EIR Daily Alert Service, FRIDAY, March 20, 2020
FRIDAY, MARCH 20, 2020
Volume 7, Number 57
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
- No More Business as Usual
- Retired U.S. Colonel: “Close the Securities Markets! Now!”
- Americans Must Bust Up the Geopolitical, Free Market Interests to Defeat Coronavirus!
- Texas Gov. Abbot: Re-Open Shut Hospitals, Use MASH Tents, Line Up COVID-19 Beds; Crime of Hospital Closures Exposed
- Russia Accuses U.S. of Wanting Syria War to Continue
- Lombardy Hospitals Under Stress; 40% Population Violates Lockdown
- PLA Mobilization Against Coronavirus: Model for the Rest of the World?
- Pompeo Continues To Exhibit His Brutality Towards Iran
- Argentines Unite Behind President Alberto Fernandez to Combat Coronavirus: “Total Quarantine” To Be Declared March 19
- Shareholder Value vs. Human Value: Two Stories, With a Moral
- ECB to Buy 750 Billion Euros of Bonds
- Commerzbank Chief Risk Officer Exposed For Shorting the DAX
- Bavaria Suspends Debt Brake For One Year
- Flight Into Cash
EDITORIAL
No More Business as Usual
March 19 (EIRNS)—The COVID-19 pandemic forcefully draws the world’s sometimes reluctant attention to the true state of human physical economy, to the present state of man’s ability to “be fruitful and multiply, [to] fill the earth and subdue it.” The overripe, globalized trans-Atlantic financial system is sinking, as leaks and fissures appear more rapidly than central banks can plug them with money. To address the first crisis, with a clear understanding of the second, requires nothing less than the reconfiguration of the economy, and indeed of human culture, on a new basis, one that recognizes the inherent dignity and value of every human individual, as endowed with a spark of creative reason, utterly distinguishing them from the beasts. This spark of reason manifests itself in scientific advances and in works of immense beauty.
Helga Zepp-LaRouche has called for taking advantage of the current opportunity by closing the markets to allow for a reorganization of the obviously unsalvageable financial disaster created through decades of British economic policies. On Thursday, she explained in a webcast:
“That is why I issued a call to close the markets for a few days, in order to take the absolutely necessary reforms of the financial system, which has to start with the immediate implementation of a Glass-Steagall banking separation, followed by the other measures which we have been demanding, namely: a national bank in every country and a New Bretton Woods credit system in order to restart the economy and concentrate on the physical economy…. After a quite significant delay, all the governments of the trans-Atlantic sector are clearly taking measures….
“But this is all missing one essential point: The reason why we are in this crisis has to be addressed…. So, the very first step would be to close the financial markets in order to implement Glass-Steagall…. It requires the intervention of the most powerful governments in the world working together. And that is the need to have the summit of the United States, Russia, China, and India; then other countries can support that. But you need a decision on the level of the heads of government to end the casino economy, to go in the direction of a world credit system which enables a world health system. Because it should be very clear that this pandemic will not be fought in one country, but you need a health system in every single country of the world, and that is absolutely not possible under the present circumstances. So therefore, the shutting down of the financial markets is the absolute necessary first step, but it must be followed by the whole package.”
That full package includes a coordinated international health and security system to defend the human race from biological, geological, and even extra-terrestrial threats such as asteroids. That full package includes investing in the staggering breakthroughs in energy production offered by nuclear fusion, a technology that is not optional, but absolutely necessary for the next generation of human economic development. Looking ahead, that full package includes a commitment to eliminating the horrors of the current education system, and acquainting students not with formulas and facts, but with the thinking and discoveries that we take for granted today. We must create geniuses!
U.S. POLITICAL AND ECONOMIC
Retired U.S. Colonel: “Close the Securities Markets! Now!”
March 19 (EIRNS)—Retired U.S. Army Colonel Pat Lang, like Schiller Institute founder and president Helga Zepp-LaRouche, issued a call yesterday for shutting down the speculative securities markets. Unlike Zepp-LaRouche, Col. Lang did not identify the systemic nature of the threat to the entire Western financial system, nor did he elaborate the remedy, starting with the immediate restoration of FDR’s Glass-Steagall Act, as she did. Nevertheless, his statement, posted yesterday evening to his Sic Semper Tyrannus blog, well-read by patriotic military and intelligence officiers, recognized the need to stop continuing with “business as usual,” “Now!” He wrote:
“Close the securities markets! Now! “Mnuchin said yesterday when the Dow was higher that ‘we are not going to close the markets.’ In my opinion he was wrong to oppose closing the damned markets. Does he want to wait until the market cap of U.S. business is ZERO? Not only are investors and market traders completely spooked, but the damned machine trading is driving the markets lower and lower.
Americans Must Bust Up the Geopolitical, Free Market Interests To Defeat Coronavirus!
March 19 (EIRNS)—President Trump and Vice President Mike Pence held a working teleconference today with all 50 U.S. governors, or close to that, to coordinate actions against the coronavirus pandemic. The call was made from FEMA’s National Response Coordination Center, as the decision has been taken to put FEMA in charge of the “locally-implemented, state-managed, federally-supported” national war against the epidemic. On Wednesday, the two had spoken with over 5,000 local and state officials, as well.
In the Task Force briefing a couple of hours earlier, however, the difficulties in getting the needed mobilization going became evident.
For the first time, the President bowed to the rabid anti-China pressure from geopolitical advisors and media, and at least twice blamed China for failing to stop the coronavirus pandemic. Some people would say the pandemic was “an act of God. I don’t view it as an act of God…. It could have been stopped right where it came from, China,” he said, wildly charging that the Chinese did not let the world know about the new virus for a couple of months.
Pressure from the free market crowd against the urgent immediate change in the nation’s productive platform by returning to the principles of American System Economics was also evident.
President Trump had tweeted on Wednesday afternoon that he had “only signed the Defense Production Act to combat the Chinese Virus should we need to invoke it in a worst case scenario in the future. Hopefully, there will be no need.”
At today’s task force briefing, officials reported that they expect an immediate huge jump in medical supplies, under the powers granted under the coronavirus bill signed into law on Wednesday. For example: Honeywell and 3M will now be able to sell their already ramped-up production of industrial masks to hospitals and healthcare providers for medical use. Construction companies are donating their masks and gowns to local hospitals. An inventory of ventilators outside hospitals (e.g. at ambulatory surgical centers) has identified many which can be converted for COVID-19 patient treatment. Carnival Cruise lines is willing to make ships available as medical facilities, if needed.
All very important for momentary survival, but the thinking expressed by the various officials is that ‘we can get by with what with have, without changing our habits.’ Pressed as to why he has not invoked the DPA he activated, President Trump said the governors should be doing a lot of what could be done under the DPA—but he reiterated that he will activate it if we are desperately in need of something. We will know a lot in the next two-three days, he added.
Texas Gov. Abbot: Re-Open Shut Hospitals, Use MASH Tents, Line Up COVID-19 Beds; Crime of Hospital Closures Exposed
March 19 (EIRNS)—A wave of hospital closures is sweeping the nation, at the very moment that the United States needs the opposite: expanding hospital bed capacity—both through re-opening recently closed hospitals, and through a large-scale program of building new hospitals, adding tens of thousands of hospital beds, to handle what is expected as an immense increase of COVID-19-infected patients, as well as to maintain the general health of the nation.
In Texas yesterday, Governor Greg Abbot held a video conference with hospital directors from around the state. In the last ten years, Texas leads the nation in rural hospital closures, with 20 shut down. Abbot said that recently closed hospitals will be re-opened, plus MASH-type tent hospitals will be set up and other measures taken.
Nationwide, 47 rural hospitals shut down in 2019, according to the Federal agency MedPAC, and the process carried over into 2020. A Jan. 6, 2020 Bloomberg news service article, entitled “Hospital Bankruptcies Leave Sick and Injured Nowhere To Go, reports that at least 30 hospitals entered bankruptcy in 2019,” according to Bloomberg data. This ranges from Hahnemann University Hospital in downtown Philadelphia, to De Queen Medical Center in rural Sevier County, Arkansas, to Americore Health LLC, a company built to preserve local hospitals.
The closing of Hahnemann Hospital is particularly severe. Started in 1848, it was a 496-bed facility, with a medical staff of 570, that had been serving mostly the poor and under-served of Philadelphia, a city of over 1.5 million. It served 30 medical specialties. It was taken over by private equity investor Joel Freedman, who on June 26, 2019 put the hospital into bankruptcy reorganization, forcing the hospital to close. An entire section of Philadelphia has no hospital.
This problem is particularly acute for rural hospitals. From 2005 to 2019, a total of 168 rural hospitals closed. Over 57% (or 96) of those closed during the Obama years, and the largest number of them were closed in the South. Especially hard hit have been Texas and Tennessee. These rural closures are concentrated in East Texas and West Tennessee. For example, McKenzie Regional Hospital in Tennessee closed in September 2018, and now families face an hour-long commute to the nearest hospital—if they have a car. In Texas, of 22 communities impacted, eleven now have no hospital, emergency services, or clinic services.
In response to this crisis, there should be a re-opening of hospitals in all 50 states. EIR’s Task Force is working on determining how many hospitals and hospital beds could be gained from re-opening recently closed hospitals. It could add 2,500 to 5,000 additional beds, and perhaps significantly more. In the short term, that would be very valuable. But to reverse the 40-plus years take-down of the Hill-Burton hospital infrastructure, there has to be a complete mobilization to build new, fully equipped hospitals, using equipment based on advanced physical principles, to tackle the crisis of the COVID-19 virus (building infection isolation hospitals or stand-alone units) as well as the needs of the nations health as a whole.
STRATEGIC WAR DANGER
Russia Accuses U.S. of Wanting Syria War To Continue
March 19 (EIRNS)—The Russian Foreign Ministry blasted Secretary of State Mike Pompeo yesterday for claiming that Russia killed dozens of Turkish troops in Syria’s Idlib province. “Even during a global pandemic of an infectious disease, U.S. officials continue their massive anti-Russian propaganda campaign, disseminating information that is clearly false. Yet another outrageous statement was made by U.S. Secretary of State Michael Pompeo during the March 17 media briefing,” a Foreign Ministry source told TASS. “Regretfully, in a bid to drive a wedge between Russia and Turkey, who are cooperating in Syria, U.S. officials even resort to plain lies.” According to the Russian diplomat, it was the United States who fueled the conflict in Syria, actively supporting any group waging a war against the Syrian Arab Republic’s legitimate government, while Russia and Turkey “are trying to bring peace to Syria’s province of Idlib.” “Provocative statements coming from the United States demonstrate once again that they want the war in Syria to continue,” he added.
COVID-19
Lombardy Hospitals Under Stress; 40% Population Violates Lockdown
March 19 (EIRNS)—Lombardy hospitals are reaching the limit of their capacity and new patients are increasingly transported to other regions. One such patient who was flown to Bari died on the plane yesterday. A survey of mobile phone flow movements, conducted by the Lombardy regional authority in collaboration with Telecom Italy, has shown that over 40% of citizens disobey orders and move more than 300 meters away from home.
Lombardy region chairman Attilio Fontana has called for even more drastic measures, such as deploying the army, while the national police has intensified controls. He appeared in a press conference today together with the deputy head of the Chinese Red Cross, who remarked that he saw too many people on the streets.
Meanwhile, the curve of newly COVID-19-infected keeps rising, but in a linear, non-exponential way. The rate of increase of disease is even going down, although the absolute number increased, reaching a peak yesterday with 475. Patients in intensive therapy are 2,257.
Yesterday, a second team of Chinese specialists arrived in Milan, with several tons of medical equipment and materials. Soon, 300 health operators will arrive from China, and another group from Cuba. One thousand workers are working in three daily shifts to build the mega-hospital on the Milan Trade Fair grounds, while the Army is going to do a similar thing in Bergamo and Cremona.
PLA Mobilization Against Coronavirus: Model for the Rest of the World?
March 19 (EIRNS)—On March 17, the South China Morning Post posted a report on the deployment of the Chinese People’s Liberation Army (PLA) against the coronavirus in Wuhan. This included the airlifting of 1,400 PLA medical personnel into Wuhan to help staff the temporary hospitals there.
The broader point of the article, however, is that one of the functions of the PLA is to provide a response force in case of any disaster, including natural disasters. “The military has been well trained to give a quick response to any critical events,” Beijing-based military observer Zhou Chenming said. “All the officers and soldiers took the battle against the coronavirus as a call-up to a non-traditional military operation where they could show their combat-readiness.” With respect to infectious diseases, the Chinese even have their own counterpart to the U.S. Army Institute of Infectious Diseases, called the Academy of Military Medical Sciences, set up in 1951 at the time of the Chinese intervention into the Korean War. The academy’s central mission was to research nuclear, biological, and chemical warfare, and has had a team in Wuhan since January. “The PLA has many experienced epidemiologists and virologists, because the military has a long history of studying biochemical warfare,” Zhou said.
Pompeo Continues To Exhibit His Brutality Towards Iran
March 19 (EIRNS)—The State Department did not announce additional sanctions against Iran yesterday, but nonetheless bragged that the screws will continue to be tightened. In a statement issued under the name of Secretary of State Mike Pompeo, the department bragged about oil-related sanctions that were announced by the Commerce Department the day before. “Our sanctions will deprive the regime of critical income from its petrochemical industry and further Iran’s economic and diplomatic isolation,” it said. “The United States will continue to fully enforce our sanctions.” Iranian Foreign Minister Mohamed Javad Zarif said in a message on the Nowruz new year holiday in Iran on March 18, that the United States is responsible for the “destructive ramifications” of its aggressive unilateral sanctions against Iran as the country is fighting the COVID-19 outbreak. “My country is among the hardest-hit by the coronavirus,” he said, adding that also, “Iran, today, is the most intensely sanctioned country in history, not in line with United Nations’ decisions but contrary to them.” He noted that the economic siege imposed by the United States on Iran impedes all legitimate trade, and deprives Iran of its own resources, the ones necessary to address the needs of Iranians, including their health and livelihoods. “Even amid this pandemic, the U.S. government has vengefully refused to lift its unlawful and collective punishment, making it virtually impossible for us to even buy medicine and medical equipment,” he said. The Iranian health ministry reported this morning that the number of COVID-19 cases has reached 18,407, and its death toll mounted to 1,284 in the country. That’s an increase of 1,046 new cases and 149 deaths in the previous 24 hours, reported IRNA.
Argentines Unite Behind President Alberto Fernández to Combat Coronavirus; “Total Quarantine” To Be Declared March 19
March 19 (EIRNS)—Argentine President Alberto Fernández has displayed extraordinary leadership and personal responsibility in unifying the entire country—including congress, the political opposition, provincial leaders, and the media—behind his declared war on the novel coronavirus. Having already closed schools and borders, and having already declared a national emergency: today, following a meeting with governors, Fernández will issue a decree declaring an “obligatory quarantine” for the entire nation.
So far there have been 97 confirmed cases and three deaths in the country, and new measures are intended to slow the virus’s spread. One source close to the President was quoted by Rosario3 radio saying “We’re going to be drastic to avoid the painful experiences we saw in Spain and Italy.” It will be “an armored quarantine,” this source said. Emergency measures are being taken to ensure that the poor, retirees, and unemployed are cared for.
The obligatory quarantine will close down most non-essential activity, keep people in their homes as much as possible except for buying food, pharmacy items, and going to banks. The armed forces have been mobilized to assist with logistics and activate their own medical and laboratory capabilities, including erecting mobile hospitals. A top priority will be to accelerate testing, which to date has been centralized in Buenos Aires, and set up 35 testing sites in the provinces to speed up processing of tests.
Exemplifying the degree of national unity is the message that appeared on the front page of every single national newspaper today, at the urging of the Argentine Association of Journalistic Entities (ADEPA): “Among us all, we will stop the virus,” the message read. “Let our message go viral!”
Also of note is the announcement, reported in Página 12 today, that the government intends to build eight “emergency modular hospitals”—five in Buenos Aires city and province, where there is the largest concentration of cases, and three in the other provinces. Reportedly, these will be completed “in a matter of days,” Wuhan-style. In addition, three hospitals whose construction had been halted by former neoliberal President Mauricio Macri, will be completed as quickly as possible.
Fernández’s actions stand in stark contrast to the do-nothing attitude of the Brazilian and Mexican governments, which together with Argentina represent Ibero-America’s three largest economies. Disgust with Brazilian President Jair Bolsonaro’s non-action is so strong, that in several cities around the country there were loud pots-and-pans demonstrations last night demanding his resignation. There are over 118 confirmed cases in Brazil, and four deaths. In Mexico, frustration is growing over President López Obrador’s failure to act.
Shareholder Value vs. Human Value: Two Stories, With a Moral
March 19 (EIRNS)—In Italy last week, the Chiari hospital was running out of replacement valves to keep its ventilators functioning, and the manufacturer had no more in stock. When local industrialists offered to 3D-print the needed valves, they got in touch with the supplier, who refused to offer them any help (such as sharing the 3D design files), and even threatened them with charges for patent infringement! Proceeding to save lives, and without the help of the manufacturer, the team of industrialists produced new valves rapidly, and are now testing them for use.
On March 9, patents bought up in 2018 from Theranos—the bankrupt, discredited individualized-health company—by Fortress Investment Group, were used to launch a lawsuit against BioFire Diagnostics. According to the court filing, BioFire, which was developing testing technology to detect COVID-19 cases, was illegally infringing on Fortress’s patents. Fortress demanded that BioFire pay “damages … together with interest and costs,” “enhanced damages,” “supplemental damages,” and because this is “an exceptional case … attorney’s fees and costs associated with this action.” After enormous blowback, the lawsuit was dropped.
This case of blatant patent trolling to extort money or shut down research during a pandemic is outrageous, but it’s entirely in keeping with the Satanic view of mankind expressed in the trans-Atlantic financial system.
Consider the International Monetary Fund’s refusal to work with the Maduro government in Venezuela. Reflect on the European Union’s unwillingness to help Italy while European Central Bank head Christine Lagarde tweets that “Extraordinary times require extraordinary action. There are no limits to our commitment to the euro.” Ponder Pompeo’s slathering-on of sanctions on Iran as it faces enormous health challenges. The world needs a new paradigm, and it needs it now!
The urgently needed reorganization of the world economy, to put it on a sound basis, was a central subject of the life work of Lyndon LaRouche. Achieving such a transformation demands immediate action.
ECONOMY
ECB To Buy 750 Billion Euros of Bonds
March 19 (EIRNS)—An emergency board meeting of the European Central Bank (in videoconference) decided to inject €750 billion of liquidity to bankrupt megabanks through purchases of government and corporate bonds on the secondary market. Although the ECB motivated the action as a move in favor of European citizens and of the economy, not one drop of the money will go into the real economy.
In order to help the banks, the ECB will relax some of the rules for collateral eligible for such loans, and it is reviewing other rules limiting to one-third of total government indebtedness the amount of bonds the ECB is allowed to buy. ECB chair Christine Lagarde tweeted that there are no limits to the bank’s commitment to the euro.
Commerzbank Chief Risk Officer Exposed for Shorting the DAX
March 19 (EIRNS)—Finanz-szene.de reports that head of the risk department of Commerzbank, Makus Chromik, bought put (short) positions at the beginning of the month, on the DAX and S&P 500 indexes, and sold them on March 16, gaining eight and a half times the investment and making a profit of 76,000 Euro.
At the same time, he advised his customers to keep long positions. In his newsletter, he told them to keep their nerves and buy stocks when the stock market was falling. Whereas the blog exposes just one trader, Chromik’s behavior is typical of what happened in 2008, and is being repeated now by many traders.
Bavaria Suspends Debt Brake for One Year
March 19 (EIRNS)—In another sign of the breaking of the monetarist austerity “rules,” the German state of Bavaria will lift the zero borrowing rule (debt brake) for one year, to mobilize an extra €10 billion for the fight against the pandemic. The money will be spent for bridging loans to companies, for loss compensations, for medical sector measures (new ICU beds, reassignment of rehabilitation clinics and centers to serve as temporary ICUs, special respiratory equipment, and hiring of retired doctors and nurses), and lockdown measures. The small city of Tirschenreuth was locked down yesterday after 90 cases of infections were registered there since the start of the week.
Lifting or easing at least the black zero of extreme fiscal austerity, has also been recommended by Clemens Fuest, director of the IFO econometric institute in Munich and one of the members of the chief economic advisory council of the German government. “The pandemic is a serious challenge—requiring extraordinary measures of a drastic character, which call for extra spending,” he said yesterday.
The scrapping of the black zero was called for two weeks ago by the BüSo, the German party headed by Helga Zepp-LaRouche, as a measure indispensable for the restoration and upgrading of Germany’s health sector.
Flight into Cash
March 19 (EIRNS)—The Wall Street Journal and CNBC nervously reported on how “a rush for cash shook the financial system Wednesday,” as the Journal put it.
“In debt markets, the sell-everything approach drove down prices of safe investment-grade bonds and government debt alongside stocks and commodities of nearly all stripes…. Investors appear to be putting their trust in only the shortest-term government bonds or cash,” the Journal wrote. A financial analyst was quoted: “When even silver and gold are getting crushed, that’s a panicked drawing of liquidity…. In the U.S., you can’t find toilet paper anywhere: This is the capital markets equivalent of that.”
CNBC called it “de-risking at breakneck speed, getting rid of anything standing between investor portfolios and solvency. The rush for the exits is breathtaking and feverish.”
CNBC focused on the “fire sale of bonds across multiple categories—U.S. Treasury’s and German bunds, corporate debt of all stripes, particularly on the lower end of the quality scale, and a variety of other fixed income instruments that buyers are generally shunning.” The bond market, as they note, is far larger than the stock market, and so the sell-offs are creating “major ripples through the system.”
As for the banks, CNBC points to the so-called TED spread as indicative of the “surging rate of risk in the bank credit markets.” That spread is the difference in yield between the three-month Treasury bill and the three-month Libor rate, the latter being “an international benchmark for what banks charge each other for loans.”
