomically wrong.

Flattening the curve was always a fool’s errand that widened the damage.

President Trump had better take notice. He will soon own this gigantic botch of policy and leadership. No one will notice that his opponents urged even more panicky blunders.

The latest figures on overall death rates from all causes show no increase at all. Deaths are lower than in 2019, 2018, 2017 and 2015, slightly higher than in 2016. Any upward bias is imparted by population growth.

Now writing a book on the crisis with bestselling author Jay Richards, Briggs concludes:

“Since pneumonia deaths are up, yet all deaths are down, it must mean people are being recorded as dying from other things at smaller rates than usual.”

Deaths from other causes are simply being ascribed to the coronavirus.

As usual every year, deaths began trending downward in January. It’s an annual pattern. Look it up. Since the lockdown began in mid-March, the politicians cannot claim that their policies had anything to do with the declining death rate.

A global study published in Israel by Professor Isaac Ben-Israel, chairman of the Israeli Space Agency and Council on Research and Development, shows that “the spread of the coronavirus declines to almost zero after 70 days—no matter where it strikes, and no matter what measures governments impose to try to thwart it.”

In fact, by impeding herd immunity, particularly among students and other non-susceptible young people, the lockdown in the U.S. has prolonged and exacerbated the medical problem. As Briggs concludes, “People need to get out into virus-killing sunshine and germicidal air.”

This flu like all previous viral flues will give way only to herd immunity, whether through natural propagation of an extremely infectious pathogen, or through the success of one of the hundreds of vaccine projects.

No evidence indicates that this flu was exceptionally dangerous. On March 20th, the French published a major controlled study that shows no excess mortality at all from coronavirus compared to other flues. SARS and Mers were both much more lethal and did not occasion what Briggs’ reader “Uncle Dave” described as “taking a hammer and sickle to the economy.”

We now know that the crisis was a comedy of errors.

The Chinese let it get going in the raw bat markets of Wuhan. But together with the Koreans, the Chinese dithered and demurred and allowed six weeks of rampant propagation to create herd immunity before they began locking everyone up.

Therefore, the Chinese and Koreans were among the first to recover.

The Italians scared everybody with their haphazard health system and smoking fogies.

Crammed together in subways and tenements, the New Yorkers registered a brief blip of extreme cases.

Intubations and ventilators turned out not to help (80 percent died).

This sowed fear and frustration among medical personnel slow to see that the problem was impaired hemogloblin in the blood rather than lung damage.

The New York media piled on with panic, with bogus reports of rising deaths. “Coronavirus deaths” soared by assuming that people dying with the virus were dying from it and then by ascribing to the coronavirus other deaths among people with symptoms of pulmonary distress, even without being tested.

Now jacking up the case rate will be further pointless testing. As Briggs points out,

“Fauci is calling for ‘tripling’ of testing, which can only boost these dailies [case totals]. And make it seem like there’s a genuine increase occurring. Oh my! The daily reported cases are up! It must mean the disease is spreading!

“No. It could also mean, and probably does given all the other evidence we now have from sampling, that the disease was already there, and we just now have measured it.”

The death rate rises with further reclassification of pneumonia and other pulmonary deaths. When we reach herd immunity, and nearly everyone has the antigen, nearly all deaths can be chalked up to COVID19. Hey, it will be Quod Erat Demonstrandum for the panic mongers.

In a fascinating open letter to German Prime Minister Angela Merkel, epidemiologist Mihai Grigoriu concludes that with the French study, corroborated by findings from a Stanford antibody seroprevalence study in Santa Clara county, “the case for extreme measures collapses like a house of cards.” Grigoriu says that since the virus has already spread widely in the general population, efforts to stop further spread are both futile and destructive.

So let’s stop pretending that our policies have been rational and need to be phased out, as if they once had a purpose. They should be reversed summarily and acknowledged to be a mistake, perpetrated by statisticians with erroneous computer models.

Perhaps then we can learn from this experience with the flaws of expertise not to shut down the economy again for the totally bogus “crisis” of climate change.

Across the US, 16 states are moving to reopen more nonessential businesses as thousands protest around the country demanding that the country be reopened now, even as governors like Andrew Cuomo advise that a recent slowdown in deaths and diagnoses suggests the lockdown is working well.

Of these, Georgia has emerged as the most aggressive, with Gov. Brian Kemp allowing the first ‘nonessential’ businesses – a group including salons, bowling allies, tattoo parlors and gyms – to reopen.  Even President Trump is now denying that he supported Kemp’s plan, a disavowal that was reportedly news to Kemp.

Mayors from the across state have warned residents that it’s too soon to return to some semblance of normal, and have urged businesses to remain close, and people to remain indoors. In many areas, as the Washington Post reported Saturday, businesses appear to be following this advice.

And even the businesses that have opened aren’t operating at anything approaching full capacity, employees don masks and take other steps to ensure social distancing is maintained.

Atlanta Mayor Keisha Lance Bottoms appeared on CNN to clear up the “confusion” that she was was putting her voters’ lives at risk: Instead, she said that businesses and individuals should ignore Kemp’s order, adding that “nothing has changed.” 

She declared that the 37% increase in Georgia’s mortality rate over the last week is a clear indication that the state ‘isn’t ready’ to reopen.

“We are not on the other side of this,” Bottoms said. “It’s like we are in a tunnel, and rather than walking straight toward the light, we’re spinning around in circles. We’ll never get to the light if we don’t continue to do what we’ve done thus far, and that’s to separate ourselves socially from one another.”

In Waycross, the county seat of Ware County, one salon owner told WaPo that the only people working on Friday and Saturday were those who absolutely needed to.

Only a handful of the 18 hairdressers who work at Salon Cheveux came in on Friday. They donned masks, spaced their workstations apart and screened inbound customers by phone with the dedication of hospital admission nurses: Any fever recently? Or contact with someone sick? Can you wear a mask?

It was the first day businesses reopened in Georgia, which is moving faster than any other state to ease restrictions amid the novel coronavirus pandemic. As a result, Georgia has become a flash point in the battle over whether it is time to remove the shutdown orders that have kept much of the country indoors.

Jamie McQuaig glanced at the two cosmetologists, clad in masks, coloring customers’ hair and wondered whether coming back to work was the right decision for her family, her salon or her state.

“I do feel like it’s too soon, but it will probably always feel like it’s too soon because we’re all scared of the virus,” she said. The nation’s response to the pandemic has left many in her shop with difficult choices. “The ones that are going back to work right now are the ones that have got to. They’ve got to feed their children. They’ve got to pay their mortgage.”

Local officials in one particularly hard hit county have been begging Kemp to carve out an exemption for them, but he has so far refused.

If he doesn’t, those ‘hot spots’ could swiftly reinfect the entire state. In Albany, Georgia, a small city with an extraordinarily high number of cases per capita, the mayor, Bo Dorough said he continues to warn residents to stay inside and practice social distancing. 

The worst outbreak in the state is still raging in Dougherty County, where Albany is located. The county has a population of about 88,000, and the Georgia Department of Health has reported 1,465 confirmed cases of the virus and 108 deaths as of Friday evening. That means more than 1% of the county’s population is currently infected.

For a time, Dougherty County had the unwelcome distinction of having one of the highest number of per capita cases in the country.

The virus ripped across the county after two widely attended funerals. One attendee, a 67-year-old man, who was at both funerals, later tested positive, setting off what’s called the “domino effect,” according to CNN.

Those Georgians who are returning to work have apparently accepted that they’re guinea pigs in a great national experiment with incredibly high stakes.

After weeks of unemployment, often with uneven government help, some said they were happy to be earning paychecks but worry about the ultimate costs of abandoning isolation too soon, according to the Washington Post.

But they won’t be the only ones for long. Tennessee’s governor has said he will allow many businesses to reopen after his shelter-in-place order expires next week. The governor of South Carolina has already said he will allow some retail stores to reopen this week. People have been walking on the beaches near Jacksonville, Fla., for a week, and on Friday, Iowa and Mississippi became the latest states to announce plans to reopen.

As of Saturday, there were nearly 4,500 confirmed in Iowa, and yet, Gov. Kim Reynolds has said she will consider reopening more businesses, while reversing a ban on hospitals performing non-essential surgeries. And in Mississippi, which has more than 5,400 confirmed Covid-19 cases, Gov. Tate Reeves has traded the4 state’s lockdown order for a “safer-at-home” order, which will remain in effect for two weeks, beginning Monday.

Across Georgia, more than 22,000 people have tested positive and nearly 900 have died. The state has tested < 1% of its residents.

Trump was correct when he said on Thursday that Georgia hasn’t met the benchmarks released by the White House. They include a downward trajectory of confirmed cases over 14 days.

Here’s a map of the US breaking down what various states are planning, courtesy of the NYT:

The big question looking ahead: Will Georgia’s decision make the state look like Sweden, or Wuhan?

Because it’s extremely likely that it’ll be one, or the other.

Authored by Ryan McMaken via The Mises Institute,

Imagine what it is like right now to plan for the future as a business owner. The owner doesn’t know if he or she will even be allowed to be open for business two weeks from now, or a month from now.

Indeed, politicians and their unelected (and unaccountable) health advisors keep insisting that they might elect to close down businesses or impose new restrictions on large portions of the economy at any time.

The uncertainly associated with all this is immense. Consider some examples: thanks to moratoria on evictions in many cities, renters who can’t pay rent — thanks in part to government-forced lockdowns — can stay in their rental units indefinitely. Landlords have no idea when they will next be able to actually collect revenues again from paying customers. Meanwhile, “elective” healthcare services like eye care and dental care have been deemed “unessential” by bureaucrats and governors in many states. These offices will be closed and collecting little-to-no revenue. Restaurants, of course, aren’t permitted to do business beyond take-out service in places with lockdowns. (Although these restaurants still have to pay rent for their dining rooms.)

Even beyond the short term, business owners have no way to plan. If a business owner is allowed to actually conduct business during the summertime this year, it may still be that politicians will later elect to shut businesses whenever it is decided the risk of spreading viruses demands another “shutdown.” We’re even told this could go on for years.

One would have to be impressively naive and deeply ignorant about how businesses work to think that commerce, investment, and entrepreneurship would just continue as usual under these conditions. In reality,  the threat of a government-mandated lockdown hanging over the heads of countless business owners and entrepreneurs will mean there will be far less willingness and ability to invest in businesses, offer products and services, or employ people.

The Problem with Regime Uncertainty

This problem has a name: “regime uncertainty.” Economic historian Robert Higgs defines it as “a pervasive lack of confidence among investors in their ability to foresee the extent to which future government actions will alter their private-property rights.”

Broadly understood, of course, “investing” isn’t just a matter of people putting money in mutual funds or buying municipal bonds. “Investors” are people who buy and manage apartment buildings. Investors include doctors and dentists who invest enormous amounts of time and money into a private healthcare office. Investors are people who put their life savings into starting a new restaurant or tavern.

As Higgs has shown, when the legal environment and property rights can be so radically altered so quickly, economic growth slows and economic depressions are drawn out and made worse.

Specifically, Higgs has illustrated that regime uncertainty was a significant factor in making the Great Depression such a long and unpleasant affair. The Roosevelt administration’s numerous and enormous changes to the legal regime — through new taxes, regulations, and labor laws — made the Depression far worse than it needed to be. Higgs explains how thanks to a multitude of state interventions during the Depression:

the Roosevelt administration “abruptly and dramatically altered the institutional framework within which private business decisions were made, not just once but several times” … with the result that regime uncertainty was heightened and recovery substantially retarded.

As one investor at the time observed:

Uncertainty rules the tax situation, the labor situation, the monetary situation, and practically every legal condition under which industry must operate. Are taxes to go higher, lower or stay where they are? We don’t know. Is labor to be union or nonunion?… Are we to have inflation or deflation, more government spending or less?… Are new restrictions to be placed on capital, new limits on profits?… It is impossible to even guess at the answers.

The result was “the New Deal prolonged the Great Depression by creating an extraordinarily high degree of regime uncertainty in the minds of investors.”

The recovery was slowed, of course, because investing, building businesses, and engaging in innovation became far riskier and unpredictable thanks to the chances that governments might once again impose draconian new restrictions on businesses. This changed the calculus completely.

Regime Uncertainty vs. Regular Uncertainty

Admittedly, even in a laissez-faire policy regime, it is more difficult for investors to calculate risk and future conditions when consumers and employees become far more fearful about an outbreak of disease. But, as Brendan Brown notes, private firms are likely to adjust quickly to attempt to address the needs of consumers who may now demand less crowded rooms and more “precautions.” Uncertainty is always a problem for investors and entrepreneurs. But regime uncertainty is worse because it limits the ability of property owners to adapt. Regime uncertainty also tends to be done in a haphazard and arbitrary way across a multitude of markets. 

Consumers will still drive some owners out of business because consumers constantly change their demands and values.  On a whim, consumers may decide to spend their money elsewhere.  But in an unhampered market, businesses and investors can learn from watching others, plan for the future in their specific markets, and adjust accordingly. Unlike governments in the business of ruling by decree, investors and business owners seek to serve as wide a swath of the public as possible.

But this sort of flexibility is destroyed when governments impose lockdowns. There is no learning and no adjusting. Statewide lockdowns don’t take into account diversity in health, demographics, and market conditions.  Instead economic activity is halted in a one-size-fits-all fashion based on what politicians — not consumers, mind you — deem to be “essential.” Even worse, changes can be be quickly imposed by a small handful of policymakers without public debate or consultation. There is no time for businesses to adjust.

This is far worse than any ordinary market shock.

Wall Street vs. Main Street, Again

Ultimately, this process will also accelerate wealth inequality by contributing to the further financialization of the economy. Thanks to the maximization of the “too big to fail” narrative at the Fed and in Washington, the financial sector continues to grow as the safe go-to place for investment. Why invest in community businesses and small medical firms when it is much lower risk to invest in a bank or a financial firm that’s sure to be bailed out? The constant threat of forced shutdowns makes this risk assessment even more stark: non-financial firms can be shut down and destroyed at any time. But Wall Street will be bailed out.

Since the financial sector employs a relatively small number of people, this shutdown-bailout dichotomy means employment will suffer. It means the working class and the middle class will suffer. It means people with sizable Wall Street portfolios will benefit while Main Street businesses go bankrupt.

But even Wall Street will eventually suffer because an economy cannot survive on bailouts forever. At some point, people have to produce actual goods and services. This requires capital. It requires planning. It requires many things that arbitrary shutdowns make far more difficult to find.

Some people are intentionally hoarding toilet paper; others are stockpiling hand sanitizers and masks; and the glut of oil around world grows concerningly higher day after day. But, while stock markets rebound by the most ever (after their fastest collapse ever), there is (at least) one billionaire investor who is not buying it and instead is hoarding something else in readiness for what comes next… 

In an insightful (and unusual for mainstream business media) interview with Bloomberg TV, Carl Icahn isn’t buying stocks right now. He’s hoarding cash, shorting commercial real estate and preparing for COVID-19 to wreak more havoc.

This is a time to be “extremely careful,” Icahn said in an interview Friday on Bloomberg Television.

The 84-year-old’s reasoning is simple – and terrifying for the average commission-raker and asset-gatherer – having traded through every stock-market crash since the Great Depression, the future is just too unpredictable for the S&P 500 to be trading at almost 20 times next 12m earnings estimates…

“You cannot really justify that multiple,” Icahn said.

“Short-term, you may have some big downdrafts.”

Source: Bloomberg

Unlike Boeing, IBM, and, the airlines, and cruise lines, the veteran investors hasn’t blown through his cash in recent years chasing dreams, he has instead been preparing and building cash positions – what he says he always keeps for “a stormy day.”

His thesis is straight forward – he disagrees with the market’s apparent belief that we will ‘return to normal’ sometime soon and everything that was will be again.

Having donated over $200 million to the medical school at Mount Sinai Hospital in New York, the 1980s corporate raider says he has been talking to “some of the smartest guys in this area” and formed an opinion of the virus that doesn’t leave him optimistic.

He’s concerned about recurrences of infection and believes the economy will reopen in “spurts.”

“It’s not like turning on a spigot,” he said.

However, there are opportunities amid the carnage as Icahn took advantage of the recent collapse in crude oil prices with a secondary trade, as Bloomberg details:

Because refiner CVR constantly needs oil to supply its two refineries, Icahn realized he could use it to profit from the frenzy. He said he instructed the Sugar Land, Texas-based company to make space in its storage tanks and put in orders for 1 million to 2 million barrels at negative prices he doesn’t expect ever to see again.

We made some money on it,” Icahn said in an interview Friday with Bloomberg Television.

“We did get a fair amount.”

You’ll never see that again in history,” Icahn said.

But, while that opportunistic position was quickly taken advantage of, Icahn’s largest position is a multibillion bet he initiated in mid-2019 against the CMBX 6, an index of commercial real estate mortgage-backed securities that should be very familiar to ZeroHedge readers:

Back in March 2017, a bearish trade emerged which quickly gained popularity on Wall Street, and promptly received the moniker “The Next Big Short.”

As we reported at the time, similar to the run-up to the housing debacle, a small number of bearish funds were positioning to profit from a “retail apocalypse” that could spur a wave of defaults. Their target: securities backed not by subprime mortgages, but by loans taken out by beleaguered mall and shopping center operators which had fallen victim to the Amazon juggernaut. And as bad news piled up for anchor chains like Macy’s and J.C. Penney, bearish bets against commercial mortgage-backed securities kept rising.

The trade was simple: shorting malls by going long default risk via CMBX 6 (BBB- or BB) or otherwise shorting the CMBS complex. For those who have not read our previous reports (here, here, here, here, here, here and here) on the second Big Short, here is a brief rundown via the Journal:

each side of the trade is speculating on the direction of an index, called CMBX 6, which tracks the value of 25 commercial-mortgage-backed securities, or CMBS. The index has grabbed investor attention because it has significant exposure to loans made in 2012 to malls that lately have been running into difficulties. Bulls profit when the index rises and shorts make money when it falls.

The various CMBX series are shown in the chart below, with the notorious CMBX 6 most notable for its substantial, 40% exposure to retail properties.

One of the firms that had put on the “Big Short 2” trade back in late 2016 was hedge fund Alder Hill Management – an outfit started by protégés of hedge-fund billionaire David Tepper – which ramped up wagers against the mall bonds. Alder Hill joined other traders which in early 2017 bought a net $985 million contracts that targeted the two riskiest types of CMBS.

“These malls are dying, and we see very limited prospect of a turnaround in performance,” said a January 2017 report from Alder Hill, which began shorting the securities.

“We expect 2017 to be a tipping point.”

Alas, Alder Hill was wrong, because while the deluge of retail bankruptcies…

… and mall vacancies accelerated since then, hitting an all time high in 2019…

…  not only was 2017 not a tipping point, but the trade failed to generate the kinds of desired mass defaults that the shorters were betting on, while the negative carry associated with the short hurt many of those who were hoping for quick riches.

One of them was investing legend Carl Icahn who as we reported last November, emerged as one of the big fans of the “Big Short 2“, although as even he found out, CMBX was a very painful short as it was not reflecting fundamentals, but merely the overall euphoria sweeping the market and record Fed bubble (very much like most other shorts in the past decade). The result was what we said four months ago was “tens if not hundreds of millions in losses so far” for the storied corporate raider.

That said, while Carl Icahn was far from shutting down his family office because one particular trade has gone against him, this trade put him on a collision course with two of the largest money managers, including Putnam Investments and AllianceBernstein, which for the past few years had a bullish view on malls and had taken the other side of the Big Short/CMBX trade, the WSJ reports. This face-off, in the words of Dan McNamara a principal at the NY-based MP Securitized Credit Partners, was “the biggest battle in the mortgage bond market today” adding that the showdown is the talk of this corner of the bond market, where more than $10 billion of potential profits are at stake on an obscure index.

However, as they say, good things come to those who wait, and are willing to shoulder big losses as they wait for a massive payoffs, and for the likes of Carl Icahn, McNamara and others who were short the CMBX, payday has just arrived.

Behold the CMBX as it stands now: 

That, in the parlance of our times, is what traders call a “jackpot.”

The epic crash in the CMBX 6 BBB (the junk-rated BB tranche has fallen 25% in the past fortnight) meant all those shorts who for years suffered the slings and stones of outrageous margin calls but held on to this “big short”, are about to get very rich (and in the case of Icahn, even richer) it has also means the pain is just starting for all those “superstar” funds on the other side of the trade who were long CMBX over the past few years, collecting pennies and clipping coupons in front of a P&L mauling steamroller.

One of them, as noted above, is mutual fund giant AllianceBernstein, which has suffered massive paper losses on the trade, amid soaring fears that the coronavirus pandemic is the straw on the camel’s back that will finally cripple US shopping malls whose debt is now expected to default en masse.

According to the FT, more than two dozen funds managed by AllianceBernstein have sold over $4 billion worth of CMBX protection to the likes of Icahn. One among them is AllianceBernstein’s $29 billion American Income Portfolio, which is down 15% since the beginning of March, having written $1.9bn of protection on CMBX 6, while some of the group’s smaller funds have higher concentrations.

The trade reflected AB’s conviction that American malls are “evolving, not dying,” as the firm put it last October, in a paper entitled “The Real Story Behind the CMBX. 6: Debunking the Next ‘Big Short’” (reader can get some cheap laughs courtesy of Brian Philips, AB’s CRE Credit Research Director, at this link).

Hilariously, that paper quietly “disappeared” from AllianceBernstein’s website, but magically reappeared on Friday, shortly after the Financial Times asked about it.

“We definitely still like this,” said Gershon Distenfeld, AllianceBernstein’s co-head of fixed income. “You can expect this will be on the potential list of things we might buy [more of].”

Sure, quadruple down, why not. Meanwhile, one of America’s biggest mall operators, Simon Property Group, has closed all its US properties until March 29, and it is unclear not only when it will reopen but what viable tenants it will still have that are able and willing to pay rent. For a broader perspective on what Simon has to look forward to when it reopens, read “Widespread Panic” Hits Commercial Property Markets: Deals Implode, Renters Disappear, Businesses Shut Down”.

Good luck on the quadruple down – as Icahn notes of the “mall short” – the more the pandemic slows economic activity and drives consumers to shop online, the greater the chances that some of those loans will default.

“It’s ‘08 all over again,” Icahn said, likening the trade to wagers that paid off massively when subprime mortgage debt collapsed more than a decade ago.

In which case, as we noted at the very beginning, Icahn’s warning to investors to be “extremely careful” would seem very timely.

Earlier this week, when we first heard the reports about Kim Jong Un possibly being dead, or close to it, followed by Yonhap’s denial – which simply stated that one official who spoke with a reporter at the news org said SK Intel had nothing on it. We suspected that observers seemed to willing to accept that report as actual evidence to the contrary. We suspected there might be something more to it.

Even when Trump said KJU was probably fine, something still seemed to be amiss. If he was truly in good health, why hadn’t he made an appearance at any other scheduled public events to ward of panic? The North Koreans didn’t even have a convincing body double to fool the crowds into believing their dear leader was well?

Now, a few days later, the Japanese press appears to be getting closer to the truth: As we noted earlier today, it’s widely believed that Kim is in a “vegetative state”, and likely won’t survive.

Kim Yo Jong

Which – since Kim’s children are far too young to run the country – brings our attention to the line of succession. As we noted earlier this week, there are several potential successors to the throne. Since the founding of the modern state in the aftermath of the Korean War, the country has been ruled by the “Mt Paektu Bloodline”, which comprises most of the mythos and cult of personality around the Kim family.

But one thing we didn’t really cover in great depth was the concerns that some in western intelligence have about Kim’s sister, who has been seen more frequently in international news reports in recent years. The younger Kim, believed to be 31, is one of her brother’s closest confidants and his de facto chief of staff. She has joined him at several high-profile international summits.

Unfortunately, to put it simply and straightforwardly, many fear that Kim Yo Jong would be even more diabolical and hostile than her brother. As one twitter wit joked, he is ready and willing to dunk on any ‘feminist takes’ claiming that the younger Kim would be a more judicious and receptive ruler.

If Kim Jong Un ends up dying and his evil sister takes over, I vow to you all right here and now that I will dunk on any & all hot takes that even hint that a woman taking over the family business of running a starving nuclear prison state is some sort of victory for feminism.

— JERRY DUNLEAVY (@JerryDunleavy) April 25, 2020

The Telegraph reports that she was recently elevated to NK’s Politburo.

One reason for the anxieties about her hardline politics: Earlier this year, she issued a scathing political statement about South Korea in her own name, raising concerns that she was pushing back against her brothers purported efforts to deescalate the tensions on the peninsula, even as ‘expert’ after ‘expert’ has insisted that NK will never surrender its nukes.

If she takes the throne, would Kim’s younger sister instead send them flying across the Pacific? News this weekend that a mobile missile launcher has been deployed amidst the crisis of leadership certainly doesn’t make us feel less alarmed.

To be sure, Kim’s sister isn’t the only possible successor; there are doubts that the Party would allow her to lead, given the fact that she is a woman.

As the speculation mounts, here’s a quick run-through of the options, courtesy of Bloomberg:

Kim Yo Jong; Sister

Part royal representative, part personal assistant, Kim Yo Jong has emerged as one of her older brother’s closest aides. Earlier this month, she was reinstated as an alternate Politburo member of the ruling Workers Party of Korea. As such, she’s the only other member of the Kim family with anything approaching real power in the regime.

Although she became the first member of the ruling family to visit Seoul and accompanied Kim Jong Un in his summits with U.S. President Donald Trump and China’s Xi Jinping, she’s also performed mundane tasks, such as helping the leader extinguish a cigarette during a train stop in China. Whether North Korea’s patriarchal elite will support a relatively young woman as the country’s next “supreme leader” is unclear.

Kim Jong Un’s Son

A male heir would provide the most conventional line of succession in a dynasty previously ruled by Kim’s father, Kim Jong Il, and founded by his grandfather, Kim Il Sung. South Korean intelligence said Kim married Ri Sol Ju, a former singer, in 2009 and is thought to have three children.

Problem is, the children have yet to be officially mentioned in state media and the oldest is believed to be a son born in 2010, according to South Korea’s DongA Ilbo newspaper. Dennis Rodman, the offbeat former basketball star who visited North Korea, said in 2013 that he also held a baby daughter named Ju Ae. That would likely require any of the children to rule under some form of regent until they come of age.

Kim Han Sol; Nephew

Kim Han Sol, born in 1995, may have become heir-apparent himself if his father, Kim Jong Nam, hadn’t fallen out with Kim Jong Il and gone into exile in the Chinese gambling hub of Macau. Kim Jong Nam was Kim Jong Un’s older half-brother and his most serious rival, frequenting casinos and occasionally criticizing his younger sibling’s regime.

Any hopes that Kim Han Sol might have had of returning to Pyongyang were dashed in 2017, when his father was murdered at the Kuala Lumpur airport by two women who smeared VX nerve agent on his face. Chinese police later arrested several North Koreans dispatched to Beijing on suspicion of plotting to kill Kim Han Sol, South Korea’s JoongAng Ilbo newspaper reported at the time. His whereabouts remain unknown.

Kim Jong Chol; Brother

Kim Jong Chol, Kim Jong Un’s only surviving brother, would be another longshot, since he has shown more interest in guitars than politics.

Thae Yong Ho, the former No. 2 at North Korea’s embassy in London who defected to South Korea, once said Kim’s elder brother “doesn’t own any official title” adding he’s “just a really talented guitarist.”

Kim Jong Il saw his middle son as “girlish,” according to the person who goes by the pen name of Kenji Fujimoto and claims to have been the personal sushi chef for the former North Korean leader. In 2011, South Korean broadcaster KBS captured Kim Jong Chol enjoying an Eric Clapton concert in Singapore. Little else is known about him except that he studied in Switzerland and is a fan of U.S. professional basketball like his brother.

*      *      *

Source: Bloomberg

Colleges across the country are trying to figure out whether they can reopen campus this fall. Right now, it’s a 50/50 shot. No one knows, and with a second coronavirus wave looming later this year, face-to-face classes might not be seen until early 2021.

Ted Mitchell, president of the American Council on Education, said reopening colleges could be a drawn-out process and lead to a 15% decline in students, resulting in billions of dollars lost for schools.

“The math is not pretty,” Robert Kelchen, a student at Seton Hall University in New Jersey, told NPR News. “Colleges are stressed both on the revenue side and on the expenditure side.”

The transition to virtual classes has been epic. Schools in nearly every state have moved courses online in just weeks, triggering lawsuits filed by some students that claim refunds for tuition, fees, and room and board must be seen. 

Dominique Baker, a professor of education policy at Southern Methodist University in Dallas, warned that every college would feel financial stress related to coronavirus lockdowns. 

NPR estimates that virus lockdowns are leading to significant losses for some universities:

“The University of Michigan estimates it may lose up to $1 billion by the end of the year. For the University of Kentucky, it’s $70 million. Hundreds of schools — including some with endowments of more than a billion dollars, like Duke University, Virginia Tech and Brown — have announced hiring freezes. Other institutions have cut pay and have laid off staff and contractors. In Vermont, state officials have floated potential college shutdowns.”

Baker said the lockdowns would affect colleges in disproportionate ways. “For some colleges, this is an existential threat that means they’ll have to close,” she said, while others have the financial support to weather the virus storm. 

The higher education community received a bailout via the CARES Act. Congress allocated around $14 billion to colleges and universities affected by the shutdowns, though the American Council on Education said it was not enough and is calling for $46 billion more. 

Campus Reform identified the top ten schools receiving the most bailout money, courtesy of the American taxpayer:

1. Arizona State University- $63.5 million
2. Pennsylvania State University- $54.9 million
3. Rutgers University- $54.1 million
4. University of Central Florida- $51 million
5. Miami Dade College- $49 million
6. Georgia State University- $45.2 million
7. California State University-Northridge- $44.6 million
8. The Ohio State University- $42.8 million
9. California State University- Long Beach- $41.7 million
10. California State University- Fullerton- $41 million

Kelchen described a situation that happened over a decade ago when the economy crashed in 2008, and state budgets were not able to fund schools. With a depression unfolding, it appears funding for higher education will come into question once more. 

And to make matters worse, nationwide enrollment in higher education has plunged 11% in the last eight years as millennials figure out they don’t need to rack up tens of thousands of dollars in debt before entering the labor force.

Nicholas Christakis, a sociologist and physician at Yale University, said colleges are not returning to normal this fall. 

“This idea — that we can somehow just get back to normal and go back to school in the fall, because we always have, it’s not reasonable, actually. I think we’re going to have to figure out other ways of doing this,” said Christakis.

Bryan Alexander, an educational futurist at Georgetown University, said the pandemic is going to reshape everything we know about college. 

“There are many ways a reconstructed fall might look, including the option of continuing everything online, though many colleges that teach in-person still think of that as a last resort. They cite online learning growing pains and an ambivalent faculty. Plus there’s some fear that students and their families won’t be willing to pay as much for an online offering. Among the ideas being floated for tweaking the in-person model is changing the traditional academic calendar. Instead of starting in August or September, school might open in October or even January. Instead of 16-week semesters, colleges could shift to quarter systems or even shorter, four-week courses to allow flexibility,” said NPR.

Some have floated the idea of trying smaller classes and hosting larger ones online. Kim Weeden, a sociologist at Cornell, along with colleague Benjamin Cornwell, said large lecture classes should be eliminated. 

“Just eliminating those 100-person or more classes didn’t seem to reduce the small-world nature of the network all that much,” Weeden said. Their research — which was published recently in a white paper, but not peer reviewed — was only looking at classes and didn’t factor in dorm life or campus events such as social gatherings and athletics.

“There’s just so much uncertainty,” said Weeden. “You know, a big piece of this, of course, is whether there is going to be [coronavirus] testing available and what those tests can and cannot tell us. And you know, everybody wants to know the answer to that question.”

The million-dollar question is if college classes will return to normal by fall. And the answer is likely no, while many schools will push for virtual classes, extended lockdowns, and a second coronavirus wave could lead to the implosion of higher education.