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German Chancellor and current EU President Angela Merkel has joined her 26 colleagues from the European Council, which is comprised of the leaders of the EU’s 27 member states, in Brussels Friday morning for the beginning of a two-day summit where Merkel and French President Emmanuel Macron will attempt to shove a controversial €750 billion recovery plan (which was hammered out by the European Parliament) down the throats of all of Europe.

However, resistance from a group of fiscal conservatives in the bloc has hurt European stocks and the euro on Friday, as investors fear that despite more than 2 months of negotiations, the European Council still won’t manage to walk out with a deal when the summit ends tomorrow.

Many investors expect the bloc will need to hold another summit later this month, though if they ever want to get something done, a compromise must be made. This week’s two day weekend summit will be chaired by European Council President Charles Michel.

But so far, the “Frugal Four”, a collection of four northern countries who oppose the plan, has shown no signs of capitulating, while the rest of the bloc has given no indication that they would be willing to incorporate the FF’s demands into the design of the joint EU recovery fund.

“Presumably, as is the way of Europe, they will agree to come back from more talks followed by a compromise and a watered down deal,” Societe Generale’s Kit Juckes said of the EU discussions. “The positive though is that we are getting a recovery fund.”

As the leaders entered the summit room, clad in masks and sharing salutatory elbow bumps, some joked that the negotiations have become “stuck in a Rutte” – a reference to Dutch Prime Minister Mark Rutte, one of the main opponents of the recovery fund deal struck by Merkel and Macron. Rutte, a leader of the “Frugal Four”, said he was “not optimistic” that an agreement would be reached on Friday as he arrived for the meeting.

The Netherlands, Sweden, Denmark and Austria have become known as “the frugal four” because of their resistance to the plan, which, as it stands, involves doling out grants to the worst-hit countries, with virtually no strings attached. Instead, Rutte and the frugal four are demanding that any money tapped from the fund must be repaid by the countries taking it, and that borrows must agree to certain financial reforms, a condition that progressives will decry as more forced austerity.

Rutte told the FT that he felt there was “less than a 50% chance” of striking a deal on Friday. The growing number of contentious issues led the FT to declare that the likelihood of a second Brussels summit later this month is extremely high.

According to the FT, one of the most controversial elements of the plan is the creation of a recovery instrument worth €560 billion that is designed to hand out grants and loans to crisis-hit economies. Rutte is demanding a veto over approving the disbursing of cash, a condition that Italy, Spain and other southern member states have fiercely resisted. That €560 billion is part of a total €750 billion stimulus package. The remaining ~€200 billion will be handed out in the form of loans.

But the FF isn’t the only bloc that Merkel & Co need to worry about. Though Hungarian PM Viktor Orban has said he would only do so as a last resort, Hungary’s parliament voted earlier this week to support a veto from Orban if the European Council tried to attach so-called “rule of law” conditions intended to block funds from going to Hungary and Poland, whose conservative governments have repudiated many of Brussels’ diktats.

All of these programs will be backed by joint debt backed by all 27 EU member states. This would be the first time that the bloc has moved to jointly take on debt, and that fact alone has rankled conservatives in the bloc who are staunchly opposed to the EU moving toward a fiscal union that would strip financial and economic power from local governments.

The Netherlands wants countries receiving EU support from the fund to agree to reforms in their labor markets and pension systems, among other more strict conditions.

European Solidarity was slow to arrive at the beginning of this crisis. EU leaders must now make amends.

The European Parliament took the initiative and proposed an ambitious recovery plan to reform our union.

Let’s take this chance to build back stronger! 🇪🇺#EUCO

— Guy Verhofstadt (@guyverhofstadt) July 17, 2020

Of course, failing to implement a deal could deliver another economic shock to Europe, something the continent’s shaken economy might not be able to easily withstand.  For this reason, some insist, the stakes “couldn’t be higher.”

“The stakes couldn’t be higher,” European Commission President Ursula von der Leyen said before the meeting began. “The whole world is watching us, (to see) whether Europe is able to stand up united and to overcome this corona-related crisis strongly.”

Since Brussels is basically a sieve for inside information, we suspect Friday morning’s session will be peppered by reports about the talks hitting an impasse. Expect more of that between now and the European market close.

The popular video-sharing app TikTok could be placed on a blacklist via the Trump administration, effectively banning Americans from using the Chinese app, reported Financial Times.

Sources familiar with conversations (three in total) within the White House said the Trump administration is studying one proposal to place ByteDance, the Chinese parent company of the video app, on the Department of Commerce’s “entity list.”

The move would restrict American companies, such as Apple and Google, from placing TikTok in their app stores, where it can be downloaded by American users.

Of course, this is hardly the first we’ve heard about the White House targeting TikTok: The DoJ and FTC are already investigating the app and its parent company over possible violations pertaining to child privacy laws in the US.

And for those who aren’t familiar with it, the Commerce Department’s “entities list” has already been utilized by the administration to pressure Chinese companies. It was the mechanism used to punish Huawei. A decision on the ban could arrive within a month. 

 “We are going to send a very strong message to China,” the official said. 

The app has been downloaded 2 billion times, and its user base is mostly millennials, with 41% between 16-24. Tens of millions of Americans are using TikTok to create 15 to 60 second long videos that can be shared on the social media platform. 

Secretary of State Mike Pompeo recently said the app was under consideration for a ban due to security reasons. The president has also said he was “looking at” a ban for retaliation against China’s virus that has devastated the US economy. 

TRUMP SAYS HE’S LOOKING AT BANNING TIKTOK, GRAY TV REPORTS

— zerohedge (@zerohedge) July 7, 2020

On Thursday, White House economic adviser Larry Kudlow said TikTok could operate under an Amerian entity and avoid banning. He reiterated what many in the White House have already said: the Chinese app is a security risk to U.S. citizens. 

Kudlow said the app should leave China, adding it would be a much better option than being banned. 

“We haven’t made final decisions but…I think TikTok is going to pull out of the holding company which is China-run and operate as an independent American company,” he said.

On Friday, Australian Prime Minister Scott Morrison was quoted by Bloomberg as saying an investigation into the Chinese video app could be nearing. 

The probe will not be a formal public inquiry, and will look at the security threats posed by TikTok, as well as WeChat and Weibo.

The Australian government has been talking with U.S. counterparts on the potential threats posed by social media companies.

The Sydney Morning Herald quotes Morrison as saying the government was monitoring TikTok “very closely.” – Bloomberg

Already, a few corporations have banned the app, including Amazon and Wells Fargo. The U.S. military instructed its service members to delete the app in December. In March, two Republican senators introduced legislation that would prevent federal employees from using TikTok on government work phones. 

Douglas Schmidt, a computer science professor at Vanderbilt University, told The Guardian, “this is the perfect storm of technology meeting geopolitical rivalry [the U.S. vs. China].” 

Schmidt added, “these kinds of things are being used as bargaining tactics in a geopolitical trade negotiation.”

Authored by Kit Knightly via Off-Guardian.org,

Apparently, that mean old Putin is stealing our magic vaccine to fight the ‘deadly virus’…

The Guardian, and all the other predictable voices, are currently reporting that Russian “state sponsored hackers” have been attempting to steal “medical secrets” from British pharmaceutical researchers.

At this stage they offer no substantiation, but it does serve as good teaching exercise in the techniques of modern propagandists.

First the lack of evidence. Observe the Guardian article, note the complete absence of sources or references. There’s not a link in sight. There’s no content there beyond the parroted words of UK government officials, whose honesty and/or competence is never interrogated.

Second, the lies by omission. They don’t mention, for example, the Vault 7 revelations from Wikileaks that the CIA/Pentagon have developed technology to make one of their own cyber-attacks appear to come from anywhere in the world, Russia obviously included. This is clearly vital information.

Third, the multitasking. When you splash a huge red lie on your front pages, it’s always best to make it serve several agendas at once. In fact, an unsupported statement which serves multiple state-backed narratives at the same time is one of the telltale signs of propaganda.

With this one completely unverified claim, the Guardian – or rather the people who tell the Guardian what to say – back up three narratives:

1. The further demonisation of an “enemy”. Russia is portrayed as pursuing “selfish interests with reckless behaviour”, whilst we (and our allies) are “getting on with the hard work of finding a vaccine and protecting global health.”

2. Promoting the vaccine. The vaccine is coming. It will likely be mandatory, it will certainly have been insufficiently tested, if tested at all. They need some pro-vaccine advertising, and nothing sells better than “our vaccine is so good, people are trying to steal it”.

3. Most importantly – Enhancing the idea that Sars-Cov-2 is a unique global threat which puts us all in danger. The unspoken assumption is that Russia needs to steal our research because the virus is so dangerous we all need to be afraid of it…despite it beingharmless to the vast majority of people.

Whether it’s the (totally unsubstantiated) allegation that Russia put bounties on NATO servicemen in Afghanistan, or the (very predictable) “leak” that “Russian interference” was backing Corbyn in the general election, it’s clear that any Globalist deal on the coronavirus is dead and buried, and it’s very much open season on Putin’s Russia again.

Nothing shows just how much the Guardian has become the voice of the Deep State more than its coverage of anything Russia-related. And nothing serves as a better exemplar of how modern propaganda works.

Some of the biggest investors in the world would see their holdings “go dark” if the SEC implements a new rule concerning Form 13F disclosures that it has recently proposed.

Names like Paulson, Einhorn, Druckenmiller, Bacon, Tudor Jones and Soros could all see an added layer of opacity to their holdings as a result of the SEC’s proposal to limit Form 13F filers to those who hold stakes of $3.5 billion or more. Even Ray Dalio, who manages $138 billion, could see added opacity to his holdings as a result of the rule. His firm holds only $5 billion in stocks.

The current threshold for Form 13F filers is $100 million and the value of most of these firms’ holdings in the U.S. is less than the proposed $3.5 billion threshold requirement. 

Even Paul Singer’s Elliot Management could wind up going dark, as his firm has only about $3.4 billion in stocks and and convertible bonds and another $2 billion in equities, according to Bloomberg. Managers like Leon Cooperman have said that it would be nice to reduce the regulatory burden required for the current threshold. 

NIRI spokesman Ted Allen thinks the new rule is a compromise for managers in exchange for requiring more timely 13F reports and a potential rule change that would require firms to disclose their short positions. 

Allen said: “If this rule goes through, you will see more small and mid-sized companies getting ambushed by hedge funds. This will increase activism in all of the mid-cap companies because there will be less transparency.”

Andrew Park, a senior policy analyst at Americans for Financial Reform, has concerns about the new requirement: “I’m certain you could see firms that want to cap at $3.5 billion. There’s a pretty stark difference of having $3.49 billion versus $3.51 billion given these reporting requirements.”

Recall, on Wednesday morning, we laid out all of the new proposed rule changes. The SEC announced in a press release late last week that they were considering amending Form 13F to update a reporting threshold for institutional investors to a new standard that would all but eliminate the point of the filings to begin with.

Form 13F was put into place in 1978 to give transparency about larger institutions and their holdings. The threshold has not been changed for the last 40 years, which has prompted Jay Clayon’s SEC to raise the reporting threshold to $3.5 billion.

This would cut out almost 90% of all institutions that currently file Form 13F, all but eliminating it. 

SEC Chairman Jay Clayton claims the change is to reduce the burden on smaller managers while keeping the same oversight on large positions from the biggest institutional managers. 

“Monitoring equity holdings of large institutional investment managers is an important part of our regulation and oversight of the securities markets. Today’s proposal will update, for the first time in over 40 years, the 13F reporting threshold to a level that furthers the statutory goal of enabling the SEC to monitor holdings of larger investment managers while reducing unnecessary burdens on smaller managers,” Clayton said.

The agency estimates $68 million to $136 million in compliance costs could be saved by smaller managers: “The proposal estimates that, for smaller managers that would no longer file reports on Form 13F under the proposed threshold, these direct compliance costs could range from $15,000 to $30,000 annually per manager, depending on certain factors, resulting in direct compliance cost savings for these managers per year ranging from $68.1 million to $136 million.”

The SEC justifies the move by citing the growth in public equities since 1975. “In 1978, when Form 13F was adopted, the threshold for filing the form was set at $100 million, the amount in the underlying statute and representing a certain proportionate market value of U.S. equities,” it said. 

It continued: “Since then, the overall value of U.S. public corporate equities has grown over 30 times (from $1.1 trillion to $35.6 trillion), and the relative significance of managing $100 million has declined considerably. The Commission and staff have received recommendations to revisit the Form 13F reporting threshold from a variety of sources over the years, including from the Commission’s Office of the Inspector General.”

Authored by Ryan McMaken via The Mises Institute,

As soon as it became clear that the Swedish state had no plans to implement harsh lockdowns, global media organizations like the New York Times have implemented what can only be described as an ideological jihad against Sweden.

For many weeks, there has been an incessant drumbeat of articles with titles touting the “the failure of the country’s no-lockdown coronavirus strategy,” that “Sweden Has Become the World’s Cautionary Tale,” and “How Sweden Screwed Up.”

It is common to read articles stating that Sweden has one of the world’s worst death rates for COVID-19.

This, however, remains a matter of perspective.

Sweden’s total deaths per million in population as of July 14 is 549. That’s considerably lower than the deaths per million rate in the UK, which is 662, and in Spain, which is 608. In Belgium, the death rate is 884.

Moreover, the Sweden deaths per million is many times better than the rates found in New Jersey and New York: 1,763 and 1,669.

An astute reader, however, will quickly notice that articles condemning Sweden’s “failure” rarely if ever mention these comparisons. Instead, anti-Sweden articles are careful to only mention countries with far lower deaths per million, usually Denmark and Norway. A nonspecific stock phrase is generally inserted which repeats that Sweden has: “a far higher mortality rate than its neighbours.”

Articles about countries with far more deaths per million than Sweden often make excuses for those governments. In May, for example, the BBC repeated the Belgian government’s talking points, which attempted to explain that things aren’t as bad as they seem in Belgium. In places where harsh lockdowns were implemented—such as New York or the UK— the explanation is that these countries implemented their lockdowns too late.

But no matter what the data shows, it is always assumed that lockdowns work well, and the fact that nonlockdown Sweden has a death rate similar to harsh-lockdown France can only be explained by claiming France didn’t lock down harshly enough or long enough.

Meanwhile, the evidence that lockdowns actually work remains spotty at best. The results we get from lockdown countries vary wildly, yet commentators ignore this and stick to a dogmatic refrain: lockdowns always work, and Sweden “screwed up.”

Now, global “experts,” such as those at the World Health Organization (WHO), are claiming that Sweden is among the countries most likely to have a resurgence in COVID-19.

So far, there is no evidence of this at all. Two weeks after the WHO’s prediction, both cases and deaths in Sweden continue to trend downward.

Indeed, looking at this, one might conclude that thanks to Sweden we know what both lockdown and nonlockdown countries look like: they look remarkably similar in some cases.

Similarly, in the US we have some states that had relatively short and less-harsh lockdowns, which we can compare to states with very strict lockdowns. In many cases, the states with the mild lockdowns continue to have total deaths that are small fractions of those in areas with far more harsh measures.

Advocates of lockdowns insist that we must only “wait two weeks” and matters in Texas will look just like those in New York.

Anything’s possible, but it’s pretty clear any sort of equivalence between the two areas is going to require more than “two weeks” to come about.

After all, after failing to implement a lockdown for months, Sweden is still nowhere near matching the death rates reported in New York.

Using Sweden’s standard we’re still too early in the game to declare victory for one method or the other. Sweden’s authorities have always maintained that their strategy was much more of a long-term strategy. They are looking a year down the line and suggesting that both lockdown and nonlockdown countries will become more similar over time. In some countries, that certainly looks to be the case, although there is yet no indication of this in others.