Author: Fact Not Fiction Media

Bernie Sanders finally creates value

SPX

Democratic Party hopeful Bernie Sanders announced overnight that he is dropping out of the presidential primaries. For the first time ever, his actions actually led to substantial wealth creation, sending the S&P500 up 3.4% on a $21 trillion market cap index.

All jokes aside, we thought markets have found a (short-term) bottom. S&P has reclaimed almost half of the peak since the corona-crash. We question the sustainability of this rally. At the moment the trend is our friend. We pointed out that the kitchen sink would be thrown and provide one last hurrah before the realities of businesses coping with a return to business played out.

As the lockdown continues, it is very hard to determine what the actual prints will be for large-scale macro-economic data and where that fits into expectations. We know that the Fed has already been out hosing the credit markets with promises of unlimited QE.

The housing market is already giving us hints. According to the Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey, the total number of loans in forbearance grew from 0.25% to 2.66% from March 2 to April 1, 2020, with mortgages backed by Ginnie Mae seeing the largest growth (from 0.19% to 4.25%).

While not strictly an apples for apples comparison, the Delinquency Rate on Single-Family Residential Mortgages, Booked in Domestic Offices, Top 100 Banks Ranked by Assets peaked at 12.89% in 2010.

Plenty of trouble ahead. The market complacency is quite astonishing.

Time to stop the world’s biggest welfare cheat

WHO are you

Being a welfare cheat is not a bad way to describe the United Nations.

In 2000, twenty-nine UN agencies employed a total of 48,500 staff. Scroll forward to the latest figures in 2018 and that has blown out to near as makes no difference, 110,000 across 38 distinct agencies. In 20 years time, one imagines the UN will be aiming to be twice the size with a whole new raft of agencies seeking new funding.

What the UN tends to do is conceive new agencies within its womb and then give birth to them leaving them to make their own way, generally by “small” under the radar voluntary payments under “trust” which grow exponentially over time. To its credit, the UN nails bureaucracy.

The more puzzling question is how can our governments be so blind as to keep encouraging this welfare cheat to claim more benefits for its ever extended family? What is the return on all that investment?

One should be disturbed at the way the UN lists the voluntary payments made by individual countries as an “honour roll.” That somehow we are not worthy unless we play ball. Cash for access? Not exactly. That all depends on who you are.

Analysing the UN “regular budget” papers reveals that prompt payment is encouraged. Australia just missed out on a podium position as it was the 4th nation to remit its full-year contribution on January 11th, 2019. All US$61 million.

China might have been a bit late to wire its 2019 contribution of US$343.7 million to the UN coffers but it is seen as the future. The United States was conspicuous by its absence from the honour roll board figures despite chipping in US$674.2 million in 2019. Mind you, this excludes all the other voluntary payments made to other UN bodies and peacekeeping units.

Is it any wonder that Trump wants to defund it. Can you name one other charity that treats its #1 philanthropic patron which contributes twice the amount of any other country in aggregate – 24% of the total – with such disdain? It is not as though the US has reduced its generosity over the past two decades. On the contrary. It has grown proportionally.

The World Health Organization (WHO) deserves particular attention. It has grown from 3,672 staff at the turn of the century to 8,153. The USA gifted WHO over $281 million in 2018 or 10% of its total income. In 2000 the US gave $148 million.

What gives? WHO has more than doubled its staff levels. In 2018, it raked in $2.9 billion in income, more than twice that of eighteen years ago. Yet with all these extra resources, it couldn’t provide superior intelligence much less improved outcomes. It reminds us of the Australian fire services during the recent bushfires.

How was it that WHO couldn’t give any sensible or consistent guidance about how the world needed to prepare for coronavirus? Why did it tell us there was no risk of human-to-human contact? Surely if those nations that volunteer 10s if not 100s of millions of dollars for a subscription service had the correct information, borders would have been shut way sooner and the devastation mitigated.

For if WHO had done its own homework in Wuhan, it would never have criticised Trump’s travel ban “on the basis of “unnecessarily interfering with international travel and trade” and “increasing fear and stigma.“, something that was lazily just dug out of the pandemic playbook from 2017. Since when have ever pandemics played to a one size fits all prescription?

Why was WHO blindly parroting whatever came out from Beijing’s propaganda ministry instead of using its $190 million annual travel budget to investigate China’s watered-down claims for itself? Why did it take so long to call a pandemic? One assumes that pandering to its future is the way to keep the gravy train going, even if it unnecessarily costs countless lives.

What do all these surplus to requirement staff across UN bodies actually do for all the extra money lobbed at them?

UNICEF has more than trebled its workforce since 2000. Over 1/3rd of its $6.7bn income in 2018 was spent on “cash assistance.” If cash transfers are the largest expense line, should we just settle for the notion that we need 3x the number of staff to administer it? Most of this cash is distributed to countries that rank amongst the worst in terms of corruption. The audited accounts talk about fraud mitigation strategies. That makes sense when only $438,000 is detected and $15,000 recovered on $2.3 billion of cash assistance. At 0.02% of funds misappropriated, any major bank would blush with performance figures like that.

To get a grasp of how children move onto their own welfare teat, the UNFCCC, aka the climate change cult, had a $99m budget in 2018 to feed 738 mouths. When it was spun out of the parent UN in 2011/2012 it had a $30m budget across 461 staff. For 2020-21, the UNFCCC is looking for $177 million. Within that, $31.2 million is set aside for “complementary activities broadly mandated as beneficial to achieving UNFCCC objectives and goals.” Another $21 million for IT and data. Of course, it requires $36.3 million in “oversight and administration

Governance and oversight have never been a strong suit at the UN. UNAIDS gave us a perfect example of how sacred cows are protected by the parent.

Independent experts concluded that UN AIDS Executive Director, Michel Sidibé,  had been responsible for creating a toxic environment that promoted “favouritism, preferment and ethical blindness.” Sidibé accepted no responsibility for any sexual harassment, bullying or abuse of power that occurred under his watch.

The investigation started after Sidibé’s deputy was accused of forcibly kissing, groping and trying to drag a colleague into his Bangkok hotel room in 2015.

In a survey of the 670 staff members at the UN agency conducted by independent investigators, 18 admitted they had experienced some form of sexual harassment in the previous year and a further 201 said they were on the wrong end of workplace abuse.

One staff member went on the record saying, “U.N.AIDS is like a predators’ prey ground…You have access to all sorts of people, especially the vulnerable: You can use promises of jobs, contracts and all sorts of opportunities and abuse your power to get whatever you want, especially in terms of sexual favours. I have seen senior colleagues dating local young interns or using U.N.AIDS resources to access sex workers.

UN Secretary-General Antonio Guterres, who made it clear he had a zero-tolerance policy with regards to sexual harassment when he took office,  refused to fire him. Despite his term ending in January 2020, Sidibé has offered to quit in June 2019 in order to ensure a stable transition period! In what world does a person outed for turning a blind eye to such a poisonous culture get to leave on his own terms?

Perhaps the economic devastation that will result from coronavirus will be the perfect excuse for countries to drastically wind back payments to these UN bodies. There appears overwhelming evidence that more money doesn’t always buy better outcomes much less lift ethical behaviour. Power corrupts. Absolute power corrupts absolutely.

Nikki Haley’s perspective

Former US Ambassador to the UN gave her 10c worth on coronavirus from the perspective of having been a governor herself. What she says is not dissimilar to that of Australia and the federal-state relationship.

Overheated critics of President Trump accuse him of being an authoritarian. Of not caring about checks and balances, civil rights, and constitutional limits on executive power. And yet, today, many of these same critics demand that he nationalize supply chains, deploy the military on our shores and shut down every town in America. It’s a curious thing.

The coronavirus presents enormous national challenges that call for a strong federal response. But we should not lose sight of the essential role that states and governors must play. America is better served when presidents respect the diversity of states instead of dictating uniform solutions.

As a governor, when you take the oath of office to serve your state, you don’t know what will come your way. During my six years as governor of South Carolina, I dealt with a thousand-year flood, damaging hurricanes, a racially driven church shooting, a white police officer who killed an innocent black victim, and a school shooting.

When times were calm, we would try to get ahead of the curve, holding regular meetings with my emergency team to make sure we were up-to-date on supplies, procedures, logistics and technology. We learned the importance of planning and to control what we could.

I was a Republican governor with a Democrat in the White House. We disagreed on most policy matters, but we put those differences aside to serve the immediate needs of our joint constituents. You don’t serve your people if you let politics get in the way.

If you know a crisis is coming, one of the first things a governor will do is reach out to the White House to coordinate F.E.M.A. relief before it hits. Then, when the trouble arrives, everyone is on the same page.

F.E.M.A. typically sends a liaison who coordinates efforts and assesses vulnerabilities. It’s technical stuff. It requires knowing your own state and building a relationship with those on the federal level who apportion resources. It takes time, effort and foresight.

Once a crisis hits, state responsibility is primary. The federal government can provide crucial resources, but the burden is on the governor and her team to distribute them. No two states are alike, and blanket approaches won’t work.

In today’s crisis, governors from both parties have exemplified strong leadership. They know their residents and their state’s needs better than anyone in the federal government. In the state-federal partnership, governors are in the best position to control what happens on the ground, better than any president could be.

Governors know their state’s mayors and local officials who facilitate aid distribution. They know their local national guard leadership, which in many cases provides essential logistical support. They know their business leaders, who are being called on to uproot their production and services while keeping as many people employed as possible. They know their hospital administrators, who have eyes on the front-line heroes in this war. And they know the leaders of their faith communities, who often spearhead life-saving humanitarian projects.

As our highest nationally elected leader, of course President Trump has enormous responsibility in this unprecedented crisis, and he is marshaling the federal response on a massive scale. But in implementing plans to save people’s lives and keep our economy afloat, look no further than the governors.

They have complicated and difficult jobs. In this crisis, as in any, some are showing their competence and leadership, while others are revealing their shortcomings. It’s true that states shouldn’t have to compete, to bid against each other for supplies at inflated prices. And party politics shouldn’t factor in disbursing federal resources to states. But, most often, this is not the case. Governors who complain about the Trump administration are, in some cases, attempting to distract from their own failures to plan and execute.

Governors are the most successful when they are given the flexibility to lead. The federal government can provide the resources, but it should not take away too much flexibility. New York is not New Mexico. South Dakota is not South Carolina.

Our Constitution has it right: Keep control and decision making close to the people. We are seeing that play out in every state today. We face a painful challenge, but we will get through it. When we do, we will look back and see that governors rose to meet the challenge, and they did it best when Washington did not impose too much on them.”

Now media has an issue with Trump’s $3,100 stake in Sanofi

The story just keeps getting more deranged. Now The NY Times is taking umbrage at the fact that Trump’s family has a $110k stake in a Dodge & Cox global mutual fund that just happens to have Sanofi, the maker of Plaquenil (hydroxychloroquine sulfate), as its largest holding. A whopping 2.9%! Which means his family stake would be c.$3,100.

One imagines if that same fund owned stakes in GM or Boeing that he should be accused of skimming off the top because he is ferried in The Beast and flown around in Air Force One. FedEx is in there too. Better keep an eye on Melania and Ivanka’s outgoing courier mail to ensure that UPS is also getting a fair share.

For the benefit of The NY Times, it might help to know that Trump has no legal control over the asset allocation choices made by a global mutual fund other than choosing to buy or sell it. Furthermore, Sanofi has been a dud stock over the last 5 years in terms of performance.

It would be better had the NYT taken pot-shots at Trump’s dreadful choice in asset manager given Sanofi has been such a dog.

Perhaps it would be nicer to think that the drug actually works. Certainly seems more promising than anything else out there to date.

Sad to think that The NY Times would seemingly prefer the drug fails and people die than Trump get a windfall profit in his 401k.

Trump Derangement Syndrome heading to The Hague for crimes against humanity?

Hague

You have to hand it to Democratic lawmakers who get triggered over anything. When collusion and impeachment failed domestically, why not call upon The Hague for charges of crimes against humanity? Hmmm.

Never mind that Speaker of the House Nancy Pelosi was encouraging San Franciscans to “come to Chinatown and join” crowds at a parade in late February. Forget the Democratic NYC Health Commissioner Oxiris Barbot downplaying the health warnings by telling the residents to immerse themselves in Lunar New Year festivities because stigmatization is a far bigger threat to people than a pesky virus.

Guess who is now telling people to stay at home? Yep, you guessed it – Oxiris Barbot. Even though she retweeted someone’s praise of her status as the first Latino female to occupy the post after it had all gone pear-shaped! If only one’s abilities were seen as more important than their identity…NYers would have been happier with an old white guy provided his medical advice kept the city from holding the highest infection rates.

Never mind that The Hill had criticized Trump’s travel ban on Feb 7th as unnecessary, parroting none other WHO, to then write on April 5th that he hadn’t done enough to block travel into the US. Which is it? The NY Times was happy to run a story on Feb 24th saying Trump’s travel ban was more an “emotional or political reaction.

Do Democratic House representatives hold such little faith in the domestic judiciary that Trump needs to be tried in an international court over supposed domestic crimes against innocent civilians? It won’t be long before Nancy Pelosi launches another impeachment trial over coronavirus. We encourage her to do it for the sake of revealing just whether she has any ties to America.

Rep Tavia Galonski’s tweet came shortly after Trump’s media briefing in which he once again spoke of hydroxychloroquine sulfate, a drug which he has previously reported has shown promise as a means of treating COVID-19.

How is it that the mainstream media outlets backflipped on their initial criticism on hydroxychloroquine to acknowledging its potential as reported by the medical profession to flip back to “irresponsibility” again. No country has a silver bullet and in such circumstances

Rep Galonski may have a case if the state was force-feeding strapped down patients against their will. The FDA says otherwise.

On March 28, 2020, the FDA issued an Emergency Use Authorization (EUA) to allow hydroxychloroquine sulfate and chloroquine phosphate products donated to the Strategic National Stockpile (SNS) to be distributed and used for certain hospitalized patients with COVID-19. These drugs will be distributed from the SNS to states for doctors to prescribe to adolescent and adult patients hospitalized with COVID-19, as appropriate, when a clinical trial is not available or feasible. The EUA requires that fact sheets that provide important information about using chloroquine phosphate and hydroxychloroquine sulfate in treating COVID-19 be made available to health care providers and patients, including the known risks and drug interactions. The SNS, managed by ASPR, will work with the Federal Emergency Management Agency (FEMA) to ship donated doses to states.

The FDA’s latest fact sheet on hydroxychloroquine is here.

To be honest, who needs the FDA when we can rely on the tweets from a NY Times best-selling author with a law degree, Kurt Eichmann, who proposed 11 questions the White House press corps should ask of Trump with respect to hydroxychloroquine.

1. What dosage should people take?
2. How long should people take it?
3. What studies are you relying on for dosage and time?
3. Are you saying this is prophylactic or post-diagnosis?…(while he won’t know what the last question means if he says anything close to prophylactic)
5. How does hydroxychloroquine prevent viral infection?
6. Since hydroxychloroquine is an immunosuppressant, how isn’t there a risk that it will *increase* the risk of infection?
7. What studies have you reviewed showing it has a preventative effect because I can’t find any. (they don’t exist.)
(If he says for treatment…)
8. At what stage of infection should people take the medicine?
9. What should people with lupus and other autoimmune diseases do to find their medication, since your recommendations have led to a national shortage of hydroxychloroquine?
10. Will the government subsidize lupus & rheumatoid arthritis patients, given the price-gouging happening with these drugs?
11. Are you concerned about lupus and autoimmune patients who can’t find their medication refusing to vote for you because they’re now in pain?

As with any drug, a doctor prescribes medication based on the severity of illness and a whole range of other factors – size, age, gender. Trying to get Trump to answer a series of “gotcha” questions in the hope he bungles some of them just smacks of how little integrity there is in journalism. If Trump told journalists that drinking Drano was great for fixing stomach ulcers, would they believe him? Wouldn’t readers prefer medical opinion?

Let’s deal with the facts.

Hydroxychloroquine sulphate is an FDA approved drug dating back to April 1955. It is best known under the brand name of Plaquenil. There are generic manufacturers such as Teva and Mylan are already making the drug. In the US, it is strictly prescription-only medication. It has been approved to treat malaria

The 65-year-old Plaquenil and its 25-yo generic brothers haven’t been approved for the application of COVID19, which, as we know, in and of itself is a brand new strain of pathogen. So the “drug” has been approved but the application has not.

It is worth noting that it takes on average 12 years and over US$350 million to get a new drug from the laboratory onto the pharmacy shelf. At the company level, it undergoes around three and a half years of laboratory testing, before an application is made to the U.S. FDA to begin the testing on humans. Only 1 in 1000 compounds that enter lab testing will ever make it to the human testing stage.

Which is exactly why the FDA stated in its release late last month that there isn’t enough hard data due to a lack of clinical trials. Stands to reason that a drug we’re trying to find a cure for hasn’t a cure.

The FDA Accelerated Approval pathway was introduced in 1992 so that drugs to treat life-threatening diseases could be brought to market to make a significant impact on the course of diseases. For example, many antiretroviral drugs used to treat HIV/AIDS entered the market via accelerated approval, and subsequently altered the treatment paradigm.

Clearly, there has been no chance to conduct clinical trials on Plaquenil on COVID19 to get official FDA approval. The side effects of Plaquenil, when taken for malaria, are well known with 65 years of data. It is a question of whether the impact of the drug causes other side effects when used to treat COVID19. Hence why the FDA is trying to ensure that people are aware of the risks if they elect to take it.

Yes, the president has a habit of saying unnecessary things. He can be unpresidential at times. We have never hidden that.

However, at what point is Trump deserved of standing trial in The Hague given the timeline of events and an insane liberal media? Perhaps President Xi of China would be a more worthy respondent in the International Criminal Court for the cover-up which led to the outbreak in the first place.

If FDR had to deal with Trump’s press gallery

Image may contain: 16 people, possible text that says 'Mr. President!! Do you feel guilty for all the sailors we lost lost Sunday? Why do you insist on calling it"the "the attack on Pearl Harbor? Many say that your oil embargo Japan led the war. there blood on your hands? What about the sailors trapped in Arizona? You've had years to prepare. Why wasn't our Navy ready? Are you going to resign? If FDR had to deal with a press corp like President Trump's.'

There can be no doubt the mainstream media has been utterly lacking in journalistic integrity since Trump took office.

Just when we thought lower depths couldn’t be plunged, COVID19 has proven that ethics in reporting will only return when the media loves America more than they hate Trump.

Who left the currency printer on?

CBs

This chart shows how fast he printing presses have been flying to boost the “asset” line of the Bank of Japan (blue), the US Federal Reserve (red) and the ECB (green).

The BoJ has grown its “assets” from ¥100 trillion in 2008 to ¥585 trillion today. Yes, that is right the Japanese central bank has printed so much money that the assets on the book are the equivalent of 100% of GDP, 5x that of 12 years ago.

Does MMT predicate that it is ok to print another 100%? After all the existing Japanese national debt pile is ¥1000 trillion. So who is counting?

We note that the shares in Japan’s biggest currency printing press maker Komori (6349) quadrupled during the boom and only tapered off as the BoJ slowed the rate in early 2018. Maybe coronavirus will get the BoJ back to its wicked ways as it buys up even more of the stock market??? It already owns 58% of outstanding ETFs and by stealth has become a top 10 shareholder in almost 50% of listed stocks. In a sense, we have a trend which threatens to turn Japan’s largest businesses into quasi-state-owned enterprises (SoE) by the back door.

The US Fed has grown “assets” from just shy of US$1 trillion at the time of GFC when the economy was worth US$15.7 trillion or around 6%. There was a nice breathing period between 2014 and 2018 before tapering started.

However, in October 2019 we noted that the Fed was getting a LOT more active in the repo market. Now with coronavirus upon us and the volatility in capital markets at the start of 2020 we can see that another $1.6 trillion has been added to the asset line to a record $5.8 trillion or around 30% of current GDP.

The European Central Bank (ECB) has powered up its balance sheet too from around Eur 1.4 trillion to Eur 4.7 trillion. or 40% of Europe 19’s Eur 10.7 trillion GDP. At the time of the GFC, Europe 19’s combined GDP was Eur 9.3 trillion meaning ECB assets were only 15% of the total. Note the ECB has discontinued reporting its assets.

The point is with the world economy about to hit a brick wall, will markets just face more central bank distortion? Surely no one honestly believes that central banks have got this under control with such an appalling record.

To be honest, if modern monetary theory (MMT) was truly working to date, there should be no unemployment, no poverty, no taxes and we could have easily funded all that renewable energy without even having a debate. Just print and spend.

Therein lies its fatal flaw of MMT. Eventually, conjuring money out of thin air hits terminal velocity. Truth be told the tales above show that each asset that the central banks have bought has created less and less impact in the real economy. Velocity has been sliding for decades.

It is a bit like taking morphine to kill the pain. Take too much and the side effects are:

  1. nausea and vomiting
  2. constipation
  3. itching
  4. loss of appetite
  5. lower body temperature
  6. difficulty urinating
  7. slow breathing
  8. sleepiness
  9. changes in heart rate
  10. weakness
  11. dizziness upon standing up
  12. confusion
  13. nervousness
  14. erectile dysfunction
  15. osteoporosis and risk of fractures

Not unlike the symptoms being shown by the global economy today.