CMR is the leading provider of funding and management support for small to medium-sized businesses and entrepreneurs 

Authored by Vanand Meliksetian via OilPrice.com,

The Chinese and Russian leadership have over the years intensified political and economic collaboration. Troubling relations with the West in general and the U.S. in particular are increasingly driving Beijing and Moscow into each other's arms. The countries' economies are highly complementary, which is an opportunity for further integration. While China has become the world's factory and an important technological powerhouse, Russia is extremely wealthy in terms of energy and minerals.

The obvious advantages have led to the landmark $400 billion ‘Power of Siberia pipeline’ agreement for the export of natural gas from Russia’s far east to northern China. On top of this success, Gazprom and Moscow have been pushing for the 'Power of Siberia-2 pipeline’ from Western Siberia to China’s Xinjiang region. The proposal has been met with a lukewarm response from Beijing because the region is already well-supplied with Central Asian gas. However, due to the Coronavirus pandemic and Gazprom’s adjusted plan, the Power of Siberia-2 project is gaining momentum.

Russia’s motives

Russia's relations with the West nosedived after the Ukraine crisis and the annexation of Crimea. Ever since Moscow has been reaffirming that it's not politically isolated by increasingly engaging with its giant Asian neighbor. The problem, however, is that the majority of Gazprom's export capabilities end in Europe. Pivoting to China, therefore, was essential to lessen dependence.

Gazprom's initial proposal through the Altai region and into Western China has been replaced with the 'Mongolia alternative' with an annual capacity of 50 bcm. The recent Russian assertiveness comes from Moscow's assertion that its position in key market Europe is under threat. The Corona pandemic has increased the pressure even further. According to Alexander Gabuev, a senior fellow at the Carnegie Moscow Center, "Gazprom sees that its position in the European market is eroding over the long run because of growing competition and a push by some countries to reduce dependence on Russia. Gazprom has to market gas from fields in Yamal and Western Siberia, and China is the big market next door."

China is essential for Russia which can be seen in Gazprom’s fast-tracking of investments concerning the enlargement of Power of Siberia-1 pipeline. Despite quarantine measures, some 3,000 laborers were infected with Corona who were drilling new wells and constructing power and compressor stations.

China’s motives

Of the two parties, Russia is more inclined to strike a deal. Beijing, in theory, has more options due to its relative proximity to large natural gas producers and the size and potential of the Chinese market. However, since Donald Trump's presidency relations between the U.S. and China have deteriorated strongly which is pushing Beijing and Moscow towards each other.

Economic relations between Russia and China were already poised to grow due to the complementarity of their economies. The pandemic has exacerbated both the upward and downward trends of relations with Russia and the U.S.

According to Lin Boqiang, dean of the China Institute for Studies in Energy Policy at Xiamen University, ”before the current situation between China and the United States, China was planning to buy a lot of energy from the U.S. because of the trade agreement. But now the situation looks uncertain, and that will certainly encourage China to cooperate more with Russia.”

The alternatives for Bejing are increasing imports from Central Asia and LNG. Both are not appealing due to different reasons. LNG is either shipped from politically unfriendly nations, e.g. the U.S. and Australia, or cargoes need to travel through bottlenecks such as the strait of Malacca. Concerning Central Asia, imports from the region dwarf Russia’s meaning a choice for the latter would improve energy security through diversification. Furthermore, Siberian natural gas is very competitive due to the favorable price difference.

Striking a deal

Despite the favorable environment, it is yet to be seen whether a deal can be struck. In the case of Power of Siberia-1, it took four years to sign a contract from the moment terms and conditions were agreed. Furthermore, construction took five years after the long-term contract agreement was signed. Power of Siberia-2 could take a similar amount of time meaning it could be operational around 2030.

Gazprom’s flexibility in considering the Mongolia route offers an additional advantage. Russian gas could be supplied to the heavily polluted capital city Ulan Bator which ranks among the most polluted cities in the world. Poverty and a relatively small state budget rule out big energy projects that would bring cleaner fuels to Mongolia's cities. The Power of Siberia-2 pipeline, therefore, is a unique opportunity.

However, the biggest beneficiaries would be China and Russia because the pipeline could further solidify the political and economic integration of the world's second-biggest economy with the world's largest energy producer.

Authored by Mac Slavo via SHTFplan.com,

Recently, gold bug and investor Doug Casey sat down with Kenneth Ameduri of Crush the Street. Casey jumped right in saying the breakdown of the United States under the boot of tyranny is “actually predictable.”

Casey says Western civilization peaked around World War 1, just after the Federal Reserve took over the monetary supply. Yet at the same time, technology improved. So in some ways, things have gotten better, but in the ways that matter, things have gotten worse. Now, people are easily programmed to believe what the TV tells them to, thanks to technological advancement. Yet, both global warming and COVID are “phony” as far as Casey is concerned.

Casey then discusses more in detail the COVID hoax.  When Ameduri asks about the cases going up, but fatalities going down, Casey says the case numbers are meaningless. He says we should focus on the deaths, which are being “greatly overreported.”

In fact, we showed documents from the government back in April that prove they need the death toll to be as high as possible to exact tyranny on people through fear.

“Look, hysteria is the problem; not the flu itself.”

He adds, “this is hysteria comparable to the witch trials of the late 17th century.”

Casey says this whole situation was done as a form of “people control.” The government, who will issue your immunity passport, will decide what you can and cannot do based on whether or not you’ve gotten the mandatory vaccine. He says it’s possible to experience even more tyranny as the vaccine is rolled out. 

“The worst people, not the best people, get into government.” 

It’s all predictable he says.

We’ve all heard the saying: “power corrupts, and ultimate power corrupts ultimately.” That saying has always been true.

The best way to protect yourself is by buying physical gold or silver. Casey is betting on economic and financial chaos more than inflation or deflation.  The whole system is set to absolutely self-destruct.

Casey says that there’s a good chance the Democrats will win the White House in 2020. He says there are two reasons.

One, Democrats are promising a lot more free stuff.

And two, they are much better at stuffing the ballot boxes.

I personally, disagree with Casey on this one. I think the winner will be whoever the New World Order, aka, the International Banking Cartel, chooses to win. Presidents are selected, not elected, especially now when we have no semblance of a government “by the people.”

“Look, it’s gonna end very badly,” Casey says of the government’s management of the economy.

Without a doubt, the Chinese investor is "all-in" again. As we detailed earlier, there has been a massive surge in retail accounts opening margin accounts with margin-trading account balances rising at a faster pace than at the peak of speculative frenzy in 2014/2015...

Source: Bloomberg

Five years on from that euphoria, it's deja vu all over again as millions of 'home-gamers' turn back to the markets, under the umbrella of government suggestions to do so... this won't end well (again).

"Right now, I’m feeling invincible," says one 36-year-old who works at a tech startup.

"There's no way I can lose!"

From everything the state-owned media is telling mom-and-pop Chinese investors, this is all a great opportunity to create wealth and lift up the masses (via mass speculation).

However, as a new research paper publish on VoxChina details, this government-sponsored buying frenzy in stocks is anything but a path to prosperity for the vast majority of China's citizenry.

Using comprehensive administrative data from China, we document a substantial increase in inequality of wealth held in risky assets by Chinese households in the 2014–2015 bubble-crash episode: the top 0.5% households in the equity market gained, while the bottom 85% lost, 250B RMB through active trading in this period, equating to 30% of each group’s initial equity wealth.

In comparison, the return differential between the top and bottom groups in periods of a relatively calm stock market is an order of magnitude smaller.

In other words, during the period when the Shanghai Composite Index climbed more than 150% before crashing 40%, the three academics found that the rich ended up richer and the poor poorer as an approximately equal RMB250 billion was redistributed from the lower wealth cohorts to the higher wealth cohorts - dramatically widening inequality.

The researchers broke the investors down into four groups based on the value of their accounts, ranging from below 500,000 yuan to over 10 million yuan.

The bottom wealth group accounted for 85% of all individual accounts, while the top wealth group made up 0.5%. Households altogether accounted for 87% of trading volume, confirming the notion that China is largely a retail market.

Wealthy investors seems to be fairly good at timing the market, while the poor are suckers. The top 0.5% households added to their exposure during the rally, while the bottom 85% cut their holdings. Shortly after the peak, the wealthy quickly exited the market, selling their shares to smaller households and corporations.

The bottom 85% of households lose 250B RMB from July 2014 to December 2015, while the top 0.5% gain 254B RMB in this 18-month period.

In stark contrast, the study finds that wealth redistribution in calm market conditions is an order of magnitude smaller than that in the bubble-crash episode.

Their key finding then is as follows:

The key takeaway from our study is that the heterogeneity in market timing and stock selection ability between the poor and the ultra-wealthy, while also present in calm periods, is greatly amplified in bubble-crash episodes, when both volatilities and trading volume spike.

In other words - officially-sanctioned (central bank or otherwise) bubbles in stock markets amplify inequality and crush the relative household wealth of the average joe far more than in a more 'normal' market environment.

The findings suggest some rather uncomfortable implications for the world's central planners (especially if the hordes find out about this reverse-Robin-Hood scheme)...

It is often believed that greater stock market participation (or participation in any other risky financial market) is a path to prosperity and equality, especially in developing countries where financial literacy and market participation are generally low. However, if the poor, less financially sophisticated invest actively in financial markets that are prone to bubbles and crashes, such participation can be detrimental to their wealth.

This is particularly concerning given the recent finding that salient early life experiences have long-lasting impacts on individuals’ economic decisions decades later.

Consequently, policymakers and academics must emphasize that while greater stock market participation can be welfare-improving - especially for the poor - active investment by the poor will likely result in the exact opposite.

And, just in case you thought smugly that "us Americans know far better than those silly speculative muppets in China," think again (even though retail accounts represent a far greater aspect of Chinese markets than in the US)...

As we detailed previously,  the exact same pattern of reverse-Robin-Hood-ism is occurring in US equity markets. The two following charts indicate that as recessions begin, the top 1% begins to sell their holdings, while the bottom 90% continues to try and "buy the dip".

The first chart shows the top 1% dumping as the market falls entering recession. Of late, we can see that selling has happened in spurts by the top 1%:

For the bottom 90% it's just the opposite: the vast majority of unsophisticated retail investor start to chase momentum at the worst possible time, as they buy stocks en masse just as a recession begins, which in turn craters the market. In the Goldman chart below, we can see that the share of equities owned by the 90% jumps just as recession begin.

And no - you're not the one buying at the lows.

In laymens terms, the rich dump their stock to the poor just before the market crashes.

The technical term is "distribution."

As Bloomberg's Ye Xie noted so eloquently, "it appears that the boom-bust was one effective way for the poor to be robbed by the rich."

Authored by Adam Taggart via PeakProsperity.com,

It’s hard to think about a second wave of covid-19 infections when countries are still wrestling with Wave 1. We don’t even know if one will occur.

But history shows it’s a possibility we have to be on guard for. The Great Influenza of 1918 had three waves, with the second being by far the deadliest.

If covid-19 turns out to indeed have a second wave, will it be more deadly, too? No way to know at this time. But again, that’s a potential outcome we need to be aware of.

Yet one other important question we don’t have the answer (yet) to: If a second wave does occur, what would happen if the timing coincides with another crisis?

This question is timely, as most predictable natural disasters tend to happen in the second half of the year. And we’re entering that period now.

The east coast’s hurricane season runs June 1 through November 30. Already there have been four named storms (out of 13 to 19 predicted), and more hurricanes than normal are expected this year. Peak activity should happen between late August and early October:

In the west, fires have been getting worse for years; and this year’s season is predicted to be “above normal”:

And if Wave 2 were to hit in late winter/early Spring 2021, these are the US regions at greatest risk of experiencing floods during that time:

So, what would happen if a covid-19 Wave 2 requiring a serious lockdown gets disrupted by one or more of these natural disasters? Where hundreds of thousands to millions of people suddenly have to evacuate to parts unknown when a health quarantine is supposed to be in place?

The short answer is: Nothing good.

Evacuees will have to jettison much of their covid defense preparations in the scramble. And hygiene discipline around social distancing/etc will likely be seriously compromised as so many weary families arrive at locations unprepared for them. It’s hard to imagine how infections won’t skyrocket.

Ugh.

While there’s no way to predict with certainty when or even if this will happen, we can improve our individual odds for safety by planning today for such an outcome.

First, identify your bug-out destination should you be forced to relocate under these conditions. Contact the folks there now and game-plan with them what would happen if you had to show up there during a Wave 2. Would they be willing to welcome you? What would the pre-arranged safety protocols be while you stayed there? What resources would they depend on you to bring with you?

Second, prepare your bug-out checklist and make sure you maintain all needed supplies in reserve should you need to leave home in a hurry. If low, head out now to fill any gaps.

And third, make sure you’re as prepared as possible for successfully dealing with a second covid-19 wave.

A growing chorus of readers have been asking my co-founder Chris Martenson and me for a covid-19 Wave 2 prep guide that builds upon the recommendations made in the earlier guides we published back in February and March. Now that we’ve been through Wave 1, what new preparations would we emphasize?

Given the high degree of reader interest as well as our strong belief that the time to prepare for adversity is well before it arrives, we’ve just compiled our critical insights.

In Part 2: The Covid-19 Wave 2 Preparation Guide, Chris and I put on our Monday Morning quarterback helmets and reveal what we assess are the most important Wave 1 lessons to bring with us in anticipation of Wave 2.

Treatment protocols, meds, key supplies, food, money, social strategies — we detail out what everyone now needs to integrate into their future covid planning. The prudent move here is to hope for the best but prepare for the worst.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

In the latest escalation over China's de facto annexation of Hong Kong, Reuters reports that Chinese state lenders are "revamping contingency plans" in anticipation of the soon to be enacted U.S. legislation (just waiting for Trump's signature) that would penalize banks for serving officials who implement the new national security law for Hong Kong.

In a "worst-case scenario" under consideration by Chinese commercial megabanks Bank of China and Industrial and Commercial Bank of China (ICBC), the lenders are said to be looking at the possibility of being cut off from U.S. dollars or losing access to U.S. dollar settlements, two Reuters sources said.

The worst-case scenario also envisions what would happen in the event of a run on its branches in Hong Kong if customers feared that it would run out of U.S. currency, one of the sources said (this is the scenario discussed in "If 500,000 Rich Hong Kongers Leave The City, The HKD Peg Would Surely Collapse"). The scenario was also looking at the experience of banks in Iran, the same person said. Iranian banks have been hit from time to time by U.S. sanctions dating back to the 1979 Islamic Revolution.

"We are hoping for the best, but preparing for the worst. You never know how things will turn out," one of the sources said.

In a milder scenario being looked at by the Agricultural Bank of China (AgBank), lenders would need to find ways to address the problem of clients blacklisted by the United States, especially those who might face a sudden loss of liquidity.

As Reuters adds, the contingency planning has been initiated by the banks themselves, who have the most to lose should the US effectively trigger a massive dollar bank run.

As Reuters calculates, Bank of China, the country's most international lender, had the biggest exposure of the country's big four lenders to the greenback at the end of 2019, with about $433 billion in liabilities. China's top four banks, which also include ICBC, China Construction Bank and AgBank, had a combined 7.5 trillion yuan ($1 trillion) in U.S. dollar liabilities at the end of 2019, annual reports show.

According to the report, at least three state-run leasing firms, including an ICBC unit and CSIC Leasing, are also making contingency plans. Leasing firms are often heavily reliant on dollar borrowing to fund purchases of aircraft, machinery and facilities.

China's contingency plans are in response to the unanimous passage in the House and Senate of a bill last week which seeks to impose financial sanctions on Chinese banks in response to the National Security Law. It has yet to be signed into law by President Donald Trump. The bill calls for sanctions on Chinese officials and others who help violate Hong Kong's autonomy and on financial institutions that do business with them. But it does not spell out what the sanctions would look like.

"There are sanctions in this bill which could be interpreted to prevent a bank from clearing some dollar transactions via U.S. institutions, but unlike other congressional sanctions bills there are not specific provisions mandating it," said Nick Turner, a lawyer specialising in sanctions and anti-money laundering at Steptoe & Johnson in Hong Kong.

Aside from its contingency planning, China has said it would "launch a counterattack against US hegemony" if Trump was to block access of Chinese banks to dollar funding and the SWIFT payment system

SGH Macro have noted that countermeasures from China could include a speeding up of the use of the Renminbi for China’s own parallel Cross-border Interbank Payment System (CIPS), a surge in issuance of RMB denominated loans to Belt and Road Initiative countries, a push for greater RMB use through the Shanghai International Energy Exchange (INE) crude oil futures, and an acceleration of the implementation of China’s Digital Currency Electronics Payment (DCEP), the first digital currency issued by a central bank. 

Summary:

• US reports 60k+ new cases for first time, per JHU & BBG
• DeSantis says schools will reopen safely in August
• NYC mayor cancels all big public events
• Texas reports 3rd straight record death
• Wisconsin sees biggest daily jump
• South Africa sees another record jump
• California reports record jump in deaths
• Cali Gov holds press briefing
• WHO begins 'independent' review of COVID-19 response
• Italy bars travelers from 13 countries as cases creep higher
• Arizona reports new cases
• NYT names Arizona "world's worst COVID-19 hotspot"
• Florida reports record jump in deaths, hospitalizations
• Goldman: 40% of US population lives in states where reopening has been rolled back or delayed
• US single-day tally tops 60k again
• At least 5 states reported record single-day cases on Wednesday
• Global total tops 12 million
• 7-day average death rate creeps higher
• Tokyo, Hong Kong report single-day highs of new cases
• India reported 22.7k new cases
• Victoria reports another 165 new cases
• Beijing slams US over WHO pullout

* * *

Update (1850ET): Preliminary counts of new cases reported in the US on Thursday shows the US on track for another record jump, at least the second in the past week, though the exact numbers vary between sources. Global deaths, meanwhile, just passed 550,000.

Globally, JHU counted 211,878 new cases on Thursday, the second-highest total according to BBG. Though the WHO counted 63k+ cases in the US earlier this week, JHU's numbers have the US case total for Thursday. Coronavirus cases in the US increased by 61,791 from a day earlier to 3.08 million. The 2% increase was higher than the average daily increase of 1.9% over the past week. Deaths rose 0.7% to 132,803.

* * *

Update (1840ET): After the state of Florida ordered schools to open in August on Monday, Gov DeSantis said during Thursday's press briefing that if stores like Home Depot and Wal-Mart can open, that the schools can reopen, too.

Gov. Ron DeSantis (R) advocated for the reopening of schools in the fall, despite rising coronavirus case numbers in Florida, comparing classrooms filling with children to businesses that have welcomed back customers.

"If you can do Home Depot, if you can do Walmart, if you can do these things, we absolutely can do the schools,” DeSantis said at a Thursday news briefing in Jacksonville with U.S. Labor Secretary Eugene Scalia.

On Thursday, Florida reported its highest one-day death toll since the start of the coronavirus pandemic, with 120 new deaths. The state tallied 8,935 new cases.

The Florida Department of Education ordered Monday that schools should reopen in August, although it is up to individual school districts to implement public health precautions.

The press is going to love this.

In other news, de Blasio has cancelled all big public events in the city (parades and such) to help out restaurants who need to set up dining in the streets.

Mayor Bill De Blasio ordered large events that typically require a permit to be canceled through Sept. 30. The goal is to ensure room for outdoor restaurant seating and New York’s “Open Streets” program, which expands car-free public spaces for city dwellers.

That is, unless you're marching for BLM.

* * *

Update (1654ET): Texas reports 9,782 new cases of coronavirus and a record 102 new deaths, the state's second straight single-day record after Wednesday's case total. The death toll increased by 102, depending on which source you want to believe. That's higher than the 98 reported yesterday, and the state's first triple-digit day for deaths since the outbreak began. 

In response, Texas Gov. Greg Abbott on Thursday issued a Proclamation suspending elective surgeries in hospitals in all counties located within 11 Trauma Service Areas in Texas.

The positivity rate in the state was around 18% on Thursday, also a new record high.

While NYC's hospitals remain nearly empty, hospitals across Texas are reporting a massive influx of patients, with the sickest often fighting the virus for weeks, sometimes more than a month, before passing away. CBS News spoke to a team of doctors in McAllen, Texas.

"Knowing how things have progressed, are you worried?" CBS News asked Dr. Osman Khan, an emergency room physician.

"Yeah, I am worried. I feel like it is just the beginning for us. It seems like it's going to be getting a lot worse," Khan said.

While we were there, Kahn was treating patients who were developing pneumonia.

"Have you seen your husband?" CBS News asked. "Once," Prieto replied.

One patient had lost her 35-year-old daughter to the virus the week before.

The state now has 230,346 confirmed cases, with 2,918 deaths.

* * *

Update (1615ET): Wisconsin, a state that hasn't received too much attention during the outbreak so far, just reported a record jump in new cases even as neighboring Illinois has found success suppressing the virus. The state reported 754 new cases.

The @DHSWI announced 754 new confirmed cases of COVID-19 and 2 new deaths in Wisconsin on Thursday with 13,158 tests reported and a 5.7% test-positivity rate, making for ongoing confirmed totals of 33,908 cases and 809 deaths, reports @WPR https://t.co/CV2F1T3pxM

— WisContext (@wiscontext) July 9, 2020

July 9 marks the highest single-day COVID-19 case count for Wisconsin so far, following a previous peak of 738 on July 4. The only other day confirmed cases have exceeded 700 was on May 29 when the count was 733, the preceding peak in the pandemic.

— WisContext (@wiscontext) July 9, 2020

The 7-day average for confirmed COVID-19 cases continued to climb on Thursday, and the figure is at its highest point of the pandemic so far, as has been the case over most of the past week. More info is available here: https://t.co/WI5138HEDc

— WisContext (@wiscontext) July 9, 2020

The number of COVID-19 tests reported on July 9 is the fourth highest daily count for this figure so far, only surpassed by those reported on May 29, June 3 and June 9.

— WisContext (@wiscontext) July 9, 2020

The percentage of positive COVID-19 tests reported in Wisconsin continued to hover near the midpoint of its range over the past few weeks. Its 7-day average increased to 7.3%, the highest point for this figure since May 11.

— WisContext (@wiscontext) July 9, 2020

The numbers brought the state's 7-day average to its highest level yet.

Elsewhere, South Africa just reported another record jump in new cases, and a positivity rate of over 24%.

JUST IN: South Africa reports 13,674 new coronavirus cases in the last 24 hours, with daily positivity rate of over 24%.

South Africa's largest daily increase by far.

— Norbert Elekes (@NorbertElekes) July 9, 2020

* * *

Update (1600ET): Dr. Fauci said Thursday that some states should consider returning to a lockdown scenario to help suppress the virus.

Anthony S. Fauci, the nation’s top infectious-disease official, is advising that some states seriously consider “shutting down” again if they are facing major resurgences of the virus — a warning that conflicts with President Trump’s push to reopen the country as quickly as possible.

“I think any state that is having a serious problem, that state should seriously look at shutting down,” Fauci said Wednesday. “It’s not for me to say, because each state is different."

Fauci added Thursday that while he hopes there’s no need for new shutdowns, it "would not be viewed very, very favorably," and urged states to pause their reopening process to slow the spread of the virus.

* * *

Update (1540ET): Newsom's briefing Thursday focused on wildfire preparations, but data released by state public health officials after he finished speaking shows California reported a record number of single-day deaths, though Newsom claims some of them are part of a "backlog", which also added 2,000 cases to Thursday's count of 7,031 new virus cases, which is below the 7-day average (8,043), even more so if one subtracts the 2k.

Yesterday, the state reported 11,694 cases. On Thursday, the state reported 149 new virus deaths, well above the 7-day average of 73.

Fire season takes the spotlight at @CAgovernor's daily #COVID19 briefing; CAL FIRE Director Thom Porter says "We need everyone to wear masks" as firefighters respond to wildfires during the #pandemic.

— Lindsay Zuchelli (@lindsayclaireee) July 9, 2020

"Wildfire evacuations will look very different this year." Firefighters say some evacuees may be sent to hotels, while those who are sent to more traditional evacuation centers will notice major safety modifications to allow for #physicaldistancing

— Lindsay Zuchelli (@lindsayclaireee) July 9, 2020

Latest #COVID19 stats for #California:
-7,031 new cases since yesterday
-7-day average for daily #coronavirus cases is 8,043
-14-day #positivity rate & 7-day positivity rate both at 7.3%
-24% increase in hospitalizations yesterday, ICU down .1%

— Lindsay Zuchelli (@lindsayclaireee) July 9, 2020

This helpful chart from CNBC puts the outbreak across the US in perspective.

* * *

Update (1500ET): California Gov Gavin Newsom is holding a press briefing...

Live now: Governor @GavinNewsom provides an update on California's wildfire preparedness and response efforts amid #COVID19. #YourActionsSaveLives https://t.co/eEj8y4Gc2Q

— Office of the Governor of California (@CAgovernor) July 9, 2020

* * *

Update (1400ET): The WHO named the heads of an independent panel it's establishing to review its COVID-19 response pandemic that has been criticized by the US.

Helen Clark, former prime minister of New Zealand, and Ellen Johnson Sirleaf, former president of Liberia, were selected as co-chairs, WHO Director-General Tedros Adhanom Ghebreyesus said in a meeting with member-states. The panel will present an interim report in November.

WHO has come under fire for its response to the coronavirus outbreak from President Donald Trump who is pulling the U.S. out of the global group, saying that it’s too close to China. Tedros has responded that the agency acted appropriately with the information it had and the rest of the world had plenty of time to prepare to fight the outbreak.

We're curious to see the report, whenever it's released.

* * *

Update (1315ET): As Florida officials continue to refuse to offer a breakdown of hospitalization data, localities have been releasing figures like the number of occupied ICU beds on their own. And what they've found is that 190 COVID-19 patients are on ventilators throughout the county, which includes the city of Miami.

• MIAMI-DADE HAS 190 COVID-19 PATIENTS ON VENTILATORS; PREV. 184

It's just another alarming hospital occupancy headline, but the market doesn't seem to be reacting much.

* * *

Update (1250ET): As COVID-19 cases creep higher in Italy (though deaths continue to slide)...

Italy#coronavirus July 9
More cases, less deaths, less ICU
*Total infected(ex Feb 21): 242,363
*new cases+229 (+119 Lombardy, +28 Lazio)
*W/virus 13,459
(-136 past 24 hrs)
*Cured 193,978(+338 past 24 hrs)
*Total dead 34,926 (+12past 24 hrs )
*ICU 69 (-2)
Civil ProtectionAgency

— Gerard O'Connell (@gerryorome) July 9, 2020

...the country just declared travelers from 13 countries barred from Italy. The countries include Brazil. Americans are also barred from traveling to most EU countries, except in special circumstances. Italy announced earlier this week that it would bar travel from Bangladesh after  a flight from the country brought many infected travelers to Italy.

Meanwhile, lockdown measures have mostly been lifted across the country.

* * *

Update (1157ET): Arizona has released its latest number. Confirmed cases rose by 4,057 to a total of 112,671, the state Department of Health said Thursday (remember, these figures are reported with a day lag). Further details of the daily update revealed that COVID-19-related hospitalizations increased by 16 to 3,437 as of Wednesday , a 12th straight record high.

75 Arizonans died, pushing the state's death toll above 2k.

The market didn't like these numbers, apparently.

Adult intensive care unit beds in use by all patients in the state edged lower from 91% on Tuesday to 89% on Wednesday.

Here's more from the state's dashboard:

The positivity rate tumbled to 11.5% on Thursday, well below the nearly 30% rate the state reported yesterday.

As states cleared a rumored weekend backlog yesterday, at least five states - Missouri, Tennessee, Texas, Utah and West Virginia - set single-day records for new infections on Wednesday, per the NYT.

Additionally, the NYT this morning declared Arizona the world's biggest "hot spot", claiming the state has the largest infection rate (often represented by the variable "R") in the world.

The NYT ranked Arizona No. 1, with about 3,300 cases per 1 million in population, with Florida (2,700) and South Carolina (2,300) following. Bahrain (2,200) took the No. 4. spot.

* * *

Update (1040ET): Florida just suffered its deadliest day yet, health officials reported Thursday.

While the state reported 8,935 new cases (+4%) on Thursday, the number of new deaths hit yet another single-day record with 120 new deaths, 7 deaths higher than the prior record of 113 reached back in early May.

The state also added 411 new hospitalizations. The previous high for new hospitalizations was 400 people back in mid-May. About 17,500 people have had to seek hospitalization because of the virus so far.

The positivity rate in the state hit 18.4%, up from 14.1% in the prior day.

Here's a rundown of the state's latest totals for cases, deaths, tests and hospitalizations.

 

* * *

Update (0830ET): A team of analysts from Goldman Sachs wrote in a note sent out to clients that 40% of America's population lives in a state that has rolled back its reopening plans.

The coronavirus situation in Arizona continues to worsen with new confirmed cases per day continuing to grow on the back of still-growing prevalence of COVID-like symptoms. Hospital capacity in the state is diminishing further. In other states that have high new case counts and fall short on other gating criteria, such as South Carolina, Georgia, and Nevada, hospital and ICU capacity looks slightly better but is still below recommended levels.

More states continue to put their reopening plans on hold. Over the past few days, Connecticut, Ohio, and Washington have delayed reopening plans or placed reopening on hold. States with over 40% of the population have now put reopening on hold, and states with another 30% have already reversed part of their reopening.   

Even states that have their outbreaks under control are rolling back measures as a precaution.

States are increasingly putting their reopenings on hold. Over the past few days, state officials in Connecticut, Ohio, and Washington delayed planned reopening measures or explicitly put reopening on hold. States containing over 40% of the population have now put reopening on hold, and states with another 30% have increased restrictions. Several state governors have also issued new executive orders instituting specific social distancing and other requirements. In Washington, these practices are required “until there is an effective vaccine, effective treatment or herd immunity.”   

Goldman illustrated the trend of pausing the economic reopening across the country.

The latest state tracker put together by the team reflects all of yesterday's near-record numbers.

The tracker also reflects the larger numbers of deaths we've seen over the last two days.

* * *

Wednesday was another brutal day for the US during the global coronavirus outbreak as all of the worst hit states in the sunbelt produced new single-day records ranging from the highest 7-day positivity rate (Florida) to new records for deaths (Texas), single-day cases (California) and hospitalizations (Arizona, Florida, Texas etc).

After the US reported more than 60k new cases on Tuesday for the first time, the country repeated that feat on Wednesday, essentially tying its record number from the prior day.

Our daily update is published. New records for cases, and a top-5 day for tests. Patients currently hospitalized jumped to over 43,000, about the levels of mid-May.

States reported more than 800 new deaths. The 7-day average is creeping back up. pic.twitter.com/b2IvB4RH7r

— The COVID Tracking Project (@COVID19Tracking) July 8, 2020

But as the COVID tracking project points out, the 7-day average for deaths is "creeping back up" after two days of deaths near 1,000 (on Monday, the US reported fewer than 500 deaths for the entire country).

FUNDSTRAT: “If I had to flag a new ‘source of worry,’ it is that daily deaths in the US have risen in the past 2 days, with deaths of +905 (1D ago) and +819 (today). This is above .. the 550-600 daily deaths seen last week. So we need to keep an eye on this.” @fundstrat pic.twitter.com/036vCSDZoW

— Carl Quintanilla (@carlquintanilla) July 9, 2020

As deaths continue falling in New England, the sun belt has more than compensated for it.

There’s been a lot of discussions about deaths continuing to trend down as cases have surged. This chart provides a partial answer to what’s been happening. The falling numbers in the NE were offsetting rising deaths in AZ, TX, FL. pic.twitter.com/hmZkhZXTPS

— The COVID Tracking Project (@COVID19Tracking) July 8, 2020

As we noted, the US also topped 3 million cases yesterday.

We reached 3 million cumulative cases today, less than a month after reaching 2 million. pic.twitter.com/tNw81l9rDZ

— The COVID Tracking Project (@COVID19Tracking) July 8, 2020

So far on Thursday, the bad news out of the US has apparently carried over to Asia, as Hong Kong and Tokyo both reported new single-day records of new cases, as new outbreaks in both territories have come roaring back in recent weeks. Both areas are closely watched bellwethers of the outbreak in East Asia.

Tokyo confirmed 224 new infections on Thursday, its  largest single-day tally yet. While Tokyo has focused its virus suppression efforts on nightlife districts, more mundane places like diners and - of course - nursing homes have seen several outbreaks.

 

 

The city’s mayor has said there are no plans to reinstate the state of emergency that was lifted in Tokyo last month.

Hong Kong health officials have warned of a third wave of coronavirus infections after the city recorded 23 new cases in two days. Social distancing measures in HK were largely lifted over the past two months as the city's cases dwindled. An outbreak at a nursing home in Kowloon has contributed 8 infections to today's total - four residents and four staff tested positive, on top of one resident who tested positive yesterday.

In response, authorities have reintroduced limits on the size of gatherings, with a maximum of eight people. At bars and restaurants, it's 4 people per table tops. Catering businesses can only operate at 60 percent of their usual capacity. Gyms and karaoke lounges must have no more than 16 people in each room or facility.

India reported 22,752 new cases, up slightly from 22,252 yesterday, bringing India's virus total to 742,417. The death toll has jumped to 20,642, up 482.

Meanwhile, as tensions with Beijing intensify, with the White House mulling new retaliatory measures ranging from an assault on the HKD currency peg to barring the popular social media app TikTok, Beijing hurled a few rhetorical rocks Thursday morning when Foreign Ministry spokesperson Zhao Lijian slammed the Trump Administration's decision to withdraw was "another demonstration of the US pursuing unilateralism, withdrawing from groups and breaking contracts."

The WHO is "the most authoritative and professional international institution in the field of global public health security," Zhao said at a briefing Wednesday, adding that the US departure would hurt the developing world, the AP reports - contrasting America's WHO withdrawal with President Xi's promises of forgivable or zero-interest loans and bundles while supplying the developing world with the vaccine.

In Australia, Victoria, the worst-hit Australian state, recorded another 165 case, as an outbreak at a Melbourne high school emerged as the largest cluster in the country. Queensland state also closed its border to people fleeing a six-week lockdown in Melbourne. In addition to the lockdown, Victoria has effectively sealed its borders, while neighboring New South Wales has also shut its border with Victoria.

The official Twitter account of the Strategic Operational Command of the Bolivarian National Armed Forces tweeted Thursday it "neutralized" a 'narco-jet' that violated Venezuelan airspace late Tuesday night. 

"#ULTIMAHORA#CEOFANB reports that the @CODAI_FANB , detected at midnight on #07JUL20 the entry of a Narco-aircraft with registration #EEUU to our airspace and once the Law protocol was applied, it was NEUTRALIZED with aircraft from our Military Aviation," the Venezuelan military tweeted.

Defense Blog said, "fighter jets of the Bolivarian Venezuelan Military Aviation forced a 'narco jet' transporting cocaine to land. After landing in the field, the crew allegedly set fire to the plane to hide all evidence." 

Attached to the Bolivarian National Armed Force's Twitter post were alleged pictures of the "neutralized" private jet. The tail number reads "N339AV." After a quick search on Flight Aware, the plane is a 1994 Raytheon Hawker 800 corporate jet owned by KMWFlight LLC, located in Wilmington, Delaware. 

N339AV's latest "registered flight route was in Mexico, from the central Toluca state to Cozumel island in the Caribbean," said Defense Blog. 

Authored by Victor Davis Hanson via RealClearPolitics.com,

A TikTok video that recently went viral on social media showed a recent Harvard graduate threatening to stab anyone who said "all lives matter." In her melodrama, she tried to sound intimidating with her histrionics.

She won a huge audience as she intended. But her video also came to the attention of the company that was going to give her an internship later this summer, Deloitte, which decided it didn't want to add an intern who threatened to kill strangers who said something she didn't like.

This wouldn't have been much of a story. But then the narcissistic Harvard alum posted a very different video -- one that showed her weeping in a near-fetal position.

She fought back tears while complaining how unfair the world had been to her. Her initial TikTok post had earned cruel pushback from the social media jungle she had courted. Deloitte, she sobbed, was mean and hurtful. And she wanted the world to share her pain.

The Harvard graduate who threatened to “slit the throats and watch them bleed out” to anyone who says “all lives matter” to her is blaming Trump supporters for ruining her life.

Pretty sure she ruined her own life by being a psychopath!pic.twitter.com/HFwrCywWdw

— Mike Coudrey (@MichaelCoudrey) July 2, 2020

The Harvard grad instantly became an unwitting poster girl for the current protest movement and the violence that has accompanied it. What turns off millions of Americans about the statue toppling, the looting, the threats and the screaming in the faces of police is the schizophrenic behavior of so many of the would-be revolutionaries.

On one hand, those toppling statues or canceling their own careers on the internet pose as vicious Maoists -- the hard-core shock troops of the revolution. Their brand is vile profanity, taunts to police, firebombs and spray paint.

In homage to Italy's blackshirts of the past, they wear black hoodies, don makeshift helmets and strap on ad hoc protective padding -- part lacrosse attire, part cinematic Road Warrior costume.

The televised stereotype of the antifa activist is a physically unimpressive but violent-talking revolutionary. He seems to strut in laid-back, blue-city Minneapolis but wisely avoids the suburbs and small towns of the nation's red states. He spits at police when standing beside fellow agitators but would never do that when alone confronting an autoworker or welder.

When police march against the antifa crowd and their appendages in order to clear the streets, they often scream like preteens, objecting to mean officers who dare to cross them.

When arrested, the trash talkers are usually terrified of being jailed or of having an arrest on their records.

Federal authorities are currently searching thousands of videos to ferret out looters, arsonists and assailants. Perpetrators who are caught are shocked that the evidence that they once posted online in triumphant braggadocio is now being used to charge them with felonies.

What is going on?

Black Lives Matter, antifa and their large numbers of imitators and loosely organized wannabes are mostly made up of middle-class youth, often either students or graduates. They deem themselves the brains of the rioting, the most woke of the demonstrators, the most sophisticated of the iconoclasts. In truth, they are also the most paranoid about being charged or being hurt.

What explains the passive-aggressive nature of these protesters and rioters?

Many no doubt are indebted, with large, unpaid student loans. Few seem in a hurry to get up at 6 a.m. each day to go to work to service loans that would take years to pay in full.

While some of those arrested are professionals, many are not. Few seem to be earning the sort of incomes that would allow them to marry, have children, pay off student loan debt, buy a home and purchase a new car.

Historically, the tips of the spears of cultural revolutions are accustomed to comfort. But they grow angry when they realize that they will never become securely comfortable.

In today's high-priced American cities, especially on the globalized coasts, it's increasingly difficult for recent college graduates to find a job that will allow for upward mobility.

The protestors are especially cognizant that their 20s are nothing like what they believe to have been the salad days of their parents and grandparents -- who did not incur much debt, bought affordable homes, had families and were able to save money.

Earlier generations went to college mainly to become educated and develop marketable skills. They weren't very interested in ethnic and gender "studies" courses, ranting professors and woke administrators. For the students of the 1960s who were, protesting was a side dish to a good investment in an affordable college degree that would pay off later.

But when such pathways are blocked, beware.

The woke but godless, the arrogant but ignorant, the violent but physically unimpressive, the degreed but poorly educated, the broke but acquisitive, the ambitious but stalled... these are history's ingredients of riot and revolution.

A lawsuit has been filed against the University of Delaware to try and force the college to hand over Joe Biden's Senate Records, which are housed at the university's library.

Biden, who graduated from the University of Delaware and served as Delaware's senator, transferred the records to the university in 2011 - which announced a change to their expected unsealing shortly before Biden announced his bid for the White House. Meanwhile, Biden has refused to allow a search of the roughly 1,875 boxes of documents and 415 gigabytes of electronic records.

Biden's excuse? That the records could expose unrelated things he's said or done which could be 'taken out of context' and used against him before the November election.

The lawsuit, brought under the Freedom of Information Act (FOIA) by Judicial Watch on behalf of themselves and the Daily Caller News Foundation, was filed in the Superior Court of the State of Delaware. It follows a denial of April 30 requests for Biden's records, as well as records about the preservation - and proposed release, of documents.

The records came to light in early May, after questions over material related to Biden sexual assault accuser Tara Reade might be contained within the records.

I don’t know what’s in Biden’s University of Delaware papers but he really doesn’t want people seeing them.

He won’t even agree to a search of documents just with Tara Reade’s name on them. pic.twitter.com/oavzsdRax2

— Benny (@bennyjohnson) May 1, 2020

Via Judicial Watch:

Judicial Watch filed the lawsuit after the University denied its April 30, 2020, FOIA request seeking:

• All records regarding the proposed release of the records pertaining to former Vice President Joe Biden’s tenure as a Senator that have been housed at the University of Delaware Library since 2012. This request includes all related records of communication between the University of Delaware and any other records created pertaining to any meeting of the Board of Trustees during which the proposed release of the records was discussed.
• All records of communication between any representative of the University of Delaware and former Vice President Biden or any other individual acting on his behalf between January 1, 2018 and the present.

On April 30, the Daily Caller News Foundation submitted its FOIA request to the University seeking:

• All agreements concerning the storage of more than 1,850 boxes of archival records and 415 gigabytes of electronic records from Joe Biden’s senate career from 1973 through 2009.
• Communications between the staff of the University of Delaware Library and Joe Biden or his senatorial, vice-presidential or political campaign staff, or for anyone representing any of those entities between 2010 [April 30,2020] about Joe Biden’s senate records.
• Any logs or sign-in sheets recording any individuals who have visited the special-collections department where records from Joe Biden’s senate career are stored between 2010 to the date of this request.
• All records from Joe Biden’s Senate career that have been submitted to the University of Delaware Library.

On May 20, the University denied the Daily Caller News Foundation’s request.

In response to both Judicial Watch’s and the Daily Caller News Foundation’s requests, the University claimed, without corroboration, that public funds are not used to support the Joseph R. Biden, Jr. Senatorial Papers.

Submitted by Joseph Carson, former chief economist at Alliance Bernstein

Since the pandemic tanked the economy in March the Federal Reserve has expanded its balance sheet by nearly $3 trillion to support the financial markets and asset prices. The injection of Fed liquidity into the financial system has roughly matched the $3 trillion in fiscal stimulus that Congress authorized to send stimulus checks to people, offer additional assistance to newly unemployed people, and provide loans to businesses.

Federal Reserve officials have also promised “unconditional support” as long as the pandemic continues to plague the financial markets and the economy. Never before has a group of non-elected officials been given unchecked authority and unlimited financial resources.

In 1996, a speech by Federal Reserve Chairman Alan Greenspan titled “The Challenge of Central Banking in a Democratic Society” is best remembered for the phrase, “ How do we know when irrational exuberance has unduly escalated asset prices”? But also in the speech, Mr. Greenspan stated, “Our monetary policy independence is conditional on pursuing policies that are broadly acceptable to the American people and their representatives in the Congress”.  

Little did Mr. Greenspan know at the time that future Federal Reserve officials would concoct a twisted set of policies that offer incentives and protection to investors, and in the process unduly escalate asset prices.

In 1996, the same year as Mr. Greenspan speech, the market value of household equity holdings, directly and indirectly, owned matched the annual flow of disposable personal income. Since then boom and busts in asset prices pushed the ratio as high as 2X and slightly below the levels of 1996.  (Note: In the chart below the latest observation for the ratio of equities to income is Q1 2020, while the data on the Federal Reserve balance sheet is through the end of Q2 2020.)

There is nothing unusual for wealth cycles to outpace economic and income cycles, on the way up, and on the way down. But what has been unusual are the actions of policymakers.

Each time asset prices dropped hard pulling the ratio towards 1996 levels policymakers engaged in a series of monetary maneuvers to reverse the trend. That happened in the early 2000s during the tech bubble, following the Great Financial Recession in 2008/09 and also in Q1 2020. However, the opposite did not occur when asset prices soared pushing the ratio of equities to income to record highs at the end of 2019.

Wealth creation, driven by growth and innovation, has always been an important feature of the US economic system.  But wealth creation directly linked to monetary policy maneuvers are arbitrary and create unfair, unbalanced, and unsustainable outcomes.

Congress will soon be debating whether to extend “conditional” unemployment compensation to millions of displaced workers.  Opposition to the extension centers on creating disincentives to work while some also worry about adding to the record budget deficit.

Critics are right to point out that workplace distortions can be caused by paying people more to not work that what they could earn working. But monetary policies that offer protection and incentives to investors can easily cause distortions in finance as they do in the workplace.

Citing the budget deficit, as an argument against extending unemployment benefits is rather weak.  The same critics have no reservation or qualms about the Federal Reserve printing more money to offer protection and incentives to the financial markets and investors.

Proponents and beneficiaries of the current system have too much to lose to change. So my bet is that change will only come if voters decide to elect a new Administration and Congress.

Before the pandemic, 70% of Americans thought the system favored the wealthy and the special interest groups. No doubt that percentage is as high or higher given the unevenness in policies and outcomes since the crisis started.  

There’s an old saying, “If you build it, you own it”. The Federal Reserve owns the unfair system they created, and all the problems and changes that come with it.  It's impossible to make the system fairer if you don't change policies, mandates, and charters that distort incentives and produce uneven outcomes. Policymakers are forewarned as investors should be as well that elections could trigger a lot of fundamental change.