Category: zerohedge

Though for the past two months global headlines have been consumed by non-stop coronavirus developments, since the weekend there’s been a sudden uptick in significant geopolitical events signalling tensions are rising in relation to various countries’ responses to the pandemic, including sanctions and tit-for-tat issues of blame, notably between China and the US, as well as involving Iran and Russia.

To review, the past days alone have witnessed North Korean cruise missile launches, an Iranian intercept of a Hong Kong-flagged tanker, US-Russia aerial intercept incidents, a US ‘show of force’ at its Guam air force base, Washington attempting to block an IMF loan to Iran, and Iranian fast boats harassing US warships in the gulf, among other things. 

But in what could mark the biggest alarming new event if confirmed, the United States has accused China of conducting banned nuclear tests. 

The charge, sure to send already worsening tensions soaring, originated with a US State Department report made public by The Wall Street Journal on Wednesday.

But considering the seriousness of the accusation, which a number of pundits have remarked should warrant a high evidentiary standard, the language of the US claim is couched in multiple qualifications leaving confirmation anything but certain.

According to the WSJ: 

China may have secretly set off low-level underground nuclear test explosions despite claiming to observe an international pact banning such blasts, the US State Department said in a report on Wednesday that could fuel US-Chinese tensions.

This is not the case with the US, however, which is now accusing China of maybe violating the ban, and which is offering no evidence at all.

The treaty in question is The Comprehensive Test Ban Treaty (CTBT) which bans all nuclear reactions conduced by explosives. 

Would China have violated the ban it’s most likely that global monitoring installations would have detected the activity, which critics say weaken Washington’s new claims.

Chinese foreign ministry spokesman Zhao Lijian blasted the claims as “groundless” and ultimately “not worth refuting”. 

“China has always adopted a responsible attitude, earnestly fulfilling the international obligations and promises it has assumed,” he said. “The US criticism of China is entirely groundless, without foundation, and not worth refuting,” he added.

The WSJ summarizes the State Dept.’s admittedly circumstantial evidence as follows:  “The concerns stem from the high tempo of activity at China’s Lop Nur test site, extensive excavations at the site, and Beijing’s purported use of special chambers to contain explosions.”

The charges appear to hinge on Beijing’s essentially beefing up its ability to ‘hide’ the tests deep underground.

“Another factor feeding U.S. suspicions is the interruption in past years of data transmissions from monitoring stations on Chinese territory that are designed to detect radioactive emissions and seismic tremors,” the report continues.

It should be recalled too that as recent as in 2019, the US similarly accused Russia of “probably” violating the CTBT. Thus it’s easy to view this not as a substantive intelligence finding, but more as a political charge part of the Trump administration’s arsenal of leverage to be used to pressure Beijing. 

For anyone seeking guidance on the timeline of the US reopening, look no further than the most connected – literally – man in the world, Facebook CEO Mark Zuckerberg, who just canceled all “large physical events” the firm had planned with 50 or more people until June 2021.

Here is the link to his post:

As we start to think about what it will look like to re-open society, I wanted to provide an update on how we’re planning for our teams at Facebook. The summary is: we’re slowing our plans to return to the office in order to prioritize helping the rest of our community and local economy to get back up and running first.

We know that most people can’t work from home as easily as many of our employees can. We also know that when society does eventually start re-opening, it will have to open slowly in staggered waves to make sure that the people who are returning to work can do so safely and that we minimize the possibility of future outbreaks.

We will require the vast majority of our employees to work from home through at least the end of May in order to create a safer environment both for our employees doing critical jobs who must be in the office and for everyone else in our local communities. A small percent of our critical employees who can’t work remotely, like content reviewers working on counter-terrorism or suicide and self-harm prevention, and engineers working on complex hardware, may be able to return sooner, but overall, we don’t expect to have everyone back in our offices for some time.

We’ve also let our employees know that even after more of our teams can return, if there’s any reason they feel they can’t work in our offices — because they are in a vulnerable population, because with schools and camps canceled they don’t have childcare, or anything else — that they can plan to work from home through at least the summer.

Even beyond this next period, guidance from health experts is that it won’t be advisable to have large groups of people get together for a while. Given this, we’re canceling any large physical events we had planned with 50 or more people through June 2021. Some of these we will hold as virtual events instead and we’ll share more details on that soon. Similarly, we’re extending our policy of no business travel through at least June of this year as well.

Most Facebook employees are fortunate to be able to work productively from home, so we feel a responsibility to allow people who don’t have this flexibility to access shared public resources first. I hope this helps contain the spread of Covid-19 so we can keep our communities safe and get back up and running again soon.

Authored by Jeff Deist via The Mises Institute,

[This text is excerpted from the introduction to Anatomy of the Crash, a Mises Institute ebook to be released in April 2020.]

The Great Crash of 2020 was not caused by a virus…

It was precipitated by the virus, and made worse by the crazed decisions of governments around the world to shut down business and travel. But it was caused by economic fragility.

The supposed greatest economy in US history actually was a walking sick man, made comfortable with painkillers, and looking far better than he felt—yet ultimately fragile and infirm. The coronavirus pandemic simply exposed the underlying sickness of the US economy. If anything, the crash was overdue. 

Too much debt, too much malinvestment, and too little honest pricing of assets and interest rates made America uniquely vulnerable to economic contagion. Most of this vulnerability can be laid at the feet of central bankers at the Federal Reserve, and we will pay a terrible price for it in the coming years. This is an uncomfortable truth, one that central bankers desperately hope to obscure while the media and public remain fixated on the virus. 

But we should not let them get away with it, because (at least when it comes to legacy media) the Fed’s gross malfeasance is perhaps the biggest untold story of our lifetimes.   

Symptoms of problems were readily apparent just last September during the commercial bank repo crisis. After more than a decade of quantitative easing, relentless interest rate cutting, and huge growth in “excess” reserves (more than $1.5 trillion) parked at the Fed, banks still did not have enough overnight liquidity? What exactly was the point of taking the Fed’s balance sheet from less than $1 trillion to over $4 trillion, anyway? Banks still needed money, after a decade of QE?

As with most crises, the problems took root decades ago. What we might call the era of modern monetary policy took root with the 1971 Nixon Shock, which eliminated any convertibility of dollars for gold. Less than twenty years later, in October 1987, Black Monday wiped out 20 percent of US stock market valuations. Fed chair Alan Greenspan promised Wall Street that such a thing would never happen again on his watch, and he meant it: the “Greenspan Put” was the Maestro’s blueprint for providing as much monetary easing as needed to prop up equity markets. The tech stock crash of the NASDAQ in 2000 only solidified the need for “new” monetary policy, and in 2008 that policy took full flight under the obliging hand of Fed chairman Ben Bernanke—a man who not only fundamentally misunderstood the Great Depression in his PhD thesis, but who also had the self-regard to write a book titled The Courage to Act about his use of other people’s money to reinflate the biggest and baddest stock bubble in US history.​

James Grant of Grant’s Interest Rate Observer characterizes the Fed’s recent actions as a “leveraged buy-out of the United States of America.” The Fed is assumed to have an unlimited balance sheet, able to provide financial markets with “liquidity” as needed, in any amount, for any length of time. Pennsylvania senator Pat Toomey urges the Fed to do more, and Congress to spend more, all in the unholy name of liquidity.

But liquidity is nothing more than ready money for investment and spending. In the current environment it is a euphemism for free manna from heaven. It is “free” money—unearned, representing no increase in output or productivity. It has no backing and no redeemability. And not only are there no new goods and services in the economy, there are far fewer due to the lockdown.  

So monetary “policy” as we know it is dead as a doornail. What central banks and central bankers do no longer falls within the realm of economics or policy; the Fed no longer operates as what we think of as a central bank. It is not a backstop or “banker’s bank,” as originally designed (in theory), nor is it a steward of economic stability pursuing its congressionally authorized dual mandate. It does not follow its own charter in the Federal Reserve Act (e.g., buying corporate bonds). It no longer operates according to economic theory or empirical data. It no longer pursues any identifiable public policy, other than sheer political expediency. Fed governors do not follow “rules.” It answers to no legislature or executive, except when cravenly collaborating with both to offload consequences onto future generations. 

The Fed is, in effect, a lawless economic government unto itself. It serves as a bizarro-world ad hoc credit facility to the US financial sector, completely open ended, with no credit checks, no credit limits, no collateral requirements, no interest payments, and in some cases no repayment at all. It is the lender of first resort, a kind of reverse pawnshop that pays top dollar for rapidly declining assets. The Fed is now the Infinite Bank. It is run by televangelists, not bankers, and operates on faith.

A Facebook fact checker who has ‘debunked’ articles suggesting that COVID-19 may have leaked from the Wuhan Institute of Virology (WIV) has a giant conflict of interest; she worked at the institute – which is now suspected of accidentally leaking the hyper-virulent virus which has killed over 130,000 people and cast the global economy into chaos.

Danielle Anderson, who works at Duke University’s NUS Medical School lab in Singapore, also contributes to Science Feedback – which Facebook has been using to slap “False Information” labels on articles claiming that COVID-19 may have originated at the Wuhan institute – where Anderson worked with bat coronavirus.

A quick search of Anderson’s publications reveals no fewer than nine collaborations with Dr. Peng Zhou – a Wuhan scientist experimenting on bat coronavirus (the mention of whom may result in a Twitter ban).

If you follow the info, you will find the Facebook fake fact-checker on the China Wuhan lab is a scientist who works/worked at China’s Wuhan lab the past two years and says it is impossible that they would be sloppy because they are very careful! 😂😡@Facebook https://t.co/Ldvu7He82v

— Sharyl Attkisson🕵️‍♂️ (@SharylAttkisson) April 16, 2020

Anderson has been adamant that the lab adheres to the highest standards of safety, and that COVID-19 simply couldn’t have accidentally been leaked by her colleagues.

“I have worked in this exact laboratory at various times for the past 2 years. I can personally attest to the strict control and containment measures implemented while working there,” Anderson writes in one such ‘debunking’ of a New York Post article that claims “China [is having] a problem keeping dangerous pathogens in test tubes where they belong” while Science Feedback cast doubt on the Post‘s claim that “evidence points to SARS-CoV-2 research being carried out at the Wuhan Institute of Virology.”

Except, they were carrying out SARS-CoV-2 research at that exact lab, according to new reports in the Wall Street Journal, the Daily Mail and Fox News.

An April 9 report in the Journal reveals that COVID-19 is genetically identical to a coronavirus found in a horseshoe bat “collected by hazmat-clad scientists from the Institute of Virology in Wuhan.”

While a Wednesday report from Fox News reveals that COVID-19 leaked from the Wuhan Institute of Virology, and that “patient zero” was an employee who became infected before spreading it throughout the community, according to ‘multiple sources who have been briefed on the details.’

And while Anderson was busy covering for her corona-labmates with Facebook debunkings implicating the WIV, she went on national television to explain that the virus could have only come from outside the lab.

Anderson further peddled the now-debunked wet-market theory in a paper she co-wrote in The Lancet, which reads: “While recognising the tremendous effort by the China CDC team in the early response to the 2019-nCoV outbreak, the small number of team members trained in animal health was probably one of the reasons for the delay in identifying an intermediate animal(s), which is likely to have caused the spread of the virus in a region of the market where wildlife animals were traded and subsequently found to be heavily contaminated. Unfortunately, what animal(s) was involved in transmission remains unknown.”

Any suggestion to the contrary is now deemed ‘False Information’ by Facebook, thanks to the highly conflicted Danielle Anderson and crew over at Science Feedback.

S&P is up 255.4 point cumulatively each Thursday in the past 4 weeks; over the same period we have lost 22.03 million jobs.

Consumer Comfort has collapsed back below when Trump was elected

Source: Bloomberg

Overall macro-economic data has never disappointed and fallen this fast…

Source: Bloomberg

Earnings expectations are collapsing…

Source: Bloomberg

All of which explains why Nasdaq 100 just went green year-to-date… (spot the odd one out)…

Source: Bloomberg

On the week, Nasdaq is up over 4%, Small Caps are down almost 7%…

Which leaves the Nasdaq 100 just shy of its richest relative to small caps ever…

Source: Bloomberg

Bloomberg’s Cameron Crise also noted that the pace of NDX outperformance over the last three months has “dotcom bubble” written all over it. Maybe it can continue indefinitely and your favorite friendly tech behemoth can keep rallying, making money and avoiding scrutiny over antitrust issues or aggressive tax avoidance. But the only thing more certain than the difficulty of timing the end of parabolic price action is that the end is coming — sooner or later.

The Dow was once again unable to hold above its 50% retracement…

As FANG stocks hit a new record high…

Source: Bloomberg

Put another way…

Over the last four weeks, on days the initial jobless claims data has been released and Americans have lost over 22 million jobs, the S&P 500 has actually rallied (+6.2%, +2.3%, +1.4%, and +0.6%), and Nasdaq 100 (+5.72%, +1.99%, +0.11%, and +2.0%).

Once again…

As stocks live on free Fed money as Americans die…

Source: Bloomberg

And The Virus Fear trade refuses to ease up…

Source: Bloomberg

HY and IG bond prices continue to drop lower, despite The Fed’s support…

Source: Bloomberg

Treasury yields were mixed on the day with the short-end flat but longer-end yields tumbled once again…

Source: Bloomberg

With 10Y back below 60bps intraday…

Source: Bloomberg

The yield curve has flattened dramatically…

Source: Bloomberg

And as yields tumbled and flattened, so did bank stocks…

Source: Bloomberg

The Dollar extended yesterday’s big gains back to one week highs…

Source: Bloomberg

Crytpos were also bid today led by Ethereum…

Source: Bloomberg

 

 

Source: Bloomberg

 

 

Source: Bloomberg

 

 

Source: Bloomberg

 

Source: Bloomberg

 

 

Source: Bloomberg

 

 

Source: Bloomberg

The premium between spot and futures gold prices compressed today…

Source: Bloomberg

Oil prices drifted lower once again with WTI back below $20…

Finally, we note that the prospect of the steepest global recession in almost a century and a massive currency-debasing debt buildup are driving investors into gold exchange-traded funds in startling numbers. The total stash of SPDR Gold Trust Holdings, the world’s largest bullion-backed fund, expanded for a 10th straight session on Tuesday, tying the record streak set in June 2016. All told, global holdings of gold-backed ETFs expanded for a 17th session (out of 18) to a fresh all-time high.

Source: Bloomberg

And the US Mint just closed due to COVID fears as gold coin demand nears a record high…

Source: Bloomberg

And then there’s this – as Bloomberg notes, U.S. stocks are out of step with one of most-watched segments of the yield curve by the most in 14 years.

Source: Bloomberg

The rebound in the S&P 500 over the past month has pushed the correlation with the 3m10y curve to the most negative since 2006. That suggests shares are ignoring signals about the economy, implying further upside may be capped.

 

 

Antibody testing is going to be the next big project in attempting to understand and control the coronavirus outbreak in the United States. It’ll give us data not only on who currently has the virus, but much needed data on who has already had the virus. 

This will help the country shape the picture of how far the virus has run its course and what areas could potentially be close to herd immunity, if any. More importantly, it shows whether or not people have encountered the virus despite potentially not ever having symptoms. 

But even though regular testing its starting to become widely available, antibody testing remains a challenge. Except for the people of Fisher Island, an exclusive community off Miami beach that is one of the wealthiest places in America. Everybody on the island can now get an antibody test, after the island secured tests through the University of Miami, according to the NY Times.

Fisher Island paid for the tests after they were purchased by the University of Miami’s health clinic. 

“The U” has been operating on a clinic on site and has been scheduling residents as of last week for finger-prick blood tests. In minutes, people learned their results. 

Fisher Island, with a population of less than 1,000, has been on the forefront of locking itself down since the pandemic began. More than half of the island’s population is over 60 and “at high risk”.

After the outbreak started, the island simply prohibited entry to guests and, while ferry service has continued, it’s only for residents and limited employees to come onto the island and perform vital jobs – like landscaping.

The marina and club on the island – which cost $250,000 to join – are both closed. The beach, golf courses and tennis courts are also closed. The tests, manufactured by BioMedomics Inc., cost $17 each. 1,250 people have been tested so far. 

Daniel Azoulay, 74, who lives on the island said: “I call it Alcatraz since we are surrounded by water and have no place to go.” Regarding the testing, he said:  “They just let you know if you have any antibodies, and that’s it.”

Every Buzzfeed-reading lib who immediately dismissed reports about the real provenance of SARS-CoV-2 as just another White House smoke bomb should take note: UK Foreign Secretary Dominic Raab, the man who is Britain’s de jure leader while Boris Johnson convalesces, just backed Trump up.

During a press conference on Thursday evening, a reporter asked Raab about Trump’s comments and the Fox News report claiming the virus leaked from a biosafety level 4 lab at the Wuhan Institute of Virology, likely when an employee was accidentally contaminated. We’ve been raising questions about the virus’s provenance and sharing this ‘conspiracy theory’ for months – we were even deplatformed for it – now, Raab believes that Beijing should furnish an explanation.

Raab replied to a reporter that the UK and the rest of the global community will need to “ask hard questions about how it came about and how it couldn’t have been stopped earlier.”

Because that’s the real point: if these claims are indeed accurate, this would almost certainly prove that instead of focusing on containing the virus, Beijing panicked, proceeded with an (ultimately botched) coverup, and then unleashed an unprecedented plague upon the world, including its own people. Even now, China insists it responded immediately and swiftly once authorities finally realized what was going on (a process that took nearly the entire month of December and most of January), a claim that has been backed up by the WHO.

Britain and its allies will ask tough questions of China over the coronavirus outbreak, Foreign Secretary Dominic Raab said on Thursday, adding “we can’t have business as usual after this crisis.”

“We’ll have to ask the hard questions about how it came about and how it couldn’t have been stopped earlier,” Raab said at a Downing Street press conference when asked about future relations with Beijing.

Raab also announced plans to extend the UK’s near-complete lockdown for another three weeks at Thursday’s press conference, and discussion about how the country would get on during this time took up most of the press conference. But readers can watch the whole thing below:

One month ago, St Louis President James Bullard drastically reduced his chances to be the next Fed chairman when he was the first to predict (correctly) that Q2 unemployment may soar to 30% with GDP plunging 50%, an economic collapse that would make the Great Depression seem like a walk in the park.

Well, fast forward to today when Bullard doubled down and in a virtual conversation with the US Chamber Of Commerce said that “you are taking a lot of downside risks with the U.S. economy, including depression as a possible outcome.”

Echoing other economists-turned-epidemiologists at the Fed, Bullard suggested that the Federal government could produce major incentives to create covid tests to produce enough tests for the entire nation so people would feel safe to restart their normal lives: “The idea would be to create a gold rush in production of tests.”

Putting the cost of testing in context, he said that “it is costing us $25 billion a day to have this shutdown policy” so tests would easily be affordable.

Why the focus on testing? Because “we want to satiate the economy with this kind of tests.” But why? Simple: as he explained previously, Americans would then be forced to display a badge on their clothing with the result of the test.

MUST WATCH: 🎥🚨

St. Louis Federal Reserve Head says Americans should be tested for COVID-19 daily and FORCED to display a badge on their clothing with the result.

I would love to hear his definition of “Orwellian”

pic.twitter.com/VHUMeusPLH

— Gold Telegraph (@GoldTelegraph_) April 16, 2020

We – for one – know a certain Austrian, long dead, who would totally endorse Bullard’s fascist Orwellian recommendation, especially if the test result is in the form of a Star of David and worn as an arm band.

Good idea. We had had that back in the days, where Jews and Gays had to wear an arm band. It worked out very well.

— Frasiliana 🇩🇪🇷🇺🇮🇪🇳🇱🇩🇰 (@frasiliana) April 16, 2020

Bottom line, either the US becomes a Orwellian police state, or the economy gets it.

Authored by Steve Watson via Summit News,

Numerous virology experts are now on record as saying it cannot be dismissed, and multiple government and intelligence sources have confirmed that investigations are underway into the possibility that the coronavirus leaked from an unsafe Wuhan bio-lab and China lied about the true scale of the outbreak.

And so in light of that, here is a timely reminder of the scores of fake news outlets that for weeks and months dismissed both notions as a ‘baseless conspiracy theories’.

Now that multiple sources are confirming coronavirus came out of the Wuhan lab, it’s time to compile a list of mainstream media outlets who repeatedly for weeks said it was a ‘dangerous fake news conspiracy theory’ to even suggest this.

Wrong again.

— Paul Joseph Watson (@PrisonPlanet) April 16, 2020

Remember, these sources (this is only a small selection of what is out there), to a varying degree in their dismissals, effectively bolstered Chinese state media and government insistences that questions over the safety of the lab were ‘dangerous’.

• The Guardian STILL says it’s a conspiracy theory.

• Vox – The conspiracy theories about the origins of the coronavirus, debunked – Mar 12

• Reuters – China lab says conspiracy theories hurting efforts to curb virus – Feb 20

• The Telegraph – Coronavirus myths, scams and conspiracy theories that have gone viral (Point 8: Coronavirus was leaked from a high security lab in Wuhan and China is trying to cover it up) – Mar 29

• USA Today – Fact check: Did the coronavirus originate in a Chinese laboratory? – Mar 22

• The Scientist – Theory that Coronavirus Escaped from a Lab Lacks Evidence – Mar 5

• Politifact – Fact-checking hoaxes and conspiracies about the coronavirus – Jan 24

• FactCheck.org – Baseless Conspiracy Theories Claim New Coronavirus Was Bioengineered – Feb 7

• The Independent – Coronavirus: From a Chinese lab to eating garlic, the Covid-19 conspiracy theories Britons believe – Mar 30

• Vice – The Coronavirus Is an Exciting Opportunity for Conspiracy Theorists – Jan 28

• Buzzfeed – Struggling for attention, Italy’s former deputy prime minister and others are sharing false claims the virus was engineered in a Chinese lab – Mar 26

• Business Insider – Sen. Tom Cotton keeps airing a long-debunked theory that the deadly coronavirus is a Chinese biological weapon that was leaked from a government lab in Wuhan – Feb 17

• The Daily Wire – Report Promotes Debunked Theory That Coronavirus Comes From Chinese Lab – Feb 2

• Vanity Fair – Inside the Viral Spread of a Coronavirus Origin Theory – April 10

• Forbes – No, COVID-19 Coronavirus Was Not Bioengineered. Here’s The Research That Debunks That Idea – Mar 17

• The New York Times – Why Coronavirus Conspiracy Theories Flourish. And Why It Matters – April 8

• Wired – Coronavirus Conspiracy Theories Are a Public Health Hazard – Mar 27

• Snopes – The Origins and Scientific Failings of the COVID-19 ‘Bioweapon’ Conspiracy Theory – April 1

• BBC – China coronavirus: Misinformation spreads online about origin and scale – Jan 30

We had a feeling a few minutes ago when we heard President Trump mention a $2 trillion infrastructure package as part of his plan to reopen the economy tonight, and as it turns out, we had good reason.

Because Mitch McConnell just confirmed that “absolutely no progress” has been made in talks with the Dems & Pelosi, meaning hundreds of thousands of small businesses desperately in need of loans will just have to wait.

• MCCONNELL: NO PROGRESS MADE IN PAST WEEK ON SMALL-BUSINESS AID
• MCCONNELL BLAMES DEMOCRATS FOR BLOCKING LOAN FUNDING
• MCCONNELL SETS NEXT SENATE PRO FORMA SESSION FOR APRIL 20

McConnell hasn’t scheduled another pro forma session until next week, though if a deal is reached, there will very likely be emergency votes. Pelosi and Mnuchin have reportedly been in talks all day, but the Dems are pushing for more resources directed to ‘underserved’ communities’ while the Republicans are essentially arguing that a quick top-off of the ‘PPP’ is all that’s needed right now.

Fox’s Chad Pergram has more: