Month: June 2020

China’s top legislative body passed, and president Xi signed, a new controversial law for Hong Kong that would allow authorities to crack down on pro-democracy protesters and “foreign forces” who attempt to destabilize the semi-autonomous region, reported Reuters. The National People’s Congress Standing Committee swiftly approved the landmark national security law on Tuesday, signaling Communist Party leader Xi Jinping’s desire to seize more control to squash pro-democracy protests in the city to stop subversion, terrorism, separatism, and collusion with external forces. 

The National Security Law for Hong Kong was passed unanimously on Tuesday. Chinese President Xi Jinping signed a presidential decree about the legislation. The law is expected to become effective once it is unveiled. #HK pic.twitter.com/XOJ5G7PsoS

— Global Times (@globaltimesnews) June 30, 2020

The new law could jeopardize civil liberties and Hong Kong’s independent judicial system, which has allowed the financial hub to thrive over the decades economically. President Donald Trump warned he would disband Hong Kong’s preferential trade status – and in response to the passage of the law in the overnight hours – Washington released a headline indicating it will bar the export of weapons and sensitive technology to the city.  

The most significant penalty under the new law is life imprisonment – something that will likely deter protesters from organizing on city streets. 

[End of Hong Kong, Beginning of Reign of Terror]

1. #Beijing has just passed the sweeping #nationalsecuritylaw. It marks the end of Hong Kong that the world knew before. pic.twitter.com/QouY6Itr1O

— Joshua Wong 黃之鋒 😷 (@joshuawongcf) June 30, 2020

Sure enough, famous HK pro-democracy protester Joshua Wong tweeted: “It [new law] marks the end of Hong Kong that the world knew before.” Conversely, Hong Kong leader Carrie Lam told the United Nations Human Rights Council in Geneva that the international community must “respect our country’s right to safeguard national security.”

AFP’s Xinqi Su tweeted the new law is expected to go into effect later today. 

#BREAKING #CarrieLam: The National Security Law will come into effect later today. pic.twitter.com/EeiV3OteDr

— Xinqi Su 蘇昕琪 (@XinqiSu) June 30, 2020

The international condemnation to the passage was swift: British Foreign Minister Dominic Raab said he was “deeply concerned by unconfirmed reports that Beijing has passed the national security law.” Japanese Chief Cabinet Secretary Yoshihide Suga described the passage of the national security law as “regrettable.” 

On Monday, a diplomatic tit-for-tat with the US, China announced it would impose visa restrictions on US government officials who “behave egregiously” in connection to Hong Kong affairs. This followed Washington’s decision last week to restrict visas for Chinese government officials who threaten Hong Kong’s autonomy. 

Hang Seng futures were unchanged on the session amid the passage of the new law. 

“Hong Kong stocks pared an advance Tuesday as investors awaited details of the legislation. Property companies were among the biggest losers on the MSCI Hong Kong Index, which gave up a gain of almost 1% before closing up 0.7%,” Bloomberg noted. 

The new security law and tit-for-tat visa restrictions come as tensions between Beijing and Washington are soaring over trade deal purchase commitments, origins of the virus pandemic, and territory disputes in the South China Sea.  

Authored by Daniel Lacalle,

The measures implemented by governments in the Eurozone have one common denominator: A massive increase in debt from governments and the private sector. Loans lead the stimulus packages from Germany to Spain. The objective is to give firms and families some leverage to pass the bad months of the confinement and allow the economy to recover strongly in the third and fourth quarter. This bet on a speedy recovery may put the troubled European banking sector in a difficult situation.

Banks in Europe are in much better shape than they were in 2008, but that does not mean they are strong and ready to take billions of higher risk loans. European banks have reduced their non-performing loans, but the figure is still large, at 3.3% of total assets according to the European Central Bank. Financial entities also face the next two years with poor net income margins due to negative rates and very weak return on equity.

The two most important measures that governments have used in this crisis are large loans to businesses partially guaranteed by the member states, and significant jobless subsidy schemes to reduce the burden of unemployment. Almost 40 million workers in the large European nations are under a subsidized jobless scheme, according to Eurostat and Bankia Research. Loans that add up to 6% of the GDP of the Eurozone have been granted to let businesses navigate the crisis. So, what happens if the recovery is weak and uneven and the third and fourth quarter growth figures disappoint, as I believe will happen? First, the rise in non-performing loans may elevate the total figure to 6% of total assets in the banking sector, or 1.2 trillion euros. Second, up to 20% of the subsidized unemployed workers will probably join full unemployment, which may increase the risk in mortgage and personal loans significantly.

Banks may face a tsunami of problems as three factors collide:

1. rise in non-performing loans,

2. deflationary pressures from a prolonged crisis and,

3. central bank keeping negative rates that destroy banking profitability.

We estimate a rise in net debt to EBITDA of the largest corporations of the Stoxx 600 soaring to 3x from the current 1.8x. This means that banks may face a wall of delinquencies and weakening solvency and liquidity in the vast majority of their assets (loans) just as deflationary pressures hit the economy, growth weakens and the central bank implements even more aggressive but futile liquidity measures and damaging rate cuts.

This combination of three problems at the same time may generate a risk of a financial crisis created by using the balance sheet of banks massively to address the bailout of every possible sector. It may undo the entire improvement in the balance sheet of the financial entities achieved slowly and painfully in the past decade and destroy it in a few months.

Weakening the balance sheet of banks and hiding larger risk at lower rates in their balance sheets may be an extremely dangerous policy in the long run. Governments have pushed banks to give loans to businesses and families with very challenging financial conditions and this may come back like a boomerang and hit the European economy where 80% of the real economy is financed by the banking sector, according to the ECB.

Governments should have taken more prudent measures and address the covid-19 crisis with tax cuts and grants and not so much through massive loans, even if those are partially guaranteed by the states. If the sovereign debt crisis starts to creep again, there will be a fourth risk that may damage banks and the financing of the real economy.

The response of banks in this crisis has been positive but may be too much too soon and clearly, they are taking too much risk at too low rates. So far, financial entities are being prudent and have made large provisions to strengthen the balance sheet. However, these provisions may need to be doubled in the next quarters.

Taking measures to avoid creating a financial crisis from these extreme policies will be critical to avoid a larger problem in 2021-2022.

“For the next two years – 2020/21 – we assume that production and deliveries will be 40% lower than originally planned,” Guillaume Faury, the chief executive officer of Airbus, told German national daily newspaper, Die Welt, on Monday, adding that output would normalize by 2025. 

Faury said the COVID-19 outbreak resulted in Airbus losing 40% of its civil aircraft business. He said that instead of planning for higher production of commercial aircraft, capacity in output and labor must be reduced as the aviation industry is facing the worst crisis in its history.

Airbus had announced previously it was slashing output by a third on average. We noted in March, Europe’s aerospace giant was expecting production cuts of its A330 output amid waning demand for its most popular wide-body airliner.

In April, Faury told employees in a memo seen by Reuters that the company is “bleeding cash” and needs cut costs to weather the coronavirus pandemic storm. 

“In April/May we were up to 80 % below our plan. Only 14 instead of 75 aircraft were delivered in April,” Faury said. “On the one hand, due to the travel restrictions, airline crews could not take delivery of their aircraft, on the other hand, there was no financial security at the airlines, but gradually it is getting better.”

Industry sources told Reuters a 40% cut in “single-aisle equivalent” output is expected to lead to layoffs and lower output capacity in jet making – the timing of the announcement could be in early July. 

Sources said 14,000 to 20,000 jobs could be eliminated – they also said the plan could be unveiled as early as Wednesday when Airbus has called an emergency session with its union. 

“It’s a brutal fact, but we must do it. It is about the necessary adjustment to the massive drop in production. It’s about securing our future,” Faury told Die Welt, while vaguely referring to restructuring details.

Faury doesn’t expect a recovery in output until 2025: 

“After market studies and discussions with the airlines, we assume that the previous volume will be back by 2025 at the latest. We expect that the demand for single-aisle aircraft will pick up faster than for the large-scale models. We therefore currently expect the A320 family to gradually increase production from 2022/2023. We anticipate low demand for wide-body aircraft over the next five years, as there was already an oversupply on the market before the crisis. At some point, a large replacement wave is expected for the Boeing 777 and the Airbus A330, but it is still a long way off,” he said.

Airbus shares have already retraced 61.8%-Fib from the low of 2009 (EUR 7.19) to the high (EUR 139.40) seen in January. 

Airbus CEO reiterated a similar warning that Boeing CEO Dave Calhoun made in April, indicating it would take 2 to 3 years for air travel growth to return to pre-corona levels, adding that long term growth trends could take even longer to recover. 

“Based on what we know now, we expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry’s long-term trend growth to return,” he said. 

To put things in perspective for readers, the world’s top commercial jet makers see no recovery in their business nor air travel for several years – the aviation industry supports 65.5 million jobs worldwide and supports $2.7 trillion (3.6%) of the world’s GDP. 

With Airbus and Boeing in the dumps, air travel collapsed, and the travel and tourism industry decimated – don’t expect a V-shaped recovery in the global economy anytime soon. 

Authored by Daniele Pozzati via The Strategic Culture Foundation,

Surprise, surprise, the European Commission (EC) had a “Roadmap on Vaccination” ready months before the COVID-19 pandemic broke out.

The Roadmap should lead to a “commission proposal for a common vaccination card / passport for EU citizens by 2022”.

Last updated during the third quarter of 2019, the 10-page document was followed, on September 12th, by a “global vaccination summit” jointly hosted by the EC and the World Health Organization (WHO).

Under the header “Ten Actions Towards Vaccination for All – Everyone should be able to benefit from the power of vaccination”, the summit manifesto laments that:

“Despite the availability of safe and effective vaccines, lack of access, vaccine shortages, misinformation, complacency towards disease risks, diminishing public confidence in the value of vaccines and disinvestments are harming vaccination rates worldwide.”

And with them, arguably, the pharmaceutical companies’ profits.

In July 2017, for example, Italy made 12 vaccinations compulsory for children. In the aftermath, the prices of these very vaccines went up by 62%: from an average price per dose of € 14.02 up to € 22,74.

The global vaccination market is currently worth USD 27 billion a year. According to WHO estimates, it will reach USD 100 billion by 2025.

Since the EC-WHO global vaccination summit also discussed a renewed immunization agenda for 2030, the big pharma’s shareholders need not worry for the long-term performance of their stock.

One ought really not to “harm vaccination rates worldwide”.

The manifesto of the global vaccination summit goes on to list 10 “lessons (…) and actions needed towards vaccination for all”.

Each “lesson” is a gem of what the Italian neo-Marxist philosopher Diego Fusaro calls “the therapeutic capitalism”.

The wording is peremptory and leaves no room for nuance and debate. Adjectives such as “all” “everyone” “indisputably” abound. Statements in the conditional mood are absent.

More than a cautious, scientifically inspired and open-to-doubt plan of action, the tone – “to protect everyone everywhere”, “to leave no one behind” – is unsuitably messianic.

What about those who do not want to be “protected” that way? In Germany alone, roughly 10% of the whole population, or 8 million people, are strongly against a Corona vaccination.

But let’s look at what we can learn, so to speak, from these “lessons”.

Lesson 1 begins with: “Promote global political leadership and commitment to vaccination” – this seems what we are witnessing now, with governments worldwide suggesting that masks and social distancing will remain in place until a vaccine for Corona-Sars2 is found.

And what about those politicians who are against vaccinations?

Will their voters be told, as the EU budget commissioner Gunther Oettinger (in)famously did with Italian Lega voters in 2018, that “markets will teach them to vote for the right thing?”.

Will a new pandemic break out to teach people to vote for the right thing?

Lesson 4, “Tackle the root-causes of vaccine hesitancy, increasing confidence in vaccination,” looks like the blueprint for a major propaganda campaign, one that foresees – we read on the EU Roadmap on Vaccinations – the “development of e-learning training modules targeting GPs and primary healthcare providers focused on improving skills to address hesitant populations and promote behavioral change”.

Lesson 5, “Harness the power of digital technologies, so as to strengthen the monitoring of the performance of vaccination programs”, raises, in times of tracing apps and electronic wristbands, legitimate concerns over the further encroachment of technology in our lives – and bodies.

Which digital technologies are we talking about? Maybe a subcutaneous chip, like the one recently patented with the satanic-sounding number 060606 by the Bill and Melinda Gates Foundation?

Lesson 9 is, for the non-mainstream journalist, and for freedom of speech in general, the most threatening [the bolded type is mine]:

“Empower healthcare professionals at all levels as well as the media, to provide effective, transparent and objective information to the public and fight false and misleading information, including by engaging with social media platforms and technological companies.”

There we go: the fight against so-called Fake News is back. More work for Facebook’s self-appointed “Facts-Checkers”.

Fake News is of course Orwellian Newspeak for any non-aligned information, no matter its contents, origins and verifiability.

Indeed, the global vaccination manifesto provides no definition for “objective information”, or for “false and misleading information”.

If vaccines are as safe as the EU and WHO claim without offering any evidence, why then did the U.S. government create, already in the 1980’s, a body called National Vaccine Injury Compensation Program (VICP)?

To provide, we read in the VICP’s official website, “a no-fault alternative to the traditional legal system for resolving vaccine injury petitions.”

Quite successfully, it would seem.

In the period between 10/01/1988 (when the VICP begun awarding damage compensation) and 06/01/2020 (last available data), the VICP has awarded a total of USD 4,385,672,580.43 in compensation.

This figure excludes the compensation resulting from actual legal action, notably class actions, against Big Pharma.

But, as the Italian documentary-maker Massimo Mazzucco explains, the U.S. authorities did not stop there to protect Big Pharma from legal action.

In 2010, a landmark ruling by the U.S. Supreme Court quoted the U.S. Code Title 42 thus:

“The Act eliminates manufacturer liability for a vaccines unavoidable, adverse side effects.”

The same ruling further elaborates:

“No vaccine manufacturer shall be liable in a civil action for damages arising from vaccine-related injury or death associated with the administration of a vaccine after Oct.1, 1988…

…if the injury or death resulted from side-effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings”

1988 was of course the year in which the National Vaccine Injury Compensation Program begun awarding compensations to the victims of vaccine injury – sparing legal headaches to Big Pharma in the process.

As system biologist Dr. Shiva Ayyadurai points out, the impossibility to sue pharmaceutical companies over vaccines, combined with falling profits from drug sales, turned vaccines into Big Pharma’s new business model.

And now the EU and the Bill Gates-financed WHO go along with it.

“The government of the modern state,” Karl Marx famously wrote in his Communist Manifesto, “is but a committee for managing the common affairs of the whole bourgeoisie”.

Were Marx alive today, he might have concluded that governance by international organization is but a committee for managing the common affairs of the global elites.

Eurostat have released an interesting forecast about how long a person can expect to be active in the European labour market during his or her life.

The data is measured in years and it’s based on someone who was 15-years-old in 2019. On average, Statista’s Niall McCarthy notes that the expected duration of working life in the European Union was 35.2 years – 3.6 years longer than in 2000.

In individual member states, it ranges from 32 years in Italy to 42 years in Sweden…

You will find more infographics at Statista

The data also includes several countries outside the EU and their figures are diverse.

In Turkey for example, a 15-year-old can expect a working life of 29.3 years. In Iceland, however, a 15-year-old can expect to work for far longer – 45.8 years in total. Elsewhere, the duration of work is estimated at 42.6 years in Switzerland and 39.8 years in Norway.