Tag: finance

Authored by James Njoroge via EuropeanScientist.com,

European activists are putting lives at risk in East Africa, turning a plague of insects into a real prospect of widespread famine. The fast-breeding desert locust has invaded Kenya, Somalia and Ethiopia, creating a state of emergency. The pests recently landed in Djibouti, Eritrea, Oman and Yemen. Swarms have also struck Tanzania and Uganda. They won’t stop on their own. According to the Food Agriculture Organization (FAO), “this is the worst situation in 25 years.”

These beasts consume every plant in their path, leaving behind devastated croplands and pastures, and can migrate up to 150km in a day. They’ve already covered a million hectares in Kenya, with no signs of slowing down.

The human toll is staggering. Twenty-five million people have been left hungry, by Oxfam’s estimate.

Yet, instead of rallying around African nations in this time of great peril, more EU-funded NGOs have descended on the Kenyan parliament to demand that the government disarm itself in the battle against locusts. They want the Kenyan government to outlaw the pesticides used to fight locusts, the only effective tool that can stop these insects, and prevent the crisis from spiraling out of control.

According to experts, a pesticide like fenitrothion will play a key role in eliminating locusts in Kenya and other African countries. Properly applied, it can thwart the desert locust swarms. But Kenya lacks the supplies it desperately needs. “The pesticide fenitrothion is very effective. It kills locusts within forty minutes to six hours of spraying,” says Salad Tutana, the Chair of Northern Kenya Locust Control Coordination team.  Mr. Salad says they are experiencing a shortage of fenitrothion, but that fresh supplies of the pesticide have recently arrived from Japan.

More planes are needed for spraying. Currently, there are only five planes being used to spray the available insecticides.

Kenya has already set aside $2.5 million to combat locusts through spraying, but this is hardly enough as the situation continues to worsen.  The U.N. FAO agreed to contribute $70 million to the spraying effort, but thus far only $15 million has made its way to the region.

Desperation in affected communities is real and more needs to be done. “We have resigned ourselves to crude methods, like shouting, burning tires, and blowing whistles, to chase away the insects,” Says Muthuri Murungi, a resident of Meru town in Eastern Kenya.

Africa’s agricultural community is still reeling from the incursion of another malignant pest, the Fall Army Worm, which in one year deprived Kenyan maize (corn) farmers of 70 percent of their crop. This voracious larval moth is kept in check in the Americas — where it is native — by pesticides and genetically modified Bt crops.

But, here too, the NGO activists are trying to dictate policies that will allow the insect plagues to continue, unchecked.

NGOs led by Route to Food — which opposes GMOs — is now pushing a proposal in Kenya to ban more than 200 pesticides — including those used against desert locusts and the Fall Army Worm.  Route to Food was created in Africa in 2016 using taxpayer funds from the German Green Party’s Heinrich Boll Foundation.

This organization is advancing all the ideas currently fashionable in Europe, such as organic food mandates and opposition to modern crop technologies in the name of “agroecology.” Europeans can afford to pay the large surcharge to grow food with inefficient, organic methods. That’s not an option in Africa.

In effect, these Europeans want Africa to give up the idea of ever becoming an advanced world economy, or ever even reaching true food security. The “agro-ecology” fad embraced by European elites in international organizations — including some in FAO — extols “peasant farming” and the “right to subsistence agriculture,” as if that were some kind of ideal, while denying Africans the modern technologies used in countries like the United States and Brazil.

Route to Food isn’t alone. Another NGO, the Kenyan Organic Agricultural Network (KOAN), also sprouted from European seed capital. EU governments, through development agencies such as the Danish Ministry of Foreign Affairs, the Swiss Agency for Development and Cooperation, and the Dutch NGOs SNV and Humanist Institute for Cooperation with Developing Countries (HIVOS, or Humanistisch Instituut voor Ontwikkelingssamenwerking in Dutch) have created this group to advance the business interests of the organic industry. Thus, KOAN is promoting bans of the pesticides Kenya needs to address these crises, but the proposal they back quite conveniently excludes from the ban the organic farmers’ favorite pesticide, copper sulfate, which is highly toxic. Why the double standards?

Copper, in its various compounds, is considered “natural” and thus is approved for organic production, but it is highly dangerous to humans and destructive to biodiversity. It accumulates in the soil and is a known carcinogen. In 2015, the EU put copper compounds on its list of “candidates for substitution” — meaning they are “of particular concern to public health or the environment.” The EU would have banned the substances long ago, except that organic growers, who dump them on their fields in truly astounding quantities, couldn’t survive without it.

Banning safer, more efficient modern pesticides, like locust-fighting fenitrothion, but allowing copper is a craven way for the organic interests to wipe out the competition.

Meanwhile, unless the locusts are stopped, it is African farmers themselves that will be wiped out.

The swarms are expected to multiply 500-fold in a matter of months, particularly as the rainy season hits in April and May. For the privileged elites of Europe’s capitals, pesticides and agricultural technology are a matter of life-style and virtue-signaling (and, sometimes, straight forward financial interest). Europe is rich enough to decimate its own agriculture and become even a larger net importer of food than it already is. For Africans without such a luxury, this is a matter of life and death.

Europe has been paralyzed by faddish, fact-free claims of activist NGOs pushing political agendas. It needs to wake up and see what happens when these anti-scientific doctrines descend on the African continent. The natural, organic world without pesticides or GMOs that they are promoting has arrived in Africa. It is a cloud of destruction.

The rest of the world needs to take action to prevent this crisis from becoming the worst form of tragedy — one that could have been prevented.

De Beers Group reported the worst set of earnings in more than a decade. The international corporation with diamond exploration, diamond mining, diamond retail, and diamond trading segments across the world, has warned the diamond industry is headed for a crisis. 

Worldwide global jewelry markets have been pinched by a global slowdown, trade wars, and a virus outbreak, crimping discretionary income among consumers. 

The extent of the diamond crisis became more evident on Thursday when De Beers reported profits for 2019, crashed by 50%, now below levels that were last seen since 2009! 

Demand woes and supply chain issues of oversupply conditions weighed on prices in the last several years, leading to declining profitability for De Beers.

Mark Cutifani, CEO of Anglo-American Plc, which controls De Beers, said a global turnaround was nearing for the industry, then the virus outbreak in China delayed the rebalancing.  

“There aren’t as many people walking around jewelry shops in China. In Hong Kong, there are virtually none,” Cutifani said. “It’ll be a couple of months before we have a better picture.”

We’ve highlighted several factors for why diamond demand has plunged in the last several years. First, the trade war between the US and China led to stock market volatility and uncertainties in regional economies in the East and West hemispheres. This led to a slowdown in world trade growth, especially in mainland China. Less demand from mainland China was visible in Hong Kong in 2018 and 2019. When riots broke out in Hong Kong in the summer of 2019, Mainlanders avoided Hong Kong altogether, crushing the jewelry industry even more. 

At the same time, midstream inventory was increasing in North America as US’ bricks and mortar’ retail outlets closed. US jewelry sales have declined in the last several years due mostly to highly indebted consumers, leveraged up to their eyeballs in auto debt, credit cards, and student loans that have limited their economic mobility.

On top of this all, the global economy began to slow in late 2017, central banks panicked in 2018/19, unleashed dozens of rate cuts, and printed trillions of dollars to stabilize the global economy. Nothing seemed to work heading into 2020 – then Covid-19 outbreak formed in China, now spreading across the world. Could mean the diamond industry is headed for a crash.

In the face of oversupplied conditions and weak consumer demand, De Beers has offered concessions to its wholesalers and slashed prices.

“I’m actually very proud of what De Beers did in 2019,” said De Beers CEO Bruce Cleaver.

“It was not an easy year. We led an industry. We spent a lot of time speaking to customers, to bankers and to retailers to give them confidence that De Beers thinks there’s a great future here.”

To summarize, weak consumer demand in North America, collapsing demand in China and Hong Kong, oversupplied conditions, and a global economy that continues to decelerate, this only means one thing: The diamond industry is headed for a crash.

Authored by Soeren Kern via The Gatestone Institute,

The Court of Appeal, the second-highest court in England and Wales after the Supreme Court, has ruled that the Islamic marriage contract, known as nikah in Arabic, is not valid under English law.

The landmark ruling has far-reaching implications. On the one hand, the decision strikes a blow against efforts to enshrine this aspect of Sharia law into the British legal system. On the other hand, it leaves potentially thousands of Muslim women in Britain without legal recourse in the case of divorce.

The case involves an estranged couple, Nasreen Akhter and Mohammed Shabaz Khan, both of Pakistani heritage, who took part in a nikah ceremony officiated by an imam in front of 150 guests at a restaurant in London in December 1998.

In November 2016, Akhter, a 48-year-old attorney, filed for a divorce, allegedly because Khan wanted to take a second wife. Khan, a 48-year-old property developer, tried to block Akhter’s divorce application on the basis that they were not legally married under English law. Khan said that they were married “under Sharia law only” and sued to prevent Akhtar from claiming money or property from him in the same way a legally married spouse could.

Akhter said that the couple, who have four children, intended to follow the nikah with a civil marriage ceremony that would be compliant with English law. No civil ceremony ever took place, however, because, according to Akhter, Khan refused.

On July 31, 2018, the London-based Family Division of the High Court ruled that the nikah fell within the scope of the Matrimonial Causes Act 1973, which establishes three categories of marriage: valid, void and non-marriage. Valid marriages may be ended by a decree of divorce; void marriages may be ended by a decree of nullity; non-marriages cannot be legally ended because legally the marriage never existed.

The high court determined that the Akhter-Khan marriage was a “void marriage” because it had been “entered into in disregard of certain requirements as to the formation of marriage.” It ruled that Akhtar was therefore entitled to a “decree of nullity of marriage.”

The Attorney General, on behalf of the British government, filed an appeal on the basis that it was wrong to recognize the marriage as being “void” rather than a “non-marriage.”

On February 14, 2020, the London-based Court of Appeals overturned the High Court’s decision and ruled that nikah marriages are “non-marriages” within the scope of English law. In its ruling, the court explained:

“The Court of Appeal finds that the December 1998 nikah ceremony did not create a void marriage because it was a non-qualifying ceremony. The parties were not marrying ‘under the provisions’ of English law (Part II of the Marriage Act 1949). The ceremony was not performed in a registered building. Moreover, no notice had been given to the superintendent registrar, no certificates had been issued, and no registrar or authorized person was present at the ceremony. Further, the parties knew that the ceremony had no legal effect and that they would need to undertake another ceremony that did comply with the relevant requirements in order to be validly married. The determination of whether a marriage is void or not cannot, in the Court’s view, be dependent on future events, such as the intention to undertake another ceremony or whether there are children.

“There is no justification for treating the civil ceremony, which the parties intended to undertake, as having in fact taken place, when it never did. This might result in a party being married even if they change their mind part way through the process of formalizing the marriage. That would be inconsistent with the abolition of the right to sue for breach of an agreement to marry by Section 1 of the Law Reform (Miscellaneous Provisions) Act 1970. The parties’ intentions cannot change what would otherwise be a non-qualifying ceremony into one which is within the scope of the Marriage Act 1949.”

The Court of Appeals added: “It is not difficult for parties who want to be legally married to achieve that status.”

The ruling, which Akhter presumably will appeal at the Supreme Court, has been greeted with outrage by activists who argue that thousands of Muslim women in Britain now have no legal rights when it comes to divorce.

In a press release, Southall Black Sisters, an advocacy group for South Asian women, said:

“We sought to inform the Court of Appeal that many minority women, especially Muslim women, are deceived or coerced by abusive husbands into only having a religious marriage, which deprives them of their financial rights when the marriage breaks down….

“The Court found that ‘it is not difficult for parties who want to be legally married to achieve that status.’ But this disregards the accounts of many minority women, who have great difficulty in obtaining that status in the context of domestic abuse, patriarchal family dynamics and considerable power imbalances….

“Today’s judgment will force Muslim and other women to turn to Sharia ‘courts’ that already cause significant harm to women and children for remedies because they are now locked out of the civil justice system.”

In November 2017, a survey carried out for a Channel 4 documentary — The Truth About Muslim Marriage — found that nearly all married Muslim women in Britain have had a nikah, but more than 60% had not gone through a separate civil ceremony which would make the marriage legal under British law.

In February 2018, an independent review of the application of Sharia law in England and Wales, commissioned by Theresa May in May 2016 when she was home secretary, recommended changes to the Marriage Act 1949 and the Matrimonial Causes Act 1973 that would require Muslims to conduct civil marriages before or at the same time as the nikah ceremony. This would bring Islamic marriage in line with Christian and Jewish marriage in the eyes of British law. The report stated:

“By linking Islamic marriage to civil marriage, it ensures that a greater number of women will have the full protection afforded to them in family law and the right to a civil divorce, lessening the need to attend and simplifying the decision process of Sharia councils.”

The review added:

“The panel’s opinion is that the evidence shows that cultural change is required within Muslim communities so that communities acknowledge women’s rights in civil law, especially in areas of marriage and divorce. Awareness campaigns, educational programs and other similar measures should be put in place to educate and inform women of their rights and responsibilities, including the need to highlight the legal protection civilly registered marriages provide.”

Finally, the panel recommended that the government create a new agency to regulate Sharia courts and thus legitimize them:

“That body would design a code of practice for Sharia councils to accept and implement. There would, of course, be a one-off cost to the government of establishing this body but subsequently the system would be self-regulatory.”

In March 2018, then Secretary of State Sajid Javid, in a Green Paper titled, “Integrated Communities Strategy,” responded:

“We welcome the independent review into the application of Sharia law in England and Wales. Couples from faith communities have long been able to enter a legally recognized marriage through a religious ceremony if the requirements of the law are met.

“However, we share the concern raised in the review that some couples may marry in a way that does not give them the legal protections available to others in a civilly registered marriage. We are also concerned by reports of women being discriminated against and treated unfairly by some religious councils.

“The government is supportive in principle of the requirement that civil marriages are conducted before or at the same time as religious ceremonies. Therefore, the government will explore the legal and practical challenges of limited reform relating to the law on marriage and religious weddings.

“The government considers that the review’s proposal to create a state-facilitated or endorsed regulation scheme for Sharia councils would confer upon them legitimacy as alternative forms of dispute resolution. The government does not consider there to be a role for the state to act in this way.”

In January 2019, the Council of Europe (COE), the continent’s leading human rights organization, raised concerns about the role of Sharia courts in family, inheritance and commercial law in Britain. It called for the government to remove obstacles that stop Muslim women from accessing justice:

“Although they are not considered part of the British legal system, Sharia councils attempt to provide a form of alternative dispute resolution, whereby members of the Muslim community, sometimes voluntarily, often under considerable social pressure, accept their religious jurisdiction mainly in marital issues and Islamic divorce proceedings but also in matters relating to inheritance and Islamic commercial contracts. The Assembly is concerned that the rulings of the Sharia councils clearly discriminate against women in divorce and inheritance cases.”

The COE also set a deadline of June 2020 for the UK to report back on reviewing the Marriage Act, which would make it a legal requirement for Muslim couples to undergo civil marriages — which is currently required for Christian and Jewish marriages.

A Home Office spokesperson responded to the COE resolution:

“Sharia law does not form any part of the law in England and Wales. Regardless of religious belief, we are all equal before the law. Where Sharia councils exist, they must abide by the law.

“Laws are in place to protect the rights of women and prevent discrimination, and we will work with the appropriate authorities to ensure these laws are being enforced fully and effectively.”

As of now, neither the British government, nor the British Parliament has introduced legislation that would require Muslims to conduct civil marriages before or at the same time as the nikah ceremony.

The Court of Appeal’s ruling does, however, put a brake on the further encroachment of Sharia law into the British legal system. The court’s decision effectively reaffirms the principle that immigrants who settle in Britain must conform to British law, rather than the other way around.

Authored by Pepe Escobar via The Asia Times,

Few postmodern political pantomimes have been more revealing than the hundreds of so-called “international decision-makers,” mostly Western, waxing lyrical, disgusted or nostalgic over “Westlessness” at the Munich Security Conference. 

“Westlessness” sounds like one of those constipated concepts issued from a post-party bad hangover at the Rive Gauche during the 1970s. In theory (but not French Theory) Westlessness in the age of Whatsapp should mean a deficit of multiparty action to address the most pressing threats to the “international order” – or (dis)order – as nationalism, derided as a narrow-minded populist wave, prevails.  

Yet what Munich actually unveiled was some deep – Western – longing for those effervescent days of humanitarian imperialism, with nationalism in all its strands being cast as the villain impeding the relentless advance of profitable, neocolonial Forever Wars. 

As much as the MSC organizers – a hefty Atlanticist bunch – tried to spin the discussions as emphasizing the need for multilateralism, a basket case of ills ranging from uncontrolled migration to “brain dead” NATO got billed as a direct consequence of “the rise of an illiberal and nationalist camp within the Western world.” As if this were a rampage perpetrated by an all-powerful Hydra featuring Bannon-Bolsonaro-Orban heads.  

Far from those West-is-More heads in Munich is the courage to admit that assorted nationalist counter-coups also qualify as blowback for the relentless Western plunder of the Global South via wars – hot, cold, financial, corporate-exploitative. 

For what it is worth, here’s the MSC report. Only two sentences would be enough to give away the MSC game:

“In the post-Cold War era, Western-led coalitions were free to intervene almost anywhere. Most of the time, there was support in the UN Security Council, and whenever a military intervention was launched, the West enjoyed almost uncontested freedom of military movement.”

There you go. Those were the days when NATO, with full impunity, could bomb Serbia, miserably lose a war on Afghanistan, turn Libya into a militia hell and plot myriad interventions across the Global South. And of course none of that had any connection whatsoever with the bombed and the invaded being forced into becoming refugees in Europe.

West is more

In Munich, South Korean Foreign Minister Kang Kyung-wha got closer to the point when she said she found “Westlessness” quite insular as a theme. She made sure to stress that multilateralism is very much an Asian feature, expanding on the theme of ASEAN centrality.

Russian Foreign Minister Sergey Lavrov, with his customary finesse, was sharper, noting how “the structure of the Cold War rivalry is being recreated” in Europe. Lavrov was a prodigy of euphemism when he noted how “escalating tensions, NATO’s military infrastructure advancing to the East, exercises of unprecedented scope near the Russian borders, the pumping of defense budgets beyond measure – all this generates unpredictability.”

Yet it was Chinese State Councilor and Foreign Minister Wang Yi who really got to the  heart of the matter. While stressing that “strengthening global governance and international coordination is urgent right now,” Wang said, “We need to get rid of the division of the East and the West and go beyond the difference between the South and the North, in a bid to build a community with a shared future for mankind.”

“Community with a shared future” may be standard Beijing terminology, but it does carry a profound meaning as it embodies the Chinese concept of multilateralism as meaning no single state has priority and all nations share the same rights.

Wang went farther:

The West – with or without Westlessness– should get rid of its subconscious mentality of civilization supremacy; give up its bias against China; and “accept and welcome the development and revitalization of a nation from the East with a system different from that of the West.” Wang is a sophisticated enough diplomat to know this is not going to happen.

Wang also could not fail to raise the Westlessness crowd’s eyebrows to alarming heights when he stressed, once again, that the Russia-China strategic partnership will be deepened – alongside exploring “ways of peaceful coexistence” with the US and deeper cooperation with Europe.

What to expect from the so-called “system leader” in Munich was quite predictable. And it was delivered, true to script, by current Pentagon head Mark Esper, yet another Washington revolving door practitioner.

21st Century threat

All Pentagon talking points were on display.

China is nothing but a rising threat to the world order – as in “order” dictated by Washington. China steals Western know-how; intimidates all its smaller and weaker neighbors; seeks an “advantage by any means and at any cost.”

As if any reminder to this well-informed audience was needed, China was once again placed at the top of the Pentagon’s “threats,” followed by Russia, “rogue states” Iran and North Korea, and “extremist groups.” No one asked whether al-Qaeda in Syria is part of the list.

The “Communist Party and its associated organs, including the People’s Liberation Army,” were accused of “increasingly operating in theaters outside China’s borders, including in Europe.” Everyone knows only one “indispensable nation” is self-authorized to operate “in theaters outside its borders” to bomb others into democracy.

No wonder Wang was forced to qualify all of the above as “lies”: “The root cause of all these problems and issues is that the US does not want to see the rapid development and rejuvenation of China, and still less would they want to accept the success of a socialist country.”

So in the end Munich did disintegrate into the catfight that will dominate the rest of the century. With Europe de facto irrelevant and the EU subordinated to NATO’s designs, Westlessness is indeed just an empty, constipated concept: all reality is conditioned by the toxic dynamics of China ascension and US decline.

The irrepressible Maria Zakharova once again nailed it:

“They spoke about that country [China] as a threat to entire humankind. They said that China’s policy is the threat of the 21st century. I have a feeling that we are witnessing, through the speeches delivered at the Munich conference in particular, the revival of new colonial approaches, as though the West no longer thinks it shameful to reincarnate the spirit of colonialism by means of dividing people, nations and countries.”

An absolute highlight of the MSC was when diplomat Fu Ying, the chairperson on foreign affairs for the National People’s Congress, reduced US House Speaker Nancy Pelosi to dust with a simple question:

“Do you really think the democratic system is so fragile” that it can be threatened by Huawei?

The student loan bubble continues to inflate. 

It’s now a $1.64 trillion problem that has increased over 120% since 2009. Student loan balances equate to 7.6% of GDP. That’s up from 5.1% a decade ago.

Much of the millennial generation has insurmountable student debts that have prevented them from family formation, home buying, and growing savings. This has severely weighed on the economy, but it appears relief could be on the way, paid for by the U.S. taxpayer.

The Congressional Budget Office (CBO) said this week that a $207.4 billion student loan forgiveness program would help Americans who are unable to pay their debt through 2029.

The CBO said borrowers who attend graduate or professional schooling would benefit from the program the most.

The government is expected to forgive $167.1 billion of the total amount, and this includes the original loan amount and unpaid interest for borrowers over the period.

The CBO estimates that the government will forgive $40.3 billion on new loans made from 2020-2029, or about 21% of the original amount.

There are more than 50 million Americans with student loan debt. The CBO estimates that most of the borrowers are stuck in low wage and low skilled jobs with large balances that may never be paid pack. Many of these folks are millennials, stuck in a renting society with absolutely no economic mobility. 

The student loan bubble is another imbalance that will correct and end very badly when the next recession strikes, hence why the government has created a new program to fund student debt forgiveness. 

Let’s call the program for what it really is: a massive bailout of the millennial generation.

Like all bubbles, this one will eventually pop. And when it does, it will end very badly.

what stage of the cycle is this @awealthofcs @michaelbatnick pic.twitter.com/rBrGyLZhKM

— LVD (@LVDTrades) February 4, 2020

But in the meantime, some millennials are flipping stocks and making money in “COLLEGE (in class)” to have “NO MORE student loans.”

Authored by Gail Tverberg via Our Finite World,

We read a lot in the news about the new Wuhan coronavirus and the illness it causes (COVID-19), but some important points often get left out.

[1] COVID-19 is incredibly contagious.

COVID-19 transmits extremely easily from person to person. Interpersonal contact doesn’t need to be very long; a taxi driver can get the virus from a passenger, for example. The virus may be transmissible even before an infected person develops symptoms. It may also be transmissible for a few days after a person seems to be over the virus; it is possible to get positive virus tests, even after symptoms disappear. Some people may have the disease, but never show symptoms.

[2] The virus likely remains active on inanimate surfaces such as paper, plastic, or metal for many days.

There haven’t been tests on the COVID-19 virus per se, but studies on similar viruses suggest that human pathogens may remain infectious for up to eight days. Some viruses that only infect animals can survive for more than 28 days. China is reported to be destroying paper currency from the hardest hit area, because people do not want to accept money which may have viruses on it. Clearly, surfaces in airplanes, trains and buses may also harbor viruses, long after a passenger with the virus has left, unless they have been thoroughly wiped down with disinfectant.

[3] Given Issues [1] and [2], about the only way to avoid spreading COVID-19 seems to be geographic isolation. 

With all of today’s travel, geographic isolation doesn’t work very well in practice. People need food and medical supplies. They need to keep basic services such as electricity and garbage collection operating. Suppliers of food and other services need to come and leave the area and that tends to spread COVID-19. Also, the longer a geographic area is isolated, the larger the percentage of the people within the area that is likely to get COVID-19. The problem is that the people need to have contact with others in the area for purposes such as buying food, and that tends to spread the disease.

[4] The real story regarding the number of deaths and illnesses seems to be far worse than the story China is telling its own people and the world.

The real story seems to be that the number of deaths is far greater than the number reported–perhaps 10 times as high as being reported. The number of illnesses is also much higher. At one point, facilities doing cremations in the Wuhan area were reported to be doing four to five times the normal number of cremations. Some of the bodies in the Wuhan area now need to be sent to other areas of China because there is not enough local cremation capacity.

China doesn’t dare tell its people how bad the situation really is, for fear of panic. They want to tell a story of being in control and handling the situation well. The news media in the West repeat the stories that the government-controlled publications of China provide, even though they seem to present a much more favorable situation than really seems to be the case.

[5] Our ability to identify who has the new coronavirus is poor.

While there is a test for the coronavirus, it costs hundreds of dollars to administer. Even with this high cost, the results of the tests aren’t very reliable. The test tends to produce many false negatives. The virus may be present somewhere inside the person being tested, but not in the areas touched by swabs of the throat and nose.

[6] Some people get much more severe symptoms from COVID-19 than others.

Most people, perhaps 80% of people, seem to get a fairly light form of the COVID-19 illness. Groups that seem particularly prone to adverse outcomes include the elderly, smokers, those who are obese, and those with high blood pressure, diabetes, or poor immune systems. Males seem to have worse outcomes than females.

Strangely enough, people with East Asian ancestry (Chinese, Japanese, or Vietnamese) may have a higher risk of adverse outcomes than those of European or African ancestry. One of the things that is targeted by the disease is the ACE2 receptor. The 1000 Genome Project studied expected differences in ACE2 receptors among various groups. Based on this analysis, some researchers predict that those of European or African ancestry will tend to get lighter forms of the disease.

Figure 1. Chart from Coronavirus risk for Asians, Africans, Caucasians revealed.

Bolstering this view is the fact that the SARS, which also tends to target the ACE2 receptor, tended to stay primarily in China, Hong Kong, Taiwan, and Singapore. While there were cases elsewhere, they tended to have few deaths.

[7] China has been using geographical quarantine to try to hold down the number of COVID-19 cases. The danger with such a quarantine is that once the economy is down, it is very difficult to come back to the pre-quarantine state.

Data shows that China’s economy is not reopening quickly after the extended New Year holiday finished.

Figure 2. China daily passenger flows, relative to Chinese New Year. Amounts are now down more than 80% and have not increased, even as some businesses are theoretically reopening. Chart by ANZ, copied by WSJ Daily Shot Feb. 17, 2020.

Figure 3. China property transactions, before and after Chinese New Year. Chart by Goldman Sachs. Reprinted by WSJ Daily Shot, Feb. 17, 2020.

All businesses will be adversely affected by a lack of sales if they need to continue to pay overhead expenses. Small and medium-sized business will be especially adversely affected. Bloomberg reports that if a shutdown lasts for three months, there is a substantial chance that these businesses will run through their savings and fail. Thus, these businesses may be permanently lost if the economy is down for several months.

Also, restarting after a shut-down is more difficult than it might appear. Take, for example, a mother who wants to go back to work. She will likely need:

• Public transportation to be operating, so she has a way to get to work;

• School to be open, so she doesn’t need to worry about her child while she is at work;

• Masks to be available, so that she and her child can comply with requirements to wear them;

• Stores providing necessities such as food to be open, or she may be too hungry to work

If anything is missing, the mother is likely not to go back to work. Required masks seem to be a problem right now, but other pieces could be missing as well.

Businesses, too, need a full range of workers to restart their operations. If the inspector doing the final inspection is not available, the business may not really be able to ship finished products, even if most of the workers are back.

[8] A shutdown of as little as three months is likely to be damaging to the world economy.

Multiple things are likely to go wrong:

(a) Commodity prices are likely to fall steeply, because of low demand from China. Oil prices, in particular, are likely to fall steeply, perhaps to $30 to $35 per barrel. Besides cutbacks in oil demand from China, there is the issue of a general reduction in long distance travel, because of fear of traveling with other passengers with COVID-19.

(b) US businesses, such as Apple, will find their supply chains broken. They won’t know when, and if, they can ship products.

(c) Debt defaults are likely to become more common, especially in China. The longer the slowdown/shutdown lasts, the greater the extent to which debt defaults are likely to spread around the world.

(d) The world economy is likely to be pushed into recession, without an easy way to get out again.

[9] The longer the shutdown lasts, the more likely there is to be a major collapse of the Chinese economy. 

In the event of a long-term shutdown, it would seem likely that, at a minimum, a new leader would take over. In fact, there would seem to be a significant chance of major changes within the economy. For example, the provinces of China that are able to restart might attempt to restart, leaving the more damaged areas behind. In such a case, instead of having a single Chinese government to deal with, there might be multiple governmental units to deal with.

Each governmental unit might consist of a few provinces trying to provide services such as they are able, without the benefit of the parts of the economy that are still shut down. Each governmental unit might have its own currency. If this should happen, China will be able to provide far fewer goods and services than it has in the recent past.

[10] Planners everywhere have been guilty of “putting too many eggs in one basket.”

Planners today look for efficiency. For example, placing a large share of the world’s industry in China looks like it is an efficient approach. Unfortunately, we are asking for trouble if the Chinese economy hits a bump in the road. Using just-in-time supply lines looks like a good idea as well, but if a major supplier cannot provide parts for a while, then having inventory on hand would have been a better approach.

If we want systems to be sustainable, they really need a lot of redundancy. Redundant systems are not as efficient, but they are much more likely to sustainable through difficult times. There is a recent article in Nature that talks about this issue. One of the things it says is,

A system with a single cycle is the most unstable because the deletion of any cycle-node or link breaks the sustaining feedback mechanism.

“A system with a single cycle” is basically similar to “putting all of our eggs in one basket.” “Deletion of any cycle-node or link” is something like China running into coronavirus problems. We probably need a world economy that consists of many nearly separate local economies to be certain of long-term world economy stability. Alternatively, we need a great deal of redundancy built into our systems. For example, we need large inventories to work around the possibility of missing contributions from one country, in the case of a problem such as a major epidemic.

Conclusion

The world economy may become very different, simply because of COVID-19. The new virus doesn’t even need to directly affect the rest of the world very much to create a problem. The United States, Europe, and the rest of the world are very much dependent on the continued operation of China. The world economy has effectively put way too many eggs in one basket, and this basket is not now functioning as expected.

If China is barely producing anything for world markets, the rest of the world will suddenly discover that long supply chains weren’t such a good idea. There will be a big scramble to try to fill in the missing pieces of supply chains, but many goods are likely to be less available. We may discover quickly how much we depend upon China for everything from shoes to automobiles to furniture to electronics. World carbon dioxide emissions are likely to fall dramatically because of China’s problems, but will the accompanying issues be ones that the world economy can tolerate?

The thing that is ironic is that it is possible that the West’s fear of the new coronavirus may be overblown–we really won’t know what the impact will be with respect to people of European or of African descent until we have had a better chance to examine how the virus affects different populations. The next few weeks and months are likely to be quite instructive. For example, how will the Americans and Australians who caught COVID-19 on the cruise ships fare? What will the health outcomes be of non-Asians being brought back from Wuhan to their native countries on special planes?

To those who have been following our series of high-frequency, daily indicators of China’s economy, it will probably not come as a surprise that the world’s second biggest economy has ground to a halt, its GDP set to post the first negative print in modern history. To everyone else who is just now catching up, we have some news: it’s going to be bad.

Ahead of official Chinese economic data which will soon start capturing the period when the coronavirus hit the nation, Nomura’s Chief China economist Ting Lu noted that China’s Emerging Industries PMI (EPMI), which gauges momentum in the country’s high-tech industries and is closely correlated with official manufacturing PMI, slumped to 29.9 in February (from 50.1 in January!), its lowest-print on record (introduced Jan ’14), which as Nomura’s Charlie McElligott writes “is pure reflection of the devastating impact of the COVID-19 outbreak.“

What does this mean for the closely followed China manufacturing PMI? As McElligott writes, “even adjusting for seasonality and expected progress in business resumption in the coming week, we estimate the official manufacturing PMI could drop to a range of 30-40 in Feb.”

And the punchline from Ting:

“We believe markets might underestimate the scale of the current growth slump. Due to a slower-than-expected rate of business resumption, we have cut our year-on-year Q1 real GDP growth forecast to 3.0% and expect Beijing to ramp up policy easing measures in coming months. That said, the likelihood of another round of massive stimulus appears low as policy space remains limited.”

The last bolded sentence confirms what we said on Sunday, and even though China has already launched what has been a generous deployment of various stimuli

… it explains why some were disappointed after the PBOC only incrementally eased policy overnight, lowering the benchmark 1Y Loan Prime Rate to 4.05% (from 4.15%) and the 5Y rate to 4.75% (from 4.80%) – not pursuing a full-blown overnight rate cut as some had expected – while at the same time stating that it will work to promote consumption and investment to boost domestic demand; the PBOC did offset some of this disappointment with the biggest ever monthly injection in Total Social Financing  credit as discussed earlier…

… but as McElligott concludes, “the negligible decline in the 5Y rate shows that authorities remain concerned about easing property policy and that, for now, they are attempting to maneuver within “conventional” policy.”

In other words, while the market remains convinced that Beijing with unleash even more stimulus to force the V-shaped rebound that has been priced in for Q2 and onward, also explaining the relentless bid for risk assets, this appears unlikely to happen any time soon, especially while China is still battling to contain the coronavirus, because as Jefferies strategist Sean Darby warned, “markets have taken a step back because the authorities won’t do any major stimulus until they are completely sure the virus has stopped, because there’s no point in doing it when people are sitting at home.”

Authored by Michael Snyder via The Economic Collapse blog,

Global food production is being hit from seemingly every side.  Thanks to absolutely crazy weather patterns, giant locust armies in Africa and the Middle East, and an unprecedented outbreak of African Swine Fever in China, a lot less food is being produced around the world than originally anticipated.  Even during the best of years we really struggle to feed everyone on the planet, and so a lot of people are wondering what is going to happen as global food supplies become tighter and tighter.  The mainstream media in the United States is so obsessed with politics right now that they haven’t been paying much attention to this emerging crisis, but the truth is that this growing nightmare is only going to intensify in the months ahead.

In Australia, conditions have been extremely hot and extremely dry, and that helped to fuel the horrific wildfires that we recently witnessed.

And everyone knew that agricultural production in Australia was going to be disappointing this year, but it turns out that it is actually going to be the worst ever recorded…

Australia’s hottest and driest year on record has slashed crop production, with summer output expected to fall to the lowest levels on record, according to official projections released Tuesday.

The country’s agriculture department said it expects production of crops like sorghum, cotton and rice to fall 66 percent — the lowest levels since records began in 1980-81.

The continent of Australia is considered to be one of the breadbaskets of the world.  According to the U.S. Department of Agriculture, in 2018/19 Australia exported over 9 million tons of wheat to the rest of the world.

But thanks to relentless crop failures, Australia has started to import wheat, and that is likely to continue for the foreseeable future.

So instead of helping to feed the rest of the world, Australia is now relying on the rest of us to help feed them.

And what is happening this year didn’t just barely break the old records.  In fact, one senior economist says that this will be the worst summer crop production the country has ever seen “by a large margin”…

“It is the lowest summer crop production in this period by a large margin,” Peter Collins, a senior economist with the department’s statistical body ABARES told AFP.

Of course if the rest of the world was doing great we could certainly survive a downturn in Australia.

Unfortunately, that is definitely not the case.

Right now, billions upon billions of locusts are voraciously devouring farms in eastern Africa and the Middle East.  As I detailed the other day, giant armies of locusts the size of large cities are traveling up to 100 miles per day as they search for food.  When they descend on a farm, all the crops can be consumed literally within 30 seconds.  It is a nightmare of epic proportions, and UN officials are telling us that this crisis is only going to get worse over the next couple of months.

In Uganda, the army has been called out to help fight this locust plague, but it is making very little difference…

Under a warm morning sun scores of weary soldiers stare as millions of yellow locusts rise into the northern Ugandan sky, despite hours spent spraying vegetation with chemicals in an attempt to kill them.

From the tops of shea trees, fields of pea plants and tall grass savanna, the insects rise in a hypnotic murmuration, disappearing quickly to wreak devastation elsewhere.

The most effective way of fighting these locust swarms is to spray insecticide on them from the air, but even that only produces very limited results.

However, at least it is better than doing nothing.

The UN is trying to raise a lot more money to get more planes into the air, because if nothing is done the number of locusts “could grow up to 500 times by June”…

The U.N. has said $76 million is needed immediately. On Tuesday, U.S. Secretary of State Mike Pompeo during a visit to Ethiopia said the U.S. would donate another $8 million to the effort. That follows an earlier $800,000.

The number of overall locusts could grow up to 500 times by June, when drier weather begins, experts have said. Until then, the fear is that more rains in the coming weeks will bring fresh vegetation to feed a new generation of the voracious insects.

Overall, these locusts are affecting nations “with a combined population of nearly 2 billion”, and the amount of food that these locusts are destroying is unprecedented.

Meanwhile, China has been dealing with the worst outbreak of African Swine Fever in history.

African Swine Fever does not affect humans, but it sweeps through herds of pigs like wildfire.  There is no vaccine, there is no cure, and once African Swine Fever starts infecting pigs in a certain area the only thing that can be done is to kill the rest of the pigs to keep it from spreading anywhere else.

Unfortunately, China has not been able to get this outbreak under control, and the losses have been staggering.

According to the New York Times, the number of pigs that have been wiped out in China already is equivalent to “nearly one-quarter of all the world’s pigs”…

The disease was first reported in Shenyang, Liaoning Province, in early August 2018. By the end of August 2019, the entire pig population of China had dropped by about 40 percent. China accounted for more than half of the global pig population in 2018, and the epidemic there alone has killed nearly one-quarter of all the world’s pigs.

But of course China is not the only one dealing with African Swine Fever.

In fact, cases of African Swine Fever have now been identified “in 50 countries”, and U.S. pig farmers are deathly afraid of what would happen if this disease starts spreading here.

As a result of this crisis, pork prices in China have gone through the roof, and many families are no longer able to eat pork at all.

Never before in the modern era have we seen so many major threats to global food production emerge simultaneously.

There are more than 7 billion people living on our planet today, and we need to be able to grow enough food to feed everyone.

If we aren’t able to do that, food prices will start to get really high, and people in the poorest areas simply will not have enough food to feed their families.

XAG Co., Ltd. was selected by the Chinese government late last month for the deployment of its ground-based robots and unmanned aerial vehicles (UAV) to spray powerful disinfectants across public places in cities where the Covid-19 outbreak is the worse. 

XAG is using a fleet of R80 Agricultural Utility Vehicle robots with 80-liter (21 gallons) sprayers for ground-based disinfectant operations across public places. 

The company tweeted several pictures of the R80 in action, spraying disinfectant across a “parking lot outside the office block in Guangzhou.” 

Our farm #robot R80 has stepped forward to join the #fightcoronavirus operation, disinfecting parking lot outside the office block in Guangzhou. Lightweight, flexible to traverse small districts, R80 can disinfect an area of up to 64800 square metres per hour, with no dead ends. pic.twitter.com/Dm7r8kqjVK

— XAG (@XAG_official) February 11, 2020

Here’s a video of the robot spraying disinfectant in an ambulance, which presumably had a virus-infected patient beforehand. The robots are used to spray disinfectants in areas where it’s too dangerous for humans, considering the virus is airborne and extremely contagious.

We have adapted our R80 AUV into an epidemic prevention #robot to spray disinfectant in public spaces, working with #drones to fight the new #COVID19 #coronavirus. Video shows how R80 was being deployed in hospital to precisely disinfect ambulance inside and out. pic.twitter.com/tWoHkmKiZn

— XAG (@XAG_official) February 13, 2020

XAG also deployed the “first-ever ground-to-air disinfection solution.”

The first-ever ground-to-air disinfection solution. The R80 #robot disinfected epidemic prevention vehicles and quarantine area at hospital, while the autonomous #drone cooperated from the air, reducing the risks of human exposure to both virus and disinfectant. #FightCoronavirus pic.twitter.com/cdq1bkKuII

— XAG (@XAG_official) February 18, 2020

Justin Gong, vice president and co-founder of XAG, said the ground-based drones and UAVs had established a “three dimensional and integrated” disinfection system.

Gong said the robots and UAVs offer a unique advantage to cover a wide area while leaving first responders out of harm’s way.   

He said virus containment operations would be mainly across outdoor public places and those communities that have confirmed or suspected cases of the virus.

Gong said operations would also include disinfecting medical and epidemic prevention vehicles, hospitals, and other areas where virus-infected people are being housed.

Last month, we noted how China was using DJI drones with front-mounted speakers, to fly around towns and yell at anyone who wasn’t wearing a mask. 

Walking around without a protective face mask? Well, you can’t avoid these sharp-tongued drones! Many village and cities in China are using drones equipped with speakers to patrol during the #coronavirus outbreak. pic.twitter.com/ILbLmlkL9R

— Global Times (@globaltimesnews) January 31, 2020

Other reports included Chinese towns deploying agriculture drones with 19 liters (5 gallons) sprayers. 

China is using advanced technology to fight a virus that could wind up collapsing its economy. 

One day after South Korea reported its first coronavirus death and shortly after all of Daegu city’s 2.5 million residents were put on lock-down, the number of covid-19 cases in South Korea has exploded, with 52 new cases reported overnight, representing a third of all the nation’s cases.

After four largely uneventful weeks in which South Korea had confirmed just 30 cases, the number of cases has soared five fold in just three days, rising from 31 cases on Tuesday  to 156 on Friday (local time), in what appears to be a very aggressive exponential increase.

Notably, thirty-nine of the cases are related to a cluster at a church in Daegu, the city that “looks like a zombie apocalypse“,  according to a statement from Korea Centers for Disease Control.

Earlier in the day, officials said the city of Daegu was facing an “unprecedented crisis” after coronavirus infections that centred on a controversial “cult” church, linked to a branch of the Shincheonji Church of Jesus, surged over the past two days. The city of 2.5 million people, which is two hours south of the capital Seoul, was turned into a ghost town after health officials said the bulk of country’s 31 new cases announced on Thursday were linked to a branch of the Shincheonji Church of Jesus (and now another 39).

Mayor Kwon Young-jin made a televised address, urging citizens to wear masks and remain indoors while revealing his concerns that the contagion could rapidly overwhelm the city’s health infrastructure. “We are in an unprecedented crisis,” the mayor told reporters, unaware that the last thing he can afford to do in times like these is tell the truth.

He ordered the shutdown of all kindergartens and public libraries, according to Yonhap. Schools in the city were considering postponing the beginning of the spring term scheduled for early March. Shopping malls and movie theaters were also empty and the usually busy city streets were quiet. A concert featuring BTS and other K-pop stars that was set for Daegu Stadium on 8 March has been postponed.

The defense ministry banned troops stationed in Daegu from leaving their barracks and receiving guests. The US military imposed similar restrictions on its army base in the city, which houses thousands of troops, family members and civilian employees, curbing travel and closing schools and child care centers.

In what the Korean center for disease control called a “super spreader” event, almost half of the country’s total of 82 infections have been linked to a 61-year-old woman who worships at the Daegu church, which has often accused of being a cult.

She first developed a fever on 10 February but reportedly twice refused to be tested for the coronavirus on the grounds that she had not recently travelled abroad. She attended at least four services before being diagnosed. So far, almost 40 other members of the church have been confirmed as infected.

Shincheonji claims that its founder, Lee Man-hee, has donned the mantle of Jesus Christ and will take 144,000 people with him to Heaven, body and soul, on Judgement Day. And if the number of cases continues to grow exponentially, Judgment Day may be in early March.

Daegu’s municipal government said there were 1,001 Shincheonji members in the city, all of whom had been asked to self-quarantine, with 90 of them currently showing symptoms. Those who have symptoms “will be tested as soon as possible”, Kwon Young-jin said, urging stronger action from the government in Seoul and calling the national response “inadequate”.

“We plan to test all believers of that church and have asked them to stay at home isolated from their families.”

The situation was “very grave”, South Korean vice health minister Kim Kang-lip said at a separate briefing.

Shincheonji said on Thursday that it had closed down all its facilities nationwide.

“We are deeply sorry that because of one of our members, who thought of her condition as a cold because she had not travelled abroad, led to many in our church being infected and thereby caused concern to the local community,” it said in a statement.

Separately a man in his 60s from the neighboring Cheongdo county tested positive for the coronavirus after dying Wednesday following symptoms of pneumonia, authorities said. He was among 15 people found to be infected at a hospital.

* * *

Meanwhile, a few hundred kilometers west, China continues to pretend it is successfully containing the virus, although it apparently can’t even do that. One week after Beijing reported nearly 15,000 new cases after a change in the definition of “infection”, China reverted back to the original definition in hopes of drastically reducing the number of new cases and boosting people’s confidence it was successfully containing the pandemic. The result was that the number of new cases on Feb 19 was just 391, one of the lowest since the start of the pandemic, and a far cry from the 15,000 new cases reported a week earlier. Alas, in its ambition to get people back to work, the case number was too low and nobody believed it, resulting in even greater self-quarantining as China’s population increasingly believes that Beijing is no longer telling it the truth and is willing to sacrifice the population just so some factories can resume production,

Meanwhile, as China bounces around between one definition and another, in hopes of finding some “just right” middle ground between reporting too many cases and sparking a market crash, or too few cases and leading to social violence as people on the ground certainly know just how bad it truly is, Beijing is now losing all credibility and even China’s best friend in the US, Bloomberg, writes that “Hubei Changes Virus Count Method With Data Mistrust Growing.” This happened after on Thursday China reported that it had just 349 additional confirmed cases, compared with almost 1,700 additional cases from the day before; the number then doubled to 889 on Friday as China appears to have given up on any pretense at reporting data objectively.

The outcome appears to be a recreating of the famous surgery scene from Spice Like Us, where China comes up with some made up number, gauges the market’s and media’s reaction, and then China offers a totally opposite number on the next day as it scramble to give everyone what they want while creating the fiction that it is in control.

The irony, of course, is that the more China manipulates the data, the less anyone will believe a positive outcome for the epidemic and will instead claim that this is just the result of Chinese propaganda: “It points to a rather concerning confusion over how best to officially report the number of cases, leading to a loss of confidence in the true numbers,” said Jeffrey Halley, a Singapore-based senior market analyst with Oanda Asia Pacific Pte. “That could mean that internationally, the rest of the world keeps China in lockdown for longer, which will not be good for the ‘V-shaped recovery’ projections.”

As reported previously, the latest changes cast doubt over whether the drop in new cases – a positive sign that the epidemic is coming under control at the epicenter – is actually happening. In recent days, China’s leaders have scrambled to project optimism over the outbreak, which has shut down large parts of its economy and plunged industries from retail to aviation into crisis. Companies and factories across China are now being urged to re-start economic activity, while Chinese premier Li Keqiang said on Monday that the outbreak is on “a positive trend.”

#COVID19 check points cancelled as gov. encourages people to go back to work, at Xingtai in #Hebei province.
为配合复工，邢台19个检查点全撤了.
Click here for more 更多视频在这里: https://t.co/fSwmxEsPYp#Coronavirus #CoronavirusOutbreak #武汉肺炎 #新冠肺炎 #新冠病毒 #少年译制 pic.twitter.com/vBt7jXndXR

— 曾錚 Jennifer Zeng (@jenniferatntd) February 21, 2020

What Li meant is that Beijing is willing to sacrifice healthy citizens by commingling them with potentially infected ones, if it means that China’s GDP, already set for a record plunge, can be pushed up just a bit. Of course, none of this is lost on the people, and in a country where the biggest morbid fear is one where the middle class rises up and overthrows the communist parasites in charge, there is a distinct possibility that by telegraphing to the people just how worthless their lives are to Beijing, the instead of delivering a “positive trend” for the outbreak, China’s ruthless rulers may soon be on the receiving end of what happens when 1.4 billion Chinese grab the pitchforks and go after those who are willing to risk their lives if only it means that the “quota met” bonus payment for 2020 is made.