Senate Bill Would Ban Federal Use Of Facial Recognition SystemsTyler DurdenSun, 07/05/2020 – 21:00
Submitted by Sovereign Man Explorer
This Week’s Intelligence
Senate bill would ban federal use of facial recognition systems
A bill in the Senate would issue a presumptive ban on the use of any facial recognition systems by any federal agencies.
That means unless a government agency or bureau is specifically authorized by Congress, they cannot deploy real time facial recognition surveillance or use it to identify people in photos and video later.
The bill would also keep certain federal funds from city and state law enforcement who use biometric surveillance, like facial recognition.
What this means:
Facial recognition technology is too easy to abuse. The government is supposed to go through due process before investigating citizens.
Even just learning the identity of someone is supposed to require reasonable suspicion that a crime has been committed.
But facial recognition is a pre-emptive “search” revealing the identity of anyone on camera.
And in addition to the due process concerns, facial recognition is a good way to quell dissent and protest from anyone afraid of being identified and targeted by the government for speaking out.
* * *
Colorado Police Reform bill on its way to ending qualified immunity
A bill has passed the Colorado Senate which would end qualified immunity in the state.
If the bill becomes law, it would mean police could be sued and charged for crimes they commit while acting in their official capacity as police officers.
The bill also requires officers to intervene if a colleague is committing a crime or face possible charges themselves.
It also permanently strips officers of their certification to be police officers if they are convicted or plead guilty to any excessive force violations.
What this means:
Qualified immunity is the legal doctrine that protects police from legal consequences if they claim they thought their actions were legal and necessary to do their job.
To hold police accountable essentially requires a matching precedent that says a specific behavior or incident of brutality is not protected.
Ending qualified immunity is a good first step towards holding police to the same legal standards as everyone else.
* * *
New Mexico Supreme Court says governments can snoop bank records
The third party doctrine is used by the federal government to spy on anyone they want without a warrant.
The idea is once a citizen gives information to a third party like a bank or internet provider, they have voluntarily given it away.
Texas Sees Record Jump In COVID-19 Hospitalizations: Live UpdatesTyler DurdenSun, 07/05/2020 – 20:45
Texas sees record jump in hospitalizations
California reports jump in daily cases
Taj Mahal closed until further notice
India draws nearer to Russia amid another record jump in cases
World sees record jump in COVID-19 cases
Florida reports 9,999 new cases
Arizona sees roughlt 3,500 new cases
South Africa sees record jump in new cases
US reports 53k cases for Sunday
WHO cancels hydroxychloroquine trials
Russia cases near 700k
Japan sees another 277 new cases
* * *
Update (1900ET): Texas saw daily hospitalizations reach a fresh record high on Sunday as 8,181 patients with the virus were admitted to hospitals around the state, even as the number of new COVID-19 cases reported declined day-over-day.
Texas reported 3,449 new confirmed cases of COVID-19 Sunday, after a record high of 8,258 Saturday.
State health officials also reported 29 additional deaths, bringing the totals to 2,637 deaths and 195,239 confirmed cases, per state data.
Officials in cities like Austin are pushing Gov Abbott to return control to municipalities to allow some places to implement new stay-at-home orders, a measure the governor has resisted despite making mask-wearing mandatory. Mayor Steve Adler, a Democrat, said as much on CNN’s “State of the Union” Sunday as he warned that hospitals have been facing a crisis and ICUs could be overrun in as few as 10 days. A few counties warned that their ICUs had been overwhelmed over the last couple of days, and hospitals in Houston have already needed to transport some patients 50 miles away. In the Houston area, Democratic Harris County Judge Lina Hidalgo claimed a stay-at-home order is needed.
* * *
Update (1435ET): California reported another 5,410 new cases (+2.1%) on Sunday (remember, the cases are reported with a 24 hour delay). The positivity rate was 6.3%, down slightly from the rates seen on Thursday and Friday.
The new cases brought the state’s total case count count climbed to 260,155
CALIFORNIA 260,155 Cases / 6,331 COVID-19 deaths
Rt = 1.20 (+.04%) Test Positivity = 6.3% (-0.2%) New Cases = +5,410 (+2.1%) New C19 Non-ICU Hospitalizations = +74 (+1.3%) New C19 ICU Cases = +29 (+1.7%) New C19 Deaths = +18 (+0.3%)
…which means mortality continues to trend lower across the state.
* * *
Update (1430ET): Already, it looks like India reported another record (or near record) total of new cases on Sunday.
The post-lockdown surge in the world’s second-most-populous nation took India’s total tally to more than 673,000 cases and 19,268 deaths, moving India closer to surpassing badly-hit Russia, the world’s third-most infected nation.
…officials have announced that the Taj Mahal, India’s most popular tourist attraction and one of the seven wonders of the modern world, won’t reopen any time soon.
“The Taj Mahal, which is in the Taj Ganj police station jurisdiction, is a ‘containment zone’,” a document released by Agra’s District Magistrate Prabhu N Singh stated late Sunday.
Containment zones are where high infection rates have been detected, with all activity except essential services halted.
* * *
The world celebrated America’s independence by reporting 212,000 new cases of the Coronavirus yesterday, with roughly half that total came from the US, India and Brazil alone.
Data from Johns Hopkins put the number at 207k:
JHU put the number of cases confirmed in the US yesterday at 52,391, with 7.6% of tests coming back positive.
The last record high in the US arrived on July 3, when 57,549 people tested positive for the first time.
Following studies showing hydroxychloroquine can be effective at mitigating symptoms in patients if taken early enough in the life of the infection, the WHO said yesterday that it planned to discontinue trials of the Trump-approved malaria drug, along with a combination HIV drugs known as lopinavir/ritonavir in hospitalised patients with COVID-19 after the medications failed to reduce mortality.
Worldwide cases have reached 11.23 million while 6.04 million patients have recovered, according to the latest Johns Hopkins University tally. The number of deaths worldwide hit more than 530,000.
Already, Arizona and Florida have reported their case numbers for the last 24 hours, with both states seeing a minor retreat from the all-time highs in daily case numbers.
As of Sunday, coronavirus cases are on the rise in 34 states over the past week, with 12 seeing an increase of more than 50%. Three states, Kentucky, New Hampshire and Vermont, are reporting a decline in cases.
Florida reported 9,999 new coronavirus cases Sunday, coming one day after the state set a record for most cases in a single day with a total of 11,458 new cases, which also surpassed New York’s previous single-day high of 11,434, which was recorded in mid-April.
Arizona reported 3,536 new cases, and 4 deaths, bringing its total confirmed to 98,089 1,809 coronavirus-related deaths, according to the state’s latest numbers.
New York, meanwhile, saw another 533 new cases and 8 fatalities.
Today’s update on the numbers:
63,415 tests were performed yesterday. 533 tests came back positive (0.84% of total).
Internationally, the Philippines reported its biggest jump in new cases with 2,434, taking its total count to 44,254, the health ministry said.
South Africa is reporting more than 10,000 new confirmed coronavirus cases for the first time in a single day, bringing the country’s total confirmed cases to more than 187,977, by far the most of any country in Africa.
South Africa also has surpassed the deaths of 3,000 people in the outbreak.
As more of the Middle East rolls back restrictions, Saudi Arabia’s coronavirus cases have surpassed 200,000 and neighboring UAE has 50,000, with the number of new cases climbing after both countries fully lifted curfews last month.
Russia reported 6,736 new cases, bringing its total to 681,251, with 134 new deaths bringing its death toll to 10,161. India saw its biggest surge in COVID-19 cases, with 24,850 new cases and 613 deaths in the last 24 hours. The country’s tally of infections rose to 673,165 as the death toll increased to 19,268, according to health ministry data.
FInally, Japan reported 277 new coronavirus cases Sunday morning, bringing the country’s total number of cases to 20,234 (19,522 on land and 712 on the Diamond Princess cruise ship).
Old coins vaccinated me against trusting politicians long before I grew my first scruffy beard. I began collecting coins when I was eight years old in 1965, the year President Lyndon Johnson began eliminating all the silver in new dimes, quarters, and half dollars. LBJ swore that there would be no profit in “hoarding” earlier coins “for the value of their silver content.” Wrong, dude: silver coins are now worth roughly fifteen times their face value.
History had always enthralled me, and handling old coins was like shaking hands with the pioneers who built this country. I wondered if the double dented 1853 quarter I bought at a coin show was ever involved in Huckleberry Finn–type adventures when “two bits” could buy a zesty time. I had a battered copper two-cent piece from 1864, the same year that Union general Phil Sheridan burned down the Shenandoah Valley where I was raised. Some of the coins I collected might now be banned as hate symbols, such as Indian Head pennies and Buffalo nickels (with an Indian portrait engraved on the front).
In the era of this nation’s birth, currency was often recognized as a character issue—specifically, the contemptible character of politicians. Shortly before the 1787 Constitutional Convention, George Washington warned that unsecured paper money would “ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”
But as time passed, Americans forgot the peril of letting politicians ravage their currency. In 1933, the US had the largest gold reserves of any nation in the world. But fear of devaluation spurred a panic, which President Franklin Roosevelt invoked to justify seizing people’s gold to give himself “freedom of action” to lower the dollar’s value. FDR denounced anyone who refused to turn in their gold as a “hoarder” who faced ten years in prison and a $ 250,000 fine.
FDR’s prohibition effectively banished from circulation the most glorious coin design in American history—the twenty-dollar Saint-Gaudens Double Eagle gold piece. I was captivated by early American coin designs, especially those featuring idealized female images emblazoned with the word liberty. I was unaware that George Washington refused to allow his own image on the nation’s coins because it would be too “monarchical.” Until 1909, there was an unwritten law that no portrait appear on any American coin in circulation. That changed with the hundredth anniversary of the birth of Abraham Lincoln, whom the Republican Party found profitable to canonize on pennies.
By the mid-twentieth century, American coinage had degenerated into paeans to dead politicians. Portraits of Franklin Roosevelt, John F. Kennedy, and Dwight Eisenhower were slapped onto coins almost as soon as their pulses stopped. This reflected a sea change in values as Americans were encouraged to expect more from their leaders than from their own freedom.
Coin dealing helped me recognize early on that a government promise is not worth a plug nickel. From 1878 onwards, the US Mint printed silver certificates, a form of paper currency. My 1935 silver certificate stated: “This certifies that there is on deposit in the Treasury of the United States of America One Dollar in Silver Payable to the Bearer on Demand.” But in the 1960s, that became inconvenient so the government simply nullified the promise.
On August 15, 1971, President Richard Nixon announced that the US would cease paying gold to redeem the dollars held by foreign central banks. The dollar thus became a fiat currency—something which possessed value solely because politicians said so. Nixon assured Americans that his default would “help us snap out of the self-doubt, the self-disparagement that saps our energy and erodes our confidence in ourselves.” Regrettably, this particular treachery was not included on the list of indictable offenses that the House Judiciary Committee enacted a few years later.
After Nixon’s declaration of economic martial law, I lost my enthusiasm for squirreling away one memento from each mint and each year in the Whitman blue coin folders that permeated many 1960s childhoods. I shifted from collecting to investing, hoping that old coins would be a good defense against Nixon’s “New Economics.” Prices for pristine coin specimens were far higher and more volatile than the value of some of the barely legible slabs of metal I previously amassed. A single blemish could slash the value of a rare coin by 80 percent (same problem I had with some manuscripts I’ve submitted over the years).
Coin values were pump primed by the Federal Reserve’s deluge of paper dollars to create an artificial boom to boost Nixon’s reelection campaign and supplemented by wage and price controls that wreaked havoc. Inflation almost quadrupled between 1972 and 1974, and I soaked up the cynicism and outrage prevailing in coin investment and hard money newsletters. I poured most of the money from the jobs I did during high school into rare coins. Because rare coins were appreciating almost across the board, it was difficult not to be lucky in a rising market. The biggest peril was the endless scam artists seeking to fleece people with false promises of lofty gains or fraudulent grading of rare coins—a pox that continues to this day.
After graduating high school in 1974, I began working a construction job. When I got laid off, I saw it as a sign from God (or at least from the market) to buy gold. Investment newsletters and political debacles convinced me the dollar was heading for a crash. I sold most of my rare coins and plunked all my available cash into gold and also took out a consumer finance loan at 18 percent to purchase even more. That interest rate was the gauge of my blind confidence. Nixon’s resignation in August 1974 did wonders to redeem my gamble.
My coin and gold speculations helped pay for my brief stints in college, with some greenbacks left over to cover living expenses during my first literary strikeouts. I eventually shifted into journalism and migrated to the Washington area.
Two weeks after I moved into a shabby group house in the District of Columbia in 1983, I pawned the last gem of my coin collection—the 1885 five-dollar gold piece that my Irish American grandmother had given me fifteen years earlier. She was a dear sweet lady who would have appreciated that her gift helped cover the rent for a few more weeks until I finally consistently hit solid paydirt later that year. (Thanks, Reader’s Digest!)
Wheeling and dealing with coins inoculated me against Beltway-style agoraphobia—a pathological dread of any unregulated market. The market set the price for 1950 Jefferson nickels coined in Denver based on the relatively small mintage chased by growing legions of young collectors. Nixon boosted the price of milk after the dairy lobby pledged $ 2 million in illegal contributions. It was nuts to permit politicians to control prices when there was no way to control politicians. Having watched coin values whipsaw over the prior decade, I recognized that value was subjective. The test of a fair price is the voluntary consent of each party to the bargain, “the free will which constitutes fair exchanges,” as Senator John Taylor wrote in 1822. Seven years ago, President Barack Obama, talking about how the government was losing money minting the lowest denomination coin, declared, “The penny, I think, ends up being a good metaphor for some of the larger problems we got.” Actually, the collapse of our currency’s value is a curse, not a metaphor. The dollar has lost 85 percent of its purchasing power since Nixon closed the gold window.
For a century, American coinage and currency policies have veered between “government as a damn rascal” and “government as a village idiot.” I remain mystified how anyone continues trusting their rulers after the government formally repudiates its promises. But I still appreciate old coins with beautiful designs that incarnated the American creed that no man has a right to be enshrined above anyone else.
How Deutsche Bank Helped Con The Public Into Believing In WirecardTyler DurdenSun, 07/05/2020 – 19:30
More reporting on the Wirecard situation has emerged over the long weekend in the US, and none of it is flattering.
As a court-appointed administrator begins the process of managing what’s left of Wirecard through the insolvency process, while doing the best the government can to compensate shareholders who were deceived by the onetime fintech darling, WSJ reports that the (now former) COO, Jan Marsalek, has disappeared, with many suspecting that the longtime COO – who probably knows where many of the bodies are buried – has gone on the run as German prosecutors seek to question hi,.
His motives aren’t too difficult to discern: With CEO Markus Braun out on bail, it’s likely that Marsalek, who’s suspected of playing a critical role in maintaining the company’s complex shell game with the “Asian third-parties” which helped Wirecard conceal its accounting fraud, even from the auditors who apparently never bothered to actually check these accounts.
When the FT reported last year that most of Wirecard’s actual profits were generated by its opaque Asian businesses, the company denied it, with CEO Markus Braun insisting this was “simply not true”. But once again, it appears the FT reporters were spot-on, as an appendix to to KPMG’s damning third-party report obtained exclusively by the FT purports to show.
Per the FT, Wirecard’s core business in Europe and the Americashas been lossmaking for years, which means the only Wirecard subsidiaries worth any money are those tied to the company’s most opaque operations, which might make it more difficult to sell the business lines that aren’t impacted by the fraud, and which still have value (theoretically, at least).
Some background: German payments group collapsed into insolvency last month after revealing that €1.9 billion ($ 2.1 billion) in cash in its accounts actually “didn’t exist”, exposing the “highly profitable” payments company and lender as a fraud.
According to its EY-audited financial reports, between 2016 and 2018 Wirecard generated operating margins of around 22% and almost doubled annual earnings before interest and taxes to €439 million. However, these profits appear to have existed largely on paper, according to the section of the KMPG report (which has already been made public, though the appendix has not) obtained by the FT. The businesses in question are WC’s payments business in Europe and Asia, and its credit card business in Europe and North America. Not only were these businesses lossmaking, but they’ve become increasingly money-losing in recent years.
During this time, Wirecard contended that its opaque Asian business more than offset these losses. But now it appears that 2/3rds of that businesses profits were completely imaginary. The company’s activities outside Asia haven’t actually generated a profit since 2016.
Wirecard’s court-appointed administrator Michael Jaffé is facing a difficult task as he tries to manage the sale of a few profitable business lines in WC’s banking and payments businesses. As more damning information comes to light, a sale of Wirecard’s subsidiaries needs to happen within weeks or they will lose any remaining value. “Wirecard has very few physical assets, and the risk is that many of its clients will switch to rivals soon,” said an anonymous source quoted by the FT. That source also claimed that the legal claims against Wirecard’s former management and its auditor (EY) said one of the people, adding that Wirecard’s legal claims against its former management and its accountant may be more valuable than its remaining operating business.
Several buyers have expressed interest, including – most notably – Deutsche Bank, which maintains it is best positioned to integrate Wirecard’s legit businesses into its existing operations.
In an extraordinary example of how banks can sometimes abuse the “Chinese Wall” that’s supposed to exist between the stock analysts and the investment bankers, Deutsche Bank, over the course of a year, hedged all of its loan exposure (some $ 300 million in loans to both Wirecard and its (now former) chief executive, Markus Braun) to Wirecard. Meanwhile, its independent investment-management unit (DWS) piled into Wirecard’s shares, and DB’s analysts issued at least one “buy” rating on the DAX component’s shares.
As Wirecard’s shares eclipsed those of Germany financial champions like Deutsche Bank and Commerzbank (which WDI would later replace as a component of the DAX), the financial establishment in the country went from treating Wirecard like a pariah or a novelty (the company got its start providing payments infrastructure to adult entertainment sites and other shadier corners of the Internet) to a true national champion.
One of DB’s most egregious decisions involving Wirecard was hiring Andreas Loetscher, the Ernst & Young partner who oversaw several audits of Wirecard’s results, as chief accounting officer. Loetscher is now under investigation by German authorities.
When the FT, published its first story alleging certain ‘accounting irregularities’ at Wirecard (the first in a series led by intrepid investigative reporter Dan McCrum) DB’s investment bankers immediately started worrying about the bank’s exposure should the company’s shares (against which all of DB’s loans were collateralized).
At Deutsche Bank, some executives grew alarmed, including Garth Ritchie, the head of investment banking at the time. Ritchie’s skepticism had arisen in part from conversations with hedge-fund clients that had conducted their own research into the firm’s workings, and who had been betting against the stock. His unit oversaw a 150 million-euro loan to Braun that was secured by Wirecard shares, so if the shares fell, the bank could lose a lot of money.
Risk managers led by Stuart Lewis, Deutsche Bank’s chief risk officer, were also worried. The lender had agreed to provide around 120 million euros to Wirecard as part of that firm’s revolving credit facility, but the payments company was expanding very rapidly and Deutsche Bank didn’t fully understand all the factors at play. They reduced their exposure and increased their hedge in the wake of the FT story.
When Wirecard approached DB about a merger last spring, the bank courteously declined. As its bankers sold off chunks of its Wirecard exposure, they made sure to do so quietly, so as not to spark a market panic that the biggest bank in Germany was getting cold feet on Wirecard. When SoftBank stepped up and invested €900 million in a complicated capital injection, DB’s analysts upped their rating on Wirecard stock to buy from hold, and projected 20% upside.
Later that year, when SoftBank got cold feet and started looking for a way out of its partnership with Wirecard, DB declined to help underwrite a convertible bond sold by Wirecard as part of the deal last spring. And while the bank did underwrite a €500 million bond deal for Wirecard in September, the entire inventory of debt was sold on to investors. The bank was more than happy to underwrite this debt and sell it on to yield-starve institutions despite having declined to underwrite a more complicated debt security for fear of getting stuck with too much of the product on its books, according to BBG.
When Wirecard shares sold off last fall, DWS doubled down. Yet, by the time Wirecard spiraled into insolvency in the spring, a margin loan to CEO Braun was off the bank’s books. But DB apparently helped Braun find another lender in the form of German bank Oldenburgische Landesbank, a small regional lender backed by private equity investors including Apollo Global Management.
Although DB is among a group of 15 lenders owed some €1.6 billion by Wirecard, its actual exposure is closer to €70 million, assuming the credit facility was 90% drawn down. Commerzbank, ABN Amro and ING are each owed twice as much.
And here’s the kicker: With Wirecard headed for insolvency, Deutsche Bank is now considering buying Wirecard’s banking operations, which have been ringfenced from the rest of the company by BaFin. After all that, DB could walk away with the only profitable business in the entire toxic company at a substantial discount. And with the explicit help of BaFin, the German securities regulator that actively protected Wirecard by attacking the FT and its reporters and even going so far as to bar short-selling in Wirecard shares. Most analysts believe that the company’s lending business will be worthless soon if clients go elsewhere. That should set the stage for DB to acquire the business at a substantial discount.
In summary, DB basically did more than any other member of the German establishment (perhaps aside from BaFin) to legitimize Wirecard. Now, DB is set to become one of the biggest beneficiaries of the company’s historic collapse.
At least 67 people were shot, including 13 fatally, over the Independence Day weekend in Chicago, according to authorities.
Nine of the weekend’s victims were minors, and two children died, officials told Fox32. That includes 14-year-old boy who was among four people who were killed in the South Side neighborhood Englewood on Saturday evening.
The victims were at a large gathering on the street at around 11:35 p.m. on South Carpenter Street. Four males then approached the group and began shooting, police said, adding that the 14-year-old boy was shot in the back before he was taken to Comer Children’s Hospital, where he was later pronounced dead.
The three other males, who were not identified, were pronounced dead at the scene and at the University of Chicago Medical Center, police said.
In the same incident, an 11-year-old boy suffered a bullet graze wound, and a 15-year-old boy was shot in the abdomen. They were taken to the Comer hospital, and both are currently in fair condition, authorities said.
Officials said a 7-year-old girl was shot in the head while standing on the sidewalk at her grandmother’s house during a Fourth of July celebration at 7 p.m. in Austin on the West Side, according to The Associated Press.
Tonight, a 7-year-old girl in Austin joined a list of teenagers and children whose hopes and dreams were ended by the barrel of a gun.
“Chicago’s heart is broken again. Austin’s heart is broken again … I’m tired of this.”
Meanwhile, in a later incident at around 2:15 a.m. on Sunday in the South Side, a 21-year-old man was shot to death while standing on the sidewalk, police said. An hour before that, a woman was shot and five men were injured when a person opened fire at a crowd setting off fireworks in the West Side’s Lawndale neighborhood.
Commenting on the latest violence, president Trump tweeted that shootings are significantly also in NYC “where people are demanding that @NYGovCuomo & @NYCMayor act now. Federal Government ready, willing and able to help, if asked!”
Chicago and New York City crime numbers are way up. 67 people shot in Chicago, 13 killed. Shootings up significantly in NYC where people are demanding that @NYGovCuomo & @NYCMayor act now. Federal Government ready, willing and able to help, if asked!
China New Car Sales Crash 37% In 4th Week Of JuneTyler DurdenSun, 07/05/2020 – 18:30
June does not appear to be shaping up to be the month where Chinese auto sales “bounce back”. Dealing with recessionary headwinds pre-Covid, the world’s largest auto market has been decimated by the effect of the pandemic and doesn’t look to be leading the world to any type of meaningful recovery any time soon.
Overnight the China Passenger Car Association said that retail car sales were down 37% YOY for the 4th week of June.
Average daily sales were down to 51,627 during June 22-27. This is a 6% sequential fall from the same week in May, indicating little respite or improvement from the pressure of the coronavirus pandemic on the industry. PCA blamed “seasonal factors” for the drop, which is a funny way to say “Chinese-borne virus ravaging the entire planet”.
This also paints an ugly picture for June’s new car sales number, since we reported about 3 weeks ago that the first week in June was also off to an ugly start. In that article, we noted that retail car sales fell 10% year over year – but more importantly 20% from the same period in May – in the first week of June.
June’s interim data comes after what looked like the beginning of a rebound for the industry in May, to the extent that we can trust the numbers coming out of Beijing. This news comes despite better than expected results in May, where sales showed a 12% increase year over year.
According to The Detroit Bureau, premium and luxury passenger car retail sales led the charge in May, rising 28% last month compared with year-ago results. Those vehicles accounted for 1.61 million of the month’s 2.14 million vehicles sold.
The China Association of Automobile Manufacturers, or CAAM, had predicted an 11.7% jump for May, including commercial vehicle sales in its results. Predictions for June look ominous:the CPCA has said that June sales will decline in part because June 2019 was such a strong month for the industry.
Meanwhile, the Chinese government is attempting to spur demand with new policies aimed at enticing buyers, according to Bloomberg, citing an unnamed automotive industry group in China.
Recall, we have recently noted that U.S. auto manufacturers are also teeing up sizeable incentives to get buyers back into showrooms. Europe is following suit, with Volkswagen starting a sales initiative to revive demand, including improved leasing and financing terms.
Outlook for the year in China remains less-than-optimistic. The CAAM predicts that sales will drop 15% to 25% for the year, depending on whether or not the country is able to further slow the spread of the virus.
June’s full retail vehicle sales data should be available in days.
Grotesque. I hope this is a joke. We are not in any danger of extinction. There are BILLIONS of humans on this planet. Growing lambs in plastic sacs is obscene god complex experimentation for experimentation’s sake, let alone more humans. There is absolutely no need for it.
It could only be morally acceptable if a woman was close to losing her child and this was used in a NICU under medical supervision- but what a disgrace to separate the biological reality of mother and child.
The happy clappy promotional video did not make mention of the fact that this all sounds like some horrific dystopian hybrid of Aldous Huxley’s Brave New World and a plot from Black Mirror.
Huxley’s 1932 classic portrayed a soft form of totalitarianism where children are biologically engineered from birth in test tubes where each one is given a predestined course in life which is dependent on the conditioning techniques used on its decanted embryo.
While the “concept incubator” falls far short of that scenario, it does promote the idea of dehumanizing the baby by removing the mother from the process entirely.
As we have previously highlighted, the tech elite seems to be obsessed with further atomizing human beings by making them do literally everything from within the confines of a pod, whether that be living, exercising, working, or eating.
Since the coronavirus outbreak, numerous restaurants have announced that they’ll be enclosing diners within pods or greenhouses, despite the fact that they will obviously overheat in summer.
“Transparent corrals for beach-goers. Dining pods. Clear boxes for students. The demand for plexiglass protective shields has never been higher,” announced the Wall Street Journal this week.
* * *
My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.
Manhattan Apartment Sales Plummet, Worst In Three Decades Tyler DurdenSun, 07/05/2020 – 17:30
The virus pandemic and social unrest have sparked an exodus of city dwellers to rural communities and towns. Remote access for work, and the recession, coupled with high unemployment, will extend this outbound emigration trend for the next several years as people seek cheaper living accommodations ex-metro areas.
It appears the factors mentioned above have dealt a heavy blow to the Manhattan real estate market, which suggests a correction in apartment prices are ahead.
Manhattan apartment sales plunged 54% in 2Q20 compared with the same period last year, marking the most significant decline in 30-years, according to Miller Samuel and Douglas Elliman. The median sales price fell 18% to $ 1 million, the largest decline in a decade. According to real estate firm Compass, there were only 1,147 sales in the quarter, the lowest on record, due mostly because of coronavirus lockdowns barred agents from showing apartments until June 22.
“Manhattan was effectively shut down throughout the second quarter until the final week,” the report said.
“Agents are going nonstop right now,” said Bess Freedman, CEO of Brown Harris Stevens, told CNBC.
“Sellers can’t be married to pre-pandemic prices,” Freedman said. “Everyone needs to be reasonable and fair about the new environment.”
“There is going to be an incredible supply of rentals,” he said. “We are going to see a lot of negotiating and landlord incentives.”
The latest indicator that the Manhattan real estate market is turning could be the number of signed contracts in June, were down 76%, compared with the same time last year.
Further, an entire floor apartment at the “coveted” One57 building, one of the flagships of billionaire’s row, just sold for $ 28 million about six years after it was initially purchased for $ 47.4 million.
It marks a 41% discount for the luxury apartment in the span of about a half-decade. The plunge in prices would be the most significant discount to date at the building.
If readers aren’t familiar with the current exodus trends ex-cities – here’s the latest:
Plans to start mining the Moon as early as 2025 became more attractive this week after a US National Aeronautics and Space Administration (NASA) team found evidence that the Earth’s natural satellite may, underneath its surface, be richer in metals than previously thought. Using data from the Miniature Radio Frequency (Mini-RF) instrument onboard NASA’s Lunar Reconnaissance Orbiter (LRO), a team of researchers came to the conclusion that the lunar subsurface contains a higher concentration of certain metals, such as iron and titanium, than estimated.
The study, published in the journal Earth and Planetary Science Letters, contends the most popular theory surrounding the Moon’s origins. The hypothesis contends the satellite was formed when a Mars-sized object collided with Earth, vaporizing large portions of the Earth’s upper crust.
“By improving our understanding of how much metal the moon’s subsurface actually has, scientists can constrain the ambiguities about how it has formed, how it is evolving and how it is contributing to maintaining habitability on Earth,” lead study author Essam Heggy said in a statement.
The evidence was discovered while the scientists were looking for ice at the bottom of craters in the lunar north pole region, NASA said. It means that fine dust found at the base of those holes are parts of the deeper layers of the Moon, ejected during meteor impacts. As such, this dust represents the composition in deeper Moon layers. The researchers found a pattern in which larger and deeper craters have higher metal concentrations than smaller and shallower ones. Specifically, in craters approximately 1 to 3 miles wide, the dielectric constant or electrical property increased along with crater size. However, the electrical property remained constant for craters between three to 12 miles wide.
Order to mine
US President Donald Trump signed an order in April encouraging citizens to mine the Moon and other celestial bodies with commercial purposes.
The directive classifies outer space as a “legally and physically unique domain of human activity” instead of a “global commons,” paving the way for mining the moon without any sort of international treaty.
“Americans should have the right to engage in commercial exploration, recovery, and use of resources in outer space,” the document states, noting that the US had never signed a 1979 accord known as the Moon Treaty. This agreement stipulates that any activities in space should conform to international law.
“There have already been examples in history when one country decided to start seizing territories in its interest — everyone remembers what came of it,” Roscosmos’ deputy general director for international cooperation, Sergey Saveliev, said.
Aircraft taking off from Ronald Reagan National Airport in Arlington, Virginia. (Public domain CC0 image.)
The proposed global legal framework for mining on the moon, called the Artemis Accords, would be the latest effort to attract allies to the National Space Agency’s (NASA) plan to place humans and space stations on the celestial body within the next decade.
Unlike NASA, LSA does not carry out research or launches. Its purpose is to accelerate collaborations between economic project leaders of the space sector, investors and other partners.
Thanks to the emerging European network, scientists announced last year plans to begin extracting resources from the moon in five years.
NASA is working on lunar bases that can travel on wheels, or even legs, increasing landing zone safety, provide equipment redundancy and improve the odds of making key discoveries. (Image courtesy of NASA.)
The mission, in charge of the European Space Agency in partnership with ArianeGroup, plans to extract waste-free nuclear energy thought to be worth trillions of dollars.
Both China and India have also floated ideas about extracting Helium-3 from the Earth’s natural satellite. Beijing has already landed on the moon twice in the 21st century, with more missions to follow.
In Canada, most initiatives have come from the private sector. One of the most touted was Northern Ontario-based Deltion Innovations partnership with Moon Express, the first American private space exploration firm to have been granted government permission to travel beyond Earth’s orbit.
Geologists, as well as emerging companies, such as US-based Planetary Resources, a firm pioneering the space mining industry, believe asteroids are packed with iron ore, nickel and precious metals at much higher concentrations than those found on Earth, making up a market valued in the trillions.
Goldman Cuts GDP Forecast Due To Coronavirus “Resurgence”Tyler DurdenSun, 07/05/2020 – 16:09
After slashing its economic outlook in April and early May, expecting a GDP crash of as much as 40% in Q2, Goldman turned cautiously optimistic around the time of peak shutdowns in the US, and not only saw a light at the end of the tunnel in mid May, but also launched its own “reopening scale” index on May 9, a number which started off at 1 and is currently at 2 and rising with the bank continuing to see modest improvements at stay-at-home businesses, offset by a slight deceleration in back-to-business segments.
However, in recent weeks, Goldman’s optimism has become increasingly more muted, and on Saturday the bank downgraded its Q3 GDP forecast due to a “dramatic resurgence of Covid over the last two weeks, with confirmed daily new cases surpassing 50,000.” AS a result, Goldman’s chief economist Jan Hatzius has “revised” his GDP forecast to reflect these new developments: “A pause in the consumer services sector in July and August should limit the 2020Q3 rebound to 25% quarter-on-quarter annualized, vs. 33% in our previous forecast.”
However, in keeping with the traditional bad news-good news strategy, the bank also upgraded its 2021 numbers by 1-1½pp, both “because some reopening activity will be delayed and because prospects for an earlier vaccine have improved recently”, in other words because of “hope.” Still, on a full-year basis, Goldman’s forecast now implies a -4.6% GDP drop in 2020, worse than the -4.2% before, and an unchanged +5.8% rebound for full year 2021, the same at the bank’s prior forecast (expect many more downward revisions to this number).
Below are some additional details from Goldman which all other sellside banks will shortly imitate as they, too, begin downgrading their forecasts due to a “resurgence” in covid cases:
The US has experienced a dramatic resurgence of Covid over the last two weeks as a spike in the Sun Belt has pushed the daily number of new cases above 50,000. In response, officials have paused or reversed reopening in states containing more than half of the US population, and reopening will likely be delayed in much of the rest of the country as well. High-frequency alternative data show a dip in consumer activity in the worst-affected states in the final week of June, and this downward trend will likely persist in early July. In this week’s Analyst, we recalibrate our economic forecast to reflect the impact of the deteriorating virus situation on reopening policy, social distancing, and consumer activity.
The Covid Resurgence
Over the last few weeks, the Covid situation in the US has worsened significantly to the point where the US is now a notable outlier among advanced economies. The US is now performing poorly on most key measures: new cases are growing rapidly; prevalence of COVID symptoms is rising; the estimated effective reproductive number Rt stands at 1.10 nationally, meaning that case growth is accelerating; the positive test rate is well above 10% in some states; and available hospital capacity is diminishing.
In recent weeks we have tracked the virus situation at the state level to monitor the risk of a pause or reversal of reopening. We focus on four recommended gating criteria for reopening from the Centers for Disease Control and Prevention: 1) declining prevalence of COVID-like illness symptoms; 2) declining new confirmed cases; 3) a positive test rate below 10%; and 4) available hospital capacity above 30%.
Exhibit 1 shows that state performance in meeting these gating criteria has worsened significantly since late May. Although most states have a positive test rate below 10% and maintain adequate available hospital capacity, the number of new cases and the prevalence of COVID-like illness symptoms are rising in states containing most of the US population. The worrisome trend in these early indicators signals that lagging indicators like hospital capacity might deteriorate further in coming weeks. At this point, five states (representing 15% of the population) meet none of the recommended gating criteria and another 11 states (24% of the population) meet only one. Only three states meet all four criteria.
Goldman then points out that while “state governments have emphasized that a return to an economically painful full lockdown would only be a last resort”, Goldman agrees that there is indeed a high bar for states to shut down large portions of their economies again, “diminishing available hospital capacity leaves state governments with little choice but to reassess reopening and potentially pursue incremental restrictions.”
As the bank shows in the next chart, “over the past two weeks, states representing about 60% of the US population have responded to the worsening virus situation by pausing or reversing their reopening plans.”
To wit, nearly all states had eased restrictions by June, but over the last week states including Florida, Texas, and California moved toward tighter restrictions with targeted measures including closing bars and limiting restaurant occupancy. Texas has also limited elective medical procedures to free up hospital capacity.
As Kostin further adds, whereas the US took a more bottom-up approach to reopening than most countries, with policy set mostly at the state and city level and as a result, there were bound to be setbacks in at least a few parts of the country as the economy reopened, “the recent virus news and the extent of reopening reversals have already been much worse than we anticipated, and further restrictions will likely be required in some states to bring the virus under control.”
This, Goldman concedes, “calls for a reappraisal of the economic outlook.”
What does this reappraisal mean in practical terms? Nothing less than a significant trim in expectations for a consumer comeback. Here’s Goldman:
A combination of tighter state restrictions and voluntary social distancing in response to the virus situation is already having a noticeable impact on economic activity. Mobility data from Google show that states with a more severe deterioration in their public health situation—defined here as those states meeting none or only one of the gating criteria for reopening as of June 28—saw a modest decline in retail and recreation activity and workplace activity toward the end of June that began even before authorities tightened policy (see Exhibit 3). Activity was flat on average in other states.
Other timely alternative data sources also indicate that the consumer comeback has stalled as the virus situation has worsened. Mobility data from Apple show a pause in activity in the worst-affected states alongside a continued upward trend in the others, and Homebase data show declines in the number of businesses open and employees working, especially in states experiencing virus outbreaks.
To be sure, the recent declines are minor compared to the collapse in activity in March and April, but as Goldman warns, “they indicate a break from the steady upward trend since mid-April. With the virus situation still worsening in many states and additional restrictions likely to be required, the recent trend downward in the worst-affected states will probably continue in early July.” Additionally, “bringing the virus under control is likely to take some time, and national consumer activity is unlikely to pick back up until that happens.”
To incorporate these developments in our economic forecast, Goldman now assumes that the consumer comeback will pause in July and August—specifically, that the level of consumer services spending in those months will equal the June average.
We reach this forecast by first assuming that late June trends continue into early July and then taking a GDP-weighted average of activity levels across states.
Which leads us to the next question: can the US get back on track, and more importantly, when? According to Goldman, the current public health situation raises legitimate doubts about the near-term outlook, “but we think it would be a step too far to conclude that the US has reached or surpassed the peak level of reopening consistent with keeping the virus contained, and we do not think it is appropriate at this time to make major changes to the outlook beyond the next two months.” Kostin takes this view for two main reasons:
First, other advanced economies show that it is clearly feasible to resume economic life to or beyond current US levels without triggering a spike in virus cases. Exhibit 4 compares the US with a group of countries that also experienced a large first wave. The chart on the left shows that the current level of economic activity in the US puts it roughly in the middle of the pack, while the chart on the right shows that the number of daily new Covid cases per million people in the US makes it a major outlier. Similar economies have clearly found a more efficient way to balance reopening the economy and keeping the virus under control, and we think the US is likely to eventually find its way to a better approach too.
Second, behavioral and policy changes offer fairly low-cost opportunities for the US to eventually achieve both a reduction in virus spread and further reopening of the economy. In particular, Goldman recently showed that mask wearing has a major impact on virus spread at negligible economic cost. It is admittedly hard to know how well the US will adapt in coming weeks. But last week Texas joined the roughly half of US states that have implemented a mask mandate, indicating that state authorities are willing to making politically controversial policy changes to address the current health crisis.
In summary, Goldman expects the US economy to get back on track in September although should the “resurgence” in cases accelerate, we expect this timeline to be shifted substantially, and the inflection point to take place some time after the November election.
* * *
As a result of these considerations, and until there is more clarity on the progress of covid in coming months, Goldman is revising its GDP forecast “to reflect the worsening of the virus situation and the likely resulting pause in the consumer recovery discussed above.” The bank has made three updates to the sector-level GDP model that it uses to track the impact of Covid on the economy.
First, the bank takes on board the latest official data for May released since its last forecast revision, especially the personal spending report, the construction spending report, and the durable goods report.
Second, Kostin uses an array of alternative data sources already available for June to update his assumptions about the pace of recovery last month. Building on earlier work, the bank combines consumer transaction data from Second Measure and Opportunity Insights and consumer mobility data from FourSquare and SafeGraph into a composite measure that it uses to forecast June spending levels in the corresponding consumer services categories, as shown in Exhibit 5. The chart indicates that the pace of consumer recovery in the first two months of reopening, May and June, was quite strong. The banks also uses real-time data on activity at construction sites from OxBlue and the latest auto and aircraft manufacturing schedules to fine-tune construction and manufacturing assumptions for June.
Third, the bank now pencils in a flat path of consumer services spending in July and August due to the deteriorating virus situation and reopening rollbacks in some states. While the bank’s economists had already anticipated a sharp deceleration in the pace of recovery after June once the easy gains from reopening were exhausted, Kostin admits that “this is nonetheless a significant downgrade” from his previous forecast.
The chart below shows Goldman’s revised estimate of the virus impact on the level of GDP by component. The solid red line shows its current estimate of the total impact of the virus hit, while the dotted red line shows the bank’s previous estimate for comparison. The orange line shows the GDP forecast in levels by adding potential growth to Kostin’s estimate of the virus impact. The forecast implies that real output will return to the pre-virus level by 2021 Q3, but a 1-2pp output gap relative to potential will remain at end-2021.
As noted above, the biggest near-term change relative to Goldman’s previous estimate is the pause in the consumer services rebound in July and August, shown by the flat path of the dark blue bars in those months. However, the bank – leery of delivering too much bad news at one time – expects this to be offset by faster growth in 2021, primarily because some reopening activity will simply be delayed. Meanwhile, “recent improvements in the prospects for earlier delivery of a Covid vaccine also increase our confidence that 2021 will see strong growth. These offsetting revisions result in little net change to the level of GDP by end-2021.”
The next chart shows that Goldman’s forecast translates to quarterly annualized GDP growth of -5%/-33%/+25%/+8% for 2020Q1-Q4 (vs. -6.5%/-33%/+33%/+8% previously) and +8%/+6.5%/+5%/+4% for 2021Q1-Q4 (vs. +6.5%/+5%/+4%/+3% previously). Goldman’s Q3 2020 forecast of +25% is still strikingly strong because of the statistical overhang created by the sharp upward trajectory from the April bottom through June—even if GDP were flat in Q3 at the June level, Kostin sees QoQ annualized growth rate still at +17%.
Additionally, Goldman’s revised forecast implies 2020 growth of -4.6% on a full-year basis (vs. -4.2% previously) and -3.7% on a Q4/Q4 basis (vs. -2.6% previously), and 2021 growth of +5.8% on a full-year basis (vs. +5.8% previously) and +5.9% on a Q4/Q4 basis (vs. +4.6% previously).
In short, the bank sees the deterioration of the virus situation as primarily shifting growth from Q3 to 2021, although it cautions that “downside risks to our baseline scenario have clearly increased.”
* * *
Of course, it’s not just GDP that is impacted by covid, although when it comes to jobs, the picture is decidedly more optimistic. As Kostin concludes, he also adjusted the bank’s forecast for the unemployment rate to reflect the large positive surprise in the June employment report. Following large declines in May and June, the official unemployment rate now stands at 11.1% and the “true” unemployment rate including misclassified workers stands at 12.3%, the latter down sharply from 19.5% in April and 16.4% in May. This strong rehiring momentum, coupled with the fact that over 80% of the newly unemployed since February still report themselves as on temporary rather than permanent layoff, points to substantial further progress in the labor market in the second half of the year. Indeed, despite the downgrade to Goldman’s Q3 growth forecast, the bank now expects the official unemployment rate to reach 9% by the end of 2020 (vs. 9.5% previously), and to drop a further 2% to 7% by the end of 2021.