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Late last week, we showed a chart from Credit Suisse which we described simply as “insanity” because it demonstrated that as the US careened into a depression, with GDP crashing and the unemployment rate soaring, between the latest Fed-driven surge in stocks and the collapse in earnings estimates, the PE multiple on the broader market had eclipsed the previous record of 19.0x set during the market’s February all time high, and had now hit a new all-time high of 19.4x. In other words, the market has never been more overvalued than it is right now.

The chart eventually made its way to Jeff Gundlach who yesterday tweeted that “U.S. GDP looks to be down 15%ish, unannualized, from its peak. SPX is presently down a similar amount from its peak. Ergo (and I over simplify to make a valid point) stocks now are back to the Feb 19th highs from a valuation perspective. “In Fed We Trust” is all the buyers have.”

U.S. GDP looks to be down 15%ish, unannualized, from its peak. SPX is presently down a similar amount from its peak. Ergo (and I over simplify to make a valid point) stocks now are back to the Feb 19th highs from a valuation perspective. “In Fed We Trust” is all the buyers have.

— Jeffrey Gundlach (@TruthGundlach) April 17, 2020

Gundlach’s math is not quite correct because as JPMorgan showed last week, the beta of corporate profits to moves in GDP is about 7x during financial crises. As a result, according to the bank’s chief economist Joseph Lipton, in the current recession in which JPM expects global GDP growth to collapse by the same 9.8%-points in Q2,  the bank is applying the same profit drop beta of seven—on par with the global financial crisis– which implies a plunge in corporate profits of roughly 70% in the year through 2Q20.

Meanwhile, with every passing day the fundamental disconnect is getting worse, because as stock prices soar (mostly due to momentum-chasing machine buying while humans sell) earnings estimates are cashing…

… with Goldman calculating that its latest bear case PE multiple (on 2021 earnings no less as nobody is looking at 2020 anymore) is now a dot com bubble-eseque 24x.

Meanwhile, crashing the bulls’ party, or rather their expectations for a V-shaped recovery, JPMorgan also cautioned that corporate profits won’t recover their pre-pandemic baseline until some time in 2022 if not 2023, which is terrible news for Wall Street strategists as it means they will now have to apply even more ridiculous forward multiples from 2023 for their optimistic recos to make any sense.

And so as Credit Suisse, JPMorgan and Goldman all point out the schizophrenia in being bullish in a time when corporate profits are set for the biggest – and longest – drop since the Great Depression, late last week two more banks joined the bandwagon with Citi warning that “equities fall the same as EPS in a recession… and reflect that equity markets are currently not reflecting the expected decline of 50% in global EPS in 2020.” Make that 70% according to JPMorgan.

Finally, exactly two weeks after our post on the “shocking” topic of how expensive the market is right now, Bank of America’s Savita Subramanian has also done the math and concludes that as “stocks have rallied, bottom-up consensus estimates for 2020 have fallen”, which in turn has pushed the S&P 500’s forward P/E ratio from March’s low of 13.0x to 19.5x, higher than mid-Feb’s peak P/E of 18.9x.

In other words, using the bank’s reference table of 20 different valuation metrics, “we’re back to elevated multiples on most of the 20 metrics we track” with just three exceptions: lower than average Price to Free Cash Flow, cheaper relative to bonds (equity risk premia frameworks) and – drumroll – relative to gold.

The last one is especially amusing because it means that slowly but surely investors are finally realizing that the biggest winner after the current reflationary surge will not be equities but what the WSJ once dubbed “a pet rock.”

Of course, even in this unprecedented dislocation of a “market”, equity investors still have hope, which is literally is all they have: or as Gundlach puts it, “In Fed We Trust” is all the buyers have” and Citi agrees: “Central bank intervention could cap the downside.”

Better pray to those central banking gods, bulls.

Authored by Bruce Wilds via Advancing Time blog,

The Paycheck Protection Program or PPP was funded with $350 billion in the last stimulus bill, this money is now gone. Of the thirty million small businesses in America, only 1.7 million received money from the 2.3 trillion dollar aid package passed to help sustain America during this difficult time. If the government blew through this money and was only was able to help only around 5% of small businesses it is difficult to think another 250 billion dollars will set things straight. 

Clearly, because the government made promises it delayed the wave of firing while companies waited for help.

The government has failed to keep its promise so now we should expect unemployment to soar as reality sets in. One of the largest problems facing small companies is they are often underfunded and have difficulty getting financing at reasonable rates. Banks find larger companies much more profitable. The sector of the economy most damaged by the covid-19 shutdown is small business. When this is over America will find many small businesses have been decimated and are not able to reopen. Others will never recover and be forced to close within months. Since small businesses employ over 54 million people in America and their importance in the economy should not be underestimated.

• Small businesses contribute 44 percent of all sales in the country.

• Small businesses employ 54.4 million people, about 57.3percent of the private workforce.

Rest assured government employees and bureaucrats will still continue to get paid but small business, the most productive part of the economy has a knife to its throat. As a landlord and small business owner, I can tell you the program was structured in a way that will be of little help to most small businesses. The government slammed expensive legislation through with no idea of the damage they were doing and how it will cause hundreds of thousands of businesses to close their doors forever. Washington has become so attuned to dealing with lobbyist from mega-companies it has lost sight of the fact small is small, and when this comes to business, this means usually under twenty employees, not hundreds.

90% Of Businesses Are Small (click to enlarge)

The government’s answer to keeping people employed was to promise small businesses an easy to get, rapid maximum loan amount of two and a half times a company’s average monthly payroll expense over the past 12 months. This loan would turn into a grant and be forgiven if a company did not fire its employees. Sadly, legislators failed to take into consideration that not all small businesses are labor or payroll intense. Some businesses with large or expensive showrooms are getting hammered by rent, others by inventory, or things like taxes, utilities, or even by having to toss products due to spoilage.

The PPP also failed to address the issue of what these employees are going to do while the company has no customers and business barely trickling. In the past, these employees were expected to pursue activities that earned revenue and garnered profits for the business but with no costumers, this is difficult to do. The PPP also ignored the fact that by keeping these employees on the payroll a generous employer is left open to the harsh mandates laid out in the government’s previous bill. The hastily drawn up 110-page federal covid-19 economic rescue package, which Trump fully supported dealt a hard blow to small business. For a small business this is a disaster, the bill requires; 

• Employers with fewer than 500 employees and government employers offer two weeks of paid sick leave through 2020.

• Those same employers must now provide up to 3 months of paid family and medical leave for people forced to quarantine due to the virus or care for family because of the outbreak

As expected, this measure,  named “Families First Coronavirus Response Act.” resulted in millions of workers to suddenly lose their jobs. Ironically, it was held before the voters as proof lawmakers could work together during a crisis.  By framing the poorly crafted pork-packed bill this way promoters positioned themselves to demonize those unwilling to support it. Remember, this bill is was in addition to the $8.3 billion emergency spending bill first approved to curb the spread of covid-19.

The Private Sector Is Shrinking (click to enlarge)

As government has grown larger it seems to have become totally oblivious to the fragility of many small businesses and how much it can cost a community when they close. By framing these pork-packed bills as bipartisan their promoters imply they are fair and balanced. This is not true, small business is the big loser and hundreds of thousands will soon have to close.  With so many tenants looking at foregoing rent small landlords that don’t have deep pockets also face huge problems. We have our heads in the sand if we think companies that exist on events where people gather will overnight regain their luster. It is not like someone can simply flick a switch and things will return to normal.

Reality undercuts the idea of the “V-shaped recovery” theory and the idea after the economy has come to a dead stop it can quickly reboot and be back at full speed in a few months. The government has presented us with an extension of crony capitalism structured to throw just enough to the masses to silence their outrage but in the coming weeks, we will see it failed. Large businesses with access to cheap capital are the winners and the big losers are the middle-class, small businesses, and social mobility. All those people that want a higher minimum wage can forget that ever happening if we don’t have jobs.

As for just how much small business owners make, according to figures from 2015 from the Small Business Administration the median income for self-employed individuals at an incorporated business was $49,804 and $22,424 for unincorporated firms. According to PayScale’s 2017 data, the average small business owner’s income is $73,000 per year. But, total earnings can range from $30,000 – $182,000 per year. This means it varies greatly depending on where and just how big the business is, however, it is important to remember these people have “skin in the game” and most risk losing everything if their business fails.

It is important to recognize that starting your own business has always been about the opportunity to design and build your own future. It is a symbol of freedom not a guarantee of wealth. Many people choose this path proudly, not to make more money but as a way to express their individuality. For these competent and talented people, a job in government or at a large company often offers more security and benefits but far less freedom. Do not underestimate the value of small business and what it contributes to our society. Companies such as Amazon are the anti-thesis of small business making their workers a cog in a machine and stealing their soul.

Based on the government’s promise to small businesses a great many held off on letting employees go but with each passing day in order to survive they are now in the process of letting hundreds of thousands of employees go. This is a ticking time-bomb. By telling these businesses to close and then through its failure to carry out its promise of helping them the government has created a situation with massive negative economic ramifications. To make matters worse, people going on unemployment look to get almost as much as those that do work. Why will anyone want to work, especially government workers when they can get paid to stay home? This is not about wanting more money for small business, it is about the reality that the firings are just beginning.

The wealth inequality story is not a complicated one to figure out. In essence, tens of millions of Americans were already suffering from insurmountable debts, no savings, and low wage jobs, even before the pandemic unfolded and crashed the economy.

Now the working-class poor are starting to get angry, sitting on their couches in quarantine, as they have recently been laid off, only to watch President Trump at afternoon press briefings tout about his epic bailouts of corporate America and Wall Street, while everyone else gets a lousy $1,200 check.

A “social bomb” is brewing in America – we’ve been documenting how the next crisis could be a social one. The bottom 90% of Americans are getting smarter by the day as they sit in lockdown, now organizing on the internet, and are plotting their very next big move that could be severely disruptive: rent strikes. 

New York City housing activists are preparing to unleash a “massive wave” of rent strikes in the next two weeks, reported Bloomberg. 

Housing Justice For All hopes to have as many as one million New Yorkers on May 1 participate in a rent strike to pressure Gov. Andrew Cuomo to cancel rent for the duration of the lockdown. 

“With so many New Yorkers unable to pay rent for the foreseeable future, the current crisis is unsustainable and demands action,” Housing Justice for All and New York Communities for Change said in a statement Thursday. “Many tenants have no ability to pay rent, and landlords can’t collect rent from tenants who are broke.”

Lena Melendez, an activist who spoke with Bloomberg, said people in her building have organized and will not pay rent on May 1. 

Melendez said landlords “have gotten taken care of” by the government, making the case that working-class poor do not need to pay rent. 

“They have gotten tax abatements and deferments on their mortgages. And tenants have just gotten a temporary freeze, a pause, on evictions,” she said.

New York City’s Independent Budget Office projects about half a million people will lose their jobs in 2020. The city has been thrown into a recession, if not depression for the 1H20, as a social crisis is brewing…

How long until rent strikes start developing in other large major metros?

 

Authored by Robert Wright via The American Institute for Economic Research,

The title comes from the two movies reviewed below, Idiocracy (2006) and Experimenter: The Stanley Milgram Story (2015). In normal times, neither would merit mention, much less review, at such a late date. But unless you are just coming off six months on a trapline in Alaska, you know that these are abnormal times.

I couldn’t decide which movie better fits our current situation but then it dawned on me that they are mutually reinforcing, not exclusive.

Idiocracy stars Luke Wilson, Maya Rudolph, and Terry Crews. In 2005, soldier Wilson and prostitute Rudolph agree to be cryogenically frozen for a year but through a series of mishaps end up sleeping for 500 years. They awaken to a dystopia where selective pressures have rendered humans dumb and dumber. Americans live surrounded by mountains of trash, watching trash on television, including shows like “Oww My Balls” that make Johnny Knoxville’s Jackass franchise look like high culture. 

POTUS Crews and his fellow Americans speak in a pidgin of grunts and rural, urban, and Valley Girl slang that sounds eerily familiar. Unlike our presidents to date, though, he fires a machine gun, Al Pacino-style, for rhetorical emphasis.

I don’t want to ruin the ending, unsurprising as it is, with spoilers but would like to draw attention to a scene where Wilson tries to explain to Crews’ cabinet that the reason that crops stopped growing was because they were irrigating with Brawndo, a ubiquitous sports drink tagged “The Thirst Mutilator,” instead of water. Everyone was sure that Wilson, though clearly the most intelligent man on earth, was wrong because everyone knows that water is only used in toilets. Moreover, Brawndo is superior to water for irrigation because “plants crave it” because it has “electrolytes.” Nobody knows what electrolytes are but they all know Brawndo has them and that plants crave it.

Somebody with some technical skills ought to dub coronavirus-speak over that scene as it would surely go “viral.” Why do we have to stay inside, even though it is safer outside, and shutter businesses? “To flatten the curve and raise the line.” What does that mean? “Coronavirus craves isolation and economic desolation!” How do you know that? “Flatten the curve, raise the line!” At any cost? Wouldn’t less extreme measures work at least as well at lower cost? “Coronavirus craves isolation and economic desolation!” You get the idea.

Interestingly, after Wilson orders the switch to water, half of Americans lose their jobs because they worked for Brawndo, the stock price of which immediately dropped to “zero” after Wilson’s water-only irrigation pronouncement. That was “good” unemployment, though, because it ended “bad” employment, the creation of an effective herbicide containing “electrolytes.” The unemployment governments are causing today is bad unemployment because it ended good employment for no good reason. There, I said it in terms even a denizen of Idiocracy America could understand.

Where Idiocracy is a semi-funny futuristic dystopian fiction, The Experimenter is a super quirky historical docudrama focusing on the actual experiments conducted by Stanley Milgram in the early 1960s.

Milgram sought to understand why people followed orders during the Holocaust. So he had an actor in a lab coat direct a test subject to administer electrical shocks of increasing voltage to another actor in an adjacent room. The shocks were fake but the screams were real. To everyone’s horror, Milgram discovered that 65 percent of test subjects were willing to administer lethal voltages to another human being, only because an authority figure, in this case a “scientist,” claimed it was necessary.

Test subjects were paid in advance and told during pre-experiment briefings that they could leave at any time, for any reason, with no penalty. In debriefings, some said they were shaken by the experience, which would never pass an IRB today, but none felt coerced in continuing by anything other than the “scientist.”

Milgram played around with variables but time and again about two-thirds of his test subjects, white or black, man or woman, gentile or Jew obeyed the authority figure. He believed that people with an “agentic personality” were susceptible to manipulation because they saw themselves as simply “doing their job” or “playing a role” and hence not morally responsible for their actions.

Again, somebody with some video editing skills could have a field day with that scene by dubbing over something like:

Subject: Why must I press the shock button?

“Scientist”: We must flatten the curve and raise the line.

Zap followed by whimpers.

Subject: The patient sounds like this is hurting him.

“Scientist”: Some must suffer today so that some old people can die of the flu, next year.

Next higher voltage switch, zap, followed by a scream for mercy.

Subject: I don’t know how much more the patient can take.

“Scientist”: What part of flatten the curve and raise the line don’t you understand?

Subject: I don’t understand how torturing this person helps anything.

“Scientist”: How dare you! I am Doctor Fow Chi, M.D., D.O., S.T.A.T.I.S.T., Ph.D. I, and I alone know what is best.

Voltage up, zap, blood curdling scream.

Subject: I still don’t understand.

“Scientist”: And oh by the way you are not zapping just one guy but almost every business owner in America.

Subject: I won’t!

“Scientist”: You will, because I am wearing a white lab coat!

Subject: Do you have a degree in economics? Economic policy? Economic history even?

“Scientist”: Of course not! All irrelevant to flattening the curve and raising the line.

Subject: I don’t know …

“Scientist”: Here is a bunch of money and laws that say you do not have to pay your bills.

Voltage up. Zap. A low moan, then silence.

“Scientist”: Excellent job. You have flattened the economy. The money I just gave you is now worthless and the companies you owed money to are bankrupt anyway. Have a nice life, what is left of it anyway. Now go on social media and brag about what you have done!

Another famous experiment discussed in the movie, conducted by Solomon Asch, showed that one third of his test subjects knowingly chose the wrong answer to a simple question about line lengths when previous respondents, actors instructed to choose the wrong answer, erred. Those test subjects valued conformity over obvious truth. The good news is that when only one other person in the respondent group picked the correct answer, conformists dropped to a mere five percent. 

The correct policy response to COVID-19 is more difficult to discern than judging the length of lines and a lot more is at stake, but there are people, more and more each day, who are no longer blindly conforming to the “shift the curve and raise the line” mantra. They are asking questions, tough ones, and thinking for themselves, which is still technically legal in most states.

While a few courageous governors have refused to order lockdowns or massive business closures, most Americans remain locked in what appears to be a giant Milgram experiment testing how far they are willing to go down an increasingly irrational path, egged on by authority figures whose unconstitutional dictates need not be followed. We will not have to wait half a millennium for an America like that depicted in Idiocracy unless we have the courage to say, “enough!” 

Residents of Wuhan, China –  the epicenter of the global pandemic which has killed more than 150,000 people in roughly four months – are now free to venture out after more than two months of home confinement in the largest quarantine in human history.

Unfortunately for local restaurants, the lifted restrictions haven’t translated to desperately needed customers, as residents are still subject to curbs on their movements such as temperature checks before one can enter a building, and people are still being encouraged to limit travel to essentials – such as work and shopping.

Restaurant owner Xiong Fei says that the end of the lockdown hasn’t brought relief – just a new set of challenges, according to Bloomberg. According to Xiong, people have changed their behavior, perhaps for good.

“People in the past dined out with their colleagues in their lunch hour, now they’re all getting lunchboxes,” he said, sitting in an empty booth at his Sichuan restaurant. “They’re more likely to cook at home than go out.“

Of the 10 restaurants Xiong’s company, Bainianfeng Catering Management Co., operated before the outbreak, none have reopened for dining in. And while three have resumed making food deliveries, Xiong has already decided to shutter three other locations for good because he expects fewer customers. Now the 40-year-old entrepreneur and his business partners are trying to decide what to do long term. Half of Bainianfeng’s restaurants were hotpot joints, where groups of diners cook raw meat and vegetables in communal pots of boiling broth—the sort of places customers now are likely to avoid. “There will be a significant downturn in consumption,” Xiong says, predicting the city’s hospitality scene will see a shakeout. –Bloomberg

“I knew restaurants would be the most heavily affected,” said Xiong, whose restaurants had already been largely closed before the lockdown due to the mysterious new pneumonia which had been circulating since late December. “I also worried about our workers’ health.”

And while perhaps Wuhan residents simply don’t trust their goverment’s “all clear” – Xiong’s experience portends continued pain for restaurants around the world currently shuttered or suffering from a lack of foot traffic due to COVID-19.

Last week, Gallup revealed that more than 80% of Americans will wait to return to normal activities after restrictions are lifted. Of that, 71% will wait to see what happens with the virus, while 10% will wait indefinitely.

What’s more, The Spoon‘s Michael Wolf noted on March 17 – right as the lockdowns went into place, that New York city restaurant traffic was already down 17% before the lockdown.

New York City’s restaurant traffic was down by 69%, while Seattle’s restaurant traffic had dropped by 62%. Despite being two of the earliest hotspots, these were not the biggest drops. San Francisco restaurant traffic was down by 72% on Sunday compared to a year earlier, while Boston’s traffic was down 70%. -The Spoon (Mar. 17)

According to UBS, restrictions in the EU and US will be lifted starting as early as May in the ‘upside’ scenario, and as late as June or July in the ‘downside’ scenario, with consumer activity estimated to rebound – as defined as a “sustained return to a level 20% below the pre-crisis baseline, or higher” – between June 2020 and June 2021.

A lot of the conversations I have been having with traders is about what to watch post peak coronavirus. Here’s a useful table via @UBS on scenario descriptions and criteria for the EU and US pic.twitter.com/EUo9Nr7Fdn

— Anthony Cheung (@AWMCheung) April 16, 2020

Making the best of a bad situation

One of Xiong’s companies, a catering business called Bainianfeng, has sought refuge in meal deliveries – though when the lockdown went into place, it was difficult to safely source and transport ingredients which were spiking in price as supplies dwindled. Meanwhile, his staff was greatly reduced, as most were too afraid to show up to work, or were restricted from leaving their homes.

Before the outbreak, people would stand in line for 40 minutes on weekends to get a seat at Xiong’s more popular spots. But under lockdown, he was lucky to get 20% of the orders he used to receive via delivery apps such as Alibaba Group Holding Ltd.’s Ele.me and Meituan Dianping, another backed by Tencent Holdings Ltd. To draw more diners, Xiong’s three operating restaurants are offering to deliver food to any location in the huge city, even if it takes hours. The online platforms take 20% of sales, but “we don’t dare to increase our prices because people will complain,” Xiong says.

And while his businesses are dying on the vine, Xiong is getting scrappy – importing high-tech food packaging machines from Taiwan to resell to other restaurants, and embarking on a livestreaming channel featuring his cousin cooking in one of his restaurants and eating the food.

“There definitely will be restaurants sifted out,” he said, adding “The market just follows natural selection, and only the fittest will survive.”

Submitted by Mark E. Jeftovic of EasyDNS

Before the current Coronavirus pandemic, the Canadian government took delivery of the Broadband Telecom Legislative Review.  The 235-page report offered 97 recommendations for revamping internet and broadcasting oversight, most of them bad ones. Among them were provisions for requiring all content creators to obtain a license for operating from the government and “discoverability provisions” to force major tech platforms to emphasize “credible sources of news” over others (what the government calls “Approved Media”).

I wrote an article about it at the time and tabled a petition into the House of Commons to call on the government to reject BTLR in it’s entirety (still open, so please sign and share). More recently the Internet Society Canada Chapter (of which I’m a board member) submitted a point-for-point critique of the framework (it’s not on the site yet, will link when it is).

Shortly after that the government-funded CBC marshalled a gaggle of “Approved Media” in Canada (no doubt one of entities who will receive part of that $600,000,000 subsidy package announced in the run up to the last election) to call forth the government to legislate “trusted sources” of news…..

If you’re with me so far, the logic flows like this:

The latest beat in this march toward CCP-style control over the narrative is the federal governments’ latest declaration that “they are open to new laws against spreading pandemic misinformation”

The federal government is considering introducing legislation to make it an offence to knowingly spread misinformation that could harm people, says Privy Council President Dominic LeBlanc.

 

Rex Murphy was quick out of the gate with a scathing criticism of the idea, drawing the quite apt parallel to the similarity any Canadian legislation to control the narrative would be the same as the Chinese Communist Party’s total control in that country, and we see firsthand the horrors that causes.

There is already a government that has that power, and in some cases brutally exercised it. That is the government of the Communist Party of China.

And what did it do with that power? It barred telling the truth about COVID-19, and instead told lies about it. On the where it happened, when it happened, how it happened and how it spread, the Chinese government confounded, confused and lied about a plague that has now hobbled the whole planet. And China “officially reprimanded” the doctor who initially tried to warn people about the coronavirus, and who, with dread irony, actually died from it.

(emphasis added)

The pretense around “preventing misinformation about Coronavirus” is appealing to governments everywhere as they use the age old “never let a good crisis go to waste” to attempt to tighten their control over their respective populations.

Dominic Leblanc cites British MP Damian Collins’ moves in a similar direction in the UK.

LeBlanc told CBC News he is interested in British MP Damian Collins’s call for laws to punish those responsible for spreading dangerous misinformation online about the COVID-19 pandemic.

Collins’ is the impetus behind Infotagion, a new website that purports to be a dispassionate, neutral arbiter of what is and isn’t “fake news” (incidentally, Collins was also a staunch “Remainer”, pushed for a second Brexit Referendum and was calling for an investigation into “Russian Meddling” around the Brexit vote).

What is troubling about this peleton of governments and incumbent mainstream media outlets singing in harmony about the need to control “misinformation” is that in a fast moving situation like this, it is impossible for anybody to say for sure what the truth actually is.

Will Luc Montagnier lose his Nobel for saying COVID-19 came from a lab?

Zerohedge was kicked off of Twitter for investigating whether Coronavirus originated in a Wuhan lab. This line of inquiry has since moved mainstream, with numerous US lawmakers and scientists saying it is possible. Among them is Luc Montagnier, the man who won a Nobel Prize in 2008 for his discovery of HIV, who says that COVID-19 is a man-made virus that came out of a lab. This is largely unreported in mainstream media and French language media are dutifully accentuating the naysayers.

What is more disturbing to me is the pejorative timbre of mainstream media criticisms toward unapproved narratives and conflating them with politically tinged ideology in order to marginalize orthogonal thought.

The hot-button 5G / Coronavirus theories are a good example. Originally that “conspiracy theory” took hold as “5G suppresses immune system, furthering the spread of Coronavirus”. But when I see mainstream media lambasting “baseless 5G conspiracy theories” it is then framed with the added notion that “people think the virus spreads via 5G radio waves”.

I haven’t seen anybody in any tin-foil hats actually making that claim (but to be honest, I haven’t gone looking for that either).

My suspicion, my worry, is that the mainstream media is juicing up the 5G conspiracies to make them more absurd, what’s worse, they are then framing them with other pet boogymen to conflate all non-conformist thought.

The screen grab is from this article in The Guardian, while this Media Matters column about the conspiracy theories around Bill Gates (who did, undeniably, call for a national tracking system to monitor individual vaccination status in a recent Reddit AMA) frames any hysteria over government overreach as exclusively a far right, far white movement:

During this time, conspiracy theorists, anti-vaxxers, white nationalists, and supporters of the QAnon conspiracy theory have spread a baseless conspiracy theory on multiple social media platforms, far-right sites, and message boards claiming that Gates’ effort to help develop a vaccine is some kind of nefarious attempt to control, follow, or even depopulate the world’s population via a “microchip” of some sort

Whenever you see news articles that use words like “baseless” and “unfounded”, without adding contextual data or underpinnings to back that up, they add to a widening suspicion amongst the general populous, one that may explain why nearly all of them are failing financially amid plummeting audiences. It’s the suspicion or realization that mainstream media outlets, especially the government funded ones, are just as agenda driven as the most outlandish shock-jocks in tin foil hats.

They sound like The Pravda.

When a populist like Donald Trump rails about #FakeNews, he isn’t making something up out of the blue and ramming it down the throats of his mindless followers, inducing some undeserved crisis of faith in the venerable integrity of major news outlets, one that otherwise wouldn’t have occurred.

It works because he’s hitting a nerve. He’s tapping into a subconscious pool of distrust and cynicism at an institution that routinely cheerleads monumental lies (like WMD in Iraq) and then enjoys immunity from accountability in doing so.

It is the increasing realization that what we call the mainsteam media today is the essential scaffolding for the hypernormalisation that has set in here in the west (hypernormalisation is the construction of an institutionalized pretext that a failing societal structure is still functioning as expected).

 in the Soviet Union [everybody] knew the system was failing, but no one could imagine an alternative to the status quo, and politicians and citizens alike were resigned to maintaining the pretense of a functioning society. Over time, this delusion became a self-fulfilling prophecy and the fakeness was accepted by everyone as real, an effect that Yurchak termed hypernormalisation.

The above outline is taken from Wikipedia. The term was coined by Soviet dissident Alexei Yurchak  and later made into a documentary by British filmaker Adam Curtis.

In the next installment I’ll tell you about the times mainstream media here in Canada tried to recruit me into participating in the construction of purely fabricated “news stories”. It’s the reason why I stopped giving media interviews after 2010.  And we’re not talking fringe “indie” elements either, in the follow-up post I’ll tell you about two incidents involving the CBC and Global News.

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Public shaming is nothing new, nevertheless, shaming others on social media. Now people have taken it to an entirely new level by shaming those on social media who are violating social distancing rules. 

From Facebook to the community app Nextdoor, people have flooded social media platforms to criticize others who are violating public health orders. Some are complaining about their neighbors hosting wild quarantine parties, while others are disgusted by joggers panting on others.  

Experts fear the rise of the surveillance state is being ushered in by the coronavirus pandemic. And people snitching on others and posting it on social media will become normalized in a post-corona world, reported AFP News. 

“It distresses me greatly to see a few uncaring louts who scoff at the safety rules that are meant for all of us to get through this awful situation,” said one user on a listserv for a wealthy suburb of the capital Washington, which has seen a slew of complaints about people ignoring distancing guidelines.

 “I have a suggestion – if you see such behaviors as mentioned above – why not take photos/videos of the offenders? This could discourage their dangerous behaviors,” said another.

Online shaming has been around for at least a decade or two. What has developed during the pandemic is that some people believe it’s their civic duty to enforce public health orders by shaming those who violate it on social media, which adds a new layer to the police state of your neighbor doing the bidding for Big Brother. 

“There is a sense that if you do it you can save lives… With COVID-19, we’re scared and there is an urgency to enforce the social distancing rules. Shaming is really one of the only tools we have,” says Dr Emily Laidlaw, an associate professor at the University of Calgary who studies privacy law and online shaming.

Most of the shamming is occurring on Facebook, Twitter, Instagram, and Nextdoor, via posts that have names, locations, and or even images or videos detailing how social distancing rules were violated, it can be extremely dangerous and allow the government to conduct unprecedented snooping operations. 

“My neighbors are all drunk and having a party next door. One of them went on a loud tirade near my door that another month of quarantine is stupid and that he wasn’t going to do it,” posted one frustrated resident of a middle-class west Los Angeles neighborhood recently.

“You need to report them when it’s happening because that just means another month for us to be indoors,” another user replied.

As we’ve noted, the government has already taken action to monitor the locations of everyone via their smartphones to make sure social distancing is being followed. In combination with neighbors shaming others on social media where the government can easily see, well, our freedoms and America we use to know will not exist in a post-corona world, as the rise of the surveillance state becomes more evident. 

Wicca Davidson, who manages communications for a municipality in Maryland, said there’s a noticeable increase in social media posts of people snitching on others for violating public health orders as the pandemic unfolds. 

“We don’t want to give a few people the ability to derail the use of the listserv,” she told AFP.

“There’s definitely social shaming. That’s part of what’s working to stay home,” Divya Sonti, an employee of IQ Solutions, which are experts in public health communication. 

But “there is a cost that should be acknowledged — casualties who are taken down by this unfairly, and the normalization of neighborhood surveillance,” Sonti said.

Another social media user around the Washington Capital Beltway fears the rise of the surveillance state: 

“I sympathize with the concern but becoming a police-state type of community isn’t healthy,” the user wrote.

“This is not ok to take picture of people and post them,” another person wrote on a Nextdoor group in Los Angeles, after a user posted photographs of people they felt were walking too closely together. “What is next? Train to Dachau?”

Privacy expert Laidlaw said public shaming on social media started way before the pandemic, noting that “shaming sites are not new, nor are neighborhood watch/surveillance sites.”

What’s even more concerning is when the government starts asking people to snoop for them: NYC Mayor Bill de Blasio told residents on Friday that people should take photos of those who are not wearing masks and report them to authorities. 

When the dust settles, which could be sometime in 2Q21, as per a new report via Morgan Stanley, it will become increasingly evident that a surveillance state in America has been erected, from the community level of people snitching on others on social media, all the way up to mega-corporations and government.