Hong Kong swells tech-buying subsidies for local businesses that buy from local businesses

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$25k from you and $75k from the government buys improved productivity and economic diversity

The Special Administrative Region of Hong Kong has increased the subsidies offered to local business’ technology investments by 50 percent.…


Sweden: Culture Of Silence

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Sweden: Culture Of Silence

Authored by Judith Bergman via The Gatestone Institute,

A recent report published by Linköping University about the Swedish National Council for Crime Prevention (Brå), "Can Brå be trusted?" has claimed that Brå's reports are politically biased.

According to Brå's own website, "Brå is an agency under the auspices of the Ministry of

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Justice and a knowledge centre for the criminal justice system. The agency's mandate is to contribute to the development of knowledge within the criminal justice system and the criminal policy area, as well as to promote crime prevention work. Brå is responsible for the official criminal statistics and other statistics, which includes producing, following, analysing, and reporting on criminality and the criminal justice system's responses to crime".

It is therefore crucial that Brå fulfill its obligations in a factual and objective manner, not least in the current environment, when Sweden is experiencing a veritable crime wave, including shootings, bombings and other gang-inspired violence that some commentators have likened to "war".

According to the Linköping University report, the results of which were based primarily on interviews with former and current employees and managers of Brå, in addition to a number of former police chiefs and ministers of justice, Brå's work is politically biased due to political pressure from the Ministry of Justice as well as the management of Brå. The report states:

"For example, a former employee said that he, together with the Director-General [of Brå] was called to the Ministry of Justice for a conversation with the requirement of a report to be 'corrected'. The report consisted of an evaluation of a government proposal, concluding that the proposals were harmful. The interviewee realized that the conclusions would be politically unpopular, but had nevertheless written them... Other former employees have pointed out that it was clear that there were political reasons why they were pressured to change content in reports even though these researchers were not called to the Ministry... One employee reported, among other things, that a director-general expressed that 'there is a reality and a political reality' when the director-general demanded that an employee change a report..."

The Linköping University report goes on to say:

"Interviews show that adaptation of content in reports has taken place in different ways. A former employee made the following summary: 'If results were not liked then censorship was used, correction of results, toning down results and highlighting other parts of [the] study that were not so sensitive or that could show positive results'".

Another employee said:

"After I was hired at Brå, it didn't take me long to realize that working at Brå is a big challenge. As an employee of Brå, you have to write and think in a certain way. Brå is extremely controlled from the top. There are some people at Brå who run [the organization] with an iron hand. If one were to be a little harsh then one could liken it to a sect. I don't think they really understand what kind of culture they have created".

The Linköping report states that there appears to be a culture of silence by which is meant, "norms that create silence among employees, when they do not dare to bring up certain viewpoints, questions or criticism, whether internal or external".

Ironically, this culture of silence has been symptomatic of Swedish society, where most have been afraid to speak publicly about the problems caused by unfettered migration for fear of being ostracized.

The report also found that Brå appears to strive to hire employees that will "act as obedient bureaucrats at an authority, rather than people who have accepted a researcher's role".

The report has caused consternation in Sweden. The Swedish Parliament's judicial committee has now invited the authors of the report, as well as the general director, to their next meeting. Johan Forsell, the legal spokesman of the Moderate party, said:

"Very serious allegations and accusations are made in the report. Brå is, after all, an expert authority that is supposed to deliver facts that objectively reflect society. We need, quite simply, to get to the bottom of this... Regardless of when it happened and under what political color, the very suspicion of influence is serious enough. But that responsibility now falls on Justice Minister Morgan Johansson".

Meanwhile, Sweden continues its downward spiral. Last year there were 257 reports of explosions -- including attempted explosions -- an increase of 59% compared to 2018, according to SVT Nyheter. Yet, only seven people were convicted for any of those 257 crimes. In 2020, at least 10 explosions have already taken place.

According to Stefan Hector, head of the National Operative Unit (NOA):

"Earlier we saw that hand grenades were used. Now we see how homemade explosives are used instead as weapons in conflicts. Either to injure or to terrorize but with a new ruthlessness where they bomb wherever the public is without caring that the public might get hurt".

According to SVT News, the police and other authorities "do not know" where all the explosives come from. "The issue of explosives as weapons in conflicts is relatively new. This means that we have considerable uncertainty as to where the parts for the explosive charges come from", Hector said.

"Unless the integration of the newcomers succeeds better, in the long run, the social glue that makes a democratic welfare society of our kind possible risks being torn apart", professor in political science at the University of Uppsala, Tommy Möller, recently wrote in an op-ed.

Gatestone Institute has described the serious economic, welfare, crime and other challenges that Swedish society now faces as a result of migration into the country, for example here, here, here, here and here.

One issue that Swedish figures of authority are now admitting to having neglected over the years is anti-Semitism. Municipal managers in Malmö, for instance, Sweden's third-largest city, where immigrants constitute one-third of the population, now say that it took a long time before they "saw the extent" of the problem. Anders Rubin was school council member of the Malmö municipality from 2013 to 2018. "Many students who have a background in the Middle East, and in several Muslim countries, have notions of Jews that are not at all compatible with democratic values," he told Sydsvenskan recently. He also confessed that the municipality had not taken the complaints of its Jewish citizens seriously. According to Sydsvenskan:

"Anders Rubin says he and the other leading Social Democrats initially underestimated the alarm from the city's Jews about a growing amount of threats and harassment. He describes it as the municipality management having had their 'guards down'."

"It was not felt that there was an established anti-Semitic attitude more than in extremely peripheral right-wing groups. I think we understood that the problem was marginal" admitted Rubin to Sydsvenskan. The newspaper also recounts how in 2009, Malmö's then-mayor, Ilmar Reepalu, responded to attacks on a Jewish demonstration by saying that Swedish Jews ought to distance themselves from Israel.

"It was only when we began to realize that in some of our immigrant groups there were ideas that were problematic, that we realized that we were forced to do something", Rubin said. He said there are probably limits to what municipal authorities can do about anti-Semitism.

"To think that we could achieve the frictionless city is a utopia. In such a diversified city as Malmö, one cannot change those types of attitudes by coming from the top and being forceful and telling people what to think. Somehow, it is extremely difficult to drive this down to a municipal political level. I think it is a complicated question, how we as representatives of the majority society should act to influence the attitudes of minorities. It easily becomes counterproductive".

Perhaps unwittingly, Rubin made a crucial point here: namely, that for years authorities swept serious problems related to migration under the rug, making them taboo and then vilifying those who dared to talk about them in public. The Linköping University report about the culture at Brå, sadly, exposed this pattern.

Tyler Durden

Wed, 04/01/2020 - 02:00

Speculation Swirls Around NY Gov Andrew Cuomo’s “Pierced Nipples”

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'Alright how do I unsee something?'

It's Happening: Oil Producers Are Now Paying Clients As Wyoming Sour Price Turns Negative

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It's Happening: Oil Producers Are Now Paying Clients As Wyoming Sour Price Turns Negative

When Goldman's crude oil analysts wrote on Monday that "This Is The Largest Economic Shock Of Our Lifetimes", they echoed something we said last week - nameley that the record surge in excess oil output amounting to a mindblowing 20 million barrels daily or roughly 20% of global demand...

... which is the result of the Saudi oil price war

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which has unleashed a record gusher in Saudi oil production, coupled with a historic crash in oil demand (which Goldman estimated at 26mmb/d), could send the price of landlocked crude oil negative: "this shock is extremely negative for oil prices and is sending landlocked crude prices into negative territory."

We didn't have long to wait, because while oil prices for virtually all grades have now collapsed to cash costs...

... Bloomberg points out that in a rather obscure corner of the American physical oil market, crude prices have now officially turned negative as "producers are actually paying consumers to take away the black stuff."

The first crude stream to price below zero was Wyoming Asphalt Sour, a dense oil used mostly to produce paving bitumen. Energy trading giant Mercuria bid negative 19 cents per barrel in mid-March for the crude, effectively asking producers to pay for the luxury of getting rid of their output.

Echoing Goldman, Elisabeth Murphy, an analyst at consultant ESAI Energy said that "these are landlocked crude with just no buyers. In areas where storage is filling up quickly, prices could go negative. Shut-ins are likely to happen by then."

While Brent and WTI are hovering just around $20 a barrel, in the world of physical oil where actual barrels change hands  producers are getting much less according to Bloomberg as demand plunges due to the lockdown to contain the spread of the coronavirus.

Oil traders believe other crude streams are likely to see negative prices soon at the well-head as refiners reduce the amount of crude they process, leaving some landlocked crude without easy access to pipeline trapped. Goldman's Jeffrey Currie explained this pricing divergence as follows:

Brent is a waterborne crude priced on an island in the North Sea, 500 meters from the water. In contrast, WTI is landlocked and 500 miles from the water. As I like to say, I would rather have a high-cost waterborne crude oil that can access a ship than a landlocked pipeline crude sitting behind thousands of miles of pipe, like the crude oils in the US, Russia and Canada.

As we noted last night, when we asked who would see zero dollar oil first, several grades in North America are already trading in single digit territory as the market tries to force some output to shut-in. Canadian Western Select, the benchmark price for the giant oil-sands industry in Canada, fell to $4 on Monday, while Midland Texas was last seen trading just around $10.

Southern Green Canyon in the Gulf of Mexico is worth $11.51 a barrel, Oklahoma Sour is changing hands at $5.75, Nebraska Intermediate at $8, while Wyoming Sweet prices at $3 a barrel, per Bloomberg.

While there is very little hope of a dramatic improvement in the situation, late on Tuesday, President Trump said the U.S. would meet with Saudi Arabia and Russia with the goal of halting the historic plunge in oil prices. Trump, speaking at the White House Tuesday, said he’s raised the issue with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman.

"They’re going to get together and we’re all going to get together and we’re going to see what we can do,” he said. “The two countries are discussing it. And I am joining at the appropriate time, if need be."

It's unclear what if anything Trump "can do" in what is effectively a collusive war between the two nations meant to crush shale oil.

Trump’s intervention comes as April shapes up to be a calamitous month for the oil market. Saudi Arabia plans to boost its supply to a record 12.3 million barrels a day, up from about 9.7 million in February. At the same time, fuel consumption is poised to plummet by 15 million to 22 million barrels as coronavirus-related lockdowns halt transit in much of the world.

There is another problem: oil demand has been so battered by government lockdowns to stop the spread of the coronavirus that any conceivable oil production cut agreement between the U.S., Canada, Russia and OPEC members would still fall well short of what’s needed to shore up the market, Goldman calculated. In fact, assuming roughly 20 million in excess supply currently, the only thing that could balance the oil market is nothing short of both Saudi Arabia and Russia halting all output together. And that will never happen.

Finally, below we put the "long history" of oil prices in context:

Tyler Durden

Tue, 03/31/2020 - 23:57

The U.S. Is About To Lose Its Place As The World’s Largest Oil Producer

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'Production has only one way to go: down.'

Zoom's end-to-end encryption isn't actually end-to-end at all. Good thing the PM isn't using it for Cabinet calls. Oh, for f...

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Super-crypto actually normal TLS, lawsuit launched over Facebook API usage, privacy policy rewritten

UK Prime Minister Boris Johnson sparked security concerns on Tuesday when he shared a screenshot of “the first ever digital Cabinet” on his Twitter feed. It revealed the country’s most senior officials and ministers were using bog-standard Zoom to discuss critical issues facing Blighty.…


Australian state will install home surveillance hardware to make sure if you're in virus isolation, you stay there

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Could be a wearable, could be wired. Backed by big fines and jail

The State of Western Australia has given itself the power to install surveillance devices in homes, or compel people to wear them, to ensure that those required to isolate during the coronavirus crisis don’t interact with the community.…


Is America Able To Handle COVID-19? – Global Prospects Hang On This Question

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Is America Able To Handle COVID-19? – Global Prospects Hang On This Question

Authored by Alastair Crooke via The Strategic Culture Foundation,

As the lockdowns across Europe began to bite, the U.S. Establishment began its ‘wobble’. The more elegant amongst élite circles pointed to a dangerous mis-match in timelines: The medical advice has been: ‘lockdown until the virus begins to subside’, but that advice encompassed to

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o, the possibility of Covid-19 returning later in the year in a Phase Two, thus requiring further personal distancing.

Hands shot high in absolute horror amongst some business and Wall Street leaders: Could the U.S. economy sustain such a prospect? Might not a long shutdown inflict permanent damage? Would there even be an economy left – to resurrect – in the wake of ‘peak Coronavirus’?

The mis-match thesis then acquired a third strand: To immediate economic fears standing in contradistinction to longer term medical perspectives was added the third question: Are Americans culturally ‘built’ for lockdown (that is to say, will an individualistic, libertarian-minded – and armed society – acquiesce to being ordered to stay home over a long period)?

Not surprisingly, President Trump – with an advancing Election, and his colours pinned to the mast of sound economic management – hit on the formula that the ‘cure cannot be worse than the disease’: Let’s have the economy open by Easter (12 April – i.e. 15 days hence), he declared.

The issue of the virus is not manufactured, (though there are still many in the U.S., who regard it as an overblown scare), nor is the dilemma of the divergent timelines. Actually – a great deal hangs on how these timelines play out – our global economic and political prospects, no less.

Just about everyone and his dog now claims to have modelled Covid-19. But in truth, we still know very little on which to accurately predict the virus’ course. The ‘data’ is made unreliable: firstly, because not only does the virus have different mutations, but secondly, owing to it acting in two quite different modes: One is mild, or even asymptomatic (the 80%); and the second mode is serious (requiring hospitalisation) – and for a minority of the 20% – deadly.

But consequently, we simply do not know how much of the population is infected, or is still to be infected – precisely owing to its very mildness or, its asymptomatic characteristics amongst the 80 percent-ers. There hasn’t been enough testing – and anyway, given its mild or non-noticeable iteration, many people may have it, but don’t test.

So the data modelling is more ‘art’, than predictive, and therefore introduces economic uncertainty. The damage to the economy is obvious from the first, but the question least considered is the importance of the third strand: Is Trump right when he says that America ‘is not built for lockdown’?

He may be right, in one sense; but if he opts to prioritise a quick opening of the economy over the welfare of the American people, he may face incalculable consequences – should Covid-19 bite him in the backside: Either by mutating (as did the Spanish ‘flu in August 1918); or simply, by beginning a second phase through a resurgence of community infection later in the year.

Plainly, Trump is of the ‘fears are exaggerated’ school of thought, and seems poised to bet his Presidency on it. In this era, viral social media images of hospitals overwhelmed, and of patients fighting to breathe their last, unaided, and lying on the floor, jam-packed in corridors, or in converted gyms – can become politically toxic. The counter- response that the financial system is struggling for oxygen, under lockdown, too, may strike many people as a ‘little lacking’ in common humanity – perhaps?

The dilemma is cruel. And maybe the social timeline ‘strand’ has more substance, than is generally granted? Americans are libertarian in many ways (not least, in their determination to carry arms). This is reflected also, in their deliberate eschewing of a public health programme, and in the purposefully limited support provided to the hourly paid – who are laid off. It is the ethos of individualism, a work ethic and the consequence of a ‘libertarian’ constitution.

The St Louis Chair of the Fed has predicted 30% unemployment and 50% of the economy at standstill by the end of June. Is it sustainable to have these furloughed workers dying in the street, because they cannot afford America’s ‘boutique’ health-service for the wealthy? (we’ve seen videos of people unexpectedly falling down in the street, dying, as passers-by skirt the afflicted victim – from both China and Iran). Such videos would be inflammatory in the U.S.

What happens if ‘lockdown’ were extended, and the unemployed were to attack supermarkets for food they cannot afford; or because the supermarket shelves are empty (this has happened in Europe)? What would videos of the U.S. National Guard look like as they arrive, armed for war, to put down the ‘looters’? What happens if the rioters angry at their plight – and without money – use their right to bear weapons to fight against the National Guardsmen? Can the U.S. national fabric handle such strains? Might it not disintegrate?

Here, the U.S. differs from Europe. America has not, since the Civil War, had to experience the harsh circumstances in hospitals approximating to wartime, on its own soil.

So, is Trump right, then, to prioritise keeping the U.S. economy open? Well, firstly, the notion that bits of the economy can be opened where infection-rates are low, whilst other parts are locked down, seems odd: Covid-19 – we do know – is highly infectious. Those who show no symptoms – whether they are under 50 years, or under 40 years-old – would not preclude them from being silent ‘super-carriers’ of the disease. We have not heard there is a test for anti-bodies, which might signal that an individual enjoys immunity. But unless an area has no infections, putting even one carrier into a workplace, would be sufficient to trigger a localised community infection.

Perhaps then, Trump might be right that anything other than a short (and possibly ineffective) lockdown is not manageable in the U.S.: That it might tear apart an already polarised, armed and inegalitarian, social fabric. There is then, a substantial point here: How far, and for how long, can an U.S. or European society accept a ‘command’ or martial-law administration – before citizens rebel, and head to the beaches for summer? What then?

Is it possible that can Trump may emerge from these events as the ‘saviour of the U.S. economy’? Here, we touch on the key question of the adaptability of élites. Are the U.S. élite capable of true transformation of consciousness as circumstances alter? On the answer to this question will hang the geo-political future. It was the inability of the Soviet elites to give up on their corrupt and privileged status quo that led to the implosion of the USSR in 1987.

We are often told that Americans are great innovators and graspers of opportunity. But today, the U.S. élites are utterly intent on preserving a status quo – as the viability and even the reality of that status quo is being questioned by important insiders. For the élite majority, though, the mind-set is intransigent and adamant. The status quo suits them well. They do not wish to see to see it reformed or changed. They refuse to think differently.

Eventually, the coronavirus will subside; but what will America look like when it does? For the moment, the élites believe that America will look just as it did, in February, before the impact of the pandemic hit U.S. markets. So, we have had the Fed, the Bank of England, the Bank of Japan all doing the same thing, over and over again, hoping that the economy will snap-back to ‘normal’. But it isn’t working.

The Fed fears a collapse in credit (with due reason), but ‘normality’ is not returning from the rush of liquidity hosed across credit markets. In the 2008 crisis, the Fed responded with all sorts of easing. This time the Fed is throwing the ‘kitchen sink’ at markets, offering ‘facilities’ for almost every asset class. At the present rate of growth, the Fed balance sheet will be $6 Trillion in days – and reach a total equivalent to almost 50% of the U.S. GDP by June. Another, unimaginable chunk of debt.

The problem is that the Fed’s measures will fail as stimulus – because it is not a problem of demand shortfall, but of supply-shock – as the globe implements ‘shut-down’ in order to slow infection. But, with recession or depression looming, asset prices are collapsing. Bloomberg has noted that core tenets such as what constitutes a safe asset, or the expectation of returns over the next decade, are all being thrown out of the window – as Central Banks strive to avert a global recession: The latter have unleashed a money tsunami, unlike anything seen before, and the fear of inflation is rising, together with a sense that all the old metrics of what constitutes safe investments are gone for good.

Meanwhile the U.S. Congress has passed a $2 trillion bill to counter the effects of Covid-19. It was well received for a while in the U.S. markets, before they fell again. The bill may help keep a part of the big business status quo alive, for now, but the bottom line is that these spending bills – as Jim Rickards notes – “provide spending but they do not provide stimulus”. And all that spending – like that of the Fed – essentially will be helicopter money: i.e. monetised debt.

The essential dilemma is that the Central Bankers’ Holy Grail – stimulus – depends on consumers, who constitute 70% of the U.S. economy; and on whether they decide consume – and to what extent. And that will depend upon their psychology in the post-Covid-19 era, and not on what the Fed does, or does not, do now.

If consumers get used – during lockdown – to doing without; to economising; they may well decide that increased savings and debt reduction, are the best ways to prepare for straitened times. 83% of U.S. businesses are small or medium sized companies. Some may survive and resume work, but others will not re-open after the lockdown. It will be a different atmosphere: a different economic era.

Of course, the élites want to go ‘back to normal’ as quickly as possible, but the ‘bottom line’ emerging from the Fed’s failure to staunch market paralysis is that that which the élites had thought to be ‘normal’ is proving not to have been normal at all. It is now apparent as having been a financialised bubble – and Covid-19 happens to have been the pin that popped it. This bubble was just the biggest, in a long line of Fed-blown bubbles (NASDAQ, sub-prime mortgages, etc.) – and now, the final ‘everything-bubble’ has burst. There’s nothing now left for the Fed to ‘bubble up’. It’s probably over.

Here’s the larger – global – point. Again, it revolves around psychology: Have these events been the ‘pin’ which also pops some sort of mass psychological bubble (a sealed Cartesian, mental retort)? Will public faith in the status quo crash, along with the financialised ‘everything-bubble’? Will a momentary flash of enlightenment to the house-of-cards reality that Americans had been living, cause them to start seeing their world afresh, and in its raw, hard reality? If so, the world order stands on the cusp of change.

For some time now, a general popular disquiet has been incubating. The question is whether, in the cold post-Covid-19 reality, Americans will begin to cease their acquiescence to – and their co-operation with – the status quo.

This might mean trouble as America and some European states try to manage the pandemic through invoking the necessity of a war-time command-governance. Will people accept such a command system, if they see its principal purpose being the return to a failed status quo ante?

Tyler Durden

Wed, 04/01/2020 - 00:05

Sweden: Migrant Activists Allowed to Protest Despite Ban on Gatherings

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Police allow large crowd of pro-Palestine protesters to demonstrate

Singapore government scraps physical 2FA tokens for government services

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There's an app for that. Or text, if you dare. Or even retail outlets

Singapore will bin the physical tokens used to provide two-factor authentication (2FA) for some digital government services.…


Border Patrol Ejecting Illegals In Minutes Under New Crisis Rules

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Agents operating quickly after Trump admin cuts red tape

The World Is Running Out Of Condoms As Factories Face COVID-19 Lockdown

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The World Is Running Out Of Condoms As Factories Face COVID-19 Lockdown

Authored by Elias Marat via TheMindUnleashed.com,

We’ve all seen the jokes on social media about how nine months from now a new generation will be born that will eventually be dubbed “Coronials” - and once they come of age, “quaranteens.

After all, if we’re stuck working from home or self-isola

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ting along with our partner or significant other, it’s only natural and healthy for us to seek solace through sexual activity - and the increase in baby-making activities can naturally result in a miniature “baby boom.”

But as it turns out, the joke may have some basis after all - especially because a global shortage of condoms could deprive couples staying at home from one of the more popular birth control methods.

Reuters reports that Malaysia’s Karex Bhd, a company that is responsible for producing one out of every five condoms globally, spent over a week without producing a single condom at its three factories after the government imposed a lockdown to halt the spread of the coronavirus.

This has resulted in a shortfall of 100 million condoms which normally would be marketed worldwide under such brands as Durex, distributed through aid programs like the United Nations Population Fund, and the U.K.’s National Health Service (NHS).

On Friday, the company was granted permission to resume production under a special exemption for critical industries but with only half of its workforce.

Chief Executive Goh Miah Kiat said:

“It will take time to jumpstart factories and we will struggle to keep up with demand at half capacity.

We are going to see a global shortage of condoms everywhere, which is going to be scary.

My concern is that for a lot of humanitarian programs deep down in Africa, the shortage will not just be two weeks or a month. That shortage can run into months.”

The news comes as condoms rank among toilet paper and hand sanitizer as one of the most sought-after items during the CoViD-19 crisis, reports Highsnobiety.

Earlier this month, sex product retailer Promescent’s CEO Jeff Abraham confirmed that the company saw surging condom sales all month.

Speaking to Business Wire, the executive said:

“In fact, we’ve seen a 54 percent increase in our online sales since the beginning of the pandemic.

With the tremendous effort put forth by so many government and local organizations, we want to do our part to ensure people are continuing to practice safe sex and have adequate access to birth control in a time of social distancing and self-isolation.”

Condom factories in China, India, and Thailand have also faced disruptions in their operations. Similar problems have also been faced by regional manufacturers of critical protective gear like medical gloves in Malaysia.

A Durex spokesman reassured Reuters that operations would continue as normal, and no supply shortages are anticipated. They added:

“For our consumers, many of whom will be unable to access shops, our Durex online stores remain open for business.”

Goh added that while condom production may face interruptions, the demand for the contraceptive remains stronger than ever. He said:

“The good thing is that the demand for condoms is still very strong because like it or not, it’s still an essential to have.

Given that at this point in time people are probably not planning to have children. It’s not the time, with so much uncertainty.”

Tyler Durden

Tue, 03/31/2020 - 20:45

VIDEO: Japanese Vice PM Says WHO Should Be Renamed ‘Chinese Health Organization’

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Taro Aso slammed the WHO for reciting CCP talking points.

Airbnb Bails Out Highly Leveraged Superhosts As Travel Industry Crashes 

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Airbnb Bails Out Highly Leveraged Superhosts As Travel Industry Crashes 

Airbnb CEO Brian Chesky wrote a letter to all hosts informing them that the company is committed to a $250 million bailout to cover some of the cost of COVID-19 cancellations. The canceled check-ins are for March 14 through May 31, Airbnb will pay hosts 25% of what they would've received via their cancellation policies, and the "payments will begin to be issued in April."


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hesky said a separate $10 million Superhost Relief Fund would be designed for "Superhosts who rent out their own home and need help paying their rent or mortgage, plus long-tenured Experience hosts trying to make ends meet. Our employees started this fund with $1 million in donations out of their own pockets, and Joe, Nate and I are personally contributing the remaining $9 million. Starting in April, hosts can apply for grants for up to $5,000 that don't need to be paid back."

And here's where the story gets interesting... 

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. 

With the travel industry crashed, many of these Superhosts have seen their rental incomes plunge in March and risk missing mortgage payments in the months ahead. Chesky was forced to bailout Superhosts because some of these folks have overextended their leveraged in building an Airbnb portfolio and risk imminent deleveraging.

Highly leveraged Superhosts could be the first domino to fall that triggers a housing bust this year. Superhosts can have one property and or have an extensive portfolio, usually built with leverage. So when rental income goes to zero, that is when some have to make the difficult decision of missing a mortgage payment or having it deferred or liquidate the property to raise cash. These decessions are all happening all at once for tens of thousands of people not just across the world but all over the US and could trigger forced selling of properties into illiquid housing markets in the months ahead.

Some of the horror stories are already playing out on Twitter: 

And just like in 2008, when the rent payments stopped, landlords also felt the crunch and went belly up. What's happening with highly leveraged Airbnb Superhosts is no different than what happened a decade ago. Again, no one has learned their lesson. And we might have discovered the next big seller that could ruin the real estate market: Airbnb Superhosts that need to get liquid. 

Tyler Durden

Tue, 03/31/2020 - 21:05

Florida Judge Orders Forced Inoculations – Watch Live

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Tune in to this exclusive broadcast of American Countdown with constitutional lawyer Robert Barnes.

As The Crisis Deepens, Keep An Eye On Illinois' Unpaid Bills

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As The Crisis Deepens, Keep An Eye On Illinois' Unpaid Bills

Authored by Ted Dabrowski and John Klingner via Wirepoints.org,

The depth of the financial and economic impact of the Coronavirus is impossible to predict since we don’t know how far the virus will spread or how long the economic shutdown will last. But we do know that pension shortfalls will jump, borrowing will increase and the state budget hole will widen dramatical

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ly. Unfortunately, it will take months before all those numbers are reported and summed up.

In the meantime, one number Illinoisans can keep an eye on is the state’s unpaid bill backlog, which currently stands at just over $7.5 billion. The state has been notorious for not paying its bills on time since 2005 and its backlog jumped to $17 billion in 2017.

As the Coronavirus crisis deepens, don’t be surprised if unpaid bills begin rising again.

Keep in mind that the unpaid bill number can be manipulated in many ways – we’ve covered that in detail – so the state can make the backlog look better than it really is. However, the backlog can serve as a limited gauge, in conjunction with other numbers, for how the state’s finances are holding up under the shutdown.

Illinois pols have constantly overpromised pension benefits, passed unbalanced budgets and hiked spending, all of which have left the state with a chronic bill backlog.

There’s a real human cost to that backlog, which has long been an indicator of Illinois’ deadbeat status. Those billions should have already been paid to thousands of contractors across the state, many of them small businesses and social service providers which are among the hardest hit by the shutdown.

The pressures on the state are going to be intense as sales and income taxes and a host of other revenues shrink along with the economic freeze. The Commission on Government Forecasting and Accountability expects revenue losses of over $8 billion for the state over the next few years. Unless the government reduces its operating costs in line with the shutdown – which it shows no signs of doing – expect the backlog to jump.

Unpaid bills reached a high of over $16 billion in 2007, but the state government borrowed $6 billion via long-term bonds to bring the backlog down to just over $9 billion in November of 2017. This time around, unless the federal government steps in, borrowing money will be much more difficult. Barring some type of bailout, it’s easy to see the bill backlog rising again.

For sure, other numbers will eventually reveal the true depth of just how unprepared Illinois was for this crisis. But in the meantime, just follow the unpaid bills.

Read more about the impact of the Coronavirus on Illinois:

  • Bad Public Pension Bailout Ideas Now Surfacing

  • What next for Illinois?

  • State of Illinois provides first look at possible revenue impact from downturn

  • Focus On Chicago’s Immediate Crisis, Mayor Lightfoot, Not Political Grandstanding

  • ‘Act of God’: Illinois Teachers Get Full Pay, Pension Accrual While Schools Are Closed

  • Will Recession Revive Discussion of Municipal Bankruptcy and Bankruptcy-for-States?

  • Stock market meltdown, collapsing bond rates will wreak havoc on Illinois’ weakest pension plans

Tyler Durden

Tue, 03/31/2020 - 20:05

Live: Trump Focuses On American Business In Coronavirus White House Briefing — March 31

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Tuesday conference comes after hospital ship arrives in NYC

FBI Report: Border Agents Stopped A Chinese Biologist Sneaking Viable SARS, MERS Viruses Into US Airport

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FBI Report: Border Agents Stopped A Chinese Biologist Sneaking Viable SARS, MERS Viruses Into US Airport

Another bombshell "conspiracy" raising serious questions over the coronavirus pandemic and China's biological weapons research and espionage programs goes mainstream.

A now viral investigative report based on a newly released FBI document authored by no less than the Chemical and Biological Intelligence Unit of the FBI’s Weapons of Mass D

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estruction Directorate (WMDD) finds that a Chinese scientist was caught under extremely suspicious circumstances transporting vials believed to contain the deadly MERS and SARS viruses into the United States.

Illustrative file image via USA Today

“In late November 2018, just over a year before the first coronavirus case was identified in Wuhan, China, U.S. Customs and Border Protection agents at Detroit Metro Airport stopped a Chinese biologist with three vials labeled 'Antibodies' in his luggage,” the lengthy report by Yahoo News begins.

“Inspection of the writing on the vials and the stated recipient led inspection personnel to believe the materials contained within the vials may be viable Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS) materials,” the report reads.

The unnamed scientist claimed he was asked to deliver the vials to a US institute, though the FBI report also fails to identify the recipient. “But the FBI concluded that the incident, and two other cases cited in the report, were part of an alarming pattern,” Yahoo News reports.

“The Weapons of Mass Destruction Directorate assesses foreign scientific researchers who transport undeclared and undocumented biological materials into the United States in their personal carry-on and/or checked luggage almost certainly present a US biosecurity risk,” the FBI report states.

“The WMDD makes this assessment with high confidence based on liaison reporting with direct access,” the FBI report adds.

The report cites US military experts who speculate it could be part of a broader Chinese program aimed at stealing US state secrets and research, and further that such foreign nationals caught with the materials might be unwitting mules, but regardless the case is part of an "alarming pattern". 

Other additional and more recent instances detailed in the report, such as in September 2019, detailed a separate case of a Chinese national's attempt to sneak vials of H1N1 influenza samples into Dallas.

Needless to say, as we reviewed precisely in past reporting related to the Wuhan Institute of Virology and its 'coincidental' proximity to the market where COVID-19 is claimed to have first emerged, the potential for deadly pathogens to 'escape' through mishandling during such haphazard airport trips by individuals trying to sneak vials across borders is high

And this is where the Yahoo News report pivots to the subject and main questions of our own reporting of two months ago, which readers may remember, was deeply triggering for Buzzfeed and others who set themselves up as gatekeepers policing and ensuring acceptance of only what they narrowly deem 'acceptable' analysis and questions: "the FBI appears to be concerned with dual-use research that would be used for bioterrorism," the report emphasizes.

Digging deeper into what we were all told is supposed to be a mere deranged conspiracy theory the Yahoo News authors then make the direct connection between COVID-19 and the aforementioned potential for bioterrorism: 

The report, which came out more than two months before the World Health Organization learned of a cluster of pneumonia cases in Wuhan that turned out to be COVID-19, appears to be part of a larger FBI concern about China’s involvement with scientific research in the U.S. While the report refers broadly to foreign researchers, all three cases cited involve Chinese nationals.

And just to underscore further potentially what we're dealing with in terms of likely threats, the FBI itself said it approached and investigated the Detroit MERS/SARS airport case and others ultimately out of biosecurity and bioterrorism concerns.

"The FBI report refers to both biosecurity, which typically refers to the intentional misuse of pathogens, such as for bioterrorism, and biosafety, which covers accidental release. The FBI declined to comment on the report," it continues.

So it now appears the FBI itself has long been closely following Chinese military bioweapons research as well as dangerous pathogens' mishandling and 'misuse' in relation to unique deadly respiratory viruses, and asking the relevant and obvious questions. Glad to know we're not alone.

Tyler Durden

Tue, 03/31/2020 - 17:45

America Releases Murderers & Child Rapists While Arresting Pastors

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COVID-19 being used to abuse rights of Americans across the country.

Pandemic-Related Unemployment And Shutdowns Are A Recipe For Social Unrest

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Pandemic-Related Unemployment And Shutdowns Are A Recipe For Social Unrest

Authored by J.D.Tuccille via Reason.com,

Could the stalled economy we've inflicted on ourselves in our frantic efforts to battle the COVID-19 pandemic lead to civil disorder? History suggests that's a real danger.

Around the world, high unemployment and stagnant economic activity tend to lead

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to social unrest, including demonstrations, strikes, and other forms of potentially violent disruptions. That's a huge concern as forecasters expect the U.S. unemployment rate in the months to come to surpass that seen during the depths of the Great Depression.

"We're putting this initial number at 30 percent; that's a 30 percent unemployment rate" in the second quarter of this year as a result of the planned economic shutdowns, Federal Reserve Bank of St. Louis President James Bullard told Bloomberg News on March 22. Gross Domestic Product, he adds, is expected to drop by 50 percent.

Unlike most bouts of economic malaise, this is a self-inflicted wound meant to counter a serious public health crisis. But, whatever the reasons, it means businesses shuttered and people without jobs and incomes. That's risky.

"Results from the empirical analysis indicate that economic growth and the unemployment rate are the two most important determinants of social unrest," notes the International Labour Organisation (ILO), a United Nations agency that maintains a Social Unrest Index in an attempt to predict civil disorder based, in part, on economic trends. "For example, a one standard deviation increase in unemployment raises social unrest by 0.39 standard deviations, while a one standard deviation increase in GDP growth reduces social unrest by 0.19 standard deviations."

Why would economic shutdowns lead to social unrest? Because, contrary to the airy dismissals of some members of the political class and many ivory-tower types, commerce isn't a grubby embarrassment to be tolerated and avoided—it's the life's blood of a society. Jobs and businesses keep people alive. They represent the activities that meet demand for food, clothing, shelter—and that develop and distribute the medicine and medical supplies we need to battle COVID-19.

President Donald Trump may be overly optimistic when he hopes to have the country, including areas hard-hit by the virus, "opened up and just raring to go by Easter," but he's not wrong to include the economy in his calculations.

By contrast, New York Gov. Andrew Cuomo's insistence that "if it's public health versus the economy, the only choice is public health," sounds fine and noble. But it reflects an unrealistic and semi-aristocratic disdain for the activities that make fighting the pandemic possible at all—and that keep social unrest at bay.

While the ILO has tried to quantify the causes of social unrest, its researchers certainly aren't the first to make the connection between angry, unemployed people and trouble in the streets.

At the height of the Great Depression, when U.S. unemployment hit a peak of 24.9 percent, Franklin Delano Roosevelt's administration saw make-work programs such as the Civilian Conservation Corps (CCC) as a means of getting the jobless—especially young men—safely into "quasi-military camps often far from home in the nation's publicly owned forests and parks," Joseph M. Speakman wrote for the Fall 2006 issue of Prologue Magazine, a publication of the U.S. National Archives and Records Administration.

"Bringing an army of the unemployed into 'healthful surroundings,' Roosevelt argued, would help to eliminate the threats to social stability that enforced idleness had created," Speakman added.

The program mostly worked—at least, it confined revolts to the camps themselves, where they were suppressed by Army officers. Those same officers commanded the men when they were drafted and dispatched to even more remote destinations with the coming of World War II.

In fact, the connection between unemployment, stagnant economies, and social unrest is so clear that an important indicator for a large underground economy is relative peace prevailing alongside a chronically high unemployment rate.

If 21 percent of the workforce "were jobless, Spain would not be as peaceful as, barring a few demonstrations, it has so far been, say economists and business leaders," the Financial Times noted in 2011. Sure enough, researchers found that off-the-books businesses and jobs thrived in Spain—accounting for the equivalent of a quarter of GDP at one point—keeping people employed and defusing tensions.

Bullard of the Fed doesn't propose shipping the jobless off to the wilderness—at least, not yet—and he doesn't seem inclined to rely on the black market to keep people fed, warm, and healthy. Instead, to defuse the impact of the social-distancing shutdowns of normal economic activity, he calls for lost income to be replaced by unemployment insurance and other payments that would make displaced workers and business owners whole.

He better be right that government checks—drawing on money from the thin air and not generated by an economy that has largely halted, I'll note—can offset the pain of lost jobs and businesses, because the first wave of the unemployment he predicts is already here.

"In the week ending March 21, the advance figure for seasonally adjusted initial claims was 3,283,000, an increase of 3,001,000 from the previous week's revised level," the United States Department of Labor announced on Thursday, March 26.

"This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series."

Those disturbed by such economic collapse include public health professionals who take COVID-19 very seriously.

"I am deeply concerned that the social, economic and public health consequences of this near total meltdown of normal life—schools and businesses closed, gatherings banned—will be long lasting and calamitous, possibly graver than the direct toll of the virus itself," wrote David L. Katz, former director of Yale University's Yale-Griffin Prevention Research Center, in The New York Times last week.

"The stock market will bounce back in time, but many businesses never will. The unemployment, impoverishment and despair likely to result will be public health scourges of the first order."

Unemployment, impoverishment, and despair are frightening outcomes in themselves. They're also a recipe for social unrest that will afflict even those of us who weather both the pandemic and the accompanying economic storm.

Tyler Durden

Tue, 03/31/2020 - 18:05

DOJ Inspector General Finds Widespread Failures With 29 Additional FBI FISA Warrants

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‘Apparent errors or inadequately supported facts’ in every application reviewed.

Another Busted M&A Arb As Xerox Abandons Hostile Bid For HP, Blames Virus

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Another Busted M&A Arb As Xerox Abandons Hostile Bid For HP, Blames Virus

So it appears David will not be slaying Goliath this time (in what is likely to come as no surprise to anyone who has actually been paying attention).

Having started this debacle on Nov 5th 2019, Xerox has decided to end its hostile takeover bid for HP Inc. because of uncertainty stemming from the COVID-19 pandemic, a person familiar wit

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h the matter said, marking a blow to the photocopier company’s efforts to stimulate future growth.

In a press release, Xerox reported:

The current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP Inc. (NYSE: HPQ) (“HP”). Accordingly, we are withdrawing our tender offer to acquire HP and will no longer seek to nominate our slate of highly qualified candidates to HP’s Board of Directors.

While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations.

There remain compelling long-term financial and strategic benefits from combining Xerox and HP. The refusal of HP’s Board to meaningfully engage over many months and its continued delay tactics have proven to be a great disservice to HP stockholders, who have shown tremendous support for the transaction.

Xerox's Board of Directors and management team are grateful for the significant backing we received from both Xerox and HP stockholders throughout this process. We thank the talented individuals who agreed to stand for election to the HP Board, making time in their busy schedules to take on this responsibility when HP’s existing Board did not. And finally, we thank the banks who agreed to finance this acquisition, who never wavered in their commitments, even during the market turmoil caused by COVID-19.

It's been an ugly ride since Xerox announced, with it stock down 48% (and HPQ's stock down just 5%)...

Just add it to the list of busted M&R arb deals...

Oddly, often times, when markets see volatility and prices move sharply lower, dealmaking can be a tailwind. Interested buyers with cash on the sidelines scoop up assets on the cheap and companies in financial distress start to look for synergies and ways to survive the current downturn.

But in the case of the coronavirus pandemic that has shut down most of the world, dealmaking has simply ground to a halt. 

Deal activity last week was down to just $12.5 billion, the lowest weekly total since April 2009, and the overall value of deals in Q1 fell 28% from a year ago to $698 billion. It's the weakest year opening period since 2016, according to the Financial Times. 

There was a "sudden reduction" in U.S. activity and the number of transactions greater than $10 billion also dropped sharply around the globe. 

Leon Kalvaria, chairman of the institutional clients group at Citigroup, was not optimistic for the near term. He told FT: “Everyone is thinking about their employees and customers first. Few companies will be doing cash deals in this environment and private equity players will focus more on managing their portfolio companies before starting to do deals.”

U.S. dealmaking plunged 51% to $253 billion in the first quarter, even inclusive of Morgan Stanley's takeover of E-Trade and Thermo Fisher's takeover of Qiagen. 

European volumes for the quarter were up due to a pick-up in private equity acquisitions and the takeover of Willis Towers Watson by Aon. European volumes rose 51% to $232 billion in the period. 

Dietrich Becker, Perella Weinberg Partners’ head of European advisory, said:

 “In the first week of a crisis, everyone looks at their balance sheet and says everything looks OK. And then as time goes on, they look at the cash burn rate amid declining revenue and become focused on their liquidity, credit profile and ratings.”

He continued: 

“Activist defence and general corporate defence remain a theme that our clients are focused on given the sharp share price falls. I suspect there will be some good, old-fashioned defensive mergers as companies will need to accelerate consolidation.”

Cross-border transactions also plunged, down 17% from a year ago to $204 billion. As individual counties batten down their respective hatches, cross-border dealmaking will likely continue to suffer into the back end of 2020. 

Ros L’Esperance, global co-head of banking at UBS, concluded:

 “M&A activity has slowed down as clients are trying to assess where the market is moving, the impact on individual sectors and businesses, and are waiting for valuations to stabilise, but dialogues remain robust."

Likely high off a hit of fresh Central Bank cash, L’Esperance continued: "Certainly there will be a delay in activity but once things reset they will probably bounce back and accelerate much faster than it did after the financial crisis in certain sectors.”

Keep thinking that, Ros.

Tyler Durden

Tue, 03/31/2020 - 17:05

Concealed Permit Holder Kills Alleged Attacker and Thwarts Mass Shooting

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Permit holder, “shot and killed the woman in response to seeing her shooting at people.”

"We Are Buyers Of Dips": Wall Street's Biggest Bear Turns Bullish

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"We Are Buyers Of Dips": Wall Street's Biggest Bear Turns Bullish

For much of 2019, Morgan Stanley's chief equity strategist Micheal Wilson issued a weekly sermon of fire and brimstone in his Monday Morning market takes, which contrasted with the euphoric pronouncements by his peers at other banks - most notably Goldman, which in December hilarious declared that the US economy is "structurally less recession-prone today", which probably explains why three months

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later the same bank cut its Q2 GDP estimate to -34%...

... earning him the moniker of Wall Street's biggest bear (a few permabearish exceptions such as Albert Edwards were excluded from the tally), not to mention quite a few angry clients. Then, in November, just as the melt up phase of the post "Not QE" market was kicking in sending stocks to all time highs every single day, Wilson got the proverbial tap on the shoulder, and threw in the towel raising his S&P "bull case" price target to 3,250, however not without a slew of warnings that the most likely outcome was another retest in stocks lower.

In retrospect, Wilson should have held fast to his bearish conviction as the unprecedented March market crisis confirmed he was spot on (even if for different reasons).

And yet, demonstrating just how fickle Wall Street fates can be, just as Goldman turned beyond bearish, warning today that the recent rally was just a bear market bounce...

... Wall Street's "biggest bear", Michael Wilson turned bullish, paraphrasing Michael Hartnett who famously says that "markets stop to panic when officials start to panic", and in his latest strategy note writes that "crises lead to bailouts and this time it's extreme given health angle. As a result, the inevitable credit crunch could be truncated this time, leaving us buyers of dips."

Explaining the reasoning behind his reversal, Wilson first lays out how we got here, noting that "in the past month, we've experienced a full bear market (-20%) and full bull market (+20%)" extreme volatility which follows a period of extreme calm during which we observed some of the lowest volatility readings in history.

Then in an appeal to the Austrians inside all of us (by which we mean Zero Hedge readers), Wilson points out that as noted by Hyman Minsky, the onset of a market collapse can be brought on by the reckless speculative activity that defines an unsustainable bullish period – i.e. the Minsky moment.

Sound familiar? If one accepts that 4Q19 was a speculative frenzy driven by liquidity rather than fundamentals, such a conclusion is compelling.

This, incidentally, is Wilson's - rather subdued - victory lap; it would have been far less subdued had Wilson not turned semi bullish in November, but since it may have been his job or his conviction, we'll let it slide. That said, Wilson's argument is spot on, and has to do with the fact that while Covid was the spark for the crisis, the gasoline that was poured on the crash was the unprecedented build up of the trillions in debt over the past decade, that lifted asset prices to their February all time highs.... and the resulting violent unwind. To wit:

Excess leverage explains the ferocity of the decline in risk assets and the economy. While the focus right now is on COVID-19 as the cause of the bear market, the conditions have to be in place for a market and economic crash like we have just experienced.

To Wilson, it is important to acknowledge how and why we got here "as it may help us understand and predict what happens from here" especially since "the necessary conditions for a Minsky-type moment referred to above require leverage in the system."

So before moving on, Wilson explains that in his view there are two primary areas of excess leverage in this particular episode that have been building for the past decade – corporate credit and the shadow banks.

First on corporate credit.

We have never seen corporate leverage as high as it is now. Much of this credit was added because credit markets have rarely been so inviting to issuers. This is the direct result of the financial repression era orchestrated by central  banks during and after the Great Recession. In short, the abnormally low cost of borrowing has encouraged companies to lever up and use this financial leverage to drive better earnings growth in what has been a sluggish economic recovery. Companies are capitalist entities and so they are simply acting in their fiduciary duty to shareholders when they behave in such a manner. Much of this financial arbitrage has been executed via share buybacks, which is now being criticized by members of Congress as they pass the largest fiscal stimulus in history. It’s important to note that low growth is very different from negative growth. Now that we have entered a recession, the corporate bond market knows the risk of default is much greater – hence the dramatic moves we have seen in credit spreads in the past month. As an aside, the correction in stocks really took a turn for the worse when tensions between Russia and OPEC caused a collapse in oil prices. This is what triggered the stress in corporate credit markets, in our view, which contributed significantly to the crash in stocks and the economy. Many acknowledge that credit markets are more important to the functioning of the economy than equity. As bad as the moves were in stocks this month, they were much worse in credit than they were in equities on a risk-adjusted basis.

Second is the shadow banks which are unregulated financial market participants.

Without singling out one particular group, these entities also ballooned in size and scope after the financial crisis. Some of this is due to the easy monetary conditions and low borrowing costs provided by central banks while it’s also due to the fact that the traditional banking system is more tightly regulated, which has allowed many of these entities to get bigger in direct lending type activities. Because the shadow banks are unregulated, they may have become too big, which is why they are now having an outsized impact on financial markets as they lever, like last year,and then de-lever like last month.

Of course, it is hardly news to anyone (at least on this site), that the same factor that crushed the system last time around, is also the same one that led to the current crisis - namely debt. The coronavirus was just the selling catalyst; and once the liquidation feedback loops kicked in and the debt had to be unwound, we got the quad-witching disaster of March 20 when the S&P was trading at levels below Trump's inauguration. In any case, we compliment Wilson for daring to something which is increasingly frowned upon in the country of "free speech" - and twitter - tell the truth, especially when it is inconvenient. With that in mind, the good news, according to Morgan Stanley, is that the regulated banking system is stronger than normal for this part of the cycle – when we are entering a recession – which means credit should still remain available. The Fed has a viable system to get the capital they are providing to the places that need it most as the economy contracts and cash flows dry up. From that perspective, "this is very different than 2008-09 and one reason we believe the Fed’s extraordinarily aggressive actions to date, which include intervening in the corporate credit markets directly, will ultimately shorten the duration of this recession even if they can’t stop the severity of the slowdown in the very near term."

And here is another instance of Wilson admirably telling the truth about what the Fed is doing:

They are, in effect, bailing out the bad actors in the corporate credit market, which should truncate the pain for both investors and issuers, and – eventually – the economy.

One final truth:

The fact that a health crisis is now the villain of this recession arguably makes this correction less painful than it would have been otherwise for credit markets, and the shadow banks.

After all one can't really depose or sue a virus. In fact, one can almost claim that the coronavirus outbreak was perhaps the most "convenient" thing that could have happened to the US financial and debt bubble: by forcing a global economic reset, it gave a carte blanche to triple down on the same debt that crashed the system twice already... and will crash it again.

But not for some time... which is why in its response to the question that is number one among its clients (incidentally the same question posed by Goldman clients), namely "will US equity markets make fresh lows in this bear market", Wilson answer that his short answer is no "for the major averages and most stocks." The longer answer is based on several key factors Wilson thinks are unique to this correction:

  • 1. Recent lows were made during what can only be described as a forced liquidation bylevered players – aka shadow banks... Both systematic strategies and active managers are now basically "sold out" and have very low risk/leverage at this point. In other words, it's hard to imagine the kind of liquidation that we just witnessed in March could happen again from these much lower levels of leverage.

  • 2. This past week, credit markets stabilized thanks to unprecedented support from the Federal Reserve and other central banks. After the past 10 years, we have no doubt in their resolve to stabilize both the funding and credit markets. Most investors we speak with agree and are actively looking to put capital into IG, Mortgages, Agency, Securitized paper and anything else the Fed has said they will be buying directly. Even high yield has responded positively, which the Fed is not buying. Perhaps the most positive market signal last week was the fact that high yield remained in positive territory on Friday even after equity markets sold off sharply into the close. The weaker US dollar is also a good sign that policy (both monetaryand fiscal) is now viewed as getting ahead of the curve.

  • 3. Economic and earnings data will be grim over the next month, but equity markets may have already discounted these revisions based on valuation and some simple relationships we track. First, the equity risk premium for the S&P 500 got as high as 700bps last Monday; it's the second-highest level we have on record (2011 was higher post the downgrade of Treasuries to AA). If we look at this from a sector and stock standpoint, we are at all-time highs. We think this suggests the index can hold the old lows even if some of the most favored sectors and stocks do not. As for some simple relationships, we compare the y/y change in the S&P to the y/y change in earnings growth and revisions breadth, PMIs,and consumer confidence. Based on the 20% y/y decline in the S&P 500, a very rare event usually associated with recessions, we think the market has discounted the recessionary economic and earnings data we expect to see next month (Exhibits 1-4). Having said  that, it has not discounted a full-blown financial crisis like we experienced in 2008-09.

  • 4. Finally, from our hundreds of conversations with clients the past few weeks, there is a strong consensus for lower lows on a retest over the next month or two. While that doesn't mean the consensus can't be right, we would remind readers that we never got a retest of the December 2018 lows which happened under a similar type forced liquidation. Time-tested technical tools like retests with a positive divergence may not work as well in a world dominated by oversized shadow banks which have become the marginal buyer/seller that really sets the price in the short term

Wilson's bullish conclusion is also the reason why the most bearish strategist on Wall Street just may be the most bullish one:

... rarely do markets become so dislocated as they have in the past month, but such are the conditions from which great investment opportunities are born. We have been less bullish than most over the past several years under the view we were  headed toward the end of the cycle. While we never know what will tip us into a recession, the conditions for one have to be in place and the excesses in the credit world were exhibit A in that regard. Now that we are here, we would like to remind readers that bear markets end with recessions, they don’t begin with them.

And, ironically, this means that MS is now flipped with Goldman, which has turned bearish and is loathe to recommend buying here, anticipating another leg lower after the bear market rally ends, while Wilson and Morgan Stanley are now the most bullish bank (with the possible exception of JPMorgan):

Given that most stocks have been in a bear market for two years or longer, we recommend investors start buying stocks now because we cannot be sure if the next pull back will lead to lowers lows or not given we already experienced forced liquidation. Bottom line, we believe 2400-2600 on the S&P 500 will prove to be very good entry points for those with a time horizon of 6-12 months.

We'll be sure to check back in 6-12 months. And speaking of "checking back", last July another Wall Street bull, JPM's Marko Kolanovic thought he spotted a similar bullish trade in the collapse of value stocks which he thought were a "once in a decade" buying opportunity while low vol/growth stocks were to be shorted. ALmost a year later, we can safely say that anyone who put on this "once in a decade" trade, which has seen the total obliteration of value stocks, has now been fired. We can only hope that Wilson doesn't follow Kolanovic's fate.

Tyler Durden

Tue, 03/31/2020 - 14:35

Spanish Government Being Sued For Encouraging Mass Gatherings Right as Coronavirus Hit

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Left-wing leaders urged Spaniards to attend huge feminist rallies on March 8th.

Epic Games floats $1m bounty to ID source of 'commercial smear' claiming Houseparty chat app has been hacked

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Lots of non-savvy users may be recycling previously hacked creds

Group video chat app Houseparty has offered a $1m bounty to identify what it claims is an organised campaign to falsely depict it as a hackers' backdoor.…


Marriott Suffers Second Breach Exposing Data of 5.2 Million Hotel Guests

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International hotel chain Marriott today disclosed a data breach impacting nearly 5.2 million hotel guests, making it the second security incident to hit the company in recent years.

"At the end of February 2020, we identified that an unexpected amount of guest information may have been accessed using the login credentials of two employees at a franchise property," Marriott said in a

Eden is a paradise, well, except for that big, fat trap laid in the middle of it

logicfish Crime Blogging the Good Book All https://tonyortega.org   Discuss    Share

 Australian fires. African locusts. Worldwide plague. Do we live in Biblical times or what? If the world really is ending, we thought it was time to prepare properly for Armageddon. By, you know, reading the damn thing. The Bible, that is. (Go back to the beginning here.)

 Continuing the Creation do-over, with our narrator starting things [...]


Hospitals Firing Doctors Who Talk To The Press

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Hospitals Firing Doctors Who Talk To The Press

US Health care systems have warned emergency room doctors and nurses that if they speak out about working conditions inside a hospital, they will be fired, reported Bloomberg. 

Ming Lin, an emergency room physician in Washington state, lost his job last week after he spoke to a local media outlet about the lack of protective gear for staff at Puget Sound area hospitals. 

Hospital s

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taff at the NYU Langone Health system were recently warned that if they spoke to the media without authorization, they would be terminated. 

"Hospitals are muzzling nurses and other health-care workers in an attempt to preserve their image," said Ruth Schubert, a spokeswoman for the Washington State Nurses Association. "It is outrageous."

With confirmed virus cases over 163,000 and 3,170 deaths, hospital systems across the country are seeing a massive influx of patients that is straining the system. 

Doctors and nurses "must have the ability to tell the public what is really going on inside the facilities where they are caring for Covid-19 patients," Schubert said.

As we noted in January, a hospital doctor in Wuhan, China, the epicenter of COVID-19, tried to inform the world about a fast-spreading disease. However, he was quickly silenced by the Chinese government, and since, more than 800,000 people around the globe have been infected, with 39,000 deaths.

One reason that nurses and doctors must be informative about evolving conditions inside hospitals is that public donations of medical equipment or gear could help out a local facility. 

"It is good and appropriate for health-care workers to be able to express their own fears and concerns, especially when expressing that might get them better protection," said Glenn Cohen, faculty director of Harvard Law School's bioethics center. Hospitals are likely trying to limit reputational damage because "when health-care workers say they are not being protected, the public gets very upset at the hospital system."

NYU Langone Health employees received notification last week that if they spoke with media, they would be "subject to disciplinary action, including termination."

New York's Montefiore Health System requires doctors and nurses to get permission from superiors before speaking to the media. 

"Associates are not authorized to interact with reporters or speak on behalf of the institution in any capacity, without pre-approval," according to the policy, which was seen by Bloomberg News.

Lauri Mazurkiewicz, a Chicago nurse at Northwestern Memorial Hospital, was fired after she told the hospital staff to wear more protective equipment:

 "A lot of hospitals are lying to their workers and saying that simple masks are sufficient and nurses are getting sick and they are dying," Mazurkiewicz said.

Doctors and nurses have also tweeted their frustrations with hospital systems – this has also led to some systems tightening the noose on what employees can and cannot say on social media: 

Nisha Mehta, a radiologist from Charlotte, North Carolina, runs several Facebook groups for physicians. She says members in her groups have reached out to her and want their stories told about working conditions:

"I'm hearing widespread stories from physicians across the country and they are all saying: 'We have these stories that we think are important to get out, but we are being told by our hospital systems that we are not allowed to speak to the press, and if we do so there will be extreme consequences," Mehta said.

America's hospital system could be cracking, like what happened in China and Italy. If everything were fine, doctors and nurses wouldn't be flooding media outlets and social media platforms, warning the public about hospital conditions and or about how deadly the virus is. 

Tyler Durden

Tue, 03/31/2020 - 12:50

Coronavirus Spread a Perfect Storm of Malnourished Americans, Big Pharma Control

infowars Issues Featured StoriesHealth All https://www.infowars.com   Discuss    Share
Americans now in a chronic state of health deficiencies, exacerbated by pharmaceutical drugs

Italian Politicians Say Netherlands' Lack of Solidarity Amid COVID-19 Crisis Threatens EU

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A dozen Italian politicians, including governors and mayors, have knocked the Netherlands for giving a no-go to the so-called “coronabonds” that are to be repaid later on, but are for now capable of rescuing those EU member states that have been hit the hardest by the COVID-19 pandemic.

Marriot Hotels breached AGAIN: Two compromised logins abused to exfil guests' personal deets

logicfish Security marriot hotels breached again compromised logins abused exfil guests personal deets All https://go.theregister.co.uk   Discuss    Share
How many customers' deets? It's not saying just yet

Marriot Hotels has suffered its second data spillage in as many years after an "unexpected amount" of guests' data was accessed through two compromised employee logins, the under-fire chain has confirmed.…

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