Watch: ‘Underground Hazard’ Exposed As NYC Homeless Fill Up Subway Cars Amid Pandemic
“I got to send this to the governor, let him see this shit,” a 25-year veteran of New York City’s Metropolitan Transportation Authority said when posting an now viral video clip depicting a growing crisis in the city’s subways.
The employee, subsequently confirmed in media reports as Torry Chalmers, offered video proof that throngs of the city’s homeless are now filling up empty train cars on a regular basis.
Chalmers and other employees are demanding “hazard pay” given that the rising number of homeless filling the subways they interact withare a huge risk amid the coronavirus pandemic, also given the Big Apple has for weeks now been the global epicenter.
“This is what I got to do. I got to go to work in this,” he said in the video. “It’s not making any sense. It’s nasty, nasty.”
“People are scared when the train comes in the station,” Chalmers added. “If one car looks bad, they’ll run to another — but it’s the same problem in every car.”
“We’re out there every day putting our lives on the line… We should get hazard pay,” he asserted.
New York Gov. Andrew Cuomo addressed the growing crisis in the wake of growing outrage over the alarming underground hazard conditions, calling the situation “disrespectful to the essential workers who need to ride the subway system.”
Cuomo said Tuesday, “We have to have a public transportation system that is clean, where the trains are disinfected,” and added: “It’s not even safe for the homeless people to be on trains,” Cuomo added.
“We’re concerned about homeless people so we let them stay on the trains without protection in this epidemic of the COVID virus? No, we have to do better than that and we will,” the governor said.
New York and other cities, especially L.A. and San Francisco have for weeks been attempting to get a handle on the homeless crisis amid the pandemic. Recently photos of Las Vegas casino parking lots which served as makeshift homeless ‘social distancing’ outdoor sleeping venues went viral.
NY Mayor Bill de Blasio has this week called on the MTA to close subway terminals to ensure homeless don’t congregate there, and for the purpose of nightly deep disinfecting.
And Interim New York City Transit President Sarah Feinberg commented:
“Our customers shouldn’t have to board a car that multiple people using it as a shelter and as a trash receptacle or toilet.”
Since the crisis began the MTA has greatly reduced its service, also as hundreds of its personnel have been out sick with coronavirus, compounding the risk to the mass transit service and broader public; however, it’s considered that the city’s subway system which has never completely closed in the century of its existence is vital for daily transporting ‘essential’ workers.
China PMIs Expand For 2nd Month After February Crash, But Real-Time Indicators Paint Different Picture
And just like that, China’s February swoon is ancient history.
After Beijing reported a dramatic rebound in March PMIs from the February crash which saw both the manufacturing and service PMIs tumble to record lows, it was virtually guaranteed that the April data would confirm a continuation of China’s “solid recovery” trend.
After all, it has now become a political race between China and the US over whose economy is more unscathed as a result of the coronavirus pandemic as the Global Times editor in chief Hu Xijin made abundantly clear today when in response to the latest US GDP print, tweeted “Already fell 4.8% in Q1, will definitely be worse in Q2. How will President Trump explain? I guess he would say the figure is better than expected and is so much better than any other country in the world.When China sees positive growth rate in Q2,he would say the number is fake.”
Already fell 4.8% in Q1, will definitely be worse in Q2. How will President Trump explain? I guess he would say the figure is better than expected and is so much better than any other country in the world.When China sees positive growth rate in Q2,he would say the number is fake. pic.twitter.com/PN10JicZKI
Well, Trump certainly wouldn’t be the first to accuse China of fabricating numbers, especially in light of the latest official PMI numbers of out China which showed manufacturing dip from 52.0 to 50.8, missing expectations of 51.0 yet still in expansion territory; at the same time the Nonmanufacturing PMI printed at 53.2, up from 52.3, and well above the 52.5 consensus estimate.
But would Trump be right if accusing China of also fabricating its PMIs which show the economy now well in expansion territory for a second month? For the answer we go to real-time activity trackers which have become so popular ever since the breakout of the coronavirus pandemic. What they show is anything but an economy that is expanding.
First, according to channel checks, we can clearly see that the latest activity in such sectors are hotels, catering and entertanment is running far below indicative 2019 levels, with just mining and real estate roughly comparable to year ago levels.
To be sure, while daily coal consumption is indeed on par with 2019…
… transportation – both ground and by air – across China remains a pale shadow of 2019 levels.
More ominously, the all-important for China’s trade economy container throughput at major port appears to still be far below last year levels.
And most concerning of all for the country that still barely has a functioning bankruptcy process, is that the number of bankruptcies filings is surging:
Superimposing China and the US in industrial and consumer activity shows that while China is well ahead in terms of activity recovery, it has a ways to go before it catches up to 2019 levels. As for the US, it certainly has a ways to go.
The final proof that China has a ways to go before it recovers, let alone is in “expansion”, come from a handful of other high-frequency indicators as shown below.
Conclusion: China’s official PMI numbers are about as credible as its coronavirus “data.”
In the depths of the 2008–09 financial crisis, Obama’s first chief of staff, Rahm Emanuel, remarked that one should never let a good crisis go to waste. You probably recall him saying that.
He was referring to the fact that crises may be temporary but hidden agendas are permanent.
The global elites and deep state actors always have a laundry list of programs and regulations they can’t wait to put into practice. They know that most of these are deeply unpopular and they could never get away with putting them into practice during ordinary times.
Yet when a crisis hits, citizens are desperate for fast action and quick solutions. The elites bring forward their rescue packages but then use these as Trojan horses to sneak their wish list inside.
The War on Cash Is Decades Old
The USA Patriot Act that passed after 9/11 is a good example. Some counterterrorist measures were needed, of course. But the Treasury had a long-standing wish list involving reporting cash transactions and limiting citizens’ ability to get cash.
They plugged that wish list into the Patriot Act and we’ve been living with the results ever since, even though 9/11 is long in the past.
Obviously, the effort to eliminate cash is hardly new. It has been going on for many years and in many forms.
The U.S. discontinued the use of large-denomination bills in the late 1960s. Until 1969, $500, $1,000, $5,000 and even $10,000 bills were issued, even though they were printed decades earlier.
Today the largest bill is a $100 bill, but it has lost 80% of its purchasing power since 1968, so it’s really just a $20 bill from those days. Europe has ended the 500-euro note and today the largest note in euros is 200 euros.
Ignore the Official Reasons
Harvard professor Ken Rogoff has a book called The Curse of Cash, which calls for the complete elimination of cash. Many Bitcoin groupies say the same thing. Central banks and the IMF are all working on new digital currencies today.
The reasons for this are said to include attacks on tax evasion, terrorism and criminal activity. There’s some truth to these claims. Cash is anonymous, so it can’t be tracked.
But the real reason is because the elimination of cash would allow elites to impose negative interest rates, account freezes and confiscation.
They can’t do that as long as you can go to your bank and withdraw your cash. That’s the key.
In other words, it’s much easier for them to control your money if they first herd you into a digital cattle pen. That’s their true objective and all the other reasons are just a smokescreen.
And now, predictably, the latest attack on cash comes courtesy of the COVID-19 pandemic.
Crisis Meets Opportunity
This crisis is even larger and scarier than the 2008 crisis, which gives elites even more opportunity to ram their agendas through without serious opposition. They don’t intend to let it go to waste.
Sure enough, government agents and tech vendors are now claiming that cash is “dangerous” because it could contain traces of the coronavirus.
While that’s not impossible, it’s highly unlikely and no more likely than getting the virus from 100 other sources including package deliveries and shopping carts.
Should we ban cardboard boxes and shopping carts too?
If you’re really concerned about getting coronavirus from cash, it’s simple to wear sanitary gloves during any transactions (I do). Then put the cash to one side. The virus cannot live more than 10 hours or so on an inorganic surface. After a while, your cash is safe.
But if you get scared into giving up cash because of COVID-19, then don’t complain when you find that your financial freedom is also gone when the world moves to 100% digital money.
Because that’s the endgame here.
How to Protect Your Wealth
The time to protect yourself is now. The best way is to keep a portion of your wealth outside of the banking system.
I strongly recommend that you own physical gold (and silver). I recommend you allocate 10% of your investable assets to gold. If you really wanted to be aggressive, maybe 20%. But no more.
Just make sure you don’t store it in a bank, because it would be subject to confiscation. That defeats the whole purpose of having this sort of protection in the first place.
One Small Positive
As bad as the COVID-19 crisis is, and it is that bad, there’s one small positive to come out of it: It’s finally snapped investors out of their complacency regarding gold.
I recommended gold at $1,100 per ounce, $1,200 per ounce, $1,300 per ounce, $1,400 per ounce, $1,500 per ounce and so on… you get the picture.
But few people cared. They just yawned. Now that gold is $1,750 per ounce (up 75% since 2015), everyone wants gold!
There’s only one problem. You may not be able to get any.
That’s also something I predicted. I said years ago that when you most want your gold, you won’t be able to get it because everyone will want it at the same time and the dealers will be back-ordered and the mints and refiners will shut down.
Now it appears that’s exactly what’s happening.
The U.S. Mint at West Point is closing. That mint produces 1-ounce American Gold Eagle coins, so this will add to the shortage of Gold Eagles. The Royal Canadian Mint also closed for coin production temporarily a few weeks ago.
Gold refiners in Switzerland are either closed or are operating on reduced hours. Gold logistics firms like Brink’s are also cutting back hours and reducing distribution of gold bullion.
You Still Have a Chance
It’s still possible to find some gold bars or coins from dealers who have inventory, but delays are long and commissions are high. The scarcity factor will only get worse as gold prices continue their rally in this third great bull market in history that began in 2015.
Gold is difficult to get now but not impossible. If you don’t have yours yet, don’t wait any longer.
If you have to pay a bit of a premium for physical gold over the officially listed gold price, don’t worry about that. It means nothing in the long run.
I see gold going to at least $10,000 an ounce ultimately, so paying a little more right now is not an issue. It’s just an indication of the skyrocketing demand for physical gold right now.
When the next panic hits, and it will hit, there won’t be any gold available at any price.
COVID-19 Rips Through Marine Boot Camp, Dozens Of New Infections
We previously reported on the growing controversy over US defense readiness as relates to continuing US armed services boot camps across the country.
Top Pentagon brass last month saidkeeping entry-level recruit training operational is essential to national security amid growing concerns the COVID-19 pandemic could spread at the military training centers:
The Pentagon has decided that keeping all the services’ entry-level training camps up and running is critical to national security. The decision was reportedly at odds with what some service leaders recommended: a temporary pause on recruit shipping until the threat of the coronavirus lessened.
Defense Department officials overrode the recommendations from senior military leaders to halt training for 30 days, The Washington Post reported March 16.
Recruits and drill instructors wearing face masks at Marine Corps Recruit Depot, San Diego. Image source: US Marine Corps/Marine Corps Times.
However, beginning early this month the main military branches, starting with the Army and Marines, began “pausing” the shipping of new incoming recruits to boot camps on the East and West coasts.
But current ongoing boot camps would continue on, according to the late March decision, with the Pentagon saying it would frequently revisit the “pause” in additional trainees. Since then, the national Marine boot camps in San Diego and Parris Island, South Carolina have resumed receiving new Marine recruits, but with a mandatory 14-day isolation period upon arrival.
Almost four dozen recruits in San Diego have tested positive for the virus and have been quarantined for two weeks, according to the Marine Corps.
The increase in COVID-19 positive recruits is related to the Marine Corps conducting more testing for the virus.
“We are experiencing challenging and unprecedented times…,” a video message from the Marine Corps top command said.
In the face of COVID-19, @CMC_MarineCorps General David H. Berger and @USMCSgtMaj Troy E. Black deliver a message for future Marines, recruits, officer candidates, Marines and their families. pic.twitter.com/T3l8DBw12c
All new COVID-19 cases are in one Marine “company” but training has still been halted broadly, nor is there a current pause in new incoming recruits, making for an increasingly dangerous and tense situation concerning the potentially deadly disease.
Spokesman for the recruit depot, Capt. Martin Harris told Marine Corps Times, “While these positive cases are currently isolated to one company and in quarantine, the increase of asymptomatic positive tests has prompted the testing of all personnel in quarantine and all recruits that arrive on the depot in the future, whether or not they present symptoms,” he explained.
Devastating flashback clip of Comey just aired on @marthamaccallum show.
When asked who went around the protocol of going through the WH Counsel’s office and instead decided to send the FBI agents into White House for the Flynn perjury trap…
…Comey smugly responds “I sent them.”
Here is the clip:
@comey is preparing for prison and hoping to avoid the death penalty. Will Obama be brought down too?
— 🇺🇸 Beyond Reproach 🇺🇸 (@BeyondReproach5) April 30, 2020
Will Comey do time?
Imagine having your life and reputation ruined by rogue US govt. officials. Then years later when the plot finally comes to light the first thing you do is post an American flag. This is the guy they wanted you to believe was a Russian asset. 🙄 https://t.co/TI768Vijn2
U.S. District Court Judge Emmet G. Sullivan unsealed four pages of stunning FBI emails and handwritten notes Wednesday, regarding former Trump National Security Advisor Michael Flynn, which allegedly reveal the retired three star general was targeted by senior FBI officials for prosecution, stated Flynn’s defense attorney Sidney Powell. Those notes and emails revealed that the retired three-star general appeared to be set up for a perjury trap by the senior members of the bureau and agents charged with investigating the now-debunked allegations that President Donald Trump’s campaign colluded with Russia, said Sidney Powell, the defense lawyer representing Flynn.
Moreover, the Department of Justice release 11 more pages of documents Wednesday afternoon, according to Powell.
While we await Judge Sullivan’s order to unseal the exhibits from Friday, the government has just provided 11 more pages even more appalling that the Friday production. We have requested the redaction process begin immediately.@GenFlynn@BarbaraRedgatepic.twitter.com/YPEjZWbdvo
“What is especially terrifying is that without the integrity of Attorney General Bill Barr and U.S. Attorney Jensen, we still would not have this clear exculpatory information as Mr. Van Grack and the prosecutors have opposed every request we have made,” said Powell.
It appears, based on the notes and emails that the Department of Justice was determined at the time to prosecute Flynn, regardless of what they found, Powell said.
“The FBI pre-planned a deliberate attack on Gen. Flynn and willfully chose to ignore mention of Section 1001 in the interview despite full knowledge of that practice,” Powell said in a statement.
“The FBI planned it as a perjury trap at best and in so doing put it in writing stating ‘what is our goal? Truth/ Admission or to get him to lie so we can prosecute him or get him fired.”
The documents, reviewed and obtained by SaraACarter.com, reveal that senior FBI officials discussed strategies for targeting and setting up Flynn, prior to interviewing him at the White House on Jan. 24, 2017. It was that interview at the White House with former FBI Special Agent Peter Strzok and FBI Special Agent Joe Pientka that led Flynn, now 61, to plead guilty after months of pressure by prosecutors, financial strain and threats to prosecute his son.
Powell filed a motion earlier this year to withdraw Flynn’s guilty plea and to dismiss his case for egregious government misconduct. Flynn pleaded guilty in December 2017, under duress by government prosecutors, to lying to investigators about his conversations with Russian diplomat Sergey Kislyak about sanctions on Russia. This January, however, he withdrew his guilty plea in the U.S. District Court in Washington, D.C. He stated that he was “innocent of this crime” and was coerced by the FBI and prosecutors under threats that would charge his son with a crime. He filed to withdraw his guilty plea after DOJ prosecutors went back on their word and asked the judge to sentence Flynn to up to six months in prison, accusing him of not cooperating in another case against his former partner. Then prosecutors backtracked and said probation would be fine but by then Powell, his attorney, had already filed to withdraw his guilty plea.
The documents reveal that prior to the interview with Flynn in January, 2017 the FBI had already come to the conclusion that Flynn was guilty and beyond that the officials were working together to see how best to corner the 33-year military veteran and former head of the Defense Intelligence Agency. The bureau deliberately chose not to show him the evidence of his phone conversation to help him in his recollection of events, which is standard procedure. Even stranger, the agents that interviewed Flynn later admitted that they didn’t believe he lied during the interview with them.
Powell told this reporter last week that the documents produced by the government are “stunning Brady evidence’ proving Flynn was deliberately set up and framed by corrupt agents at the top of the FBI to target President Trump.
She noted earlier this week in her motion that the evidence “also defeats any argument that the interview of Mr. Flynn on January 24 was material to any ‘investigation.’ The government has deliberately suppressed this evidence from the inception of this prosecution—knowing there was no crime by Mr. Flynn.”
Powell told this reporter Wednesday that the order by Sullivan to unseal the documents in Exhibit 3 in the supplement to Flynn’s motion to dismiss for egregious government conduct is exposing the truth to the public. She said it’s “easy to see that he was set up and that Mr. Flynn was the insurance policy for the FBI.” Powell’s reference to the ‘insurance policy,’ is based on one of the thousands of texts exchanged by former FBI lawyer Lisa Page and her then-lover former FBI Special Agent Peter Strzok.
In an Aug. 15, 2016, text from Strzok to Page he states,“I want to believe the path you threw out for consideration in Andy’s (former Deputy Director Andrew McCabe) office — that there’s no way he gets elected — but I’m afraid we can’t take that risk. It’s like an insurance policy in the unlikely event you die before 40.”
The new documents were turned over to Powell, by U.S. Attorney Timothy Shea. They were discovered after an extensive review by the attorneys appointed by U.S. Attorney General William Barr to review Flynn’s case, which includes U.S. Attorney of St. Louis, Jeff Jensen.
In one of the emails dated Jan. 23, 2017, FBI lawyer Lisa Page, who at the time was having an affair with Strzok and who worked closely with him on the case discussed the charges the bureau would bring on Flynn before the actual interview at the White House took place. Those email exchanges were prepared for former FBI Deputy Director Andrew McCabe, who was fired by the DOJ for lying multiple times to investigators with DOJ Inspector General Michael Horowitz’s office.
Former FBI Director James Comey, who was fired by President Trump for his conduct, revealed during an interview with Nicolle Wallace last year that he sent the FBI agents to interview Flynn at the White House under circumstances he would have never done to another administration.
“I probably wouldn’t have done or maybe gotten away with in a more organized investigation, a more organized administration,” Comey said. “In the George W. Bush administration … or the Obama administration, two men that all of us, perhaps, have increased appreciation for over the last two years.”
In the Jan 23, email Page asks Strzok the day before he interviews Flynn at the White House:
“I have a question for you. Could the admonition re 1001 be given at the beginning at the interview? Or does it have to come following a statement which agents believe to be false? Does the policy speak to that? (I feel bad that I don’t know this but I don’t remember ever having to do this! Plus I’ve only charged it once in the context of lying to a federal probation officer). It seems to be if the former, then it would be an easy way to just casually slip that in.
“Of course as you know sir, federal law makes it a crime to…”
Strzok’s response:
I haven’t read the policy lately, but if I recall correctly, you can say it at any time. I’m 90 percent sure about that, but I can check in the am.
In the motion filed earlier this week, Powell stated “since August 2016 at the latest, partisan FBI and DOJ leaders conspired to destroy Mr. Flynn. These documents show in their own handwriting and emails that they intended either to create an offense they could prosecute or at least get him fired. Then came the incredible malfeasance of Mr. Van Grack’s and the SCO’s prosecution despite their knowledge there was no crime by Mr. Flynn.”
Attached to the email is handwritten notes regarding Flynn that are stunning on their face. It is lists of how the agents will guide him in an effort to get him to trip up on his answers during their questioning and what charges they could bring against him.
“If we get him to admit to breaking the Logan Act, give facts to DOJ & have them decide,” state the handwritten notes.
“Or if he initially lies, then we present him (not legible) & he admits it, document for DOJ, & let them decide how to address it.”
The next two points reveal that the agents were concerned about how their interview with Flynn would be perceived saying “if we’re seen as playing games, WH (White House) will be furious.”
“Protect our institution by not playing games,” the last point on the first half of the hand written notes state.
From the handwritten note:
Afterwards:
interview
I agreed yesterday that we shouldn’t show Flynn (redacted) if he didn’t admit
I thought @ it last night, I believe we should rethink this
What is (not legible) ? Truth/admission or to get him to lie, so we can prosecute him or get him fired?
we regularly show subjects evidence, with the goal of getting them to admit their wrongdoing
I don’t see how getting someone to admit their wrongdoing is going easy on him
If we get him to admit to breaking the Logan Act, give facts to DOJ & have them decide
Or if he initially lies, then we present him (not legible) & he admits it, document for DOJ, & let them decide how to address it
If we’re seen as playing games, WH will be furious
Protect our institution by not playing games
(Left column)
we have case on Flynn & Russians
Our goal is to (not legible)
Our goal is to determine if Mike Flynn is going to tell the truth or if he lies @ relationship w/ Russians
can quote (redacted)
Shouldn’t (redacted
Review (not legible) stand alone
It appears evident from an email from former FBI agent Strzok, who interviewed Flynn at the White House to then FBI General Counsel James Baker, who is no longer with the FBI and was himself under investigation for leaking alleged national security information to the media.
The email was a series of questions to prepare McCabe for his phone conversation with Flynn on the day the agents went to interview him at the White House. These questions would be questions that Flynn may ask McCabe before sending the agents over to interview him.
Email from Peter Strzok, cc’d to FBI General Counsel James Baker: (January 24, 2017)
I’m sure he’s thought through these, but for DD’s (referencing Deputy Director Andrew McCabe) consideration about how to answer in advance of his call with Flynn:
Am I in trouble?
Am I the subject of an investigation?
Is it a criminal investigation?
Is it an espionage investigation? Do I need an attorney? Do I need to tell Priebus? The President?
Will you tell Priebus? The President? Will you tell the WH what I tell you?
What happens to the information/who will you tell what I tell you? Will you need to interview other people?
Will our interview be released publically? Will the substance of our interview be released?
How long will this take (depends on his cooperation – I’d plan 45 minutes)? Can we do this over the phone?
I can explain all this right now, I did this, this, this [do you shut him down? Hear him out? Conduct the interview if he starts talking? Do you want another agent/witness standing by in case he starts doing this?]
“Holy God. We’re About To Lose Everything” – Pandemic Crushes Overleveraged Airbnb Superhosts
“History doesn’t repeat itself, but it often rhymes,” as Mark Twain is often reputed to have said. Before the 2007-2008 GFC, people built real estate portfolios based around renters. We all know what happened there; once consumers got pinched in the GFC, rent payments couldn’t be made, and it rippled down the chain and resulted in landlords foreclosing on properties. Now a similar event is underway, that is, overleveraged Airbnb Superhosts, who own portfolios of rental properties built on debt, are now starting to blow up after the pandemic has left them incomeless for months and unable to service mortgage debt.
We have described the financial troubles that were ahead for Superhosts in late March after noticing nationwide lockdowns led to a crash not just in the tourism and hospitality industries, but also a plunge in Airbnb bookings. It was to our surprise that Airbnb’s management understood many of their Superhosts were overleveraged and insolvent, which forced the company to quickly erect a bailout fund for Superhosts that would cover part of their mortgage payments in April.
The Wall Street Journal has done the groundwork by interviewing Superhosts that are seeing their mini-empires of short-term rental properties built on debt implode as the “magic money” dries up.
Cheryl Dopp,54, has a small portfolio of Airbnb properties with monthly mortgage payments totaling around $22,000. She said the increasing rental income of adding properties to the portfolio would offset the growing debt. When the pandemic struck, she said $10,000 in rental income evaporated overnight.
“I made a bargain with the devil,” she said while referring to her financial misery of being overleveraged and incomeless.
Dopp said when the pandemic lockdowns began, “I thought, ‘Holy God. We’re about to lose everything.'”
Market-research firm AirDNA LLC said $1.5 billion in bookings have vanished since mid-March. Airbnb gave all hosts a refund, along with Superhosts, a bailout (in Airbnb terms they called it a “grant”).
“Hosts should’ve always been prepared for this income to go away,” said Gina Marotta, a principal at Argentia Group Inc., which does credit analysis on real estate loans. “Instead, they built an expensive lifestyle feeding off of it.”
We noted that last month, “Of the four million Airbnb hosts across the world, 10% are considered “Superhosts,” and many have taken out mortgages to accumulate properties to build rental portfolios.”
Airbnb spokesman Nick Papas said the decline in bookings and slump in the tourism and travel industry is “temporary: Travel will bounce back and Airbnb hosts—the vast majority of whom have just one listing—will continue to welcome guests and generate income.”
Papas’ optimism about a V-shaped recovery has certainly not been echoed in the petroleum and aviation industry. Boeing CEO Dave Calhoun warned on Tuesday that air travel growth might not return to pre-corona levels for years. Fewer people traveling is more bad news for Airbnb hosts that a slump could persist for years, leading to the eventual deleveraging of properties.
AirDNA has determined that a third of Airbnb’s US hosts have one property. Another third have two and 24 properties and get ready for this: a third have more than 24.
Startups such as Sonder Corp. and Lyric Hospitality Inc. manage properties for hosts that have 25+ properties. Many of these companies have furloughed or laid off staff in April.
Jennifer Kelleher-Hazlett of Clawson, Michigan, spent $380,000 on two properties in 2018. She and her husband borrowed $100,000 to furnish each. Rental income would net up to $7,000 per month from Airbnb after mortgage payments, which would supplement her income as a part-time pharmacist and husband’s work in academia.
Before the virus struck, both were expecting to buy more homes – now they can’t make the payments on their Airbnb properties because rental income has collapsed. “We’re either borrowing more or defaulting,” she said.
Here’s another Airbnb horror story via The Journal:
“That sum would provide little relief to hosts such as Jennifer and David Landrum of Atlanta. In 2016, they started a company named Local, renting the 18 apartments they leased and 21 apartments they managed to corporate travelers and film-industry workers. They spent more than $14,000 per apartment to outfit them with rugs, throw pillows, art and chandeliers. They grossed about $1.5 million annually, mostly through Airbnb, Ms. Landrum said.
They spend about $50,000 annually with cleaning services, about $25,000 on an inspector and $30,000 a year on maintenance staff and landscapers, Ms. Landrum said, not to mention spending on furnishings.
When Airbnb began refunding guests March 14, the Landrums had nearly $40,000 in cancellations, she said. The couple has been able to pay only a portion of April rent on the 18 apartments they lease and can’t fulfill their obligations to pay three months’ rent unless bookings resume. They have reduced pay to cleaning staff and others. Adding to the stress, Georgia banned short-term rentals through April.
“It’s scary,” said Ms. Landrum, who said she has discounted some units three times since mid-March. The Landrums have negotiated to get some leniency from apartment owners on their leases. If not, Ms. Landrum said, they would have to sell their house.”
To make matters worse, and this is exactly what we warned about last month, Airbnb Superhosts are now panic selling properties:
Greg Hague, who runs a Phoenix real-estate firm, said Airbnb hosts are “desperate to sell properties” in April.
“There’s been a flood of people. You have people coming to us saying, ‘I’m a month or two away from foreclosure. What’s it going to take to get it sold now?'” Hague said.
And here’s what we said in March: “We might have discovered the next big seller that could ruin the real estate market: Airbnb Superhosts that need to get liquid.”
Numerous “nonessential” businesses around the country have been shuttered by state and local government “lockdown” orders in an attempt to control the spread of the coronavirus pandemic. This has inflicted huge losses on their owners and employees. Some have filed lawsuits arguing that they are entitled to compensation under the Takings Clause of the Fifth Amendment. In a March 20 post, I explained why the vast majority of such claims are highly unlikely to succeed under current Supreme Court precedent. Since then, the Pennsylvania Supreme Court has issued a decision rejecting coronavirus takings claims based on reasoning similar to that I outlined in my post. My sense is that most experts on the subject hold similar views.
But Prof. F.E. Guerra-Pujol of the University Central Florida has written an article, published by the Mercatus Center at George Mason University, which takes a contrarian position. He argues not only that businesses closed by shutdown orders are entitled to takings compensation, but that that outcome is required by an unlikely source: the Supreme Court’s 2005 ruling in Kelo v. City of New London:
[T]here is a handy and well-known precedent that supports lockdown compensation under the takings clause. Consider the leading Supreme Court case on the takings clause, Kelo v. City of New London. In this 2005 ruling, the Supreme Court held that the city of New London, Connecticut, could acquire 15 residential properties without the owners’ consent in order to transfer them to a private developer. However, the city had to compensate the owners for the value of the taken property.
How did the Supreme Court reach such an egregious result in that case? By taking a very broad and expansive interpretation of the “public use” requirement of the takings clause. In the Kelo Court’s words, “When this Court began applying the Fifth Amendment to the States at the close of the 19th century, it embraced the broader and more natural interpretation of public use as ‘public purpose.’. . . Without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field.”
Although many conservative jurists, including [Ilya] Somin himself, have criticized this controversial Supreme Court decision for giving the government too much leeway, Kelo can be turned on its head to support the argument that the takings clause, including its requirement of just compensation, applies to coronavirus lockdowns. After all, the sole rationale of these lockdown orders is to promote public health. Accordingly, if “public use” under the takings clause means any legitimate public purpose, per Kelo, then what greater “public purpose” is there than public health?
Having written a book and numerous articles about the Kelo decision and its impact, I thought I was familiar with all of the different possible interpretations of that ruling. Still, I admit Guerra-Pujol’s theory took me by surprise. It’s definitely a creative and original idea. But, unfortunately, it has no basis in the Court’s decision.
Kelo simply does not address the issue of what qualifies as a “taking”—the main point in contention in the shutdown cases. In Kelo, both sides agreed that the use of eminent domain to seize fifteen residential properties for “economic development” purposes was a taking requiring compensation. The point at issue whether it was for a “public use” or not. If the courts had ruled that the purpose of the taking was not a public use (which would have been the correct decision, in my view), the government would have been forbidden to take the property even if it did pay compensation. On the other hand, the absence of a public use would be irrelevant if the government action in question was not a taking in the first place.
By contrast, in the shutdown cases, the whole point at issue is whether the government has “taken” the property in question at all, as that term is understood under the Fifth Amendment. Kelo simply did not address that question. It is true, as Guerra-Pujol notes, that the Kelo majority points out that eminent domain can sometimes be used for “police power” purposes, including promoting “public health.” But the Court did not overrule or limit earlier decisions holding there is no taking in many situations where the government restricts property rights for police power purposes. As I explained in my earlier post on takings and shutdowns, this is especially true in situations where the property in question—or the owner’s use of it—itself poses a threat to public health, as opposed to one where the the government restricts property rights in order to combat a threat elsewhere. In the latter scenario, courts are more willing to grant takings compensation, but the coronavirus situation is an example of the former.
This distinction also undercuts Guerra-Pujol’s reliance on the 2012 Arkansas Game and Fish Commission case, in which the courts ruled takings compensation was required when the federal government deliberately flooded land in order to prevent potentially more severe flooding elsewhere. In that case, the land destroyed by the federal government did not in any way itself threaten public health or safety. It was just in the wrong place at the wrong time. That isn’t true of a business whose continued operation might facilitate the spread of a deadly disease.
Guerra-Pujol also argues that shutdown takings plaintiffs can prevail under the Penn Central test, which applies to takings challenges government regulations that are not automatic “per se” takings. For reasons laid out in my earlier post, I think most shutdown plaintiffs are likely to lose under that test—which, in general, tends to be applied in ways favorable to the government. Admitted, as I and other critics have long emphasized, the Penn Central is often vague and unclear. But unless the Supreme Court decides to reinterpret it in a way more favorable to property owners, it’s unlikely that any but very atypical shutdown plaintiffs can prevail under it.
Even more importantly, the Penn Central test only comes into play if the plaintiffs can get around the police power issue. And that is itself highly unlikely. Guerra-Pujol speculates that “conservative” judges might be willing to reinterpret both Penn Central and the police power cases to enable the plaintiffs to prevail. But if these judges were going to greatly strengthen constitutional protection for property rights under the Takings Clause, it’s highly unlikely they would use this particular set of cases to do so—a situation where the government has a much stronger than usual public health rationale for its actions, and large numbers of lives could be at stake.
As I previously noted, there might be unusual cases where shutdown plaintiffs could potentially prevail, as in situations where the public health benefits of shutting down a category of businesses might be extremely low, or situations where the shutdown has deprived plaintiffs’ property of virtually all economic value. But such cases are likely to be rare.
Guerra-Pujol also errs in describing me as a “conservative” legal scholar. I am, in fact, a libertarian—a distinction that is especially important in the Trump era, where the two differ on major issues such as immigration, trade, law enforcement abuses, and government spending; though admittedly it is the case that the two groups still largely agree on Kelo (with the notable exception of Donald Trump, who is a longtime defender of that decision).
From the outset, I have emphasized that there is a strong moral case for compensating at least some victims of shutdown orders. But the Takings Clause is unlikely to be an effective vehicle for getting it.
from Latest – Reason.com https://ift.tt/3aQY2dC
via IFTTT
Numerous “nonessential” businesses around the country have been shuttered by state and local government “lockdown” orders in an attempt to control the spread of the coronavirus pandemic. This has inflicted huge losses on their owners and employees. Some have filed lawsuits arguing that they are entitled to compensation under the Takings Clause of the Fifth Amendment. In a March 20 post, I explained why the vast majority of such claims are highly unlikely to succeed under current Supreme Court precedent. Since then, the Pennsylvania Supreme Court has issued a decision rejecting coronavirus takings claims based on reasoning similar to that I outlined in my post. My sense is that most experts on the subject hold similar views.
But Prof. F.E. Guerra-Pujol of the University Central Florida has written an article, published by the Mercatus Center at George Mason University, which takes a contrarian position. He argues not only that businesses closed by shutdown orders are entitled to takings compensation, but that that outcome is required by an unlikely source: the Supreme Court’s 2005 ruling in Kelo v. City of New London:
[T]here is a handy and well-known precedent that supports lockdown compensation under the takings clause. Consider the leading Supreme Court case on the takings clause, Kelo v. City of New London. In this 2005 ruling, the Supreme Court held that the city of New London, Connecticut, could acquire 15 residential properties without the owners’ consent in order to transfer them to a private developer. However, the city had to compensate the owners for the value of the taken property.
How did the Supreme Court reach such an egregious result in that case? By taking a very broad and expansive interpretation of the “public use” requirement of the takings clause. In the Kelo Court’s words, “When this Court began applying the Fifth Amendment to the States at the close of the 19th century, it embraced the broader and more natural interpretation of public use as ‘public purpose.’. . . Without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field.”
Although many conservative jurists, including [Ilya] Somin himself, have criticized this controversial Supreme Court decision for giving the government too much leeway, Kelo can be turned on its head to support the argument that the takings clause, including its requirement of just compensation, applies to coronavirus lockdowns. After all, the sole rationale of these lockdown orders is to promote public health. Accordingly, if “public use” under the takings clause means any legitimate public purpose, per Kelo, then what greater “public purpose” is there than public health?
Having written a book and numerous articles about the Kelo decision and its impact, I thought I was familiar with all of the different possible interpretations of that ruling. Still, I admit Guerra-Pujol’s theory took me by surprise. It’s definitely a creative and original idea. But, unfortunately, it has no basis in the Court’s decision.
Kelo simply does not address the issue of what qualifies as a “taking”—the main point in contention in the shutdown cases. In Kelo, both sides agreed that the use of eminent domain to seize fifteen residential properties for “economic development” purposes was a taking requiring compensation. The point at issue whether it was for a “public use” or not. If the courts had ruled that the purpose of the taking was not a public use (which would have been the correct decision, in my view), the government would have been forbidden to take the property even if it did pay compensation. On the other hand, the absence of a public use would be irrelevant if the government action in question was not a taking in the first place.
By contrast, in the shutdown cases, the whole point at issue is whether the government has “taken” the property in question at all, as that term is understood under the Fifth Amendment. Kelo simply did not address that question. It is true, as Guerra-Pujol notes, that the Kelo majority points out that eminent domain can sometimes be used for “police power” purposes, including promoting “public health.” But the Court did not overrule or limit earlier decisions holding there is no taking in many situations where the government restricts property rights for police power purposes. As I explained in my earlier post on takings and shutdowns, this is especially true in situations where the property in question—or the owner’s use of it—itself poses a threat to public health, as opposed to one where the the government restricts property rights in order to combat a threat elsewhere. In the latter scenario, courts are more willing to grant takings compensation, but the coronavirus situation is an example of the former.
This distinction also undercuts Guerra-Pujol’s reliance on the 2012 Arkansas Game and Fish Commission case, in which the courts ruled takings compensation was required when the federal government deliberately flooded land in order to prevent potentially more severe flooding elsewhere. In that case, the land destroyed by the federal government did not in any way itself threaten public health or safety. It was just in the wrong place at the wrong time. That isn’t true of a business whose continued operation might facilitate the spread of a deadly disease.
Guerra-Pujol also argues that shutdown takings plaintiffs can prevail under the Penn Central test, which applies to takings challenges government regulations that are not automatic “per se” takings. For reasons laid out in my earlier post, I think most shutdown plaintiffs are likely to lose under that test—which, in general, tends to be applied in ways favorable to the government. Admitted, as I and other critics have long emphasized, the Penn Central is often vague and unclear. But unless the Supreme Court decides to reinterpret it in a way more favorable to property owners, it’s unlikely that any but very atypical shutdown plaintiffs can prevail under it.
Even more importantly, the Penn Central test only comes into play if the plaintiffs can get around the police power issue. And that is itself highly unlikely. Guerra-Pujol speculates that “conservative” judges might be willing to reinterpret both Penn Central and the police power cases to enable the plaintiffs to prevail. But if these judges were going to greatly strengthen constitutional protection for property rights under the Takings Clause, it’s highly unlikely they would use this particular set of cases to do so—a situation where the government has a much stronger than usual public health rationale for its actions, and large numbers of lives could be at stake.
As I previously noted, there might be unusual cases where shutdown plaintiffs could potentially prevail, as in situations where the public health benefits of shutting down a category of businesses might be extremely low, or situations where the shutdown has deprived plaintiffs’ property of virtually all economic value. But such cases are likely to be rare.
Guerra-Pujol also errs in describing me as a “conservative” legal scholar. I am, in fact, a libertarian—a distinction that is especially important in the Trump era, where the two differ on major issues such as immigration, trade, law enforcement abuses, and government spending; though admittedly it is the case that the two groups still largely agree on Kelo (with the notable exception of Donald Trump, who is a longtime defender of that decision).
From the outset, I have emphasized that there is a strong moral case for compensating at least some victims of shutdown orders. But the Takings Clause is unlikely to be an effective vehicle for getting it.
from Latest – Reason.com https://ift.tt/3aQY2dC
via IFTTT
“What The F**k”: In Conference Call Meltdown, Elon Musk Blasts “Fascist” Shelter-In-Place Orders
It has been almost exactly two years since Elon Musk’s infamous conference call meltdown when Tesla’s CEO snapped at RBC analyst Joseph Spak for asking “boring bonehead questions” during the Q1 2018 earnings call. Today, Musk did it again only this time instead of raging at a “bonehead” question, the notoriously volatile CEO went off on a bizarre tirade, hammering an issue he has expressed substantial displeasure with in recent days: the inability to open up the Tesla Fremont factory Calilfornia’s shelter-in-place orders.
Just hours after the Tesla CEO tweeted his best Donald Trump impression to date, screaming “FREE AMERICA NOW” clearly displeased with the ongoing state of affairs in the US virus-stricken nation…
… Elon held the Tesla earnings call where toward the end, an increasingly angry Musk unleashed a 5-minute rant complete with its own f-bomb, when the CEO doubled down on his stance against the shelter-in-place orders that have gripped the United States economy in recent weeks, warning that the factory shutdowns are a “serious risk” to the electric automaker’s business.
“It will cause great harm, not just to Tesla, but to many companies,” Musk said on the call. “And while Tesla will weather the storm, there are many companies that will not. Everything people have worked for their whole life is being destroyed in real time.”
“It’s breaking people’s freedoms in ways that are horrible and wrong and not why they came to America or built this country. What the fuck. Excuse me. Outrage. Outrage.”
“Frankly, I would call it forcible imprisoning of people in their homes against all of, their constitutional rights, in my opinion” he said. Musk then went on to call the state and government imposed shutdown of all-but-essential businesses undemocratic and downright “fascist.”
“If somebody wants to stay in their house, that’s great and they should be able to,” he said. “But to say that they cannot leave their house and they will be arrested if they do, this is fascist. This is not democratic, this is not freedom, give people back their goddamn freedom.”
The billionaire first said panic about the coronavirus “is dumb” on March 6, as the US first began reporting cases that have now topped 1 million. On Tuesday, he escalated his complaints on Twitter, and shortly before he urged someone to “FREE AMERICA NOW”, he praised Texas’ relaxation of rules starting Friday.
The irony, of course, is that Musk is calling the US government response to COVID-19 “fascist” while praising China on the same day he held a private conference call with the Chinese owners of the Shanghai Tesla plant…
… The same China which put hundreds of millions of people into forced quarantine, and those who violated the non-stop curfew was “disappeared” forever.
The even bigger irony is that Musk could care less about US freedoms, and all he is raging about is the forced shuttering of his Fremont auto plant which he has repeatedly violate city ordinances just to keep it running in hopes of beating Wall Street estimates, just so he can keep the stock price elevated above $100 billion so he can earn a $370 million payout.
JPMorgan: “If There Is Any Good News In This Report, Don’t Believe It”
It’s perfectly fitting that in an economy which – as of tomorrow morning – will have 30 million newly unemployed workers (and perhaps as many as 50 million), and where the recession officially began after the biggest GDP plunge since the financial crisis (soon to be followed by an even worse collapse in Q2 growth) that stocks would soar almost 3% and tech names are now flat for the year.
Some would call it a depression; others a new bull market.
But maybe we are somehow misreading today’s GDP print? Maybe, hidden somewhere deep between the lines there was just the right amount of good news the algos were looking for and the economic crash was really a catalyst to send stocks surging? Maybe we are deluding ourselves, and it wasn’t that bad? Well, according to JPM the answer is…
Nope, it looks like that the data was indeed bad. So bad, in fact, that stocks exploded because thanks to central planning, the worse the news for the ordinary man on the street, the richer Wall Street gets, courtesy of Powell. Here are the details from JPM:
US GDP growth for 1Q fell 4.8% q/q saar. If there is any good news in this report, don’t believe it. These data are ugly, and are set to get much worse.
While the outturn was not as bad as we had feared (-11.2%ar), it was modestly worse than consensus (-4.0%ar) and the largest decline since 2008. Moreover, given the likely hit to hard-to-measure service sector activity late in the quarter, there is a high likelihood of downward revisions. Notably, we have not changed our call for a 40%ar plunge in current-quarter GDP—but we lowered our 3Q20 projection so as to leave the level of GDP by 4Q20 unchanged at a huge 7% below its 4Q19 level.
So now that we are in a quarter when the US economy is expected to shrink by 40%, or about $9 trillion, stocks are now just 10% below their all time highs, and at the current pace of levitation, will surpass the previous records in a few days.
Incidentally, when Jerome Powell was asked what he thinks of this absolute idiocy, and if he is guilty of encouraging moral hazard and pushing stocks higher, he said that “we want markets to work, we are not focused on asset prices”, to which he added that “it’s been good to see markets working.” Which by implication means that when markets are down, they no longer “work.”
