Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65459 Thu, 13 Aug 2020 14:08:23 GMT Thousands of Small Businesses Going Bankrupt in US Are Uncounted in Covid http://implode-explode.com/viewnews/2020-08-13_ThousandsofSmallBusinessesGoingBankruptinUSAreUncountedinCovid.html This wave of silent failures goes uncounted in part because real-time data on small business is notoriously scarce, and because owners of small firms often have no debt, and thus no need for bankruptcy court.

... Yelp Inc., the online reviewer, has data showing more than 80,000 permanently shuttered from March 1 to July 25. About 60,000 were local businesses, or firms with fewer than five locations. About 800 small businesses did indeed file for Chapter 11 bankruptcy from mid-February to July 31, according to the American Bankruptcy Institute, and the trade group expects the 2020 total could be up 36% from last year.

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Chapter 11 bankruptcy gives a business protection from its creditors while the owners work out a turnaround plan. For smaller companies, though, the extra time might not make any difference. "Bankruptcy cannot create more revenue," said Robert Keach, a restructuring partner at New England-based Bernstein Shur and former president at the American Bankruptcy Institute.

Some owners fear bankruptcy could scar their credit reports and hurt their future chances to rebuild. Bankrupt businesses have a nearly 24 percentage point higher likelihood of being denied a loan, according to the SBA, and a filing can show up on a credit report for 10 years.

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To be sure, small business attrition is high even in normal times. Only about half of all establishments survive for at least five years, according to the SBA. But the swiftness of the pandemic and the huge drop in economic activity is hitting hard among typically upbeat entrepreneurs. About 58% of small business owners say they're worried about permanently closing, according to a July U.S. Chamber of Commerce survey.

In a June 2020 NFIB survey, a net 31% of owners reported lower sales in the past three months, while 7% reported higher sales a year earlier. In the same survey, only 13% of business owners said it was a good time to expand, a dip from 24% a year earlier.

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iehi-feed-65450 Sun, 02 Aug 2020 16:45:23 GMT Retail rents plummet across New York City, a warning for other areas http://implode-explode.com/viewnews/2020-08-02_RetailrentsplummetacrossNewYorkCityawarningforotherareas.html During the second quarter ended June 30, average asking rents along 16 major retail corridors in Manhattan declined for the eleventh consecutive quarter, falling to $688 per square foot, according to a report from the commercial real estate services firm CBRE. The drop marked the first time since 2011 that prices dropped below $700, the firm said, representing an 11.3% decline from a year ago.

Within that, rents on Prince Street in the SoHo neighborhood saw the biggest declines, according to CBRE, tumbling 37.5% year-over-year to $437 per square foot from $699 per square foot -- and falling below $500 for the first time since 2014.

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One driving factor is fewer people spending their afternoons out shopping -- especially tourists. Global luxury sales are forecast to drop roughly 29% in 2020, falling anywhere between $85 billion and $120 billion from a year ago, amid the decline in tourism, according to a report from the Boston Consulting Group.

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iehi-feed-65442 Sun, 26 Jul 2020 15:35:55 GMT Millennials are Caught in the Two Recession Trap: the Great Recession and now the Great Pandemic. http://implode-explode.com/viewnews/2020-07-26_MillennialsareCaughtintheTwoRecessionTraptheGreatRecessionandnow.html iehi-feed-65437 Mon, 20 Jul 2020 19:03:44 GMT Mark Cuban says 2020 stock-market rally 'very similar' to tech bubble--'everybody's a genius' http://implode-explode.com/viewnews/2020-07-20_MarkCubansays2020stockmarketrallyverysimilartotechbubbleeverybod.html iehi-feed-65434 Sun, 19 Jul 2020 20:10:07 GMT Here's What Everyone, Including Mary Trump, Gets Wrong About Donald Trump's Failed Response to COVID-19 http://implode-explode.com/viewnews/2020-07-19_HeresWhatEveryoneIncludingMaryTrumpGetsWrongAboutDonaldTrumpsFai.html iehi-feed-65433 Sun, 19 Jul 2020 20:02:23 GMT 'Riddled With Lies': Analysis Finds Fox News Covid-19 Coverage Featured Misinformation 253 Times in Just Five Days http://implode-explode.com/viewnews/2020-07-19_RiddledWithLiesAnalysisFindsFoxNewsCovid19CoverageFeaturedMisinf.html MMFA revealed that: Nearly half of Fox's coronavirus misinformation was about the science of coronavirus and health recommendations from experts (115 instances). Fox politicized recommended public health measures, such as face masks usage and business closures, 63 times. Fox emphasized the economy and reopening schools 46 times despite public health concerns. Fox's "The Ingraham Angle" was responsible for a quarter of all coronavirus misinformation on the network. Fox's "straight news" shows accounted for more than one-third of all coronavirus misinformation.

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"Ingraham herself pushed coronavirus misinformation 38 times, which included 21 instances of undermining and misrepresenting the science on the coronavirus and 13 instances of politicizing the response to the pandemic," he continues. "Fox personalities and guests on 'The Ingraham Angle' were responsible for an astonishing 63 instances of misinformation."

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Citing six polls that have shown Fox viewers "are woefully --and dangerously--misinformed regarding the coronavirus," Savillio says that "these recent events illustrate the real-world consequences of Fox's continued broadcasting of coronavirus misinformation that downplays the threat of the virus, dismisses the recommendations of public health officials, and misrepresents the scientific consensus on the disease."

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iehi-feed-65431 Wed, 15 Jul 2020 21:05:54 GMT Trump Financial Regulator Quietly Shelved Discrimination Probes Into Bank of America and Other Lenders: Propublica http://implode-explode.com/viewnews/2020-07-15_TrumpFinancialRegulatorQuietlyShelvedDiscriminationProbesIntoBan.html Since President Donald Trump took office, the OCC has quietly shelved at least six investigations of discrimination and redlining, according to internal agency documents and eight people familiar with the cases. Flagstar Bank, a leading lender in Michigan, wrongly charged Black homeowners more through a network of mortgage lending affiliates, OCC officials concluded in 2017. That same year, agency examiners found that Colorado Federal Bank, an online lender, was doing the same to female borrowers.

Another inquiry by OCC officials concluded that Chicago-based MB Financial, a lender acquired by Fifth Third Bank last year, charged Latinos too much on mortgage loans. Cadence Bank, a lender in several Southern states, was turning away minority borrowers in Houston, according to an OCC investigation. Fulton Bank, a lender based in Pennsylvania, had been discriminating against minorities in parts of Richmond, Virginia, and its home state, regulators concluded.

In each case, despite staff recommendations that fines or other penalties be imposed, the OCC took no public action and closed the investigations quietly. In the past, banks have had to pay substantial sums after similar investigations. In 2012, in the wake of the housing crisis, Wells Fargo paid $175 million to resolve allegations that it charged Blacks and Hispanics more to buy a home after an investigation that began with the OCC years earlier.

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iehi-feed-65425 Fri, 10 Jul 2020 14:07:38 GMT A Coffee Chain Reveals Flaws in the Fed's Plan to "Save" Main Street http://implode-explode.com/viewnews/2020-07-10_ACoffeeChainRevealsFlawsintheFedsPlantoSaveMainStreet.html ``La Colombe didn't think it qualified for the government's forgivable small-business loan program given its size and canned coffee manufacturing business. It is too small to have ready access to the debt markets big companies use to raise funds -- markets that are chugging along with the help of Federal Reserve backstops.

The company's leaders thought that another Fed program, one intended to help midsize businesses by providing loans, would be their best shot at getting help. But when the central bank announced the details in early April, it was clear that La Colombe would not qualify. The company has too much debt relative to earnings to meet the Fed's leverage restrictions.

"That just doesn't make sense for companies like La Colombe, because we're growing so quickly," said Aren Platt, who leads special projects for the company.

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First announced on March 23, the Main Street program finally allowed banks to register as lenders in mid-June -- but only about 450 of the nation's thousands of eligible banks have registered so far. Banks have reported that many clients are not interested in using the program, the Fed chair, Jerome H. Powell, acknowledged to concerned lawmakers during testimony in late June.

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Small-town bankers say some clients have gotten spooked by the substantial paperwork involved in using the program. Big companies often have more attractive options elsewhere in the market. Some, like La Colombe, have too much debt to apply. That problem is echoed across the comment letters by companies that were expanding their footprint pre-pandemic.

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The program fully opened on Monday, and Mr. Rosengren said banks had already offered loans for companies that had been hard-hit, like movie theaters. He declined to say how many, and said he expected demand to ramp up over time. The Boston Fed disclosures show that hardly any of the biggest banks, other than Bank of America, are willing to publicly say that they will make loans to new customers through the program.

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Lawmakers have repeatedly pushed policymakers to make the program more inclusive and widely available. But Mr. Mnuchin has been relatively cautious about taking on credit risk, occasionally describing the Main Street program as a backup option that could be successful without ever being used by providing certainty to the market that credit would remain available.

Compare this with the Fed's pandemic support of the stock market and corporate debt -- it just goes in and buys without the companies having to do anything, or give up any rights...

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iehi-feed-65423 Thu, 09 Jul 2020 22:18:08 GMT Soaring demand for federal jobless benefits points to fresh fissures in the U.S. economy http://implode-explode.com/viewnews/2020-07-09_Soaringdemandforfederaljoblessbenefitspointstofreshfissuresinthe.html The number of unemployed people collecting jobless benefits through a temporary federal-relief program has exploded in the past month to more than 14 million, suggesting the U.S. labor market is facing a fresh set of problems.

After a small decline in mid-May, applications for benefits filed through the federal Pandemic Unemployment Assistance program have soared 53% to 14.4 million as of June 20 from 9.37 million a month earlier. Federal continuing claims are reported with a two-week lag.

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The portrait of the coronavirus-infected labor market looks worse if all continuing jobless claims are combined. Almost 33 million people were receiving benefits as of June 20, up from 31.5 million in the preceding week, according to Labor Department data.

By contrast, the Bureau of Labor Statistics' normally more reliable monthly employment report indicated 17.8 million people were unemployed in June.

The gap between weekly continuing jobless claims and the monthly unemployment numbers has left a big -- and inexplicable puzzle -- for economists. Why aren't all these people telling the Labor Department they are unemployed?

The BLS has already said that people aren't answering the survey correctly (really, it lacks the appropriate categories to handle the current situation). A lot of people are functionally unemployed but hopeful of being rehired -- it's hard to infer from this that they are "employed", though we hope their employers' businesses do survive, and rehire them.

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iehi-feed-65418 Wed, 08 Jul 2020 21:55:29 GMT Never Before Have I Seen So Much Fake Unemployment & Jobs Data by the Bureau of Labor Statistics | Wolf Street http://implode-explode.com/viewnews/2020-07-08_NeverBeforeHaveISeenSoMuchFakeUnemploymentJobsDatabytheBureauofL.html The difference between those actually receiving unemployment insurance (31.5 million people) and those that the BLS claims are unemployed has today exploded to 13.7 million. In other words, the BLS has under-reported the number of unemployed by at least 13.7 million people.

No one knows how many jobs were created on net, but it wasn't 4.8 million as the BLS tried to make us believe, or even a smaller positive number, but a negative number, with more jobs being shed on net, because the number of people still receiving unemployment insurance since the end of May has surged by 1.3 million people, according to the Labor Department.

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Of course, the dire unemployment data released today by the Department of Labor got practically no air time. And the BLS's fake BS trumped, so to speak, all news coverage.

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iehi-feed-65417 Wed, 08 Jul 2020 15:10:18 GMT How Trump Could Lose the Election--And Still Remain President http://implode-explode.com/viewnews/2020-07-08_HowTrumpCouldLosetheElectionAndStillRemainPresident.html iehi-feed-65413 Mon, 06 Jul 2020 23:32:22 GMT Coronavirus can spread as aerosol ‘beyond any reasonable doubt,' over 200 scientists tell the World Health Organization http://implode-explode.com/viewnews/2020-07-06_Coronaviruscanspreadasaerosolbeyondanyreasonabledoubtover200scie.html More than 200 scientists have called for the World Health Organization and others to acknowledge that the coronavirus can spread in the air -- a change that could alter some of the current measures being taken to stop the pandemic.

In a letter published this week in the journal Clinical Infectious Diseases, two scientists from Australia and the U.S. wrote that studies have shown "beyond any reasonable doubt that viruses are released during exhalation, talking and coughing in microdroplets small enough to remain aloft in the air." That means people in certain indoor conditions could be at greater risk of being infected than was previously thought.

... The letter was endorsed by 239 scientists from a variety of fields. It stated that the issue of whether or not COVID-19 was airborne was of "heightened significance" as many countries stop restrictive lockdown measures.

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iehi-feed-65412 Mon, 06 Jul 2020 16:25:01 GMT What the Coronavirus Has Wrought on New Development in NYC http://implode-explode.com/viewnews/2020-07-06_WhattheCoronavirusHasWroughtonNewDevelopmentinNYC.html ... [Long Island City,] as in Manhattan, a number of factors, including changing tax incentives and the retreat of foreign buyers, have slowed sales just as many new projects have been coming online. In Long Island City, out of 1,945 condo units completed since 2018, nearly 60 percent remain unsold, he said.

"If you're a shoemaker, and 60 percent of your shoes haven't sold, you've either made the wrong shoes, or you've made too many," he said.

The problem is not necessarily too much building -- there is huge demand for affordable housing in the city. It's a matter of what was built, agents said.

"There is simply no demand for two-bedroom apartments that are 950 square feet and go for $1.5 million," said Patrick W. Smith, an agent with Corcoran who specializes in Long Island City, referring to the recent trend toward apartments with less square footage but higher-end finishes. The average size of a two-bedroom apartment in Manhattan is 1,344 square feet, according to Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers & Consultants.

Mr. Smith considers himself lucky that his upcoming projects are still in the planning stages, which means the developers still have time to change their layouts to react to the coronavirus. At one upcoming project, the ubiquitous open floor plan has been modified to create an old-fashioned foyer -- a decontamination area of sorts before entering the living room. At another, some kitchens will shrink to make way for offices, now that so many people are working from home.

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The lasting impact of Covid-19 is not lost on buyers. Gary Hirshfield, a 58-year-old ophthalmologist who works in Queens, moved with his wife, Stacey Kruger, also an ophthalmologist, into a three-bedroom penthouse at Galerie, a nearby condo project, at the end of 2019. Now he is having second thoughts.

"Today, if I could get my money out, I'd consider it," Mr. Hirshfield said. For the cost of his 1,690-square-foot apartment, he said he could have bought a 5,000-square-foot house with some land in the suburbs. But Long Island City appealed to him because of the restaurant scene, its proximity to Manhattan, and the high-end fitness center in the building (now closed to residents). He still believes in the value of the project, but doesn't know when he'll feel safe enough to use the gym again.

Some buildings are already sweetening the pot to entice new buyers. At the Neighborly, where prices range from $585,000 for a roughly 440-square-foot studio to $2 million for a three-bedroom penthouse, the developer, New Empire Corp., is offering to pay residents' taxes and common charges for the first full year, almost $10,000 for a one-bedroom. Another project, Corte, offered a number of "rent-to-own" plans, in which a renter would pay toward ownership -- a tactic more commonly seen during the last recession.

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It's unclear how well the units will be received in this new climate, but early data suggests hurdles ahead. Nearly a quarter of New York City rentals were discounted in May, up from 15 percent in the same period last year. And the discounting was most pronounced in buildings with more than 50 units, where the median discount was 9.3 percent below the original asking price, according to Nancy Wu, an economist with the real estate listings site StreetEasy. She calls that discount the "social distancing premium," because the data suggests renter wariness with more crowded buildings.

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iehi-feed-65409 Fri, 03 Jul 2020 22:05:54 GMT Dalio: "Capital Markets Are No Longer Free Markets" Due To Central Bank Interference http://implode-explode.com/viewnews/2020-07-03_DalioCapitalMarketsAreNoLongerFreeMarketsDueToCentralBankInterfe.html iehi-feed-65388 Sun, 14 Jun 2020 02:05:09 GMT Even More Crazy Distortions in the May Jobs Report http://implode-explode.com/viewnews/2020-06-13_EvenMoreCrazyDistortionsintheMayJobsReport.html iehi-feed-65387 Sun, 14 Jun 2020 02:01:04 GMT Mnuchin secrecy on bailout sparks rift with Congress http://implode-explode.com/viewnews/2020-06-13_MnuchinsecrecyonbailoutsparksriftwithCongress.html Treasury Secretary Steven Mnuchin is facing criticism from lawmakers and watchdog groups after refusing to disclose the businesses that received more than $500 billion in government-backed emergency loans.

Mnuchin ignited controversy on Wednesday when he said the Trump administration will not reveal the names of companies and nonprofits that got the so-called Paycheck Protection Program loans, which are guaranteed by the taxpayer and can be forgiven in full if borrowers maintain their payrolls.

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A senior House Democratic aide said lawmakers need to know the information to assess whether the administration is "trying to hide bad decisions, and the true impact of the PPP program, especially in meeting the needs of underserved communities."

Rep. Ben McAdams, a Utah Democrat who serves on the House Financial Services Committee, said "transparency, not secrecy, is the only way to keep faith with citizens that their money is getting to those for whom it was intended." "What part of `it's taxpayer money' does he not understand?" he said of Mnuchin.

The SBA has also withheld information from the Government Accountability Office, the watchdog agency that serves Congress. The GAO confirmed on Friday that it has received no information about when SBA will provide data the agency requested on the loans and the separate Economic Injury Disaster Loan program.

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iehi-feed-65384 Thu, 11 Jun 2020 22:45:34 GMT Trump Lauded Known-False Employment Numbers--More Distorted Than He Criticized in 2015 http://implode-explode.com/viewnews/2020-06-11_TrumpLaudedKnownFalseEmploymentNumbersMoreDistortedThanHeCritici.html ...it now looks like the jobs report has been inaccurate for the last two months. BLS has admitted that government household survey takers mistakenly counted about 4.9 million people as employed, although they were unemployed. Had the mistake been corrected, the unemployment rate would have risen to 16.1% in May. The corrected April figure would have been more than 19.5%--rather than 14.7%.

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"It's going to be a problem of credibility now with the BLS," said Mike Wolford, Director of Customer Success at Claro Workforce Analytics. "[BLS] looks incompetent or political. Twenty million people didn't finish unemployment in the last 30 days. I would have thought lag time was an explanation because it's a lot to count actually, but to find out they made a five-million-person error, knew about it, didn't correct it for the sake of ‘data integrity' when they literally update things all the time. That is suspicious and, at least, merits investigation," Wolford added.

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A recent analysis from the Becker Friedman Institute at the University of Chicago estimated that 42% of people furloughed will never get their old jobs back and only 30% of those laid off will land new jobs later this year. Some companies have already acknowledged that they will layoff workers once they meet their obligation.

People who have finished collecting unemployment benefits, but did not find new jobs, fall off the government's radar and are not accounted for in the official unemployment statistics. In an interview with "Face the Nation" back in 2015, Trump specifically called out then President Barack Obama, referring to unemployment data, saying "it's a phony number" and lambasted the practice of ignoring people who've given up looking for a job by excluding them from the unemployment statistics.

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iehi-feed-65378 Sun, 07 Jun 2020 23:26:55 GMT The only way to truly solve the race problem in America is to narrow the wealth gap, black economists say http://implode-explode.com/viewnews/2020-06-07_TheonlywaytotrulysolvetheraceprobleminAmericaistonarrowthewealth.html By one estimate, the typical white family has wealth of $171,000. This is nearly ten times greater than the $17,150 for an average black family. Put another way, the typical black household remains poorer than 80% of white households.

This stunning wealth gap between the races has persisted, in good times and bad, for the past 70 years. It did not get better after the civil rights era legislation was passed in the 1960s or during the Obama administration.

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"As long as we have racial wealth gap, we're going to have a problems with race," said Patrick Mason, an economics professor at Florida State University.

"The wealth gap is one of the reasons there are protests today," said Linwood Tauheed, a professor of economics at The University of Missouri-Kansas City and the president of the National Economics Association.

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"African Americans are dissatisfied with the way things are -- that's not new for us-- but now you find young college students dissatisfied with their future."

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iehi-feed-65374 Wed, 03 Jun 2020 20:59:55 GMT Trump's Invocation of Occupy Wall Street In Call To Governors Misses ALL The Points http://implode-explode.com/viewnews/2020-06-03_TrumpsInvocationofOccupyWallStreetInCallToGovernorsMissesALLTheP.html In the call with Governors, Trump invoked the Occupy Wall Street movement... This is the mind of the President of the free world. Protesters attempting to realign their corrupted democracy while braving snow and ice living in tents on the sidewalks of lower Manhattan (following the greatest bank looting in U.S. history by Wall Street executives) have committed the ultimate crime of getting free pizza delivery.

As most Americans now realize, the President regularly relies on "alternative facts" to make his arguments. Wall Street On Parade covered the Occupy Wall Street protests. Wall Street was not "closed up" and there was no "total domination" of Wall Street. The stock exchange traded every single business day. Wall Street banks went merrily about their business of ripping off two-thirds of average folks 401(k) plans. Local residents came and went on the sidewalks, often delivering home-made meals to the protesters.

The protesters were not "there forever." The occupation of Zuccotti Park by Occupy Wall Street lasted from September 17, 2011 to November 15, 2011. Two months of peaceful protest. The brutal military-style raid and destruction of the protesters' camp left a lasting stain on the reputation of New York City and Mayor Michael Bloomberg.

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iehi-feed-65371 Sun, 31 May 2020 04:14:25 GMT America Is a Tinderbox http://implode-explode.com/viewnews/2020-05-31_AmericaIsaTinderbox.html So many things make America combustible right now: mass unemployment, a pandemic that's laid bare murderous health and economic inequalities, teenagers with little to do, police violence, right-wingers itching for a second civil war and a president eager to pour gasoline on every fire. "I think we're indeed in a moment where things are going to get a lot more tense before they get more peaceful," said the University of Michigan historian Heather Ann Thompson, who won the Pulitzer Prize for her 2016 book "Blood in the Water: The Attica Prison Uprising of 1971 and Its Legacy."

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These demonstrations were sparked by specific instances of police violence, but they also take place in a context of widespread health and economic devastation that's been disproportionately borne by people of color, especially those who are poor. "Sociologists have studied collective behavior, urban unrest for decades, and I think it's safe to say that the consensus view is that it's never just about a precipitating incident that resulted in the unrest," Darnell Hunt, dean of social sciences at U.C.L.A., told me. "It's always a collection of factors that make the situation ripe for collective behavior, unrest and mobilization."

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