Category: zerohedge

Authored by Wendy McElroy via The Future of Freedom Foundation,

“If a government wishes to alleviate, rather than aggravate, a depression, its only valid course is laissez-faire—to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates and business liquidation, will the necessary adjustment proceed with smooth dispatch.”

-Murray Rothbard, America’s Great Depression

The economic disruption caused by the government’s coronavirus clamp-down may lead to a deep recession or depression; arguably, it already has. President Trump’s $2.2 trillion relief package indicates what his answer to such an economic disaster will be: mega-spending on hand-outs and social projects. Trump is setting himself up as a modern version of Franklin D. Roosevelt (FDR) whose New Deal programs defined 20th century America by diverting it from a largely free-market path down a largely statist one. Trump wants to be an activist president — the type that history books applaud. Congress’s near-unanimous support of the relief bill means that no real brake will be applied on the speed or depth of federal spending. Few voices even question the need for government to lift up the economy by its bootstraps.

The Great Depression of the 1930s is often viewed as the gold standard for a federal response to an economic crisis. And, yet, FDR’s strong-man policies ushered in a decade of economic misery that did not end until the jolt of a world war in which over 400,000 Americans were killed.

Happily, a less bloody “success” story exists.

The financial analyst and historian James Grant offers the do-nothing alternative in his path-breaking book The Forgotten Depression. 1921: The Crash That Cured Itself. The crash of 1920-21 is called “the forgotten depression” because it has almost vanished from history books.

The main reason:

its lesson is anathema to the political and economic elites who derive power from controlling the marketplace.

Its lesson:

when the economy is melting down, do nothing because the free market will self-correct and naturally return to a healthier equilibrium.

Recessions — even deep ones called depressions — cause short term pain and damage; in the long term, however, such corrections allow for the healthy adjustment of overvalued assets and provide buying opportunities for the prudent.

Government interruption of this dynamic is useless, and worse. It is useless because government policies cannot prevent a depression. It is “worse” than useless because the policies can prevent a free-market recovery and needlessly draw out the economic pain. The “missed” recovery is never seen, of course. The 19th century French economist Frédéric Bastiat wrote eloquently of the “seen and unseen” costs of government intervention.

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession – they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.

In order to perceive the “unseen” cost of government’s intervention into an economic crisis — that is, the missed opportunity for a natural recovery — it is invaluable to draw upon history for comparisons. In America’s Great Depression, Murray Rothbard observed, “The 1920 recession had adjusted itself within a year. There was no reason why the 1929 recession should have taken longer, for the American economy was fundamentally sound.”

What happened in 1920 that did not happen in 1929?

When World War I ended on November 11, 1918,  A brief recession and a fast recovery followed. Then, a sharp deflation hit and lasted from January 1920 to July 1921. In a Wall Street Journal article entitled “The Depression That Was Fixed by Doing Nothing,” Grant explained, “Beginning in January 1920, something much worse than a recession blighted the world. The U.S. suffered the steepest plunge in wholesale prices in its history (not even eclipsed by the Great Depression).”

Indeed, the first year of the 18-month crash was worse than the first year of the Great Depression. Unemployment went from 4 to 12%; production fell by 21%. According to Grant,

“the nation’s output in 1920-21 suffered a decline of 23.9 per cent in nominal terms, 8.7 per cent in real terms. From cyclical peak to trough, producer prices fell by 40.8 per cent, industrial production by 31.6 per cent, stock prices by 46.6 per cent and corporate profits by 92 per cent.”

And, yet, Grant wrote:

“The successive administrations of Woodrow Wilson and Warren G. Harding met the downturn by seeming to ignore it — or by implementing policies that an average 21st-century economist would judge disastrous….” The government did not lower interest rates nor did it ramp up the public debt. Under Harding, the government raised interest rates and paid down the debt. Average money wages were allowed to fall by 19% in one year. “ Grant continued, “Yet by late 1921, a powerful, job-filled recovery was underway.

This is the story of America’s last governmentally unmedicated depression.”

The government’s laissez-faire attitude may seem surprising because Wilson, a Democrat, was not a fan of the free market. During World War I, Wilson had been an activist president with his hand clenched around every lever of control. His inaction in 1920 has been grotesquely ascribed to “a stroke of luck.” In October 1919, toward the end of Wilson’s second term, he had a debilitating stroke; his wife Edith assumed stewardship of her husband’s office and decided which items were important enough to bring to his bedside. Many matters experienced benign neglect.

In March 1921, when Harding was inaugurated, the economy was already turning around after fifteen months of decline or stagnation. The Republican Harding was an open advocate of laissez-faire, and he did nothing to hamper the ongoing cycle of recovery. Harding and Andrew Mellon, his Treasury Secretary, reduced federal spending, paid down the debt, and lowered tax rates. A Washington Post article entitled “Curing a Depression through Austerity” commented on the effect of Harding’s economic policies. “The unemployment rate fell from 15.6 percent to 9 percent (on its way to 3.2 percent in 1923), while constant-dollar output leapt by 16 percent. After which the 1920s proverbially roared.” By the summer of ‘21, the depression had reversed itself, America proceeded into the Roaring Twenties with a surging economy and happy-go-lucky consumerism.

How specifically did a recovery occur without government “assistance”? A significant part of the answer lies in the incredible power of the price mechanism to motivate human behavior. Which is to say, people want to prosper, and they will respond quickly in the presence of opportunities to advance themselves. “America was on the bargain counter,” Grant observed in his book, and Americans love a bargain.

Grant poured over financial pages of the 1920-21 period, especially those of the Wall Street Journal, as a way to take the economic pulse of the time. Among the insights Grant picked up: “Stocks were commandingly cheap, the Journal’s capitalist source concluded. ‘Scores’ of companies were valued in the market at less than their working capital — as if the business itself, apart from the net cash, was worthless. The shares of ‘large numbers’ of industrial companies were selling at “one-third of their respective intrinsic values’.” It was time for Americans to buy solid value at basement rates.

The preceding analysis is simplistic, but it sketches one of the most remarkable episodes in America’s economic history: a depression that cured itself. Unlike the Great Depression, it did so rapidly and without the political disruption of massive social programs and huge transfers of wealth.

Trump has chosen the path of FDR and the Great Depression rather than Harding and 1920. Rothbard referred to these past economies as “fundamentally sound.” Whether a similar statement is true of today’s economy can be hotly debated, and the prevalent presence of government is a complicating factor; the short-term misery of the correction will be deeper than it needed to be. What the 1920-21 depression demonstrates, however, is the salutary effect of allowing economic consequences to play out; what the Great Depression demonstrates is the incredible damage of doing the opposite. And, if the current economy is not as solid as in the past, perhaps this is all the more reason to abandon the one factor most responsible for destroying it: government intervention.

Nevertheless, instead of “doing nothing,” the Trump administration will “do everything.” The money supply will balloon and cause run-away inflation; resources will be misdirected, preventing free-market allocation; the market will be centrally coordinated according to a bureaucratic vision; interest rates will be driven artificially low; spending and debt will explode; unsustainable investments will be bolstered by tax funding…. In short, the depression will grind on to the misery of many and to the profit of a well-connected few.

Trump refers to the campaign against the coronavirus as a “war.” Like FDR, he is prepping to be a wartime president with the attendant legacy of glory. Or so the history books will read.

In this quest, the narrative of FDR serves Trump well. We can only hope that, unlike the Great Depression, it will not take an actual war to break the cycle of depression being spun.

As the number of confirmed COVID-19 cases confirmed in the US races toward the 300k mark, President Trump and the rest of the White House coronavirus task force will deliver their latest daily briefing on Saturday.

Watch live below. Trump tweeted that it’s set to start at 330pmET…

I will be holding a News Conference at 3:30 P.M. at the White House. Thank you!

— Donald J. Trump (@realDonaldTrump) April 4, 2020

…but the daily briefing typically kicks off at least 15 minutes late.

The last time we heard from former US secretary of state Henry Kissinger, he was warning that a permanent conflict between Washington And Beijing would be unwinnable and lead to “catastrophic outcome”…

“It’s no longer possible to think that one side can dominate the other… it will be worse than the world wars that ruined European civilisation,” said Kissinger.

And now the former US Secretary of State has an even more ominous warning, the U.S. must protect its citizens from disease while starting the urgent work of planning for a new epoch.

The surreal atmosphere of the Covid-19 pandemic calls to mind how I felt as a young man in the 84th Infantry Division during the Battle of the Bulge. Now, as in late 1944, there is a sense of inchoate danger, aimed not at any particular person, but striking randomly and with devastation.

But the 96-year-old notes, there is an important difference between that faraway time and ours.

American endurance then was fortified by an ultimate national purpose. Now, in a divided country, efficient and farsighted government is necessary to overcome obstacles unprecedented in magnitude and global scope. Sustaining the public trust is crucial to social solidarity, to the relation of societies with each other, and to international peace and stability.

Nations cohere and flourish on the belief that their institutions can foresee calamity, arrest its impact and restore stability. When the Covid-19 pandemic is over, many countries’ institutions will be perceived as having failed. Whether this judgment is objectively fair is irrelevant. The reality is the world will never be the same after the coronavirus. To argue now about the past only makes it harder to do what has to be done.

The coronavirus has struck with unprecedented scale and ferocity. Its spread is exponential: U.S. cases are doubling every fifth day. At this writing, there is no cure. Medical supplies are insufficient to cope with the widening waves of cases. Intensive-care units are on the verge, and beyond, of being overwhelmed. Testing is inadequate to the task of identifying the extent of infection, much less reversing its spread. A successful vaccine could be 12 to 18 months away.

The U.S. administration has done a solid job in avoiding immediate catastrophe. The ultimate test will be whether the virus’s spread can be arrested and then reversed in a manner and at a scale that maintains public confidence in Americans’ ability to govern themselves. The crisis effort, however vast and necessary, must not crowd out the urgent task of launching a parallel enterprise for the transition to the post-coronavirus order.

Leaders are dealing with the crisis on a largely national basis, but the virus’s society-dissolving effects do not recognize borders. While the assault on human health will – hopefully – be temporary, the political and economic upheaval it has unleashed could last for generations. No country, not even the U.S., can in a purely national effort overcome the virus. Addressing the necessities of the moment must ultimately be coupled with a global collaborative vision and program. If we cannot do both in tandem, we will face the worst of each.

Drawing upon his lessons from the development of the Marshall Plan and the Manhattan Project, Kissinger believes that the U.S. is obliged to undertake a major effort in three domains.

• First, shore up global resilience to infectious disease. Triumphs of medical science like the polio vaccine and the eradication of smallpox, or the emerging statistical-technical marvel of medical diagnosis through artificial intelligence, have lulled us into a dangerous complacency. We need to develop new techniques and technologies for infection control and commensurate vaccines across large populations. Cities, states and regions must consistently prepare to protect their people from pandemics through stockpiling, cooperative planning and exploration at the frontiers of science.

• Second, strive to heal the wounds to the world economy. Global leaders have learned important lessons from the 2008 financial crisis. The current economic crisis is more complex: The contraction unleashed by the coronavirus is, in its speed and global scale, unlike anything ever known in history. And necessary public-health measures such as social distancing and closing schools and businesses are contributing to the economic pain. Programs should also seek to ameliorate the effects of impending chaos on the world’s most vulnerable populations.

• Third, safeguard the principles of the liberal world order. The founding legend of modern government is a walled city protected by powerful rulers, sometimes despotic, other times benevolent, yet always strong enough to protect the people from an external enemy. Enlightenment thinkers reframed this concept, arguing that the purpose of the legitimate state is to provide for the fundamental needs of the people: security, order, economic well-being, and justice. Individuals cannot secure these things on their own. The pandemic has prompted an anachronism, a revival of the walled city in an age when prosperity depends on global trade and movement of people.

The world’s democracies need to defend and sustain their Enlightenment values. A global retreat from balancing power with legitimacy will cause the social contract to disintegrate both domestically and internationally. Yet this millennial issue of legitimacy and power cannot be settled simultaneously with the effort to overcome the Covid-19 plague. Restraint is necessary on all sides—in both domestic politics and international diplomacy. Priorities must be established.

We went on from the Battle of the Bulge into a world of growing prosperity and enhanced human dignity. Now, we live an epochal period. The historic challenge for leaders is to manage the crisis while building the future. Failure could set the world on fire.

Over two years ago, in Jan 2018, we first showed that when it comes to betting on trouble in the investment grade bond market, investors had a preferred instrument for pessimism: shorting the LQD, the largest US investment grace corporate ETF.

In retrospect, and loosely paraphrasing Crocodile Dundee, what happened to the LQD in Jan 2018 wasn’t trouble. This – as shown in the chart below – was “trouble“: between its all time high on March 6, and the ten year low hit just two weeks later on March 19, the LQD went bidless as the corporate bond bubble burst, and both investment grade and high yield debt ETFs and single names cratered.

As LQD plunged, the shorts soared, rising to never before seen levels, send the index even lower and sparking even more shorting. By this point, only one thing could save capital markets – both bonds and stocks (why stocks? Because as a reminder the only buyer of stocks in the past decade have been buybacks; kill the bond market and suddenly companies can’t issue debt to fund buybacks and it’s bye bye, not buy buy, stocks): the Fed had to step in and buy bonds, something we explained on Thursday, March 19 in ““The Bond Market Is Broken” And Only Fed Buying Bonds Can Fix It“

However, on quad-witching Friday, March 20, the Fed did not do what so many traders were now expecting, and the liquidation continued with stocks in freefall, sending the Dow below 19,000, and to levels not seen since the Trump election.

By the following Monday, the Fed was trapped – either it unleashes not a bazooka but a “nuclear bomb” (as Paul Tudor Jones called it) and stabilizes the unprecedented panic gripping traders, or the market was about to close. It picked the former, and before the open on Monday, March 23, the Fed announced not only unlimited QE, but in an unprecedented move, Powell said he would also start buying loans and bonds in the secondary market, as well as the LQD.

What happened next was also unprecedented: as JPM puts it, “looking at credit ETFs, the short base collapsed in spectacular fashion from LQD, the biggest HG ETF after the Fed’s credit backstop programs.” As shown in the chart below, all those traders who naively expected that the Fed would not nationalize virtually every market and – at least implicitly fought the Fed – were carted out following the biggest, most “spectacular” short squeeze in history: that of LQD on March 23.  The chart below shows that between March 23 and April 2, the % of LQD shares loaned out – a proxy for shorting – had dropped from an all time high to a record low…

… as the Fed triggered a historic short squeeze, crushing all those who did not even know they were fighting the Fed when they shorted the LQD, which had become a systemically important instrument, explaining why everything in the cap structure above IG debt is no longer subject to any market forces but merely to the whims of the NY Fed’s trading desk – will it buy LQD, and how much. That’s all that maters now.

What happens next?

Well, with shorts no longer allowed to speculate in IG debt or anything less risky as it is all backstopped by the Fed now, only a few things remain subject to the whims of markets: junk bonds and stocks.

Which is why, as JPM observes, after the epic squeeze in LQD, the short base on both HY ETFs and the most popular ETF od all, the SPY, remains elevated…

… as does the short base on the EEM ETF.

We point this out because the pain for markets is hardly over, and with shorts now having an even more limited arsenal of instruments, they will inevitably focus on HYG and SPY during the next crash. Which also means that now that the Fed has effectively gone all in, the only question is how low will it allow first junk bonds and then stocks to drop, before Powell goes full Haruhiko “Peter Pan” Kuroda and announces that the Fed will buy both junk bonds and stocks going forward, in the process nationalizing the entire market.

Authored by Paul Joseph Watson via Summit News,

The Director-General of the World Health Organization is a former member of a violent revolutionary communist party in Ethiopia that denied emergency medical treatment to an ethnic group and he is accused of personally overseeing the extradition of dissidents who were later imprisoned and tortured.

As we have previously highlighted, Tedros Adhanom Ghebreyesus has repeatedly parroted Chinese Communist Party talking points, constantly heaping praise on Beijing’s response to coronavirus despite the fact that China hid the truth about its spread and viciously silenced scientists and doctors who tried to warn the world.

Now we know why.

As John Martin explains in his excellent piece ‘The Crimes of Tedros Adhanom’, during his time in Ethiopia, the WHO chief was a member of the Tigray People’s Liberation Front (TPLF), a violent communist revolutionary party which was listed as a terrorist organization by the U.S. government in the 90’s.

According to one Ethiopian newspaper, Adhanom was listed as the 3rd most important member of the politbureau standing committee in the TPLF.

Martin writes how the TPLF engaged in “systematic discrimination and human rights abuses” by refusing emergency healthcare to the Amhara ethnic group because of their affiliation with the opposition party. The Ministry of Health that oversaw these abuses was led at the time by Tedros Adhanom Ghebreyesus.

Birth rates were recorded to be significantly lower in the Amhara region compared to other regions and 2 million Amhara people “disappeared” from the subsequent population census.

As Tucker Carlson highlighted earlier this week, Adhanom “got his job with Chinese support after he covered up cholera outbreaks in his home country” of Egypt.

Tedros has denied the allegation, which centered around claims he had downplayed cholera epidemics in Ethiopia in 2006, 2009 and 2011 by passing them off as “acute watery diarrhea,” a symptom of cholera.

“International organisations were pressured not to call it Cholera (despite the UN testing the infected and finding Cholera), and were pressured by government employees not to reveal the number of infected. Another stunning victory for the health minister,” writes Martin.

After he was appointed foreign minister of Ethiopia in 2012, dissidents and journalists across the country were subjected to a brutal government crackdown, leading some to flee to exile in nearby Yemen.

Adhanom was personally responsible for negotiating the extradition of these dissidents back to Ethiopia, some of whom were subsequently imprisoned and tortured.

“One such case was a British citizen Andy Tsege who was arrested at Sana’a airport and twice given a death sentence in Ethiopia,” writes Martin. “This led to the involvement of the British government who threatened denial of aid to Ethiopia unless he be granted asylum. Tedros responded that Tsege was “being treated very well. He even has a laptop, have you ever heard of a political prisoner with a laptop?” Andy of course, after his return to the UK told a somewhat different story of being tortured for days on end, alongside dozens of other prisoners.”

Dissidents being imprisoned and tortured? No wonder Adhanom is so effusive in his praise for China.

It gets worse.

In 2016, the Ethiopian government attempted to force relocate 15000 people in the Oromia region because it wanted to requisition their land. This led to mass protests followed by mass shootings and a stampede that killed 500 people according to Human Rights Watch. The government then embarked on another brutal crackdown, arresting 70,000 people.

Adhanom subsequently tried to downplay the violence, falsely claiming the police weren’t armed and that the numbers weren’t as high as stated.

After ascending to his lofty position within the World Health Organization, Adhanom appointed mass murdering dictator Robert Mugabe to be a “goodwill ambassador” to the WHO while also defending Uhuru Kenyatta, under whose government 1,300 people were killed following rigged elections.

“Tedros of course takes every chance he can to praise the good governance of China, and given the human rights record of the People’s Republic, it’s no wonder he likes them so much,” writes Martin.

“From projects like media propaganda centres, mass relocations, and social credit style score cards, Ethiopia’s governance in many ways resembles a carbon copy of the Chinese authoritarian model. Complete with a one party state and focus on profit over human rights.”

In the immediate aftermath of the coronavirus outbreak, the World Health Organization, under Adhanom’s direction, amplified Chinese fake news that there was no “human to human” transmission of COVID-19 as late as January 14th, despite this having already occurred in December.

The WHO and Adhanom also repeatedly demanded countries not impose border controls, exacerbating the spread of the disease, while appearing to be more concerned about political correctness and the “stigmatization” of Chinese people.

“In a sane world, instead of leading a global organisation, Tedros and his cronies would be put on trial at the International Criminal Court, tried for his crimes, and if found guilty, should spend the rest of his life in prison,” concludes Martin.

*  *  *

My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.

On April 1, a Tesla Model 3 slammed into a “traffic island” in Taoyuan, Taiwan, overturning and bursting into flames, killing the driver, Taiwan News Online reported.

“Firefighters found the car ablaze when they arrived at the scene of the single-vehicle crash on Zhongzheng Road, Longtan District at around 12:30 am Wednesday morning.

Details of the incident were widely reported today after one of the firefighters wrote a detailed Facebook post about the procedure of dealing with an AEV fire.

When the firefighter identified the vehicle as a Tesla, he called a second firefighting unit for support, as electrical vehicle fires require specialist procedures.

Fires in electric vehicles can’t be extinguished with foam or other chemicals.

Because EVs are silent, firefighters may not realize that the vehicle is on. If they try to help the occupants, they are at risk of electric shock.

After stabilizing the main fire, the lithium-ion batteries continued to burn. While continuing to douse the heat source, firefighters from the second unit went in to disable the power supply via the front hood.

After the power off and stabilization procedure, firefighters cut the 32-year-old driver, named Tang, out of the wrecked vehicle, but Tang was obviously dead, and his body had been badly burned by the fire.”

Taiwan News made no mention if the vehicle’s Autopilot was engaged during the incident. 

Last month, the US National Transportation Safety Board (NTSB) said the Autopilot was partially to blame for a fatal 2019 crash in Florida that involved a Tesla. 

In March of last year, we also reported that the US National Highway Traffic Safety Administration (NHTSA) was conducting an “ongoing investigation” involving two crashes in the state. 

Assuming a preliminary report of the Taiwan crash could be published in the near term. The report could shed light on the driver’s final moments and if Autopilot was engaged before the collision. 

Here are the latest Tesla-related deaths from around the world (courtesy of TeslaDeaths.com): 

Yeah, it’s a long list that the mainstream media dares not to share. 

Authored by James Corbett via Off-Guardian.org,

Pssst. You.

Yeah, you.

Are you interested in talking about…things? You know, the kind of things that we’re not allowed to talk about anymore? You know, since the…uhhh…“The Event“?

You are? Great. I mean, you might have noticed things are getting a bit hairy out there. As in, you’re likely to get your head bitten off for daring to suggest that things may not be totally ok with the “new normal.”

It seems all these new social norms and cultural taboos that have arisen in the past few weeks have also created a raft of new thoughtcrimes: Things that must not be spoken for fear of being expelled from polite society… or worse.

That’s why it’s so vitally important for us to speak out about our concerns before these socially-policed thoughtcrimes become literal crimes. As I’m sure you know, if these new social norms are not confronted, voicing dissent will soon become impossible.

So, allow me to voice some thoughtcrimes of my own. But be forewarned: I assure you that you will find at least some of my ideas to be offensive. You will disagree with them strongly. You will become irate.

The real question is: What are you going to do to those voicing opinions you disagree with? Engage in dialogue with them? Or demand that agents of the state scrub their speech from the internet and lock them in a cage for their thoughtcrime?

Well, either way, I’ve already committed thoughtcrime numerous times in recent weeks, I might as well share them with you. Are you ready? Let’s go.

1. WE HAVE MET THE ENEMY . . . AND IT IS OUR NEIGHBORS

People imagine that when the boots-on-the-ground tyranny arrives, it will be enforced by the police or the military. Newsflash: the boots-on-the-ground tyranny is here, and it is being enforced by your neighbors, Joe Sixpack and Jane Soccermom.

Need proof? How about all the new “snitch lines” that are opening up in city after city and state after state all around the globe to help good citizens tattle on neighbors who aren’t practicing proper social distancing?

That’s right. It’s not just guys yelling out their windows in Brooklyn anymore. Now whenever you see someone within two meters of someone else it is your duty as a loyal citizen of the Brave New World Order to actively report them to the authorities so that they can be dealt with by Big Brother. Rest assured, a score card is being compiled for each jurisdiction, and the powers-that-shouldn’t-be are keeping a list of who’s being naughty or nice (Good job, Minnesota!).

Still, while we can all unequivocally and universally agree 100% with the idea that anyone who physically approaches another human being in this Year of our Virus 2020 deserves to be charged with manslaughter for their heinous act, maybe, just mayyyyyybe—and I’m just spitballing, so forgive me if this seems brash—we’re heading into dangerous territory here. You know, what with the social distancing Stasi becoming the enforcers of our new police state nightmare and all. Call me crazy.

2. DOCTORS ARE THE NEW SOLDIERS

When 9/11 happened, there was a marked and notable intensification in the propaganda glorifying the American military. Not that such propaganda didn’t exist before, but it was nothing like what we’ve seen since “the day that changed everything.” Yes, the hero worship of veterans is one of the hallmarks of the Age of Terror that 9/11 ushered in .

So if this plandemic is the new 9/11, what’s the new hero worship? Well, it should be obvious by now: Doctors are the new soldiers. Now we must dutifully show our appreciation for the brave medical workers on the front lines of this new war…or face yet more social castigation.

You may have noticed the interesting phenomenon making its way around the world. I call it “The Totally Spontaneous Balcony Applause Phenomenon.” Yes, completely out of the blue, all the people under lockdown have decided to show their appreciation for the valiant doctors and nurses in this heroic struggle by going to their balcony at a pre-appointed time and applauding. And no, this totally spontaneous phenomenon is not just occurring in one or two countries. Or three or four countries. But in seemingly every country around the globe.

Just like that. Just out of the blue. Must be something in the zeitgeist, I guess.

Now you’ll forgive me for being out of the loop, but as you know the corona madness has not quite made its way to Japan yet. (But, precisely as I predicted, the very same day that the Tokyo 2020 Games were postponed the Tokyo Governor suddenly became gravely concerned about her city, and they are now going to “have to” lockdown Tokyo unless the poor plebs behave.) So I don’t know exactly how people decide on the right time to go to their balcony to applaud. Is it done by vote? What if I’m a few minutes late? Will people think I’m clapping for something else? What exactly is the etiquette here?

Here’s my thoughtcrime: I find these displays creepy and off-putting. I find the glorification of doctors and nurses unsettling. Not because I think they are all quacks. Not because I think they are all evil. Not because I am not grateful for the work that (some) doctors do (some of the time). Not because I don’t recognize the enormous stress that these doctors and nurses are under right now. But because this socially engineered adoration is going to be used to push an agenda exactly like the glorification of veterans was used to push the militarism agenda of the post-9/11 years.

This time, we are being asked to glorify doctors and nurses because these are the same trusted experts whose authority cannot be questioned who are going to be giving you the vaccine. You know, The Vaccine. The one that will bring an end to the then 18-month long psychological siege that we are being placed under.

What?? You still question the vaccines? You still dare to defy the authority of these brave doctors and nurses who risked their lives for us? You can’t say that, you disgusting conspiracy mongering throughtcriminal, you!

Be honest, you know that this push is coming. And they are getting the public to sign on with all these “spontaneous” balcony applause sessions. So perhaps you’ll forgive me for not joining in.

3. I DO NOT TRUST A SINGLE ONE OF THE NUMBERS BEING REPORTED ABOUT THIS OUTBREAK

I am still baffled by the attention that otherwise sane human beings are given to the latest reported numbers from this or that health agency about the scourge of Covid-19. People are throwing around CFRs and R0s like they’ve been studying epidemiology their whole lives. In truth, they’re just regurgitating whatever they saw on CNN or were told in the latest Governor Cuomo press conference.

So what do we make of the baffling discrepancy in death rates from Covid-19 between different countries? Why is Italy’s death rate from the disease a staggering 10% while China’s is more like 4%? And what does that mean for the 70% of humanity that “experts” warn will be infected by this virus?

And while we’re at it, why don’t we ask some equally meaningful questions, like: What color is the Easter Bunny? How many angels can dance on the head of a pin? And just how tasty is the cheese that the moon is made of, anyway?

As I demonstrated weeks ago, methods for diagnosing this disease vary so widely from country to country that making comparisons between countries isn’t even like comparing apples and oranges. It’s like comparing apples and aardvarks. And diagnosing a particular type of viral infection via CT scan? How can we possibly trust the infection numbers that are being generated by such methods?

All of that would make the calculation of mortality rates for this disease problematic enough. But, to make matters worse, we don’t even have an accurate tally of the number of people who have died from Covid-19. Take the infamous Italian example, for instance. We’re told that the staggering death rates in Italy (roughly 10% if we go by the official numbers at press time) are a sign of just how deadly this new virus can be.

…But there’s some problems with those numbers. As Prof Walter Ricciardi—scientific adviser to Italy’s minister of health—recently revealed, “The way in which we code deaths in our country is very generous in the sense that all the people who die in hospitals with the coronavirus are deemed to be dying of the coronavirus.”

So how many of the people who are reported as “Covid-19 deaths” in Italy actually had coronavirus listed as their cause of death? Just 12 per cent. What’s more, according to the Italian government’s own report, half of those who died had three or more other diseases at the time of the death. Nearly 80 per cent had at least two other diseases that they were fighting when they died. Only 1.7 per cent of those who died had no other disease.

But why listen to James Corbett, conspiracy theorist, or those silly Italian government health advisors on this matter? Well, I’m not alone in this suspicion of the official numbers. It turns out the “Our World in Data” research group that has been attempting to keep track of the coronavirus numbers has stopped using the World Health Organization’s data because “we found many errors in the data published by the WHO when we went through all the daily Situation Reports.”

And John Ioannidis — who Corbett Report listeners will remember launched the replication crisis in science with his landmark 2005 paper on “Why Most Published Research Findings Are False” — has recently come out questioning whether the current Covid-19 response is “A fiasco in the making.” As Ioannidis observes:

The data collected so far on how many people are infected and how the epidemic is evolving are utterly unreliable. Given the limited testing to date, some deaths and probably the vast majority of infections due to SARS-CoV-2 are being missed. We don’t know if we are failing to capture infections by a factor of three or 300. Three months after the outbreak emerged, most countries, including the U.S., lack the ability to test a large number of people and no countries have reliable data on the prevalence of the virus in a representative random sample of the general population.

After this current madness passes, people will view the public’s blind acceptance of these practices in the same way that we look at the public’s blind acceptance of bloodletting and other methods of medical chicanery from times past.

4. THE DEATH OF A 91 YEAR-OLD IS A FAMILY TRAGEDY, NOT AN EVENT OF INTERNATIONAL CONCERN

OK, so you still insist on taking these phony baloney numbers seriously? Then let’s take another looks at that Italian report on those dying with (not of) Covid-19.

The report tells us that the median age of those who have been pronounced dead with (not of) Covid-19 is 78. To put that number in perspective, the average life expectancy in Italy is 82.8.

That means those who are dying with (not of) the disease are within years of reaching the average life expectancy (and, let’s not forget, they are also suffering in the vast majority of cases from at least two other diseases). I venture to say that a similar panic could be raised about just about any viral disease in circulation if it was being reported in the same way as this coronavirus is being reported.

Since we’re committing thoughtcrimes here, let’s be blunt: “Elderly Patient With Multiple Complications Dies After Contracting Respiratory Illness” is NOT a news story. It’s a daily fact of life.

But in fact, it is a news story. I have been keeping tabs on how the Canadian MSM have been covering the pandemic panic and saw a segment on one of the national news broadcasts about a woman whose 91-year old mother died in a nursing home. It was implied that this 91-year old woman’s life was tragically cut short by the coronavirus and, to make matters worse, her daughter was unable to hold a funeral or service for her mother because Canada is currently under lockdown. I don’t know if I have lost touch with reality or everyone else has, but let me reiterate: This is NOT a news story.

Don’t get me wrong: Any such death is doubtless a tragedy for the family involved. My heart genuinely goes out to all those who lose their relatives in such circumstances. But this is not something that we upend our entire civilization over. We do not stop all productive human activity on the planet, collapse the economy, send millions upon millions of people to the unemployment line, institute lockdowns, and begin talking about mandatory vaccinations, internal passports and other abrogations of essential human freedoms on such a basis.

In fact, if I were to be dying at the age of 78 due to some viral respiratory illness along with my other 78-year old cohorts, I can guarantee that I would be outraged that the powers-that-shouldn’t-be were using my death to upend the liberties that I had spent my life attempting to defend. It is disgusting.

“But what about the young people who die of the disease?” you ask. Fair enough. Again, according to the official reports (which, let me remind you, should not be trusted), there are people under the age of 78 who are dying from the disease as well, albeit in much smaller numbers. And, according to the “models” from the “experts” (who, let’s remember, are right about everything), there could be hundreds of thousands more deaths before this pandemic runs its course.

Well, that brings me to my ultimate thoughtcrime:

5. THE IDEA THAT DISEASE AND DEATH ARE UNNATURAL OR AVOIDABLE IS ANTI-HUMAN

People die.

Sometimes they die of car accidents. Sometimes they die of work-related mishaps. Sometimes they die of old age. Sometimes they die under extremely questionable circumstances while trying to shed light on information that is uncomfortable for the deep state. And, yes, sometimes they die of respiratory illnesses during viral pandemics.

I’ll go one step further: Our mortality makes us who we are. Humans are blessed and cursed with a knowledge of our own fate. No one makes it out of this life alive. And so the question of what we do with our lives becomes paramount.

But more and more, death is being removed from life. Our elderly are shipped off to nursing homes to whither away so that we don’t have to face aging. The funerary industry is neat and anti-septic. Death has become an abstraction. Something that happens somewhere out there, to other people. Not to us, though, surely.

But this entire pandemic madness seems to be predicated on the notion that disease and death are somehow avoidable. That we have conquered such things. Or, at least, that no new disease could ever possibly arise (bioengineered or not) to upset our perfect balance with nature. I mean, yes, many people die of the flu every year, but that doesn’t count. That’s not new.

This is not to say that we shouldn’t work to cure diseases and improve our health. Quite the contrary. It’s just that this current bout of hysteria seems almost anti-human; as if we should be able to transcend our mortal humanity.

CJ Hopkins, in his characteristically humorous way, points out the absurdity of this “War on Death” in his latest article:

We can’t let these Russian dissension sowers, neo-Nazi accelerationists, and coronavirus-sympathizers confuse us. They want to convince us that Death is, yes, scary, and sad, but inevitable, and natural. How utterly heartless and insane is that?!

No, we need to close our minds to that nonsense. People are dying! This is not normal! Death is our enemy! We have to defeat it! We need to hunt down and neutralize Death! Root it out if its hidey hole and hang it like we did with Saddam!”

I don’t know why the idea that death is a part of life should be controversial. But, given that even a respected blogger like Craig Murray can be largely lambasted by his own audience for daring to post similar musings, I suppose that it is. I don’t know anymore. Perhaps I’m off my rocker.

All I know is that the room to express dissent on these topics is fast disappearing. It’s time for those of us who can tolerate thoughtcrime to circle the wagons. The Thought Police are closing in.

So maybe you disagree with me. Maybe you’re offended by what I say. Maybe you have your own thoughtcrimes that you’re afraid to express. But if we don’t engage in dialogue about these ideas now, what are the chances that this information will be easier to share in the future?

So what’s your thoughtcrime? 

The Department of Homeland Security has put “on hold” a plan to authorize an additional 35,000 H-2B guestworker visas, meaning businesses can no longer bring on new migrant workers under the program.

The move comes after the initial unemployment claims spiked by 10 million in two weeks due to the coronavirus pandemic – with 6.6 million in one week alone as businesses across the country conducted mass layoffs.

“DHS’s rule on the H-2B cap is on hold pending review due to present economic circumstances. No additional H-2B visas will be released until further notice,” reads a tweet from DHS.

To clear up various misreporting – DHS’s rule on the H-2B cap is on hold pending review due to present economic circumstances. No additional H-2B visas will be released until further notice. Per the statute, H-2B allocations are set in consultation with @USDOL.

— Homeland Security (@DHSgov) April 2, 2020

Notably, the pause came one day after Fox News‘s Tucker Carlson blasted Homeland Security over the increase.

“We’re facing a global calamity that could wreck our economy, fracture our society,” said Carlson, arguing that DHS shouldn’t be offering 35,000 slots for jobs that could go to unemployed Americans.

In early March, the agency announced that it would be boosting H-2B slots after nearly 100,000 workers were requested for just 33,000 remaining slots, according to Law360.

Of those extra visas, 10,000 were reserved for citizens of El Salvador, Guatemala and Honduras, the three countries comprising the Northern Triangle region that have struck deals with the Trump administration to accept U.S. asylum seekers.

Before the virus struck the U.S., national unemployment was low, hovering below 4% in both January and February of this year, when employers submitted requests to the Labor Department for seasonal workers starting in April.

With H-2B visas capped at 66,000 per fiscal year, demand for these temporary visas, which are granted to employers who can show there are no Americans willing or available to fill the jobs, has consistently outstripped supply. –Law360

With the program paused, however, employers who came up short in the Labor Department’s January lottery are out of luck – and might just have to hire Americans.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Major Technical Failures Confirm Bear Market Risk

In last week’s discussion, we stated the “bear market” was not yet complete. This was despite the “market rally,” which convinced the media the “bull market was back.”

While it was indeed a sharp “reflex rally,” and expected, “bear markets” are not resolved in a single month. Most importantly, as we discussed in our employment report on Thursday, “bear markets” do not end with “consumer confidence” still very elevated. 

“Notice that during each of the previous two bear market cycles, confidence dropped by an average of 58 points.”

This past week, we saw early indications of the unemployment that is coming to America as jobless claims surged to 10 million, and unemployment in April will surge to 15-20%.

Confidence, and ultimately consumption, Which comprises 70% of GDP, will plummet as job losses mount. It is incredibly difficult to remain optimistic when you are unemployed.

No Light At The End Of The Tunnel – Yet.

The markets have been clinging on to “hope” that as soon as the virus passes, there will be a sharp “V”-shaped recovery in the economy and markets. While we strongly believe this will not be the case, we do acknowledge there will likely be a short-term market surge as the economy does initially come back “online.”  (That surge could be very strong and will once again have the media crowing the “bear market” is over.)

However, for now, we are not there yet. As we noted last week’s Macroview there are two issues currently weighing on the economy and markets, short-term.

“Most importantly, as shown below, the majority of businesses will run out of money long before SBA loans, or financial assistance can be provided. This will lead to higher, and a longer-duration of unemployment.”

Furthermore, the bill only provides for  two and a half times a company’s average monthly payroll expense over the past 12 months. However, the bill fails to take into consideration that not all small businesses are labor and payroll intensive. Those businesses will fail to receive enough support to stay in business for very long. Furthermore, the bill doesn’t provide for inventory, other operating costs, and spoilage.

Small businesses, up to 500-employees, make up 70% of employment in the U.S. While the government is busy bailing out self-dealing publicly traded corporations, there will be a massive wave of defaults in the small- to mid-size business sector.

Secondly, we are not near the end of the virus as of yet. As noted last week:

“While there is much hope that the current ‘economic shutdown’ will end quickly, we are still very early in the infection cycle relative to other countries. Importantly, we are substantially larger than most, and on a GDP basis, the damage will be worse.”

This was confirmed again this week by the New York Times’ columnist David Leonhardt:

“Five ways we know that the American response to the coronavirus isn’t yet working.

1. There is still no sign of the curve flattening.

2. The caseload is growing more rapidly here than in Europe.

3. The shortage of medical supplies continues.

4. There is still a testing shortage.

5. Nationwide, the policy response remains inconsistent. 

What the cycle tells us is that jobless claims, unemployment, and economic growth are going to worsen materially over the next couple of quarters.

The problem with the current economic backdrop, and mounting job losses, is the vast majority of American’s were woefully unprepared for any disruption to their income going into recession. As job losses mount, a virtual spiral in the economy begins as reductions in spending put further pressures on corporate profitability. Lower profits lead to higher unemployment and lower asset prices until the cycle is complete.

Two important points:

1. The economy will eventually recover, and life will return to normal. 

2. The damage will take longer to heal, and future growth will run at a lower long-term rate due to the escalation of debts and deficits. 

For investors, this means a greater range of stock market volatility and near-zero rates of return over the next decade.

The Bear Still Rules

Over the last two weeks, we published several pieces of analysis for our RIAPro Subscribers (30-Day Risk Free Trial) discussing why the “bear market rally” should be sold into. On Friday, our colleague, Jeffery Marcus of TP Analytics, penned the following:

Meanwhile, the charts below of the S&P500 benchmark tell TPA the following:

1. When the 11-year bull market trend ended, other shorter trends were also violated.  In late February, the S&P 500 fell below its 14-month uptrend line, and in early March the 13-month uptrend line was violated.  Those breaks set in place the steep declines seen in the 2nd and 3rd weeks of March.

2. While it may seem like an epic battle is going on around S&P 500 2500, the real problem is the downtrend forming from the 2/19 high.

3. TPA still continues to see real long term support in the 3% range between 2110 and 2180. A less likely move below that support, would leave long term support levels of the lows of 2014 and 2015.

S&P 500 – Long Term

His analysis agrees with our own, which we discussed with you on Tuesday:

“While the technical picture of the market also suggests the recent “bear market” rally will likely fade sooner than later. As we stated last week:

‘Such an advance will ‘lure’ investors back into the market, thinking the ‘bear market’ is over.’

Importantly, despite the sizable rally, participation has remained extraordinarily weak. If the market was seeing strong buying, as suggested by the media, then we should see sizable upticks in the percent measures of advancing issues, issues at new highs, and a rising number of stocks above their 200-dma.”

Chart updated through Friday.

On a daily basis, these measures all have room to improve in the short-term. However, the market has now confirmed longer-term technical signals suggesting the “bear market” has only just started.

Major Technical Failures

Price is nothing more than a reflection of the “psychology” of market participants. The mistake the media made by calling an “end” to the “bear market” is they were using an outdated proxy of a “20% advance or decline” to distinguish between the two.

However, due to a decade-long bull market, which had stretched prices to historical extremes above long-term trends, that 20% measure is no longer valid.

Let’s clarify.

• A bull market is when the price of the market is trending higher over a long-term period.

• A bear market is when the long-term upward trending advance is broken and prices begin to trend lower.

The chart below provides a visual of the distinction. When you look at price “trends,” the difference becomes both apparent and more useful.

This distinction is important. With the month, and quarter-end, behind us, we can now analyze our longer-term weekly and monthly price trends to make determinations about the market.

The market has now violated the 200-week (4-year) moving average. Given this is such a long-term trend line, such a violation should be taken seriously. Also, that violation will be very difficult to reverse in the short-term, and suggests lower prices to come for the market.

Using the definition of “bull and bear” markets above, the market has also violated the long-term “bull trend” on a “confirmed” basis.

A confirmed basis is when the market violates a long-term trend, rallies, and then fails. As Jeffery Marcus, noted above, that market is now establishing a confirmed downtrend with the recent rally failing at downtrend resistance. (Also, the 50-200 dma negative cross will apply more downward pressure on any forthcoming rally.)

Most importantly, for the first time since the “Great Financial Crisis” lows, the market now has a confirmed close below the bull-trend line. If the market is able to rally in April, and close above the long-term trend line, then the “bull market” will technically still be intact. However, if the month of April closes below that trend, a confirmed “bear market” will be underway and suggests markets will see lower levels before it is over.

There are reasons to be optimistic about the markets in the very short-term. We will get through this crisis. People will return to work. The economy will start moving forward again.

However, it won’t immediately go right back to where we were previously. We are continuing to extend the amount of time the economy will be “shut down,” which exacerbates the decline in the employment, and personal consumption data. The feedback loop from that data into corporate profits, and earnings, is going to make valuations more problematic even with low interest rates currently. 

This is NOT the time to try and “speculate” on a bottom of the market. You might get lucky, but there is very high risk you could wind up losing even more capital.

For long-term investors, remain patient and let the market dictate when the bottom has been formed.

This was a point we discussed in “Rothschild’s 80/20 Rule:”

You can have the top 20% and the bottom 20%, I will take the 80% in the middle.” – Rothschild

This is the basis of the 80/20 investment philosophy, and the driver behind our risk management process at RIA.

Yes, you may sell to early and miss the 10% before the peak, or you sell a little late and lose the 10% from the peak. Likewise, you may start buying into the market 10% before, or after, it bottoms. The goal is to capture the bulk of the advance, and miss the majority of the decline.

Investing isn’t a competition of who gets to say “I bought the bottom.” Investing is about putting capital to work when reward outweighs the risk. 

That is not today.

Bear markets have a way of “suckering” investors back into the market to inflict the most pain possible.

This is why “bear markets” never end with optimism, but in despair.

As if a national lockdown to prevent a deadly pandemic from killing hundreds of thousands of people wasn’t terrifying enough, there are now armed asylum seekers marauding around southeastern France, murdering shoppers as they venture out to buy groceries.

To wit, a man killed two people and wounded several others, one critically, during a knife attack in the town of Romans-sur-Isère in the Drôme, about 20 kilometers north of Valence.

According to Haaretz, witnesses said the man first attacked the owner of a tobacco shop in the town center, then attacked two customers inside the shop. After that, he twalked out and began stabbing people in the street. One of the dead was inside the tobacconist. A second man, a butcher from a nearby shop, was killed outside.

Local police told French media that the suspect was a 33-year-old asylum seeker from Sudan. Anti-terrorism investigators are reportedly investigating the incident to try and determine if it was an act of terrorism.

As COVID-19 has spread across Europe, the issue of how to handle the asylum-seekers and migrants who continue to spill over the continents’ borders, even as the Syrian Civil War appears to finally be winding down, has become increasingly fraught as Turkey has reportedly tried to send migrants infected with the virus to Greece.

Macron tweeted his condolences, and promised to investigate to incident and determine whether it was an act of terrorism.

The suspect was living in the center of town where he carried out the attack. A statement from the local municipal government read: “This Saturday 4 April morning an individual carried out a knife attack at several places in the centre of Romans-sur-Isère. The individual in question was arrested around 11am. According to initial information, two people have died, five others are injured and in a critical condition. At this moment, we do not know the motive for this act.”