Along the way, the gang manages to argue about—surprise!—Trump, Sen. Mitt Romney (R–Utah), The Irishman, the economy, and the potential meanings of “lying, dog-faced pony soldier.” And yes, we go to the Oscars, in terms of both speechifying and merit. A fun time for the whole family!
North Korea Concealing Coronavirus Outbreak; Officials Ordered To ‘Quickly Dispose Of Bodies’
While Coronavirus has officially reached 28 countries, with over 40,000 people officially infected and over 900 fatalities, North Korea – which has a woefully ill-prepared medical infrastructure, is concealing a massive outbreak of the disease, according to the Daily Beast.
There have been reports filtering out about North Koreans falling prey to coronavirus despite Kim Jong Il sealing its 880-mile border with China, “most of it along the Yalu River into the Yellow Seat to the west,” as well as its 11-mile border with Russia.
One sure sign of the regime’s fears is that it failed to stage a parade in central Pyongyang on Saturday, the 72nd anniversary of the founding of the country’s armed forces. Last year, Kim Jong Un himself presided over the procession that displayed the North’s latest missiles and other fearsome hardware along with goose-stepping soldiers in serried ranks.
This year, nothing about the nation’s nuclear warheads, much less the “new strategic weapon” that Kim has vowed to unveil. Rodong Sinmum, the newspaper of the ruling Workers’ Party, merely cited the armed forces’ supposed success combating “severe and dangerous difficulties”—and said nothing at all about the parade. –Daily Beast
South Korean news outlet Daily NK, meanwhile, reported that five people had died in the northwestern city of Sinuiju – which borders the key trade border town of Dandong, the largest Chinese city in the region located along the Yalu River. The Daily, relying on sources within North Korea, reports that authorities had “ordered public health officials in Sinuiju to quickly dispose of the bodies and keep the deaths secret from the public.“
The novel Coronavirus is suspected to have crossed into North Korea via the porous Yalu River border despite attempts to quarantine the country.
One of the first patients in North Korea reportedly was hospitalized in Sinuiju “with symptoms similar to a cold and was given fever reducers and antibiotics,” said Daily NK, but the patient died as the fever rose. Two more patients died two days later in another hospital in Sinuiju and another two in a nearby town.
North Korea’s worries about an epidemic are all the more intense because of its shortage of basic medicine and equipment. As cases mount, authorities are working feverishly to contain a disease that, if unchecked, could undermine Kim’s grip over his 25 million people, most of whom live in poverty worsened by hunger. –Daily Beast
“Because health conditions and health care in North Korea are so bad,” according to Rand corporation analyst Bruce Bennett, who added “they cannot allow the replication process to develop without severe intervention” – i.e. they need to take drastic measures to halt the spread, now.
According to Bennett, North Korea has to “rapidly contain any leakage—exactly what they are trying to do by preventing people-to-people contacts.”
That’s virtually impossible, however, as long as people move illicitly across the border, carrying on low-level commerce in the need to survive a decrepit system. JoongAng Ilbo, a leading South Korean newspaper, cited anonymous source saying that a woman had been diagnosed in the capital and that all those with whom she had had contact had been quarantined.
Unlike in China, North Korea officially has denied any cases while attempting to get people to cooperate in stopping the spread of the disease. JoongAng Ilbo quoted a North Korean health official, Song In Bom, as having called on North Korean TV for “civil awareness” and unity in dealing with the disease while assuring his audience there had so far been no cases. –Daily Beast
According to Rodong Sinmun, the regime has just streamlined an operational headquarters to battle the disease, and have activated 30,000 workers to combat the epidemic. NK’s Central News Agency has reported that the headquarters have ordered coronavirus tests for everyone entering Pyongyang via road, and anyone who has traveled outside the country. Foreign-workers in Pyongyang, including diplomats or NGOs, have been temporarily banned from venturing outside or shopping.
“I believe absolutely nothing of what I’m hearing from Pyongyang,” said former senior US diplomat, Evans Reverre, who specializes in North Korea issues.
“It simply defies credibility that a country with a grossly inadequate public health infrastructure and a malnourished population, a country that depends on China for some 90 percent of its trade, and a country that had until recently opened itself up to a major influx of Chinese tourists in order to earn foreign exchange has avoided having a lot of victims,” he added. “The total closure of the border and other measures Pyongyang has taken reflect a real sense of emergency in the North about the threat.”
“I can’t help but think it may also reflect panic if the number of patients is growing,” he said.
Victor Cha and Marie DuMond of the Center for Strategic and International Studies – a DC think tank, wrote that “the coronavirus arguably poses a unique threat to North Korea” because while “The regime’s relative isolation from the international community hinders the widespread penetration of many diseases from abroad … the porous nature of the border with China and frequent travel is a clear vector for the virus’ transmission.”
Thus, “If there are reports of the virus inside of North Korea, we should expect that the virus would spread rapidly given the state’s inability to contain a pandemic.“
It may be too late, however:
“Several suspected coronavirus infections have occurred in North Korea even though it shut all its borders,” said Chosun Ilbo, South Korea’s biggest-selling newspaper, citing anonymous sources. “The infections most likely spread through porous parts of the border with China that see plenty of smuggling and other clandestine traffic,” said the paper, reporting suspected cases among those “engaged in smuggling between the North and China.”
“Bottom line,” said Steve Tharp, who’s been analyzing North Korean affairs as both an army officer and civilian expert for many years here, “the coronavirus has tightened up sanctions enforcement more than any other measure over the years because the North Koreans are actually self-enforcing the sanctions, against their will, through the tight closing of their borders in order to save the regime from being wiped out by this human pandemic coming.”
According to Tharp, North Korean leaders “understand very well that this pandemic would rip through their population and be much more dangerous in North Korea than other places because of their inadequate medical infrastructure and the low resistance disease of the general population after so many years of surviving under near-starvation conditions.”
“Despite a few notable hiccups along the way, the bull market continues to prove insanely resilient.”
What was most interesting, however, was the following quote:
“Current hyper-valued extremes are likely to be followed by market losses on the order of two-thirds of the value of the S&P 500.”
The immediate response by most individuals is a 60%+ decline is an outlandish and impossible event given ongoing Central Bank interventions.
But is it really?
The risk of a larger mean reverting event is a possibility even though such is entirely dismissed by the mainstream media under the guise of “this time is different.” With the market trading more than 3-standard deviations above the 50-week moving average, historical reversions have tended to be more brutal.
The chart below uses key support levels as potential reversion levels. The lows of 2018. The highs and lows of 2015-2016, and the 2007 highs.
At this juncture, a correction back to the 2018 lows would entail a 25% decline. However, if a “bear market” growls, the 2015-16 highs become the target, which is 34% lower. The lows of 2016 would require a 43% draft, with the 2008 highs posting a 52% “crash.”
Those levels are still short of the 67% decline discussed above.
Such a level certainly seems preposterous, as Shawn quoted:
“I recognize that the notion of a two-thirds market loss seems preposterous. Then again, so did similar projections before the 2000-2002 and 2007-09 collapses.”
While the current belief is that such declines are no longer a possibility, due to Central Bank interventions, we had two 50% declines just since the turn of the century. The cause was different, but the end result was the same. The next major market decline will be fueled by the massive levels of corporate debt, underfunded pensions, and evaporation of “stock buybacks,” which have accounted for almost 100% of net purchases since 2018.
Market downturns are a historical constant for the financial markets. Whether they are minor, or major, the impacts go beyond just the price decline when it comes to investors. This was a discussion I had in more detail in “Retired, Or Retiring Soon? Yes, Worry About A Correction.”
“In 2000, the average ‘baby boomer’ was around 45-years of age. The ‘dot.com’ crash was painful, but with 20-years to go before retirement, there was time to recover. In 2010, following the financial crisis, the time to retirement for the oldest boomers was depleted, and the average boomer only had 10-years to recover. During both of these previous periods, portfolios were still in accumulation mode. However, today, ONLY the youngest tranche of ‘boomers,’ have the luxury of ‘time\ to work through the next major market reversion. (This also explains why the share of workers over the age of 65 is at historical highs.)
With the majority of ‘boomers’ now faced with the implications of a transition into the distribution phase of the investment cycle, such has important ramifications during market declines. The following example shows a $1 million portfolio with, and without, an annualized 4% withdrawal rate.”
“While a 10% decline in the market will reduce a portfolio from $1 million to $900,000, when combined with an assumed monthly withdrawal rate, the portfolio value is reduced by almost 14%. This is the result of taking distributions during a period of declining market values. Importantly, while it ONLY requires a non-withdrawal portfolio an 11.1% return to break even, it requires nearly a 20% return for a portfolio in the distribution phase to attain the same level.
Impairments to capital are the biggest challenges facing pre- and post-retirees currently.
This is an important distinction. Most articles written about retirees, or those ready to retire, is an unrealized assumption of an indefinite timeline.
While the market may not be different than in the past, YOU ARE!”
This is an important point.
Investing is about growing your savings over time, and controlling the risk which could lead to a significant loss of principal. Taking on excruciating losses is not investing, nor is it financially feasible to do so, and still reach your retirement goals successfully.
Putting Corrections Into Perspective
The real problem with discussing corrections is three-fold:
It is has been so long since we have had a correction of magnitude, many investors have forgotten what happens, and more importantly, how they reacted previously.
The majority of mainstream media advice is written or prognosticated by individuals who don’t manage money for a living, have substantial investment capital at risk, and have never actually been through a bear market.
Given the extremely long market expansion, many investors have truly come to believe “this time is different.”
If we put corrections into a bit of perspective, it becomes easier to visualize that damage which could, and most likely will, eventually occur.
10% Correction
A correction of 10% is entirely normal for a market in any given year. While a 10% decline in a bit painful, such a decline from current levels would only set the market back October of 2019 when the Federal Reserve started their latest liquidity interventions.
20% Correction
A 20% correction from the recent highs is a bit more serious. The last time we came close to a 20% reset was in December, 2018. Try and remember how you felt during that decline.
Currently, a 20% decline would reset your portfolio back to where it was in December 2017, wiping out all the gains of the past two-years. While not the end of the world, your retirement is now set back by almost 4-years as you will have to make up the 30% gain from 2019 plus two-more years of lost growth.
30% Correction
A 30% correction gets much more serious. A decline of this magnitude takes you back to the beginning of 2017. While losing just 3-years of growth may not seem that bad, assuming you need 6% a year to reach your retirement goal, you will need almost 9-years to recover. (Remember, it takes 42.9% to recover the 30% loss, plus you have to make up the 6% annual gains you needed, but didn’t accrue, during each year of recovering the previous loss.)
40% Correction
Okay, this is starting to get a bit uglier. A 40% decline takes the market back to 2014 levels and has now wiped out 6-years of your gains. While a 40% decline requires a 66.7% recovery to breakeven, (10 years at 6%,) the lost accrual years are going to make it very difficult to meet retirement goals.
50% Correction
I know…I know…this can’t happen. (It just happened twice the century already.)
A 50% decline is effectively “game over” for investors at this point. A decline of this magnitude will reset the market essentially back to the market highs of 2000 and 2007. For individuals who were close to retirement in 2000, their portfolio, on an inflation-adjusted basis, will have been completely reset.
At this point, retiring is no longer an option for most.
60% Correction
A 60% correction is not entirely out of the question. As I have discussed previously, the next mean reverting event will likely be the last. Corrections of such a magnitude would reset portfolios back to 1999 levels. The devastation will be greater than investors can currently imagine and retirement goals would be erased entirely.
There are numerous catalysts which could pressure such a downturn in the equity markets:
An exogenous geopolitical event
A credit-related event
Failure of a major financial institution
Recession
Falling profits and earnings
A loss of confidence by corporations which contacts share buybacks
Whatever the event is, which is currently unexpected and unanticipated, the decline in asset prices will initiate a “chain reaction.”
Investors will begin to panic as asset prices drop, curtailing economic activity, and further pressuring economic growth.
The pressure on asset prices and weaker economic growth, which impairs corporate earnings, shifts corporate views from “share repurchases” to “liquidity preservation.” This removes a major support of asset prices.
As asset prices decline further, and economic growth deteriorates, credit defaults begin triggering a near $5 Trillion corporate bond market problem.
The bond market decline will pressure asset prices lower, which triggers an aging demographic who fears the loss of pension benefits, sparks the $6 trillion pension problem.
As the market continues to cascade lower at this point, the Fed is monetizing nearly 100% of all debt issuance, and has to resort to even more drastic measures to stem selling and defaults.
Those actions lead to a further loss of confidence and pressures markets even further.
The Federal Reserve can not fix this problem, and the next “bear market” will NOT be like that last.
It will be worse.
None of this will happen, you say?
Maybe? I certainly hope not.
But are you actually willing to bet your retirement on it?
From 0 To 100 – Iran Missile Attack Brain-Related Injuries Spike
Remember when the Pentagon told everyone that the initial casualty report from the Jan. 8 Iranian ballistic missile attack on Ayn al-Assad airbase in Iraq was zero?
Then by Jan. 24, The New York Times (NYT) revealed that the count jumped from 11 to 34 American soldiers diagnosed with traumatic brain injury (TBI).
UPDATE: The Pentagon now reports that 34 U.S. service members suffered traumatic brain injuries from the Iranian missile strike on U.S. forces in Iraq. Earlier this week, Trump dismissed TBIs as ‘headaches.’ Trump originally claimed that no U.S. troops had suffered injuries. pic.twitter.com/qv54WJOTnH
One week later, on Jan. 31, the Pentagon admitted that “14 more U.S. service members have been diagnosed with TBI since the Iranian missile attack targeting U.S. forces at two Iraqi bases this month, bringing the total number to 64.”
Now, IRAQ- U.S. officials confirmed to Reuters that new total is over 100 American troops have been diagnosed with TBI since the missile attack, up from 64, or about a 56% jump in cases since the last report on Jan. 31.
In summary, confirmed TBI cases went from zero to 11 to 34 to 50 to 100… and who knows where from here:
1/08 – 0
1/17 – 11
1/24 – 34
1/31 – 64
2/10 – 100
????
To review, Trump’s first address to the nation following the major unprecedented attack on U.S. forces in retaliation for Qassem Soleimani’s death indicated “no casualties” and that “all is well!” Two weeks later, the Pentagon stunned reporters by indicating 11 U.S. troops suffered TBI.
It must also be remembered that U.S. officials and media pundits slammed Iranian state media for its repeated claims that the Jan. 8 ballistic missile attack resulted in significant casualties.
Iranian media went so far as to report emergency medical evacuations of U.S. personnel from the scene. U.S. officials scoffed and laughed at this “fake news” at the time — and several weeks ago, the semi-official major Iranian media outlet Fars News had its English news website was taken offline by order of U.S. Treasury for sanctions violations and state propaganda.
But now we know the accurate headline in the wake of the attack should have read: “50+ Americans Injured, Some Seriously…”.
The awkward truth is the Iranian state media was more accurate than U.S. corporate media in covering what happened that night when Iranian missiles peppered Ayn al-Assad airbase.
‘THEY HAD HEADACHES’: President Trump told reporters injuries sustained by several U.S. service members airlifted from Iraq after the Iran missile attacks were “not very serious” compared to combat injuries he’s seen that have resulted in lost limbs. https://t.co/2UHJ5xQXUqpic.twitter.com/kKSbMOrXTL
This evolving casualty count should be a major scandal yet has been swept under the carpet by the military and the Trump administration because it would be optically displeasing for Trump during an election year.
Trump has to control the narrative about how everything is awesome, despite our bravest warriors being ignored for having mere “headaches.”
Saxo: Watch Global Logistics Shares For Virus Supply-Chain Signals
Authored by Peter Garnry, head of Equity Strategy, Saxo Bank,
Summary
Logistics stocks have underperformed the global equity market since 17 January 2020 but overall the declines have not been severe enough to be called an all-out warning. Drilling deeper we observe the most stress among logistics stocks in China and Asia-Pacific (ex. China) and among industries we observe the worst declines in the marine shipping and transit services industries.
* * *
The coronavirus in China has still not peaked and mixed reports are coming out of China in relation to when production can be resumed in some regions of the country. Equities in general have been calm on the coronavirus outbreak with the real impact showing up in commodities such as crude oil which tells a tale of the world’s factory grinding to a halt. Within equities the epicenter is in the logistics industry group which was down 5% last Monday compared to the official start date of the coronavirus’ impact on financial markets. However, news flow was on balance positive last week pulling back equities as investors were betting on the coronavirus being contained fast enough to leave little impact on the economy.
We take a more cautious view and believe the coronavirus could get much worse globally. As of this morning the Bloomberg World Transportation Index is down 3% from the close on 17 January 2020 which means that investors have not really discounted any meaningful disruption yet from the outbreak.
Underneath the index value the data tells more stories about where the impact really is. Across regions it’s clear that Asia-Pacific and China (a few of the larger names are pulling the weighted return into positive) are the two regions that are suffering the most which is not a surprise.
When we look at industries we observe that marine shipping and transit services (basically passenger transport by rail) are hit the hardest.
So the global supply chain has seen a materially decline in activity also supported by the 83% drop in the Baltic Dry Index since August 2019.
[ZH: And The Capesize Freight Index is negative! Shippers are paying you to be able to ship your gear]
While shipping and transit services are flashing some signs of warning here the declines are not catastrophic but we recommend investors to watch these industries for guidance. The overall market cap weighted equity indices are broadly reflecting technology companies which are not living in the same physical world as manufacturing companies.
It’s worth noting that the transportation sector has not been an attractive investment over a five year period delivering less than 9% return while the global equity market has delivered 34%.
In our technology-driven society our equity markets are no longer reflecting the underlying manufacturing economy but more a services and software economy.
If you’ve ever walked through a shopping center and received a text-messaged coupon for the store you’ve just passed, you have a hint that your location isn’t exactly a secret. Somebody out there knows where you are and is putting that information to use.
That sort of proximity marketing might be super-creepy or really helpful, depending on your tastes. But location-tracking can be dangerous if you’re up against a government agency, which are more prone to shackles than to special offers. Your cell phone is tracking your movements and, despite legal protections, federal, state, and local officials are finding new and disturbing ways to use that information.
Some cops saw the potential for tracking people through their phones long before the law formally caught up.
Cory Hutcheson, the former sheriff of Mississippi County, Missouri, was sentenced last April to six months in federal prison and four on house arrest for illegally tracking people’s phones without a warrant. Among the people he tracked without legal cause were his predecessor in office, state troopers, and a county judge.
“For a three year period, including after being elected Sheriff of Mississippi County, Hutcheson uploaded false and fraudulent documents to a law enforcement database to obtain the location of over 200 mobile phone users,” according to the U.S. Attorney’s Office for the Eastern District of Missouri. “Hutcheson submitted thousands of requests and obtained the location data of hundreds individual phone subscribers without valid legal authorization, and without the consent or knowledge of the targeted individual.”
Hutcheson did his tracking through Securus, a prison phone provider that offers location services on communications devices (and not just those related to correctional institutions). According to a 2018 ZDNet investigation into the relationship, Securus got its cell phone location data from LocationSmart, which partners with major mobile communications providers. The arrangement bypassed restrictions on government agencies acquiring such data directly from telecoms.
Fourth Amendment protections for cell phone location records gained a boost from Carpenter v United States in 2018, which found that “historical cell-site records present even greater privacy concerns” than GPS tagging of vehicles. But it’s not yet clear how far the new protections go. Besides, Securus already required legal documentation for location requests—Hutcheson just dummied-up the paperwork.
But bad cops gonna bad cop, and they’re going to do their worst with whatever tools you give them. That should be taken as a cautionary tale about the inevitable abuse of everything provided to government agencies.
Good cops—or at least, those playing by the rules—like to know where your cell phone is, too, and their actions aren’t necessarily much more reassuring.
“U.S. Immigration and Customs Enforcement … has used [cell phone location] data to help identify immigrants who were later arrested,” the Wall Street Journalreported last week. “U.S. Customs and Border Protection, another agency under DHS, uses the information to look for cellphone activity in unusual places, such as remote stretches of desert that straddle the Mexican border.”
Homeland Security draws its location data from Venntel, an aggregator which itself acquires information not from telecoms, but from app companies. Think about your mapping apps, or the weather app that adjusts its forecast as you move around, or the food-ordering app that tells you which vendors are nearby. Those handy capabilities require tracking your movements, and those movements are valuable to end-users that include the Department of Homeland Security.
That said, most apps obscure individual identities in their shared data. The information purchased by the Department of Homeland Security should reveal where phones are and their movements to and from places, but unlike the LocationSmart/Securus tracking, it shouldn’t connect to actual identities. That pseudonymized data, available from commercial vendors and escaping (officials believe) the restrictions of the Carpenter ruling, is still useful to government officials.
“The data was used to detect cellphones moving through what was later discovered to be a tunnel created by drug smugglers between the U.S. and Mexico that terminated in a closed Kentucky Fried Chicken outlet on the U.S. side near San Luis, Ariz., said people with knowledge of the operation,” the Journal notes.
But if you correlate the data from several apps, or put together a pattern of life, you can reconnect a moving dot on a map with a human identity. “Several people in the location business said that it would be relatively simple to figure out individual identities in this kind of data,” according to a New York Timesreport on the industry.
Most of the safeguards, it should be noted, are intended to protect people from hackers and private sector misuse of personal information. Even the Carpenter decision doesn’t make specific location data on people’s movements, linked to their names, unavailable—it just says that government officials need to get a warrant to track individuals. The sort of individual cell phone tracking that Sheriff Hutcheson applied to his political enemies remains available to government agencies who are willing and able to secure a search warrant.
The phones in our pockets act as location beacons, signaling generic movements of people to agencies who might want to know where groups are gathering, and broadcasting our personal locations to officials who are willing to jump through the legal hoops (or pretend to do so) to map out our travels.
Just remember that, no matter what safeguards are in place, your super-helpful cell phone is a terrible tattletale. When you carry it, your phone creates a continuous trail of where you’ve been, and it will tell anybody who asks in the right way.
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DOJ Confirms Giuliani Providing Evidence In Ukraine Investigation
US Attorney General William Barr acknowledged on Monday that President Trump’s personal attorney, Rudy Giuliani, has been providing the Department of Justice with information collected during a months-long investigation of Ukraine.
The former New York mayor has been interviewing witnesses and gathering evidence to shed light on what the Bidens were up to during the Obama years, and get to the bottom of claims that Kiev interfered in the 2016 US election in favor of Hillary Clinton.
Barr said that Giuliani’s Ukraine findings must be carefully vetted to ensure accuracy and authenticity, according to Bloomberg.
“The DOJ has the obligation to have an open door to anybody
who wishes to provide us information that they think is
relevant,” said Barr during a press conference in Washington, adding “We have to be very careful with respect to any
information coming from Ukraine. There are a lot of agendas in the Ukraine, there are a lot of cross-currents and we can’t take anything we receive from the Ukraine at face value.”
Barr didn’t specify what kind of information Giuliani has been providing. Trump’s personal lawyer has previously said he has been collecting information about the activities of former Vice President Joe Biden and his son, Hunter, in Ukraine. Giuliani’s efforts became a central factor in Trump’s impeachment for pressuring the Ukrainian government to announce investigations into the Bidens to help his re-election. -Bloomberg
Giuliani has been providing conservative news network OAN with regular exclusive interviews from his travels:
In December we noted that Rudy has been working on this project for a while. In late January, he conducted phone interviews with former Ukrainian prosecutors Viktor Shokin and Yiury Lutsenko. On the call was George Boyle – Giuliani’s Chief Operating Officer and Director of Investigations. Boyle started as a NYPD beat cop in 1987, and was promoted to detective – eventually joining the Special Victims Squad. In short, the ever-grinning Giuliani has some serious professionals working on this.
“When he believes he’s right, he loves taking on fights,” said longtime Giuliani friend, Tony Carbonetti.
Giuliani challenged Fox News senior specialist Bryan Murphy to a debate, after Murphy recently wrote an internal memo titled “Ukraine Disinformation and the Trump Administration,” in which he suggested that some of the network’s top commentators were misleading the public.
Murphy accused Giuliani of having “high susceptibility to Ukrainian disinformation.” The former mayor responded by saying, “Fox owes us an opportunity to respond to this attack.”
“I can prove what I’m saying, can he?” asked Giuliani.
The memo went on to target network correspondent and investigative journalist John Solomon. Murphy said Solomon “uses unreliable sources, focuses on stories (that are) part of the disinformation campaign and also misrepresents his sources.”
The final two victims, couple Victoria Toensing and Joe DiGenova, are attorneys who frequently guest star on the network as commentators. Murphy argued they have ulterior financial motives related to their non-disclosure agreements.
Giuliani said if he gets the opportunity to debate, he may bring Toensing and DiGenova to support him. He added, “All facts are backed up by witnesses, documents and tapes.” –OAN
I challenge Brian Murphy to a debate on Fox on the lies he is spreading about us.
If he needs help maybe he can bring a few others. I’ll bring Joe or Vicky or John or all of them.
Fox owes us an opportunity to respond to this attack.
Oh how I miss George Carlin. Yes he was mainly known as a stand up comedian, but he was more than that, much more. He was a social critic, he challenged that status quo, he dared to go where society wasn’t prepared to go: Look at ourselves critically. He did it with biting humor, masterful oration and a directness digging into core truths that were not only uncomfortable at times, but needed to be heard and said.
His voice has fallen silent as he passed away a few years ago and I’m sorry to say: We don’t have anyone like George today. I didn’t agree with everything George said and I don’t need to, nor does anybody else, but his talent was to make us think and to view the world with a different perspective and yes he was a prophet.
He saw long ago where this was all heading. The political charades and manufactured dramas that are sold to the public as choice, the illusion of choice as the agendas have long been in play.
“What do they want?” he asked.
“More for themselves and less for everybody else.”
He spoke of the owners of this country, the owners that control everything, the media, what to believe what to think, and the great business and lobbying interests that spend billions of dollars lobbying for ever more benefits for themselves.
And boy did they succeed. Under the mantle of populism and draining the swamp they got themselves the biggest tax cuts in corporate history, a historic killing:
Wall Street celebrated and celebrates to this day.
Wealth inequality skyrocketing for years and now trillion dollar deficits as far as the eye can see and debt through the roof:
“But now they’re coming for your social security money” George prophesied.
“So they can give it to their criminal friends on Wall Street. And sooner or later they’ll get it all”.
After all after Act I is complete here comes Act 2:
Act I: Big corporate tax cuts for the top 1%.
Act II: Cut benefits for the poor. https://t.co/UrrrDn8rHP
“President Donald Trump will propose a $4.8 trillion budget on Monday, with sharp cuts to safety-net programs and international aid.
“Trump would increase military spending by 0.3% to $740.5 billion for the fiscal year 2021, which starts on Oct. 21. Spending cuts of $4.4 trillion over a decade would target $2 trillion in savings from mandatory spending programs, including cuts of $130 billion tied to Medicare drug-pricing and $292 billion from safety-net programs, such as food stamps and Medicaid. The budget assumes the $1.5 trillion tax-cut package enacted in 2017 and set to expire by 2025 is extended.”
Protect those tax cuts for Wall Street, but cut benefits for the rest, the needy and poor specifically. But we always have money to increase military spending which was already increased dramatically in the past few years on yes, a bipartisan basis. Both Democrats and Republicans voted for those. Lobbying dollars freely flow into both parties of course. Elections are expensive, don’t you know. And who are you going to listen to? To those that pay for access of course.
Don’t act surprised though. George Carlin, the prophet, told you years ago this was all coming in a brutally honest and biting rant that only George could’ve pulled off:
I miss his voice and I do wonder what he would tell us today. I shudder to think.
* * *
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When a state is almost completely dominated by one party, some people aren’t very enthusiastic about voting. One California lawmaker thinks he has a solution to that: Make voting mandatory.
Last week, Assemblymember Marc Levine (D–San Rafael) introduced AB-2070, a bill that would require every person who registers to vote to “cast a ballot, marked or unmarked in whole or in part, at every election.” The legislation says it will be up to the secretary of state to enforce this mandate, but it doesn’t really say how.
To explain himself, Levine put out a statement filled with tiresome bromides about the importance of voting:
Democracy is not a spectator sport—it requires the active participation of all its citizens. California is a national leader on expanding voting rights to its citizens. Those rights come with a responsibility by registered voters to cast their ballot and make sure that their voice is heard by their government. This is not a time to be complacent at the ballot box. My AB 2070 will ensure that the voices of all California voters are heard loud and clear.
That’s an odd argument, given that California has gone out of the way to limit voters’ choices at the polls in November elections.
In 2012, the state implemented a “jungle primary” system. This means that in the primary (which always has a lower turnout than the fall election), all the candidates for statewide races and the state legislature are put in a big scrum for voters to choose from, regardless of political party. The top two vote-getters in each contest then face off in November, again regardless of the political party. These frequently lead to voters getting the choice of only two candidates from the same political party.
That’s why Kamala Harris faced off against a fellow Democrat when she was elected to the U.S. Senate in 2016. It’s why Sen. Dianne Feinstein didn’t face a Republican, let alone any third-party candidates, when she won re-election in November 2018. Indeed, this is the system that helped Levine keep his seat in 2018: He defeated another Democrat, Dan Monte. No Republicans ran against Levine at all in 2018. Maybe they took a lesson from 2016’s election, when a second Democrat crowded Republican Gregory Allen out of the race.
If democracy requires “active participation,” it’s a bit strange that California has implemented a system that pushes so many people away. When Harris won her Senate seat, nearly two million Californians who cast a ballot didn’t even bother to vote in that race. When voters are given only two candidates from the same political party, greater numbers of them decide not to make a choice at all.
Levine doesn’t actually care if people even vote on these ballots. He just wants to force people to mail them back in. They can be completely blank. Apparently, he doesn’t actually care about “active participation” after all.
That’s telling. Public narratives about an election’s “success” often revolve around voter “participation” but tend to ignore digging in on whether people are actually voting in particular races. Sending in blank ballots may not be active participation, but it avoids embarrassments like 2014’s record-low 42.2 percent turnout of registered voters. And that makes it easier for politicians like Levine to convince themselves that Sacramento’s actions have the general public’s stamp of approval.
Australia has mandatory voting, as do about 30 other countries. But you won’t find Australians showing up to the polls to get handed a ballot where nearly all their choices are narrowed down to a single political party. Americans tend to take a very dim view toward countries that force citizens to vote but then don’t give them any real choices. North Korea has mandatory voting too, after all.
If candidates can’t convince voters even to mail back a sheet of paper, why should we allow them to pretend the public is willing to “participate” in their charade? Americans’ right to refuse to vote needs to be preserved precisely because it speaks to the apathy and disenchantment of the electorate.
Voting disclosure: As a Californian I’ve voted in several races, but skipped several myself, often voting only on ballot initiatives. The last actual human being I cast a vote for was Gary Johnson for president in 2016.
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Is China Really Resuming Production? Here Is The Dismal Answer, And An “Alternative” Way To Track What’s Really Going On
As we discussed earlier today, for traders following every twist and turn in the coronavirus saga, just one thing matters: “did China go back to work today or not” (the answer would also indicate whether global supply chains are still operational, or are as some fear, fraying and jeopardizing corporate earnings around the world). Of course, a cynic could interject that if China is lying misrepresenting the number of infections (as it clearly now is) and undercounting the epidemic casualties, why wouldn’t it lie about the logical next step: the number of people who have returned to work?
Conveniently, Morgan Stanley has come up with an answer.
As the bank’s strategist Min Dai writes today, echoing what we said earlier, “the most asked question among investors these days as they try to gauge the economic impact from the coronavirus is how to track the resumption of production in China.” His answer?
Sitting on a high floor in the International Commerce Center does give us the advantage of monitoring air pollution in Hong Kong, which has improved significantly in the past three weeks due to the suspension of traffic and industrial production in the Great Bay Area. This gives us the idea of whether we are able to monitor air pollution in China to gauge the resumption of production., as an alternative to the daily power coal consumption and daily national passenger traffic highlighted by our economists.
Inspired by his Hong Kong penthouse vista, Dai shows four cities’ air pollution since the start of the year versus their average in the past six years. These four are Shanghai, Guangzhou, Chengdu and Beijing, which to Morgan Stanley are a good representation of Eastern, Southern, Western and Northern China.
The key takeaways are:
The start of the new year normally sees higher pollution across China due to higher coal/fuel consumption for heating and resumption of industrial production after Chinese New Year.
Guangzhou, Shanghai and Chengdu see a clear pattern – air pollution is only 20-50% of the historical average. This could imply that human activities such as traffic and industrial production within/close to those cities are running 50-80% below their potential capacity.
However, Beijing pollution is similar to the historical average, probably because pollution in northern China is usually not good during winter time due to heating.
In summary, Morgan Stanley – which is as confused about what is really going on on the ground in China as the rest of us – believes that these sets of data “could provide an alternative view of economic activity in major cities in China, which are important for China rates and FX markets”, and going forward will provide timely updates in due course. At least until China decides to “adjust” the pollution data too, making this latest “alternative” indicator of China’s economy also meaningless.
