Establishment

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.

When the people you least expect praise Trump on COVID19 response

The View, hosted by Joy Behar is about as liberal as a show can get. The members of the panel are all suffering chronic Trump Derangement Syndrome.

Instead of wishing that Americans are safe, she tried to pillory California Governor Grant Newsom over his positive remarks about Trump, making out as though he was kissing the ring to get help. He replied,

Let me just acknowledge the frame of your question. We’re involved in over 68 lawsuits with the Trump administration, and so there’s no question we have had our differences of opinion on many issues but I just want to remind you that you and many others that maybe are not aware of this. We have been at this since late January. California got a head start in many respects where no one was really paying much attention. We started working with the administration directly to get these repatriated flights from mainland China into the state of California. Many states turned their back on those flights and those repatriation missions. California embraced them. We also had that “Grand Princess,” that large cruise ship where we worked very collaboratively with the federal government developed strong relationships of trust with emergency planning and how we can bring those passengers back into our diverse communities and all across the rest of the country.

As a consequence of that, our relationship began earlier than most, and so from that perspective, all I can say is from my perspective, the relationship has been strong and I’m not doing it to kiss the ring. I’m not doing it in a way, you know — I’m just being forthright with the president. He returns calls. He reaches out. He’s been proactive. We got that “Mercy” ship down here in Los Angeles. That was directly because he sent it down here. 2,000 medical units came to the state of California, these fms, these field medical stations, and that’s been very, very helpful and to the extent we’re going to need more, and I’ll let you know in a few weeks if that relationship continues.

What were we saying about media narratives that are so removed from the truth?

If only we could find a cure for both

Trump Derangement Syndrome (TDS) reared its ugly head in the attached video. Yes, we get many people hate President Trump. If only the producers actually cared about the facts of what has actually been done in dealing with COVID19 compared to previous pandemics they may have reconsidered. Even if he had managed a perfect delivery the nitpickers would have found fault.

We do not deny that Trump’s unnecessary and flippant deliveries could be more presidential but none of it is remotely out of the bounds of expectations. This is the nature of the beast. Perhaps it would be more concerning if he stepped out of character?

For the record, Trump announced a ‘national emergency‘ on March 13th after 41 deaths had been recorded. WHO had declared a pandemic just two days earlier. Trump had restricted travel from China on January 31st, despite media outrage that this move was based solely on xenophobia. Where have the retractions been now that so many countries are following his lead?

When swine flu (H1N1) got out of control, WHO announced a level 5 pandemic on 29th April, 2009. Obama announced a ‘national emergency‘ on October 24th, 2009, when the death toll was over 1,000. A full 6 months after WHO.

CDC estimated there were 60.8 million cases, 274,304 hospitalizations and 12,469 deaths in the United States due to H1N1. The death toll for coronavirus in the US has just gone north of 4,000.

An estimated 151,700 to 575,400 died from H1N1 worldwide in 2009. 47,000 have died so far from COVID-19. Preventing death by discovering advanced antiviral treatments should be front and centre of the media’s attention, no? Shouldn’t a cure be all that matters?

People’s lives are being materially impacted. Losing loved ones. Being put under financial stress due to job losses. Real-world problems. Yet the social and mainstream media are obsessed with fuelling TDS narratives for purely clickbait purposes. Trust in the media continues to slide.

Ironic that Trump’s approval rating continues to climb despite the media onslaught.

Whether the media wants to confect stories of a rift between Trump and Dr Fauci or drum up racist narratives, all of it takes priority over finding a solution. 

Perhaps the producers might make a video about the Democrats trying to block an emergency $2 trillion rescue package unless aircraft emissions standards, corporate board diversity targets or wind/solar tax credits were included. Who knew the latest March 2020 Gallup ‘Trust in Congress’ poll fell to 22% from 27% in December?

Perhaps we will have journalistic integrity when the media learn to love America more than they hate Trump.

Only one you can’t stop crashing at your place during COVID19 is the economy

Warning Signs Investors Ignored Before the 1929 Stock Market Crash ...

Brace yourself.

COVID19 will be defeated but the cure is turning out to be way worse than the disease.

Unfortunately, the sad reality is that at the rate governments are tightening legislation to keep us in shut down mode, we are day-by-day staring at a great depression.

While some will praise governments for throwing the kitchen sink at the economy with all manner of stimulus packages, the relief will be temporary because all of the ammunition for a sustainable recovery had been depleted years earlier. It is like supplying an alcoholic on rehab with an all-you-can-drink open bar.

Our feckless RBA has just embarked on QE, a mission that has failed every other central bank that has tried it. The velocity of money has been falling for decades. Who will be given access to borrowing at zero interest rates when the economy is in freefall? Which banks will lend against properties that will likely implode in value? 50% down? To think of all the reckless “first home buyer” schemes that loaded young people at the top of the property market. The RBA has been complicit. Not wanting to put pressure on the government to reform, it just kept cutting rates to keep housing afloat. It was totally negligent in its duty even though it will signal its role as a rescuer of last resort.

When will banks be forced to mark to book the value of mortgages on their balance sheet? Equity is thin as it is. 15-20% equity buffer to mortgages is pretty wafer-thin. They need to do this immediately so we can properly assess risk. Forget stress tests by APRA. They’re meaningless. Our housing market will collapse with higher unemployment. 50% falls from here are possible. Remember there will be hardly any buyers. Prices fell up to 90% in Japan after its property bubble popped.

Worse our regulators have been asleep at the wheel chasing financial institutions on their commitment to climate change, the absolute least relevant metric to save them from here. It shows how complacent they became.

Australia has made some interesting crisis policy choices. For instance, PM Scott Morrison is trying to pass rent moratoriums where landlords suspend payments from tenants until things return to normalcy. It is not enshrined in law yet. In principle that is a nice gesture even if the government is subsidizing the banks for forgone interest due to short term loan repayment moratoriums. Let’s assume this continues for 6 months. Apart from the astronomical size of the subsidy, who will ultimately end up sacrificing the 6 months? Landlords? It won’t be the tenants.

Shouldn’t landlords be free to choose whether they are prepared to forgo rent or not as a purely rational business proposition? Shouldn’t a landlord be free to enforce a rental agreement? Will contracts matter anymore?

At some stage, the free market must be allowed to function and the government will hit a tipping point of weighing stopping economic armageddon by allowing businesses to function and the marginal risk of infections. The people will be crying for this if shutdowns remain.

Landlords may be labelled un-Australian or worse but in 6 months time, if unemployment has surged to nose bleed levels well above the 6% we saw during GFC at what point will disposable income be able to support a daily coffee at a cafe?

A cafe might soldier on for a further 3 months on skeleton staff before realising that they can’t cover costs. A landlord would be well within reason to demand that early cancellation clauses and fees are enforced.

Then what of all the invoices to coffee suppliers, bakeries who provide muffins and croissants and utilities? Who misses out? What about the invoices of the coffee supplier? Will the bakery get called on by its flour supplier to pay upfront for future deliveries when it has no operating cash flow, instead of the long-standing 60-90 day terms? That happens overnight. It isn’t a managed outcome. Cash is king.

The question is why hasn’t the government taken advice from the banks on business lending so it can better assess the risks involved from those that deal every day with small companies?

We can’t just shut an economy down for 6 months and expect a return to normal when it is all over. Unemployment rates are likely to surge well above 10%.

As we wrote in an earlier piece, there are 13.1 million Australians employed as of February 2020. Full-time employment amounted to 8,885,600 persons and part-time employment to 4,124,500 persons. Retail trade jobs come in at a shade over 1.2 million jobs. Construction at 1.15 million. Education 1.1 million. Accommodation/restaurants /bars etc at 900,000. Manufacturing another 900,000. Noticing a trend in our employment gearing?

We can fudge the unemployment figures however we like. We can pay $1,500 a fortnight for 6,000,000 workers to pretend they still have a job. That is $18bn a month. The PM can talk about how this will help us bounce on the other side. If it continues for just over 6-months can the budgeted $130 billion will be spent. This is separate to NewStart payments too.

Yet, will people lavishly spend or pay down debt and economise as best they can? We think the latter unless moral hazard has truly sunk in.

What people need to understand is that our Treasury expects to raise $472.8 billion in taxes for FY2019-20. Throw in sales of services, interest and dividend income and that climbs to a total of $511 billion. Expenses are forecast at $503 billion. In the following three years Treasury anticipates $490.0 billion,  $514.4 billion and $528.9 billion in taxes. Expect those totals to be cut significantly.

So if ScoMo’s JobKeeper rescue package for workers goes beyond 6 months, that is equivalent to 27% of annual tax revenues. That doesn’t take into account the slug to tax collections of lower GST and vastly lower income tax for individuals and corporates. That is just at the federal level.

Note, states such as NSW have recently waived payroll taxes for small businesses in a  $2.3bn stimulus package. We shouldn’t forget that the NSW Government is the largest employer in the Southern Hemisphere at 327,000 staff.

We remind readers that according to the RBA small businesses employ 47% of the workforce. Medium enterprises employ 23%. That is 70% of the entire workforce who are most at risk from a slowdown.

In 2019-20 income tax collections will make up $220 billion. Company tax was forecast to generate $99.8 billion. GST $67.2 billion. Excise taxes (petrol, diesel, tobacco etc) $44.7 billion. This data can be found on page 21 here.

Local cafes are reporting a 60~80% fall in revenue. Pretty much all casuals have been let go. It is a bit hard to survive on coffee when a lot of stores aren’t stocking pastries for fear of spoilage.

It is not hard to assume a scenario where government income taxes fall to $160 billion (-28%) due to mass layoffs. One assumes many people will be able to get a tax rebate come June 30th. So this number may end up being conservative on an annualised basis.

Company tax could plunge to $40 billion annualised due to the drastic fall in revenues as customers change the manner of contracts and reign in their own spending. Anyone that thinks that business will resume as normal is crazy. The ripple effects will be huge.

Excise taxes may drift to $35 billion as people cut back on drink (currently $7bn in tax revenue), are limited in places to drive negating the need to fill up (currently $18bn in total tax take). The $17 billion in tobacco excise may weather the storm better than most.

GST could fall to $50 billion. People just aren’t spending much outside of food. Massive retail discounts will not make much difference. GST will be the best indicator of how much the economy has slowed. Even if we start to see a massaging of the GDP numbers, GST won’t lie. It will be the safest indicator.

If our assumed tax revenue sums to $285 billion annualised from the budgeted $472 billion that equates to a 40% haircut.

Trim the ‘other revenue’ column to $30 billion from $39 billion and we have $315bn. Will the government then chop away at the $503 billion in expenses? All of the stimuli doesn’t arrive at once but a lot of it in relatively short order. Surely a $300~400 billion deficit is a fait accompli?

We should also anticipate forward year tax revenues be cut c.30% for several years after. The question is when does the government realise that it must cut the public service and scrap wasteful projects like French submarines and other nice-to-have quangos? We won’t see a budget surplus for decades.

We must careful not to fall into the trap Japan finds itself in. It has a US$1 trillion budget funded by US$600bn in taxes and US$400bn in JGB issuance. Every. Single. Year.

Nothing short of drastic tax and structural reform will do. Instead of behaving more prudently by cutting budgets when we had the chance, instant gratification created by governments desperate to stay in power has only weakened our relative position. Since 2013, the Coalition has been responsible for 46% of the total amount of all debt issued since 1854.

States should quickly realise that the $118 billion in federal grants going forward will also be curtailed. NSW will likely fare the worst because its financial position is by far the best.

If the government had a proper plan, it would be looking to what essential industries have been given up to the likes of China that we need to onshore. Medical equipment, masks or sanitiser. For cricketer Shane Warne to be converting his Seven Zero Eight gin factory to produce hand sanitiser shows how much of a joke our local manufacturing has become.

We must never forget that a Chinese government-owned company displayed the Communist Party’s mercenary credentials by (legally) buying 3,000,000 surgical masks, 500,000 pairs of gloves and bulk supplies of sanitiser and wipes. So not only was it responsible for covering up the truth surrounding the virus in the early stages of the pandemic, we openly let it compromise our ability to combat the virus when it hit our shores.

China has shown it doesn’t give a hoot for ordinary Australians. So why should we continue to fold to its whims and cowardly surrender our industries for fear it’ll stop dealing with us? It is nonsense. We have some of the highest quality mineral resources which it depends on. We can bargain. We have chosen to appease a bully.

Our Foreign Investment Review Board (FIRB) needs to be far more vigilant to prevent takeovers by Chinese businesses. We should openly accept the way China conducts business practices and recognise that it is often incompatible with ours when national security is at stake. Surely this crisis has highlighted the true colours of the political system in Beijing.

That leads us to Japanese companies. Many are seriously cashed up, have a favourable exchange rate and have a long-standing history of partnering with local businesses. We should be prioritising our relationship with Japan and look to have them invest in our inevitable capital works programs – specifically high-speed rail. It is the type of project that has meaning for the future and a long enough timeline to turn an economy around.

People need to be prepared for the reckoning. There is no point softening the blow. The brutal truth will eventually arrive and we will have only put ourselves in an even weaker position with the policy suite enacted so far. Time to be rational about risk/reward. Whether we like it or not, the minimum wage will need to be cut substantially in order to get the jobs market alive again. Don’t worry, unemployment will be so high that people will demand minimum wages are cut because it is far superior to the alternative!

(Time to ditch your industry super and start shovelling your superannuation into gold)

Never let a good crisis go to waste

Never let a good crisis go to waste. Democrats have been doing their utmost to show partisanship during coronavirus. Instead of trying to help their fellow citizens, they see it better to throw in some irrelevant nice to haves which will do nothing to help Americans fight the economic impacts of coronavirus as bargaining chips.

Here are 20 examples.

  1. Corporate pay statistics by race and race statistics for all corporate boards at companies receiving assistance.
  2. Corporate board diversity targets
  3. Bailing out all current debt of postal service
  4. Required early voting
  5. Required same-day voter registration
  6. $10,000 bailout for student loans
  7. For companies accepting assistance, 1/3 of board members must be chosen by workers
  8. Provisions on official time for union collective bargaining
  9. Full offset of airline emissions by 2025
  10. Greenhouse gas statistics for individual flights
  11. Retirement plans for community newspaper employees
  12. $15 minimum wage at companies receiving assistance
  13. Permanent paid leave at companies receiving assistance
  14. hiding the citizenship status of College Students from the Census Bureau
  15. expanded wind & solar tax credits
  16. $100,000,000 for NASA’s environmental restoration group

While it is fair game to question the contents of a $1.8 trillion rescue package, none of the above will help Americans combat coronavirus. So the Dems have upped it to $2.5 trillion to include the above, including $1.5k in aid per individual; as much as $7.5k for a family of 5.

We suppose when the central bank has committed to endless QE, what does an extra $700bn on top of $1.8 trillion matter?

Unlimited QE and a reminder of discontinued series

Just when you thought it couldn’t get crazier, the Fed has announced that it will buy unlimited sizes of treasuries, mortgage-backed securities and corporate bonds. Recall our comments in 2018 when the Fed discontinued its reporting of assets. We noted that the Fed discontinued M3 money stock in 2006, two years before the GFC. Coincidence?

We were always struck by former Fed Chair Janet Yellen’s comments in 2016:

Monetary and fiscal policy is far better prepared for large positive shocks than negative ones

and 2017:

Don’t expect another financial crisis in our lifetime

The only thing left is to buy equities outright which would require an act of Congress. Such moves once again only highlight just how bad the situation has become. The Bank of Japan can hardly be credited with success over its ETF based equity purchases. It has now lost $30bn in this recent market rout. We should mention that the BoJ is a top 10 shareholder in almost 50% of listed stocks, creating an overhang of epic proportions should it ever announce it wants to reduce holdings. It now owns $300bn and due to be $400bn by year-end.

MSM relishes trade of economic depression via pandemic over Trump as POTUS w/ no virus

Trump Derangement Syndrome (TDS) knows no bounds. Yes, the mainstream media (MSM) is celebrating the milestone that the Dow is below the level when Donald Trump was inaugurated.

We have always said that if Trump continued to boast about market gains he would have to wear it on the downside too. Alas, he is being hoisted by his own petard.

Sadly, as much as CNN and others relish the though of Trump out of office, we sincerely doubt the vast majority of Americans would trade a pandemic with catastrophic unemployment over business as usual before the WuFlu with a Trump at the helm.

Markets are forward looking. They anticipate where corporate earnings are likely to be. This market rout has little to do with Trump’s policies in isolation.

We’ve said repeatedly that global central banks have created a debt bomb through reckless monetary policies over the last two decades. They have proved just how little impact cutting rates to zero or throwing $850bn in handouts has on markets. They’re out of ammunition. Confidence is shot. We’re in uncharted territory.

Boeing is the perfect canary in the coal mine. The 737MAX debacle which is imminently due to be on sale again to a market that has effectively vanished. Airlines are cutting routes and it will be up to the zombie lending cycles of aircraft leasing companies to renegotiate rates so they can keep the patient alive. Airlines will push out deliveries.

However before Boeing’s core business troubles, the management embarked on short term incentive chasing buybacks to the tune of $43bn since 2013. The company is trading negative equity and has drawn down ALL of its credit lines ($13.8bn) and now wants a handout.

All of this is the product of two decades of mindless expediency. Governments are just as culpable for allowing greed to override common sense. No lessons have been learnt since 2000 and especially 2008. Blue chips like Boeing and GE are now heading to record lows because of it. Ford Motor is rated junk. How long before Boeing and GE fall foul of the same problem?

We are particularly interested in the next set of results from Parker Hannifin. It is like the global industrial hardware store. All of the major manufacturers use Parker for parts – pumps, hydraulics, pneumatics, valves, hoses etc. When we see Parker’s upcoming report on order flows we can gauge how bad it is at the manufacturing coal face.

This time we are staring at a “global depression” and it would be nice to think the MSM would try to put some context around the ramifications of this virus and the raft of economy killing policies governments around the world are introducing instead of just blaming Trump. Yes, he’s been his normal self during this but is he responsible for the actions of other countries going into shutdowns? Seriously? Do the US Coronavirus stats stack up poorly vs countries like Italy on a relative or absolute basis? No. Moreover COVID-19 cases in the US are a mere fraction of H1N1 swine flu cases which the media made nowhere near the level of hysteria as now. It’s a disgrace how far the media will go for clickbait.

Had the world’s central banks behaved sensibly to stop excessive debt and allowed markets to function freely, this pandemic would have had far less effect than it is now because we would have had the ammunition to fight this war of attrition. Now all our governments and regulators are doing is moving phantom armies across maps trying to stop economic Armageddon.