Wells Fargo Reports 1 Cent Profit After Loan Loss Provision Soars To $4 Billion

Wells Fargo Reports 1 Cent Profit After Loan Loss Provision Soars To $4 Billion

With JPM starting Q1 earnings season by taking a whopping $6.8 billion in covid-19 loan loss reserves in Q1, it appears that the bank is bracing for even more pain in Q2, even if the number was enough to allow JPM to report a profit in Q1 (albeit down some 69%, or the most since the financial crisis) instead of an outright loss. Moments after JPM, Wells Fargo followed suit, when it reported a surge in credit costs in the first quarter, setting aside $4 billion in loan-loss provisions in the first quarter, almost five times what it allocated a year ago and the most in a decade. Amusingly, despite this surge in provisions, Wells too reported an EPS profit, but the smallest possible of just 1 cent (!), down from $1.20 a year ago.

Net income dropped 89% to $653MM from $5.860BN a year ago, as a result of the following provisions:

  • $4.0 billion of provision expense for credit losses
    • $2.9 billion reserve build for loans
    • $909 million of net charge-offs for loans
    • $172 million of provision expense for debt securities, including $141 million reserve build (1) and $31 million in net charge-offs
  • $950 million of securities impairment
  • $621 million of net losses on equity securities from deferred compensation plan investment results, which were largely offset by a $598 million decline in employee benefits expense
  • $464 million of operating losses
  • $463 million gain on the sale of residential mortgage loans, reclassified to held for sale in 2019
  • $379 million of mortgage banking income vs. $783 million in 4Q19 on higher losses on loans held for sale, and higher

As Bloomberg points out, provisions for credit losses were $1.7 billion in community banking alone, which pretty much wiped out the division’s profit, down 95% from a year ago. Net interest income in the segment were little changed despite falling interest rates.

Net loan charge-offs were $909 million in the quarter, up about 18%. Reserve build was $3.1 billion, which was four times a year ago. CECL accounting is forcing banks to build up reserves faster on expectations of loans going bad. Thus even though charge-offs are slower to rise, reserves have to be built up front when the economy is doing bad.

“Wells Fargo plays an important role in the financial system and the economic strength of our country, and we take our responsibility seriously, particularly in these unprecedented times,” Scharf said in a statement Tuesday.

The San Francisco-based lender, and Warren Buffett’s favorite bank, has been constrained by a Federal Reserve order limiting bank assets to their end-of-2017 level following a series of scandals at the bank, though it was granted a temporary break last week to expand lending to small businesses. Total assets were just above that level at the end of the first quarter. Scharf said last week that Wells Fargo extended almost $70 billion in new and increased commitments and outstanding loans in March alone.

The bank was quick to assure the Fed that both its Tier 1 Ratio and its LCR Ratios were well above the regulatory minimum.

CFO John Shrewsberry outlined activities during the first quarter: “Commercial loans grew by $52 billion, deposits increased by $54 billion, we originated $48 billion of residential mortgage loans, and we raised $47 billion of debt capital for our clients.”

As expected, cash flooded the bank in this uncertain time, with period end deposits up $112.5BN to $1.4 trillion. Deposits have been flowing in to banks as lower interest rates and declining markets typically shift funds from money market funds and securities investments.

Commercial and industrial loans jumped $50.9 billion, largely as clients drew on their revolving credit lines because of the pandemic.

That said, consumer loans were down $4.4 billion from the previous quarter due to declines in credit card and mortgages.

And something unexpected: despite the plunge in rates to all time lows, in Q1, Wells reported that its Net Interest Income actually rose to $11.3BN, from $11.2BN, a NIM of 2.58%, up from 2.53% in Q4, although there was less here than meets the eye, and the rebound was largely driven by subsequent adjustments, to wit:

  • $356 million higher hedge ineffectiveness accounting results reflecting large interest rate changes in the quarter
  • $84 million lower MBS premium amortization resulting from lower prepays
  • Partially offset by balance sheet repricing, including the impact of the lower interest rate environment, and one fewer day in the quarter.

Meanwhile, the NIM of 2.58% which was up 5 bps LQ and included:

  • ~8 bps from hedge ineffectiveness accounting results
  • ~2 bps from MBS premium amortization
  • ~(5) bps from balance sheet mix and repricing

In other words, without the adjustments, NIM would have been flat Q/Q.

Curiously, interest Income rose even as average earning assets declined by $1.2 billion LQ:

  • Debt securities down $7.0 billion
  • Mortgage loans held for sale down $3.6 billion
  • Short-term investments / fed funds sold down $1.6 billion
  • Equity securities down $746 million
  • Loans up $8.5 billion

Noninterest income was uglier, dropping 31% Y/Y to $6.4BN from $9.3BN a year ago.

Finally, on staffing, Scharf says the company has enabled about 180,000 employees to work remotely, and with approximately 260,000 employees at year-end, which means about 69% if its staff are able to work remotely.

The full Wells presentation is below:


Tyler Durden

Tue, 04/14/2020 – 08:31

via ZeroHedge News https://ift.tt/3cj0KtK Tyler Durden

Emergency COVID-19 Rules Effectively Give California’s NIMBYs Unlimited Time To File Anti-Housing Environmental Lawsuits

The COVID-19 outbreak might be a disaster for most of the globe, but it’s proving to be a windfall for California’s NIMBYs who are being provided with new legal tools for delaying real estate developments.

Last week, the Judicial Council of California—the rule-making body for the state’s courts—issued 11 emergency rules for the judicial system during the current pandemic.

Included in the council’s rules was a blanket extension of deadlines for filing civil actions until 90 days after the current state of emergency ends. Ominously for housing construction, this extended statute of limitations applies to lawsuits filed under the California Environmental Quality Act (CEQA).

That law requires local governments to study proposed developments for potentially significant environmental impacts. CEQA also gives third parties the power to sue local governments for approving a construction project if they feel that a particular environmental impact wasn’t studied enough.

The law has become a favored tool of NIMBYs and other self-interested parties to delay unwanted developments or to extract concessions from developers. Anti-gentrification activists use CEQA to stop apartment buildings that might cast too much shadow. Construction unions use the law as leverage to secure exclusive project labor agreements.

Under normal circumstances, these CEQA lawsuits have to be filed within 30 or 35 days of a project receiving final approval. That deadline gives builders, and their lenders, a modicum of certainty about the future timeline of their projects.

By extending this statute of limitations to 90 days after the end of the state’s emergency (which is still yet to be determined), the council is effectively giving project opponents an unlimited amount of time to hold up projects, says Jennifer Hernandez, a land-use attorney with the law firm Holland & Knight.

“It’s not after the courts re-open, or after the courts re-open with a new and more cautious social distancing protocol,” she tells Reason. “When the COVID emergency is no longer an emergency is a much more aspirational goal than trying to figure out what the rules should be for conducting business given the COVID emergency.”

This could effectively put any construction project that hasn’t already run out the clock on CEQA’s statute of limitations on hold, says Nick Cammarota of the California Building Industry Association (CBIA).

“If I’m a builder I can’t move forward with my project until the [CEQA] statute of limitations has expired. The reason why I can’t do that is because if you do move forward, courts have the authority to order you tear down what you’ve built,” Cammarota tells Reason, explaining that “lenders today are unwilling to fund those loans for construction until the statute of limitations has expired.”

That’s bad news for a state that is already suffering from a shortage of some 3.5 million homes according to one estimate, and which has given itself the goal of building 500,000 new units a year to make up for the shortfall.

In 2019, permits for 109,000 units were issued in the state, down from 117,000 in 2018, and 113,000 in 2017, according to U.S. Census Bureau data. The indefinite extension of the timeline for filing CEQA lawsuits plus the current shutdown of most construction sites in the Bay Area could mean California is looking at another lost year for new housing construction.

“Without construction, you don’t have new housing and we stay in the housing catastrophe that we’re in,” says Hernandez.

In announcing their emergency provisions last week, the Judicial Council made clear that they were more or less operating on the fly and were open to revisions in their order.

“We are at this point truly with no guidance in history, law, or precedent,” said California Chief Justice Tani Cantil-Sakauye, chair of the council, in a press release. “And to say that there is no playbook is a gross understatement of the situation.”

Holland & Knight and the CBIA are both asking the Judicial Council to issue separate guidance for CEQA actions that offers a more limited extension of the statute of limitations.

California’s local governments are asking much the same thing. On Monday, the California League of Cities, as well as two associations representing county governments, requested the Judicial Council modify its emergency rules to allow the normal CEQA statute of limitations to resume after the lifting of the COVID-19 state of emergency.

“The Governor is calling upon all cities and counties to step up and face these crises by approving more housing units on a very considerable scale,” these local government associations say in their letter. The Judicial Council’s extension of civil action deadlines means “any applicants who got their approvals after the first week of March 2020 may have to wait until several months from now to get a green light from their lenders.”

Other than saying their emergency rules would be open for revision, the Judicial Council hasn’t given any indication on when, or even if, they’ll modify last week’s ruling to carve out some exemption for CEQA.

Not changing anything would be disastrous for new housing construction in the state, says Hernandez, saying “if this remains in place as is we’d expect to see an even more catastrophic slowdown in housing starts.”

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Trump Claims He Has ‘Total’ Authority Over When States End Social Distancing Rules. He’s Wrong.

Donald Trump told America last night that as president, total authority rests with him. “And that’s the way it’s gotta be. It’s total. It’s total. And the governors know that,” the president said during Monday night’s televised press conference on COVID-19 developments.

Last week, Trump told states they were on their own. Last night, he suggested “they can’t do anything without the approval of the president.”

Trump was referring to state decisions whether to “open the economy” anytime soon, something his administration has been urging state leaders to do while simultaneously denying them access to critical supplies from the National Strategic Stockpile and sometimes seizing gear that states and hospitals managed to acquire on their own.

If there’s a possible way to make state leaders look unprepared, Trump seems willing to take it regardless of the potential cost in American lives.

But Trump is wrong about having “total” authority over state leaders, and he’s wrong about being able to force a one-size-fits-all solution on the whole country.

Trump may tell Twitter that it’s not “the Governors [sic] decision to open up the states” but “that of the President of the United States & the Federal Government,” however—as Billy Binion wrote here yesterday—”the U.S. Constitution and Supreme Court precedent say otherwise.” Or, as John Yoo notes at National Review:

Congress can control commerce that crosses state lines, and even prohibit wholly intrastate activity that affects the national markets. It cannot, however, force individuals and businesses to engage in business in the first place.

Trump is also wrong to think we can move forward based on a national solution rather than regional and local approaches.

New York City is not Yavapai County, Arizona. San Francisco isn’t the Iowa suburbs or rural Kentucky. And so on. It’s foolish, unproductive, and dangerous to pretend the whole country should be lifting containment measures in unison or to act like one person can know what’s right for folks in vastly different communities with varying risk factors and a mish-mash of resources.


FOLLOWUP

Legal battles over state abortion bans continue. Oklahoma Gov. Kevin Stitt declared in late March that “any type of abortion services … which are not a medical emergency as defined … or otherwise necessary to prevent serious health risks to the unborn child’s mother” would be temporarily banned. Earlier this month, a U.S. district judge ruled against the ban. Now, the U.S. Court of Appeals for the 10th Circuit has upheld the lower court’s decision.

That’s in line with what the 6th U.S. Circuit Court of Appeals decided last week with regard to an Ohio abortion ban.

But the U.S. Court of Appeals for the 5th Circuit decided the other way for Texas. Abortion providers there have asked the U.S. Supreme Court to intervene.

Meanwhile, Arkansas’ abortion-ban battle is just getting started in court. On Monday, the American Civil Liberties Union filed an emergency motion challenging the state’s ban on abortion procedures during the COVID-19 pandemic.


FREE MINDS

Amash teases a presidential run. On Monday, Rep. Justin Amash (I–Mich.) responded to a tweet suggesting he should be America’s alternate option in the 2020 election for those who care about limited government by saying he was “looking at it closely this week.”


FREE MARKETS

Americans plan to stay away from some public spaces for months:

New polling from Morning Consult shows that some consumers won’t feel comfortable traveling or heading back to many public spaces at all for at least six months—with many unsure of how to even answer the question of when they’ll feel safe returning to normal life.

Related:


ELECTION 2020

Anti-drug war activist and judge joins Libertarian Party presidential contest. From Reason‘s Matt Welch:

Judge Jim Gray, the 2012 Libertarian Party (L.P.) vice presidential nominee and the first sitting jurist to come out against the drug war way back in 1992, announced to his email list Monday that he will seek the party’s presidential nomination in tandem with vice presidential candidate Larry Sharpe.

The L.P., America’s third-place finisher in the previous two presidential elections, is scheduled to determine its 2020 ticket during a national convention on May 21-25.

More here.


QUICK HITS

  • The U.S. has recorded more than 23,600 COVID-19 deaths since this time last month:

  • “There is no evidence that the virus now plaguing the world was engineered; scientists largely agree it came from animals. But that is not the same as saying it didn’t come from the lab, which spent years testing bat coronaviruses in animals,” The Washington Post‘s Josh Rogin reports.
  • Public service announcement:

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via IFTTT

Emergency COVID-19 Rules Effectively Give California’s NIMBYs Unlimited Time To File Anti-Housing Environmental Lawsuits

The COVID-19 outbreak might be a disaster for most of the globe, but it’s proving to be a windfall for California’s NIMBYs who are being provided with new legal tools for delaying real estate developments.

Last week, the Judicial Council of California—the rule-making body for the state’s courts—issued 11 emergency rules for the judicial system during the current pandemic.

Included in the council’s rules was a blanket extension of deadlines for filing civil actions until 90 days after the current state of emergency ends. Ominously for housing construction, this extended statute of limitations applies to lawsuits filed under the California Environmental Quality Act (CEQA).

That law requires local governments to study proposed developments for potentially significant environmental impacts. CEQA also gives third parties the power to sue local governments for approving a construction project if they feel that a particular environmental impact wasn’t studied enough.

The law has become a favored tool of NIMBYs and other self-interested parties to delay unwanted developments or to extract concessions from developers. Anti-gentrification activists use CEQA to stop apartment buildings that might cast too much shadow. Construction unions use the law as leverage to secure exclusive project labor agreements.

Under normal circumstances, these CEQA lawsuits have to be filed within 30 or 35 days of a project receiving final approval. That deadline gives builders, and their lenders, a modicum of certainty about the future timeline of their projects.

By extending this statute of limitations to 90 days after the end of the state’s emergency (which is still yet to be determined), the council is effectively giving project opponents an unlimited amount of time to hold up projects, says Jennifer Hernandez, a land-use attorney with the law firm Holland & Knight.

“It’s not after the courts re-open, or after the courts re-open with a new and more cautious social distancing protocol,” she tells Reason. “When the COVID emergency is no longer an emergency is a much more aspirational goal than trying to figure out what the rules should be for conducting business given the COVID emergency.”

This could effectively put any construction project that hasn’t already run out the clock on CEQA’s statute of limitations on hold, says Nick Cammarota of the California Building Industry Association (CBIA).

“If I’m a builder I can’t move forward with my project until the [CEQA] statute of limitations has expired. The reason why I can’t do that is because if you do move forward, courts have the authority to order you tear down what you’ve built,” Cammarota tells Reason, explaining that “lenders today are unwilling to fund those loans for construction until the statute of limitations has expired.”

That’s bad news for a state that is already suffering from a shortage of some 3.5 million homes according to one estimate, and which has given itself the goal of building 500,000 new units a year to make up for the shortfall.

In 2019, permits for 109,000 units were issued in the state, down from 117,000 in 2018, and 113,000 in 2017, according to U.S. Census Bureau data. The indefinite extension of the timeline for filing CEQA lawsuits plus the current shutdown of most construction sites in the Bay Area could mean California is looking at another lost year for new housing construction.

“Without construction, you don’t have new housing and we stay in the housing catastrophe that we’re in,” says Hernandez.

In announcing their emergency provisions last week, the Judicial Council made clear that they were more or less operating on the fly and were open to revisions in their order.

“We are at this point truly with no guidance in history, law, or precedent,” said California Chief Justice Tani Cantil-Sakauye, chair of the council, in a press release. “And to say that there is no playbook is a gross understatement of the situation.”

Holland & Knight and the CBIA are both asking the Judicial Council to issue separate guidance for CEQA actions that offers a more limited extension of the statute of limitations.

California’s local governments are asking much the same thing. On Monday, the California League of Cities, as well as two associations representing county governments, requested the Judicial Council modify its emergency rules to allow the normal CEQA statute of limitations to resume after the lifting of the COVID-19 state of emergency.

“The Governor is calling upon all cities and counties to step up and face these crises by approving more housing units on a very considerable scale,” these local government associations say in their letter. The Judicial Council’s extension of civil action deadlines means “any applicants who got their approvals after the first week of March 2020 may have to wait until several months from now to get a green light from their lenders.”

Other than saying their emergency rules would be open for revision, the Judicial Council hasn’t given any indication on when, or even if, they’ll modify last week’s ruling to carve out some exemption for CEQA.

Not changing anything would be disastrous for new housing construction in the state, says Hernandez, saying “if this remains in place as is we’d expect to see an even more catastrophic slowdown in housing starts.”

from Latest – Reason.com https://ift.tt/34LGgY9
via IFTTT

Trump Claims He Has ‘Total’ Authority Over When States End Social Distancing Rules. He’s Wrong.

Donald Trump told America last night that as president, total authority rests with him. “And that’s the way it’s gotta be. It’s total. It’s total. And the governors know that,” the president said during Monday night’s televised press conference on COVID-19 developments.

Last week, Trump told states they were on their own. Last night, he suggested “they can’t do anything without the approval of the president.”

Trump was referring to state decisions whether to “open the economy” anytime soon, something his administration has been urging state leaders to do while simultaneously denying them access to critical supplies from the National Strategic Stockpile and sometimes seizing gear that states and hospitals managed to acquire on their own.

If there’s a possible way to make state leaders look unprepared, Trump seems willing to take it regardless of the potential cost in American lives.

But Trump is wrong about having “total” authority over state leaders, and he’s wrong about being able to force a one-size-fits-all solution on the whole country.

Trump may tell Twitter that it’s not “the Governors [sic] decision to open up the states” but “that of the President of the United States & the Federal Government,” however—as Billy Binion wrote here yesterday—”the U.S. Constitution and Supreme Court precedent say otherwise.” Or, as John Yoo notes at National Review:

Congress can control commerce that crosses state lines, and even prohibit wholly intrastate activity that affects the national markets. It cannot, however, force individuals and businesses to engage in business in the first place.

Trump is also wrong to think we can move forward based on a national solution rather than regional and local approaches.

New York City is not Yavapai County, Arizona. San Francisco isn’t the Iowa suburbs or rural Kentucky. And so on. It’s foolish, unproductive, and dangerous to pretend the whole country should be lifting containment measures in unison or to act like one person can know what’s right for folks in vastly different communities with varying risk factors and a mish-mash of resources.


FOLLOWUP

Legal battles over state abortion bans continue. Oklahoma Gov. Kevin Stitt declared in late March that “any type of abortion services … which are not a medical emergency as defined … or otherwise necessary to prevent serious health risks to the unborn child’s mother” would be temporarily banned. Earlier this month, a U.S. district judge ruled against the ban. Now, the U.S. Court of Appeals for the 10th Circuit has upheld the lower court’s decision.

That’s in line with what the 6th U.S. Circuit Court of Appeals decided last week with regard to an Ohio abortion ban.

But the U.S. Court of Appeals for the 5th Circuit decided the other way for Texas. Abortion providers there have asked the U.S. Supreme Court to intervene.

Meanwhile, Arkansas’ abortion-ban battle is just getting started in court. On Monday, the American Civil Liberties Union filed an emergency motion challenging the state’s ban on abortion procedures during the COVID-19 pandemic.


FREE MINDS

Amash teases a presidential run. On Monday, Rep. Justin Amash (I–Mich.) responded to a tweet suggesting he should be America’s alternate option in the 2020 election for those who care about limited government by saying he was “looking at it closely this week.”


FREE MARKETS

Americans plan to stay away from some public spaces for months:

New polling from Morning Consult shows that some consumers won’t feel comfortable traveling or heading back to many public spaces at all for at least six months—with many unsure of how to even answer the question of when they’ll feel safe returning to normal life.

Related:


ELECTION 2020

Anti-drug war activist and judge joins Libertarian Party presidential contest. From Reason‘s Matt Welch:

Judge Jim Gray, the 2012 Libertarian Party (L.P.) vice presidential nominee and the first sitting jurist to come out against the drug war way back in 1992, announced to his email list Monday that he will seek the party’s presidential nomination in tandem with vice presidential candidate Larry Sharpe.

The L.P., America’s third-place finisher in the previous two presidential elections, is scheduled to determine its 2020 ticket during a national convention on May 21-25.

More here.


QUICK HITS

  • The U.S. has recorded more than 23,600 COVID-19 deaths since this time last month:

  • “There is no evidence that the virus now plaguing the world was engineered; scientists largely agree it came from animals. But that is not the same as saying it didn’t come from the lab, which spent years testing bat coronaviruses in animals,” The Washington Post‘s Josh Rogin reports.
  • Public service announcement:

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via IFTTT

We Can Track COVID-19’s Spread Without Violating Privacy

As the weeks of quarantine and social distancing drag on, many justifiably wonder when life can start getting back to normal. It’s not just cabin fever: Shutdowns mean real economic pain for millions of Americans, to say nothing of the mental and sometimes physical tolls of isolation. Getting Americans back to work is a public health concern, too.

We simply can’t expect people to stay cooped up for a year or longer, as some have suggested. And there are reasons for cautious optimism anyway: Although the data are hazy and ever-changing, decreasing rates of infection and death in parts of Asia, Europe, and the United States suggest that non-pharmaceutical interventions like better hygiene and social distancing have indeed made COVID-19 more manageable.

But we can’t just blindly open the gates and infect vulnerable populations that overwhelm the healthcare supply, either. Not only could that scenario increase the threats to healthcare workers and first responders, it could compel people to stay home more often anyway for fear of the virus, which would create the same economic problem that the re-opening was trying to fix.

The challenge is how to intelligently get closer to normal without letting COVID-19 transmissions get out of control. The specific pathway to open the United States back up is still unclear, but we’ll probably need at least three things to do so: near-universal mask-wearing, targeted mass testing, and a virus-tracing surveillance system.

The first two conditions should find few dissenters. We should make sure that our essential workers have enough personal protective equipment, but in the meantime, pandemic civilians can dramatically cut down on the viral spread by simply wearing a good homemade mask. Strategically testing to determine where the virus has spread is similarly a no-brainer, since it allows us to separate virus-free “green zones” that can be loosened up from beleaguered “red zones” that need to continue control measures.

But when you start talking about “surveillance,” many may understandably chafe. In our age, the word is synonymous with rights-defying government snooping, and so it immediately smacks of a conspiracy to spy.

But surveillance has a more innocuous meaning in the context of public health. The official definition is the “ongoing, systematic collection, analysis, and interpretation of health-related data essential to planning, implementation, and evaluation of public health practice, closely integrated with the timely dissemination of these data to those responsible for prevention and control.” Less spying on your Facebook messages to see whether you’re up to no good, more looking at seasonal influenza trends to determine which vaccine to recommend this year.

For the COVID-19 pandemic, public health surveillance mostly means contact tracing. When an infectious disease is in a manageable state, outbreaks can be contained by identifying who is sick and “tracing” the other people with whom they have made “contact.” Those sick patients can then be surgically quarantined to stop the spread while their contacts are monitored to see whether they too develop symptoms. Meanwhile, those who are healthy or who have immunities can continue on mostly unimpeded.

In the past, contact tracing took a lot of public health officials’ shoe leather. To beat back the 2014-2016 Ebola outbreak in Africa, for instance, officials asked patients to physically write out a list of people they remembered seeing recently. Faulty memory and insufficient resources meant that some cases could go undiscovered, and public health surveillance was not as effective as it might have been.

Today, we have technology to help. We can devise applications and wearables to help us see how diseases are spreading by monitoring with whom we come into contact. If one of us falls sick, we can review whom we’ve been around to hopefully catch new outbreaks before they spiral out of control.

And this is where the typical definition of surveillance can rear its ugly head. Many worry that such technology-enabled contact tracing can indeed become a tool for state control. After all, what government wouldn’t want to get its greedy paws on such a God View of society? (Setting aside the question of whether it already has one.)

The governments of South Korea and China have rolled out mandatory apps that capture and share people’s full location and identification data. This may have helped to spread to tide of COVID-19, but at a great cost to privacy. In China’s case, the data are already being shared with law enforcement. Perhaps it will continue being collected long after the pandemic passes.

But as Peter Van Valkenburgh of Coin Center points out, there is no need to sacrifice either public health or privacy.

Here’s an example from Singapore: The country’s Government Technology Agency developed an app called TraceTogether that takes note of each user’s SARS-CoV-2 (the virus that causes COVID-19) status and which other app users each person comes into contact with using Bluetooth signals. If a person tests positive, they update their status on the app, which triggers a notification to others that someone they recently saw tested positive. This not only helps individuals know when they should be limiting social interactions and monitoring their symptoms, it also gives epidemiologists an easy way to trace contacts and determine how the virus is spreading.

Singapore’s system is better and less intrusive because it is voluntary (each user can choose whether to download the app or share with health officials or both), anonymizes the data before sharing, and does not track GPS data (because it relies on Bluetooth, it merely senses other nearby phones). You will know that you came into contact with someone with COVID-19, but you won’t necessarily know who or where.

But we can do even better than that. As Van Valkenburgh notes, some TraceTogether data are still stored in a central location and tied to a person’s phone number, which is less than ideal. By borrowing some tools from cryptography, we can design a system that not only uses Bluetooth to track possible infections, but we can do in a way that conceals our phone numbers and does not require storage on a central server managed by a government or corporation. The ZCash Foundation has already put forth a proposal to build such a system, and similar projects are in development across the world.

The race to develop privacy-preserving contact tracing technologies stepped up in a big way last week when Apple and Google announced a joint partnership to develop APIs and tracing systems that can assist the applications that government bodies eventually roll out. The companies report that their tracing tech will use anonymized encrypted Bluetooth sensing like Singapore. But we’ll want to scrutinize their offerings and any other private- or government- developed applications to ensure that they are as privacy-preserving as possible.

Emergencies are precisely the times when powerful groups seek to expand their control. The promises and perils of new public health surveillance technologies are no exception to that trend.

In the American context, scrutiny is particularly prudent. At the same time that encryption technologies are proving more critical than ever, an effort to kneecap safe computing techniques is snaking its way through the halls of Congress in the form of the EARN IT Act.

Officials may say that their apps and offerings protect privacy. Yet at the same time, many of them defend privacy-killing measures like the EARN IT Act. We cannot just take their word. To ensure that any contact tracing applications are truly privacy-preserving, we must be able to take a look under the hood and verify that they are designed in a way like Van Valkenburgh describes. Anything else is just too risky.

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Central Banks Add More Gold To Their Reserves

Central Banks Add More Gold To Their Reserves

Via SchiffGold.com,

Central banks continued their gold-buying spree in February, although the pace of gold purchases has slowed compared to last year’s near-record purchases.

On net, central banks globally added another 36 tons of gold to their reserves in February, according to the latest data released by the World Gold Council. That was about 33% higher than January’s total.

On the year, central banks have bought 64.5 tons of gold. That compares to 116 tons through the first two months of 2019.

Central bank demand came in at 650.3 tons in 2019. That was the second-highest level of annual purchases for 50 years, just slightly below the 2018 net purchases of 656.2 tons. According to the WGC, 2018 marked the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second-highest annual total on record.

The World Gold Council bases its data on information submitted to the International Monetary Fund.

Turkey continued to be the biggest gold-buyer. The Turks added another 24.8 tons to their reserves in February.

Russia further increased its stockpile of yellow metal, adding another 10.9 tons to their hoard.

Russia’s quest for gold has paid off in a big way. The Russian Central Bank’s gold reserves topped $100 billion in September 2019 thanks to continued buying and surging prices.

The Russians have been buying gold for the last several years in an effort to diversify away from the US dollar.  Russian gold reserves increased 274.3 tons in 2018, marking the fourth consecutive year of plus-200 ton growth. Meanwhile, the Russians sold off nearly all of its US Treasury holdings. According to Bank of America analysts,  the amount of US dollars in Russian reserves fell from 46% to 22% in 2018.

Last month, the Central Bank of Russia announced it planned to suspend gold-purchases for the time being, effective April 1. But in the first week of April, Russian banks were already asking the central bank to restart gold purchases. They expressed concern over gold exports amid disruptions in the transportation industry due to the coronavirus pandemic. National Finance Association head Vasily Zablotsky told Reuters that banks are “facing problems” exporting gold as there are also fewer cargo flights and transportation costs have doubled.

Other buyers of gold in February included:

  • Bulgaria – 0.3 tons

  • Greece – 0.1 tons

  • Kazakhstan – 1.8 tons

  • Qatar –  1.6 tons

The only major seller was Uzbekistan at 3.1 tons.

The People’s Bank of China did not report any gold purchases for the fifth straight month.  It’s not uncommon for China to go silent and then suddenly announce a large increase in reserves.

Many analysts believe China holds far more gold than it officially reveals. As Jim Rickards pointed out on Mises Daily back in 2015, many people speculate that China keeps several thousand tons of gold “off the books” in a separate entity called the State Administration for Foreign Exchange (SAFE). Given the political dynamics and the ongoing trade war, it seems unlikely the Chinese suddenly stopped increasing their gold reserves in 2016.

The WGC said it expects central banks to remain net-buyers of gold in 2020, but likely at a slower pace than the record levels we’ve seen over the past two years.

“We often get asked if central bank demand will be sustained. The past two months clearly suggest gold continues to be an important component of foreign reserves despite heightened levels of demand in recent years. But like everyone else, the recent market instability and uncertainty will be at the forefront of central bankers’ mind.

Of course, it is difficult to tell how the economic impacts of the coronavirus pandemic will impact things down the road. It is possible that a rapid devaluation of the dollar due to Federal Reserve quantitative easing could drive central banks to dump dollars in exchange for gold.

Earlier this year, World Gold Council director of market intelligence Alistair Hewitt said there are two major factors driving central banks to buy gold – geopolitical instability and extraordinarily loose monetary policy.

Central banks are looking toward gold to balance some of that risk. We’ve also got negative rates and yields for a large number of sovereign bonds.”

Central bank policy has become significantly looser since Hewitt made that observation.

Peter Schiff has talked about central bank gold-buying. He has noted that the US went off the gold standard in 1971, but he thinks the world is going to go back on it.

The days where the dollar is the reserve currency are numbered and we’re going back to basics. You know, everything old is new again. Gold was money in the past and it will be money again in the future, and central banks that are smart enough to read that writing on the wall are increasing their gold reserves now.”

Ron Paul made a similar point in an episode of the Liberty report. He said foreign central banks are increasingly gravitating to sound money like gold and ripping themselves away from the Fed’s dollar.

The central banks of the world are looking at gold again.”


Tyler Durden

Tue, 04/14/2020 – 08:00

via ZeroHedge News https://ift.tt/2KglGpn Tyler Durden

We Can Track COVID-19’s Spread Without Violating Privacy

As the weeks of quarantine and social distancing drag on, many justifiably wonder when life can start getting back to normal. It’s not just cabin fever: Shutdowns mean real economic pain for millions of Americans, to say nothing of the mental and sometimes physical tolls of isolation. Getting Americans back to work is a public health concern, too.

We simply can’t expect people to stay cooped up for a year or longer, as some have suggested. And there are reasons for cautious optimism anyway: Although the data are hazy and ever-changing, decreasing rates of infection and death in parts of Asia, Europe, and the United States suggest that non-pharmaceutical interventions like better hygiene and social distancing have indeed made COVID-19 more manageable.

But we can’t just blindly open the gates and infect vulnerable populations that overwhelm the healthcare supply, either. Not only could that scenario increase the threats to healthcare workers and first responders, it could compel people to stay home more often anyway for fear of the virus, which would create the same economic problem that the re-opening was trying to fix.

The challenge is how to intelligently get closer to normal without letting COVID-19 transmissions get out of control. The specific pathway to open the United States back up is still unclear, but we’ll probably need at least three things to do so: near-universal mask-wearing, targeted mass testing, and a virus-tracing surveillance system.

The first two conditions should find few dissenters. We should make sure that our essential workers have enough personal protective equipment, but in the meantime, pandemic civilians can dramatically cut down on the viral spread by simply wearing a good homemade mask. Strategically testing to determine where the virus has spread is similarly a no-brainer, since it allows us to separate virus-free “green zones” that can be loosened up from beleaguered “red zones” that need to continue control measures.

But when you start talking about “surveillance,” many may understandably chafe. In our age, the word is synonymous with rights-defying government snooping, and so it immediately smacks of a conspiracy to spy.

But surveillance has a more innocuous meaning in the context of public health. The official definition is the “ongoing, systematic collection, analysis, and interpretation of health-related data essential to planning, implementation, and evaluation of public health practice, closely integrated with the timely dissemination of these data to those responsible for prevention and control.” Less spying on your Facebook messages to see whether you’re up to no good, more looking at seasonal influenza trends to determine which vaccine to recommend this year.

For the COVID-19 pandemic, public health surveillance mostly means contact tracing. When an infectious disease is in a manageable state, outbreaks can be contained by identifying who is sick and “tracing” the other people with whom they have made “contact.” Those sick patients can then be surgically quarantined to stop the spread while their contacts are monitored to see whether they too develop symptoms. Meanwhile, those who are healthy or who have immunities can continue on mostly unimpeded.

In the past, contact tracing took a lot of public health officials’ shoe leather. To beat back the 2014-2016 Ebola outbreak in Africa, for instance, officials asked patients to physically write out a list of people they remembered seeing recently. Faulty memory and insufficient resources meant that some cases could go undiscovered, and public health surveillance was not as effective as it might have been.

Today, we have technology to help. We can devise applications and wearables to help us see how diseases are spreading by monitoring with whom we come into contact. If one of us falls sick, we can review whom we’ve been around to hopefully catch new outbreaks before they spiral out of control.

And this is where the typical definition of surveillance can rear its ugly head. Many worry that such technology-enabled contact tracing can indeed become a tool for state control. After all, what government wouldn’t want to get its greedy paws on such a God View of society? (Setting aside the question of whether it already has one.)

The governments of South Korea and China have rolled out mandatory apps that capture and share people’s full location and identification data. This may have helped to spread to tide of COVID-19, but at a great cost to privacy. In China’s case, the data are already being shared with law enforcement. Perhaps it will continue being collected long after the pandemic passes.

But as Peter Van Valkenburgh of Coin Center points out, there is no need to sacrifice either public health or privacy.

Here’s an example from Singapore: The country’s Government Technology Agency developed an app called TraceTogether that takes note of each user’s SARS-CoV-2 (the virus that causes COVID-19) status and which other app users each person comes into contact with using Bluetooth signals. If a person tests positive, they update their status on the app, which triggers a notification to others that someone they recently saw tested positive. This not only helps individuals know when they should be limiting social interactions and monitoring their symptoms, it also gives epidemiologists an easy way to trace contacts and determine how the virus is spreading.

Singapore’s system is better and less intrusive because it is voluntary (each user can choose whether to download the app or share with health officials or both), anonymizes the data before sharing, and does not track GPS data (because it relies on Bluetooth, it merely senses other nearby phones). You will know that you came into contact with someone with COVID-19, but you won’t necessarily know who or where.

But we can do even better than that. As Van Valkenburgh notes, some TraceTogether data are still stored in a central location and tied to a person’s phone number, which is less than ideal. By borrowing some tools from cryptography, we can design a system that not only uses Bluetooth to track possible infections, but we can do in a way that conceals our phone numbers and does not require storage on a central server managed by a government or corporation. The ZCash Foundation has already put forth a proposal to build such a system, and similar projects are in development across the world.

The race to develop privacy-preserving contact tracing technologies stepped up in a big way last week when Apple and Google announced a joint partnership to develop APIs and tracing systems that can assist the applications that government bodies eventually roll out. The companies report that their tracing tech will use anonymized encrypted Bluetooth sensing like Singapore. But we’ll want to scrutinize their offerings and any other private- or government- developed applications to ensure that they are as privacy-preserving as possible.

Emergencies are precisely the times when powerful groups seek to expand their control. The promises and perils of new public health surveillance technologies are no exception to that trend.

In the American context, scrutiny is particularly prudent. At the same time that encryption technologies are proving more critical than ever, an effort to kneecap safe computing techniques is snaking its way through the halls of Congress in the form of the EARN IT Act.

Officials may say that their apps and offerings protect privacy. Yet at the same time, many of them defend privacy-killing measures like the EARN IT Act. We cannot just take their word. To ensure that any contact tracing applications are truly privacy-preserving, we must be able to take a look under the hood and verify that they are designed in a way like Van Valkenburgh describes. Anything else is just too risky.

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Father Can’t Be Ordered “to Comply With the Cultural Norms of Hasidic Judaism” During His Visitation Time with Children

From Thursday’s N.Y. appellate decision in Cohen v. Cohen:

We agree with the father that, by directing him to comply with the “cultural norms” of Hasidic Judaism [which were practiced by the parties during the marriage] during his periods of parental access, the Supreme Court ran afoul of constitutional limitations by compelling the father to himself practice a religion, rather than merely directing him to provide the children [age about 5 and 7 at the time of the order] with a religious upbringing (see Cohen v. Cohen, 177 AD3d at 852; Weisberger v. Weisberger, 154 AD3d at 53). While the court referred to the “cultural norms” by which the children were raised, the testimony at the hearing made clear that the “cultural norms” referenced were that each parent would comply with the religious requirements of Hasidic Judaism. Under this Court’s decisions in Weisberger and on the prior appeal, the court’s directive that the father himself comply with these religious practices was an unconstitutional modification of the religious upbringing provision in the judgment of divorce, which must be reversed (see Cohen v. Cohen, 177 AD3d at 852; Weisberger v. Weisberger, 154 AD3d at 53).

I think this is right, though I disagreed with the appellate court’s earlier decision upholding an earlier trial court order in the same case, in which “the father was directed to provide the children with exclusively kosher food and to make ‘all reasonable efforts to ensure that the children’s appearance and conduct comply with the Hasidic’ religious requirements of the [mother] and of the children’s schools as they were raised while the children are in [his] physical custody.'” For more on that, see this post.

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Father Can’t Be Ordered “to Comply With the Cultural Norms of Hasidic Judaism” During His Visitation Time with Children

From Thursday’s N.Y. appellate decision in Cohen v. Cohen:

We agree with the father that, by directing him to comply with the “cultural norms” of Hasidic Judaism [which were practiced by the parties during the marriage] during his periods of parental access, the Supreme Court ran afoul of constitutional limitations by compelling the father to himself practice a religion, rather than merely directing him to provide the children [age about 5 and 7 at the time of the order] with a religious upbringing (see Cohen v. Cohen, 177 AD3d at 852; Weisberger v. Weisberger, 154 AD3d at 53). While the court referred to the “cultural norms” by which the children were raised, the testimony at the hearing made clear that the “cultural norms” referenced were that each parent would comply with the religious requirements of Hasidic Judaism. Under this Court’s decisions in Weisberger and on the prior appeal, the court’s directive that the father himself comply with these religious practices was an unconstitutional modification of the religious upbringing provision in the judgment of divorce, which must be reversed (see Cohen v. Cohen, 177 AD3d at 852; Weisberger v. Weisberger, 154 AD3d at 53).

I think this is right, though I disagreed with the appellate court’s earlier decision upholding an earlier trial court order in the same case, in which “the father was directed to provide the children with exclusively kosher food and to make ‘all reasonable efforts to ensure that the children’s appearance and conduct comply with the Hasidic’ religious requirements of the [mother] and of the children’s schools as they were raised while the children are in [his] physical custody.'” For more on that, see this post.

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