Tag: news

Authored by Charles Hugh Smith via OfTwoMinds blog,

When reality and truth become the sworn enemies of society’s political and economic elites, the society is well and truly doomed.

The risks of Covid-19 and the lockdown have been explored across a wide spectrum of opinion. To hit just a few of too many to count:

— Permanent loss of civil liberties under the guise of “pandemic controls.”

— Failure of control measures to limit the pandemic in any sort of economically manageable manner.

— Schemes for ID Cards identifying those with antibodies may fail as immunity might be fleeting, or low antibody counts may not confer immunity.

These visible risks arise directly from the pandemic and efforts to control it, but the reasons why the economy won’t recover were in force long before the pandemic:

1. Unsustainable dependence on expanding debt to fund consumption as earned income stagnated.

2. Unsustainably high costs imposed by cartels, monopolies, insider-skims/scams, institutionalized fraud, hyper-financialization, exploitation, etc. (Please see What’s Collapsing Can’t Be Saved: Our Fraudulent Economy)

3. The economy-wide creation of self-serving simulations of trust, credibility, transparency and accountability as substitutes for actual trust, credibility, transparency and accountability.

This ceaseless spew of simulacra to cloak self-serving corruption is hidden from view lest the truth–that authentic trust, credibility, transparency and accountability have been dismantled because they inhibit the profiteering and exploitation of insiders and elites– undermine the entire status quo.

And so “success” (as in maximizing profits) in America is now a game of creating believable facsimiles of what was once authentic. Like all mammals, humans retain a sixth sense–commonly referred to as the “sniff test”, i.e. something doesn’t feel right–and so the simulacra are only partially successful in making us believe institutions are trustworthy, credible, transparently operated and governed in a way that enforces accountability.

As a result, the more all our dominant institutions press their claims of legitimacy, the more they erode their legitimacy.

We sense all of these facsimiles are false, but are powerless to uncover the actual machinery of corruption. We are forced to rely on insiders who release the actual processes to the public, and these whistleblowers are hunted to the ends of the Earth (Assange, Snowden, et al.) because their revealing how the status quo actually functions is the most dangerous force the status quo faces.

This requirement to hide the truth lest it collapse all the skims, scams, frauds, rackets and insider plundering and pillaging is the Monster Id of America. The more the insiders and institutional technocrat machinery attempt to censor and suppress critical inquiry, the greater the erosion of public trust in the credibility and legitimacy of the dominant institutions.

When reality and truth become the sworn enemies of society’s political and economic elites, the society is well and truly doomed. We have reached the “let them eat cake” moment in which our self-serving insiders have lost touch with the reality of their own dissonance and disconnect from the real world.

The hollowed-out brittle shell of the global economy has shattered, and no amount of simulations and bogus reassurances can restore what’s broken. Authoritarian overkill only speeds the collapse of legitimacy, trust and credibility.

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A world renowned Russian microbiologist says that the novel coronavirus responsible for the COVID-19 pandemic was the result of Wuhan scientists doing “absolutely crazy things” in their laboratory.

Dr. Peter Chumakov of the Engelhardt Institute of Molecular Biology and Russian Academy of Sciences claims that while the Wuhan scientists’ goal in creating the coronavirus was not malicious – instead, they were trying to study the pathogenicity of the virus, according to the Daily Mail.

“In China, scientists at the Wuhan Laboratory have been actively involved in the development of various coronavirus variants for over ten years,” he said. “Moreover, they did this, supposedly not with the aim of creating pathogenic variants, but to study their pathogenicity.”

“They did absolutely crazy things, in my opinion,” he said, adding ” For example, inserts in the genome, which gave the virus the ability to infect human cells. Now all this has been analyzed.”

‘The picture of the possible creation of the current coronavirus is slowly emerging.‘

He told Moskovsky Komsomolets newspaper: ‘There are several inserts, that is, substitutions of the natural sequence of the genome, which gave it special properties.

‘It is interesting that the Chinese and Americans who worked with them published all their works in the open (scientific) press.

‘I even wonder why this background comes to people very slowly.

‘I think that an investigation will nevertheless be initiated, as a result of which new rules will be developed that regulate the work with the genomes of such dangerous viruses.

‘It’s too early to blame anyone.’

–Daily Mail

Chumakov suggested that Chinese scientists were possibly searching for an HIV vaccine.

The Mail notes that the professor works for Russia’s Federal Research Center for Research and Development of Immunobiological Preparations – while Vladimir Putin’s spokesman, Dmitry Peskov, advised against speculation that the virus was manmade.

“In the situation where there is not enough information that has been supported and checked by science … we think it is unacceptable, impossible, to groundlessly accuse anyone,” said Peskov.

Meanwhile, the head of Russia’s Federal Medical-Biological agency, Veronika Skvortsova, told Russia’s Channel One “This question is not that easy. It demands a very thorough study,” adding “None of the versions can be ruled out.”

“We can see that a fairly large number of fragments distinguishes this virus from its very close relative, SARS,” Skvortsova added. “They are approximately 94 per cent similar, the rest is different… I think that we must conduct a very serious research.

The headline banner may be a little misleading:

• The Good – Stocks are up (all it took was a few trillion dollars)? Oil is up (all it took was threats of war)?

• The Bad – COVID cases are up, COVID deaths are up (and Gilead’s drug is a dud)…

• The Ugly – Over 26 million Americans have now filed for unemployment benefits in the last 5 weeks, PMI…

A three-way-standoff between ugly real economic data, ongoing global lockdowns, and The Fed’s “whatever it takes” asset liftathon…

For the fifth week in a row, The Dow managed gains on the back of simply unprecedented surge in joblessness BUT the S&P 500 and Nasdaq DID NOT!!…

• 3/26 – 3.31mm jobless, S&P +6.24%, Dow +6.38%

• 4/02 – 6.87mm jobless, S&P +2.28%, Dow +2.24%

• 4/09 – 6.62mm jobless, S&P +1.45%, Dow +1.21%

• 4/16 – 5.24mm jobless, S&P +0.58%, Dow +0.12%

• 4/23 – 4.43mm jobless, S&P -0.04%, Dow +0.18%

As LPL’s Ryan Detrick noted “So stocks have never dropped when more than 3 million people apply for unemployment. That is crazy.”

Nasdaq and the S&P were unable to hold the early gains that were lost after the Gilead headlines.

Crazy indeed Ryan and the US’ COVID cases and deaths continues to rise – so ignore that too…

oh and Gilead’s stock price has erased all of its gains from last week as its Remdesivir drug proved to be a dud… but stocks are hopeful…

So, in its worst precedent yet, bad news – the absolute worst – is good news? Because it means fiscal and monetary idiocy will go all the way to ’11’ – even if it’s not already there.

But safe-havens were bid with bonds (price) rising…

Gold rallying…

And Bitcoin bouncing back…

Source: Bloomberg

Notably the “Virus Fear” trade has been flat for almost two weeks – even as the broad market has lifted…

Source: Bloomberg

The Dow manage to scramble back up to its 50% retrace level once again… and fail…

 

The long-end of the bond curve saw yields drop today as the short-end was flat…

Source: Bloomberg

Big divergence today between HY (down) and IG (up) bond prices…

Source: Bloomberg

The Dollar rallied for the 4th day in a row after Europe closed…

Source: Bloomberg

The Brazilian real collapsed to 5.5/USD – a record low…

Source: Bloomberg

The entire crypto-space was bid today with Ethereum leading the charge…

Source: Bloomberg

Oil futures (June WTI) rallied once again (as did USO modestly) but as the chart below shows, the muppets still don’t get it…

Source: Bloomberg

Finally, we note that Gold surged to a new record high against Yuan…

Source: Bloomberg

And while physical and paper gold were bid, the futures premium over spot compressed today…

Source: Bloomberg

You have to laugh… global stocks know something that the global economy doesn’t…

Source: Bloomberg

Rep. Donna Shalala has come out an openly admit that she did not report at least 6 stock sales that were made after she was elected to the house in 2018. 

The sales only became a topic of discussion after Nancy Pelosi appointed Shalala to a committee conducting oversight on the hundreds of billions of dollars being provided to companies through the coronavirus relief bill, according to Axios.

Shalala sold stock in Boeing, Alaska Airlines, Chevron, Conoco, and AMC after she was elected to congress in 2018.

She claims she made the sales to avoid conflicts of interest, but she did not report them within 45 days as it required by the STOCK Act. “I did file my disclosure report, so everybody knew what my holdings are. They didn’t know I was unloading the entire portfolio so I could put everything into mutual [funds] basically to avoid any conflict of interest,” she said, according to The Hill. 

Her spokesperson, Carlos Condarco, had previously said she was unfamiliar with the rules. “She had a misunderstanding about the periodic transaction report process and her need to report the sale of these stocks while preparing a blind trust. As a new member with a broker and attorney who were not familiar with the congressional disclosure rules, there was a misunderstanding.”

But Shalala said:

“Look, I knew what the law was. I missed the deadlines.”

She continued:

 “It was my mistake and I take full responsibility. I missed the deadlines. And I have to take responsibility, personal responsibility for doing that. No one else is responsible except for me.”

In terms of punishment, Shalala said she is open to whatever is deemed necessary: “Whatever they think is appropriate. Whether it’s a financial penalty or anything else. I’m really sorry I missed those deadlines in the process of trying to do the right thing.”

Recall, Kelly Loeffler and other lawmakers came under fire for selling stocks following a private congressional briefing on coronavirus, and shortly before the market crashed. Loeffler bought and sold roughly $1.4 million in stock.

“Ms. Loeffler reported that she and her husband bought about $590,000 of stock and sold about $845,000 of stock from Feb. 18 through March 13. If they had held the shares they sold through Monday, the stock would have been valued at $86,000 less than what they sold it for, according to the Journal analysis.” -WSJ (03/31/2020)

Authored by Steve Watson via Summit News,

US intelligence officials have claimed that Chinese agents attempted to stoke panic and social unrest in the US by spreading text messages in March warning of coming curfews and martial law with troops on the streets.

The New York Times highlighted the claims from six intelligence officials from different agencies that people acting on behalf of the Chinese communist government worked to spread the rumours, with advice to take as much money out of bank accounts as possible and fill up on gas.

Many of the messages claimed to have knowledge from people inside the Pentagon, National Security Council or FBI, with one specifically warning that nationwide curfews would be announced “as soon as they have troops in place to help prevent looters and rioters.”

Another text referred to a military source as saying “he got the call last night and was told to pack and be prepared for the call today with his dispatch orders.”

The texts also appear to have been designed to promote panic buying, with one claiming a government source “said things are going to be crazy tomorrow, and its [sic] probably best to get some serious groceries before the afternoon announcement tomorrow.”

When the messages went viral in mid-March, The National Security Council labelled them “FAKE.”

Text message rumors of a national #quarantine are FAKE. There is no national lockdown. @CDCgov has and will continue to post the latest guidance on #COVID19. #coronavirus

— NSC (@WHNSC) March 16, 2020

US officials believe that while the Chinese agents did not create the messages, they used WhatsApp and similar encrypted messaging platforms to ensure they spread quickly.

The Times report also notes that intelligence officers are investigating whether Chinese diplomats inside the US were responsible for spreading the panic.

The Chinese government has, of course, denied the claims as “complete nonsense and not worth refuting.”

Meanwhile, the State Department has also warned that China, Russia, and Iran are actively spreading anti-American theories about the origin of the virus, including that the disease is an US bioweapon.

Politico reports that the countries are pushing various conspiracy theories including “that the novel coronavirus is an American bioweapon, that the US is scoring political points off the crisis, that the virus didn’t come from China, that U.S. troops spread it, that America’s sanctions are killing Iranians, that China’s response was great while the US’ was negligent, that [Russian, Iranian and Chinese] governments are managing the crisis well, and that the US economy can’t bear the toll of the virus.”

It’s refreshing that credit investors have learned absolutely nothing from the March crash.

After warning in its earnings release that it would fund its ongoing cash burn with junk bonds, Netflix wasted no time, and just hours later announced it would issue $1 billion in dollar-denominated and euro bonds. The response was remarkable, with the offering said to be 10x oversubscribed despite offering what according to Bloomberg will be a record low yield for high yield debt.

Thanks to the massive oversubscription, Netflix, which is rated a high junk Ba3/BB, was able to reduce yields on both portions on Thursday, sourced told Bloomberg. As a result, investors in the dollar bonds are now looking at a 3.625% yield, the lowest ever seen in the U.S. high-yield bond market and in line with prices typically offered on investment-grade bonds. The euro portion is being offered even lower, at 3%.

Such low yields were last seen before the virus sparked the biggest sell-off since the financial crisis, and prompted the Fed to announce it would purchase both investment grade and fallen angel junk bonds. Technology firm PTC Inc. priced a $500 million five-year bond at 3.625% in January, while VICI Properties Inc. got a $750 million deal at 3.5% that month.  By the time the offering is complete, we expect the yield on US bonds to slide even further, potentially below 3.5% as underwriters capitalized on the unprecedented demand.

During the March crash, Netflix bonds tumbled, with the yield on its bonds maturing in 2026 doubling from 3% to above 6% briefly, before tumbling right back down to 3.6%

Bond investors are rewarding Netflix for benefiting from the coronavirus pandemic, after adding a record 15.8 million subscribers in the first quarter and turning its first quarter of positive free cash flow since 2014, mostly due to shuttering its new content production pipeline.

Even so, Netflix remains a years away from achieving sustained positive free cash flow, so it makes sense to build up a war chest especially at such cheap rates, according to Bloomberg Intelligence analyst Stephen Flynn.

“Given the outlook for many high-yield issuers is so uncertain in response to the pandemic, Netflix may offer a much higher level of certainty in future performance given its business model,” he said. The model “is well-situated for a social-distanced environment,” according to Flynn.

The new offering means that Netflix’ total debt will rise from an already record $16.265 billion to a new all time high above $17 billion, even as both LTM EBITDA and cash flow remain deep in the red.

Netflix will use the net proceeds for general corporate purposes, which may include content acquisitions and for production and development.

Iran has fired back at President Trump’s provocative Wednesday tweet instructing the US Navy to “shoot down and destroy” Iranian gunboats in the gulf which “harass our ships at sea”.

Iranian Foreign Minister Javad Zarif responded by mocking the rising coronavirus spread among US military ranks, a month after the outbreak aboard the USS Theodore Roosevelt diverted the nuclear carrier from its mission in the Western Pacific. 

“The US military is hit by over 5000 Covid-19 infections,” Zarif said on Twitter Thursday. “Trump should attend to their needs, not engage in threats cheered on by Saddam’s terrorists. Also, US forces have no business 7,000 miles away from home, provoking our sailors off our OWN Persian Gulf shores.”

Sleepy Joe thought this was OK. Not me! https://t.co/VgIlA4fJKF

— Donald J. Trump (@realDonaldTrump) April 22, 2020

And more crucially at a moment the US has been conducting military maneuvers in the Persian Gulf since late March, Iranian Revolutionary Guard Corps (IRGC) Hossein Salami threatened directly in a fiery new speech to destroy any American warships that act aggressively against Iranian ships.

He said the US Navy will be met with a “crushing response”:

“I have ordered our naval forces to destroy any American terrorist force in the Persian Gulf that threatens security of Iran’s military or non-military ships,” Major General Hossein Salami said. “Security of the Persian Gulf is part of Iran’s strategic priorities.”

“I am telling the Americans that we are absolutely determined and serious in defending our national security, our water borders, our shipping safety, and our security forces, and we will respond decisively to any sabotage,” Salami added.

The US military is hit by over 5000 #covid19 infections. @realdonaldtrump should attend to their needs, not engage in threats cheered on by Saddam’s terrorists.

Also, US forces have no business 7,000 miles away from home, provoking our sailors off our OWN Persian Gulf shores. pic.twitter.com/7CjzabkyVK

— Javad Zarif (@JZarif) April 23, 2020

“Americans have experienced our power in the past and must learn from it,” he threatened further in a likely reference to the Jan.8 retaliation attack against US bases in Iraq, days after the US assassination by drone of the IRGC’s Qassem Soleimani.

Meanwhile, undeterred by Iran’s own rhetoric heightening in a tit-for-tat way, Trump retweeted the below political cartoon later in the day Wednesday, related to his “ordering” the Navy to attack Iranian vessels that come close (though many observers have noted he stopped short of changing the official rules of engagements):

For everybody wondering ‘why now?’, Trump’s command follows the release of footage showing Iranian ships harassing Navy warships.

But for both sides it all could be but a brief distraction from more pressing crises at home, given Tehran is struggling with a brutal coronavirus outbreak that has forced the government to start reopening its economy for fear of an all-out collapse. Perhaps to a lesser degree, American is also facing this dilemma. 

And the US’s push to enforce sanctions and add further strain has appalled some European allies, who have moved to try and shore up the regime via a facility that bypasses the dollar-based financial system to transact directly with the Iranians.