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[Markets] : House members assail Big Tech (again), consider changes to antitrust law The House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law held the first in a planned series of hearings to 'consider legislative proposals to address the rise and abuse of market power online and to modernize the antitrust laws.'
Published:2/25/2021 9:58:17 AM
[Markets] Peter Schiff: The Reality That Nobody Wants To Acknowledge Peter Schiff: The Reality That Nobody Wants To Acknowledge


Interest rates continue to rise. Gold continues to languish. The stock market bubble continues to inflate. In his podcast, Peter Schiff argues that investors are reading the tea leaves all wrong. They think rising rates are going to force the Fed to tighten monetary policy sooner than expected. But Peter says there is a reality out there that nobody wants to acknowledge.

Early Wednesday morning, long-term interest rates spiked. The yield on the 10-year Treasury pushed to 1.43%. The yield on the 30-year nearly hit 2.3%. This still isn’t particularly high in historical terms, but it was the highest yield since the pandemic collapse. More significantly, it continues the relentless move-up in interest rates that we’ve seen over the last couple of months. Peter said the only thing he thinks can change this course is a massive increase in the Federal Reserve’s quantitative easing. The central bank will need to buy more bonds to buoy the market and hold interest rates down.

But Wall Street apparently sees things differently. As soon as interest rates spiked Wednesday morning, gold sold off. That was the knee-jerk reaction in the precious metals market to the surge in bond yields.

This is because Wall Street traders are convinced that rising bond yields mean the economy is really strong, and because the economy is really strong, the Fed is going to raise rates sooner rather than later, and a premature tightening is going to push up the dollar, and a strong dollar is going to be bearish for gold.”

But Peter said they are completely wrong in this assessment. Bond yields are not spiking because the economy is strong. They are spiking because of inflation.

Bond yields are going up because there is a massive supply of bonds because we have massive deficits. And even though the Fed is buying a lot of bonds, they ain’t buying enough. So, those extra bonds, there’s no buyer, and so the price keeps falling.”

Bond yields are inversely correlated with bond prices. As the price falls, interest rates rise. And there is really nothing to stop yields from climbing higher and higher. But if that happens, the entire economic house of cards will collapse. The economy is predicated on low interest rates. Peter said the Federal Reserve knows this. He doesn’t understand why investors don’t seem to get it.

That brings us to Federal Reserve Chairman Jerome Powell who was on Capitol Hill testifying before Congress this week. As Peter said in a recent podcast, every time Powell speaks, he becomes more dovish.

Because each time he speaks, the US economy is more addicted and more dependent on the cheap money that the Fed is supplying, so he has to be more dovish.”

In a nutshell, Powell said that it may take three years for the Fed to hit its 2% inflation target. In effect, Powell was telling the market, “Don’t worry, we won’t be tightening monetary policy for years.” This despite the fact that the commodity markets are screaming inflation. Oil, industrial metals, grains, beans – they are all making big gains. The only thing that’s not catching a bid is gold.

For some reason, people are still thinking that rising interest rates are bad for gold and silver, but they’re bullish for everything else. But the reality is — they’re not. They’re more bullish for gold and silver than any of these other commodities. Because what the market still doesn’t get, despite everything Powell has been saying … the market should be able to figure this out based on what the Fed is saying. I mean, they’re not being secretive about their points. But the Fed is not going to raise rates, or shrink its balance sheet, or taper its bond purchases in response to rising long-term interest rates. That may have been what the Fed did in the past, but it ain’t going to do it again in the future because it can’t. In fact, here is the reality that nobody wants to acknowledge: as interest rates are moving up, rather than raising rates and reducing the size of its QE program, it is going to increase the size of its QE program.”

In a nutshell, the only way the Fed can stop interest rates from rising – and it has to keep interest rates from rising – is to increase its quantitative easing. It has to intervene in the market and buy more bonds to boost prices and hold yields down. There is a glut of bonds in the marketplace. Foreign buyers are unloading Treasuries. Foreign holdings of US Treasuries slipped by $35 billion in the fourth quarter of 2020. The Chinese shrunk their US debt holdings by $8 billion last year. The Fed now holds a record percentage of US debt. But it’s not enough to keep the market stable.

So, you have massive supply, and there’s no demand outside the Fed. So, the Federal Reserve is going to have to pick up the pace. At some point soon, the Fed is going to be forced to announce a major increase in its asset purchase program. And when the Fed comes clean, the market is going to figure out that they’ve got this wrong. Why they haven’t figured it out already is beyond me.”

Simply put, the Fed is not going to fight inflation. It is going to keep stoking the inflationary fire until it’s burning out of control.

Peter goes on in the podcast to break down and analyze some of Powell’s specific comments during his two days of testimony on Capitol Hill.

Tyler Durden Thu, 02/25/2021 - 10:55
Published:2/25/2021 9:58:17 AM
[Markets] US STOCKS-Wall St edges lower as tech shares fall, bond yields rise Wall Street's main indexes edged lower on Thursday as heavyweight technology-related stocks remained under pressure with a rise in U.S. Treasury yields, while data showed weekly jobless claims fell more than expected. The benchmark 10-year Treasury yields hit a one-year high of 1.45%, prompting investors to lock in profits on some high-flying growth stocks due to concerns over heightened valuations. Microsoft Corp, Alphabet Inc, Facebook Inc and Netflix Inc were down between 0.2% and 0.6% in early trading. Published:2/25/2021 9:32:47 AM
[Markets] Most Major Retail Brokerages Suffer Outages As 'Meme Stock'-Mania Continues Most Major Retail Brokerages Suffer Outages As 'Meme Stock'-Mania Continues

Downdetector reports customers of E-Trade, TD Ameritrade, Charles Schwab, Robinhood, and Fidelity are experiencing outages and issues 30 minutes into the US cash session on Thursday. This comes as heavily-watched so-called 'meme stocks' are higher after yesterday's late-day gamma squeeze in GME (and AMC, among others).

E-Trade outages and issues were detected around the cash session start. 

The outage map shows E-Trade disruptions are widespread. 

TD Ameritrade users are reporting issues as well. 

The outage map shows TD Ameritrade disruptions are from coast to coast. 

Possible problems were spotted at Charles Schwab. 

Robinhood users are also reporting possible problems with the trading app. 

... and so is Fidelity. 

The resurgence in bullish sentiment towards WSB-Short-Squeeze favorites began Wednesday afternoon, with GameStop doubling in minutes. 

In a virtual conference on Thursday, Morgan Stanley Chief Financial Officer Jonathan Pruzan said the number of trades customers are making daily on the self-directed online trading platform E*Trade is "off the charts." 

Tyler Durden Thu, 02/25/2021 - 10:19
Published:2/25/2021 9:32:47 AM
[Markets] The Ratings Game: AT&T, Verizon downgraded at Oppenheimer following hefty bids for spectrum Oppenheimer analyst Timothy Horan downgraded shares of AT&T Inc. and Verizon Communications Inc. to perform from outperform Thursday, after the Federal Communications Commission revealed the results of a recent spectrum auction, showing that the two telecommunications companies were overwhelmingly the largest bidders in an expensive auction.
Published:2/25/2021 9:32:47 AM
[Markets] : Mortgage rates jump to the highest level since August — is the refinance boom over? Rates continue to be low by historical standards, but perhaps not low enough to make refinancing attractive for many homeowners.
Published:2/25/2021 9:10:27 AM
[Markets] Durable-goods-orders rise is most substantial in six months Durable-goods-orders rise is most substantial in six months Published:2/25/2021 9:10:27 AM
[Markets] Pending Home Sales Unexpectedly Plunge In January - Lowest Since July Pending Home Sales Unexpectedly Plunge In January - Lowest Since July

After sliding for four straight months, analysts expected pending home sales to flatline in January (despite bounces in new- and existing-home sales). But, amid a collapse in mortgage applications (and jump in mortgage rates), pending home sales tumbled 2.8% MoM to the lowest level since July...

Source: Bloomberg

And while pending home sales are up YoY, that acceleration is slowing rapidly...

Source: Bloomberg

“There are simply not enough homes to match the demand on the market” Lawrence Yun, chief economist at the NAR, said in a statement.

Still, Yun said he expects inventory to rise in the coming months.

By region, contract signings fell in the West, Northeast and Midwest. In the South, the index for pending home sales rose to the highest since August.

The tumble in pending home sales should not be a total surprise as mortgage applications crashed by most since April (dropping for 5 of the last 6 weeks)...

Source: Bloomberg

With home purchase applications (as opposed to refis) collapsing to the lowest in 9 months...

Source: Bloomberg

As 30Y mortgage rates rise to their highest since September

Source: Bloomberg

Get back to work Mr.Powell!

Tyler Durden Thu, 02/25/2021 - 10:07
Published:2/25/2021 9:10:27 AM
[Markets] Target to double number of Apple shops in its stores Target to double number of Apple shops in its stores Published:2/25/2021 8:28:36 AM
[Markets] The Law Of Unintended Conse-Kiwi-Nces The Law Of Unintended Conse-Kiwi-Nces

By Michael Every of Rabobank

Allow me to focus on just New Zealand today as the perfect illustration of the law of unintended market conse-Kiwi-nces.

The RBNZ left rates on hold at 0.25% as expected, but that’s not the real story. To tell it, let’s rewind. NZ was, not that long ago, a highly-regulated economy that focused almost exclusively on exporting its lovely agri output to the UK. Then the UK made a geopolitical pivot to join the EU and its common agricultural policy, and NZ was left adrift. The country suffered a massive economic shock; had to reinvent itself; and reinvent itself it did, with a market-friendly, Asia-focused export economy. The first law of unintended conse-Kiwi-nces is that geopolitics is swinging back in the other direction, or at least as far as the EU and UK, and a pre-1973-style export focus on China is concerned.

As part of its market reforms, and after the high and variable inflation of the 1970s, which followed on the back of both the end of Bretton Woods in 1971, the oil shock of 1973, and the UK joining the EU, there was a search for a new policy direction. Neoliberal monetarism was very much in vogue, and in 1984 the RBNZ adopted inflation targeting as the focus of monetary policy, the first to do so. As part of the broader financial reforms introduced, a series of variable reserve requirement ratios and interest rate controls, to try to limit how credit flowed, and FX controls, to prevent international flows to circumvent the former, were all removed. The NZD dropped sharply, floated freely, and we entered the policy framework we see in most major economies today.

There was an immediate spike in Kiwi inflation in the 1980s. As then usual, this was taken as a signal for the wage round – and yet under this new neoliberal framework, it fell on deaf ears. While arguably necessary at the time as part of restructuring and transition towards the macrostability inflation targeting likes to flag as its ultimate reward, this was the first clear indication that wages/labour were always going to come second to business/capital/exports in this brave new world. How else was inflation to be kept in check?

As we all now know from the global experiment with this system, this power imbalance within the economic structure --which presents itself as natural, sensible, and entirely ‘neutral’-- ultimately requires workers to borrow more and more to sustain the level of consumption they would have previously enjoyed via wage growth. We also now know that this means asset bubble after asset bubble, usually of housing; and when these burst, the system can only respond with even more liquidity, which exacerbates the problem rather than acting as any kind of counterbalance for the underlying root cause. So the second law of unintended conse-Kiwi-nces is that socio-economic AND macro stability are ultimately undermined if you focus on inflation and ignore the political economy. Which is part of the reason why geopolitics is shifting so uncomfortably for NZ.

Yes, some central banks have a dual inflation and employment remit: the RBNZ had one added too. Yet in the US this was historically ignored in favour of inflation; and now that the zeitgeist has shifted, that dual mandate in both the US and NZ is being used as an excuse to let inflation --which actually means asset prices!-- run hot. So where is this mythical balance? That there isn’t just underlines that without addressing the taboo issue of labour vs. capital, which involves undoing much of the labour market deregulation of the past, central banks still can’t resolve the real problem: and so (geo)politics shifts even faster.

So here we today, and the Kiwi government has just told the RBNZ that from now on it must also “consider housing” in its interest rate and financial policy decisions, aiming at keeping them “sustainable”. The RBNZ of course considers risks to housing in terms of financial stability, but not whether the prices are sustainable (or affordable to voters) or not. Naturally, the RBNZ welcomes this decision. But what will it mean? With housing prices soaring again in NZ, as everywhere, and homelessness a political issue for the government, this logically must point to one of three policy outcomes:

  • First, nothing happens. As with full employment promises, it’s just neoliberal window dressing. That would get politically difficult at some point, one would imagine;
  • Second, rates have to rise despite other parts of the economy still suffering, underlining how inefficient the central rates tool is when trying to target activity across a variety of different sectors in a globalized economy. This suggestion has helped see NZD soar, now up 4% in just a week! That means potentially higher mortgage payments AND a far less competitive currency for those farmers already having to consider what exporting alternatives might need to be available in a worst-case Australia-style scenario. Fortunately, high commodity prices, which the US central bank is more than partly responsible for, are providing some kind of cushion to Kiwi farmers for now in a law of unintended(?) conseq-US-nces; or
  • Third, major macroprudential measures to allow for ultra-low rates but to stop liquidity flowing to housing. This has been tried to some degree before, but current house prices tell you if it’s worked or not (hint: they are no more affordable/”sustainable” vs. wages).

I would remind regular readers that this last point is not too far removed from the idea floated just days ago – that if you want ultra-easy monetary policy for a long time without bubbles, one is going to have to use de facto credit rationing. Is the RBNZ a market thought leader here again too, but in reverse? Probably not, because then you also have to deal with capital flows to stop foreigners buying Kiwi houses, which takes us all the way back to the pre-1984 Kiwi economy again.

Indeed, the final law of unintended conse-Kiwi-nces is that neoliberalism saw a shift from an economy too geopolitically fixed on one large power, in need of macroeconomic adjustment, and with an overvalued exchange rate, to an economy too geopolitically fixed on one large power, in need of macroeconomic adjustment, and with an overvalued exchange rate. Yes, it’s far richer today: but due to asset prices, not wages. Or, putting it differently, the only logical way to deal with the underlying problem seems to be bringing back elements of the pre-neoliberal regulatory policies that were dumped 40 years ago.

In the meantime, let the NZD and the neoliberal easy money rip: and ‘good as gold,’ as they say in NZ.

Tyler Durden Thu, 02/25/2021 - 09:16
Published:2/25/2021 8:28:36 AM
[Markets] Where Should I Retire?: We want to retire in ‘an area like the Berkshires, but warmer’ — where should we go? The search for 'an upscale retirement area with lots of hiking, biking, great restaurants and culture.'
Published:2/25/2021 8:28:36 AM
[Markets] U.S. durable-goods orders climb 3.4% in January U.S. durable-goods orders climb 3.4% in January Published:2/25/2021 7:59:29 AM
[Markets] First-Time Jobless-Benefits Seekers Plunge To COVID-Crisis Lows Amid Collapse In CA,OH Claims First-Time Jobless-Benefits Seekers Plunge To COVID-Crisis Lows Amid Collapse In CA,OH Claims

After disappointingly rising the prior week, analysts expected initial jobless claims to shrink modestly last week but remain above 800k (825k exp) for the seventh straight week. However, the data was better, much better, with first-time claimants plunging to just 730k (against a 825k exp) - back near its lowest levels since pre-COVID...

Source: Bloomberg

The plunge in claims was driven by a somewhat unprecedented collapse in claims in California and Ohio...

But Pandemic Emergency Claims soared to post-COVID record highs...

Source: Bloomberg

Leaving the total number of Americans on government unemployment benefits higher, back above 19 million last week...

Source: Bloomberg

So there's something for everyone here - Good news (initial claims down), Bad news (total claimants higher), and Ugly news (pandemic claims at a record highs)

Tyler Durden Thu, 02/25/2021 - 08:54
Published:2/25/2021 7:59:29 AM
[Markets] Market Snapshot: Dow futures flat and broader market set to slump after jobless claims report Dow futures hover on either side of unchanged Thursday, a day after the blue-chip index ended at an all-time high, with investors parsing weekly data on applications for unemployment benefits.
Published:2/25/2021 7:59:29 AM
[Markets] Peak COVIDiocracy? Peak COVIDiocracy?

Authored by Paul Joseph Watson via Summit News,

An image shows students at a school in Wenatchee, Washington State socially distanced inside what look like human tents as they perform in a band.

The picture appears to show two girls playing saxophones while trapped inside the awning-like structures, while others in the background play flute.

According to the article, “You can’t see them smiling beneath the masks,” but the kids are happy to be back at school.

The article quotes Wenatchee Principal Eric Anderson, who celebrates the fact that the school environment has been carefully tailored to ensure that students never remove their face coverings.

“We really have an environment in this building where there is never a reason where a kid has to take their mask off,” he said.

That’s presumably why the children in the image have been made to stand inside the tents, because they have to remove their masks to play the instruments.

Growing up in a world where they are forcibly isolated from each other, starved of physical contact and cannot properly discern facial reactions while having to wear humiliating human tents.

What could possibly go wrong?

*  *  *

In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Also, I urgently need your financial support here.

Tyler Durden Thu, 02/25/2021 - 08:10
Published:2/25/2021 7:27:47 AM
[Markets] Metals Stocks: Gold prices extend drop Thursday as 10-year Treasury nears 1.5% Gold futures on Thursday is on track to decline for a third straight session as government bond yields extended their climb to the highest level in a year, complicating the opportunity cost of owning nonyielding gold over sovereign debt.
Published:2/25/2021 7:27:47 AM
[Markets] Tech Tumbles As Yields Surge, Meme Stocks Explode Tech Tumbles As Yields Surge, Meme Stocks Explode

It's not just the surge in meme stocks that is a case of deja vu all over again: the big action this morning is in another closely watched asset - the 10Y - where yields have soared by almost 10bps, rising from 1.38% to a one-year high of 1.46%, rising just 4bps shy of the closely watched 1.50% level which Nomura predicts will spark an equity selloff.

"Inflationary signals, including a surge in commodity prices, are higher than we have seen in years,” said Geir Lode, head of global equities at the international business of Federated Hermes. “The prospect of a sooner-than-expected economic recovery has led to a surge in the U.S. 10-year yield.”

And amid fears that the stock rout will only get worse, Nasdaq futures fell 1% on Thursday, sliding for seven out of the last eight sessions, as investors rotated out of technology-related stocks...

... and into small cap and reflationary shares that will benefit from an economic rebound later in the year. The Russell 2000 index rallied and S&P500 eminis were modestly in the red. At 715 am ET, Dow e-minis were up 5 points, or 0.01%, S&P 500 e-minis were down 12.35 points, or 0.3%, and Nasdaq 100 e-minis were down 123.5 points, or 1%.

Banks such as Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, Wells Fargo and Bank of America Corp were up between 0.6% and 1.2%, tracking a rise in U.S. 10-year Treasury yields. Oil producer Apache Corp gained 1.3% after it reported a smaller-than-expected fourth-quarter loss and raised its spending forecast. Tesla fell as much as 2.7% in premarket trading Thursday after the company told workers it will temporarily halt some production at its car assembly plant in California.

Meanwhile, traders were kept busy after a renewed retail frenzy re-ignited the likes of GameStop, bets on $70 a barrel oil and a decade high in copper prices drove a commodity currency rally and bond yields were still rising too. In a fresh sign of a renewed retail-driven frenzy in equity markets, GameStop shares quadrupled, rising as high as $200 overnight.

The new frenzy puzzled analysts, who had ruled out another short squeeze of the stock which had battered some hedge funds, and fueled more hype after some Twitter users pointed out a cryptic tweet of an ice-cream cone photo from activist investor Ryan Cohen - a major shareholder in GameStop and a board member.

Reddit discussion threads were buzzing again about GameStop on Thursday, with members exhorting others to pile into the stock as the rally gathers steam. “Bought lots more #GME today, let’s keep fighting !!,” wrote one Reddit user Fundssqueezzer, while another user Responsible_Fun6255 said, “Rise of the planet of the ape: GME edition”.

Other “stonks” favored by WallStreetBets retail traders also leapt again, although explanations for the moves were tenuous.  Headphone maker Koss Corp surged 57%, while cannabis company Sundial Growers rose 10%; AMC rose 29%, Express was up 42%, and Koss soared 75%. In Europe, Nokia shares are up 6.2%; the stock was also a Reddit favorite last month

The risky trading strategies employed by some traders on Reddit have drawn the ire of investing legends such as Charlie Munger, long time business partner of Warren Buffett. “It’s really stupid to have a culture which encourages as much gambling in stocks by people who have the mindset of racetrack bettors,” said Munger on Wednesday.

Of course, everyone ignored the warning and GameStop’s U.S.-listed shares soared nearly 104% on Wednesday. The volatility in GME, AMC Entertainment and other stocks led to outages on Reddit and periodic trading halts by the New York Stock Exchange. Robinhood said in a tweet that the NYSE action would impact all brokerages, but that it had not paused trading on the shares.

“It’s a pretty risky play to try and buy now ... what we might (see) at the open of the cash market is some people trying to get in,” said Oriano Lizza, premium sales trader at CMC Markets in Singapore, which does not offer pre- or post-market trade.

In any case, back to global markets where European stocks erased an earlier gain even as most European equities hold in the green. Eurostoxx 50 traded 0.2% higher having gapped up on the open. DAX fades an initial 0.5% gain to trade flat. FTSE 100 and IBEX outperform. Oil & gas, banks and miners are the best performers. Here are some of the biggest European movers today:

  • Nokia shares jump as much as 8.2%, the biggest gainer in the Stoxx Telecom Index, amid fresh interest in meme stocks. Nokia surged 26% last month as the stock became a Reddit trader favorite.
  • Telefonica shares gain as much as 5.7%, the best performer in Spain’s benchmark IBEX 35 index, after results, with Berenberg saying the telecom firm’s 4Q financials were strong.
  • DS Smith surges as much as 14%, the most since 2011, after Bloomberg reported Wednesday night that rival Mondi is exploring a potential takeover.
  • Vestas shares jumps as much as 6.2% after UBS analysts said the outlook for wind-turbine makers is continuing to gain momentum and upgraded the stock to buy.
  • Standard Chartered falls as much as 5.5% in London as the Asia-focused lender’s financial markets unit and progress on cost cutting disappoint at quarterly results.
  • Bayer shares drop as much as 4.5% after what Redburn describes as “messy” 4Q earnings and cautious 2021 dividend expectations, as well as management comments that co. may withdraw from various Roundup settlement agreements if certain eligibility and participation rates are not satisfied.

Earlier in the session, Asian stocks rebounded from their biggest drop in almost three months, bolstered by a rally in technology names. Samsung Electronics, SK Hynix and Taiwan Semiconductor Manufacturing boosted the MSCI Asia Pacific Index after U.S. President Joe Biden said he plans to address shortfalls in chip output that have idled production at some auto plants. SK Hynix hit a 20-year high. Tencent and SoftBank were the other big contributors to the Asian benchmark’s rise. South Korea’s equity benchmark surged 3.5% to lead gains in Asia. Key gauges in Singapore, Malaysia and Taiwan rallied at least 1.5% each. Markets in the Philippines were shut for a local holiday. Stocks in New Zealand bucked the regional trend, with the S&P/NZX 50 index sliding 1.2%. The nation’s government said it will require the central bank to take account of rampant house prices when it sets interest rates, a change that may restrict its ability to run loose monetary policy.

“There are two clear stories now” said CMC Markets senior analyst Michael Hewson. “You have the concerns about rising yields and they are continuing to move higher today, and then you have got an economic recovery story, which is helping lift the more moderately-valued parts of the market.”

Yields on U.S. Treasury bonds have soared recently (and with CTAs the most short in two years, they are likely to rise even more), pressuring technology-related companies as the United States accelerates its coronavirus vaccination program and plans further fiscal spending. Commodities also extended gains, with investors piling into metals that can ride faster growth trends. Copper, as previewed last week, moved closer to a record high set a decade ago and aluminum touched a two-year high.

Yields have blown up despite two days of reassuring remarks by Fed Chairman Jerome Powell who offered reassurance that policy would continue to be supportive and look beyond a temporary pick-up in inflation, especially from a low base. That’s given the bond market enough reason to keep driving yields higher. Powell said on Wednesday that U.S. rates could remain low for years, while ECB board member Isabel Schnabel was out early on Thursday saying it would fight any big increases in inflation-adjusted market rates.

“A too-abrupt increase in real interest rates on the back of improving global growth prospects could jeopardise the economic recovery,” she said. “Therefore, we are monitoring financial market developments closely.”

Despite growing central bank jawboning, bond markets are still not playing ball and are threatening to steamroll over what little credibility central bankers have. Ten-year German Bund yields climbed 3 basis points in early trading. U.S. 10-year Treasury yields blew to one-year highs of 1.46% and on course for the biggest monthly rise since Donald Trump’s 2016 U.S. election victory jolted markets.

In the FX markets, the dollar slumped in early trading to three-year lows as the Fed’s stance, ongoing progress with COVID vaccination programmes and commodity market uplift boosted riskier currencies. However, it has since rebounded back to unchanged. The Australian and Canadian dollars both hit three-year highs of $0.7978 and C$1.2503 per U.S. dollar respectively. The euro touched a one-month high of $1.2183. The safe-haven yen and Swiss franc both weakened.

“It is pretty clear that there is a pretty strong concentration in the commodity currencies,” said Saxo Bank’s John Hardy. “Even with emerging markets you are seeing it to a degree,” he added, pointing to how big energy importers like Turkey’s lira had faded.

In commodities, crude oil climbed to 13-month highs after U.S. government data on Wednesday showed a drop in crude output as a deep freeze in Texas disrupted production last week. Copper prices steadied near $9,500 a tonne in London. It’s now at its highest level in almost a decade and could log its biggest monthly gains in 15 years this month.

Looking at the day ahead, data releases from the US include the second estimate of Q4 GDP, weekly initial jobless claims and the preliminary January durable goods orders reading.  From central banks, we’ll hear from the Fed’s Quarles, Bostic, Bullard and Williams, and the ECB’s De Guindos, Lane and Hernandez de Cos. Earnings releases include Salesforce, American Tower, Moderna and HP, and this afternoon EU leaders will be gathering via videoconference for a European Council meeting. Highlights on the earnings agenda include Salesforce, HP, Etsy and Monster Beverage, all expected after markets close

Market Snapshot

  • S&P 500 futures down 0.1% to 3,917.50
  • Euro up 0.4% to $1.2213
  • Brent Futures up 0.5% to $67.35/bbl
  • MXAP up 1.4% to 215.29
  • MXAPJ up 1.5% to 723.82
  • Nikkei up 1.7% to 30,168.27
  • Topix up 1.2% to 1,926.23
  • Hang Seng Index up 1.2% to 30,074.17
  • Shanghai Composite up 0.6% to 3,585.05
  • Sensex up 0.5% to 51,043.83
  • Australia S&P/ASX 200 up 0.8% to 6,834.03
  • Kospi up 3.5% to 3,099.69
  • Brent Futures up 0.5% to $67.35/bbl
  • Gold spot down 0.8% to $1,790.99
  • U.S. Dollar Index down 0.40% to 89.82

Top Overnight News from Bloomberg

  • Economic confidence in the euro area improved in February, as consumers and businesses grew more optimistic that vaccine rollouts will spark a recovery this year
  • The European Central Bank is keeping a close eye on the euro area’s financing conditions and will use bond purchases to counter any unwarranted tightening, according to chief economist Philip Lane
  • New Zealand’s government will require the central bank to take account of rampant house prices when it sets interest rates, a change that may restrict its ability to run loose monetary policy.
  • Federal Reserve Chair Jerome Powell emphasized his view that the economy has a long way to go in the recovery and signs of prices rising won’t necessarily lead to persistently high inflation
  • Pfizer Inc. and BioNTech SE’s Covid-19 vaccine was overwhelmingly effective against the virus in a study that followed nearly 1.2 million people in Israel, results that public-health experts said show that immunizations could end the pandemic
  • Australia’s central bank found itself overwhelmed by the global reflation trade after it dived back into markets and discovered its biggest bond purchases in 11 months did little to hold down yields
  • New Zealand’s government will require the central bank to take account of rampant house prices when it sets interest rates, a change that may restrict its ability to run loose monetary policy
  • The Bank of Japan’s policy review will likely center on flexible stock-fund buying, bond yield movements and the potency of negative rates
  • Oil held gains after closing at the highest level in more than a year as a slump in U.S. crude production following the cold blast and shrinking European stockpiles tightened the market further

A quick look at global markets courtesy of Newsquawk

European stocks trade mostly firmer (Euro Stoxx 50 +0.1%) with price action somewhat contained in early hours as the region picked up a similarly mixed APAC lead heading into month-end. US equity futures also see a mixed session early-doors, but have waned off best levels seen overnight with the growth-led NQ (-0.6%) once again the laggard in European hours whilst the value-driven RTY (+0.6%) remains propped. The lukewarm tone in the equities markets comes as Fed officials downplayed the sustainability of the expected rise in inflation, whilst yields continue to remain elevated – with French 10yr yield turning positive for the first time since mid-2020. On the topic of rising yields, it’s worth recapping the sectorial correlation relative to a high-yield environment. The top beneficiaries from rising yields (by order) includes Banks, Cyclicals, Value, Insurance, Autos, Basic Resources. The top hit sectors meanwhile (by order) goes as such: Food & Beverage, Defensives, Growth, Healthcare, Real Estate. Meanwhile Technology and Retail see little correlation with rising rates in the context of weekly relative returns, as suggested by Goldman Sachs. This higher-yield playbook is currently portrayed within European sectors, with Banks, Oil & Gas, Basic Resources and Auto’s residing as the winners, whilst Healthcare, Food & Beverage and Chemicals reside on the other end of the spectrum. In terms of individual movers, heavyweight Bayer (-3.5%) pressures the DAX (-0.1%) lower following dismal earnings whereby revenue and Adj. EBIT deteriorated Y/Y whilst a large number of segments reported sales contractions. Other earnings-related movers include Axa (+3%), Telefonica (+2%), AB Foods (+1%), AB InBev (-5%) and Standard Chartered (-5%). Looking at M&A, FTSE-listed DS Smith (+7%) is lifted on reports Mondi (-0.7%) is reportedly considering a bid for DS Smith and has been speaking with advisors on the matter. Finally, heading into the US session, it’s worth mentioning the Reddit darling stocks - GME (+50% pre-mkt) and AMC (+16% pre-mkt) - are seeing another bout of upside after a late-door buying frenzy heading into the close.

Top European News

  • Europe’s Recovery Choices Will Leave It a Year Behind the U.S.
  • Merkel Is Leaving, But the EU Has a New Heavyweight in Draghi
  • Sunak Gives Himself Room to Raise Corporation Tax in U.K. Budget
  • How U.K. and Israel Raced to Global Lead in Covid Vaccination

Asia-Pac stocks rebounded from yesterday’s selldown after the region took impetus from the strong performance on Wall St where sentiment was underpinned by dovish Fed rhetoric and with gains led by energy and financials after oil prices and yields edged higher. ASX 200 (+0.8%) was positive in which energy stocks spearheaded the advances across the commodity-related sectors and with participants occupied by a heavy stream of earnings results including Qantas which surged despite posting a H1 net loss, as it also announced it was on track to deliver billions of cost savings over the next 3 years and is working on the assumption for international travel to resume in October. Nikkei 225 (+1.6%) coat-tailed on favourable currency flows and reclaimed the 30k status, while KOSPI (+2.1%) outperformed post-BoK meeting in which the central bank maintained its 7-day repo rate at 0.50% as expected and suggested the economy is to recover gradually led by solid growth in exports. Hang Seng (+2.1%) and Shanghai Comp. (+1.2%) were also positive in light of the global optimism and with MOFCOM planning to reinforce policy support for foreign trade, although tensions continued to linger after a US Navy warship transited through the Taiwan Strait and with USTR nominee Tai suggesting the US needs a plan for holding China accountable and to compete with its state-run economy. Finally, 10yr JGBs were lower amid gains in stocks which saw prices slip beneath the 151.00 level and as JGB yields extended to multi-year highs with 30yr and 40yr yields reaching the highest since December 2018 and January 2019, respectively, while the presence of the BoJ in the market for nearly JPY 1.3tln of JGBs with up to 10yr maturities failed to support prices.

Top Asian News

  • Hong Kong’s Biggest Builder Sun Hung Kai Posts Higher Profit
  • Hong Kong’s Richest Property Tycoon Said to Plan U.S. SPAC
  • Armenian Premier Warns of Coup as Army Tells Him to Quit
  • Aussie Dollar Breaches 80 U.S. Cents to Reach Three-Year High

In FX, the Euro marginally pipped the Aussie to the post in round number terms, but it was much more even between the single currency and both Antipodean Dollars when it came to percentage gains vs the Greenback before the former accelerated beyond 1.2225. All 3 are gleaning leverage from yield differentials, while Eur/Usd is also benefiting from supportive month end rebalancing flows and what looks like a more concerted technical correction in Eur/Gbp after the midweek bounce from just under 0.8550. Hence, the headline pair has breached recent highs ahead of 1.2200 on the way to circa 1.2235 and applied further pressure on the DXY that is losing touch with 90.000 between 90.144-89.720 parameters following Wednesday’s false break through the 50 DMA. Meanwhile, Aud/Usd has peered over 0.8000 where big barriers reside with impetus from an unexpected rise in Q4 Capex that reversed the prior quarter’s fall precisely, and Nzd/Usd is hovering around 0.7450 having spiked above 0.7460 in wake of NZ Finance Minister Robertson formally announcing changes to the RBNZ’s remit to include house prices. Note, modest declines in NBNZ business sentiment and the activity outlook were largely shrugged off, but looming trade data will likely draw more attention.

  • GBP/CAD - Notwithstanding the aforementioned retracement against the Euro, Sterling has taken advantage of general Dollar weakness to reclaim 1.4150+ status, and the Loonie has notched another milestone with the aid of strong oil prices with Usd/Cad down through 1.2500.
  • CHF/JPY- The Franc and Yen are still lagging due to less attractive costs of carry even though JGBs were flogged overnight in catch-up trade as widely anticipated, as the former languishes below 0.9050 and latter under 106.00 ahead of Tokyo CPI, Japanese ip and retail sales.
  • SCANDI/EM - The Sek is back on a more even keel vs the Nok and Eur amidst bullish rebalancing requirements given an above average standard deviation for the end of February, while Swedish sentiment indices for the current month were firmer across the board. Elsewhere, most EM currencies are reeling on the high yield eroding risk appetite and threatening capital flight scenario.

In commodities, WTI and Brent front-month futures are firmer on the session and hovering around best levels during early European trade. The complex overnight benefited from a mostly upbeat APAC session, whilst sources yesterday highlighted a rift building among OPEC+ members ahead of the meeting next week. One source suggested prices are “definitely high” and more oil is needed to cool the markets – adding that a 500k BPD increase looks to be a good option. Conversely, another source suggested no more relaxations until June given the risk of new variants and setbacks in the battle against COVID. Saudi will have to avoid a rift widening as the Kingdom itself is currently poised to reintroduced the 1mln BPD of oil which was taken offline as a goodwill gesture in January. ING previously suggested “It is unlikely that the group would bring a little over 2.2mln BPD of supply back onto the market, aware that the market would baulk at such a decision”, but the bank highlights that there is room for some sort of easing, contingent on how much output volume Saudi decides to bring back from its own additional cuts. Barclays meanwhile, forecasts 2021 Brent at USD 62/bbl & WTI at USD 58/bbl reflecting their projection of OPEC+ to increase aggregate supply by 1.5mln BPD over Q2 and for Saudi Arabia to reverse the unilateral cut in April. Furthermore, as production in Texas is coming back online - a subsequent reflection in the price of WTI may be noticed as ING states it expects to see further crude oil builds in the weeks ahead. WTI resides mid USD 63/bbl (vs high USD 63.79/bbl) and Brent mid USD 67/bbl (vs high USD 67.70/bbl). Notable tail-risks on the table surrounds month-end factors which may offer volatility, several Fed officials speaking through the session alongside US data which includes Initial Jobless Claims and Q4 PCE prices. Elsewhere, precious metals are mixed on the session, with spot gold trading below the USD 1800/oz handle amid headwinds from rising yields and spot silver nursed earlier losses. As a side note for silver, Reddit retail traders have been driving GME prices higher again so it may be something to just keep an eye on for any potential targeting of silver. Turning to base metals, LME copper has gains of around 0.5% and trades above USD 9,500/t, continuing the narrative as a recovery metal surrounding the reflationary backdrop. More on base metals. Looking further ahead, some suggest aluminium supply in China could be affected by China’s journey to net-zero CO2 emissions by 2060. China Inner Mongolia has seen a series of environmental changes which would inhibit further capacity growth as the region accounts for 9.0% of total Chinese aluminium supply.

US Event Calendar

  • 8:30am: 4Q GDP Annualized QoQ, est. 4.2%, prior 4.0%
  • 8:30am: Feb. Initial Jobless Claims, est. 825,000, prior 861,000; Continuing Claims, est. 4.46m, prior 4.49m;
  • 8:30am: Jan. Durable Goods Orders, est. 1.1%, prior 0.5%
  • 8:30am: Jan. Cap Goods Ship Nondef Ex Air, est. 0.6%, prior 0.7%; Cap Goods Orders Nondef Ex Air, est. 0.8%, prior 0.7%
  • 8:30am: 4Q PCE Core QoQ, est. 1.4%, prior 1.4%; 4Q Personal Consumption, est. 2.5%, prior 2.5%
  • 8:30am: 4Q GDP Price Index, est. 2.0%, prior 2.0%
  • 9:45am: Feb. Bloomberg Consumer Comfort, prior 45.8
  • 10am: Jan. Pending Home Sales YoY, prior 22.8%; Pending Home Sales (MoM), est. 0%, prior -0.3%
  • 11am: Feb. Kansas City Fed Manf. Activity, est. 15, prior 17

DB's Jim Reid concludes the overnight wrap

Risk appetite showed signs of returning to global markets over the last 24 hours as Fed Chair Powell stuck to his reassuring tone and continued to signal that the central bank would keep policy accommodative for some time to come. The remarks led to a sharp turnaround across a number of different asset classes, with the S&P 500 moving from an intraday low of -0.56% shortly after the open to end the session +1.14% higher, which was the strongest daily performance for the index in over 3 weeks. Perhaps the most headline-grabbing comment from Powell was thatit could take more than 3 years before the Fed reached its inflation goal of 2%, helping to reiterate the message that the Fed are in absolutely no rush to pare back on stimulus any time soon, and he reaffirmed his message that the labour market was very far from the Fed’s goal, saying that there was still “a long way to go” before the US got to maximum employment. We should find out more on the Fed’s current thinking on inflation in the next 3 weeks when they release their new Summary of Economic Projections at the March FOMC meeting.

Looking at the moves in more depth, risk assets had their best day for some time thanks to Powell, though it was energy stocks that saw the largest gains thanks to another sizeable rise in oil prices. In fact, both Brent crude (+2.55%) and WTI (+2.51%) climbed to their highest levels in over a year yesterday, at $67.04/bbl and $63.22/bbl respectively, as the combination of tighter supplies and recovering economic demand proved supportive, and they’re holding those levels this morning. Otherwise though, it was cyclical industries that led the advance, with autos (+5.60%), banks (+2.49%) and capital goods (+2.26%) being among the strongest performers in the S&P. Tech stocks recovered their losses too, with the NASDAQ up +0.99%, while over in Europe the STOXX 600 gained +0.46%. The reflation/reopen trade was in full force in Europe as well with the travel & leisure (+1.87%), energy (+1.71%) and basic resources (+1.46%) again leading the charge here.

Even as Powell struck a dovish tone, sovereign bonds continued to lose ground on both sides of the Atlantic, and yields on 10yr Treasuries rose +3.4bps to 1.376%, their highest closing level in a year, and have moved up a further +2.0bps this morning. As with equities though, that was some distance from its intraday high, at which point yields had climbed all the way to 1.434%. The moves were evident across the curve, with 30yr Treasury yields rising +5.2bps yesterday to their own 1-year high, which helped the 5s30s curve reach its steepest level in over 6 years. For Europe it was a similar story, with yields paring back their intraday highs as Powell spoke, though they still closed at levels not seen in months, with yields on 10yr bunds (+1.2bps), OATs (1.4bps) and BTPs (+4.2bps) all moving higher. The moves in turn have proved supportive for bank stocks, with the STOXX Banks index in Europe up a further +1.36% yesterday at its highest level since the pandemic began.

Overnight in Asia, markets have taken Wall Street’s lead with the Nikkei (+1.57%), Hang Seng (+2.15%), Shanghai Comp (+1.07%) and ASX (+0.93%) all rising. Futures on the S&P 500 are also trading +0.25% higher and sovereign bond yields have continued to climb in Asia, with Japan’s 30yr yield (+1.9bps) at its highest level since December 2018, and 10yr yields on Australian (+10.3bps) and New Zealand (+18.4bps) debt seeing sharp moves higher. For New Zealand, the moves have been prompted by a decision to change the RBNZ’s remit to support more sustainable house prices and improve affordability for first time buyers, which has led to expectations that the central bank could tighten more quickly than previously expected. On top of this, the Bank of Korea left their main interest rate unchanged at 0.5% as expected, though they raised their CPI forecast for 2021 by three-tenths to +1.3%.

Staying on central banks, a number of other Fed speakers gave remarks yesterday, though the overall tone didn’t add much to what we already knew. Vice Chair Clarida gave a speech on the economic outlook and monetary policy, where he made the point others have about “the true unemployment rate” being closer to 10% when you factor in declines in the labour force and misclassification. However, he remains “bullish on the economic rebound in the US” and sees inflation reaching around 2% by end of 2021. Separately Governor Brainard noted that transitory inflation was “not the kind of inflation that monetary policy would react to”.

Here in the UK, multiple newspapers have reported that the government are potentially planning for a rise in corporation tax at next week’s budget on Wednesday, with the FT saying that Chancellor Sunak would announce “a sharp rise” in the tax from its current 19%, and that the similar proposed increase in the US from 21% to 28% would offer some cover in terms of competitiveness. Other proposals reported have been a six-month extension to the uplift in Universal Credit mentioned in the Telegraph, as well as a Times report that the holiday on stamp duty (the home purchase tax) would be extended until the end of June. For those wanting more info, our UK economists released their preview of the budget yesterday (link here).

Turning to the pandemic, we got some very positive news yesterday as a large-scale study of almost 1.2m people in Israel showed that 2 doses of the Pfizer/BioNTech vaccine prevented 94% of infections. On top of this, staff at the FDA in the US wrote that the Johnson & Johnson vaccine was safe and effective, which comes ahead of an FDA committee meeting tomorrow where they’ll be discussing whether to give it an emergency use authorization. Unlike the other vaccines authorised in the US (Pfizer/BioNTech and Moderna), the Johnson & Johnson vaccine only requires a single dose, and the company have said that they’ll initially be able to provide 4m shots. Elsewhere, Ghana received the first delivery from the Covax vaccine-sharing initiative, which is seeking to support vaccine distribution in lower-income countries, with 600,000 doses of the AstraZeneca vaccine. When it comes to global restrictions there was a divergent picture however, with France announcing that Dunkirk would go into lockdown over the weekend, while in Switzerland, it was confirmed that shops, museums and outdoor sports and leisure facilities would be open from Monday. Meanwhile Moderna announced plans to study various approaches to vaccine boosters to protect against the variant strains, at the same time as they’re taking steps to ramp up production in the next year. The company has already completed manufacturing and sending doses to researchers for a clinical study around the South African strain.

As we mentioned in yesterday’s edition, it’s now been over a year since the first big pandemic-related selloff for markets as the virus started to hit Western nations. In Jim’s chart of the day yesterday (link here) ), we showed the performance of a number of global assets since this point, and also include the low point over the last 12 months. Commodities have been among the strongest performers, with copper leading the way as it hit its highest level in nearly a decade yesterday, whilst gold, silver and oil have also seen major gains. European equities have been the worst hit however, falling behind other regions as a number of indices still haven’t recovered to their pre-Covid levels.

In terms of yesterday’s data releases, the final German GDP reading for Q4 was revised up to show +0.3% growth quarter-on-quarter (vs. +0.1% initial estimate). Looking at the breakdown, private consumption saw the biggest hit (-3.3% qoq), though the savings rate rose again to 17.7%, which supports the argument from our German economists (link here) that pent-up demand will support the economy in the summer half and potentially add to emerging inflationary pressures. With the more positive end to last year, they’re maintaining their 4% GDP forecast for 2021. The other main data release were the new home sales figures from the US, which rose to a stronger-than-expected annualised rate of 923k in January (vs. 856k expected).

To the day ahead now, and data releases from the US include the second estimate of Q4 GDP, weekly initial jobless claims and the preliminary January durable goods orders reading. Over in Europe, there’s also the final Euro Area consumer confidence reading for February, and the January M3 money supply figure. From central banks, we’ll hear from the Fed’s Quarles, Bostic, Bullard and Williams, and the ECB’s De Guindos, Lane and Hernandez de Cos. Earnings releases include Salesforce, American Tower, Moderna and HP, and this afternoon EU leaders will be gathering via videoconference for a European Council meeting.

Tyler Durden Thu, 02/25/2021 - 07:55
Published:2/25/2021 6:59:22 AM
[Markets] : Goldman Sachs CEO: Working from home is an ‘aberration’ David Solomon cited collaboration as a reason for bankers to return to the office.
Published:2/25/2021 6:25:49 AM
[Markets] Is Hyperinflation In The Horizon? Is Hyperinflation In The Horizon?

Authored by Tuomas Malinen via,

From time-to-time historically, national authorities have resorted to financing by their central bank to cover budget shortfalls. Another word for this is monetization of debt or deficit-financing by the central bank.

Asset purchase (or “QE”) programs can be viewed as modern versions of deficit-financing. With them, central banks buy (mostly) sovereign bonds from the capital markets, resulting in artificially low yields on government bonds. As these programs essentially provide credit from the central bank, they do increase the money in circulation quite a bit.

In the U.S., for example, the quantity of money, measured by M2, has increased by a whopping 26% in a single year. This is the largest annual increase since 1943.

The combination of the fast growth of money in circulation and the decline in production capacity, whatever the cause, is the pre-condition for ravaging inflation. Worryingly, we are seeing those pre-conditions met.

In this blog we detail the process of hyperinflation. Recently, we have seen hyperinflation episodes in Zimbabwe and Venezuela. In history, there are two rather well-known and extensively studied examples of out-of-control inflation: hyperinflation in the Weimar Republic in the early 1920s and the inflation crisis in Russia in the early 1990s. We concentrate on those.

The process of monetization and hyperinflation

Monetization typically proceeds as follows. The central bank buys the debt—bonds—issued by the Finance Ministry (or Treasury). Government then uses this money to increase its consumption. The debt bought by the central bank then either remains on the balance sheet of the central bank ad infinitum or the central bank nullifies it, thereby creating a loss.

To cover the loss, the central bank issues new physical currency notes (or nowadays digital) to increase its revenue. This results in an increase in the monetary base, meaning an increase in the currency in circulation.

When a government uses “debt” from the central bank to sustain or increase its consumption and investments, this newly created money enters the economy through consumption. Government effectively becomes the guarantor of jobs and profits of different industries with money created from “thin air”.

If production capacity becomes limited at the same time due to, for example, damage from war or from large-scale corporate bankruptcies by other causes, consumption increases faster than production. In practice, there is more money chasing fewer products, and prices start to rise very rapidly. Moreover, politicians and bureaucrats tend not to be very skilled in the efficient management of businesses and they permit public pressure to influence their decisions. This leads to wasteful investments, falling productivity and unprofitable enterprises.

When there’s more money in circulation relative to production of goods and services, prices start to rise fast and inflation accelerates. As it continues, consumers, firms and workers start to expect ever-higher inflation, which, combined with the quickly increasing supply of money from the central bank, starts to weaken public faith in the currency.  As inflationary expectations rise, even faster inflation ensues.

A tale of two hyperinflations 

Weimar Germany was ravaged by the aftermath of the First World War, which the nation had lost. The subsequent Treaty of Versailles burdened the country with impossible levels of war reparations. Similarly, the collapse of the Soviet Union at the end of the 1980s had left Russia with a vast external debt burden accrued during the final years of the Soviet Union, when it borrowed desperately to keep the planned economy afloat.

Both these instances led to stark choices for their respective governments. Each was faced with an overwhelming national debt and with an industrial base in serious need of reform. Both governments also decided that instead of painful reforms and a likely default, they would try to uphold national demand and production by monetizing their budget deficits.

In Weimar Germany, and in early 1990’s Russia, both governments supported high employment levels through deficit financing. In Weimar, the unemployment rate hovered under four percent and in Russia it was even lower, tending between 1.1 and 2.6 percent between 1992 and 1998. However, labor productivity fell dramatically.

The result: run-away inflations

Inflation in these two examples varied from high to extreme. In Russia, monthly consumer prices rose nearly 300 percent in some periods, but the mean monthly inflation rate was “only” around 21 percent from January 1992 till July 1995.

In Weimar Germany, the situation was much more extreme. The wage price index first made spectacular leaps (between November 1918 and March 1920 it increased by 700%, and between mid-1921 and mid-1922, by 500%) after hyperinflation—defined as monthly price increase of more than 50 percent—fully set in. The rate of inflation was, actually, much higher than the rate of monetization. For example, Burdekin and Burkett (1992) show that that rising wage claims and demand for private credit that followed were major contributors to the hyperinflation. In essence, this means that the targeted real wage rate of workers was an important factor and it implies that, when wage pressures build to extreme levels, they are very hard to contain.

Both inflations were stopped by the combination of massive cutbacks in government spending and credit freezes. The inevitable consequence of these actions was a recession, which was relatively short in Germany, and a forced restructuring of the economy.

Social repercussion

The social repercussions were heavy in both instances.

The hyperinflation in the Weimar Republic has been linked to the rise of Hitler and National Socialism (“Nazis”). In Russia, the serious damage inflation inflicted, especially on the income of the middle-class, created demands for stability. As in Germany, these frustrations were met by the emergence of a strong leader.

In both cases the main losers were the middle-class, pensioners, and professionals, whose salaried purchasing power fell. High inflation may be avoided by the rich as they have the means to hedge against it by buying precious metals, usually gold, making suitable alternative financial investments and by transferring funds to sounder markets or currencies.

Thus, paradoxically, deficit monetization tends to hurt the most those it is originally aimed to help. This should be remembered now, when ideas like “job guarantees” and “deficits don’t matter” are offered as solutions. 

Where are we now?

Worryingly, many of the conditions that led to the extreme inflation episodes in Weimar Germany and in 1990s Russia have started to emerge.

First, central bankers have been running ‘quasi-monetization’, or asset-purchase (QE) programs for over a decade with a stupendous increase during the past pandemic year (see Figure 1). Secondly, supply-chain disruptions have also started to emerge, which will start to crimp production capacities at some point. These are the two ‘pre-conditions’ for an inflationary crisis to materialize.

Figure 1. The combined balance sheet of the BoJ, ECB and the Fed in billions of dollars. Source: GnS Economics, BoJ, ECB, Fed

What this means is that in coming months evidence of inflation may start to emerge. Inflation expectations, while still somewhat subdued e.g. in the US (see Figure 2), may rise rapidly.

Figure 2. The daily 5-year forward inflation expectation rate, calculated using the 10 year and 5 year nominal and inflation adjusted Treasury securities. Source: GnS Economics, St. Louis Fed

Fast inflation would wreak havoc

With massive quantities of new money in circulation, all that is needed for an “inflation scare” to start  is a pickup in the velocity of money driven, for example, by improving economic activity in the U.S.  If and when inflation suddenly quickens it may lead to an over-reaction, a shock, among consumers and corporations, which may revise their inflation expectations upwards, drastically and simultaneously.  And then all bets are off.

We have been lulled into complacency believing that central banks can control the economy and stop crises ‘at will’. As we have repeatedly warned for more than two years, this is a dangerous fallacy.

If a fast inflation emerges, central banks will eventually be forced to raise rates, almost certainly toppling over-leveraged, zombified firms and over-indebted, zombified European nations.  Total chaos in the financial markets would obviously follow with world descending into recession or depression.

*  *  *

The historical accounts of Weimar and Russian hyperinflations are based on: Ferguson, N. and B. Granville (2000), “Weimar on the Volga”: Causes and consequences of inflation in 1990s Russia compared with 1920s Germany.

We provide in-depth analysis and forecasts on the risks haunting the global economy and the financial markets in our Q-Review reports and Deprcon Service. They are are available at GnS Store

Tyler Durden Thu, 02/25/2021 - 06:30
Published:2/25/2021 5:56:50 AM
[Markets] The Tell: A new wave of fearless retail investors could be ready to pour $170 billion into stocks, says Deutsche Bank Deutsche Bank has taken the pulse of a wave of individual investors that blossomed in 2020 and drove a market rally from last March. And they are ready to keep buying stocks.
Published:2/25/2021 5:56:50 AM
[Markets] A 'bubble' no one is talking about: Morning Brief Top news and what to watch in the markets on Thursday, February 25, 2021. Published:2/25/2021 5:27:22 AM
[Markets] Dow Nears 32,000 as Oil and Commodities Leap, Tech Stocks Resume Slide; GameStop Surges The Dow could top 32,000 for the first time Thursday as oil and commodity prices extend gains amid bets on firm vaccine-related recovery over the second half of the year. Published:2/25/2021 4:55:37 AM
[Markets] Banks lead European stocks higher, as U.S. futures dip after Wednesday rally Banks lead European stocks higher, as U.S. futures dip after Wednesday rally Published:2/25/2021 4:55:36 AM
[Markets] Qatar's Al Jazeera Launches Right-Wing News Platform For Americans "Who Feel Left Out" Of MSM Qatar's Al Jazeera Launches Right-Wing News Platform For Americans "Who Feel Left Out" Of MSM

Upon the announcement this week that Qatar-based Al Jazeera plans to open a US conservative news platform it seemed the near universal reaction on social media was to say simply, weird

"Al Jazeera, the Qatar-based news network that has previously sought to become a liberal media force in the US, is launching a platform to target conservatives, it was revealed on Tuesday," The Guardian reports.

The Al Jazeera outlet will be called Rightly, and apparently aims to imitate and partake of Fox News' longtime success as leading the US mainstream. Rightly plans to cater to center-right Americans and is headed by Fox News’ Scott Norvell. Its target audience has been further described as Republicans who "feel left out of mainstream media," Politico noted, in perhaps a hint it also seeks to tap into pro-Trump support.

Via Reuters

Much of the stir on social media after Tuesday's announcement was focused around Liberals being outraged over the move, questioning why America would need another 'center-right' publication. But the more interesting angle is the fact that Al Jazeera is backed by the Qatari government.

The outlet with its headquarters in Doha often escapes scrutiny as a state-funded news source, despite decades ago the Bush administration essentially going to battle with the foreign outlet over its critical Iraq War coverage. We can only imagine the fierce reaction and pushback if this were instead Russia attempting to establish a 'conservative news outlet' on US soil.

Recall too that Al Jazeera was key in pushing the early 'Arab Spring' narrative which rapidly turned into regime change wars the West-Gulf military alliance pushed in places like Libya and Syria. At every step of the way the outlet reflected the perspective of Qatar's Sunni monarchy (namely, the House of Al Thani).

The Hill notes in a review of Al Jazeera's struggles to find a niche in the US political landscape

Al Jazeera, which is financially backed by the Qatari government, has had mixed success in its past U.S.-focused efforts. In 2013, the company launched an American-focused media brand by acquiring Al Gore’s Current TV for $500 million and rebranding it as Al Jazeera America. The effort was shuttered in January 2016 after struggling with poor ratings and staff discord.

A "soft launch" of an initial show will begin Thursday according to a press release

Rightly will soft launch with its first show, "Right Now with Stephen Kent," on February 25th. The show, hosted by one of the rising stars in Millennial political circles in the United States, will stream on Rightly social media and podcast platforms. Additional Rightly programming will be announced in the coming months.
"Right Now with Stephen Kent" will be an in-studio interview program in which the show’s host, Stephen Kent, will get beyond talking points and retweets to engage current newsmakers, opinion leaders and incisive commentators from across the political spectrum in a discussion about the issues animating right-of-center Americans today.

Al Jazeera English - which is its flagship international channel - has remained popular in the US (also online via AJPlus videos) even after the prior US-focused TV channel 'Al Jazeera America' shut down in 2016.

Tyler Durden Thu, 02/25/2021 - 05:45
Published:2/25/2021 4:55:36 AM
[Markets] GameStop, AMC, Nvidia, Salesforce, Pfizer - 5 Things You Must Know Thursday Stock futures fluctuate and bonds tumble Thursday, a day after the Dow set a record high; GameStop and AMC surge amid more mania around meme stocks; Nvidia lower after earnings; Salesforce and Airbnb report earnings. Published:2/25/2021 4:25:16 AM
[Markets] Kelley Blue Book: The best full-size trucks of 2021 Here are the 12 trucks that score big on capability, reliability, comfort, technology, and more.
Published:2/25/2021 4:25:16 AM
[Markets] Europe Markets: European stocks rise after Wall Street rally as banks boosted by steepening yield curve European stocks rose on Thursday, catching up with the rally on Wall Street after a key official laid out the conditions that would keep U.S. monetary policy loose for some time.
Published:2/25/2021 3:55:12 AM
[Markets] Twitter Says It Purged Dozens Of Accounts For "Undermining Faith In NATO" Twitter Says It Purged Dozens Of Accounts For "Undermining Faith In NATO"

Twitter has announced it recently suspended dozens of accounts for undermining confidence in NATO. It was part of a broader purge of almost 400 Twitter accounts believed to have "ties to Russia, Armenia and Iran" state actors which were found to have "breached its platform manipulation policies," according to Reuters.

And further Twitter said according to the Reuters that "100 accounts with Russian ties were removed for amplifying narratives that undermined faith in NATO and targeted the United States and the European Union."

That's right, amid numerous examples of recent Twitter overreach and Silicon Valley's blatant attempts to crush speech deemed politically inconvenient or out of bounds, this one is arguably the most bizarre and blatant yet - the offending accounts were deemed to have not upheld "faith" in the NATO military alliance. (Did we miss the "oath" that was supposed to be taken upon setting up an account?...)

Some of the accounts appear to have been suspended in prior months, with Twitter now disclosing its fuller investigation results and rationale for taking action against the accounts.

Here's the official Twitter statement according to its full context:

"Today we’re disclosing two separate networks that have Russian ties. Our first investigation found and removed a network of 69 fake accounts that can be reliably tied to Russian state actors. A number of these accounts amplified narratives that were aligned with the Russian government, while another subset of the network focused on undermining faith in the NATO alliance and its stability. As part of our second investigation in this region, we removed 31 accounts from two networks that show signs of being affiliated with the Internet Research Agency (IRA) and Russian government-linked actors. These accounts amplified narratives that had been previously associated with the IRA and other Russian influence efforts targeting the United States and European Union."

In follow-up reporting by Russia's RT detailing some of the prominent accounts impacted by the ban, it's since been revealed that "One of the accounts targeted belonged to the Valdai Discussion Club. A leading Russian think tank, it hosts an annual event in Sochi, which has attracted dignitaries such as ex-Afghan leader Hamid Karzai, one time Finnish President Tarja Halonen, erstwhile South African President Thabo Mbeki, former Italian Prime Minister Romano Prodi and China's richest man, Jack Ma."

Valdai however has multiple accounts it operates, and this isn't the first time it's been targeted by a Twitter purge of state-affiliated 'nefarious' actors. 

"In addition, according to Twitter, 31 accounts were deleted for being allegedly associated with the Internet Research Agency, which some in the West claim is a state-connected hacker factory, and other Russian government structures. The company added that some of these were engaged in criticism of the EU," RT wrote further.

Twitter's latest "purge" has caught the attention of the Russian government, with Foreign Ministry spokeswoman Maria Zakharova on Tuesday saying the Kremlin will launch its own investigation. Russia has recently passed legislation opening up US social media companies to fines, sanctions, or even the possibility of being blocked inside Russia should they be found to have engaged in unfair targeting of Russian users or entities (though it remains largely symbolic given it's unlikely the Kremlin would outright ban these apps which remain hugely popular among the Russian population).

She referenced the latest events surrounding Navalny to highlight Twitter's hypocrisy and overly broad punitive measure: "Millions of users can fall under [this term]. Even Navalny and his associates – they certainly influence the US and the EU, given the speed with which anti-Russian sanctions have been rubber stamped," she said. "We will assess the grounds for blocking and give an expert response," Zakharova added.

Tyler Durden Thu, 02/25/2021 - 04:15
Published:2/25/2021 3:25:29 AM
[Markets] Swiss To Vote In Referendum On Government's Emergency COVID-19 Measures Swiss To Vote In Referendum On Government's Emergency COVID-19 Measures


After mounting a national campaign, and the work of determined local organisations, Swiss campaigners have managed to trigger a referendum for ending the government’s destructive COVID regulations. If successful, this will also be a blow for the extremists at the World Economic Forum in Davos, Switzerland, who have been pushing the idea of a global economic shutdown since the beginning of the alleged ‘global pandemic.’

Among other things, the peoples’ revolt is pushing back against the government’s coercive attempt to enforce a “compulsory system with poorly tested vaccines.”

In the meantime, the government has announced that it will start to ease some national mitigation measures from March 1st.

Euro News reports…

Swiss campaigners have triggered a referendum on ending the government’s COVID-19 restrictions.

The association Freunden der Verfassung (Friends of the Constitution) has filed a petition to the Federal Chancellery with 90,000 signatures.

Swiss law means any petition that is backed by more than 50,000 people will go to a national referendum.

The association has argued the government’s legislation, passed by parliament in September 2020, is “dangerous, unethical, and unnecessary”.

Last month, Swiss authorities announced plans to shut restaurants, bars, sports facilities, and cultural institutions until the end of February.

But Friends of the Constitution say the move is “disproportionate” and “demonstrably ineffective”. The association’s spokesperson, Christoph Pfluger, is a known critic of the country’s COVID-19 measures.

Opponents also say the bill focuses too much on financial measures that the government can already regulate by federal decrees, without the need for emergency powers.

Others believe the law gives the government too much power to enforce a “compulsory system with poorly tested vaccines”, something that the Federal Council has repeatedly denied.

“People and companies who have been pushed to the brink by the irresponsible dictates of the Federal Council must be helped,” the group said in a statement.

Any referendum vote on the government’s measures will take place after June 2021, when the law will have been in force for nine months.

Tyler Durden Thu, 02/25/2021 - 03:30
Published:2/25/2021 2:55:10 AM
[Markets] ???????IATA Revises Forecast, Warns Summer Air Travel Will "Remain Weak" ???????IATA Revises Forecast, Warns Summer Air Travel Will "Remain Weak"

The International Air Transport Association (IATA) just wrapped up a media briefing around 0830 ET. The big takeaway from the world's airlines' trade association is that air travel trends in the first half of 2021 will be weaker than initially forecasted from December. 

IATA said booking remains stubbornly "weak" for the summer period. The association is very concerned that only 7% of summer travel bookings have been set, indicating that global travel and tourism will continue to remain weak in the coming months. Even with a vaccine rollout, the airline industry has yet to experience a "V-shaped" recovery. 

The association shows a chart of global COVID-19 cases slumping.

But the group pointed out travel restrictions in many regions of the world remain harsh.

"IATA raises concerns about uncertainty when governments vaccinate vulnerable populations, travel industry body sees more cautious approach to re-opening up," said SCMP's Danny Lee

Lee said, "IATA revises its forecasts and see the difference in charting two different scenarios Vs. pre-crisis levels." 

IATA said additional rounds of stimulus will be needed for airlines as the recovery wanes. With continued cash burns, mounting debt, many airlines will go into 2022 with "too much debt," IATA chief economist said. 

Under current conditions, some airlines might not survive and may restructure or be forced to merge with others. 

IATA warns without the lifting of global flight restrictions, additional risks persist for airlines. 

The association's warning comes as the number of single-aisle aircraft in service has plunged since the beginning of the year. Cirium's data showed single-aisle aircraft in service fell below the 8.8k mark on Feb. 5, a drop of 15% compared with Jan. 3 figures. 

Source: Bloomberg 

The outlook for a rebound in travel and tourism this year has severely dimmed in the last couple of months. After the air travel industry experienced the worst year on record, last year (2020), with one billion fewer international arrivals, recovery might not be in the cards for a few years. 

United Nations World Tourism Organization recently said 2021 prospects for a travel and tourism rebound have worsened. 

"In October, 79% of experts polled by the agency believed a 2021 rebound was possible. Only 50% said they believed that in January, and some 41% didn't think travel would reach pre-pandemic levels until 2024 or beyond," WSJ said.

For example, US hotel demand recovery is not expected to return to 2019 levels until 2023. Room prices might not fully recover until 2025. 

While a "V-shaped" recovery in air travel seems unlikely in the first half, Robinhood traders continue piling into airline stocks like there's no tomorrow. 

JETS ETF is approaching a significant resistance level at the 27.70 mark, also seen by some technical traders as the 76.4 Fibonacci retracement level. 

Tyler Durden Thu, 02/25/2021 - 02:45
Published:2/25/2021 1:55:26 AM
[Markets] UK Health Authorities Announce Not A Single Case Of Flu Detected This Year UK Health Authorities Announce Not A Single Case Of Flu Detected This Year

Authored by Paul Joseph Watson via Summit News,

Health authorities in England have announced that not a single case of influenza has been detected this year, with one professor suggesting that mask wearing should be kept in place during winter to drive down flu deaths to “zero.”

“The social restrictions brought in to curb transmission of coronavirus, combined with an increased uptake of flu vaccine, have both been credited with driving down infections,” reports the Independent.

Of the 685,243 samples tested at the PHE’s laboratories since the first week of January, not a single flu infection was discovered.

Professor Christina Pagel went on to suggest that some of the measures brought in to fight coronavirus could be kept in place to combat flu infections.

Asserting that “we can reduce flu deaths to pretty much zero,” Pagel said it is “worth encouraging people to wear masks” on public transport and in other busy environments every winter.

As we previously highlighted, other health experts have suggested that flu cases are so dramatically low because influenza cases are being falsely counted as COVID cases.

Last month, top epidemiologist Knut Wittkowski asserted that, “Influenza has been renamed COVID-19 in large part.”

According to the CDC, the cumulative positive influenza test rate from late September into the week of December 19th was just 0.2%, compared to 8.7% from a year before.

According to Wittkowski, former Head of Biostatistics, Epidemiology and Research Design at Rockefeller University, this was because many flu infections are being incorrectly labeled as coronavirus cases.

“There may be quite a number of influenza cases included in the ‘presumed COVID-19’ category of people who have COVID-19 symptoms (which Influenza symptoms can be mistaken for), but are not tested for SARS RNA,” Wittkowski told Just the News.

Numbers published in April last year by the UK’s Office of National Statistics also showed that there had been three times more deaths from flu and pneumonia than coronavirus.

“The number of deaths from flu and pneumonia – at more than 32,000 – is three times higher than the total number of coronavirus deaths this year,” reported the BBC.

*  *  *

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Tyler Durden Thu, 02/25/2021 - 02:00
Published:2/25/2021 1:24:56 AM
[Markets] TaxWatch: Need to report bitcoin trades on your taxes? Here are 5 things to know first For the first time, the IRS is asking about virtual currency transactions on the first page of its main income tax form.
Published:2/24/2021 11:27:29 PM
[Markets] How Societies Are Imprisoned: The Whole World Will One Day Be Like Hollywood? How Societies Are Imprisoned: The Whole World Will One Day Be Like Hollywood?

Authored by Brandon Smith via,

I rarely write about Hollywood or the film industry, primarily because there is a vast array of analysts and YouTubers in the alternative media that discuss the bizarre behaviors and trespasses of Tinsel Town on a daily basis. They usually have it covered. That said, every once in a while I find that events in Hollywood reflect a much more pervasive dynamic in our culture and that the bigger picture needs to be addressed.

I also want to be clear that when I talk about “Hollywood” I am not only referring to the place; I’m referring to the entire corporate empire. I’m including Netflix and other streaming companies that may not work completely out of LA. They are all funded and run by the same people anyway.

Hollywood and the corporate cabal behind it have long sought to be the center of America’s cultural universe. In other words, they are seeking to pervert the natural dynamic so that life imitates art instead of art imitating life. And, if they control all the art then they control people’s perceptions of life.

The concept of “Manufacturing Consent”, posited by people like Noam Chomsky, plays a role here, but I think it goes far beyond that. Rather, Hollywood seeks to not only manufacture consent from the public, but also to manufacture the public’s relationship to reality. They don’t just want us to keep our heads down and begrudgingly accept their ideological zealotry; they want us to believe that their way is and always was the ONLY way.

What I see in the film industry and in the corporate world in general today is complete and unfettered propaganda. We have moved beyond the phase of subversively hidden manipulations to a new stage in which the propaganda has become blatant and aggressive. Almost every new movie and television series, not to mention most commercials, are rife with leftist distortions. You will be hard pressed to find any content these days that does not push ideas like:

1) Endless feminist platitudes.

2) Mentions of patriarchy and “white privilege”.

3) Ridiculous exaggerations of racism in America (as if nothing has changed since the days of Jim Crow).

4) Oppression of women, rape culture, etc. as if all the tenets of first and second wave feminism have not already been accomplished. Depicting oppression of women where none actually exists.

5) Women consistently portrayed as overtly masculine with traits and abilities that defy their biology.

6) Men consistently portrayed as weak and feminine.

7) Masculinity, strength, competition and merit portrayed as destructive, “toxic” and outdated.

8) Common positive feminine traits (nurturing, child rearing, home making) portrayed as obsolete or oppressive.

9) Forced and unrealistic diversity, which misrepresents the actual statistical racial make-up of the US population and other Western nations.

10) Saturation of gay and Trans representation – A tiny percentage of the population is made to appear as if it is a vast movement that inhabits every person’s daily experience.

11) Older generations cast as confused and ignorant, or removed from film and television completely.

12) Younger people portrayed as wise leaders “cleaning up the messes” of older generations, somehow blessed with extensive knowledge and experience by mere virtue of their youth.

13) History erased and rewritten to reflect modern leftist ideals.

I could go on and on, but I think you get the idea. “Representation” in itself is not a bad thing, but when it becomes a weapon used to twist fundamental truths for political gain, then it is a problem. None of the concepts listed above are an accurate reflection of the real human world. Instead, they seek to make the outliers into the mainstream, and they seek to take normal human biological and psychological standards and portray them as aberrant and wrong.

Yes, there are cases where Hollywood is dabbling in fantasy and science fiction and this could be used to rationalize some of their odd depictions. That’s not what I am talking about here. I am talking about force feeding the public an obvious agenda across the full spectrum of storytelling. These are not just movies. These are not just TV shows. This is not just storytelling; this is brainwashing.

Hollywood is not in the business of making art. They are not even in the business of making money anymore. Rather, they are in the business of indoctrination. Yes, it is a “conspiracy”. Not a conspiracy theory, but conspiracy reality.

Their job is to make the public believe that leftist ideals (or in some cases globalist ideals) are the prevailing ideals. If you see the same lies everyday in every manufactured depiction of life, you might start to think that your more rational, traditional and grounded views are in the minority. You might begin to self censor for fear of being ridiculed. You might even join the other side just to avoid being attacked.

In order to maintain control over the propaganda machine a very important factor is ensuring that the faces on the screen are never allowed to deviate from the party line. Your puppet and pet celebrities need to be kept under lock and key.

Like most people, I recently watched Ben Shapiro’s interview with Gina Carano and it basically confirmed everything I already knew about Hollywood (my brief stint as a screenwriter 20 years ago exposed me to the underlying sell-out culture and I was repulsed by it).

What was striking though was the extent to which the Hollywood corporate elites seek to rape the minds of their employees and force them to submit to the cult. It wasn’t that Carano was fired for posting a historical fact on Twitter, it was everything that happened before that.

We see corporate diversity training such as Coca Cola’s “Be less white” seminars and we are disturbed by the cultism and manipulation. But listen to Carano’s story and you’ll realize that Hollywood is far ahead in their exploitation of social justice controls.

Carano mentions that as soon as she began speaking her mind from a conservative position, Disney and Lucasfilm began to bombard her with representatives, publishing agents, etc. whose mission was to convince her to stay silent or apologize publicly for her personal statements. They even tried to force her to endure a mass admonition in front of 40 trans people because she refused to post her “pronouns” to her Twitter page.

This is often referred to as a “struggle session” in communist circles, a crucible used to berate and destroy people who dare step out of line . It is also used to strike fear in the hearts of anyone else who might be thinking about voicing independent views.

Struggle sessions were the primary tactic employed during the Cultural Revolution in China as a means to pacify the citizenry and erase all ideas that opposed Marxism. The film ‘Red Violin’, produced in 1998, is one of the only films I have seen that accurately depicts the ravages of the communist social sterilization:

This is what happens when big business or government align with the leftist cult. SJWs would have no power at all if it were not for the backing of corporations and government institutions.

You want to know why so many celebrities these days seem desperate to virtue signal online all the time? It might not be because they agree with the leftists. They may just be trying to keep their jobs and avoid being suffocated by a weaponized mob. What the interview with Gina Carono really revealed to me was the extent to which Hollywood corporations are involved in that mob.

Companies like Disney aren’t following the mob’s lead – Instead, they are USING the mob as a tool. They are LEADING the social justice cult, the cult is not leading them, as many wrongly assume.

After finishing the Carano interview I could not stop thinking about a show from the 1960’s called ‘The Prisoner’ starring Patrick McGoohan. It portrays a man who works for the government and abruptly quits, only to be kidnapped by a nefarious unknown organization and transported to a place called “The Village”. The Village is a sprawling complex made to look like a happy seaside vacation town on the surface, but underneath it is a vast surveillance grid.

All the people that live there are trapped, watched constantly and the group that runs The Village uses elaborate mind games to break the prisoners down. The Village operates by turning prisoners into informants and guards; its goal often has nothing to do with making people talk. Instead, the goal is to get prisoners to submit, to get them to love the village and become a part of it. The Village is not a prison, The Village is an experiment, a microcosm of what the elite want for the entire world.

Hollywood IS The Village.

The way Carano was essentially stalked by her own employers and prodded with struggle sessions and mind games, the way that Hollywood operates behind the scenes, is exactly what leftists and corporate elites intend for the rest of us. It is already happening to some extent. How often have we heard conservatives labeled as “insurrectionists, terrorists and racists” in the past year alone? How many conservatives have been censored by Big Tech platforms? How many have lost their jobs because of their opinions, or simply making factual statements?

The social justice cult and the corporations that control them want the world to be Hollywood. They want that environment of oppression and fear to become the standard. They want everyone to be afraid to speak, or to disagree, or to step away from the agenda in any way. Everyone must play their part to perpetuate the fantasy world. Everyone must battle to appear virtuous and pure for the mob. Everyone is an actor, pretending they love their new totalitarian collective.

There is a huge weakness to this strategy, though…

All of it depends on people’s aversion to loss. If you are afraid to lose something, then that something can be used to control you. Carano was not afraid to lose and so she could not be controlled, and I commend her for that. The example she has set for others is far more valuable than any work that she might have done by submitting to the Hollywood Cheka. If only the majority of people would do the same, our civilization could change for the better overnight.

All tyranny is an illusion predicated on fear within the minds of the enslaved. So, do not fear.

*  *  *

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Tyler Durden Wed, 02/24/2021 - 23:40
Published:2/24/2021 10:55:04 PM
[Markets] : San Francisco cuts off COVID vaccine doses to One Medical for vaccinating ineligible patients: report Three counties in the San Francisco Bay Area have suspended COVID-19 deliveries to One Medical offices after the private health-care provider allowed ineligible people to cut in line for vaccines, the San Francisco Chronicle reported Wednesday.
Published:2/24/2021 10:23:50 PM
[Markets] US Army Building World's Most Powerful Laser To Vaporize Drones  US Army Building World's Most Powerful Laser To Vaporize Drones 

The US Army appears to be developing a laser weapon that is a "million times stronger" than anything ever used before - instead of concentrating a beam of light to destroy a target, the new weapon will fire short pulses, sort of like laser beam weapons from science-fiction movies, according to New Scientist.

The Tactical Ultrashort Pulsed Laser (UPSL) for Army Platforms will be designed to fire pulse-like bursts for a brief 200 femtoseconds or one quadrillionth of a second. The laser, firing bullet-like pulses of light would be enough to vaporize a drone, cruise missile, mortar, and or any other threat in its vicinity. UPSL can also function as an electromagnetic pulse (EMP) weapon. 

"The sheer amount of intensity in a terawatt pulse laser is able to cause a non-linear effect in the air resulting in a self-focusing filament," according to the Small Business Innovation Research (or SBIR) posting titled Tactical Ultrashort Pulsed Laser for Army Platforms. 

Laser weapons are beneficial when combating enemy drones and missiles. The cost per round depends on the amount of energy available, which is far cheaper than launching costly interceptor missiles. 

A UPSL prototype model could be ready by 2022. Under the Trump administration, funding dramatically increased for laser weapon development. Multiple types of continuous-wave laser weapons have been fielded in the past couple of years. 

We've outlined some of those laser systems that have been fielded, including the high-energy laser (HEL) weapon with various energy output levels measured in kilowatts

The Navy is expected to install the High Energy Laser and Integrated Optical-dazzler (HELIOS) with surveillance sensors aboard an unspecified Arleigh Burke-class Flight IIA destroyer in the early 2020s.

The Air Force has mentioned a roadmap to laser weapons for this decade. It plans to mount lasers on stealth jets. 

Instead of continuous-wave lasers already in deployment among various services, the Army is preparing to test laser, firing bullet-like pulses as early as 2022.

Lasers, hypersonics, fifth-generation fighters, and autonomous war machines are some of the new technologies already entering some modern battlefields. 

Bank of America's equity strategist Haim Israel recently told clients that the next frontier between major superpowers could outer space. 

Tyler Durden Wed, 02/24/2021 - 23:20
Published:2/24/2021 10:23:50 PM
[Markets] Maryland Set To Tax Online Ads From Facebook And Google Maryland Set To Tax Online Ads From Facebook And Google

Look out, Google and Facebook.

Maryland is now set to become the first state in the nation to tax online ads. It's a trend, that if it catches on (and we predict it will), could likely sweep through the nation as money-hungry spend-o-crats look for more ways to finance their respective Green New Deals, government subsidized sex changes and racial equality seminars. 

The state's House of Delegates and Senate both voted to override a veto of a bill from last year that would place a tax on online ads, according to NPR. The tax would apply to companies like Facebook and Google and will range from 2.5% to 10% per ad, depending on the value of the company selling the ad. 

It's expected to net the state $250 million per year, which the state then says it will use to fund an overhaul of public education that is expected to cost $4 billion. 

Those advocating for the tax say that it is simply Maryland's tax code trying to catch up to where the economy has wound up. Gov. Larry Hogan has said it would raise operating costs for businesses, who would then pass the costs on to the state and customers. Hogan has been fighting for the state to uphold his veto of the tax. 

Doug Mayer, spokesman for Marylanders For Tax Fairness, a coalition of businesses created to fight the tax, said on Friday: "In Senate President Bill Ferguson's short tenure as a leader, he has managed to do what no other Senate President has ever done — raise taxes and costs on Marylanders in the middle of a worldwide pandemic. There is no doubt what took place today was a historic event, but not in the way President Ferguson hoped. This tax increase was historically shortsighted, foolish, and harmful to countless small businesses and employees, and Marylanders will remember it that way."

Ferguson pulled the solution for these criticisms directly out of the Democratic playbook last week: more regulation. He introduced "emergency legislation last week to prohibit Big Tech from simply passing along the costs of the new tax to local businesses," NPR wrote. 

The new tax is likely going to result in lawsuits, Maryland Attorney General Brian Frosh said last year. And the tax isn't just being considered in Maryland. Washington D.C. has also passed, and then repealed, a similar tax and more states are considering it, the report notes.

Baltimore bookstore owner Benn Ray concluded: "Beyond their infiltration into our daily lives, these big digital firms are further exploiting us by failing to pay taxes on this advertising, grabbing and monetizing our data without just compensation. This legislation is about fairness, making sure those who reap enormous profits in our state help support public services here. It's also about developing a tax code that keeps up with a changing economy. It's about ensuring we recognize the value of our personal data – at least as much as corporations do. And it's about ensuring that Marylanders — and not just large, global corporations – reap the benefits of the landmark economic changes happening around us."

Tyler Durden Wed, 02/24/2021 - 22:40
Published:2/24/2021 9:54:55 PM
[Markets] The Moneyist: We put our spendthrift neighbors in touch with our financial adviser. They called her ‘lousy.’ So how come WE are the ones who retired early? ‘Warren Buffett and Harry Potter couldn’t get those two retired early.’
Published:2/24/2021 9:54:55 PM
[Markets] MarketWatch First Take: A crypto-influenced boom amid a chip shortage? Sounds familiar, but Nvidia says it ‘feels very different’ Amid another semiconductor shortage, combined with a mini boom for chips used in crypto mining, Nvidia Corp. believes it will be able to handle the competing demands of its data center customers, gamers, and crypto-miners.
Published:2/24/2021 9:32:14 PM
[Markets] Is COVID-Derangement-Syndrome Real? Is COVID-Derangement-Syndrome Real?

Authored by Donald Boudreaux via The American Institute for Economic Research,

Over the past two weeks I’ve received emails urging me to tamp down my criticism of restrictions imposed in the name of fighting Covid-19. Most of the correspondents are polite, sincere, and even warm. Each, however, is convinced that I underestimate the threat that Covid poses to humanity. Each correspondent hopes that I come to take this threat much more seriously.

What follows here is part of my response to each of these correspondents. This essay isn’t meant to change their minds but, instead, to better explain why I hold the position that I do toward Covid, as well as toward the public’s and governments’ responses to Covid. For the record, I understand that different individuals have different risk preferences. I genuinely respect these differences.

I understand also that different individuals even have different perceptions of reality. As with the understanding of reality achieved by blindfolded persons each touching a different part of the elephant, reality isn’t revealed to everyone in the same way. Yet I’m sufficiently old-fashioned to believe that there is an objective reality, and that it’s the duty of everyone who comments publicly on that reality to do his or her best to understand it as well as possible, despite the inaccessibility of perfect understanding.

I believe also that, while the range of legitimate differences in this understanding is wide, this range isn’t unlimited. Some understandings are so detached from reality as to be illegitimate – as in, not to be taken seriously. It is for each reader to judge for himself or herself if my understanding of reality, as I express it here (and elsewhere), falls within or outside of the legitimate range.

Below is a list of some of the facts, as I understand them, about Covid-19, as well as about the reaction to this disease. Although some of these facts are more firmly established than are others, I believe that each of the facts detailed below is legitimate, and that my interpretations of them are plausible.

Further, I believe that my understanding justifies my relative lack of anxiety about Covid’s likely impact on me personally and about its impact on humanity. And I believe that the facts as I understand them warrant my description of the media’s, the public’s, and governments’ reactions to Covid as being hysterically excessive.

The Overestimated Dangers of Covid and Underestimated Dangers of Lockdowns

  • Covid-19 is disproportionately lethal to the very old and ill, and heavily so. In the United States as of February 17th, 2021, nearly a third (31.8%) of “All Deaths Involving Covid-19” – as defined and reported by the CDC – were of persons 85 years old and older. Nearly 60 percent (59.6%) of these deaths were of persons 75 years of age and older. More than 81 percent (81.3%) were of people 65 years of age and older. Despite media-trumpeted exceptions, serious suffering from Covid-19 is largely an experience for very old people.

  • Although Covid-19 is indeed unusually dangerous to very old people, it’s still not close to being a death warrant. The infection fatality rate for 85-year-olds is estimated to be 15 percent; for 75-year-olds it’s estimated to be 4.6 percent. For 65-year-olds, Covid’s infection fatality rate is estimated to be 1.4 percent. For 55-year-olds it’s estimated to be 0.4 percent.

  • Covid’s overall lethality compared to that of the seasonal flu is no more than 10 times greater. (Some estimates have Covid’s lethality, compared to that of the flu, to be as low as 3.5 times greater.) Of course, because Covid’s lethality undeniably rises significantly with age, for the elderly Covid is far more than 10 times as deadly than is the flu, and for young people Covid is much less than ten times as deadly. (Keep in mind that the numbers in this and the previous two paragraphs come chiefly from before any vaccines were administered.)

  • In the Spring of 2020, hospitals in the U.S. had a financial incentive to inflate their Covid numbers. As reported on April 24, 2020, by USA Today, “The coronavirus relief legislation created a 20% premium, or add-on, for COVID-19 Medicare patients.” Covid inflation occurred outside of the U.S. as well. In Toronto, for example, officials admit that they are inflating the Covid death count: Here’s Toronto Public Health: “Individuals who have died with COVID-19, but not as a result of COVID-19 are included in the case counts for COVID-19 deaths in Toronto.” (I encourage you to read the whole Twitter thread.)

  • Lockdowns themselves have negative health consequences. How could they not, even if the only such effect arises because of people’s increased difficulty of visiting physicians for non-Covid-related illnesses and injuries? But there is evidence that negative health consequences of lockdowns extend beyond those that arise from delayed or foregone medical treatments.

  • There is credible evidence that lockdowns do not significantly reduce people’s exposure to the coronavirus.

  • Lockdowns have negative personal and social consequences. Avoiding contact with family and friends, even during holidays. Inability to fraternize at your favorite gym, coffee shop, bar, or restaurant. Restrictions on travel. Even if you believe that these costs are worth paying, you cannot deny that these costs are serious.

  • Lockdowns have a severe negative impact on economic activity. How could they not, given that people are prevented from going to work and from engaging in much ordinary commercial activity? There’s debate about how much of the decline in economic activity is caused by voluntary action and how much is caused by the forcible lockdowns. Even in light of the likelihood that people’s fear of Covid is further stoked by the very fact that governments’ resort to the dramatic action of locking us down, evidence exists that a great deal of economic damage was caused by the lockdowns themselves.

Misinformation and Misunderstanding are Rampant

  • I never recall the media giving running accounts of deaths from seasonal flu, from auto accidents, from heart disease, or from any other major sources of death. But the media do give such accounts of Covid. The false impression is thus created that the dangers posed by Covid differ categorically from the dangers posed by other of life’s serious risks. I find it incredible to suppose that such out-of-context and biased reporting does not give the general public a terribly distorted and outsized impression of Covid’s dangers – an impression that is then reinforced by people communicating with each other.

  • Panic itself is contagious. As Gustave Le Bon observed in 1895, “Ideas, sentiments, emotions, and beliefs possess in crowds a contagious power as intense as that of microbes.” Social media and other sources of 24/7/365 contact with hordes of strangers is a new phenomenon, one that seems to me to have created an unprecedentedly large crowd through which panic spreads.

Panic, in turn, corrupts human decision-making abilities. This corruption is worsened by the echo-chamber feedback within the crowd. Combine these two realities with a third – namely, the difficulty the typical person experiences in expressing disagreement with a dominant narrative – and the overwhelming acceptance of the official fear-ladened account of Covid is unsurprising. But this overwhelming acceptance does not imply its own validity.

  • I have encountered in major media outlets too many egregiously misleading accounts about Covid – see, for example, here and here – for me not to severely discount what the media (and government officials) ‘report’ about Covid.

  • Decades of following media reports on, and politicians’ statements about, economic reality long ago convinced me that the proportion of misinformation to information is appallingly high. Because I know that most people in the media and in government are pathetically uninformed about economic reality – because I know that these people are largely innumerate and, in many cases, intellectually lazy – because I know that pundits and politicians often ignore facts and explanations that don’t fit their priors – I have every reason to doubt the reports on the numbers, to question the explanations, and to reject the spins that are issued by the media and by politicians.

Justification for my skepticism of the popular narrative about Covid is only enhanced by the resulting panic. Aware that the public is in a state of panic, pundits and politicians who are prone to play fast and loose with the truth in normal times feel even less constrained to speak carefully and accurately during times of panic.

  • The reaction to the Great Barrington Declaration alone proves the gross carelessness of too many mainstream voices. This carelessness puts me on yet higher alert against the popular perception of Covid.

For example, Paul Krugman attacked the Declaration with an ad hominem. This Nobel-laureate thinker asserted that the Declaration should be dismissed because of the organization that brought together the three acclaimed scientists who wrote it. That organization, of course, is AIER which – Krugman bizarrely thinks this fact is relevant – is said by Krugman to be “linked to the Charles Koch Institute.” (Not that it matters, but this ‘fact’ is not close – not remotely close – to what Krugman’s wording implies.)

Nor, by the way, does the Great Barrington Declaration advocate a strategy of “let it rip.” But you’d never know this fact by reading many ‘descriptions’ of it. (Googling “Great Barrington Declaration” and “let it rip” – with each of the two terms in quotation marks – pulled up on February 21, 2021, 34,200 results.)

Covid Derangement Syndrome

I could list many other reasons for why I’m convinced that humanity’s fear of Covid-19 springs from profound misinformation about this disease. I could also expand my list of reasons why I believe the public’s precautions are grossly disproportionate to this disease’s actual dangers, and for why I regard the lockdowns, mask mandates, quarantine ‘hotels,’ and other restrictions to be tyranny that is wholly unjustified by the facts. But already I’ve overtaxed readers’ patience.

One doesn’t have to have Covid in order to have a life that’s meaningful and to suffer a death that’s mournful. Yet most of the public, media, and governments have reacted to Covid as if the only deaths that matter are Covid deaths – as if the only lives that matter are the lives of people with Covid – as if the only risk that matters and, hence, the only risk worth reducing is the risk of suffering from Covid. 

This lack of proportion – this sudden ignorance that our lives are inescapably filled with many different risks that must be traded off against each other – this treatment of Covid deaths as being categorically worse than are non-Covid deaths – all combined with a blind faith that politicians and bureaucrats will use vast powers wisely, prudently, and effectively – is what I call “Covid Derangement Syndrome.” 

I believe this syndrome to be real and deserving of a name that grabs attention. Such attention-grabbing is warranted, because I further believe that this syndrome poses a dangerous risk to humanity that dwarfs the risk posed by SARS-CoV-2.

Tyler Durden Wed, 02/24/2021 - 22:20
Published:2/24/2021 9:32:14 PM
[Markets] Conversation With BLS About Price Mismeasurement For Housing Conversation With BLS About Price Mismeasurement For Housing

Submitted by Joseph Carson, former chief economist at AllianceBernstein

Recently, I shared my concerns about price mismeasurement for owner-occupied housing with a senior official who works in the Division of Consumer Prices at the Bureau of Labor Statistics (BLS). The senior official agreed with me, "That, in theory, treatment of owner-occupied housing in a CPI measure sounds easy, but in practice, it is not." Here's a summary of the main points of the conversation.

First, the senior official noted the International Labor Organization (ILO) manual of Consumer Prices states: The treatment of owner-occupied housing in consumer price indices (CPIs) is arguably the most difficult issue faced by CPI compilers.

I used to share that view, but no longer. The most challenging problem in price measurement is the pervasiveness of item replacements. It isn't easy to get a continuous price series when products have a short shelf-life. Technology products create a problem for price measurement as the characteristics of items change frequently. The stock of housing does not change much from year to year, so it's not an issue.

Moreover, the quality of house price statistics has dramatically improved in the past few decades. Repeat sales series adjusted for the time between sales provides government statisticians with price information that was not available in the past. In the early 1980s, BLS cited poor data quality on house prices as one reason to change the measurement of owner housing costs. Nowadays, there is better data on prices for owner housing than there is for rents.

Second, according to ILO, "Depending on the proportion of the reference population that are owner-occupiers, the alternative conceptual treatments can have a significant impact on the CPI, affecting both weights and, at least, short-term measures of price change."

But the hard evidence shows that alternative measures have had a significant short-term and long-term influence on reported inflation.

In 1999, BLS adopted an alternative measure for owner-occupied housing. Due to an inadequate sample of homes for rent, BLS decided to use rent data to gauge the owner-occupied housing implicit rents. Before the change, the rate of inflation for owner-occupied rent ran consistently above rent inflation. But after the change, that pattern flipped. Since 1999, the inflation rate for rent for primary residences has always run above what BLS estimated for owner-occupied housing.

That pattern of rents runs counter to market fundamentals. During periods of economic expansion, the vacancy rate for owner-occupied housing is falling, while the rental market's vacancy rate often moves in the opposite direction. Shrinking supply with rising prices for homes should yield a rent-inflation rate for owner-occupied housing that is much faster than the rent for a primary residence.

BLS data shows that the cumulative increase in rents for a primary residence is 20% greater than that of owners-occupied over the past two decades. It would seem improbable that based on market fundamentals alone, the owner's rent rate would run below that of primary rents.

The weight of owner-occupied housing accounts is substantial, accounting for approximately 30% of the core CPI. And given its vast scale, the continuous understatement of rent-inflation for owner-occupied housing has created the false impression that cyclical inflation is "flat". But in reality, it's not.

Third, the senior official stated that it is not "impossible" to measure owner-occupied implicit rents from rental markets. I said it is.

The two markets are separate. Research has shown that location is an essential factor for housing price, and it makes sense it would also influence rents. Owner housing is of a much higher quality than renter housing. Over 80% of owner homes are detached single-family versus less than 30% for rentals, and owner-occupied homes are much larger in scale. Five states, including two of the largest rental markets (New York and California), have rent control or rent stabilization policies. Trying to match the inflation rate from a partial-regulated rent market with one that is not regulated creates the potential for large-scale price mismeasurement.

Janet Norwood, the legendary BLS Commissioner, stated, "The goal of a government statistical agency must be to produce data that are objective, relevant, accurate, and timely." BLS measure of owners' housing costs fails all four.

Tyler Durden Wed, 02/24/2021 - 21:40
Published:2/24/2021 8:54:48 PM
[Markets] Asian stocks open higher as Fed's Powell nixes inflation fears Asian stocks perked up on Thursday after U.S. Federal Reserve Chair Jerome Powell reaffirmed interest rates would stay low, calming market fears that higher inflation might prompt the central bank to tighten the monetary spigot. Hong Kong's Hang Seng index futures rose 0.92%. In a second day of testimony in Washington, Powell reiterated the Fed's promise to get the U.S. economy back to full employment and to not worry about inflation unless prices rose in a persistent and troubling way. Published:2/24/2021 8:23:52 PM
[Markets] Goldman Sachs Says Urban Flight To Last For Years  Goldman Sachs Says Urban Flight To Last For Years 

Goldman Sachs expects the exodus from cities to weigh on shelter inflation. Goldman's Jan Hatzius told clients that it could take years for urban vacancies to normalize. 

Hatzius' note, titled "Inflation Signal, Healthcare Noise (Hill)," had some excellent commentary on the urban exodus, aligning with our thoughts from last July when we said city dwellers fleeing metro areas could last for the next 18-24 months. 

Here's what he told clients:

We expect a waning drag from urban flight on shelter inflation by next year. However, we don't expect upward pressure from this channel (relative to the pre-crisis period), because we believe it is the level of rental vacancies that is the primary determinant of shelter inflation. 

We also expect at least some of the suburban relocation to prove permanent. The advent of work from home and the fact that second homes represent less than a third of 2020 home sales growth suggest it could take several years for urban vacancy rates to normalize—even with the relatively quick return to full employment that we forecast. 

... and there it is: "several years for urban vacancy rates to normalize." The hope and hype of urban revivals in a post-pandemic world could get squashed as suburbanization becomes more permanent - hybrid work for white-collar workers is pushing this trend into hyperdrive. 

Last month, in a note titled "Rental-Exodus Sparks Surge In Single-Family Housing Starts & Permits," we continued to outline the supporting trends of booming starts and permits for single-family homes as folks sought shelter in suburbia. 

While the boom in the suburbs is still intact but could be experiencing some headwinds, especially with rising mortgage rates, housing recoveries in major metro areas will likely wane as housing supply tops demand.

Hatzius shows rents in suburban zip codes are experiencing upwards pressure due to the exodus. Meanwhile, downtown and high-density zip codes are seeing downward pressure. 

Because of the social-economic chaos last summer across major metro areas, violent crime surging, and hybrid work trends due to the pandemic, the shift to suburbia will become more permanent. It will take people some time to realize that the economy will never return to pre-COVID times - a lot of structural changes have already happened in a short period. 

Tyler Durden Wed, 02/24/2021 - 21:20
Published:2/24/2021 8:23:52 PM
[Markets] "Door Is Always Open": China Invites UN Rights Chief To Investigate Uighur Genocide Charge "Door Is Always Open": China Invites UN Rights Chief To Investigate Uighur Genocide Charge

While vehemently rejecting widespread reports from the US and Western allies as well as various Europe-based human rights groups of a systematic campaign to ethnically cleanse Uighur Muslims, China is now "welcoming" a United Nations team to come and investigate the allegations.

Chinese Foreign Minister Wang Yi addressed the UN Human Rights Council in Geneva at the start of this week via video call. Calling the allegations "slanderous attacks" he later at a news conference touted that "China has sent invitations to the high commissioner of the UN for human rights about a trip to China and Xinjiang."

??????Via AFP

“The two sides have maintained close communication on this matter,” Wang added. He had told the UN human rights session on Monday that "basic facts show that there has never been so-called genocide, forced labor or religious oppression in Xinjiang."

It follows the US formally designating it as such during the tail end of the Trump administration, something which Biden has signaled is up for review. There's long been widespread allegations of on million Uighurs forcibly detained in either labor or 'reeducation' camps under Communist authorities. 

Wang said he's issued a personal invitation to UN rights chief Michelle Bachelet, after the UN team has long sought access to Xinjiang, where most of the detention camps are said to be. But much like the recent WHO trip to investigate the origins of coronavirus, such an endeavor is likely only to end in further accusations of a highly 'stage managed' and choreographed max obfuscation PR exercise.

"The door to Xinjiang is always open. People from many countries who have visited Xinjiang have learned the facts and the truth on the ground. China also welcomes the High Commissioner for Human Rights to visit Xinjiang," Wang said in reference to Bachelet.

Wang's defense before the UN body centered on "Xinjiang-related issues" ultimately being about "countering terrorism and separatism", touting further that there's been zero terror attacks in the region for almost the last half-decade. He also claimed the Uighur population has actually grown, not decreased as would be expected if there were an ongoing "genocide".

Meanwhile on Tuesday Canada's parliament unanimously passed a non-binding motion on the heels of the prior controversial US designation, calling China's policy toward Xinjiang and its ethnic minorities "genocide". Canada is also seeking to boycott the 2022 Beijing Winter Olympics over the issue, something which UK's Johnson has said his country won't jump on board with (i.e.: London does not plan to boycott the Olympics). "Genocide is clearly defined in international law which cannot be pinned to China," China's embassy in Canada shot back in reaction to what it called a "disgraceful" vote.

The vote was 266-0 in favor of the motion, however PM Trudeau and his cabinet abstained - yet it's likely the further damage to trade relations is already "done" in Beijing's eyes on the mere symbolism of the vote.

Tyler Durden Wed, 02/24/2021 - 20:40
Published:2/24/2021 7:54:45 PM
[Markets] What's Worth Streaming: Here’s everything coming to Netflix in March 2021 — and what’s leaving For a third month in a row, Netflix is light on original series (blame pandemic production delays?), but a full slate of fresh docuseries, movies and reality shows should fill some of those gaps in March.
Published:2/24/2021 7:26:59 PM
[Markets] Ohio Public School Orders Teachers And Students To Lobby For LGBT Legislation Ohio Public School Orders Teachers And Students To Lobby For LGBT Legislation

By Joseph Backholm of the Family Research Council,

An assistant principal at a Hilliard, Ohio high school sent an email to faculty telling teachers to endorse a controversial piece of legislation and encouraged students to do the same. The Hilliard City Council is currently considering legislation that would include sexual orientation and gender identity (SOGI) as protected classes in the city.

Similar legislation has been debated around the country for more than a decade, and the flagship piece of SOGI legislation -- the Equality Act -- was reintroduced in Congress this week.

While the ideas represented in the Hillard City Council legislation are not new, they are highly controversial. Aaron Baer, President of Citizens for Christian Values in Ohio, was on Washington Watch this week to explain the problem. "Not only are they turning students into lobbyists, using taxpayer dollars to force teachers to do something that violates their conscience and students to do the same, but they're not even telling students what they're really advocating for."

Mr. Baer pointed out that the call for activism did not even include a discussion of why the bill was controversial.

"The implications of this bill for women's privacy and the safety of children are massive. And the teachers and the script that they were given, literally a literal script that they were given to read to students, says nothing about the implications of this bill."

To their credit, Hillard City Schools has already released a statement recognizing that the actions of the principal were "not appropriate."

The incident raises questions about where else schools are being turned into progressive political action centers without the awareness of parents. Since the story broke, Mr. Baer acknowledged hearing from other teachers in Ohio Schools who had seen similar communications from their school but were reluctant to object out of concern for their careers.

It also provides a great opportunity for parents to reflect on whether the people they are entrusting with the education of their children are worthy of the trust they've been given.

It's worth noting that the signature block of the principal who sent the email includes the principal's "preferred pronouns," which are functionally a public statement of agreement with a set of ideas that are anti-truth, anti-science, and anti-God.

When Christian parents see this from "educators" in their schools, it should serve as their cue to remove their children as quickly as possible.

Think of it as a form of social distancing. When a child is developing their immune system, you don't put them in situations where they are likely to be exposed to a lot of dangerous viruses. So it is with worldview formation.

Bad ideas function just like a virus, but the consequences are much more serious. The education of your children should expose them to bad ideas, but like a vaccine, they should be exposed to them in ways and in doses that allow them to build up an immunity. The goal of a vaccine is not simply to expose someone to a virus -- the goal is to expose them in ways that allow them to defeat the virus anytime they are exposed to it.

Understanding and demonstrating the emptiness of bad ideas should be a primary goal of your child's education, but this cannot be accomplished by people who have embraced bad ideas.

Once your kids are properly formed, there's less risk in them being surrounded by people who believe things that aren't true because they recognize bad ideas when they see them and understand both why people believe those things and why they aren't true.

In that case, no matter how emotional the appeal or how well-intentioned the messenger, your child will be less likely to be affected because they understand the larger context of the debate and are anchored to reality. That should be the goal of our child's education, not "getting into a good college."

But until they have developed that capability, they're vulnerable. You cannot "fix" in a couple hours a week what your child absorbs for seven hours a day for 12 years, plus college.

The good news is, it's becoming easier to see where these ideological viruses are in their most advanced stages. Listing preferred pronouns is just one of the symptoms.

Continue to be kind and help if you can. Of course, befriend people who don't think like you, both because it's a good example for your kids and because the people most committed to bad ideas are often unhappy and want to figure out why they're so miserable despite doing everything they've been told to do that will make them happy. No one is beyond the reach of the truth, and you're there to be a depository of truth.

But don't let them teach your kids. Anything.

Citizens for Christian Values is encouraging families in Hilliard, Ohio to contact their school board to demand an immediate apology for this violation of the public trust, and rightly so.

Tyler Durden Wed, 02/24/2021 - 20:20
Published:2/24/2021 7:26:59 PM
[Markets] IPO Report: Oscar Health is going public: Five things to know about the digital insurer Oscar Health Inc., the digital health insurance company well known to New Yorkers thanks to a subway advertising campaign, is going public in a deal that could value the company at up to $8 billion.
Published:2/24/2021 6:53:51 PM
[Markets] Asian open higher as Fed's Powell nixes inflation fears Asian stocks perked up on Thursday after U.S. Federal Reserve Chair Jerome Powell reaffirmed interest rates would stay low, calming market fears that higher inflation might prompt the central bank to tighten the monetary spigot. Hong Kong's Hang Seng index futures rose 0.92%. In a second day of testimony in Washington, Powell reiterated the Fed's promise to get the U.S. economy back to full employment and to not worry about inflation unless prices rose in a persistent and troubling way. Published:2/24/2021 6:53:51 PM
[Markets] If America Splits Up, What Happens To The Nukes? If America Splits Up, What Happens To The Nukes?

Authored by Ryan McMaken via The Mises Institute,

Opposition to American secession movements often hinges on the idea that foreign policy concerns trump any notions that the United States ought to be broken up into smaller pieces.

It almost goes without saying that those who subscribe to neoconservative ideology or other highly interventionist foreign policy views treat the idea of political division with alarm or contempt. Or both.

They have a point. It's likely that were the US to be broken up into smaller pieces, it would be weakened in its ability to act as a global hegemon, invading foreign nations at will, imposing “regime change,” and threatening war with any regime that opposes the whims of the American regime.

For some of us, however, this would be a feature of secession rather than a bug.

Moreover, the ability of the American regime to carry out offensive military operations such as regime change is separate and distinct from the regime’s ability to maintain an effective and credible defensive military force.

Last month, we looked at how even a dismembered United States would be more than capable of fielding a large and effective defensive military force. A politically divided America nonetheless remains a very wealthy America, and wealth remains a key component in effective military defense. In other words, bigness is not as important as the extent to which a regime can call upon high levels of wealth and capital accumulation.

That analysis, however, concentrated on conventional forces, and this leaves us with the question of how the successor states to a post-secession United States would fare in terms of nuclear deterrence.

In this case, there is even less need for bigness than in the case of conventional military forces. As the state of Israel has demonstrated, a small state can obtain the benefits of nuclear deterrence without a large population or a large economy.

In other words, an effective military defense through nuclear deterrence is even more economical than conventional military forces.

After Secession, Who Gets the Nukes?

But how would secession actually play out when nuclear weapons are involved?

One example we might consider is Ukraine’s secession from the Soviet Union the early 1990s.

In 1991, as the Soviet Union was collapsing, Ukrainians voted overwhelmingly to secede and set up an independent republic. At the time, the new state of Ukraine contained around one-third of the Soviet nuclear arsenal. This means there were literally thousands of nuclear warheads within Ukraine’s borders, making Ukraine’s arsenal the third largest in the world. In 1994, Ukraine began a program of denuclearization and today is no longer a nuclear power.

The relations between Ukraine and the new Russian Federation were acrimonious in the early nineties—as now—so this means that the lessons of the Ukraine situation are limited if applied to American secessionist movements. American pundits may like to play up the red-blue division in America as an intractable conflict of civilizations, but these differences are small potatoes compared to the sort of ethnic and nationalist conflicts that have long existed in Eurasia. 

Nevertheless, we can glean some insights from that separation.

For example, the Ukrainian secession demonstrates that it is possible for nuclear weapons to pass into the control of a seceding state without a general conflict breaking out. Indeed, Ukraine was not alone in this. Kazakhstan and Belarus “inherited” nuclear arms from the Soviet Union as well. If Russia, Ukraine, Kazakhstan, and Belarus can all peacefully negotiate a resolution on how to deal with a suddenly decentralized nuclear arsenal, the Americans can pull it off, too.

Nonetheless, the Ukraine situation highlights some of the technical and logistical problems involved in working out who exactly controls nuclear weapons in a postsecession situation.

For example, it was never a simple matter for the Ukrainian regime to assert technical control over land-based nuclear missiles. It is unlikely that Ukraine ever obtained all the tools necessary to actually launch the nuclear missiles within its territory.

It is likely, however, that Ukraine could have eventually gained this power, as it was already developing its own control system for the arsenal in 1993. Not surprisingly, the Soviet Russian regime was unenthusiastic about helping the Ukrainians in this respect.

When it came to using nuclear-capable bombers, on the other hand, it appears Ukraine’s regime had total control.

It is likely the successor states of the US would face similar issues. The use of land-based missiles would be heavily reliant on authorization from whichever faction most recently controlled access and launching authority, even if those missiles are physically located within the borders of a separatist state. It must be noted, however, that the state within which land-based nuclear missiles exist has the ability to prevent usage in most cases. This is because even if the missiles themselves cannot be directly controlled, the personnel that maintains and controls the sites can far more easily be traded out for personnel loyal to the new regime.

When it comes to submarines and bombers, a secessionist US region might find itself better able to assert control in the short term. Where those bombers and subs end up would have a lot to do with the likely chaotic situation in the wake of the independence movement and shifting borders.

Separatist Regions May Be Unwilling to Give Up Nukes

Ukraine had denuclearized in part due to bribes and pressure from both the United States and Russia. Russia wanted Ukraine’s arsenal for obvious reasons. The United States was obsessed with deproliferation, although it naturally insisted on keeping its own massive stockpile. 

Neither the US nor Russia had the ability to force Ukraine to denuclearize—short of a full-scale invasion of Ukraine, of course. However, Ukraine capitulated to pressure when the Russian Federation, the US, and the UK (and to a lesser extent China and France) pledged in the Budapest Memorandum to protect Ukraine's territorial integrity. 

In 2014, many interpreted this move as a grand folly when Russia annexed the Crimea from Ukraine and none of the other parties to the memorandum intervened. Ukraine had given up its best guarantee against Russian intervention—its nuclear arsenal—in exchange for weak “assurances” from foreign states.

Some foreign policy scholars—most notably John Mearsheimer—had predicted this and advised against denuclearization in Ukraine. Indeed, in 1993, Mearsheimer doubted that Ukraine would cave to denuclearization pressure precisely because reliable assurances from outsiders were unlikely. Even after the Budapest Memorandum became a reality a year later, it was nonetheless a rather weak reed on which to hang denuclearization. As Mearsheimer pointed out, should the Americans fail to provide an effective defense for Ukraine—as ended up being the case with the Crimea crisis—the Americans “would not have to live with the consequences of a Russian attack.” Nonetheless, some Ukrainians insist the Crimea crisis is not evidence of a need for a nuclear deterrent

Many, Americans, however, may be much less sanguine—even to the point of unwarranted paranoia—about the prospects of foreign intervention on American soil. This is why it is best to proceed assuming that at least some successor states to the current US would insist on retaining a nuclear arsenal. After all, while the Ukraine might have been betting on the US as the enforcer of the international order, such guarantees would be even more unlikely in the wake of an American secession crisis. Postsecession American states, in other words, would need to rely on a self-help system of deterrence.

On the other hand, we should not assume that all successor states to the United States would seek permanent nuclear arsenals. Some would likely give up nuclear programs, just as Sweden and South Africa have abandoned nuclear programs that were well advanced toward assembling arms (Sweden) or had already completed the construction of functioning warheads (South Africa). While the Ukrainian example of voluntary denuclearization may appear to be a blunder to many now, the situation in North America is different. North America is not eastern Europe with its long history of interstate conflict. In North America, Canada and the United States have been at peace for more than two centuries, and Canada has never made much effort to move toward assembling a nuclear arsenal. Rather, Canada’s proximity to the United States shields it from nuclear threats from outside North America. Any conventional or nuclear arrack on Canada from, say, China or Russia is likely to be interpreted as an attack on the United States, with disastrous consequences for the initial aggressor.

In other words, Canada benefits from what Baldur Thorhallsson calls “shelter” in the international arena. Canada requires no nuclear arsenal of its own, because it can use its close alliance with the United States as a substitute.

So long as some successor states of the United States maintain a functioning arsenal, other nonnuclear states in North America will be able to function similarly. It stands to reason that just as the United States in its current form has been at peace with all other former British colonies, it is likely that new North American republics will share a similar fate.

Big States Are Not Necessary: A Deterrent Nuclear Force Is Entirely Feasible for Small States

A new American republic need not be especially large to maintain a working arsenal.

While a sizable economy and population are extremely helpful in terms of building a large conventional military, these factors are not nearly as important when it comes to a nuclear force capable of deterring foreign powers.

As Kenneth Waltz has explained, “Nuclear parity is reached when countries have second-strike forces. It does not require quantitative or qualitative equality of forces.” That is, if a regime can plausibly hide or move around enough nuclear warheads to so as to survive a nuclear first strike, it is able to deter nuclear aggression from other states altogether. Moreover, the number of warheads necessary to achieve this number “not in the hundreds, but in the tens.”

This is why Waltz has concluded that “deterrence is easier to contrive than most strategists have believed" and that “some countries may find nuclear weapons a cheaper and safer alternative to running economically ruinous and militarily dangerous conventional arms races. Nuclear weapons may promise increased security and independence at an affordable price.” In other words, deterrence “can be implemented cheaply.”

The Israeli state is an important and illustrative case. This is a country with a GDP smaller than Colorado's and a population smaller than that of the US state of Georgia, yet Israel is thought to maintain a nuclear triad of sea, air, and land-based warheads. In other words, this is a small state which has taken full advantage of the relatively economical nature of a small nuclear arsenal (estimated to include approximately eighty assembled warheads).

Clearly, claims that even medium-sized American states—such as Ohio with 11 million people and a GDP nearly as large as that of Switzerland—are too small to possibly contemplate functioning as independent states are quite detached from reality. Moreover, there is no reason to assume any postsecession American state would seek to act alone in the realm of international relations. Kirkpatrick Sale has pointed out what should be regarded as obvious: "Historically, the response of small states to the threat of … aggression has been temporary confederation and mutual defense, and indeed the simple threat of such unity, in the form of defense treaties and leagues and alliances, has sometimes been a sufficient deterrent" (emphasis added).

On the other hand, a continuation of the current trend toward political centralization in Washington—and the growing political domination of every corner of the nation by central authorities—is likely to only harm future prospects for amicable separation and peaceful cooperation on the international stage. 

Tyler Durden Wed, 02/24/2021 - 19:40
Published:2/24/2021 6:53:51 PM
[Markets] Tanden Pounded By Progressives Over Potential 'Conflicts Of Interest' After Senate Delays Votes Tanden Pounded By Progressives Over Potential 'Conflicts Of Interest' After Senate Delays Votes

On Wednesday, two Senate committees delayed Wednesday votes on President Biden's pick to lead the Office of Management and Budget (OMB), Neera Tanden, after Democratic Sen. Joe Manchin (D-WV) and several GOP senators announced they wouldn't vote for her - in what the Washington Post described as "probably dooming her selection in an evenly divided Senate."

Tanden, president of the John Podesta-founded Center for American Progress, has come under fire for a series of now-deleted tweets promoting the Russia hoax as fact, denigrating political foes, and other statements which Manchin deemed 'overly partisan.'

That's not all, Tanden reportedly punched a progressive journalist in 2008 who had the audacity to ask then-Sen. Hillary Clinton about voting in favor of the Iraq war.

"Ms. Tanden responded by circling back to Mr. Shakir after the interview and, according to a person in the room, punching him in the chest," the New York Times reported in 2019, describing the alleged incident from when Tanden served as a top Clinton adviser.

Tanden claims she 'pushed him.'

On Wednesday, Sen Lisa Murkowski (R-AK) expressed concerns over Tanden, saying " suggested to the White House that my colleagues were being very critical of the statements, and rightly so and I think some of (the tweets) were clearly over the top," adding "Apparently I'm going to have to do more looking into what she thinks about me," after a tweet recently resurfaced in which Tanden attacked Murkowski.

What's more, a progressive advocacy group, RootsAction, says they're "heartened" that Tanden's nomination has stalled and 'may soon be withdrawn.'

"We are heartened that Tanden's nomination has stalled. Mainly due to her well-documented coziness with corporate elites, she is the wrong choice to head a federal agency that is vital in the regulatory process. It strains credulity to contend that she would be a true advocate for the public interest after many years of dutifully serving corporate interests," the group said in a statement.

Why doesn't RootsAction like Tanden?

"RootsAction opposed her OMB nomination from the outset. With our encouragement, many thousands of constituents wrote to their senators and urged them to vote against confirmation -- not because of her 'mean tweets' but because of her close funding relationships with corporate titans and foreign governments. What's stunning is the silence from Senate Democrats about the potential conflicts-of-interest raised by her decade of aggressive fundraising from powerful interests," according to co-founder Jeff Cohen.

Meanwhile, RootsAction national director Norman Solomon said "Business-as-usual in Washington means that elite donations are inundating think tanks and members of Congress. Tanden epitomizes a pay-to-play view of governance, which helps to explain why the anti-regulation, anti-union U.S. Chamber of Commerce is supporting her nomination. We need an OMB director without corporate ties that bind. Neera Tanden just doesn't qualify."

Tyler Durden Wed, 02/24/2021 - 19:20
Published:2/24/2021 6:32:08 PM
[Markets] Round 2 Of Face-Ripping Short Squeeze Arrives Just As Hedge Funds Pile Into Shorts Round 2 Of Face-Ripping Short Squeeze Arrives Just As Hedge Funds Pile Into Shorts

One of the key catalysts behind the original round of meme stocks such as GME and AMC surging in late January in "rip your face off" rallies, was targeting companies that were heavily short, in some cases - such as Gamestop - with a synthetic short position that was 140% of the float. Since then, the short interest in all of these original meme companies has collapsed dramatically as hedge funds that were short said meme stocks suffered tremendous, and in some cases, irreparable losses.

What is remarkable is that the targeted WallStreetBets raids of heavily shorted stocks took place in an environment where marketwide shorts were actually at the lowest level on record as a result of the endless levitation in the S&P500 thanks to the trillions of Fed monetary generosity, with most industries ranking in the 0 percentile vs history in terms of short interest as a % of market cap (with the exception of energy, where the short squeeze has yet to come at the industry level).

But is that really true? Well, it may have been until about two weeks ago but then things changed drastically.

As JPMorgan wrote on Tuesday, while hedge funds were quite positive on markets especially in the US, over the past 6+ months (JPM had seen net buying most days since late July 2020), "following the recent weakness and rotation, we’ve seen HFs react by adding more shorts, which are picking up after the large covering in late Jan", and remarkably Monday was the largest day of short additions in North America since late June 2020!

Meanwhile, as JPM notes today in its summary of the furious rip higher in Gamestop and AMC, "we may be seeing the beginning of the Retail impulse returning." Translation: the WallStreetBets "incels" are back for round two and are trying to make lightning strike twice, by focusing on the two more popular shorts of the latest round of short squeezes:

This means that just as hedge funds reloaded on their shorts expecting a rapid acceleration in the recent market correction... the reddit rebellion is back and is set to squeeze all those millions in newly layered shorts which are not being picked up in the latest data which is as of two weeks ago, or just as the short flush peak and a new layer of shorting was starting.

And while one can only dream, it would be truly remarkable if - expecting that lightning will not strike twice - the likes of Melvin Capital doubled down on their GME shorts after suffering catastrophic losses on the same position. While we doubt god can be that cruel, here is an artist's rendering of "what if"...

Tyler Durden Wed, 02/24/2021 - 18:40
Published:2/24/2021 5:52:48 PM
[Markets] What's Worth Streaming: Here’s what’s coming to HBO Max in March 2021, and what’s leaving HBO Max is all about things going ka-blooey in March, with the premieres of the blockbuster movies "Godzilla vs. Kong" and "Zack Snyder's Justice League."
Published:2/24/2021 5:52:48 PM
[Markets] Stock market news live updates: Stock futures open flat; GameStop, AMC shares surge Stock market news live updates: Stock futures open flat; GameStop, AMC shares surge Published:2/24/2021 5:24:54 PM
[Markets] A Year Later, There's Still No Evidence Showing Governments Can Control The Spread Of COVID-19 A Year Later, There's Still No Evidence Showing Governments Can Control The Spread Of COVID-19

Authored by Anthony Rozmajzl via The Mises Institute,

As we approach the one-year anniversary of fifteen days to flatten the curve, we have yet to acquire any data suggesting that the past year of life-destroying lockdowns and politicized behavioral mandates has done anything to keep us safe from covid-19. While discussions surrounding the reintroduction of nationwide lockdowns seem to have ceased—it's impossible to ignore the lockdowns' disproportionately deadly effects and the numerous studies demonstrating their futility—the media still retain their grip on the narrative that nonpharmaceutical interventions (NPIs) such as mask mandates, curfews, capacity restrictions, gathering restrictions, and others remain necessary to prevail in our fight against covid-19.

Government officials, in lockstep with big tech and nearly all major news outlets, have controlled the NPI narrative to such an extent that its proponents have simply sidestepped the burden of proof naturally arising from the introduction and continued support of novel virus mitigation strategies, happily pointing to the fact that their ideas enjoy unanimous support from the corporate media and government officials all over the world. This seemingly impenetrable narrative rests, of course, on the critical assumption that NPIs, or behavioral mandates, have protected us from covid-19.

The One Chart That Covid Doomsdayers Can’t Explain

If there is one visualization the reader should become familiar with to highlight the ineffectiveness of a nearly a year’s worth of NPIs, it would be the following chart comparing hospitalizations and deaths per million in Florida with those in New York and California, however we will be focusing solely on the comparison between Florida and California.

In light of everything our officials have taught us about how this virus spreads, it defies reality that Florida, a fully open and popular travel destination with one of the oldest populations in the country, currently has lower hospitalizations and deaths per million than California, a state with much heavier restrictions and one of the youngest populations in the country. While it is true that, overall, California does slightly better than Florida in deaths per million, simply accounting for California's much younger population tips the scales in Florida’s favor.

Florida has zero restrictions on bars, breweries, indoor dining, gyms, places of worship, gathering sizes, and almost all schools are offering in-person instruction. California, on the other hand, retains heavy restrictions in each of these areas. At the very least, Florida's hospitalizations and deaths per million should be substantially worse than California's. Those who predicted death and destruction as a consequence of Florida's September reopening simply cannot see these results as anything other than utterly remarkable. Even White House covid advisor Andy Slavitt, much to the establishment’s embarrassment, had no explanation for Florida’s success relative to California. Slavitt was reduced to parroting establishment talking points after admitting that Florida’s surprisingly great numbers were “just a little beyond our explanation.”

Does Compliance Explain the Discrepancy?

Invariably, the above graph will invoke responses pointing to Californians’ supposed lack of compliance relative to Floridians as justification for their poor numbers. On its face, this claim is patently absurd given that Florida has been fully open since September. But if we dig into the data a bit more, we find some relevant metrics that shed light on how frequently Floridians and Californians are engaging in behaviors that allegedly fuel covid-19 transmission. The following survey data—California is shown in blue, Florida in gray—is taken from Carnegie Mellon University's Delphi Research Group. Beyond the red vertical line, Florida has had consistently lower hospitalizations and deaths per million than California.

Mask Compliance

Bar Visits


Restaurant Visits

We can see that, relative to Floridians, Californians have consistently been doing a better job of avoiding social behaviors that allegedly fuel the spread of covid-19. Moreover, at no point was there a drastic change in behavioral patterns after December 17 indicating that Floridians had suddenly begun avoiding activities purportedly linked to covid transmission.

A quick glance at each state's "social distancing score" also indicates, yet again, that Californians have been doing a better job avoiding activities meant to facilitate the spread of covid-19. Additionally, Google's covid mobility reports, as of February 16, 2021, show that Californians partake in fewer retail and recreational visits—restaurants, cafes, shopping centers, theme parks, museums, libraries, and movie theaters—as well as fewer grocery store and pharmacy visits, which include farmers markets, food warehouses, and speciality food shops. Evidently, the whole “noncompliance” schtick is nothing more than a fraudulent excuse for explaining away undesirable trends.

More Metrics Rebutting the Mainstream Covid-19 Narrative

Moving on from the Florida-California comparison, national metrics also highlight the lack of correlation between the intensity of states' NPIs—methodology for determining this can be found here—and deaths per million.

In fact, if we visualize case trends across all fifty diverse states, each state having varying levels of restrictions, you'll quickly notice a pattern that presents itself quite similarly across all fifty states: a bump in cases early to midway through the year followed by a much bigger surge in cases during winter months. The following data was retrieved from Johns Hopkins Coronavirus Resource Center.

Similar case patterns across fifty states is hardly an indicator of a government capable of influencing the course of the virus. Instead, research published in Evolutionary Bioinformatics shows that case counts and mortality rates are strongly correlated with temperature and latitude, a concept known as “seasonality,” which, once recognized, largely explains the failure of the past year’s NPIs.

Meanwhile, we can look at seasonally congruent regions to see whether or not varying degrees of behavioral mandates have had any noticeable impact on cases. What we find, thanks to seasonality, is that regardless of the timing or existence of mask mandates and other behavioral mandates, similar regions follow similar case growth patterns.

For the firm believer in NPIs, these simultaneous and nearly identical fluctuations between cities within the same state and states having similar climates are inexplicable. After accepting seasonality as one of the driving factors behind case fluctuations, we can start speaking of "covid season" as pragmatically as we speak of "flu season." A helpful visual of what covid season might look like, based on the Hope-Simpson seasonality model for influenza, can be found here.

Update on the Holiday Surge and Recent “Superspreaders”

Some of you may be wondering about the "holiday surges" that were supposed to have ravaged our hospitals following Thanksgiving and Christmas. Well, they never happened. Not only did the rate of covid-19 hospitalization growth decline after Thanksgiving, hospitalizations peaked less than two weeks after Christmas and have been sharply plummeting since! At the very least we should have seen a rapid increase in the hospitalization growth rate in the few weeks following Christmas.

As a bonus for those who like to keep up to date with the latest installments of The Media Who Cried Superspreader, Alabama recently came under heavy fire after thousands of maskless football fans took to the streets to celebrate their team winning the national college football title. FanSided, among others, was quick to label the large celebration as a superspreader event, and health officials were worried that the Alabama superspreader was going to result in a huge case spike. Here's what really happened.

Miraculously, cases immediately plummeted after Alabama’s "superspreader" event and continue to plummet to this day. If that wasn't enough, Mississippi, Alabama's next-door neighbor, followed a nearly identical case pattern despite hosting no superspreader events.

Finally, in our most recent installment of The Media Who Cried Superspreader, we see that two weeks—two weeks being the establishment’s baseline lag time between superspreaders and their consequences—after millions of people gathered with friends and family to watch Superbowl LV, cases, hospitalizations, and deaths continue to plummet.

Despite the scary warnings and grim predictions of Superbowl gatherings, we find, yet again, a gaping hole in the mainstream covid-19 narrative. It would appear safe to conclude that the worst of covid season is behind us.

Data show that from the few weeks prior to February 4, cases have fallen 45 percent in the United States—cases are still declining at a rapid pace despite mid-January warnings that the new variant would create a surge in cases—30 percent globally, and hospitalizations have dropped 26 percent since their mid-January peak. Yet there appears to be a general confusion as to how we've achieved these numbers. Did populations around the world unanimously begin complying with covid regulations? Did governments finally get serious about enforcing their mandates? These are some explanations we might hear, but only so long as cases and hospitalizations continue to trend downward.

It is very unlikely, however, that health officials will start pointing to seasonality as an alternative explanation for our continually improving numbers. To do so would be a tacit admission that nearly a year's worth of heavily politicized behavioral mandates, life-destroying lockdowns, and devastating business closures were all for naught. But the data have spoken, and it is abundantly clear that attempting to socially engineer a respiratory virus out of existence is nothing short of a fool's errand.

Tyler Durden Wed, 02/24/2021 - 18:20
Published:2/24/2021 5:24:54 PM
[Markets] Was Trump 'The Mule'? Was Trump 'The Mule'?

Authored by Jim Quinn via The Bunring Platform blog,

“Excellence, he is known as the Mule. He is spoken of little, in a factual sense, but I have gathered the scraps and fragments of knowledge and winnowed out the most probable of them. He is apparently a man of neither birth nor standing. His father, unknown. His mother, dead in childbirth. His upbringing, that of a vagabond. His education, that of the tramp worlds, and the backwash alleys of space. He has no name other than that of the Mule, a name reportedly applied by himself to himself, and signifying, by popular explanation, his immense physical strength, and stubbornness of purpose.” 

- Isaac Asimov, Foundation and Empire

“The fall of Empire, gentlemen, is a massive thing, however, and not easily fought. It is dictated by a rising bureaucracy, a receding initiative, a freezing of caste, a damming of curiosity—a hundred other factors. It has been going on, as I have said, for centuries, and it is too majestic and massive a movement to stop.” 

– Isaac Asimov, Foundation

In March 2017, a mere two months after the stunningly unexpected victory of Donald Trump over the Deep State hand picked representative of dark forces – Hillary Clinton, I wrote a three-part article based upon Isaac Asimov’s Foundation trilogy, attempting to connect Trump’s elevation as the Gray Champion of this Fourth Turning to the plot of Asimov’s masterpiece. The three articles: Foundation – Fall of the American Galactic EmpireFoundation and Empire: Is Donald Trump the Mule?; and Second Foundation: Empire Crumbling, landed with a dud, generating few views and not many comments.

I thought it was a creative look at the fledgling Trump presidency, a Deep State intent on destroying him, integrated within the context of Asimov’s story of galactic subterfuge, controlling populations through mathematical mechanisms, and the rise of an individual upending the plans of elitists. I chalked up the dis-interest to the fact many people had never read the books, therefore could not relate to the comparison between Trump, the Mule, and Hari Seldon’s plan.

The other possibility was the fact I was already pondering Trump failing in his effort to defeat the Deep State and drain the Swamp. Trump supporters were still ecstatic with their victory, believing he could defeat the dark forces aligned against him, and resistant to the thought he might lose. Four years later, with the perspective of what has happened, we can honestly assess the suppositions I made in that article.

For those not familiar with Asimov’s trilogy, The Mule was a powerful mentalic mutant, warlord, and conqueror who posed the greatest threat to the Seldon Plan.

The plan involves the two Foundations. The First Foundation is the bastion of physical science and political order while the Second Foundation is a covert group of people hidden away who are experts in mentalics and psychohistorical prediction. Seldon’s science of psychohistory was outstanding at predicting the behavior of large populations but worthless in trying to predict what an individual might do.

The emergence of the Mule, a mentalic mutant with an acute telepathic ability to modify the emotions of human beings, could not have been predicted by the Seldon Plan, focused as it was on the statistical movements of vast numbers of peoples and populations across the galaxy. The Mule’s acute telepathic ability to modify the emotions of human beings derailed one of the basic assumptions of Hari Seldon’s psychohistory – that, in general, the responses of human populations to given stimuli will remain the same.

The Mule was the unpredictable variable in the equations of history and the greatest threat to the Seldon Plan. He disrupts the inevitability of the continued evolution of the First Foundation and potential early ending of the Dark Age. The Mule, through telepathic manipulation, defeats and takes over the Foundation’s growing empire, which has become increasingly control-oriented and out-of-touch with the outer planets in its rapidly expanding realm of influence.

The term mule invokes feelings of strength, stubbornness, and the ability to power forward despite obstacles. That description fits Trump perfectly and his ability to inspire millions of Americans through emotional appeals to patriotism and demonizing his left wing political and media enemies. His powers of persuasion weren’t mentalic, but his appeal to flyover country Americans was baffling to the liberal elites on the coasts and the RINOs who pretended to be conservative but were nothing more than grifters and neo-con warmongers.

I did not associate Hari Seldon with any particular person on the scene today when I wrote my article in 2017. Hari Seldon was an intellectual who created the Foundation, made up of other academic intellectuals. Then he set up a Second Foundation of even more talented intellectuals as a backup plan in case the Foundation failed. I saw Seldon and his ensemble of elitist academics and intellectual snobs as pompous control freaks on par with the Washington DC and Wall Street elitists like Pelosi, Schumer, McConnell, Yellen, Powell, Dimon and Buffet. They constitute the Foundation.

The Second Foundation was hidden in plain sight, operating in the shadows, unknown to the masses, and controlling the galaxy from behind the curtain. They were the Galactic Deep State.

I now see the Seldon character as Bill Gates, a college dropout geek who lucked into becoming a multi-billionaire with one decent idea, who now portrays himself as an expert in medical science, vaccines, farming, climate change, population right sizing, social media censorship and politics.

His billions entitle him to pontificate his psycho-babble propaganda on captured corporate media outlets, much like Seldon using his psychohistory to predict the future. Billionaire egos are immense. Gates flies on his private jet around the world spewing CO2 while preaching the gospel of lockdowns, drinking reprocessed piss, and forcing the masses to eat synthetic beef and bugs to save the planet.

I see the Second Foundation as representative of the Deep State. This amalgamation of the likes of Clapper, Comey, Brennan, Clinton, Soros, Bloomberg, Zuckerberg, Bezos, Dorsey, Cook, Schmidt, Schwab, and plethora of other sociopaths in the government, media, military, academia, and corporate world spent the last four years attempting to neutralize and neuter Donald Trump (aka The Mule). These affluent, highly educated, narcissistic, sanctimonious, malevolent scumbags, who believe they are the smartest men in the world, operate behind the scenes as the invisible government, manipulating the mechanisms of society and pulling the wires controlling the public mind.

There is virtually no difference between Seldon’s psychohistory and Bernays’ propaganda. These sociopaths believe they are entitled to run the world as they choose, with no input or resistance from the ignorant masses allowed. When the basket of deplorables rose up and elected Trump, the Deep State went into overdrive to nullify and defeat him. My prediction about his presidency came to be, with my ending question still up for debate:

His first two months in power will likely reflect his entire presidency. The Washington establishment and sinister Deep State players will attempt to thwart Trump’s every move. They have already impeded his immigration controls and attempt to repeal and replace Obamacare, while using their illegal surveillance state techniques to undermine his administration. The surveillance agencies, who are supposed to act on his behalf, are clearly trying to subvert his presidency. Leaks and fake news designed to sabotage the credibility of Trump and his administration will continue. Will the fear of retribution from mysterious surveillance state operatives convince Trump to fall into line and become a submissive lackey, no longer making waves for the Deep State?

The level of Deep State interference to undermine the Trump presidency reached extreme levels after those first two months of relatively minor meddling. What followed was a three-year Russia-gate farce as the DOJ, FBI and CIA conspired with Obama to unseat Trump by creating a fake Russia interference narrative based on a bullshit dossier, using it to have Comey weaponize the FBI against a duly elected president. Then his AG swamp creature allowed Mueller and his Hillary supporting cronies to torture Trump for two years before calling it quits with absolutely no charges. All along, the left-wing media cackled and crowed, producing a prodigious amount of fake news, which was duly called out by Trump.

The unrelenting negative coverage, despite successes on many fronts by Trump, revealed the true nature of the Deep State coup to overthrow a sitting president. The never-ending coup was ramped up again in 2019 as Pelosi and her flying monkeys – Chinese spy-shagger, Swalwell (aka the farter) and the socialist squad of hate mongers, drummed up a fake impeachment against Trump based upon a phone call regarding actual provable Biden family corruption in the Ukraine. The impeachment was a dead-on arrival political stunt to disparage Trump going into the election year.

But the Deep State coup de grace for cancelling and castrating Trump (aka The Mule) was the Covid conspiracy, which fell into the laps of Trump’s enemies through the accidental or purposeful release of a highly contagious, highly non-lethal flu virus from a Chinese bio-weapon lab, funded by Fauci and other U.S. governmental entities. After the impeachment charade imploded in January, and the Democrat presidential field of dementia patients, communists, whores, and morons pathetically made their case to replace Trump, a November victory seemed assured for Trump, as the economy was OK and the stock market was booming.

But then they were presented with a faux crisis, and as everyone knows – you can never let a good crisis go to waste. The Deep State, democratic governors, democratic mayors, the left-wing loving media, the Silicon Valley social media billionaire censorship tyrants, and Big Pharma combined forces to turn the nation into quivering cowering masked sheep, begging to be corralled and sheered by traitorous lying authoritarians demanding their acquiescence.

Throwing in systematic racism, elevating violent felon scum to sainthood, encouraging BLM and ANTIFA terrorists to burn cities, assault police, storm the White House, and blaming it all on Trump was a genius move. By using the Covid hysteria as a cover for demanding unlimited and uncontrolled mail-in voting, with no signature verification or time limits on counting votes, the Democrats assured themselves of certain victory in the limited number of swing states.

And still, Trump was on his way to victory again as of midnight on election night. This is when a halt was called by the Deep State, Dominion voting machines were “re-programmed” and suitcases full of “newly discovered” mail-in ballots appeared, with 97% of the votes going to Dementia Joe. He truly had put together the best election fraud team in history. That is why he never needed to leave his basement during the campaign.

Despite hundreds of documented accounts of massive voter fraud, eye witness accounts of fraudulent mail-in ballots, statistical analysis proving what supposedly happened with voting machines could not possibly happen, and the absolute laughability of Basement Biden actually getting 80 million votes, the Deep State co-conspirators closed ranks and did not allow Trump and his team a fair day in court to make their case. They had successfully stolen the election and accomplished their four-year long coup.

In order to ensure Trump did not rise again, Pelosi and her compadres used Trump’s powers of persuasion against him, by exploiting his peaceful January 6 rally in DC, as a means to lure some of his useful idiot supporters into entering the Capitol (with the Capitol police opening the doors), enticed by a bunch of ANTIFA/BLM provocateurs and taking selfies, stealing podiums, and milling around, until one of them got shot.

This fake news “armed insurrection” (despite no firearms used or confiscated) was then weaponized by Pelosi and her useful idiot followers to conduct an even more farcical impeachment of a president who was already out of office, playing golf in Florida. This tempest in teapot clown show of idiocracy played out over a few days, breathlessly covered by the MSNBC dullards and CNN dimwits, until it died under its own weight of superficial lunacy, with the Chief Justice refusing to preside and Democrat prosecutors caught doctoring evidence.

This failure to drive a stake through the heart of mule-headed Trump and insure he does not rise from the dead in 2024 to assume power once again, will not stop his vast number of enemies from keeping him stuck in Florida to live out his days on this earth as a failed president. Soros funded attorney generals across the land will hound Trump and his family with legal entanglements unless he promises to be a non-participant in government forever. Will the fear of financial retribution and consequences from a legal system that is stacked in favor of his enemies convince Trump to stand down? In my four-year-old article I asked these questions:

Will Trump’s reign resemble the reign of The Mule? The Mule’s conquest was astonishingly fast. He defeated the Foundation and established the Union of Worlds after only five years. The unpredictability of his arrival and rare mental talents befuddled the Foundation. Then he inexplicably paused in his campaign of conquests. Instead, he launched repeated expeditions in search of the Second Foundation. The Second Foundation, through unyielding pressure and generating fear of the unknown into the mind of The Mule, was able undermine his plans of conquest and turn him into a non-disruptive, toothless, nonthreatening, passive figurehead. As Trump’s best laid plans are obstructed, agenda foiled, and legislation hindered, will his enthusiasm for governance wane?

Based on what I have seen since the January 6 staged event at the Capitol, it appears Trump’s will to fight has subsided, even though he will continue to do interviews and give speeches to burnish his image as an outsider, continuing to fight for his 75 million followers. His influence didn’t help win the two Georgia run-off elections. It is highly unlikely he runs for president again in 2024.

He will utilize his popularity to invigorate his real estate and potential media empire. It will be all about the Benjamin’s from here on out. He surprised himself with his unlikely victory in 2016 and will be busy writing his best- selling book about the adventure in the near future. Trump TV is practically a given, but he will not be anything more than a thorn in the side of the Deep State (Second Foundation) going forward. He will no longer be a legitimate threat to their Plan.

Trump was a disrupting factor, disturbing the best laid plans of the global elitist establishment and revealing the hidden agendas of the Deep State. He had no support from the GOP establishment. In most cases, they undermined his efforts. He hired them into his cabinet and they continuously stabbed him in the back. Having your supposed allies work against you, in cahoots with the Democrats, surveillance state apparatus, all the alphabet agencies, and 90% of the mainstream and social media propaganda machinery, and you come to the realization we are ruled by a Uni-party of globalist elite using their immense wealth to manipulate and control the masses.

Sociopaths like Gates, Soros, Schwab, and Obama believe they are the smartest men on the planet and can pull the strings, making the puppet masses do as they command. Based on the last year, it appears they are right. The neutralization of Trump has convinced themselves of their invincibility. Their hubris blinds them to the wisdom of the bible – Pride goes before destruction, a haughty spirit before a fall.

Not only is the Great Reset, green new deal, communist doctrine implementation not going to reverse the downward spiral of the American Empire, but the last year of horrific political and financial decisions and imminent execution of the left-wing agenda through their empty senile vessel will accelerate the unavoidable collapse. MMT plus QE to infinity will surely solve all our problems.

The national debt went from $20 trillion when Trump was elected to $28 trillion today, and $30 trillion within the next year. It took 219 years to accumulate the first $10 trillion of debt, 9 years to accumulate the next $10 trillion of debt, and now less than five years to accumulate the next $10 trillion. Meanwhile, GDP has barely grown by 2% per year and household income has been stagnant for decades. Anyone who thinks this is sustainable, economically healthy, or representative of free market capitalism is either delusional or lying to promote their agenda of you owning nothing and being happy about it, while eating bugs and drinking processed piss.

Asimov’s trilogy documents the fall of the Galactic Empire, based upon the Fall of the Roman Empire, and written during the fall of the Third Reich. Whether Trump delayed or accelerated the Fall of the American Empire is inconsequential, as no one can reverse the coming collapse at this point. Technology does not improve human nature, create wisdom, or provide understanding. Humanity is incapable of change. The same weaknesses and self- destructive traits which have plagued us throughout history are as prevalent today as they ever were.

Empires are created by corruptible men whose failings, flaws, and desire for power, control and wealth never change. Decades of blunders, awful decisions, incompetent leadership, dishonesty and unconcealed treachery have paved a pathway to ruin for the American Empire. The outward appearance of strength disguises the internal rot, which will be revealed when the coming storm arrives with suddenness and a surprising fierceness.

“Mr. Advocate, the rotten tree-trunk, until the very moment when the storm-blast breaks it in two, has all the appearance of might it ever had. The storm-blast whistles through the branches of the Empire even now. Listen with the ears of psychohistory, and you will hear the creaking.” 

– Isaac AsimovFoundation

The American Empire is crumbling under the weight of military overreach; the totalitarian synergy between Big Tech and Big Gov.; destruction of the Constitution by traitorous surveillance state apparatchiks; the burden of unpayable debts; currency debasement; cultural decay; civic degeneration; diversity and deviancy trumping common culture and normality; pervasive corruption at every level of government; globalist agendas; and the failure of myopic leaders to deal with the real problems.

In the last year we have crossed our proverbial Rubi-covid, willingly trading our freedom and liberties for the perception of safety. We’ve past the point of no return. Asimov’s analogy of the wolf, horse and man has never been more apt than now. In our present- day version, the wolf is a China flu with a 99.7% survival rate that only kills the old and infirm. The horse is the American public (and most of the global population) living in constant fear of a non-lethal virus killing them at any moment. No matter how irrational, they desperately want to believe “experts” who authoritatively declare the steps necessary to save the world from this scourge.

The man is an amalgamation of Gates, Soros, Fauci, and the petty authoritarian politicians (Cuomo, Newsom, Whitmer, Wolf, Murphy) wielding power across the land. The man offered to save the horse from the wolf on condition of being given the power to disregard the Constitution, lockdown the country, destroy small businesses, create mass unemployment, mandate masks, crush free speech (except during BLM and ANTIFA riots), suspend the 4th Amendment, force experimental vaccinations upon the masses, and create $10 trillion of new debt, giving most of it to Wall Street, mega-corporations, and Big Pharma. And as an added benefit, get rid of a president who did not cooperate with their Global Reset agenda.

“A horse having a wolf as a powerful and dangerous enemy lived in constant fear of his life. Being driven to desperation, it occurred to him to seek a strong ally. Whereupon he approached a man, and offered an alliance, pointing out that the wolf was likewise an enemy of the man. The man accepted the partnership at once and offered to kill the wolf immediately, if his new partner would only co-operate by placing his greater speed at the man’s disposal. The horse was willing, and allowed the man to place bridle and saddle upon him.

The man mounted, hunted down the wolf, and killed him. “The horse, joyful and relieved, thanked the man, and said: ‘Now that our enemy is dead, remove your bridle and saddle and restore my freedom.’ “Whereupon the man laughed loudly and replied, ‘Never!’ and applied the spurs with a will.” – Isaac AsimovFoundation

So, today we find ourselves one year into “15 days to slow the spread” and millions of “horses” have asked the “man” to remove their bridle and saddle and restore our freedom. Miraculously, cases, hospitalizations, and deaths have plunged since the insertion of Dementia Joe into the White House by his Deep State handlers. The vaccine and mask propaganda campaigns are being ratcheted up, emperor Gates is on TV every other day expounding on covid, climate, synthetic food, population control, and the need for more control by billionaires like himself.

As millions demand their freedoms back, Gates, Fauci, Soros and Schwab laugh loudly and proclaim we can never go back to the way it was. They will apply the spurs of the “New Normal” and “Great Reset”. We failed to heed the wisdom of Ben Franklin and will pay a heavy price for our cowardice and subservience to totalitarian global elitists. The Mule has been defeated.

“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” – Ben Franklin – 1775

*  *  *

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Tyler Durden Wed, 02/24/2021 - 17:40
Published:2/24/2021 4:52:03 PM
[Markets] Personal Finance Daily: Many Texans face sky-high electricity bills after winter storms and IRS has already received 55 million tax returns ahead of April 15 deadline Wednesday’s top personal finance stories
Published:2/24/2021 4:52:03 PM
[Markets] REFILE-US STOCKS-Wall Street finishes up as Fed's Powell soothes inflation fears Shares on Wall Street ended higher on Wednesday, as a selloff in technology-related stocks eased and a rotation into cyclical shares continued after Federal Reserve Chair Jerome Powell's comments calmed inflation worries. The Nasdaq index, which traded as much as 1.3% lower earlier in the session, regained its footing by early afternoon and closed up. The Dow hit a record high earlier in the session. Published:2/24/2021 4:25:31 PM
[Markets] : GameStop and AMC stocks spike anew, as Reddit struggles to stay online Shares in GameStop Corp. and AMC Entertainment Holdings Inc. suddenly resumed spiking late in Wednesday's trading session, as Reddit --- the online message board where investors gathered to discuss their interest in those stocks previously --- suffered from outages.
Published:2/24/2021 4:25:31 PM
[Markets] Iran Says S.Korea To Release $1BN Of Its Frozen Funds After Tanker Seizure Iran Says S.Korea To Release $1BN Of Its Frozen Funds After Tanker Seizure

Iran and South Korea have been engaged for the past two months in intense crisis meetings triggered by the Jan.4 Iranian seizure of the South Korean-flagged tanker MT Hankuk Chemi off the Islamic Republic's southern waters. From the start of the IRGC's capturing the vessel and detaining its crew, Tehran pointed to $7 billion to $10 billion in Iranian assets in Korean banks previously frozen by Seoul in compliance with US-led sanctions. The clear message has been that the tanker can be released when the funds are released, despite the official Iranian claim that the Hankuk Chemi violated 'environmental protocols'.

And now Iran’s Central Bank says Seoul has agreed to release some of these funds. It's expected that $1 billion cash will be unfrozen in the first phase. "In the meeting with the South Korean envoy, we stressed how Iran could use its resources," Governor of the Central Bank of Iran (CBI) Abdolnaser Hemmati told state media on Wednesday.

Via Tasnim

"Great damage has been incurred on the Islamic Republic. It was Koreans themselves who asked and [came] to say that they are seeking to pay Iran’s assets and we showed them how to do so," the Iranian bank official added.

Ironically it had been Tehran officials that charged Seoul with "hostage taking" - in the form of badly needed funds at a moment the Iranian economy is being strangled by Washington sanctions.

While the release of the 19-person crew was already accomplished in early February, it appears Iran is still holding the oil tanker itself. South Korea’s Ministry of Foreign Affairs had said of the crew's release at the time: 

"The two sides... shared the view that the release of the sailors was an important first step to restore trust between the two countries and they will work to resolve the issue of frozen Iranian assets in South Korean banks," according to The Hill.

Iranian state media photo of talks on Monday.

At this point there hasn't been clear confirmation from the South Korean side that it's unfreezing $1 billion as touted in Iranian sources. However, it's clear that intensive talks have been ongoing, with South Korea previously scrambling to send diplomatic teams to Tehran over the tanker issue.

Tyler Durden Wed, 02/24/2021 - 17:20
Published:2/24/2021 4:25:31 PM
[Markets] Nvidia's quarterly sales top $5 billion for first time ever Nvidia's quarterly sales top $5 billion for first time ever Published:2/24/2021 3:52:43 PM
[Markets] GLOBAL MARKETS-Global equities rise as U.S. bond yield fears ease A gauge of global equity markets rose on Wednesday after Federal Reserve Chair Jerome Powell said interest rates will remain low, calming market jitters sparked by a jump in U.S. Treasury yields on fears that a robust recovery would drive inflation higher. Sales of new U.S. single-family homes increased more than expected in January as the median sale price rose 5.3% on a year-over-year basis, the latest data to show certain consumer prices are rising faster than expected. Published:2/24/2021 3:52:43 PM
[Markets] Dozens Of House Democrats Ask Biden To Relinquish Sole Authority To Launch Nukes Dozens Of House Democrats Ask Biden To Relinquish Sole Authority To Launch Nukes

Remember in January when House Speaker Nancy Pelosi (D-CA) asked the Pentagon to limit still-President Trump's ability to use nuclear weapons during his last week in office?

Now, a cadre of House Democrats spearheaded by former CIA Director Leon Panetta's son, Jimmy (D-CA) - who was part of the above effort, have asked President Biden to relinquish sole authority to use nuclear weapons, since "The military is obligated to carry out the order if they assess it is legal under the laws of war," should Biden - or a future president - choose to launch nukes without consulting advisers.

Democrats are recommending that Biden modify existing procedures too require "additional officials in the line of presidential succession, starting with the vice president and the speaker of the US House of Representatives - neither of whom can be removed by the president if they disagree - to concur with a launch order..."

Also recommended is requiring that launch orders be validated by the secretary of defense, and deemed legal by the attorney general, with concurrence from the chair of the Joint Chiefs of staff and/or the secretary of state.

Another suggestion in the letter is a requirement that a congressional declaration of war and specific authorization be required before any nuclear first strike could be conducted, and the creation of a "permanent active council of congressional leaders that would regularly participate in deliberations with the executive branch on vital national security issues and madate some portion of the council be consulted before the first use of nuclear weapons.

In other words, steps that would add critical minutes to a competent president's ability to act quickly in the face of an imminent threat - or - possibly save the world from thermonuclear war because a mentally unstable president is having a dementia episode after falling asleep during a Jack Ryan episode.

Read the letter below:

Tyler Durden Wed, 02/24/2021 - 16:40
Published:2/24/2021 3:52:43 PM
[Markets] Earnings Results: Nvidia quarterly sales top $5 billion for first time Nvidia Corp. on Wednesday reported that its quarterly revenue blew past last quarter's record-setting sales as high holiday demand for gaming chips met with supply shortages.
Published:2/24/2021 3:52:43 PM
[Markets] Moderna says COVID vaccine tweaked for South African variant ready for testing Moderna says COVID vaccine tweaked for South African variant ready for testing Published:2/24/2021 3:25:26 PM
[Markets] Earnings Results: Booking’s stock gains despite continued erosion of the online-travel business Booking Holdings Inc.'s business continued to struggle in the face of the COVID-19 pandemic at the end of 2020, but held up better than analysts expected.
Published:2/24/2021 3:25:25 PM
[Markets] Royal Caribbean stock surges to a 1-year high and longest win streak in 4 years Royal Caribbean stock surges to a 1-year high and longest win streak in 4 years Published:2/24/2021 2:52:15 PM
[Markets] Deja Vu All Over Again: Gamestop Halted After Soaring 70% In Minutes On No News Deja Vu All Over Again: Gamestop Halted After Soaring 70% In Minutes On No News

The squeeze is back.

About a month after everyone was transfixed by the Gamestop-led short squeeze insanity, which however fizzled in early February when the stock plunged more than 80% from as high as $500 to $40, moments ago GME exploded higher, surging more than 70% in the last half hour of trading on no news, and what appears to be yet another attempt to spark a short squeeze...

... which however will be difficult with just 32.8% of the float now short, a drop of roughly 100% from a month ago.

Squeeze or not, after GME was reopened for trading following a brief halt, the stock exploded even higher, and was halted for a second time when it was up 100%, trading just above $91.

Without a clear buying catalyst, many speculated that the source of the move is likely to be found on the Wall Street Bets message board, and sure enough, after a week when Palantir was all the "incels" could talk about, according to Swaggy Stocks, AMC and GME were once again the two stocks with the top comment volume on WSB.

Bloomberg chimed in and noting that retail traders took to Reddit "to discuss the stock following news of the upcoming departure of Chief Financial Officer Jim Bell" resulting in GME's biggest intraday jump in nearly three weeks

Reddit-fueled traders cheered each other on to buy more shares into the market close after news of Bell’s planned departure

The stock had been focus of a House hearing on retail trading

Elsewhere, Jefferies analyst Stephanie Wissink wrote that the move follows the natural progression of RC Ventures’ activist agenda. That agenda pushes for a faster timeline, with many strategies to boost the company already underway.


Tyler Durden Wed, 02/24/2021 - 15:42
Published:2/24/2021 2:52:15 PM
[Markets] Key Words: ‘Get used to me’ — Louis DeJoy says he will stay at the USPS for a ‘long time’ Lawmakers grilled the Postmaster General over mail delays as Democrats called for his removal
Published:2/24/2021 2:52:15 PM
[Markets] The Top 10 Takeaways From JPMorgan's Conference Call On Asset Bubbles The Top 10 Takeaways From JPMorgan's Conference Call On Asset Bubbles

On Tuesday, we pointed out something which we hoped was only unintentionally ironic: at the same time as the first day of Jay Powell's highly anticipated Congressional Testimony (which, to loosely paraphrase Gabriel Garcia Marquez was titled "inflation love in a time of Treasury cholera") was set to begin, JPMorgan was holding a conference call "on potential asset bubbles" - all of which have been sparked by the abovementioned individual - which included the who is who of sellside JPM research, including the bank's heads of global equity and credit research, the top quants, and so on.

During the call, which had thousands of JPM clients dialing in and which was riddled with technical difficulties, JPMorgan traders and researchers discussed their outlook for global markets in the context of what virtually everyone now sees is one massive bubble...

... including the implications of growing retail participation in US equity markets, the increased acceptance and adoption of bitcoin and possible market consequences.

For those who missed it, here are the bank's own highlights of its top ten takeaways (a replay can be found here) while the accompanying presentation is at the bottom:

1. We do not see a broad equity market bubble but rather certain pockets of the market that are experiencing hyper growth such as electric vehicles and renewables. While there is a lot of talk about bubbles, it is hard to see one in the broad equity market, where a dominant group (FANGs) practically hasn’t moved for 6 months despite massive amount of stimulus and an expected economic recovery, Financials that have barely recovered 2020 losses, and Energy that is still down 25% from last year despite a commodity bull market. We do see some relatively contained market segments that appear to be in a bubble related to Electric Vehicles (EV), renewable energy and innovations stocks. These sectors only make up a small part of the market (e.g., electric vehicles make up only 2% of the S&P 500), but we do see segments that remain cheap such as energy where positioning remains heavily underweight. We believe that this is only the first inning of the market rally, and that the rotation into cyclicals could play out for the next year. The broad rotation into cyclicals has contributed to an increase in intraday volatility as realized volatility of the S&P 500 has gone down to 5. If we want to be thorough in our search for bubbles, there is another asset that is currently in a bubble—the VIX. The VIX is now disconnected to underlying short-term S&P 500 realized volatility, indicating a bubble of fear and demand from investors looking to hedge or profit from a hypothetical market selloff. Given the VIX is at a near-record premium to actual equity volatility (~400-500% above the ‘fair value’), we think selling the “VIX bubble” represents a good market opportunity.

2. We remain constructive and sanguine on the outlook for the S&P 500, and the strong rotation and outperformance to Value from Growth which should continue and taking into account client positioning.  Although the topic of reflation has been top of mind for most clients in the past few weeks, we have seen investors starting to position for higher interest rates by reducing exposure from high multiple and momentum names. However we remain positive and constructive on the market outlook. We distinguish between a positive vs. negative rise in yields and remain constructive as the Covid-19 recovery is on track, ongoing fiscal and monetary support will be forthcoming with a new stimulus bill and a possible infrastructure bill in the pipeline, and equity positioning remains low. There is strong interest for reopening names such as cruise lines, transports, casinos and hotels from both  hedge funds and real money accounts and also growing interest in financials and energy.

3. There has been a strong rebound in global gross exposures across equities, up ~11% month to date, or 9% year to date. Short gamma positions have increased, but we see that as a secular phenomenon as retail activity has increased. Despite some warning of a ‘VAR shock’ what we are seeing now is ‘VAR inflows’ with volatility targeters/risk parity funds adding (rather than reducing) ~$1.5bn in equity exposure daily and gamma hedging reducing S&P 500 volatility, and long VIX positioning (e.g. via ETPs, limiting VIX upside).

4. The overall flow impulse by US retail investors is important to monitor as retail flows appears to have been the driving force of the risk market rally since November; however, tracking flow data remains difficult. Tracking the retail flow into equities on a high frequency basis is difficult as this retail impulse does not reverberate via equity funds, but rather via purchases of individual equities or call options on single names. Over the past year, there has been a preference change with US retail investors shifting their equity buying away from equity funds towards individual equities or call options on individual equities. After rising to record highs in the last week of January, this call option buying metric appears to have stabilized at close to record high levels, and we see no signs yet of any material slowing in this option flow metric.

5. We do not see Credit markets in a bubble but see credit spreads having the capacity to move tighter from current levels. Credit spreads could potentially overshoot our year-end targets and move back to levels last seen in the first half of 2018. In particular, US High Grade spreads could go a lot tighter as spreads are currently trading within the 10th percentile of their 20 year range. We calculate a spread floor of 79bp for ratings-sensitive investors in a base-case scenario while for non-ratings sensitive investors, we calculate a spread floor of 31bp.

6. In Credit, we position (or hedge) for orderly versus disorderly reflation via buying strangles to take advantage of low volatility. From a market outcome perspective, we think it's important to differentiate between what we term orderly and disorderly reflation dynamics. We think differentiating between these two outcomes naturally lends itself to derivative strategies like strangles, which are motivated by the idea of capturing or hedging against tail outcomes.

7. The best hedges for a too-hot economy should consider historical performance in higher-inflation regimes plus current valuations and carry. On these criteria, the best are a Commodity index, Oil, Agriculture, Energy Equities & EM commodity FX; the worst are Base Metals, Gold & G10 commodity FX; and the in-betweens are TIPS & Mining Equities.

8. The rally in Bitcoin continues, with current prices well above our most recent estimates of fair value, as Tesla, BNY Mellon,  Mastercard and PayPal announced measures that point to growing acceptance and adoption, pushing Bitcoin’s market cap up by $700bn since end-September 2020 on the back on just $11bn in institutional flows, which accounts for only a 1.5% increase in market cap. Current prices are well above our most recent estimates of fair value based on mining costs and risk capital equivalence in gold.

9. Bitcoin does not have any kind of value as a hedging vehicle in the current environment given the same investors drawn to Bitcoin are typically the same type of investors drawn to single name stocks in equity markets. The mainstreaming of Bitcoin is raising its correlation with equities. Since holders of Bitcoin and single name stocks have the same risk preference around macro shocks such as in interest rates, there is a risk of simultaneous deleveraging in both of these assets.

10. The correlation between Bitcoin and equities has risen meaningfully over the past year and looks to likely be sustained. In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk adjusted returns of the portfolio. However, cryptocurrencies are investment vehicles and not funding currencies, so when looking to hedge a macro event with a currency, we recommend a hedge through funding currencies like the Yen or USD instead. If looking to hedge against weak growth, then investors should look to buy 30-year US Treasuries or US dollar versus EM currencies. To hedge inflation, look to take exposure to commodities.

And here it the presentation JPM handed out to all call participants

Tyler Durden Wed, 02/24/2021 - 15:09
Published:2/24/2021 2:21:30 PM
[Markets] GLOBAL MARKETS-Global equities rise as U.S. bond yield fears ease A gauge of global equity markets rose on Wednesday after Federal Reserve Chair Jerome Powell said interest rates will remain low, calming market jitters sparked by a jump in U.S. Treasury yields on fears a robust recovery would drive inflation higher. Crude oil rose more than 2% to fresh 13-month highs while gold prices struggled for traction as elevated Treasury yields eroded the allure of bullion as an inflation hedge. MSCI's all-country world index, a gauge of equity markets in 49 countries, added 0.16%, as rising stocks on Wall Street pushed the global benchmark to reverse losses. Published:2/24/2021 2:21:30 PM
[Markets] The new design for the USPS mail trucks is delivering an animated social debate The new design for the USPS mail trucks is delivering an animated social debate Published:2/24/2021 1:52:31 PM
[Markets] The Ratings Game: Crocs sold 18.9 million pairs of shoes in the most recent quarter, up 37.7% year-over-year Crocs stock has more than doubled over the past year.
Published:2/24/2021 1:52:31 PM
[Markets] Jobless claims preview: Another 825,000 Americans likely filed new unemployment claims The Department of Labor is set to release its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Published:2/24/2021 1:40:39 PM
[Markets] Why Inflation Exploded In The 20th Century Why Inflation Exploded In The 20th Century

By Jim Reid, chief credit strategist at Deutsche Bank

The hottest topic in markets at the moment is inflation. For a bit of background our 2018 annual Long-Term Study was entitled “The History (and Future of) Inflation” where we looked at 800 years of data on the topic.

Today’s Chart of the Day from that report shows that in most of our lifetimes we’ve lived through a very inflationary period relative to long-term history even if it hasn’t always felt like that, especially in recent years. Before the start of the twentieth century, prices generally crept higher only very slowly over time and were indeed often flat for very long periods. For example, in the UK the overall price level was broadly unchanged between 1800 and 1938.

However, inflation moved higher everywhere across the globe at numerous points in the twentieth century. UK prices since 1938 have increased by a multiple of 50 (+4885%) and, of the 25 countries we have continuous inflation data back to 1900, the UK is actually one of only 5 countries in the sample not to experience extreme inflation (if we define it as >25% YoY) in a given year. Of these 25 countries, only Holland (3.0%), Canada (3.0%), the US (3.0%) and Switzerland (2.1%) have seen average annual inflation at 3% or below since 1900.

So what changed in the twentieth century? There was a unique explosion in the global population and we regularly broke ties with precious metal currency systems ahead of abandoning them completely across most of the world from 1971.

Going forward, we won’t have the same population boost (disinflationary), but the working age population in the West plus China will decline which may help labor reclaim lost power (inflationary). Many say technology will offset this. Ultimately though, inflation will likely depend on how aggressive monetary and fiscal policy are and whether they work together consistently. In the post-GFC decade, they worked in opposite directions, but the early signs post-Covid are that they are moving more in the same direction. A fiat currency system allows such an experiment if the policy makers decide to go down that route. All eyes on the US stimulus package(s) and the FED over the coming months and quarters.

Tyler Durden Wed, 02/24/2021 - 14:36
Published:2/24/2021 1:40:39 PM
[Markets] Occidental Petroleum stock is up about 9% to lead S&P 500 gainers Wednesday Occidental Petroleum stock is up about 9% to lead S&P 500 gainers Wednesday Published:2/24/2021 1:24:36 PM
[Markets] Mother Of Cop Who Died After Capitol Riot Believes It Was Stroke, Not Trump Supporter, That Killed Him Mother Of Cop Who Died After Capitol Riot Believes It Was Stroke, Not Trump Supporter, That Killed Him

The mother of deceased Capitol police officer Brian Sicknick believes her son may have suffered a fatal stroke during the Jan. 6 riot, but was not hit in the head by a Trump supporter wielding a fire extinguisher, as mainstream outlets began reporting almost immediately after Sicknick's death.

As journalist Glenn Greenwald recently noted, "Sicknick’s death was the only example the media had of the pro-Trump mob deliberately killing anyone," as the four other people who died that day included Ashli Babbit - who was killed by a police officer, and three other Trump supporters who died, respectively, from a stroke, a heart attack and from being accidentally crushed by the crowd (via

And now, it appears Sicknick's own family believes it was a stroke.

"He wasn’t hit on the head no. We think he had a stroke, but we don’t know anything for sure," 74-year-old Gladys Sicknick told the Daily Mail.

The lack of detail on Sicknick's death didn't stop MSM outlets from lying about it to promote the narrative that Trump supporters were involved in a deadly insurrection. As Sara Carter notes:

On January 8, The New York Times reported that rioters had hit Sicknick in the head with a fire extinguisher while citing two law enforcement officers. The newspaper ultimately issued a correction for the report on February 11 in a separate piece, asserting: “Investigators have found little evidence to back up the attack with the fire extinguisher as the cause of death, the official said. Instead, they increasingly suspect that a factor was Officer Sicknick being sprayed in the face by some sort of irritant, like mace or bear spray, the law enforcement official said.”

Meanwhile, the Daily Mail lays out the facts on the 'fire extinguisher':

On January 10 when video emerged of a rioter hurling a fire extinguisher towards law enforcement on the steps of the Capitol it was co-opted into the narrative as evidence of the protesters’ lethal force.

Four days later, on January 14, retired Philadelphia firefighter Robert Sanford, 55, was arrested as the rioter in the video. His charges included assault of a police officer, disorderly conduct, civil disorder and unlawful entry of the Capitol.

The fire extinguisher he hurled was reported by AP to have ‘bounced off the heads of three officers, two of whom were wearing helmets.’

None of the charges related to Officer Sicknick and yet the narrative continued to run unchecked with not one leader acknowledging the ongoing investigation or the complete absence of any certainty amid the melee of misreporting. -Daily Mail

According to brother Ken Sicknick, Brian texted him after he was injured, making no reference to a fire extinguisher.

"He texted me last night and said, ‘I got pepper-sprayed twice,’ and he was in good shape," Ken told ProPublica. "Apparently he collapsed in the Capitol and they resuscitated him using CPR."

Sicknick was later placed on a ventilator, passing away on Jan. 7 before his family could make it to the hospital to say their goodbyes.

Tyler Durden Wed, 02/24/2021 - 14:14
Published:2/24/2021 1:24:36 PM
[Markets] In One Chart: It’s the anniversary of the stock market’s COVID meltdown: Here’s how assets have performed over the last 12 months The stock market's COVID-19 induced meltdown began one year ago Wednesday. Here's a look at how major financial assets have performed since then.
Published:2/24/2021 1:24:36 PM
[Markets] The unemployment rate for the bottom quartile of Americans is 23% The Federal Reserve says that the unemployment rate for the lowest wage quartile of workers is about 23%. Published:2/24/2021 12:52:28 PM
[Markets] How Ugly Will It Get: CTAs Are The Most Short Treasurys Since 2018... And Getting Shorter How Ugly Will It Get: CTAs Are The Most Short Treasurys Since 2018... And Getting Shorter

A little over a month ago, on January 7 when looking at the technicals in the Treasury market and when the 10Y was trading at just over 1%, we warned that "it's about to get ugly"...

... revealing that the key catalyst for further downside in rates would be when trend-following funds such as CTAs liquidated their long positions and flipped from long to short, an event which Nomura's Masanari Takada said would take place when "10yr UST yields remained above 1.10%".... which they clearly have in the past few weeks.

Well ,since then it has indeed gotten quite "ugly", with the 10Y blasting off from 1% to an intraday high above 1.43% today (at which point Powell was forced to talk down rates once again this morning).

And since the sharp move higher in yields has already had a sharp and cascading effect on risk assets in general and high-duration tech and growth stocks in particular, the question everyone wants answered is what happens next, and will CTAs keep hammering the 10Year?

To answer that question we first need to know how positioned CTAs are currently - after all, one month ago we warned that their liquidation and subsequent short reversal would be the catalyst for the next big move.

Well, as JPM's Nick Panigirtzoglou writes overnight when he confirms just what we said back in January, "the bond market sell-off has likely been amplified by CTAs" and substantially at that: according to JPM estimates, CTA and momentum signals have shifted to their most bearish territory since 2018, although they are still some way from extreme territory (which is probably not good news for those hoping for the shorting to be over).

According to the JPM strategist, "the last week or so has seen an important shift in our signals. Figure 6 depicts the average of the shorter- and longer-term signals for 10y Bunds and USTs, and shows that both have now turned bearish. Indeed, the signal for 10y Bunds turned short on Feb 12th and is now sitting at its most bearish level in two years. Similarly, the signal for 10y USTs turned bearish on Feb 16th and is now sitting at its most bearish level since late 2018."

This confirms what we warned about in January, and to JPM, "suggests that CTAs have served to amplify the bond market sell-off in recent weeks."

Unfortunately, the fact that CTAs have aggressively increased their bearish bias yet are well off extreme positions, cuts both ways: while they could in theory reverse, they can just as easily press momentum and push the 10Y to the critical 1.50% which according to Nomura - which has been well ahead of everyone in its analysis of bond-risk dynamics - will mark the level where stocks suffer a substantial selloff.

So what does JPMorgan, which is once again well behind the curve, think? As Panigirtzoglou writes quite belatedly, the bond market sell-off over the past weeks has been accompanied by a drift up in bond-equity correlation, "raising concerns about de-risking by multi-asset investors, such as risk parity funds and balanced mutual funds" something we also briefly mentioned on monday when the big Treasury puke first emerged:

Since these two types of investors benefit from the structurally negative correlation between bonds and equities (as this negative correlation suppresses the volatility of bond-equity portfolios allowing investors like risk parity funds to apply higher leverage and thus boost their returns and improving risk-adjusted returns for balanced mutual funds as equity drawdowns are mitigated by bond allocations) the opposite takes place when this correlation turns positive: the volatility of bond-equity portfolios increases, inducing these investors to de-risk. This overall increase in risk portfolios has been apparent in recent days with both equity VIX and the bond volatility index, MOVE, rising sharply.

So "How worried should we be about de-risking by these two types of investors" JPM asks?

As shown in the chart below, there were a few episodes over the past years during which the bond-equity correlation turned positive. The major ones were five: the Fed taper tantrum of May-June 2013, the Bund tantrum of May-June 2015, the period into the US election Oct-Nov 2016, Feb 2018 and Q4 2018. Outside these episodes the bond-equity correlation has been predominantly negative helping to contain the volatility of risk parity funds and balanced mutual funds.

What have we learned from those episodes, JPM asks rhetorically? Which ones were most problematic for risk parity funds and balanced mutual funds? Figure 2 and Figure 3 show the performance of these two types of investors during the above episodes when the bond-equity correlation turned positive. For the $150bn risk parity fund universe, the most problematic episode was the taper tantrum of May-June 2013 as they had entered that episode with very high leverage. As a result they were forced to de-risk abruptly and suffered a heavy 10% loss. The other episodes, i.e. May-June 2015, Oct-Nov 2016, Feb 2018 and Q4 2018 were relatively less severe, as risk parity funds lost around 4% and their de-risking was likely more orderly.

What about balanced mutual funds, a $1.5tr universe in the US and $7tr globally?

According to the Greek strategist, these funds have typically higher allocation to equities, around 60%, and are less mechanical and thus have more flexibility in responding to changes in volatilities and correlations. As a result of this flexibility and their higher equity allocation, they posted modest losses during the episodes of May-June 2013, May-June 2015 and Oct-Nov 2016. However, they suffered heavy losses during the Feb 2018 and Q4 2018 episodes as they were caught up with higher equity positioning and thus forced to de-risk by more than the former episodes. This shows how important is the starting point of risk positioning in determining the eventual loss in each episode.

Finally, how vulnerable are these types of investors currently in a scenario where the bond-equity correlation continues to creep up taking the form of a tantrum similar to the above episodes, whether with the involvement of CTAs or not?

To assess their vulnerability JPM resorted to two position proxies. For balanced mutual funds it compared their returns to that of 60:40 equity:bond benchmark as shown in Figure 4. For risk parity funds the bank gauged leverage by using the ratio of their volatility to the volatility of a risk parity fund benchmark. This risk parity fund leverage proxy is shown in Figure 5.

Figure 4 and Figure 5 show that balanced mutual funds look more vulnerable than risk parity funds currently. This is because after de-risking in January these balanced mutual funds appear to have raised their risk positioning, i.e. increased their equity overweights and bond underweights, to high levels in February. Instead, after de-risking in January, risk parity funds’ leverage stayed below average during February.  In other words, if the bond-equity correlation continues to creep up, e.g. via a worsening of the equity market drawdown even as yields continue to grind higher, balanced mutual funds pose a greater vulnerability for the equity market.

Finally, JPMorgan cautions that the elevated positioning by balanced mutual funds "is also raising questions about month-end rebalancing" as the equity rally and the bond selloff during February "is creating a pending rebalancing flow for balanced mutual funds (assuming the past few days equity market correction does not propagate to erase any pending rebalancing)."

Assuming balanced mutual funds had fully rebalanced by January, which is a reasonable hypothesis given the reduction in their betas in January, JPM expects around $90bn of equity selling by them for February month-end. However, as we discussed last Nov/Dec and as some - namely those who have a habit of trying to frontrun month and quarter-end rebalancing - learned the hard way is that balanced mutual funds do not necessarily rebalance every month. In fact, according to JPM, during the previous quarter, they appear to have postponed rebalancing during Nov-end or Dec-end and to have waited until January to de-risk/rebalance. As such, in JPMorgan's opinion given balanced mutual funds had de-risked in January, it would be too soon to rebalance again in February, and the bank believes that "they will likely postpone any pending rebalancing to March." On the other hand, considering that this advice comes from JPM which has been painfully wrong about most market trends and themes in recent months, don't be surprised to see a violent and sudden month-end flush...

Tyler Durden Wed, 02/24/2021 - 13:37
Published:2/24/2021 12:52:28 PM
[Markets] The Dow is up more than 400 points as it heads toward a record close Wednesday The Dow is up more than 400 points as it heads toward a record close Wednesday Published:2/24/2021 12:52:28 PM
[Markets] Want to sleep well and still make money? This could be the stock fund for you Want to sleep well and still make money? This could be the stock fund for you Published:2/24/2021 12:21:44 PM
[Markets] Ugly, Tailing 5Y Auction Completes Day Of Misery For Treasuries Ugly, Tailing 5Y Auction Completes Day Of Misery For Treasuries

A far cry from yesterday's solid 2Y auction, moments ago the Treasury sold $61BN in 5 year paper in a very ugly auction.

The high yield of 0.621% was sharply higher from last month's 0.424%, the direct result of the pounding the belly has suffered in recent days. The fact that it tailed the When Issued 0.615% by 0.6bps only confirms just how ugly demand for any duration was during today's Treasury rout.

The misery did not end there, and the bid to cover dropped from 2.34 to just 2.24, the lowest since December 2018 as buyside interest clearly collapsed into the auction.

The internals were less ugly, with Indirects sliding from 60.5% to just 57.1%, below the 60.7% recent average. And with Directs taking down 14.4%, up from 14.1% last month, Dealers were left holding 28.6%, the highest since November.

Overall, a very ugly auction which was in keeping with the hammering observed by the belly in recent days, perhaps a function of expectations that the bulk of the Fed's rate hikes will take some time around 2024/2025 at which point all bets will be off. For now, however, the auction was ugly enough to push yields higher across the curve.


Tyler Durden Wed, 02/24/2021 - 13:16
Published:2/24/2021 12:21:44 PM
[Markets] The Fed: Fed’s Clarida sees brighter economy in 2021, but he’s not worried about inflation The Federal Reserve's second in command said the economy is primed to show big improvement this year owing to more Americans getting vaccinated and Congress approving more stimulus. What he doesn't expect to rise much is inflation.
Published:2/24/2021 12:21:44 PM
[Markets] Mark Hulbert: Do nursing homes and private equity mix? New research into the effects of private equity acquisition of nursing homes
Published:2/24/2021 11:51:28 AM
[Markets] Why Durham Report Is Becoming Highly Unlikely Why Durham Report Is Becoming Highly Unlikely

Authored by Lee Smith via The Epoch Times (emphasis ours),

Republicans on the Senate Judiciary Committee say they want to know if President Joe Biden’s nominee for Attorney General Merrick Garland will allow Special Counsel John Durham’s investigation into the origins of the Federal Bureau of Investigation’s Crossfire Hurricane probe to continue. “I have no reason to think he should not remain in place,” Garland told Sen. Chuck Grassley Monday.

Attorney John Durham speaks to reporters on the steps of U.S. District Court in New Haven, Conn., on April 25, 2006. (Bob Child/AP Photo)

In reality, if confirmed Garland will not allow Durham to stay in place, never mind issue a report. The prospect that Biden’s attorney general might allow Durham to indict former Barack Obama administration officials is ludicrous. Remember that documents released over the last year gave evidence that as vice-president Biden was not only aware of the spying operation against Trump officials but participated in it. Biden not only knew that the FBI was framing incoming National Security Advisor Michael Flynn but suggested that the Department of Justice might charge Flynn for violating the Logan Act.

In other words, the FBI officials that Durham is reportedly investigating are Biden’s co-conspirators. To allow them to be indicted would not only point to Biden’s guilt but also show that the most powerful man in the world is unable or unwilling to protect allies who have helped advance the cause of the party he now leads. That would show Biden to be weak. Garland understands that his primary duty as Biden’s chief law enforcement officer is not to oversee the fair and equal treatment of all Americans under the law, but to protect the president and the party he serves.

The Biden administration has already shown it is a very different animal than Trump’s. During his four years in office, Trump’s allies complained that his biggest problem was staffing. It’s true that key spots in his administration were filled with officials who opposed his America First agenda. There were problems with the personnel office, insiders explain. Further, sometimes Trump family members pressed for friends without the experience or commitment to implement Trump’s vision. But even those least experienced or most opposed to Trump’s vision would’ve fallen in line, if he’d given them cause to fear him.

In “The Prince,” Machiavelli writes that in deciding between earning the love and respect of his subjects, the successful prince must choose the public mood that he can control. Instead, the 45th president of the United States sought love. Perhaps the clearest record of that is to be found in former FBI director James Comey’s memos of his meetings and conversations with Trump. They are unintentionally moving documents, showing that Trump solicited the help and even friendship of experienced bureaucrats like Comey. But to him, Trump’s entreaties signaled weakness. Soon Comey saw that the new president had become frustrated when the director failed to publicly clear him of any ties to Russia. And Trump only asked him again to clear him. Instead of firing Comey in disgrace, he cut Flynn loose and then petitioned Comey to go easy on the retired general, the one man who was most loyal to the president. As a result, Trump got the Mueller investigation, which consumed two years of his presidency. But even then there was still time for Trump to elicit the respect that is engendered by fear.

William Barr may be a decent man, but he is a Washington man and thus subject to the winds of power that course through the capital. What makes a Washington man honorable is not any abstract sense of duty but the fear that if he doesn’t serve his boss, he will be destroyed. In Spring 2020, Barr counseled the president against firing FBI director Christopher Wray, warning it would be taken as evidence the White House was in chaos in the middle of an election year. Barr could have fired Wray himself, and had reason to do so, for withholding documents from DOJ prosecutors. But the attorney general was probing the president. By agreeing to Barr’s wishes, Trump indicated there would be no price to be paid for crossing him. Barr hedged his bets with the potential victory of a candidate who had shown that by spying on the Trump team there was no question he would, if victorious in November, retaliate against Trump’s attorney general for chasing him. With no pressure on him from Trump, Barr did not pressure his prosecutor to choose between issuing indictments by late summer, as had previously been promised, or being replaced by someone who would. For all practical purposes, the Durham investigation was over by April.

Biden’s attorney general has an additional incentive to shut down Durham for good. Let’s say the special counsel has the evidence to indict the senior FBI officials he has been investigating. That would confirm what Republicans have been saying about Crossfire Hurricane since 2017—the FBI wasn’t investigating Russian interference, it was spying on a presidential candidate and then the commander-in-chief. To show that Biden’s party was lying about that would suggest that maybe the Democrats were lying about other things, too, maybe lying about everything. They lied about the phone call that got Trump impeached; they lied about the “mostly peaceful” George Floyd riots; they lied about the Jan. 6 protests by calling them an armed insurrection; and most importantly, they lied about the transparency and legitimacy of the 2020 election.

Republicans could try to fight Garland’s nomination or at least use the hearings to advance a case about Democratic Party corruption, but they won’t because they fear the new administration.

Lee Smith is the author of the recently published book “The Permanent Coup: How Enemies Foreign and Domestic Targeted the American President.”

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Tyler Durden Wed, 02/24/2021 - 12:45
Published:2/24/2021 11:51:28 AM
[Markets] Coronavirus Update: Worldwide COVID-19 cases down for a sixth straight week Coronavirus Update: Worldwide COVID-19 cases down for a sixth straight week Published:2/24/2021 11:22:16 AM
[Markets] The Fed Just Keeps Getting More And More Dovish The Fed Just Keeps Getting More And More Dovish


Is Jerome Powell the most dovish Fed chair yet?

Peter Schiff said he wasn’t when he first took the position and was raising interest rates. But he is now. The minutes from the January FOMC meeting released last week bear this out.

“We’re all doves now. That is the problem, the Fed gets progressively more dovish,” Peter said in a recent podcast.

An economy built on a foundation of debt needs more and more monetary accommodation to keep it going.

Whatever preconceived notions Powell had when he first took the job, he’s now been faced with reality. And the reality is it’s going to hit the fan unless you keep printing money. And that’s exactly what they’re going to do.”

That’s exactly what the January minutes revealed. It’s clear the central bankers think the economy is going to take longer to recover than many expect, unemployment remains elevated, stimulus must continue, there is no plan to raise interest rates or shrink the balance sheet. The FOMC also indicated that it would not make any big policy shifts without first signaling it to the markets. Peter said they essentially gave the green light to keep the pedal to the metal.

Don’t worry about anything in the road that’s going to blindside you. You’ve got a clear path to gamble, to speculate, to spend, to do whatever you want, because we are not going to do anything to upset this apple cart or to rain on your parade.”

The minutes also affirmed that the Fed is not worried about rising prices and inflation. In fact, the FOMC discussed running what amounts to a PR campaign to sell higher prices to the American public. As Reuters report put it, “Federal Reserve officials last month debated how to lay the groundwork for the public to accept higher inflation.”

With a jump in some prices expected this spring, ‘many participants stressed the importance of distinguishing between such one-time changes in relative prices and changes in the underlying trend for inflation.’ … ‘A number of participants’ said they saw such price increases on the horizon for goods ‘whose production has been subject to supply chain constraints, or soon could be; others anticipated that a possibly abrupt return to normal levels of activity could result in one-time increases in certain prices,’ the minutes stated as Fed officials wrestled with how to prepare for a post-pandemic reopening of the economy.”

Translating this out of Fed-speak, the FOMC is telling us the central bank isn’t going to do squat about inflation. In fact, they’re going to pretend it isn’t inflation. It’s just rising prices due to pent-up demand. If you ask me, this is a distinction without a difference.

Peter said there’s another problem with this storyline. There isn’t that much pent-up demand.

Consumers kept on spending even though they were unemployed because they had a lot of money. I mean, there is pent-up demand for certain things — maybe travel, taking a cruise, going out into a bar — so there are some sectors of the economy where there’s obviously some demand that’s been pent up. But during the pandemic, Americans simply shifted their spending. Instead of spending their money on those things, they spent it on something else. It’s not like all that demand has been held off. It’s just been redirected someplace else.”

Regardless, the Fed is clearly telling us that it’s not going to worry about rising prices. As Peter put it, they don’t care. They’re banking on price increases being transitory.

So, what they’re telling the market is don’t even pay attention to these PPI numbers. Don’t pay attention to the CPI numbers. We don’t care. Don’t pay attention to what you’re seeing in the oil market, or in the lumber market, or in the copper market, or in the soybean market. We don’t care. All of this is temporary noise. It’s all going to come out in the wash.”

But how do they know? How do they know that big price increases aren’t the beginning of an even bigger trend?

They don’t. But you know what? They have no choice but to pretend that’s the case because the last thing they want to do is acknowledge that there’s an inflation threat because the real last thing they want to do is do anything about the inflation threat. So, they can’t admit that there’s a monster that they know they can’t vanquish, so they have to pretend it’s not there.”

That raises another question: when will the markets finally figure this out? When will people stop selling gold and silver and realize that rising inflation is not a one-time threat that the Fed will stomp out by raising rates and tightening monetary policy?

They are going to do nothing. The dollar is going to collapse, which is the mother of all tailwinds for gold. And so, at some point, it’s going to happen. But in the meantime, they’re simply creating more buying opportunities for people who have been really slow to pull the trigger on getting their precious metals, getting their mining stocks.”

Tyler Durden Wed, 02/24/2021 - 12:05
Published:2/24/2021 11:22:16 AM
[Markets] : New York has more very wealthy tycoons but London the highest number of millionaires, according to this report New York led the investment category due to the high number of top global firms based there as well as strong domestic investment.
Published:2/24/2021 11:22:16 AM
[Markets] British pound pushing toward levels unseen in three years British pound pushing toward levels unseen in three years Published:2/24/2021 10:51:09 AM
[Markets] "Spot's Rampage" Event Awakens Us With Reality Of Dystopian World Ahead  "Spot's Rampage" Event Awakens Us With Reality Of Dystopian World Ahead 

A company called MSCHF has been responsible for the most absurd viral stunts and products throughout the internet. Their products range from a squeaking rubber chicken bong for smoking weed to Nike sneakers filled with Holy Water to a YouTube channel dedicated to a man eating mayonnaise. 

MSCHF's latest stunt debuts Wednesday, Feb. 24, beginning at 1300 ET. The company allegedly bought a Boston Dynamics Spot robot and mounted a paintball gun to it. 

Tomorrow's live stream event will allow attendees, randomly selected, to control the dystopic robot for two minutes. Those selected will be able to shoot a ".68cal paintball gun" mounted to Spot and aim at anything in an unknown "art gallery" for two minutes. 

To summarize the company's manifesto. It said: "See Spot KILL!! Spot is an empathy-building tool, because: Cute and approachable!" 

Here's the manifesto: 

See Spot Run. It tops out at a blistering 3mph.

See Spot Roll Over. Spot is an empathy missile, shaped like man's best friend and targeted straight at our fight or flight instinct. When killer robots come to America they will be wrapped in fur, carrying a ball. Spot is Rob Rhinehart's ideal pet: it never shits.

Good Boy, Spot! Everyone in this world takes one look at cute little Spot and knows: this thing will definitely be used by police and the military to murder people. And what do police departments have? Strong unions! Spot is employee of the month. You never need to union bust a robot - but a robot can union bust you.

The manifesto continued, "Boston Dynamics and they HATED this idea." They said the robotics company even offered them two free robots to call off the event. 

See Spot KILL!! Spot is an empathy building tool, because: Cute and approachable! We talked with Boston Dynamics and they HATED this idea. They said they would give us another TWO Spots for FREE if we took the gun off. That just made us want to do this even more and if our Spot stops working just know they have a backdoor override built into each and every one of these little robots.

See Spot Fall Over And Freak Out. Quite an experience to live in fear, isn't it? That's what it is to be a slave. Our saving grace: Spot is evil but not very good at its job.

Boston Dynamics wasn't thrilled with the stunt. They released this statement last week: 

MSCHF said the only "losers" of the event would be the "human race when remote-operated dogs of war become commonplace. As these war dogs become fixtures of militaries and militarized police, we will all learn a new meaning of fear: an oppressor who can pull the trigger without even needing to be physically present." 

... and maybe MSCHF is on to something as the US Army continues to test, develop, and field autonomous war machines.

Tyler Durden Wed, 02/24/2021 - 11:45
Published:2/24/2021 10:51:09 AM
[Markets] The Ratings Game: Square’s big revenue ambitions draw cheers Snap Inc. shares are rising again Wednesday as analysts cheer the company's new growth targets and its plans to dramatically expand the revenue potential of its various features.
Published:2/24/2021 10:51:09 AM
[Markets] How should millennials think about their retirement paths? Join live event today How should millennials think about their retirement paths? Join live event today Published:2/24/2021 10:24:23 AM
[Markets] Stocks & Bonds Suddenly Bid On Brainard, Powell Double-Dove-Down Stocks & Bonds Suddenly Bid On Brainard, Powell Double-Dove-Down

Fed Chair Powell did it yesterday... unleashing his uber dovishness to save stocks and today has done the same by reaffirming just what a shitshow the US economy is how long it will take to mend... (yeah seriously)

“There is a long way to go to maximum employment.”

Additionally, Powell says it could take more than three years to hit that 2% average inflation target.

“I’m confident that we can and that we will and we are committed to using our tools to achieving that. The three-year time frame is actually an arbitrary 3-year time frame chosen by us. And you know, we’re just being honest about the challenge.

“We live in a time where there is significant disinflationary pressures around the world and where essentially all major advanced economy’s central banks have struggled to get to 2%. We believe we can do it, we believe we will do it. It may take more than three years but we’ll update -- every quarter we update that assessment and we’ll see how that goes.”

Then Fed Governor Lael Brainard, who has become an increasingly vocal and potentially influential policy maker, has released a speech that echoes Powell in its dovishness:

“The economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress.”

That sent stocks soaring...

And also put a bid under bonds, with 30Y yield snow down 5bps from the intraday highs...

Source: Bloomberg

Bloomberg Opinion's John Authers, in reviewing the Powell economic commentary in his prepared remarks, wrote:

“This was as downbeat an assessment as he could have mustered. Nothing shifted thereafter, with Powell continuing to emphasize the way the recession has fallen disproportionately on minorities, and persistently stressing the downside rather than the upside risks to inflation.”

So bad news is good news?!

Oh and don't worry about the bubble:

“There are some asset prices that are elevated by some measures,” Powell says. Overall, it’s a “mixed picture," adding that leverage in the financial system is moderate.

Tyler Durden Wed, 02/24/2021 - 11:07
Published:2/24/2021 10:24:23 AM
[Markets] The Wall Street Journal: Credit card companies are taking another swipe at merchants with higher fees Visa Inc. and Mastercard Inc. are planning to raise swipe fees for some types of credit-card purchases in April, adding to the squeeze felt by restaurants, retailers and other merchants already struggling through the Covid-19 pandemic.
Published:2/24/2021 10:24:23 AM
[Markets] Metals Stocks: Gold in ‘danger zone’ as prices fail to retain perch at $1,800 Gold futures head lower Wednesday for a second session, failing to hold above the key $1,800 level after Federal Reserve Chairman Jerome Powell tried to placate markets that had grown skittish about a rapid rise in bond yields as the economy attempts to recover from the COVID-19 pandemic.
Published:2/24/2021 9:50:30 AM
[Markets] Policy Risks Are Rising... Hope Is Never A Good Strategy Policy Risks Are Rising... Hope Is Never A Good Strategy

Authored by Bill Blain via,

“Let’s go to the other side. The view will be better over there...”

No surprises from Fed-Head Jay Powell yesterday – no matter how much we fear inflation or recovery pushing rates higher, he reassured us by saying what the market wanted to hear: the US economy remains “a long way from our employment and inflation goals, it is likely to take some time for substantial progress to be achieved.” Low rates will continue long-term, “inflation dynamics” won’t “change on a dime” – and even if they did the Fed is ready with the necessary tools to address it. Until then, the Fed will keep buying bonds, controlling the yield curve, and will stay well away from any comments on fiscal policy. 

The telling moment yesterday was Powell’s ongoing refusal to comment on fiscal policy – as a senator tellingly asked: what do you think of Biden’s $1.9 trillion stimulus package? Powell made clear he won’t say anything. If he did he’d be making a political comment. 

Let me make a cryptic observation: the right hand might well know what the left hand is doing – but they aren’t necessarily working together to rebuild the global economy.  

The left and right hand tools I’m talking about are monetary policy wielded by “independent” central banks, and fiscal policy determined by national governments. Both seek to achieve the same end – stronger economic growth. Both are very effective levers to be used to heat or cool economies. Both are critical. Any market player will be aware the biggest risks for any economy are policy mistakes in fiscal or monetary policy can result in magnified financial crisis – such as austerity in the early 2010s or the taper tantrum a few years back.

If you are placing your trust in markets on the ability of central banks and governments to invisibly/independently coordinate these powerful twin levels of fiscal and monetary policy – well that’s a big ask. Can the global economy really recover without fiscal and monetary policies being played harmoniously together? Can the global economy be redirected to address all the multiple challenges like climate change, income and social inequality, and the rest unless monetary and fiscal policy are used effectively by grown ups to lever economies? 

I’m asking a rhetorical question – you know it’s happening, but you don’t know how effectively. That depends on the quality of government, and the quality of central bankers. Worries me. It should probably worry you.

Policy uncertainty is a key risk for markets. The big concerns come from the various factions of the market who perceive multiple potential policy mistakes – like runaway debt to pay for fiscal stimulus driven by “god-damn socialist” spending and tax programmes, or the debasement of currency though overly easy monetary stimulus.  Much of that noise is politically driven – but if often rooted in common sense.

We got a clear illustration of the power of monetary policy yesterday: after stumbling for a couple of days, markets went back into rally mode after the Fed confirmed its easy money fire-sale will continue for the long-term. If the $1.9 trillion Biden stimulus package is passed, it will have a similar effect – but also consequences in terms of how it benefits particular sectors.

Analysts can argue about fundamental vs growth stocks, or the coming transition from tech into dividend stocks (or is it the other way round?), but the bottom line today is its supportive policy that is driving markets. Jay Powell won’t ever admit it, but it’s cheap (effectively free) money, artificially low interest rates and QE infinity around the globe that has been driving the remorseless rally across financial assets. The prices of real assets (everything from property, fast cars, art and fine malt whisky) are all being dragged higher in the wake of relative value to financial assets.

Really smart investors are increasingly hedging their wealth created from financial assets (stocks and shares) by putting much of their allocations into Alternatives: outright real assets or cash flow driven assets, assets that are likely to retain value while still paying attractive returns. (The cost is lower liquidity). The idea is that if crisis ever comes, then owning the wheelbarrow might be better than owning the mountains of worthless cash it’s carrying (to cite the classic example of inflationary danger from Weimar Germany…)

The problem is worse in Europe. ECB head Christine Lagarde can say whatever she likes about doing whatever is needed, and keeping rates low, but Europe is limited to reliance primarily on monetary policy only. 

While the US Congress or the UK Parliament can approve how much government spends to reflate their respective economies via fiscal policies, the rules of the Euro mean countries can only borrow if they are within the rules. Hence the curious construct of the ECB’s €750 bln Recovery Bond programme – which is likely to prove a Euro late and short by the time it actually filters down as grants and loans to Euro members. 

Because fiscal policy is constrained at the level of the national states by the Euro’s rules, and the ECB can’t be seen to be acting as a political fiscal decision maker (even if its connived at such control via the EU through the recovery bonds), all the ECB can do is keep trying to keep rates as low as possibly via QE and yield curve control and HOPE it might drive a Euro wide recovery. 

Hope is never a good strategy. 

The last 10-years has shown you can’t drive an economy into recovery through monetary stimulus on it own – that’s absolutely clear across Spain, Italy, Greece and the rest. These nations need to deliver fiscal stimulus; via regional policy, education and technical training, youth employment programmes, and a host of other programmes. But the only instrument available is the ECB’s zero rate policy and hoping the €1.85 trillion QE programme will drive growth. 

Again. Hope is not a good strategy. If it hasn’t worked for 10-years – why should it now. It’s the equivalent of pushing a heavy boulder uphill with a length of damp string. 


A couple of comments from readers yesterday asking about Cathie Wood (investment superstar of the day) and ARK – noting its exposures to Tesla, Bitcoin and Biotech. I would simply suggest you read something I put out weeks ago: ARK: Tech, Luck and Megatrends.

Tyler Durden Wed, 02/24/2021 - 10:45
Published:2/24/2021 9:50:30 AM
[Markets] Tiger Woods Recovering From "Long" Surgery For Multiple Open Leg Fractures Tiger Woods Recovering From "Long" Surgery For Multiple Open Leg Fractures

Tiger Woods, the greatest golfer of his generation, is recovering from a lengthy surgery after he sustained multiple open fractures to his leg and ankle during a single-car accident Tuesday morning. Woods' car reportedly rolled over several times, and required a rescue team equipped with special tools to rescue the trapped and badly injured athlete.

While Woods' injuries are said to be non-life-threatening, at the time of the accident, he was recovering from back surgery which he had just the week before. With Woods' career in jeopardy, the chief medical officer and interim chief executive at Harbor-UCLA Medical Center detailed the extent of the injuries, saying that a rod, pins and screws were needed to stabilize Woods’s injuries.

"Comminuted open fractures affecting both the upper and lower portions of the tibia and fibula bones were stabilized by inserting a rod into the tibia," Anish Mahajan said in a statement released early Wednesday by Woods’s representatives.

"Additional injuries to the bones of the foot and ankle were stabilized with a combination of screws and pins. Trauma to the muscle and soft-tissue of the leg required surgical release of the covering of the muscles to relieve pressure due to swelling."

For those who aren't up on their medical terminology, a comminuted open fracture is one in which a bone breaks in more than one place and breaks through the skin.

Woods’s team added that the golfer is “awake, responsive and recovering in his hospital room” after what was described as a "long" surgery, and thanked everyone for their "overwhelming support and messages during this tough time."

Woods, who was rehabbing from his fifth back surgery, had been in the Los Angeles area for the Genesis Open, a golf tournament his foundation sponsors. He remained to shoot videos, joining Dwyane Wade and David Spade on Monday and scheduling more with quarterbacks Justin Herbert of the Los Angeles Chargers and Drew Brees of the New Orleans Saints.

Woods had stayed at a resort in Rancho Palos Verdes, south of downtown Los Angeles, and was en route to Rolling Hills Country Club when he crashed while driving through a residential area. His car crossed a median on a hilly, curvy road at a place where a number of accidents had happened and rolled several hundred feet before settling on the driver’s side of the 2021 Genesis SUV. Fortunately, deputies said Woods was wearing his seatbelt, which probably saved his life.

One of the first people to arrive on the scene said he opted not to remove Woods from the car right away so they could wait for the fire department with its specialized tools, which were used to carefully extract Woods from the vehicle.

"He didn’t seem like he was in distress, and he was able to kind of talk to me a little bit … I did consider pulling him out myself, but I decided that it would be better to wait for the fire department, since they have the specialized tools and training to remove people safely from vehicles like that."

Meanwhile, as far as what might have caused the crash, one TV director reportedly told coworkers that he nearly crashed into an "agitated and impatient" Woods hours before the accident. The director of the TV show "Grown-ish" recounted the near-miss to his crew even before news of the golfing legend’s horrifying crash first broke. Woods crashed in a residential area in a spot where many accidents have occurred, and video obtained by TMZ shows Woods driving his Genesis GV80 SUV just moments before the crash.

The clip was filmed at 0705PT. on Hawthorne Boulevard, the same road that the legendary golfer crashed on seven minutes and five miles later.

Tyler Durden Wed, 02/24/2021 - 10:15
Published:2/24/2021 9:29:08 AM
[Markets] U.S. new-home sales rise as buyers confront property scarcity U.S. new-home sales rise as buyers confront property scarcity Published:2/24/2021 9:29:08 AM
[Markets] Dispatches from a Pandemic: ‘It feels predatory’: 6 million people are not eligible for a COVID-related payment pause on student debt — even if they work in public service One student-loan borrower is slated to pay off her debt when she’s 87, despite a career in public service.
Published:2/24/2021 9:29:08 AM
[Markets] Why more people are filing their taxes weeks before April 15 deadline this year Why more people are filing their taxes weeks before April 15 deadline this year Published:2/24/2021 8:51:16 AM
[Markets] : ‘I was just panicking:’ Some Texans face extraordinary electric bills after winter storms — but can they do anything about it? Frisco resident Liz Guess’s utility provider, Griddy, charged her credit card 15 times due to an automated debit.
Published:2/24/2021 8:51:16 AM
[Markets] Biden To Sign Executive Order On Alarming Computer Chip Shortage That's Thrashed Carmakers Biden To Sign Executive Order On Alarming Computer Chip Shortage That's Thrashed Carmakers

Among US-manufactured items seen as vital across multiple industries which increasingly came up in short supply as demand increased faster than expected amid the coronavirus pandemic have been semiconductor chips and large-capacity batteries for electric vehicles.

The chip shortage has most immediately and severely hit US automakers to the point of having to in many cases halt production and furlough workers amid the supply bottleneck. "The supply disruptions threaten to harm U.S. economic growth and could lead to layoffs, prompting concern from the White House as Biden seeks to rebuild an economy battered by the coronavirus," Bloomberg writes.

AFP/Getty Images

On Wednesday President Biden will sign an executive order which seeks to address the global semiconductor chip shortage after a session with a bipartisan group of lawmakers to discuss the growing crisis. "Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them," an administration official said.

Reuters cites alarming numbers out of Ford Motor Co which said recently that "a lack of chips could cut the company’s production by up to 20% in the first quarter while General Motors said it was forced to cut output at factories in the United States, Canada and Mexico and would reassess its production plans in mid-March."

The crisis at home also comes as China is chasing its own semiconductor self-sufficiency and as Republicans pressure the Biden White House to act to protect pandemic-slowed American supply chains. The slowed supply in the US is also hurting smartphone companies.

"U.S. semiconductor firms account for 47% of global chip sales but only 12% of production, because they have outsourced much of the manufacturing overseas, according to the Semiconductor Industry Association," Reuters underscores. "In 1990, the U.S. accounted for 37% of global semiconductor production."

Via The Wall Street Journal/IHS Market

Part of the problem, as WSJ recently reviewed, is the immense cost, space and construction it takes to set up a chip fabrication plant which usually "take more than two years to set up and the soaring cost of building and equipping them has led more semiconductor companies to outsource more of their production needs. As examples, WSJ notes that "Renesas, NXP and Infineon -Cypress, which together account for nearly 80% of the automotive chip market, all use TSMC for some of their manufacturing. The Taiwanese firm now produces about 70% of the microcontroller units used in the world’s automobiles, estimates Phil Amsrud of IHS Markit."

The new executive order, expected to be signed late in the afternoon, will initiate an immediate 100-day review of supply chains for the following products deemed vital to US industrial development and the defense sector: semiconductor chips, large-capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals.

Tyler Durden Wed, 02/24/2021 - 09:50
Published:2/24/2021 8:51:16 AM
[Markets] FDA on Johnson & Johnson's vaccine candidate: no ‘specific safety concerns’ FDA on Johnson & Johnson's vaccine candidate: no ‘specific safety concerns’ Published:2/24/2021 8:19:43 AM
[Markets] Fisker Partners With Foxconn To Build Electric Cars  Fisker Partners With Foxconn To Build Electric Cars 

Electric-car maker Fisker entered into a memorandum of understanding with Foxconn Technology Group, the world's biggest electronics manufacturer, to build electric vehicles as soon as the fourth quarter of 2023. It seems Fisker is getting another shot at making electric vehicles after declaring bankruptcy in 2013.

Fisker's shares jumped nearly 18% in trading in the premarket. 

Taiwan's Foxconn is expected to build more than 250,000 vehicles per year. The electric cars are expected to be distributed to North America, Europe, China, and India markets. 

"Projected start of production is Q4 2023; this will be the second vehicle introduced by the Fisker brand, following the launch of the Ocean SUV in Q4 2022," the company press release said.  

"We created our company to disrupt every convention in the auto industry," Fisker Chairman and Chief Executive Officer, Henrik Fisker said in a statement. 

"The creation of Project PEAR with Foxconn brings together two likeminded and complementary companies, each focused on creating new value in a traditional industry. We will create a vehicle that crosses social borders, while offering a combination of advanced technology, desirable design, innovation and value for money, whilst delivering on our commitment to create the world's most sustainable vehicles," Fisker continued. 

"The Fisker and Foxconn partnership brings together two global leaders in innovation that will join forces to unlock the potential of the electric vehicle industry," said Foxconn Technology Group Chairman, Young-way Liu." 

"Not unlike when Isaac Newton realized the powers of gravity, the inspiration for this project has come from some unconventional sources," added Fisker. "The design sketch hints at the direction we are taking. However, with the level of innovation planned for this vehicle, I intend to keep the final design a surprise until the last possible moment!"

While automakers, big and small, are increasingly releasing new models - that crowding-out effect may not be a good fit for Telsa, whose equity valuations are sky-high. As of Feb. 23, Tesla's PE ratio, a simple way to assess whether a stock is over or undervalued, is at a mind-numbing 1,141. 

More or less, the flood of electric cars entering the market in the next couple of years may not be the best news for Tesla unless Elon Musk continues to buy Bitcoin. 

Tyler Durden Wed, 02/24/2021 - 09:04
Published:2/24/2021 8:19:43 AM
[Markets] The Moneyist: We started a home-schooling pod with another family. They refused to participate or pay 50% for the nanny for 2 weeks after we got back. Who’s right? ‘I still paid my share of the nanny during our absence and intended to pay the nanny in full after our return, although I did not agree with their assessment.’
Published:2/24/2021 8:19:43 AM
[Markets] Stephen Roach: Why a boom isn't in the cards for the U.S. economy Stephen Roach: Why a boom isn't in the cards for the U.S. economy Published:2/24/2021 7:55:38 AM
[Markets] Stocks Slammed As Treasury Yields Explode Higher Stocks Slammed As Treasury Yields Explode Higher

After a positive night, US equity futures are suddenly sliding as Treasury yields spike further.

US 10Y Yields just broke above 1.40%...

Source: Bloomberg

10Y Yields are now at their highest since Feb 2020...

Source: Bloomberg

30Y Yields are now up over 10bps!

Source: Bloomberg

The dollar is also spiking...

Source: Bloomberg

And that spike has spooked stocks...

Get back to work Mr.Powell!

Tyler Durden Wed, 02/24/2021 - 08:50
Published:2/24/2021 7:55:38 AM
[Markets] Bitcoin Bounces Back Above $50K After Square, MicroStrategy Buying Bitcoin Bounces Back Above $50K After Square, MicroStrategy Buying

Bitcoin has bounced back from its lows around $45,000 yesterday to over $50,000 this morning following reports from Square last night, and MicroStrategy this morning, of more corporate HODLing.

Source: Bloomberg

After reports that Square added $170 million of Bitcoin to its reserves, MicroStrategy today announced that it had purchased an additional approximately 19,452 bitcoins for approximately $1.026 billion in cash at an average price of approximately $52,765 per bitcoin.

As of February 24, 2021, the Company holds an aggregate of approximately 90,531 bitcoins, which were acquired at an aggregate purchase price of approximately $2.171 billion and an average purchase price of approximately $23,985 per bitcoin, inclusive of fees and expenses.

“The Company remains focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.

“The company now holds over 90,000 bitcoins, reaffirming our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, can serve as a dependable store of value. We will continue to pursue our strategy of acquiring bitcoin with excess cash and we may from time to time, subject to market conditions, issue debt or equity securities in capital raising transactions with the objective of using the proceeds to purchase additional bitcoin.”

“MicroStrategy remains dedicated to our enterprise analytics customers and our goal of operating a growing profitable business intelligence company,” said Phong Le, President & CFO, MicroStrategy Incorporated.

“We believe our bitcoin strategy, including our bitcoin holdings and related activities in support of the bitcoin network, is complementary to our software business, by enhancing awareness of our brand and providing opportunities to secure new customers.”

Bitcoin also found support from the futures market where funding rates dropped substantially. Across major futures exchanges, including Binance, Bybit and Bitfinex, the funding rate of Bitcoin has dropped to 0.01%.

The Bitcoin futures funding rate was consistently above 0.1% throughout the entirety of the rally from the $40,000s to $58,000. When the futures funding rate is high, it means the market is overcrowded with buyers and the rally likely overextended. This creates a major risk of a long squeeze, which can cause the price of Bitcoin to drop quickly in a short period.

With the funding rate back to 0.01%, the risk of a long squeeze is significantly lower and if a new uptrend ensues, the rally could be more sustainable.

Additionally, Ark Investment Management founder, CEO and CIO Cathie Wood, who said that the retracement was a "healthy" sign given months of near-vertical upside.

Speaking to Bloomberg, she said that was “very positive on Bitcoin, very happy to see a healthy correction here."



Tyler Durden Wed, 02/24/2021 - 08:13
Published:2/24/2021 7:25:41 AM
[Markets] Bond Report: 30-year Treasury bond yield approaches 2.25% on inflation fears U.S. Treasury yieldsrise as worries around inflationary pressures renewed the selloff in longer-dated government bonds.
Published:2/24/2021 7:25:41 AM
[Markets] Market Snapshot: Stock futures edge higher after Tuesday’s intraday rebound Stock-index futures edge higher Wednesday as investors prepare for a second day of testimony from Federal Reserve Chairman Jerome Powell after his remarks before a Senate panel were credited with helping major benchmarks trim or erase big intraday losses.
Published:2/24/2021 6:50:10 AM
[Markets] Cathie Wood's ARK Hit By Record Outflows, Sold Apple To Catch Falling Knife In Tesla Tuesday Cathie Wood's ARK Hit By Record Outflows, Sold Apple To Catch Falling Knife In Tesla Tuesday

We would be remiss to mention the turmoil that the NASDAQ has been under for the last couple of sessions without mentioning everyone's favorite "visionary" tech investor, Cathie Wood at ARK Invest. With more than $50 billion in ETF AUM, up from $3.6 billion this time last year, Wood has been featured almost non-stop in financial media as the next revolutionary asset manager. She was even given the nickname "money tree" in South Korea. Here on Zero Hedge, we have been writing extensively about how the law of large(r) numbers could make life difficult for Wood's ETFs heading into the new year.

But one thing Wood hasn't had to deal with over the last 18 months during her meteoric rise has been a serious sell off in Tesla. And, over the last few sessions, Tesla - one of the main driving forces behind Wood's investing "genius" - has fallen about $100, or about 10%. At the same time, Bitcoin - another asset with numerous ties to Wood's portfolio and positions - fell more than 20% peak to trough. 

Heading into Tuesday, the fund's flagship ARKK ETF had already experienced its worst back-to-back fall since September 2020, according to Bloomberg. The ETF finished lower by another 3.3%, recovering some of its losses on Tuesday, after plunging almost 10% at the cash open. ARK's Genomic Revolution and Ark Innovation funds had lost a combined $4.3 billion heading into Tuesday's session, Bloomberg noted. 

And as ARKK fell again on Tuesday, fund outflows swung lower by $1.3 billion. 

On Tuesday, we were eager to see the update in ARK fund flows.

And with good reason. Investors pulled $465 million from the ARK Innovation ETF and $202 million was pulled from the ARK Genomic Revolution ETF, according to Bloomberg. The ARK Next Generation Internet ETF saw a $119 million outflow. 


Compounding the shellacking for ARK Funds on Tuesday was the news that EV company Workhorse was not going to be receiving a much-coveted multi-billion dollar contract from the U.S. Postal Service.

Workhorse was rumored (and widely expected judging by the price reaction) to be in the running for the contract, which was a frequently touted piece of the bull case by investors. On the news, Workhorse shares plunged by over 50% and were halted 5 times before the close on Tuesday.

Several short sellers had targeted Workhorse over the course of the past year, noting that the USPS contract was unlikely. Among those was Nathan Anderson's Hindenburg Research, who predicted that Workhorse shareholders would be in for a "reality check" when the details of the USPS contract were finally released. 

Compounding the wonderful week for ARK even further was 3D Systems, the second largest holding in ARK's 3D printing ETF (why does this even exist?), who announced on Tuesday afternoon that it had "discovered certain internal control deficiencies" and, as a result, "may report one or more material weaknesses in internal controls in its upcoming fiscal 2020 Annual Report on Form 10-K."

What to do during these troubling times, after Tesla has almost singlehandedly driven all of your "success" over the last 18 months and has ballooned in market cap about 10x without any major material fundamental developments that would warrant such a run higher?

Buy more Tesla, of course. After the trading session on Tuesday, the headline hit that ARK Funds had tried to catch the falling knife in Tesla, purchasing more than 240,000 shares on the session. Tesla, at its closing price of $698 per share, was still valued at a market cap of $670 billion at the end of the day. The company's ARK Innovation ETF bought 177,214 shares, while ARK Autonomous Technology & Robotics ETF bought 11,893 and ARK Next Generation Internet ETF purchased 51,441, according to Bloomberg.

But an even further examination of the day's trading revealed a larger trend: ARKK sold off some of its most liquid, relatively risk-adverse positions (at least relative to the tech industry) to not only add Tesla, but also to add to another former short seller target Vuzix Corporation, which had been alleged to be a stock promotion in 2018, and is now trading about 20x higher than it was in March 2020. 

And so ARK's fund management happens to look more like a novice trader trying to catch a falling knife this week. As was suggested during the day on Tuesday, we wouldn't mind seeing the due diligence file not only on Workhorse, but also on Vuzix.

You might be saying to yourself: they have $50 billion under management. Certainly they have enough money to hire at least a couple of competent analysts to at least do basic due diligence on their positions before staking claims in them, right? 

Doubts about Wood's stock picking acumen seem to be growing. Short bets against ARK continue to rise - a trend we first pointed out that had started weeks ago. 

We noted several weeks ago that short interest in ARK funds had "exploded" after ARK's banner 2020. Short interest as a percentage of shares outstanding for the firm's flagship $21 billion ARK Innovation ETF spiked to an all time high of 1.9% from just 0.3% two months ago, according to data from IHS Markit Ltd. and Bloomberg.  That number now stands at nearly 3.5%, as evidenced in the chart above. 

We were one of the first to highlight how the law of large numbers could eventually stand in the way of Cathie Wood's success.

Tyler Durden Wed, 02/24/2021 - 07:09
Published:2/24/2021 6:22:08 AM
[Markets] Icon will buy PRA Health Sciences in $12 billion cash-and-stock deal Icon will buy PRA Health Sciences in $12 billion cash-and-stock deal Published:2/24/2021 5:50:16 AM
[Markets] Former Clinton Adviser Admits America Becoming "Totalitarian State" Under Biden Former Clinton Adviser Admits America Becoming "Totalitarian State" Under Biden

Authored by Steve Watson via Summit News,

Author and former Clinton advisor Naomi Wolf warned Monday that the US is devolving into a police state under the Biden administration as endless lockdowns and restrictions show no sign of being lifted.

Appearing on Tucker Carlson Tonight, Wolf urged that the US is “moving into a coup situation,” under Democrat rule, owing to medical mandates being extended under the “guise of a real medical pandemic.”

Wolf emphasized that “lockdowns have never been done in society and really, we are turning into a of totalitarian state before everyone’s eyes.”

Far from being a conservative commentator, Wolf pointed out that it’s “not a partisan thing,” and told Carlson that what is happening “transcends everything that you and I might disagree or agree on. That should bring together left and right to protect our Constitution.”

Wolf continued, “The state has now crushed businesses, kept us from gathering in free assembly to worship as the First Amendment provides, is invading our bodies … which is a violation of the Fourth Amendment, restricting movement, fining us in New York state … the violations go on and on.”

“Autocratic tyrants at the state and now the national level are creating this kind of merger of corporate power and government power, which is really characteristic of totalism fascism in the ’20’s,” Wolf further warned.

“They are using that to engage in emergency orders that simply strip us of our rights; rights to property, rights to assembly, rights to worship, all the rights the Constitution guarantees,” the liberal author added.

“I really hope we wake up quickly,” Wolf proclaimed, adding “history also shows that it’s a small window in which people can fight back before it is too dangerous to fight back.”

Less than a week after the election, Wolf expressed regret for voting for Biden, saying that she would never have done so if she had known he was committed to endless lockdowns:

Elsewhere during Carlson’s broadcast, he declared that the “lockdown regime is moving towards authoritarianism.”

The host told viewers “Bill Gates isn’t God, just a big shareholder in Microsoft. But since COVID, Bill Gates has gained extraordinary powers over what you can and cannot do to your own body. Bill Gates would like you to take the coronavirus vaccine. That’s not a request. If you don’t comply, you could lose your job.”

Carlson continued, asking “what effect will this current suspension of our Bill of Rights have on American society over time? What kind of country will your grandkids live in? Is anyone even asking that question? Not anymore, because questions are disloyal. If you believe in science, simply obey.”


Tyler Durden Wed, 02/24/2021 - 06:30
Published:2/24/2021 5:50:16 AM
[Markets] Need to Know: Why the world’s largest fund manager is getting more aggressive — and says climate change boosts the case for equities BlackRock makes the case for increasing allocation toward stocks and away from government bonds.
Published:2/24/2021 5:50:16 AM
[Markets] Main Street is lagging Wall Street: Morning Brief Top news and what to watch in the markets on Wednesday, February 24, 2021. Published:2/24/2021 5:20:23 AM
[Markets] Pizza Delivery Driver Nets $400 From A $5 Tip He Took In Bitcoin In 2013 Pizza Delivery Driver Nets $400 From A $5 Tip He Took In Bitcoin In 2013

A pizza driver who was given the choice of taking his tip in Bitcoin back in 2013 is now cashing in on the $5 that has since risen 70x and has turned into close to $400.

A bitcoiner that ordered a pizza more than half a decade ago said on a Reddit forum that he gave his delivery driver two options for his tip: either a $5 bill or .0069 BTC on a paper wallet, according to Coin Telegraph.

At the time, Bitcoin was only valued at about $774. Today, even after a recent short term plunge, bitcoin is trading at around $50,000. 

And just this week, the driver apparently reached out for help on how to get the funds in a wallet where he could have access to them. With bitcoin raging over $58,000 at one point, the $5 tip was worth about $400, an increase of about 7000% since the day the pizza was delivered. 

User btcbible said on Reddit: "I let the pizza guy choose between $5 in fiat or BTC. Needless to say, he chose wisely. I've responded with instructions on how to import the private key via Electrum." The user said they had liquidated most of their bitcoin last year to buy a home and that, at the time, the driver "had heard of bitcoin from the news and grasped the general concept of it" but was "obviously still very new to it."

The story is a reminder of the famous story where, in May 2010, a programmer paid 10,000 BTC for two pizzas from a Papa Johns. That 10,000 bitcoin is today worth almost $500 million.

Tyler Durden Wed, 02/24/2021 - 05:45
Published:2/24/2021 4:52:05 AM
[Markets] Square, Bitcoin, Nvidia, Boeing, Tiger Woods - 5 Things You Must Know Wednesday Stock futures rise following the Federal Reserve's pledge it will continue supporting the economy; Nvidia reports earnings; Square buys $170 million more bitcoin; the FAA orders inspections on Boeing 777s with certain Pratt & Whitney engines. Published:2/24/2021 4:21:57 AM
[Markets] The Death Of Logic The Death Of Logic

Authored by Matthew Piepenburg via,

Just over four years ago, as Bitcoin was making its first big moves in both price and public perception, John Hussman of Hussman Investment Trust penned a lengthy as well as seminal report entitled, “Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin.”

The core themes set forth in his report (as in any well-reasoned, blunt analysis) are refreshingly evergreen in their ongoing applicability.

Rather than re-invent an already functioning wheel, I’ve opted to revisit some of Hussman’s key arguments which have not only stood the test of time, but remain even more pertinent in today’s perception-challenged markets.

The Follies of Our Predecessors

Hussman’s report opens with a quote from Charles Mackay’s work, Extraordinary Popular Delusions and the Madness of Crowds:

“Let us not, in the pride of our superior knowledge, turn with contempt from the follies of our predecessors. The Study of the errors into which great minds have fallen in the pursuit of truth can never be uninstructive.”

As for the “follies of our predecessors” and “the study of [their] errors,” the list is long and distinguished, as we’ve chronicled in greater detail elsewhere, advising investors to question rather than follow the “experts”while simultaneously keeping a cautious eye onthe madness of crowds.

As Hussman and others remind, delusion is a complicated thing.

Most logical minds, for example, tend to feel immune from delusion, but the irony lies in the fact that delusional ideas, including delusional markets, policies and pricing, are in fact marked not by deficiencies in logic, but rather by an over-abundance of it.

Crowd Thinking—Crowd “Logic”?

Throughout the cyclical history of delusional market bubbles and their subsequent implosions, otherwise “logical” and/or intelligent market participants always find themselves in the comforting presence of crowds.

In Japan, for example, just before the Nikkei died in 1989, the popular expression in Tokyo was: “How can we get hurt if we’re all crossing the street at the same time?”

Crowds, of course, love comforting consensus, feedback loops and opportunism, often at the expense of historical lessons, ignored data or even common sense.

Instead, crowds focus on current signals, lofty credentials and the loud logic of price momentum at the expense of risk’s more unpleasant whispers.

In other words, logical minds will often overlook unpleasant information and cling exclusively to the data which confirms their hopes and biases, creating a mass perception that is often misperception.

As Hussman observed: “The reason that delusions are so hard to fight with logic is that delusions themselves are established through the exercise of logic.”

The overwhelming and objective evidence, for example, of dangerous and grossly distorted risk asset pricing can be easily re-described (and thus re-perceived and re-framed) in the echo chambers of bubble-blind investors or debt-cornered policy makers as logical “stimulus,” “support,” or “accommodation.”

The logic that Modern Monetary Theory, for example, with its academic aura and blissful projections of deficits without tears (and money creation sans inflation) has slowly left the fringe of economics and entered its forefront as a sound, indeed “logical” new path forward.

Equally, “logical” are the titles given to such popular policies as “Yield Curve Control” or “Quantitative Easing,” which, as many of us already understand, are just clever, even logically titled concepts masking the far more pernicious reality of extreme debt expansion supported by extreme money creation which leads logically to extreme currency debasement.

Indeed, these crowd-sanctioned ideas have acquired popular/global acceptance not because they are logical or rational, but simply because they have become crowd-acceptable, common and, at least for now, profitable and even “effective.”

History’s Patterns

For Hussman, as well as other students of market history, speculative bubbles or even mass psychology, such delusions of popularity, logic, profit and even efficiency are not only dangerous, but historically quite common.

His lengthy report traces the anatomy of prior bubbles and crowd-ignored delusions with painful candor and historical confirmation rather than just self-selecting logic.

His insights are highly, highly recommended.

The conclusions which Hussman and others (from J.K. Galbraith to Benjamin Graham) derived come down to this:

Deluded investors forever seek to justify extreme price valuations in ever-increasing and novel ways, which in the end, are nothing “but excuses for continued speculation” rather than honest confessions of desperate top creations and equally delusional top chasing.

Hussman takes particular care to point out that such delusions are not simply held by retail investors riding a speculative wave which will eventually drown them.

The “Experts”—A Smaller Yet Equally Mad Crowd

In fact, the so-called experts, like Janet Yellen in Hussman’s study, are equally, if not more, guilty of such self-delusion.

Of course, this is no surprise to many of us.

Hundreds of pages could be written which detail the myriad occasions in which Yellen, both before and after she took the Chair at the Federal Reserve, completely understated, exacerbated and then ignored real market risk, from the Pre-08 era to today.

For simplicity and brevity, let me just proffer the following example:

“You will never see another financial crisis in your lifetime.”

-Janet Yellen, spring 2018

“I do worry that we could have another financial crisis. ?

-Janet Yellen, fall 2018

Valuation Still Matters

What Hussman and countless other logical minds consistently warn boils down to a simple truth proven throughout history, from the Romans of old to the Elons of today, namely: Valuation still matters.

First published in December of 2017, Hussman’s report warned that the expert as well as investor-fed speculative bubble in full gear then would inevitably devolve “into a roughly -65% loss in the S&P over the completion of the current market cycle.”

Of course, logical detractors would laugh at such logic, reminding Hussman and others that such warnings, made over four years prior, have been disproved by an S&P that never seems to halt its climb north, despite a few hiccups along the way, easily “recovered” by more logical  Fed “support.”

Such “logic” however, misses the historical point that boom-to-bust cycles don’t have clearly defined expiration dates, especially when those natural cycles are un-naturally extended via equally un-natural and illogical “stimulus” from global central banks.

Preparing Rather than Timing the Death of Paper “Wealth”

Thus, rather than mire one’s self in the “logical” debate of timing a crisis (a fool’s errand), more informed, and hence logical minds, should be otherwise engaged in preparing for one.

Hussman’s lengthy report then turns to the ultimate delusion, namely the delusion of paper wealth.

He began this theme with a quote by Galbraith as to the “extreme brevity of the financial memory.”

At the time of its 2017 publication, Hussman’s report referenced the St. Louis Fed’s December 16th declaration that negative interest rates “may seem ludicrous, but not if they succeed in pushing people to invest in something more stimulating to the economy than government bonds.”

Hussman was prescient in not only proving that “expert logic” can be openly delusional, but also in how predictively the mad crowds would follow such expert delusion toward even greater speculation, greater bubbles, and alas, greater pain when they pop.

As for the so-called logic of the St. Louis Fed in its stance as to negative rates “succeeding” in pushing crowds to invest in something “more stimulating” to our economy, history and Hussman prove, yet again, how dangerous experts can become in their own illogical crowd.

As for those ludicrous yet real negative rates, well, we sure as Hell got em post 2017…

Fast forward just over four years since the Fed made this so-called “logical” suggestion and look at what those low rates and retail “people” have invested in since.

Take Tesla.

It’s a bubble asset for the ages, and whatever logical defense Tesla bulls might have for its “growth potential,” the screaming disconnect between its cash flow and share price once again proves Hussman’s warning that valuation still matters.

Once assets climb too far from the plow of real valuation, the end is not only brutal, but inevitable.

Similar  and “logical” (?) speculation suggested by the St. Louis Fed has taken place since 2017, but as the graph below of profitless IPO’s currently peddled by the “logical crowd” at Goldman Sachs confirm, none of that speculation was as economically logical or “successful” as our Fed “experts” had so arrogantly suggested in late 2017:

When stocks rise illogically on the backs of speculative (QE/debt-driven) policies which in fact have no logic despite the credentialed “logic” of their policy makers, the paper wealth which follows and grows in their wake acquire the delusion of permanence, even stability.

But as Hussman warned then, and which is even more true today, investors quickly and collectively fall under the collective delusion that the trillions of dollars in their portfolios today represent durable purchasing power tomorrow.

In other words, “logical” investors always ignore the historically confirmed fact that most of that wealth will eventually evaporate in a delusional economy measured by rising stock prices rather than tanking productivity.

Today, for example, the global value of financial assets (stocks, bonds and real estate) is $520 trillion, which is 6.2X the $84 trillion in global GDP.

Re-read that last line. Seem delusional to you?

And Then There’s Bitcoin…

Speaking of delusion, no conversation then (in 2017) or today, would be complete without addressing the current, yet logically-defended sacred cow otherwise known as Bitcoin.

This is not the time or word-count space to effectively unpack the myriad pros and cons, as well as logic and delusion, which mark the Bitcoin phenomenon.

But as Mackay was quoted then, and worth repeating here, such speculative cycles are not only common, but loaded with historical danger:

“We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught in some new folly more captivating than the first.”

Sound eerily familiar?

From 17th century tulips to 19th century railroads or 20th century tech stocks, market historians know this fantasy pattern all too well.

Of course, Bitcoin is more than a tulip, and as Hussman himself confirmed, “the blockchain algorithm itself is brilliant.”

I too fully support Bitcoin’s underlying thesis that fiat currencies and the central bank policies behind them are staggeringly weak and in need of an alternative approach.

But the irony, as well as delusion, of the BTC era boils down to this: No asset bubble like Bitcoin, despite the logic of its thesis or the headline-generated confirmation of its supporters (as well as mysterious creators) can become a source of stability for something as critical as a national or global currency.

Bitcoin will not go away, but its valuations will go both north and south in astounding ways which, by itself, disqualifies this asset as a rational (or even “logical”) solution to an admittedly irrational and openly bogus global currency market.

Our antidote to the dying paper wealth of all global paper currencies, of course is physical gold. This is no secret, and to some, perhaps even an illogical, and even outdated bias.

Yes, physical gold is far less sexy that the current BTC delusion gaining popularity, as well as speculative momentum, by the day.

Ironically, however, therein lies gold’s open and logical advantage, for physical gold, unlike electronic Bitcoin, has both an inherent as well as historical logic to both its role (and pricing) when measured against fiat paper as well as equally fiat digital “coins,” which logically speaking, aren’t even coins at all…

Like dollars, Bitcoins are backed by faith, not a physical asset. In short: fiat.

Detractors, of course will claim that the Hussman logic used to debunk BTC’s speculative illogic (i.e. delusion) can be equally used against the logic to defend physical gold.

This is both fair and to be expected.

In the end, however, to describe a physical asset derived from the periodic table (rather than a software genius) and which has historically served to save dying currencies and delusional debt policies century, after century, and currency crash after currency crash, as a “delusion” is a bit of a stretch, no?

Bitcoin cheerleaders will naturally, in their own crowd-supported logic, argue that physical gold is the “Blockbuster video” of an old world, whereas BTC is the streaming and wise currency direction of the new world.

That’s a comforting defense indeed, as are the rapidly rising valuations of BTC.

But like Hussman, I’ll favor valuation, sanity, history and valuation logic over the mad crowds falling madly in love with the speculative “logic” of BTC.

In the end, history favors one form of logic over the other.

Tyler Durden Wed, 02/24/2021 - 05:00
Published:2/24/2021 4:21:57 AM
[Markets] Autotrader: Review: The 2021 Ford F-150, updated and redesigned This well-rounded full-size pickup consistently offers capability, value, innovation, and choice but the new model's exterior isn't much different this year.
Published:2/24/2021 4:21:57 AM
[Markets] : ‘If we had a bunch more headroom, we probably would’ve let things continue,’ Robinhood’s Tenev tells Dave Portnoy It's hard to find two people who better epitomize the retail trading boom than Vlad Tenev, the co-CEO of the popular online broker Robinhood, and Dave Portnoy, the brash founder of Barstool Sports who took up investing as the COVID-19 pandemic shut down the sports world.
Published:2/24/2021 3:48:48 AM
[Markets] HSBC To Slash Office Space By 43% As COVID Ushers In Hybrid Work  HSBC To Slash Office Space By 43% As COVID Ushers In Hybrid Work 

There is absolutely no way to avoid a great deal of pain coming to the commercial real estate market as companies dump or are planning to eliminate office space as the pandemic has changed the office's role. 

HSBC Holdings Plc is the latest company that will reduce its "real estate footprint" by 40% over the long-term, Group Chief Operating Officer John Hinshaw said in a conference call with analysts on Tuesday, according to Reuters

Chief Executive Officer Noel Quinn said the bank would end leases on "premises elsewhere in London" when they were due for renewal. He said their Canary Wharf headquarters would be maintained. 

"We are focused on those offices with support functions and head office activities when we talk about the 40% reduction," Quinn said.

"We believe we'll achieve it via a very different style of working post-COVID with a more hybrid model.

"Take London, for example, we will have the building at Canary Wharf, this will be the primary office but the nature of working in the office will change."

Europe's largest bank has allowed 85% of its employees to work-at-home; as many as 226,059 employees worked remotely during the pandemic. Many were given laptops and other devices to increase productivity. The bank believes in the hybrid working model and will likely continue implementing it even after the pandemic. 

"We expect a change in the way we use our office space, recognizing the work-life balance and environmental benefits of hybrid working arrangements," HSBC said in its annual report. 

Accounting firm Deloitte released a recent study that said 76% of the 171 CEOs surveyed said plans have already been made to slash office space, a move that we've said could impact commercial real estate markets in major metro areas. 

For the world's financial capital, New York City, Manhattan's office space market is already facing the highest availability of vacancies on record. 

At some point, the commercial real estate market will have to face pain, but for now, according to Bank of America's Michael Hartnett, "global central banks bought $1.1bn of financial assets every hour since March." So, for now, the pain has been numbed, but a financial reckoning is on the horizon. 

Tyler Durden Wed, 02/24/2021 - 04:15
Published:2/24/2021 3:18:37 AM
[Markets] Russia Showcases Operations Of Its Combat Drones In Syria Russia Showcases Operations Of Its Combat Drones In Syria

Submitted by South Front,

Russia released a video showing its Orion combat drone carrying out strikes on targets in Syria. This marked the very first time such footage was being released. It shows the drone’s operation, lock-on and launching of a payload on a militant target. The Orion is a long-flight duration attack-reconnaissance UAV, that can also carry out airstrikes. According to the report, this type of UAV has carried out 38 sorties, including 17 strike missions.

Meanwhile, a new electronic surveillance system has been spotted at the Russian-operated Hmeimim Air Base. The Avtobaza-M can determine the parameters of signals and types of radars, track air and seaborne objects by their electronic signature and support higher air defense command and control posts with data.

Despite the ISIS threat in central Syria, the focus of the key players is evidently shifting towards Idlib. The US and its ally-to-be Hay’at Tahrir al-Sham (HTS) will begin active movements soon.

Russia reported that HTS is preparing to stage a chemical attack, similar to those that led to US missile strikes back in 2018 and earlier. More than once, the US-led coalition carried out strikes on Syrian government forces, in punishment of alleged chemical weapons usage.

This sense of urgency is also felt in the Syrian Arab Army (SAA). The government forces are opening a civilian corridor to evacuate civilians from Greater Idlib.

This is likely because an offensive is on the way, the SAA is preparing, likely together with Russia and some Iranian support to push on the biggest militant stronghold left in Syria. To prime the location, the SAA carried out heavy shelling, killing or injuring at least 5 militants in the process.

This is likely an ideal moment to push for Idlib, because Turkey is focused in Northeastern Syria, and so is the US. The SAA has deployed large amounts of forces in that region, which is out of the way.

It also moved its short-range defense systems to Iraq, which makes it an even more opportune moment for the SAA and Russia to push to push in another direction, and namely Idlib. The following days will show whether this evacuation of civilians is, indeed, a preparation for an offensive.

The ceasefire regime and the demilitarized zone are largely non-functional, despite Russia’s efforts to implement them. Turkey, the other co-signatory, is focused on fighting the Kurdish in the north. Even without that distraction, it seldom paid any attention to adhering to the rules set out in the deal.

The Syrian Arab Army, and its allies, likely need to push before HTS are completely rebranded as “moderate opposition” and their ties to al-Qaeda are forgotten. Additionally, this needs to be happen before ISIS pushes further out from central Syria.

Tyler Durden Wed, 02/24/2021 - 03:30
Published:2/24/2021 2:53:45 AM
[Markets] Israel Imposes Gag Order On Probe Into Oil Spill Dubbed "Most Serious Ecological Disaster" In Years Israel Imposes Gag Order On Probe Into Oil Spill Dubbed "Most Serious Ecological Disaster" In Years

Israeli authorities have closed down miles of beaches as the county is in the midst of its "most serious ecological disaster in recent years" after an oil spill from an unknown origin occurred some dozens of miles off the coast into the Mediterranean Sea.

The Ministry of Environmental Protection indicated that tar was "washing up and contaminating the beaches" starting last Wednesday. A major clean-up and conservation effort is underway that has included the Israeli Army. 

Beached whale on Israeli beach as a result of the disaster, via AP.

It's believed the oil spill may have happened a week or more ago, or possibly even weeks prior, but recent stormy weather washed it up to shore.

Currently an estimated 106 miles of coastline have been impacted, stretching from Israel through the Gaza Strip. It's also been widely reported as impacting southern Lebanon's coastline.

A statement from the Israel Nature and Parks Authority predicted that clean-up efforts could take years after the dozens of tons of tar washed up in various places. "The disaster we are witnessing in recent days on the beaches of Israel is the most serious ecological disaster in recent years, and its consequences we will see more years ahead," the Parks Authority wrote Saturday.

Via Reuters

Israeli as well as various international bodies are investigating the source of the Mediterranean spillage, which has included reviewing satellite tracking data of tankers that have traversed the area in recent weeks. Interestingly and suspiciously, the investigations findings are being kept under tight wrap, as Fox News describes:

In an unusual move, an Israeli judge has issued a gag order on the investigations and any detail relating to it, including the suspects’ name or identities, the vessels involved, and destination and port of departure.

Maya Jacobs, CEO of Zalul, an Israel NGO that protects the country's seas and streams, called to remove the gag order, and conduct a transparent investigation.

"The companies who cause the environmental risks like the petroleum and shipping companies have a great influence on the Israeli government," she said. 

Sea turtles, other marine life, and birds have been found dead in the hundreds as a result of the disaster, which has further included thousands of volunteers rushing to save injured wildlife from the large tar globs.

Minister of Environmental Protection Gila Gamliel had this to say of painstakingly slow improvements to the situation: "I know that everyone wants to help, but tar is a dangerous substance! It is imperative to act carefully and responsibly," she said.

Tyler Durden Wed, 02/24/2021 - 02:45
Published:2/24/2021 1:48:13 AM
[Markets] Germany: Far-Left Extremists Viciously Attack Political Candidate In The Street Germany: Far-Left Extremists Viciously Attack Political Candidate In The Street

Authored by Paul Joseph Watson via Summit News,

Far-left extremists in Germany viciously attacked a populist political candidate who was campaigning for this year’s regional election on the street.

Alternative for Germany (AfD) candidate Stephan Schwarz was left hospitalized following the beating, which took place in the town of Schorndorf over the weekend.

According to the city prosecutor, Schwarz was manning an information booth when he was approached by around 15-20 individuals carrying Antifa flags and banners.

36-year-old Schwarz was dragged to the ground and beaten by the mob before having his mobile phone stolen as he attempted to call the police.

Schwarz was subsequently taken to a local hospital where he was diagnosed with a concussion.

“Police later arrested five people in connection with the incident, three outside the town’s railway station and two others on a pedestrian footbridge,” reports Breitbart.

“All five are said to be between the ages of 18 and 25 and are currently under investigation by the Stuttgart public prosecutor’s office.”

“Violence must never be a means of political debate: I am dismayed and appalled by the violent attack on the AfD candidate for the Landtag, Stephan Schwarz, and the destruction of the AfD’s information stand at today’s Schorndorf weekly market,” said Schorndorf Mayor Matthias Klopfer.

As we previously highlighted, Antifa extremists threatened to assassinate an AfD member of parliament, even naming the exact date on which they would kill her.

MP Frank Magnitz was also brutally attacked by left-wing radicals, with Antifa later claiming credit for what some observers suggested was an assassination attempt.

*  *  *

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Tyler Durden Wed, 02/24/2021 - 02:00
Published:2/24/2021 1:21:08 AM
[Markets] CJ Hopkins: The Vaccine (Dis)Information War CJ Hopkins: The Vaccine (Dis)Information War

Authored (mostly satirically) by CJ Hopkins via The Consent Factory,

So, good news, folks! It appears that GloboCap’s Genetic Modification Division has come up with a miracle vaccine for Covid! It’s an absolutely safe, non-experimental, messenger-RNA vaccine that teaches your cells to produce a protein that triggers an immune response, just like your body’s immune-system response, only better, because it’s made by corporations!

OK, technically, it hasn’t been approved for use - that process normally takes several years - so I guess it’s slightly “experimental,” but the US Food and Drug Administration and the European Medicines Agency have issued “Emergency Use Authorizations,” and it has been “tested extensively for safety and effectiveness,” according to Facebook’s anonymous “fact checkers,” so there’s absolutely nothing to worry about.

This non-experimental experimental vaccine is truly a historic development, because apart from saving the world from a virus that causes mild to moderate flu-like symptoms (or, more commonly, no symptoms whatsoever) in roughly 95% of those infected, and that over 99% of those infected survive, the possibilities for future applications of messenger-RNA technology, and the genetic modification of humans, generally, is virtually unlimited at this point.

Imagine all the diseases we can cure, and all the genetic “mistakes” we can fix, now that we can reprogram people’s genes to do whatever we want … cancer, heart disease, dementia, blindness, not to mention the common cold! We could even cure psychiatric disorders, like “antisocial personality disorder,” “oppositional defiant disorder,” and other “conduct disorders” and “personality disorders.”

Who knows?

In another hundred years, we will probably be able to genetically cleanse the human species of age-old scourges, like racism, sexism, anti-Semitism, homophobia, transphobia, etcetera, by reprogramming everyone’s defective alleles, or implanting some kind of nanotechnological neurosynaptic chips into our brains. The only thing standing in our way is people’s totally irrational resistance to letting corporations redesign the human organism, which, clearly, was rather poorly designed, and thus is vulnerable to all these horrible diseases, and emotional and behavioral disorders.

But I’m getting a little ahead of myself. The important thing at the moment is to defeat this common-flu-like pestilence that has no significant effect on age-adjusted death rates, and the mortality profile of which is more or less identical to the normal mortality profile, but which has nonetheless left the global corporatocracy no choice but to “lock down” the entire planet, plunge millions into desperate poverty, order everyone to wear medical-looking masks, unleash armed goon squads to raid people’s homes, and otherwise transform society into a pathologized-totalitarian nightmare. And, of course, the only way to do that (i.e., save humanity from a flu-like bug) is to coercively vaccinate every single human being on the planet Earth!

OK, you’re probably thinking that doesn’t make much sense, this crusade to vaccinate the entire species against a relatively standard respiratory virus, but that’s just because you are still thinking critically. You really need to stop thinking like that. As The New York Times just pointed out, “critical thinking isn’t helping.” In fact, it might be symptomatic of one of those “disorders” I just mentioned above. Critical thinking leads to “vaccine hesitancy,” which is why corporations are working with governments to immediately censor any and all content that deviates from the official Covid-19 narrative and deplatform the authors of such content, or discredit them as “anti-vax disinformationists.”

For example, Children’s Health Defense, which has been reporting on so-called “adverse events” and deaths in connection with the Covid vaccines, despite the fact that, according to the authorities, “there are no safety problems with the vaccines” and “there is no link between Covid-19 vaccines and those who die after receiving them.” In fact, according to the “fact-checkers” at Reuters, these purported “reports of adverse events” “may contain information that is incomplete, inaccurate, coincidental, or unverifiable!”

Yes, you’re reading between the lines right. The corporate media can’t come right out and say it, but it appears the “anti-vax disinformationists” are fabricating “adverse events” out of whole cloth and hacking them into the VAERS database and other such systems around the world. Worse, they are somehow infiltrating these made-up stories into the mainstream media in order to lure people into “vaccine hesitancy” and stop us from vaccinating every man, woman, and child in the physical universe, repeatedly, on an ongoing basis, for as long as the “medical experts” deem necessary.

Here are just a few examples of their handiwork …

And then there are all the people on Facebook sharing their stories of loved ones who have died shortly after receiving the Covid vaccine, who the Facebook “fact checkers” are doing their utmost to discredit with their official-looking “fact-check notices.” For example …

OK, I realize it’s uncomfortable to have to face things like that (i.e., global corporations like Facebook implying that these people are lying or are using the sudden deaths of their loved ones to discourage others from getting vaccinated), especially if you’re just trying to follow orders and parrot official propaganda … even the most fanatical Covidian Cultists probably still have a shred of human empathy buried deep in their cold little hearts. But there’s an information war on, folks! You’re either with the Corporatocracy or against it! This is no time to get squeamish, or, you know, publicly exhibit an ounce of compassion. What would your friends and colleagues think of you?!

No, report these anti-vaxxers to the authorities, shout them down on social media, switch off your critical-thinking faculties, and get in line to get your vaccination!

The fate of the human species depends on it!

And, if you’re lucky, maybe GloboCap will even give you one of these nifty numerical Covid-vaccine tattoos for free!

Tyler Durden Wed, 02/24/2021 - 00:05
Published:2/23/2021 11:22:01 PM
[Markets] : Mining stocks have surged in a struggling U.K. market — and have 2 more tailwinds Mining stocks have rallied as the global economy has recovered, and there are factors that could further lift the sector.
Published:2/23/2021 11:22:01 PM
[Markets] Saudi Arabia Sued By Families Of Pensacola Terror Attack Victims Saudi Arabia Sued By Families Of Pensacola Terror Attack Victims

Saudi Arabia is once again facing a major lawsuit in the US filed by the families of victims killed in a terror attack perpetrated by a Saudi citizen.

The attack in question occurred at Pensacola Naval Air Station in Pensacola, Fla. on Dec. 6, 2019. On that morning, a 21-year-old member of the Saudi military opened fire on Americans staying at the Naval base, carrying out a shooting rampage that led to the deaths of 3 Americans with 13 others wounded. The perpetrator, Mohammed Saeed Alshamrani, is believed to have posted his justification to social media before the attack. He was a member of the Royal Saudi Air Force staying in the US as part of a program whereby the US military offers training to military pilots from certain geopolitical 'partners'.

Al Qaeda in the Arabian Peninsula claimed responsibility for the attack weeks later, a claim that was corroborated by the FBI, which ruled the attack was motivated by Jihadist ideology. And while it had little discernible impact on US-Saudi relations at the time, that may soon change. Because family members of the deceased and wounded are now suing Saudi Arabia for civil damages.

The complaint filed in federal court in Pensacola on Monday alleged that the Saudi Arabian government had known about the gunman and his increasing radicalization, and could have prevented the killing.

According to Reuters, the Saudis didn't respond to a request for comment on the lawsuit. Saudi Arabia’s King Salman bin Abdulaziz condemned the attack as a “heinous crime” and said it “does not represent the Saudi people" during a statement made shortly after it happened.

Although several of Alshamrani's fellow Saudi Naval officers reported attending a dinner party thrown by Alshamrani shortly before the attack where they all watched videos of US mass shootings, it was determined that Alshamrani was the sole shooter, and that he acted alone.

President Joe Biden and his administration are already embracing a more distant approach to handling America's allies and adversaries in the Middle East, particularly when it comes to Saudi Arabia and Israel. Whether or not this lawsuit further sours relations between Washington and Riyadh remains to be seen.

Tyler Durden Tue, 02/23/2021 - 23:45
Published:2/23/2021 10:47:46 PM
[Markets] Amnesty International Rescinds Navalny's 'Prisoner Of Conscience' Status After Discovering His Past Amnesty International Rescinds Navalny's 'Prisoner Of Conscience' Status After Discovering His Past

In a surprise twist on the Alexei Navalny saga, and on the very day that it's being widely reported Biden is preparing sanctions on Russia as punishment for his alleged poisoning by nerve agent last August, the human rights organization Amnesty International has withdrawn its formal designation of Navalny as a "prisoner of conscience"

US state-funded Radio Free Europe/Radio Liberty reports the following on Tuesday:

Amnesty International has reportedly withdrawn its recent designation of Russian opposition politician Aleksei Navalny's as a "prisoner of conscience" over his alleged advocacy of violence and discrimination and comments that included hate speech.

Aleksandr Artemyev, the rights watchdog's media manager for Russia and Eurasia, confirmed the decision to Mediazona on February 23 after the news was first reported by U.S. journalist Aaron Mate.

Alexei Navalny, via AP

And just like that it appears the narrative which cast Navalny and his supporters as some kind of 'anti-Putin freedom fighters' has been deflated. 

The early February street protests following Navalny's arrest after he arrived from Berlin where he'd been recovering from an alleged poisoning were widely supported by officials in the West, including by the US and some European embassies in Moscow.

This created tensions leading to the Kremlin expelling a handful of European diplomats, citing their stoking unrest related to 'illegal' protests. US mainstream media also gave the large pro-Navalny protests close coverage

Here's how Amnesty International previously described Navalny and his plight in a January press release:

"He has previously been tried and convicted in two separate, politically-motivated criminal cases. On 29 December, the Russian Investigative Committee levelled new charges against Navalny, accusing him of embezzling 356 million rubles (£3.6m) in donations to the Anti-Corruption Foundation and affiliated non-profit organisations. Amnesty believes these charges are trumped-up.

Navalny has been deprived of his liberty for his peaceful political activism and for exercising free speech. Amnesty considers him a prisoner of conscience and is calling for his immediate and unconditional release."

This "prisoner of conscience" designation is what Amnesty has now walked back in a clearly humiliating and devastating blow to his cause and his supporters.

In the wake of the initial reports, an Amnesty official confirmed to independent Russian news outlet Meduza: "Yes, we will no longer use the phrase ‘prisoner of conscience’ when referring to [Navalny], insofar as our legal and political department studied Navalny’s statements from the mid-2000s and determined that they qualify as hate speech."

As an example of Navalny's "newly uncovered" hate speech (though long well-known inside Russia), see this...

He was recently sentenced by a Moscow court to serve over 2.5 years in prison for probation violation stemming from a prior embezzlement case.

Amnesty's dramatic change in designation is related to the "jailed Russian opposition politician’s past statements about migrants from Central Asia and the North Caucasus [which] constitute hate speech," Meduza writes. But the question now remains how quickly he'll be dropped as a darling of Western media coverage which has included a recent flurry of 'romanticized' reports on the anti-Kremlin activist, if at all.

Tyler Durden Tue, 02/23/2021 - 23:05
Published:2/23/2021 10:17:00 PM
[Markets] Capitol Riots Were A Dark Day For American Journalism Capitol Riots Were A Dark Day For American Journalism

Authored by Patrick Cockburn via,

The invasion of the Capitol on 6 January now stands alongside 9/11 as an act of war against American democracy. Unsurprisingly, news coverage of the incursion has come to resemble war propaganda. All facts, true or false, are pointed in the same direction with the aim of demonising the enemy and anybody who minimises its demonic nature.

The three-hour takeover of the Capitol building by a pro-Trump mob is portrayed as a “coup” or an “insurrection” egged on by President Trump. The five who died during the events are seen as evidence of a violent, pre-planned plot to overturn the result of the US presidential election. Film spliced together and shown by prosecutors during the impeachment proceedings gives the impression that what happened resembled a battle scene in Braveheart.

Does it matter what really did occur?

Many people feel that anything damaging to Trump and his fascistic followers is all right by them. They may suspect privately that accounts of Trump’s plot against America are exaggerated, but the fabricator of 30,573 falsehoods over the last four years is scarcely in a position to criticise his opponents for departing from the strict truth. They argue that he is an unprecedented threat to American democracy, even as it becomes clear that what actually happened in the Capitol on that day was radically different from the way elements of the media reported it.

But what is reported matters and particularly so when it risks exaggerating violence or deepening fear and a sense of threat. If the US government really was the target of an armed insurrection, then this will be used to justify repression, as it was after 9/11, and not just against right wing conspiracy theorists. By becoming partisan instruments for spreading fake news, the media undermines its own credibility.

A problem with a giant news story like the Capitol invasion is that at first it is over-covered before we know the full facts, and then it is under-covered when those facts begin to emerge. This has been true of US media coverage. But even at the time it seemed to be a very peculiar armed insurrection.

Only one shot appears to have been fired and that was by a police officer who killed Trump supporter Ashil Babbitt who was involved in the storming of the Capitol.

In a country like the US awash with guns, this absence of gunfire is remarkable.

Five people died during the takeover of the Capitol building and this is the main proof of deadly intent by the rioters. But one of the dead was Babbitt, killed by the police, and three of the others were members of the pro-Trump mob, who died, respectively, from a stroke, a heart attack and from being accidentally crushed by the crowd.

This leaves just one person, Capitol policeman Brian Sicknick, as the sole victim of the Trump supporters who allegedly beat him to death with a fire extinguisher. On 8 January, the New York Times ran two stories about his death, quoting anonymous law officers as describing how pro-Trump rioters had struck him on the head with a fire extinguisher causing “a bloody gash on his head”. He is then reported to have been rushed to hospital, placed on life support but to have died the following day.

This graphic story went around the world and was widely picked up by other news outlets – including The Independent, the BBC and USA Today. It was also separately reported by the Associated Press. It gave credibility to the idea that the pro-Trump mob was willing to kill, even if they only killed one person. It also gave credibility to the idea that vice president Mike Pence, House speaker Nancy Pelosi and senator Mitt Romney had only escaped being lynched by seconds.

Yet over the last seven weeks – without the world paying any attention – the story of the murder of Officer Sicknick has progressively unravelled. Just how this happened is told in fascinating detail by Glenn Greenwald, the investigative journalist and constitutional lawyer, who concludes that “the problem with this story is that it is false in all respects”.

It was always strange that, though every event that took place during the riot was filmed, there is no video of the attack on Sicknick. He texted his brother later that day and sounded as if he was in good spirits. No autopsy report has been released that would confirm his alleged injuries. Conclusively, the New York Times quietly “updated” its original articles about the murder of Sicknick, admitting that new information had emerged that “questions the initial cause of his death provided by officials close to the Capitol Police”.

Since these officials were the only source for the original story, this – though readers might not guess it – amounts to an admission that it is untrue.

The misreporting of the Capitol invasion also included: a man carrying zip ties – that were taken to be evidence of a possible organised plan to detain political leaders – were in fact, according to prosecutors, picked up from a table within the Capitol, likely to ensure police could not use them. It is significant because it is part of a decline in media reporting everywhere, but particularly in the US. Trump is both a symptom and cause of this decline since he is a past master of saying and doing things, however untruthful or absurd, which are usually entertaining and always attention-grabbing. He guarantees high ratings for himself and the television channels, Trump haters and Trump-lovers alike, to their mutual benefit.

This symbiotic relationship between Trump and the media means that they do less and less reporting, allowing Trump and his supporters to provide the action while they provide the talking heads who thrive on venomous confrontation. Even American reporters on the ground have turned themselves into talking heads, willing to waffle on endlessly to meet the needs of 24/7 newscasts.

Events on Capitol Hill provided damning evidence of this decline in American journalism when Robert Moore, ITV News’s Washington correspondent, was the only television correspondent to make his way into the Capitol in the middle of the turmoil. He later expressed astonishment that, given the vast resources of US television and the thousands of journalists in Washington, that it should be “a solitary TV crew from Britain that was the only one to capture this moment in history – it’s bizarre”.

Bizarre, but not surprising. As a news event, the Capitol invasion showed that when it comes to spreading “fake facts”, the traditional media can be even more effective than the social media that is usually blamed.

Tyler Durden Tue, 02/23/2021 - 22:45
Published:2/23/2021 9:48:18 PM
[Markets] SportsWatch: Seatbelt, airbag may have saved Tiger Woods’ life in rollover crash Tiger Woods was in the driver’s seat of a mangled SUV that rolled and ended up on its side down a steep roadway in the Los Angeles suburbs Tuesday morning, seatbelt still fastened, both legs seriously injured.
Published:2/23/2021 9:25:27 PM
[Markets] It Now Only Costs $350 To 3D-Print An Entire Gun It Now Only Costs $350 To 3D-Print An Entire Gun

The next round of COVID-19 relief could bring up to $1,400 direct payments to millions of Americans. Some people will buy food, save money, pay rent or bills. Others will gamble in the stock market. Some may take the free money and print an entire 3D gun at home. According to Futurism, it now only costs $350 to print to a firearm, including the printer's cost. 

Deterrence Dispensed, an online group that promotes and distributes open-source 3D-printed firearms, has designed a fully functional 3D-printable semiautomatic pistol caliber carbine. Designs for the FGC-9, which stands for "f**k gun control 9 mm," were made widely available on the internet in late 2020. 

The FGC-9 eliminates the need for factory-made gun parts. Its design was created with careful consideration for anyone, at any skill level, to produce the firearm at home with a 3D-printer. From the body of the weapon to the magazine, much of the gun can be printed. The FGC-9's barrel, which is metal and cannot be printed with a typical 3D printer, is created through electrochemical machining. 

Futurism states that the total cost of the weapon is $350, including a $250 printer and $100 in parts. 

But the days of people sharing 3D printed gun designs on the internet could be limited. The Biden administration has repeatedly warned they will "stop ghost guns." Here's what Biden's website says:

One way people who cannot legally obtain a gun may gain access to a weapon is by assembling a one on their own, either by buying a kit of disassembled gun parts or 3D printing a working firearm. Biden will stop the proliferation of these so-called "ghost guns" by passing legislation requiring that purchasers of gun kits or 3D printing code pass a federal background check. Additionally, Biden will ensure that the authority for firearms exports stays with the State Department, and if needed, reverse a proposed rule by President Trump. This will ensure the State Department continues to block the code used to 3D print firearms from being made available on the internet.

As for now, Deterrence Dispensed and Cody Wilson's Defense Distributed, another open-source website that develops firearms in CAD files, still operate, but we assume a crackdown is nearing.  

US lawmakers could cite Baltimore's massive increase in ghost gun seizures as one reason why these untraceable weapons need to be regulated or banned. 

Tyler Durden Tue, 02/23/2021 - 22:25
Published:2/23/2021 9:25:27 PM
[Markets] : AT&T poised to sell stake in DirecTV to TPG: reports AT&T Inc. is close to a deal to sell a substantial stake of DirecTV to private equity firm TPG, according to reports Tuesday.
Published:2/23/2021 8:48:08 PM
[Markets] Apple Reclaims Top Smartphone Maker, First Time Since 2016  Apple Reclaims Top Smartphone Maker, First Time Since 2016 

Apple reigned supreme in the fourth quarter as it shipped more smartphones than any other company in the fourth quarter. Still, in the full year, Samsung emerged as the top smartphone vendor, according to a report released by market research firm Gartner on Monday.

Apple shipped 80 million phones in the final three months of 2020, surpassing rival Samsung to become the world's top smartphone maker. The last time this happened was in 2016. Apple's growth was primarily driven by the release of the 5G iPhone 12 series. 

Due to the US government's sanctions, Huawei suffered a massive slide in smartphone sales for the quarter, down 41%. The Chinese technology company sank to fifth place in the table below, beneath other domestic rivals Xiaomi and Oppo. 

Anshul Gupta, senior research director at Gartner, wrote in the report that "sales of more 5G smartphones and lower-to-mid-tier smartphones minimized the market decline in the fourth quarter of 2020." 

Gupta said, "even as consumers remained cautious in their spending and held off on some discretionary purchases, 5G smartphones and pro-camera features encouraged some end users to purchase new smartphones or upgrade their current smartphones in the quarter." 

Gartner's numbers indicate Apple has weathered the pandemic storm much better than its competitors. 

Even though Apple led the fourth quarter, on a full-year basis, Samsung was the top smartphone vendor. Samsung posted a 14.6% decline year-on-year in 2020. However, the highest drop was suffered by Huawei.

Overall, global smartphone shipments declined 5.4% in 2020 amid the worldwide coronavirus pandemic, according to Gartner. 

Gupta believes affordable 5G smartphones could boost 2021 sales. 

"In 2021, the availability of lower end 5G smartphones and innovative features will be deciding factors for end-users to upgrade their existing smartphones," he said. "The rising demand for affordable 5G smartphones outside China will boost smartphone sales in 2021."

Tyler Durden Tue, 02/23/2021 - 21:45
Published:2/23/2021 8:48:08 PM
[Markets] Japan Appoints "Minister Of Loneliness" After Disturbing Rise In 'Social Distancing Era' Suicides Japan Appoints "Minister Of Loneliness" After Disturbing Rise In 'Social Distancing Era' Suicides

Japan like many other developed nations witnessed an alarming rise in suicides or attempted suicides over this past year of pandemic shutdowns and social distancing measures. The country was already at crisis levels even before the pandemic (though generally on a downward trajectory the prior decade), with recent studies showing it to be "the leading cause of death in men among the ages of 20-44 and women among the ages of 15 to 34."

To tackle the crisis, especially in the midst of this COVID-induced period of greater social isolation, Japan's government has appointed a "Minister of Loneliness" after the UK became the first country to establish such a position in 2018.


The most recent numbers cited in Japanese media reports say that 879 women killed themselves in the country during the month of October, a figure that marks a whopping 70% increase compared to the same month from 2019. Officials have noted that the pandemic and oftentimes mandated social distancing measures have appeared to have a harsher impact on women.

According to Japan Times, Prime Minister Yoshihide Suga earlier in the month appointed as the new Minister of Loneliness a 70-year old veteran politician named Tetsushi Sakamoto. It is a cabinet level position which aims to alleviate social isolation among citizens. 

He'll head up an 'emergency taskforce' to battle the disturbing spike in suicides nationally as his first order of business. "With isolation tied to an array of social woes such as suicide, poverty and hikikomori (social recluses), the Cabinet Office also established a task force Friday that seeks to address the problem of loneliness across various ministries, including by investigating its impact," Japan Times writes.

"According to preliminary figures released by the National Police Agency, 20,919 people took their own lives in 2020, up 750 from the previous year and marking the first year-on-year increase in 11 years. The surge is largely attributed to a noticeable rise in suicides among women and young people," the report pointed out.

Perhaps ironically, Japan also a has minister in charge of tackling Japan's sharply declining birthrate, which has also been subject of much reporting in recent years. 

We wonder if these ministers will tackle some of the underlying problems related to both the suicide and low birthrate crisis. As an example recall that Japan has seen whole high-tech industries and supposed 'solutions' arise, including 'loneliness' bots that provide AI-based "companionship" and even sex robots. 

One UK media report recounts for example, "Experts have suggested that the popularity of love dolls and sex robots might be to blame for Japan's declining birth rate. One even warned that Japanese people had become 'an endangered species' as the nation falls in love with silicon women." These bizarre trends only look to perpetuate the problems. 

Tyler Durden Tue, 02/23/2021 - 21:05
Published:2/23/2021 8:16:20 PM
[Markets] The Wall Street Journal: Blown jet engine over Colorado: Investigation focuses on engine cover The midair breakdown of a jet engine that spewed a trail of metal over a Colorado town is putting regulatory focus on the design and strength of engine coverings.
Published:2/23/2021 8:16:20 PM
[Markets] Biden Administration Rejects China's Calls For Better Relations Biden Administration Rejects China's Calls For Better Relations

Authored by Dave DeCamp via,

In the wake of the Trump administration, US-China relations are at their lowest point in decades. For weeks now, Chinese officials have been calling for better relations, and on Monday, Chinese Foreign Minister Wang Yi continued the call.

"We stand ready to have candid communication with the US side, and engage in dialogues aimed at solving problems," Wang said. He also called on the US to lift trade restrictions and stop interfering in China’s internal affairs. The US responded sharply to Wang’s remarks.

Xi Jinping and Joe Biden in 2012, AFP via Getty Images

"I think his comments reflect the continued pattern of Beijing’s tendency to avert blame for its predatory economic practices, its lack of transparency, its failure to honor its international agreements, and its repression of universal human rights," US State Department spokesman Ned Price said in response to Wang.

"You’ve heard us speak before about the way in which we will approach China, through the prism of competition from a position of strength," Price added.

So far, President Biden’s China policy is looking a lot like his predecessor’s. US warships continue to frequently sail into the South China Sea, trade restrictions are still in place, and Treasury Secretary Janet Yellen said tariffs on Chinese goods will remain, at least for now.

Biden’s Pentagon is currently reviewing the US military’s posture in Asia and its overall China policy. The review is being led by Ely Ratner, a China hawk who co-authored an article last September titled, "Trump Has Been Weak on China, and Americans Have Paid the Price." Ratner was appointed to advise Secretary of Defense Lloyd Austin, who Republican China hawks feared was too inexperienced on Asia.

Speaking at the Munich Security Conference last week, President Biden said the US and its allies must prepare for "long-term strategic competition with China." Working with regional allies to confront China seems to be the focus of Washington’s Asia strategy. Even NATO is looking to get in on the action in the Pacific.

Also speaking at the Munich Conference, NATO Secretary-General Jens Stoltenberg echoed Biden and said the "rise of China" is a "defining issue" for the alliance. "This is why NATO should deepen our relationships with close partners, like Australia and Japan, and forge new ones around the world," he said.

Tyler Durden Tue, 02/23/2021 - 20:45
Published:2/23/2021 7:47:58 PM
[Markets] Asian stocks open lower on inflation fears The Dow and S&P 500 recouped early losses after Federal Reserve Chair Jerome Powell reiterated in testimony before the Senate Banking Committee that monetary policy would remain accommodative and would not change without advance warning. The tech-heavy Nasdaq index closed down 0.5% as investors sold the big tech stocks that have driven the market rally since last March, and rotated into cyclicals, helping lift the Dow and S&P 500. But Powell's testimony hasn't fully swept away fears of rising inflation as the economies around the world are expected to rebound this year more strongly than was expected just weeks go as vaccines roll out around the world. Published:2/23/2021 7:16:32 PM
[Markets] Rochester Cops Avoid Charges In Death Of Mentally Distressed Black Man Placed In 'Spit Hood' Rochester Cops Avoid Charges In Death Of Mentally Distressed Black Man Placed In 'Spit Hood'

A New York Grand Jury has voted not to indict several Rochester police officers involved in the death of 41-year-old Daniel Prude last March, according to New York Attorney General Letitia James, who launched an investigation into the fatal encounter.

In a viral video released nearly six months after his death, Prude could be seen sitting handcuffed and naked in the street, wearing a "spit hood" which had been placed around his head after he reportedly smashed store windows and ranted about having COVID-19. The officers could be seen laughing and smiling as Prude made delusional comments, at times shouting incoherently in what a lieutenant later described in police documents as Prude having "acted in a fashion consistent with an individual in some form of mental distress."

Rochester police arrested Prude in the early hours of March 23 while responding to a 911 call made by his brother, who was concerned about Prude's safety during an apparent mental health crisis.

Prude had been released from Rochester's Strong Memorial Hospital earlier that evening after expressing suicidal thoughts and had left his brother's house wearing long johns and a tank top in below-freezing temperatures. Police found him naked and acting irrationally, allegedly smashing storefront windows and ranting about having the coronavirus. -NPR

According to police reports, Prude lost consciousness and stopped breathing - only to die a week later after being taken off life support.

Prude's family, which obtained the bodycam footage through a Freedom of Information Act (FOIA) request, filed a federal lawsuit alleging the Rochester police department attempted to cover up the true nature of his death.

Joe Prude, brother of Daniel Prude, right, and his son Armin, stand with a picture of Daniel Prude in Rochester, N.Y. (Ted Shaffrey/AP)

According to the Chicago Tribune, officers Troy Taladay, Paul Ricotta, Francisco Santiago, Andrew Specksgoor, Josiah Harris and Mark Vaughn, along with Sgt. Michael Magri were cleared of wrongdoing by the Grand Jury, after their attorneys argued that the officers were strictly following their training that night, and had employed a restraining technique called "segmenting."

They claim that Prude's use of PCP was the "root cause" of his death, while the county medical examiner cited the drug as a "contributing factor."

Following Prude's death, Democratic Mayor Lovely Warren fired police chief La'Ron Singletary, the latter of whom claims that Warren told him to lie to support her claim that she didn't know about Prude's death until months later, and that he was fired for refusing to do so.

Warren announced a run for a third term in January and pleaded not guilty in October to an unrelated indictment alleging she broke campaign finance rules and committed fraud. The city’s public integrity office found no ethical lapses by the mayor in a narrow review of Prude’s death.

The city halted its investigation into Prude’s death when James’ office began its own investigation in April. Under New York law, deaths of unarmed people in police custody are typically turned over to the attorney general’s office, rather than handled by local officials. -Chicago Tribune

Cover photo via the Daily Mail.

Tyler Durden Tue, 02/23/2021 - 20:05
Published:2/23/2021 7:16:32 PM
[Markets] Case Study Shows Cannabis Led To Remarkable Improvement In Childhood Autism Symptoms Case Study Shows Cannabis Led To Remarkable Improvement In Childhood Autism Symptoms

Authored by Matt Agorist via,

An extremely promising case study was recently published in the Journal of Medical Case Reports illustrating the positive effects of cannabis extract and its association with improved autism related behavioral symptoms.

According to the authors, “the pharmacological treatment for autism spectrum disorders is often poorly tolerated and has traditionally targeted associated conditions, with limited benefit for the core social deficits. We describe the novel use of a cannabidiol-based extract that incidentally improved core social deficits and overall functioning in a patient with autism spectrum disorder, at a lower dose than has been previously reported in autism spectrum disorder.”

The case study focused on a child with autism who was switching out prescription seizure medicine for his epilepsy with a very low cannabidiol-based extract dose. The study found that not only did the cannabidiol extract help with his seizures, but he also “experienced unanticipated positive effects on behavioral symptoms and core social deficits,” according to the study.

Researchers pointed out that to modify disruptive behaviors and improve social communication skills, often times children with autism are prescribed psychopharmacologic medications that target specific ASD core behaviors (for example, repetitive behaviors) and associated behaviors (for example, hyperactivity, aggression, anxiety, and sleep disturbances), but do not treat core social communication deficits. They explain that these medications are known for producing “substantial side effects.”

For example, aripiprazole and risperidone, the only two medications approved by the US Food and Drug Administration (FDA) to treat irritability and agitation in ASD, frequently cause somnolence, increased appetite, and weight gain.

These factors have led to families seeking alternative treatments outside of the psychopharmacologic realm. One of the newest forms of these alternative medicines is cannabidiol-based extract.

Researchers reported that the patient’s symptoms improved within six-months of treatment, and that he has maintained “positive effects on his behavioral symptoms, anxiety, sleep, and social deficits” since that time.

The results of CBE treatments, according to the case study, were nothing short of remarkable.

He became more motivated and energetic, starting his own vegetarian diet and exercise programs, ultimately losing 6.4?kg after starting CBE for a calculated BMI of 21.33?kg/m2. He was able to start his first part-time job helping customers and interacting with them. He was instructed to fill out the self-administered Adult AQ which resulted in a normal score of 10. His mother stated he now also has a girlfriend.

“This case report provides evidence that a lower than previously reported dose of a phytocannabinoid in the form of a cannabidiol-based extract may be capable of aiding in autism spectrum disorder-related behavioral symptoms, core social communication abilities, and comorbid anxiety, sleep difficulties, and weight control,” authors concluded. “Further research is needed to elucidate the clinical role and underlying biological mechanisms of action of cannabidiol-based extract in patients with autism spectrum disorder.”

According to a report in Norml, these finding back up previous research published last year by investigators at Tufts University in Boston who similarly reported that the oral administration of cannabis-based products is associated with improvements in autistic symptoms in patients with self-injurious behaviors and co-morbid epilepsy, Several small clinical trials – such as those reported hereherehere, and here – have also previously reported that plant-derived cannabis extracts are effective and well-tolerated in mitigating various symptoms in patients with ASD, including hyperactivity, seizures, anxiety, and rage attacks.

Knowing these incredible effects, imagine the obstinance, cruelty, and sheer lunacy that it takes for those in Washington to keep cannabis as a Schedule 1 drug - claiming it has no medical use whatsoever.

Tyler Durden Tue, 02/23/2021 - 19:25
Published:2/23/2021 6:46:19 PM
[Markets] Softbank Reportedly Eyes Billion-Dollar Biotech Bet Softbank Reportedly Eyes Billion-Dollar Biotech Bet

Though SoftBank has denied it, rumors are circulating Tuesday that the Japanese telecom/venture capital giant is planning to invest billions of dollars in the biotech sector.

The booming SPAC trend has amplified curiosity about Softbank's next big investment idea, especially amid rumors that the company might pursue a SPAC as the vehicle for its second "Vision Fund", and according to Bloomberg's sources, SB is looking to focus on biotech, a sector that has already been embraced by Wall Street Bets and others betting on microcap biotech stocks.

Biotech has been a hot sector for the SPAC trend: this past week alone, Foresite Capital’s second SPAC raised $175 million in its IPO, while two other biotech SPACs, European Biotech Acquisition and Frontier Acquisition, filed to raise a total of $300 million in their Nasdaq debuts.

Japan's aging population offers fertile ground for biotech companies looking to solve myriad problems linked to aging. Softbank has already made a series of equity investments in the sector, including a $312MM stake in Pacific Biosciences of California, an American DNA-sequencing company whose stock has risen almost 9x over the past year. 

And now, the Japanese firm is reportedly planning to spend billions investing in public biotech companies, according to Bloomberg and its sources. The trades will reportedly be housed in the company's SB Northstar, which houses some of the company's Nasdaq "whale" trades. One Softbank rep told Bloomberg that the report about Northstar's role were inaccurate.

"This is misleading and inaccurate," said a SoftBank spokesperson.

"SB Northstar continues to consider investment opportunities across the entire technology spectrum and is not specifically focused on one particular sector."

Softbank has already made a number of investments in health-care startups, primarily through its Vision Fund, such as 10x Genomics and Roivant Sciences. The Japanese investor also has a $298MM equity stake in Canadian antibody-drug discovery platform AbCellera Biologics, a small investment in 4D Molecular Therapeutics, and is planning a further $900MM convertible debt investment in a company called PacBio, according to Bloomberg.

Still, analysts and investors have been speculating about whether founder Masayoshi Son will spend more than $80B in assets, after the Softbank CEO last year unveiled plans to sell off $43B in assets and buy back 2.5 trillion yen of its own stock. Shares in the Japanese billionaire’s company have since surged, reaching the highest close since the company went public in 1994, and flying past a long-standing record two decades ago. This has helped Softbank's post-WeWork turnaround, and will continue to enable Masa Son to trawl about for a new strategy.

Tyler Durden Tue, 02/23/2021 - 19:05
Published:2/23/2021 6:16:06 PM
[Markets] Stock market news live updates: Stock futures open flat after choppy session Stock futures opened little changed Tuesday evening, as investors paused following another day of heavy tech selling. Published:2/23/2021 5:46:08 PM
[Markets] Board Leaders Of Texas Power Grid Resign After Blackout Outrage Board Leaders Of Texas Power Grid Resign After Blackout Outrage

The chair of Texas’s power grid operator and four other board members have resigned in the wake of the widespread outrage resulting from the energy crisis that crippled the state’s electrical system.

According to a filing by the PUC of Texas, Electric Reliability Council of Texas Chair Sally Talberg resigned along with Vice Chair Peter Cramton and board members Raymond Hepper, Terry Bulger, Vanessa Anesetti-Parra,/

In their resignation letter, the member cited recent concerns raised about out-of-state board leadership at the grid operator. “To allow state leaders a free hand with future direction and to eliminate distractions, we are resigning from the board effective after our urgent board teleconference meeting adjourns on Wednesday, February 24, 2021."

The resignations come as the Texas grid operator ERCOT and state regulators scramble to contain the catastrophic fallout from last week’s blackouts that left millions of homes without heat and light during a severe cold snap. The resignations also come after Texas Governor Greg Abbott last week called for Ercot leadership, including board members, to step down, and one day after the mother of an 11-year-old Texas boy who died during the power outage sued ERCOT and Entergy.

"We look forward to working with the Texas Legislature, and we thank the outgoing Board Members for their service," Ercot spokesperson Leslie Sopko said in a statement.

Craig Ivey also submitted a letter to withdraw his petition for approval as an unaffiliated director, citing concerns stakeholders recently expressed of having out-of-state directors.

Tyler Durden Tue, 02/23/2021 - 18:25
Published:2/23/2021 5:46:08 PM
[Markets] SportsWatch: Tiger Woods injured in rollover car crash, according to Los Angeles County sheriff Woods has been transported to a local hospital.
Published:2/23/2021 5:46:08 PM
[Markets] The Tell: Here are 3 reasons why the stock market can survive rising bond yields in 2021 Rising Treasury yields are contributing to a selloff by the stock market's pandemic highfliers, but probably won't be enough to spoil the appeal of stocks over bonds, one analyst says.
Published:2/23/2021 5:16:19 PM
[Markets] Can Governments Stop Bitcoin? Can Governments Stop Bitcoin?

Authored by Alex Gladstein via,

Since its creation more than 12 years ago, Bitcoin is undefeated. Its price has leaped from $5 to $50 to $500 to $5,000 to now past $50,000. The number of global users has eclipsed 100 million. The system’s network security, number of developers, and new applications are at all-time highs. Dozens of companies including Tesla and Square have started to add Bitcoin to their corporate treasuries.

This worldwide success doesn’t mean that people haven’t tried to stop Bitcoin. The digital money project has in fact survived a variety of attacks which in some cases threatened its existence.

There are two main vectors: network attacks on the software and hardware infrastructure, and legal attacks on Bitcoin users.

Before we explore them and consider why they failed, let’s start at the beginning.

In January 2009, a mysterious coder going by the name of Satoshi Nakamoto launched Bitcoin, an open-source financial network with big ambitions: to replace central banking with a decentralized, peer-to-peer system with no rulers. It would use a programmable, highly-fungible token that could be spent like electronic cash or saved like digital gold. It would be distributed around the world through a set-in-stone money printing schedule to a subset of users who would compete to secure the network with energy and in return, get freshly minted Bitcoin.

Initially, most were understandably skeptical, and very few paid attention. There had been attempts at creating “ecash” before, and all had failed. No one had been able to figure out how to create a decentralized, incorruptible mint, or how to grow a system that couldn’t be stopped by governments.

But a small community grew around Bitcoin, which promised just that. Led by Satoshi and Hal Finney, this group of iconoclasts discussed, tinkered with, and improved the software in its first year, using their computers to mine1 50 worthless Bitcoin every 10 minutes. Eventually, someone decided these virtual tokens were worth enough to accept in return for a real-world good. On May 22nd, 2010, a developer named Laszlo Hanyecz paid 10,000 Bitcoin for two Papa John’s pizzas, at an exchange rate of .1 cents per Bitcoin. No one could have predicted that Laszlo’s pizza order would one day be so costly: today, this order is worth more than $500 million.

Since the early days of PC mining and the Silk Road, Bitcoin has become a global phenomenon. No one knows who Satoshi is, but if their creation was a company, it would be one of the world’s top 10 most valuable. Its fan base has grown from a few pseudonyms on Cypherpunk messageboards to including the likes of Twitter CEO Jack Dorsey, Tesla CEO Elon Musk, Harvard professor Niall Ferguson, Fidelity CEO Abby Johnson, actress Lindsay Lohan, singer Soulja Boy, skateboarder Tony Hawk, and investor Paul Tudor Jones. It has its own unicode character, the ?. An industry conference held this month focusing on how to add Bitcoin to corporate treasuries drew more than 6,000 companies. MIT boasts a research center contributing to long-term Bitcoin security.

Bitcoin markets have popped up in virtually every country and major urban area on Earth, with local traders eager to buy Bitcoin in exchange for local currency everywhere from Caracas to Manila to Moscow. Millions of people in Nigeria, Argentina, Iran, Cuba, and beyond are now using Bitcoin to escape their local currency system, and opt into something with a better track record as a store of value than the naira, bolivar, rial, or peso. They can control their Bitcoin with a private key (think: password) that they can store on a phone, USB stick, on paper, or even with memorized wordlists, and send the currency to family or friends anywhere on Earth in minutes, with no permission from any authority required.

The mainstream media typically portrays Bitcoin as a penny stock gone wild, or a new kind of digital tulip mania. But the reality is Bitcoin is a political project that threatens to fundamentally disrupt the Davos-led economic system, with everyone from Janet Yellen to Christine Lagarde expressing fear about its rise and demanding it be regulated.

Governments retain their power in part by issuing and controlling money. Bitcoin is a new model that mints and secures money without governments. So the big question is: Why haven’t governments or megacorps stopped it? And if they try to attack Bitcoin in the near future, what would that look like?

There is an enormous amount of speculation on the Internet about how Bitcoin might be attacked, but few stop to think about why it hasn’t already been destroyed. The answer is that there are political and economic incentives for more and more people to push the system forward and strengthen its security, and strong political, economic, and technical disincentives that discourage attacks.

Certainly, Bitcoin isn’t too small to draw the attention of governments. Previous attempts at parallel online digital currencies, like e-Gold and Liberty Reserve, were shut down by the US government before even making it to $10 billion in market capitalization. Bitcoin now has a market cap north of $1 trillion. Every day Bitcoin survives, it becomes stronger, and for many attack vectors, the windows are rapidly closing.

One reason that Bitcoin is so tenacious is that it is a globally-distributed phenomenon. The vast majority of mining takes place outside of the US in China and central Asia. But the vast majority of Bitcoin holders and buyers appear to be US and EU entities, and the software’s core developers and node-runners (who host Bitcoin’s servers) are scattered throughout the world. The most important person in Bitcoin—its inventor—is no longer relevant, and could even be dead.

Coding, mining, infrastructure, and markets are all independent, happening in competing jurisdictions and geopolitical rivals, often done by anonymous or pseudonymous actors, all with different philosophies and goals, but with one uniting motivation: to keep Bitcoin going.

Unlike every other cryptocurrency, there is no central point of failure. Bitcoin has no Vitalik Buterin, no Ethereum Foundation, no Deltec bank like Tether, no fancy offices in San Francisco, no team of lawyers, no governance token, no VC-backing, no pre-mine, no small council, and no whales able to manipulate the system. This decentralized architecture has already insulated Bitcoin from attacks at the highest levels. No matter how much Bitcoin you own, you can’t change the rules, print more, censor, steal or prevent others from using the network.

Arguably the most powerful financial force in the world—the US government led by then-Treasury secretary Steve Mnuchin—just launched an attack on Bitcoin in December 2020. It was not a particularly strong one, but still, an attack nonetheless, which would have forced US exchanges to gather more information about individuals withdrawing their Bitcoin to wallets they control than even mainstream banks collect, handing the surveillance state much more intricate knowledge of Bitcoin’s flow of funds. But the crackdown failed, stymied by a broad coalition of opposition, and Mnuchin is now gone.

The new US regulatory regime might be less aggressive. In fact, incoming SEC chairman Gary Gensler once taught a class about Bitcoin. Cynthia Lummis, a freshly elected Senator from Wyoming and passionate Bitcoin supporter, has been named to the Senate Banking Committee. That means one of the most powerful bodies in the US financial system now sports a member who recently tweeted about Bitcoin: “I came for the store of value. I stayed for the censorship-resistance.” Lummis joins Warren Davidson and others in Congress who have vowed to defend Bitcoin.

The biggest attack in Bitcoin’s history came in 2017 at the software level. That spring a handful of the most important industry actors gathered and signed what is called the New York Agreement. The authors boasted more than 83% of the global mining hashpower, more than 50 total companies, more than 20 million wallets, and a huge share of the payment infrastructure. It was an alliance between Chinese miners, Silicon Valley, and Wall Street, and their goal was to change Bitcoin to allow it to process more transactions per second, at the cost of sacrificing decentralization and the ability of users to audit the monetary supply from home.

Despite the odds, a handful of grassroots activists ended up building a movement that stunningly defeated this New York alliance. By November 2017, the corporate “SegWit2X” plan was dead, and Bitcoin remained decentralized. The lesson from these “scaling wars” is that neither miners nor corporations control Bitcoin. Yes, miners process transactions, and developers propose upgrades to the software, but tens of thousands of users running nodes actually decide what transactions are valid and what software version is adopted.

Even if a government took control of a majority of the Bitcoin hashrate, this doesn’t enable them to change the Bitcoin consensus rules or print more Bitcoin or steal anyone’s holdings. The worst they could do is use their power to mine new versions of Bitcoin (which, in the case of BCH or BSV, has failed spectacularly), or burn billions of dollars to temporarily damage the network in what’s called a “51% attack.” In such an attack, a majority of miners could team up and use their superior hashrate to momentarily overwhelm the network. The price of the hardware required would exceed $5 billion.

Even if a government did want to risk that much on such an exotic assault, it is unlikely that they would divert the precious fabrication capacity of the world’s few semiconductor manufacturers to this very speculative purpose. For China or the US, disrupting existing semiconductor orders during a global shortage could put national security at stake. An alternative would be to seize a majority of the world’s mining equipment in a military operation. But the logistics of trying to locate and violently capture hundreds of thousands of 5-pound machines owned by often pseudonymous actors across dozens of jurisdictions would be hugely prohibitive.

Speculation about other technical attacks on Bitcoin abounds: mining pools censoring transactions (miners make more money from not censoring, can quickly switch to non-censoring pools, and may adopt software that makes censorship impossible), a global internet shutdown (could be disruptive, but not fatal), mining hardware backdoors (this actually happened, but was not exploited, and the threat is now fading), quantum computers breaking Bitcoin’s cryptography (not to be taken seriously according to experts), and even bad actors making harmful updates to the codebase (this wouldn’t stand a chance against hundreds of watchful developers).

The fact is, despite constant fear-mongering about how Bitcoin could fail, all users have always been able to transact. There have been no significant acts of censorship. Attempts to disrupt the protocol or the network infrastructure would be incredibly difficult and costly to attempt, and have no guarantee of success. As we saw in 2017, even if powers are able to amass a super-majority of the hashrate, they could be defeated by the network’s decentralized architecture. Far easier and far more likely are attacks on users themselves.

There are several nightmare scenarios that Bitcoiners fear that don’t involve science fiction around governments teaming up in a Mission Impossible-style mission to seize billions of dollars of energy and mining equipment.

One such fear is four numbers: 6102.

In 1933, the FDR administration passed Executive Order 6102, which banned citizens from holding gold and forced them to turn in any gold to the authorities. The US government, or any other government, could try doing the same, giving citizens a window to declare and sell their Bitcoin to the government, or else face jail time.

The Bitcoin community is already preparing for such an attack. One reason 6102 was so successful is that the government could just go to banks who held gold on behalf of citizens, and seize at point of custody. So every January 3rd, users celebrate “proof of keys” day, where it is customary to withdraw any Bitcoin they own on exchanges or in the custody of third parties to wallets that the end users control. “Not your keys, not your coins,” first popularized by Bitcoin educator Andreas Antonopoulos, is a community mantra. With more than 10 percent of the American population using Bitcoin, if enough people self-custody, then a 6102 attack would be of limited effect. Given that the keys to your Bitcoin account are typically in the form of 24 seed words that can be written down, hidden, encoded, or memorized, a military home-by-home raid couldn’t work very well and would constitute a mass set of human rights violations.

Another regulatory threat would be a new unrealized gains tax on Bitcoin, which would be devastating to long-term savers, or new strict “know your customer” rules making it a crime to buy Bitcoin through an unauthorized issuer. But such rules have many obstacles: first and fourth amendment protections; numerous senators and congressmen pushing for a more Bitcoin-inclusive policy; and a large and growing cryptocurrency industry that would vigorously lobby against such rules.

Governments could try to marginalize Bitcoin by introducing a competitor: a Central Bank Digital Currency. Most central banks worldwide are experimenting with the idea of replacing banknotes with digital tokens that citizens could hold in mobile wallets. One argument that promoters of these systems make is that they could help check the thirst for Bitcoin. Ultimately, however, CBDCs like China’s DCEP can’t compete because their floating global price will be tied to the existing fiat currency, which will inevitably fall in relative purchasing power. Meanwhile, Bitcoin’s purchasing power continues to rise over time, and it offers a level of transactional freedom and privacy from the state that no CBDC could ever boast.

Another attack vector could be a ban on the act of Bitcoin mining itself inside democracies. Today, many mainstream media articles describe Bitcoin as an environmental disaster. In reality, it relies heavily on renewable energy (estimates range from 39 percent to 74 percent), consumes a lot of stranded or excess energy, and could very well have a mostly green future. But given the poorly-informed narratives around the subject, one could imagine a world in which the Biden Administration restricts Bitcoin mining as part of a Green New Deal.

The “two-Bitcoin” problem is perhaps the biggest existing threat to Bitcoin users today. If the top 25 global exchanges in the US, EU, and East Asia agreed to end user withdrawals, then that would effectively bifurcate the system. Bitcoin inside the bubble would be “whitelisted” and Bitcoin outside could be “blacklisted” — meaning, if a merchant accepts Bitcoin from you that is not on a certain list, they’d be running a risk. No matter how private you are with your Bitcoin, it wouldn’t matter. You’d need to find people willing to accept your Bitcoin with no trail. Such laws would force users into peer-to-peer markets, where buyers don’t care about coin history.

Even still, there are lots of barriers to this attack. Exchanges would lose millions of customers and billions of dollars of business. The “DeFi” ecosystem would potentially collapse, given it relies on users being able to purchase ETH with dollars on big exchanges and then withdraw to trading platforms like Uniswap. Companies in this space would vigorously resist any change that would prevent citizens from withdrawing Bitcoin or any cryptocurrency to self-controlled wallets.

As these examples show, there are plenty of kinds of regulatory attacks that should concern Bitcoin users, and they are much more likely than cryptographic or hashrate attacks on the network, but the reality is that many legal attacks have already happened, and they have been ineffective.

In 2017, the Chinese Communist Party restricted the ability of its citizens to exchange RMB for Bitcoin. Shortly thereafter, the Indian government did the same, followed by the Pakistani government and several others. In other words, the two largest governments in the world tried to cut off Bitcoin access to their citizenry at the most obvious point: the on and off ramps where citizens exchange local currency for Bitcoin through exchanges.

Last year, the Indian Supreme Court reversed this rule, and Bitcoin is no longer restricted. The government is again seeking to pass a bill prohibiting Bitcoin and all non-state cryptocurrencies, while also launching a digital currency to be issued by the Reserve Bank of India, but in the meantime, local usage grows. In China after the 2017 restrictions, some companies moved to other countries in east Asia, but continued to do business with Chinese customers. Two of the biggest exchanges for the Chinese market, Huobi and OKCoin, still service millions of Chinese. In Pakistan, Bitcoin is de facto banned, but adoption is exploding.

In Nigeria, the government is currently promising to freeze the bank accounts of any citizens who are identified as buying or selling Bitcoin. This regime has tried similar tactics before, but all have failed. What these actions actually accomplish is to drive citizens into harder to control peer-to-peer markets, and into the arms of risk-tolerant entrepreneurs committed to helping their fellow citizens access a better financial system.

In the United States, the recent last-minute attack by Secretary Mnuchin aside, American financial activity is increasingly monitored under laws like the Bank Secrecy Act. In line with this trend, cryptocurrency exchanges have introduced more stringent identification requirements for their customers, as well as increasingly small withdrawal limits. So far though, Americans are still easily able to buy Bitcoin and withdraw it to wallets they control, and this will be defended by new powerful allies.

Senator Lummis and Congressmen Davidson, McHenry, Emmer, and Soto, as well as state leaders like Miami mayor Francis Suarez, have all come out in support of Bitcoin, whether by hosting the whitepaper on their websites, promising to fend off overly-restrictive regulation, or pledging to make their jurisdictions hotspots for Bitcoin entrepreneurial activity and innovation. Mayor Suarez, for example, is pushing for employees of the city of Miami to earn a percentage of their salary in Bitcoin, for residents to be able to pay taxes in Bitcoin, and to include Bitcoin as part of the city’s investment portfolio.

Some argue that corporate America will try to attack Bitcoin. But so far, it seems that big companies are instead trying to join the party. In the past few months, Tesla, Microstrategy, Square, Grayscale, and others are buying up billions of dollars more Bitcoin than the amount being produced through mining. And, as savvy investors will realize, ultimately you can’t separate Bitcoin from its cypherpunk nature. Bitcoin is only valuable as an asset because of its decentralization, since no one can arbitrarily change its rules or decide to print more. Driven by self-interest, Wall Street may ironically end up being one of the biggest cheerleaders of this new technology that Washington can’t control.

So far, it seems that when governments try to ban or restrict Bitcoin, it ends up merely accelerating the adoption of the currency inside their countries. Governments that have failed miserably with their Wars on Drugs may find stopping people from holding something that’s invisible, borderless, and teleporting much more difficult. In democracies, governments will face major obstacles from the tech and financial industries, but also from the fact that restrictions on Bitcoin ownership can clash with free speech, privacy, and private property protections. Confiscation will require brutality, and it’s not clear that all governments have the stomach or ability.

In the end, Bitcoin’s biggest defense is human nature itself. We are greedy and self-interested, and this applies to our governments. Already, some authorities are starting to mine or are encouraging mining. This is happening everywhere from Beijing to Kentucky to Siberia to Ukraine. As the price rises, more and more are buying into Bitcoin’s value as a long-term store-of-value and inflation hedge. Just as some governments with weak currencies have been forced to dollarize, others in the future could be forced to accumulate Bitcoin. It’s a rivalrous planet.

Why would a government attack Bitcoin if it could gain more from using its energy monopoly or ability to print fiat to buy some? The rich and powerful will always design systems that benefit them before everyone else. The genius of Bitcoin is to take advantage of that very base reality and force them to get involved and help run the system, instead of attacking it.

In a world with friendly US regulators, rogue regimes mining Bitcoin to print dollars, and citizens of the world demanding an asset that can’t be inflated away, the incentive to attack Bitcoin is dwindling.

In the end, the only way to kill Bitcoin may be to make it so that people don’t need it anymore. If no one wants a devaluation-proof, censorship-resistant, permissionless, borderless, non-discriminatory, teleporting financial asset, then no one will feed it energy, and it will die. Perhaps humanity can come up with another technology that addresses these needs.

But until then, Bitcoin will thrive.

*  *  *

Alex Gladstein is chief strategy officer at the Human Rights Foundation, a non-profit that supports civil liberties in authoritarian societies. You can follow him on Twitter @gladstein.

Tyler Durden Tue, 02/23/2021 - 18:05
Published:2/23/2021 5:16:19 PM
[Markets] Earnings Outlook: Square buys more bitcoin as Cash App users boost revenue Square Inc. doubled down on bitcoin with a $170 million investment in the cryptocurrency, as surging interest in trading among Cash App customers helped revenue more than double in the fourth quarter.
Published:2/23/2021 4:47:12 PM
[Markets] GOP Senators Counter Democrats With $10 Minimum Wage By 2025 GOP Senators Counter Democrats With $10 Minimum Wage By 2025

GOP Sens. Tom Cotton (AR) and Mitt Romney (UT) unveiled a proposal to raise the federal minimum wage to $10 per hour by 2025, countering a $15 hourly increase baked into the Democrats' $1.9 trillion stimulus package.

Federal minimum wage has been $7.25 since 2009, which is approximately $15,000 per year for a 40-hour work week.

According to Axios, "In addition to gradually increasing the federal minimum wage and youth minimum wage each year after the "COVID-19 emergency," Romney and Cotton's proposal would mandate E-Verify for all employers to ensure the rising wages go to "legally authorized workers."

Senate parliamentarian Elizabeth MacDonough will rule as soon as Wednesday whether the Democrats' $15 an hour wage hike will be included in the broader stimulus, which would be voted on through a budget reconciliation process requiring a simple majority to pass. According to the report, if the $15 increase doesn't make it into the final package, it will likely need bipartisan support.

Democrats have long pushed for an incremental minimum wage hike to $15 an hour, but the president has said that he doesn’t expect the provision to survive negotiations — especially after two moderate Democrats came out against including the measure in the massive relief package.

  • Biden has promised to promote a standalone bill to raise the minimum wage.
  • The $10 an hour proposal by Republicans could act as a first step to compromise in passing a separate bill, but it's unlikely that Democrats will accept the provisions related to undocumented immigrants. -Axios

According to the nonpartisan Congressional Budget Office, raising minimum wage to $15 would result in 1.4 million jobs lost by 2025, though 900,000 people would be lifted out of poverty.

  • The cumulative budget deficit over the 2021–2031 period would increase by $54 billion
  • From 2021 to 2031, the cumulative pay of affected people would increase, on net, by $333 billion—an increased labor cost for firms considerably larger than the net effect on the budget deficit during that period.
  • That net increase would result from higher pay ($509 billion) for people who were employed at higher hourly wages under the bill, offset by lower pay ($175 billion) because of reduced employment under the bill.
  • Employment would be reduced by 1.4 million workers, or 0.9 percent
  • The number of people in poverty would be reduced by 0.9 million
Tyler Durden Tue, 02/23/2021 - 17:45
Published:2/23/2021 4:47:12 PM
[Markets] Dow erases 360-point loss to eke out positive finish after Powell testimony Dow erases 360-point loss to eke out positive finish after Powell testimony Published:2/23/2021 3:48:14 PM
[Markets] Capitol Report: Russia assigned more than 1,000 expert engineers to execute SolarWinds hack, says Microsoft exec A cyberespionage campaign waged by Russian foreign intelligence on U.S. companies and government institutions was of a scale and sophistication never before seen, technology executives told the Senate Select Committee on Intelligence on Tuesday.
Published:2/23/2021 3:48:14 PM
[Markets] Here's How Much Wasteful Spending Is In The New $1.9 Trillion Stimulus Bill Here's How Much Wasteful Spending Is In The New $1.9 Trillion Stimulus Bill

By Adam Andrzejewski, CEO/Founder of, first published in Forbes

Over the weekend, the U.S. House posted a first draft version of the “American Rescue Plan Act of 2021” – a $1.9 trillion emergency aid package to help America recover from the coronavirus pandemic.

Previous legislation has already provided at least $4 trillion in funds for testing, paid family leave, small business relief, direct payments to individuals and families, the Kennedy Center, and a plethora of non-related COVID “relief.”

Since House Speaker Nancy Pelosi’s leadership team essentially wrote the bill, our auditors at found what House Democrats consider coronavirus-recovery “essential” spending:

  • $1.5 million earmarked for the Seaway International Bridge, which connects New York to Canada. Senate Leader Chuck Schumer hails from New York.

  • $50 million for “family planning” – going to non-profits, i.e. Planned Parenthood, or public entities, including for “services for adolescents[.]”

  • $852 million for AmeriCorps, AmeriCorps Vista, and the National Senior Service Corps – the Corporation for National and Community Service – civic volunteer agencies. This includes $9 million for the AmeriCorp inspector general to conduct oversight and audits of the largess. AmeriCorps received a $1.1 billion FY2020 appropriation.

People of goodwill can debate each of these goals, but is it truly emergency spending or funding related to COVID?

For example, what is the public purpose for a hike in the minimum wage to $15 per hour – which the non-partisan Congressional Budget Office (CBO) says will cost the economy 1.4 million jobs?

Certainly, the coronavirus stimulus bill does provide $473 billion in payments to individuals, $75 billion in cash for vaccines, $26 billion to restaurants, $15 billion to help fund airline payrolls, and another $7.2 billion in Paycheck Protection Program funding for small businesses.

However, The Wall Street Journal editorial board estimated that only $825 billion was directly related to COVID-relief and $1 trillion was “expansions of progressive programs, pork, and unrelated policy changes.”

For example, separately, our auditors found that $470 million in the bill doubles the budgets of The Institute of Museum and Library Services and the National Endowment of the Arts and the Humanities.

  • $200 million in the bill to The Institute of Museum and Library Services (FY2019 budget: $230 million). This agency is so small that it doesn’t even employ an inspector general.

  • $270 million funds the National Endowment of the Arts and the Humanities (FY2019 budget: $253 million) – In 2017, our study showed eighty-percent of all non-profit grant making flowed to well-heeled organizations with over $1 million in assets.

A quick spotlight on agencies and entities receiving “coronavirus recovery” money in the bill includes:

  • $350 billion to bailout the 50 States and the District of Columbia. The allocation formula uses the unemployment rate in the fourth quarter of 2020. Therefore, states like New York and California –who had strict economic lockdown policies and high unemployment – will get bailout money. States like Florida and South Dakota – who were open for business – will get less.

  • $128.5 billion to fund K-12 education. The CBO determined that most of the money in education will be distributed in 2022 through 2028, when the pandemic is over.

  • $86 billion to save nearly 200 pension plans insured by the Pension Benefit Guaranty Corp. There are no reforms mandated while these badly managed pensions are bailed-out. Many of these pension plans are co-managed by unions.

  • $50 billion goes to the Federal Emergency Management Agency (FEMA). A portion of these funds is earmarked to reimburse up to $7,000 for funeral and burial costs related to COVID deaths.

  • $39.6 billion to higher education. This amount is three times the money – $12.5 billion – that higher ed received with the massive CARES Act funding from last March.  

  • $1.5 billion for Amtrak – the National Railroad Passenger Corporation. In FY2020, Congress appropriated $3 billion for Amtrak ($2 billion in annual appropriations, plus an additional $1 billion in the CARES Act COVID relief bill). In the three years before the pandemic, AMTRAK lost $392 million – even after a $5 billion taxpayer subsidy (FY2017-FY2019).

We reached out to Speaker Pelosi for comment and will update the piece if there is a response.

During the past three years, Republicans and Democrats have helped drain the U.S. Treasury from the left and the right. Our national debt increased from $10 trillion (2008) to $19.6 trillion (2016) to $23.6 trillion (2020) and stands at $28 trillion today.

Continuing coronavirus responses and bloated legislation will drive the national debt much higher.

Tyler Durden Tue, 02/23/2021 - 16:45
Published:2/23/2021 3:48:14 PM
[Markets] Workhorse stock slides after Oshkosh wins USPS contract Workhorse stock slides after Oshkosh wins USPS contract Published:2/23/2021 3:15:55 PM
[Markets] US STOCKS-S&P 500 closes higher in late session U-turn Wall Street reversed its losseslate Tuesday, with the S&P 500 and the Dow reclaiming positiveterritory by the close in a tug-of-war between stocks thatthrived amid lockdowns and those that stand to benefit most froma reopening economy. The Nasdaq was the only major U.S. stock index to loseground on the day. Market-leading growth stocks, which thrived amidpandemic-related lockdowns, weighed on stocks for much of theday as investors favored shares that stand to gain most asongoing vaccine deployment allows economic restrictions to belifted. Published:2/23/2021 3:15:55 PM
[Markets] Square Adds $170 Million In Bitcoin To Enable "Economic Empowerment" Square Adds $170 Million In Bitcoin To Enable "Economic Empowerment"

Building on the list of recent companies to add crypto to their reserves, or embrace as a payments solution, Jack Dorsey's other company - Square - reportedly added $170 million of bitcoin to its existing $50 million reserves.

Full Square Statement:

Square also announced today that it has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million.

Combined with Square’s previous purchase of $50 million in bitcoin, this represents approximately five percent of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020.

Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future.

The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.

And Bitcoin rebounded modestly on the news:

Dorsey's average entry price for this latest quarter's bitcoin buys was $53,125, meaning they are underwater on the crypto position for now.

As an aside, Square's bitcoin revenue came in at $1.76bn (less than the expected $1.87bn).

Tyler Durden Tue, 02/23/2021 - 16:11
Published:2/23/2021 3:15:55 PM
[Markets] Bond Report: U.S. Treasury yields pull back from intraday high after Powell testimony U.S. Treasury yields come off their highs on Tuesday after congressional testimony from Federal Reserve Chairman Jerome Powell, who suggested the central bank remains far from deciding when to taper its asset purchases.
Published:2/23/2021 2:48:38 PM
[Markets] Workhorse Implodes, Halted Five Times After Oshkosh Wins USPS Contract Workhorse Implodes, Halted Five Times After Oshkosh Wins USPS Contract

Update 1546EST: The stock has been halted higher, making a fifth halt on the session. 

Update 1537EST: The stock has been halted lower a fourth time. Good thing there's only 23 minutes left in the cash session.


Shares of Workhorse imploded on Tuesday afternoon after news broke that the United States Postal Service awarded a 10-year contract to manufacture a new generation of U.S.-built postal delivery vehicles to Oshkosh.

Workhorse was rumored (and widely expected judging by the price reaction) to be in the running for the contract, which was a frequently touted piece of the bull case by investors. On the news, Workhorse shares plunged by over 50% and have been halted three times.

Recall, several short sellers had targeted Workhorse over the course of the past year, noting that the USPS contract was unlikely. Both Hindenburg Research and Fuzzy Panda research took victory laps on Tuesday afternoon after the stock's plunge.

The USPS press release states:

The U.S. Postal Service announced today it awarded a 10-year contract to Oshkosh, WI, based Oshkosh Defense, to manufacture a new generation of U.S.-built postal delivery vehicles that will drive the most dramatic modernization of the USPS fleet in three decades.

Under the contract's initial $482 million investment, Oshkosh Defense will finalize the production design of the Next Generation Delivery Vehicle (NGDV) — a purpose-built, right-hand-drive vehicle for mail and package delivery — and will assemble 50,000 to 165,000 of them over 10 years. The vehicles will be equipped with either fuel-efficient internal combustion engines or battery electric powertrains and can be retrofitted to keep pace with advances in electric vehicle technologies. The initial investment includes plant tooling and build-out for the U.S. manufacturing facility where final vehicle assembly will occur.

This story is developing...

Tyler Durden Tue, 02/23/2021 - 15:46
Published:2/23/2021 2:48:38 PM
[Markets] #LaserEyes meme goes viral on Twitter in apparent bid to double bitcoin price #LaserEyes meme goes viral on Twitter in apparent bid to double bitcoin price Published:2/23/2021 2:16:15 PM
[Markets] GLOBAL MARKETS-Stocks slide on tech sell-off, bond yields steady Global equity markets slid onTuesday as a rally in commodity-related assets yielded to fearsof an over-bought market as investors dumped tech stocks, butremarks by Federal Reserve Chair Jerome Powell helped calmjitters. Powell said in prepared remarks for a U.S. Senate BankingCommittee hearing that the recovery remains "uneven and far fromcomplete," and that it will be "some time" before the Fedconsiders changing policies aimed at achieving full employment. Powell believes monetary policy needs to be supportive andthat there is a long way to go to repair the jobs market andbefore inflation becomes a concern, said Michael Arone, chiefinvestment strategist at State Street Global Advisors in Boston. Published:2/23/2021 2:16:15 PM
[Markets] Blowing Up The "Everything" Bubble Blowing Up The "Everything" Bubble

Authored by Lance Roberts via,

Recently, I discussed the “Two Pins That Pop The Bubble,” specifically noting the risk of rising interest rates and inflation. However, the real threat is not just the stock market bubble’s deflation but rather blowing up the “everything bubble.”

During previous periods in financial history, the focus was primarily on the deflation of a singular market bubble. Such was a point we touched on in “Extraordinary Popular Delusions:” The two tables below show the history of bubbles and what they all had in common.

The flood of liquidity and ultra-accommodative monetary policies has simultaneously inflated multiple bubbles. Stocks, bonds, real estate, and speculative investments have all experienced historic inflations.

The byproduct of cheap debt and liquidity is the explosion of household net worth as a percentage of disposable personal income. Starting in the early 80s, as President Reagan deregulated the banking system, net worth exploded through massive leverage increases. Such was made possible by four decades of continually falling interest rates and inflation.

Another view is to look at the expansion of net worth relative to GDP growth. Of course, the massive deviation would not be possible without the massive increases in leverage over the last 40-years.

However, ironically, while it appears that Americans are far more wealthy, in reality, it is only a small fraction of the population that has benefitted. A point we made in “The Fed Made The Top 10% Richer.”

This framework is the basis for the rest of our discussion on the coming deflation of the “Everything Bubble.”

The Stock Bubble

There is little argument that financial markets are currently in a “bubble.”  The monthly chart of the S&P 500 shows the deviation from long-term monthly means at levels not seen since 1990.

As discussed in “Yes, There Is A Stock Market Bubble,” valuations are just a reflection of the underlying psychology at the second-highest level in history. As noted:

If market bubbles are about ‘psychology,’ as represented by investors’ herding behavior, then price and valuations are reflections of that psychology. In other words, bubbles can exist even at times when valuations and fundamentals might argue otherwise.”

During a “market mania,”  investors must continue to rationalize overpaying for assets to keep prices moving higher. Over the last decade, the most common justification remains that low discount rates justify high valuations.

The problem comes when interest rates rise. Throughout history, an unexpected surge in interest rates has repeatedly led to poor investor outcomes.

Despite media rhetoric that “rising rates” aren’t a problem for the stock market, history suggests they are. Given the massive surge in corporate leverage promulgated by weak economic growth, higher rates will quickly impact corporate profitability and financing activities.

As history shows, such collisions have often left a trail of bodies in its wake.

The Real Estate Bubble

Currently, there is also a “bubble” once again in housing as a continual suppression of borrowing costs, loose lending policies, and a flood of stimulus has led to a historical surge in home prices. As we noted previously in “There Is No Supply Shortage,” home price appreciation has once again eclipsed long-term price trends.

The current overvaluation in homes, of course, is driven by record-low mortgage rates.

However, as noted above, that economic support will quickly reverse as interest rates rise. Given there is a surging demand for homes, just as with the stock market, when rates rise, there will be a rush to sell to a diminishing pool of buyers.

Also, as with the stock market, owned by the top 20% of income earners, most houses bought were by that same fraction of the population. (Higher incomes and nearly perfect credit.)

Given the sharp rise in prices, the resulting price decline will likely be equally as quick.

The Bond Bubble

Of course, there is nowhere more at risk from higher rates than the bond market itself. Given that “yield” is a function of price, there is a perfectly negative correlation between prices and interest rates.

I pointed out before the “pandemic-driven shut-down” the 2019 yield-curve inversion was signaling a problem with the bond market. To wit:

“The magnitude of the Fed’s response was also a function of “panic” based more on “recency bias” than facts. The Fed quickly returned to the “Financial Crisis” playbook to anticipate events that may occur in the credit markets rather than responding to outcomes.

There is a difference.

The Financial Crisis was a problem with the banking system. The COVID-19 pandemic is a health crisis.”

The Federal Reserve problem is they have now pushed “yield spreads” across the entirety of the credit spectrum to record lows. The Fed’s suppression of rates to “bail-out” the bond market in the short-term has created a long-term problem of “mispricing risk.”

That mispricing of risk, or rather the creation of “moral hazard,” in the credit markets created a record number of “zombie” companies in the process.

Eventually, when rates rise enough, these “zombie” companies will be unable to refinance debt for their continued survival. Once bankruptcies begin to spike uncontrollably, investors will demand to get paid for their investment risk. As shown, such has occurred in the past with relatively dismal outcomes.

As they found out back in March, the Fed can only buy a small fraction of corporate bonds without disrupting the market.

The risk is a surge in rates and defaults, greater or faster than the Federal Reserve can absorb.

The Unwinding

What should be clear is that if the rise in interest rates approaches 2% or higher, there are many problems embedded in an economy laden with nearly $85 trillion in debt.

The debt problem exposes the Fed’s most significant risk. Given economic growth remained elusive over the last decade, it is unlikely doubling the Fed’s balance sheet will improve future outcomes. The failure to recognize the impact of ongoing monetary policies, given a decade of experience of surging debt and deficits inhibiting organic growth, is problematic.

The US economy is literally on perpetual life support. Recent events show too clearly that unless fiscal and monetary stimulus continues, the economy will fail and, by extension, the stock market.

However, the Fed currently has no choice.

Such is the consequence, and problem, of getting caught in a “liquidity trap.”

What the average person fails to understand is that the next “financial crisis” will not just be a stock market crash, a housing bust, or a collapse in bond prices.

It could be the simultaneous implosion of all three.

Whatever causes that change in sentiment is unknown to me or anyone else. 

I am not saying with certainty it will happen, as I hope sanity prevails and actions are taken to mitigate the consequences.

Unfortunately, history suggests such is unlikely to be the case.

Tyler Durden Tue, 02/23/2021 - 15:10
Published:2/23/2021 2:16:15 PM
[Markets] Tiger Woods Injured In Major Roll-over Collision, "Jaws Of Life" Used To Rescue Him Tiger Woods Injured In Major Roll-over Collision, "Jaws Of Life" Used To Rescue Him

Golfer Tiger Woods has reportedly been injured in a car accident in California's Ranchos Palos Verdes at Hawthorne Blvd near Blackhorse Rd, according to multiple media reports.

Fire crews were reportedly called to the scene as authorities reportedly needed to use the jaws of life to help rescue Woods from the car.

The accident reportedly occurred in Palos Verdes, a tony section of LA County that’s home to several golf courses, including Palos Verdes Golf Club, which is known for its ocean views.

LA County Sheriff released a statement via Twitter.

Early reports also claim Woods is in the operating room with two broken legs, though right now little has been confirmed, and much remains unclear.

Remember, Woods had a previous infamous accident back in Nov. 2009 at around 0230ET outside his former mansion in Windermere, Fla., he collided with a row of hedges and hit a fire hydrant. The vehicle finally came to rest after hitting a tree.

That accident and its murky circumstances (paramedics found Woods lying in the road, snoring and without shoes or socks) coincided with the start of a career decline for Woods, which he only recently overcame when he won the Masters back in 2019. A full-on sex scandal followed that first accident, exposing years of infidelity and destabilizing Woods' life.

Tyler Durden Tue, 02/23/2021 - 14:36
Published:2/23/2021 1:44:36 PM
[Markets] Watch: WH Press Sec Blames Pandemic After Being Asked About 'Kids In Cages' Watch: WH Press Sec Blames Pandemic After Being Asked About 'Kids In Cages'

On Monday, we noted that child-shelter facilities run by the Department of Health and Human Services (HHS) used to house unaccompanied minors are 93% full - causing the Biden administration to reopen an emergency shelter in Carrizo Springs, Texas, in order to house 700 additional children.

Emergency overflow facility, Carrizo Springs, TX

The facility, converted in 2019 during the Trump administration to manage the surge of other children, was widely criticized by Democrats at the time as yet another example of keeping 'kids in cages' - despite the fact that the Carrizo Springs facility has no cages (yet was still described by The Guardian as "still a jail").

In fact, two weeks after the Carrizo Springs facility made headlines in 2019, then-candidate Kamala Harris said: "You look at the fact that this is a president who has pushed policies that's been about putting babies in cages at the border in the name of security when in fact what it is, is a human rights abuse being committed by the United States government."

On Tuesday, Fox News' Peter Doocy asked White House Press Secretary Jen Psaki struggled to reconcile past comments by Biden and Harris, including the 'babies in cages' statement.

Watch (heats up around 1:25):

Tyler Durden Tue, 02/23/2021 - 14:00
Published:2/23/2021 1:16:21 PM
[Markets] The Margin: #LaserEyes meme campaign goes viral on Twitter in apparent bid to double bitcoin price to $100,000 Viral trend to boost bitcoin enjoys backing from the likes of Elon Musk and Tyler Winklevoss.
Published:2/23/2021 1:16:21 PM
[Markets] US STOCKS-Tech selloff hits Nasdaq, Powell comments limit declines The Nasdaq index fell in volatile tradingon Tuesday as investors sold off mega-cap growth stocks onvaluation concerns, although Federal Reserve Chairman JeromePowell's comments on the economy helped ease some sellingpressure. Declining issues outnumbered advancers for a 2.78-to-1 ratioon the NYSE and a 5.09-to-1 ratio on the Nasdaq. Published:2/23/2021 12:48:16 PM
[Markets] Cryptos: Should I buy bitcoin? Why the cryptocurrency is on the verge of a bear market Bitcoin is on the brink of entering a bear market in recent trade as the volatile crypto asset is experiencing a double-digit plunge over the past 24-hour period.
Published:2/23/2021 12:48:16 PM
[Markets] Bitcoin is on the verge of a bear market. Should you buy in now? Bitcoin is on the verge of a bear market. Should you buy in now? Published:2/23/2021 12:48:16 PM
[Markets] Former Capitol Police Chief Blames Intel Breakdown For Jan. 6 Breach Former Capitol Police Chief Blames Intel Breakdown For Jan. 6 Breach

Authored by Jack Phillips via The Epoch Times,

The former chief of the Capitol Police on Tuesday blamed a breakdown in intelligence ahead of the Jan. 6 breach of the U.S. Capitol.

“I think in exigent circumstances there needs to be a streamlined process for the Capitol police chief, for Capitol Police, to have authority,” former Chief Steven Sund told senators during a hearing about the incident.

“A clear lack of accurate and complete intelligence across several federal agencies contributed to this event and not poor planning by the United States Capitol Police,” Sund argued.

“Based on the intelligence that we received, we planned for an increased level of violence at the Capitol and that some participants may be armed, but none of the intelligence that we received predicted what actually occurred.”

Sund, who resigned from his post several days after the Capitol breach, remarked that the House and Senate sergeants-at-arms on Jan. 4 allegedly did not respond to a request for assistance. He also requested assistance from the National Guard but was rebuffed.

“Your testimony makes clear that the current structure of the Capitol Police Board resulted in delays in bringing in assistance from the National Guard,” Senate Rules Chairwoman Amy Klobuchar (D-Minn.) told Sund during the hearing.

Acting Metropolitan Police Department Chief Robert Contee defended the response, saying officials were not alerted about the potential for violence despite federal officials’ claims.

“The District did not have intelligence pointing to a coordinated assault on the Capitol,” Contee said in a statement before the hearing.

“MPD’s police officers were engaged in a literal battle for hours. Many were forced into hand-to-hand combat to prevent more rioters from gaining entry into the Capitol. This was not a peaceful protest. This was not a crowd trying to express their First Amendment rights—rights which we are proud to protect regardless of belief,” Contee said, referring to the Metropolitan Police Department. “At the end of the day, this was an assault on our democracy, and MPD officers held the line.”

Former Acting Department of Homeland Security Chief Chad Wolf earlier this month said there are still questions as to why Capitol Police officers weren’t properly prepared.

There was a “heightened threat environment” due to the Jan. 6 rally “given all the tensions” regarding the election’s outcome, Wolf told CBS News, adding there were numerous “coordination calls” with various law enforcement agencies. He said the Department of Homeland Security and other federal agencies beefed up security ahead of the riot.

Capitol Police had “the same intelligence that we did” at the Department of Homeland Security, Wolf said. He said that intelligence was shared with the U.S. Capitol Police as well as the Metropolitan Police Department.

Former President Donald Trump was impeached in January for a speech he gave on Jan. 6, with Democrats and some Republicans blaming the riots on his remarks and rhetoric. Trump, via lawyers, denied that he incited violence. During his speech, he called on demonstrators to “peacefully and patriotically make [their] voices heard.”

Tyler Durden Tue, 02/23/2021 - 13:42
Published:2/23/2021 12:48:16 PM
[Markets] "The Dam Is Going To Break": We Are In The Early Innings Of A Colossal Migration Into Commodities "The Dam Is Going To Break": We Are In The Early Innings Of A Colossal Migration Into Commodities

From Larry McDonald, author of the Bear Traps Report

The great awakening is upon us, millions of investors are loaded to the gills with deflation bets.

Imagine being wedded to big tech stocks since July only to watch commodity plays pass you like a Ferrari on Sunset Boulevard. The psychology must be respected and it’s showing up in classical technical analysis.

We must be cautious, our trade is maturing. The empty meadow has become a fairground with patrons out for a walk in the midday sun. Over the last week, both Goldman Sachs and JP Morgan have implored their sales force to embrace the “commodity super cycle”. Just months ago they were talking down this “un-investable” sector. We must buy every dip we see, especially coming from commodity producing countries like ECH Chile (copper) and EWZ Brazil (oil, agriculture and iron ore).

Bottom line, we are overbought but still the early innings of this colossal migration into commodities.  The dam is going to break, there is still far too much capital in big tech. If the rate move is too aggressive we crash.

The Nasdaq has 50% downside from here, rebalance the portfolio before the market forces you to. Think 2020-2030, NOT 2010-2020. Remember: it is normal to be overbought in bull markets, and to stay that way much of the time.

In a bear market you might get slightly overbought for a few days. But when markets become so overbought for this long means we are in a new bull market.

Buy the commodity dip. There is a classic line from our global bestseller - “A Colossal Failure of Common Sense.” The late Larry McCarthy loved the fierce impact of market psychology on both bull and bear markets. He said; “just when you think it cannot possibly get any better it always does. And just when you think it cannot get any worse it always does.”

Russell 1000 Growth to Value

Tremors before the Quake - We really want to emphasize this point to clients , the 1.69 level in the Russell 1000 growth to value ratio (IWF / IWD) is highly important, in our view. We have had numerous growth to value tremors since last June and we suspect when the dam gives way, a violent wall of capital will be running...

Nasdaq / XME Metals and Mining Rollover

With rates grinding higher, the Nasdaq continues to breakdown relative to the XME Metals and Mining ETF. Despite a brief bounce in recent weeks, the ratio is back below the support trend. We continue to see  commodity exposed equity outperformance relative to tech over the long term.

Dividend Yield and Cost of Debt

Some of the best credit investors we know always look at stock dividend yields vs. the company´s ten year corporate bonds. Interesting data here. These are the top 30 S&P 500 dividend yielders, but we also show their cost of debt. Many of the top dividend payers in the S&P are paying out much more than their cost of debt (average bond yield) and many of them have strong balance sheets as well. The top 3 highest spreads of dividend yield cost of debt are 1. Altria 2. Exxon Mobil and 3. AT&T. This speaks to how cheap true value names are.

Tyler Durden Tue, 02/23/2021 - 12:55
Published:2/23/2021 12:16:18 PM
[Markets] GLOBAL MARKETS-Stocks slide on tech sell-off, bond yields steady Global equity marketsslid on Tuesday as a rally in commodity-related assets gave into pressure from fears of an over-bought market as investorsdumped tech stocks, though remarks by Federal Reserve ChairJerome Powell helped calm sentiment. But the equity decline is a warning sign that risks must beheeded and that investors should not be so reckless or deceivedby markets at extremely high levels, he said. Published:2/23/2021 11:44:35 AM
[Markets] Biden Readies His First Major Sanctions On Russia For Navalny Crackdown Biden Readies His First Major Sanctions On Russia For Navalny Crackdown

Early this month cities across Russia were hit by large, well organized and closely reported mass demonstrations in support of jailed Kremlin critic and anti-Putin activist Alexei Navalny. Over recent weekends, however, both the rallies and international media interest in them appear to have lost momentum and waned.

But not wanting to let a political opportunity to punish Russia go to waste, the Biden administration is said to be preparing major economic penalties over Navalny's 2.5+ year jail sentence recently handed down by a Moscow court for probation violation. The US is also poised to slap penalties on the Russian government over allegations that intelligence poisoned Navalny with nerve agent back in August, which kicked off the whole saga, bringing his name from relative obscurity into the international mainstream.

AFP via Getty Images

A new report in Politico says the Biden White House "is expected to coordinate a sanctions rollout with European allies in the coming weeks, according to people familiar with the matter."

One senior admin official was cited as saying while not offering specifics, "Suffice it to say... we won’t stand by idly in the face of these human rights abuses."

Currently all "options" for sanctioning Russia are under review, which can include the following:

The package proposed three types of sanctions: Magnitsky Act sanctions on the individuals who detained Navalny; sanctions under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act); and sanctions under Executive Order 13382 — which is "aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters," according to the State Department.

The scant foreign policy statements issued by President Biden thus far have focused heavily on Russia. He's unleashed a hail of criticism on everything ranging from election 'interference' to the Navalny affair to bullying Ukraine and even the "bounties to kill Americans in Afghanistan" narrative.

The US review and impending rollout of new sanctions comes after on Monday the EU announced punitive measures on four Russian officials in response to Navalny's prison sentence. The four are said to be close to President Putin and were involved in decision-making related to the Navalny saga, which has further sunk Russia-Europe relations to their lowest point in the last few years, particularly since the Ukraine and Crimea crisis. 

Tyler Durden Tue, 02/23/2021 - 12:36
Published:2/23/2021 11:44:35 AM
[Markets] Billionaire philanthropy is a 'PR scam,' says CEO who pays workers $70,000 Billionaire philanthropy is a 'PR scam,' says CEO who pays workers $70,000 Published:2/23/2021 11:44:35 AM
[Markets] The Technical Indicator: Charting a market divergence, Nasdaq violates the breakout point Technically speaking, the major U.S. benchmarks have extended a downturn from recent record highs, pressured amid increasingly uneven price action, writes Michael Ashbaugh.
Published:2/23/2021 11:44:35 AM
[Markets] 500,000 Jobs At Risk As Instacart Mulls Robot-Driven Warehouses 500,000 Jobs At Risk As Instacart Mulls Robot-Driven Warehouses

For the more than 500,000 Instacart gig workers fulfilling grocery orders at supermarket chains such as Giant, Food Lion, Costco, among others, the delivery service is exploring ways it can eliminate human workers by employing robots at warehouses, according to a new report via Financial Times

Anyone who straps on a mask, or now maybe two or three, and has shopped at a major grocery chain this year have noticed, many of whom, young millennials, running around the stores in green Instacart shirts, fulfilling orders. 

While this innovative delivery service has been nothing but stellar during the virus pandemic, the San Francisco-based startup has been researching ways to automate the picking process. 

"Last spring, Instacart sent out proposal requests to at least five companies that offer robotic systems that would pick goods from purpose-built "dark" warehouses instead of store shelves," FT said.

Sources said, "Instacart had initially expressed a desire to open as many as 50 robot-driven warehouses across the US in about a year." 

No deal has been struck with robotics makers to fulfill Instacart's automation plans. This comes as Walmart and Amazon are entrenched in an e-commerce delivery war where networks of robotic micro-fulfillment centers are being developed around the country. 

The source said there'd been a lack of interest from grocery store players who have caught wind of Instacart's plans. 

Brittain Ladd, a supply-chain consultant, said Instacart's ultimate goal is to become an "online grocery retailer and leverage micro-fulfillment centers to fulfill their orders. "

Instacart told FT that human workers would "continue to play an important role" at the company.

"While we have no updates to share today, we're constantly evaluating our services in deep partnership with the nearly 600 retailers we work with. Instacart's entire product and model is predicated on being a chief ally to our retail partners."

We're committed to supporting our brick-and-mortar partners and continuing to invest in and explore new tools and technologies that support the needs of their customers and further enable their businesses to grow and scale over the long term."

What's troubling is that more than half a million people work for Instacart. If a future rollout of Instacart automation is seen, this will undoubtedly result in higher technological unemployment

Our advice to readers - if you're in a low-skilled job that will be heavily impacted by artificial intelligence and automation - now is the time to retain for another job.

Tyler Durden Tue, 02/23/2021 - 11:55
Published:2/23/2021 11:14:55 AM
[Markets] Capitol Report: Biden to focus on climate and COVID in meeting with Canada’s Trudeau President Joe Biden is set to unveil a new “roadmap” with Canada during his meeting Tuesday with Prime Minister Justin Trudeau, as the two allies plan to cooperate on combatting the coronavirus pandemic and climate change.
Published:2/23/2021 11:14:55 AM
[Markets] Coronavirus Update: Biden issues call for unity as U.S. death toll tops 500,400 Coronavirus Update: Biden issues call for unity as U.S. death toll tops 500,400 Published:2/23/2021 10:46:49 AM
[Markets] Need to Know: A tangled market web of Tesla-bitcoin-ARK Investment could spell trouble for investors, warns strategist Our call of the day comes from Saxo Bank's head of equity strategy, who is worried that Tesla is wrapped up in a tangled market web, and investors could pay the price.
Published:2/23/2021 10:46:49 AM
[Markets] David Rosenberg: "We're Getting Closer To A Breaking Point" David Rosenberg: "We're Getting Closer To A Breaking Point"

Submitted by Christoph Gisiger of TheMarket.Ch

David Rosenberg, Chief Economist & Strategist of Rosenberg Research, worries that the surge in bond yields threatens the economic recovery. He warns of the consequences of today’s massive debt volumes and explains why he spots investment opportunities in the commodity sector and in Asia.

* * *

The temperature is rising. In the US, yields on long-term government bonds have jumped to the highest level since early 2020. Oil prices are rising, and copper is more expensive than it has been in almost ten years – clear signals that markets are bracing for a strong economic recovery.

"Not so fast," says David Rosenberg. The internationally renowned economist and strategist from Toronto has no doubt that the pandemic will subside. But he also thinks that the post-opening growth spurt in the economy will soon lose steam and structural problems will resurface and reality sets in. "And then, we have to assess how these massive deficits and debts are going to be regressed," he’s warning.

In this in-depth interview with The Market/NZZ which has been edited and condensed for clarity, the founder of Rosenberg Research explains why he sees attractive prospects for commodities such as oil, gas and copper despite subdued demand. He’s also bullish on US banks. Globally, he sees the best investment opportunities in Asia, where the economy is benefiting from China's robust growth.

Mr. Rosenberg, one year ago today, the global outbreak of the pandemic triggered the worst market crash since 1929. Since then, the S&P 500 has fully recovered and gained another 15%. What's your take on the current state of the financial markets against this background?

We are in another massive bubble. Not every single part of the market is in a bubble, but we have speculative frenzies in many pockets. There is not just this view that the central banks are always going to have your back and we have tremendous growth in money supply and liquidity, but there is also this extremely high level of confidence that life is going back to normal starting in the second half of this year. That’s really the primary driver of this tremendous confidence, whether you’re talking about corporate bonds, crypto currencies or the stock market.

To what extent is this optimism justified?

No question, we are going to get to the light at the end of the tunnel, but it’s going to take longer, and timing is extremely important in this regard. In the US, it looks like the vaccine rollout is winning and by a wide margin. But we also have to weigh in the fact that not every country in the world is going to come out of this at the same time. We are a globalized economy, and that’s going to be an impairment. Especially, with respect to the fact that Europe is so far behind which is going to have a big impact on foreign travel and on tourism. Keep in mind: Europe is every bit as large an economic unit in the world economy as the US.

However, the infection numbers are also declining in Europe.

I don’t believe life is going back to normal once we get to the end of the tunnel. There hasn’t been enough thought given on how behavior has been fundamentally altered from this past year of social distancing, travel restrictions and other curbs to movement, working from home. Sure, we are social animals; everybody is going to want to get out and go to bars and restaurants and go on a vacation. But we shouldn't base our economic forecast on the fact that we're going to have a couple of quarters of pent-up demand release in these cyclical services. That’s just temporary.

So what does the future look like in your opinion?

We are going through a secular change in behavior. Actually, we’re seeing it already. The market believes that the household sector has all this dry powder to spend. To that I’m saying: not so fast. If you go back to the Great Financial Crisis and look at the wealth shock the households in the United States endured, you can see a pattern that developed in the personal savings rate. This is crucial, because the savings rate is the most important behavior aggregate, the household decision on how much to spend and how much to save on every incremental dollar disposable.

What exactly do you mean by that?

Before the Financial Crisis, the trend average in the savings rate was 4%. In the following decade, the new equilibrium savings rate was 7%. In a $22 trillion economy, that’s a pretty big deal. It can make the difference between the economy growing in the low 2% range and in the high 2% range. So why is it that the last decade was one of the weakest economic cycles of all time despite all the stimulus? It's because there was, at the margin, a fundamental shift in behavior. Those scars never went fully away. From a human standpoint, this current health crisis is far bigger than the wealth shock from the Financial Crisis. It affects everybody to a varying degree. Based on our work, in the next decade the new equilibrium precautionary savings rate is going to be closer to 10% than 7% - and that’s going to be a deadweight drag on aggregate demand growth for a long period to come.

However, the Federal Reserve and the US government remain committed to massive stimulus measures.

The markets believe we’re going to have a post pandemic party that’s going to last to perpetuity. I’m saying, maybe it lasts for a few months and then reality will set in. And then, we have to assess how these massive deficits and debts are going to be regressed. At the peak of the last bubble in 2007, the level of global debt outstanding was $100 trillion. Here we are at the peak of the next bubble, 13 years later, and it’s over $200 trillion. It has more than doubled from bubble peak to bubble peak. This is a very unstable situation. That’s why we can’t have interest rates rise for any length of time or any meaningful degree. It’s because of the implications from a debt servicing standpoint, and the impact rising rates will have on economic growth, defaults and delinquencies and so forth.

The yield on ten-year Treasuries got another strong push last week, topping 1.3% for the first time since last March. At what level do rising bond yields become a problem?

Nobody is that smart to know when we get to a breaking point. But let me just tell you with a 100% certainty: We’re getting closer to that point, than we were five, ten or twenty years ago. These deficits and debts will get regressed one way or the other. I don’t see how we are going to grow out of them, we’ve already tried that. I also don’t see how we are going to manage to inflate our way out. People don’t realize that the causation runs the other way. They say: "We're just going to inflate our way out of this debt morass." But the real problem is that the debt morass is what’s causing the credit multiplier to become impaired, and why we’re having this deflationary circumstance that was prevalent even before the pandemic.

Then again, there are many indications that inflation is picking up. In the USA, inflation expectations have risen to the highest level in more than five years.

Let me put it this way: The level of outstanding debt in the United States today at all levels of society, government, households, businesses, is just about $80 trillion. If the general level of interest rates goes up by 100 basis points and stays there, you’ve just pushed $800 billion or 4% of GDP into debt servicing. The US economy can’t really afford to have bond yields back up more than they already have.

Still, the US economy is expected to pick up steam this year. The Atlanta Fed's GDPNow indicator signals 9.5% growth for the first quarter.

If bond yields rise because economic growth is accelerating, that’s one thing. But it’s not clear to me that the economy is going to be on a self-sustaining upward trajectory. Right now, it’s just an assumption, and we already know that less than 30% of these stimulus checks are actually going into the real economy. All that is happening is that we are borrowing from future growth; that is the overriding story: Money spent on borrowed money from the government. So we are building up for a "fiscal cliff" of epic proportions in 2022, and very likely a renewed economic downturn. And this means that the backup in Treasury yields will ultimately be reversed and I would not be surprised if the lows get revisited.

What are your expectations in terms of central bank policy?

For at least the balance of this year, central banks are going to do what they have been doing: Ongoing asset purchases and zero percent interest rates. I don’t see that changing. Many economists think that the Fed is going to have to pull the plug earlier than expected. I’m not so sure about that. I wouldn't be surprised if the central banks are ultimately forced to do more easing as opposed to less. There is a risk that they will have to get even more creative in terms of their policies.

How should investors position themselves in this kind of market environment?

If I’m right and the market is way premature on its forecast, then there is a real opportunity here to go back to long-duration in the Treasury market. In fact, our proprietary bond duration model is flashing green right now after this latest move up in bond yields.

In other words, you recommend betting on long-term US government bonds and high-quality mortgage securities?

Absolutely. This move up in yields has been based on assumptions as opposed to reality. In terms of how you want to be invested, people think that they have to choose between value or growth. To me, it’s not value or growth, because you can actually own pieces of both. I don’t like the airline stocks. Neither do I like restaurant stocks, or theme parks, or hotels. If I want to play the recovery, I would rather do it in a diversified way than in buying single sector stocks. And, as a part of the value trade that is still relatively inexpensive, I would be buying the US banks.

But if yields fall again and the yield curve flattens, wouldn’t that weaken the banks' margins?

Don’t get me wrong. I’m not saying there is a zero percent chance of some sort of recovery and that we’re going back into a perfectly flat yield curve. We will have a recovery, but it’s not going to be as big as people think. And insofar as you have a recovery in our mindset, you want to have exposure to the banks because they are a prudent, diversified way of playing any sort of recovery. Banks are still trading inexpensively, they generate a cash flow stream, and they pay a solid dividend. Basically, all the things you don’t get with Bitcoin you will get with the banks.

Where do you see further opportunities for investments?

You want to be invested in sectors where there are shortages, and there are several commodities that fit that bill. For instance, the demand outlook for oil is still challenging, but the pandemic caused significant interruptions in the production and storage of oil. It resulted in a drastic cut-back in capital expenditures in the sector. Indeed, the International Energy Agency estimates that upstream oil and gas investments fell 28% globally in 2020. In comparison, during the severe oil market downturn in 2015 which decimated many producers in the US and Canada, these investments fell only 12%. That’s why I believe that energy stocks as well as the debt of energy companies is attractively priced right now. The Oil and gas sector was undervalued and under-owned even before the pandemic, but with collapse in global demand in 2020, it has been even more unloved.

Crude oil prices have seen impressive gains since last fall. However, many investors are convinced that the trend is favor of renewable energies and electric vehicles.

Sure, longer-term, there are significant headwinds from the shift towards renewables, but that's likely still years away. Bottom line: While the conventional energy space has been valued for extinction the future is one where petroleum products continue to play a major role. In the meantime, amid the current market backdrop where value and yield are scarce, the energy players offer low-cost access to an income stream in a sector where the bad news is likely already priced in.

How do you assess the prospects for commodities in general?

LNG and natural gas in particular have alluring characteristics, too. That’s why you want to have natural gas content and owners of pipelines in your portfolio. What’s more, if we get any sort of infrastructure package in the US, it’s going to have to include a revamp of the electricity grid. Within the commodity complex, there are other areas with clear supply and demand imbalances in favor of the price. Copper surely fits that bill. So you can have my cautious view on the economic outlook and still have a constructive assessment of the commodity landscape based on supply fundamentals.

Unlike oil and copper, gold is currently under pressure. Rightly so?

I own gold not to make a killing but as a ballast in the portfolio, a source of diversification and insurance policy against the gargantuan levels of outstanding liabilities. It’s a hedge against inflation, if we ever get it, and it’s also a hedge against deflation given these destabilizing financial imbalances we have. They’re not that apparent obviously when you look at the markets this year: The junkiest bonds have outperformed the most, and the junkiest stocks have outperformed the most. That’s how you know that we are in a speculative mania. So gold is an insurance policy against things going wrong, especially in a time when most asset markets are priced for perfection. You hope your house doesn't burn down, but you still have home insurance.

Where else do you spot opportunities?

If my thesis is correct that we’re heading into a future of an elevated precautionary household savings rate, then you want to focus on what people need, not what they want. That’s why I prefer consumer staples over consumer discretionary. More to the point, you want to own companies with an ability not just to deliver growth but also with utility like characteristics. Here, you can actually pick up some quality names in the technology sector. Microsoft is the poster child for that particular viewpoint. It’s a classic growth company that has been re-rated for having utility like characteristics.

What’s your advice for investors looking outside the US?

Asia is where the opportunities are. If you are scanning the world for growth investments with P/E multiples that at least approximately match the growth outlook, you’re better off in Asia than in the developed world. The Asian countries, by and large, have dealt with the pandemic much better than most other parts of the world. Leaving politics aside, you have to face the fact that China was practically the only country in the world whose economy did not contract in 2020. They’re poised for at least 8% growth this year, and a lot of the countries in Asia are feeding off the improvement in Chinese economic growth.

What does this mean for investors?

China is about the only country with the capacity to ease monetary policy in a traditional sense. They did not embark on quantitative easing; they didn’t blow their brains out on fiscal stimulus. So far, they’re actually successfully moving towards deleveraging they’re heavily indebted economy. In contrast, the Fed is perpetuating a situation of survival instead of creative destruction. As a result, 20% of the companies in the S&P 500 are technically zombies, meaning they don’t earn enough cash flow to cover interest expenses. So at the margin, we have a situation where capitalism in America is going on a long-term sabbatical, when at same time, this communist country called China is moving increasingly more towards capitalism.

However, the authoritarian regime in Beijing could take different measures than Western governments to contain the spread of the coronavirus.

That’s true, but the reality is that as strong as China was relative to the rest of the world before the pandemic, it’s that much stronger today. This is going to be a big headache for Joe Biden in terms of how to curb China’s accelerating economic dominance. The irony of ironies is that Donald Trump's first move as President was to walk away from the Trans-Pacific Partnership which actually would have helped to restrain China to some extent. Now, here we are after Donald Trump just left the White House, and China signs on to a trade deal with most of the rest of Asia that gives China more security of supply. So geopolitical complications aside, China’s growth outlook is very strong and that’s going to feed off into the rest of the region. That’s why one of my principal themes for the past several months has been "go east young man and young woman".

Tyler Durden Tue, 02/23/2021 - 11:35
Published:2/23/2021 10:46:49 AM
[Markets] U.S. home prices register their largest monthly increase since 2014 U.S. home prices register their largest monthly increase since 2014 Published:2/23/2021 10:16:06 AM
[Markets] The Babble-On 7: The Fed And Yellen The Babble-On 7: The Fed And Yellen

Authored by Charles Hugh Smith via OfTwoMinds blog,

So babble on, Babble-On 7; it won't change anything. The forces in motion are like tides, and you can't talk the tide into reversing.

Allow me to introduce the Babble-On 7: the six board members of the Federal Reserve and Treasury chief Janet Yellen. (The Fed board has seven slots but one is vacant at the moment, so 6 + Yellen = 7.)

These seven lackeys of the Financial Aristocracy babble on, endlessly repeating the same disconnected-from-reality fantasies and delusions, apparently on the premise that if they repeat "you can fly, you can fly!" often enough, people will jump off the cliff actually believing the Fed and Treasury gave them super-powers to sprout wings at will.

Alas, denying reality does not stop reality from intruding, typically with great force. The Fed is not all-powerful, and wings will not sprout from believers' shoulder blades. They will impact the rocks at the bottom of the cliff with the devastating force known as gravity.

The short list of endlessly spewed disconnected-from-reality fantasies and delusions by the Babble-On 7 are:

Fantasy/Delusion # 1.

The Federal Reserve's policies of free money for financiers and speculators did not cause or exacerbate the skyrocketing wealth-income inequality that is undermining America's democracy, social order and economy.

If the Fed governors were Pinocchio, their noses would have now crossed the Grand Canyon. Please examine any chart of wealth-income inequality in the U.S. and note how it took off as former Fed chair Greenspan destroyed market discovery of the price of credit and risk, and the Fed chair servants of the Financial Aristocracy who followed (and who were each well-rewarded for their abject servitude) only accelerated and amplified the wealth-income inequality that has fatally undermined the nation.

The chart below reflects how each of the three Fed-inflated speculative bubbles enriched the Financial Aristocracy at the expense of the bottom 90%.

The Fed's most recent spew of free money for financiers and speculators enriched the billionaires by a cool $1 trillion.

Fantasy/Delusion # 2.

This is not a bubble, it is merely plain old normal investor activity.

At this point, the Babble-On 7's noses are in the troposphere, threatening low-orbit satellites, as even the most cursory glance at the charts of equities such as Tesla or the Russell 2000 index (IWM) reveal GBOAT: The Greatest Bubble of All Time.

Fantasy/Delusion # 3.

The next trillion will make it all better--and if $1 trillion isn't enough, we'll go big and create $5 trillion, $10 trillion, $20 trillion, whatever it takes, to prop up the sad, pathetic distortions that have brought America to the precipice.

Because the one thing Yellen and the Fed Six cannot allow is for those they serve so diligently to lose any of their bubblicious wealth. Since the bottom 90% own near-zero of the nation's income-producing capital, the karmic collapse of the Fed's latest and greatest bubble won't have much of a direct effect on those who actually work for a living--but it will remove the immense hoard of phantom wealth the Fed has bestowed on the financiers and speculators that make up the Financial Aristocracy.

For the Fed, supposedly blessed with god-like powers, cannot eliminate diminishing returns on its delusional tricks. Lowering interest rates to zero--done. The sugar high from the Fed's spew of trillions is diminishing faster than they can babble on.

The Babble-On 7 would do well to study the meaning of their moniker: Babylon:

Babylon has achieved considerable prominence throughout the ages as a symbol and by-word of wealth, luxury, decadence, vice and corruption. The city owes its fame (or infamy) to the many references the Bible makes to it; all of which are unfavorable.

So babble on, Babble-On 7; it won't change anything. The forces in motion are like tides, and you can't talk the tide into reversing.

*  *  *

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Tyler Durden Tue, 02/23/2021 - 10:56
Published:2/23/2021 10:16:06 AM
[Markets] Encore: Few 401(k) participants changed portfolio allocation when market tanked Morningstar shows those with self-directed investments were more likely to change than those in target-date funds or managed accounts
Published:2/23/2021 10:16:06 AM
[Markets] Massive Explosion Rocks Cameron, Texas After Train Collides With 18-Wheeler Massive Explosion Rocks Cameron, Texas After Train Collides With 18-Wheeler

Bloomberg reports a train carrying coal collided with an 18-wheeler in Cameron, Texas, Tuesday morning. 

Local television station KVUE said the incident occurred around 7 a.m. local time. 

The Milam County Sheriff's Office said there was no timing when the fire would be under control. 

Milam County Precinct 2 Commissioner Donald Shuffield said homes in the surrounding area were evacuated. So far, no injuries have been reported. 

A massive fireball erupts after the train smashed into an 18-wheeler. 

More scenes from the incident area. 

Video of the fire has emerged. 

Watch Live: Train collides with 18-wheeler in Milam County, Texas

*This story is developing... 

Tyler Durden Tue, 02/23/2021 - 10:38
Published:2/23/2021 9:43:52 AM
[Markets] Nasdaq sharply lower Tuesday as tech stocks take bond-yield rise on the chin Nasdaq sharply lower Tuesday as tech stocks take bond-yield rise on the chin Published:2/23/2021 9:13:40 AM
[Markets] Jeff Reeves's Strength in Numbers: These 4 stocks and 3 ETFs let you cash in on the boom in videogames and esports Look beyond Activision Blizzard and Nvidia and focus on these up-and-coming stocks.
Published:2/23/2021 9:13:40 AM
[Markets] If This Isn't A Blow-Off Top... If This Isn't A Blow-Off Top...

Authored by John Rubino via,

Financial history includes plenty of extreme years. That’s not surprising, since we’re emotional beings with short memories. Combine those two traits and you get cycles, many of which end with a bang.

Even so, this one stands out. A full accounting of the ways in which today’s financial markets have exceeded previous bounds of rationality would tax the average reader’s attention span. So let’s just hit a few high points.

Home prices up 14% during a recession

In a typical downturn, housing tends to either stagnate or contract, depending on what it did in the preceding expansion. This time, home prices had been rising for a solid decade, to levels comparable to the bubble year of 2007. Then came the pandemic lockdowns and a deep recession … and home prices spiked. 14% in one year is epic when you consider that most houses are financed. If you put down 20% on something and it then rises by 14%, the return on the money you actually risked is 70%. In one year. While you’re living in it. Almost unprecedented.

Option traders bet the farm

While home prices were soaring, stocks were doing even better, quickly recovering from the “Oh my God it’s a pandemic” flash crash in March of 2020 to blow through all-time highs a few months later. Now, options traders – i.e., people who swing for the fences with leveraged bets – are all-in on the bull market. The ratio of puts (bets that stocks will fall) to calls (bets that stocks will rise) is the lowest since the 2000 dot-com mania. As with houses, everyone seems to think the good times are going to roll on, pretty much forever.

Small businesses leverage themselves to the hilt

Small businesses are either struggling to survive or have been gripped by the same euphoria as the rest of the financial system, because their debt to EBITDA (the broadest and most generous measure of cash flow) has spiked to levels last seen, well,  never.

As the Wall Street Journal recently put it:

Companies Aren’t Saving Their Pennies as Markets Turn Bubbly

Thrift is in a bear market as even the riskiest borrowers rush to issue new debt. That world may not last forever.

When money is readily available and almost free, why bother saving for a rainy day?

For corporations, the question is worth asking at a time when dollars might as well be falling from the sky. The average rate on so-called “high yield” bonds recently fell below 4% to a record low. In the late 1990s, even corporate borrowers with the best reputations paid average interest rates on the order of 7%. There is so much money looking for a place to go that companies are being contacted by investors asking if they would like to issue bonds rated below investment grade rather than the other way around.

Buyers snarf up munis from near-bankrupt issuers

The pandemic lockdown has decimated the finances of dozens of states and hundreds of cities. Yet it’s never been cheaper for the public sector to borrow money by selling municipal bonds. Today’s low muni-bond yields seem to imply that bond buyers are totally confident in the ability of states and cities to raise sufficient tax revenue to pay off those bonds. Why? Read on for the answer.

Crazy valuation Hall of Fame

Valuations in most markets are now extreme. But some things stand out even in this crowd. As a Twitter poster recently noted:

Washington To the Rescue

There’s a reason that global investors are willing to buy Italian bonds: The bonds aren’t really Italian. Germany, if it wants the eurozone to survive, has to stand behind the paper issued by every member. Which means Italian bonds are actually German bonds and are thus likely to pay their creditors on time and in full.

The past year’s blow-off top in US financial assets can be explained in the same way: Tesla stock, a house in Denver, a Chicago muni bond, and a California small business loan will, in the coming mass-bail-out, become obligations of the federal government, which has a printing press capable of not just making the required payments but pushing the price of these things even higher than they are today.

The problem, of course, is that our savior is itself broke despite the printing press. It is, in fact, the scene of its own blow-off top, in the form of a deficit that might exceed 15% of GDP in 2021 – for the second straight year — at a time when commodities are starting to spike. When those rising prices work their way into food, transportation, and other costs of living, it might be a lot harder to sell promiscuous bailouts as necessary to prevent a deflationary crash.

Are we the greater fool?

To sum up, with everyone everywhere throwing money at overpriced assets on the assumption that the government will bid those assets still higher,  we’re witnessing the greater fool theory taken to its logical extreme. Unfortunately, since a national government doesn’t have money of its own, we taxpayers and savers are now the greater fool. Buy gold.

Tyler Durden Tue, 02/23/2021 - 10:07
Published:2/23/2021 9:13:40 AM
[Markets] Market Snapshot: Stock market lower ahead of testimony by Fed’s Powell on economy Stocks lose ground, with tech shares continuing to lead the way down, as investors prepare for testimony by Federal Reserve Chairman Jerome Powell on the economic outlook.
Published:2/23/2021 8:48:23 AM
[Markets] IRS pushes back April 15 tax-filing deadline for Texans IRS pushes back April 15 tax-filing deadline for Texans Published:2/23/2021 8:48:23 AM
[Markets] Focus on Airbnb's first post-IPO earnings report as travel-sector bellwether Focus on Airbnb's first post-IPO earnings report as travel-sector bellwether Published:2/23/2021 8:40:50 AM
[Markets] TaxWatch: IRS pushes back tax-filing deadline for Texans recovering from winter storm Texans have extra time to file their taxes this year, the Internal Revenue Service said, attempting to give Lone Star-state residents more time to pick up the pieces of their financial lives after last week’s devastating winter storm.
Published:2/23/2021 8:40:50 AM
[Markets] Home Prices Soar At Over 5 Times The Fed's Inflation Target In All US Cities Home Prices Soar At Over 5 Times The Fed's Inflation Target In All US Cities

The Fed's most frequent lament is that no matter how many trillions in bonds (and stocks and ETFs) it buys or how much liquidity it forehoses into the market, it just can't push inflation higher.

Well, here's an idea: maybe all the central-planning megabrains at the Marriner Eccles building and 33 Liberty Street can take a break from whatever circle jerk they are engaged in right now, and look at the latest Case Shiller numbers which showed not only that home prices surged at the fastest pace in seven years, rising at a double-digit pace for the first time since 2014...

... but that for the first time since the financial crisis, the annual price increase in every major US MSA (according to Case Shiller there are 20 of them) rose by at least 7.7% Y/Y (in the case of Las Vegas) and as much as 14.4% in Phoenix, meaning that the average home prices across all of the US is now rising at over 5 times the Fed's stated inflation target, and even the cheapest US MSA is rising at nearly 4 times the Fed's inflation goal.

Why does this matter? Simple: Because if - as Joseph Carson mused last month - CPI measured actual house prices, inflation would be above 3% right now.

For those who missed it, here again is the explanation:

"Actual" consumer price inflation is rising during the recession. That runs counter to the normal recessionary pattern when the combination of weak demand and excess capacity works to lessen inflationary pressures.

The main source of faster consumer price inflation is centered in the housing market. The Case-Shiller Home Price Index posted a 7% increase the last year, more than twice the gain of one-year ago.

The sharp acceleration in house price inflation represents the fastest increase since 2014 and runs counter to the patterns of the past two recessions. During the 2001 recession house price inflation slowed by one-third, while in the Great Financial Recession housing prices posted their largest decline in the post-war period, falling over 12% nationwide.

The consumer price index (CPI) does not show in house price inflation because it uses a non-market rent index to capture the trends in housing inflation. The Bureau of Labor Statistics (BLS) estimates that the non-market rent index has increased 2.5% in the past 12 months, or 450 basis points below the rise in house prices.

If actual house prices were used in place of rents core CPI would have registered a 3% gain in the past year, nearly twice the reported gain of 1.6%.

If aggregate price measures did not exist house prices would be one of the most important measures to gauge inflation and the proper setting of official interest rates. That’s because house price cycles include easy credit/financial conditions, excess demand, and inflation expectations, three key ingredients of inflation cycles.

Rising consumer price inflation is added to the list of unique features of the 2020 recession. Others include an increase in corporate debt levels instead of debt-liquidation and rising equity prices instead of share price declines.

If the 2020 recession has economic and financial features that normally appear during economic recovery what does that imply for the next growth cycle? The debt overhang at the corporate and federal debt should impede the next growth cycle. And if the cyclical rise in housing demand is occurring in recession it can't be repeated during recovery.

The next economic cycle will be filled with unique tipping points, and no one should assume that policymakers can control or offset them.

Tyler Durden Tue, 02/23/2021 - 09:40
Published:2/23/2021 8:40:49 AM
[Markets] J&J targets 20 million–dose delivery of COVID vaccine in U.S. next month J&J targets 20 million–dose delivery of COVID vaccine in U.S. next month Published:2/23/2021 8:15:11 AM
[Markets] US Home Prices Accelerate At Fastest Pace Since 2014 US Home Prices Accelerate At Fastest Pace Since 2014

According to the latest data from S&P CoreLogic Case-Shiller, US home prices in the top 20 cities rose at a stunning 10.10% year-over-year - its fastest acceleration since 2014...

Source: Bloomberg

That is a price rise that is five times The Fed's 'mandated' level of inflation.

Phoenix, San Diego and Seattle posted the biggest gains in prices. Nationally, the Case-Shiller index jumped 10.4% in December, also the biggest surge since 2014.

Historically low mortgage rates have fueled a pandemic housing rally, with scant inventory of homes to buy helping to boost prices.

As in the housing boom of the mid-2000s, home prices are rising faster than personal incomes. Changes in the Home Price Index and the Income Index from 1991 to 2020:

Will The Fed never learn? This pump-a-thon didn't end well before... and with exponentially more debt and leverage now, it will end in even more wealth transfer and socialism for the rich...and this time, the paeons pitchforks are already sharpened.

We also note that the moratoriums on evictions and foreclosures are also distorting the market. There's no question these policies are needed to keep people from being displaced in the midst of a pandemic, but they will eventually have to be lifted and it is not clear what will happen when they do.

Tyler Durden Tue, 02/23/2021 - 09:03
Published:2/23/2021 8:15:11 AM
[Markets] London Markets: Tech selloff hits these London-listed stocks as a Tesla-heavy fund tumbles The selloff in tech stocks hit the London market on Tuesday, with the sector dragging down the U.K.’s benchmark index as investors exit companies that have been among the biggest winners through the COVID-19 pandemic.
Published:2/23/2021 8:15:11 AM
[Markets] From chicken wings to steel: How companies are mitigating inflation Earnings calls have cast a light on inflationary pressures in products ranging from wings to cleaning products. But will inflation run away? Published:2/23/2021 7:48:04 AM
[Markets] Tech Tock, Tech Tock, Tech Tock Tech Tock, Tech Tock, Tech Tock

By Michael Every of Rabobank

“How do you defuse a time bomb? Help, I need answers really qui…”

Yesterday saw US tech stocks tumble. Some of the biggest names took a big dip, and Bitcoin, the apparent wave of the future, receded nearly 20% from its recent peak. One pities the blue-chip CFO having to think about marking that crypto asset to market on their balance sheet: no firm would ever do something so rash in such volatile times, would they?

Meanwhile, US 10-year yields surged again to 1.39%, retracing, and then deciding that, no, they had been right earlier, to stand at 1.37% at time of writing. It’s almost as if the prospect of higher borrowing costs is negatively correlated with the performance of firms who base both their businesses and CEOs on Hooli/Gavin Belson from TV’s ‘Silicon Valley’ (“What is Hooli? Excellent question. Hooli isn't just another high-tech company. Hooli isn't just about software. Hooli, Hooli is about people. Hooli is about innovative technology that, makes a difference. Transforming the world as we know it. Making the world, a better place, through minimal message oriented transport layers.”) It’s also almost as if Bitcoin might be correlated with one ‘Belson’, who had just put crypto on his CFO’s balance sheet, saying that the price of said asset “seems high”. Or perhaps, more likely but less-well reported, with the US Treasury Secretary repeating that most of the activity that takes place in it is “extremely inefficient” and “illicit”. Tech tock, tech tock, tech tock(?)

What’s interesting is that the USD also sold off. So, briefly, nobody seemed to want to hold anything: not stocks, not bonds, not Bitcoin, and not the dollar. They are instead moving into commodities as the safest place to be, which is about as low-tech --and dystopian-- a future as one can imagine. (I refer readers back to my previous Mad Max references of mohawked brokers in bondage masks and studded leather hotpants all screaming “Gasoline!” at each other.)

That means one wants to own AUD, for example. And Australians themselves still only want to own houses, of course. It’s boom-a-rama in that sector, with the ABC news last night underlining how even rural areas in Tasmania just saw sales prices rise 40% in 6 months. The RBA could arguably save themselves a lot of money by just publishing the daily paper property supplement ‘Domain’ instead of their reports focusing on the Aussie ‘macro economy’.

The problem --and it is a problem—remains that this is not the basis for a sustainable recovery, just a frenetic short-term scramble. Everyone, with Australia at the vanguard on housing, has painted themselves into a corner with this latest leg in a decades-long ‘boom’. What we have begotten is a series of global Hoolis, and housing now unaffordable everywhere to at least half the overall population, and the vast majority of the young, and to a mortgage debt-load so heavy that any rate increases --which Aussie markets are now actively pricing for!--  will bring the whole thing tumbling down.

Unless wages magically turn up to save the day. On which note, the ABC news last night, as just one example, was talking about how despite the unemployment rate in Australia nearly being back to the pre-Covid normal, vast numbers of people are still on the ‘JobKeeper’ scheme that ends on 28 March; and, separately, it explained how a government employer wage subsidy for younger workers was seeing a serious financial incentive put in place to fire full-time staff earning AUD75,000 (in their example) and replacing them with three youngsters all earning AUD25,000. Sticking with tech(ish) retorts: very wage pressure; so salaries; many money - you’d have to sew eight of them together into a human centi-aussie-pede to afford a single Aussie house at a level which would allow borrowing rates to rise again in the future.

Of course, this dilemma is true everywhere to varying degrees. As Bloomberg reports solemnly today: “US Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell appear wary of signs of froth in financial markets, even as they press ahead with economic stimulus measures that are elevating the euphoria.” Indeed, just a few weeks after two IMF officials warned of a “sense of complacency” permeating markets, Yellen told CNBC TV viewers yesterday that there “may be sectors where we should be very careful.” Was she referring to stocks, bonds, crypto, and the dollar?

Was ANY of what is now unfolding anything but entirely predictable? We are all very much Keynesians again now. Yet Keynes spoke of the need to “euthanize the rentier” via low interest rates: we have eulogised them that way!

Bloomberg then goes on to bewail that “the US has fewer regulatory tools to head off asset bubbles and excessive leverage than many other countries.” Back to tech analogies: do the regulatory tools to stop such rentier-eulogising appear from the sky, like the Black Slab in ‘2001’, for primitive markets to gather round and jabber at, before then ascending to a higher level of evolutionary development? Or are they ultra-complex manmade things that only a few Gavin Belsons of this world can understand?

It’s not rocket science. We all know what happens when you don’t juice the system;  and we all know what happens when you juice the system the way we are. Logically, the only way to prevent what we see today would be de facto credit rationing – which used to be the norm in capitalist economies under Bretton Woods, until the neoliberal reforms that built our present, wobbly global structure. For example, you could slash rates to zero, but cap the overall level of borrowing in a given sector, like mortgages, which given supply and demand for funds would then mean households would pay a higher price for money. (China tries some similar things today in its own way.)

Would that create a whole new set of problems? Sure! First, the current bubble would burst. But that’s going to happen anyway – or society will, with a lag. Second, a lot of international capital flows wouldn’t be needed – so de facto deglobalisation. So one can see why this is therefore ignored. But fewer and fewer voters seem to like this globalisation – and what other *logical* answer is there?

Today we hear from the Fed’s Powell at his semi-annual testimony to Congress – and I am sure nothing at all that I have mentioned above will be spoken of. We can expect something more Belson-esque --“What those in dying business sectors call failure, we in tech know to be pre-greatness” -- or else that ‘teching’ sound in the background is going to be followed by a very, very loud bang even more quickly than would otherwise be the case.

Tyler Durden Tue, 02/23/2021 - 08:25
Published:2/23/2021 7:48:04 AM
[Markets] Luxury consignment site RealReal's quarterly loss widens as sales drop Luxury consignment site RealReal's quarterly loss widens as sales drop Published:2/23/2021 7:48:04 AM
[Markets] Futures Movers: Oil prices lifted by sluggish return of Texas output, broader commodity rally Oil futures continue to push higher Tuesday, lifted by expectations U.S. output curtailed by last week's winter storms will be restored more slowly than initially anticipated as well as a broader rally across commodities.
Published:2/23/2021 7:13:17 AM
[Markets] : It’s Apple versus a huge swath of the tech world, and Apple is winning Apple is capitalizing on its privacy campaign to win markets and burnish its image.
Published:2/23/2021 6:48:03 AM
[Markets] A tangled web of Tesla-bitcoin-ARK Investment could spell trouble for the market A tangled web of Tesla-bitcoin-ARK Investment could spell trouble for the market Published:2/23/2021 6:48:03 AM
[Markets] Futures Tumble As Tech Stocks, Cryptocurrencies Crash Futures Tumble As Tech Stocks, Cryptocurrencies Crash

Global stocks, US equity futures and cryptocurrencies all tumbled on Tuesday as the recent surge in inflation, bond yields and commodity prices continued to hammer technology shares while investors awaited fresh reassurance from U.S. Federal Reserve Chair Jerome Powell on the path for monetary policy in United States.

The MSCI world equity index fell 0.1% to fresh two-week lows, having earlier risen on gains in commodity-heavy equity indexes in Asia. After rising during the Asian session, S&P 500 futures also fell once Europen came online, and were last down 0.4%.

Nasdaq futures tumbled as much as 2%, and were last down 1.4% a day after the tech-heavy gauge posted its longest losing streak in four months. Heavyweight tech stocks slid premarket, with Apple -2.7%, Amazon -2.4%, Tesla -7.5%, Alphabet -1.6%. Tesla crashed 6% in pre-market trading, sliding below the $695 level at which it entered the S&P500.  Tesla shares were set to plunge into the red for the year, hit by a fall of bitcoin, in which the electric carmaker recently invested $1.5 billion.

Adding to the risk off mood, Bitcoin resumed its recent plunge, plunging as much as 17% below $46,000, down over $12,000 from recent highs after a bout of volatility highlighted lingering doubts about the durability of the token’s rally.

"The prospect of a less dovish tone from central banks, sparked by rising inflation, is causing stock traders to reduce their exposure to equities, especially overbought sectors like tech," said Pierre Veyret, analyst at ActivTrades in London. Another concern among investors is that broad benchmarks have already priced in much of the prospective global recovery spurred by vaccines and U.S. stimulus. Alongside rising inflation, another is that central banks may eventually start reconsidering emergency programs that have supported global markets.

Europe's Stoxx 600 was down -0.8%, sliding as much as 1.6% earlier, with Tech stocks leading losses. European tech stocks were on set for their worst day in four months, down 2.7%, and the worst-performing index in Europe, as chip-equipment makers plunged  amid market rotation out of more expensive sectors. Pandemic winners also dive. The index fell as much as 3.9% to a three-week low, the steepest intraday drop since Oct. 26. Chip- equipment makers, which have benefited amid a global shortage of semiconductors and are among the best-performing tech stocks in Europe this year, declined sharply: BE Semi -7.2%, ASMI -6.1%, ASML -3.4%. On the other end, mall operators, office landlords and events companies rose in Europe on increasing optimism about the prospects for reopening the Covid-hit economy following news that Germany mulled loosening the rules for easing lockdown restrictions. That followed the U.K. having set out an aim to gradually ease restrictions in stages over the next four months.

Here are some of the biggest European movers today:

  • Chip stocks fall on Tuesday, weighing on the Stoxx Tech Index, reflecting declines across U.S. semiconductor peers late Monday, as market rotation out of more expensive stocks and sectors gathers pace.
  • Covestro shares jump as much as 3.4% before erasing gain in Frankfurt; Commerzbank says the company published a “strong” 1Q outlook, but a cautious view on 2Q to 4Q, leaving upside to consensus.
  • U.K. domestically oriented stocks gained on Tuesday as travel and entertainment shares surged after Prime Minister Boris Johnson announced plans to reopen the economy.
  • KPN shares tumble as much as 10%, their biggest one-day drop since June 2016, as America Movil sells around EU2.2b of bonds exchangeable into shares in the Dutch phone company.
  • Adyen shares drop as much as 4.5% to a two-week low of EU2,056, after a pre-IPO investor sells shares in the payments firm.

Earlier in the session, Asian stocks rose clearly unaware of the shitstorm that was about to be unleashed by European traders, with equity benchmarks in Thailand and Hong Kong the biggest gainers in the region. The SET Index jumped as much as 2%, with tourism and leisure stocks rallying the most on the gauge amid optimism over the arrival of Covid-19 vaccines and relaxation of pandemic-led restrictions. Casino operators Galaxy Entertainment Group and Sands China surged to be among the top gainers on the Hang Seng Index, after Macau reopened to quarantine-free travel from mainland China. Energy was the top-performing sector in Asia as oil surged toward $63 a barrel. Investment banks and traders predicting the market will tighten further and push prices higher. Technology was the worst performer. The MSCI Asia Pacific Index headed for its first gain in four sessions, with equity benchmarks in Australia and Singapore also rising. Stocks were lower in South Korea and Malaysia, while Japanese markets were shut for a holiday.

India stocks ended little changed, after swinging between gains and losses several times in the session. The S&P BSE Sensex closed marginally higher at 49,751.41 in Mumbai, while the NSE Nifty 50 Index added 0.2%. Both gauges had retreated more than 4% through Monday from record highs on Feb. 15. Reliance Industries Ltd. gave the biggest boost to both measures after saying it plans to spin off its oil-to-chemicals operation into an independent unit. A gauge of metal companies was the top performer among the 19 sector indexes compiled by BSE Ltd

Rising inflation bets spurred by the global economic recovery have hammered stocks in the past week. The level of angst was also reflected in various equity volatility gauges which rose to multi-week highs, while on bond markets German and U.S. yields moved in different directions, even though both remained just below the highs hit on Monday. 

After being knocked off from eight-month high by European Central Bank chief Christine Lagarde signalling discomfort with the recent surge in yields, 10-year Bund yields resumed their upward trend and were last at -0.297%.

Treasuries steadied on Tuesday, below Monday’s one-year high of 1.394% and were last at 1.360%, after the gap between 5- and 30-year yields touched the highest level in more than six years. 

Traders will be waiting to hear from Fed Chair Jerome Powell when he testifies to the Senate Banking Committee on Tuesday and the House Financial Services panel the following day. He’s expected to be reassuring on the central bank’s dovish stance when he gives his congressional testimony at 1500 GMT in Washington, and to play down the risk of inflation despite the size of President Joe Biden’s $1.9 trillion coronavirus relief proposal.

“Fed Chair Jay Powell will be torn today,” ING analysts led by Padhraic Garveywrote in a anote. “A bit of inflation is a good thing; it’s what the Fed has wanted. But too much anticipation of it is not good, as it tightens policy prematurely.”

“If there were already any expectations that Powell could try to calm down rates, then (Lagarde’s remarks) have just further cemented them,” said Giuseppe Sersale, strategist and fund manager at Anthilia in Milan.

In currency markets, the dollar briefly dropped to its lowest since Jan. 13 before advancing against most G-10 peers, with traders waiting to see if Powell will address the selloff in Treasuries. The pound led G-10 gains, nearing $1.41 as investors digested the U.K.’s plan to open up the economy. The Canadian dollar outperformed most peers as oil prices continued their ascent.  The dollar index was up 0.1% at 90.137, with the euro flat at $1.215.

Commodity prices strengthened again with Copper extending gains, while WTI crude rose toward $63 a barrel. Oil prices jumped by more than $1 at one point, underpinned by optimism over COVID-19 vaccine rollouts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut in crude production last week. Brent crude was last up 0.7% at $65.7 a barrel after earlier hitting a fresh 13-month high of $66.79, while U.S. crude rose 0.8% to $62.17 a barrel.

“Oil has been caught up in the broader commodities move higher, with a weaker USD proving constructive for the complex,” ING strategists led by Warren Patterson said in a note. “Meanwhile, there is also a growing view that the oil market is looking increasingly tight over the remainder of the year”.

Copper prices meanwhile hit a 9-1/2-year high as tight supply and solid demand from top consumer China boosted sentiment.

To the day ahead, and the highlight will be the aforementioned appearance of Fed Chair Powell before the Senate Banking Committee. Otherwise, data releases from Europe include UK unemployment for December and the final Euro Area CPI reading for January, while from the US there’s the Conference Board’s consumer confidence indicator for February, the Richmond Fed’s manufacturing index for February and the FHFA house price index or December. Lastly, earnings releases include Home Depot, Medtronic and Intuit.

Market Snapshot

  • S&P 500 futures down 0.3% to 3,860.50
  • SXXP Index down 1.2%
  • MXAP up 0.1% to 216.65
  • MXAPJ up 0.3% to 725.81
  • Nikkei up 0.5% to 30,156.03
  • Topix up 0.5% to 1,938.35
  • Hang Seng Index up 1.0% to 30,632.64
  • Shanghai Composite down 0.2% to 3,636.36
  • Sensex little changed at 49,720.21
  • Australia S&P/ASX 200 up 0.9% to 6,839.17
  • German 10Y yield up 4 bps to -0.30%
  • Euro little changed at $1.2155
  • Kospi down 0.3% to 3,070.09
  • Brent futures up 1.2% to $66.03/bbl
  • Gold spot down 0.2% to $1,806.15
  • U.S. Dollar Index up 0.1% to 90.14

Top Overnight News from Bloomberg

  • The U.K.’s finance minister Rishi Sunak is set to spend billions of pounds in extra support for the economy over the next four months, as pandemic curbs pushed unemployment to its highest level in almost five years
  • Copper rose to the highest level in over nine years as a rally in industrial metals showed little sign of abating amid a global recovery from the pandemic
  • European Central Bank President Christine Lagarde said her institution is “closely monitoring” the market for government bonds, in a sign that she might act to prevent rising yields undermining the economic recovery from the pandemic
  • Oil extended gains near $62 a barrel with investment banks and traders predicting the market will tighten further and push prices higher
  • Commodities rose to their highest in almost eight years amid booming investor appetite for everything from oil to corn. The Bloomberg Commodity Spot Index, which tracks price movements for 23 raw materials, rose 1.6% on Monday to its highest since March 2013
  • In Brazil, investors unloaded everything from state- run companies to bonds and the currency after President Jair Bolsonaro ousted the head of oil giant Petrobras, sparking worries of government meddling and a break with his administration’s market-friendly pledges
  • Japan is planning to lift the state of emergency in places outside the Tokyo metropolitan area earlier than planned, with falling numbers of coronavirus cases easing the strain on hospitals, the Asahi newspaper reported Tuesday
  • U.S. deaths passed the 500,000 mark on Monday. Global deaths related to Covid-19 have surpassed 2.46 million, with the U.S. leading all countries with more than twice the number recorded by the next closest, Brazil, according to Bloomberg’s virus tracker

A quick look at global markets courtesy of Newsquawk

Asian equity markets eventually traded mostly positive after weathering the initial choppy price action following on from the mostly negative lead from Wall St where sentiment was pressured amid underperformance in tech and continued increases in yields as US money markets brought forward bets of a Fed rate increase and priced in a 70% chance of a 25bps hike by end-2022. ASX 200 (+0.9%) shrugged off the early tech-led declines and found support from strength in the commodity-related sectors especially energy stocks after oil prices continued to rally and as financials benefitted from the rising yield environment. KOSPI (-0.1%) lagged its peers in a resumption of this year’s consolidation above the 3,000 level and with a miss on earnings from drug manufacturer Celltrion weighing on other domestic pharmaceutical heavyweights. Hang Seng (+1.6%) and Shanghai Comp. (+0.4%) began indecisive following a tepid liquidity effort by the PBoC which injected a net CNY 10bln, while US-China tensions continued to linger as US House Speaker Pelosi suggested all options are on the table in holding China accountable for human rights abuses and State Department spokesman stated that recent comments by China Foreign Minister Wang Yi reflected the continued pattern of Beijing averting the blame. However, Chinese markets then gained with Hong Kong leading the advances as the Chinese oil majors reacted to further upside in crude prices and with HSBC leading the banks amid its earnings release in which it reported a decline in FY net and revenue but announced a resumption of its interim dividend. As a reminder, Japanese markets were closed in observance of the Emperor’s Birthday holiday.

Top Asian News

  • China Must Reform Hong Kong Election Rules, Carrie Lam Says
  • Axiata Tower Unit Stake Sale Is Said to Stall After Myanmar Coup
  • Japan Seen Ending Virus Emergency Early Outside Tokyo Region
  • HSBC’s Asia Bankers Do Better Than Peers as Bonus Pool Cut 20%

European equities kicked off the session with mild gains across the board, but the momentum then reversed and major bourses now trade notably lower (Euro Stoxx 50 -1.4%) following on from a mixed APAC handover. US equity futures have also given up overnight gains, with the tech-led NQ (-1.8%) again the underperformer during early European trade – as traders and investors seemingly rotate out of “stay at home” tech stocks and into more commodity and recovery-driven names. Meanwhile in Europe, UK’s FTSE 100 cash (-0.8%) was initially resilient, and remains comparatively so to a degree, after UK PM Johnson provided recovery stocks with a boost as he unveiled a roadmap out of lockdown - with the 'finish-line' currently on June 21st. This announcement has seen a surge in airline bookings, with easyJet (+8.2%) reporting that summer flight bookings rose 337% W/W and holiday bookings surged 630%. In turn, assisting regional airlines with impetus as IAG (+6%) and Ryanair (+4.3%) cheer the light at the of the tunnel, whilst EU airliners Lufthansa (+7%) and Air France-KLM (+5%) are dragged higher in tandem – note, this would also be bullish for the energy complex amid higher jet fuel demand. As such, the gains across the oil complex has also translated to gains among the FTSE 100’s oil giants Shell (+1.7%) and BP (+2.8%), whilst the extended rally in base metals, namely copper, has again bolstered UK miners – with index heavyweights Rio Tinto (+1.7%) and BHP (+3%) reaping rewards. The performances mentioned above is reflected in the regional sectors, with Travel & Leisure topping the charts, closely followed by Oil & Gas, Basic Resources and Banks. The latter is supported by the overall higher yield environment, whilst HSBC (-1.3%) conformed to the broader sentiment after topping FY/Q4 pretax and FY CET1 ratio forecasts and announced a dividend. However, the group downgraded the language surrounding its ROTE target. Tech is the notable laggard in tandem with the performance in NQ futures, with healthcare also residing towards the bottom of the pile. In terms of movers, the top gainers in the region consists of the most-hit pandemic stocks including the likes of Cineworld (+11%), airliners, aircraft manufacturers and hotel names, with the other side of the spectrum is comprised of the COVID-beneficiaries including Ocado (-5%) and Delivery Hero (-4%).

Top European News

  • BlackRock Strategists Debut OW Call on U.K. Stocks, Lift Europe
  • French Have a $146 Billion Savings War Chest From Covid Crisis
  • Aviva Sells French Arm for $3.9 Billion in Key Deal for CEO
  • Sunak Plans More Covid Aid for U.K. as Unemployment Climbs

In FX, the Dollar has lost a bit more of its yield advantage, but not all attraction as a safe-haven it seems given that the index has regained some composure after a more pronounced pull-back from recent recovery highs. The DXY is holding around 90.000 within a 89.941-90.194 range ahead of US housing data, consumer confidence, regional Fed surveys, Discount Rate meeting minutes, the first semi-annual testimony from chair Powell and the Usd 60 bn 2 year note auction that could set the tone for this week’s issuance remit. Note also, the Greenback is getting a boost from another abrupt and sustained reversal in crypto currencies like Bitcoin that is back below the Usd 50k mark and has been down to Usd 45k vs its new circa Usd 58.5k record peak.

  • GBP/EUR/NOK/CAD - Relative G10 outperformers, or at least displaying some resilience in face of the Buck bounce, as Sterling eyes 1.4100 in wake of UK PM Johnson’s 4 step plan to reopen the nation, and the Euro finds support around 1.2150 where technical levels form a cluster with hefty option expiry interest (50 DMA at 1.2154 today, 50% Fib of the fall from 1.2349 in January to 1.1952 current m-t-day low at 1.2151 and 1.6 bn at the 1.2155 strike). Meanwhile, further upside in oil, with WTI touching Usd 63/brl and Brent above Usd 66.75 at one stage is helping the Norwegian Crown to pare losses between 10.3425-10.2825 parameters against the Euro and keeping the Loonie anchored to 1.2600 vs its US counterpart in advance of comments from BoC Governor Macklem.
  • NZD/AUD - Both off best levels as broad risk sentiment sours, but the Kiwi has unwound declines vs the Aussie from around 1.0827 following weaker than forecast NZ retail sales and another boost for the latter via base metals. Hence, Nzd/Usd is holding firmer on the 0.7300 handle than Aud/Usd in relation to 0.7900 before construction work done, wages, RBNZ policy meeting and press conference.
  • JPY/CHF/SEK - The Yen could not maintain momentum through 105.00 overnight, perhaps due to the lack of Japanese participation on the Emperor’s Birthday market holiday, but the Franc is underperforming again and back beneath 0.9000 with little support from mildly less deflationary Swiss producer and import prices on a y/y basis. Indeed, Eur/Chf is firmly above 1.0900 and has nudged 1.0949 in keeping with upside in Eur/Sek after recent approaches towards 10.0000 failed to breach the round number and the cross retraces amidst more dovish-leaning Riksbank remarks (Bremen latest) and a rise in Swedish unemployment.

In commodities, WTI and Brent front month futures have given up intraday gains as sentiment across the market deteriorated during early European trade. WTI now resides closer to USD 62/bbl (vs high USD 63/bbl) and Brent has relinquished its USD 66/bbl handle (vs high USD 66.79/bbl). However looking at the bigger picture, the complex remains elevated by underlying fundamentals still being present such as OPEC+ support and vaccination progress. Moreover, production in the oil-pumping state of Texas is returning at a slower pace than previously anticipated. In turn, due to this weather event and Texas producing just under half of all US oil, a distortion in this week’s inventory and production figure may be seen. On the demand side, UK PM Johnson announced the UK’s roadmap for lifting restrictions against COVID moving ahead. This announcement translates into a bullish prospect for jet fuel demand, as within the plan it highlights the opening of holidays and ability to travel abroad in the Summer. Both the supply and demand factors could be regarded as the driving force behind the firmer price action overnight, whilst sentiment took helm in early hours. Notable tail-risks on the table surrounds the UK lockdown plan, which is data driven and hence, if the figures are not favourable it could see a change to the roadmap moving forward. Also, the OPEC+ confab is next week (JMMC on the 3rd and OPEC+ on the 4th), and participations will pay close attention to the sentiment between Saudi Arabia & Russia. With the COVID outlook looking increasingly favourable, the conservative Saudi Arabia and hawkish Russia may clash heads, again, thus a clear downside risk is present heading into the policy-setting meeting. Elsewhere, precious metals seem to be influenced by Buck, with spot gold relatively contained just above USD 1800/oz and spot silver resides around USD 27.85/oz (vs high USD 27.94/oz) . Turning to base metals, LME copper remains above USD 9,000/t but trades off best levels and edging closer to session lows as the firming Dollar and destination sentiment weigh on the recovery-driven metal. More on copper, Chile's state-owned Codelco, the world's largest copper producer, states the recent spike in the price of the red metal could increase miner’s costs. Lastly, Dalian iron ore futures fell 2% after top steel-producing city Tangshan issued a second-level pollution alert forcing mills to curb production.

US Event Calendar

  • 9am: Dec. S&P/Case-Shiller US HPI YoY, prior 9.49%
  • 9am: Dec. S&P CS Composite-20 YoY, est. 9.90%, prior 9.08%
  • 9am: Dec. FHFA House Price Index MoM, est. 1.0%, prior 1.0%
  • 9am: 4Q House Price Purchase Index QoQ, prior 3.1%
  • 10am: Feb. Conf. Board Consumer Confidence, est. 90.0, prior 89.3;
  • 10am: Feb. Richmond Fed Index, est. 16, prior 14

DB's Jim Reid concludes the overnight wrap

Yesterday had more twists than your average Shakespearian drama in what was a pretty topsy-turvy day for global markets. Equities sold off again on the back of continued concerns over inflationary pressures, while sovereign bonds swung between gains and losses with yields around 3bps higher in the US but around 3bps lower across Europe. Meanwhile, commodities hit 7-year highs, Bitcoin traded in a 17% range, and Tesla (-8.52%) technically tipped into a bear market.

Looking at the moves in more depth, all of the major equity indices on both sides of the Atlantic lost ground, with the S&P 500 (-0.77%) experiencing its 5th consecutive decline and the VIX index of volatility rising +1.40pts to its highest level in nearly 3 weeks. As it happens, the last time the S&P saw that many straight moves lower was exactly a year ago during the last week of February 2020, when global markets saw their first major pandemic-led sell-off. Europe’s STOXX 600 (-0.44%) outperformed, in part due to its smaller exposure to Technology companies. The tech-heavy NASDAQ composite fell -2.46% in its worst day so far this month with some of its largest names seeing heavy losses, namely Tesla (-8.52%), Apple (-2.98%) and Microsoft (-2.68%). Tesla is now only up c.1% YTD having been nearly +25% less than a month ago.

Tesla and Bitcoin are increasingly tied together and the latter had a crazy day, trading down -16.53% at one point before closing -4.21% in its worst daily performance this month. It’s not clear if the moves were prompted by a delayed reaction to an Elon Musk tweet on Saturday in which he said that the bitcoin did “seem high”. Bitcoin prices are down a further -10.54% this morning to $49,145 and are approaching yesterday’s lows again.

The risk-off sentiment has come to a halt in Asia this morning though with the Hang Seng (+1.67%), Shanghai Comp (+0.59%), Kospi (+0.27%), Asx (+0.86%) and India’s Nifty (+1.14%) all up. Japanese markets are closed for a holiday. Futures on the S&P 500 are also up +0.54% and European ones are pointing to a positive open too. Yields are fairly flat.

Back to yesterday and it was another strong day for oil prices with WTI up +3.80% and Brent crude gaining +3.70% to finish over $65/bll, this helped the energy sector continue to outperform (S&P Energy +3.46%) and fuel the cyclical rotation trade. The strength in oil prices followed news of accelerating drawdowns of global inventories and improving demand conditions. WTI (+1.62%) and Brent (+1.82%) continue to climb this morning with Brent crude trading at $66.43, the highest since November 2018. Elsewhere, copper advanced further (+1.64%) yesterday to its highest level in nearly a decade. In fact, the Bloomberg Commodity Spot Index also rose +1.64% to reach its highest level since March 2013, on the back of the move in industrial metals and the jump in oil prices.

For sovereign bond markets, it was a much more divergent performance, with Europe seeing a reasonable decline in yields whilst those on 10yr Treasuries actually rose +2.9bps to 1.365%. That was beneath its intraday high of 1.393% though, but still marked its highest closing level in nearly a year. Today, all eyes will be on Fed Chair Powell, who’s testifying before the Senate Banking Committee when delivering the semiannual monetary policy report to Congress. According to our US economists, Powell is likely to reiterate his messages that a "patiently accommodative" monetary policy is important, and that the US is still "very far" from a strong labour market. Real yields have continued to climb ahead of his appearance, however, with 10yr real yields hitting a 3-month high yesterday of -0.79%.

I did a CoTD showing real yields back over 200 years and highlighted that the only time real yields are negative for any period of time are around episodes of high debt. Given today’s debt levels, it’s likely real yields will stay ultra low for as far as the eye can see even if we’re seeing some cyclical pressure now. If real yields got anywhere close to long-term norms, debt sustainability would be seriously questioned and hence the Fed would likely step in well before. Financial repression and QE will likely be alive and well for the rest of most of our careers. See the piece here.

Over in Europe, yields were on track to hit their highest in months as well, but swung round mid-session to move lower following comments from ECB President Lagarde. Notably, she said that the ECB were “closely monitoring the evolution of longer-term nominal bond yields”, which isn’t generally a phrase you’d use when you welcomed the recent rise. Given that 10yr Bunds are still -0.34% it’s a remarkable situation that one can be getting uncomfortable with the move. Anyway, yields fell in direct response, with those on 10yr bunds (-3.4bps), OATs (-3.6bps) and BTPs (-2.6bps) all ending the day lower. Gilts (-1.9bps) continued to underperform bonds elsewhere however, with the spread between their 10yr yields over bunds widening to their biggest level in nearly a year.

Elsewhere, news that President Bolsonaro fired the head of Petrobras – a state-run oil company – roiled markets there, as investors took the move as a sign that some of the Brazilian President’s market-friendly initiatives may be rolled back. Brazilian markets saw their worst day since the autumn, as the Ibovespa index lost -4.87%, with state-run companies leading the declines. It was the biggest loss for the equity index since October of last year and Petrobras, the third-largest component of the index, finished the day down -21.19%. Meanwhile, the Brazilian 10yr yield rose +18.0bps to close at its highest level since late-March.

On the pandemic, studies added to a growing body of evidence that the vaccination programmes are beginning to have an impact. One in Scotland published yesterday, albeit not peer-reviewed yet, found that the AstraZeneca/Oxford vaccine reduced hospital admissions by 94% with a single dose 4-6 weeks after vaccination, while the Pfizer/BioNTech vaccine led to an 85% reduction. On top of this, a separate analysis from Public Health England found that a single dose of the Pfizer vaccine reduced the risk of catching infection by 85% after the second dose.

These positive announcements yesterday coincided with Prime Minister Johnson’s moves to outline the roadmap out of the English lockdown, which will begin to be eased from March 8, at which point schools would be reopened. However, it was a fairly cautious path overall and the stay-at-home message will remain until March 29, at which point people will be able to gather in groups of up to 6 or 2 separate households outdoors. Golf will return on this date - a bit later than I’d hoped. Furthermore, it won’t be until April 12 at the earliest that non-essential retail and gyms could reopen, along with outdoor hospitality, while indoor mixing between households will have to wait until May 17 at the earliest. As we said at the top, all social restrictions are hoped to be abandoned by June 21st just as the nights slowly start to get darker again!!

Elsewhere in Europe, the direction of travel seemed to be towards tougher restrictions, with Italy announcing an extension of travel curbs between regions until March 27, and authorities in France announced a lockdown for the next two weekends in Nice. Separately, Bloomberg reported that the German government were considering a further €50bn in debt spending, or around 1.5% of GDP, with the report saying that finance minister Scholz would propose suspending the constitutional debt brake for a third year. Speaking of Germany, the Ifo’s latest business climate indicator rose to a stronger-than-expected 92.4 in February (vs. 90.5 expected). That’s a 4-month high and was supported by the expectations measure coming in at 94.2, which also beat expectations for a 91.7 reading.

In the US, the FDA announced that drugmakers would not have to undergo large efficacy trials on booster shots to combat the variants, if needed, and that they would instead be based on immunogenicity studies, where researchers give vaccines to people and then conduct lab tests to measure the immune response. This is similar to how the annual flu vaccine is tested and produced. Also on vaccines, Moderna got positive feedback from the US government to get more doses of its Covid-19 vaccine from each individual vial it produces. This could expand supplies, which continues to trail demand dramatically. In terms of restrictions, New York continues to ease curbs on businesses as theatres will be allowed to reopen in mid-March with reduced capacity. Meanwhile in Asia, Japan is planning to end the state of emergency in six prefectures including Osaka and Kyoto at the end of the month, a week earlier than planned.

To the day ahead, and the highlight will be the aforementioned appearance of Fed Chair Powell before the Senate Banking Committee. Otherwise, data releases from Europe include UK unemployment for December and the final Euro Area CPI reading for January, while from the US there’s the Conference Board’s consumer confidence indicator for February, the Richmond Fed’s manufacturing index for February and the FHFA house price index or December. Lastly, earnings releases include Home Depot, Medtronic and Intuit.

Tyler Durden Tue, 02/23/2021 - 07:44
Published:2/23/2021 6:48:03 AM
[Markets] Hedge Fund Manager: Investors No Longer Want Common Ground, They Want To Destroy Hedge Fund Manager: Investors No Longer Want Common Ground, They Want To Destroy

Authored by One River Asset Management CIO Eric Peters, who is up about $2 billion on his massive and pioneering purchase of bitcoin last year.


"Faith, cynicism, skepticism," said the CIO.

"The faithful believe in something, cynics believe in nothing, skeptics find the balance,” he continued.

“Western society was built on a foundation of healthy skepticism, and this is quite clearly being lost. It is easiest to observe in Washington which makes sense because the political costs of polarization in today’s world are declining,” he said.

"We increasingly see that as people are drawn toward the cynical and faithful wings of the distribution, the cynics develop their own faith, and the faithful develop their own cynicism. And these passions amplify the tribal conflicts that divide us," he said.

"This is beginning to manifest in markets, which we are taught should be immune, rational. Having capital at risk forces one to be sober when considering the possible future states of the world, probabilities, market prices, risk versus reward,” he explained.

"But then you see GameStop and the January 6th insurrection. They were the same phenomenon, the same pathology, manifesting in different ways, and each will have lasting consequences, tattooed in ink."

Shorting stocks will never be quite the same.

And the radicalization of political protest has entered a new realm.

"People don’t want to find common ground, they want to fight. People want to destroy the opposing premise. Go to a Reddit board and see what happens to someone who questions Tesla’s valuation," he said.

"This is spilling over into financial markets more broadly, in ways that fatten the bullish and bearish tails and will increase the frequency of wild outcomes,” he said.

"Markets are beginning to take a new shape – driven by the amplification of faith and cynicism. It is ultimately terrible for society, but vital to see clearly if you must navigate markets. And we’re already starting to see things happen that not long ago were unimaginable."

Tyler Durden Tue, 02/23/2021 - 06:30
Published:2/23/2021 5:55:26 AM
[Markets] Wells Fargo selling asset-management unit for $2.1 billion Wells Fargo selling asset-management unit for $2.1 billion Published:2/23/2021 5:55:26 AM
[Markets] : Airlines and travel stocks surge as U.K. sets out lockdown exit plans EasyJet said holiday bookings jumped by 660% hours after Prime Minister Boris Johnson outlined a road map for a return to air travel.
Published:2/23/2021 5:55:26 AM
[Markets] NASDAQ, S&P 500 Tumble as High-Flying Tech Shares Plunge on Valuation Concerns The catalysts behind the volatile price action were climbing Treasury yields and the prospects of rising inflation. Published:2/23/2021 5:14:25 AM
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