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Now that the jobs recovery is officially underway thanks to the latest monthly jobs report from the BLS (a dead cat bounce? unpossible) it seems nobody really cares about COVID-19 anymore. At least not in the US.

After all, NYC, the most visible hot spot in the US, reported zero confirmed fatalities yesterday for the first time since March (though three deaths from untested patients may be attributable to the virus).

However, investors who turn a blind eye to data do so at their own peril. There are now three countries whose outbreaks are now widely seen as out of control, and one of those countries lies just south of the border: Mexico reported a record jump in new cases – 4,422 in a single day – as the countrywide total hit 105,680. Many have accused the government of deliberately undercounting.

Last night, Brazil surpassed Italy as the country with the third most deaths in the world. Although the outbreaks have eased in some countries, the virus continues to spread at a more or less steady rate, with about 100,000 new cases being reported every day as new hot spots emerge. The World Health Organization said on Friday that some countries have seen “upticks” in COVID-19 cases as lockdowns ease.

“On upticks, yes we have seen in countries around the world – I’m not talking specifically about Europe – when the lockdowns ease, when the social distancing measures ease, people sometimes interpret this as ‘OK, it’s over’,”  WHO spokeswoman Margaret Harris told a UN briefing in Geneva.

“It’s not over. It’s not over until there is no virus anywhere in the world,” she said, adding that US protesters must also take precautions when gathering.

Along with Mexico, South Africa reported 3,267 new cases of the virus, the country’s largest jump by far, bringing its total to 40,792.

Even as South Africa eases its coronavirus lockdown, infection numbers have started to rise quickly and President Cyril Ramaphosa has said he is particularly concerned about the province around Cape Town, known as Western Cape, one of the country’s leading tourist destinations. The country also recorded 651 out of the the country’s total of 848 deaths.

As UK PM BoJo faces a torrent of criticism over his plan to slowly unwind the country’s lockdown, Ireland said it would accelerate its plan to ease coronavirus lockdown restrictions in the coming days, according to PM Leo Varadkar.

“Today I can confirm that it is safe to move to phase two of the plan to reopen our country starting on Monday,” Varadkar said. “I’m also announcing an acceleration of the roadmap.”     

Meanwhile, the UK has become the second country after the US to surpass 40k deaths. Exactly 40,261 people have died since the beginning of the outbreak, up 357 from Thursday. The US, by comparison, has recorded 108,000 deaths.

In Europe, the UK is behind only Sweden in deaths per capita.

To be sure, true global comparisons may not be possible for months, according to experts who spoke with the BBC.

Turkish President Recep Tayyip Erdogan on Friday walked back a decision to impose a new, 2-day weekend curfew in 15 of the country’s provinces, as well as cancelling a weekend lockdown in a country that has one of the largest COVID-19 outbreaks in Western Asia.

Source: BBC

Another day has passed, along with another study by the University of Oxford that found Hydroxychloroquine had little impact on seriously ill patients. Keep in mind, doctors have said the antiviral, which has been used for decades to treat malaria, would likely work best on early-stage patients, particularly those who are at high-risk of seeing symptoms advance.

The biggest takeaway: the number of new cases has been steadily rising by a rate of 100,000 a day as new hotspots emerge while the hotspots of yesterday – in Europe and in the US – see infections wane.

India’s COVID-19 fatalities have passed 6,000 after recording 260 deaths in the last 24 hours. The country registered 9,304 new cases in yet another record single-day spike in infections, bringing its total to 216,919 cases with 6,075 deaths, the health ministry reported on Thursday.

Around the world, ~6.6 million coronavirus cases have been confirmed, according to JHU. More than 389,000 people have died, including some 108,000 in the United States. More than 2.8 million people have recovered from the disease.

Authored by Patrick Buchanan via Buchanan.org,

In his statement to The Atlantic magazine, former Defense Secretary General James Mattis says of the events of the last 10 days that have shaken the nation as it has not been shaken since 1968:

“We must not be distracted by a small number of lawbreakers.”

Is “a small number of lawbreakers” an apt description of wilding mobs who have showered cops with bottles, bricks and rocks in 40 cities, looted stores in the hundreds, torched police cars, and injured dozens of Secret Service personnel defending the White House?

Is “a small number of lawbreakers” the way a patriot would describe anti-American anarchists who desecrated the Lincoln Memorial, the World War II Memorial on the Mall and the Korean War Memorial and tried to burn down the Church of the Presidents in Lafayette Square?

Was the sacking of Georgetown, Rodeo Drive in LA, 5th Avenue in New York and 40 city centers, the work of a few “lawbreakers”?

Is that a good description of the people who gravely wounded that cop in Las Vegas and shot four cops and murdered that retired black police chief in St. Louis?

The protesters, says Mattis, are “rightly demanding … Equal Justice Under Law.” This is a “wholesome and unifying demand — one that all of us should be able to get behind.”

But what does the general think of the methods and means the “protesters” have used — the massive civil disobedience, the blocking of streets, the vilification of police, the contempt for curfews. What does the general think of protesters who provide moral cover for insurrection?

“Donald Trump is the first president in my lifetime who does not try to unite the American people,” says Mattis. Trump “doesn’t even pretend to try. Instead he tries to divide us.”

But it was not Trump who divided America in this racial crisis.

The nation was united in revulsion at the criminal cruelty that led to George Floyd’s death. The nation was united in backing an enraged people’s right to protest that atrocity.

What divided America were the methods and means protesters began using in the first hours of the Minneapolis riot — the attacks on cops with bottles, bricks and Molotov cocktails.

In Mattis’ statement, one finds not a word of sympathy or support for the police bearing the brunt of mob brutality for defending the communities they serve, while defending the constitutional right of the protesters to curse them as racist and rogue cops.

“Keeping public order rests with civilian state and local leaders who best understand their communities and are answerable to them,” not to the military, says the general.

Correct. But what happens when mobs run wild to where a governor of New York is denouncing the NYPD for failing to protect the city from anarchy and is threatening to replace the mayor for failing to put down the insurrection.

In July 1967, the 82nd Airborne was sent into Detroit to put down the riot. In 1968, there were federal troops in D.C. to stop the rioting in the wake of Dr. King’s assassination. In the violent protests of the Nixon era, U.S. airborne troops were brought into the basement of the Executive Office Building.

The general quotes James Madison:

“America united with a handful of troops, or without a single solider exhibits a more forbidding posture to foreign invaders than an America disunited.”

And how, General, did that work out for Madison when the “foreign invaders” arrived in Maryland in August 1814, marched up Bladensburg Road, and burned the Capitol and White House and Alexandria, while “Little Jimmy” fled out the Brookville Road?

If memory serves, it was Gen. Andrew Jackson and the troops he pulled together for the Battle of New Orleans who defeated the British and saved the Union.

“Society cannot exist,” wrote Edmund Burke, “unless a controlling power upon will and appetite be placed somewhere; and the less of it there is within, the more there must be without.

“It is ordained in the eternal constitution of things, that men of intemperate minds cannot be free. Their passions forge their fetters.”

That is where we are now. Society and civilization are on the line.

If mob tactics are now how we change laws and alter public policy, the democratic republic is dead and we have gone full Third World.

Some of us do not believe America is a racist society or that the nation’s police, numbering a million men and women, are shot through with anti-black racism.

Some of us believe the police are the last line of defense we have against that “small number of lawbreakers” Mattis tells us are no problem.

Did the general actually produce this pile of mush that reads like something out of Ramsey Clark in the 1960s?

My guess: Mattis, an obedient servant of President Trump for two years, has been persuaded that the wind is blowing the other way and his “place in history” demands that he get himself on the correct side.

The general has just defected to the resistance.

Earlier we pointed out some statistical aberrations that helped explain some of the shocking surprise in today’s jobs report. But none other than the BLS itself admitted that a “misclassification error” led to the unemployment rate being as much as 3% higher than reported.

Here is what the BLS said about adjustments to the household survey as a result of the Coronavirus shutdowns:

… there was also a large number of workers who were classified as employed but absent from work. As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff. However, it is apparent that not all such workers were so classified.

If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis).

So the BLS knows there is an error and is hoping to fix it…

“BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue.”

… but not yet:

“However, according to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.”

One can only imagine what other “survey errors” were made but not fixed for the sake of “data integrity.”

Could this mark the beginning of the end for the US ‘maximum pressure’ campaign against Iran? Is this the big diplomatic “opening” that will dramatically soften tensions?

On Thursday evening President Trump in an unprecedented move actually praised the Islamic Republic after Tehran released US Navy veteran Michael White, who faced a decade behind bars as essentially a political prisoner after the Iranians arrested and convicted him for “insulting” the Supreme Leader, among other things, in June 2018.

White languished for two years behind bars while the deadly coronavirus pandemic ravaged the country’s overpopulated prisons, resulting in Iranian furloughing tens of thousands of jailed citizens.

…to the UNITED STATES! We have now brought more than 40 American hostages and detainees back home since I took office. Thank you to Iran, it shows a deal is possible!

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

“Thank you to Iran, it shows a deal is possible!” Trump in a surprise tweet said, announcing that White “will be on a U.S. plane shortly, and is COMING HOME.”

The “deal” references the Trump administration’s efforts to get Iran back to the table to ultimately “negotiation a better deal” following the president initially pulling the US out of the Obama-brokered JCPOA nuclear deal in May 2018.

White said he had contracted coronavirus while held in Mashhad central prison. This was a crucial factor in the diplomatic opening which led to his release, according to Reuters:

Iran’s decision to release American Michael White and the U.S. move to let dual citizen Majid Taheri visit Iran, both of which were confirmed by Iran’s foreign minister, appeared to be a rare instance of U.S.-Iranian cooperation.

A White House spokesman expressed hope that White’s release could lead to an opening in the bitter relationship.

White has already been released to US custody in Zurich, and is being flown back to US soil:

“I’m improving. I did contract coronavirus in the Mashhad central prison prior to going out on furlough. But I’m recovering pretty decently,” White told Fox News Channel on the tarmac of Zurich airport, adding he had been “in poor shape.”

In the years following Trump ditching the nuclear deal, especially since last summer, tensions have skyrocketed into direct conflict especially centered in Iraq, where in January the Pentagon assassinated IRGC Quds Force chief Qassem Soleimani, which could have easily sparked broader war.

But there’s been a bit of a cooling since the start of the global pandemic, which hit Iran especially hard, causing the US and UK to instensify efforts to get their citizens – often dual nationals languishing in political prisons on generic “spying” charges – released. 

I am to happy announce that Navy Veteran, Michael White, who has been detained by Iran for 683 days, is on a Swiss plane that just left Iranian Airspace. We expect him to be home with his family in America very soon….

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

Apparently those intense efforts have been rewarded, given as Trump said 40 American hostages been released since the president took office. 

The US for its part has also lately released Iranian academics and scientists, typically held on US soil on low-level crimes, as part of good faith deals of late.

As people dig deeper in the entrails of the most bizarre – and most politicized – jobs report in history, they keep finding more and more irregularities.

Consider this: according to the BLS report, which was based on a survey week from May 10th through May 16th when virtually all of the US was still shut down, the government decided that a record number of new businesses were formed. According to the BLS’s Birth/Death model which is used to adjust the raw payrolls data for estimated new business openings and closures, a record 345K new jobs were created due to new businesses opening in a month when – we will repeat again – the US was largely shut down! This also means that over 60% of the business closures from the month of April (April Birth/Death -553K) were somehow undone in a month when the US was still mostly closed down.

Needless to say, this was entirely a statistical adjustment in the “eye of the beholder”, one which even the BLS felt ashamed of, because in a little noticed addendum to the jobs report, the BLS announced it had made “changes” to its net birth-death model due to the coronavirus pandemic, changes which apparently included the modeling of massive business reopenings when millions of small businesses were shutting down. From the BLS:

These two methodological changes are the following:

• A portion of both reported zeros and returns from zero in the current month from the sample were used in estimation to better account for the fact that business births and deaths will not offset.
• Current sample growth rates were included in the net birth-death forecasting model to better account for the changing relationships between business openings and closings.

Firstly, BLS included a proportion of reports that fell to zero employment and reports that returned from zero employment in the current month in the over-the-month change of the sample-based estimates. Typically, reports with zero employment in either the previous or current month are not included in estimation. To account for an excess amount of reports going to zero employment as well as reports returning from zero employment, CES calculated the probabilities that either a reported zero or a return from zero exceeded what would be expected for the month. These “excess zeroes” and “excess returns from zero” partially account for drops in employment (when more business deaths than are usually observed in historical population data occur) and for increases in employment (when there are more business births than normal). More specifically, and due to time limitations for implementation, “excess zeroes” were used in our March final, April first and second preliminary, and May first preliminary estimates; “excess returns from zero” were used in our March final, April second preliminary, and May first preliminary estimates.

Secondly, BLS adjusted the portion of business births and deaths that cannot be accounted for using our sample data by including more recent information. Net birth-death forecasts are normally modeled using an auto-regressive integrated moving average (ARIMA) based on 5 years of historical birth-death residual values that end 9 months before the forecast of the current month. Instead of using only historical data—data that would not accurately account for how the labor market has changed due to COVID-19—a regression variable that includes data up to the current month was included in the model. The regression variable is the CES sample-based ratio of over-the-month change, known as the sample link, for each of the major industry sectors. Each major industry sector sample link was used for the basic-level industries only within that sector. Using additional regression variables in the net birth-death forecasts accounted for 345,000 in employment for May at the total private level .

The punchline from the above: “Using additional regression variables in the net birth-death forecasts accounted for 345,000 in employment for May at the total private level.” In short instead of another 553K drop in jobs due to massive shutterings as was the case in April, the BLS decided to “add” 375K jobs because, well… it felt like it. And that is how you get an almost 1 million swing in monthly payrolls based on nothing more than a statistical revision.

But wait, there’s more.

According to the American Dental Association, there are just over 200,000 dentists in the US. So how surprising it must be that at a time (as a reminder the survey week was from May 10th through May 16th) when most dental offices across the US were still shuttered (and in places like California they still are), a record 245K dentist office jobs were added, effectively undoing half of all the April job losses in this job category.

Finally there was this, from the report:

… there was also a large number of workers who were classified as employed but absent from work. As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff. However, it is apparent that not all such workers were so classified. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue.

If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis).

How can one explain any of this? The only possible explanation is that after decades of China stealing US technology, the BLS finally reverse-engineered China’s own economic model spreadsheet where any “data” can be goalseeked to be exactly what one wants it to be.