Tag: finance

Authored by Mike Krieger via Liberty Blitzkrieg blog,

We find ourselves at a moment where the financial and political systems that have dominated for decades are failing in a spectacular and irredeemable fashion. Those who pull the levers are (as usual) attempting to take advantage of the situation by rapaciously snatching and consolidating more wealth and power, while leaving the general public to rot. When faced with such a historic moment, one should assume a certain degree of responsibility to make sure the next paradigm ends up better than the one we’re leaving. If we fail to think deeply about an improved vision and framework for the future, someone else will do it for us.

From my perspective, humanity remains stuck within antiquated paradigms that generally function via predatory and authoritarian structures. We’ve been taught — and have largely accepted — that the really important decisions must be handled in a centralized manner by small groups of technocrats and oligarchs. As a result, we basically live within feudal constructs cleverly surrounded by entrenched myths of democracy and self-government. We’d prefer to be lazy rather than take any responsibility for the state of the world.

Empires are not democratic.
The U.S. is an empire.
The idea the U.S. is a democracy is a myth. https://t.co/LlCvzbgzbL

— Michael Krieger (@LibertyBlitz) April 20, 2020

We’re now at a point where simply recognizing current structures as predatory and authoritarian isn’t good enough. We require a distinct and superior political philosophy that can appeal to others likewise extremely dissatisfied with the status quo. My belief is humanity’s next paradigm should swing heavily in the direction of decentralization and localism.

Decentralization and localism aren’t exactly the same, but can play well together and offer a new path forward. The simplest way to describe decentralization to Americans is to look at the political framework laid out in the U.S. Constitution.

As discussed in the 2018 piece, The Road to 2025 (Part 4) – A Very Bright Future If We Demand It:

At the federal level, a separation of powers between the three branches of government: the legislative, the executive and the judicial was a key component of the Constitution. The specific purpose here was to prevent an accumulation of excessive centralized power within a specific area of government…

Beyond a separation of powers at the federal level, the founding founders made sure that the various states had tremendous independent governance authority in their own right in order to further their objective of decentralized political power.

Localism takes these Constitutional ideas of political decentralization and pushes them further, by viewing the municipality or county as the most ethical and logical seat of self-governance. The basic idea, which I tend to agree with, is that genuine self-government does not scale well. A one-size fits all approach to governance not only ends up making everyone unhappy, it also entrenches a self-serving political and oligarchical class at the top of a superstate which makes big decisions for tens, if not hundreds of millions, with little accountability or oversight. This is pretty much how the world functions today.

While localism implies relative political decentralization, decentralization is not always localism. One of the best examples of this can be found in bitcoin. Unlike traditional monetary policy, which is handled in a topdown manner by a tiny group of unelected technocrats working on behalf of Wall Street, there’s no bitcoin politburo. There’s no CEO, there’s no individual or organization to call or pressure to dramatically change things out of desire or political expediency. The protocol is specifically designed to prevent that. It’s designed to operate in a way that makes all sorts of people uncomfortable because they’re used to someone “being in control.” We’ve been taught that centralization works well, but the reality is political and economic centralization concentrates power, makes the public lazy and ultimately winds up in a state of authoritarian feudalism.

Bitcoin also demonstrates how decentralization and localism, though not quite the same, can complement each another well in an interconnected planet. Imagine a world where governance is largely occurring at a local level, but global trade remains desirable. You’d want a politically neutral, decentralized and permissionless money to conduct such transactions. Similarly, a free and decentralized internet allows the same sort of thing in the realm of communications. Regions that can’t grow coffee will still want coffee, and people in New York will still want to chat with people in Barcelona. Decentralized systems allow for the best of both worlds — localism combined with continued global interconnectedness.

The big question all of us should be asking ourselves right now is: When should small groups of people be making extremely important decisions for the masses? My answer would be almost never, yet that’s the world most of us live in irrespective of which nation-state we call home.

The pendulum has swung so far in the direction of centralization, oligarchy and authoritarianism that the whole thing is breaking down down under its own weight.

Those in charge are doing everything possible to keep it going in that same direction, but we can’t let that happen. What we need is a new era defined by decentralization and localism.

*  *  *

For more, see my 5-part series on localism.

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In a stunning turn of events, late on Monday, president Trump tweeted that “In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!”

In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!

— Donald J. Trump (@realDonaldTrump) April 21, 2020

Trump did not offer specifics, such as the time frame or the scope of who would be affected.

As some noted, Trump’s decision to escalate the US response to the coronacrisis is at odds with his desire to rush in reopening the country:

Trump, who says the country is ready to begin reopening, says the crisis is so bad that he is signing an order to “temporarily suspend immigration into the United States!”

— Peter Baker (@peterbakernyt) April 21, 2020

And while we wait for more details, we wonder if this executive order will be followed by Trump canceling the November elections.

Update (2252ET): Futures rebounded sharply after South Korea’s Yonhap refuted reports that Kim Jong Un is seriously ill.

Yonhap cites an official as saying there’s no particular sign pointing to Kim Jong Un being in grave danger. The Korean rumor about a coma is exactly the same as one from 2014. While it’s indeed odd Kim didn’t show up on April 15, we should calm down. https://t.co/yZ2tJDC71N pic.twitter.com/Ep5cAlZDs8

— Sam Kim (@samkimasia) April 21, 2020

Update (2240ET): Bloomberg is now reporting that Kim is in a ‘critical state,’ according to a US official speaking on condition of anonymity.

US officials are now studying the North Korean line of succession.

Trump administration officials are looking into who would be in the line of succession if Kim Jong Un dies or is already dead, I’m told.

— Jennifer Jacobs (@JenniferJJacobs) April 21, 2020

S&P futures are sliding on the reports.

Update (2215ET): NBC’s Katy Tur was quick to respond to being scooped by CNN and tweeted the following:

“@KatyTurNBC

🚨 North Korean leader Kim Jong Un is brain dead, according to two US officials. He recently had cardiac surgery and slipped into a coma, according to one US current and one former US official.

@NBCNews confirms and adds to CNN scoop from me, @ckubeNBC @carolelee”

Only to delete it shortly after:

I’ve deleted that last tweet out of an abundance of caution. Waiting on more info. Apologies.

— Katy Tur (@KatyTurNBC) April 21, 2020

*  *  *

South Korea’s KOSPI stock market index and the Won are tumbling as uncertainty grows over the health of their northern neighbor’s leader.

Earlier headlines from Daily NK – a website run mostly by North Korean defectors – reported that North Korean leader Kim Jong Un recently had cardiovascular surgical procedure and is now mostly recovered, citing unidentified sources inside the isolated state saying Kim is recovering at a villa in the Mount Kumgang resort county of Hyangsan on the east coast after getting the procedure on April 12 at a hospital there.

However, CNN  has upped the ante and reported that the US is monitoring intelligence that North Korea’s leader, Kim Jong Un, is in grave danger after a surgery, according to a US official with direct knowledge.

Kim last appeared in North Korean state media on April 11. April 15 – North Korea’s most important holiday, the anniversary of the birth of the country’s founding father, Kim Il Sung – came and went without any official mention of Kim Jong Un’s movements or explanation of his absence.

CNN notes that Kim Jong Il’s absence from a parade celebrating North Korea’s 60th anniversary in 2008 was followed by rumblings that he was in poor health.

So who to believe – “mostly recovered” from NK defectors or “in grave danger” from CNN’s intel sources.

As Seoul Bureau Chief for VOA, William Gallo tweeted:

Bottom line: there is a hell of a difference between “US officials think Kim Jong Un is in grave danger” and “US officials have read unconfirmed media reports about Kim Jong Un being in grave danger.” We need to know which this is.

The market for now appears to be erring on the side of CNN’s warnings as stocks tumble…

And Korea’s Won hits a two-week low…

We wonder, of course, if President Trump will send Kim a “Get Well Soon” card (and we note that Kim Jong Un is only ~36. His father lived to be 82).

 

In the annals of market history, April 20, 2020 will be forever remembered the day when, for the first time ever, the deliverable WTI future contract plunged 50%, 60% – the drop accelerating – then 70%, 80%, 90%, 99%, … and then the unthinkable happened: after the May WTI contract dropped to $0.00, meaning it was free to get delivery of oil, it proceeded to slide into negative territory – an unprecedented event in market history – as oil producers were willing to pay their customers to take delivery of physical oil in a world in which oil storage has almost run out. 

And so the price of oil tumbled, dropping to negative $10, then negative… negative $30, before finally stopping at -$40.32, the lowest price ever recorded for a barrel of WTI.

In many ways, the move was a mirror image of what happened during the legendary Volkswagen short squeeze, when countless shorts found out there was not enough stock in the float to cover all existing shorts, unleashing a scramble to buy shares at any price and avoid being the last man standing, as the alternative was – in theory – a stock price hitting infinity (Volkswagen did end up becoming the world’s most valuable company briefly, destroying dozens of iconic shorts in the process). Today’s move was similar, as many inexperienced traders suddenly realized that instead of an asset, oil had become a liability, having only hours to find a place where to receive delivery of physical barrels of oil.

A game of explosive hot potato (or rather black gold) then ensued around noon, when the deliverable WTI contract hit $10 and then dropped diagonally before triggering hundreds of $0.01 stops, at which point oil plunged vertically, crashing $40 dollars in minutes.

As Roger Diwan explained the dynamics, “speculators found themselves unable to resell the WTI contract, and have no storage booked to get delivered the crude in Cushing, OK, where the delivery is specified in the contract. This means that all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires.”

So what happens now?

Well, some stability appears to have been restored, because since its settlement close around -$37, May WTI has recovered all its losses for the day and was last trading just above $0.

But don’t count on the relative stability lasting into tomorrow’s contract expiration – or the next month – because as Goldman’s commodity strategist, Damien Courvalin, who first predicted one month ago that negative oil prices are coming for landlocked producers, warns of “potential further distress ahead of the settlement window” tomorrow for the May WTI contract.

It gets worse from there because as we discussed earlier, the pain will then shift to the June contract, which expires on May 19:

The June contract will then become the prompt contract until its expiration on May 19. While it has outperformed significantly today, down only $4.60 to $+20.43/bbl, it will nonetheless likely see downward pressure in coming weeks

In other words, there will be more fireworks tomorrow for the May future, for the simple reason that there are likely still tens of thousands of maturing May contracts that need to find a literal home, which – with Cushing effectively full – is a problem, to wit:

The May CME WTI contract expires tomorrow, April 21. Any holder of a long position going into settlement would then be obligated to take delivery of crude in Cushing during the month of May (either by transfer into a designated pipeline or storage facility or by in-tank transfer). This means that an investor long a WTI May contract would be forced to sell out of this position (at any price) before tomorrow’s settlement to avoid being stuck having to find room for barrels in the Cushing storage hub which will likely be completely full by then (it is 77% full as of last Friday with the last 2-week builds pointing to stock-out by the first week of May).

Goldman then lists the following three reasons why the June future will be crushed next:

1. the potential exit of spooked long retail investors given the violence of today’s move (and the negative carry incurred at each contract roll),
2. the negative impact of investors rolling their long positions from the June to the July contract in early May (the USO rolls on May 5-8), and ultimately
3. the still unresolved market surplus that will hit binding storage capacity in coming weeks.

Finally, here is Goldman’s answer to the question on everyone’s lips: who was left long heading into today’s record price drop, and who was selling at any price?

Given the difficulty and costs of storing oil (even in normal times), investors typically never keep positions into expiration. The size of the long positions in May WTI had therefore already shrunk significantly as all the major commodity indices and ETFs rolled earlier this month into the June contract. Illustrating that point, the unprecedented collapse in May WTI prices occurred with only 100k contracts trading today, a tenth of the June contract volumes.

In terms of holders, the surge in retail interest in recent weeks — as illustrated by the USO ETF which now represents 30% of the June WTI contract open interest — suggests that retail positions (in outright WTI contracts rather than systematically rolling products) were likely still long May WTI contracts into this week and now forced sellers (consistent with the sell-off accelerating in the 30 minutes ahead of the close and the sharp rebound that followed).

And so it was once again the mom and pop daytraders and r/wallstreebets amateurs, who however have felt quite professional if not invincible, thanks to the Fed’s constant market manipulation and bailout out of every crash… but not in the commodity sector. It was they that suffered unprecedented losses having held on to a contract they did not understand, and without realizing that they faced not only a total wipe out, but a wipe out more than 100% of their invested capital, a privilege traditionally only reserves for short sellers.

And while we agree with Goldman that retail was the biggest victim of today’s crash, we doubt it’s the only one, because if there is one thing this market has created – if not real value (sorry but rising nominal stock prices due to printing money is the opposite of value creation) – it is an army of professional money-managing idiots who think they are geniuses whenever they are not on CNBC declaring how brilliant they are. And in the next few days we will find out not only just how many of them were wiped out, but also the names of all those “pros” who at the end of the day were as clueless as 23-year-old reddit discussion board “traders.”

Uber says it will not be indemnifying former star engineer Anthony Levandowski for a $180 million legal award won against him by Google. The company instead claims that Levandowski’s guilty plea confirms he’s a liar and that he should not be entitled to have the company help with his legal fees.

Levandowski was brought on in 2016 from Alphabet’s self-driving car program but Uber wound up firing him after the two companies went to war over trade secrets, according to Bloomberg.

This year, Google won a contract-breach arbitration case against him and Levandowski agreed to plead guilty to trade-secret theft. He was driven into bankruptcy as a result. Levandowski had been counting on Uber’s promise for indemnification, but Uber now says they have no obligation to support him. 

Instead, in a legal filing, the company said: “Levandowski secretly committed a crime by stealing trade secrets with the intent to use them at Uber. If Uber had known that, it never would’ve entered into any agreements with Levandowski.”

Sure. Because that’s not why you hire people directly from Google’s competing self-driving program, right?

Levandowski’s lawyer claims that Uber is not allowed to renege on the indemnification because it vetting Levandowski before hiring him and know there was a reasonable chance he had taken information from Google. He claims Uber is trying to protect itself from an unfavorable legal outcome, and nothing more.

“Uber’s assertion that Anthony did not disclose material information to Uber is false,” Levandowski’s lawyer said.

Uber says Levandowski forfeited his indemnification when he asserted his 5th Amendment right and refused to testify. Levandowski will likely argue in the future that Uber was so eager to hire him, they offered to buy his $680 million in stock and looked the way when red flags arose during his vetting report. 

Their vetting report on Levandowski showed he had “highly confidential Google proprietary information,” including source code, design files, engineering documents and software related to self-driving cars.

Which is probably why they hired him in the first place…

A viral post written by a veteran professor on Medium recently grabbed prospective students’ attention in saying provocatively: “This is a message to all high school seniors (and their parents). If you were planning to enroll in college next fall — don’t.”

“No one knows whether colleges and universities will offer face-to-face instruction in the fall, or whether they will stay open if they do,” University of La Verne law professor Diane Klein wrote. “No one knows whether dorms and cafeterias will reopen, or whether team sports will practice and play.”

“It’s that simple. No one knows. Schools that decide to reopen may not be able to stay that way. A few may decide, soon, not even to try. Others may put off the decision for as long as possible — but you can make your decision now,” the veteran teacher said, making the case that it’s the worst time ever for families to make the massive financial commitment. After all, who wants to drop an initial $50K or more to potentially sit at home for Fall 2020 and take online classes?

And it’s 100% accurate that colleges and universities are flying through the coronavirus economic ‘pause’ blindly, now slashing budgets for next year and in many instances notifying employees that drastic cuts are coming, including regarding salaries and staffing positions — possibly even reaching into faculty ranks.

Colleges and universities across the nation are stuck in financial limbo at a moment that key staffing, faculty contracts, student recruiting, tuition and donor revenue-related decisions are typically made for next year, also as controversy erupts over refusal to refund student housing and campus activity fees. Crucially, endowment values have plunged along with markets.

The $600 billion-plus higher education industry is expected to suffer effects of this Spring’s campus shutdowns at least through next Fall, given everything down to campus tours for potential recruits have been canceled, leaving open the crucial question of incoming levels of freshmen and vital tuition revenue for next year. And now it’s not a question of profitability, academic reputation or long-term growth, but of mere survival. 

In a new report Bloomberg warns this week: “Administrators across the nation increasingly fear their schools may not reopen for the fall semester.” This amid mass cancellations of everything from sports to summer programs and classes, to shuttering of on-campus facilities and student activities. It further details panicked institutions which were already struggling, now fearing amid coronavirus closures and ‘online only’ format, bracing for the “fatal” blow of next Fall, when students may opt to not return and wait things out. 

Gap years for all, says professor in California. https://t.co/Y545ss8P5G?

— Tim Rostan. (@mrtgr) April 20, 2020

“The hit is huge,” Larry Ladd, a consultant with the Association of Governing Boards of Universities and Colleges, told Bloomberg. “They will have less financial cushion because that summer revenue is no longer is there.”

Worse, high school guidance counselors and parents are well aware of this ‘state of limbo’ and don’t want to risk major investment in their entering college freshmen’s education when there may not be a Fall semester. Bloomberg continues: 

“I would tell kids: Number one, the likelihood of having face-to-face classes in September is pretty darn small,” said Scott White, a retired guidance director for more than 20 years at Montclair High School in New Jersey. Referring to Covid-19’s risk to older people, he said: “You’re not going to get 65-year-old college professors going in.”

Northwestern University is still making that tough call. “Our return to on-campus instruction in the summer or fall quarters is also not guaranteed,” the school’s president, Morton Schapiro, wrote in a letter Thursday. He said the decision to refund room-and-board payments and student fees for the spring had cost more than $25 million, and the school is facing more losses from endowment declines, increased financial aid and the cancellation of some on-campus programs.

Another consultant said “empty dorms is what kills colleges” — precisely the state of things at institutions across the nation at least through summer. 

While wealthier schools such as Harvard, Brown and Princeton are expected to weather the storm with greater ease, with some already offering students housing credit and prorated refunds conditioned in their return to campus, the crisis has hit student housing managers and investors hard for the majority of campuses in which the university doesn’t own its own student housing. Some students and families are already suing to get tuition and campus fee refunds.

Needless to say this is completely uncharted territory for institutions which of necessity make all their major funding, staffing, and financial decisions some six months before the Fall opening and start of the semester. Like other sectors of the US economy, universities are bracing for the avalanche of debt problems sure to roll down hill into the still very much up-in-the-air Fall semester.

You know there is a lot of confusion in the market when even fundamental, deep-value investing bloggers legends like Howard Marks now flip-flop every single week (accompanied by one investor letter after another) from bearish to bullish and back again, as if so much has changed besides, you know, the stock market:

• April 20: Widely followed investor Howard Marks says the stock market rebound is not reflecting reality

• April 14: Howard Marks Bemoans Fed Help for Junk Bonds, Leveraged Debt

• April 8: Howard Marks says it’s time to stop playing defense: ‘We’re buying today when we find good value’

• April 1: Investors can do some buying as markets are ‘a lot cheaper,’ but key is moderation, says billionaire investor Howard Marks

• March 16: Howard Marks says the market is ‘pricing in a bad scenario’ and there is value for investors

But while Marks may simply be talking both sides of his book – see “Howard Marks’s Oaktree Seeks $15 Billion for Biggest Distress Fund Ever“, the vast majority of traders have legitimately lost the plot, and merely follow momentum or whatever the algos are doing at any given moment.

As Deutsche Bank’s Jim Reid explains, the most confusing thing in the market at the moment is the huge dichotomy between what will possibly be one of the worst synchroniszd global economic slumps in history against what is undoubtedly the largest ever intervention. On the second point, DB’s Alan Ruskin showed that global central bank balance sheet expansion has already spiked by $2.7 trillion since early March which now comfortably eclipses the full peak 12-month increase seen during the GFC (under $2.5tn). This is the same amount as the annual total GDP of either the UK or French economies. Two thirds of this increase has come from the Fed so far.

Again using Reid’s back of the envelope calculations, “given that the global economy is worth around $80 trillion dollars annually and that the IMF last week said it would fall -3% in 2020 (in real terms under the base case) that’s potentially ‘only’ $2.4 trillion of lost activity. Relative to the pre-covid trend they forecast $9 trillion of global GDP losses by the end of 2021.” And even if one thinks these numbers are a bit low, when central banks have so far pumped in an annualized $23.4 trillion into the financial system you can see how it’s hard to get a feel for where markets can go, besides eventually becoming a replica of the world’s best performing market, of course – that of Venezuela.

And while it unlikely that central banks will keep up that pace of liquidity injections unless economies fall even further but could you really have a situation in 1-2 months’ time where economies are still struggling to fully open and yet equity markets are back at record highs? While Reid doesn’t think so one certainly can’t rule it out given the ginormous liquidity injections. As he concludes “crazy times and we haven’t even mentioned the government injections.”

And speaking of Alan Ruskin, here is why the German bank’s macro strategist said that “Global QE is already on another scale.“

By almost any metric Central bank balance sheet expansion in the last few weeks has already exceeded anything seen in the 2008/9 crisis period. In the last six weeks alone, G10 Central banks have expanded their collective balance sheet by $2.7 trillion, and 2/3rds of this comes from the Fed.

The Fed has stepped up into a role sometimes seen by China, in its credit policies, and sheer scale of support.

The steep ascent of Central Bank balance sheets has of course been more than matched by the collapse in the global economy. Unprecedented QE policy accommodation will then build substantially from here, which warrants asking all the usual questions about what this might reap? The answers unfortunately belie simplicity. QE delivers very different results depending on circumstance, but in general, the marginal risk appetite gains from QE will wane with time.

The Fed appears to be working under the premise that in past crises of historic proportion, there are almost no occasions when the monetary authorities are remembered and accused of doing too much. So why not load the bazooka with the kitchen sink and go nuclear?

Theoretical models typically would see large scale QE as negative for a currency, but in this instance, the initial positive QE impact on risk (helping EM and commodity currencies) but also seen as an alternative to negative rates, is a mixed bag for the USD, enough to leave the USD choppy at elevated levels.

The experience during and after the 2008 crisis, is that markets are apt to initially support a major currency backed by an aggressive Central bank, especially when the economic morass that provoked the easing is universal. There is currently a brief window for many Central Banks to pursue QE, including EM Central Banks precisely because everyone else is doing it.

If persistent QE looks like the Central Bank is out of ideas, and, especially where the actions are enacted by a Central bank in isolation, QE will be greeted with a weaker currency. The EUR and JPY have periodically suffered this fate, and Japanization will become a more widespread phenomena in this downturn.

And here is why readers should be loading up on every bar of physical gold they can find, because once it becomes clear to everyone what the endgame is, and everyone demands delivery of their physical gold, the move in gold will be similar to what we saw in oil today, just in the opposite direction.

… when QE looks more obviously a cover for unsustainable fiscal policies and especially if the primary function appears to be long standing debt monetization, currencies will suffer. This is a story for 6 months and beyond, and is certainly relevant for EM countries, but may also be important for countries like the US, where fiscal discipline was abandoned before the crisis.

Finally, when even Deutsche Bank tells you to buy gold…

“Gold is a natural beneficiary of this latter stage QE, and looks to be already anticipating this outcome.“

… then it’s clearly time, amusing “who is the biggest goldbug sideshows” such as this one…

I spoke about this possibility on my live podcast today, which ended about an hour prior to your tweet. I also made a similar comment on my Twitter account three hours before you did. When I repeat a good point that you made, I always give you credit. https://t.co/OUEwfrRvsT

— Peter Schiff (@PeterSchiff) April 20, 2020

… notwithstanding.

Hawaiians are becoming increasingly angry, not because the tourism industry has collapsed, and 37% of the labor force has just filed for unemployment, but mostly because US mainlanders, motivated by super discounted flights and hotel rooms, continue to pour into the various Hawaiian Islands during the pandemic. 

Troy Kane, a local on Oahu, who was interviewed by The Guardian, said residents are abiding by the stay-at-home orders as cases and deaths surge. He points out tourists on the island are ignoring social distancing rules and risk spreading the virus to locals.

“Locals are following the orders, staying home. But there are people, who are clearly tourists, here by the dozens,” said Kane. “They’re still out here, still in groups of seven or more, still coming, and that’s a problem.”

The Guardian says, “$100 airfares” are enticing people in quarantine in the continental US to vacation in Hawaii. Last week, nearly 800 tourists arrived on the islands. The influx triggered a nerve among locals and officials who argue tourists need to leave. 

As of Monday, 580 cases and ten deaths have been confirmed across the Hawaiian Islands. About 35 cases have been non-residents.

Kane is a neighborhood board member and community representative of Waimanalo and says the native Hawaiian and Micronesian populations on the islands are at higher risk of contracting the disease. He worries for his community and family that tourists are blatantly disregarding the public health order. 

“People will always see this place as their playground. And in this moment, as a Native Hawaiian, this is very reflective of many historical circumstances, where people from outside of the islands have come in and caused real harm to the native population. It’s not always with the direct intent to do so, but the impacts, especially on Hawaiian people, are very real,” he said.

“If you take our history, it tells us that we are not very well protected.”

Hawaiians last month protested tourists arriving at the Maui airport. Some held signs that said: “TOURIST GO HOME,” “LEAVE OUR AINA!,” “TIME TO GO,” and “GO HOME.” 

Josh Masslon, a Maui-based ICU nurse, said the healthcare system on the islands does not have enough capacity to handle a virus outbreak. 

“It’s beyond frustrating,” said Masslon. “We cannot handle an outbreak with our resident population alone.”

Masslon said he’s called the police on tourists for breaking the public health order.

So, at what point do Hawaiians, fed up with ignorant tourists breaking social distancing rules and risk infecting the local community, take the law into their own hands and start blocking airport exits, preventing new arrivals from entering?

Via Great Game India,

Dr. Charles Lieber is a nano-scientist at Harvard University. He was recently charged by the American authorities for secretly being a Chinese agent.

However, there is a mystery surrounding the nature of his work. It is said he was recruited for advanced research into nanowire-batteries. But investigation by GreatGameIndia has shown that Lieber was infact working on virus transmitters that could penetrate cell membranes without affecting the intercellular functions and even measure activities inside heart cells and muscle fibers.

Chinese Agent Charles Lieber

Dr. Charles Leiber is a nano-scientist at Harvard University who also serves as a chair for Harvard’s Department of Chemistry and Chemical Biology. He was arrested by the U.S. Department of Defense in January for lying about his association with China’s Thousand Talent Program. It is basically a recruitment plan which seeks to lure Chinese overseas talent and foreign experts to bring their knowledge and experience to China and in return, reward individuals for stealing proprietary information.

Chinese Agent Dr. Charles Lieber

According to the charging documents, Lieber was a contractual participant of the program and was paid $50,000 monthly, along with $158,000 in living expenses and $1.74 million to set up a research lab at Wuhan University. The fact that Lieber kept his association with the Chinese a secret put his integrity in question as well as financial conflicts of interest, including financial support from foreign governments or foreign entities.

Nanowire-Batteries – a Smokescreen?

What’s more concerning is that the affidavit released by the federal prosecutors states that Leiber signed an agreement between Harvard and Wuhan Insitute of Technology. According to the affidavit, the purpose of the agreement was to “carry out advanced research and development of nanowire-based lithium-ion batteries with high performance for electric vehicles.”

Dr. Charles Lieber at Wuhan Institute of Technology in 2011

However, things don’t add up since the focus of Leiber’s research has never been about nanowire batteries. One nanoscientist and former student of Lieber’s says: “I have never seen Charlie working on batteries or nanowire batteries.” In fact, in all his research papers and patents, there is no mention of “batteries” or “vehicles”.

Although Lieber was released a day later on a $1 million bond, the question remains what exactly was the nature of Leiber’s research.

Leiber and his ‘Virus Transmitters’

Dr. Leiber joined Harvard in 1991. In his early days at the university, he made great strides in the field by growing nanowires in a flask. Researchers before Leiber were already creating wire-like structures with the help of semiconductors, metals and other materials. However, their approach would be quite expensive and would need clean-room facilities like the ones used by computer chip-makers.

In contrast, Lieber could create nanostructures using nothing but simple and inexpensive chemical techniques. He even went a step further to show how these nanowires could be used as transistors, complex logic circuits, data storage devices, and even sensors.

A V-shaped silicon nanowire is attached to bimetal connectors that lift the entire structure up out of the horizontal plane on which it is made. B.Tian and C.M. Lieber, Harvard University

In 2001, Harvard Magazine published a report that discussed Leiber and his team’s research into what was termed as ‘Liquid Computing’. The report mentioned how Leiber was at the forefront solving silicon-based microelectronics industry’s greatest challenge – making silicon chips smaller and smaller.

Leiber noted that “continued shrinkage ultimately becomes problematic in terms of just how one achieves [it].” Instead, he created tiny logic circuits and memory – the two main components of a computer – using nanowires. And these circuits were really tiny, some of which just a few atoms across!

Ten years later, Leiber created a transistor so small it can be used to penetrate cell membranes and probe their interiors, without affecting the intercellular functions. The bio-compatible transistor – the size of a virus – can not only measure activities inside a neuron but also heart cells and muscle fibers.

Charles Lieber created a transistor so small it can be used to penetrate cell membranes and probe their interiors, without disrupting function. The transistor (yellow) sits near the bend in a hairpin-shaped, lipid-coated silicon nanowire. Its scale is similar to that of intra-cellular structures such as organelles (pink and blue orbs) and actin filaments (pink strand). B.Tian and C.M. Lieber, Harvard University

In 2017, Leiber and his team successfully created flexible 3D nanowires mesh that can inject into the brain or retina of an animal, attach itself to the neurons and monitor electrical signals between the cells.

Once the nanowire has been lifted up, it can penetrate three-dimensional structures such as cells. B.Tian and C.M. Lieber, Harvard University

It’s no surprise the Chinese officials were quick to get him onboard considering he’s the brightest brain when it comes to nanotechnology. Not only his research would have made China an important player in this futuristic technology but it would also be a be a step forward towards China’s stated goal of Biological Dominance.

Nanotech in the Battlefield

The importance of nanotechnology in advanced warfare can be understood from the fact that the United States’ Department of Defense (DoD) is one of the largest supporters of nanotechnology research. They have funded hundreds of millions of dollars into various research related to nanoelectronics and nanomaterials.

The technology could help create nanosensors and nanocoatings that military could use to protect soldiers against chemical and biological attacks. The fact that nanosensors can detect microscopic quantities of chemicals means it can be used as an effective early warning system against chemical warfare agents such as nerve agents and blood agents.

One can see why Charles Lieber’s secret association with the Chinese institutes and universities and his expertise in nanotechnology could pose a serious threat. Lieber lied about his involvement with the Thousand Talents Plan and affiliation with the Wuhan Institute of Technology and that makes him no less than a Chinese biowarfare agent.

As thousands of Boeing employees head back to work in the Puget Sound region over the last week, the Washington-based aircraft manufacturer has noticed a string of recent cancellations of the grounded 737 MAX jet.  

Last Tuesday (April 14), Boeing announced a total of 150 MAX cancellations in March, including 75 previously reported from Irish leasing company Avolon. Cancellations also came from other buyers, including 34 of 135 aircraft ordered by Brazil’s GOL.

Now on Monday morning (April 20), China Development Bank Financial Leasing Co. (CDB) has joined the cancellation party, slashing 29 MAX planes from its order, worth about $2.9 billion, reported Bloomberg.

The MAX jet has been grounded globally for a little more than a year after two deadly crashes in Indonesia and Ethiopia.

“In light of evolving aviation market dynamics, we’ve been working together with Boeing over many months to re-calibrate our MAX order book to be in line with our long-term view of the market and related opportunities,” Xuedong Wang, chairman of CDB Financial unit CDB Aviation, said in a statement to the Hong Kong stock exchange Monday.

The statement says CDB’s outstanding MAX order is now 70 after the adjustment. 

The coronavirus pandemic coupled with MAX groundings, has crushed Boeing. CEO Dave Calhoun recently warned that the commercial jet market could take years to recover.

Boeing published a statement on Monday outlining how it continues to partner with CDB amid challenging times.

“As we work to return the 737 MAX to service, our focus remains on addressing our customers’ fleet needs while optimizing the delivery of the more than 4,000 airplanes in our 737 backlog,” it said.

“As market conditions normalize, Boeing anticipates that lessors who have restructured or reduced their order books will continue to add MAX aircraft to their portfolios through sale-leaseback agreements with airlines,” Boeing said. “Longer term, we expect these lessors will again place orders for direct MAX purchases.”

Boeing suspended MAX production in January, and it plans a phased restart by the end of April. We noted last month how the struggling company drew down a $13.8 billion revolver and is also seeking billions of dollars in bailouts from the US government.  

Boeing shares are down several percent on Monday morning (April 20) following the news of more cancellation orders.