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Egypt and Turkey have long been on opposite sides of the raging battle for the fate of Libya, with Turkey providing major military support and backing for the UN-recognized Government of National Accord (GNA) in Tripoli, and with Egypt backing Gen. Khalifa Haftar.

The situation escalated over the weekend, amid a pullback of pro-Haftar forces from Tripoli after being defeated in the bid for the capital, when Egypt’s President Sisi announced from an airbase near the Libyan border that the Egyptian Army stands ready to intervene in Libya on behalf of Haftar.

Sisi declared that if GNA forces attempt to enter Haftar-controlled Sirte, pushing deeper into central Libya, this would be a ‘red line’ for Egypt, forcing it’s intervention.  Crucially both Tripoli and its main ally Turkey on Sunday condemned what they called Sisi’s “declaration of war”.

Turkish state media recorded the GNA statement as follows: “This is a hostile act, direct interference, and amounts to a declaration of war” – in condemnation of Sisi’s statements. It added that for the Libyan state, “interference in its internal affairs, attacks on its sovereignty, whether by declarations… like those of the Egyptian president or by support for putschists, militias, and mercenaries, is unacceptable.”

The heated rhetoric, and with Egypt potentially beefing up forces and military hardware along its border with Libya, has some regional sources saying that Turkey and Egypt are headed for direct war in a rapidly intensifying situation.

“Now Egypt’s president is signaling possible red lines in Libya,” The Jerusalem Post writes. “This line could keep the Turkish-backed GNA from Sirte and a strategic airfield at Jufra. The country would be split down the middle. Egypt has a massive army, but it is also an army mostly untested on foreign battlefields.”

Tripoli is now calling on the international community, especially the UN, to step in should Egypt’s army get involved. 

Surveying the prospects for major war between Turkey and Egypt over Libya, The Jerusalem Post explains further: 

On paper Turkey’s armed forces and Egypt’s are well matched. Both have F-16s and hundreds of fighter aircraft. Egypt’s army is the 9th strongest in the world on paper with thousands of tanks. Turkey’s armed forces are thought to be the 11th strongest in the world. Both countries use western weapons systems linked to the US or NATO. Turkey’s work with NATO likely makes it more effective than Egypt.

Both countries are bogged down in counter-insurgency campaigns. Egypt is close to Libya and can easily move an armored brigade or troops to the frontline. Turkey would have to fly them in and it likely prefers using Syrian rebel mercenaries to do its dirty work. 

In short, the Libya situation – a country on fire since Gaddafi’s toppling and death due to the 2011 US-NATO military intervention, or what many have called “Obama’s Iraq” – is set to get a lot messier. 

There are already unverified reports that Egypt may be sending jets to Haftar airbases in eastern Libya in support of his LNA.

If so, Turkey will certainly increase its own aerial patrols, which has already involved ample use of drone warfare in and around Tripoli. But no doubt this would give Erdogan greater excuse to get Turkish fighter jets involved.

Authored by Jack Phillips via The Epoch Times,

Nine people have been killed, including four under the age of 18, and 47 more were injured in shootings across Chicago on Father’s Day weekend, police said.

Two teenage boys, a 3-year-old, and a 13-year-old girl are among those who were killed, officials told ABC7 in Chicago.

The 3-year-old’s death was also confirmed by Chicago Mayor Lori Lightfoot, who wrote that “our city’s collective heart breaks to hear the unfathomable news of a 3-year-old boy who was shot and killed tonight on Chicago’s West Side.”

“There are simply no words to describe such a heinous, unconscionable act of cowardice to shoot at a toddler,” Lightfoot wrote.

According to the Chicago Sun-Times, officials said the toddler was identified as Mekay James, who was struck in the back when a suspect approached his father’s black SUV before firing several rounds.

Our city’s collective heart breaks to hear the unfathomable news of a 3-year-old boy who was shot and killed tonight on Chicago’s West Side. There are simply no words to describe such a heinous, unconscionable act of cowardice to shoot at a toddler.

— Mayor Lori Lightfoot (@chicagosmayor) June 21, 2020

In one incident in the Austin neighborhood, two teenage boys were sitting on a porch when one noticed a laser being pointed at him, according to police. Gunshots then erupted, injuring the two boys, who are in good condition. However, a 13-year-old girl who was inside the home was shot in the neck during the incident and later died.

The Chicago Sun-Times, citing the Cook County medical examiner’s office, identified the teen girl as Amaria Jones.

Officials said that in a separate incident, a 16-year-old boy and a 17-year-old male were killed in an alley in South Chicago’s South Luella Avenue. A male suspect approached the two and opened fire.

A running tally compiled by the Chicago Tribune says that 227 more people have been shot across Chicago this year, compared with the figures in 2019. So far, nearly 1,300 people have been shot.

On Memorial Day weekend, which saw violent unrest in the wake of George Floyd’s death, more than 50 people were injured in shootings across the city. Ten people were fatally shot, marking the deadliest Memorial Day weekend in five years.

The weekend violence came as Chicago aldermen announced a plan last week to remove police officers from city schools amid growing outcry for police reforms.

Protesters take to the streets of Chicago, Ill., on June 6, 2020. (Natasha Moustache/Getty Images)

The proposal ending the city’s $33 million deal with the Chicago Police Department follows similar action in Minneapolis and Seattle. Proponents say police in schools can be intimidating to students and criminalize student behavior in Chicago’s public schools.

Alderman Roderick Sawyer, a sponsor, said historically police were called to schools to protect from outside threats.

“Now our students are being criminalized for being students at CPS and that’s not right,” he said at a news conference. “We want to make sure that our children have every opportunity to learn and grow from children to young adults and police officers in schools is not the answer.”

The plan, to be introduced Wednesday for a vote next month, requires the police chief to end the contract within 75 days.

Two weeks ago we reported that with PredictIt showing growing odds of a Democratic Sweep after the November election…

… Goldman’s clients were becoming increasingly concerned what this would mean for the stock market. David Kostin’s response only added fuel to the fire: the chief Goldman strategist warned that if Biden’s tax proposals are enacted, this would reduce Goldman’s S&P 500 earnings estimate for 2021 by roughly $20 per share, from $170 to $150, resulting in a substantial hit to the bank’s S&P forecast.

Furthermore, Kostin explained that according to a general rule of thumb, every percentage point change in the effective corporate tax rate should change S&P 500 earnings by 1.2% or $2 per share.

This ominous Goldman assessment was among the various reasons cited why in the subsequent two weeks the markets have become increasingly shaky as Biden’s PredictIt lead over Trump has continued to grow.

But now, according to a follow up response from Morgan Stanley, the bulls have nothing to fear even if Biden wins for one simple reason: no matter who ends up victorious on Nov 3, there is no stopping the Brrrrrrrrrr.

As Morgan Stanley’s in house political expert Michael Zezas writes, “if you think this election could be a game changer for the US economy and markets, we’re with you.” But – he adds – don’t make the mistake of conflating candidates’ provocative policy positions with future policy paths, or in other words, expect politicians to lie. Focusing on ‘plausible policy paths’, Zezas thinks “the impact of the election on policy supports a constructive path for risk assets and headwinds for US Treasuries, consistent with our colleagues’ positions in our recent mid-year outlook.”

In retrospect it’s is not all that surprising that we have yet another bullish note out from Morgan Stanley, which on the back of Michael Wilson’s reversal to Wall Street’s most cheerful optimist from its biggest bear three months ago, has prompted an outpouring of constant bullish notes from the bank (just as stocks increasingly appear wobbly and the Fed’s balance sheet has stopped soaring).

On the other hand, Zezas is also right that no matter the outcome of the election, there is no way that the Fed can taper the helicopter money, as the alternative would result in a market crash.

In other words, fiscal policy in the US is now completely independent of who is in charge and the US president is now nothing more than a figurehead; the only thing that matters is the Fed and whether it will continue monetizing all US debt issuance as it is doing in 2020…

… and whether it will continue to singlehandedly fund the US budget deficit.

While it doesn’t reach quite the same conclusions, here is the rest of Zezas’ note:

US Election: The Art of the Plausible

First, a policy lesson from recent history. Ahead of the 2016 election, the conventional wisdom held that a Trump victory would be a risk-off event. The key mistake was conflating the outcome of the presidential race with overall government policy. The election resulted in a Republican sweep, but their plausible policy path for governing was limited by what they could deliver. That included tax cuts and deregulation, but not the spending cuts and healthcare repeal they also promised. This added up to an economically supportive fiscal expansion, and it only took hours for the markets to put two and two together.

In this election cycle, we see investors making similar mistakes, focusing on the candidates’ provocative positions and overlooking the plausible policy paths. We differ from consensus in three key areas:

• We expect more fiscal stimulus even though it’s an election year. We continue to get pushback on our view that Congress will deliver follow-up stimulus to the recent CARES Act this summer. Some believe it is in the Democrats’ interest to deny Republicans the electoral benefit of a strong economy. We disagree. First, there’s only weak evidence that a strong economy guarantees reelection of the incumbent. Second, government assistance in times of crisis is core to the Democrats’ policy brand. Third, though fiscal expansion is rare in a divided government, it is common in reaction to a recession. While growth has turned positive, high unemployment is likely influencing the political calculus. Hence, we think the parties’ areas of agreement could add up to a US$1 trillion package.
• A Democratic win doesn’t have to be ‘risk off’. Investors responding to our election survey seem most concerned with a situation where Democrats take back both the Senate and the White House, clearing a path for Biden’s proposals of more than US$3 trillion in new taxes and tighter regulation. However, we think that fails to consider what is practically achievable. First, enacting these proposals would likely require the end of the filibuster – a strong possibility, but a major assumption. Second, Democrats likely have much more scope to spend than to raise taxes. In a sweep, Senate control will come via key wins by moderates, who are less likely to support an array of tax hikes. However, limited tax increases may not keep Democrats from their spending ambitions. Our AlphaWise Battleground States survey shows that Democratic voters are keen on healthcare spending, with moderate-to-liberal voters overwhelmingly supporting the effort even if it means expanding the deficit. Hence, investors may be too focused on the tax side of the equation, overlooking the support for aggregate economic demand from fiscal expansion.
• Don’t overreact to China tensions. We’ve recently heard investor concerns that the current US administration will re-escalate tariffs to boost its election prospects. We’re more inclined to see the election as a reason why the US will not take this path. Our survey shows that voters are skeptical about China’s role in the global arena, but more concerned about the domestic economy. Since polls suggest that, on net, voters favor President Trump on the economy, the administration likely views a V-shaped recovery as essential to reelection. Hence, heightened rhetoric and fresh non-tariff actions may be in the cards, but we think that tensions will likely stop short of tariff re-escalation.

Hence, election outcomes remain uncertain, but we think their influence on current policy choices and future policy paths is supportive of risk assets today [ZH translation: no matter who the president is, they won’t allow stocks to drop].

More fiscal expansion this year bolsters our economists’ call for a V-shaped recovery, and further fiscal support in a range of election scenarios could pave the way for sustained economic recovery. While this poses a challenge to US Treasury duration, we think it helps to extend recent gains in US equities and US credit. At the equity sector level, we highlight the potential for financials – an out-of-consensus favorite of our equity strategists – to outperform. They expect value stock outperformance and see positive exposure to a steeper yield curve from fiscal expansion, factors that we think would endure in a variety of November outcomes.

Former Vice President Joe Biden has assembled a transition team for a smooth return to the White House, should he beat President Trump in the November election.

Leading the team is former Sen. Ted Kaufman (D-DE), who filled Biden’s senate seat when he became VP – and led Biden’s 2008 and 2009 transition team, according to Fox News.

Kauffman says they’re in the “very early stages of pre-transition planning” after hiring around six people – including “Obama Administration and Capitol Hill veterans,” according to the report. There’s also a former CIA official.

Yohannes Abraham, a longtime senior White House staffer in the Obama administration and former COO of the Obama Foundation, will manage day-to-day operations. Avril Haines, former principal deputy national security advisor and deputy director of the CIA, will manage the transition’s national security and foreign policy efforts.

Other staffers will include Gautam Raghavan, chief of staff to Rep. Pramila Jayapal, D-Wash.; Angela Ramirez, chief of staff to Assistant Speaker Ben Ray Lujan of New Mexico; Evan Ryan, a senior advisor to Biden during the Obama administration, and Julie Siegel, who worked for Sen. Elizabeth Warren, D-Mass., as senior counsel for economic policy. –Fox News

“The next president will confront an ongoing global health pandemic and inherit an economy in its worst shape since the Great Depression,” he said in a statement. “No one will have taken office facing such daunting obstacles since Franklin Delano Roosevelt. Joe Biden is prepared to meet these urgent challenges on the day he is sworn in as president, and begin the hard work of addressing the public health crisis and rebuilding an economy that puts working families first.”

According to team Biden, the timing of the transition staffing coincides with the “Edward “Ted” Kaufman and Michael Leavitt Presidential Transitions Improvement Act of 2015″ which requires that campaigns begin initial transition work six months before an election.

Authored by Thomas Price, M.D. & C.L. Gray, M.D. via RealClearPolitics.com,

The media is churning out countless alarmist stories each day about the threat of COVID-19 and the dangers of societal reopening. “Risk of new lockdown rises with fear of second COVID-19 wave,” writes Reuters, as one example of the genre.

These stories generally incite, rather than inform. They cherry-pick facts and lack context. Only when the COVID picture is viewed in perspective are people able to make wise decisions about their actions. It should be safe for society to continue broadly reopening while directing resources to specific at-risk populations, such as nursing homes and prisons, which are more vulnerable.

The media has focused on increasing numbers of positive tests and hospitalizations in parts of the country to imply reopening is reckless.

“Confirmed coronavirus cases have risen by double-digit percentages in 16 U.S. states that have gradually loosened restrictions since Memorial Day,” says Marketwatch.

Yet this perspective omits several essential facts.

First, testing capacity has dramatically increased. The U.S. has tested 3.4 million people over the last week — about 40% more than the weekly numbers one month ago. It’s no surprise that positive cases have increased in some areas along with testing, especially since numerous antibody studies suggest that the disease is far more widespread than initially thought. We are witnessing a new infectious disease, and these case count ebbs and flows are to be expected.  

In a country as vast and varied as the U.S., there will likely be COVID hotspots somewhere. Yet focusing on these in national news gives the impression that the country, or even individual states, are in far more danger than in reality. Even with a significant increase in testing, the number of new positive tests nationally has remained flattened as society has reopened.

Topline case counts overlook where outbreaks are occurring. Nearly half of COVID deaths have occurred in nursing homes and assisted-living facilities. A sizeable portion of Arizona cases has occurred on Indian reservations. We’d prefer that at-risk populations didn’t bear the brunt of this disease, but these vulnerable groups tell us nothing about the relative safety of reopening Main Street. By lacking this context in their stories, the media is distorting with statistics.

Numerous news outlets are featuring rising COVID hospitalizations in some states to indicate a second wave. Admittedly, hospital admissions are a more objective measure of disease severity than positive tests. Often left unsaid, however, is that hospitalizations are falling in most states. Wouldn’t it be more helpful to cite these statistics in context?  

Even in the states with rising hospitalizations, media stories about percentage increases often exaggerate the threat when increases occur from low baseline figures. For instance, numerous stories highlight how Arkansas’s COVID hospital admissions have increased by 121% since Memorial Day. Sounds bad, until you look at the raw numbers, which reveal that this increase only amounts to 111 patients.

Likely for political reasons, the media has identified Florida as the leading edge of a second wave. “Floridians flattened the COVID curve. Then, amid upbeat talk, the numbers began to rise,” reads a Miami Herald headline. Yet the data shows that new positive cases in Florida have tracked the increase in testing. Over the last month, hospitalizations have increased by about 50%, or just over 4,300 patients (in a state of 22 million people). Yet, the number of daily COVID deaths in the state has fallen considerably, by about one-third from May 10, using a seven-day rolling average.

This rise and fall in cases, hospitalizations, and deaths is precisely what one expects with a new infectious disease as we learn more and adjust. It’s part of “the dance” that we all knew was coming after the curve was flattened. It shouldn’t be used to justify pausing societal reopening, so long as appropriate precautions are encouraged and taken.

Reopening remains a success, with the positive case rate flattened, hospitalizations falling in most of the country, and deaths significantly reduced. That’s the positive story that the media should tell. Even if it won’t get as many clicks. 

*  *  *

Thomas Price M.D. is the former HHS Secretary and a senior healthcare fellow at the Job Creators Network. C.L. Gray M.D. is the president and founder of Physicians for Reform and a partner of the Job Creators Network.

He may have avoided prison for the time being, but the financial pain for Markus Braun, CEO of the biggest corporate fraud in German history is just starting.

According to Bloomberg sources, Braun is facing a massive margin call as Deutsche Bank has issued a margin call on a €150MM loan pledged by shares that have lost 72% of their value following news that billions in company cash have gone missing.  Braun, who holds 7% of Wirecard’s shares and is the company’s biggest shareholder, did what so many CEOs have done, and funded a €150 million margin loan that was secured by the value of the underlying stock. However, last week’s plunge has triggering a margin call liquidation of these shares which no longer cover the full value of the loan.

In 2017, Braun – who has invested tens of millions of euros of his own funds into the firm and owned 8.7 million shares of Wirecard as of June 19 – secured the loan from Deutsche Bank (there’s that name again) by pledging 4.2 million shares, or just under half of his personal stake. When the stock was trading above €100/share the overcollaterialization cushin was generous, giving the loan an LTV of well below 50%. However, with the stock now trading at €25, there is a €50MM shortfall in the loan and DB is rushing to collect on whatever it can.

in other words, it would take as much as 6 million shares of Braun’s WDI holdings to satisfy the margin loans leaving him with about 2.7 million shares which at a price of €25 means a little over €50 million, which will evaporate in no time on lawyer retainers as the CEO prepares for the legal onslaught facing him (assuming of course the stock retains any value if and when WireCard files for bankruptcy as now appears likely).

The good news for Deutsche Bank is that for once it is not facing a direct loss on this massive fraud because as Bloomberg notes that the bank has since offloaded the risk tied to the position. The bad news is that Deutsche Bank is part of the 15 bank syndicate behind Wirecard’s revolver.

Those banks now have the legal right to terminate the loan known as revolving credit facility because Wirecard breached conditions known as covenants when it failed to publish the annual report on Friday. The involved banks are currently trying to extract other concessions from Wirecard such as heightened transparency to avoid a default that would hit them too, Bloomberg has reported.

Ultimately, depending on the extent of the fraud, the banks may suffer substantial impairment, especially if Wirecard files for bankruptcy in the next few days, something which its Friday hiring of Houlihan Lokey suggests is imminent.

As noted above, Wirecard’s CEO is not alone in using his shares as margin against a loan: take the example of Tesla, whose directors and executives – such as Elon Musk – have pledged a whopping 10% of the outstanding stock or some 5 million shares as collateral against margin loans, a number which has increased by 36% over the past year.

 

A study suggesting the coronavirus might have been spreading across Lombardy as early as December, months before the first cases were detected in February, was only the latest in a steady stream of research from around the world finding traces of coronavirus infection and deaths weeks or months earlier than previously known.

And on Sunday, the Nikkei Asian Review added more to this growing body of evidence in a report entitled “Coronavirus likely spread in China last fall, more studies find”. It follows that if the virus appeared abroad earlier than we initially suspected, then maybe it emerged in Wuhan even earlier than Chinese public health officials have let on?

According to Nikkei, the virus likely began spreading in China last fall, according to separate analyses of the virus’s genome conducted by research teams in the UK and elsewhere.

Various studies of viral genetic information have indicated that ongoing person-to-person transmission had begun before the first patient was confirmed in Wuhan on Dec. 8. However, the research offers no clues about where the virusd came from or how it began spreading among the human population in the area, leaving what Nikkei describes as “an even deeper mystery.”

Zero Hedge has shared some theories about the provenance of the outbreak, occasionally eliciting a surprisingly intense response from American tech platforms.

Even before these studies, local officials had admitted, perhaps under pressure from Beijing, that they deliberately kept the outbreak under wraps, shaking international faith in Beijing’s promised transparency. Now, the WHO is supposedly preparing to begin an “independent” investigation into the origins of the outbreak.

This is far from the first piece of evidence suggesting Beijing dragged its feet on alerting the WHO about the outbreak, helping to unleash the greatest pandemic in 100 years on all of humanity. Yet, many American progressives, when confronted with this information, will simply blame President Trump, who now appears to be gloating about deliberately slowing the testing effort.

Of course, they’re not wrong. But China’s plan to hoard supplies while it allowed the virus to simply overwhelm the health-care system in Wuhan sounds far more nefarious.

According to the ‘official’ timeline, the first confirmed patient with pneumonia caused by the coronavirus was identified in Wuhan on Dec. 8. Chinese doctors reported to The Lancet, a leading medical journal in the UK, that this patient began exhibiting symptoms Dec. 1. But whether this was truly the first case has been the subject of intense skepticism.

Researchers at University College London estimate that infections among people began between Oct. 6 and Dec. 11, based on genetic information of the virus drawn from more than 7,500 patients in China, Europe, the US and elsewhere. That’s a fairly wide range, and what’s more, the research suggests the virus spread beyond China fairly early on.

Meanwhile, a separate team at the University of Cambridge estimates that infections spread to people between mid-September and early December, based on a study of some 1,0000 samples of viral genetic material. The research from Cambridge also suggests the virus may not have originated in Wuhan (a notion that we imagine Chinese propagandists will seize on quickly).

The notion that the virus may have been spreading in places like NYC as early as September, October or November is hardly surprising, when once considers just how widespread it was once testing finally ramped up.

The common ancestor to the new coronavirus, which is close to a type found in bats, seems to have originated in China, said Peter Forster, a fellow of the McDonald Institute for Archaeological Research at Cambridge. But this ancestor had been found more often outside of Wuhan, such as much farther south in Guangdong Province, until mid-January.

Generally speaking, this research is consistent with findings by a team from Harvard University, relying on satellite imagery, which found that the usage rate of parking lots at large hospitals in Wuhan increased significantly last August.

There have also been confirmed one-offs, like a man who died in France of a strange pneumonia-causing syndrome back in December. After his death, tissue revealed that he had been infected. But the connection to the broader outbreak is unclear.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Authored by Tsvetana Paraskova via OilPrice.com,

Tesla is considering buying a property near Austin, Texas, for the possible construction of a new electric vehicle manufacturing plant, an application to the Texas Comptroller’s Office shows. 

Elon Musk said that the EV manufacturer is considering several options for the new plant.

“Tesla Inc is evaluating the possible development, design, and construction of a high-tech electric vehicle manufacturing plant in Travis County within the Austin Green property located at the intersection of SH130 and Harold Green Road,” the EV maker said, noting that if the sale goes through and all required approvals are obtained, construction could begin in the third quarter of 2020.

If the new EV manufacturing plant is built in Texas, it would create 5,000 jobs in the state, Tesla said in its application.

“Tesla has an option to purchase this land, but has not exercised it,” Musk tweeted on Thursday, replying to a news story reporting that it had already acquired the property in Travis County.

Asked if Tulsa, Oklahoma, is also in the mix, Musk said that “We are considering several options.”

If Tesla were to pick Austin for the next factory, it could save more than US$68 million on property taxes during the next decade, the Austin American-Statesman reported this week.

Last month, Tesla and the state of California were in a bitter dispute over the reopening of the Fremont factory during the lockdown. Tesla reopened its factory in Fremont, California, in violation of a shutdown order issued by the health authorities of Alameda County, and Musk threatened to move Tesla’s headquarters out of California to Texas or Nevada.

“Texas is a perfect fit for Tesla,” Texas Governor Greg Abbott said last month, while Tulsa, Oklahoma, has found a novel way to advertise itself to Tesla, which is looking for a location for a new car factory. The city has started work on one of its landmarks, the Golden Driller statue, to make it look like Musk.