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In our latest look at the turmoil among China’s small and medium banks, which included not only the recent bailouts and nationalizations of Baoshang Bank , Bank of Jinzhou, China’s Heng Feng Bank, but also the two very troubling bank runs at China’s Henan Yichuan Rural Commercial Bank at the start of the month, and then more recently at Yingkou Coastal Bank. 

As we further explained, the reason why so many (for now) smaller Chinese banks have found themselves either getting bailed out or hit by bank runs, is that in a time when China’s interbank/repo rates have surged amid growing counterparty concerns, increasingly more banks have been forced to rely almost entirely on deposits to fund themselves, forcing them to hike their deposit rates to keep their funding levels stable.

Meanwhile, cuts in key lending rates since August to stimulate up a slowing economy have only exacerbated net interest margin pressures on banks.

In other words, with less income from lending and without the full suite of funding options available to much larger peers, the interest rates that China’s legion of small banks may have to offer to attract deposits could further undermine their stability. The irony is that to preserve their critical deposit base, small banks have to hike deposit rates even higher to stand out, in the process sapping their own lifeblood and ensuring their self-destruction, or as we dubbed it earlier, China’s own version of Europe’s “doom loop.“

Dai Zhifeng, a banking analyst with Zhongtai Securities, told Reuters the funding difficulties risked distorting small banks’ behavior, making failure even more likely: “Lacking core competitiveness, some of them have turned to high-risk, short-sighted operations,” he said, adding that a liquidity crunch was possible at some institutions.

But for a nation with a $40 trillion financial system, double the size of US banks, and well over 4,000 small, medium and massive, state-owned banks, here please recall that the 4 largest banks in the world are now Chinese:

• ICBC: $4TN
• China Construction: $3.4TN
• Agri Bank of China: $3.3TN
• Bank of China: $3.1TN

… the question how many banks will fail in the near future, is especially relevant not only for China but for the entire world.

Luckily, we got an answer from none other than China’s central bank, which on Monday said that China’s banking sector is “showing signs of strain”, with more than 13% of 4,379 lenders now considered “high risk” by the central bank.

In other words, take the 5 banks listed above which either suffered a bank run and/or were bailed out or nationalized, and add to them over 500 which are about to suffer the same fate.

As Bloomberg reports, in the PBOC’s its 2019 China Financial Stability Report, the high risk category contains 586 banks and financing firms, most of which are smaller rural institutions. The report also comically noted that one bank got a “D” grade this year, meaning it went bankrupt, was taken over or lost its license. No banks were named in the report.

And here is why the next global financial crisis will likely start in some backward Chinese province best known for its massively polluting coal plants, ghost cities and made up GDP data: while foreign and private banks are seen as relatively safe, more than one third of rural lenders were rated “high risk,” or those which are near failure.

Additionally, some medium- and small-sized financial institutions received poor ratings because of the slowing economy, with small lenders more sensitive to swings in the economy.

What did the PBOC do with this doomsday list? As Bloomberg reports, the central bank notified each bank of its rating, and required some to increase capital, reduce bad loans, limit dividends and even change management. In short, trillions in Chinese bank (non performing) assets are about to mysteriously disappear off the books while hundreds of local banks scramble to inject liquidity in their balance sheets, effectively removing free liquidity from the interbank market.

Separately, the PBOC also stress tested 30 medium- and large-sized banks in the first half of 2019. In the base-case scenario, assuming GDP growth dropped to 5.3% – or well above where China’s real GDP is now – nine out of 30 major banks failed and saw their capital adequacy ratio drop to 13.47% from 14.43%. In the worst-case scenario, assuming GDP growth of 4.15%, or less than 2% below the latest official GDP print, more than half of China’s banks, or 17 out of the 30 major banks failed the test. So with the entire Chinese financial system roughly $40 trillion, this suggests that China now has a rather insurmountable $20 trillion problem on its hands.

Separately, a liquidity stress test at 1,171 banks, representing nearly three-quarters of China’s banking sector by assets, showed that 90 failed in the base-case and 159 in the worst-case scenario.

* * *

According to the central bank, it made progress in containing financial risks in the past year, but warned that some potential threats require more time to eliminate. Financial risks can “occur easily” and more frequently as the economy cools and the risk of a slowdown in global growth increases, it said, clearly offering a very non-subtle hint of what is coming.

Faced with this complex situation, the central bank said that it should “stay cool-headed” to keep a balance between economic growth and risk control. It also means that the PBOC is now trapped – on one hand it can’t cut rates further as it will push even more small banks into insolvent as per the “doom loop” described earlier, on the other it can’t hike rates as then the entire economy would slow, resulting in unprecedented devastation and tens of trillions in bank assets wiped out.

Next year marks the last year in a three-year campaign by policy makers to contain financial risks. The PBOC said it will “fine-tune” its policies to fit the economic situation, ensuring that they aren’t too tight or too loose according to Bloomberg. The general direction of containing financial risks will be unchanged, in other words, despite the clear signs that things are bad and getting worse by the day – yes, there were two bank runs in the past two weeks – after years if not decades without a single bank crisis – the PBOC will do what China has been so good at doing in the past decade when it comes to addressing the unprecedented risks associated with a 320% debt/GDP and a $40 trillion financial system.

Iran’s top elite forces commander, Islamic Revolutionary Guard Corps (IRGC) chief Gen. Hossein Salami, issued a public threat Monday before a large crowd, vowing to destroy the US, Saudi Arabia, and Israel if they cross Tehran’s “red lines”.

“We announce to the United States, Britain, Israel, and Saudi Arabia that you experienced us in the field and received strong slaps,” said Gen. Salami, adding: “If you cross our red lines, we will destroy you.”

“We will not leave any move unanswered,” he warned, and said that if Iran decides to respond, “the enemy will not have security anywhere, our patience has a limit.” The speech is being widely viewed as Tehran’s ‘victory lap’ of sorts after anti-government protests across a hundred cities have been largely quelled. 

He was addressing a mass pro-government rally at a moment that dozens of such ‘counter-protests’ were held across the country, in answer to the anti-fuel hike and anti-government protests which have gripped the country over the past two weeks.

State media featured the large government-supportive demonstrations in multiple cities early this week, seeking to underscore the Islamic Republic’s leadership has emerged ‘victorious’ after quashing the mainstay of the prior anti-government rallies. 

Footage showed protesters burning the American flag and chanting slogans which blamed the external interference of the US and Israel, and “seditious” elements for the Islamic Republic’s current unrest, which had included a week of a total internet blackout ordered by authorities in Tehran.

As of November 24, global internet monitoring group NetBlocks said that “basic connectivity is returning, but many users now face a filternet that restricts access to the outside world.”

Meanwhile, a new report by Amnesty International issued simultaneous to Gen. Salami’s fiery Monday speech counted at least 143  killed in protests since Nov. 15. Tehran has rejected those numbers while asserting that it was armed elements among demonstrators who attacked police. 

The Amnesty report also claimed “clear evidence” that Iranian security forces used live ammo on unarmed civilian demonstrators. This after unverified social media videos emerged last week appearing to show live fire being used by police to disperse crowds.

Though anti-regime protests do appear to lack in size after fierce clashes with police in the past days, evidence continues to emerge that they are still ongoing in many places.

Authored by Tsvetana Paraskova via OilPrice.com,

Russia’s gas giant Gazprom is rushing to hire an engineering contractor to have an underwater natural gas pipeline, which has broken off the seabed in the Arctic, fixed, Russian news agency Interfax reports.

This is the second time a pipeline on the route that crosses the Baydaratskaya Bay has come to the surface in the past two years. As Interfax notes, last year another pipeline had broken off the seabed.

It was not clear if the resurfacing of the pipelines has created major safety hazards or affected gas supply from the fields in the Yamal Peninsula, according to The Barents Observer.  

A unit of Gazprom has announced a competitive tender for engineering surveys for the Bovanenkovo – Ukhta 2 line, which transports natural gas from the Bovanenkovskoye field on the Yamal Peninsula via the Baydaratskaya Bay in the Kara Sea to mainland Russia and onto Europe.  

Bovanenkovskoye is currently the largest natural gas producing field on the Yamal Peninsula, according to Gazprom.

The construction of the Bovanenkovo – Ukhta 2 gas pipeline began in 2012 and the pipeline was brought on line in 2017.

Now with a second line resurfacing, Gazprom has launched a tender for repair works on 9.2 kilometers (5.7 miles) of the pipeline in the bay, Interfax reports, citing tender documents from the Gazprom unit.

Gazprom expects the work to help it have the pipeline placed in a trench of up to 5 meters (16.4 feet) below the seabed. The engineering surveys are planned to take place in 2020 and 2021, according to Interfax.

Gazprom is dominating gas supplies to many European markets, and now it also vies to meet rising Chinese natural gas demand. Russia wants a share of the huge Chinese market and the Russian gas giant looks to supply pipeline gas to China—and this will begin in weeks.

As we noted earlier, a bombshell admission from Politico today exploring Obama’s substantial behind the scenes influence as Democratic kingmaker: included in the lengthy profile on the day-to-day of the former president’s personal office in the West End of Washington D.C. and his meeting with the field of Democratic candidates, is the following gem:

“Obama said privately that if Bernie were running away with the nomination, Obama would speak up to stop him.”

And crucially, when asked about that prior statement reported in Politico, an Obama spokesperson did not deny that he said it.

The frank admission underscores what many independent analysts, not to mention prior damning WikiLeaks DNC disclosures, have pointed out for years: that the establishment controlling the Democratic party has continuously sought to rig the system against Bernie.

“Since losing 2016, Dem elites have waged a prolonged effort to stop Bernie. Bernie is the obvious answer to the neoliberal Clinton-Obama legacy voters rejected…” journalist Aaron Maté observed of the Politico quote. 

Here’s the stunning and deeply revealing section in full, which began by outlining Obama’s ‘advice-giving’ throughout meetings with Democrat contenders including Joe Biden, Elizabeth Warren, Pete Buttigieg, Kamala Harris, Cory Booker, and others:

Publicly, he has been clear that he won’t intervene in the primary for or against a candidate, unless he believed there was some egregious attack. “I can’t even imagine with this field how bad it would have to be for him to say something,” said a close adviser. Instead, he sees his role as providing guardrails to keep the process from getting too ugly and to unite the party when the nominee is clear.

There is one potential exception: Back when Sanders seemed like more of a threat than he does now, Obama said privately that if Bernie were running away with the nomination, Obama would speak up to stop him. (Asked about that, a spokesperson for Obama pointed out that Obama recently said he would support and campaign for whoever the Democratic nominee is.)

And a further deeply revealing but more laughable quote comes later as follows: “Obama designed his post-presidency in 2016, at a time when he believed Hillary Clinton would win and Biden would be out of politics.”

Wow. “Obama said privately that if Bernie were running away with the nomination, Obama would speak up to stop him.”https://t.co/mBCUhb5Lol

— George Zornick (@gzornick) November 26, 2019

So the reality is… far from the idea that the Dem elites would back the actual nominee the party puts forward, clearly the die has already been cast against Bernie just like the last time around against Hillary in 2016. 

Politico author Ryan Lizza later in the story quotes a “close family friend,” who described that Obama’s “politics are not strong left of center.” 

“I mean it’s left, but he’s nowhere near where some of the candidates are currently sitting, at least when he got himself elected,” the source claimed. 

This means in the mind of Obama and other top party influencers and kingmakers, Bernie and other popular outliers like Tulsi Gabbard have already long been sidelined. Tulsi, it should also be noted, is one of the couple of candidates who did not bother to stop by Obama’s D.C. office for a ‘blessing’ and advice. 

Authored by Elias Marat via TheMindUnleashed.com,

Police in the United States have quietly begun integrating advanced robots into officers’ ranks, raising alarm among civil liberties advocates and police watchdogs in the country.

Video of Boston Dynamics robots climbing stairs, carrying boxes, and doing basic parkour have long circulated around the internet, creeping out viewers with the lifelike motion of its humanoid robot model and it’s semi-autonomous four-legged robot “Spot”—a customizable bot which resembles a metal dog without a head that, understandably, some people call “terrifying.”

And now, radio station WBUR and the ACLU have discovered that the Massachusetts State Police have been leasing one of the Boston Dynamics’ robot dogs for use in its bomb squad.

Spot’s integration into the state police, which began in August, marks the very first time that such advanced robotics have been deployed within a civilian police force.

The American Civil Liberties Union of Massachusetts has been seeking official public records on the use of Spot in the police arsenal. The group believes that the robotic dogs, which can carry out such tasks like opening doors and clearing obstacles in high-risk environments, have already been put to use in live incidents.

However, many fear that the secretive introduction of such technology into police arsenals, along with their deadly potential in police encounters, can open the door to future abuses.

Kade Crockford, the director of the technology for liberty program at the ACLU of Massachusetts, told WBUR:

“We just really don’t know enough about how the state police are using this.

And the technology that can be used in concert with a robotic system like this is almost limitless in terms of what kinds of surveillance and potentially even weaponization operations may be allowed.”

Police, however, have defended the use of Spot. Under their lease agreement with Boston Dynamics, the robot can’t be used to “physically harm or intimidate people.”

State police spokesman David Procopio said:

“Robot technology is a valuable tool for law enforcement because of its ability to provide situational awareness of potentially dangerous environments.” 

Boston Dynamics is a U.S.-based company that is a wholly-owned subsidiary of Japanese investment conglomerate SoftBank Group Corp.

Earlier this year, Boston Dynamics announced that it would begin selling the so-called “nimble robot” Spot, which is depicted in promotional materials as serving a number of roles in varied environments, including on construction sites or as remote security guards.

Boston Dynamics vice president for business development Michael Perry said that Spot is mainly being used in situations that would pose a danger to human personnel. Perry explained:

“Right now, our primary interest is sending the robot into situations where you want to collect information in an environment where it’s too dangerous to send a person, but not actually physically interacting with the space.”

However, the ACLU is primarily worried not so much about Spot itself, but about a general absence of transparency—especially regarding the law enforcement agencies’ rules and policies surrounding the use of robots.

In a separate statement provided to TechCrunch, the ACLU said:

“There is a lot we do not know about how and where these robotics systems are currently deployed in Massachusetts.

All too often, the deployment of these technologies happens faster than our social, political, or legal systems react.

We urgently need more transparency from government agencies, who should be upfront with the public about their plans to test and deploy new technologies.

We also need statewide regulations to protect civil liberties, civil rights, and racial justice in the age of artificial intelligence.”

China Industrial Enterprises total profits collapsed in October to CNY427.5bn from CNY575.6bn in September – a 9.9% YoY plunge, the biggest drop on record.

In fact, China’s Industrial sector has seen annual declines in its profits for 4 of the last 6 months.

Source: Bloomberg

What is perhaps even more disturbing is that seasonally, this is a period where profits typically begin to accelerate. This year, they are collapsing to the lowest since July 2013 (and lowest for an October on record)

Source: Bloomberg

“Extended deflation in producer prices is likely to keep downward pressure on profits,” Bloomberg Economist David Qu said in a note before the data.

“Looking ahead, the low base will continue to support the year-on-year comparisons.”

Additionally, Industrial firms’ liabilities increased 4.9% from a year earlier to 66.74 trillion yuan at end-October, compared with a 5.4% increase at end-September.

Is Trump winning?

Authored by Majid Rafizadeh via The Gatestone Institute,

The Iranian government is shortening its nuclear breakout time — the amount of time required to produce enough weapons-grade uranium for a single nuclear weapon. Tehran has accomplished this through several steps in the last few months.

Iran’s government first increased its enriched uranium stockpile beyond the 300 kilogram limit; it enriched uranium to levels beyond the cap of 3.67 percent, and then activated 20 IR-4 and 20 IR-6 advanced centrifuges. The Iranian leaders even boasted that their government is now exploring new uranium enrichment programs and producing centrifuges.

Most recently, the head of the Atomic Energy Organization of Iran, Ali Akbar Salehi, declared that Iran has an adequate supply of 20% enriched uranium., “Right now we have enough 20% uranium,” he told the Iranian Students News Agency, ISNA, “but we can produce more as needed”. He added that the country is resuming uranium enrichment at a far higher level at the Fordow nuclear facility — an underground uranium enrichment facility which is reportedly located on one of bases of the Islamic Revolutionary Guard Corps (IRGC­­) — injecting uranium gas into centrifuges, and operating 60 IR-6 advanced centrifuges.

This marks a dangerous phase in Iran’s nuclear defiance. Tehran is now using a kind of prototype centrifuge that enriches uranium almost 50 times faster.

Iran’s nuclear breakout time in 2015 was estimated at less than one year. Tehran has advanced its nuclear program since then. In an interview with Iran’s state-owned Channel 2, Salehi admitted that the “nuclear deal” initiated by then-US President Barack Obama not only failed to restrict Iran’s nuclear program; it actually helped Iran to advance its nuclear program through the flow of funds thanks to the lifting of sanctions. “If we have to go back and withdraw from the nuclear deal,” he stated, “we certainly do not go back to where we were before … We will be standing in a much, much higher position.”

Although Iran is a party to the Non-Proliferation Treaty (NPT), it refuses to allow the International Atomic Energy Agency (IAEA) to inspect its sites. The IAEA is also not allowed to inspect or monitor Iran’s military sites, where nuclear activities are most likely being carried out.

Among the many concessions that the Obama administration granted to the Iranian government, one was accepting the Iranian leaders’ demand that military sites would be out of the IAEA’s reach. Because of this surrender, at various high-profile sites such as the Parchin military complex, located southeast of Tehran, the regime has been free to engage in nuclear activities without the risk of inspection.

The Iranian leaders keep claiming that their nuclear activities are solely for peaceful purposes. This claim is bogus. If the Islamic Republic is advancing its nuclear program for peaceful purposes, why has Tehran repeatedly failed to report its nuclear facilities, including those at Natanz and Arak, to the IAEA?

Also, why does the Iranian government keep refusing to answer the IAEA’s questions regarding a secret nuclear facility, reportedly located in the suburbs of Tehran? Two nonpartisan organizations based in Washington — the Institute for Science and International Security and the Foundation for the Defense of Democracies — last year released a detailed report on Iran’s clandestine nuclear activities at this site.

In addition, why did the Iranian government place an S-300 anti-aircraft missile system at the Fordow underground nuclear site after the 2015 nuclear agreement? Finally, why does the Iranian regime never adequately address reports about its efforts to obtain illegal nuclear technology and equipment? Germany’s domestic intelligence agency, the Federal Office for the Protection of the Constitution, revealed in its annual report for 2016 that the Iranian government had pursued a “clandestine” path to obtain illicit nuclear technology and equipment from German companies “at what is, even by international standards, a quantitatively high level.”

The truth is that, from the perspective of the ruling clerics of Iran, obtaining nuclear weapons is a must to help Tehran advance its hegemonic ambitions to dominate the region. Also, by having nuclear weapons, the Iranian government can more powerfully support terror groups and proxies to destabilize the region without being concerned that the West might strike Iranian military targets.

Most of all, in the view of the ruling clerics, having nuclear weapons can ensure the survival of their theocratic, anti-American and anti-Semitic establishment.

That is why, before it is too late, which it is fast becoming, it is incumbent on the US and the international community to take seriously Iran’s nuclear advances and urgently address its rush to obtain nuclear weapons.

*  *  *

Dr. Majid Rafizadeh is a business strategist and advisor, Harvard-educated scholar, political scientist, board member of Harvard International Review, and president of the International American Council on the Middle East. He has authored several books on Islam and US foreign policy. He can be reached at Dr.Rafizadeh@Post.Harvard.Edu

Bill Gross spoke with Financial Times US markets editor Jennifer Ablan. Gross laid it all out for her, warning that 2020 could be a sluggish year for financial assets as fiscal and monetary stimulus becomes ineffective, or as he put it: the stimulus is losing its “oomph.” 

Gross is echoing what central bankers and government officials in many G7 countries are warning about at the moment: the stimulus isn’t working as a synchronized global slowdown continues to gain momentum. 

He said gains in stocks and bonds could be depressed next year as central banks have figured out that ultra-low interest rates aren’t the prescription to fixing structural issues. 

Fed funds futures aren’t pricing in interest rate cuts until next summer. The most recent FOMC minutes show the Federal Reserve is likely on-hold with already three rate cuts since July. Gross said the Fed isn’t expected to use negative interest rates when the next recession strikes. 

Gross said US stocks would be “flat to down 10%” in 2020, while the UST10Y would end the year around 1.75% level. 

He also said stimulus from the 2017 Tax Cut and Jobs Act (TCJA) has already worked through the system and has now become a fiscal drag. “To retain the 1% boost that it provided to the economy . . . the deficit needs to expand by another $1tn or else the economy expands by 1% less,” he said.

Gross touched on politics with Ablan. He said the 2020 political environment would produce volatility for financial markets.

He added that President Trump’s “schizophrenic day-to-day” tweeting and the “Democrats waver between centrist and ultra-liberal candidates” are leading to uncertainty in the economy and markets. 

With GDPNoW estimates crashing towards zero for Q4, Gross understands that a recession could be on the horizon.

 

Authored by Paul Craig Roberts,

Former US Attorney Joe diGenova predicts that US Justice (sic) Department Inspector General Michael Horowitz’s report on the Obama regime’s FISA court violations and US Attorney John Durham’s criminal investigation of the Russiagate hoax perpetrated by the CIA, FBI, Democratic National Committee, and presstitute media will be “very bad for people in the Obama administration. . . . it’s going to be devastating . . . it’s going to ruin careers.”

For the sake of accountable government, I hope that Mr. diGenova is right. But I have my doubts. Cabinet departments and government agencies are not very good at investigating themselves. Attorney General Barr’s job is to protect his department. He knows, and will be often told, that to bring indictments against Justice Department officials would discredit the Justice Department in the public’s mind. It would affect the attitude of juries toward DOJ prosecutions. John Durham knows the same thing. He also knows that he will create a hostile environment for himself if he indicts DOJ officials and that when he joins a law firm to capitalize on his experience as a US Attorney, he will not receive the usual favors when he represents clients against DOJ charges. Horowitz knows that his job is to coverup or minimize any illegalities in order to protect the Department of Justice from scandals.

In Washington coverups are the rule, and the DOJ coverup might already have begun. One sign of a coverup is to announce a future release date of the report. This has now occurred with Horowitz’s report on the FISA violations. The purpose of such announcements is to allow the report to be discredited in advance and to be old news by the time it appears.

Another sign of a coverup is the use of leaks to shift the focus from high level officials to lowly underlings, and this has happened with the Horowitz report, which has leaked that a low level FBI attorney is under criminal investigation for allegedly falsifying a document related to the surveillance of former Trump campaign official Carter Page in 2016. According to the leak, the FBI attorney has acknowledged that he did alter the document.

In other words, it seems we are being prepared for a false story that the plot against Trump originated in lower levels and not with CIA Director John Brennan, FBI Director James Comey, FBI Deputy Director Andrew McCabe, Deputy Attorney General Rod Rosenstein, and Deputy Attorney General Sally Yates, and the rest.

This is the way the coverups of the US torture prison, Abu Ghraib, in Afghanistan was handled and the My Lai massacre in Vietnam. Only the underlings take the hit as if they were in charge acting on their own, independently of their superiors.

Another sign that a coverup is in place is Attorney General Barr’s assurance that Jeffrey Epstein killed himself and that evidence to the contrary is just a series of coincidences that, misunderstood, resulted in a conspiracy theory. Caitlin Johnstone gives this short shrift.

Barr claims to have personally reviewed security footage that no one entered the area where Epstein was imprisoned. Previously we were told that the security cameras were not turned on, so what security footage did Barr review? Can the rest of us see the “evidence”?

Barr also in his pronouncement evaded the remarks of the Chief Medical Examiner, who stated clearly that the damage to Epstein’s neck is not consistent with suicide but is associated with strangulation.

There was no reason whatsoever for Epstein to kill himself. He had so much dirt on the Western political elite that he could not be given his day in open court. So he was murdered. The question is, why was he picked up and murdered? Was he using the pedophile information to exact blackmail payments from those he had provided with underage sex? Is it possible for an elite society to be more corrupt than the Western elite society is? How can the West survive when its elites are corrupt beyond comprehension?

That Epstein did not kill himself is completely obvious, so when AG William Barr covers up Epstein’s murder, this is an indication that he will cover up the military/security complex/DNC/presstitute coup against President Trump.

From what I know of Washington, I am certain that Washington, the cesspool of the world, will never rat on itself.

Hong Kong police are reportedly attempting to bring the over week-long dramatic events at Polytechnic University to a peaceful end after prior apocalyptic fire-engulfed scenes grabbed the world’s attention. “Independent” humanitarian teams are now going door to door throughout campus buildings attempting to contact the ‘radical’ holdouts.

Police have had the campus surrounded for days, and the prior 100 final holdout protesters of a week ago have now dwindled to some 30 student occupiers believed still in hiding on campus. Despite a potential 10-year prison sentence (laws against rioting, which are being applied to the protesters, carry heavy penalties), some 1,000 protesters have already walked off campus into the waiting arms of police.

However, police announced Monday those requiring medical treatment and who leave willingly would not be immediately arrested, though the official statement said authorities reserved the right to do so later. 

Teams of psychologists, social workers, Red Cross medics, and trained negotiators are now going building to building, floor to floor, attempting to convince the final small group to exit of their own accord.

“A 50-strong group made up of PolyU management, security guards, councilors and Red Cross doctors divided into six teams and entered the campus at 9.30am to look for anyone who might still be in hiding,” the South China Morning Post reported Tuesday. 

“We will only enter the campus in an appropriate time, hoping not to provoke people inside,” HK Chief Executive Carrie Lam said of the continuing crisis.

“I hope the group doesn’t need to be deployed, if PolyU’s working team can successfully persuade people to leave the campus safely. The mission is still about persuading them to come out,” she added.

It remains a tense situation given the humanitarian search teams want to be seen as separate from police so as not to betray the students’ trust. 

However, those going in are reportedly worried about explosive items and even the potential for booby traps.

According to the SCMP:

PolyU said in its latest statement that its six teams had searched four buildings by 1pm on Tuesday, but did not find any protesters. They found that many parts of the buildings had been vandalized and destroyed, and different kinds of dangerous items and petrol bombs had also been discovered inside.

There also reports that some among the estimated 30 protesters still scattered inside the buildings are suicidal and/or plan to resist to the very end.

HK leader Lam said in a radio broadcast she believes those still inside are “afraid of police” but that the mediation team will hopefully establish positive contact, leading to a peaceful removal of the final occupiers.