Tag: news

In what was clearly a meticulously planned exhortation from one of the presidency’s most acclaimed speechwriters, former President Barack Obama – after spending the last 3.5 years “respecting the precedent” of not attacking his successor by name (though he did leave a breadcrumb trail of not-so-oblique aspersions denouncing Trump as corrupt)  – laid into Trump Wednesday night during Night 3 of the Democratic National Convention Prime-Time Programming Slot.

Obama assailed his successor as “unfit” for the office he holds, and a direct threat to the country and its founding principles, while also repudiating Trump’s supporters as Americans who truly don’t care about preserving American Democratic principles.

While Obama never expected Trump to share his views or preserve his policies, Obama said he had hoped Trump would find “some reverence” for the office he holds. But over the last four years, Trump has shown “no interest in putting in the work,” done nothing to find common ground with his detractors, or use “the awesome power of his office to help anyone but himself and his friends.”

He has “no interest in treating the presidency as anything but one more reality show that he can use to get the attention he craves,” Obama added. “Donald Trump hasn’t grown into the job, because he can’t. And the consequences of that are severe.”

On the other hand, Joe Biden and Kamala Harris “actually care about every American, and they care deeply about this democracy,” Obama said, bolstering the reputation and offering his personal seal of approval to his former Veep, about whom he harbored “grave concerns” until only recently.

Of course, Obama is fighting for more than simply making sure “my friend Joe Biden” gets a crack at running the country. He’s fighting for the restoration, and preservation, of his legacy. For both Obama and Biden, the election is a chance to reverse Trump’s decision to dismantle dozens of policies on immigration, climate change and healthcare enacted during the Obama Administration.

“For eight years, Joe was the last one in the room whenever I faced a big decision. He made me a better president – and he’s got the character and the experience to make us a better country,” Obama continued as he heaped praise on Biden.

And just in case Obama’s words weren’t enough to get the point across, the speech was filmed in Philadelphia, and delivered from the Museum of the American Revolution in the city where the US Constitution was written, and still features many monuments to American Democracy.

Of course Obama wasn’t last night’s only speaker, and “Night Three” included several other highlights, from Kamala Harris accepting the nomination to Hillary Clinton wishing “Donald Trump knew how to be president” (unlike Clinton, who knows better than anybody else in the country, remember?)

Harris declared in her speech, as she formally accepted the VP nomination (becoming the third woman, and first black woman, to headline or co-headline a presidential ticket for a major American party), that American is “crying out for leadership.”

Former Secretary of State and 2016 Democratic presidential nominee Hillary Clinton offered a reflection on the “morning after” the 2016 election, and insisted that “if he had put his own ego and inhumanity aside” Democrats would have worked with Trump (despite the fact that Democratic leaders embraced a policy of broad-based obstruction from the very beginning).

Clinton insisted that “I wish Donald Trump knew how to be a president because America needs a president right now.”

Finally, singer Billie Eilish (who literally just turned 18) prefaced her performance of her new single “My Future” by urging viewers to vote against Trump, and for presumptive nominee and former Vice President Joe Biden. “Silence is not an option, we can not sit this one out. We all have to vote like our lives and the world depend on it.”

Spoken with all the wisdom, and hormone driven certainty, of a fabulously wealthy teenager, right before obviously lipsynching during a live TV performance.

Back on July 14 when a wave of new covid cases was sweeping the sunbelt states prompting many to speculate if a new round of shutdowns was imminent, we took the other side of the argument and said that the pandemic peak had hit, and that in Arizona – an early recent outbreak state, “the worst was over for the COVID breakout.” We were right, and as Bank of America writes today, Arizona has seen a 66% decline since its peak on July 14th, while the US excl. the four major recent outbreak states (AZ, CA, FL, TX) experiencing a 13% decline since the peak on July 30th.

There’s more: as BofA also points out, “we continue to see clear signs the Coronavirus is rolling over in the US as the number of people hospitalized due to COVID-19 declines at a rapid pace of about one percent a day (26% in 23 days).”

Extrapolating, this rate of decline means that there will be zero covid-related hospitalizations around the Nov 3 election day, a feat that if marketed properly, could mean the differnce for Trump between victory and defeat.

Some more observations from BofA:

This week saw front page headlines that official COVID-19 statistics can no longer be trusted due to decreasing testing volumes. We agree but are wondering why there were no such headlines when daily new cases were rising due to more testing.

This is why we rely on statistics for the number of people hospitalized due to COVID-19. Drawback is that hospitalizations are lagged indicators of infections. Let’s assume for this discussion that the lag is three weeks. The recent peak number of hospitalized on July 24th suggests peak daily new COVID-19 infections in the US around Independence Day (July 4th).

But daily new COVID-19 cases continued to rise sharply in July, which dominated the headlines. It looks like daily new cases and the number of people hospitalized are virtually coincident, as the peaks for both were reached around the same time. This actually makes sense as probably the primary driver of testing is someone going to the hospital with COVID-19 symptoms. We imagine that person gets tested along with the immediate family, friends and colleagues. Because COVID-19 statistics are very persistent, it seems likely that the numbers continue to roll over.

There is little doubt that all these negative COVID-19 related headlines have weighed on consumer, business and investor confidence. As this now reverses we remain positioned for a re-steepening Treasury curve by expecting bull flattening IG corporate spread curves, compression along the quality curve and outperformance of the most COVID-19 negatively impacted names. Heavy new issuance remains a headwind, but it is mitigated by strong inflows. Next week should be busy and then the window closes in the two weeks before Labor Day.

It wasn’t just Bank of America that had good news: in its state-level coronavirus tracker, Goldman confirmed that the number of new confirmed coronavirus cases continues to decline in the vast majority of states, yet the bank urged some caution, noting that “although the nationwide downward trajectory is encouraging, state government officials may wait until case levels decline further before moving forward with additional reopening policies.”

Ironically, there is just one state where there is a tangible number of new cases – the one which was among the first to permit protests (and riots) in late May and early June: as Goldman notes, “Cases are on the rise in the most populous state of California, which has faced technical difficulties in reporting accurate daily case counts.”

For the second time in just over a year, Russian opposition leader Alexei Navalny has apparently been poisoned. According to media reports, the liberal politician and leader of Russia’s anti-Putin domestic opposition was admitted to a hospital in Siberia after his aircraft was forced to make an emergency landing.

Navalny became sick on a flight from Tomsk to Moscow on Thursday and lost consciousness on the aircraft after reportedly drinking a cup of tea in the airport (it’s always the tea), according to his spokeswoman Kira Yarmysh. The politician collapsed in the plane’s bathroom during the flight.

According to reports, he was in a coma according to the most recent update.

Local health officials said Navalny was in intensive care and doctors were “performing all necessary tests.”

This is the second time in just over a year that Navalny, the most visible member of Russia’s domestic political opposition, has been mysteriously poisoned. Back in July 2019, while serving a 30-day sentence for planning an unauthorized protest, Navalny was apparently poisoned while in prison – the authorities attributed his symptoms of severe facial swelling to “an allergic reaction” – and was briefly treated at a nearby hospital before being abruptly sent back to the pen.

He is also still blind in one eye from a 2017 attack when a pro-Kremlin activist threw corrosive chemicals in his face.

Navalny’s camp says doctors at the hospital have been given the ‘tap on the shoulder’ and told not to disseminate any more information about Navalny’s case. Alexei Kalinichenko, deputy chief doctor of the hospital in Omsk where Navalny was taken, said “there was no certainty that poisoning is the cause” though it is “one of the versions” under consideration. “We suspect Alexei was poisoned with something mixed into his tea…It was the only thing he drank all morning. Doctors said that the toxin was absorbed more quickly through hot liquid.”

Russian media are now speculating on the agent used in the poisoning, with one gossip site claiming GHB was the substance used on Navalny.

Authored by Max Rangeley via The Mises Institute,

As the Bubble Slowly Pops, the Economic Chain Reaction Is Now in Progress

Much has been written about the economic consequences of covid-19, yet, just as in many of the analyses of the Great Depression and the 2008 crisis, the years of accumulating debt preceding the event do not attract the attention they deserve. Covid-19—or to be more precise, the lockdown—has initiated a cascading liquidation of the debt bubble that has been building for a generation. From the early 1980s, each recession has been responded to with iteratively lower interest rates.

Following the bursting of the late 1980s credit bubble, Greenspan inaugurated the loosest monetary policy for a generation, creating the dotcom bubble.

When this burst in 2000, it was responded to with even lower interest rates, reaching 1 percent from 2003–04, generating the housing bubble.

When this burst in 2007/8, the response was 0 percent interest rates, turning a $150 trillion global debt bubble as it was then—already the largest In history—into a $250 trillion global debt bubble.

When central banks set interest rates it fundamentally distorts the pricing mechanisms of credit markets, just like price setting in other parts of the economy. Friedrich von Hayek won the Nobel Prize in 1974 for articulating that interest rates, like other prices, should be set by the market rather than central planning committees. We are not surprised when the government setting the price of food in Venezuela leads to food shortages, so we should not be surprised that 0 percent interest rates leads to a shortage in yield for investors, leading to a $250 trillion global debt bubble.

(Below is a speech I gave in the European Parliament in 2018 in which I adumbrated these points for a political audience):

With each wave of artificially low interest rates, generating ever more distortive monetary effects, bond quality has fallen concomitantly, as shown by OECD (Organisation for Economic Co-operation and Development) research in 2019. We are now at the stage where low-quality debt, rather than being the exception, has metastasized through much of the economy.

Figure 1: Effective Federal Funds Rate

Source: Board of Governors of the Federal Reserve System.

Figure 2: Bond Quality

Source: OECD 2019.

While debt quality has fallen, we have seen a proliferation of so-called zombie companies. Research at the Bank for International Settlements showed a cyclical growth in zombie companies from 2 percent of companies in the late 1980s to 12 percent in 2016, corresponding empirically to the waves of artificially low interest rates. The BIS in its well-written 2018 paper noted that:

Lower rates boost aggregate demand and raise employment and investment in the short run. But the higher prevalence of zombies they leave behind misallocate resources and weigh on productivity growth….Our study cannot answer this question. We leave the exploration of this trade-off to future research.

The “boost” to the economy is the very same poison that makes it worse. Artificially low interest rates send false price signals to markets: debt goes up, savings go down, and resources are directed from productive uses to more interest rate-sensitive, debt-fueled sectors (including, of course, financial speculation).

Figure 3: USA Domestic Credit Provided by the Financial Sector (Percentage of GDP)

Source: World Bank.

A lot of attention has been paid to stock market and housing bubbles during this period, yet the bubble is in fact an aggregate asset bubble which has had a series of different instantiations. Young people cannot buy houses, P/E (price-to-earnings) ratios are at similar levels to 1929, but almost all assets have been inflated by artificially cheap credit in a series of waves corresponding to the waves of lower interest rates.

Figure 4: Households and Nonprofit Organizations’ Net Worth, Level/GDP

Sources: US Bureau of Economic Analysis (BEA); Board of Governors of the Federal Reserve System.

The virus was not predictable, but what is happening to the economy was entirely predictable. Sooner or later something was going to burst the bubble. To appropriate Donald Rumsfeld’s famous monologue, what is happening now is a “known unknown” rather than an “unknown unknown.” It could also have been a war or terrorist attack that brought about the bursting of the bubble; indeed, it would have burst at some point by itself, just as it began to burst in 2008.

Most of the policies pushed by the establishment over the preceding decade have made things worse. Zero percent interest rates, bailouts, preserving zombie companies, quantitative easing and encouraging debt-fueled consumer spending as a path to economic growth.

At the Economic Freedom Summit at the European Parliament in 2018 I had a debate with the head of IMF Europe on policies following the economic crisis. The position of the establishment is clear: central banks saved the day. I made the case that most of the metrics were worse ten years after the crisis than they were in 2008—debt levels, zombie companies, financial speculation, and transfers of wealth from hard-working, productive people to spivs who know how to play the game created by an extractive system.

What Is to Be Done?

When I give seminars at central banks, the OECD, and elsewhere I make the case that interest rates should be set by the market rather than central banks and that 0 percent interest rates have made things worse since 2008. One of the responses was interesting: “What would you expect us to do, just let the whole thing collapse?”

We are now entering act 5 of the bubble—negative interest rates. Negative interest rate mortgages have already been given in Denmark. Once interest rates go negative—a complete aberration for the principles of market economics—the nature of debt will fundamentally change. But it will collapse. Covid-19 has seen to it that the bubble inflated by 0 percent interest rates will collapse shortly, but the level of accumulated malinvestment means that negative interest rates will not have the steroidal effect hoped for.

It will deliver another few years of subpar debt-fueled economic activity—I hesitate to call it “growth”—before an even larger debt liquidation becomes necessary.

Just two generations ago governments in Britain, the US, and elsewhere engaged in widespread price-fixing, including of fuel, wages, and consumer goods. The abject failure of those policies was a painful lesson to learn, but the most important lesson of all will soon be delivered—interest rates, like other prices in a capitalist economy, should be set by the market rather than by central planning committees.

Scandinavia and northern Europe is developing a reputation as a hotbed of “mandatory mask” denierism. But is it truly a dangerous affront to science and survival, as American social media companies like Facebook – which earlier today purged QAnon-linked accounts from its platform – want us all to believe?

One by one, scientists in Denmark, the Netherlands, Finland and Sweden have raised doubts about the effectiveness of asking citizens to wear masks in every public venue, with many arguing that asking people to wear masks at all hardly makes sense in places where the rate of spread is low. However, over the past few weeks, many have acknowledged that masks may be beneficial in certain circumstances, and policies that focus specifically on these (such as mandatory use on public transit) might be more beneficial.

As debate is mostly stifled in the US, Sweden’s top epidemiologist and architect of the country’s no-lockdown COVID-19 strategy, Anders Tegnell, is speaking up about Sweden’s decision to stand by its mask policy, which, like most of Sweden’s COVID-19 response, is surprisingly lax.

Speaking once again to the FT , Tegnell explained his doubts, his hopes and even areas where he suspects masks may be effective. But his final conclusion is that the “science” that American liberals are always boasting about simply isn’t as concrete as the Washington Post, New York Times and others make it out to be.

“It is very dangerous to believe face masks would change the game when it comes to Covid-19,” Tegnell told the FT. He also shared some evidence to suggest that his neighbors were caving to political whims, and perhaps pressure from Brussels, by widening mask mandates.

Soren Riis Paludan, a viral infections expert from Aarhus University, said research had suggested that at Denmark’s current infection rate 100,000 people would have to wear face masks properly for a week to avoid one infection. “If there’s very little virus in the community, the effect is limited. But if you’re in the middle of a hotspot, then everything says that they can have an effect. In Denmark, we have compromised and said face masks may be another tool in the toolbox,” Prof Paludan said. Another reason for Swedish reluctance, according to experts, is high trust in the authorities. “When the Swedish health agency says there’s no reason to wear face masks, people don’t wear face masks,” said Prof Ludvigsson. “In other countries, where there’s less trust and they don’t recommend wearing masks, people might do it anyway.”

The odds of infection in the initial scenario above are staggeringly low, and yet, viral memes shared on Instagram and Facebook for the past few months have posed scenarios where neglecting to wear a mask could practically guarantee that more than a dozen random strangers could be accidentally infected. This is extremely unlikely.

Most evidence supporting mask involves retrospective analysis of hundreds of studies and data sets used to study other things. The truth is, we truly don’t know how effective wearing a surgical mask might be to stop an infected individual from spreading it to another person (which is why they’re worn in surgery).

Nordic experts also point to a lack of hard evidence over the effectiveness of face masks. Many countries as well as the World Health Organization have changed their advice on wearing masks as studies have appeared to point to a link between their use and lower infection rates. But some Nordic experts are still sceptical. Mr Ludvigsson noted that in a meta-analysis by the WHO of 29 studies that showed face masks were effective, only three concerned their use outside hospitals and of those that did not none involved Covid-19. Still, he said his personal position had changed and he now believed they should recommend their use on public transport in Sweden but for a set period. “It would increase compliance if people know it’s only for three months,” he added.

Though Tegnell says he is keeping an open mind.

“Face masks can be a complement to other things when other things are safely in place. But to start with having face masks and then think you can crowd your buses or your shopping malls – that’s definitely a mistake,” he said, adding that countries such as Belgium and Spain with widespread mask use still had rising infection rates. Sweden’s public health agency said on Tuesday that it was working on proposals for the government in the next few weeks and could open up for face mask use in specific circumstances such as visits to hospitals or dentists. Sweden is not the only European country skeptical about face masks. In the Netherlands, they must be worn on public transport and at airports but are not mandatory elsewhere.

Our only question is, how much longer will Tegnell be allowed to peddle his view without rousing the anger, and retribution, of Big Tech?

Authored by Kit Knightly via Off-Guardian.org,

Do you remember five months ago?

Normally I wouldn’t ask, but the world is moving incredibly fast these days.

Do you remember that it was predicted that covid19 would kill literally millions of people?

Do you remember that hospitals were going to be over-run with patients and our struggling medical infrastructure was going to collapse under their weight?

Do you remember that locking down global society was the only way to prevent this disaster? That we had to do it, regardless of how much damage it did to the livelihoods and security of countless millions of people?

Final question – do you know how many people in the United Kingdom officially died with (not of) the coronavirus yesterday?

It’s 12.

Twelve people.

You probably didn’t hear about that, because sometime in the last five weeks or so the media completely stopped using the word “deaths”, and started talking only about “cases”.

A “case” is anyone who tests positive for Sars-Cov-2, using the notoriously unreliable PCR tests which produce huge numbers of false positives.

Even supposing the positive test is real, the vast majority of “cases” are asymptomatic. Between false positives, unreliable tests and asymptomatic infection, a “case” count for sars-cov-2 is borderline meaningless.

Let’s say there are symptoms AND a positive test, and assume they’re not just a false positive who has a cold or the flu. Well, even the vast majority of the “symptomatic cases” will only ever be mildly ill. In fact of the 6 million active cases in the world, only 1% are considered severely ill. The majority of them will survive.

The CDC estimates the infection fatality ratio of Sars-Cov-2 to be about 0.26%. A number perfectly in line with severe flu seasons. Virtually every country in Europe is now reporting average, or even below average, mortality.

Broadly speaking, the vast majority of the world is, and will likely remain, absolutely fine.

But things aren’t going back to normal, are they?

In fact, they are getting worse.

The governments have got their foot in the door, and they have no intention of moving it.

Masks are now mandatory in the UK, and Australia, and New Zealand, and Germany and France. And many others. The Democrat’s nominee for President, Joe Biden, has said they should be mandatory in the US as well.

There’s talk of “local lockdown” in Birmingham, because of a “sudden increase in cases”, but we get no details on the numbers are, or if that’s translating into any kind illness, let alone deaths.

The same for Oldham, which is on the brink of a “catastrophic lockdown” thanks to its infection rate of 83 people per 100,000. (Oldham has a population of about 250,000, so that’s about 200 cases.)

Actually, over the last week the UK’s covid death count has reduced by over 5000, thanks to a review which removed duplicates and mistakes (which OffG predicted would happen months ago). The case count is bloated by at least 30,000 duplicates too.

In New Zealand, the patron saint of coronavirus Jacinda Ardern has just postponed next months general election. It’s only a month, for now. But what if there’s a “second wave” in October and they have to postpone it again? Regardless, the precedent is set.

New Zealand has had 1600 cases, total, in 5 months. They haven’t had a reported death since May. But their country is on lockdown and their democracy on hold.

Oh, and they’re shipping positive tests (and their families) off to “quarantine centres”, where if you refuse to be tested, you will be detained indefinitely.

Australia is locking down cities, even imposing curfews, based on 450 deaths.

Every day there are more and more articles discussing the need for mandatory vaccination, or something even worse.

And everywhere the language is changing. “The New Normal” was about beating Covid19, but now it’s about “covid19 and future pandemics”, or the “other colossal challenges facing humanity”….which can mean literally anything they want it to mean.

All this is based on the ever-increasing number of cases, without any reference to the fact deaths are falling.

All the way through those of us calling for a measured, proportional response were abused or ignored. The numbers have shown we were right, but that doesn’t matter now. They scared people into giving them the power, then they set the precedent for using that power, and there’s no reason to think they will ever stop.

It used to be about “deaths”, now it’s about “cases”. It used to be about coronavirus, next time it will be about something else.

Germany is about to try their hand at a universal basic income (UBI), after 1,500 people signed up for a three-year study to observe the effects on the economy and the wellbeing of the recipients, according to Business Insider.

Of those who signed up, 120 individuals will receive the equivalent of US$1,430 per month for three years – just above Germany’s poverty line. Their lives will be compared to the remaining 1,380 people who will not receive the payments. The participants will be asked to complete questionnaires about their lives – including their emotional state and their work status, to see if UBI has had a meaningful impact.

Of course, as we and others have noted over and over and over, UBI experiments typically end in disaster. That said, it really helps if you’ve got a giant printing press and happen to be the world’s reserve currency during a pandemic (and for how long?). The study will also seek to determine whether UBI is a disincentive to work, or whether people will continue to ‘do fulfilling work, become more creative and charitable, and save democracy,’ according to the study’s lead investigator, Jürgen Schupp.

Sound familiar?

Germany’s experiment has been funded by 140,000 private donations, and is being conducted by the German Institute for Economic Research.

Universal basic income is the idea that a government should pay a lump sum of money to each of its citizens, usually once a month, regardless of their income and employment status, effectively replacing means-tested benefits.

Its proponents argue that it would reduce inequality and also improve public wellbeing by providing people with more financial security. Its opponents say it would be too expensive and discourage people from going to work. The idea has gained traction in recent years amid recent financial crises and growing inequality in some Western countries. –Business Insider

Schupp told Der Spiegel that the experiment would produce scientific evidence that would ‘improve the debate’ over UBI.

“The debate about the basic income has so far been like a philosophical salon in good moments and a war of faith in bad times,” he said, adding “It is — on both sides — shaped by clichés: Opponents claim that with a basic income people would stop working in order to dull on the couch with fast food and streaming services. Proponents argue that people will continue to do fulfilling work, become more creative and charitable, and save democracy.

“Incidentally, these stereotypes also flow into economic simulations as assumptions about the supposed costs and benefits of a basic income.

“We can improve this if we replace these stereotypes with empirically proven knowledge and can therefore lead a more appropriate debate.”

A pro-basic income lobby group called Mein Grundeinkommen is funding the experiment. The group has used donations from its supporters to fund monthly €1,000 ($1,194) payments of for 668 people since 2014.

Finland experimented its with own form of Universal Basic Income for nearly two years between January 2017 and December 2018 but concluded that while it led to people out of work feeling happier, it did not lead to increased employment, the BBC reported. During the experiment, 2,000 unemployed Finns received €560 ($667) a month. –Business Insider

As we noted in 2018, The Telegraph explains Universal basic income is a form of cash payment given to individuals, without means testing or work requirements. In some models this is at a rate sufficient to cover all living expenses.

Proponents argue that:

• The lack of expensive means-testing leads to a higher proportion of the budget going to recipients. This would be more efficient

• The transparency of universal payments would drastically reduce the need to detect benefits fraud

• One scheme could replace the current complex arrangement of government benefits, rebates and tax rebates

• Work will always benefit recipients of this welfare, rather than the ‘benefits trap’ that leaves part-time workers

Critics argue that:

• Universal income may be inflationary and, in attempting to move all individuals out of poverty, it may simply raise the level of the poverty line

• It may reduce the incentive to work and studies have found some evidence to support this.

• A reduction in taxable income would reduce the government’s ability to cover other expenses, such as healthcare

As Nathan Keeble wrote (via the Mises Institute) in 2017: “A universal basic income is not the god-sent welfare policy that it initially seems to be. It does not create incentive to work. It won’t help solve unemployment, and it will not alleviate poverty. The truth is that a UBI will exaggerate all of these factors in comparison to what would exist in a more unhampered market. There is even reason to think that it would be worse in the long run than traditional, means-tested welfare systems.”