Mar 132023
 
 March 13, 2023  Posted by at 9:56 am Finance Tagged with: , , , , , , , , , , ,  73 Responses »


Rembrandt van Rijn Student at a table by candlelight c.1642

 

Fed, TSY, FDIC Announce New Banking System Bailout, Signature Bank Closed (ZH)
Bill Ackman To US Gov’t: Fix Mistake In ‘48 Hours’ Or Face ‘Destruction’ (CT)
Yellen Says Government Will Help SVB Depositors But “No Bailout” (ZH)
HSBC To Buy Silicon Valley Bank’s UK Operations (G.)
Hatred of Putin Makes Washington ‘Do Dumb Things’ – Seymour Hersh (RT)
Liu Xin’s Interview With Seymour Hersh (CGTN)
Zakharova: Ukraine Allegations Russia’s Reluctant To Talk A Colossal Lie (TASS)
Ukraine Won’t Get Western Jets ‘Anytime Soon’ – FM (RT)
Growing Backlash Against Methods To Conscript Ukrainian Men For War (Lavrenin)
Prigozhin Describes Situation In Bakhmut As Very Difficult (TASS)
US ‘Sitting Still’ Amid Growing China-Russia Influence – Bolton (RT)
‘Rigorous’ Maidan Massacre Exposé Suppressed By Top Academic Journal (GZ)
Comer: We Have Documents That Show Biden Family Was Getting Money from CCP (GP)
The Democrats Have Lost the Plot (Taibbi)
Georgian Protesters Unwittingly Imperil Their Nation’s Survival (Scott Ritter)
Could Vitamin D Help Save Our Veterans? (ET)
The Doctor Indicted For Not Killing His Patients (Horowitz)

 

 

 

 

 

 

Chansley
https://twitter.com/FreeStateWill/status/1635011407434641408

 

 

 

 

O’Keefe

 

 

Iran Saudi

 

 

 

 

Stone Putin
https://twitter.com/i/status/1634557724619943939

 

 

 

 

 

 

Zakharova: “Every child can explain how the US authorities will ‘support the stability of the banking system’ – with paper and paint. They will print even more unsecured dollars then they will cause even more problems in the world.”

“..pledge collateral at par, not at market value, thus giving banks credit for all those hundreds of billions in unrealized net losses, and allowing banks to “unlock liquidity” based on losses which the Fed and TSY now backstop!”

Fed, TSY, FDIC Announce New Banking System Bailout, Signature Bank Closed (ZH)

On Friday, we said that the Fed will have to make an announcement before the Monday open, and we didn’t have to wait that long: in fact, the Fed waited just 15 minutes after futures opened for trading to announce the new bailout, alongside even more shocking news: the Treasury announced that New York State regulators are shuttering Signature Bank – a major New York bank – adding that all depositors both at Signature Bank, and also the now insolvent Silicon Valley Bank, will have access to their money on Monday. And as we process the shock of yet another small bank failure (which makes JPMorgan even bigger), the Fed just issued a statement saying that “to support American businesses and households, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy.” The Fed also said that it is prepared to address any liquidity pressures that may arise, which in turn has just unveiled the first bailout acronym of the new crisis: the Bank Term Funding Program, or BTFP. Some more details: The financing will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.

The Fed explains that the Department of the Treasury will make available “up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP.” And while the Federal Reserve – which was completely clueless about this banking crisis until Thursday – does not anticipate that it will be necessary to draw on these backstop funds, we anticipate that the final number of needed backstop liquidity be somewhere north of $2 trillion. What is more notable is that the BTFP – or Buy The Fucking Pivot – facility, will pledge collateral at par, not at market value, thus giving banks credit for all those hundreds of billions in unrealized net losses, and allowing banks to “unlock liquidity” based on losses which the Fed and TSY now backstop!

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And they did…

Bill Ackman To US Gov’t: Fix Mistake In ‘48 Hours’ Or Face ‘Destruction’ (CT)

Billionaire Bill Ackman has urged the United States government to “guarantee” all deposits held by Silicon Valley Bank (SVB) within the next “48 hours,” or it risks the “destruction” of many financial institutions. In a March 11 tweet, Bill Ackman, CEO of hedge fund management firm Pershing Square Capital Management, said a “giant sucking sound” will be heard from the ”withdrawal of substantially all uninsured deposits” from all banks, not just the “systemically important banks (SIBs),” should the government fail to “guarantee all” of SVB’s deposits before the “open on Monday.”Ackman suggested that this would be the result of “the world” realizing what an uninsured deposit is — “an unsecured illiquid claim on a failed bank.”

https://twitter.com/CaitlinLong_/status/1635047789376974848

He warned that these withdrawals would “drain liquidity” from the community, regional and other banks and “begin the destruction” of these crucial institutions if the United States government fails to protect “all depositors.” Ackman said the only other way to prevent this was in the “unlikely” event that major financial institutions, such as JPMorgan Chase, Citibank or Bank of America, acquire SVB before Monday. He argued that this could have been “avoided” if the U.S. government had “stepped in on Friday” to guarantee SVB’s deposits, adding that the long-standing bank’s “franchise value” could have been safeguarded and “transferred” to a new owner in return for an “equity injection.”


Ackman suggested that SVB’s senior management “made a basic mistake” and should be fired. He noted: “They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs. After conducting a “back-of-the-envelope review” of SVB’s balance sheet, Ackman believes that even “in a liquidation,” depositors “should eventually” get back approximately “98% of their deposits”. However, he argued that “eventually” is “too long” when you have “payroll to meet next week.”

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A new meaning for “bailout”.

“No bailout for shareholders and bondholders of SVB. Depositors will be protected.”

“the Fed itself is insolvent. It has exactly the same problem as SVB — it paid top dollar for bonds whose prices have fallen, driving the Fed deep into neg equity (along with BoJ, ECB…)”

Yellen Says Government Will Help SVB Depositors But “No Bailout” (ZH)

With just hours left until futures open for trading late on Sunday afternoon, the situation remains extremely fluid and for now it appears that regulators, central bankers and treasury officials (we won’t mention the White House where the most competent financial advisor is Hunter Biden) still don’t have a clear idea of how they will coordinate or respond. Take Janet Yellen, who said on Sunday morning that the US government was working closely with banking regulators to help depositors at Silicon Valley Bank but dismissed the idea of a bailout. Speaking with CBS on Sunday, the treasury secretary sought to assure US customers of the failed tech lender that policies were being discussed to stem the fallout from the sudden collapse this week. The Federal Deposit Insurance Corporate (FDIC) took control of the bank on Friday morning.

“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out . . . and the reforms that have been put in place means we are not going to do that again,” Yellen said (oh but you will, you just don’t know it yet). “But we are concerned about depositors, and we’re focused on trying to meet their needs.” It wasn’t clear which depositors she meant: as we first pointed out on Friday, out of SIVB’s $173 billion of customer deposits at the end of 2022, $152 billion were uninsured (i.e., over the $250,000 FDIC insurance threshold) and only $4.8 billion were fully insured. As we also noted last week, a further look at SIVB funding (pie charts) shows unusually high reliance on corporate/VC funding; only the small red private bank slice looks like traditional retail deposits to us.

As a result, as JPM’s Michael Cembalest says “It’s fair to ask about the underwriting discipline of VC firms that put most of their liquidity in a single bank with this kind of risk profile. At the end of 2022, SIVB only offered 0.60% more on deposits than its peers as compensation for the risks illustrated below; in 2021 this premium was 0.04%”.

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Tech start-ups are sexy.

HSBC To Buy Silicon Valley Bank’s UK Operations (G.)

The government has struck a last-minute deal for HSBC to buy Silicon Valley Bank’s UK operations, saving thousands of British tech startups and investors from big losses after the biggest bank failure since 2008. The takeover will override the Bank of England’s initial decision to place SVB UK into insolvency, after a run on the lender that was originally sparked by fears over the a multibillion-pound shortfall on the US parent company’s balance sheet. The US bank was closed and its assets seized by authorities on Friday. “This morning, the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC. Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise,” the chancellor, Jeremy Hunt, said on Twitter.

HSBC’s takeover is expected to protect the finances of SVB UK’s 3,500 customers, including hundreds of tech startups that feared they would go bust if their deposits were wiped out. Authorities had been considering a range of options to help SVB UK customers pay wages and suppliers, including an emergency fund that could provide a cash lifeline to support startups, as well as government-guaranteed loans for the sector, similar to those offered to businesses during the Covid crisis. It follows a tense 72 hours, with Rishi Sunak having been locked in weekend talks with the Bank of England governor, Andrew Bailey, and Hunt, who warned that tech and life sciences sector were at “serious risk” as a result of the bank’s collapse.

While analysts said there was little chance of contagion across the banking sector – given that the biggest banks serve a wider range of customers and have plenty of capital – tech startups and investors were worried about the ripple effects for the sector. A group of more than 200 tech executives warned in an open letter to Hunt over the weekend that the loss of deposits had the potential to cripple the industry, with many businesses at risk of falling into insolvency overnight.

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“They make it personal. They don’t make it professional.”

Hatred of Putin Makes Washington ‘Do Dumb Things’ – Seymour Hersh (RT)

Legendary investigative journalist Seymour Hersh on Sunday offered a theory for what he sees as the foreign policy “complete idiocy” displayed by US officials, saying they’re so consumed by hatred of Russian President Vladimir Putin that they stumble into bad decisions. Hersh, the Pulitzer Prize-winning journalist who reported last month that US President Joe Biden ordered last fall’s sabotage of the Nord Stream natural gas pipelines, has called the alleged plot one of Washington’s “dumbest” decisions in years. However, the blunder didn’t reflect a lack of intelligence among top officials in Biden’s administration, including Secretary of State Antony Blinken and National Security Adviser Jake Sullivan, Hersh said in an interview with China’s CGTN.

Top administration officials “all have high degrees of, plenty of, intelligence,” Hersh said. “It’s just what they’re so driven by, I think, hatred of all things particularly Putin, and also communism per se. They’re so cold warriors, they’re really out of sorts. It makes them do dumb things.” The White House dismissed Hersh’s bombshell report on the Nord Stream blast as “complete fiction.” The New York Times, where Hersh did award-winning work on the Watergate scandal and other stories as a star reporter in the 1970s, claimed earlier this month that a “pro-Ukraine group” was behind the Nord Stream attack. The story cited unidentified US officials. Hersh told CGTN that neither the Ukrainian navy nor a non-state actor had the resources to carry out the sabotage, which involved planting C4 explosives on four concrete-encased steel pipelines at the bottom of the Baltic Sea. He said the false claim was made to distract from the fact that US Navy divers planted the remotely detonated explosives under cover of a NATO exercise in the Baltic.

“They’re trying to divert attention from the story that I wrote, which included enormous specifics,” Hersh said. “I was describing a process that began before Christmas of 2021. . . . They had a series of meetings at a secret room in the White House, that I gave clues I know the title of the room.” The veteran journalist argued that being “antagonistic” with China and Russia is counterproductive for Washington. “They make it personal. They don’t make it professional.” He added that Biden’s foreign policy has alienated governments around the world since Russia’s military operation in Ukraine began last year. “Russia has made more friends in the Third World since this began than anybody in this administration seems to appreciate,” Hersh said. “This notion of American hegemony, if you will, just doesn’t work anymore.”

Nordstream attack vessel

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The interview.

Liu Xin’s Interview With Seymour Hersh (CGTN)

As the NYT reports new allegations on the Nord Stream sabotage, Seymour Hersh takes the “pro-Ukrainian group” intel with a pinch of salt. Here’s the reason. Liu Xin: But you think it’s not possible for a “pro Ukrainian group” to carry out this explosion? Seymour Hersh: I know that the few things I know about the Ukrainian navy is they are capable of dropping mines. I’m not an expert on it. I just happen to ask questions after that story came out. They don’t have a working decompression chamber. We’re talking about four pipelines, Nord Stream 1 and 2, each has two. They’re steel tubes covered by a concrete cover to protect themselves from the salinity, the salt in the water. So, you have to have people that know, that are the experts in underwater diving and experts in using the most, the plastic C4, the most volatile stuff there is.And also, they have to be able to go quick. They have to be sure they get the bomb, their weapon and the bomb in the right place that triggers, destroys everything. They have to practice like, they practice for weeks and months on this, I would say, in the waters of the Baltic Sea. “The U.S. is trying to divert attention away from my story,” says Seymour Hersh, after the NTY reported intel pointed at a “pro-Ukrainian group” on the Nord Stream sabotage.

Liu Xin: The fact that the U.S. government officials leaked this intelligence to the New York Times at this particular moment. What do you think they are trying to send as a message? Seymour Hersh: They are trying to divert attention from the story that I wrote, which included enormous specifics. I was describing a process that began before Christmas of 2021. It involved the National Security Advisor Jake Sullivan of the White House for the President. They had a series of meetings at a secret room in the White House. They gave clues, I know the title of the room. They were asked to come up with both reversible and irreversible concepts, ideas. A reversible concept would have been more sanctions. Something irreversible would have been kinetic, a bomb. And then eventually it turned out what they really wanted was a hit on the pipelines. And in this government, the concern has always been that Germany has been getting so much gas at such a cheap price from Russia that it would be very hard to wean them away from Russia. Slamming U.S. foreign policy as “complete idiocy,” Seymour Hersh told Liu Xin he believes American hegemony and the hatred of “all things Putin & communism” are driving the Biden Administration to do dumb things.

Liu Xin: You have also called a part of the called this planning “stupidity.” And you on several occasions you laughed at the intelligence level of the Biden. Seymour Hersh: I was not questioning their intelligence. These are all people, Tony Blinken, the Secretary of State, the one who didn’t go to China to meet his counterpart because of a balloon and Jake Sullivan, who’s the National Security Advisor, and the Undersecretary of State, all have high degrees of, plenty of intelligence. It’s just what they’re so driven by, I think, hatred of all things particularly Putin, and also communism per se. They’re so cold warriors. They’re really out of sorts. It makes them do dumb things. I just think his foreign policy is too complete idiocy, alienating a lot of people around the world. This notion of American hegemony, if you will, it just doesn’t work anymore. That’s what I object to.

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“..this point of view is nothing but a wish of defeat to his country and its non-existence..”

Zakharova: Ukraine Allegations Russia’s Reluctant To Talk A Colossal Lie (TASS)

Russian Foreign Ministry Spokeswoman Maria Zakharova has slammed her Ukrainian counterpart Dmitry Kuleba’s statement that Moscow is reluctant to negotiate the crisis settlement with Kiev as a “colossal lie”. “These days, Kuleba was once again ranting and raving in interview with the Italian newspapers Repubblica and Stampa. He called those Italians who are standing for settling the conflict with Russia through talks rather than in the battlefield hypocrites. In his interpretation, this point of view is nothing but a wish of defeat to his country and its non-existence – “Not peace but ‘rest in peace’ on Ukraine’s grave,” she wrote on her Telegram channel.


“However, he seems to share the opinion that ‘there is always room’ for talks but says he sees no willingness for them in Russia. A colossal lie, bearing in mind the fact that it is the regime he represents that has banned such talks with Russia in its laws”. Moreover, in he words, Kuleba forecasted “the end of Europe if Ukraine is defeated”. “An optimist. In its current shape, Europe ended right when the European Union let Washington govern its political institutions and ultimately surrendered to NATO,” she added.

Ukraine Inc.
https://twitter.com/i/status/1634810341682036738

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“We sat down with Ukrainian representatives and the German armaments industry … and German industry, in my presence, asked the German government for one thing: signed contracts..”

Ukraine Won’t Get Western Jets ‘Anytime Soon’ – FM (RT)

Kiev will not get Western-made fighter jets “anytime soon,” Ukrainian Foreign Minister Dmitry Kuleba admitted during an interview with the German newspaper Bild am Sonntag published late on Saturday. The potential delivery of fighter jets to Kiev to prop it up in its ongoing conflict with Moscow is hindered by assorted technical and logistical issues, Kuleba said. However, he urged that Ukrainian pilots, who are only familiar with Soviet-made aircraft, begin training on the Western planes as soon as possible. “I don’t expect the delivery of fighter jets to happen anytime soon because it’s a very difficult task logistically and technically. Therefore, we advise that the training of Ukrainian pilots on Western jets should start now, so that when the decision to provide aircraft is made, we do not waste time or many months on training,” he said.

The diplomat also urged Berlin to ramp up deliveries of ammunition to Ukraine, namely artillery shells, claiming that while German industry had already expressed a readiness to provide them, the issue lies with the country’s government. “We sat down with Ukrainian representatives and the German armaments industry … and German industry, in my presence, asked the German government for one thing: signed contracts,” he stated. Over the course of the conflict, Ukraine has increasingly demanded more and more sophisticated weapon systems from its Western backers. Kiev has intensified calls for NATO to supply it with fighter jets – namely the US-made F-16 – in recent months after securing a pledge for dozens of Leopard 2 and Leopard 1, M1 Abrams, and Challenger 2 main battle tanks from multiple EU countries, the US, and UK, respectively.

So far, however, the West has been reluctant to provide Ukraine with modern aircraft. Late in February, US President Joe Biden said he was “ruling it out for now.” His Ukrainian counterpart Vladimir Zelensky “doesn’t need F-16s now. There is no basis upon which there is a rationale, according to our military, now, to provide F-16s,” Biden told ABC at the time. Still, American media reported that the Pentagon has already invited Ukrainian pilots to a military base in Arizona to determine how long it would take to train them to fly the F-16. Last week, unnamed officials told NBC that two Ukrainian airmen had already arrived on American soil and more were likely to follow. Russia has repeatedly warned the West against “pumping” Ukraine with assorted weaponry, maintaining it would only prolong the hostilities rather than change the ultimate outcome.

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By Petr Lavrenin, Odessa-born political journalist and expert on Ukraine and the former Soviet Union

Growing Backlash Against Methods To Conscript Ukrainian Men For War (Lavrenin)

Last year, military conscription became an issue in both Russia and Ukraine. However, the extent has been completely different in the two countries. While in Russia the mobilization was partial, lasting barely more than a month and affecting around 300,000 people, according to official figures – a significant part of whom already had military experience – a completely different picture has developed in Ukraine. Kiev instituted a general conscription drive which has been in force for more than a year. The exact number of those taken to the armed forces during this time is not known for certain and the process has been accompanied by numerous scandals. Cases where law enforcement officers have applied force when handing out conscription notices and illegally delivered men to enlistment offices have given rise to public discontent.

However, the Ukrainian authorities clearly have no intention of pausing enlistment because the situation remains critical at some sections of the front. The Armed Forces of Ukraine (AFU) are losing their grip on fortified areas around Artyomovsk (Bakhmut), and taking huge numbers of casualties, according to the Guardian and other media outlets. Meanwhile, Kiev continues to issue mobilization summonses and is sending people without proper training. According to the country’s legislation, a summons for military duty can only be issued on the street if it specifies the personal data of the person to whom it is given. It is also illegal for military commissars to detain citizens, as they are not the police, and conscripts are not criminals. Yet, that’s exactly how conscription is currently being conducted in Ukraine. Men of military age are being hunted down, and videos showing military commissars going to extreme lengths to hand out summonses, including by force, constantly circulate on social media.

Odessa, in particular, stands out in this respect. For example, military commissars were caught driving around the city in ambulances. When they came across men of the appropriate age, they stopped, handed over summonses and drove on. After videos emerged on social networks, local military commissars had to explain themselves and claimed that they were given the ambulance to use for their work. There were also cases when men in Odessa were detained on the street and forcibly taken to military enlistment offices, even without being handed a mobilization summons. For quite a long time, the AFU’s Operational Command South tried to ignore the illegal, forceful methods used by its military commissars. However, on February 14, a video was released showing military enlistment office staff detaining a man by force. In order to avoid a scandal, the military quickly assured the public that the staff responsible would be disciplined for “incorrect” behavior and the incident investigated.

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Too many tunnels?!

Prigozhin Describes Situation In Bakhmut As Very Difficult (TASS)

The situation is Artyomovsk (known as Bakhmut in Ukraine) is very difficult, with the Ukrainian army receiving “endless reserves,” Wagner PMC founder Yevgeny Prigozhin said on Sunday. “The situation in Bakhmut is difficult, very difficult, with the enemy fighting for each meter. And the closer we are approaching the city center the fiercer fighting is growing, the more artillery and tank being used against us. Ukrainians keep on supplying endless reserves. But we are moving forward and will continue to move forward and we will not cover the glory of Russian arms with shame,” his press service quoted him as saying on its Telegram channel.


Artyomovsk is located in the Kiev-controlled part of the Donetsk People’s Republic (DPR). Fierce fighting for control of the city is underway. According to the latest data, Russian forces have blocked or taken control of all paved roads to the city while the nascent spring mud season is complicating the logistics of supplying the Ukrainian army with fresh ammunition and personnel. Prigozhin said on Saturday that Russia forces were some 1.2 kilometers from the city’s administrative center.

Prigozhin
https://twitter.com/i/status/1634598452666544128


“Wagner” began storming the underground part of the “Bakhmut Azovstal”. Right now,”Wagner” are making their way into the mine. The battles take place at a depth of up to 320 meters.

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You lost. You were staring blind.

US ‘Sitting Still’ Amid Growing China-Russia Influence – Bolton (RT)

President Joe Biden’s administration is doing nothing to counteract steps by China, Russia, and their allies to work more closely together, jeopardizing US interests and undermining its global influence, former White House National Security Adviser John Bolton has claimed. “We’re sitting still, and the Chinese, the Russians, Iran, North Korea and several others are moving to shore up their relations and threaten us in a lot of different places,” Bolton said on Sunday in a WABC 770 radio interview. He added that while Beijing follows a clear strategy, “we kind of wander around from day to day.”

Bolton, a longtime war hawk who has called for regime changes in Moscow and Tehran, made his comments in the wake of Friday’s announcement that Saudi Arabia and Iran had agreed to re-establish diplomatic ties under a deal brokered by China. He lamented that the agreement reflected diminishing US influence around the world. “It’s an indication that the Saudis and others are trying to hedge their bets with China and Russia, because they don’t think the United States has the resolve and the fortitude necessary to do what they need to do to protect the world against Iran and its intentions,” Bolton said.

The 74-year-old Bolton has worked in the administrations of former Presidents Donald Trump, George W. Bush, George H.W. Bush and Ronald Reagan. Chinese officials have bristled at Washington’s threat claims, arguing that the US and its NATO allies behave as if they’re still fighting the Cold War. Beijing has maintained neutrality on the Ukraine crisis, resisting US pressure to condemn Russia over the conflict, and proposed a 12-point blueprint to end the fighting late last month. Biden dismissed the peace plan, saying it would benefit only Russia.

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Maybe he should name the journal…

‘Rigorous’ Maidan Massacre Exposé Suppressed By Top Academic Journal (GZ)

A peer-reviewed paper initially approved and praised by a prestigious academic journal was suddenly rescinded without explanation. Its author, one of the world’s top scholars on Ukraine-related issues, had marshaled overwhelming evidence to conclude Maidan protesters were killed by pro-coup snipers. The massacre by snipers of anti-government activists and police officers in Kiev’s Maidan Square in late February 2014 was a defining moment in the US-orchestrated overthrow of Ukraine’s elected government. The death of 70 protesters triggered an avalanche of international outrage that made President Viktor Yanukovych’s downfall a fait accompli. Yet today these killings remain unsolved.

Enter Ivan Katchanovski, a Ukrainian-Canadian political scientist at the University of Ottawa. For years, he marshaled overwhelming evidence demonstrating that the snipers were not affiliated with Yanukovych’s government, but pro-Maidan operatives firing from protester-occupied buildings. Though Katchanovski’s groundbreaking has been studiously ignored by the mainstream media, a scrupulous study he presented on the slaughter in September 2015 and August 2021 and published in 2016 and in 2020 has been cited on over 100 occasions by scholars and experts. As a result of this paper and other pieces of research, he has among the world’s most-referenced political scientists specializing in Ukrainian matters.

In the final months of 2022, Katchanovski submitted a new investigation on the Maidan massacre to a prominent social sciences journal. Initially accepted with minor revisions after extensive peer review, the publication’s editor effusively praised the work in a lengthy private note. They said the paper was “exceptional in many ways,” and offered “solid” evidence in support of its conclusions. The reviewers concurred with this judgment. However, the paper was not published, a decision Katchanovski firmly believes to have been “political.” He filed an appeal, but to no avail. Among those fervently supporting Katchanovski’s appeal was renowned US academic Jeffrey Sachs. “You have written a very important, rigorous, and substantial article. It is thoroughly documented. It is on a topic of great significance,” Sachs wrote to the scholar.

“Your paper should be published for reasons of its excellence…The journal will only benefit from publishing such a work of importance and excellence, which will further the scholarly understanding and debate regarding a very important moment of modern history.” Katchanovski declined to name the journal in question, but described it as “top-tier” in the field of social sciences. He believes its refusal to publish his study is “extraordinary,” but nonetheless emblematic of a “far bigger problem in academic publishing and academia.” “The editor who accepted my article only learned it would not be published from my tweets on the subject. This reversal was highly irregular and political. There is growing political censorship concerning Ukraine in academia, and also self-censorship..”

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Let’s see them.

Comer: We Have Documents That Show Biden Family Was Getting Money from CCP (GP)

House Oversight Chairman James Comer (R-KY) joined Maria Bartiromo on Sunday Morning Futures this morning. This was an explosive interview. Comer dropped several bombs on the Biden Crime Family. According to Comer the House Oversight Committee is working with four individuals with close ties to the Bidens. Comer says the committee now has documents that tie the Bidens to the Chinese Communist Party. Biden is finished. James Comer: “It’s as bad as we thought… Since we’ve last spoken we have bank records in hand. We have individuals who are working with our committee. In the last two weeks we’ve met with either these individuals personally or with their attorneys. And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party.”

Comer’s got the goods! This is a pivotal moment in American history. They finally have the goods on the Biden Crime Family.How will Democrats deal with this? With more phony charges against President Trump? Or maybe Old Joe will suffer a slip and fall?

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“They did not want to have a discussion about anything. It was completely opposite to what the party was even ten years ago..”

The Democrats Have Lost the Plot (Taibbi)

One of the crazier parts came at the end of the examination by Garcia, when I ended up becoming just a bystander to a heated and apparently sincerely unfriendly blowup between chairman Jim Jordan and Plaskett: GARCIA: So you’re not gonna tell us when Musk first approached you. TAIBBI: Again, Congresswoman, you’re asking me to, you’re asking your journalist to reveal a source. GARCIA: So then you consider Mr. Musk to be the direct source of all this? TAIBBI: Now you’re, you’re trying to get me to say that he is the source. GARCIA: Well, he isn’t, if you’re telling me you can’t answer because it’s your source, the only logical conclusion is that he is in fact your source. TAIBBI: Well, you’re free to conclude that. GARCIA: Well, sir, I just don’t understand. You can’t have it both ways, but let’s move on, because — JORDAN: Well, no, he can. He’s a journalist. PLASKETT: He can, because either Musk is the source and he can’t talk about it, or Musk is not the source. And if Musk is not the source, then he can discuss.

Did these people really not understand that identifying who is not a source crosses the same line as identifying who is one? You just can’t go into these questions. I started to interject to point this out, then realized that Garcia and Plaskett legitimately didn’t even know the basics of the civil liberties landscape. This was much the same as when Vijaya Gadde acted completely at a loss when Ro Khanna wrote to her in the middle of the Hunter Biden laptop affair, to express concerns about speech rights. Khanna mentioned the New York Times v. Sullivan case and other principles to Gadde, and she seemed to have no idea what he was talking about. This was like that. Garcia also made it clear she didn’t know what Twitter was. At one point she said, regarding yesterday’s Twitter Files thread, that I had said “I had to attribute all the sources to Twitter first.”

I was so confused by this that I paused, worried that I was misunderstanding (my hearing is not so great). She then asked if I “sent it to Twitter first.” As I was replying no, that I’d posted the thread on Twitter, I heard an aide whispering something about “putting it on Twitter.” Garcia seemed to think that Twitter was an editorial body to which I was sending text, maybe for review. It’s understandable, not knowing that the platform doesn’t work that way — not everyone has to be on Twitter obviously — but then why the hostility? Instead of simply asking me in a friendly way about this process, which I would have been glad to explain, she kept blasting away. “First, sir. Yes or no?” The Democrats were angry that Michael and I were there at all. They did not want to have a discussion about anything. It was completely opposite to what the party was even ten years ago, when expression rights were an issue they wanted to own.

Read more …

Scott Ritter’s wife is Georgian. He knows the country. This is a harrowing story.

Georgian Protesters Unwittingly Imperil Their Nation’s Survival (Scott Ritter)

In many ways, the critics were correct—the practical outcome of the foreign agents bill would have been to expose the extent to which Georgian politics and governance had become overrun with foreign money and influence. The threat, however, didn’t come from Russia, but rather the United States, which uses the $40 million in aid funneled through the United States Agency for International Development (USAID) every year to conduct what amounts to a “soft coup” in Georgia designed to displace the current government with one that will be compliant to American—not Georgian—goals and objectives—including the establishment of a “second front” against Russia. All of this is done, according to Samantha Power, the Director of USID, to build “a country with free expression, a free press, & a path to Euro-Atlantic integration.”

But what she really means is a country that suppresses any dissent as “disinformation,” uses the media as state-sponsored propaganda, and removes from power any politician or political party that dares impede Georgia’s absorption into the US-led NATO sphere of influence. Georgia’s Prime Minister, Irakli Garibashvili, does not want an expanded war with Russia—especially one that drags Georgia into the conflict. As such, Samantha Power and her minions at USAID believe the prime minister of Georgia must now be removed and replaced with an anti-Russian (i.e., pro-war) leader cut from the same pro-American cloth as Georgia’s US-backed President, Salome Zurabishvili.

To accomplish this, USAID funds programs designed to foment a “bottom-up” transformation of Georgian society and politics by empowering “diversity” at the grass-roots level, suppressing opposing points of view in the name of building “societal resilience to disinformation,” and seizing control of the electoral process so that the US-controlled “diversity” movements can prevail in local elections and, by extension, national elections. The Georgian foreign agents bill would have exposed the level to which these USAID-funded programs, and other related US and EU-funded activities, had infiltrated Georgian society. For that reason, the US mobilized its paid activists to take to the streets, forcing the Georgian Prime Minster to pull the plug on the legislation in the interests of public safety.

Read more …

This is about suicides, not covid. Why only suicides among veterans? Isn’t it time to widen and broaden this discussion?

Could Vitamin D Help Save Our Veterans? (ET)

Findings from a new study have shown that vitamin D may lower the risk of suicide and suicide attempts in U.S. veterans with low vitamin D levels. The study found that veterans who received vitamin D had a 64 percent lower risk of suicide than those who did not receive supplementation. The study was published in February 2023 in the journal Plos One. Suicide is a serious public health issue and the 12th leading cause of death in the United States. In 2020, 45,979 Americans died by suicide and there were an estimated 1.2 million suicide attempts. According to the CDC, suicide rates increased 36 percent between 2000-2018, and Suicide Awareness Voices of Education states that from 2020 to 2021 there was a 3.6 percent increase in suicides, bumping it up to the 11th leading cause of death in the United States. This is one death every eleven minutes.

When it comes to veterans, however, the statistics change. Veterans are at a 57 percent higher risk of suicide than those who haven’t served, which is more than 1.5 times the national average. Suicide is the second leading cause of death of veterans under the age of 45. Some other notable statistics: • 125,000 veterans have died by suicide since 2001. • There were 6,146 veteran suicides in 2020. • There have been 20 consecutive years with 6,000-plus veteran suicides. The study aimed to determine the association between vitamin D supplementation, vitamin D blood serum levels, suicide attempts, and intentional self-harm in a group of veterans in the Department of Veterans Affairs.

The retrospective cohort study looked at veterans who had filled either a vitamin D3 or vitamin D2 prescription between 2010 and 2018. A cohort of 169,241 vitamin D2-treated veterans and 490,885 vitamin D3-treated veterans were each matched to an equal number of controls that had similar demographics and medical histories. The results of the study showed that vitamin D3 and D2 supplementation was associated with a 45 percent and 48 percent reduced risk of suicide attempt and self-harm. This was an almost 44 percent difference between the groups receiving supplementation and the control group. Additionally, the study found that vitamin D supplementation among black veterans was associated with a 60 percent decline in suicide attempts, and in veterans with vitamin D deficiency, which the study defined as being below 20 nanograms per milliliter (ng/mL), there was a more than 64 percent reduction in potential suicide attempts.

Read more …

“..in exceptional circumstances of unjust laws, ethical responsibilities should supersede legal duties.”

The Doctor Indicted For Not Killing His Patients (Horowitz)

All the government officials, pharmaceutical executives, and doctors involved in defrauding the public with taxpayer funding and violating the consent of humanity to mandate dangerous shots are absolved of liability. Meanwhile, a doctor who took his Hippocratic Oath seriously and allegedly saved nearly 2,000 patients (with FULL CONSENT) from the shots, is facing serious federal charges for conspiracy to defraud the government defrauders. We’re all big talkers. We’d like to believe that if we were there in Germany during the late 1930s, we would have protested the budding genocide, which was first rooted in medical experimentation and coerced sterilization. But just like most doctors and scientists went along with the Third Reich, nearly every doctor went along with the Fourth Reich in coercing patients into taking a known dangerous shot because they were “just following orders” and “following the science.”

Dr. Kirk Moore, an experienced plastic surgeon from Utah, on the other hand, has risked his life and career to actually follow the dictates of the Nuremberg Code. Yet despite everything we now know about the shots, which should win him the Presidential Medal of Freedom for his alleged actions, he is the one facing prosecution for a disposing of a shot that is only on the market because of government fraud. In January, Dr. Moore, along with two members of his clinic’s staff and a neighbor, were indicted on conspiracy to defraud the federal government by allegedly offering nearly 2,000 patients saline injections along with vaccine documentation while disposing of the real shots into the sink. To be clear, he is not being accused of tricking patients. He never offered unsuspecting patients fake shots. These were all people (or parents of minors) who desperately sought him out to bypass the genocidal, unconstitutional, inhumane, and immoral jab mandates, so they could go on with their lives unharmed by this terrible technology.

Prosecutors accuse Dr. Moore and staff at the Plastic Surgery Institute of Utah of pretending to administer 391 children shots, 524 adult Pfizer shots, 64 Moderna shots, and 958 J&J shots between October 2021 and Sept. 2022 just based on the inventory of shots that went to that office. That was long after it was known these shots were dangerous, yet Moore, not the Pfizer executives, faces up to five years in federal prison. According to the AMA Medical Code, “When physicians believe a law violates ethical values or is unjust, they should work to change in law.” However, it adds that “in exceptional circumstances of unjust laws, ethical responsibilities should supersede legal duties.”That is clearly going to be part of Moore’s defense if he is indeed shown to have given people saline at their request. Ironically, Moore is being accused of grifting and running a fake vaccine card ring and earning $98,000 off it. Dr. Moore, though, rigorously disputed this fact in an interview on my podcast and notes that when people asked him for his fee for COVID treatment, he told them to donate it to a 501(c)(3) medical freedom group.

Read more …

 

 

 

 

 

 

 

 

Earth music
https://twitter.com/i/status/1634947463487574018

 

 

 

 

Owl
https://twitter.com/i/status/1634644161239437318

 

 

God made a farmer
https://twitter.com/i/status/1634879637527445504

 

 

 

 

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Feb 022021
 
 February 2, 2021  Posted by at 1:21 pm Finance Tagged with: , , , , , , , , , , ,  22 Responses »


Roy Lichtenstein Woman With Flowered Hat 1963

 

 

Well, Dr. D is back again. You might want to sit down for this one.

 

 

Dr. D: In my last article I wrote about cows and hay and unrealistic estimates of production of the land. But surely that is all academic. What could possibly force Americans to once again eat by the sweat of their brow?

Insider military think tank Deagel.com. The think tank that in 2015 estimated the death of 200M Americans by 2025.

Deagel – Forecast 2025

The Great Reset; like the climate change, extinction rebellion, planetary crisis, green revolution, shale oil (…) hoaxes promoted by the system; is another attempt to slow down dramatically the consumption of natural resources and therefore extend the lifetime of the current system. It can be effective for awhile but finally won’t address the bottom-line problem and will only delay the inevitable. The core ruling elites hope to stay in power which is in effect the only thing that really worries them.


The collapse of the Western financial system – and ultimately the Western civilization – has been the major driver in the forecast along with a confluence of crisis with a devastating outcome. As COVID has proven Western societies embracing multiculturalism and extreme liberalism are unable to deal with any real hardship. The Spanish flu one century ago represented the death of 40-50 million people.

Today the world’s population is four times greater with air travel in full swing which is by definition a super spreader. The death casualties in today’s World would represent 160 to 200 million in relative terms but more likely 300-400 million taking into consideration the air travel factor that did not exist one century ago. So far, COVID death toll is roughly 1 million people. It is quite likely that the economic crisis due to the lockdowns will cause more deaths than the virus worldwide.

The Soviet system was less able to deliver goodies to the people than the Western one. Nevertheless Soviet society was more compact and resilient under an authoritarian regime. That in mind, the collapse of the Soviet system wiped out 10 percent of the population. The stark reality of diverse and multicultural Western societies is that a collapse will have a toll of 50 to 80 percent depending on several factors but in general terms the most diverse, multicultural, indebted and wealthy (highest standard of living) will suffer the highest toll.

The only glue that keeps united such aberrant collage from falling apart is overconsumption with heavy doses of bottomless degeneracy disguised as virtue. Nevertheless the widespread censorship, hate laws and contradictory signals mean that even that glue is not working any more. Not everybody has to die migration can also play a positive role in this.


We expected this situation to unfold and actually is unfolding right now with the November election triggering a major bomb if Trump is re-elected. If Biden is elected there will very bad consequences as well. There is a lot of bad blood in the Western societies and the protests, demonstrations, rioting and looting are only the first symptoms of what is coming. However a new trend is taking place overshadowing this one…

Six years ago the likelihood of a major war was tiny. Since then it has grown steadily and dramatically and today is by far the most likely major event in the 2020s. The ultimate conflict can come from two ways. A conventional conflict involving at least two major powers that escalates into an open nuclear war. …

If there is not a dramatic change of course the world is going to witness the first nuclear war. The Western block collapse may come before, during or after the war. It does not matter. A nuclear war is a game with billions of casualties and the collapse plays in the hundreds of millions.” – Deagel, September 25, 2020

Now clearly this is ridiculous. Even these new, revised estimates have population drop in the U.S. to 99 Million in 4 years.

 

 

So what do we see here? A catastrophic event that hurts only very specific nations, leaving nearby neighbors untouched or even improved. That is, not a climate event or asteroid strike. It hurts a few nations most specifically, that is, Britain, U.S., Germany, Israel, France, Australia, Italy, S. Korea, Saudi Arabia.

What do these nations all have in common? They are the Western Allies, and under the Western fiat central banking system. While India and Asia prosper most, conspicuous in the list is China and Russia, presumably the Axis in any new war. China takes a massive numbers hit, but a unimportant percentage hit. Russia is unmoved. That would seem to rule out wars of food, wars of money, and wars with Russia or in Europe.

What type of singular event can kill several billion people in just 4 years, leaving some nations erased and some nations untouched? Not economic wars. Not conventional wars.

That leaves nuclear and biological war, almost certainly a first-strike surprise war. Clearly this will not be with Russia, which would take more injury in a counter attack, so a first strike surprise war from China, perhaps via close proxy North Korea, as they are the only two Axis countries that (presumably) take any damage. They are counter-attacked, but weakly. Their own allies, in SE Asia, are unharmed. Australia is depopulated and easy to conquer. As is the United States, but not Canada or Mexico. Note if they attacked India they would be nuked again and open second front in a land war in Asia against an equal power, and China leaves them alone for this round, the presumed Deagel scenario.

Now what did I just tell you a few weeks ago?

If China doesn’t conquer and colonize the United States, they die.

That seems true for Australia, or at least corollary. Here’s the same phrase: If China DOES conquer and colonize the United States, WE die.

Now why would they do that? Their people are rioting with dissent, of increased expectations that have been capped. There are more riots and protests in China than anywhere on earth, both in percentage, and sheer numbers, and riot of 250,000 is rightfully identified as a mortal threat. There are no longer any food exports worldwide. The U.S. and to some extent Australia are the only ones. China is the net food importer, having everything else. If they do not solve their food and space problem, they – or rather the CCP – are overthrown and die. If the CCP can solve the food and space problem, they are heroes, stay in power, and prosper for a generation.

Is there any reason to believe China would undertake such a unprecedented, violent act? Well, when we ask if they would murder 70% of all Americans, they are presently erasing 70% of all Uighers who are their own citizens, and in the most brutal, appalling, and mercantile ways. Taking their property. Selling their slave labor. Harvesting their live organs. Selling their women to a man-heavy population thanks to an earlier wave of murder and genocide. So if they are happy to kill 70% of their own people – who they consider inferior, not being Han, and are proud to the world about the fact – how much easier is it to kill 70% of your major rival and solve all your problems for 100 years?

It’s your Lebensraum for a Socialist State-Corporate entity, totalitarian, race-based, using the fascio of combining government, industrial, and corporate power into one. There could hardly be any difference, and are along the same timeline as 1938. They are imprisoning their own people by ethnic origin and social-credit cooperation scores, then killing them for efficiency, while the West denies this is happening and refuses to prepare or respond, or in fact gleefully cooperates with open concentration camps, buying and selling cheap misery.

Surely this is slander, from a military-complex site selling military hardware and predictions. There is nothing from the Chinese to substantiate such an attack.

“A senior Chinese general has warned that his country could destroy hundreds of American cities if the two nations clash over Taiwan.” –The Guardian This week clashing over Taiwan as China has escalated buzzing Taiwanese and American ships and airspace.

In 2005 “Major General Zhu Shin Hu, Dean of the National Defense University, Speaking at a lecture, he said “War logic dictates that a weaker power needs to use maximum effort to defeat a stronger rival. If the Americans draw their missiles and position guided ammunition on to the target zone on Chinese territory, I think we will have to respond with nuclear weapons.” And goes on to describe destroying hundreds of American cities in a nuclear war over Taiwan. 15 years ago.

=
Deputy Chief PLA Juang Won Kai, “ Americans should worry more about Los Angeles than Taipei. They will be using nuclear weapons in the Taiwan conflict.” Kai later was diplomat to the United States.

“20 years of the idyllic theme of ‘peace and development’ have come to an end, and concluded that modernization under the saber is the only option for China’s next phase. I also mention we have a vital stake overseas.”

More alarmingly, General Chi Houtian in a speech to the CCP before 2003, said, “in an online survey asking if Chinese would shoot at women, children, and prisoners of war, more than 80% answered in the affirmative. …The purpose of the survey is to…If China’s development will necessitate massive deaths in enemy countries, will our people endorse that scenario [and] be for…it?”

After highlighting the similar youth propaganda departments he says,

China is alarmingly similar to Germany back then. Both of them regard themselves as the most superior races; both of them have a history of being exploited by foreign powers and are therefore vindictive; both of them have the tradition of worshiping their own authorities; both of them feel they have seriously insufficient living space; both of them raise high the two banners of nationalism and socialism and label themselves as ‘national socialists’; both of them worship ‘one party, one state, one leader, one doctrine.’”


“We don’t have to worry about the labels of ‘totalitarianism’ or ‘dictatorship’. Whether we [the CCP] can forever represent the Chinese people depends on whether we can succeed in leading the Chinese people out of China. …Whether we can lead the Chinese people out of China is the most important determinant of the CCP”.

Lebensraum. Living space. Down the Silk Road. Expansion, conquest that – according to their own party and generals – is the only way the CCP leadership survives. Nationalist, hypermilitary expansion is the last hallmark of fascist regimes, a most grave one, as other nations therefore cannot entirely respect national boundaries and sovereignty.

How will they lead the Chinese out and conquer new lands?

“Once we open our doors, the profit-seeking western capitalists will invest capital and technology in China to assist our development so they can occupy the largest market in the world. …the most favorable environment for foreign capital, foreign technology, and advanced experience in China. …China’s economic expansion will inevitably come with significant development in our military forces, creating conditions for our expansion overseas. …China…is advancing into the world and has become unstoppable.”

“Solving the issue of America is key to solving all other issues. This makes it possible for us to have many people migrate there and establish another China under the CCP. …America was discovered by the yellow race [and] we are entitled to the possession of the land.

…The residents of the yellow race have a very low social status in the United States. We need to liberate them. After solving the ‘issue of America’, the western countries of Europe will bow to us , not to mention Japan, Taiwan…” – General Chi Haotain

Lebensraum. The master race. Liberating nations as a duty to their racial brothers. At the expense of inferior races.

“We must transcend conventions and restrictions. In history, [one] could not kill all the people in the conquered land because you could not kill people effectively [enough]. …Only by using special means to ‘clean up’ America will we be able to lead people there. This is the only choice left to us. It is not a matter of whether we are willing.


…What kind of special methods do we have to ‘clean up’ America? …We are not as foolish as to want to perish together with America by using nuclear weapons… There has been a rapid development in modern biological technology, and new bio-weapons have been developed one after the other. …We are capable of ‘cleaning up’ America all of a sudden. Lethal weapons that can eliminate mass populations of the enemy country.”

But it’s not all bad:

“From a humanitarian perspective, we should issue a warning to the American people and persuade them to leave America and leave the land to the Chinese people. Or they should at least leave half of America to be China’s colony…but if this strategy does not work, there is only one choice left…”

“That is, use decisive means to ‘clean up’ America in a moment. …Historical experience has been that as long as we make it happen, nobody in the world can do anything about us. Furthermore, if the United States as leader is gone, then our other enemies have to surrender to us.”

If the Americans do not die, then the Chinese have to die. If the Chinese are strapped to the land, a total societal collapse is bound to take place. …[Then] more than half the Chinese people will die, and that figure will be 800 million. …The Great Collapse will occur at any time and more than half the population will have to go. …The population can be reproduced. But if the Party falls, everything is gone, and forever gone.”

How very like our own Western leaders.

Cool story bro. I feel for your position. Now let me ask you a question: If you knew you were running out of food and space, why did you pave every rice paddy and poison every river? Wouldn’t you rather take 6 time zones of Russian lands which are lush, actually empty, and on your own border? And how ARE you out of space when the entire Gobi desert, or indeed much of north and western China, are as empty as the United States?

You might not have heard, but most of the United States was also considered a desert, a wasteland from Iowa to San Diego that would never be occupied by humankind, yet through hard work and imagination we created the innovation that has made our prosperity and our population possible. It only seems easy now, in hindsight, like some automatic miracle we didn’t deserve. Yet, in the most high-tech era ever recorded, I think no less of the power of men on the Silk Road or Mongolia.

So perhaps I’m asking: are you really sure you NEED to do this? Or is it just that America is big, rich, and shiny and you WANT to do this? You WANT to do to Americans what you do to the Uighurs. Because I strongly suspect the latter.

The specifics of their plan was revealed elsewhere, the “1, 3, 5, 7, 9 Plan”
1 Create a bioweapon
3 Make it available in three years (from 2017)
5 Insure effectiveness for 5 years.
7 Paralyze the 7 Western countries including Japan and India.
9 Release vaccines 9 months later to blackmail the world.

Now, is that the plan that was just attempted in 2019? Or was that a beta test for a real, upcoming attack? Was this genocide deflected, the payload of the “China Virus”, hollowed out, only narrowly missed? Or is that mere slander? Do we know? Can we tell?

The West of course would fight such an attack. In 1994, in a world conference in San Francisco’s Fairmont Hotel including H. Bush and M. Thatcher, Xin He reported, “The outstanding people of the world attendance thought that in the 21st century a mere 20% of the world’s population would be adequate to maintain the world’s economy and prosperity. The other 80% will be human garbage, unable to produce…high-tech means should be used to eliminate them gradually .”

That also sounds like our Western leaders.

Remember “Event 201”, promoted by these very same ‘outstanding people’? “ In the simulation, the virus infected the globe within six months, and killed 65 million people, triggering a global financial crisis. All of this took place just months before COVID-19 emerged.” Gee that sounds familiar. Good timing too. So good it almost defies credulity.

This goes along with the long-held rumor that the U.S. was planned and positioned to be in a war and to lose it. Many aspects, from causing unnecessary and unusual internal strife, to the complete erasure of our manufacturing and production – except for food – as well as our sale or loss of most military secrets to China, support such a hypothesis. Then there is the open exposure of Chinese agents with Feinstein for 20 years, and Swalwell, both of whom were on high-level committees.

Worse, when this was exposed, nothing was done, hinting at a much deeper level of capture, where some agents and proxies appear to be clearly covering and supporting other Chinese proxies against the interests of the people of the United States. They do not explain how they thought it remotely possible that with 20% of the population they could defend a rich, empty, unproductive West from complete, inevitable Chinese conquest. Perhaps China did not remind them.

The problem could be, it probably is, far deeper, harder, graver, and wider than we on the outside can contemplate. While I disagree – for in a democracy the people must be informed to make hard, informed decisions – we can see that many times the attempt has been made to inform people, and the facts are widely and regularly rebuffed and rejected. If you started here, where I have, the general population would say you were simply being political, ginning up for more war profits, or are simply lying and making it up simply because they haven’t heard it before. The truth has been intentionally withheld in favor of colored trinkets for 40 years. All attempts to prevent it have been shot down. That isn’t reversed in a day.

Now I’m not saying Deagel is right. Already they’ve had to update their 2015 prediction. However, we can infer from this that the present situation is far more complicated than cartoon. Far deeper and more grave than Twitter. It transcends one man, one party, or even one generation. And can help illuminate why certain positions, certain actions, certain reactions, and certain IN-actions, may have happened right now.

While I don’t personally feel this is our future, I do believe the situation as described is entirely true. There are such opinions and such plans and such weapons. Therefore it should be dealt with in our own lives, and in the actions of our country, in the firm, defensive preparations that Americans are known for. Regardless of such a war, which should naturally be avoided, a number of other responses are indicated:

1) Remove as much reliance on China as possible without crippling them either. We already learned we do not have medicines, masks, rare earths, or semiconductors here, as well as learning their steel and raw materials may be intentionally substandard and undermining. This especially includes communications infrastructure.

2) Our own nation needs much attention and support with the re-opening of our own parallel manufacturing that must also be dispersed so as not to be a single target for destruction or capture.

3) The U.S. Dollar and financial system is wholly established on financeering and imports. This comes from the too-high dollar and world reserve currency that necessitates the destruction of internal production and complete hollowing of business, culture, politics, psychology, society, and morality. Yet its reversal and replacement will be extremely disruptive, and the loss of the reserve currency will quite suddenly drop us from emperor to peer. Nevertheless, this can not be delayed or avoided.

4) The U.S. Military, with the loss of the reserve currency, must retreat home, and therefore needs to re-tool and re-position rapidly to a defensive role, while still maintaining the overwhelming deterrent effect on China, and helping allies – thus preventing China from taking over the world nation-by-nation. Defense is enormously cheaper and easier, and as an ally, not an empire, our position would be far easier and more supported. This published reality may cause other nations to take more action than we could alone. While at home we may follow the Swiss model of having every man capable of arms and the materials secretly cached and available in each town.

5) While we may not have to come back to God to have the internal sense of equality, justice, morality, and enthusiasm for self-denial and hardship this will require, historically nothing else has sufficed for the righting of the ship and return to a forgiving, cohesive unity, and not weakening, atomized discord.

6) Along with our own ports, canals, rivers, grids, and mines, we need to maintain our own food production and distribution, and counter-intuitively sell it to our own rival or enemy. First, cutting off food must cause a certain war just as the embargo of Japanese oil did in 1940. Second, and not innocently, food is a major export we already have when we are no longer an importer of exorbitant privilege. Not less, as equals, we can always promote ourselves as being a friend and thereby encourage our rivals to pass through where they are or what plans they may have in favor of a stable peace that advantages all. Or else, like Switzerland, we must be certain to communicate we will most assuredly make them wish they had for their plans will not succeed.

7) We must recognize that such weapons are a reality now that cannot be reversed but must be accounted for and avoided with new strategies and new consciousness that does not require gain at the expense of others. The experience of the U.S. in making deserts bloom with the simplest tools is a good example.

Now these are easily supported by all Americans, all except the very few who are profiting by the existing system. So should there be a war or no war, with China or no China, all these responses are good for the country, the individual, and the world.

They are also workable in our own lives. As we’ve seen recently with massive, unpredictable, and longstanding supply disruptions that are only cured with more local production, smaller businesses, and local food. We see how having far more preparation, far more resiliency, far more local support, are important, both in hardship, but in our daily lives as well. Producing more, with more meaning, and consuming less, but better, are the only ways we can exit both this peril, and our own national failings at home.

 

 

 

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Feb 132020
 


Saul Leiter 463 1956

 

Hubei’s Coronavirus Cases Rise 10-Fold After Change In Diagnostic Criteria (SCMP)
COVID-19 Coronavirus Cases (Worldometer)
Novel Coronavirus (COVID-19) Mortality Rate (Worldometer)
44 More Cases On Diamond Princess Cruise Ship Anchored Off Japan (SCMP)
WHO Team Arrives In China As Wuhan Coronavirus Deaths Top SARS (CNN)
Beijing’s Purge Over Virus Takes Down Top Communist Party Officials In Hubei (SCMP)
Botched Wuhan Quarantine Left Dead Bodies In The Street (ZH)
What Happened After One Chinese Company Reopened After The Corona-Chaos (ZH)
China Struggles To Balance Coronavirus Containment With Economic Cost (SCMP)
Protecting The US From Global Pandemics (Scott Gottlieb)
South Korea’s Moon Says Virus Epidemic To End Soon (YNA)
Epidemics Are Tough To Turn Into Profit (R.)

 

 

Major developments today (overnight for many) with regards to the COVID19 coronavirus. Probably not so much in infections or deaths per se (at least not that we know), but in the way(s) cases are reported. Or, if a spade is called a spade, the way they have been severely underreported so far.

What happened is Hubei’s health commission changed the diagnostic criteria used to confirm cases. And that looks something like this:

 

 

Which leads to this global picture:

 

 

What it comes down to is Hubei used to count cases according to “the old method”, which required clinical diagnosis PLUS testing, and has now switched to “the new method”, in which clinical diagnosis suffices. “Clinically diagnosed cases” here means those cases that show up positive on a CT scan (CT: computed tomography, a way to “look at” internal organs). The changes are in red in the doc:

 

 

Basically, “showing up positive on a CT scan” refers to the detection of pneumonia. For weeks, officials maintained that in an area under heavy siege of a disease for which pneumonia is one of the main symptoms, additional testing was mandatory to confirm a case as COVID19. Yeah, that’s a little crazy.

Ironically, the WHO went along with these counts based on “the old method”, with its chief effusively praising China for its efforts to combat the virus, but the switch to “the new method” comes just two days after a first team of WHO specialists arrived in China, which will “lay the groundwork for a larger international team.” Looks like Beijing has lost control.

The Party understood that it would no longer be able to keep up appearances, so it fired a whole bunch of politicians (Wuhan Party Chief et al) and other functionaries, appointed others in their place, and now vows a fresh start without the Party being blamed for a thing. And it can say nothing really changed, there is no large amount of additional cases, it’s all just a diagnostic ”tweak”.

Still, this hides the reasons behind the diagnostic changes: China either doesn’t have enough testing kits, or can’t get them out -and used- in the field fast enough. And that means too many potentially infectious patients are out there able to spread the virus. Add the WHO team of specialists to the mix and they chose to do damage control.

 

 

All of which leads to these provisionary official numbers:

 

 

Obviously, this has blown all previously referenced models out of the water.

Even JPMorgan’s most pessimistic case can’t keep up. Everybody needs to go back to the drawing board. And will do so, much more suspicious of anything China says from here on in. Tomorrow’s official numbers are likely to “normalize” again, 2,000 new cases, 90 deaths, that sort of thing. But they will now be reported with big question marks. Still, politicians and media alike, whether in the west or in China, will tell you things are improving. They can’t help themselves. But you can.

 

 

Here are some of the relevant news stories. Regular news in the Automatic Earth Debt Rattle will follow later today.

 

 

“Hubei’s new confirmed cases pegged at 14,840, nearly 10 times more than the previous day, while deaths more than doubled to 242.”

Note: that may look like a mortality rate of 20%, but that is far too high. Then again, 2% max doesn’t look tenable anymore either. More on that below.

Hubei’s Coronavirus Cases Rise 10-Fold After Change In Diagnostic Criteria (SCMP)

Health authorities in China’s Hubei province – the epicentre of the coronavirus epidemic – reported on Thursday 14,840 new confirmed cases, almost 10 times the number reported a day earlier, and new deaths attributable to the contagion rose to 242, more than double on the day. This brings the totals announced by the province’s health commission to 48,206 and 1,310, respectively, as of Wednesday. Officials in Hubei had reported 94 fatalities and 1,638 newly confirmed cases a day earlier. Hubei’s health commission said in its daily statement that it had changed the diagnostic criteria used to confirm cases, effective Thursday, meaning that doctors have broader discretion to determine which patients are infected.

“From today on, we will include the number of clinically diagnosed cases into the number of confirmed cases so that patients could receive timely treatment,” the health authority said. Previously, patients could only be diagnosed by test kits, which has seen a shortage of supply across the country. Tong Zhaohui, an expert in the central guidance group and vice-president of Beijing Chaoyang Hospital, said the move was in line with the National Health Commission’s latest diagnostic guidelines to include clinical diagnosis, using CT scans and other tests. “When doctors diagnose pneumonia, they can only get the etiology of the disease 20 to 30 per cent of the time. We have to rely on clinical diagnosis 70 to 80 per cent of the time. Increasing the diagnosis of clinical cases will help us make an additional judgment on the disease,” he told state broadcaster CCTV in an exclusive interview.

[..] Some 13,436 of the new cases announced on Thursday were confirmed in Hubei’s capital of Wuhan …

Read more …

The mortality rate looks bad. See more in next article. (h/t Doc Robinson)

COVID-19 Coronavirus Cases (Worldometer)

There are currently 60,373 confirmed cases and 1,369 deaths from the Wuhan Novel Coronavirus (2019-nCoV) outbreak as of February 13, 2020, 05:20 GMT. The condition of patients, according to the World Health Organization (Feb. 7 press conference) and based on 17,000 cases in China, are: • 82% mild •15% severe •3% critical


“Total Cases” = total cumulative count (60,373). This figure therefore includes deaths and recovered/discharged patients (cases with an outcome). By removing these from the “total cases” figure, we get “currently infected cases” (cases still awaiting for an outcome). The charts include provisional data and values for Feb. 12 that are the result, for the most part, of a change in diagnosis classification, for which an additional 13,332 cases and 107 deaths were counted on Feb. 12..

Read more …

Mortality rate in Hubei/mainland China looks awful at 18%. Is that just because no “light” cases are counted, which the world outside China does seem to do?

Novel Coronavirus (COVID-19) Mortality Rate (Worldometer)

Let’s take, for example, the data at the end of February 8, 2020: 813 deaths (cumulative total) and 37,552 cases (cumulative total) worldwide. If we use the formula (deaths / cases) we get: 813 / 37,552 = 2.2% CFR (flawed formula). With a conservative estimate of T(ime) = 7 days as the average period from case confirmation to death, we would correct the above formula by using February 1 cumulative cases, which were 14,381, in the denominator: Feb. 8 deaths / Feb. 1 cases = 813 / 14,381 = 5.7% CFR (correct formula, and estimating T=7).

T could be estimated by simply looking at the value of (current total deaths + current total recovered) and pair it with a case total in the past that has the same value. For the above formula, the matching dates would be January 26/27, providing an estimate for T of 12 to 13 days. This method of estimating T uses the same logic of the following method, and therefore will yield the same result. An alternative method, which has the advantage of not having to estimate a variable, and that is mentioned in the American Journal of Epidemiology study cited previously as a simple method that nevertheless could work reasonably well if the hazards of death and recovery at any time t measured from admission to the hospital, conditional on an event occurring at time t, are proportional, would be to use the formula:

CFR (case fatality rate)= deaths / (deaths + recovered) which, with the latest data available, would be equal to: 1,369 / (1,369 + 6,032) = 18% CFR (worldwide) If we now exclude cases in mainland China, using current data on deaths and recovered cases, we get: 2 / (2 + 76) = 2.6% CFR (outside of mainland China) The sample size above is extremely limited, but this discrepancy in mortality rates, if confirmed as the sample grows in size, could be explained with a higher case detection rate outside of China especially with respect to Wuhan, where priority had to be initially placed on severe and critical cases, given the ongoing emergency.

Unreported cases would have the effect of decreasing the denominator and inflating the CFR above its real value. For example, assuming 10,000 total unreported cases in Wuhan and adding them back to the formula, we would get a CFR of 7.9% (quite different from the CFR of 18% based strictly on confirmed cases). Neil Ferguson, a public health expert at Imperial College in the UK, said his “best guess” was that there were 100,000 affected by the virus even though there were only 2,000 confirmed cases at the time. [11] Without going that far, the possibility of a non negligible number of unreported cases in the initial stages of the crisis should be taken into account when trying to calculate the case fatally rate.

Read more …

Ship has 2,600 passengers, 1,100 crew. Only a few hundred have been tested. And we get it, it’s very hard to isolate that many untested people off the ship, where do you get the accomodation.

Now crew members are increasingly getting infected, while attending to the passengers. A crew member told CNN the quality of meals is getting real good, children get new toys every day etc.

The same crew member said she herself waited for 2 days to see a doctor. Crew also don’t have private rooms. They must be very anxious.

44 More Cases On Diamond Princess Cruise Ship Anchored Off Japan (SCMP)

Another 44 people on board a cruise ship moored off Japan’s coast have tested positive for the novel coronavirus, the country’s health minister said on Thursday. Health Minister Katsunobu Kato said the 44 new cases were detected from another 221 new tests. They raise the number of infections detected on the Diamond Princess to 218, in addition to a quarantine officer who also tested positive for the virus. Kato said authorities now want to move elderly people off the ship if they test negative for the virus, offering to put them in government-designated lodging. “We wish to start the operation from tomorrow or later,” Kato told reporters.


Of the newly diagnosed infections, 43 are passengers, and one a member of the crew. The Diamond Princess set off from Hong Kong on January 25 for a trip scheduled to end on February 4. Instead, it has been moored off Japan since February 3, after it emerged that a former passenger who disembarked in Hong Kong last month had tested positive for the virus now named Covid-19.

Read more …

At the WHO, the administrative leadership is miles apart from the medical specialists. The latter are now taking over.

WHO Team Arrives In China As Wuhan Coronavirus Deaths Top SARS (CNN)

The number of deaths from the Wuhan coronavirus had risen to over 1,000 by Tuesday morning, as experts from the World Health Organization (WHO) arrived in China to assist with controlling the epidemic. Chinese health authorities said 108 people died from the virus in mainland China on Monday, with the majority of those deaths occurring in Hubei province, the capital of which is Wuhan – the city where the virus was first found. The total number of deaths stands at 1,018, all but two of those in mainland China. Globally, 43,114 have now been diagnosed with the virus, again with the majority in China. Around 4,000 patients have been treated and released from hospital in China since late December.


A team of World Health Organization (WHO) experts landed in China on Monday. The organization’s director general, Tedros Adhanom Ghebreyesus, said they will “lay the groundwork for a larger international team,” which will join them “as soon as possible.” The WHO group in China is led by Bruce Aylward, who helmed the body’s response to Ebola, as well as initiatives for immunization, communicable diseases control and polio eradication. Their arrival comes as the WHO is facing increasing criticism for its initial decision not to declare a global health emergency, and for officials’ effusive praise of China’s handling of the crisis, even as Beijing faces outrage domestically for, among other things, the death of whistleblower doctor Li Wenliang, and the subsequent censorship of that news.

Read more …

Spring cleaning.

Beijing’s Purge Over Virus Takes Down Top Communist Party Officials In Hubei (SCMP)

Beijing’s purge of officials in Hubei province picked up pace with the removal of the top Communist Party leaders in the region as the central government responded to public anger over what is seen as a botched response to the deadly coronavirus outbreak in the region. China’s official Xinhua news agency reported that Hubei party secretary Jiang Chaoliang will be replaced by Shanghai Mayor Ying Yong, 61, a close ally of Chinese President Xi Jinping. The Communist Party leader of Wuhan city Ma Guoqiang, 56, is also set to be dismissed, according to a person familiar with the development who was not authorised to speak on the issue. Ma will be replaced by Wang Zhonglin, 57, party secretary of Shandong’s provincial capital Jinan.


Jiang, 61, is the highest-ranking political casualty so far in the outbreak, which has killed more than 1,100 people in mainland China, the vast majority in Hubei and its capital, Wuhan city. As details have trickled out on how local officials mismanaged the outbreak, public anger has swelled on social media. Academics have also signed a public petition to demand free speech after the police punished doctors who raised the early alarm about the outbreak. “Sending Ying Yong and Wang Zhonglin to Hubei shows the central government is determined to fix Hubei and give people answers. The cadres there have been really disappointing,” the unnamed person said. “The outbreak cost the party dearly. Those who are responsible will be held accountable.”

Read more …

“Then on day 8, the reporters saw their first dead body in the street. He’s a man, in his sixties, who is lying on his back in front of a closed furniture store. Officials in hazard suits slowly approach the body, taking every conceivable precaution.”

Botched Wuhan Quarantine Left Dead Bodies In The Street (ZH)

[..] few have captured the atmosphere of the situation quite like a team of AFP journalists who lingered in Wuhan after the lockdown, and have detailed their experiences in diary format. The diary begins on Jan. 23, the day Wuhan was placed under lockdown. It starts as one might expect: Though the news was a shock, few tried to escape the city before the lockdown officially went into effect. Police chase the last travelers out of the railroad station. But the situation doesn’t really start to escalate until Jan. 25, or New Year’s Day in China. Those who went to worship at the city’s Guiyan temple, normally packed this time of year, found it empty: nobody was allowed inside.

“No-one is allowed inside in order to prevent the virus spreading,” a uniformed man – who is not wearing the compulsory mask – tells AFP. On the fourth day of the crackdown, conditions in Wuhan really started to deteriorate. This marked the beginning of hard times for Wuhan. Overwhelmed hospitals arbitrarily turned people away if their swab tests came back negative for the virus. One man told an AFP reporter that he had been turned away by four hospitals, despite being seriously ill. “I haven’t slept,” he said. He was getting ready to wait in line all night to hopefully be admitted to another hospital. For the first in their memory, the AFP reporters said Chinese out on the streets approached them to complain about the government’s handling of the lockdown.

“Like a horror film,” says one witness, who tells AFP bodies were left unattended for hours. [..] On day 6, the AFP spoke to a French doctor who had decided to stay in Wuhan, a Dr. Philippe Klein. “It’s not an act of heroism,” he said. “It’s been well thought out, it’s my job.” More signs of the government crackdown are beginning to appear: Guards take the temperature of customers at supermarkets and other stores hawking essential goods. Then on day 8, the reporters saw their first dead body in the street. He’s a man, in his sixties, who is lying on his back in front of a closed furniture store. Officials in hazard suits slowly approach the body, taking every conceivable precaution.

Read more …

Well, you can’t say I didn’t warn you. This is precisely what I warned about. And the new numbers will do nothing to restore any confidence at all.

What Happened After One Chinese Company Reopened After The Corona-Chaos (ZH)

Today, two days after China officially returned to work, we got the first confirmation of just how catastrophic Beijing’s order to local enterprises and businesses to rush back reboot the economy could be, when Jennifer Zeng reported that a company in Suzhou reopened, and immediately at least one CoVid2019 case found. As a result, the company’s 200+ employees couldn’t go home and were immediately placed under quarantine. At least the workers managed to “organize” quilts for themselves. This is just the first such case. Expect many more – especially across Hubei and its neighboring provinces – as latent cases of Coronavirus which were never caught and cured spark new infections and mini epidemics, all of which dutifully captured on a smartphone clip for everyone in China to watch and freak out even more.

Which reminds us of another comment from Rabobank, which last week explained why the dilemma facing China is “truly awful”: The quandary for China between releasing the quarantine straitjacket in days to stop its economy from getting truly sick, and allowing a virus like this to spread further as people start to mingle again is truly awful. There are no good options. For a world with a serious lack of final end-demand, and which has been relying on China, along with increasingly “Chinese” central banks, this is going to be a nasty shock either way that Mr Market is treating like he is Mr Magoo.

And since Beijing has no way out, especially since the epidemic is still raging despite Beijing’s “doctored”, no pun intended, infection and death numbers, expect China to unleash the most draconian censorship crackdown on any reports Covid-2019 has not only not been purged but is making unwelcome appearances across China’s enterprises, which will be quietly put under blanket quarantine even as Beijing pretends that all is well and its economy is once again humming on all cylinders until eventually the epidemic reaches a critical mass and China has no choice but to once again admit the full extent of the social and economic fallout. And just like in the case of SARS, don’t expect such “honesty” to emerge for at least several weeks if not months.

Read more …

“The city governments of Zhongshan and Foshan in Guangzhou province have postponed the resumption of work until March 1, while companies must apply for special permission in Hangzhou, the capital of Zhejiang province. The local administration has so far only given the green light to 1,462 out of nearly 30,000 companies based in the city”

Will these party officials be fired for being too strict?

China Struggles To Balance Coronavirus Containment With Economic Cost (SCMP)

To work or not to work – that is proving a crucial question for Chinese officials, companies and employees as the world’s second largest economy struggles to balance the risk of the deadly coronavirus with the need to resume business. Most provinces across China restarted operations on Monday after an extended Lunar New Year holiday, but an influx of workers returning from their hometowns is posing a headache for authorities. The coronavirus, which has killed more than 1,100 people and infected nearly 45,000, shows few signs of being contained, stoking fears of a potential spike in infections as people return to work. While the central government has made it clear that containing the outbreak is an overriding priority, Communist Party leaders know they cannot afford to freeze industrial production indefinitely, especially as China’s economy grows at its slowest pace in decades.

[..] As the virus has spread from Hubei’s provincial capital Wuhan, authorities across China have imposed travel restrictions, cancelled public events and locked down neighbourhoods. Last week, the government of Suzhou, a major manufacturing hub in Jiangsu province, which is known for its silk products, asked local communities to tell workers from Hubei and Zhejiang provinces not to return until further notice. This employee “blacklisting” was echoed by other cities, including Wuxi in the south of Jiangsu, which banned migrant workers from at least seven provinces. While most provincial level governments have urged companies to resume operations this week, officials at local levels are dragging their feet.

The city governments of Zhongshan and Foshan in Guangzhou province have postponed the resumption of work until March 1, while companies must apply for special permission in Hangzhou, the capital of Zhejiang province. Once approved, employees are required to report their body temperatures to local authorities daily. The local administration has so far only given the green light to 1,462 out of nearly 30,000 companies based in the city, an approval rate below 5 per cent. Small and medium-sized enterprises in China, which are a cornerstone for employment and social stability, are at most risk from the efforts to contain the outbreak. A recent survey conducted by researchers from Tsinghua and Peking universities in Beijing, two of China’s top institutions of higher learning, found that 67.1 per cent of small and medium-sized enterprises had only enough financial reserves to sustain operations for two months if revenues dried up. The survey of 995 companies also found that 30 per cent expected revenues to shrink by at least half from 2019.

Read more …

In case the virus didn’t scare you enough:

“80 percent of the U.S. supply of antibiotics are made in China…”

Protecting The US From Global Pandemics (Scott Gottlieb)

About 40 percent of generic drugs sold in the U.S. have only a single manufacturer. A significant supply chain disruption could cause shortages for some or many of these products. Last year, manufacturing of intermediate or finished goods in China, as well as pharmaceutical source material, accounted for 95 percent of U.S. imports of ibuprofen, 91 percent of U.S. imports of hydrocortisone, 70 percent of U.S. imports of acetaminophen, 40 to 45 percent of U.S. imports of penicillin, and 40 percent of U.S. imports of heparin, according to the Commerce Department. In total, 80 percent of the U.S. supply of antibiotics are made in China.

While much of the fill finishing work (the actual formulation of finished drug capsules and tablets) is done outside China (and often in India) the starting and intermediate chemicals are often sourced in China. Moreover, the U.S. generic drug industry can no longer produce certain critical medicines such as penicillin and doxycycline without these chemical components.iv According to a report from the US-China Economic and Security Review Commission, China’s chemical industry, which accounts for 40 percent of global chemical industry revenue, provides a large number of ingredients for drug products.

It’s these source materials – where in many cases China is the exclusive source of the chemical ingredients used for the manufacture of a drug product – that create choke points in the global supply chain for critical medicines. Moreover, when it comes to starting material for the manufacture of pharmaceutical ingredients, a lot of this production is centered in China’s Hubei Provence, the epicenter of coronavirus. Most drug makers have a one to three-months of inventory of drug ingredients on hand. But these supplies are already being drawn down. Among big API makers in Wuhan are Wuhan Shiji Pharmaceutical, Chemwerth, Hubei Biocause, Wuhan Calmland Pharmaceuticals.

[..] We’re facing the potential for unprecedented supply chain disruptions. You can’t easily switch component part suppliers — either starter material for the manufacture of drugs or components for device devices. You have to qualify those alternative sources, make sure they meet regulatory standards for Good Manufacturing Practices (GMPs), and meet the conditions set by those incorporating these materials into their finished goods. Even if FDA is able to offer manufacturers flexibility in making these component changes, substitutions are often complex.

Read more …

Some people are just not all that smart.

South Korea’s Moon Says Virus Epidemic To End Soon (YNA)

President Moon Jae-in expressed confidence Thursday that South Korea will soon bring the novel coronavirus pandemic under control and stressed it is time to resume full-scale efforts to revitalize the economy, meeting with a group of local business leaders. “COVID-19 will be terminated (in South Korea) before long,” he said, using the official name of the disease, during the session held at the Korea Chamber of Commerce and Industry (KCCI) in Seoul. Fortunately, he said, domestic quarantine management “appears to have entered a stable stage to some extent,” although it is still too early to be complacent. He emphasized that quarantine authorities here would continue their efforts “until the end” to contain the virus.


The president voiced regret once again over the outbreak’s negative impact on the country’s economy, which he said had been showing clear indications of recovery. “It’s very regrettable that the ankle of the economy has been seized by the occurrence of the COVID-19 incident,” Moon told the attendees including Samsung Electronics Vice Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won, CJ Group Chairman Lee Jae-hyun and Park Yong-maan, chairman of the KCCI. “Now, it’s time for the government and business circles to join forces and revive the recovery trend of the economy,” Moon said. He reaffirmed the government’s resolve to ramp up its bid to create more jobs with massive investment projects and support private firms with “bold” tax incentives and regulatory reform.

Read more …

And here’s for the morally challenged. If it won’t make us rich, we should we develop a vaccine?

Epidemics Are Tough To Turn Into Profit (R.)

Epidemics are catastrophic for humans, and it turns out they aren’t much better for healthcare companies. The number of confirmed cases of the new coronavirus has multiplied more than 80-fold over three weeks despite measures such as travel bans, and exceeded 45,000 across 26 countries on Wednesday, according to researchers at Johns Hopkins University. Tests and treatments are in demand. Yet past events like SARS show slow research, high production costs and political pressure on pricing often add up to disappointing returns. Tests for the virus now called SARS-CoV-2 are here. These are vital for diagnosing, isolating carriers, and tracking exposure.

Meridian Bioscience saw its stock pop on news it had developed a test, but the shares then dropped as investors realized Roche, Qiagen and others would all fight for thin margins. So far, none of the stocks has moved much. A treatment has better profit potential, as competition probably will be limited. The snag is, proving a drug’s effectiveness typically takes years. There are already multiple trials started using existing anti-viral treatments, and potential new drugs by Gilead Sciences and Regeneron Pharmaceuticals have begun testing, or will soon. Even if one company hits the jackpot, production can be a problem. Flu fears in 2009 made Roche’s Tamiflu a blockbuster. But securing enough production of spice star anise to make the drug proved troublesome.

The best long-term hope for coronavirus control is a vaccine. Old-school giant Novartis, biotechnology outfit Moderna and others want to make one. But drug development is hard, and vaccines can be particularly tricky due to viral mutation. World Health Organization chief Tedros Adhanom Ghebreyesus said on Tuesday a vaccine might be available in 18 months, a long way off even assuming no hiccups. Vaccines can be profitable for endemic diseases – Pfizer sold $1.6 billion of a pneumonia vaccine last year. But the outbreak of Severe Acute Respiratory Syndrome in 2003 flared up and hasn’t been seen in humans since. SARS-CoV-2 might follow the same path.

Read more …

 

 

 

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Feb 052020
 


Max Ernst Inspired hill 1950

 

Hi, it’s me again, with more virus stories. I know you may think it’s enough now, but I do want to do this one. Actually, I haven’t written all that much about it, just two essays, 2019-nCoV and The Party and the Virus, but the topic has become a staple of my daily Debt Rattle news aggregators lately. So much that I find I need to remind myself all the time that it’s been a news item for only two weeks, going back to January 20 or so.

Through those two weeks, I’ve seen a number of studies, simulations, models, of where the virus can be expected to go going forward. And I want to take a look at some of them. I said early on that I didn’t like people talking about the economy as soon as the first people died, but 2 weeks later, given the growth of the epidemic, that doesn’t appear avoidable anymore.

People are starting to wonder what’s going to happen to society at large, and in “the markets” -or what’s left of them after central bank manipulation- if and when the virus remains an issue for an X amount of time. I think I can explain some of the parameters, though I want to make clear predicting what viruses do is, even for virologists, crystal ball material, and I ain’t got one of those.

 

China injected $242.74 billion into the markets via reverse repos on Monday and Tuesday, and stocks seem to have made up for their $445 billion losses on Monday. But what exactly is that optimism based on? Is it that “investors” think the PBOC will have their backs no matter what? Is it the reports of companies like Gilead testing possible solutions, vaccines?

I’m not an expert, but I do know it takes a sophisticated drug company about a year to develop a drug/vaccine for a novel disease, as “WuhanCorona” is. From what I can gather, the Gilead drug (co-)tested by the Chinese is basically an anti-viral developed with Ebola in mind, which may or may not work. Ebola is somewhere related to “WuhanCorona”, in a third cousin twice removed kind of way, but that’s it. HIV drugs could also perhaps work to some extent, but that’s a big question.

So what the optimism in the “markets” is based on, you tell me. Are people so afraid of what might be coming that their minds switch off, are they afraid to get informed, or do they genuinely think it’ll all soon be over? Me, I hope it’ll turn out fine, but I wouldn’t put any money on it. And that’s based on what I’ve been reading.

 

When reporting on the Wuhan situation started for real in the west, let’s say January 20 (that’s just 16 days ago!), there were 291 registered infection cases. There are 27,648 now, and 564 people have died. Those are “official” Chinese numbers, and there are plenty doubts about their accuracy (see today’s stories about Tencent posting 10x higher numbers), but let’s roll with the official ones for the moment. I’m going to hop through time a little, but please bear with me, there is a logic.

First, there’s this from January 28 in the SCMP (South China Morning Post), a major Hong Kong news outlet owned by -very Chinese- Alibaba. Zhong Nanshan is a scientist working for the government. My first reaction when I saw this was: it looks like he’s doing damage control for the CCP.

 

Chinese Experts Say Wuhan Coronavirus Outbreak Will Not Last

One of China’s top experts said the Wuhan coronavirus infection rate could peak in early February. “I estimate that it will reach its peak in around the next week or 10 days, after that there will be no more major increases,” said Zhong Nanshan, the respiratory disease scientist who played the pivotal role in China’s fight against the severe acute respiratory syndrome (Sars) coronavirus epidemic in 2002-03.


[..] Gao Fu, the director of the Chinese Centre for Disease Control and Prevention [said] he was “optimistic” that the outbreak’s “turning point” could arrive by February 8 if current disease control protocol is maintained.

3 days earlier, January 25 (that’s just 11 days ago!), the SCMP ran this piece on the same Zhong Nanshan, which reinforces my image of him a bit more. One might argue that Beijing has become more transparent recently, but the facts remain that for instance the WuhanCorona virus can be traced back to early December if not earlier, and that after the first death on December 9 no testing at all was done in Wuhan for a week.

Just to name a few things. So for a scientist to claim that “Beijing has no secrets to hide” and “has not held back information in reporting the outbreak in Wuhan” is at the very least over the top.

 

China Has Been Transparent About Wuhan Outbreak, Virus Expert Zhong Nanshan Says

Chinese officials have been transparent in handling the Wuhan coronavirus outbreak and the participation of a Hong Kong professor through the process indicates that Beijing has no secrets to hide, said one of the country’s leading experts on communicable diseases. Dr Zhong Nanshan, whose team is advising the leadership on how to handle the crisis, told a news conference in Guangzhou on Tuesday that China had not held back information in reporting the outbreak in Wuhan, which has sickened more than 300 people across the country since early December.

But also on January 25, there was this Zero Hedge piece about British scientist Jonathan Read, who had completely different ideas about the outbreak. Note: both predictions focus on Feb 4.

 

UK Researcher Predicts Over 250,000 Chinese Will Have Coronavirus In Ten Days

[..] in 10 days time, or by February 4, 2020, Read’s model predicts the number of infected people in Wuhan to be greater than 250 thousand (with an prediction interval, 164,602 to 351,396); [..] Read estimates that only 5.1% of infections in Wuhan are identified (as of Jan 24)..


[..] Read’s model alleges that Beijing was woefully late in its response and that recently imposed “travel restrictions from and to Wuhan city are unlikely to be effective in halting transmission across China; with a 99% effective reduction in travel, the size of the epidemic outside of Wuhan may only be reduced by 24.9% on 4 February.”

Very different. Remember his “travel restrictions from and to Wuhan city are unlikely to be effective in halting transmission across China”, it’ll come in handy later. Now, I’ve been posting a few math sequences, Fibonacci and otherwise, and those are way too negative, or at least would seem to be.

Problem with that is, as with many facets of the whole thing, we don’t know. There are simply too many scientists who state that real infection- and fatality numbers are much higher than what Beijing reports. They do that based on models, simulations etc. Not because they want The Party (CCP) to look bad, but because the models tell them.

An example: SCMP reported early Tuesday that the mortality rate for the city of Wuhan has reached 4.9%, while the mortality rate for Hubei province as a whole is 3.1%. They added that the mortality rate is predicted by doctors to drop, because extra medical attention is available etc. But we know that extra attention threatens to be overwhelmed by too many patients, shortages of beds, equipment, test kits, protective clothing etc. Nice try, but…

 

All this just to get to why I started writing this, which is a report published at The Lancet on January 31, from Hong Kong University (HKU). I have cited previously that it estimated 75,815 people had been infected in Wuhan on January 25, a far cry from the 1,300 official number at that point. And yes, I do want to use the discrepancy to cast at least some doubt on the official numbers.

But there’s something else that I would like to focus on. The same report also says that the epidemic -or episode, pandemic- would end “around April” 2020, so between, say, mid-March and mid-May, 6 weeks and 14 weeks from now, if certain conditions are met. And that’s just Wuhan. Add another 2 weeks “across cities in mainland China”.

The full name of the paper by Prof Joseph T. Wu, PhD, Kathy Leung, PhD and Prof Gabriel M. Leung, MD is “Nowcasting and forecasting the potential domestic and international spread of the 2019-nCoV outbreak originating in Wuhan, China: a modelling study”

It says: “We estimated that if there was no reduction in transmissibility, the Wuhan epidemic would peak around April, 2020, and local epidemics across cities in mainland China would lag by 1–2 weeks.”

[..] In this modelling study, we first inferred the basic reproductive number of 2019-nCoV and the outbreak size in Wuhan from Dec 1, 2019, to Jan 25, 2020, on the basis of the number of cases exported from Wuhan to cities outside mainland China. We then estimated the number of cases that had been exported from Wuhan to other cities in mainland China. Finally, we forecasted the spread of 2019-nCoV within and outside mainland China, accounting for the Greater Wuhan region quarantine implemented since Jan 23–24, 2020, and other public health interventions.

Figure 2 summarises our estimates of the basic reproductive number R0 and the outbreak size of 2019-nCoV in Wuhan as of Jan 25, 2020. In our baseline scenario, we estimated that R0 was 2·68 (95% CrI 2·47–2·86) with an epidemic doubling time of 6·4 days (95% CrI 5·8–7·1;).

We estimated that 75 815 individuals (95% CrI 37 304- 130 330) had been infected in Greater Wuhan as of Jan 25, 2020. We also estimated that Chongqing, Beijing, Shanghai, Guangzhou, and Shenzhen, had imported 461 (227–805), 113 (57–193), 98 (49–168), 111 (56–191), and 80 (40–139) infections from Wuhan, respectively.

Beijing, Shanghai, Guangzhou, and Shenzhen were the mainland Chinese cities that together accounted for 53% of all outbound international air travel from China and 69% of international air travel outside Asia, whereas Chongqing is a large metropolis that has a population of 32 million and very high ground traffic volumes with Wuhan. Substantial epidemic take-off in these cities would thus contribute to the spread of 2019-nCoV within and outside mainland China.

 


Figure 2 – Posterior distributions of estimated basic reproductive number and estimated outbreak size in greater Wuhan
NOTE: a zoonosis is an infectious disease that can spread between animals and humans. FOI = force of infection

 

Figure 4 shows the epidemic curves for Wuhan, Chongqing, Beijing, Shanghai, Guangzhou, and Shenzhen with a R0 of 2·68, assuming 0%, 25%, or 50% decrease in transmissibility across all cities, together with 0% or 50% reduction in inter-city mobility after Wuhan was quarantined on Jan 23, 2020.

The epidemics would fade out if transmissibility was reduced by more than 1–1/R0=63%. Our estimates suggested that a 50% reduction in inter-city mobility would have a negligible effect on epidemic dynamics.

We estimated that if there was no reduction in transmissibility, the Wuhan epidemic would peak around April, 2020, and local epidemics across cities in mainland China would lag by 1–2 weeks.

If transmissibility was reduced by 25% in all cities domestically, then both the growth rate and magnitude of local epidemics would be substantially reduced; the epidemic peak would be delayed by about 1 month and its magnitude reduced by about 50%.

A 50% reduction in transmissibility would push the viral reproductive number to about 1·3, in which case the epidemic would grow slowly without peaking during the first half of 2020.

However, our simulation suggested that wholesale quarantine of population movement in Greater Wuhan would have had a negligible effect on the forward trajectories of the epidemic because multiple major Chinese cities had already been seeded with more than dozens of infections each.

The probability that the chain of transmission initiated by an infected case would fade out without causing exponential epidemic growth decreases sharply as R0 increases (eg, <0·2 when R0>2).

As such, given the substantial volume of case importation from Wuhan, local epidemics are probably already growing exponentially in multiple major Chinese cities.

Given that Beijing, Shanghai, Guangzhou, and Shenzhen together accounted for more than 50% of all outbound international air travel in mainland China, other countries would likely be at risk of experiencing 2019-nCoV epidemics during the first half of 2020.

 


Figure 4 – Epidemic forecasts for Wuhan and five other Chinese cities under different scenarios of reduction in transmissibility and inter-city mobility

 

Ergo: reducing mobility is ineffective because too much mobility had already happened prior to the lockdowns. That ship has sailed. Not that one shouldn’t try to limit mobility, but it can’t stop the disease from spreading. The HKU team doesn’t say much about how they would see transmissibility lowered, but that seems to come down to more, and intense, lockdowns.

There’s a cruise ship floating off Yokohama where everyone is ordered to stay in their cabin because of the virus. Think along those lines: ordering people to stay in their homes. Sort of like the Black Death plague in 14th century Europe.

Perhaps there are anti-virals that can lower transmissibility somewhat, but that is by no means sure. The discovery ofasymptomatic transmitters doesn’t help either. You can’t very well test everyone, you test those with symptoms.

Chinese health authorities have identified a number of patients who have become carriers and transmitters of the coronavirus despite showing no outward symptoms of the disease. Li Xingwang, chief infectious diseases expert at Beijing Ditan Hospital, said most of the “dormant” carriers were related to and had caught the virus from patients with symptoms.


“These [carriers] have the virus and can transmit it. The amount of virus correlates to the severity of the illness, which means these patients carry less of the virus and their ability to transmit disease is weaker,” Li said.

 

Lunar New Year holidays have been extended everywhere across China, except in a few rare places. Major cities are under full lockdown. Western companies are scrambling to find alternative suppliers. Just 2 weeks into the epidemic. What happens when the factories stay closed for 6 or 16 more weeks?

Where will Chinese and western stocks be then? Xi Jinping has declared the WuhanCorona virus the number 1 threat. How can he order the factories to re-open before mid-April at the earliest then, when the peak of the epidemic hasn’t even been reached? But at the same time, can he afford to order all production shut for 2-3-4 months?

Thing about such peaks is, you can only see them in the rearview mirror. But you can bet that in 2-3 weeks max, people will solemnly declare the peak is here. Because the existing but especially potential economic damage will be so great. Bur declaring a peak too soon, let alone the end of the epidemic, is too much of a risk.

The way things are going, pretty soon there won’t be any westerners left in China, other than those who wish to stay permanently. Many if not most factories will be closed. No Chinese will be allowed to visit the rest of the world, while Chinese products will not ship there.

The big lockdown has just begun. Because once you start it, you can’t go back until you can prove that everything is safe. And that will in all likelihood take a long time, months. When will absolutely everybody have faith that everything is safe? When nobody falls ill anymore, when nobody can infect other people anymore.

But that’s a long way away. April, May, or later? And that in an economic system built on just-in-time delivery? Chinese oil demand is allegedly down 20% already. How can oil prices not fall if that is true? Since those prices are linked to the US dollar, what will happen with the currency?

There are too many questions that nobody can answer, or even try to. That’s complex systems for you. And I really really hope I’m wrong, but the way out of the lockdown is not clear at all.

The world cannot afford the risk of consciously helping to spread a lethal pandemic. And the only way to prevent it may be the big lockdown. Unless there’s a vaccine. But there isn’t one right now.

Overly alarmist, you say? Let’s hope so.

 

 

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Feb 022020
 
 February 2, 2020  Posted by at 3:30 pm Finance Tagged with: , , , , , , , , ,  11 Responses »


Samuel Colman The Edge of Doom 1836-38

 

What the future will bring for the 2019nCoV novel Wuhan coronavirus is still unclear. An epidemic it already is, but is it also a pandemic? Some 20 countries have reported infections, but it still could all fizzle out; 305 deaths can be forgotten by next week. Nobody can tell you how this will play out, not even the most experienced and/or smartest virologists and other experts.

Because there’s no telling what viruses will do, not even for them, and because while they have some idea about the infinitesimal size and lifespan of viruses, “ordinary” people have no grasp of either, and that includes managers, planners and politicians. Whether in the rich west or in “up and coming” China.

 

The timeline is quite literally terribly obvious. In early December -and it could have been even earlier-, it was obvious to doctors and Communist Party (CCP) politicians in Wuhan that something was wrong. But their painfully predictable reaction was to hope this would pass. Never a bad word should be uttered about the Party, and nothing said that could embarrass it.

December passed, as news was getting worse and more obvious due to a large number of “pneumonia” patients. Chinese doctors published an article in the Lancet this week (this week, 6 weeks after the fact!) saying human-to-human transmission had been established by mid-December.

But the code of silence was not broken, even when a man died from the virus on January 9. It took until mid-January before word got out, a full week later. By then millions of people had left and/or entered Wuhan, a city of 11 million, potentially infecting millions of other Chinese and perhaps people abroad. 5 million later left the city for Lunar New Year.

On January 10, the virus was defined and the sequence was shared, but testing didn’t start for another week; patients were registered as pneumonia sufferers, including those that died (we have no idea how many there were).

 

 

Then, mid January, doctors starting testing for the virus. The first “exported” case was noted in Thailand on January 13, but it still took more time for the potential threat to be realized and reported. The Party boys were still hoping it would all pass. Can you blame them? They are civil servants, they don’t know anything about viruses, or their threat.

Ironically, over 300 civil servants (Party officials) and health care workers were sanctioned very recently for not doing enough. The Party makes sure the blame is put on individuals, not on itself. Even if all they’ve done is follow the party line. It’s very simply how the system works. And not just in China. If the virus might come to a town near you, check where the blame is placed. It won’t be the president or prime minister, health workers will be first in line, civil servants second.

It’s good to note how fast the novel virus has spread. If only to show what those who are determined to keep such a thing silent are up against. Can’t be easy. 291 cases on Jan 20, 14,562 cases 13 days later. Those are exponential numbers, even if the number of fatalities “only” rose by 46 overnight.

It’s also good to keep in mind that the main threat in viruses is their ability to mutate and become deadlier. This virus now has at least those 14,562 hosts which they can use to mutate in. Hong Kong University doctor and epidemiologist Gabriel Leung and his team said in a Jan 31 report: “In our baseline scenario, we estimated 75,185 infections as of Jan 25.” . And they were reporting on Wuhan alone. In other words, well over 5 times as many hosts and chances for the virus to mutate in just one city. In a city of 11 million people, numbers like that are perhaps not that extreme.

 

 

Back to politics. We have had two phases so far. 1 is first discovery followed by total silence. 2 is damage control, and deflecting all blame from the Party.

We are now in phase 3. The WHO, which was caught napping as much as the Party in phase 2, lavishes great praise on that same Party now for its “extraordinary safety measures”. Locking down entire cities (increasingly people are not even allowed to leave their homes), speed-building hospitals, you name it. And the WHO is not the only entity praising the Party.

The reason why there is so much emphasis on this is that the CCP is desperate to show everyone, at home and abroad, that it is in control. That there is no reason to worry, at least not due to actions by the Party. If other countries have problems, that is not the Party’s fault.

And also, the Party will take it from here, no need for foreign assistance. They’ll allow in some doctors, preferably WHO related, and they have asked both the US and EU for medical equipment and doctors’ uniforms, hazmat suits, that sort of thing, just so nobody asks any further questions: see, we do accept help! We’ll let you know if we need anything.

Other than that, the Party is in full control, thank you very much. And if Chinese people start protesting the failures of the Party so far, as they are, that is none of anyone else’s business. “We” have it under control”. Ask the WHO, they said so too.

 

If the Party is allowed to get away with this behavior aimed at self-preservation above anything else, including human lives of both Chinese and foreigners, something bad is sure to happen. Maybe not this time, maybe this one will fizzle out. But the next one, or the one after that, will not.

It is obvious how dangerous this is, putting the interests of the Party, or the economy, above the risk of spreading global pandemic. But is is also obvious why it happens. And it wouldn’t or couldn’t happen only in China. Though the country in its present state is a ideal breeding ground.

Flights are halted. Hundreds of millions will soon be in lockdown. Exports will plunge, because production will. Which will hit the west as much as China. Just so the Party can say it did what had to be done, and so it will stay in power. Xi Jinping knows his power depends on the economy, but he thinks he has what it takes to hold on to power even when the economy tanks.

He can simply declare force majeure, he can tell his people how much worse things would have been had he not decided to lock down everything.

We’ve been following the numbers of infections and fatalities now for 2 weeks or so, even as we know they don’t mean much, they’re just Party propaganda. The Party will release what it thinks it must, but no more. Perhaps we need other sources; these will come if and when things get out of hand. Not that we know they will.

Xi can claim today that he has control. He can say things are not too bad, but we don’t really know, he’s issuing the numbers. What we do know, and there’s the crux, is that he was 6 weeks late in starting to acknowledge the epidemic, in contacting the outside world, in acknowledging his mistakes, and in acknowledging that such mistakes are baked into the model that keeps him in power.

Phase 1 is complete denial, not a word. Phase 2 is damage control, massaging the numbers downward. Phase 3 is “close all the doors, not to worry, nothing to see here, we got this, no you can’t come in, too risky!”

But, yeah, praise him while you can. The only praise he cares about is from people just as clueless as he is anyway.

The Party is a highly effective vehicle for protecting its own interests and survival. For other things, perhaps not so much. Viruses can be quite deadly at times. Combine them with politics and the risk factor rises exponentially.

Tragedy assured. Just not every single time.

 

 

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Aug 052019
 


Odilon Redon Peyrelebade landscape 1880

 

It’s never easy to gauge what exactly is happening in China, or why the CCP Politburo takes the decisions it does. Today, or overnight, is no exception to that. However, one thing that appears certain, but which I don’t see reflected in all the analyses, is that Beijing pushing the value of the renminbi (yuan) down below 7 to the USD in one fell swoop, is a major setback for Xi Jinping and his government.

Yes, China may have given up hope of reaching positive conclusions in its trade talks with the US. And yes, some may think, even in China itself, that devaluing the currency is a tool that can be useful in a potential currency war. But there’s another side to this coin. It’s not even about the value itself, or the change in it, it’s the heavy-handed way it’s executed.

 

China wants, and desperately needs too, for the yuan to be a force in global financial markets. In very simple terms this is true because if it then wants to buy something, it can simply print the money for it. But only about 1% of global trade today is executed in yuan. That is not nearly enough. It means China needs dollars and euros, all the time. And devaluing the yuan means the country needs even more of those.

You’d almost think: why would you want to do that? What are the long-term prospects for a move like this? You’re telling forex markets that the value of the yuan is not trustworthy, because if Xi or the PBOC decides in the next five minutes that it should go up or down by 10% or 20%, they can do it. The Fed and ECB also have tools to manipulate their currencies (re: interest rates), but none of that magnitude.

 

The crux of the dilemma probably lies in the Belt and Road Initiative (BRI), which I’ve been saying for years is just China’s way to sell its overcapacity and overproduction abroad. Sure, there may be loftier goals, and surely in the glitzy brochures, but the fact remains that China has tried to be an economic miracle, doing in 10 years what took the US a century, and it never slowed down its growth, at least not voluntarily, even if that might have been a wise move.

Already lately, purchases by Chinese citizens and companies of real estate and businesses abroad have been curtailed, and not a little bit, by Beijing. There’s no better way to convince Chinese people of the miracle’s success than to let them travel the world and spend there, but that, too, may well soon be cut. It kills foreign reserves.

If Beijing could charge participating countries in the Belt and Road Initiative in yuan, and they could pay for the overcapacity’s steel and cement and what not in yuan, that could be a game-changing program for the entire planet. But these countries have no reason to hold yuan, other than the BRI itself. And they, too, were watching the overnight move above 7 and must have thought: let’s be careful now.

And to top it all off, China right now needs for these countries to pay in dollars instead of yuan, because its foreign reserves are shrinking so fast. It’s Catch-22 all the way down. China’s need for dollars goes against everything BRI stands for.

 

Could the move hurt the US as well? Absolutely. But the long-term view behind the tariffs, and the talks China appears to have lost faith in, is to move the US away from its near all-encompassing addiction to Chinese production, and to move at least some of that production back home. Problem of course is, that is precisely what China’s miracle growth has been built on.

If the US starts bringing production home, who is Beijing going to sell its (over-)production to? Yes, I hear you, to the BRI countries. But there it runs into the currency problems mentioned before. To Europe? The top of that trade route is also behind us. Europe will have to follow the US to an extent, and also bring factories back to the continent (and not just to Germany either).

China could perhaps sell more than it does today to Russia. But that country still does produce a lot of things, and has been forced to be much more self-sufficient due to US and EU sanctions. It’s also a mighty small market compared to 350 million North Americans and 500 million Europeans, who are on average much richer than your average Russian to boot.

 

There is a way for China to make the yuan more important in global trade (but devaluation is definitely not that way): Beijing could let go of its central and total control over the value of its currency, and let forex markets figure it out. That would give traders -and everyone else- faith in the value. Problem with that is, this is not how central control communist governments think.

Beijing wants both: central total control AND a prominent place in world trade. And it may take them a long time to figure out that is not going to happen, unless of course they first conquer the entire world militarily. That is not an option, at least not for the foreseeable future. Come see me next century.

 

It wouldn’t be the first time for me to say I can see China retreat into itself, into its own borders and culture and market (1.3 billion people!). If the Communist Party wants to remain in power, and there’s no doubt it does, this may be only possible choice going forward. If growth has indeed left the miracle -as many observers think-, it can implode in very rapid succession. And even if growth hasn’t yet evaporated, it may well very soon. Without the growth, there is no miracle anymore.

And if China can no longer grow its exports, its domestic growth will also become a thing of the past. Domestic consumption can only grow as long as exports do too. Seen from that angle, the problems with trade and the currency look downright ominous. If you need dollars that badly, and you notice that you’re already getting fewer of them, not more, you’re in trouble.

Devaluing your currency may afford you some temporary respite, but it can’t possibly solve your troubles. It can make them much worse though.

I think China has wanted too much too fast, got carried away and forgot to take care of a few potential barriers to its growth, in particular the standing its currency had and still has in the world, and the grinding need for dollars that stems from it. And the Communists have no answer to this problem.

 

 

 

 

Jan 092019
 
 January 9, 2019  Posted by at 7:27 pm Finance, Primers Tagged with: , , , , , , , , , , , , ,  9 Responses »


Pablo Picasso Massacre in Korea 1951

 

In the New Year, after a close to the old one that was sort of terrible for our zombie markets, do prepare for a whole lot of stories about China (on top of Brexit and Yellow Vests and many more windmills fighting the Donald). And don’t count on too many positive ones that don’t originate in the country itself. Beijing will especially be full of feel-good tales about a month from now, around Chinese New Year 2019, which is February 5.

And we won’t get an easy and coherent true story, it’ll be bits and pieces stitched together. What will remain is that China did the same we did, just on steroids. It took us 100 years to build our manufacturing capacity, they did it in under 20 (and made ours obsolete). It took us 100 years to borrow enough to get a debt-to-GDP ratio of 300%, they did it in 10.

In the process they also accumulated 10 times more non-productive assets than us, idle factories, bridges to nowhere and empty cities, but they thought that would be alright, that demand would catch up with supply. And if you look at how much unproductive stuff we ourselves have gathered around us, who can blame them for thinking that? Perhaps their biggest mistake has been misreading our actual wealth situation; they didn’t see how poorly off we really are.

 

Xiang Songzuo, “a relatively obscure economics professor at Renmin University in Beijing”, expressed some dire warnings about the Chinese economy in a December 15 speech. He didn’t get much attention, not even in the West. Not overly surprising, since both Beijing and Wall Street have a vested interest in the continuing China growth story.

But with the arrival of 2019, that attention started slowly seeping through. Former associate professor of business and economics at the Peking University HSBC Business School in Shenzhen, Christopher Balding, left China 6 months ago after losing his job. At the time, he wrote: “China has reached a point where I do not feel safe being a professor and discussing even the economy, business and financial markets..”. And, noting a change that very much seems related to what is coming down the road:

”One of my biggest fears living in China has always been that I would be detained. Though I happily pointed out the absurdity of the rapidly encroaching authoritarianism, a fact which continues to elude so many experts not living in China, I tried to make sure I knew where the line was and did not cross it. There is a profound sense of relief to be leaving safely knowing others, Chinese or foreigners, who have had significantly greater difficulties than myself. There are many cases which resulted in significantly more problems for them. I know I am blessed to make it out.”

A few days ago, Balding wrote this on Twitter:

“Most experts dismissed the speech by Xiang Songzuo (claiming Chinese GDP growth could be as low as 1.67%) as implausible…”. No, we didn’t. The GS PE guy and the PKU dean have every reason to deny it. Car and mobile phone shipment down 2% and 16% are not a 6.5% growth economy.”

That certainly sets the tone of the discussion. GDP growth of 1.67% vs the official 6.5%; smartphone shipments down 16%, car sales slumping. Not the kind of numbers you’ll hear from Beijing. And Balding does know China, whether they like it or not. On Monday, Bloomberg, where he was/is a regular contributor, published this from his hand:

 

China Has a Dangerous Dollar Debt Addiction

Officially, China lists its outstanding external debt at $1.9 trillion . For a $13 trillion economy, that’s not a major amount. But focusing on the headline number significantly understates the underlying risks. Short-term debt accounted for 62% of the total as of September, according to official data, meaning that $1.2 trillion will have to be rolled over this year .

Just as worrying is the speed of increase: Total external debt has increased 14% in the past year and 35% since the beginning of 2017 . External debt is no longer a trivial slice of China’s foreign-exchange reserves, which stood at just over $3 trillion at the end of November, little changed from two years earlier. Short-term foreign debt increased to 39% of reserves in September, from 26% in March 2016.

 

The true picture may be more precarious. China’s external debt was estimated at between $3 trillion and $3.5 trillion by Daiwa Capital Markets in an August report. In other words, total foreign liabilities could be understated by as much as $1.5 trillion after accounting for borrowing in financial centers such as Hong Kong, New York and the Caribbean islands that isn’t included in the official tally. Circumstances aren’t moving in China’s favor.

The nation’s companies rushed to borrow in dollars when there was a 3% to 5% spread between Chinese and U.S. interest rates and the yuan was expected to strengthen. Borrowing offshore was cheaper and offered the additional bonus of likely currency gains. Now, the spread in official short-term yields has shrunk to near zero and the yuan has been depreciating for most of the past year. Refinancing debt in dollars has become harder, and more risky.

 

Beijing’s policies have exacerbated the buildup of foreign debt. To promote Xi Jinping’s Belt and Road Initiative, the president’s landmark foreign policy endeavor, China has been borrowing dollars on international markets and lending around the world for everything from Kenyan railways to Pakistani business parks. With this year and 2020 being the peak years for repayments, China faces dollar funding pressure.

To repay their dollar debts, Chinese firms will either have to draw from the central bank’s foreign-exchange reserves (a prospect Beijing is unlikely to allow) or buy dollars on international markets. This creates a new set of problems. There are only 617 billion yuan ($90 billion) of offshore renminbi deposits in Hong Kong available to buy dollars . If China was to push firms to bring debt back onshore, this would necessitate significant outflows that would push down the yuan’s value against the dollar.

 

The Xiang Songzuo speech was also noted by the Financial Times this week. Their conclusions are not much rosier. Recent US imports from China look good only because both buyers and sellers try to stay ahead of tariffs. And whole some truce or another there may smoothen things a little, China must launch a massive stimulus against the background of twice as much investment being needed for a unit of GDP growth.

 

Nervous Markets: How Vulnerable Is China’s Economy?

A relatively obscure economics professor at Renmin University in Beijing sparked a minor furore last month when he claimed a secret government research group had estimated China’s growth in GDP could be as low as 1.67% in 2018 — far below the officially published rate of 6.7% for the year up to September. 

Most experts dismissed the speech by Xiang Songzuo as implausible, despite longstanding doubts about the reliability of China’s official GDP data. Yet although discussion of his claims was quickly scrubbed from the Chinese internet, the presentation has been viewed more than 1.2m times on YouTube — an indication of the raw nerve Mr Xiang touched with his doom-laden warnings.

[..] the question that is hanging over global markets is just how vulnerable is China to a much sharper slowdown? Ominously, the recent downturn has occurred even though the expected hit to Chinese exports from the trade war has not yet materialised. In fact, analysts say exports probably received a one-off boost in recent months as traders front-loaded shipments to beat the expected tariff rise from 10% to 25% that US president Donald Trump threatened would take effect in January. That rise is now on hold due to the 90-day truce that Mr Trump agreed with Chinese president Xi Jinping at the G20 meeting in Argentina last month.

[..] The amount of new capital investment required to generate a given unit of GDP growth has more than doubled since 2007 , according to Moody’s Analytics. In other words, investment stimulus produces little bang for Beijing’s buck, even as it adds to the debt levels.

[..] “They [Beijing] will soon have no choice but to launch massive stimulus,” says Alicia Garcia Herrero, chief Asia Pacific economist at Natixis in Hong Kong. “They do not want to give away their credibility because they said they wouldn’t do it, but there is no time to be cautious any more. Not having growth is ultimately the worst outcome of all.”

 

Christopher Whalen picks up on Xiang Songzuo’s speech as well, and quotes him saying that “Chinese stock market conditions resemble those during the 1929 Wall Street Crash”. Whereas the China Beige Book states that sales volumes, output, domestic and export orders, investment, and hiring fell on a year-over-year and quarter-over-quarter basis. Which leads to the conclusion that deflation is, or should be, Beijing’s main worry.

Oh, and Chinese consumer demand has weakened, something we’ve seen more off recently. Reuters headlines “China To Introduce Policies To Strengthen Domestic Consumption” today, but that headline could have come from any of the past 5 years or so. Domestic consumption is precisely China’s problem, and they can’t achieve nearly enough growth there.

 

China’s Stability Is at Risk

Foreign investors have convinced themselves that the Chinese Communist Party (CCP) is superior in terms of economic management, this despite ample evidence to the contrary, thus accepting the official view is easy but also increasingly risky. In a December 15 speech , Renmin University’s Xiang Songzuo warned that Chinese stock market conditions resemble those during the 1929 Wall Street Crash. He also suggested that the Chinese economy is actually shrinking.

China growth, Tesla profitability, or the mystical blockchain all require more credulity than ever before. For example, in the first half of 2016 global capital markets stopped due to fear of a Chinese recession. Credit spreads soared and deal flows disappeared. But was this really a surprise? In fact, the Chinese government had accelerated official stimulus in 2015 and 2016 to counter a possible slowdown and, particularly, ensure a quiet domestic scene as paramount leader Xi Jinping was enshrined into the Chinese constitution.

Today western audiences are again said to be concerned about China’s economy and this concern is justified, but perhaps not for the reasons touted in the financial media. The China Beige Book (CBB) fourth-quarter preview, released December 27, reports that sales volumes, output, domestic and export orders, investment, and hiring fell on a year-over-year and quarter-over-quarter basis. CBB is a research service that surveys thousands of companies and bankers on the ground in China every quarter.

Contrary to the positive foreign narrative about “growth” in China, CBB contends that deflation is the bigger threat compared to inflation. “Because of China’s structural problems, deflation has very clearly emerged as the bigger threat in a slowing economy than inflation. Consumer demand has weakened, and you see that reflected in retail and services prices,” CBB Managing Director Shehzad Qazi said in an interview.

 

So, China phone shipments are down 16%, as per Balding. But Tim Cook says Apple’s never done better. Still, if that 16% number is correct, either Apple or its Chinese suppliers are doing worse, not better. And 16% is a lot.

 

Despite Recent Battering, Tim Cook Says Apple’s ‘Ecosystem Has Never Been Stronger’

Apple Inc. stock has taken a beating in recent months, but Chief Executive Tim Cook defended his company Tuesday, and expressed optimism that trade tensions with China would soon ease. Apple shares have fallen by more than one-third since their peak on Oct. 3, and tumbled further last week after the tech giant warned of disappointing iPhone sales in its holiday quarter. But in an interview Tuesday with CNBC’s Jim Cramer, Cook said the company was still going strong, and its naysayers were full of “bologna.” “Here’s the truth, what the facts are,” Cook said about reports of slow iPhone XR sales, according to a CNBC transcript.

“Since we began shipping the iPhone XR, it has been the most popular iPhone every day, every single day, from when we started shipping, until now. . . . I mean, do I want to sell more? Of course I do. Of course I’d like to sell more. And we’re working on that.” Slower sales in China also contributed to Apple’s lowered forecast, and Cook said Tuesday he believes that situation to be “temporary.”

“We believe, based on what we saw and the timing of it, that the tension, the trade-war tension with the U.S. created this more-sharp downturn,” he said. Cook said he’s “very optimistic” a trade deal between the U.S. and China will be reached . “I think a deal is very possible. And I’ve heard some very encouraging words,” he said.

 

16% fewer phones, that gets you the second production cut at Apple and its ‘magnificent ecosystem’ in short order. Now sure, Cook can try and blame the tariffs. but Samsung’s Q4 2018 sales fell 11%, and its operating profit fell by 29%. It’s a bigger and wider issue, and China is at the heart of it.

 

Apple Cuts Q1 Production Plan For New iPhones By 10%

Apple, which slashed its quarterly sales forecast last week, has reduced planned production for its three new iPhone models by about 10% for the January-March quarter, the Nikkei Asian Review reported on Wednesday. That rare forecast cut exposed weakening iPhone demand in China, the world’s biggest smartphone market, where a slowing economy has also been buffeted by a trade war with the United States.

Many analysts and consumers have said the new iPhones are overpriced. Apple asked its suppliers late last month to produce fewer-than-planned units of its XS, XS Max and XR models, the Nikkei reported, citing sources with knowledge of the request. The request was made before Apple announced its forecast cut, the Nikkei said.

 

And very much not least there was this graph of Chinese investments in Africa. What are the conditions? At what point will they call back the loans? And when countries can’t pay back, what’s the penalty? How much of this has been provided by Beijing in US dollars it doesn’t have nearly enough of?

 

 

It’s like the much heralded Belt and Road project, or Silk Road 2.0, isn’t it, where the first batch of participating nations have started sounding the alarm over loan conditions. Yes, it sounds great, I admit, but I have long said that in reality Belt&Road is China’s ingenious scheme to export its industrial overcapacity and force other countries to pay for it. It’s like the model Rome had, and the US still do, just all in one single project. And this one has a name, and it can be expanded to Africa.

But no, I don’t see it. I think China’s debt, combined with the vast distance it still has from owning a global reserve currency, will call the shots, not Xi Jinping.

China won’t be taking over. At least, not anytime soon.