If The US Was Japan, The Fed’s Balance Sheet Would Be $25 Trillion

If The US Was Japan, The Fed’s Balance Sheet Would Be $25 Trillion

Tyler Durden

Mon, 07/13/2020 – 20:05

If anyone still needs a simple yet infallible thesis to buy gold, here it is from Deutsche Bank’s chief credit strategist Jim Reid.

Fed Balance Sheet – One-way traffic again

Last week the Fed balance sheet dipped below $7tn and is now -3.5% below its peak a month ago. However, this reflects emergency pandemic liquidity facilities rolling off rather than anything more structural. DB’s Steven Zeng now thinks it will start to climb again with QE and various other loan facilities to around $8.3tn by year end, double where it was at the start of 2020.

Some believe this is already a huge amount, but as the second graph shows, the Fed’s balance sheet as a % of GDP is notably lower than the ECB and BoJ’s. If they were aligned, the Fed balance sheet would now be around $11tn and $25tn, respectively.

With DB’s Matt Luzzetti expecting that US debt to GDP will be above 100% in 2020 and near 140% by 2030 from just shy of 80% at the start of this year, it seems inconceivable to me that the Fed and other central bank balance sheets will do anything other than explode over the next decade and perhaps beyond.

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Demographics, Debt, & Disappointment – The Japanifation Of America’s Economy

Demographics, Debt, & Disappointment – The Japanifation Of America’s Economy

Tyler Durden

Mon, 07/13/2020 – 19:45

Authored by Chris Hamilton via Econimica blog,

I’m not an economist nor a Wall Street analyst.  I get paid nothing to write this, have nothing to sell, make no buy recommendations, and leave it up to the reader to determine what it all means.  Today, just some comparisons of the Japanese and American demographic driven zero interest rate policy kickoffs, resulting in debt explosions, ongoing collapses in births, and declining energy consumption…yet (thus far) resulting in divergent asset depreciation/appreciation.

  Also of note should be that regardless the crisis (Lost decade(s), Fukushima, 9/11, GFC, Coronavirus) the answer has been the same; cheaper debt to incentivize more debt and call it “growth” (without a concern how it would ever be repaid).

For Japan, 1991 was the conclusion of the last bit of demographic driven demand growth.  Since then, interest rates have been pushed to zero to incent an ever decreasing quantity of consumers to consume more…with little positive impact.  Instead, the Japanese government has decided to do what Japanese consumers couldn’t…grow spending via blowing out official government debt to GDP.  Interestingly for all the government market intervention, equity prices are still down over 40% from peak valuations.

For the US, the last bit of demographic driven momentum concluded in 2018 but the US went to ZIRP a decade earlier in the demographic cycle (’09) than Japan.  Now the US government has decided even the best efforts of US consumers to consume beyond their means isn’t adequate…and thus official government debt to GDP is soaring (and of course, this doesn’t take into account the 2x to 4x larger unfunded liabilities that did not exist prior to 1950).  Like Japan, the US federal government and Federal Reserve have taken an ever increasingly “interventionist role”, to great effect for asset valuations.  One note on the estimated return to working age population growth in the chart below…it is entirely dependent on the unlikely return to high rates of immigration.

Annual Change Working Age/Elderly, Discount Interest Rate, Debt/GDP, Equities

To read the charts, five variables – annual change in 20 to 60 year old populations (green columns), annual change in 60+ year old populations (grey columns), discount interest rates (black dashed lines), Nikkei 225/Wilshire 5000 (yellow lines), and debt to GDP ratios (red line).

JAPAN

US

BTW – In retrospect, the talking heads and market gurus agree the market peaks of 2000 and 2007 were “bubbles”, but these same folks are now suggesting “this time is different”!?!

Childbearing, Post-Childbearing, & Births

JAPAN

Below, no anecdotes or happy stories, just demographic facts that drive the real world…annual births plus UN estimated births through 2040 (grey columns), likely births (black dashed line), childbearing females (yellow line), post childbearing females (red line).  Japan (and its domestic consumption) will only continue shrinking and likely at an accelerating rate!?!

US

Annual births plus Census/UN estimated births (grey columns), actual births since ’00 and likely births (black dashed line), childbearing females (yellow line), post childbearing females (red line).  BTW – US female childbearing population is inclusive of anticipated immigration, but actual immigration in 2019/2020 is running far below estimates…and may essentially be zero for 2020.  Beyond that, who knows, but continued lower immigration means significantly fewer females of childbearing age and subsequently significantly fewer births…and significantly smaller present and future consumption (GDP).

Demographics & Energy Consumption

To round out the picture, I show the correlation of demographics in energy consumption.  Charts below are total primary energy consumption (oil, coal, renewable, nat. gas, etc) blue line, year over year change in energy consumption (red columns), year over year change in 20 to 60 year old population (green columns), and the central bank set discount interest rate (black dashed line).  Consumption data is from EIA through 2017 and then my estimates through 2040 following existing demographic reality.  After decades (centuries) of energy consumption growth, both Japan and the US continue falling for over a decade now…mirroring their domestic demographic and import/export realities.

JAPAN

US

Make of this data what you will and invest accordingly.

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Mobile Trading Surges In India As Retail Joins Stock Market Party

Mobile Trading Surges In India As Retail Joins Stock Market Party

Tyler Durden

Mon, 07/13/2020 – 19:25

The rise of mobile daytraders has been a global phenomenon during the pandemic. From the US to Europe to China to India, pajama traders swinging stock and options positions from their smartphones steadily increased as global central banks printed trillions of dollars and ignited a historic rally in world stocks. 

Central bank balance sheets expanded rapidly as pandemic began. 

World stocks drop on the pandemic, but V-shaped recovered as central banks unleashed trillions of dollar into global markets. It was the run-up when retail decided to download mobile apps for trading and join the stock market party. 

More recently, daytraders in China have seen a chaotic melt-up catapult the tech-heavy ChiNext index 40% in the last 30 trading sessions. 

US daytraders using the Robinhood mobile app bored during virus lockdowns with no sports and confined to their homes, panic bought shares of bankrupted companies, outpaced hedge funds in returns over the last several months.   

The rise of daytraders using smartphones has also become popular in India. Mobile trading recently overtook internet-based trading in cash markets. 

Nitin Kamath, founder, and CEO of Zerodha, told BloombergQuint, inexpensive smartphones have made mobile trading more accessible to the masses who don’t have access to a desktop computer or traditional stockbroker. 

Official data via the National Stock Exchange of India shows mobile trading turnover in cash markets increased 9-percentage-points to 23% since February, compared against the 4-percentage-point rise to 13% for internet trading during the period. 

As of June, the mobile share of trading on the National Stock Exchange was about a quarter of all traders. 

Upstox, an Indian discount brokerage firm operated by RKSV Securities India Pvt., which has a mobile app for trading – has seen a rapid increase in users this year: 

“Over the last year, Upstox has on-boarded a large number of digitally savvy traders from non-metro cities,” Ravi Kumar, co-founder, said in a statement. “Over 80% of the total customer base acquired by the company is from tier-2 and tier-3 cities like Nashik, Jaipur, Guntur, Patna, Kannur, Tiruvallur & Nainital and among others. Currently, almost 75% of the total customer base is below the age of 35.” 

BloombergQuint notes, “as more investors flock to equity markets, shares of listed brokerages surged in the last three months. ICICI Securities, IIFL Securities Ltd., 5paisa Capital Ltd. and Motilal Oswal Financial Services Ltd. jumped 33-101% during the period.” 

NIFTY’s rising wedge broke – can’t get too excited about this pattern’s downside break. 

Retail is going all-in into equity markets during a global pandemic, worldwide recession, and central banks juicing stock markets with trillions of dollars will ultimately end in tears.

We’ve already outlined Robinhood traders blowing up their accounts by taking out too much leverage. 

And how will this all end for inexperienced daytraders using mobile apps to panic buy stocks across the world at record high valuations? Well, Leon Cooperman recently said it ‘won’t end well’. 

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COVID-19’s “Inconsistent Nature” Confuses Us All

COVID-19’s “Inconsistent Nature” Confuses Us All

Tyler Durden

Mon, 07/13/2020 – 19:05

Authored by Bruce Wilds via Advancing Time blog,

As time goes by covid-19 has proven not to be the hammer or tsunami we feared. It has not taken the large number of lives many experts predicted but it has brought the economy to its knees. It now seems covid-19 is just a deadly bug that will probably with us for some time. Not only has it spread slower than we were told it would but the fatality rate is far lower than many “experts” predicted. Still, this inconsistent beast holds society confused and paralyzed with fear.

The article below is an effort to give this subject some context and frame of reference.

Covid-19 Has Confused Us All

Over time answers have begun to emerge as to the extent covid-19 will have to impact our lives in coming years, however, the truth is being diluted and held hostage by politics. Because I live in a rather conservative area my views may be a bit skewed when it comes to how other Americans see the government’s role in handling the pandemic.

Interestingly, it is mainstream media that is largely responsible for banging the drums of fear by speculating the worst is yet to come. Mainstream media appears to be going out of its way to weaponize covid-19 it an effort to demonize Trump and paint his administration as a failure. One theory is that democrats and other big-spending politicians are using all the fear-mongering as a way to  push a massive stimulus package through with little resistance. This is a very troubling development for those of us that expect our government to be at least somewhat responsible and to consider how its actions will impact society.

Early on I pointed out the “need to know more and collect real information” was crucial to creating a plan that would minimize the damage covid-19 posed. That need still exists. When the virus first appeared, the projection below was written based on the lower edge of what the experts were touting as expected percentages of infection. No wonder people became fearful.

We are all like frogs in a pot of water and the water temperature is slowly rising.

If predictions are correct, I see a giant catastrophe ahead. In a city of 300 hundred thousand people, let’s do some numbers. They est. 40% to 80% of people may get this bug. Of those American health officials say as many as 20% may need to be hospitalized, some for months.

Going with a 50% catch rate, roughly 150,000 people will get infected in my area.

With only a 10% hospitalization rate it would come to 15,000

We sure don’t have the beds in my area to handle such a surge. Note, this is 5% of the population.

In this case, It’s not just about how many people may die but the fact that simply

caring for so many very sick people creates a massive problem!

While it is true we should error to the side of caution when dealing with a new pandemic, the problem is that as this unfolded, not only can we not trust the numbers because of fraud and inconsistent testing from one area to another but when important facts or a shred of truth does emerge it is rapidly mucked up when dropped into this data. Adding to the confusion and fear-mongering flowing from the mainstream media is the fact frustrated Americans confronted with a resurgence of the scourge are facing long lines at testing sites in the summer heat or are getting turned away. Some people are having to wait before receiving a diagnosis. Not only are some test sites running out of kits, but labs are also reporting shortages of materials and workers to process the swabs.

The total failure of Governments across the world to lead us through this mess confirms a bleak future for mankind going forward. One critic of  how this has been handled is Ron Paul, a physician that served as the U.S. Representative for Texas’s 22nd congressional district from 1976 to 1977 and again from 1979 to 1985 recently wrote an article in which he questioned whether the covid-19 spike in Texas was fake news. He contends Texas Governor Greg Abbott’s executive order mandating the wearing of face masks both indoors or outdoors across the state is a violation of the civil liberties of all Texans.

Will History View Fauci As A Hero Or Goat?

Paul argues the executive order is based on inaccurate information about a “rise” in Covid cases due to the Texas State Department of Health Services changing the definition of what constitutes a “Covid case” to a ridiculous levelPaul writes, In a Commissioners Court hearing for Collin County on May 18th, it was revealed that while previously the determination of a Covid “case” was a confirmed test result, the definition was suddenly changed to count “probable” cases as “cases.” This discounts the fact that many people will already carry some natural immunity to covid-19 making them far less likely to catch it.

The policy adopted by Sweden differs greatly from that of other countries. The Swedes have settled on a more traditionalist approach that avoided a full-scale lock-down and has allowed people to maintain their personal freedom even amid this global pandemic. Sweden pursued a course they felt was sustainable and would save as many lives as possible in the long run. While Sweden’s fatality rate is higher than some and lower than others. (Sweden has 543 deaths per million this translates into roughly 1 death in every 2,000 people.) As in other countries, the vast majority of Swedish fatalities have been among people 70 years and older with underlying health conditions.

By settling on a policy, that keeps the economy running, preserves an atmosphere of normality, and exposes its young, low-risk people to the infection, Sweden is moving its population closer towards the ultimate goal of achieving “herd immunity.” Some people think Sweden is very close to reaching the point where the majority of people have developed antibodies that will help to fend-off similar sars-covid infections in the future. This would ensure that future outbreaks will be less disruptive and less lethal. It must be noted that even The Herd Immunity Threshold (“HIT”) is still being debated.

The reason everyone was so scared about covid-19 originally was because after the lock-down in China it was hyped as a completely new deadly virus with no known cure or natural protection. That has turned out to be false but has been promoted by Fauci and many others. This has resulted in vast destruction to the US economy, an explosion in our national debt, an unprecedented spike in unemployment, and the destruction of tens of millions of small businesses. As we look back most people will realize the error we have made by shutting down a $21 trillion economy and ordering 340 million people into quarantine because a small number of people may die.

All this means is the subject of a “covid future” has a lot of parts that we have yet to face. Successfully balancing the damage to the economy and the mess it makes of our lives with health issues is a difficult act. It includes the complications, health issues, and other negative outcomes arising from covid and all the ways that it can affect you even if it doesn’t actually kill you. It includes whether schools should be reopened, whether it is safe to fly, and if governments are abusing our rights when ordering people about claiming it is for the greater good. Expect the confusion to continue but rest assured that through all this, those making the rules and at the top of the food chain will be sure to remain unscathed.

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New Court Filing: Ghislaine Maxwell ‘Fled’ Across House During Raid; FBI Found Tin Foil-Wrapped Cell Phone

New Court Filing: Ghislaine Maxwell ‘Fled’ Across House During Raid; FBI Found Tin Foil-Wrapped Cell Phone

Tyler Durden

Mon, 07/13/2020 – 18:45

According to a Monday court filing (see below), Ghislaine Maxwell bolted to another room when FBI agents showed up to her secluded New Hampshire estate to arrest the accused sex-trafficker.



Ghislaine Maxwell pictured in front of her New Hampshire estate (Illustration: Bruce Hubbard)

When agents entered, they found a cell phone wrapped in tin-foil sitting on a desk in what prosecutors described as a “misguided effort to evade detection, not by the press or public, which of course would have no ability to trace her phone or intercept her communications, but by law enforcement.”

FBI agents were first barred from entering the property by a locked gate they had to pry open and were then confronted by one Maxwell’s private guards, according to the U.S.

When the agents approached the front door, they caught a glimpse of Maxwell through the window, trying to “flee” rather than answer them. The FBI ultimately forced to “breach” Maxwell’s door to enter and only arrested Maxwell after she was found “in an interior room in the house,” according to the government. –Bloomberg

According to the filing, one of Maxwell’s security guards told agents that that the British socialite’s brother had hired former members of the British military to guard her 24-7. As Bloomberg reports, Maxwell gave one of the guards a credit card in the name of the same LLC which bought her luxury New Hampshire bugout last year. According to the guard, Maxwell hadn’t left the property in the time he’d been working there, and had been ordered to buy things for the estate.

Federal prosecutors detailed the lengths Maxwell went to in order to evade US law enforcement in order to argue that she’s a flight risk who has access to “extraordinary financial resources” and would flee the country if allowed free on bail. A federal judge will decide on Tuesday whether to grant Maxwell’s request to post $5 million bond so she can live under house arrest until her trial.

“She has demonstrated her ability to evade detection, and the victims of the defendant’s crimes seek her detention,” said DOJ prosecutors in their filing. “Because there is no set of conditions short of incarceration that can reasonably assure the defendant’s appearance, the government urges the Court to detain her.”

Maxwell wouldn’t be extradited if she fled to France where she has citizenship, argued the prosecution, as the country does not extradite its own citizens to the US for prosecution, according to the report.

The government also argued Maxwell has been hiding from authorities, living in a secluded 156-acre estate in Bradford, New Hampshire, since late last year.

Maxwell is accused of luring girls as young as 14 for sexual encounters with Epstein and engaging in some of the abuse. Prosecutors argued she could face as long as 35 years in prison if convicted. Epstein died in a Manhattan lockup last August of an apparent suicide while awaiting trial on federal sex-trafficking charges.

While Maxwell’s lawyers said in a separate court filing that she has six people willing to co-sign her bond, prosecutors argued she hasn’t identified these people, whether any are even in the U.S. or have the sufficient finances to pay if she does flee. –Bloomberg

Maxwell’s defense team also cited her long ties to the US, where she has lived for decades. They’re also arguing that Maxwell was covered by Epstein’s controversial 2007 non-prosecution agreement  which allowed the convicted pedophile to avoid federal sex trafficking charges.

Federal prosecutors called that “absurd,” arguing that the current case involved evidence from two new accusers who weren’t involved in the prior prosecution – and that their case could become “even stronger” as additional witnesses have come forward to offer evidence against Maxwell.

See the filing below:

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Taleb: Tail-Risk Hedges Are Now A Necessity

Taleb: Tail-Risk Hedges Are Now A Necessity

Tyler Durden

Mon, 07/13/2020 – 18:25

Authored by Michelle Jones via ValueWalk.com,

Tail risk hedges are designed to only pay off when the markets suddenly plunge, so many investors don’t have the stomach to carry them. However, one expert on tail risk funds advises investors not to be in the market right now if they aren’t using a tail hedge.

No V-shaped recovery

Black Swan author Nassim Nicholas Taleb told CNBC in an interview that doesn’t expect a V-shaped recovery like most investors seem to expect. He considers the market’s continuing rise to be strange because it’s been happening while the numbers of COVID-19 infections and deaths have continued to rise.

He warned that the market’s rise could result in more economic pain on top of the human tragedy of the pandemic. He added that while policymakers are “printing money like there’s no tomorrow,” it may all come to nothing. He also said that the Federal Reserve slashed interest rates to below 0% and 0.25% in March and that it may not have much room to provide further support amid the resurgence in infections.

He expects the fears about the coronavirus to plague the economy and the market for a long time. He said even if the pandemic dies down, the virus will still be out there. That means fearful customers won’t be rushing to spend money again.

“And COVID seems to be there even if the pandemic … dies down, [so] you will still have people cautious enough that it will impact a lot of industries,” he said.

Caution among consumers will still have a negative impact on many industries, he warned.

Why tail risk hedges are needed

Taleb believes investors shouldn’t be in the market without a tail risk hedge because of the high degree of uncertainty about the future right now. Tail events are extreme situations that have a lower probability of happening compared to other scenarios. However, the odds of these tail events happening increases during times of uncertainty even though they remain lower than the odds of the set of standard outcomes.

“If you don’t have a tail hedge, I suggest not being in the market [as] we’re facing a huge amount of uncertainty…”

Tail risk funds benefit from such rare events because they prepare for the possibility of them. According to MarketWatch, the uncertainty around the COVID-19 pandemic has been especially good for tail risk funds.

The CBOE Eurekahedge Tail Risk Volatility Hedge Fund Index is up 48.19% year to date. The Dow Jones Industrial Average is down nearly 12%, while the S&P 500 is down 6.2% and the Nasdaq Composite is up by about 10%.

The problem with tail risk funds is that they tend to lose money during bull runs, but if uncertainty is here to say like Taleb believes it is, now could be the time to put tail risk hedges in place.

Meanwhile, Universa, managed by Mark Spitznagel, saw an eye-popping 4,000% return in his tail-risk fund during the height of the pandemic. Taleb has been an adviser on that fund.

The key is to protect your portfolio from tail risks without actually betting on them. The Wall Street Journal reported about two years ago that funds which attempted to bet solely on volatility tend to outperform because they fail to benefit when the market rebounds.

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Daily Briefing – July 13, 2020

Daily Briefing – July 13, 2020


Tyler Durden

Mon, 07/13/2020 – 18:10

Senior editor Ash Bennington hosts Ed Harrison for a conversation about life and markets during coronavirus. Using Tesla as a jumping off point, they take an existentialist turn and explore what might bring people to speculate on a stock that, by all traditional metrics, is extremely overvalued. Ed proffers that people who take a gamble on Tesla and other retail favorites do so out of a sense of desperation in order to feel a sense of control, at a time when they feel powerless. Ash provides additional color on Ed’s theory by analyzing the impact of fiscal stimulus. Ed and Ash also they frame their thinking through today’s interview with Mark Blyth and Eric Lonergan. In the intro, Jack Farley explores the coming “fiscal cliff” in the U.S., and puts Tesla’s extreme price action in context.

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Banks Use COVID As Cover To Shutter Branches Across America

Banks Use COVID As Cover To Shutter Branches Across America

Tyler Durden

Mon, 07/13/2020 – 18:05

The Office of the Comptroller of the Currency (OCC) acting head Brian Brooks said banks should not use the cover of the virus pandemic to shrink branch footprints across cities and towns, the Financial Times reported.

Brooks warned in a recent interview with the European financial daily newspaper that he “was not prepared to revisit the fundamentals of bank regulation” due to the pandemic. 

“I do not believe this is the worst thing that’s ever happened in the history of the republic, and so, therefore, I am not prepared to revisit the fundamentals of bank regulation,” he said. 

He said banks shouldn’t expect permanent concessions from regulators because of virus-related issues. 

Many bank branches were temporarily closed for months due to virus-related shutdowns. Customers heavily relied on online services, and bankers told FT they hope the pandemic will allow them to “accelerate branch closures.” 

Brooks said national banks preparing to shrink branch footprint must inform OCC three months in advance along with a detailed explanation of the reasoning. The latest Federal Deposit Insurance Corporation (FDIC) data shows 6%, or 4,500 bank branches, have closed in the last decade. 

He said, “the pandemic is a one-time event that has affected a relatively small sliver of society compared to the number of people who depend on financial services and branches.” 

Adding that “people who want to be allowed to use cheques should be. I really do hope that we don’t over-index on Covid-19. It is a big deal, but it should not be cover for a whole bunch of unrelated stuff.”

Brooks said banks must not “abandon our cities” – after the pandemic, there will be consequences for these actions. 

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Save America From Cancel Culture

Save America From Cancel Culture

Tyler Durden

Mon, 07/13/2020 – 17:45

Authored by Richard Ebeling via The American Institute for Economic Research,

One of the new fashionable phrases has become “cancel culture,” the idea that ideas, institutions, and people of the present as well of the past must be overturned and dethroned from legitimacy and acceptance in society, so as to expunge the injustices, cruelties, and insensitivities existing in current life and lingering over from history. The question is: what exactly is the culture in America that is to be cancelled?

Elements of the “cancel culture” mindset and movement have been seen in the tearing down of statues, demands for removing from buildings and other monuments the names and imageries of various people, and the ostracizing of certain individuals, living or dead, who are accused of and condemned for racist, sexist, and other politically incorrect words or deeds at any time during their life. 

White racists of the past used to say that “one drop of black blood” disqualified any person from having status as a member of the “superior” white race, and, instead, relegated you to the lower category of being an inferior being. Now we see another variation on the same type of theme: One word or deed, no matter how innocent or innocuous, no matter how long ago or in the context of an earlier less “enlightened” time, and no matter how much of a “higher consciousness” you have had ever since, or how publicly apologetic you may be for that “sin’” of the past, none of this can save you from banishment, seemingly for all time, from good “woke” society. 

You are cast out to the nether regions of human existence. Erased from the record of humankind. And all because everything “American,” past and present, should be seen as the essence of all things evil and immoral. Because what the country has stood for and done represents the worst in human history. 

Racial Bigotries and Cruelties of the Past

Of course, endless examples and instances of such racist attitudes and behaviors can be offered from the pages of American history. For instance, historian John B. McMaster (1852-1932) detailed the racist actions of white prospectors and fortune-hunters in California, following the gold discoveries in 1848, in his History of the People of the United States 1850-1861, Vol. 8 (1913): 

“Hatred of the ‘greaser’ was early and strongly developed, and in the northern and central mining regions Chileans, Peruvians, even Frenchmen were driven from the placers. Here and there some resistance was made; but in most instances they quietly submitted and went off to the valley of the San Joaquin. Germans, English, Irish were not disturbed, for it was against the dark-skinned races, Malays, Kanakas, Spaniards, and above all Mexicans and South Americans that feeling ran high…

“The greasers having been driven from the State, the wrath of the native Americans fell next on the Chinese . . . At first the Celestials, the China boys, met a warm welcome, and in San Francisco on more than one occasion were the object of public attention . . . In the mining camps, on the other hand, the feeling against the Chinese ran high, and meetings were held, and resolutions passed calling for their expulsion . . . A few days later some sixty American miners came down the north fork of the American River, drove away two hundred Chinese, and destroyed their tents.” (pp. 60-63)

The classical liberal author and essayist, Albert Jay Nock (1870-1945), penned a piece that appeared in the American Magazine (February 1913) on, “What We Stand For” (reprinted in, The State of the Union: Essays in Social Criticism by Albert Jay Nock [1991]) He asked what America was really about when a black man could be dragged from a hospital bed by a mob, and then burned alive:

“On Sunday evening, August 13, 1911, at the hour when churches dismiss their congregations, a human being named Zack Walker was taken by violence out of a hospital at Coatesville, Pennsylvania, where he lay chained to an iron bedstead, in the custody of the law, suffering from a shot-wound, apparently self-inflicted.

“The bedstead was broken in half, and the man, still chained to the lower half, was dragged half a mile along the ground, thrown upon a pile of wood, drenched with oil, and burned alive. Other human beings to the number of several hundred looked on in approval. When Walker with superhuman strength burst his bonds and tried to escape, they drove him back into the flames with pitchforks and fence-rails and held him there until his body was burned to ashes. Those who could get fragments of his charred bones took them off as souvenirs.” (p. 139)

Nock wondered what this told us about human beings in modern, supposedly civilized society, whether in America or anywhere, who would act in such ways? 

America is Not a Lie, But an Ideal of Liberty in Progress

The cancel culture proponents, and most certainly the more “activist” and radical among them, would insist that such episodes tell us all we need to know about America, and that the America of the mid-19th and early 20th centuries, about which historian, John B. McMaster, and essayist, Albert Jay Nock, wrote, is the same America today. 

Is that what American culture is, and always has been about? I would beg to differ. If it was, let me suggest that we would not have seen the improvements in racial and social circumstances and conditions that have happened over the last century. Segregation laws are long gone, and, if anything, laws have been introduced to impose and police compulsory integration under federal anti-discrimination laws. 

Employments, professions, and occupations that had been long reserved for “whites only” went out with the Jim Crow statutes in the South, and to the extent that “social distancing” was practiced by many whites due to personal and peer-pressure prejudices, over the last half century these have radically disappeared in an amazing array of social and interpersonal settings. 

The civil liberties expressed in the Bill of Rights no longer apply to some while not to others. Where violations, abuses, and any other willful acts may occur, legal defenses, advocacy groups, and general public opinion in the age of mass and social media try to limit or turn a bright light onto such conduct in most instances today; and pressures are made for the introduction of reforms that would make such behavior less frequent, if not impossible, and not to go unpunished. 

I have no wish to sound Panglossian, that the world we are in is the best of all worlds. It is certainly not. And as a classical liberal who believes in and cares deeply about the rights and dignity of the individual human being, all such infringements, denials, and abuses are unacceptable affronts to what I consider the moral principles upon which any good and decent society should and can be based. 

Liberty is a Single Tapestry of Civil and Economic Liberty

Classical liberalism is not simply a political philosophy of economic freedom. The right to honestly acquire private property, the right to freedom of association in the competitive marketplace of supply and demand, the right to produce, buy and sell whatever individuals choose to on the peaceful and non-fraudulent terms to which the participants agree, are essential elements to any consistent practice of liberty in society. 

But for most classical liberals and libertarians, the starting premise and principle from which economic liberty is derived is the broader right of the individual to be viewed as having the most basic and fundamental property right: to himself. Each individual is a self-governing person, having “sovereignty” over his life, liberty, and the external properties that he has acquired with either his own direct efforts of production or through the free and honest exchange entered into with others. 

Freedoms of speech, the press, and of religion; the right of association for any and all peaceful purposes, to be secure in one’s person and papers and other properties from those in political power without legal warrant and due process of equal and impartial rule of law; these and other such rights captured in the U.S. Constitution and complementary legal bases, means the of securing and protecting the civil liberties and rights that are inseparable threads along with economic freedom in the tightly woven single tapestry of human liberty. To abuse or abridge any one of them is a threat and a warning signal to all other sides of liberty. 

This is what makes the principles and founding documents of the American Revolution and the U.S. Constitution impossible to be viewed as defenses of slavery or legal segregation and discrimination, or institutional racism. The American founding runs counter to all such conduct in its vision, hope and promise for a society based on the sanctity, dignity, and respect for the individual and his rights from the violent betrayal of either private persons or those in political power. 

Justice David Brewer on Free, Self-Governing Americans

David J. Brewer (1837-1910) served as an associate justice on the United States Supreme Court for 20 years, from 1889 to 1910. He strongly advocated equal rights and respect for women, worked for equal opportunities for black Americans, and supported freedom of association among workers. In a series of lectures delivered at Yale University on American Citizenship (1902), Justice Brewer explained what it meant to be an American in terms of defining beliefs and ideas:

“This is a government of and by and for the people. It rests upon the thought that to each individual belong the inalienable rights to life, liberty and the pursuit of happiness. It affirms that the nation exists not for the benefit of one man, or set of men, but to secure to each and all the fullest opportunity for personal development. It stands against the governments of the Old World in that there the thought is that the individual lives for the nation; here the nation exists for the individual…

“Far be it for me to affirm that we have lived up to our ideals. I am making no Fourth of July speech. On the contrary, our history has disclosed many shortcomings. We have not been free from the weaknesses of human nature. But, notwithstanding all our failures, nowhere has there been a closer living to the ideals of popular government, and nowhere are the possibilities of future success greater.

“If, therefore, the chief object of national existence is to secure to each individual the fullest protection in all inalienable rights and the fullest opportunity for personal advancement, and if this nation has come nearer than any other to the realization of this ideal, and if by virtue of its situation, its population, and its development, it has the greatest promise of full realization of this ideal in the future, surely it must be that the obligations of its citizens to it are nowhere surpassed.” (pp. 14, 17-18)

The obligation of an American citizen was to live up to this ideal of a land dedicated to the liberty and rights of each and every individual. To strive to practice what was preached. Clearly, to overcome those weaknesses in human nature that resulted in a failure to fully respect and live by the idea of human freedom, a society in which the government exists to protect the individual in his rights and not to make the individual a subject to those in political power for their own purposes, whether those in power was one, or a few, or even many. 

Hans Kohn, Austrian Historian Who Found a Home in America

Sometimes, moments of great political and ideological crisis place things in more essential defining clarity. Certainly, the rise of totalitarianism in the years between the two World Wars was such a time, which reached its climax in the Second World War. In the eyes of many, the crisis of that time was between two conceptions of man, society and government. Communism and Nazism represented a reactionary turn toward a comprehensive and cruel collectivism that would envelop and crush the individual in the rush for making “new men” based on Marxian-imagined social class or National Socialist biological race. 

On the other side was the ideal of free men in a free society, without human beings reduced to cogs in the wheels of political tyranny and social terror. America, in the eyes of many at that time, represented the alternative to the totalitarian threats. One of them was historian Hans Kohn (1891-1971), a recognized leading scholar on the idea and history of nationalism in the modern age. 

Born in Prague in the old Austro-Hungarian Empire, he became a determined Zionist in his 20s. Kohn served as an officer in the Austro-Hungarian Army when the First World War began in 1914, but was captured by the Russians in 1915 on the Eastern Front, and spent five years in Russia as a prisoner of war, witnessing both the Russian Revolution of 1917 and the three years of bitter and brutal Civil War that followed before in Russia before returning home to Prague.

Kohn spent several years in Palestine in the 1920s but became disillusioned with a political and nationalist Zionism that showed little regard for the rights of the Palestinians with whom the immigrant European Jews were increasingly living. He came to the United States in the early 1930s and remained in America for the remainder of his life, devoting his scholarly efforts to analyzing and understanding the nature and consequences of nationalism versus the liberal and free society in general. 

America as the Liberal Ideal of the Free Society

In Hans Kohn’s view, in that world crisis between freedom and liberalism versus totalitarian tyranny, America held a unique philosophical position. He explained this in one of his wartime works, World Order in Historical Perspective (1942):

“All the great currents of the Western liberal development of the 17th and 18th centuries were able to ripen to fruition under the especially favorable circumstances of the English colonies in North America and in the wake of their revolutionary movement.

“Here, more than anywhere else, emerge the Western man; not as a race, because he was a mixture of many races, but as a social and intellectual type, professing a deep faith in man and his potentialities, and trying to build a civilization on the basis of rationalism, optimism, and individualism. The American society more than any other is a product of the 18th century, of the faith in freedom and in ultimate harmony; a typical middle-class society with its ultimately pacifist ideal . . .

“No wonder that Europeans looked longingly toward the vast spaces of North America, where they saw the possibility of establishing a society without kings or nobles, a society founded upon the philosophy of the century. Though the Americans had come from Europe, they seemed to be changed men, as if the air of America were filled with liberty and were able to transform men’s minds and hearts . . .

“Among the realities of national life, the image which a nation forms of itself and in which it mirrors itself is one of the most important. Though the everyday reality, in many ways, does not correspond to the image and falls far short of its ideal perfection – sometimes even contradicts it in the countless and conflicting trends of the complex actuality – nevertheless, this image, woven of elements of reality, tradition, imagination, and aspiration is one of the most influential agents in forming the national character. It helps to mold national life; if it does not always act in a positive direction, it acts at least as a constant brake.” (pp. 9-10, 17-18)

This inspiration and aspiration of a society of free men, based as Kohn said, on rationalism, optimism, and an individualism of liberty was and is real. It has not been a fabrication, a “false consciousness” to hide a reality of oppression, discrimination, and racism. There have been oppressions, discriminations and racisms. But the fact that they ran contrary to what the country has stood for in terms of its own image of what an American is supposed to be and stand for, and which has been that mirror, as Kohn suggested, that reflects back on the actualities of men’s words and deeds, that has made Americans, however slowly and sometimes grudgingly, move more in the direction of those ideals, without which there really is no reason or rationale for an “America.” 

That racism was a deep and deadly wound in the American reality was not lost or deemphasized by Hans Kohn. In a contribution to the Encyclopedia of the Social Sciences (1938) on “Race Conflicts,” he said and warned that racial inequality and mistreatment, epitomized by the brutality of the lynching of black men was, “conducive not only to the destruction of democracy and liberty, but also to the undermining of justice and law.” 

“Cancel Culture” Would Destroy America’s Memory and Hope

The “cancel culture” radicals, made up of the “politically correct,” the “identity politics” warriors, and “democratic” socialists, who all are dreaming dreams of a new tribal collectivism of mind control, political planning, and the social engineering of their own versions of a “new person,” want to wipe out any knowledge, memory, or belief in that American ideal about which people like Justice David J. Brewer or historian Hans Kohn attempted to explain both what it was and to argue its importance for Americans and all of humankind. (See my articles, “The Meaning and Mind of an American” and “Ad Hominems Against Freedom” and “Liberty is the Theme of the American Spirit”.)

If the cancel culture destroyers win, then America will be no different than the rest of the world; a world filled with racial genocides, religious bigotries and wars, plundering despotisms, and political paternalisms that reduce human beings to expendable pawns on a great chessboard manipulated by others who arrogantly believe they know how we all should live and what each of us “really” deserves. 

When the famous 19th century sociologist and laissez-faire liberal, Herbert Spencer (1820-1903), visited the United States in 1882, he said to an American news reporter:

“As one of your early statesmen said, ‘The price of liberty is eternal vigilance.’ But it is far less against foreign aggressions upon national liberty that this vigilance is required than against insidious growth of domestic interferences with personal liberty . . .

“The fact is, that free institutions can be properly worked only by men each of whom is jealous of his own rights and is also sympathetically jealous of the rights of others – will neither himself aggress on his neighbors, in small things or great, nor tolerate aggression on them by others. The republican form of government is the highest form of government; but because of this it requires the highest type of human nature – a type nowhere at present existing. We [the British] have not grown to it, nor have you [the Americans].”

But how can we hope to grow more into that type of person who is respectful and jealous for his own liberty and protective of that same liberty that rightfully belongs to all others – including to be free from racist bigotries and political injustices that may flow from it – that American culture of individualism, and personal, social, and economic liberty, and the ideal of a government of impartial rule of law devoted to securing each person’s individual rights, if it is all “cancelled” through the destruction and the repression of all knowledge and understanding of the country’s history, the good and the bad?

How shall that history be an inspiration and an aspiration for the next generations if it is all torn down and cast away? And most importantly, the denial and distortion of its founding ideals of a morality of a free people?

It is why all possible effort must be made to resist and rationally respond to a “cancel culture” that would erase the history and memory of America from the minds of humankind.

via ZeroHedge News https://ift.tt/38WYvfg Tyler Durden

Parents Are Paying $50,000 To Reserve Spots At NYC Private Schools Even Though Kids May Never Attend

Parents Are Paying $50,000 To Reserve Spots At NYC Private Schools Even Though Kids May Never Attend

Tyler Durden

Mon, 07/13/2020 – 17:25

Parents in New York City are locking up spots at elite private schools for their kids by paying deposits of up to $50,000 – even though children may never wind up attending.

One mom highlighted by Bloomberg paid more than $50,000 per child to reserve NYC private schools for her kids while at the same time enrolling them in public school out west, where the family is staying during the Covid outbreak. She is hoping her kids can use Zoom to attend classes in the interim, if the family doesn’t re-locate back to the city.

This is a growing trend in the world of NYC private schools. With many families having fled the city, they are on the hook to make a decision about whether to lock up schooling for their kids for the fall. The spots at private school can be tough to get and are coveted within the city, so many parents have taken the “safe” route of paying for schooling they may not ever use.

Schools are also coming up with ways to try and ensure they stay funded regardless of volatility with enrollment. Fanning Hearon, head of school at Palm Beach Day Academy in Florida, where many New York families applied, said: “A lot of people are just hedging their bets.” Hearon said 3 students were confirmed on Wednesday while at the same time 2 others dropped enrollment.

Grace Church School in New York’s Greenwich Village is charging $53,330 for tuition and about 4% of families said they won’t be coming back this year despite putting down $6,000 deposits. At Avenues: The World School, parents can take a year break by paying about 15% of tuition, or about $8,500. 

The Horace Mann School in the Bronx says that if students want to stay enrolled, they need to be back this year, or they will be forced to reapply next year. The Trinity School has seen no one pull out yet. The Dalton School on the Upper East Side says it’ll be doing fully remote classes for students who want it. 

Private schools usually require a deposit by Februrary or March the year prior to enrollment. This year, that deadline has been moved to summer for many schools as parents continue to create logistical volatility for those running the schools. Roxana Reid, an admissions consultant, said:  “Schools don’t even know if they’re officially going to be coming back.” 

Adding to the volatility is the unknown elements of the virus. Jeff Pothof, an emergency-room physician who consults for schools, said: “You might invest significant time and resources and do things that are hugely disruptive to yourself and your children, and a month later come to regret it because where you went is worse and has more cases than where you came from.”

Conversely, the volatility has allowed some parents without access to private schools to make their move and try to get their children enrolled. Schools are now more open to speaking to new families, as well. Robin Aronow, a school admissions consultant concluded: “They hope their own families will be able to return. They’re also being realistic that they may have openings to fill.”

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