Category Archives: Economy and Meltdown

China Is Its Own Worst Enemy

China Is Its Own Worst Enemy

Tyler Durden

Tue, 05/26/2020 – 22:45

Authored by Brahma Chellaney via Project Syndicate,

The global backlash against China over its culpability for the international spread of the deadly coronavirus from Wuhan has gained momentum in recent weeks. And China itself has added fuel to the fire, as exemplified by its recent legal crackdown on Hong Kong. From implicitly seeking a political quid pro quo for supplying other countries with protective medical gear, to rejecting calls for an independent international inquiry into the virus’s origins until a majority of countries backed such a probe, the bullying tactics of President Xi Jinping’s government have damaged and isolated China’s communist regime.

The backlash could take the form of Western sanctions as Xi’s regime seeks to overturn Hong Kong’s “one country, two systems” framework with its proposed new national-security laws for the territory, which has been wracked by widespread pro-democracy protests for over a year. More broadly, Xi’s overreach is inviting increasing hostility among China’s neighbors and around the world.

Had Xi been wise, China would have sought to repair the pandemic-inflicted damage to its image by showing empathy and compassion, such as by granting debt relief to near-bankrupt Belt and Road Initiative partner countries and providing medical aid to poorer countries without seeking their support for its handling of the outbreak. Instead, China has acted in ways that undermine its long-term interests.

Whether through its aggressive “Wolf Warrior” diplomacy – named after two Chinese films in which special-operations forces rout US-led mercenaries – or military-backed expansionist moves in China’s neighborhood, Xi’s regime has caused international alarm. In fact, Xi, the self-styled indispensable leader, views the current global crisis as an opportunity to tighten his grip on power and advance his neo-imperialist agenda, recently telling a Chinese university audience that, “The great steps in history were all taken after major disasters.”

China has certainly sought to make the most of the pandemic. After buying up much of the world’s available supply of protective medical equipment in January, it has engaged in price-gouging and apparent profiteering. And Chinese exports of substandard or defective medical gear have only added to the international anger.

While the world grapples with COVID-19, the Chinese military has provoked border flare-ups with India and attempted to police the waters off the Japanese-controlled Senkaku Islands. China has also recently established two new administrative districts in the South China Sea, and stepped up its incursions and other activities in the area. In early April, for example, a Chinese coast guard ship rammed and sank a Vietnamese fishing boat, prompting the United States to caution China to “stop exploiting the [pandemic-related] distraction or vulnerability of other states to expand its unlawful claims in the South China Sea.”

Meanwhile, China has made good on its threat of economic reprisals against Australia for initiating the idea of an international coronavirus inquiry. Through trade actions, the Chinese government has effectively cut off imports of Australian barley and blocked more than one-third of Australia’s regular beef exports to China.

Whereas Japan readily allowed the International Atomic Energy Agency to conduct a full investigation into the 2011 Fukushima nuclear disaster – a probe that helped the country to improve safety governance – China strongly opposed any coronavirus inquiry, as if it had something to hide. In fact, some Chinese commentators denounced calls for an inquiry as racist.

But once a resolution calling for an “impartial, independent and comprehensive evaluation” of the global response to COVID-19 gained the support of more than 100 countries in the World Health Organization’s decision-making body, the World Health Assembly, Xi sought to save face by telling the assembly that “China supports the idea of a comprehensive review.” At the last minute, China co-sponsored the resolution, which was approved without objection.

The resolution, however, leaves it up to the WHO’s controversial director-general, Tedros Adhanom Ghebreyesus, to launch the review “at the earliest appropriate moment.” Tedros, who has been accused of aiding China’s initial COVID-19 cover-up, may decide to wait until the pandemic has come “under control,” as Xi has proposed.

Make no mistake: the world will not be the same after this wartime-like crisis. Future historians will regard the pandemic as a turning point that helped to reshape global politics and restructure vital production networks. Indeed, the crisis has made the world wake up to the potential threats stemming from China’s grip on many global supply chains, and moves are already afoot to loosen that control.

More fundamentally, Xi’s actions highlight how political institutions that bend to the whim of a single, omnipotent individual are prone to costly blunders. China’s diplomatic and information offensive to obscure facts and deflect criticism of its COVID-19 response may be only the latest example of its brazen use of censure and coercion to browbeat other countries. But it represents a watershed moment.

In the past, China’s reliance on persuasion secured its admission to international institutions like the World Trade Organization and helped to power its economic rise. But under Xi, spreading disinformation, exercising economic leverage, flexing military muscle, and running targeted influence operations have become China’s favorite tools for getting its way. Diplomacy serves as an adjunct of the Communist Party’s propaganda apparatus.

Xi’s approach is alienating other countries, in the process jeopardizing their appetite for Chinese-made goods, scaring away investors, and accentuating China’s image problem. Negative views of China and its leadership among Americans have reached a record high. Major economies such as Japan and the US are offering firms relocation subsidies as an incentive to shift production out of China. And India’s new rule requiring prior government approval of any investment from China is the first of its kind.

China currently faces the most daunting international environment since it began opening up in the late 1970s, and now it risks suffering lasting damage to its image and interests. A boomerang effect from Xi’s overreach seems inevitable. A pandemic that originated in China will likely end up weakening the country’s global position and hamstringing its future growth. In this sense, the hollowing out of Hong Kong’s autonomy in the shadow of COVID-19 could prove to be the proverbial straw that breaks the Chinese camel’s back.

Chinese Yuan Suddenly Tumbling

Chinese Yuan Suddenly Tumbling

Tyler Durden

Tue, 05/26/2020 – 22:32

Just after 9:45pm ET the offshore yuan – the one which is not subject to the PBOC’s trading band limits – tumbled, plunging 250 pips in minutes.

The move was unexpected, following a stronger than expected setting of the USDCNY by the PBOC, whose midpoint was set at 7.1092, far stronger than the 7.1220 expected and the 12 year low of 7.1293 hit on Tuesday. The drop comes just hours after Bloomberg reported that Trump administration was considering sanctions including transaction controls, and asset freezes, over the implementation of the new national security law in Hong Kong.

While the offshore yuan is not at all time lows yet – it would need to hit around 7.20 for that – there has been no news to justify the move, with the sudden move sparking speculation that Beijing may be using it to telegraph the devaluation that could follow should the US escalate aggressively in response to a Hong Kong crackdown.

Here, once again, is a reminder from Rabobank’s Michael Every why in the current environment of escalating hostility between the US and China, the only thing that matters is the Yuan, and why in the not too distant future, the Chinese currency may have a 10-handle in front of it.

This time last year, when we were all still going abroad regularly (right now just ‘outside’ is becoming a psychological barrier if I am honest) I was traveling with a presentation titled “Clause is Cause”. This argued that from a geostrategic ‘Von Clausewitz’ perspective, not a neoliberal “Let’s assume world peace” version, the US would at some point realise the USD/Eurodollar was a weapon it could wield vs. China, and when it did we would see three key strings cut: trade; tech; and then capital flows. The first was evident during the trade war – which has not been concluded is likely to get far worse soon; the second is also abundantly clear on a variety of fronts, much to Silicon Valley’s chagrin; and potentially, now we see the start of that third step – because if the US does block this first USD50bn going in, other such steps will follow, just as they did on the previously unthinkable idea of US tariffs on China.

CNH is right to be selling off, albeit in a traditionally limited fashion, because if you don’t buy from China and you don’t help China up the value-chain and you don’t invest in China then China is not going to be getting much USD liquidity at all. The US hawks probably don’t get the Eurodollar iron logic there; they are likely just pressing buttons in anger. The outcome would be the same nonetheless.

I can hear the market bulls and technocrats of the world saying “But China has USD3 trillion in reserves!” Perhaps. Most think it’s far lower than that. And not earning USD means you have to dig into that stockpile. And when you do, the PBOC either has to contract the local money supply (because every USD is backed by 7.xx CNY on the other side of the balance sheet) or it just creates new CNY anyway and supply-demand sees CNY move sharply lower – as we have been seeing in all other EM FX. Looking at the drop in BRL, ARS, ZAR, TRY, etc., or even THB, this would be how we would get to the ‘unthinkable’ 8 (9? 10?) handle in CNY. That would also crush those other EM crosses in tandem – and AUD and NZD, as the former tries to navigate its own geopolitical spat with Beijing.

As we said two days ago, “with the Fed having taken over most US capital markets which have now lost most if not all of their discounting and signaling capabilities, keep an eye on that USDCNH: ironically, it may be the last true market stress indicator left.”

Moves like tonight suggest that either someone knows something, that something big may be coming, or the algos are just doing all they can to trigger another stop loss domino effect.

“I’m Looking For The Truth!” – Experts Slam States For ‘Misrepresenting’ COVID-19 Data As Outbreak Recedes

“I’m Looking For The Truth!” – Experts Slam States For ‘Misrepresenting’ COVID-19 Data As Outbreak Recedes

Tyler Durden

Tue, 05/26/2020 – 22:25

For better or worse, every state in the US is pushing ahead with plans to reopen their economies. On Tuesday afternoon, California Gov. Gavin Newsom announced that retailers across the state would be allowed to reopen immediately, along with barbershops and salons in some counties. Later this week, Texas and a handful of other states will enter “phase 2” of their reopening plans.

But while the spike in new cases and deaths has decidedly not materialized – the number of new cases confirmed across the US tumbled to its lowest level in 2 months on Tuesday – a handful of states have still be called out for meddling or distorting the data before it was presented to the public to help justify plans to reopen before satisfying the federal guidelines released by the Trump Administration back in April.

Former Obama-era CDC Director Tom Frieden, a near-constant voice on cable news like MSNBC and CNN, has regularly bashed states like Georgia for allegedly putting President Trump’s reelection prospects before people’s lives. But Frieden – one of many officials who proclaimed that the White House was deliberately trying to suppress projections calling for 3k deaths per day by June 1 – has moved on to highlighting examples of disingenuous data reporting by the states.

Of course, it has become clear in the weeks since the NYT published those projections that they were way, way off-base, just like the White House explained when it explained why it wasn’t relying on them.

But Frieden just can’t help himself, apparently, as NBC News reports.

“Accurate, complete and timely information is the best way to understand, respond to and limit the impact of the virus on both health and the economy,” Dr. Tom Frieden, who ran the Centers for Disease Control and Prevention under former President Barack Obama, told NBC News.

“This helps to set realistic expectations on how the pandemic will affect people’s lives and to inform required changes in behavior to prevent the spread of the virus,” he added.

In Georgia, officials have apologized for string of suspicious “errors” that implied the number of new cases were falling earlier and more quickly than the official data bore out (over the past week, the number of new cases has fallen sharply even as access to testing has been expanded).

Georgia officials have apologized and corrected what was described as a “processing error” that wrongly showed a downward trend in the number of new daily infections in the state, making it appear as if new infections had dropped every day for two weeks. The error was at least the third in three weeks, the Atlanta Journal-Constitution reported.

Georgia was among the first states to launch its reopening. Georgia Gov. Brian Kemp, a Republican, said the state on Tuesday recorded its lowest number of hospitalized patients since it began tracking such data in early April.

Florida reported just 7 deaths on Tuesday, but its Republican Gov Ron DeSantis, who is universally loathed by liberals, and state public health officials were called out by a would-be whistleblower who says she was pressured to remove some data from a public website.

In the neighboring state of Florida, which has also moved expeditiously in reopening swathes of its economy, several data-related controversies also have brewed.

According to internal emails obtained by the Tampa Bay Times, state officials directed a top Florida Department of Health data manager earlier this month to remove data from public view that showed Florida residents had reported coronavirus-associated symptoms before cases were officially announced. The emails showed that the data manager, Rebekah Jones, had complied with the order but said it was the “wrong call.”

Jones was taken off her role maintaining the state’s coronavirus dashboard one day after that directive. She told a local CBS affiliate that she refused to “manually change data to drum up support for the plan to reopen” Florida. Last week, Florida Gov. Ron DeSantis, a Republican, said Jones was under “active criminal charges” for cyber stalking and cyber sexual harassment.

Meanwhile, Florida officials last month stopped releasing the list of coronavirus deaths being compiled by the state’s medical examiners, which had at times shown a higher death toll than the total being published by the state. State officials said that list needed to be reviewed as a result of the discrepancy.

A spokesman for the state Health Department said the medical examiners had a different method for reporting deaths and that it was untrue “that deaths have been hidden.”

“The government has one mission; academics and scholars have a very different mission,” Dr. Dean Hart, an expert on viral transmission and former Columbia University professor who has run for the New York State Assembly as a Democrat, told NBC News.

“As a scientist, I’m looking for the truth, the heck with who it hurts politically,” he added.

Arizona, another red state, was accused of ignoring dire projections from a team at the University of Arizona. It’s unclear if they were ever used, of if they were even all that reliable. But the local and national press jumped on the story nonetheless.

Amid reopening in Arizona, the state Department of Health Services cut off a team of Arizona State and University of Arizona experts who provided pandemic modeling specific to the state, saying it was no longer needed as the state preferred to use a federal model. After a backlash, the Health Department reinstated the team, though it’s unclear whether state officials are using the local universities’ work in their decision-making.

Since that dust up, Arizona State released new data showing infections and hospitalizations in the state could soar this summer.

But by far the biggest complained alleged by NBC News applied to both blue and red states. States have unsurprisingly done an abysmal job sharing data on deaths and cases in nursing homes, where roughly half of the patients who died of the virus lived.

The top issue nationally related to the publication of specific coronavirus data involving nursing home cases and deaths, where state and local officials have faced intense scrutiny over the collection and release of such information. The virus has hit nursing homes exceptionally hard — a result of both their residents’ vulnerability and policies states and localities have put into place.

In one such example, Arizona officials argued this month they should not reveal the names of facilities with outbreaks because it could give those nursing homes a stigma and could lead to discrimination against them. The argument was made in response to a lawsuit from Arizona news outlets demanding the state provide information on COVID-19 cases in nursing homes and other data.

In Pennsylvania, state officials released such data last week after weeks of delay and in the face of significant pressure.

The federal government, on the other hand, plans to publish such information by the end of May.

Hart said more information on nursing homes could paint a clearer picture of what happened specifically in New York with the spread of COVID-19. New York Gov. Andrew Cuomo, a Democrat, has come under fire for his administration’s March order that nursing homes must accept coronavirus patients. That order was reversed earlier this month.

Which is the greater sin: manipulating data on a chart to exaggerate a decline in coronavirus cases? Or slow-rolling data on deaths and infections involving the most at-risk patients? We suspect that, in the long run, Gov. Cuomo’s “policy” forcing nursing homes to take in COVID-19-positive residents even after they had tested positive at a local hospital will be remembered as a much more reckless lapse than squabbling between some of bureaucrats in Florida’s Department of Health.

Psychiatrists Wrote 86% More Prescriptions For Psychotropic Drugs During Lockdown Months

Psychiatrists Wrote 86% More Prescriptions For Psychotropic Drugs During Lockdown Months

Tyler Durden

Tue, 05/26/2020 – 22:05

Authored by Paul Joseph Watson via Summit News,

Psychiatrists wrote 86% more prescriptions for psychotropic drugs, including antidepressants, during the lockdown months of March and April compared to January and February, it has been revealed.

“Prescriptions for anti-anxiety medications and sleep aids have risen during the pandemic, prompting doctors to warn about the possibility of long-term addiction abuse of the drugs,” reports the Wall Street Journal.

According to Ginger, an organization that provides mental health services to companies, compared to January and February of this year, prescriptions for psychotropics, most of which were antidepressants, were up 86% for the months of March and April.

The stress of unemployment, social isolation and health concerns are all cited by Americans who say the lockdown is having a serious impact on their mental health.

Pharmacy group Express Scripts also revealed that prescriptions for anti-anxiety medications were up 34.1% between mid-February and mid-March, while prescriptions for antidepressants increased 18.6%.

The numbers emphasize the significant mental health toll created by the lockdown which will reverberate for many years to come.

As we highlighted yesterday, Doctors at John Muir Medical Center in Walnut Creek, California say they have recorded more deaths from suicide than coronavirus, with a year’s worth of suicides and suicide attempts being recorded in a 4 week period.

“Community health is suffering,” warned Dr. Mike deBoisblanc, as he called for the lockdown order to be fully lifted.

*  *  *

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Coronavirus Uses Same Strategy As HIV To Evade, Cripple Immune System: Chinese Study Finds

Coronavirus Uses Same Strategy As HIV To Evade, Cripple Immune System: Chinese Study Finds

Tyler Durden

Tue, 05/26/2020 – 21:46

Back on February 1, when the coronavirus pandemic was only just starting to attract broader attention and the China-influenced mainstream media was still politically inclined to minimize the severity of the disease before pulling a sharp U-turn and now going full bore with a narrative of just how dangerous it is for the Trump administration to reopen the economy (because if the economy recovers by November, Trump just might get re-elected), we published an article referencing an Arxiv pre-print which found that the covid-19 genome contained “HIV Insertions”, stoking fears that the virus was an artificially created bioweapon. While the mere suggestion that this virus was man-made – nevermind sharing discrete segments of its genetic structure with HIV – sparked outrage among the well-paid mercenary enforcers of the First Amendment known as “fact-checkers” who are employed by such biased organizations as Twitter and Facebook to stifle any line of inquiry that runs contrary to whatever dominant narrative has been blessed by the Zuckerbergs and Dorseys of the world, it was none other than the man who discovered the HIV virus back in 1983, that confirmed our suspicions saying that “the virus was man-made.”

As we reported in April, Professor Luc Montagnier, the 2008 Nobel Prize winner for Medicine, claimed that SARS-CoV-2 is a manipulated virus that was accidentally released from a laboratory in Wuhan, China, and added that the WUhan laboratory, known for its work on coronaviruses, tried to use one of these viruses as a vector for HIV in the search for an AIDS vaccine.

Needless to say, since this narrative was destructive to China and all those self-proclaimed experts who had vowed there is no way the Wuhan virus was i) manmade, ii) released by a Chinese lab and iii) had HIV-insertions, the story was quickly buried and never received as much as a minute of airtime in conventional media sources.

That may all change now, as a result of the third, and perhaps most startling yet twist in the bizarre saga of the coronavirus, after the South China Morning Post reported that a new study by Chinese scientists has found that the novel coronavirus uses the same strategy to evade attack from the human immune system as HIV.

Specifically, both viruses remove marker molecules on the surface of an infected cell that are used by the immune system to identify invaders, the researchers said in a non-peer reviewed paper titled “The ORF8 Protein of SARS-CoV-2 Mediates Immune Evasion through Potently Downregulating MHC-I”, posted on pre-print website bioRxiv.org on Sunday (a paper which the great hordes of amateur epidemiologists will make sure is promptly taken down or else their carefully planted propaganda may be obliterated). They warned that this commonality could mean Sars-CoV-2, the clinical name for the virus, could be around for some time, like HIV.

Separately, virologist Zhang Hui and a team from Sun Yat-sen University in Guangzhou also said their discovery added weight to clinical observations that the coronavirus was showing “some characteristics of viruses causing chronic infection”.

Some more details on the Hui study: the researchers collected killer T cells from five patients who had recently recovered from Covid-19; those immune cells are generated by people after they are infected with Sars-CoV-2, and whose job is to find and destroy the virus. But the killer T cells used in the study were not effective at eliminating the virus in infected cells. When the scientists took a closer look they found that a molecule known as major histocompatibility complex, or MHC, was missing.

The molecule is an identification tag usually present in the membrane of a healthy cell, or in sick cells infected by other coronaviruses such as severe acute respiratory syndrome, or Sars. It changes with infections, alerting the immune system whether a cell is healthy or infected by a virus. However, there is one notable disease that makes MHC molecules disappears from the cell surface: HIV.

The coronavirus removes these markers by producing a protein known as ORF8, which binds with MHC molecules, then pulls them inside the infected cell and destroys them, the researchers said.

ORF8, which is also known to play an important role in viral replication, is the gene that is targeted by most commercial test kits to detect viral loads in nose or oral swabs. 

Needless to say, the absence of MHC makes the creation of vaccines against covid problematic, although the study authors had a suggestion: while drugs used to treat Covid-19 patients mainly target enzymes or structural proteins needed for viral replication, Zhang and his team suggested compounds be developed “specifically targeting the impairment of MHC by ORF8, and therefore enhancing immune surveillance for Sars-CoV-2 infection”.

And here is where things gets very messy for the frauds known as “fact-checkers” who – without any actual facts or knowledge – threw up all over our February report that the coronavirus shared genetic material with HIV: while the mainstream media did everything in its power to censor any suggestions that Covid and HIV having genetic similarities (after all who wants to be threatened by an airborne version of AIDS) now it is none other than the South China Morning Post which writes that “earlier studies found the spike protein of the new coronavirus had a structure that allowed it to enter many types of human cells and bind with them. The same structure was also found in HIV, but not in other coronaviruses found in animals such as bats and pangolins.”

Oops, the SCMP will have a a lot of explaining for reporting on, you know, the facts.

But wait there’s more. Another study by researchers in New York and Shanghai also found that the Sars-CoV-2, sometimes called the “Wu Flu” could kill T cells, or as the SCMP puts it “the discovery came after autopsies in China found immune system destruction similar to that caused by AIDS.”

At this point, the SCMP has pointed out all the exact same facts – that the coronavirus not only shares genetic material with HIV, but also evades and cripples the immune system in a similar way to HIV – that got the “highly respected” StatNews to accuse Zero Hedge of spreading an “infodemic.” We wonder if StatNews author John Gregory will append his “analysis” now that actual “facts” have emerged showing that it’s not the infodemic we should be afraid of, but the censordemic.

* * *

Of course, if covid and HIV share a similar approach to hiding from, and crippling the host immune system, kiss any hope for a vaccine – or cure – goodbye. Four decades after HIV – a virus that attacks the immune system – emerged, it has killed about 32 million people globally and there is still no vaccine or drug that can completely cure the disease.

Which begs the question: who were the real conspiracy theorists – those who reported the facts, or all those countless “mainstream” publications who sought to stifle the facts, by accusing us – and many others – of peddling conspiracy theories. For the answer, we go back to what HIV-discovered Montagnier said in April:  “Conspirators are the opposite camp, hiding the truth,” he said without wanting to accuse anyone, but hoping that the Chinese will admit to what he believes happened in their laboratory. “In any case, the truth always comes out, it is up to the Chinese government to take responsibility.”

And while we admire Montagnier’s optimism,we are not holding our breath until the truth finally does come out. Until then, the SCMP may want to watch the bank of its social media accounts – can’t have the peasants realizing they were lied to all along. Twitter, for example, has developed a nasty habit of immediately banning anyone who dares to tell the truth about anything.

The full paper is below (link). Read it before it mysteriously disappears.