Earlier this year, the U.S. government passed the largest piece of stimulus legislation in our nation’s history. The Coronavirus Aid, Relief, and Economic Security Act included a very generous expansion of unemployment insurance benefits. The idea was to help people to keep paying their bills during the forced COVID-19 shutdowns. These benefits are expiring, and Congress is now fighting over whether to extend them as they are or to modify them.
The proper approach is to phase these benefits out as quickly as possible.
It is typical that during nationwide economic downturns the federal government provides supplemental funding to boost the unemployment insurance, or UI, provided by the states. But this time around, the expansion was unusually massive. For those eligible for UI, the legislation provided a $600 weekly bonus on top of the unemployment benefits provided by the states. But the bill also expanded eligibility to millions who would not have qualified otherwise, such as many workers who remain employed part time and hourly workers. That means that the Uber driver who lost most of his income during the lockdown and the wife of a banker offering a few hours of private yoga lessons a week are now receiving the state benefits plus the bonus.
Expanding the benefits made sense at the beginning of the crisis. You don’t want workers out looking for a job in the middle of a pandemic because they can’t feed their family or pay their rent. This was especially important because state and local governments forced hundreds of thousands of businesses to shut down, forcing them to let go of their workers.
What made little sense was the scale of the expansion. One study found that two-thirds of the recipients made more money from unemployment than from working, so much so that disposable income increased by 5.4 percent between February and May.
While it’s tempting to cheer the ability of UI to alleviate the pain of the recession, it’s not all good news. UI puts money in people’s pockets, but the negative impact of the program is well documented. Many studies find that UI benefits create an incentive for workers to delay looking for jobs until the expiration of the benefit. This finding was confirmed by many other studies, including one by economist Alan Krueger, who, in 2008, noted, “Job search increases sharply in the weeks prior to benefit exhaustion.” The more generous the benefit the bigger the effects.
In addition, during normal times, UI struggles with a large amount of improper claims—according to some estimates, by nearly 11 percent of its payments. Under the coronavirus relief bill expansion, the unusually large number of cases that will have to be processed by unemployment offices makes it quite unrealistic to expect that dubious claims will be more thoroughly filtered out. In other words, expect a lot of fraud and abuse.
With a July 31 expiration date on the UI bonus and eligibility expansions, House Democrats want them renewed and extended until March 2021. Senate Republicans are offering a $200 weekly bonus for a few months. But the economic reality dictates that the expansion needs to be put on a glide path to zero as soon as possible. To be sure, losing the bonus means a reduction of disposable income for some workers. That’s a design flaw of the expansion by those who thought it was a good idea to pay people more when they don’t work than when they do work. As such, it shouldn’t be used as an argument against returning to a better-designed expansion. Besides, some of the loss can be minimized by going back to work.
What’s more, even if one supports expanding UI during rough times, we must remember that whether the money is borrowed or taxed, this redistribution of income comes out of the real economy at the expense of other investments that are likely more valuable. This important reality looms especially large as the economy reopens, and businesses have a long road ahead just to survive.
The difficulties for oversight paired with the generosity of the benefits will continue to reduce both employment and economic output if legislators fail to reform the program. Now is not the time to add more bad policies to the damage already done by COVID-19.
Harvard Prof Charged With False Statements, Failing To Report Income From Wuhan University Of Technology Tyler Durden
Wed, 07/29/2020 – 23:25
In what we’re sure is just an honest mistake and total coincidence, Harvard University professor Dr. Charles Lieber was charged yesterday “in a superseding indictment with tax offenses for failing to report income he received from Wuhan University of Technology (WUT) in Wuhan, China.”
The United States District Attorney of Massachusetts said yesterday that Lieber, who had already been arrested on January 28, 2020, was indicted by a federal grand jury in Boston on two counts of making and subscribing a false income tax return and two counts of failing to file reports of foreign bank and financial accounts with the Internal Revenue Service. Then, in June 2020, Lieber was indicted on two counts of making false statements to federal authorities.
The DA alleges that Lieber served as the Principal Investigator of the Lieber Research Group at Harvard University, which received more than $15 million in federal research grants between 2008 and 2019. Unbeknownst to his employer, Harvard University, Lieber allegedly became a “Strategic Scientist” at WUT and, later, a contractual participant in China’s Thousand Talents Plan from at least 2012 through 2015.
China’s Thousand Talents Plan is described as “one of the most prominent Chinese talent recruitment plans designed to attract, recruit and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security.”
He was paid a salary of up to $50,000 per month, living expenses of up to $150,000 and was awarded more than $1.5 million to establish a research lab at WUT.It is alleged that in 2018 and 2019, Lieber lied to federal authorities about his involvement in the Thousand Talents Plan and his affiliation with WUT.
He is accused of not paying taxes on money earned in 2013 and 2014 and it is alleged that he, together with WUT officials, opened a bank account at a Chinese bank during a trip to Wuhan in 2012. WUT “periodically deposited portions of Lieber’s salary into that account.”
According to the Mass. DA, “the charge of making false statements provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of making and subscribing false income tax returns provides for a sentence of up to three years in prison, one year of supervised release and a $100,000 fine. The charge of failing to file an FBAR provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000.”
We reported on Lieber when he was arrested back in January here. We noted the two Chinese nationals he was found to be working with – one a Boston University researcher who was once a lieutenant in the People’s Liberation Army, according to prosecutors, and another who was a cancer researcher who tried to smuggle 21 vials of biological materials in his sock – allegedly.
“Lieber’s actions look like an unvarnished attempt at espionage, complete with an extremely seductive monetary reward,” we noted at the time.
via ZeroHedge News https://ift.tt/3jPoRVo Tyler Durden
So, the White Black Nationalist Color Revolution (“made possible in part by GloboCap”) appears to be going extremely well. According to Foreign Policy magazine, the Trump regime is clinging to power, but it’s only a matter of time until the identitarian moderate rebels drive the Putin-backed fascists out of office and restore democracy to the Western world.
Yes, that’s right, just when it looked like the corporate-sponsored, totally organic, peaceful uprising against racism was over, and the Russo-fascist Trump regime had survived, the Global Capitalist Anarchists of Portland and other militant “Resistance” cells have launched a devastating counter-attack against assorted fascist building facades, fascist fences, and stores, and so on, and are going mano-a-mano in the streets with heavily-armed Putin-Nazi goon squads.
According toThe Guardian, and other elements of the underground “Resistance” media, peaceful protesters in Portland have been attacking the fascists with rocks, bottles, improvised explosive devices, and various other peaceful anti-racist projectiles. In Oakland, they peacefully set fire to the courthouse. In Austin, Texas, a peaceful protester armed with an AK-47-style rifle was shot to death by a suspected fascist whose car was peacefully swarmed by a mob after he “tried to aggressively drive past protesters.” In Los Angeles, peaceful anti-racism protesters have been whipped up into such a frenzy of righteous anti-fascist fervor that they are performing flying tackles on the cops, who then promptly beat the snot out of them. And so on … I think you get the picture.
Portland, Oregon (where just under 6% of the population is Black) has of course been at the vanguard of the revolution, as it has since the Russians stole the election from Hillary Clinton in 2016 by “influencing” gullible African-Americans with a handful of ridiculous Facebook ads, and then installed Donald Trump and the rest of the Putin-Nazi Occupation Government in office. Not only have local Antifa militants been tirelessly fighting gangs of neo-nationalist boneheads you’ve probably never heard of more or less around the clock since then, Portland is also the headquarters of most of the militant Antifa intelligentsia (characters like Alexander Reid Ross, an anti-fascist geography lecturer who inculcates kids with his paranoid theories about the international Duginist-Red-Brown conspiracy to take over the whole world and mass-murder the Jews). So, naturally, Portland is now the epicenter of the White Black Nationalist Color Revolution.
But this isn’t just the usual Portlandia silliness. This White Black Nationalist Color Revolution has been in the works for the last four years. Since the moment Trump won the Republican nomination, the global capitalist ruling classes have been fomenting racialized polarization, Putin-Nazi paranoia, and other forms of mass hysteria, in anticipation of the events of this summer. The propaganda has remained consistent.
Both the liberal corporate media and the alternative left media have been predicting that Trump is going to go full-Hitler, impose martial law, proclaim himself Führer, and perpetrate some sort of racialized holocaust… for reasons they’ve never quite been able to explain.
He hasn’t, of course, so the global capitalist ruling classes had no choice but to unleash a shit-storm of civil unrest to goad him into overreacting … which, no surprise, he was stupid enough to do. Ordering the goon squads into the streets might delight his hardcore right-wing base, but it will alienate the majority of “normal” Americans, who aren’t especially fond of goon squads (unless they’re doing their thing in some faraway country). Most importantly, it will motivate all those non-Clinton-voting Obama voters to go out and vote for “Slappy” Joe Biden, or whichever corporate puppet the Democrats have replaced him with by November 3. That seems to be the general strategy.
Now, regardless of whether they can pull this off (and whatever your feelings about GloboCap as a de facto hegemonic empire), you have to at least admire their audacity. The part where the mayors of major cities stood down and otherwise hamstrung their cops, and let the “peaceful protesters” run amok, was particularly audacious, in my opinion. That was a serious gamble on GloboCap’s part. Trump could have resisted the urge to go totalitarian and called their bluff. He could have made a speech explaining to Americans exactly how these color revolutions work, how this one is going right by the book, and why he wasn’t going to take the bait, and left the cities in question to their own devices (until the mayors were forced to restore order themselves). But no, tactical genius that he is, he had to order in the goon squads, which, of course, is exactly what the “Resistance” wanted. Now he’s got cities like Philadelphia threatening to order their police to confront and attempt to arrest the federal agents … I assume you see where this is heading.
The other part that was particularly tricky was segueing from the original protests following the murder of George Floyd by the cops, most of which were authentic expressions of frustration and outrage by actual Black people about systemic racism and police brutality (both of which are very real, of course) to the orchestrated civil unrest that followed, most of which is being coordinated, funded, and carried out by White people. That was also an extremely bold move, but, as the generous folks at The Ford Foundation put it in July of 2016, when they announced that they would be overseeing the funneling of $100 million to organizations in the Black Lives Matter movement:
“We want to nurture bold experiments…”
Oh, and speaking of bold experiments, what better setting could there be for a White Black Nationalist Color Revolution than a fake apocalyptic plague that has wrecked the economies of most Western countries, terrorized the masses into mindless obedience, and destabilized whole societies to the point where fanatical, GloboCap-brainwashed brownshirts are macing people in the face for not wearing masks at outdoor picnics and wishing death on entire families if the mothers won’t put masks on their kids?
No, credit where credit is due to GloboCap. At this point, not only the United States, but countries throughout the global capitalist empire, are in such a state of mass hysteria, and so hopelessly politically polarized, that hardly anyone can see the textbook color revolution that is being executed, openly, right in front of our faces.
Or … OK, actually, most Trump supporters see it, but most of them, like Trump himself, have mistaken Antifa, Black Lives Matter, and the Democratic Party and their voters for the enemy, when they are merely pawns in GloboCap’s game. Most liberals and leftists cannot see it at all … literally, as in they cannot perceive it. Like Dolores in the HBO Westworld series, “it doesn’t look like anything” to them. They actually believe they are fighting fascism, that Donald Trump, a narcissistic, word-salad-spewing, former game show host, is literally the Return of Adolf Hitler, and that somehow (presumably with the help of Putin) he has staged the current civil unrest, like the Nazis staged the Reichstag fire! (The New York Times will never tire of that one, nor will their liberal and leftist readers, who have been doing battle with an endless series of imaginary Hitlers since … well, since Hitler.)
I’ve been repeating it my columns for the last four years, and I’m going to repeat it once again. What we are experiencing is not the “return of fascism.” It is the global capitalist empire restoring order, putting down the populist insurgency that took them by surprise in 2016. The White Black Nationalist Color Revolution, the fake apocalyptic plague, all the insanity of 2020 … it has been in the pipeline all along. It has been since the moment Trump won the election.
No, it is not about Trump, the man. It has never been about Trump, the man, no more than the Obama presidency was ever about Obama, the man. GloboCap needs to crush Donald Trump (and moreover, to make an example of him) not because he is a threat to the empire (he isn’t), but because he became a symbol of populist resistance to global capitalism and its increasingly aggressive “woke” ideology. It is this populist resistance to its ideology that GloboCap is determined to crush, no matter how much social chaos and destruction it unleashes in the process.
“2020 is for all the marbles. The global capitalist ruling classes either crush this ongoing populist insurgency or God knows where we go from here. Try to see it through their eyes for a moment. Picture four more years of Trump … second-term Trump … Trump unleashed.
Do you really believe they’re going to let that happen, that they are going to permit this populist insurgency to continue for another four years? They are not. What they are going to do is use all their power to destroy the monster, not Trump the man, but Trump the symbol. They are going to drown us in impeachment minutiae, drip, drip, drip, for the next twelve months. The liberal corporate media are going to go full-Goebbels.
They are going to whip up so much mass hysteria that people won’t be able to think. They are going to pit us one against the other, and force us onto one or the other side of a simulated conflict (Democracy versus the Putin-Nazis) to keep us from perceiving the actual conflict (Global Capitalism versus Populism). They are going to bring us to the brink of civil war …”
OK, I didn’t see the fake plague coming, but, otherwise, how’s my prediction holding up?
via ZeroHedge News https://ift.tt/2X8QVJK Tyler Durden
Unsolved Mysteries: Who Released The Toxic Plume Of Methane In Florida? Tyler Durden
Wed, 07/29/2020 – 22:45
A mysterious toxic plume of methane, estimated to be about 300 metric tons, was released somewhere north of Gainesville, Florida, in early May, eventually reached Jacksonville, according to Bloomberg, citing new satellite data from Bluefield Technologies Inc.
Yotam Ariel, the founder of Bluefield, said, satellites can now track climate change and aid researchers in finding out who released the plume of methane a couple of months back.
h/t Bloomberg
So far, no energy or industrial company in the area has come forward about the methane discharge.
Stanford University professor Adam Brandt said the methane is likely from an “industrial facility, power plant, or gas compression or handling system,” calling it, “a significant leak.”
The Alachua County Environmental Protection Department told Bloomberg they’re “unaware of any incidents that may have contributed to methane emissions.”
Bloomberg dug around and found that Gainesville Regional Utilities (GRU) requested an exemption on its air permits on April 24 to replace a steam turbine generator at its J.R. Kelly power plant, which is about 12 miles south from where the methane cloud was spotted.
GRU has yet to disclose when the turbine was replaced. Also near where the plume was detected, the utility company has at least two more power plants, one that runs on natural gas and another on coal.
In the same area, Energy Transfer LP’s Florida Gas Transmission has natural gas pipelines and compressor stations. The energy company didn’t report any planned releases or disruptions in early May.
Underneath the area of where the plume was spotted is land owned by forest products company Weyerhauser Co. Christine Berish, development review manager for Alachua County’s Department of Growth, said the forestry company “doesn’t have development projects in that area.”
How the toxic plume was released remains a mystery.
via ZeroHedge News https://ift.tt/30cC1Us Tyler Durden
John Kass of the Chicago Tribune is one of maybe three consistently right-of-center columnists in all of Illinois, and certainly the most widely read, so it was only a matter of time before the mob tried to off him.
Now we have it, from the Chicago Tribune Guild, which is that newspaper’s union. It’s perhaps the most vicious effort to date in the cancel culture’s assault on journalism, and it’s based on a charge that’s entirely fabricated.
Kass wrote last week about the growing sense of lawlessness in urban areas, focusing on the connections between soft-on-crime prosecutors and the political donations that helped elect them from billionaire George Soros.
Yawn. Old news, you might think. Anybody following American politics has, for several years, seen a very long list of news stories and commentary in media of all political stripes across the nation about those Soros contributions, which are thoroughly documented. And Kass was hardly the first to address the obvious question about the connection between those prosecutors’ work and the surge in violent crime.
But it wasn’t lack of originality that the Tribune union alleged.
It was Kass’s “odious, anti-Semitic conspiracy theory that billionaire George Soros is a puppet master controlling America’s big cities.” Kass, the Guild wrote in a letter to all staff, “does not deserve a mainstream voice, especially at a time when hate crimes are rising.”
The Guild went on:
This column from the Tribune’s lead columnist does a disservice to our entire institution, not just the editorial board, for which he nominally works. It undermines the efforts of our newsroom to provide fair and diligent reporting to readers who, we all know, don’t always grasp the distinction between “opinion” and “news.”
We ask that the paper, and Kass separately, apologize for his indefensible invocation of the Soros tropes….
But read Kass’s column.
Read it again.
It contains nothing whatsoever that says or implies anything remotely like that.
It’s entirely about Soros’s contributions and their effect on law enforcement, which obviously are important matters to address.
Among those who have covered the topic before is Commentary, which was founded by the American Jewish Committee and has long had a central focus on “the future of the Jews, Judaism, and Jewish culture in Israel, the United States, and around the world.”
Aside from the pure cruelty to Kass and its naked contempt for diversity of opinion, the Guild’s letter is a tragedy for other reasons.
To charge anti-Semitism where there is none dilutes attention to real anti-Semitism, which there’s no shortage of. That includes false charges against Soros. Crank stories about Soros abound on the internet and they often include anti-Semitic, world conspiracy theories. Defeat those by attacking them, not columns that are entirely unrelated, or you will only inflame the conspiracy theorists.
Consider the irony that Cook County State’s Attorney Kim Foxx is among the prosecutors whose campaign Soros funded – with a whopping $333,000. It’s not irony, actually, but consistency.
It’s Foxx who let Jussie Smollett off. What most infuriated many about that, especially blacks, was that his made-up story of bigotry detracts from real stories of bigotry. The Tribune Guild is guilty of precisely that, undermining the real fight against real bigotry by concocting a fake one. So much for the mob’s sincerity about bigotry.
Standing ovation to him for dealing with the mob exactly as one should, by not giving in a single inch. From Kass’s response:
I will not apologize for writing about Soros.
I will not bow to those who’ve wrongly defamed me.
I will continue writing my column.
Kass says Tribune management has decided not to take sides on the controversy. That’s a big mistake by the Tribune if true. This is a chance to distinguish itself from the long list of formerly reputable media, from the New York Times on down, that have thrown both their own reputations and the most fundamental standards of journalism to the wind.
Most of Chicago’s beaches are wide open because of the coronavirus shutdown, so the Tribune Guild should have no trouble taking a running jump into Lake Michigan. That’s what they should be told to do.
via ZeroHedge News https://ift.tt/338HXji Tyler Durden
In Unprecedented Move, Congress Proposes Taxpayer-Funded Bailout Of $550 Billion CMBS Industry Tyler Durden
Wed, 07/29/2020 – 22:05
Well, with everyone and everything else getting a bailout, may as well go all the way.
Two months after we reported that the state of California is trying to turn centuries of finance on its head by allowing businesses to walk away from commercial leases – in other words to make commercial debt non-recourse – a move the California Business Properties Association said “could cause a financial collapse”, attempts to bail out commercial lenders have reached the Federal level, with the WSJ reporting that lawmakers have introduced a bill to provide cash to struggling hotels and shopping centers that weren’t able to pause mortgage payments after the coronavirus shut down the U.S. economy.
The bill would set up a government-backed funding vehicle which companies could tap to stay current on their mortgages. It is meant in particular to help those who borrowed in the $550 billion CMBS market in which mortgages are re-packaged into bonds and sold to Wall Street. What it really represents, is a bailout of the only group of borrowers that had so far not found access to the Fed’s various generous rescue facilities: and that’s where Congress comes in.
To be sure, the commercial real estate market is imploding, and as we reported at the start of the month, some 10% of loans in commercial mortgage-backed securities were 30 or more days delinquent at the end of June, including nearly a quarter of loans tied to the hard-hit hotel industry, according to Trepp LLC.
“The numbers are getting more dire and the projections are getting more stern,” said Rep. Van Taylor (R., Texas), who is sponsoring the bill alongside Rep. Al Lawson (D., Fla.).
Van Taylor (R-Texas) is sponsoring the bill to aid hotels and shopping centers.
Under the proposal, banks would extend money to help these borrowers and the facility would provide a Treasury Department guarantee that banks are repaid. The funding would come from a $454 billion pot set aside for distressed businesses in the earlier stimulus bill.
Richard Pietrafesa owns three hotels on the East Coast that were financed with CMBS loans. They have recently had occupancy of around 50% or less, which doesn’t bring in enough revenue to make mortgage payments, he said.
He said he is now two months behind on payments for one of his properties, a Fairfield Inn & Suites in Charleston, S.C. He has money set aside in a separate reserve, he said, but his special servicer hasn’t allowed him to access it to make debt payments.
“It’s like a debtor’s prison,” Mr. Pietrafesa said.
Those magic words, it would appear, is all one needs to say these days to get a government and/or Fed-sanctioned bailout. Because in a world taken over by zombies, failure is no longer an option.
While any struggling commercial borrower that was previously in good financial standing would be eligible to apply for funds to cover mortgage payments, the facility is designed specifically for CMBS borrowers.
It gets better, because not only are taxpayers ultimately on the hook via the various Fed-Treasury JVs that will fund these programs, but the new money will by default be junior to existing insolvent debt. As the Journal explains, “many of these borrowers have provisions in their initial loan documents that forbid them from taking on more debt without additional approval from their servicers. The proposed facility would instead structure the cash infusions as preferred equity, which isn’t subject to the debt restrictions.“
Yes, it’s also means that the new capital is JUNIOR to the debt, which means that if there is another economic downturn, the taxpayer funds get wiped out first while the pre-existing debt – the debt which was unreapayble to begin with – will remain on the books!
Perhaps sensing the shitstorm that this proposal would create, the WSJ admits that “the preferred equity would be considered junior to other debt but must be repaid with interest before the property owner can pull money out of the business.”
What was left completely unsaid is that the existing impaired CMBS debt will instantly become money good thanks to the junior capital infusion from – drumroll – idiot taxpayers who won’t even understand what is going on.
How did this ridiculously audacious proposal come to being? Well, Taylor led a bipartisan group of more than 100 lawmakers who last month signed a letter asking the Federal Reserve and Treasury to come up with a solution for the CMBS issues. Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell have indicated that this may be an issue best addressed by Congress.
In other words, while the Fed will be providing the special purpose bailout vehicle, it is ultimately a decision for Congress whether to bail out thousands of insolvent hotels and malls.
And if some in the industry have warned that an attempt to rescue the CMBS market would disproportionately benefit a handful of large real-estate owners, rather than small-business owners, it is because they are precisely right: roughly 80% of CMBS debt is held by a handful of funds who will be the ultimate beneficiaries of this unprecedented bailout; funds which have spent a lot of money lobbying Messrs Taylor and Lawson.
Of course, none of this will be revealed and instead the talking points will focus on reaching the dumbest common denominator. Taylor said the legislation is focused on – what else – saving jobs. What he didn’t say is that each job that is saved will end up getting lost just months later, and meanwhile it will cost millions of dollars “per job” just to make sure that the billionaires who hold the CMBS debt – such as Tom Barrack who recently urged a margin call moratorium in the CMBS market – come out whole.
“This started with employees in my district calling and saying ‘I lost my job’,” Taylor said, clearly hoping that he is dealing with absolute idiots.
And while it is unclear if this bill will pass – at this point there is literally money flying out of helicopters and the US deficit is exploding by hundreds of billions every month so who really gives a shit if a few more billionaires are bailed out by taxpayers – should this happen, well readers may want to close out the trade we called the “The Next Big Short“, namely CMBX 9, whose outlier exposure to hotels which had emerged as the most impacted sector from the pandemic.
Alternatively, those who wish to piggyback on this latest egregious abuse of taxpayer funds, this crucifxion of capitalism and latest glorification of moral hazard, and make some cash in the process should do the opposite of the “Next Big Short” and buy up the BBB- (or any other deeply impaired) tranche of the CMBX Series 9, which will quickly soar to par if this bailout is ever voted through.
via ZeroHedge News https://ift.tt/3hPA8mG Tyler Durden
Beijing Professor Who Says He Was “Framed” On Prostitution Charges Takes Unheard Of Step Of Suing Police Tyler Durden
Wed, 07/29/2020 – 22:05
A Chinese legal scholar who believes he’s being framed by the communist government after he wrote a series of essays criticizing President Xi Jinping’s leadership style, especially after the 2018 constitutional changes which allowed Xi to rule for life, is taking theextremely rare step of defying the party by filing a lawsuit against police.
Xu Zhangrun was until earlier this month a law professor at one of Beijing’s most prestigious universities. But that institution, Tsinghua University, fired him after police arrested him on the professionally humiliating charge of soliciting prostitution. Xu was held in detention for a week and then released with little explanation.
Via GMTV/Casino.org
But despite authorities showing no evidence whatsoever – not even documents or surveillance footage to suggest he was even at a hotel with a prostitute as the police said – this was enough to get him dismissed from his prestigious teaching position.
Xu and his supporters think it hearkens back to his public essays which case the country’s leader Xi in a negative light. “Professor Xu believes there is no evidence whatsoever supporting their claim that he solicited prostitutes and believes he is being framed and entrapped,” an unnamed person involved in the case told FT.
Mr. Xu on Tuesday engaged a pair of well-known human-rights lawyers, Mo Shaoping and Shang Baojun, to assist his efforts to overturn the solicitation charge, according to Mr. Shang. Police had accused Mr. Xu of committing the offense in the southwestern Chinese city of Chengdu in December, an allegation the former professor rejected as false and “wholly nonexistent,” Mr. Shang said.
Though the country doesn’t have Miranda rights, it’s normal procedure to at least be given access to a copy of the police-detention order, which his lawyers are now working to obtain.
The 57-year-old was told by his university that not only was being terminated based on the prostitution arrest, but due to the series of political-related essays he’d authored going back to July 2018.
The WSJ notes it he was “deemed to have violated a code of conduct for teachers at tertiary institutions, according to a photo of the notice reviewed by The Wall Street Journal.”
Portrait of Chinese President Xi Jinping during a parade to commemorate the 70th anniversary of the founding of Communist China, via AP
The WSJ report suggests that it may still be uncertain whether or not he and his lawyers will move forward with the lawsuit, or if they’ll simply appeal the police and university decisions and seek reinstatement. Regardless, it was a bold move to hire lawyers and seek to overturn everything in the first place.
And now given the Western media attention, if Xu was indeed framed by someone or entities high within the party, we can expect the lawsuit and story itself to quietly go away, given the nature of the Chinese system.
via ZeroHedge News https://ift.tt/316n3iq Tyler Durden
Back in 2009, Nancy Pelosi infamously declared the best way to revive the economy was to dole out ever more generous food stamps and unemployment benefits. The more people collecting welfare the better.
At the time, this notion seemed laughable. Now this economic illiteracy seems to have become a conventional wisdom.
This was a headline in the New York Times recently: “End of $600 Unemployment Bonus Could Push Millions Past the Brink.”
Here was the lead on the “news” piece:
“When millions of Americans began losing their jobs in March, the federal government stepped in with a life preserver: $600 a week in extra unemployment benefits to allow workers to pay rent and buy groceries, and to cushion the economy.
“With economic conditions again deteriorating, that life preserver will disappear within days if Congress doesn’t act to extend it. That could prompt a wave of evictions and inflict more financial harm on millions of Americans while further damaging the economy.”
These benefits are not a “life preserver,” but a job-killer. A study for the Committee to Unleash Prosperity by University of Chicago economist Casey Mulligan estimated 10 million fewer Americans working by the end of the year, thus killing any chance of a “V-shaped recovery.”
Perhaps that’s why Pelosi is so adamant about the policy remaining in place. This would mean a high unemployment rate in November when voters go to the polls. How convenient for Pelosi and Joe Biden.
Incidentally, there are now some 5 million unfilled jobs in the U.S. today — near an all-time high. This is a weird predicament we are in. Even with some 25 million unemployed Americans, employers are hanging “Help Wanted” signs in the windows.
Here’s why.
Under the Pelosi policy, 5 out of 6 unemployed workers are getting paid more NOT to work than to return to the job, according to the Congressional Budget Office. We estimate that most workers who earn $30 or less are financially better off staying off the job — even as the economy improves. Many workers can get twice as much for staying unemployed. Workers are supposed to lose unemployment benefits if they are offered a job and don’t take it. But workers know how to game the system. They can pretend to be sick, and employers are loath to bring a contagious worker back in the office or factory.
Employers are now telling me that to get workers back on a construction crew, on a factory line or in a restaurant, they won’t work unless they get paid cash of, say, $100 or $200 a shift so they can still collect the unemployment benefits. The Economist magazine recently wrote that the extra unemployment benefits are doing more harm than good. Liberal groups are marching in the streets for another six months of these payments.
This policy is what I have long-called economic bimboism. Somehow, magically, if I pay my kid who gets up, mows lawns and works hard 40 hours a week, and I pay my other son even more money for staying home and playing computer games, this strategy is going to lead to more work effort in the Moore household. I assure you it won’t.
Paying people not to work is no way to expand economic output, more jobs and more prosperity. By this warped logic, we should start paying unemployed workers $5,000 a week, and we will really have a rip-roaring recovery.
This is not just lousy economics; it also violates basic principles of fairness. Think of a construction company with 100 employees laid off. They are all offered their jobs back a month later, but only 50 come back to work. Under the Pelosi scheme, the 50 that work hard get less money than the ones who stay home and watch TV. The suckers here are the ones who return to the job.
The only way politicians can “stimulate” the economy and lower unemployment is by incentivizing more economic production. This is why a payroll tax cut makes a lot of sense, and let us hope President Donald Trump, who favors the idea, doesn’t give up on it. Every worker — the heroes of our economy, including nurses, technicians, sanitation workers, truckers and nursing home care givers — would get a 7.5% pay raise starting on or around Aug. 1. Every small business would see their payroll costs shrink by 7.5%. By a 2-to-1 margin, workers love the payroll tax cut.
Skeptics complain that the payroll tax cut only helps people with a job, not the unemployed. Wrong. The best way to help the unemployed, Nancy Pelosi, is not by passing out food stamps and unemployment benefits. It is getting people a job, a paycheck and a step on the economic ladder. And there is one other thing that liberals seem to have forgotten: there is dignity and educational value in working rather than getting a welfare check paid for by someone else.
via ZeroHedge News https://ift.tt/3f8xkQ5 Tyler Durden
Chinese Banks Urged To Switch From SWIFT And Drop USD In Anticipation Of US Sanctions Tyler Durden
Wed, 07/29/2020 – 21:25
Even as the market does its best to ignore the unprecedented upheavals in US-Sino relations in everything from trade, to diplomacy, to financial relations, the truth is that there are tectonic shifts tearing apart decades of established norms between the two superpowers, and one doesn’t even have to dig too deep to see it.
Consider this: one month ago, we reported that Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, delivered a strong warning on the US currency, frontrunning Goldman by about a month in cautioning that the greenback’s reserve status may be ending.
Speaking at the Lujiazhui Forum in Shanghai, Guo made four points:
The Fed is the de facto central bank of the world. When its policy targets its own economy without considering the spillover effect, the Fed is “very likely to overdraft the credit of the dollar and the U.S.”
The pandemic may persist for a long period of time, and countries keep throwing money at the problem with a diminished impact. “It is recommended that you think twice and reserve some policy space for the future.”
There is no free lunch. Watch out for inflation.
Financial markets are disconnected from the real economy, and such distortions are “unprecedented.” It’s going to be “really painful,” when the policy withdrawal starts.
“Some people say: ‘Domestic debt is not debt, but external debt is debt. For the United States, even external debt is not debt. This seems to have been the case for quite some time in the past, but can it really last for a long time in the future?”
So what will China do? “China cherishes the conventional monetary and fiscal policies very much. We will not engage in flooding the system, nor will we engage in deficit monetization and negative interest rates.”
It’s not the first time China vented frustration against the “exorbitant privilege” of the dollar. After the financial crisis, then-PBOC Governor Zhou Xiaochuan proposed using the SDR to replace the dollar as the main reserve currency. For the most part these warnings were ignored, but one thing was clear: China is all too aware that the US is not only ready but also willing to weaponize the dollar and use it to its advantage in the recently launched cold with China.
So fast forward to today, when according to Reuters, a report from the investment banking unit of Bank of China warned that China should prepare for potential US sanctions by switching away from the Dollar-centric SWIFT system, and increasing use of its own financial messaging network for cross-border transactions in the mainland, Hong Kong and Macau.
According to the BOC report, which was co-authored by a former foreign exchange regulator, greater use of the Cross-Border Interbank Payment System (CIPS) instead of the Belgium based SWIFT system would also reduce exposure of China’s global payments data to the United States. The bank’s chief economist Guan Tao was previously a director of the international payments department of State Administration of Foreign Exchange (SAFE).
The report looked at potential measures the United States could take against Chinese banks, including cutting off their access to the SWIFT financial messaging service, the primary network used by banks globally to make financial transactions.
“A good punch to the enemy will save yourself from hundreds of punches from your enemies,” the report wrote, amid deteriorating relating between the world’s two largest economies. “We need to get prepared in advance, mentally and practically.”
The report said that if the United States were to take the extreme action of cutting off some Chinese banks’ access to dollar settlements, China should also consider stopping using the U.S. dollar as the anchor currency for its foreign exchange controls.
Chinese state banks have been implementing contingency plans in anticipation of US legislation that will penalize banks for serving officials who implement the new national security for Hong Kong, Reuters reported earlier this month.
China launched the CIPS clearing and settlement services system in 2015 as its alternative to SWIFT and in hopes to internationalise use of the yuan. So far, uptake has been negligible: supervised by the central bank, CIPS said it processed a mere 135.7 billion yuan ($19.4 billion) a day in 2019, with participation from 96 countries and regions.
The BOC also recommended that China develop legislation similar to the European Union’s Blocking Statute, which allowed the EU to sustain trade and economic relations with Iran, a country targeted by U.S. sanctions, although as has emerged in the past two years, Europe’s attempt to launch its own SWIFT-equivalent via Instex has been a failure, as virtually nobody is willing to risk alienation from the US Dollar by endorsing a European alternative. In fact, only when push comes to shove, and correspondent nations have no choice but to launch their own non-dollar transfer systems, will SWIFT’s supremacy finally be but to the test… as will the reserve status of the dollar.
Finally, confirming that this time China will have no choice but to proceed with “Plan B”, the SCMP reported overnight that the top adviser to Hong Kong’s leader, Carrie Lam, confirmed that his account at a US bank was closed earlier this year, as a result of Washington’s push to sanction Chinese and local officials over the city’s national security law.
Bernard Chan, convenor of the Executive Council, Chief Executive Carrie Lam Cheng Yuet-ngor’s de facto cabinet, told the Post on Tuesday he believed it was because he was deemed to be a “politically exposed person”.
He had opened the account at the bank, which has so far been unnamed and which also has branches in Hong Kong, more than a year ago. But it was closed by the institution, and he got his money back in April.
“I’m sure they closed it because they found out I’m a PEP, politically exposed person,” Chan said. “I have other bank accounts in the United States which still function normally.”
Chan previously told the Financial Times that senior members of the city’s government were finding it increasingly difficult to bank with foreign institutions, as tensions mount between China and the US over the city’s future.
In retaliation for Beijing’s decision to impose a national security legislation on Hong Kong, President Trump signed a law and issued an executive order on July 15 to sanction individuals and banks deemed to have aided the erosion of Hong Kong’s autonomy. He also put forth an executive order ending the city’s preferential trading and other privileges.
Foreign individuals or entities determined by the US secretary of state to fall into this category will be blocked from investing, transferring, exporting, withdrawing or dealing with any property or interests in property in the US.
In other words, while markets may be oblivious to these latest developments, the financial war between Washington and DC has officially begun and from this point on it will only accelerate as both countries progress in tit-for-tat retaliation to each and every move they find provocative.
via ZeroHedge News https://ift.tt/3gcOa1v Tyler Durden
Gold recently crested $1950, where it is today as of this writing. For some, the $1900 price level is an important indicator of momentum building. I’ll share with you some advice on the gold price offered by my zoom interview this week, George Gammon, Rebel Capitalist, below.
In an effort to help you sort things out, I’ve invited George to help us put the macro picture into perspective given the pandemic, shutdown of the economy, a bizarrely resilient stock market and prospects for your investments now and in the future.
Gammon’s own story – from serial entrepreneur to global real estate developer to macroeconomic guru – uniquely positions him to help put the current state of affairs into perspective. On top of that he’s a heckuva good guy, entertaining, approachable; he has a talent for making complex ideas easy to understand.
He’s well versed in my late obsession with collectivism, which I’ve been exploring deeply since the protests started. He also explains how the Fed will monetize the $26.5 trillion in debt racked up during the crisis; the secret vehicle the Treasury will use if Fed efforts fail; how and why the dollar remains strong; what shenanigans the data wonks to white wash important economic data.
We further discussed prospects for reopening of the economy; why the economy and the stock market have diverged so dramatically; what signs to look for in the capitalist endgame; where the heck all that stimulus money is going; and more.
Frankly, my conversation with George was one of the more interesting, informative and entertaining I’ve done since starting the Surviving and Thriving series for Agora Financial Platinum Reserve members.
You’ll definitely want to see the “lightning round” at the end where we cover his thoughts on real estate, stocks, tech, commodities, bitcoin, gold, silver and precious metals; including a look under the hood at some of his own investments. Go here for a full transcript of our interview.
Now, let’s play with a hypothetical…
Let’s say we have another wave of lockdowns in various geographic locales in the economy. Here in Baltimore the mayor is about to close restaurants again, for example. The restaurants close. Bars close. Gyms close. Schools don’t reopen… yada, yada.
Institutional traders get spooked, again – still speaking hypothetically – and start selling stocks. The hoi polloi see the numbers tanking in their 401(k)s. And so on. We know what happened during the initial lockdown. February and March of 2020 account for 8 out of 10 of the largest single day point losses in the Dow Jones’ ever.
By March 11 the Dow had lost 6,004 points – down 20.3% from the Feb. 12 high. What if bad news causes this, still jittery, market to drop 20% again?
“The whole U.S. economy is so tied to asset prices,” George Gammon suggests, “I just cannot see the Fed and or Treasury not stepping in and trying to prop up the market. Fact is, they have to step in and try to do something.”
I can’t argue with that.
“When you trap people in a system of debt,” said lefty linguist Noam Chomsky, “they can’t afford the time to think.”
I’m not sure I’d agree with Chomsky on too many things, but I think he nails that one.
For the first time since WWII the interest on the debt — which grows daily — is higher than the nation’s GDP. If that isn’t a trap, I can’t think of what would be… and so much of the hole the country is digging itself into is entirely out of your hands.
What’s an individual investor to do?
Back in the Crisis of ‘08 I often referred to the “Fed Put” — a friendly colloquial term describing the Fed practice of buying mortgage backed securities to put a floor in the market. So many banks were leveraged into those moribund financial instruments, without the Fed Put, the entire global system would have been kaput.
Fast forward 12 years and a fully re-inflated bubble, The ‘Fed Put’ may have expired. “If you want to think that one through,” George explains:
Remember when the Fed had that emergency meeting in March, where they were going to meet on Wednesday to decide the interest rate policy, but they had that emergency meeting on Sunday where they dropped interest rates by 100 basis points, took it down to zero and they announced QE Infinity and they’re committing a trillion a day to the repo market.
Monday, the market opens, it does go higher for maybe three or four hours, but then it just tanks, drops out of bed. Even though the Fed throws everything at it but the kitchen sink. And then the government comes in and announces all these stimulus programs. Then at that point, the market started to go back up a few days later.
So it seems like maybe, just maybe the Fed Put has expired and has been replaced by a government put. So now the only entity to prop up the market is going to be straight government spending.
What that means is not just bank reserves, but that means a direct M2 money supply — cash to folks like you and me — and an increase in velocity, the speed at which “getting and spending” happens.
Whether it will continue to work, or not, is anybody’s guess.
The “Government Put” could be the butterfly that unleashes a hurricane on the other side of the planet.
So… what should you buy? How about gold? And when should you buy it?
“I don’t even worry about the price of gold,” Mr. Gammon answers.
“I don’t even look at the price. When I get an extra hundred grand, bam, 10,000 goes into gold.”
“As far as silver, I look at that more like a speculation, more like Bitcoin. But the ultimate speculation right now are the gold miners. And I was fortunate enough to buy a lot of those back in March as well. And they’ve had a good run, but again, I’m not planning on selling them at all. And if they go back down even further, I’ll buy more.”
“I think if you look at everything we’ve talked about in this interview, and the M2 money supply, the velocity, the deficits, not only that, but you’ve got oil that’s very low, which definitely helps the P&L for the gold miners because a lot of their expenses are energy.”
“Cheap oil benefits them tremendously. And with the Government Put there is already a huge tailwind for gold in general. They could go down. But if they do go down, I’ll happily buy more and just wait until I think they’re expensive, which probably is going to be a long bull run from now.”
Buy gold (and gold miners)… and enjoy the ride.
via ZeroHedge News https://ift.tt/3fbHcIL Tyler Durden
