Blain: The Tragedy Of HSBC

Blain: The Tragedy Of HSBC

Tyler Durden

Thu, 06/04/2020 – 20:45

Authored by Bill Blain via,

“A waiter, again unbidden, brought the chessboard and the current issue of The Times, with the page turned down at the chess problem.”

While America burns, the dollar tumbles, stock markets soar, Germany announces a massive bailout programme which dwarfs the pennies Italy desperately needs, the ECB gets ready for another money dump, and UK politicians grumble about queues… life goes on…

There is something deeply tragic about yesterday’s announcements from HSBC and Standard Chartered supporting the imposition of China’s Security Law in Hong Kong. We can all act shocked and damn them for supping with the devil, but neither bank had any real choice but to make the unpalatable decision to support the unsupportable. Both know their futures depend too much on China’s patronage to survive without kow-towing. 

Yesterday, they each wrote the first lines of the final few paragraphs of their own obituaries.  

10-years ago I wrote in the Porridge why HSBC was my top bank stock. I said something along the lines of while other banks will remain vulnerable, HSBC had the franchise, strength and depth to survive and thrive. Its dividend policy was strong and would provide dull, boring, predictable returns for the long-term. The Long-term is so over. 

Read the comments following any article about the two Hong Kong banks this morning and are they full of earnest virtue signalling from angry clients who say they will close their accounts. I will probably switch mine.. but only because now there is zero chance the service will get any better.

Timing is everything. I laughed out loud at a post on Linked-In from HSBC claiming leadership in ESG matters and Green funding. Really… this is not the time for HSBC to be bragging about its ethical credentials.

The sad reality is HSBC has become a patron of the Chestnut Tree Café – the bar where the purged characters from 1984 spend their last few months in isolation, irrelevancy and waiting for the axe to fall. HSBC and Standard Chartered’ future is window dressing the new Hong Kong. HSBC has become as yesterday as Deutsche Bank. 

It could have been so different.

In the early 2000s HSBC’s tag line was The World’s Local Bank. The Hexagon Logo dominated airports and appeared everywhere. Its ambition was to generate one third of its profits from each of the main global markets; Asia, Europe and North America. By market capitalisation it was the largest bank on the planet. When it bought US sub-prime credit lender Household in 2002, it was a clear signal the bank was on the move with expansion plans everywhere. 

I joined HSBC in 2002. It was a bit of a shock after 10 years at an aggressive but highly innovative US investment bank. 

HSBC people were lovely. They were friendly, they were nice. Yet, they were fiercely tribal and regional in their mindset. There was a cadre of International Officers who’d been drilled in the HSBC tau of things since they joined straight from school. The regarded outside hires as mere hired hands. You could not argue with the IOs – they knew best. And then there were the old Hong Kong hands, trading hotshots from Hong Kong who knew even better. They’d been big fish in the small pool that was then Asia. They couldn’t grasp that Wall Street and City traders swam in much larger more aggressive oceans. The firm was naturally hierarchical in the way only a thoroughly English bank could be – even though its DNA was broadly Presbyterian Scots!  

Yet, the bank failed to make much a mark on the global markets. It owned multiple diverse and unconnected business, united only by the logo. The way the bank’s independently minded German operation operated had nothing to do with the London hub. The Paris operation delighted in doing things differently. Asia had little interest in what New York or London were doing. It sold global clients a grand vision of access to Asia – but any second rate US firm knew more of the top Asian accounts. 

Successive waves of hired guns were hired to enliven its sub-par investment banking activities, but without much enthusiasm from across the firm which remained siloed. The senior management were good, knew the issues and the bank– they were some of the best in the business. But they were trying to run an enormous bloated bureaucracy of dissimilar banking businesses, investment and commercial banking operations, consumer banking around the globe, an Asian franchise, while trying to grow new businesses in areas they perceived the bank understrength. They faced pushback from local fiefdoms, and became jacks of all and masters of nothing. 

The crunch came following the global financial crisis in 2007/08. HSBC was the only UK bank that avoided disaster and bailout. (So did Barclays, but by the skin of their teeth and some dubious chicanery which Amanda Stavely will no-doubt shortly reveal in court.) Household went from being an inspired purchase to toxicity overnight – and dragged the whole North American operation down. A succession of banking scandals in Latin America followed – HSBC discovering to their shock that putting the logo on a Mexican bank did not suddenly cleanse it of endemic corruption and drug money laundering. 

The result was a bank that was no longer managed from growth and the future, but in order to placate the regulators.  

This is the critical lesson of HSBC. The brand was brilliant but hollow. Its’ businesses were individually good, but collectively poor. Rationalising them into a strong single force was a massive ask – and would have required more than the best banking management on the planet. But that management was totally focused on placating the regulators to avoid them purging the bank. At one time the board seriously feared the US SEC might close them down as more South American scandals came to light. 

While US banks thrived through the 20-Teens HSBC plodded and became more bloated. Its ambitions a global bank vanished like an early morning mist. It contracted. Asia’s share of profitability – to be blunt, Hong Kong savers – rose through 80%. It became classically squeezed in its home market. The levels of dissatisfaction with its consumer banking division means it’s among the most complained about banks. 

I figured out how bad things were a few years ago when I walked into the Premier Branch of HSBC at its Canary Wharf Global HQ a few years ago. No one greeted me. There were last week’s papers sprawled across a table, and dead pot plant in the corner coated in dust. I pressed the desk bell, and a bored looking girl sauntered out to tell me to go downstairs to the public branch because she was too busy to help. I sold all my stock soon after.

Except that it is, it wasn’t the fault of senior management. They tried. But the bureaucracy won. Banks run to please regulators rather than customers seldom thrive. Across the bank the middle management are shuffling papers and waiting for the a long-delayed axe to fall as cuts are finally enacted. 

It’s a shame. The Home for Scottish Bank Clerks will join the list of other banks that once were contenders…..

via ZeroHedge News Tyler Durden

Note To Rioting Americans: A Guide To Safe & Profitable Looting

Note To Rioting Americans: A Guide To Safe & Profitable Looting

Tyler Durden

Thu, 06/04/2020 – 20:25

Continuing our series of Public Service Announcements for America’s rioting class (parts one and two here), tonight we are focusing on your safety.

Here’s Babylon Bee’s guide on being prepared for safe and profitable rioting.


1. LOOK OUT FOR SWEET LOOT. We got purses, we got cell phones, we got cheesecake, shoes, Legos…

2. FOLLOW OTHER RIOTERS INTO STORES. If you just run into a store by yourself you might get shot.

3. HAVE A BUDDY. Those new 4K TVs are freaking heavy man.

4. STAY SAFE — But also throw bricks at police. 

*  *  *

In case you didn’t realize by now, this is humor in the face of our nation’s ugliness.

via ZeroHedge News Tyler Durden

Japan’s Three Decades Of Depressive Stimulus Schemes

Japan’s Three Decades Of Depressive Stimulus Schemes

Tyler Durden

Thu, 06/04/2020 – 20:05

Authored by Richard Salsman via The American Institute for Economic Research,

he New York Times reports optimistically that “Japan Approves Fresh $1.1 trillion Stimulus to Combat Pandemic Pain.” As the Times elaborates, Japan’s “record stimulus of 117 trillion yen ($1.09 trillion), which will be funded partly by a second extra budget, followed another 117 trillion yen ($1.09 trillion) package rolled out last month. The new package takes Japan’s total spending to combat the virus fallout to 234 trillion yen ($2.18 trillion), or about 40% of gross domestic product.” “The packages (this year) took the size of the budget to a record 160 trillion yen, with new bond issuance making up 56.3% of annual budget revenue and raising the spectre of more bond issues later to offset falling tax income.” 

It’s a “record stimulus,” the Times gushes. Very exciting stuff! Surely it will work!?

But why would any of it help “combat” a “virus fallout” or “stimulate” Japan’s economy? By “economy” do we not, as economists, refer to output, the production of goods and services, to real GDP at the least? If so, how can deficit spending create wealth? There is no evidence for that.

The “fresh” part of the Times’ headline is best translated as “recent” because for the past three decades, amid various crises, Japan has adopted literally dozens of alleged “stimulus” schemes – including not just massive deficit spending but rate-cutting, a zero-interest rate policy (ZIRP), “QE” (central bank monetization of public debts), and even direct purchases of private debt and equity securities. None of these programs has ever been proved to improve Japan’s economic-financial performance. Indeed, its performance has eroded amid the cascade of higher spending.

Japan’s economic-financial performance peaked in 1989-1991 and periodic revivals aside, it has stagnated since, amid degeneration in public finances. The causes of the peak and subsequent “lost decades” are worth recalling. In the late 1980s the Bank of Japan (BoJ), on the advice of leading economists, interpreted the decade as artificial, a mere “bubble,” and set out to “pop” it with punitive interest-rate hikes. The BoJ inverted the yield curve, which is a recession signal in part because it makes credit intermediation (“borrowing short, lending long”) unprofitable.

After the BoJ-authored yield curve inversion, Japan’s real GDP decelerated from growth of 9.4% in 1988 to only 4% in 1989; by 1993 GDP was contracting. Industrial production also decelerated, from 7.4% in 1988 to only 3.5% in 1989 before contracting by 13% between 1991 and 1993. Today Japan’s industrial production index remains 12% below its 1991 peak. The NIKKEI equity index also crashed after the BoJ’s policy assault, by 60% from the end of 1989 to mid-1992. The index low in 2009 was 80% below the 1989 peak; today the index remains 46% below its 1989 peak. 

One could say the BoJ certainly “succeeded” in its mission to combat the supposed artificiality of Japan’s economic-financial performance in the 1980s; since then, Japan’s policymakers have dutifully followed the advice of Keynesians like Paul Krugman, implementing dozens of “stimulus schemes;” in effect, they’ve tried to artificially revive Japan’s economy, not by deregulating it, not by cutting tax rates or restraining growth in government but by massive public deficit spending. 

Figure One illustrates the dramatic shift in Japan’s public finances after 1990. In the fifteen years prior to 1990, growth in public spending and tax revenues closely tracked; new debt issuance was limited and even declined between 1982 and 1990. Since then, however, spending growth has far outpaced growth in tax revenues, due mainly to tax rate hikes and a stagnant economy. Deficit spending and new debt issuance have been preferred – the genuine Keynesian prescription.

Decades of chronic deficit spending have boosted Japan’s public leverage (debt-to-GDP ratio). Figure Two shows debt is now 235% of GDP, up from 175% in 2010, 125% in 2000, 64% in 1990, and 50% in 1980. Having boosted its policy rate in the late 1980s to fight a “fake” prosperity, the BoJ has since cut the rate dramatically. For a quarter century the rate has been below 1%, not, it seems, to “stimulate” the economy (or lending) but to enable the Treasury to borrow more affordably. The BOJ has been politically dependent, serving mainly Japan’s deficit spenders. 

Surely one might expect that eventually this stupendous, multi-decade deficit-spending would “stimulate” Japan’s economy or equities. But mostly Keynesians (and some monetarists) would expect it. Adherents of Saysian economics, in contrast, would not expect it; indeed, they’d predict that vast increases in public spending and borrowing would more probably impede prosperity. 

Table One contrasts Japan’s performance over the past three “lost decades” (1990-2020) and the prior three decades of robust growth (1960-1990). Public debt has grown 5.8% p.a. in the three decades since 1990 while public leverage has increased 4.2% p.a.; meanwhile, real GDP has grown only 1.0% p.a., the NIKKEI has risen by only 0.4% p.a., and industrial production has contracted. So much for Japan’s “stimulus.” The Keynesian prescription has been worse than useless. It’s been harmful. Yet the more it fails, the more its adherents insist on still larger doses of deficit spending.

In the three decades prior to 1990, before Keynesian policy advice became dominant in Japan, the nation enjoyed robust and sustainable economic growth amid fiscal rectitude. Table One makes clear that Japan’s public debt and public leverage increased by only 2.6% p.a. and 2.0% p.a., respectively, while real GDP grew 6.4% p.a., industrial output grew 7.2% p.a., and the NIKKEI advanced 5.5% p.a. In each case pre-1990 performance outpaced post-1990 performance. The difference is due mainly to the tragic suspicion of prosperity which took hold in Japan in the late 1980s, and to later adoption of so-called “stimulus” schemes, which, I argue, are depressive:

Many economists believe public spending and money issuance create wealth or purchasing power. Not so. Our only means of obtaining real goods and services is from wealth creation — production. Under barter no one comes to market expecting to buy stuff without also offering stuff. A monetary economy does not alter this key principle. What we spend must come from income, which itself must come from producing. Say’s Law teaches that only supply constitutes demand; we must produce before we demand, spend or consume. Demand is not a mere desire to spend but desire plus purchasing power.

Believers in “stimulus” also claim that government spending entails a magical “multiplier” effect on aggregate output, unlike most private sector spending. They tout a government’s greater “propensity to consume.” But consuming is the opposite of producing. Welfare states certainly consume and redistribute wealth. They divide it up. But math teaches that nothing – wealth included – can be multiplied by division. The so-called “multipliers” imagined by today’s economists are, in fact, divisors. Many studies have verified the principle.  

To see why “stimulus” truly depresses, consult the basics. The creation of public money and public debt is not the creation of wealth; it is not food, clothing, shelter, energy or the like. Even privately generated money and debt, which reflect the needs of trade and lengthy production chains, represent, facilitate and circulate wealth but are not themselves wealth. Meanwhile, the savings borrowed by governments are unavailable to productive enterprises, and when a government creates fiat money beyond what money holders demand, the money loses purchasing power, which boosts the cost of living. These are not roads to prosperity.

A tragically wrong public policy should be abandoned, not emulated. Sadly (and tragically), the U.S. since 2001 has been copying Japan’s approach, with a lag of a decade or so. What some here called “unorthodox” fiscal-monetary policy was first “normalized” in Japan. The two nations differ in some important ways, including demographically, but that does not nullify the laws of economics (or of public finance). The U.S. and Japan are old welfare states that can’t afford what they’re doing; nonetheless, their politicians can’t seem to succeed electorally without persisting in their profligacy. Japan’s history signals the likely outcome for copycats: prolonged stagnation.

via ZeroHedge News Tyler Durden

Shenzen Adopts China’s First Personal Bankruptcy Laws As Small Businesses, Freelancers Face Financial Ruin

Shenzen Adopts China’s First Personal Bankruptcy Laws As Small Businesses, Freelancers Face Financial Ruin

Tyler Durden

Thu, 06/04/2020 – 19:45

Surprisingly enough, considering that it’s a Communist State founded – at least, in theory – on the principles of social justice and equality, China doesn’t have personal bankruptcy laws, and individuals who are saddled with debt, medical or otherwise, are typically held liable for these debts until death.

However, back in 2007, as Beijing shifted its drift toward ‘economic liberalization’ into hyperdrive, the country adopted corporate bankruptcy laws. Corporate bankruptcies have surged in recent years, and earlier this year, we discussed expectations that the number for 2020 would be even higher, as the coronavirus upends the Chinese economy.

Now, Shenzhen, known as the “Silicon Valley” of the mainland, has drafted China’s first personal bankruptcy laws as the southern city prepares for what’s expected to be a wave of bankruptcies, particularly among the freelancers and smaller contractors common in China’s tech sector. The rules are intended to give “honest and unfortunate” debtors the chance to escape the mire of debt and make a comeback.

Despite corporate bankruptcy laws nationwide since 2007, individuals are still held personally liable for business debts, which makes it virtually impossible for entrepreneurs to be ‘okay’ with failure, like American entrepreneur gurus have advised.

China’s personal bankruptcy process bears certain – shall we say – “Chinese characteristics”. For example, the state will monitor the finances of those who file for personal bankruptcy for three years.

The draft rules, open for public comment until June 18, allow Shenzhen residents who cannot pay their debts to apply for personal bankruptcy if they have paid social insurance in the city for at least three years.

Once approved, applicants will spend at least three years in a supervised “probation” period before all or part of their debts are wiped clean. During this time their expenditure will be supervised, the draft rules said.

Other major Chinese cities are expected to follow in Shenzen’s footsteps as Beijing cranks up the stimulus and hastily reopens its economy. To prevent a second wave, it has embraced dramatic tactics like mass surveillance testing, which were used to test every citizen of Wuhan, something China purportedly finished doing last week (affording to state media).

Reuters claimed 76 companies filed for bankruptcy with the Shenzhen Intermediate People’s Court in May, up 85% from a year earlier. So-called individual businesses (in many cases freelancers) making up 3.3 million of the province’s commercial entities, and accounted for a large share of those filing.

“After the epidemic, it’s unclear just how many business owners will be forced on to the country’s defaulter list if they fail,” said Yin Yanrong, a partner in the Guangdong Baocheng law firm.

On the other hand, creditors who owe more than 500,000 yuan ($70,228.66) will also be able to petition for liquidation of debtor companies.

China has built its explosive growth on a mountain of bad debt. What’s going to happen when investors in the country are forced to take losses on “safe” securities for the first time?

via ZeroHedge News Tyler Durden

Top NYC Health Official Says “Racism” To Blame For Imminent COVID Spike (Not 1000s Of Demonstrators Gathering in Close Proximity)

Top NYC Health Official Says “Racism” To Blame For Imminent COVID Spike (Not 1000s Of Demonstrators Gathering in Close Proximity)

Tyler Durden

Thu, 06/04/2020 – 19:25

Authored by Paul Joseph Watson via Summit News,

A top health official in New York says that if there is a second spike in coronavirus cases, “racism” will be to blame, not thousands of demonstrators gathering in close proximity.

Yes, really.

Mark D. Levine, the Chair of the New York City council health committee, tweeted, “Let’s be clear about something: if there is a spike in coronavirus cases in the next two weeks, don’t blame the protesters. Blame racism.”

This is the same guy who back in February urged New Yorkers to congregate in large numbers to celebrate the Chinese Lunar New Year parade as a show of “defiance” against the COVID-19 “scare”.

For weeks, the left and the media denounced and publicly shamed anti-lockdown protesters for “killing granny” because they violated the ‘stay-at home’ order.

They did this despite many of the protesters across the country staying inside their vehicles during the protest.

The media also venerated health workers for counter-protesting the ‘stay-at-home’ dissidents.

Meanwhile, literally thousands upon thousands of Antifa and Black Lives Matter demonstrators staged mass protests, some of them violent, and were lauded by the left and the mainstream press.

As we document in the video below, health workers even staged a photo-op where they applauded left-wing activists for flagrantly violating ‘social distancing’ rules.

Because, apparently, coronavirus is ‘woke’ and takes a break from infecting people, so long as they’re championing anti-American causes.

*  *  *

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via ZeroHedge News Tyler Durden

As The Country Burns, Citadel’s Founder Spends $100 Million On A Painting

As The Country Burns, Citadel’s Founder Spends $100 Million On A Painting

Tyler Durden

Thu, 06/04/2020 – 19:05

While the country burns and millions of Americans scramble to figure out how they’re going to survive once supplemental unemployment benefits expire, Citadel founder Ken Griffin has just dropped a $100 million nut – nearly half the amount he dropped on a Central Park penthouse, and roughly equivalent to the cost of his wintertime Palm Beach Mansion – on a contemporary painting by American artist Jean Michel Basquiat, who died of a drug overdose in 1988.

Bloomberg‘s story about the purchase reported that Basquiat’s work focused on issues of “race and inequality”.

One of Griffin’s PR reps pointed out that the “the vast majority” of the Wall Street titan’s art collection was on display in museums.

“The vast majority of Ken’s art collection is on display at museums for the public to enjoy” said Zia Ahmed, a Citadel spokesman. He intends to share this piece as well.”

But Zero Hedge was unable to independently verify this.

The piece Griffin purchased, “Boy and Dog in a Johnnypump” (1982), was long considered a prized possession of newsprint magnate Peter Brant, but isn’t widely known to the public. According to BBG, values for Basquiat works have soared since the painter’s death in 1988. Three years ago, a Basquiat painting set a record for an American artist when it fetched $110.5 million at Sotheby’s auction.

News of the sale was first announced in an art world newsletter, though the newsletter didn’t identify the purchaser.

Griffin is notorious for a ~$800 million real-estate buying spree that spanned several years, culminating with his ~$240 million purchase of a penthouse on “Billionaire’s Row”.

We wouldn’t want this painting hanging in our foyer, but several other bidders vied with Griffin for the painting (as for why there might be such intense demand for art by a black American contemporary artist at the outset of a punishing recession, we’ll let readers parse that one on their own).

We suspect Griffin feels zero guilt about his big splurge. When asked why the younger generation has become so “disillusioned” with capitalism, Griffin blamed government intervention in the student loan market, one of several factors that has led to the ballooning economic inequality in the US.

Plus, thanks to the massive resurgence in Fed-induced economic inequality, Griffin and his fellow billionaires are still feeling the “wealth effect”. While more than 30 million Americans sign up for the unemployment rolls, the combined wealth of America’s billionaires jumped over 19% (or half a trillion) since the onset of the COVID-19 pandemic.

via ZeroHedge News Tyler Durden

Police Use Contact Tracing And Big Tech To Identify Protesters

Police Use Contact Tracing And Big Tech To Identify Protesters

Tyler Durden

Thu, 06/04/2020 – 18:45

Via Mass Private I blog,

Countless warnings about how law enforcement could use contact tracing apps to monitor people have gone unheeded.

As revealed, police are using contact tracing to identify protesters’ affiliations.

According to Minnesota Public Safety Commissioner John Harringon, officials there have been using what they describe, without going into much detail, as contact-tracing in order to build out a picture of protestor affiliations — a process that officials in the state say has led them to conclude that much of the protest activity there is being fueled by people from outside coming in.

A Twitter feed titled “Minnesota Contact Tracing” revealed how police are using contact tracing to identify and arrest protesters. “Minnesota Public Safety Commissioner John Harrington says they’ve begun contact tracing arrestees.”

Recently, 100 human rights groups warned that an Apple/Google contact tracing app could be used as a cover to identify activists and minorities.

An increase in state digital surveillance powers, such as obtaining access to mobile phone location data, threatens privacy, freedom of expression and freedom of association, in ways that could violate rights and degrade trust in public authorities—undermining the effectiveness of any public health response. Such measures also pose a risk of discrimination and may disproportionately harm already marginalized communities.

So despite all assurances to the contrary, it appears that 100 human rights groups were right; law enforcement can and will use contact tracing to identify protesters.

As NBC News noted, contact tracers also use geofencing to help identify protesters.

“Geofencing” captures the social media posts of people entering a specific area. The technology locates any cellphones that cross into the area by locking onto their geolocation systems, and then records social media posts and sometimes other data from the phones.

Time exposed how the military (National Guard) uses a classified system called “Secret Internet Protocol Router” or SIPR to monitor protesters. (To learn about Perspecta Inc.’s role click here & here.)

Big Tech’s hands are dirty with federal money paying for new ways to monitor Americans.

A recent Business Insider article describes how police use Big Tech to monitor activists and protesters the moment they walk out their door.

Law enforcement agencies have made full use of high-tech surveillance tools as protests sweep the country following the death of George Floyd. A predator drone operated by Customs and Border Patrol circled above protesters in Minneapolis.

Buzzfeed News warns,

law enforcement has a wide breadth of surveillance technologies that could be used to monitor and target protesters — including controversial facial recognition software Clearview AI, license plate readers, body cameras, and video analysis tools.

Both of these articles reveal a frightening array of Big Tech surveillance devices being used by police nationwide.

Minneapolis police and the Minnesota Fusion Center are also using Clearview AI, BriefCam, Ring doorbell cameras, Axon police body cameras, ShotSpotter and license plate readers to create an intimate view of people’s lives.

BuzzFeed’s article also revealed how police use Arxys “Milestone” software which uses video detection and analytics to identify people.

The Minneapolis Police Department said in a surveillance white paper that it uses Arxys [Milestone] software — a video management tool that claims to offer “video motion detection” and “video analytics” — to analyze CCTV footage.

While both articles do a great job of revealing some of the ways law enforcement can monitor anyone, it really did not go into detail about how invasive Big Tech’s surveillance devices truly are.

Let’s say you use your smartphone for everything; texts, phone calls, pictures, music, etc. — if you also use Alexa or a NEST thermostat or any smart device in your home, these devices collect, store and transmit all that personal data, which police can use to identify a person. Police can also identify people who use a tablet or laptop, because like a phone they have an IP and MAC address.

If you use any of these devices to make online purchases, police can ask those companies to provide details of what you bought and when. Anytime you use a credit/debit or customer rewards card, someone is compiling a database of everything you purchased.

Let’s say you drive or take public transit, police can track your vehicle and they can use facial recognition to identify where you work or which bus or train stops you use.

If you drive or take an Uber or Lyft, chances are your personal information is being recorded and used to build a massive database of your comings and goings. From the moment you step outside of your home, your neighbor’s Ring doorbell or Flock cameras have identified you, your family and your vehicle.

And if they are any social distance snitches in your neighborhood, they have recorded you and reported you to police via Ring Neighbors or Nextdoor.

Thanks to Big Tech, a person’s everyday life is no longer private. Now everything we do is being recorded in real-time. Things like what and where you eat, who your friends and family members are, who your family doctor is or where you worship are all available to law enforcement.

Despite what Big tech, politicians and law enforcement say, AI and smart devices are being used to identify activists and protesters.

via ZeroHedge News Tyler Durden

Daily Briefing – June 4, 2020

Daily Briefing – June 4, 2020

Tyler Durden

Thu, 06/04/2020 – 18:10

Senior editor Ash Bennington joins managing editor Roger Hirst to discuss the latest developments in macro, markets, and coronavirus. Bennington and Hirst talk about the trajectory of the global recovery and growth—specifically, they explore the exponential increase in the savings rate, the vicious cycle the Fed might find itself in as they continue to support asset prices, and the potential for “zombification” of corporations through misallocated capital. They also dive into how sentiment is currently driving financial markets, why passive investors may not be prepared for the air pockets of potential drawdowns, and how easy monetary policy actually encourages growth deflation. In the intro, Nick Correa analyzes today’s ECB announcement to expand its Pandemic Emergency Purchase Program (PEPP).

via ZeroHedge News Tyler Durden

Haseltine: Human COVID-19 Vaccine Trials Are Unnecessary, Uninformative, & Unethical

Haseltine: Human COVID-19 Vaccine Trials Are Unnecessary, Uninformative, & Unethical

Tyler Durden

Thu, 06/04/2020 – 18:05

Authored by William Haseltine via Project Syndicate,

I was recently stunned to learn of the serious consideration being given to deliberately infecting human volunteers with the SARS-CoV-2 virus in order to assess the effectiveness of potential COVID-19 vaccines.

My first reaction was that the advocates of such “human challenge studies” had gone so mad with panic that they had forgotten the history and horrors of medical experimentation on humans. But on closer inspection, I saw that they included some of the world’s most respected vaccine researchers and medical ethicists, and even the World Health Organization.

As far as I can tell, their principal argument is that waiting for an answer from naturally occurring infections will take too long. The new coronavirus has already infected 6.5 million people worldwide and killed more than 386,000, including 107,000 in the United States alone. And in the absence of safe, effective vaccines and treatments, measures aimed at controlling the virus’s spread are ruining economies around the world. The WHO’s recent white paper on the use of human subjects for vaccine research makes it clear that such trials are a desperate last resort.

Vaccines are indeed the most effective medications we have. Some have conferred long-term immunity against great scourges such as smallpox, polio, typhoid, diphtheria, typhus, and tetanus. But there are just as many diseases for which no truly effective vaccine exists, including HIV/AIDS, malaria, and tuberculosis. And some vaccines can do more harm than good, as attempts to develop a dengue vaccine have demonstrated.

Caveats notwithstanding, the rush to develop a COVID-19 vaccine that will definitively end the loss of life and stop the economic devastation has already produced more than 100 candidates, all in very early stages of development. With so many pharmaceutical companies and governments scrambling to get some skin in the game, each day seems to bring announcements of new programs, most of them unaccompanied by supporting data.

But deliberately infecting volunteers with SARS-CoV-2 to test the efficacy of vaccine candidates is unnecessary, uninformative, and unethical.

Why unnecessary?

Most vaccines are developed in the context of active epidemics. But one prominent British researcher recently opined that there is only a 50% chance that enough people in the United Kingdom will be infected with the virus for the University of Oxford vaccine field trial (as currently designed) to yield a statistically significant result. What a curious statement. Does it mean that the trial is too small, or too short, or that the Oxford team expects their vaccine to be only partly effective – or all three?

After all, there is no shortage of new infections. On an average day, close to 100,000 newly confirmed cases are reported worldwide, and I cannot recall another disease for which such a number was insufficient for a field trial of a drug or vaccine. Surely, with more time and patience, a real test is possible.

Moreover, the major departure from the norm entailed by human challenge studies presupposes a lack of alternative means to control the pandemic. But many East Asian countries, as well as some Nordic states, New Zealand, and Australia, have so far successfully controlled the virus in the absence of highly effective drugs or vaccines. And Wuhan, the Chinese city where it originated, is now essentially free of COVID-19, save for minor, containable flare-ups.

In each case, the relevant authorities have executed well-known, proven public-health measures: clear messaging, strong stay-at-home orders, vigorous disease detection, contact tracing, and mandatory supervised controlled isolation for all those exposed to the virus.

Although not every country is capable of implementing what works, all should try their best to control the pandemic through proven methods, rather than pinning their hopes on a vaccine that either will be slow in coming or may not work at all. In addition, medical ethicists should consider governments’ moral obligations to protect citizens through proper use of public-health measures, rather than by opening a Pandora’s box of unnecessary human experimentation.

Challenge studies are also uninformative. To the best of my knowledge, all current protocols for vaccine trials envisage enrolling only young, healthy adults. This is understandable from a recruitment perspective, but COVID-19 morbidity and mortality are highest among the elderly, who have a plethora of underlying chronic diseases.

Numerous studies have shown that vaccines that are effective among the young can fail in older populations – sometimes completely. Our bodies’ ability to respond to most, if not all, vaccines declines precipitously with age. Are today’s COVID-19 vaccine developers seriously entertaining the idea of trials that use a live virus in this vulnerable population?

Furthermore, preliminary studies using non-human primates have already shown that potential vaccines may not provide complete protection; when confronted with the virus, the vaccinated animals were spared serious infection of the lungs, but not of the nasal passages. The same was true of the wide variety of vaccine candidates previously developed for severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS), also coronaviruses. And the implications of partial protection for both community spread and human disease are not well understood.

Finally, human challenge trials are unethical. SARS-CoV-2 causes multi-system disease in about 20% of those infected, and the incidence may be even higher in challenge studies, given the large virus doses likely to be used. Infection may permanently damage the heart, lungs, brain, and kidneys, in the young as well as the old. Moreover, once someone is infected, there is no known drug that completely cures or even ameliorates COVID-19, much less reverses serious damage. And because it is extremely unlikely that all vaccine candidates will work in all trials, a number of volunteers will be permanently harmed.

If such trials are unnecessary, uninformative, and dangerous, then they are by definition unethical. I fear that in the rush to find a “medical miracle” to end the pandemic’s toll in human lives and livelihoods, we will jeopardize the centuries-old moral imperative to do no harm, possibly destroying trust in the integrity of science and medicine for generations to come. In that case, the losses we will face will be far greater.

*  *  *

William A. Haseltine, a scientist, biotech entrepreneur, and infectious disease expert, is Chair and President of the global health think tank ACCESS Health International.

via ZeroHedge News Tyler Durden

“Woke” NYT Staffers Revolt After Paper Publishes Tom Cotton’s ‘Send In The Army’ Column

“Woke” NYT Staffers Revolt After Paper Publishes Tom Cotton’s ‘Send In The Army’ Column

Tyler Durden

Thu, 06/04/2020 – 17:45

A long-simmering culture war at the New York Times, once the undisputed national paper of record, has burst into public view on Thursday as a group of young “woke” staffers at the paper denounced the opinion section’s decision to publish a column penned by GOP Sen. Tom Cotton urging President Trump to call in the military to restore order in cities across the US where violence and looting have broken out.

By now, more police officers have been killed since George Floyd’s murder after a Minneapolis police officer kneeled on his neck, cutting off circulation. An autopsy report blamed the officer’s decision to pin Floyd to the ground by his throat as the cause of death. The office is now facing second degree murder and manslaughter charges. But leftists continue to insist that all opposition to the looting in violence is a fascist dog whistle. Whether you think Cotton is an incorrigible fascist, or you agree with his position, the notion that a small but vocal minority of the body politic is pushing for the active suppression of political speech.

In a twitter thread, NYT columnist Bari Weiss – who has frequently attracted the ire of the “woke”/DSA/Bernie Bro faction, which hates “neoliberals” just as much as it hates “conservatives” (aka fascists, since everybody who isn’t a “democratic” socialist is a fascist, in their view) – explains the division between the younger “woke” reporters/staffers, and the older liberals, with executive editor Dean Baquet, the paper’s first black executive editor, caught in the middle.

Of course, many of the NYT reporters and staffers who denounced the op-ed also denounced their colleague’s take. One reporter even said the very decision to print the op-ed put the paper’s black reporters “in danger”.

In a post weighing in on the debate, the Columbia Journalism Review argued that Cotton’s views shouldn’t have been published because it was “built on lies”. However, the sections of the paper that it described as lies weren’t lies at all, but descriptions of the chaos across the country, recounted with perhaps a touch of hyperbole. But leftists frequently test the bounds of what’s believable, like when they accuse crime reporters of “spreading false narratives” when they report on black-on-black crime statistics.

The problem with this idea of the Times as an open forum for views of all stripes — no matter how abhorrent — is that by opening the door to all “operative opinion” (as a member of the Opinion section described it to me a couple of years ago), the Times becomes a platform for those who are hostile to its core values and at direct odds with the New York Times Company mission to “seek the truth and help people understand the world.”

The core problem with Cotton’s column, it seems to me, isn’t that its arguments are painful or dangerous (though they are those things too). It’s that it’s built on lies. “This week, rioters have plunged many American cities into anarchy, recalling the widespread violence of the 1960s,” it begins, before trotting out hyperbolic (and false) phrases like “the riots were a carnival for the thrill-seeking rich as well as other criminal elements,” “orgy of violence,” and “cadres of left-wing radicals like Antifa infiltrating protest marches.”

Recent days have been marked by looting and violence. But the violence has sometimes been prompted by the police themselves, and the incidents getting the most attention have been isolated to a few commercial districts. The areas around the protests (to say nothing of the entirety of “American cities”) have been relatively calm and peaceful. As Davey Alba, a Times reporter who covers misinformation, pointed out on Twitter, the paper’s news side has already reported how promoting claims of unbridled urban unrest is part of the “untruths, conspiracy theories, and other false information…running rampant online” and being pushed by Trump and his allies.

Remember: These are the same people who forced their employers to describe riots as “protests” and looters as “demonstrators” leading to jarring headlines like “Violence and looting rage as George Floyd protests lead to clashes with cops in several states”.

The notion that we can trust them to be arbiters of the truth as simply laughable.

via ZeroHedge News Tyler Durden