Auto Bust Triggers Sharp Slowdown In Global Manufacturing

Auto Bust Triggers Sharp Slowdown In Global Manufacturing

The gloom of the world is centered around auto manufacturing, which is dragging on the global economy, fuelling fears that a worldwide trade recession has already begun.

The first domino to fall has been auto manufacturing, already hitting a near-record low in August, reported the Financial Times.

New data from IHS Markit global car industry purchasing managers’ index shows some of the sharpest declines across all sectors, not seen since 2009.

IHS indices for industrial goods, machinery, equipment, metals, and mining fell below the 50 mark, indicating that executives saw their businesses contracting.

The Financial Times blames much of the global slowdown on the escalation of the US-China trade war and its disruption of complex supply chains that have led to depressed exports and lower overall trade volumes.

Global export volumes fell by 1.4% in June YoY, according to the CPB Netherlands Bureau for Economic Policy Analysis.

“The world trade slowdown has much to do with the manufacturing downturn,” said Adam Slater, lead economist at Oxford Economics.

World trade has contracted, which is quite unusual outside a recession period, and it might worsen.”

*chart world trade volume

Jennifer McKeown, head of global economics at Capital Economics, said, “machinery, metal, and auto vehicles have driven more than half of the slowdown in global manufacturing since it peaked at the end of 2017. That suggests that is closely related to the weakness in investment globally, which would have affected the demand for machinery.”

The epicenter of the downturn is likely Europe, and to be more precise, it started in Germany, a major exporter on the continent. Slowing demand for German cars, EU emission tests, stagnating regional economy, and concerns of a US-Europe trade war have all affected car manufacturers on the continent.

The auto manufacturing downturn is spreading quickly. Also seen in China, India, Japan, and now the US.

The US has finally contracted a cold, and it’s one that isn’t going away anytime soon. June manufacturing output fell on an annual basis in July, while the main sentiment index slid into the contraction in August.

In the US, “domestic activity has seemingly converged with the rest of the world in a full-scale downturn,” said Iaroslav Shelepko, an economist at Barclays.

The global manufacturing downturn is likely to persist through 1H20.

Global central banks are cutting rates aggressively to stave off a downturn. But loose monetary policy around the world could take upwards of a year to positively affect global manufacturing data.

The next shoe to drop will be global consumer sentiment – and for countries heavily reliant on consumers, such as the US, this could mean a further slowdown that is more broad-based could be seen in 2020.

Tyler Durden

Tue, 09/17/2019 – 20:05

via ZeroHedge News Tyler Durden

Johns Hopkins Professor On Child-Transgender Trend: “Many Will Regret This”

Johns Hopkins Professor On Child-Transgender Trend: “Many Will Regret This”

Authored by Maria Lencki via The College Fix,

Argues that doctors are doing treatment without evidence…

A psychiatrist from Johns Hopkins University has slammed the medical and psychiatric industries for what he says is reckless and irresponsible treatment of patients who claim to be transgender.

Paul McHugh, a renowned psychiatrist from Johns Hopkins University, told The College Fix he believes transgender people are being experimented on because the doctors treating transgender patients with hormones “don’t have evidence that (the treatment) will be the right one.” He also criticized the manner of treatment given to many children who claim to be transgender.

“Many people are doing what amounts to an experiment on these young people without telling them it’s an experiment,” he told The Fix via phone.

“You need evidence for that and this is a very serious treatment. It is comparable to doing frontal lobotomies.”

Vast majority of gender minorities report mental health issues

A recent study published in the American Journal of Preventive Medicine found that 80 percent of gender minority students report having mental health problems, nearly double the rate of “cisgender” students. McHugh believes that in many cases the patient’s gender dysphoria is precipitated by mental illness.

“I think their mental problems, often depression, discouragement are the things that need treatment,” not gender dysphoria, he argued.

“I’m not positive about this. It’s a hypothesis, but it is a very plausible hypothesis, and it would explain why many of the people who go on to have treatment of their body discover they are just as depressed, discouraged and live just as problematic lives as they did before because they did not address the primary problem,” he added.

Possible ‘contagion effect’

“I believe that these gender confusions are mostly being driven by psychological and psychosocial problems these people have. That explains the rapid onset gender dysphoria Lisa Littman has spelled out,” McHugh said.

The Lisa Littman to whom the professor referred is a researcher at Brown University, who last year published a bombshell report suggesting that some transgender-identified children might suffer from “rapid onset gender dysphoria,” a phenomenon in which “one, multiple, or even all of the friends [in a group] have become gender dysphoric and transgender-identified during the same timeframe.”

There was significant backlash following Littman’s publication of the study, after which Brown censored the report. The study was eventually validated with its results unchanged.

Long-term effects of child transgender treatment

Asked about the possible long-term consequences of the growing practice of helping children develop transgender identities, including with hormones, McHugh expressed pessimism.

“They’re going to be in the hands of doctors for the rest of their lives, many of them are going to be sterilized not able to have their own children, and many will regret this,” McHugh said.

“Can you imagine having a life where you need to seek doctors all the time, for everything, just to live? Getting your hormones checked, getting everything checked. That is something doctors should like to spare people of,” he added.

McHugh thinks that eventually our society will look back on this craze as something of an historical shame. “I believe it will be something like how we think of eugenics now. We will come to regret it when we discover how many of the young people that were injured regret it themselves,” he told The Fix.

The doctor stressed that medical professionals should stick to a higher standard of evidence when considering treatment for individuals who claim a transgender identity.

“You can think whatever you want without proof. Be my guest. You can think anything you want, if you like it that way. But don’t ask me as a doctor to prescribe hormones or operate on you when I try to do things which are for your benefit,” he said.

“My aim isn’t to stop people. It’s when they draw medical people in. That’s when I insist on evidence and what makes more sense.”

Tyler Durden

Tue, 09/17/2019 – 19:45

via ZeroHedge News Tyler Durden

“Desperate To Come Home”: American Siblings Trapped By China’s “Exit Ban” For More Than A Year

“Desperate To Come Home”: American Siblings Trapped By China’s “Exit Ban” For More Than A Year

Victor and Cynthia Liu, two American siblings, have been trapped in China for more than a year due to a so-called “exit ban” by the Chinese government. They are growing increasingly “desperate and despondent” because Chinese authorities continue to prevent them from leaving the country, according to USA Today

David Pressman, the siblings’ New York-based attorney said: 

“They are trapped. They are alone. They are desperate to come home.”

The situation is similar for another American citizen, Huang Wan, who says that Chinese officials are using a “fake” legal case against her to prevent her from returning to the United States. Australian resident Yuan Xiaoliang has also been prevented from leaving China for more than 8 months after her husband, also an Australian citizen, was arrested on “suspicion of spying”. 

Cynthia and Victor Liu

The U.S. State Department continues to warn about China’s use of “exit bans”, stating that the Chinese government has used them in the past to keep Americans in China for years. 

In a January 2019 statement, the State Department said: “China uses exit bans coercively to compel U.S. citizens to participate in Chinese government investigations, to lure individuals back to China from abroad, and to aid Chinese authorities in resolving civil disputes in favor of Chinese parties.”

Thomas Kellogg, executive director of the Center for Asian Law at Georgetown University Law Center, said:

“China has long used exit bans to stop its own citizens from leaving the country, particularly human-rights activists or other dissidents. But authorities are increasingly using the tactic to harass Americans and other foreign nationals, particularly those of Chinese descent.

He continued: “We don’t have firm numbers in terms of exactly how many people, on either the Chinese side or the international side, have been subjected to exit bans … but we know that the number is quite large.”

He estimates that “thousands” of Chinese citizens have been subject to exit bans in recent years.

The trade war with the United States isn’t helping, nor are President Xi Jinping’s efforts to consolidate power by purging opponents by claiming “corruption”, repressing Muslims and doing away with term limits.  

Cynthia Liu, in video where she pleas for help

Robert Manning, a senior fellow at the Atlantic Council, a Washington-based foreign policy think tank said: “It’s a very ominous way of governing. The use of exit bans is one element of it.”

The State Department says it can’t disclose the total number of Americans being held by exit bans, but it did say that Chinese authorities have “broad authority” to prevent U.S. citizens from leaving China. 

A State Department official said: “U.S. officials, including the Secretary of State, regularly raise the issue of exit bans with the Chinese government and will continue to do so until we see a transparent and fair process.”

But the Liu siblings are instead being used as “a crude form of human bait” to lure their estranged father, Liu Changming, back to China. Liu has been accused by the Chinese government of being involved in a $1.4 billion fraud and he fled China in 2007. He is no longer in touch with his family.

Cynthia Liu said in a video she recorded in May 2019: “This man abandoned my family many years ago. We are not in touch with him, nor do we have any way of contacting him.”

The Liu siblings traveled to China in June 2018 with their mother to visit an elderly relative. Victor Liu was planning on starting his sophomore year at Georgetown and Cynthia was set to return to her consulting job in New York. But the sibling’s mother, Sandra Han, was detained during the trip and her children were barred from returning to the U.S.

The siblings are allowed to move around China, but can’t leave the country. 

Huang Wan’s case is similar in nature, Pressman said: “She hasn’t been accused of any crime. She seems to have been subject to an exit ban merely because of her association with political figures who have been disgraced and purged.”

Huang’s husband and her father-in-law were charged and convicted in corruption cases. Huang was detained and held for several years after being placed on probation. She was supposed to be set free this summer, but instead she fell victim to an exit ban. 

U.S. based China Change, a group that provides information on human rights in China, said: “On June 6, Ms. Huang, an American citizen since 1998, completed her probation and was finally free. But just days before her long-awaited freedom, a civil case involving a lease dispute was brought against her which she described to her lawyer Chen Jiangang as ‘fictitious’ and designed to prevent her from leaving China.”

Feng Chongyi, an associate professor of China Studies at the University of Technology in Australia, concluded: “China’s security forces have used exit bans more and more frequently because this punishment can apply to a very large number of people with little administrative costs.”

He said of his own detention in China in 2017: “I was extremely lucky to receive overwhelming international media campaign and immediate high level intervention from governments of Australia and the US.”

Tyler Durden

Tue, 09/17/2019 – 19:25


via ZeroHedge News Tyler Durden

U.S. And Russia Battle It Out Over This Huge Iraqi Gas Field

U.S. And Russia Battle It Out Over This Huge Iraqi Gas Field

Authored by Simon Watkins via,

With the U.S, Russia, and China all jostling for position in Iraq’s oil and gas industry both north and south, Iraq’s oil ministry last week reiterated its desire to have one or more foreign partners in the Mansuriya gas field. Situated in Diyala province, close to the Iran border, Mansuriya is estimated to hold around 4.6 trillion cubic feet of natural gas, with plateau production projected at about 325 million standard cubic feet per day.

For the U.S., encouraging Iraq to optimise its gas flows so that it reduces its dependency for power from Iran is the key consideration.

For Russia, Rosneft essentially bought control of the semi-autonomous region of Kurdistan in northern Iraq in November 2017, so power in southern Iraq figuratively will complete the set.

Securing oil and gas contracts across all of Iraq will allow Russia to establish an unassailable political sway across the entire Shia crescent of power in the Middle East, stretching from Syria through Lebanon (by dint of Iran), Jordan, Iraq (also helped by Iran), Iran itself, and Yemen (via Iran). From this base, it can effectively challenge the U.S.’s vital oil, gas, and political ally in the region – Saudi Arabia. China, in the meantime, is operating to its own agenda in South Pars Phase 11 and its West Karoun holdings.

Iraq, like Turkey, is still – nominally at least – not committing to either the Russia or the U.S., preferring to play each off against the other for whatever they can get, and the same applies in microcosm to the field of Mansuriya. Turkey itself was a key player in this gas field through its national oil company Turkiye Petrolleri Anonim Ortakligi (TPAO) until the middle of last year – holding a 37.5 per cent stake – along with the Oil Exploration Company (25 per cent), Kuwait Energy (22.5 per cent), and South Korea’s KOGAS (15 per cent).

TPAO had signed the original development deal for Mansuriya back in 2011, promising Iraq’s oil ministry that it could be trusted to reach plateau production within 10 years at most, a senior figure in the ministry told last week. This was not an unreasonable schedule, for which TPAO would be remunerated US$7.00-7.50 per barrel of oil equivalent, a relatively generous amount compared to many of the previous awards from the ministry. TPAO agreed that the first phase would mean production of at least 100 million cubic feet a day within 12 months from the signing date.

Unsurprisingly, given the rise of Islamic State at the time, TPAO suspended all operations on Mansuriya in 2014, but more surprisingly was that it refused to resume development work in September 2017 when asked to do so by then-oil minister, Jabar al-Luaibi. There were many subsequent requests from the ministry to TPAO to resume work before the ministry rescinded the contract last July.

As it stands, Iraq’s oil ministry has made it clear that it needs Mansuriya to be properly up and running and gradually increasing production towards the 325 million standard cubic feet per day figure so that it can be used as a feedstock for the country’s calamitous power sector. Peak summer power demand every year exceeds domestic generation capacity, frequently leading to up to 20 hours per day of blackouts in many areas. Without Mansuriya and similar gas fields coming online, this will get worse, as Iraq’s population is growing at a rate of over one million per year, with electricity demand set to double by 2030, according to the International Energy Agency.

This supply-demand imbalance has resulted in Iraq’s being dependent on neighbouring Iran for a considerable amount of gas and electricity imports – around one third of its total energy supplies, in fact. Specifically, Iraq pipes in up to 28 million cubic metres of Iranian gas a day for power generation and also directly imports up to 1,300 megawatts of Iranian electricity. Even the U.S. has been forced to grant waivers for Iraq to continue to do this, given the absence of other options currently.

Playing the game of pitting one side against the other for optimal gain, the Secretary General of the Iran-Iraq Joint Chamber, Seyed Hamid Hosseini, stated recently that Iran’s gas and electricity exports to Iraq are expected to reach US$5 billion by the end of the current Iranian calendar year, ending on 21 March 2020. This comment was made at the same time as a U.S. consortium led by Honeywell signed a memorandum of understanding for a deal that would reduce the country’s current level of gas flaring by nearly 20%. Part of this deal included processing associated gas at the Siba gas field, the original deal for which was also done in 2011 and also with TPAO.

In the running at the time for both fields was Russia. So interested is it in securing gas sites in north and south Iraq, which it will eventually be able to move via its vast pipeline capabilities and networks, that even before the latest announcement on Mansuriya’s availability was made public, Gazprom Neft (the oil arm of Russia’s gas giant, Gazprom) communicated to Iraq’s current oil minister, Thamir Ghadhban, that it was ‘very interested’ in taking a role in the Mansuriya field.

“Gazprom Neft often acts as the point man for Gazprom in initial conversations, as it is a slick, well-run, Western-style company, whereas Gazprom is a bit more old-style Soviet,” said the Iraq source. “It [Gazprom Neft] also made it clear that it would be interested in other sites, such as Siba,” he added. “It should be remembered that Gazprom was in the prime position to develop the other key gas fields of North Pars, Kish, and Farzad A and B before the U.S. withdrew from the JCPOA [Joint Comprehensive Plan of Action] last year,” he concluded.

Tyler Durden

Tue, 09/17/2019 – 19:05

via ZeroHedge News Tyler Durden

Brazil Experiment May Have Accidentally Created Genetically-Modified Super Mosquitos

Brazil Experiment May Have Accidentally Created Genetically-Modified Super Mosquitos

An experiment to deliberately release genetically modified mosquitos into Brazil appears to have failed miserably – and may have even resulted in ‘super-mosquitos’ according to a Yale research study published earlier this month. 

During a 27-month experiment aimed at curbing the spread of Yellow Fever, Dengue, Zika and other mosquito-borne diseases, approximately 450,000 male “OX513A” mosquitos modified by UK biotech company Oxitec were released into the wild in 2013. Females who mate with the designer mosquitos produce non-viable offspring, while Oxitec said that the man-made modifications wouldn’t make it into the local insect population.


While the experiment initially proved a success – dramatically reducing mosquito populations in the Brazilian city of Jacobina by up to 85%, the mosquitos adapted. 

“The claim was that genes from the release strain would not get into the general population because offspring would die,” said professor of ecology and evolutionary biology, Jeffrey Powell. “That obviously was not what happened.”

What’s more, the OX513A genes were passed on to offspring that was able to reproduce anyway. 

Around the 18-month mark, the number of mosquitos returned to pre-release levels, while females opted to avoid mating with the weaker, genetically-modified mosquitos at the same time in a phenomenon known as “mating discrimination” according to Powell. 

According to the paper, some of the mosquitos likely have “hybrid vigor,” resulting in “a more robust population than the pre-release population” which may be more resistant to insecticides. 

Oxitec told Gizmodo that the Yale study “was found to contain numerous false, speculative and unsubstantiated claims and statements about Oxitec’s mosquito technology,” and provided a three-page document outlining the company’s issues with the research. In particular, Oxitec notes that the paper fails to identify any “negative, deleterious or unanticipated effect to people or the environment from the release of OX513A mosquitoes.”

According to Oxitec, the “OX513A self-limiting gene does not persist in the environment,” and that the “limited 3-5% survival of the OX513A strain means that, within a few generations, these introduced genes are completely eliminated from the environment.

Oxitec also disputes the researchers’ claim that female mosquitoes began to avoid mating with modified males, saying, “Selective mating has never been observed in any releases of close to 1 billion Oxitec males worldwide. The authors provide no data to support this hypothesis.” –Gizmodo 

Meanwhile, according to German outlet Deutsche Welle, the failure of Oxitec’s experiment has raised alarm among scientists and environmentalists. 

Biologists critical of genetic engineering go one step further with their criticism, among them the Brazilian biologist José Maria Gusman Ferraz: “The release of the mosquitos was carried out hastily without any points having been clarified,” Ferraz told the newspaper Folha de S. Paulo.

The Munich-based research laboratory Testbiotech, which is critical of genetic engineering, accuses Oxitec of having started the field trial without sufficient studies: “Oxitec’s trials have led to a largely uncontrollable situation,” CEO Christoph Then told the German Press Agency, dpa. “This incident must have consequences for the further employment of genetic engineering”, he demanded.

Mosquito-borne diseases are a massive health problem in developing countries, and of increasing concern in developed regions such as the southern United States. 

Tyler Durden

Tue, 09/17/2019 – 18:45

via ZeroHedge News Tyler Durden

Is The Trump Administration Losing The Narrative Battle Over Iran?

Is The Trump Administration Losing The Narrative Battle Over Iran?

Authored by Caitlin Johnstone via,

I’m expected to write something about the Trump administration’s warmongering against Iran over an attack on a Saudi oil refinery, because that’s typically what I do in this ongoing improvisational exercise of mine: I write about the behavior of the US war machine and the propaganda that is used to bolster it. It’s what my readers have come to expect. But honestly I find the whole thing extremely tedious and I’ve been putting off writing about it for two days.

This is because from a propaganda analysis point of view, there’s really not much to write about. The Trump administration has been making bumbling, ham-fisted attempts at manufacturing public support for increasing aggressions against Iran since it initiated withdrawal from the JCPOA a year and a half ago, yet according to a Gallup poll last month Americans still overwhelmingly support diplomatic solutions with Tehran over any kind of military aggression at all. In contrast, most Americans supported a full-scale ground invasion of Iraq according to Gallup polls taken in the lead-up to that 2003 atrocity. With the far less committed Libya intervention, it was 47 percent supportive of US military action versus 37 percent opposed.

That’s the kind of support it takes to get a US war off the ground these days. And it’s going to take a lot more than a busted Saudi oil refinery to get there, even in the completely unproven event that it was indeed Iran which launched the attack.

The reason I’m able to spend so much time writing about war propaganda as part of my job is because war propaganda is happening constantly, and the reason war propaganda is happening constantly is because it’s absolutely necessary for the perpetuation of the US-centralized empire’s slow-motion third world war against unabsorbed governments. In other words, the propaganda apparatus of the empire works constantly to manufacture consent for military aggressions because it absolutely requires that consent.

When I say that the imperial war machine requires public consent before it can initiate overt warfare, I’m not saying that the US government is physically or legally incapable of launching a war that the public disapproves of, I’m saying that it is absolutely essential for the drivers of empire to preserve the illusion of freedom and democracy in America. People need to feel like their government is basically acting in everyone’s best interest, and that it is answerable to the will of the electorate, otherwise the illusion of freedom and democracy is shattered and people lose all trust in their government and media. If people no longer trust the political/media class, they can’t be propagandized. Without the ability to propagandize the masses, the empire collapses.

So out of sheer self-interest, establishment power structures necessarily avoid overt warfare until they have successfully manufactured consent for it. If they didn’t do this and chose instead to take off the nice guy mask, say “Screw you we’re doing what we want,” and start butchering Iranians at many times the cost of Iraq in both money and in American lives lost, people would immediately lose trust in their institutions and the narrative matrix which holds the whole thing together would crack open like an egg. From there revolution would become an inevitability as people are no longer being successfully propagandized by the establishment narrative managers into believing that the system is working fine for everyone.

Think about it: why else would the mass media be churning out propaganda about disobedient governments like Iran, Venezuela, Syria, Russia and China if they didn’t need to? They need the citizenry they’re charged with manipulating to consent to important geostrategic imperialist maneuvers, or they’ll break the hypnotic trance of relentless narrative control. And make no mistake, maintaining narrative control is the single highest priority of establishment power structures, because it’s absolutely foundational to those structures.

This is why the warmongers have been favoring economic warfare over conventional warfare; it’s much easier to manufacture support for civilian-slaughtering starvation sanctions. It’s slower, it’s sloppier, and it’s surely a lot less fun for the psychopaths in charge, but because the public will consent to economic sanctions far more readily than ground invasions or air strikes, it’s been the favored method in bringing disobedient governments to their knees. That’s how important manufacturing consent is.

So a bunch of drama around a Saudi oil refinery isn’t going to do the trick. The US government is not going to leap into an all-out war which would inevitably be many times worse than Iraq based on that, because they can’t manufacture consent for it right now. All they’re trying to do is escalate things a bit further with the goal of eventually getting to a point where Iran either caves to Washington’s demands or launches a deadly attack, at which point the US can play victim and the mass media can spend days tearfully running photos of the slain US troops. If that happens they might gain their consent from the public. If not, we may see them get a little more creative with their “crisis initiation”.

Until then this is a whole lot of noise and very little signal, which is why I find this current circus uninteresting to write about. It seems like every week now the Trump administration is trotting out some new narrative with the help of the mass media explaining why the Iranian government is evil and must be toppled, and nobody buys it because it’s on the other side of the damn planet and it’s always about something silly like oil or broken drones. Their unappealing pestering about this is starting to remind me of a really awkward loser who’s constantly asking out the prettiest girl in the office over and over again; you just want to pull him aside and say dude, stop. She’s just not into you.

I think I’m going to stop paying as much attention to these high-noise, low-signal Trump foreign policy dances and wait until I actually see a hard, tangible thing to run commentary on instead, particularly with Iran. With the narrative battle still so far from success it’s entirely likely that such an event will not occur until at least 2021, possibly under a President Warren whose warmongering will be cheered on as a historic victory for women everywhere.

Until then, just remember: they’re trying to manufacture your consent because they need it. So don’t give it to them. Make sure others don’t, either.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, throwing some money into my hat on Patreon or Paypalpurchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permissionto republish or use any part of this work (or anything else I’ve written) in any way they like free of charge.

Bitcoin donations:1Ac7PCQXoQoLA9Sh8fhAgiU3PHA2EX5Zm2

Tyler Durden

Tue, 09/17/2019 – 18:25


via ZeroHedge News Tyler Durden

Furious WeWork Employees Blame CEO’s “Outsized Personality” For IPO’s Collapse

Furious WeWork Employees Blame CEO’s “Outsized Personality” For IPO’s Collapse

Now that WeWork has finally acquiesced to growing chorus of investment firms and bankers calling for the company to shelve its deeply troubled IPO, which it did this morning (the offering is slated to take place in October “at earliest”), CEO Adam Neumann would like his employees, and the general investing public to know something: He found the experience of watching four-fifths of his company’s valuation evaporate during a string of media reports “humbling.”

According to the Financial Times, Neumann expressed this sentiment during a webcast on Tuesday for company employees, and added that he needs more time to deepen his understanding of how a public company is supposed to be run. The 40-year-old founder, who has been lampooned as a “caricature” worthy of the TV show “Silicon Valley”, said that while he knows how to run a private company, he hadn’t received enough “feedback” to understand what needed to change.

Unsurprisingly, some employees who have clashed with Neumann in the past are finding it hard to forgive the CEO. One employee who worked closely with Neumann in the past said his “outsized personality” played a “huge role” in derailing the offering.

But there was little mia culpa in Neumann’s feeble attempt at contrition was leaked to the press just as the company’s bonds were taking another beating on Tuesday. WeWork, which has burned through billions of dollars in private financing over the past 10 years and never turned a profit, had lined up a $6 billion credit facility from a group of syndicate banks. But the loan was contingent on the successful completion of an IPO, which would have netted WeWork another $3 billion.

Without another influx of capital, WeWork could swiftly find itself on the cusp of a liquidity crisis, as it continues to burn $2 for every $1 in revenue. During the first half of 2019, the company reported operating cash outlays of $2.6 billion, nearly matching its cash burn for the entirety of 2018.

But WeWork’s biggest backer, the Japanese telecoms firm/VC megafund Soft Bank, demanded that WeWork delay the listing after potential investors expressed extreme trepidation about buying into the offering, particularly during such a fragile market that has already seen its fair share of embarrassing IPO flops by “unicorns” like Uber and Lyft.

Adam Neumann

Circling back to the webcast, Neumann was joined by his co-founder, Miguel McKelvey, who is also the company’s “chief culture officer”, as well as Artie Minson, WeWork’s CFO.

Many analysts who have been tracking WeWork doubt that a few months’ delay will make much of a difference. One analyst insisted that he’s never seen such a distinct lack of enthusiasm for such a wildly hyped-up startup.

John McClain, a portfolio manager at Diamond Hill Capital Management, said he could not remember another unicorn – a privately held start-up valued at more than $1bn – having “zero support from either debt or equity investors.”

“Their borrowing model is seriously in question at this point,” he added. “There is not a level that we could become interested in owning this company based on the business, the governance, and the financial statements.”

Thanks to the WeWork business model’s “susceptibility to recession,” it’s extremely likely that whenever it raises money next, whether in the private or public markets, that WeWork’s valuation wouldn’t exceed $10 billion.

Barry Oxford, an analyst at brokerage DA Davidson, said the value of the company was likely to fall below $10 billion given its “susceptibility to a recession, current cash burn rate, corporate structure, and corporate governance.”

Neumann tried to assuage investors’ concerns about the firm’s governance, which delegated a tremendous level of control to Neumann and his wife, Paltrow-cousin Rebekah Neumann, by reducing the voting power of his special Class B and C shares, along with a few other relatively minor concessions. That, apparently, wasn’t enough.

For all we know, the tweet below could prove eerily prescient (it doesn’t sound like much of a departure from where we are right now).

And who knows what scandals or other issues (like, say, malfunctioning equipment) could rock the company in the interim?

Maybe a buyout is the best Neumann can hope for?

Tyler Durden

Tue, 09/17/2019 – 18:05

via ZeroHedge News Tyler Durden

“The ‘Bots Are Coming For The Priests”

“The ‘Bots Are Coming For The Priests”

Via Global Macro Monitor,

Good, God!

  • A mechanical ‘priest’ has recently begun conducting Buddhist prayers in Japan. It is not the first attempt to deliver religious teachings and advice through the use of a programmed machine.

  • And Catholic Christians may soon find spiritual advice from a tiny 40-cm robot SanTO, developed by Gabriele Trovato, a roboticist and assistant professor at Japan’s Waseda University, after Trovato finishes perfecting his device in Peru.

  • In Germany, there is a BlessU-2 robot that looks like a hybrid between an ATM terminal and US comic Jeff Dunham’s puppet of Ahmed the Dead Terrorist. The robot is reportedly designed to engage in philosophical debates about the future of religion and the potential of artificial intelligence.  – Sputnik International

Just think of the coming spike in moral dilemmata.

Here’s one, for example.

  1. Does confessing sins of adultery with a sex robot to a robotic priest absolve you of sin?

  2. Is the affair with the robot adultery?

Tyler Durden

Tue, 09/17/2019 – 17:45

via ZeroHedge News Tyler Durden

Trump Reveals His Top 5 Names To Replace John Bolton

Trump Reveals His Top 5 Names To Replace John Bolton

President Trump Tuesday afternoon revealed to reporters his short list of candidates to replace former national security adviser John Bolton. He presented his “top 5 candidates” which had been whittled down from 15 he was previously reported to be considering. 

Per Axios the finalists are:

  • Top hostage negotiator Robert O’Brien

  • Former deputy national security adviser Ricky Waddell

  • Department of Energy Under Secretary for Nuclear Security Lisa Gordon-Hagerty

  • Bolton’s former chief of staff Fred Fleitz

  • Vice President Mike Pence’s national security adviser Keith Kellogg.

Image source: Bloomberg/Getty

Obviously the choice comes at a very sensitive point, given this week’s Saudi Aramco attacks and a potential crisis for global oil markets, and after a summer of escalating tensions with Iran which has put Washington and Tehran on a path to war. 

There’s also a potential changing of the guard in Israel, with a major election unfolding on Tuesday which could make or break Prime Minister Benjamin Netanyahu and his hawkish Likud Party.

The US has further seen relations with NATO member Turkey at a historic low point, as well as deeply uncertain and worsening future relations with Moscow, which remains a big question mark. And further there’s the Afghan quagmire, now almost at two decades, which the US can’t seem to get out of.

A CNN infographic published last week included most of the names Trump on Tuesday said made up his short-list; however, Robert O’Brien and Lisa Gordon-Hagerty appear unexpected mentions as part of Trump’s “top 5”. 

Following Bolton’s departure, the new national security adviser will be Trump’s 4th in less than 3 years.

Tyler Durden

Tue, 09/17/2019 – 17:25


via ZeroHedge News Tyler Durden

Markets That Live By The Fed, Die By The Fed

Markets That Live By The Fed, Die By The Fed

Authored by Charles Hugh Smith via OfTwoMinds blog,

The “everything bubble” is not permanent.

All eyes are again on the Federal Reserve, as everyone understands that the Fed is the market— the stock market, the bond market, the art market, the housing market, etc. All markets have been driven higher by one force: central bank money creation and distribution to the financial sector of financiers and corporations, the richest of the rich.

What few seem to grasp (because they’re paid not to?) is the Fed is powerless over what actually matters in a healthy economy:

1. The Fed is powerless to create productive, profitable ventures for capital to invest in. Productivity has gone nowhere in the Fed’s reign while speculative profits leveraged by the Fed’s free money for financiers have soared.

2. The Fed is powerless to raise wages. Despite ginned-up claims that wages are finally rising 3% a year after a decade of stagnation, wages are still losing purchasing power once real-world inflation is factored in.

3. The Fed cannot force creditworthy households and enterprises to borrow more money, nor can they stop banks from lending to the only people who want to borrow more money, those who are credit risks, i.e. borrowers who will default at the first spot of bother.

4. The Fed is powerless to stop the New Gilded Age consequences of their policies via The Cantillon Effect: it’s not just how the money is created, but how it’s distributed. Those who get the Fed’s nearly free money can use it to buy productive assets and pursue speculations such as stock buy-backs, while everyone else who didn’t get a single dollar of the Fed’s trillions experiences a loss of purchasing power as the Fed’s new money expands the money supply without actually expanding the real economy.

The only power the Fed has is to incentivize profiteering via stock buy-backs and speculations of the super-wealthy–the power, in other words, to create a New Gilded Age of obscene wealth inequality.

The Fed’s New Gilded Age is generating political blowback, and eventually the masses will awaken to the fact that the Fed is the enemy of the people because it is the sole enabler of the unproductive, parasitic, predatory corporate/insider class that’s skimmed something like 87% of all the “wealth” “created” by the Fed’s policies.

The Fed has created an economy in which capital has been stripped of low-risk yield. All capital must become gambling chips in the casino to earn a return, but gambling is intrinsically risky, and the asymmetry between the risk–rising–and the return–increasingly paltry–is setting the markets up for a fall the Fed is powerless to stop, and a political blowback to the Fed’s New Gilded Age that is it equally powerless to stop.

Markets that live by the Fed also die by the Fed. The Fed’s abject, pathetic powerlessness over what actually matters will be revealed in the years ahead, and everyone will look back on the decades in which the Fed was viewed as god-like as a form of mass delusion.

The “everything bubble” is not permanent. Gambling is risky, and the Fed has rigged the world’s largest casino to benefit its banking / financier / corporate cronies. But bubbles burst for reasons outside the control of the Fed, a reality that’s about to become undeniable.

*  *  *

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format. My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF). My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

Tyler Durden

Tue, 09/17/2019 – 17:05

via ZeroHedge News Tyler Durden