Category: zerohedge

As President Trump prepares to sign a bill imposing new sanctions on Chinese officials involved with the country’s sprawling security state, the White House has just unveiled its latest measure to turn up the pressure on Beijing: Chinese grad students with ties to the PLA will be barred from returning.

The news comes as China’s Politburo Standing Committee officially weaves a new “National Security” law effectively barring political dissent into HK’s Basic Law, according to the NYT.

Per the NYT, the Trump administration plans to cancel the visas of thousands of Chinese graduate students and researchers studying at US Universities who have ties to the People’s Liberation Army, according to anonymous administration officials.

This isn’t the first time the White House has considered barring some or all Chinese students in the US. Back in 2018, the FT reported that  the Trump administration had considered banning all Chinese students from the United States – an idea that was attributed to Trump advisor Stephen Miller.

And according to the NYT, this measure has been in the works for some time, and was being considered before China moved to crack down on Hong Kong’s autonomy.

Moreover, this might not be the end of Trump’s retaliation: The president has a long list of possible responses to China’s plans to impose a national security law on Hong Kong, according to Assistant Secretary of State for East Asian and Pacific Affairs David Stilwell, who spoke to reporters last night.

Two weeks ago, with traders and analysts wondering who has been aggressively buying stocks in the past 2 months as markets tumbled – besides retail investors of course – we gave the answer: the money-printing (literally) hedge fund known as the Swiss National Bank.

As we explained then, we showed that as the value of the SNB’s US equity holdings increased more than threefold, from $26.7 billion in Dec 2014 to $97.5 billion in Dec 2019….

… the SNB had kept its total holdings relatively flat for the past year, conserving its dry powder for just the right occasion, an occasion which materialized in March, and the Swiss National Bank went on a buying spree as markets crashed, adding roughly 22% (on average) to its top positions.

Also according to the SNB’s latest 13F, as of March 31, the central bank owned $4.5 billion in Microsoft shares, $4.4 billion in Apple, $3.2 billion in Amazon, $2.7 billion in Google and $1.6 billion in Facebook, also known as the FAAMG stocks which as everyone knows by now, have become the market leaders, accounting for over 20% of the S&P’s market cap.

And the punchline: the SNB added approximately 22% to its holdings of each of the FAAMGs in Q1 as follows:

• MSFT: +23%
• AAPL: +21%
• AMZN: +23%
• GOOGL: +22%
• FB: +23%

In short, to keep the value of its portfolio of US stocks relatively flat at $100BN, the SNB unleashed a massive buying spree that boosted its FAAMG holdings by over 20%, which in turn sent the bank’s foreign currency reserves – roughly $100BN of which are parked in the US stock market – to an all time high.

As a reminder, the SNB is one of the few central banks – the BOJ being the other – which openly buys equities in order to keep the value of the Swiss franc from rising too rapidly. The fund flow is simple: the SNB prints CHFs, which it then sells for USDollars – in the process depressing the value of one of the world’s most sought after safe haven currencies – and uses the proceeds to buy US stocks of which it owns about $100 billion. In many ways, this is similar to what the Fed does, only instead of buying Tsys, MBS, and now corporate bonds, the SNB is buying equities.

Simple enough.

And now, in order to convinced currency speculators to stay away from the Swiss Franc which, similar to the dollar, has seen an impressive surge in recent months, the Swiss National Bank announced on Wednesday that is intervening more heavily in the foreign exchange market to weaken the franc and can further cut interest rates, if a cost-benefit analysis warrants such a step, SNB President Thomas Jordan said.

“We have room to maneuver for both instruments,” Jordan said at a panel discussion hosted by UBS Group AG. “It’s clear that we have the possibility to cut rates if necessary.”

He may be telling the truth, although some wonder: with the SNB having cut the Swiss deposit rate to a record low -0.75% plus a pledge to wage foreign exchange market interventions to keep the franc in check, some have suggested that it is approaching the reversal rate beyond which any further cuts hurt not help the economy. Yet with pressure on the haven currency rising as a result of the coronavirus pandemic, Bloomberg notes that Swiss central bank officials said they’d picked up the pace of activity, something we already discussed when we noted that in Q1 the SNB unleashed a massive buying spree of US stocks.

Addressing the SNB’s policy dilemma, whereby further rate cuts may now be self-defeating, Jordan said any policy step required a cost-benefit assessment and that the SNB would enlarge its balance sheet via interventions if the pros outweighed the cons. And due to the unique nature of the SNB, what Jordan really meant, is that he is willing to buy even more tech stocks should the franc continue to rise.

We bring this up just in case there is still confusion just who was buying FAAMGs and tech names as everything else crashed.

We also bring it up to bring some clarity to a truly bizarro world: one where, the worse the global economy gets, the more aggressively at least one central bank to buying US tech stocks.

Authored by Yanis Varoufakis via Project Syndicate,

To exorcise my worst fears about the coming decade, I chose to write a bleak chronicle of it.

If, by December 2030, developments have invalidated it, I hope such dreary prognoses will have played a part by spurring us to appropriate action.

Before our pandemic-induced lockdowns, politics seemed to be a game. Political parties behaved like sports teams having good or bad days, scoring points that propelled them up a league table that, at season’s end, determined who would form a government and then do next to nothing.

Then, the COVID-19 pandemic stripped away the veneer of indifference to reveal the political reality: some people do have the power to tell the rest of us what to do. Lenin’s description of politics as “who does what to whom” seemed more apt than ever.

By June 2020, as lockdowns began to ease, left-wing optimism that the pandemic would revive state power on behalf of the powerless remained, leading friends to fantasize about a renaissance of the commons and a capacious definition of public goods. Margaret Thatcher, I would remind them, left the British state larger, more powerful, and more concentrated than she had found it.

An authoritarian state was necessary to support markets controlled by corporations and banks. Those in authority have never hesitated to harness massive government intervention to the preservation of oligarchic power. Why should a pandemic change that?

As a result of COVID-19, the grim reaper almost claimed both the British prime minister and the Prince of Wales, and even Hollywood’s nicest star. But it was the poorer and the browner that the reaper actually did claim. They were easy pickings.

It’s not hard to understand why. Disempowerment breeds poverty, which ages people faster and, ultimately, readies them for the cull. In the shadow of falling prices, wages, and interest rates, it was never likely that the spirit of solidarity, which soothed our souls during lockdowns, would translate into the use of state power to strengthen the weak and vulnerable.

On the contrary, it was megafirms and the ultra-rich that were grateful socialism was alive and well. Fearing that the masses, condemned to the savage arena of unfettered markets amid a public-health disaster, would no longer be able to afford to buy their products, they reallocated their spending to shares, yachts, and mansions. Thanks to the freshly printed money central banks pumped into them via the usual financiers, stock markets flourished as economies collapsed. Wall Street bankers assuaged their guilt, lingering since 2008, by letting middle-class customers fight over the scraps.

Plans for the green transition, which young climate activists had put on the agenda before 2020, were given only lip service as governments buckled under towering mountains of debt. Precautionary saving by the many reinforced the economic depression, yielding industrial-scale discontent on a browning planet.

The disconnect between the financial world and the real world, in which billions struggled, inevitably widened. And with it grew the discontent that gave rise to the political monsters I was warning my left-leaning friends about.

As in the 1930s, in the souls of many, the grapes of wrath were growing heavy for a new, bitter vintage. In place of the 1930s soapboxes from which demagogues promised to restore dignity to the disgruntled masses, Big Tech provided apps and social networks perfectly suited for the task.

Once communities surrendered to the fear of infection, human rights seemed an unaffordable luxury. Big Tech developed biometric bracelets to monitor our vital data around the clock. In cahoots with governments, they combined the output with geolocation data, fed it all into algorithms, and ensured that the population received helpful text messages informing them what to do or where to go to stop new outbreaks in their tracks.

But a system that monitors our coughs could also monitor our laughs. It could know how our blood pressure responds to the leader’s speech, to the boss’s pep talk, to the police announcement banning a demonstration. The KGB and Cambridge Analytica suddenly seemed Neolithic.

With state power re-legitimized by the pandemic, cynical agitators took advantage. Instead of strengthening voices calling for international cooperation, China and the United States bolstered nationalism. Elsewhere, too, nationalist leaders stoked xenophobia and offered demoralized citizens a simple trade: personal pride and national greatness in exchange for authoritarian powers to protect them from lethal viruses, cunning foreigners, and scheming dissidents.

Just as cathedrals were the Middle Ages’ architectural legacy, the 2020s left us tall walls, electrified fences, and flocks of surveillance drones. The nation-state’s revival made the world less open, less prosperous, and less free precisely for those who had always found it hard to travel, to make ends meet, and to speak their minds. For the oligarchs and functionaries of Big Tech, Big Pharma, and other megafirms, who got on famously with the strongmen in authority, globalization proceeded apace.

The myth of the global village gave way to an equilibrium between great-power blocs, each sporting burgeoning militaries, separate supply chains, idiosyncratic autocracies, and class divisions reinforced by new forms of nativism. The new socioeconomic cleavages threw the prevailing features of each country’s politics into sharp relief. Like people who become caricatures of themselves in a crisis, whole countries focused on their collective illusions, exaggerating and cementing pre-existing prejudices.

The great strength of the new fascists during the twenties was that, unlike their political forebears, they did not even have to enter government to gain power. Liberal and social-democratic parties began to fall over one another to embrace xenophobia-lite, then authoritarianism-lite, then totalitarianism-lite.

So, here we are, at the end of the decade. Where are we?

Steve Bannon and his associates were handed a win in his ongoing legal battle over the fate of his populist training academy, which had its 19-year lease to a 13th century monastery revoked last year by the Italian Ministry of Culture.

After hearing arguments several weeks ago, three administrative judges ruled that the state has no right to revoke the lease awared to Bannon and his partner Benjamin Harnwell – a British conservative who founded the Dignitatis Humanae Institute (The Institute for Human Dignity, or DHI).

The Abbey of Trisulti, which sits on land owned by the Ministry of of Culture, will house to Bannon and Harnwell’s training academy for European nationalists – if they win the next phase of their legal entanglement with the Ministry, which says it plans to appeal the decision to Italy’s Council of State, according to Reuters.

Harnwell – a former conservative British politician, says he hopes to resume restorations on the property, and that registration for an on-line program taught from the United States would begin shortly.

Bannon and Harnwell’s fight is far from over, however. According to ArtNet, the judges ruled that the Ministry of Culture failed to seek an annulment of the contract within the legally allotted time period – so Bannon and crew won on a technicality.

The judges left the Ministry a loophole, however, pointing out that in order to prevail the Ministry must prove their allegations against DHI in a criminal court. Within 48 hours, Rome’s Attorney General announced that DHI is now facing criminal prosecution over supposed contractual crimes.

“We stood by the monastery, the community and Italy during this pandemic when it would have been easy to walk away,” Bannon said in a statement issued through Harnwell. “We now launch the program of learning and training that will make the world more prosperous, more secure, and more healthy for everyone.”

Authored by Tsvetana Paraskova via OilPrice.com,

The flow of natural gas from Russia to Europe via the Yamal-Europe pipeline crossing Poland completely stopped on Tuesday after a two-and-a-half-decade-old transit deal between Russia and Poland expired and after the COVID-19 pandemic battered gas demand in Europe.

The Russia-Poland transit deal for natural gas from the Yamal peninsula to Germany, via Belarus and Poland, expired on May 17. Poland has aligned its legislation with the energy regulations of the European Union (EU) and Polish operator Gaz-System began offering capacity bookings on the Polish section of the Yamal-Europe pipeline in accordance with EU regulations.

Poland has been trying to wean itself off Russian energy supplies and has become one of the first eastern European countries to have booked U.S. liquefied natural gas (LNG) cargoes.

With the end of the gas transit agreement with Russia, Poland is moving to a more liberalized natural gas market, but it expects that Russia will continue to send similar volumes of gas before the transit deal expired, a Polish official told Reuters last week.

For July 1 through October 1, Poland’s Gaz-System has already sold 80 percent of the capacity on the pipeline made available as a result of termination of the transit contract, the company said on May 15. The remaining available capacity will be auctioned in June, July, and August at monthly auctions for monthly volumes.

But the capacity bookings for the first days following the expiration of the gas transit showed little appetite for gas in Europe, according to analysts.

Gaz-System told Reuters that the capacity booked for Sunday was much lower than for the previous days. So, “there is no need for the pumping stations to work for 24 hours a day at such low orders for the transit service,” the company said.

Commenting on the drastic decline in gas flows from Russia via Poland, VTB Capital said in a note, as carried by Bloomberg:

“Such a significant reduction in gas transit is primarily driven by weak demand in Europe amid warm winter, high levels of gas in underground storage and demand distortion due to Covid-19.”

Can’t The ECB just print up some more demand? or more pipelines?

The super rich are dealing with a slightly different set of problems than Main Street as it relates to the coronavirus, which persists in many parts of the nation. While average folks are looking for creative ways to dodge the “2 item maximum” at their local grocery’s meat section, the super rich are dealing with another pesky problem: how do I get to a yacht while staying germ-free?

That was the problem that global aviation company VistaJet has sought to solve. Inspired by “member demand”, the company is now offering freshly sanitized jets for customers to fly to yachts moored in Malta. 

Why Malta? “The World Health Organization singled out Malta as a role model for other countries in the fight against Covid-19,” according to Bloomberg.

Members on their way to their yacht have to provide a “health declaration” which the company describes as “self-appointed”. Temperatures are taken on the jet and surgical masks and gloves will be provided by the crew. Upon arrival in Malta, customers are moved to a VIP lounge where customs agents check passports and another temperature screening is performed. 

From there, a “pre-sanitized” car takes you to pre-stocked yachts, outfitted according to member requests. Customers have to sign declarations that they won’t stop anywhere between the jet and the yacht.  

As of now, Malta is the only destination that the company is offering. A popular destination for the super rich, Malta offers “multiple yacht marinas” and and zero taxes on income or capital gains earned outside of Malta. You can also buy a second citizenship in Malta for just $1.3 million in cash and property. 

VistaJet says its normal Bombardier Global 6000 jet service costs about $16,000 per hour, but its jet-to-yacht pre-sanitized service carries additional fees. 

 

Authored by Trevor Marshallsea via The Belfast Telegraph,

A prominent Oxford epidemiologist has reportedly called for a more rapid exit from Britain’s lockdown, saying the coronavirus pandemic is “on its way out” of Britain after infecting as much as half the population.

Professor Sunetra Gupta says there would be a “strong possibility” that pubs, nightclubs and restaurants in Britain could reopen without serious risk from Covid-19.

The professor of theoretical epidemiology at the University of Oxford said the UK had most likely erred on the side of over-reaction in its handling of the crisis, suggesting imposing the lockdown itself was one such misstep.

Prof Gupta told unherd.com the Government had brought in the lockdown based on the worst-case scenario modelling of the Imperial College London.

In March, Imperial College’s workings suggested Covid-19 had a deaths-to-cases ratio of as high as 1.4%, reducing to 0.66% when allowing for undiagnosed cases.

Prof Gupta’s Oxford team produced a rival model, also in March, speculating as much as 50% of Britain’s population may have already been infected, and suggesting an infection fatality rate as low as 0.1%, which she says would be far lower now.

Asked for her updated ratio, Prof Gupta said the epidemic had “largely come and is on its way out in this country” and that the rate would be “definitely less than one in 1000 and probably closer to one in 10,000”, or between 0.1% and 0.01%.

Prof Gupta said the Government’s defence of the lockdown was that it was based on a plausible, “or at least a possible”, worst case scenario.

“The question is, should we act on a possible worst case scenario, given the costs of lockdown?

“It seems to me that given that the costs of lockdown are mounting, that case is becoming more and more fragile,” she said.

Prof Gupta called for a “more rapid exits from lockdown” based on factors such as “who is dying and what is happening to the death rates”.

She said it was feasible Britain could have fared better with the Covid-19 crisis by doing “nothing at all” or at least by concentrating on protecting the people most vulnerable to the disease.

“Remaining in a state of lockdown is extremely dangerous from the point of view of the vulnerability of the entire population to new pathogens,” she said.

“Effectively we used to live in a state approximating lockdown 100 years ago, and that was what created the conditions for the Spanish Flu to come in and kill 50m people.”

Whilst accepting it hard to prove on current evidence, Prof Gupta said there was a “strong possibility” the UK could return to normal without great risk.

For the third time in a couple of months American and Russian aircraft entered a close, dangerous encounter over the Mediterranean near Russia’s Hmeimim Airbase in western Syria.

The Tuesday incident reportedly involved two Russian Su-35 jets which intercepted a US Navy reconnaissance aircraft over the eastern Mediterranean. The Pentagon blasted their actions as “unsafe”,”unprofessional” and “irresponsible”. 

“For the third time in two months, Russian pilots flew in an unsafe and unprofessional manner while intercepting a US Navy P-8A Maritime Patrol and Reconnaissance Aircraft,” the Navy said of the provocative aerial encounter, which like prior recent intercepts was caught on video.

The US statement underscored the danger in “the Russian pilots taking close station on each wing of the P-8A simultaneously, restricting the P-8A’s ability to safely maneuver.”

Indeed photographs and video show that each Su-35 fighter just behind each wing of the airliner-size US recon plane. The Russian jets accompanied the aircraft for about 65 minutes, according to the statement.

It appears the Russian Air Force has drawn a ‘red line’ in not tolerating flights near its Hmeimim Airbase in western Syria.

Recall too that a mere two weeks ago the top US special envoy to region, James Jeffrey, openly declared “his job” was to make Syria a “quagmire” for the Russians.

His comments came on May 12 during a video conference hosted by the neocon Hudson Institute:

Asked why the American public should tolerate US involvement in Syria, Special Envoy James Jeffrey points out the small US footprint in the fight against ISIS. “This isn’t Afghanistan. This isn’t Vietnam. This isn’t a quagmire. My job is to make it a quagmire for the Russians.”

No doubt, the Kremlin took note, putting their military even more on edge and on alert, suspicious of any level of US reconnaissance along Syria’s coastline. 

Though the Syrian war has largely slipped from the headlines, the question of jihadi-control over Idlib province is still festering, and likely the Americans are closely monitoring Syrian Army and Russian moves on the area. 

Authored by Lawrence Kadish via The Gatestone Institute,

A soon to be released international survey finds that when the COVID-19 virus finally burns itself out its biggest victim may be the very country that launched the pandemic – China.

Bluster, bullying, and propaganda launched by China’s leadership to subdue international criticism of their handling of COVID-19 is only stoking the anger among nations as diverse as the U.K., Germany and India, according to data revealed during a comprehensive poll conducted by the firm McLaughlin & Associates.

They may not embrace the White House on any given issue but when it comes to China, a large and significant number of those polled in this global COVID-19 survey would now support economic sanctions, confronting China’s strategy to achieve global dominance by controlling worldwide access to technology, pharmaceuticals, manufacturing, and more.

What can only be described as a diplomatic earthquake is the emerging political fault line along China’s southern border with India.

The McLaughlin poll found that a majority of voters in the world’s largest democracy, some 54%, believe China hid key COVID-19 details, resulting in more damage by the pandemic, and 78% believe China knowingly kept data from the international community.

And it gets worse for Beijing. As many as 85% of Indian voters believe China should be held accountable with 88% approving of an investigation of not just China but the World Health Organization (WHO) regarding what did they know and when did they know it.

More than three time zones away, in Germany, a significant majority, 69% of voters polled, say China has not been open or honest about COVID-19, and more than a third say there is little doubt China hid key details regarding its origins or spread. In the U.K. seven out of 10 voters, or 68%, say China kept data about the virus from the world.

In Germany, 61% of the voters believe China should be held accountable while in the U.K., 81% of those voters polled said the Chinese government should be held accountable with 20% of those United Kingdom respondents suggesting one response should be lawsuits by families impacted by COVID-19.

Some 26% proposed diplomatic actions, and 38% believe economic actions would be the best response.

When asked whether they would support changes in diplomatic and economic relations with China if it was revealed that that regime withheld information, more than half of the Germans polled, 54%, said yes.

A stunning 80% said their nation needs to end its dependence on China and 71% believe Germany should withdraw manufacturing investments. In the UK 74% of the respondents were prepared to change their relationship with China following COVID-19.

The only good news for a China intent on diminishing America’s role as a 21st century superpower is that a majority of those surveyed abroad believe China’s COVID-19 induced economic tremor has impacted America’s global leadership, a goal the Chinese dare not accomplish through military means, no matter how many additional nuclear weapons they seek to place in their growing arsenal.

That response reflects a tacit acknowledgment that China’s handling of the COVID-19 outbreak, whether deliberate or otherwise, has allowed it to win a public perception battle without firing a shot.

It also reveals what the White House already knows; this is a defining moment for China, its relationship with the United States, and those nations the Chinese intend to place under their economic thumb.

This poll will compel Beijing to consider a stark truth. Their offer of billions in health aid to those nations suffering from COVID-19, coupled with an extensive media/diplomatic blitz that threatens those brave enough to question their actions, is a complete failure.

In fact, the global survey documents a rising awareness of the existential threat from a China that has not only infected the world but seeks to hold the keys to the medical and economic remedies our world needs.

We will recover from COVID-19. Our nation has withstood far worse.

What America needs now is to hear these overseas voices of outrage over China’s treachery and respond with the bipartisan political will to confront the real danger: a regime that will use the chaos of COVID-19 to acclerate their strategy of dominating the 21st century as the world’s sole superpower.

*  *  *

The full poll results for the Kadish article on our European and Indian polls are found here.

Authored by Derrick Broze via The Last American Vagabond blog,

The world’s largest airline trade group has called for immunity passports, thermal screening, masks, and physical distancing to be a part of the industry’s strategy for returning to “normal” operations.

The International Air Transport Association (IATA), which represents 299 airlines, recently issued their publication, Biosecurity for Air Transport A Roadmap for Restarting Aviation, which outlines their strategy to open up air travel as governments begin to lift travel restrictions.

Under a section titled, “The passenger experience” and “Temporary biosecurity measures,” the IATA describes their vision of post-COVID-19 flights. The organization calls for contact tracing, a controversial method of tracking the civilian population to track the spread of COVID-19.

“We foresee the need to collect more detailed passenger contact information which can be used for tracing purposes,” the report states. “Where possible, the data should be collected in electronic form, and in advance of the passenger arriving at the airport including through eVisa and electronic travel authorization platforms.”

Interestingly, this call for pre-boarding check-in using “electronic travel authorization platforms” coincides with the recent announcement of the Covi-Pass and the Health Pass from Clear, both of which call for a digital ID system using biometrics and storing travel, health, and identification data.

Alexandre de Juniac, IATA’s CEO, told Arabian Industry that “a layered approach” combining multiple measures which are “globally implemented and mutually recognized by governments” are “the way forward for biosecurity.”

The IATA also calls for temperature screening at entry points to airport terminals. They envision the airline experience involving physical distancing of 3-6 feet throughout the airport. The group believes changes to the airport buildings to allow for physical distancing may be necessary. The IATA also recommended “face coverings” for passengers and protective equipment for airline and airport staff.

Although the organization acknowledged that there is not currently a fast reliable test for COVID-19, they believe that once an effective test is developed it could be applied on entry to the terminal. They call for this measure to be “incorporated into the passenger process as soon as an effective test, validated by the medical community, has been developed.”

On the topic of immunity passports — an idea discussed by Anthony Fauci, the World Health Organization, and Bill Gates — the IATA states that “immunity passports could play an important role in further facilitating the restart of air travel.” The organization believes that if a person is shown to have recovered from COVID-19 and developed immunity they will not need protective measures. Once medical evidence supports the possibility of immunity to COVID-19, IATA believes “it is essential that a recognized global standard be introduced, and that corresponding documents be made available electronically.”

Finally, the IATA believes a “general move towards greater use of touchless technology and biometrics should also be pursued.” Biometrics would include facial recognition, retina scanning, and/or thumbprints.

This vision painted by the IATA is one where those who choose to fly are faced with invasive security measures, surveillance, biometric tracking, immunity passports, temperature screenings, and generally, less human contact due to physical distancing and less communication with actual people. Of course, this push towards a digital ID which contains an individual’s personal identifying information, health records, and other personal data is part of an agenda which predates COVID-19. The “powers that wish they were” are taking every opportunity to expand their technocratic control grid and the panic caused by COVID-19 allows them to accelerate their plans at a rate not seen since the days after the attacks of September 11, 2001.

The only thing stopping the roll out of this Technocratic State is the people of the world coming together, informing those who are in the dark, and unplugging from this control grid.