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"We"re Breaking Her, Keep Going": ACLU Strategist Issues Chilling Tweet Against Sinema

"We're Breaking Her, Keep Going": ACLU Strategist Issues Chilling Tweet Against Sinema Authored by Jonathan Turley, While President Joe Biden has portrayed anyone supporting the filibuster as a virtual confederate sympathizer and Bull Conner wannabe, the attacks did not sway senators like Sen. Kyrsten Sinema, D-Ariz. who defiantly went to the floor to deliver a speech calling for the end of the politics of division. She, and her colleague Sen. Joe Machin, D-W.V., stood firm in support of the filibuster. The response from the commentators on the left was pure unadulterated rage. Many like MSNBC Lawrence O’Donnell cruelly mocked her from appearing emotional. However, one of most chilling attack came from a reported staff member at the ACLU, Sarah Michelsen, who encouraged people to keep up the pressure to “break” Sinema. The senator has been continually harassed by activists, who even followed her into a bathroom to berate her. Michelsen, a former state director for Sen. Bernie Sanders’ presidential campaign, is a “senior strategist” at the ACLU. Like many, Michelsen seemed thrilled that Sinema seemed emotional in her speech and encouraged activists to “keep going” with the attacks because they are “breaking her.” Michelsen seemed to be following the lead of President Biden, who was widely criticized for his Atlanta speech declaring that anyone supporting the filibuster was attacking democracy and supporting autocracy. He continued the attacks yesterday on the Hill despite the fact that he was clearly not intimidating either senator into changing their positions. It did not matter that Biden showed equal passion as a senator to denounce those who would find excuses for abandoning the filibuster rule. He called such efforts “disastrous” and proclaimed: “God save us from that fate … [it] would change this fundamental understanding and unbroken practice of what the Senate is all about.” After six months of uncomfortable silence as president, Biden later said that, as president, he continued to support the rule. Putting aside certain factual and historical errors, Biden declared that killing the rule would “throw the entire Congress into chaos and nothing will get done. Nothing at all will get done.” Despite the support of the rule by figures from Barack Obama to Chuck Schumer, it is now officially a “relic of Jim Crow” and open season on anyone standing with the senate tradition. The tweet from Michelsen was particularly disconcerting coming from someone associated with the ACLU. We previously discussed the disgraceful attack on Nicholas Sandmann by ACLU lawyer Samuel Crankshaw, who opposed his being accepted into college. This was after Sandmann was shown to have been falsely accused of harassing a Native American activist in front of the Lincoln Memorial. Nevertheless, even as media companies settled lawsuits with Sandmann for defamation, figures like Crankshaw and writers like Above the Law’s editor Joe Patrice continued to attack him. For those of us who have long supported the ACLU, the organization has changed dramatically in the last ten years to a more political organization. It now opposes due process rights when they support the wrong people — a striking departure from the traditional apolitical stance of the group. At points, it has become a parody of its own self like celebrating the legacy of Ruth Bader Ginsburg by editing her words as offensive. It is not clear what Michelsen did or does at the ACLU. Her Twitter account was taken private after her attack on Sinema. The account calls for defunding police and chaos. What is most notable about Michelsen’s attack (like the diatribes of President Biden) is that they are clearly not working to intimidate these senators. Yet, activists still want to continue them because they can. The age of rage gives them license to hate and harass. That is enough to “keep it up” in harassing those who hold opposing views. Tyler Durden Fri, 01/14/2022 - 15:11.....»»

Category: blogSource: zerohedgeJan 14th, 2022

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead One year ago, when looking at the 20 most popular stories of 2020, we said that the year would be a very tough act to follow as there "could not have been more regime shifts, volatility moments, and memes than 2020." And yet despite the exceedingly high bar for 2021, the year did not disappoint and proved to be a successful contender, and if judging by the sheer breadth of narratives, stories, surprises, plot twists and unexpected developments, 2021 was even more memorable and event-filled than 2020. Where does one start? While covid was the story of 2020, the pandemic that emerged out of a (Fauci-funded) genetic lab team in Wuhan, China dominated newsflow, politics and capital markets for the second year in a row. And while the biggest plot twist of 2020 was Biden's victory over Trump in the presidential election (it took the pandemic lockdowns and mail-in ballots to hand the outcome to Biden), largely thanks to Covid, Biden failed to hold to his biggest presidential promise of defeating covid, and not only did he admit in late 2021 that there is "no Federal solution" to covid waving a white flag of surrender less than a year into his presidency, but following the recent emergence of the Xi, pardon Omicron variant, the number of covid cases in the US has just shattered all records. The silver lining is not only that deaths and hospitalizations have failed to follow the number of cases, but that the scaremongering narrative itself is starting to melt in response to growing grassroots discontent with vaccine after vaccine and booster after booster, which by now it is clear, do nothing to contain the pandemic. And now that it is clear that omicron is about as mild as a moderate case of the flu, the hope has finally emerged that this latest strain will finally kill off the pandemic as it becomes the dominant, rapidly-spreading variant, leading to worldwide herd immunity thanks to the immune system's natural response. Yes, it may mean billions less in revenue for Pfizer and Moderna, but it will be a colossal victory for the entire world. The second biggest story of 2021 was undoubtedly the scourge of soaring inflation, which contrary to macrotourist predictions that it would prove "transitory", refused to do so and kept rising, and rising, and rising, until it hit levels not seen since the Volcker galloping inflation days of the 1980s. The only difference of course is that back then, the Fed Funds rate hit 20%. Now it is at 0%, and any attempts to hike aggressively will lead to a horrific market crash, something the Fed knows very well. Whether this was due to supply-chain blockages and a lack of goods and services pushing prices higher, or due to massive stimulus pushing demand for goods - and also prices - higher, or simply the result of a record injection of central bank liquidity into the system, is irrelevant but what does matter is that it got so bad that even Biden, facing a mauling for his Democratic party in next year's midterm elections, freaked out about soaring prices and pushed hard to lower the price of gasoline, ordering releases from the US Strategic Petroleum Reserve and vowing to punish energy companies that dare to make a profit, while ordering Powell to contain the surge in prices even if means the market is hit. Unfortunately for Biden, the market will be hit even as inflation still remain red hot for much of the coming year. And speaking of markets, while 2022 may be a year when the piper finally gets paid, 2021 was yet another blockbuster year for risk assets, largely on the back of the continued global response to the 2020 covid pandemic, when as we wrote last year, we saw "the official arrival of global Helicopter Money, tens of trillions in fiscal and monetary stimulus, an overhaul of the global economy punctuated by an unprecedented explosion in world debt, an Orwellian crackdown on civil liberties by governments everywhere, and ultimately set the scene for what even the World Economic Forum called simply "The Great Reset." Yes, the staggering liquidity injections that started in 2020, continued throughout 2021 and the final tally is that after $3 trillion in emergency liquidity injections in the immediate aftermath of the pandemic to stabilize the world, the Fed injected almost $2 trillion in the subsequent period, of which $1.5 trillion in 2021, a year where economists were "puzzled" why inflation was soaring. This, of course, excludes the tens of trillions of monetary stimulus injected by other central banks as well as the boundless fiscal stimulus that was greenlighted with the launch of helicopter money (i.e., MMT) in 2020. It's also why with inflation running red hot and real rates the lowest they have ever been, everyone was forced to rush into the "safety" of stocks (or stonks as they came to be known among GenZ), and why after last year's torrid stock market returns, the S&P rose another 27% in 2021 and up a staggering 114% from the March 2020 lows, in the process trouncing all previous mega-rallies (including those in 1929, 1938, 1974 and 2009)... ... making this the third consecutive year of double-digit returns. This reminds us of something we said last year: "it's almost as if the world's richest asset owners requested the covid pandemic." A year later, we got confirmation for this rhetorical statement, when we calculated that in the 18 months since the covid pandemic, the richest 1% of US society have seen their net worth increase by over $30 trillion. As a result, the US is now officially a banana republic where the middle 60% of US households by income - a measure economists use as a definition of the middle class - saw their combined assets drop from 26.7% to 26.6% of national wealth as of June, the lowest in Federal Reserve data, while for the first time the super rich had a bigger share, at 27%. Yes, the 1% now own more wealth than the entire US middle class, a definition traditionally reserve for kleptocracies and despotic African banana republics. It wasn't just the rich, however: politicians the world over would benefit from the transition from QE to outright helicopter money and MMT which made the over monetization of deficits widely accepted in the blink of an eye. The common theme here is simple: no matter what happens, capital markets can never again be allowed to drop, regardless of the cost or how much more debt has to be incurred. Indeed, as we look back at the news barrage over the past year, and past decade for that matter, the one thing that becomes especially clear amid the constant din of markets, of politics, of social upheaval and geopolitical strife - and now pandemics -  in fact a world that is so flooded with constant conflicting newsflow and changing storylines that many now say it has become virtually impossible to even try to predict the future, is that despite the people's desire for change, for something original and untried, the world's established forces will not allow it and will fight to preserve the broken status quo at any price - even global coordinated shutdowns - which is perhaps why it always boils down to one thing - capital markets, that bedrock of Western capitalism and the "modern way of life", where control, even if it means central planning the likes of which have not been seen since the days of the USSR, and an upward trajectory must be preserved at all costs, as the alternative is a global, socio-economic collapse. And since it is the daily gyrations of stocks that sway popular moods the interplay between capital markets and politics has never been more profound or more consequential. The more powerful message here is the implicit realization and admission by politicians, not just Trump who had a penchant of tweeting about the S&P every time it rose, but also his peers on both sides of the aisle, that the stock market is now seen as the consummate barometer of one's political achievements and approval. Which is also why capital markets are now, more than ever, a political tool whose purpose is no longer to distribute capital efficiently and discount the future, but to manipulate voter sentiments far more efficiently than any fake Russian election interference attempt ever could. Which brings us back to 2021 and the past decade, which was best summarized by a recent Bill Blain article who said that "the last 10-years has been a story of massive central banking distortion to address the 2008 crisis. Now central banks face the consequences and are trapped. The distortion can’t go uncorrected indefinitely." He is right: the distortion will eventually collapse especially if the Fed follows through with its attempt rate hikes some time in mid-2020, but so far the establishment and the "top 1%" have been successful - perhaps the correct word is lucky - in preserving the value of risk assets: on the back of the Fed's firehose of liquidity the S&P500 returned an impressive 27% in 2021, following a 15.5% return in 2020 and 28.50% in 2019. It did so by staging the greatest rally off all time from the March lows, surpassing all of the 4 greatest rallies off the lows of the past century (1929,1938, 1974, and 2009). Yet this continued can-kicking by the establishment - all of which was made possible by the covid pandemic and lockdowns which served as an all too convenient scapegoat for the unprecedented response that served to propel risk assets (and fiat alternatives such as gold and bitcoin) to all time highs - has come with a price... and an increasingly higher price in fact. As even Bank of America CIO Michael Hartnett admits, Fed's response to the the pandemic "worsened inequality" as the value of financial assets - Wall Street -  relative to economy - Main Street - hit all-time high of 6.3x. And while the Fed was the dynamo that has propelled markets higher ever since the Lehman collapse, last year certainly had its share of breakout moments. Here is a sampling. Gamestop and the emergence of meme stonks and the daytrading apes: In January markets were hypnotized by the massive trading volumes, rolling short squeezes and surging share prices of unremarkable established companies such as consoles retailer GameStop and cinema chain AMC and various other micro and midcap names. What began as a discussion on untapped value at GameStop on Reddit months earlier by Keith Gill, better known as Roaring Kitty, morphed into a hedge fund-orchestrated, crowdsourced effort to squeeze out the short position held by a hedge fund, Melvin Capital. The momentum flooded through the retail market, where daytraders shunned stocks and bought massive out of the money calls, sparking rampant "gamma squeezes" in the process forcing some brokers to curb trading. Robinhood, a popular broker for day traders and Citadel's most lucrative "subsidiary", required a cash injection to withstand the demands placed on it by its clearing house. The company IPOed later in the year only to see its shares collapse as it emerged its business model was disappointing hollow absent constant retail euphoria. Ultimately, the market received a crash course in the power of retail investors on a mission. Ultimately, "retail favorite" stocks ended the year on a subdued note as the trading frenzy from earlier in the year petered out, but despite underperforming the S&P500, retail traders still outperformed hedge funds by more than 100%. Failed seven-year Treasury auction:  Whereas auctions of seven-year US government debt generally spark interest only among specialists, on on February 25 2021, one such typically boring event sparked shockwaves across financial markets, as the weakest demand on record hit prices across the whole spectrum of Treasury bonds. The five-, seven- and 10-year notes all fell sharply in price. Researchers at the Federal Reserve called it a “flash event”; we called it a "catastrophic, tailing" auction, the closest thing the US has had to a failed Trasury auction. The flare-up, as the FT put it, reflects one of the most pressing investor concerns of the year: inflation. At the time, fund managers were just starting to realize that consumer price rises were back with a vengeance — a huge threat to the bond market which still remembers the dire days of the Volcker Fed when inflation was about as high as it is today but the 30Y was trading around 15%. The February auaction also illustrated that the world’s most important market was far less liquid and not as structurally robust as investors had hoped. It was an extreme example of a long-running issue: since the financial crisis the traditional providers of liquidity, a group of 24 Wall Street banks, have pulled back because of higher costs associated with post-2008 capital requirements, while leaving liquidity provision to the Fed. Those banks, in their reduced role, as well as the hedge funds and high-frequency traders that have stepped into their place, have tended to withdraw in moments of market volatility. Needless to say, with the Fed now tapering its record QE, we expect many more such "flash" episodes in the bond market in the year ahead. The arch ego of Archegos: In March 2021 several banks received a brutal reminder that some of family offices, which manage some $6 trillion in wealth of successful billionaires and entrepreneurs and which have minimal reporting requirements, take risks that would make the most serrated hedge fund manager wince, when Bill Hwang’s Archegos Capital Management imploded in spectacular style. As we learned in late March when several high-flying stocks suddenly collapsed, Hwang - a former protege of fabled hedge fund group Tiger Management - had built up a vast pile of leverage using opaque Total Return Swaps with a handful of banks to boost bets on a small number of stocks (the same banks were quite happy to help despite Hwang’s having been barred from US markets in 2013 over allegations of an insider-trading scheme, as he paid generously for the privilege of borrowing the banks' balance sheet). When one of Archegos more recent bets, ViacomCBS, suddenly tumbled it set off a liquidation cascade that left banks including Credit Suisse and Nomura with billions of dollars in losses. Conveniently, as the FT noted, the damage was contained to the banks rather than leaking across financial markets, but the episode sparked a rethink among banks over how to treat these clients and how much leverage to extend. The second coming of cryptos: After hitting an all time high in late 2017 and subsequently slumping into a "crypto winter", cryptocurrencies enjoyed a huge rebound in early 2021 which sent their prices soaring amid fears of galloping inflation (as shown below, and contrary to some financial speculation, the crypto space has traditionally been a hedge either to too much liquidity or a hedge to too much inflation). As a result, Bitcoin rose to a series of new record highs that culminated at just below $62,000, nearly three times higher than their previous all time high. But the smooth ride came to a halt in May when China’s crackdown on the cryptocurrency and its production, or “mining”, sparked the first serious crash of 2021. The price of bitcoin then collapsed as much as 30% on May 19, hitting a low of $30,000 amid a liquidation of levered positions in chaotic trading conditions following a warning from Chinese authorities of tighter curbs ahead. A public acceptance by Tesla chief and crypto cheerleader Elon Musk of the industry’s environmental impact added to the declines. However, as with all previous crypto crashes, this one too proved transitory, and prices resumed their upward trajectory in late September when investors started to price in the launch of futures-based bitcoin exchange traded funds in the US. The launch of these contracts subsequently pushed bitcoin to a new all-time high in early November before prices stumbled again in early December, this time due to a rise in institutional ownership when an overall drop in the market dragged down cryptos as well. That demonstrated the growing linkage between Wall Street and cryptocurrencies, due to the growing sway of large investors in digital markets. China's common prosperity crash: China’s education and tech sectors were one of the perennial Wall Street darlings. Companies such as New Oriental, TAL Education as well as Alibaba and Didi had come to be worth billions of dollars after highly publicized US stock market flotations. So when Beijing effectively outlawed swaths of the country’s for-profit education industry in July 2021, followed by draconian anti-trust regulations on the country's fintech names (where Xi Jinping also meant to teach the country's billionaire class a lesson who is truly in charge), the short-term market impact was brutal. Beijing’s initial measures emerged as part of a wider effort to make education more affordable as part of president Xi Jinping’s drive for "common prosperity" but that quickly raised questions over whether growth prospects across corporate China are countered by the capacity of the government to overhaul entire business models overnight. Sure enough, volatility stemming from the education sector was soon overshadowed by another set of government reforms related to common prosperity, a crackdown on leverage across the real estate sector where the biggest casualty was Evergrande, the world’s most indebted developer. The company, whose boss was not long ago China's 2nd richest man, was engulfed by a liquidity crisis in the summer that eventually resulted in a default in early December. Still, as the FT notes, China continues to draw in huge amounts of foreign capital, pushing the Chinese yuan to end 2021 at the strongest level since May 2018, a major hurdle to China's attempts to kickstart its slowing economy, and surely a precursor to even more monetary easing. Natgas hyperinflation: Natural gas supplanted crude oil as the world’s most important commodity in October and December as prices exploded to unprecedented levels and the world scrambled for scarce supplies amid the developed world's catastrophic transition to "green" energy. The crunch was particularly acute in Europe, which has become increasingly reliant on imports. Futures linked to TTF, the region’s wholesale gas price, hit a record €137 per megawatt hour in early October, rising more than 75%. In Asia, spot liquefied natural gas prices briefly passed the equivalent of more than $320 a barrel of oil in October. (At the time, Brent crude was trading at $80). A number of factors contributed, including rising demand as pandemic restrictions eased, supply disruptions in the LNG market and weather-induced shortfalls in renewable energy. In Europe, this was aggravated by plunging export volumes from Gazprom, Russia’s state-backed monopoly pipeline supplier, amid a bitter political fight over the launch of the Nordstream 2 pipeline. And with delays to the Nord Stream 2 gas pipeline from Russia to Germany, analysts say the European gas market - where storage is only 66% full - a cold snap or supply disruption away from another price spike Turkey's (latest) currency crisis:  As the FT's Jonathan Wheatley writes, Recep Tayyip Erdogan was once a source of strength for the Turkish lira, and in his first five years in power from 2003, the currency rallied from TL1.6 per US dollar to near parity at TL1.2. But those days are long gone, as Erdogan's bizarre fascination with unorthodox economics, namely the theory that lower rates lead to lower inflation also known as "Erdoganomics", has sparked a historic collapse in the: having traded at about TL7 to the dollar in February, it has since fallen beyond TL17, making it the worst performing currency of 2021. The lira’s defining moment in 2021 came on November 18 when the central bank, in spite of soaring inflation, cut its policy rate for the third time since September, at Erdogan’s behest (any central banker in Turkey who disagrees with "Erdoganomics" is promptly fired and replaced with an ideological puppet). The lira recovered some of its losses in late December when Erdogan came up with the "brilliant" idea of erecting the infamous "doom loop" which ties Turkey's balance sheet to its currency. It has worked for now (the lira surged from TL18 against the dollar to TL12, but this particular band aid solution will only last so long). The lira’s problems are not only Erdogan’s doing. A strengthening dollar, rising oil prices, the relentless covid pandemic and weak growth in developing economies have been bad for other emerging market currencies, too, but as long as Erdogan is in charge, shorting the lira remains the best trade entering 2022. While these, and many more, stories provided a diversion from the boring existence of centrally-planned markets, we are confident that the trends observed in recent years will continue: coming years will be marked by even bigger government (because only more government can "fix" problems created by government), higher stock prices and dollar debasement (because only more Fed intervention can "fix" the problems created by the Fed), and a policy flip from monetary and QE to fiscal & MMT, all of which will keep inflation at scorching levels, much to the persistent confusion of economists everywhere. Of course, we said much of this last year as well, but while we got most trends right, we were wrong about one thing: we were confident that China's aggressive roll out of the digital yuan would be a bang - or as we put it "it is very likely that while 2020 was an insane year, it may prove to be just an appetizer to the shockwaves that will be unleashed in 2021 when we see the first stage of the most historic overhaul of the fiat payment system in history" - however it turned out to be a whimper. A big reason for that was that the initial reception of the "revolutionary" currency was nothing short of disastrous, with Chinese admitting they were "not at all excited" about the prospect of yet one more surveillance mechanism for Beijing, because that's really what digital currencies are: a way for central banks everywhere to micromanage and scrutinize every single transaction, allowing the powers that be to demonetize any one person - or whole groups - with the flick of a switch. Then again, while digital money may not have made its triumphant arrival in 2021, we are confident that the launch date has merely been pushed back to 2022 when the rollout of the next monetary revolution is expected to begin in earnest. Here we should again note one thing: in a world undergoing historic transformations, any free press must be throttled and controlled, and over the past year we have seen unprecedented efforts by legacy media and its corporate owners, as well as the new "social media" overlords do everything in their power to stifle independent thought. For us it had been especially "personal" on more than one occasions. Last January, Twitter suspended our account because we dared to challenge the conventional narrative about the source of the Wuhan virus. It was only six months later that Twitter apologized, and set us free, admitting it had made a mistake. Yet barely had twitter readmitted us, when something even more unprecedented happened: for the first time ever (to our knowledge) Google - the world's largest online ad provider and monopoly - demonetized our website not because of any complaints about our writing but because of the contents of our comment section. It then held us hostage until we agreed to implement some prerequisite screening and moderation of the comments section. Google's action was followed by the likes of PayPal, Amazon, and many other financial and ad platforms, who rushed to demonetize and suspend us simply because they disagreed with what we had to say. This was a stark lesson in how quickly an ad-funded business can disintegrate in this world which resembles the dystopia of 1984 more and more each day, and we have since taken measures. One year ago, for the first time in our 13 year history, we launched a paid version of our website, which is entirely ad and moderation free, and offers readers a variety of premium content. It wasn't our intention to make this transformation but unfortunately we know which way the wind is blowing and it is only a matter of time before the gatekeepers of online ad spending block us again. As such, if we are to have any hope in continuing it will come directly from you, our readers. We will keep the free website running for as long as possible, but we are certain that it is only a matter of time before the hammer falls as the censorship bandwagon rolls out much more aggressively in the coming year. That said, whether the story of 2022, and the next decade for that matter, is one of helicopter or digital money, of (hyper)inflation or deflation: what is key, and what we learned in the past decade, is that the status quo will throw anything at the problem to kick the can, it will certainly not let any crisis go to waste... even the deadliest pandemic in over a century. And while many already knew that, the events of 2021 made it clear to a fault that not even a modest market correction can be tolerated going forward. After all, if central banks aim to punish all selling, then the logical outcome is to buy everything, and investors, traders and speculators did just that armed with the clearest backstop guarantee from the Fed, which in the deapths of the covid crash crossed the Rubicon when it formally nationalized the bond market as it started buying both investment grade bonds and junk bond ETFs in the open market. As such it is no longer even a debatable issue if the Fed will buy stocks after the next crash - the only question is when. Meanwhile, for all those lamenting the relentless coverage of politics in a financial blog, why finance appears to have taken a secondary role, and why the political "narrative" has taken a dominant role for financial analysts, the past year showed vividly why that is the case: in a world where markets gyrated, and "rotated" from value stocks to growth and vice versa, purely on speculation of how big the next stimulus out of Washington will be, the narrative over Biden's trillions proved to be one of the biggest market moving events for much of the year. And with the Biden stimulus plan off the table for now, the Fed will find it very difficult to tighten financial conditions, especially if it does so just as the economy is slowing. Here we like to remind readers of one of our favorite charts: every financial crisis is the result of Fed tightening. As for predictions about the future, as the past two years so vividly showed, when it comes to actual surprises and all true "black swans", it won't be what anyone had expected. And so while many themes, both in the political and financial realm, did get some accelerated closure courtesy of China's covid pandemic, dramatic changes in 2021 persisted, and will continue to manifest themselves in often violent and unexpected ways - from the ongoing record polarization in the US political arena, to "populist" upheavals around the developed world, to the gradual transition to a global Universal Basic (i.e., socialized) Income regime, to China's ongoing fight with preserving stability in its gargantuan financial system which is now two and a half times the size of the US. As always, we thank all of our readers for making this website - which has never seen one dollar of outside funding (and despite amusing recurring allegations, has certainly never seen a ruble from the KGB either, although now that the entire Russian hysteria episode is over, those allegations have finally quieted down), and has never spent one dollar on marketing - a small (or not so small) part of your daily routine. Which also brings us to another critical topic: that of fake news, and something we - and others who do not comply with the established narrative - have been accused of. While we find the narrative of fake news laughable, after all every single article in this website is backed by facts and links to outside sources, it is clearly a dangerous development, and a very slippery slope that the entire developed world is pushing for what is, when stripped of fancy jargon, internet censorship under the guise of protecting the average person from "dangerous, fake information." It's also why we are preparing for the next onslaught against independent thought and why we had no choice but to roll out a premium version of this website. In addition to the other themes noted above, we expect the crackdown on free speech to accelerate in the coming year when key midterm elections will be held, especially as the following list of Top 20 articles for 2021 reveals, many of the most popular articles in the past year were precisely those which the conventional media would not touch out of fear of repercussions, which in turn allowed the alternative media to continue to flourish in an orchestrated information vacuum and take significant market share from the established outlets by covering topics which the public relations arm of established media outlets refused to do, in the process earning itself the derogatory "fake news" condemnation. We are grateful that our readers - who hit a new record high in 2021 - have realized it is incumbent upon them to decide what is, and isn't "fake news." * * * And so, before we get into the details of what has now become an annual tradition for the last day of the year, those who wish to jog down memory lane, can refresh our most popular articles for every year during our no longer that brief, almost 11-year existence, starting with 2009 and continuing with 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020. So without further ado, here are the articles that you, our readers, found to be the most engaging, interesting and popular based on the number of hits, during the past year. In 20th spot with 600,000 reads, was an article that touched on one of the most defining features of the market: the reflation theme the sparked a massive rally at the start of the year courtesy of the surprise outcome in the Georgia Senate race, where Democrats ended up wining both seats up for grabs, effectively giving the Dems a majority in both the House and the Senate, where despite the even, 50-seat split, Kamala Harris would cast the winning tie-breaker vote to pursue a historic fiscal stimulus. And sure enough, as we described in "Bitcoin Surges To Record High, Stocks & Bonds Battered As Dems Look Set To Take Both Georgia Senate Seats", with trillions in "stimmies" flooding both the economy and the market, not only did retail traders enjoy unprecedented returns when trading meme "stonks" and forcing short squeezes that crippled numerous hedge funds, but expectations of sharply higher inflation also helped push bitcoin and the entire crypto sector to new all time highs, which in turn legitimized the product across institutional investors and helped it reach a market cap north of $3 trillion.  In 19th spot, over 613,000 readers were thrilled to read at the start of September that "Biden Unveils Most Severe COVID Actions Yet: Mandates Vax For All Federal Workers, Contractors, & Large Private Companies." Of course, just a few weeks later much of Biden's mandate would be struck down in courts, where it is now headed to a decision by SCOTUS, while the constantly shifting "scientific" goal posts mean that just a few months later the latest set of CDC regulations have seen regulators and officials reverse the constant drone of fearmongering and are now even seeking to cut back on the duration of quarantine and other lockdown measures amid a public mood that is growing increasingly hostile to the government response. One of the defining political events of 2021 was the so-called "Jan 6 Insurrection", which the for America's conservatives was blown wildly out of proportion yet which the leftist media and Democrats in Congress have been periodically trying to push to the front pages in hopes of distracting from the growing list of failures of the Obama admin. Yet as we asked back in January, "Why Was Founder Of Far-Left BLM Group Filming Inside Capitol As Police Shot Protester?" No less than 614,000 readers found this question worthy of a response. Since then many more questions have emerged surrounding this event, many of which focus on what role the FBI had in organizing and encouraging this event, including the use of various informants and instigators. For now, a response will have to wait at least until the mid-term elections of 2022 when Republicans are expected to sweep one if not both chambers. Linked to the above, the 17th most read article of 2021 with 617,000 views, was an article we published on the very same day, which detailed that "Armed Protesters Begin To Arrive At State Capitols Around The Nation." At the end of the day, it was much ado about nothing and all protests concluded peacefully and without incident: perhaps the FBI was simply spread too thin? 2021 was a year defined by various waves of the covid pandemic which hammered poor Americans forced to hunker down at home and missing on pay, and crippled countless small mom and pop businesses. And yet, it was also a bonanza for a handful of pharma companies such as Pfizer and Moderna which made billions from the sale of "vaccines" which we now know do little if anything to halt the spread of the virus, and are instead now being pitched as palliatives, preventing a far worse clinical outcome. The same pharma companies also benefited from an unconditional indemnity, which surely would come in useful when the full side-effects of their mRNA-based therapies became apparent. One such condition to emerge was myocarditis among a subset of the vaxxed. And while the vaccines continue to be broadly rolled out across most developed nations, one place that said enough was Sweden. As over 620,000 readers found out in "Sweden Suspends Moderna Shot Indefinitely After Vaxxed Patients Develop Crippling Heart Condition", not every country was willing to use its citizens as experimental guniea pigs. This was enough to make the article the 16th most read on these pages, but perhaps in light of the (lack of) debate over the pros and cons of the covid vaccines, this should have been the most read article this year? Moving on to the 15th most popular article, 628,000 readers were shocked to learn that "Chase Bank Cancels General Mike Flynn's Credit Cards." The action, which was taken by the largest US bank due to "reputational risk" echoed a broad push by tech giants to deplatform and silence dissenting voices by literally freezing them out of the financial system. In the end, following widespread blowback from millions of Americans, JPMorgan reversed, and reactivated Flynn's cards saying the action was made in error, but unfortunately this is just one example of how those in power can lock out any dissenters with the flick of a switch. And while democrats cheer such deplatforming today, the political winds are fickle, and we doubt they will be as excited once they find themselves on the receiving end of such actions. And speaking of censorship and media blackouts, few terms sparked greater response from those in power than the term Ivermectin. Viewed by millions as a cheap, effective alternative to offerings from the pharmaceutical complex, social networks did everything in their power to silence any mention of a drug which the Journal of Antibiotics said in 2017 was an "enigmatic multifaceted ‘wonder’ drug which continues to surprise and exceed expectations." Nowhere was this more obvious than in the discussion of how widespread use of Ivermectin beat Covid in India, the topic of the 14th most popular article of 2021 "India's Ivermectin Blackout" which was read by over 653,000 readers. Unfortunately, while vaccines continue to fail upward and now some countries are now pushing with a 4th, 5th and even 6th vaccine, Ivermectin remains a dirty word. There was more covid coverage in the 13th most popular article of 2021, "Surprise Surprise - Fauci Lied Again": Rand Paul Reacts To Wuhan Bombshell" which was viewed no less than 725,000 times. Paul's reaction came following a report which revealed that Anthony Fauci's NIAID and its parent, the NIH, funded Gain-of-Function research in Wuhan, China, strongly hinting that the emergence of covid was the result of illicit US funding. Not that long ago, Fauci had called Paul a 'liar' for accusing him of funding the risky research, in which viruses are genetically modified or otherwise altered to make them more transmissible to humans. And while we could say that Paul got the last laugh, Fauci still remains Biden's top covid advisor, which may explain why one year after Biden vowed he would shut down the pandemic, the number of new cases just hit a new all time high. One hope we have for 2022 is that people will finally open their eyes... 2021 was not just about covid - soaring prices and relentless inflation were one of the most poignant topics. It got so bad that Biden's approval rating - and that of Democrats in general - tumbled toward the end of the year, putting their mid-term ambitions in jeopardy, as the public mood soured dramatically in response to the explosion in prices. And while one can debate whether it was due to supply-issues, such as the collapse in trans-pacific supply chains and the chronic lack of labor to grow the US infrastructure, or due to roaring demand sparked by trillions in fiscal stimulus, but when the "Big Short" Michael Burry warned that hyperinflation is coming, the people listened, and with over 731,000 reads, the 12th most popular article of 2021 was "Michael Burry Warns Weimar Hyperinflation Is Coming."  Of course, Burry did not say anything we haven't warned about for the past 12 years, but at least he got the people's attention, and even mainstream names such as Twitter founder Jack Dorsey agreed with him, predicting that bitcoin will be what is left after the dollar has collapsed. While hyperinflation may will be the endgame, the question remains: when. For the 11th most read article of 2021, we go back to a topic touched upon moments ago when we addressed the full-blown media campaign seeking to discredit Ivermectin, in this case via the D-grade liberal tabloid Rolling Stone (whose modern incarnation is sadly a pale shadow of the legend that house Hunter S. Thompson's unforgettable dispatches) which published the very definition of fake news when it called Ivermectin a "horse dewormer" and claimed that, according to a hospital employee, people were overdosing on it. Just a few hours later, the article was retracted as we explained in "Rolling Stone Issues 'Update' After Horse Dewormer Hit-Piece Debunked" and over 812,000 readers found out that pretty much everything had been a fabrication. But of course, by then it was too late, and the reputation of Ivermectin as a potential covid cure had been further tarnished, much to the relief of the pharma giants who had a carte blanche to sell their experimental wares. The 10th most popular article of 2021 brings us to another issue that had split America down the middle, namely the story surrounding Kyle Rittenhouse and the full-blown media campaign that declared the teenager guilty, even when eventually proven innocent. Just days before the dramatic acquittal, we learned that "FBI Sat On Bombshell Footage From Kyle Rittenhouse Shooting", which was read by over 822,000 readers. It was unfortunate to learn that once again the scandal-plagued FBI stood at the center of yet another attempt at mass misinformation, and we can only hope that one day this "deep state" agency will be overhauled from its core, or better yet, shut down completely. As for Kyle, he will have the last laugh: according to unconfirmed rumors, his numerous legal settlements with various media outlets will be in the tens if not hundreds of millions of dollars.  And from the great US social schism, we again go back to Covid for the 9th most popular article of 2021, which described the terrifying details of one of the most draconian responses to covid in the entire world: that of Australia. Over 900,000 readers were stunned to read that the "Australian Army Begins Transferring COVID-Positive Cases, Contacts To Quarantine Camps." Alas, the latest surge in Australian cases to nosebleed, record highs merely confirms that this unprecedented government lockdown - including masks and vaccines - is nothing more than an exercise in how far government can treat its population as a herd of sheep without provoking a violent response.  The 8th most popular article of 2021 looks at the market insanity of early 2021 when, at the end of January, we saw some of the most-shorted, "meme" stocks explode higher as the Reddit daytrading horde fixed their sights on a handful of hedge funds and spent billions in stimmies in an attempt to force unprecedented ramps. That was the case with "GME Soars 75% After-Hours, Erases Losses After Liquidity-Constrained Robinhood Lifts Trading Ban", which profiled the daytrading craze that gave an entire generation the feeling that it too could win in these manipulated capital markets. Then again, judging by the waning retail interest, it is possible that the excitement of the daytrading army is fading as rapidly as it first emerged, and that absent more "stimmies" markets will remain the playground of the rich and central banks. Kyle Rittenhouse may soon be a very rich man after the ordeal he went through, but the media's mission of further polarizing US society succeeded, and millions of Americans will never accept that the teenager was innocent. It's also why with just over 1 million reads, the 7th most read article on Zero Hedge this year was that "Portland Rittenhouse Protest Escalates Into Riot." Luckily, this is not a mid-term election year and there were no moneyed interests seeking to prolong this particular riot, unlike what happened in the summer of 2020... and what we are very much afraid will again happen next year when very critical elections are on deck.  With just over 1.03 million views, the 6th most popular post focused on a viral Twitter thread on Friday from Dr Robert Laone, which laid out a disturbing trend; the most-vaccinated countries in the world are experiencing  a surge in COVID-19 cases, while the least-vaccinated countries were not. As we originally discussed in ""This Is Worrying Me Quite A Bit": mRNA Vaccine Inventor Shares Viral Thread Showing COVID Surge In Most-Vaxxed Countries", this trend has only accelerated in recent weeks with the emergence of the Omicron strain. Unfortunately, instead of engaging in a constructive discussion to see why the science keeps failing again and again, Twitter's response was chilling: with just days left in 2021, it suspended the account of Dr. Malone, one of the inventors of mRNA technology. Which brings to mind something Aaron Rogers said: "If science can't be questioned it's not science anymore it's propaganda & that's the truth." In a year that was marked a flurry of domestic fiascoes by the Biden administration, it is easy to forget that the aged president was also responsible for the biggest US foreign policy disaster since Vietnam, when the botched evacuation of Afghanistan made the US laughing stock of the world after 12 US servicemembers were killed. So it's probably not surprising that over 1.1 million readers were stunned to watch what happened next, which we profiled in the 5th most popular post of 2021, where in response to the Afghan trajedy, "Biden Delivers Surreal Press Conference, Vows To Hunt Down Isis, Blames Trump." One person watching the Biden presser was Xi Jinping, who may have once harbored doubts about reclaiming Taiwan but certainly does not any more. The 4th most popular article of 2021 again has to do with with covid, and specifically the increasingly bizarre clinical response to the disease. As we detailed in "Something Really Strange Is Happening At Hospitals All Over America" while emergency rooms were overflowing, it certainly wasn't from covid cases. Even more curiously, one of the primary ailments leading to an onslaught on ERs across the nation was heart-related issues, whether arrhytmia, cardiac incidents or general heart conditions. We hope that one day there will be a candid discussion on this topic, but until then it remains one of the topics seen as taboo by the mainstream media and the deplatforming overlords, so we'll just leave it at that. We previously discussed the anti-Ivermectin narrative that dominated the mainstream press throughout 2021 and the 3rd most popular article of the year may hold clues as to why: in late September, pharma giant Pfizer and one of the two companies to peddle an mRNA based vaccine, announced that it's launching an accelerated Phase 2/3 trial for a COVID prophylactic pill designed to ward off COVID in those may have come in contact with the disease. And, as we described in "Pfizer Launches Final Study For COVID Drug That's Suspiciously Similar To 'Horse Paste'," 1.75 million readers learned that Pfizer's drug shared at least one mechanism of action as Ivermectin - an anti-parasitic used in humans for decades, which functions as a protease inhibitor against Covid-19, which researchers speculate "could be the biophysical basis behind its antiviral efficiency." Surely, this too was just another huge coincidence. In the second most popular article of 2021, almost 2 million readers discovered (to their "shock") that Fauci and the rest of Biden's COVID advisors were proven wrong about "the science" of COVID vaccines yet again. After telling Americans that vaccines offer better protection than natural infection, a new study out of Israel suggested the opposite is true: natural infection offers a much better shield against the delta variant than vaccines, something we profiled in "This Ends The Debate' - Israeli Study Shows Natural Immunity 13x More Effective Than Vaccines At Stopping Delta." We were right about one thing: anyone who dared to suggest that natural immunity was indeed more effective than vaccines was promptly canceled and censored, and all debate almost instantly ended. Since then we have had tens of millions of "breakout" cases where vaccinated people catch covid again, while any discussion why those with natural immunity do much better remains under lock and key. It may come as a surprise to many that the most read article of 2021 was not about covid, or Biden, or inflation, or China, or even the extremely polarized US congress (and/or society), but was about one of the most long-suffering topics on these pages: precious metals and their prices. Yes, back in February the retail mania briefly targeted silver and as millions of reddit daytraders piled in in hopes of squeezing the precious metal higher, the price of silver surged higher only to tumble just as quickly as it has risen as the seller(s) once again proved more powerful than the buyers. We described this in "Silver Futures Soar 8%, Rise Above $29 As Reddit Hordes Pile In", an article which some 2.4 million gold and silver bugs read with hope, only to see their favorite precious metals slump for much of the rest of the year. And yes, the fact that both gold and silver ended the year sharply lower than where they started even though inflation hit the highest level in 40 years, remains one of the great mysteries of 2021. With all that behind us, and as we wave goodbye to another bizarre, exciting, surreal year, what lies in store for 2022, and the next decade? We don't know: as frequent and not so frequent readers are aware, we do not pretend to be able to predict the future and we don't try despite endless allegations that we constantly predict the collapse of civilization: we leave the predicting to the "smartest people in the room" who year after year have been consistently wrong about everything, and never more so than in 2021 (even the Fed admitted it is clueless when Powell said it was time to retire the term "transitory"), which destroyed the reputation of central banks, of economists, of conventional media and the professional "polling" and "strategist" class forever, not to mention all those "scientists" who made a mockery of the "expertise class" with their bungled response to the covid pandemic. We merely observe, find what is unexpected, entertaining, amusing, surprising or grotesque in an increasingly bizarre, sad, and increasingly crazy world, and then just write about it. We do know, however, that after a record $30 trillion in stimulus was conjured out of thin air by the world's central banks and politicians in the past two years, the attempt to reverse this monetary and fiscal firehose in a world addicted to trillions in newly created liquidity now that central banks are freaking out after finally getting ot the inflation they were hoping to create for so long, will end in tears. We are confident, however, that in the end it will be the very final backstoppers of the status quo regime, the central banking emperors of the New Normal, who will eventually be revealed as fully naked. When that happens and what happens after is anyone's guess. But, as we have promised - and delivered - every year for the past 13, we will be there to document every aspect of it. Finally, and as always, we wish all our readers the best of luck in 2022, with much success in trading and every other avenue of life. We bid farewell to 2021 with our traditional and unwavering year-end promise: Zero Hedge will be there each and every day - usually with a cynical smile - helping readers expose, unravel and comprehend the fallacy, fiction, fraud and farce that defines every aspect of our increasingly broken system. Tyler Durden Sun, 01/02/2022 - 03:44.....»»

Category: personnelSource: nytJan 2nd, 2022

Twitter’s Highest-Profile Users Get VIP Treatment When Trolls Strike

Twitter Inc.’s highest-profile users—those with lots of followers or particular prominence—often receive a heightened level of protection from the social network’s content moderators under a secretive program that seeks to limit their exposure to trolls and bullies. Code-named Project Guardian, the internal program includes a list of thousands of accounts most likely to be attacked… Twitter Inc.’s highest-profile users—those with lots of followers or particular prominence—often receive a heightened level of protection from the social network’s content moderators under a secretive program that seeks to limit their exposure to trolls and bullies. Code-named Project Guardian, the internal program includes a list of thousands of accounts most likely to be attacked or harassed on the platform, including politicians, journalists, musicians and professional athletes. When someone flags abusive posts or messages related to those users, the reports are prioritized by Twitter’s content moderation systems, meaning the company reviews them faster than other reports in the queue. [time-brightcove not-tgx=”true”] Twitter says its rules are the same for all users, but Project Guardian ensures that potential issues related to prominent accounts—those that could erupt into viral nightmares for the users and for the company—are dealt with ahead of complaints from people who aren’t part of the program. This VIP group, which most members don’t even know they’re a part of, is intended to remove abusive content that could have the most reach and is most liable to spread on the social-media site. It also helps protect the Twitter experience of those prominent users, making them more likely to keep tweeting—and perhaps less apt to complain about abuse or harassment issues publicly. “Project Guardian is just the internal name for one of many automated tools we deploy to identify potentially abusive content,” Katrina Lane, vice president for Twitter’s service organization, which runs the program, said in a statement. “The techniques it uses are the same ones that protect all people on the service.” The list of users protected by Project Guardian changes regularly, according to Yoel Roth, Twitter’s head of site integrity, and doesn’t only include famous users. The program is also used to increase protection for people who unintentionally find the limelight because of a controversial tweet, or because they’ve suddenly been targeted by a Twitter mob. That means some Twitter users are added to the list temporarily while they have the world’s attention; others are on the list at almost all times. “The reason this concept existed is because of the ‘person of the day’ phenomenon,” Roth says. “And on that basis, there are some people who are the ‘person of the day’ most days, and so Project Guardian would be one way to protect them.” The program’s existence raises an obvious question: If Twitter can more quickly and efficiently protect some of its most visible users—or those who have suddenly become famous—why couldn’t it do the same for all accounts that find themselves on the receiving end of bullying or abuse? The short answer is scale. With more than 200 million daily users, Twitter has too many abuse reports to handle all of them simultaneously. That means that reports are prioritized using several different data points, including how many followers a user has, how many impressions a tweet is getting, or how likely it is that the tweet in question is abusive. An account’s inclusion in Project Guardian is just one of those signals, though people familiar with the program believe it’s a powerful one. Roth said the distinction can’t apply to everybody, or it would mean that there’s no point in having a list. “If the list becomes too big, it stops being valuable as a signal,” he added. “We really want to focus on the people who are getting an exceptional or unprecedented amount of prominence in a specific moment…this is really focused on a small slice of accounts.” Project Guardian has been used to protect users from a range of different professions. YouTube star and makeup artist James Charles was added to the program earlier this year after being harassed online. Egyptian internet activist Wael Ghonim has also been part of Project Guardian, as has former U.S. Food and Drug Administration Commissioner Scott Gottlieb, who tweets often about Covid-19 vaccines. The program has also included journalists—even news interns—who write about topics that can result in harassment, like 8chan or the Jan. 6 riot at the U.S. Capitol. Twitter has used Project Guardian to protect its own employees, including Roth. After the company first fact-checked then-President Donald Trump’s tweets in May 2020, Roth was singled out by Trump and his supporters as the employee behind the decision, leading to attacks and death threats. Roth, who wasn’t actually the employee who made the call, says he was temporarily added to the Project Guardian list at the time. “All of a sudden I became a lot more famous than I was the day before,” Roth explained. He said he was removed from the program after the harassment started to slow down. Accounts are added to the list in several ways, including by recommendation from Twitter employees who witness a user getting attacked and request added protection. In some cases, a famous Twitter user’s manager or agent will approach the company and ask for extra protection for their client. Social media managers at news organizations have also requested extra protection for their colleagues who write high-profile or controversial stories. Users who are in the program don’t necessarily know they are receiving any extra attention. “We look at it as, who are the people who we know have been the targets of abuse or who are predicted to be likely targets of abuse?” Roth said. Twitter said it is getting better at detecting abuse and harassment automatically, meaning it doesn’t need to wait for a user to report a problem before it can send it to a human moderator. The company says its technology now flags 65% of the abusive content it removes or asks people to delete before a user ever reports it. Lane said Twitter uses both technology and human review “to proactively monitor Tweets and Trends, especially when someone is put in the spotlight unexpectedly or there is a significant uptick in abuse or harassment.” It’s not clear whether there was any one event or incident that sparked Project Guardian, though it has existed for at least a couple of years, people familiar with the program said. The list doesn’t just protect prominent users; it also helps protect Twitter’s reputation. In years past, Twitter’s image has suffered when high-profile users publicly criticize the service—or abandon it entirely—because of a failure to combat abuse and harassment. It’s been particularly common with famous women. Model Chrissy Teigen, singer Lizzo, actor Leslie Jones and New York Times journalist Maggie Haberman have all publicly stepped back from the service after being swamped with negative tweets and messages. (They’ve all since returned.) More recently, celebrities calling out Twitter for constant harassment seems to be happening less often, though, and some people familiar with the company believe Project Guardian is one reason. Twitter’s program is another instance of the different treatment that social media apps provide to certain pre-eminent users and accounts. A Wall Street Journal investigative report from September found that Meta Platforms Inc., which owns Facebook and Instagram, was giving some prominent users special exemptions from some of its rules, leaving up content from these people that would have been flagged or removed from others. Twitter officials are adamant that Project Guardian is different, and that all users on its platform are held to the same rules. Reports related to users who are part of Project Guardian are judged the same way as all other content reports—the process usually just happens faster. While Twitter’s rules may apply to everyone, punishments for breaking those rules aren’t always equal. World leaders, for example, have more leeway when breaking Twitter’s rules than most of its users. Twitter and Meta have also spent years cultivating relationships with high-profile users, creating teams to help those people use their products and to provide hands-on assistance when needed. In 2016, Twitter stopped showing ads to a small group of prominent users with the goal of improving their experience......»»

Category: topSource: timeDec 8th, 2021

Futures Rebound From Friday Rout As Omicron Fears Ease

Futures Rebound From Friday Rout As Omicron Fears Ease S&P futures and European stocks rebounded from Friday’s selloff while Asian shares fell, as investors took comfort in reports from South Africa which said initial data doesn’t show a surge of hospitalizations as a result of the omicron variant, a view repeated by Anthony Fauci on Sunday. Meanwhile, fears about a tighter Fed were put on the backburner. Also overnight, China’s central bank announced it will cut the RRR by 50bps releasing 1.2tn CNY in liquidity, a move that had been widely expected. The cut comes as insolvent Chinese property developer Evergrande was said to be planning to include all its offshore public bonds and private debt obligations in a restructuring plan. US equity futures rose 0.3%, fading earlier gains, and were last trading at 4,550. Nasdaq futures pared losses early in the U.S. morning, trading down 0.4%. Oil rose after Saudi Arabia boosted the prices of its crude, signaling confidence in the demand outlook, which helped lift European energy shares. The 10-year Treasury yield advanced to 1.40%, while the dollar was little changed and the yen weakened. “A wind of relief may blow the current risk-off trading stance away this week,” said Pierre Veyret, a technical analyst at U.K. brokerage ActivTrades. “Concerns related to the omicron variant may ease after South African experts didn’t register any surge in deaths or hospitalization.” As Bloromberg notes, the mood across markets was calmer on Monday after last week’s big swings in technology companies and a crash in Bitcoin over the weekend. Investors pointed to good news from South Africa that showed hospitals haven’t been overwhelmed by the latest wave of Covid cases. Initial data from South Africa are “a bit encouraging regarding the severity,” Anthony Fauci, U.S. President Joe Biden’s chief medical adviser, said on Sunday. At the same time, he cautioned that it’s too early to be definitive. Here are some of the biggest U.S. movers today: Alibaba’s (BABA US) U.S.-listed shares rise 1.9% in premarket after a 8.2% drop Friday prompted by the delisting plans of Didi Global. Alibaba said earlier it is replacing its CFO and reshuffling the heads of its commerce businesses Rivian (RIVN US) has the capabilities to compete with Tesla and take a considerable share of the electric vehicle market, Wall Street analysts said as they started coverage with overwhelmingly positive ratings. Shares rose 2.2% initially in U.S. premarket trading, but later wiped out gains to drop 0.9% Stocks tied to former President Donald Trump jump in U.S. premarket trading after his media company agreed to a $1 billion investment from a SPAC Cryptocurrency-exposed stocks tumble amid volatile trading in Bitcoin, another indication of the risk aversion sweeping across financial markets Laureate Education (LAUR US) approved the payment of a special cash distribution of $0.58 per share. Shares rose 2.8% in postmarket Friday AbCellera Biologics (ABCL US) gained 6.2% postmarket Friday after the company confirmed that its Lilly-partnered monoclonal antibody bamlanivimab, together with etesevimab, received an expanded emergency use authorization from the FDA as the first antibody therapy in Covid-19 patients under 12 European equities drifted lower after a firm open. Euro Stoxx 50 faded initial gains of as much as 0.9% to trade up 0.3%. Other cash indexes follow suit, but nonetheless remain in the green. FTSE MIB sees the largest drop from session highs. Oil & gas is the strongest sector, underpinned after Saudi Arabia raised the prices of its crude. Tech, autos and financial services lag. Companies that benefited from increased demand during pandemic-related lockdowns are underperforming in Europe on Monday as investors assess whether the omicron Covid variant will force governments into further social restrictions. Firms in focus include meal-kit firm HelloFresh (-2.3%) and online food delivery platforms Delivery Hero (-5.4%), Just Eat Takeaway (-5.6%) and Deliveroo (-8.5%). Remote access software firm TeamViewer (-3.7%) and Swedish mobile messaging company Sinch (-3.0%), gaming firm Evolution (-4.2%). Online pharmacies Zur Rose (-5.1%), Shop Apotheke (-3.5%). Online grocer Ocado (-2.2%), online apparel retailer Zalando (-1.5%). In Asia, the losses were more severe as investors remained wary over the outlook for U.S. monetary policy and the spread of the omicron variant.  The Hang Seng Tech Index closed at the lowest level since its inception. SoftBank Group Corp. fell as much as 9% in Tokyo trading as the value of its portfolio came under more pressure. The MSCI Asia Pacific Index slid as much as 0.9%, hovering above its lowest finish in about a year. Consumer discretionary firms and software technology names contributed the most to the decline, while the financial sector outperformed.  Hong Kong’s equity benchmark was among the region’s worst performers amid the selloff in tech shares. The market also slumped after the omicron variant spread among two fully vaccinated travelers across the hallway of a quarantine hotel in the city, unnerving health authorities. “People are waiting for new information on the omicron variant,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management in Tokyo. “We’re at a point where it’s difficult to buy stocks.” Separately, China’s central bank announced after the country’s stock markets closed that it will cut the amount of cash most banks must keep in reserve from Dec. 15, providing a liquidity boost to economic growth.  Futures on the Nasdaq 100 gained further in Asia late trading. The underlying gauge slumped 1.7% on Friday, after data showed U.S. job growth had its smallest gain this year and the unemployment rate fell more than forecast. Investors seem to be focusing more on the improved jobless rate, as it could back the case for an acceleration in tapering, Ichikawa said.  Asian equities have been trending lower since mid-November amid a selloff in Chinese technology giants, concern over U.S. monetary policy and the spread of omicron. The risk-off sentiment pushed shares to a one-year low last week.  Overnight, the PBoC cut the RRR by 50bps (as expected) effective 15th Dec; will release CNY 1.2tln in liquidity; RRR cut to guide banks for SMEs and will use part of funds from RRR cut to repay MLF. Will not resort to flood-like stimulus; will reduce capital costs for financial institutions by around CNY 15bln per annum. The news follows earlier reports via China Securities Daily which noted that China could reduce RRR as soon as this month, citing a brokerage firm. However, a separate Chinese press report noted that recent remarks by Chinese Premier Li on the reverse repo rate doesn't mean that there will be a policy change and an Economics Daily commentary piece suggested that views of monetary policy moves are too simplistic and could lead to misunderstandings after speculation was stoked for a RRR cut from last week's comments by Premier Li. Elsewhere, Indian stocks plunged in line with peers across Asia as investors remained uncertain about the emerging risks from the omicron variant in a busy week of monetary policy meetings.   The S&P BSE Sensex slipped 1.7% to 56,747.14, in Mumbai, dropping to its lowest level in over three months, with all 30 shares ending lower. The NSE Nifty 50 Index also declined by a similar magnitude. Infosys Ltd. was the biggest drag on both indexes and declined 2.3%.  All 19 sub-indexes compiled by BSE Ltd. declined, led by a measure of software exporters.  “If not for the new omicron variant, economic recovery was on a very strong footing,” Mohit Nigam, head of portfolio management services at Hem Securities Ltd. said in a note. “But if this virus quickly spreads in India, then we might experience some volatility for the coming few weeks unless development is seen on the vaccine side.” Major countries worldwide have detected omicron cases, even as the severity of the variant still remains unclear. Reserve Bank of Australia is scheduled to announce its rate decision on Tuesday, while the Indian central bank will release it on Dec. 8. the hawkish comments by U.S. Fed chair Jerome Powell on tackling rising inflation also weighed on the market Japanese equities declined, following U.S. peers lower, as investors considered prospects for inflation, the Federal Reserve’s hawkish tilt and the omicron virus strain. Telecommunications and services providers were the biggest drags on the Topix, which fell 0.5%. SoftBank Group and Daiichi Sankyo were the largest contributors to a 0.4% loss in the Nikkei 225. The Mothers index slid 3.8% amid the broader decline in growth stocks. A sharp selloff in large technology names dragged U.S. stocks lower Friday. U.S. job growth registered its smallest gain this year in November while the unemployment rate fell by more than forecast to 4.2%. There were some good aspects in the U.S. jobs data, said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute. “We’re in this contradictory situation where there’s concern over an early rate hike given the economic recovery, while at the same time there’s worry over how the omicron variant may slow the current recovery.” Australian stocks ended flat as staples jumped. The S&P/ASX 200 index closed little changed at 7,245.10, swinging between gains and losses during the session as consumer staples rose and tech stocks fell. Metcash was the top performer after saying its 1H underlying profit grew 13% y/y. Nearmap was among the worst performers after S&P Dow Jones Indices said the stock will be removed from the benchmark as a result of its quarterly review. In New Zealand, the S&P/NZX 50 index fell 0.6% to 12,597.81. In FX, the Bloomberg Dollar Spot Index gave up a modest advance as the European session got underway; the greenback traded mixed versus its Group-of-10 peers with commodity currencies among the leaders and havens among the laggards. JPY and CHF are the weakest in G-10, SEK outperforms after hawkish comments in the Riksbank’s minutes. USD/CNH drifts back to flat after a fairly well telegraphed RRR cut materialized early in the London session.  The euro fell to a day low of $1.1275 before paring. The pound strengthened against the euro and dollar, following stocks higher. Bank of England deputy governor Ben Broadbent due to speak. Market participants will be watching for his take on the impact of the omicron variant following the cautious tone of Michael Saunders’ speech on Friday. Treasury yields gapped higher at the start of the day and futures remain near lows into early U.S. session, leaving yields cheaper by 4bp to 5bp across the curve. Treasury 10-year yields around 1.395%, cheaper by 5bp vs. Friday’s close while the 2s10s curve steepens almost 2bps with front-end slightly outperforming; bunds trade 4bp richer vs. Treasuries in 10-year sector. November's mixed U.S. jobs report did little to shake market expectations of more aggressive tightening by the Federal Reserve. Italian bonds outperformed euro-area peers after Fitch upgraded the sovereign by one notch to BBB, maintaining a stable outlook. In commodities, crude futures drift around best levels during London hours. WTI rises over 1.5%, trading either side of $68; Brent stalls near $72. Spot gold trends lower in quiet trade, near $1,780/oz. Base metals are mixed: LME copper outperforms, holding in the green with lead; nickel and aluminum drop more than 1%. There is nothing on today's economic calendar. Focus this week includes U.S. auctions and CPI data, while Fed speakers enter blackout ahead of next week’s FOMC. Market Snapshot S&P 500 futures up 0.7% to 4,567.50 STOXX Europe 600 up 0.8% to 466.39 MXAP down 0.9% to 189.95 MXAPJ down 1.0% to 617.01 Nikkei down 0.4% to 27,927.37 Topix down 0.5% to 1,947.54 Hang Seng Index down 1.8% to 23,349.38 Shanghai Composite down 0.5% to 3,589.31 Sensex down 1.5% to 56,835.37 Australia S&P/ASX 200 little changed at 7,245.07 Kospi up 0.2% to 2,973.25 Brent Futures up 2.9% to $71.89/bbl Gold spot down 0.2% to $1,780.09 U.S. Dollar Index up 0.15% to 96.26 German 10Y yield little changed at -0.37% Euro down 0.2% to $1.1290 Top Overnight News from Bloomberg Speculators were caught offside in both bonds and stocks last week, increasing their bets against U.S. Treasuries and buying more equity exposure right before a bout of volatility caused the exact opposite moves Inflation pressure in Europe is still likely to be temporary, Eurogroup President Paschal Donohoe said Monday, even if it is taking longer than expected for it to slow China Evergrande Group’s stock tumbled close to a record low amid signs a long-awaited debt restructuring may be at hand, while Kaisa Group Holdings Ltd. faces a potential default this week in major tests of China’s ability to limit fallout from the embattled property sector China Evergrande Group is planning to include all its offshore public bonds and private debt obligations in a restructuring that may rank among the nation’s biggest ever, people familiar with the matter said China tech shares tumbled on Monday, with a key gauge closing at its lowest level since launch last year as concerns mount over how much more pain Beijing is willing to inflict on the sector The U.S. is poised to announce a diplomatic boycott of the Beijing Winter Olympics, CNN reported, a move that would create a new point of contention between the world’s two largest economies SNB Vice President Fritz Zurbruegg to retire at the end of July 2022, according to statement Bitcoin has markedly underperformed rivals like Ether with its weekend drop, which may underscore its increased connection with macro developments Austrians who reject mandatory coronavirus vaccinations face 600-euro ($677) fines, according to a draft law seen by the Kurier newspaper Some Riksbank board members expressed different nuances regarding the asset holdings and considered that it might become appropriate for the purchases to be tapered further next year,  the Swedish central bank says in minutes from its Nov. 24 meeting A more detailed look at global markets courtesy of Newsquawk Asian equities began the week cautiously following last Friday's negative performance stateside whereby the Russell 2000 and Nasdaq closed lower by around 2% apiece, whilst the S&P 500 and Dow Jones saw shallower losses. The Asia-Pac region was also kept tentative amid China developer default concerns and conflicting views regarding speculation of a looming RRR cut by China's PBoC. The ASX 200 (+0.1%) was initially dragged lower by a resumption of the underperformance in the tech sector, and with several stocks pressured by the announcement of their removal from the local benchmark, although losses for the index were later reversed amid optimism after Queensland brought forward the easing of state border restrictions, alongside the resilience in the defensive sectors. The Nikkei 225 (-0.4%) suffered from the currency inflows late last week but finished off worse levels. The Hang Seng (-1.8%) and Shanghai Comp. (-0.5%) were mixed with Hong Kong weighed by heavy tech selling and as default concerns added to the headwinds after Sunshine 100 Holdings defaulted on a USD 170mln bond payment, whilst Evergrande shares slumped in early trade after it received a demand for payments but noted there was no guarantee it will have the sufficient funds and with the grace period for two offshore bond payments set to expire today. Conversely, mainland China was kept afloat by hopes of a looming RRR cut after comments from Chinese Premier Li that China will cut RRR in a timely manner and a brokerage suggested this could occur before year-end. However, other reports noted the recent remarks by Chinese Premier Li on the reverse repo rate doesn't mean a policy change and that views of monetary policy moves are too simplistic which could lead to misunderstandings. Finally, 10yr JGBs were steady after having marginally extended above 152.00 and with prices helped by the lacklustre mood in Japanese stocks, while price action was tame amid the absence of BoJ purchases in the market today and attention was also on the Chinese 10yr yield which declined by more than 5bps amid speculation of a potentially looming RRR cut. Top Asian News SoftBank Slumps 9% Monday After Week of Bad Portfolio News Alibaba Shares Rise Premarket After Rout, Leadership Changes China PBOC Repeats Prudent Policy Stance With RRR Cut China Cuts Reserve Requirement Ratio as Economy Slows Bourses in Europe kicked off the new trading week higher across the board but have since drifted lower (Euro Stoxx 50 +0.1%; Stoxx 600 +0.3%) following a somewhat mixed lead from APAC. Sentiment across markets saw a fleeting boost after the Asia close as China’s central bank opted to cut the RRR by 50bps, as touted overnight and in turn releasing some CNY 1.2tln in liquidity. This saw US equity futures ticking to marginal fresh session highs, whilst the breakdown sees the RTY (+0.6%) outpacing vs the ES (Unch), YM (+0.3%) and NQ (-0.6%), with the US benchmarks eyeing this week’s US CPI as Fed speakers observe the blackout period ahead of next week’s FOMC policy decision – where policymakers are expected to discuss a quickening of the pace of QE taper. From a technical standpoint, the ESz1 and NQz1 see their 50 DMAs around 4,540 and 16,626 respectively. Back to trade, Euro-indices are off best levels with a broad-based performance. UK’s FTSE 100 (+0.8%) received a boost from base metals gaining impetus on the PBoC RRR cut, with the UK index now the outperformer, whilst gains in Oil & Gas and Banks provide further tailwinds. Sectors initially started with a clear cyclical bias but have since seen a reconfiguration whereby the defensives have made their way up the ranks. The aforementioned Oil & Gas, Banks and Basic Resources are currently the winners amid upward action in crude, yields and base metals respectively. Food & Beverages and Telecoms kicked off the session at the bottom of the bunch but now reside closer to the middle of the table. The downside meanwhile sees Travel & Tech – two sectors which were at the top of the leaderboard at the cash open – with the latter seeing more noise surrounding valuations and the former initially unreactive to UK tightening measures for those travelling into the UK. In terms of individual movers, AstraZeneca (+0.7%) is reportedly studying the listing of its new vaccine division. BT (+1.2%) holds onto gains as Discovery is reportedly in discussions regarding a partnership with BT Sport and is offering to create a JV, according to sources. Taylor Wimpey (Unch) gave up opening gains seen in wake of speculation regarding Elliott Management purchasing a small stake. Top European News Johnson Says U.K. Awaiting Advice on Omicron Risks Before Review Scholz Names Harvard Medical Expert to Oversee Pandemic Policy EU Inflation Still Seen as Temporary, Eurogroup’s Donohoe Says Saudi Crown Prince Starts Gulf Tour as Rivalries Melt Away In FX, the Buck has settled down somewhat after Friday’s relatively frenetic session when price action and market moves were hectic on the back of a rather mixed BLS report and stream of Omicron headlines, with the index holding a tight line above 96.000 ahead of a blank US agenda. The Greenback is gleaning some traction from the firmer tone in yields, especially at the front end of the curve, while also outperforming safer havens and funding currencies amidst a broad upturn in risk sentiment due to perceivably less worrying pandemic assessments of late and underpinned by the PBoC cutting 50 bp off its RRR, as widely touted and flagged by Chinese Premier Li, with effect from December 15 - see 9.00GMT post on the Headline Feed for details, analysis and the initial reaction. Back to the Dollar and index, high betas and cyclicals within the basket are doing better as the latter meanders between 96.137-379 and well inside its wide 95.944-96.451 pre-weekend extremes. AUD/GBP/CAD/NZD - A technical correction and better news on the home front regarding COVID-19 after Queensland announced an earlier date to ease border restrictions, combined to give the Aussie a lift, but Aud/Usd is tightening its grip on the 0.7000 handle with the aid of the PBoC’s timely and targeted easing in the run up to the RBA policy meeting tomorrow. Similarly, the Pound appears to have gleaned encouragement from retaining 1.3200+ status and fending off offers into 0.8550 vs the Euro rather than deriving impetus via a rise in the UK construction PMI, while the Loonie is retesting resistance around 1.2800 against the backdrop of recovering crude prices and eyeing the BoC on Wednesday to see if guidance turns more hawkish following a stellar Canadian LFS. Back down under, the Kiwi is straddling 0.6750 and 1.0400 against its Antipodean peer in wake of a pick up in ANZ’s commodity price index. CHF/JPY/EUR - Still no sign of SNB action, but the Franc has fallen anyway back below 0.9200 vs the Buck and under 1.0400 against the Euro, while the Yen is under 113.00 again and approaching 128.00 respectively, as the single currency continues to show resilience either side of 1.1300 vs its US counterpart and a Fib retracement level at 1.1290 irrespective of more poor data from Germany and a deterioration in the Eurozone Sentix index, but increases in the construction PMIs. SCANDI/EM - The aforementioned revival in risk appetite, albeit fading, rather than Riksbank minutes highlighting diverse opinion, is boosting the Sek, and the Nok is also drawing some comfort from Brent arresting its decline ahead of Usd 70/brl, but the Cnh and Cny have been capped just over 6.3700 by the PBoC’s RRR reduction and ongoing default risk in China’s property sector. Elsewhere, the Try remains under pressure irrespective of Turkey’s Foreign Minister noting that domestic exports are rising and the economy is growing significantly, via Al Jazeera or claiming that the Lira is exposed to high inflation to a degree, but this is a temporary problem, while the Rub is treading cautiously before Russian President Putin and US President Biden make a video call on Tuesday at 15.00GMT. In commodities, WTI and Brent front month futures are firmer on the day with the complex underpinned by Saudi Aramco upping its official selling prices (OSPs) to Asian and US customers, coupled with the lack of progress on the Iranian nuclear front. To elaborate on the former; Saudi Arabia set January Arab light crude oil OSP to Asia at Oman/Dubai average +USD 3.30/bbl which is an increase from this month’s premium of USD 2.70/bbl, while it set light crude OSP to North-West Europe at ICE Brent USD -1.30/bbl vs. this month’s discount of USD 0.30/bbl and set light crude OSP to the US at ASCI +USD 2.15/bbl vs this month’s premium of USD 1.75/bbl. Iranian nuclear talks meanwhile are reportedly set to resume over the coming weekend following deliberations, although the likelihood of a swift deal at this point in time seems minuscule. A modest and fleeting boost was offered to the complex by the PBoC cutting RRR in a bid to spur the economy. WTI Jan resides on either side of USD 68/bbl (vs low USD 66.72/bbl) whilst Brent Feb trades around USD 71.50/bbl (vs low 70.24/bbl). Over to metals, spot gold trades sideways with the cluster of DMAs capping gains – the 50, 200 and 100 DMAs for spot reside at USD 1,792/oz, USD 1,791.50/oz and USD 1,790/oz respectively. Base metals also saw a mild boost from the PBoC announcement – LME copper tested USD 9,500/t to the upside before waning off best levels. US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap We’re really at a fascinating crossroads in markets at the moment. The market sentiment on the virus and the policymakers at the Fed are moving in opposite directions. The greatest impact of this last week was a dramatic 21.1bps flattening of the US 2s10s curve, split almost evenly between 2yr yields rising and 10yrs yields falling. As it stands, the Fed are increasingly likely to accelerate their taper next week with a market that is worried that it’s a policy error. I don’t think it is as I think the Fed is way behind the curve. However I appreciate that until we have more certainly on Omicron then it’s going to be tough to disprove the policy error thesis. The data so far on Omicron can be fitted to either a pessimistic or optimistic view. On the former, it seems to be capable of spreading fast and reinfecting numerous people who have already had covid. Younger people are also seeing a higher proportion of admissions which could be worrying around the world given lower vaccinations levels in this cohort. On the other hand, there is some evidence in South Africa that ICU usage is lower relative to previous waves at the same stage and that those in hospital are largely unvaccinated and again with some evidence that they are requiring less oxygen than in previous waves. It really does feel like Omicron could still go both ways. It seems that it could be both more transmittable but also less severe. How that impacts the world depends on the degree of both. It could be bad news but it could also actually accelerate the end of the pandemic which would be very good news. Lots of people more qualified than me to opine on this aren’t sure yet so we will have to wait for more news and data. I lean on the optimistic side here but that’s an armchair epidemiologist’s view. Anthony Fauci (chief medical advisor to Mr Biden) said to CNN last night that, “We really gotta be careful before we make any determinations that it is less severe or really doesn’t clause any severe illness comparable to Delta, but this far the signals are a bit encouraging….. It does not look like there’s a great degree of severity to it.” Anyway, the new variant has taken a hold of the back end of the curve these past 10 days. Meanwhile the front end is taking its guidance from inflation and the Fed. On cue, could this Friday see the first 7% US CPI print since 1982? With DB’s forecasts at 6.9% for the headline (+5.1% for core) we could get close to breaking such a landmark level. With the Fed on their media blackout period now, this is and Omicron are the last hurdles to cross before the FOMC conclusion on the 15th December where DB expect them to accelerate the taper and head for a March end. While higher energy prices are going to be a big issue this month, the recent falls in the price of oil may provide some hope on the inflation side for later in 2022. However primary rents and owners’ equivalent rents (OER), which is 40% of core CPI, is starting to turn and our models have long suggested a move above 4.5% in H1 2022. In fact if we shift-F9 the model for the most recent points we’re looking like heading towards a contribution of 5.5% now given the signals from the lead indicators. So even as YoY energy prices ease and maybe covid supply issues slowly fade, we still think inflation will stay elevated for some time. As such it was a long overdue move to retire the word transitory last week from the Fed’s lexicon. Another of our favourite measures to show that the Fed is way behind the curve at the moment is the quits rate that will be contained within Wednesday’s October JOLTS report. We think the labour market is very strong in the US at the moment with the monthly employment report lagging that strength. Having said that the latest report on Friday was reasonably strong behind the headline payroll disappointment. We’ll review that later. The rest of the week ahead is published in the day by day calendar at the end but the other key events are the RBA (Tuesday) and BoC (Wednesday) after the big market disruptions post their previous meetings, Chinese CPI and PPI (Thursday), final German CPI (Friday) and the US UoM consumer confidence (Friday). Also look out for Congressional newsflow on how the year-end debt ceiling issue will get resolved and also on any progress in the Senate on the “build back better” bill which they want to get through before year-end. Mr Manchin remains the main powerbroker. In terms of Asia as we start the week, stocks are trading mixed with the CSI (+0.62%), Shanghai Composite (+0.37%) and KOSPI (+0.11%) trading higher while the Nikkei (-0.50%) and Hang Seng (-0.91%) are lower. Chinese stock indices are climbing after optimism over a RRR rate cut after Premier Li Kequiang's comments last week that it could be cut in a timely manner to support the economy. In Japan SoftBank shares fell -9% and for a sixth straight day amid the Didi delisting and after the US FTC moved to block a key sale of a company in its portfolio. Elsewhere futures are pointing a positive opening in US and Europe with S&P 500 (+0.46%) and DAX (+1.00%) futures both trading well in the green. 10yr US Treasury yields are back up c.+4.2bps with 2yrs +2.6bps. Oil is also up c.2.2% Over the weekend Bitcoin fell around 20% from Friday night into Saturday. It’s rallied back a reasonable amount since (from $42,296 at the lows) and now stands at $48,981, all after being nearly $68,000 a month ago. Turning back to last week now, and the virus and hawkish Fed communications were the major themes. Despite so many unknowns (or perhaps because of it) markets were very responsive to each incremental Omicron headline last week, which drove equity volatility to around the highest levels of the year. The VIX closed the week at 30.7, shy of the year-to-date high of 37.21 reached in January and closed above 25 for 5 of the last 6 days. The S&P 500 declined -1.22% over the week (-0.84% Friday). The Stoxx 600 fell a more modest -0.28% last week, -0.57% on Friday. To be honest both felt like they fell more but we had some powerful rallies in between. The Nasdaq had a poorer week though, falling -c.2.6%, after a -1.9% decline on Friday. The other main theme was the pivot in Fed communications toward tighter policy. Testifying to Congress, Fed Chair Powell made a forceful case for accelerating the central bank’s asset purchase taper program, citing persistent elevated inflation and an improving labour market, amid otherwise strong demand in the economy, clearing the way for rate hikes thereafter. Investors priced in higher probability of earlier rate hikes, but still have the first full Fed hike in July 2022. 2yr treasury yields were sharply higher (+9.1bps on week, -2.3bps Friday) while 10yr yields declined (-12.0bps on week, -9.1bps Friday) on the prospect of a hard landing incurred from quick Fed tightening as well as the gloomy Covid outlook. The yield curve flattened -21.1bps (-6.8bps Friday) to 75.6bps, the flattest it has been since December 2020, or three stimulus bills ago if you like (four if you think build back better is priced in). German and UK debt replicated the flattening, with 2yr yields increasing +1.3bps (-0.7bps Friday) in Germany, and +0.3bps (-6.7bps) in UK this week, with respective 10yr yields declining -5.3bps (-1.9bps Friday) and -7.8bps (-6.4bps Friday). On the bright side, Congress passed a stopgap measure to keep the government funded through February, buying lawmakers time to agree to appropriations for the full fiscal year, avoiding a disruptive shutdown. Positive momentum out of DC prompted investors to increase the odds the debt ceiling will be resolved without issue, as well, with yields on Treasury bills maturing in December declining a few basis points following the news. US data Friday was strong. Despite the headline payroll increase missing the mark (+210k v expectations of +550k), the underlying data painted a healthy labour market picture, with the unemployment rate decreasing to 4.2%, and participation increasing to 61.8%. Meanwhile, the ISM services index set another record high. Oil prices initially fell after OPEC unexpectedly announced they would proceed with planned production increases at their January meeting. They rose agin though before succumbing to the Omicron risk off. Futures prices ended the week down again, with Brent futures -3.67% lower (+0.55% Friday) and WTI futures -2.57% on the week (-0.15% Friday). Tyler Durden Mon, 12/06/2021 - 07:51.....»»

Category: smallbizSource: nytDec 6th, 2021

Arbery Jury Declares All 3 Defendants Guilty Of Murder In Racially Charged Case

Arbery Jury Declares All 3 Defendants Guilty Of Murder In Racially Charged Case Update (1345ET): In a high-profile verdict that will likely see liberals across the country celebrate, Travis McMichael, his father, Greg McMichael, and William “Roddie” Bryan have been convicted of murder in the killing of Ahmaud Arbery. Only the younger McMichael was found guilty of "malice murder", the highest charge since he actually pulled the trigger, while the other two were both convicted of felony murder. And the celebration from liberals on Twitter is already beginning to pour in... Travis McMichael has just been found guilty of murder in the Ahmaud Arbery case. The justice system finally did its job!!! — Sabrina (@spiritualSab) November 24, 2021 with Letitia James, NY's AG, was quick to declare that "justice was served" in a tweet. Today, justice was served. I pray that the Arbery family can find some semblance of peace and that we continue to march forward towards justice for all. — NY AG James (@NewYorkStateAG) November 24, 2021 ...as were news headlines. TRAVIS MCMICHAEL CONVICTED OF ALL COUNTS IN ARBERY KILLING GREG MCMICHAEL CONVICTED OF FELONY MURDER IN ARBERY KILLING ARBERY'S KILLERS FOUND GUILTY OF MURDER BY GEORGIA JURY All three men were charged with malice murder, felony murder, aggravated assault, false imprisonment and criminal attempt to commit a felony. The verdict comes just days after the Rittenhouse verdict, which had set critics of the crimininal justice system slamming it, after the teenager was spared charges by a local jury (likely due to specific details of Rittenhouses's case than anything). Arbery was shot and killed on Feb. 23, 2020 and cellphone video leaked to the public show two armed white men in a truck approaching the 25-year-old Black man as he runs down the road. One of the men, later identified as Travis McMichael, and Arbery can be seen struggling over McMichael's shotgun before Arbery is shot and collapses. In the nearly 2 years since, the case has evolved into one of a handful of major criminal cases typically involving white men or white police officers have become symbols for American criminal justice "accountability". Many have noticed that the killing of Arbery yielded three life sentences, the minimum sentence for all three due to the "felony murder" convictions, aka three lives ruined, for the death of one man (and with one defendant who simply helped two friends chase Arbery, while filming the incident. Here's a breakdown of the verdict courtesy of KVUE: Travis McMichael * Count 1: Found guilty of malice murder * Count 2: Found guilty of felony murder * Count 3: Found guilty of felony murder * Count 4: Found guilty of felony murder * Count 5: Found guilty of felony murder * Count 6: Found guilty of aggravated assault * Count 8: Found guilty of false imprisonment * Count 9: Found guilty criminal attempt to commit a felony Gregory McMichael   * Count 1: Found not guilty of malice murder * Count 2: Found guilty of felony murder * Count 3: Found guilty of felony murder * Count 4: Found guilty of felony murder * Count 5: Found guilty of felony murder * Count 6: Found guilty of aggravated assault * Cpount 8: Found guilty of false imprisonment * Count 9: Found guilty criminal attempt to commit a felony William "Roddie" Bryan * Count 1: Found not guilty of malice murder * Count 2: Found not guilty of felony murder * Count 3: Found guilty of felony murder * Count 4: Found guilty of felony murder * Count 5: Found guity of felony murder * Count 6: Found not guilty of aggravated assault * Cpount 8: Found not guilty of false imprisonment * Count 9: Found guilty of criminal attempt to commit a felony * *  * According to Jonathan Turley, the decision has already led lawmakers to abandon what critics have described as "archaic" "citizens arrest" laws. But the decision by the jury should quiet concerns raised in the state where racial tensions have long been used by the left (which itself has been supercharged by the country's obsession with racially charged cases, ideally involving police...) * * * In Georgia, where the trial over the killing of Ahmaud Arbery, is ongoing, Judge Timothy Walmsley delivered a haymaker to the defense on the very eve of closing statements, Johnathan Turley reports. The court ruled that Georgia’s prior citizen’s arrest law is only applicable if a person sees a felony committed and acts without delay. The ruling could be “outcome determinative” in the case by stripping away the core defense that these men were chasing a person suspected of a series of crimes over the last year. Travis McMichael, his father, Greg McMichael, and William “Roddie” Bryan are likely to make this ruling the heart of any appeal if they are convicted. The judge ruled Friday afternoon that the prior citizen’s arrest law requires that the arrest would have to occur right after any felony crime was committed. Bob Rubin, attorney for Travis McMichael, objected that “if you are going to instruct the jury as you say, you are directing a verdict for the state.” Judge Walmsley simply responded “I understand the significance of this charge.” The new law in Georgia removes the right of bystanders or witnesses generally to detain people. Deadly force is not authorized to detain someone unless it is used in the act of self-protection, protecting a home, or preventing a forcible felony. The new law does allow business employees to detain people suspected of theft, including restaurant employees who detain people who try to leave without paying for their meals. Licensed security guards and private detectives are also allowed to detain people. Georgia, however, still retains its “stand your ground” law, which does not require retreat before someone defends themselves. Here is the prior law: O.C.G.A. 17-4-60 (2010) 17-4-60. Grounds for arrest A private person may arrest an offender if the offense is committed in his presence or within his immediate knowledge. If the offense is a felony and the offender is escaping or attempting to escape, a private person may arrest him upon reasonable and probable grounds of suspicion. Walmsley’s interpretation is that even if the offense is committed in a person’s presence or within his immediate knowledge, they must act contemporaneously with that observation.  The active language of the second line would seem to support that meaning of an immediate response to the observed crime. The defense could appeal this ruling and will likely do so with any conviction. One can read the first line to mean that the qualification elements refer to personal observation or knowledge. The second line could then mean that the person, upon confrontation or identification, is attempting to escape.  Moreover, if it is not “committed in his presence,” it is a bit unclear what “within his immediate knowledge” means. It clearly cannot mean the same thing as “committed in his presence.” Thus, it suggests that someone has been informed of the status of the suspect as an offender. Of course, that could still mean, as Judge Walmsley suggests, that the knowledge was “immediate” to the crime like assisting an actual witness to the crime. The history of this provision is highly controversial. Indeed, the problem is that the court must rely on past courts interpreting a law with a horrific legacy not just during the Civil War but later during the Civil Rights movement. The law was created in 1863 and was designed to allow whites to capture fleeing slaves.  The defense could argue that such a purpose contradicts Walmsley’s immediacy element since fleeing slaves could be captured days or weeks after escape. However, the appellate court could rule that the escape was, at that time, considered a crime in progress and thus remained an immediate or ongoing crime.  The appellate court will have to weigh past cases on how the law was interpreted. Whatever happens on appeal, the ruling cut the legs away from the defense. This is a common risk in criminal cases where you build a defense based on an interpretation that the court later rejects on the eve of closing arguments. In my view, courts should avoid this problem by ruling on such threshold legal issues before the trial. As I have noted throughout the trial, both the prosecution and defense counsel were strong in the case. The defense counsel did an effective job in having McMichael go through his training in the Coast Guard. At points he sounded like an expert witness on law enforcement and the use of force. The prosecution did an excellent job in showing that there was no evidence that Arbery had actually stolen anything and how McMichael continued to pursue him as Arbery tried to avoid the trucks. Defense counsel took a considerable risk in putting Travis McMichael on the stand. As a defense attorney, I see the justification for the risk. Indeed, this ruling increases the need for such a Hail Mary play. The thrust of such testimony is not acquittal, which always seemed unlikely. The videotape in the case is too chilling to expect an acquittal. The scene of these men chasing Arbery in their trucks was incredibly upsetting for many of us who watched the videotape. It was equally unnerving to see a law designed to chase down slaves used as a defense.  The testimony of McMichael was more likely part of a strategy for a hung jury — trying to create just enough of a connection with the defendant or reasonable doubt to sway a couple of jurors. Hearing from the defendant can create that type of connection.  While McMichael made admissions like the fact that Arbery did not threaten him before they struggled for the gun, that fact was already obvious from the videotape and the testimony of witnesses. The defense was trying to rebut the image of the videotape showing McMichael shooting Arbery and then walking away. That is not likely to sway an entire jury as opposed to a couple members. However, you need only one holdout for a hung jury. Tyler Durden Wed, 11/24/2021 - 13:49.....»»

Category: smallbizSource: nytNov 24th, 2021

"This Is Code Red": Here"s How Zillow"s Home-Flipping AI Triggered Judgement Day For Real Estate Firm

"This Is Code Red": Here's How Zillow's Home-Flipping AI Triggered Judgement Day For Real Estate Firm Nearly three weeks ago, real estate firm Zillow Group Inc. announced during earnings that it was halting it's AI-powered house-flipping program, firing 25% of its staff, and would be writing down losses of more than a half-billion dollars on the value of its remaining housing portfolio. The resulting carnage brought the company's market cap from a peak of $48.35 billion in February to around $16 billion. The program, Zillow Offers, was originally supposed to make money primarily from transaction fees and services such as title insurance - not from flipping homes for huge profits. And according to a new analysis from The Wall Street Journal, the company's algorithm just "didn't seem to understand the market." The first quarter delivered home-sale profits that were more than twice as high as anticipated... ... By the summer, it had the opposite problem, the company later acknowledged. It was paying too much money for homes, and buying too many of them, just when price increases were starting to slow. -WSJ Zillow's algorithm was designed to predict what a home would be worth in a few months, and offer a cash sum to the seller that would allow the company to make minor upgrades and repairs before flipping it for a tidy sum. Home sellers benefited from an instant cash offer which cut out real-estate agents, along with listing and showings during the Covid-19 pandemic. Zillow's original plan was to make no more than 2% profit so homeowners wouldn't feel cheated. The entire model relied on the algo's ability to predict future home prices based on its already-successful 'Zestimate' - which the company said in recent years was accurate within a median error rate of 2 percentage points. So what went wrong? According to WSJ, Zillow went beyond the limits of their technology in an industry where buyers are ultimately following personal tastes, emotional attachments and other intangible factors. Compounding their missteps, Zillow - while understaffed - scrambled to play catch-up with competitors and disregarded internal concerns that the company was overpaying for homes according to current and former employees. The company also suffered from supply-chain issues and labor shortages that hindered its ability to quickly renovate and flip homes - in what is described as the "breaking point for a business that executives once predicted would generate $20 billion in annual revenue." In order to try and account for aesthetics, Zillow incorporated photographic analysis into its home pricing metrics in 2019, which included factors such as natural light, the quality of interior finishes, and 'curb appeal.' It also hired over 100 pricing analysts to double-check the algo's figures by looking at recent comps in the area, which was aimed at reducing the risk of overpaying - but made it harder to quickly flip a growing portfolio of homes in major metropolitan areas. Then, an unexpected surge in home prices and real estate activity during the pandemic caused their algo to go haywire, as buyer preferences began to change in unusual ways. "That shift in buyer preferences is extremely hard for a machine-learning model to incorporate," said BiggerPockets VP of data and analytics, Dave Meyer. In the spring, Zillow execs and managers huddled for a tense meeting, according to a person who attended. While the company was making more money than anticipated on flips, they were on track to miss their annual target for the number of homes purchased - falling behind top competitor, Opendoor. "This is code red," said Joshua Swift, senior vice president of Zillow Offers, during the virtual meeting. Following the meeting, Zillow hatched "Project Ketchup," designed to speed up the volume of home purchases by purchasing more homes on an accelerated basis - and making offers which were well above what the company's own algorithm predicted as a fair market value, according to people familiar with whjat happened. "Our observed error rate has been far more volatile than we ever expected possible," said CEO Rich Barton. "And makes us look far more like a leveraged housing trader than the market maker we set out to be." Sam Chandan, dean of New York University’s Schack Institute of Real Estate, said the complexity of the housing market makes it difficult to predict home prices months in advance. Some factors that have an impact on a home’s value are hard to capture with algorithms. “The system may capture that there are three bedrooms, but does it capture that they are laid out in a way that makes sense?” he said. -WSJ In Phoenix, home to one of the company's largest portfolios, the median price Zillow paid for homes rose from $351,000 in May to $475,000 in September - at a time when competitors were easing off the throttle on their own purchases, according to Mike DelPrete, a real-estate tech strategist at the University of Colorado Boulder. Fast forward two months later, and Barton now says the company expects to sell its homes at a 5-7% loss, down from an average profit of nearly 6% in the second quarter. The company halted its future home purchases for the remainder of the year in mid-October, and notably shut down Zillow offers for good earlier this month. "We determined that further scaling up Zillow Offers is too risky, too volatile to our earnings and operations, too low of a return on equity opportunity and too narrow in its ability to serve our customers," he said. Did Zillow Offers' AI become sentient and decide to nuke its creator? One can never know these days. Tyler Durden Thu, 11/18/2021 - 17:20.....»»

Category: smallbizSource: nytNov 18th, 2021

Crypto exchange Kraken promises to list shiba inu on Tuesday, and asks the SHIBarmy to vote on it

Kraken said it would list record-breaking meme token shiba inu on the online exchange on Tuesday if the idea got 2,000 Twitter "likes". Shiba Inu Imajin No Asking Kraken said it would list shiba inu on its platform on Tuesday if the idea got 2,000 Twitter "likes". The SHIBarmy of fans quickly hit the target, but the coin has not yet appeared on the crypto exchange. The dogecoin-inspired token's price has shot up recently, thanks in part to Elon Musk's tweets. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Crypto exchange Kraken plans to list shiba inu on its trading platform on Tuesday, it signaled by asking fans of the meme coin to vote on Twitter.The company called on the token's fans to back the idea in a poll posted to Twitter Monday. Kraken product lead Brian Hoffman would add shiba inu to its cryptocurrency roster if it got 2,000 "likes," it said."@brianchoffman said if we get 2,000 likes we will list $SHIB tomorrow - but he doesn't think we can do it. #SHIBArmy where you at?" the company said in the tweet.The SHIBarmy - the die-hard fans who have driven the token's record-setting rise - showed up in full force with more than 58,700 likes and 14,500 retweets as of Tuesday morning. They hit the target in less than 20 minutes.However, shiba inu did not appear to have been added to Kraken's platform yet. The online crypto exchange, one of the biggest in the world, already lists 93 assets from market leader bitcoin to popular altcoins cardano and solano.The dogecoin-inspired token's fans on Twitter urged people to "make some noise" for Kraken, welcomed newcomers to the army and said they expect shiba inu to rally more.Investors have been riding high on shiba inu's epic recent rise. The dogecoin-inspired token's price has risen more than 900% in the past month, lifted by the enthusiasm of fans and in part by tweets from Tesla CEO Elon Musk, who owns a shiba inu puppy. On Tuesday, though, its price was down 2.4% from 24 hours ago, to stand at $0.00006973.Not everyone in the crypto space thinks shiba inu is a great investment. "Memes are more like lottery tickets than an investment," James Butterfill, investment strategist at crypto product platform CoinShares, told Insider. He said shiba inu completely lacks any fundamentals or potential end-use, and therefore should not be taken seriously."We believe it is very difficult to grasp when the meme will capture the imagination of investors, and should therefore be looked at with extreme caution," he added.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 2nd, 2021

Futures Meltup To New All Time High As November Begins With A Bang

Futures Meltup To New All Time High As November Begins With A Bang US futures and European stocks rose to a new record high to start the historically stellar month of November... ... and Asian markets jumped amid positive earnings surprises and as concerns of a global stagflation and central bank policy error faded for a few hours (they will return shortly). TSLA melted up by another $35BN in market cap "because gamma." S&P 500 futures climbed 0.4% after the cash index posted the biggest monthly gain since last November. Treasury Secretary Janet Yellen expressed confidence in the continuing recovery from the pandemic, helping spur gains in equity markets. Health-care shares rallied in Europe. The dollar and Treasury yields advanced as investors awaited this week’s Federal Reserve meeting to announce the start of tapering (which will then lead to rate hikes next July according to Goldman). Oil rebounded on fresh supply concerns. In addition to the now absolutely batshit insane meltup in Tesla, which won't end until the SEC cracks down on gamma squeeze manipulation, other mega-cap technology stocks such as Google, Meta, Microsoft, Amazon.and Apple, aka oddly enough GAMMA, traded mixed. Exxon and Chevron added about 0.7% each as JP Morgan raised its price target on the oil majors following their strong quarterly results last week. Major Wall Street banks gained between 0.2% and 0.8%. The broader S&P 500 financials sector slipped last week, breaking a three-week winning streak. Lucid Group Inc. rose 4.8% in premarket, extending its advance from last week, after the new U.S. tax plan included a proposal to make EV tax credits more widely available. Harley-Davidson Inc jumped 8.2% after the European Union removed retaliatory tariffs on U.S. products including whiskey, power boats and company’s motorcycles. Here are the most notable pre-market movers: Tesla shares rise 2.3% in U.S. premarket trading after their biggest monthly gain in almost a year in October ABVC BioPharma jumps more than 700% as thelittle known biotechnology company garners attention from retail traders on social media Ocugen and Zosano (ZSAN US) are some other top gainers among retail trader stocks in premarket A largely upbeat earnings season has helped investors look past a mixed-macro economic picture, with the benchmark S&P 500 and the tech-heavy Nasdaq recording their best monthly performance since November 2020 in October. Of the 279 S&P 500 companies that have reported quarterly results, 87% have met or exceeded estimates. Among members of Europe’s Stoxx 600 index, 68% surpassed expectations. On the economic data front, readings on October factory activity data from IHS Markit and ISM are due after market open, followed by non-farm payrolls on Friday. Focus is now on the Fed’s two-day policy meeting which concludes at 2pm on Nov 3, where the central bank will announce the tapering of its $120 billion monthly bond buying program by $15 billion. With recent U.S. data showing inflation pressures building, the market has also started pricing in rate hikes next year. November and December tend to be among the strongest months for stocks and any hawkish tilt in the Fed’s message could catch equities by surprise.  Meanwhile, Biden’s economic agenda seemed to be on track as Democratic lawmakers worked to overcome their differences on a $1.75 trillion social-spending plan. “Depending on where you are looking, you are getting very different stories on the outlook for global markets,” Kerry Craig, global market strategist at JPMorgan Asset Management, said on Bloomberg Television. “If you look at equities and the rally you are seeing, you think everything is OK. If you look at the bond market and how yields are moving, there’s obviously a lot more concern around inflation and policy normalization.” European stocks hit the afterburner out of the gate with the Euro Stoxx 50 adding as much as 1% before drifting off best levels. FTSE MIB and IBEX outperform, FTSE 100 lags slightly. Banks, construction and travel are the strongest sectors; tech the sole Stoxx 600 sector in the red. Barclays Plc fell 1.5%. Chief Executive Officer Jes Staley stepped down amid a U.K. regulatory probe into how he characterized his ties to the financier and sex offender Jeffrey Epstein. Asian stocks were poised to snap a three-day decline thanks to a rally in Japanese equities, which got a boost from an election victory for the country’s ruling party and Prime Minister Fumio Kishida.  The MSCI Asia Pacific Index advanced as much as 0.6%, while Japan’s benchmark Topix and the blue-chip Nikkei 225 Stock Average each added more than 2%. Sony Group, Toyota Motor and Tokyo Electron were among the single-largest contributors to the regional measure’s rise. By sector, industrials and information-technology companies provided the biggest boosts.  Japan’s ruling Liberal Democratic Party defied worst-case scenarios to secure a majority by itself in a closely-watched election Sunday. Analysts said the outcome signals political stability, paving the way for economic stimulus to be executed as anticipated (see Street Wrap).  “Indicators of market activity show that there will be a positive market impact to the election, as although it was not greatly different than expectations, the LDP clearly surpassed some of the more dire polls of last week and there will not likely be any party shake-up in the intermediate-term,” John Vail, Tokyo-based chief global strategist at Nikko Asset Management wrote in a note.  The market is also “reacting positively” to Friday’s share-price gains in the U.S., Vail said. Futures on the S&P 500 rose during Asian trading hours after the underlying gauge added 0.2%.  Asia’s regional benchmark capped a weekly drop of 1.5%, its worst such performance since early October, as disappointing results weighed on big technology stocks. More than half of the companies on the MSCI Asia Pacific Index have reported results for the latest quarter with about 37% posting a positive surprise, according to data compiled by Bloomberg. Australia's S&P/ASX 200 index rose 0.6% to 7,370.80, recouping some losses after Friday’s 1.4% plunge. Health and consumer discretionary stocks contributed the most to the benchmark’s gain. WiseTech was among the top performers, snapping a four-day losing streak. Westpac was the worst performer after the bank delivered a smaller share buyback than some had expected. In New Zealand, the S&P/NZX 50 index fell 0.5% to 13,030.31. In rates, fixed income trades heavy with gilts leading the long end weakness. Treasuries were slightly cheaper on the long-end of the curve as S&P 500 futures exceed last week’s record highs. Yields are cheaper by 2bp to 2.5bp from belly out to long-end, with front-end slightly outperforming and steepening 2s10s spread by 1.7bp; 10-year yields around 1.58% with gilts underperforming by 1.1bp, Italian bonds by 3.5bp. Gilts and Italian bonds lag, with Bank of England rate decision due Thursday. In the U.S., weekly highlights include refunding announcement and FOMC Wednesday and Friday’s October jobs report. Bund and gilt curves bear steepen with gilts ~1bps cheaper to bunds. Peripheral spreads swing an early tightening to a broad widening to core with Italy the weakest performer. Overnight futures and options flows included block seller in 5-year note futures (3,900 at 3:09am ET) and a buyer of TY Week 1 129.00 puts at 3 on 10,000, says London trader. In FX, the Bloomberg dollar index held a narrow range. SEK and CHF top the G-10 score board, GBP lags with cable snapping below 1.3650. TRY outperforms EMFX peers. The BBDXY inched up and the greenback traded mixed against its Group-of-10 peers, with many of the risk-sensitive currencies leading gains The pound retraced some losses against the dollar, after dipping earlier in the European session. The yield on 2-year gilts hit the highest since May 2019. Financial markets are almost fully pricing in a 15-basis point increase in the Bank of England’s benchmark lending rate on Nov. 4, while economists increasingly share that view, even as they see the decision as a far closer call. A record share of U.K. businesses are expecting to increase prices, adding to the inflationary pressures confronting Bank of England policy makers ahead of their meeting on Thursday Australian bonds extended opening gains as traders positioned for the Reserve Bank’s policy decision Tuesday. The Aussie fell, tracking losses in iron ore prices following a weak China PMI, which showed signs of further weakness in October The yen fell for a second day after the ruling Liberal Democratic Party retained its outright majority in a lower-house election, reinforcing bets for fiscal stimulus and reforms. Hedge funds boosted net short positions on the yen to the most since January 2019, raising the risk of a squeeze should risk appetite deteriorate suddenly and demand for havens rise The Turkish lira edged higher after Turkish President Recep Tayyip Erdogan said he had “positive” talks with U.S. President Joe Biden In commodities, crude futures drift higher. WTI adds 40c to trade near $84; Brent rises ~1% near $84.50. Spot gold is quiet near $1,786/oz. Base metals are mixed: LME nickel and tin outperform, zinc lags. Looking at today's calendar, earnings continue on Monday with PG&E and ON Semiconductor reporting pre-market, and NXP Semiconductors post-market. We also get the latest Mfg PMI print and the October Mfg ISM print. Market Snapshot S&P 500 futures up 0.3% to 4,612.25 STOXX Europe 600 up 0.8% to 479.40 MXAP up 0.4% to 198.04 MXAPJ down 0.3% to 645.49 Nikkei up 2.6% to 29,647.08 Topix up 2.2% to 2,044.72 Hang Seng Index down 0.9% to 25,154.32 Shanghai Composite little changed at 3,544.48 Sensex up 1.3% to 60,079.40 Australia S&P/ASX 200 up 0.6% to 7,370.78 Kospi up 0.3% to 2,978.94 Brent Futures up 0.3% to $83.95/bbl Gold spot down 0.0% to $1,783.20 U.S. Dollar Index little changed at 94.14 German 10Y yield little changed at -0.091% Euro up 0.1% to $1.1571 Top Overnight News from Bloomberg House Democratic leaders are pushing hard to get Biden’s package finalized, with votes on both that bill and a smaller infrastructure plan this week -- the latest in a string of self- imposed deadlines. The Senate, which already approved the public-works bill, is likely to vote on the larger package later in the month Leaders of the Group of 20 countries agreed on a climate deal that fell well short of what some nations were pushing for, leaving it to negotiators at the COP26 summit in Glasgow this week to try to achieve a breakthrough The U.K. said it will trigger legal action against France within 48 hours unless a dispute over post-Brexit fishing rights is resolved, as the growing spat threatens to overshadow the United Nations’ climate summit Treasury Secretary Janet Yellen said she believes Federal Reserve Chair Jerome Powell has taken “significant action” in the wake of revelations over the personal investments of U.S. central-bank policy makers; Yellen dismissed recent moves in the bond market that have signaled concern about monetary policy makers squelching economic growth, and expressed confidence in the continuing recovery from the Covid-19 pandemic The U.S. and the European Union have reached a trade truce on steel and aluminum that will allow the allies to remove tariffs on more than $10 billion of their exports each year Asia-Pac bourses traded mostly higher amid tailwinds from last Friday's fresh record highs in the US where Wall St. topped off its best monthly performance YTD, but with some of the advances in the region capped as participants digested mixed Chinese PMI data and ahead of this week’s slew of key risk events including crucial central bank policy announcements from the RBA, BOE and FOMC, as well as the latest NFP jobs data. ASX 200 (+0.8%) was led higher by the consumer-related sectors amid a reopening play after Australia permitted fully vaccinated citizens to travel internationally again and with several M&A related headlines adding to the optimism including the Brookfield-led consortium acquisition of AusNet Services and Seven West Media’s takeover of Prime Media. Conversely, the largest weighted financials sector failed to join in on the spoils with Westpac shares heavily pressured following its FY results which fell short of analyst estimates despite more than doubling on its cash earnings. Nikkei 225 (+2.5%) was the biggest gainer with the index underpinned by favourable currency flows and following the general election in which the ruling LDP maintained a majority in the lower house although won fewer seats than previously for its slimmest majority since 2012, while the KOSPI (+0.4%) was kept afloat but with upside limited by slightly softer than expected trade data. Hang Seng (-1.5%) and Shanghai Comp. (+0.1%) were subdued amid a slew of earnings releases and following mixed Chinese PMI data in which the official Manufacturing and Non-Manufacturing PMIs disappointed analysts’ forecasts with the former at a second consecutive contraction, although Caixin Manufacturing PMI was more encouraging and topped market consensus. Finally, 10yr JGBs initially declined amid gains in stocks and recent pressure in T-notes due to rate hike bets with analysts at Goldman Sachs bringing forward their Fed rate hike calls to July 2022 from summer 2023 citing inflation concerns, although 10yr JGBS then recovered despite the mixed results from the 10yr JGB auction which showed a higher b/c amid lower accepted prices and wider tail in price. Top Asian News Japan’s Kishida Mulls Motegi for LDP Secretary General: Kyodo Home Sales Slump; Another Bond Deadline Looms: Evergrande Update Two Thirds of China’s Top Developers Breach a ‘Red Line’ on Debt Hedge Fund Quad Sells Memory Stocks Citing Demand Uncertainty European equities (Stoxx 600 +0.6%) have kicked the week off on the front-foot with the Stoxx 600 printing a fresh all-time-high. The handover from the APAC session was a largely constructive one with the Nikkei 225 (+2.6%) the best in class for the region amid favourable currency flows and the fallout from the Japanese general election which saw the ruling LDP party maintain a majority in the lower house. Elsewhere, performance for the Shanghai Composite (-0.1%) and Hang Seng (-0.9%) was less impressive amid a slew of earnings releases and mixed Chinese PMI data in which the official Manufacturing and Non-Manufacturing PMIs disappointed analysts’ forecasts. US equity index futures are trading on a firmer footing (ES +0.5%) ahead of Wednesday’s FOMC announcement and Friday’s NFP data. The latest reports from Washington suggest that House Democrats are hoping to pass the social spending and bipartisan infrastructure bills as soon as Tuesday. Back to Europe, a recent note from JPM stated that Q3 European earnings “are coming in well ahead of expectations in aggregate”, adding that results are healthy when considering the “trickier operating backdrop”. Sectors in the region are higher across the board with Auto names top of the leaderboard. Renault (+3.3%) sits at the top of the CAC 40 with the name potentially gaining some reprieve from agreement to resolve the US-EU steel and aluminium trade dispute (something which the Co. has previously noted as a negative). Also following the resolution, Thyssenkrupp (+2.8%) and Salzgitter (+4.5%) are both trading notably higher. Barclays (-2.0%) shares are seen lower after news that CEO Staley is to step down with immediate effect following the investigation into his relationship with sex offender Jeffrey Epstein; Barclays' Global Head of Markets, Venkatakrishnan is to take over. UK homebuilders (Persimmon -2.1%, Taylor Wimpey -1.9%, Barratt Developments -1.9%, Berkeley Group -1.7%) are softer on the session amid concerns that the sector could fall victim to higher mortgage rates given the shape of the UK yield curve. Ryanair (+1%) shares are higher post-earnings which saw the Co. continue its recovery from the pandemic, albeit still expects a loss for the year. Furthermore, the board is considering the merits of retaining its standard listing on the LSE. Finally, BT (+4.2%) is the best performer in the Stoxx 600 ahead of earnings on Thursday with press reports suggesting that the Co. could announce that its GBP 1bln cost savings target will be met a year earlier than the guided March 2023. Top European News SIG Proposed Offering for EU300m Senior Secured Notes Due 2026 Delivery Hero’s Turkey Unit CEO Nevzat Aydin to Step Down Goldman Sachs Says ‘Lost Decade’ Is Looming for 60/40 Portfolios URW Sells Stake in Paris Triangle Tower Project to AXA IM Alts In FX, the Greenback is holding above 94.000 in index terms and gradually ground higher after pausing for breath and taking some time out following its rapid resurgence last Friday to eclipse the 94.302 month end best at 94.313 before waning again. Hawkish vibes going into the FOMC are underpinning the Dollar and helping to offset external factors that are less supportive, including ongoing strength in global stock markets on solid if not stellar Q3 earnings and economic recovery from COVID-19 lockdown or restricted levels. Hence, the DXY is keeping its head above the round number and outperforming most major peers within and beyond the basket, awaiting Markit’s final manufacturing PMI, the equivalent ISM and construction spending ahead of the Fed on Wednesday and NFP on Friday. JPY/AUD - Little sign of relief for the Yen from victory by Japan’s ruling LDP part at the weekend elections as the 261 seat majority secured is down from the previous 276 and the tightest winning margin since 2012. Moreover, Security General Amari lost his constituency and new PM Kishida concedes that this reflects the public’s adverse feelings towards the Government over the last 4 years. Usd/Jpy is eyeing 114.50 as a result and the Aussie is looking precarious around 0.7500 against the backdrop of weakness in commodity prices even though perceptions for the upcoming RBA have turned markedly towards the potential for YCT to be withdrawn following firm core inflation readings and no defence of the 0.1% April 2024 bond target. NZD/EUR/CHF/CAD/GBP - All narrowly mixed vs their US counterpart, and with the Kiwi also taking advantage of the aforementioned apprehension in the Aud via the cross, while the Euro has pared declines from just under 1.1550, but still looks top-heavy into 1.1600. Elsewhere, the Franc is pivoting 0.9160 and 1.0600 against the Euro with more attention on a rise in Swiss sight deposits at domestic banks as evidence of intervention than a fractionally softer than expected manufacturing PMI, the Loonie is keeping afloat of 1.2400 ahead of Markit’s Canadian manufacturing PMI and Sterling is striving to stay above 1.3600, but underperforming vs the Euro circa 0.8470 amidst the ongoing tiff between the UK and France over fishing rights. SCANDI/EM - Robust Swedish and Norwegian manufacturing PMIs plus broad risk appetite is underpinning the Sek and Nok, in contrast to the Cnh and Cny following disappointing official Chinese PMIs vs a more respectable Caixin print, but the EM laggard is the Zar in knock-on reaction to Gold’s fall from grace on Friday, increasingly bearish technical impulses and SA energy supply issues compounded by Eskom’s load-shedding. Conversely, the Try has pared some declines irrespective of a slowdown in Turkey’s manufacturing PMI as the CBRT conducted a second repo op for Lira 27 bn funds maturing on November 11 at 16%. In commodities, WTI and Brent are firmer this morning with gains of between USD 0.50-1.00/bbl, this upside is in-spite of a lack of fundamental newsflow explicitly for the complex and is seemingly derived from broader risk sentiment, as mentioned above. Nonetheless, Energy Ministers are beginning to give commentary ahead of Thursday’s OPEC+ event and so far Angola, Kuwait and Iraq officials have voiced their support for the planned 400k BPD hike to production in December. This reiteration of existing plans is in opposition from calls from non-OPEC members such as the US and Japan that the group should look to increase production quicker than planned, in a bid to quell rising prices. Separately, Saudi Aramco reported Q3 earnings over the weekend in which its net profit doubled given strong crude prices and sales volumes improving by 12% QQ; subsequently, some analysts have highlighted the possibility for a end-2021 special dividend. Elsewhere, base metals are mixed and fairly contained in-spite of the EU and US announcing an agreement to resolve the ongoing aluminium and steel trade dispute. While spot gold and silver are modestly firmer this morning as the yellow metal remains contained after its slip from the USD 1800/oz mark in the tail-end of last week. Currently, spot gold is pivoting its 100-DMA at USD 1786 with the 50- and 200-DMAs residing either side at USD 1780/oz and USD 1791/oz respectively. US Event Calendar 9:45am: Oct. Markit US Manufacturing PMI, est. 59.2, prior 59.2 10am: Oct. ISM Manufacturing, est. 60.5, prior 61.1 10am: Sept. Construction Spending MoM, est. 0.4%, prior 0% DB's Jim Reid concludes the overnight wrap Welcome to November. I had three halloween parties over the weekend which is probably more than the entire number I went to before I had kids. I still have some spooky make up on this morning that I just couldn’t get off from last night. So there’s a reason alone to zoom into the call at 3pm today. As it’s the 1st of November Henry is about to publish our monthly performance review. It was a hectic month of higher inflation expectations and commodities, and also the best S&P 500 month of the year. Bonds underperformed across the board but these small negatives masked great volatility and stress under the surface, especially in the last week. See the report that should be out in the next 30-60mins. With all due respect to our readers in Australia, I’m going to open the market section this morning with a line I don’t think I’ve written in 27 years of market commentary and probably won’t again. And it’s not about England thrashing Australia at cricket on Saturday. Yes the most important event of the week could be the RBA meeting tomorrow. 2 year yields last week rose from 0.15% on Wednesday morning to 0.775% at the close on Friday as the RBA were conspicuous by their absence in defending the 0.1% target on the April 24 bond. I’ve absolutely zero idea what they are going to do tomorrow which should help you all tremendously but their absence again this morning gives a decent indication. I was taught economics in an era where central banks liked to keep an element of mystery and surprise. As such I’ve always disliked the forward guidance era as it encourages markets to pile on to much riskier, one way positions that a normally functioning market should naturally allow. But to go from forward guidance to silence (that rhymes) is a recipe for huge market turmoil if the facts change. It's unclear if the full implications of last week’s carnage at the global front end has yet been cleared out. There is lots of speculation about large unwinds, big stop losses etc. Liquidity was also awful last week. Much might depend on central banks this week. Make no mistake though there is considerable pain out there. The latest this morning in Aussie rates is that the 2y yield is down around -7bps while the 10y yield is down -19.0bps. So we wait with baited breath for tomorrow. Elsewhere in Asia, the Nikkei 225 (+2.42%) is charging ahead this morning as Japan’s Liberal Democratic Party kept its majority after lower house elections, thus boosting optimism about a potential fiscal stimulus. Elsewhere, the KOSPI (+0.43%) and the Shanghai composite (+0.07%) are outperforming the Hang Seng (-1.10%). In terms of data, China’s official manufacturing PMI fell from 49.6 to 49.2 (49.7 expected), not helped by commodities price rises and electricity shortages. The non-manufacturing PMI also fell to 52.4 from 53.2 (consensus 53). The Caixin manufacturing PMI did beat at 50.6 this morning (consensus 50). In terms of virus developments in the region, Shanghai Disneyland is closed amid recent COVID outbreaks, while Singapore is adding ICU beds in response to high levels of serious cases. The S&P 500 mini futures is up +0.23% this morning, the US 10y Treasury is at 1.56% (+1.2bps). It’s strange to have a likely Fed taper announcement on Wednesday be third billing for the week but the BoE on Thursday might be the next most important meeting as it’s still a finely judged call as to whether they hike this week or not. DB (preview here) think they will raise rates by 15bps with two 25bps hikes in February and May. They’ll also end QE a month earlier than planned. So over to the third billing, namely the Fed. They will announce a well flagged taper on Wednesday. In line with recent guidance, DB expect that the Fed will announce monthly reductions of $10bn and $5bn of Treasury and MBS purchases, respectively. With the first cut to purchases coming mid-November, this will bring the latest round of QE to a conclusion in June 2022. The Fed has some flexibility with this timetable but it will be interesting to hear how much Powell pushes back on markets that price in two hikes in 2022, including one almost fully priced for before the taper ends. If markets attacked the Fed in the same way they have the RBA the global financial system would have a lot of issues so it’s a fine balance for the Fed. They won’t want to push back too aggressively on market pricing given the uncertainty but they won’t want an outright attack on forward guidance. Moving on, a lowly fourth billing will be reserved for US payrolls on Friday. DB expect the headline gain (+400k forecast, consensus +425k vs. +194k previously) to modestly outperform that of private payrolls (+350k vs. +317k) and for the unemployment rate to fall by a tenth to 4.7% and average hourly earnings to post another strong gain (+0.4% vs. +0.6%) amidst still-elevated hours worked (34.8hrs vs. 34.8hrs). Outside of all this excitement, we have the COP26 which will dominate all your news outlets. The other main data highlight are the global PMIs (today and Wednesday mostly) which will give insight into how the economic recovery has progressed in the first month of Q4 with the surveys shedding light onto how inflation is affecting suppliers. There is lots more in store for us this week but see the day by day calendar at the end for the full run down The market also enters the second half of the 3Q earnings season. There are 168 S&P 500 and 85 Stoxx 600 companies reporting this week with 52% of the S&P 500 and 48% of the STOXX 600 having already reported. DB’s Binky Chadha published an update on earnings season over the weekend (link here). In the US, the size of the earnings beat has declined over the course of the season and is on track to hit 7%, well below the record 14-20% range post pandemic. Excluding the lumpy loan-loss reserve releases by banks, the beat is even lower at 5%, bringing it back in line with the historical norm. Quarterly earnings are on track to be down sequentially from Q2 to Q3 by -1.1% (qoq seasonally adjusted), the first drop since Q2 2020. The flat to down read of earnings is broad based across sector groups. Forward consensus estimates have fallen outside of the Energy sector. The S&P 500 nevertheless has seen one of the strongest earning season rallies on record. See much more in Binky’s piece. This week’s highlights include NXP Semiconductors, Zoom, and Tata Motors today before Pfizer, T-Mobile, Estee Lauder, BP, Mondelez, Activision Blizzard, and AP Moller-Maersk tomorrow. Then on Wednesday we’ll hear from Novo Nordisk, Qualcomm, CVS, Marriott, Albemarle, and MGM resorts. Thursday sees reports from Toyota, Moderna, Square, Airbnb, Uber, and Deutsche Post and then a busy Friday with Alibaba Group, Dominion Energy, Honda, and Mitsubishi. Looking back now and reviewing last week in numbers, it was a week of heightened intraday volatility within rates, as markets brought forward the expected timing of central bank policy actions across advanced economies while revising down growth expectations. Position stop outs almost certainly played a role as the magnitude of the moves were out of sync with macro developments while FX and equity markets were not nearly as volatile. Global front end rates started moving in earnest on Wednesday, following the Bank of Canada’s surprise decision to end net asset purchases, while bringing forward the timing of liftoff, which sent 2yr Canadian bonds more than +20bps higher. In the following days, the RBA opted not to defend their yield curve control target, and ECB President Lagarde did not use her press conference to provide much of a forceful pushback on recent repricing. All told, almost every DM economy saw their 2 yr bond selloff, including the US (+4.4 bps, +0.8 bps Friday), UK (+4.9 bps, +5.9 bps Friday), Germany (+5.2 bps, +3.2 bps Friday), Canada (+23bps) and Australia (+65bps). The long end went the other direction in the core countries, with many curves twist flattening over the week as negative growth sentiment weighed on the back end. Nominal 10yr yields declined -6.2 bps (-2.8 bps Friday) in the US, -11.1 bps (+2.5 bps Friday) in the UK, and were flat in Germany (+3.0 bps Friday). Unlike the rest of October, the decline in nominal yields coincided with declining inflation breakevens (albeit from historically high levels), with 10yr breakevens declining -5.2 bps (-0.6 bps Friday) in the US, -25.4 bps (-8.5 bps Friday) in the UK, and -16.3 bps (-11.5 bps Friday) in Germany. Note that outside the core there were some bond markets that moved higher in yield with 10yr bonds in Canada (+7bps), Australia (+30bps) and Italy (+19bps) all higher for different reasons. Some of the bond moves above don’t do the intra-day volatility any justice though. Elsewhere Crude oil prices dipped to close out what was otherwise another very good month, with Brent and WTI -1.34% (+0.07% Friday) and -0.23% (+0.92% Friday) lower. Meanwhile, equity markets marched to the beat of a different drum. The S&P 500 (+1.33%, +0.19% Friday), Nasdaq (+2.71%, +0.33% Friday), and DJIA (+0.40%, +.25% Friday) all set new all-time highs, while the STOXX 600 increased +0.77% (+0.07% Friday), cents below the all-time high set in August. Generally strong earnings relative to a worried market prior to the season again supported equity markets. Calls were replete with mentions of supply chain woes and labour shortages though, but companies sounded an optimistic note on end-user demand. Many big tech stocks reported, to more mixed results than the broader index. Alphabet and Microsoft beat on both revenue and earnings, Facebook and Apple missed analyst revenue estimates, while Amazon and Twitter missed revenue and earnings estimates. Ford and Caterpillar, two bellwethers particularly exposed to current supply chain and labour maladies, fared especially well. So far this season 279 companies have reported, with 206 beating on revenue and 237 beating on earnings Out of D.C., after prolonged negotiations within the Democratic Party, US President Biden unveiled a new social and climate spending framework, containing $1.75 trillion in spending measures as well as revenue-raising offsets. Once the text is finalized, it should enable a vote on the social spending package as well as the separately-negotiated bi-partisan infrastructure bill. More is likely to come this week. Tyler Durden Mon, 11/01/2021 - 07:59.....»»

Category: smallbizSource: nytNov 1st, 2021

Green Energy: A Bubble In Unrealistic Expectations

Green Energy: A Bubble In Unrealistic Expectations Authored by David Hay via Everegreen Gavekal blog, “You see what is happening in Europe. There is hysteria and some confusion in the markets. Why?…Some people are speculating on climate change issues, some people are underestimating some things, some are starting to cut back on investments in the extractive industries. There needs to be a smooth transition.” - Vladimir Putin (someone with whom this author rarely agrees) “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of its citizens.” – John Maynard Keynes (an interesting observation for all the modern day Keynesians to consider given their support of current inflationary US policies, including energy-related) Introduction This week’s EVA provides another sneak preview into David Hay’s book-in-process, “Bubble 3.0” discussing what he thinks is the crucial topic of “greenflation.”  This is a term he coined referring to the rising price for metals and minerals that are essential for solar and wind power, electric cars, and other renewable technologies. It also centers on the reality that as global policymakers have turned against the fossil fuel industry, energy producers are for the first time in history not responding to dramatically higher prices by increasing production.  Consequently, there is a difficult tradeoff that arises as the world pushes harder to combat climate change, driving up energy costs to painful levels, especially for lower income individuals.  What we are currently seeing in Europe is a vivid example of this dilemma.  While it may be the case that governments welcome higher oil and natural gas prices to discourage their use, energy consumers are likely to have a much different reaction. Summary BlackRock’s CEO recently admitted that, despite what many are opining, the green energy transition is nearly certain to be inflationary. Even though it’s early in the year, energy prices are already experiencing unprecedented spikes in Europe and Asia, but most Americans are unaware of the severity. To that point, many British residents being faced with the fact that they may need to ration heat and could be faced with the chilling reality that lives could be lost if this winter is as cold as forecasters are predicting. Because of the huge increase in energy prices, inflation in the eurozone recently hit a 13-year high, heavily driven by natural gas prices on the Continent that are the equivalent of $200 oil. It used to be that the cure for extreme prices was extreme prices, but these days I’m not so sure.  Oil and gas producers are very wary of making long-term investments to develop new resources given the hostility to their industry and shareholder pressure to minimize outlays. I expect global supply to peak sometime next year and a major supply deficit looks inevitable as global demand returns to normal. In Norway, almost 2/3 of all new vehicle sales are of the electric variety (EVs) – a huge increase in just over a decade. Meanwhile, in the US, it’s only about 2%. Still, given Norway’s penchant for the plug-in auto, the demand for oil has not declined. China, despite being the largest market by far for electric vehicles, is still projected to consume an enormous and rising amount of oil in the future. About 70% of China’s electricity is generated by coal, which has major environmental ramifications in regards to electric vehicles. Because of enormous energy demand in China this year, coal prices have experienced a massive boom. Its usage was up 15% in the first half of this year, and the Chinese government has instructed power providers to obtain all baseload energy sources, regardless of cost.  The massive migration to electric vehicles – and the fact that they use six times the amount of critical minerals as their gasoline-powered counterparts –means demand for these precious resources is expected to skyrocket. This extreme need for rare minerals, combined with rapid demand growth, is a recipe for a major spike in prices. Massively expanding the US electrical grid has several daunting challenges– chief among them the fact that the American public is extremely reluctant to have new transmission lines installed in their area. The state of California continues to blaze the trail for green energy in terms of both scope and speed. How the rest of the country responds to their aggressive take on renewables remains to be seen. It appears we are entering a very odd reality: governments are expending resources they do not have on weakly concentrated energy. And the result may be very detrimental for today’s modern economy. If the trend in energy continues, what looks nearly certain to be the Third Energy crisis of the last half-century may linger for years.  Green energy: A bubble in unrealistic expectations? As I have written in past EVAs, it amazes me how little of the intense inflation debate in 2021 centered on the inflationary implications of the Green Energy transition.  Perhaps it is because there is a built-in assumption that using more renewables should lower energy costs since the sun and the wind provide “free power”.  However, we will soon see that’s not the case, at least not anytime soon; in fact, it’s my contention that it will likely be the opposite for years to come and I’ve got some powerful company.  Larry Fink, CEO of BlackRock, a very pro-ESG* organization, is one of the few members of Wall Street’s elite who admitted this in the summer of 2021.  The story, however, received minimal press coverage and was quickly forgotten (though, obviously, not be me!).  This EVA will outline myriad reasons why I think Mr. Fink was telling it like it is…despite the political heat that could bring down upon him.  First, though, I will avoid any discussion of whether humanity is the leading cause of global warming.  For purposes of this analysis, let’s make the high-odds assumption that for now a high-speed green energy transition will continue to occur.  (For those who would like a well-researched and clearly articulated overview of the climate debate, I highly recommend the book “Unsettled”; it’s by a former top energy expert and scientist from the Obama administration, Dr. Steven Koonin.) The reason I italicized “for now” is that in my view it’s extremely probable that voters in many Western countries are going to become highly retaliatory toward energy policies that are already creating extreme hardship.  Even though it’s only early autumn as I write these words, energy prices are experiencing unprecedented increases in Europe.  Because it’s “over there”, most Americans are only vaguely aware of the severity of the situation.  But the facts are shocking…  Presently, natural gas is going for $29 per million British Thermal Units (BTUs) in Europe, a quadruple compared to the same time in 2020, versus “just” $5 in the US, which is a mere doubling.  As a consequence, wholesale energy cost in Great Britain rose an unheard of 60% even before summer ended.  Reportedly, nine UK energy companies are on the brink of failure at this time due to their inability to fully pass on the enormous cost increases.  As a result, the British government is reportedly on the verge of nationalizing some of these entities—supposedly, temporarily—to prevent them from collapsing.  (CNBC reported on Wednesday that UK natural gas prices are now up 800% this year; in the US, nat gas rose 20% on Tuesday alone, before giving back a bit more than half of that the next day.) Serious food shortages are expected after exorbitant natural gas costs forced most of England’s commercial production of CO2 to shut down.  (CO2 is used both for stunning animals prior to slaughter and also in food packaging.)  Additionally, ballistic natural gas prices have forced the closure of two big US fertilizer plants due to a potential shortfall of ammonium nitrate of which “nat gas” is a key feedstock.  *ESG stands for Environmental, Social, Governance; in 2021, Blackrock’s assets under management approximated $9 ½ trillion, about one-third of the total US federal debt. With the winter of 2021 approaching, British households are being told they may need to ration heat.  There are even growing concerns about the widespread loss of life if this winter turns out to be a cold one, as 2020 was in Europe.  Weather forecasters are indicating that’s a distinct possibility.   In Spain, consumers are paying 40% more for electricity compared to the prior year.  The Spanish government has begun resorting to price controls to soften the impact of these rapidly escalating costs. (The history of price controls is that they often exacerbate shortages.) Naturally, spiking power prices hit the poorest hardest, which is typical of inflation whether it is of the energy variety or of generalized price increases.  Due to these massive energy price increases, eurozone inflation recently hit a 13-year high, heavily driven by natural gas prices that are the equivalent of $200 per barrel oil.  This is consistent with what I warned about in several EVAs earlier this year and I think there is much more of this looming in the years to come. In Asia, which also had a brutally cold winter in 2020 – 2021, there are severe energy shortages being disclosed, as well.  China has instructed its power providers to secure all the coal they can in preparation for a repeat of frigid conditions and acute deficits even before winter arrives.  The government has also instructed its energy distributors to acquire all the liquified natural gas (LNG) they can, regardless of cost.  LNG recently hit $35 per million British Thermal Units in Asia, up sevenfold in the past year.  China is also rationing power to its heavy industries, further exacerbating the worldwide shortages of almost everything, with notable inflationary implications. In India, where burning coal provides about 70% of electricity generation (as it does in China), utilities are being urged to import coal even though that country has the world’s fourth largest coal reserves.  Several Indian power plants are close to exhausting their coal supplies as power usage rips higher. Normally, I’d say that the cure for such extreme prices, was extreme prices—to slightly paraphrase the old axiom.  But these days, I’m not so sure; in fact, I’m downright dubious.  After all, the enormously influential International Energy Agency has recommended no new fossil fuel development after 2021—“no new”, as in zero.  It’s because of pressure such as this that, even though US natural gas prices have done a Virgin Galactic to $5 this year, the natural gas drilling rig count has stayed flat.  The last time prices were this high there were three times as many working rigs.  It is the same story with oil production.  Most Americans don’t seem to realize it but the US has provided 90% of the planet’s petroleum output growth over the past decade.  In other words, without America’s extraordinary shale oil production boom—which raised total oil output from around 5 million barrels per day in 2008 to 13 million barrels per day in 2019—the world long ago would have had an acute shortage.  (Excluding the Covid-wracked year of 2020, oil demand grows every year—strictly as a function of the developing world, including China, by the way.) Unquestionably, US oil companies could substantially increase output, particularly in the Permian Basin, arguably (but not much) the most prolific oil-producing region in the world.  However, with the Fed being pressured by Congress to punish banks that lend to any fossil fuel operator, and the overall extreme hostility toward domestic energy producers, why would they?  There is also tremendous pressure from Wall Street on these companies to be ESG compliant.  This means reducing their carbon footprint.  That’s tough to do while expanding their volume of oil and gas.  Further, investors, whether on Wall Street or on London’s equivalent, Lombard Street, or in pretty much any Western financial center, are against US energy companies increasing production.  They would much rather see them buy back stock and pay out lush dividends.  The companies are embracing that message.  One leading oil and gas company CEO publicly mused to the effect that buying back his own shares at the prevailing extremely depressed valuations was a much better use of capital than drilling for oil—even at $75 a barrel. As reported by Morgan Stanley, in the summer of 2021, an US institutional broker conceded that of his 400 clients, only one would consider investing in an energy company!  Consequently, the fact that the industry is so detested means that its shares are stunningly undervalued.  How stunningly?  A myriad of US oil and gas producers are trading at free cash flow* yields of 10% to 15% and, in some cases, as high as 25%. In Europe, where the same pressures apply, one of its biggest energy companies is generating a 16% free cash flow yield.  Moreover, that is based up an estimate of $60 per barrel oil, not the prevailing price of $80 on the Continent. *Free cash flow is the excess of gross cash flow over and above the capital spending needed to sustain a business.  Many market professionals consider it more meaningful than earnings.  Therefore, due to the intense antipathy toward Western energy producers they aren’t very inclined to explore for new resources.  Another much overlooked fact about the ultra-critical US shale industry that, as noted, has been nearly the only source of worldwide output growth for the past 13 years, is its rapid decline nature.  Most oil wells see their production taper off at just 4% or 5% per year.  But with shale, that decline rate is 80% after only two years.  (Because of the collapse in exploration activities in 2020 due to Covid, there are far fewer new wells coming on-line; thus, the production base is made up of older wells with slower decline rates but it is still a much steeper cliff than with traditional wells.)  As a result, the US, the world’s most important swing producer, has to come up with about 1.5 million barrels per day (bpd) of new output just to stay even.  (This was formerly about a 3 million bpd number due to both the factor mentioned above and the 2 million bpd drop in total US oil production, from 13 million bpd to around 11 million bpd since 2019).  Please recall that total US oil production in 2008 was only around 5 million bpd.  Thus, 1.5 million barrels per day is a lot of oil and requires considerable drilling and exploration activities.  Again, this is merely to stay steady-state, much less grow.  The foregoing is why I wrote on multiple occasions in EVAs during 2020, when the futures price for oil went below zero*, that crude would have a spectacular price recovery later that year and, especially, in 2021.  In my view, to go out on my familiar creaky limb, you ain’t seen nothin’ yet!  With supply extremely challenged for the above reasons and demand marching back, I believe 2022 could see $100 crude, possibly even higher.  *Physical oil, or real vs paper traded, bottomed in the upper teens when the futures contract for delivery in April, 2020, went deeply negative.  Mike Rothman of Cornerstone Analytics has one of the best oil price forecasting records on Wall Street.  Like me, he was vehemently bullish on oil after the Covid crash in the spring of 2020 (admittedly, his well-reasoned optimism was a key factor in my up-beat outlook).  Here’s what he wrote late this summer:  “Our forecast for ’22 looks to see global oil production capacity exhausted late in the year and our balance suggests OPEC (and OPEC + participants) will face pressures to completely remove any quotas.”  My expectation is that global supply will likely max out sometime next year, barring a powerful negative growth shock (like a Covid variant even more vaccine resistant than Delta).  A significant supply deficit looks inevitable as global demand recovers and exceeds its pre-Covid level.  This is a view also shared by Goldman Sachs and Raymond James, among others; hence, my forecast of triple-digit prices next year.  Raymond James pointed out that in June the oil market was undersupplied by 2.5 mill bpd.  Meanwhile, global petroleum demand was rapidly rising with expectations of nearly pre-Covid consumption by year-end.  Mike Rothman ran this chart in a webcast on 9/10/2021 revealing how far below the seven-year average oil inventories had fallen.  This supply deficit is very likely to become more acute as the calendar flips to 2022. In fact, despite oil prices pushing toward $80, total US crude output now projected to actually decline this year.  This is an unprecedented development.  However, as the very pro-renewables Financial Times (the UK’s equivalent of the Wall Street Journal) explained in an August 11th, 2021, article:  “Energy companies are in a bind.  The old solution would be to invest more in raising gas production.  But with most developed countries adopting plans to be ‘net zero’ on carbon emissions by 2050 or earlier, the appetite for throwing billions at long-term gas projects is diminished.” The author, David Sheppard, went on to opine: “In the oil industry there are those who think a period of plus $100-a-barrel oil is on the horizon, as companies scale back investments in future supplies, while demand is expected to keep rising for most of this decade at a minimum.”  (Emphasis mine)  To which I say, precisely!  Thus, if he’s right about rising demand, as I believe he is, there is quite a collision looming between that reality and the high probability of long-term constrained supplies.  One of the most relevant and fascinating Wall Street research reports I read as I was researching the topic of what I have been referring to as “Greenflation” is from Morgan Stanley.  Its title asked the provocative question:  “With 64% of New Cars Now Electric, Why is Norway Still Using so Much Oil?”  While almost two-thirds of Norway’s new vehicle sales are EVs, a remarkable market share gain in just over a decade, the number in the US is an ultra-modest 2%.   Yet, per the Morgan Stanley piece, despite this extraordinary push into EVs, oil consumption in Norway has been stubbornly stable.  Coincidentally, that’s been the experience of the overall developed world over the past 10 years, as well; petroleum consumption has largely flatlined.  Where demand hasn’t gone horizontal is in the developing world which includes China.  As you can see from the following Cornerstone Analytics chart, China’s oil demand has vaulted by about 6 million barrels per day (bpd) since 2010 while its domestic crude output has, if anything, slightly contracted. Another coincidence is that this 6 million bpd surge in China’s appetite for oil, almost exactly matched the increase in US oil production.  Once again, think where oil prices would be today without America’s shale oil boom. This is unlikely to change over the next decade.  By 2031, there are an estimated one billion Asian consumers moving up into the middle class.  History is clear that more income means more energy consumption.  Unquestionably, renewables will provide much of that power but oil and natural gas are just as unquestionably going to play a critical role.  Underscoring that point, despite the exponential growth of renewables over the last 10 years, every fossil fuel category has seen increased usage.  Thus, even if China gets up to Norway’s 64% EV market share of new car sales over the next decade, its oil usage is likely to continue to swell.  Please be aware that China has become the world’s largest market for EVs—by far.  Despite that, the above chart vividly displays an immense increase in oil demand.  Here’s a similar factoid that I ran in our December 4th EVA, “Totally Toxic”, in which I made a strong bullish case for energy stocks (the main energy ETF is up 35% from then, by the way):  “(There was) a study by the UN and the US government based on the Model for the Assessment of Greenhouse Gasses Induced Climate Change (MAGICC).  The model predicted that ‘the complete elimination of all fossil fuels in the US immediately would only restrict any increase in world temperature by less than one tenth of one degree Celsius by 2050, and by less than one fifth of one degree Celsius by 2100.’  Say again?  If the world’s biggest carbon emitter on a per capita basis causes minimal improvement by going cold turkey on fossil fuels, are we making the right moves by allocating tens of trillions of dollars that we don’t have toward the currently in-vogue green energy solutions?” China's voracious power appetite increase has been true with all of its energy sources.  On the environmentally-friendly front, that includes renewables; on the environmentally-unfriendly side, it also includes coal.  In 2020, China added three times more coal-based power generation than all other countries combined.  This was the equivalent of an additional coal planet each week.  Globally, there was a reduction last year of 17 gigawatts in coal-fired power output; in China, the increase was 29.8 gigawatts, far more than offsetting the rest of the world’s progress in reducing the dirtiest energy source.  (A gigawatt can power a city with a population of roughly 700,000.) Overall, 70% of China’s electricity is coal-generated. This has significant environmental implications as far as electric vehicles (EVs) are concerned.  Because EVs are charged off a grid that is primarily coal- powered, carbon emissions actually rise as the number of such vehicles proliferate. As you can see in the following charts from Reuters’ energy expert John Kemp, Asia’s coal-fired generation has risen drastically in the last 20 years, even as it has receded in the rest of the world.  (The flattening recently is almost certainly due to Covid, with a sharp upward resumption nearly a given.) The worst part is that burning coal not only emits CO2—which is not a pollutant and is essential for life—it also releases vast quantities of nitrous oxide (N20), especially on the scale of coal usage seen in Asia today. N20 is unquestionably a pollutant and a greenhouse gas that is hundreds of times more potent than CO2.  (An interesting footnote is that over the last 550 million years, there have been very few times when the CO2 level has been as low, or lower, than it is today.)  Some scientists believe that one reason for the shrinkage of Arctic sea ice in recent decades is due to the prevailing winds blowing black carbon soot over from Asia.  This is a separate issue from N20 which is a colorless gas.  As the black soot covers the snow and ice fields in Northern Canada, they become more absorbent of the sun’s radiation, thus causing increased melting.  (Source:  “Weathering Climate Change” by Hugh Ross) Due to exploding energy needs in China this year, coal prices have experienced an unprecedented surge.  Despite this stunning rise, Chinese authorities have instructed its power providers to obtain coal, and other baseload energy sources, such as liquified natural gas (LNG), regardless of cost.  Notwithstanding how pricey coal has become, its usage in China was up 15% in the first half of this year vs the first half of 2019 (which was obviously not Covid impacted). Despite the polluting impact of heavy coal utilization, China is unlikely to turn away from it due to its high energy density (unlike renewables), its low cost (usually) and its abundance within its own borders (though its demand is so great that it still needs to import vast amounts).  Regarding oil, as we saw in last week’s final image, it is currently importing roughly 11 million barrels per day (bpd) to satisfy its 15 million bpd consumption (about 15% of total global demand).  In other words, crude imports amount to almost three-quarter of its needs.  At $80 oil, this totals $880 million per day or approximately $320 billion per year.  Imagine what China’s trade surplus would look like without its oil import bill! Ironically, given the current hostility between the world’s superpowers, China has an affinity for US oil because of its light and easy-to-refine nature.  China’s refineries tend to be low-grade and unable to efficiently process heavier grades of crude, unlike the US refining complex which is highly sophisticated and prefers heavy oil such as from Canada and Venezuela—back when the latter actually produced oil. Thus, China favors EVs because they can be de facto coal-powered, lessening its dangerous reliance on imported oil.  It also likes them due to the fact it controls 80% of the lithium ion battery supply and 60% of the planet’s rare earth minerals, both of which are essential to power EVs.     However, even for China, mining enough lithium, cobalt, nickel, copper, aluminum and the other essential minerals/metals to meet the ambitious goals of largely electrifying new vehicle volumes is going to be extremely daunting.  This is in addition to mass construction of wind farms and enormously expanded solar panel manufacturing. As one of the planet’s leading energy authorities Daniel Yergin writes: “With the move to electric cars, demand for critical minerals will skyrocket (lithium up 4300%, cobalt and nickel up 2500%), with an electric vehicle using 6 times more minerals than a conventional car and a wind turbine using 9 times more minerals than a gas-fueled power plant.  The resources needed for the ‘mineral-intensive energy system’ of the future are also highly concentrated in relatively few countries. Whereas the top 3 oil producers in the world are responsible for about 30 percent of total liquids production, the top 3 lithium producers control more than 80% of supply. China controls 60% of rare earths output needed for wind towers; the Democratic Republic of the Congo, 70% of the cobalt required for EV batteries.” As many have noted, the environmental impact of immensely ramping up the mining of these materials is undoubtedly going to be severe.  Michael Shellenberger, a life-long environmental activist, has been particularly vociferous in his condemnation of the dominant view that only renewables can solve the global energy needs.  He’s especially critical of how his fellow environmentalists resorted to repetitive deception, in his view, to undercut nuclear power in past decades.  By leaving nuke energy out of the solution set, he foresees a disastrous impact on the planet due to the massive scale (he’d opine, impossibly massive) of resource mining that needs to occur.  (His book, “Apocalypse Never”, is also one I highly recommend; like Dr. Koonin, he hails from the left end of the political spectrum.) Putting aside the environmental ravages of developing rare earth minerals, when you have such high and rapidly rising demand colliding with limited supply, prices are likely to go vertical.  This will be another inflationary “forcing”, a favorite term of climate scientists, caused by the Great Green Energy Transition. Moreover, EVs are very semiconductor intensive.  With semis already in seriously short supply, this is going to make a gnarly situation even gnarlier.  It’s logical to expect that there will be recurring shortages of chips over the next decade for this reason alone (not to mention the acute need for semis as the “internet of things” moves into primetime).  In several of the newsletters I’ve written in recent years, I’ve pointed out the present vulnerability of the US electric grid.  Yet, it will be essential not just to keep it from breaking down under its current load; it must be drastically enhanced, a Herculean task. For one thing, it is excruciatingly hard to install new power lines. As J.P. Morgan’s Michael Cembalest has written: “Grid expansion can be a hornet’s nest of cost, complexity and NIMBYism*, particularly in the US.”  The grid’s frailty, even under today’s demands (i.e., much less than what lies ahead as millions of EVs plug into it) is particularly obvious in California.  However, severe winter weather in 2021 exposed the grid weakness even in energy-rich Texas, which also has a generally welcoming attitude toward infrastructure upgrading and expansion. Yet it’s the Golden State, home to 40 million Americans and the fifth largest economy in the world, if it was its own country (which it occasionally acts like it wants to be), that is leading the charge to EVs and seeking to eliminate internal combustion engines (ICEs) as quickly as possible.  Even now, blackouts and brownouts are becoming increasingly common.  Seemingly convinced it must be a role model for the planet, it’s trying desperately to reduce its emissions, which are less than 1%, of the global total, at the expense of rendering its energy system more similar to a developing country.  In addition to very high electricity costs per kilowatt hour (its mild climate helps offset those), it also has gasoline prices that are 77% above the national average.  *NIMBY stands for Not In My Back Yard. While California has been a magnet for millions seeking a better life for 150 years, the cost of living is turning the tide the other way.  Unreliable and increasingly expensive energy is likely to intensify that trend.  Combined with home prices that are more than double the US median–$800,000!–California is no longer the land of milk and honey, unless, to slightly paraphrase Woody Guthrie about LA, even back in the 1940s, you’ve got a whole lot of scratch.  More and more people, seem to be scratching California off their list of livable venues.  Voters in the reliably blue state of California may become extremely restive, particularly as they look to Asia and see new coal plants being built at a fever pitch.  The data will become clear that as America keeps decarbonizing–as it has done for 30 years mostly due to the displacement of coal by gas in the US electrical system—Asia will continue to go the other way.  (By the way, electricity represents the largest share of CO2 emission at roughly 25%.)  California has always seemed to lead social trends in this country, as it is doing again with its green energy transition.  The objective is noble though, extremely ambitious, especially the timeline.  As it brings its power paradigm to the rest of America, especially its frail grid, it will be interesting to see how voters react in other states as the cost of power leaps higher and its dependability heads lower.  It’s reasonable to speculate we may be on the verge of witnessing the Californication of the US energy system.  Lest you think I’m being hyperbolic, please be aware the IEA (International Energy Agency) has estimated it will cost the planet $5 trillion per year to achieve Net Zero emissions.  This is compared to global GDP of roughly $85 trillion. According to BloombergNEF, the price tag over 30 years, could be as high as $173 trillion.  Frankly, based on the history of gigantic cost overruns on most government-sponsored major infrastructure projects, I’m inclined to take the over—way over—on these estimates. Moreover, energy consulting firm T2 and Associates, has guesstimated electrifying just the US to the extent necessary to eliminate the direct consumption of fuel (i.e., gasoline, natural gas, coal, etc.) would cost between $18 trillion and $29 trillion.  Again, taking into account how these ambitious efforts have played out in the past, I suspect $29 trillion is light.  Regardless, even $18 trillion is a stunner, despite the reality we have all gotten numb to numbers with trillions attached to them.  For perspective, the total, already terrifying, level of US federal debt is $28 trillion. Regardless, as noted last week, the probabilities of the Great Green Energy Transition happening are extremely high.  Relatedly, I believe the likelihood of the Great Greenflation is right up there with them.  As Gavekal’s Didier Darcet wrote in mid-August:  ““Nowadays, and this is a great first in history, governments will commit considerable financial resources they do not have in the extraction of very weakly concentrated energy.” ( i.e., less efficient)  “The bet is very risky, and if it fails, what next?  The modern economy would not withstand expensive energy, or worse, lack of energy.”  While I agree this an historical first, it’s definitely not great (with apologies for all the “greats”).  This is particularly not great for keeping inflation subdued, as well as for attempting to break out of the growth quagmire the Western world has been in for the last two decades.  What we are seeing in Europe right now is an extremely cautionary case study in just how disastrous the war on fossil fuels can be (shortly we will see who or what has been a behind-the-scenes participant in this conflict). Essentially, I believe, as I’ve written in past EVAs, we are entering the third energy crisis of the last 50 years.  If I’m right, it will be characterized by recurring bouts of triple-digit oil prices in the years to come.  Along with Richard Nixon taking the US off the gold standard in 1971, the high inflation of the 1970s was caused by the first two energy crises (the 1973 Arab Oil Embargo and the 1979 Iranian Revolution).  If I’m correct about this being the third, it’s coming at a most inopportune time with the US in hyper-MMT* mode. Frankly, I believe many in the corridors of power would like to see oil trade into the $100s, and natural gas into the teens, as it will help catalyze the shift to renewable energy.  But consumers are likely to have a much different reaction—potentially, a violently different reaction, as I noted last week.  The experience of the Yellow Vest protests in France (referring to the color of the vest protestors wore), are instructive in this regard.  France is a generally left-leaning country.  Despite that, a proposed fuel surtax in November 2018 to fund a renewable energy transition triggered such widespread civil unrest that French president Emmanuel Macron rescinded it the following month. *MMT stands for Modern Monetary Theory.  It holds that a government, like the US, which issues debt in its own currency can spend without concern about budgetary constraints.  If there are not enough buyers of its bonds at acceptable interest rates, that nation’s central bank (the Fed, in our case) simply acquires them with money it creates from its digital printing press.  This is what is happening today in the US.  Many economists consider this highly inflationary. The sharp and politically uncomfortable rise in US gas pump prices this summer caused the Biden administration to plead with OPEC to lift its volume quotas.  The ironic implication of that exhortation was glaringly obvious, as was the inefficiency and pollution consequences of shipping oil thousands of miles across the Atlantic.  (Oil tankers are a significant source of emissions.)  This is as opposed to utilizing domestic oil output, as well as crude from Canada (which is actually generally better suited to the US refining complex).  Beyond the pollution aspect, imported oil obviously worsens America’s massive trade deficit (which would be far more massive without the six million barrels per day of domestic oil volumes that the shale revolution has provided) and costs our nation high-paying jobs. Further, one of my other big fears is that the West is engaging in unilateral energy disarmament.  Russia and China are likely the major beneficiaries of this dangerous scenario.  Per my earlier comment about a stealth combatant in the war on fossil fuels, it may surprise you that a past NATO Secretary General* has accused Russian intelligence of avidly supporting the anti-fracking movements in Western Europe.  Russian TV has railed against fracking for years, even comparing it to pedophilia (certainly, a most bizarre analogy!).  The success of the anti-fracking movement on the Continent has essentially prevented a European version of America’s shale miracles (the UK has the potential to be a major shale gas producer).  Consequently, the European Union’s domestic natural gas production has been in a rapid decline phase for years.  Banning fracking has, of course, made Europe heavily reliant on Russian gas shipments with more than 40% of its supplies coming from Russia. This is in graphic contrast to the shale output boom in the US that has not only made us natural gas self-sufficient but also an export powerhouse of liquified natural gas (LNG).  In 2011, the Nord Stream system of pipelines running under the Baltic Sea from northern Russia began delivering gas west from northern Russia to the German coastal city of Greifswald.  For years, the Russians sought to build a parallel system with the inventive name of Nord Stream 2.  The US government opposed its approval on security grounds but the Biden administration has dropped its opposition.  It now appears Nord Stream 2 will happen, leaving Europe even more exposed to Russian coercion.  Is it possible the Russian government and the Chinese Communist Party have been secretly and aggressively supporting the anti-fossil fuel movements in America?  In my mind, it seems not only possible but probable.  In fact, I believe it is naïve not to come that conclusion.  After all, wouldn’t it be in both of their geopolitical interests to see the US once again caught in a cycle of debilitating inflation, ensnared by the twin traps of MMT and the third energy crisis? *Per former NATO Secretary General, Anders Fogh Rasumssen:  Russia has “engaged actively with so-called non-governmental organizations—environmental organizations working against shale gas—to maintain Europe’s dependence on imported Russian gas”. Along these lines, I was shocked to listen to a recent podcast by the New Yorker magazine on the topic of “intelligent sabotage”.  This segment was an interview between the magazine’s David Remnick and a Swedish professor, Adreas Malm.  Mr. Malm is the author of a new book with the literally explosive title “How To Blow Up A Pipeline”.   Just as it sounds, he advocates detonating pipelines to inhibit fossil fuel distribution.  Mr. Remnick was clearly sympathetic to his guest but he did ask him about the impact on the poor of driving energy prices up drastically which would be the obvious ramification if his sabotage recommendations were widely followed.  Mr. Malm’s reaction was a verbal shrug of the shoulders and words to the effect that this was the price to pay to save the planet. Frankly, I am appalled that the venerable New Yorker would provide a platform for such a radical and unlawful suggestion.  In an era when people are de-platformed for often innocuous comments, it’s incredible to me this was posted and has not been pulled down.  In my mind, this reflects just how tolerant the media is of attacks on the fossil fuel industry, regardless of the deleterious impact on consumers and the global economy. Surely, there is a far better way of coping with the harmful aspects of fossil fuel-based energy than this scorched earth (literally, in the case of Mr. Malm) approach, which includes efforts to block new pipelines, shut existing ones, and severely restrict US energy production.  In America’s case, the result will be forcing us to unnecessarily and increasingly rely on overseas imports.  (For example, per the Wall Street Journal, drilling permits on federal land have crashed to 171 in August from 671 in April.  Further, the contentious $3.5 trillion “infrastructure” plan would raise royalties and fees high enough on US energy producers that it would render them globally uncompetitive.) Such actions would only aggravate what is already a severe energy shock, one that may be worse than the 1970s twin energy crises.  America has it easy compared to Europe, though, given current US policy trends, we might be in their same heavily listing energy boat soon. Solutions include fast-tracking small modular nuclear plants; encouraging the further switch from burning coal to natural gas (a trend that is, unfortunately, going the other way now, as noted above); utilizing and enhancing carbon and methane capture at the point of emission (including improving tail pipe effluent-reduction technology); enhancing pipeline integrity to inhibit methane leaks; among many other mitigation techniques that recognize the reality the global economy will be reliant on fossil fuels for many years, if not decades, to come.  If the climate change movement fails to recognize the essential nature of fossil fuels, it will almost certainly trigger a backlash that will undermine the positive change it is trying to bring about.  This is similar to what it did via its relentless assault on nuclear power which produced a frenzy of coal plant construction in the 1980s and 1990s.  On this point, it’s interesting to see how quickly Europe is re-embracing coal power to alleviate the energy poverty and rationing occurring over there right now - even before winter sets in.  When the choice is between supporting climate change initiatives on one hand and being able to heat your home and provide for your family on the other, is there really any doubt about which option the majority of voters will select? Tyler Durden Tue, 10/26/2021 - 19:30.....»»

Category: worldSource: nytOct 26th, 2021

A Tale Of Two Civilizations

A Tale Of Two Civilizations Authored by Alasdair Macleod via GoldMoney.com, In recent years, America’s unsuccessful attempts at containing China as a rival hegemon has only served to promote Chinese antipathy against American capitalism. China is now retreating into the comfort of her long-established moral values, best described as a mixture of Confucianism and Marxism, while despising American individualism, its careless regard for family values, and encouragement of get-rich-quick financial speculation. After America’s defeat in Afghanistan, the geopolitical issue is now Taiwan, where things are hotting up in the wake of the AUKUS agreement. Taiwan is important because it produces two-thirds of the world’s computer chips. Meanwhile, the large US banks are complacent concerning Taiwan, preferring to salivate at the money-making prospects of China’s $45 trillion financial services market. The outcome of the Taiwan issue is likely to be decided by the evolution of economic factors. China is protecting herself against a global credit crisis by restraining its creation, while America is going full MMT. The outcome is likely to be a combined financial market and dollar crisis for America, taking down its Western epigones as well. China has protected herself by cornering the market for physical gold and secretly accumulating as much as 20,000-30,000 tonnes in national reserves. If the dollar fails, which without a radical change in monetary policy it is set to do, with its gold-backing China expects to not only survive but be able to consolidate Taiwan into its territory with little or no opposition. Introduction On the one hand we have America and on the other we have China. As civilisations, America is discarding its moral values and social structures while China is determined to stick with its Confucian and Marxist roots. America is inclined to recognise no other civilisations as being civilised, while China’s leadership has seen America’s version and is rejecting it. Both forms of civilisation are being insular with respect to the other, and their need to peacefully cooperate in a multipolar world is increasingly hampered. Understanding another nation’s point of view is essential for peaceful harmony. This truism has been ignored by not just America, but by the Western alliance under American coercion. The Federal Government and its agencies are pursuing a propaganda effort against China’s exports and technology, while the average American appears less troubled. Perhaps we can put this down to a nation based on immigrants having a more cosmopolitan psyche than its predominantly Anglo-Saxon establishment. In Europe, it sometimes appears to be the other way round, with the politicians more prepared to tolerate China than their US counterparts. But then geography is involved, and the silk roads do not involve America, while rail links between China and Western Europe work efficiently, delivering vital trade between them. Economic interdependency is rarely considered. Nor are the potential consequences of diverging economic and monetary policies. While China has been squeezing domestic credit, the West has been issuing currency and credit like drunken sailors on shore leave. Being starved of extra credit, China’s economy has been deliberately stalled, and there is a real or imagined crisis developing in its property markets. Only now, it has become apparent that the West’s major economies are running into troubles of their own. Economic destabilisation heightens the risk of conflict, and perhaps the timing of the build-up of tensions in the South China Sea and over Taiwan is not accidental. On Wall Street there is an air of complacency, with the US investment community led by the big banks ignoring the developing risks of this dysfunction. In the context of deteriorating relations between China and America and with China’s growing contempt for US political resolve, Taiwan is becoming extremely important geopolitically. China’s plans for Taiwan Taiwan is in the world’s geopolitical crosshairs with President Xi insisting it returns to China. The West, which has failed to protect Taiwan from China’s claims of sovereignty in the past, thereby endorsing them, is only now belatedly coming to its aid with a new Pacific strategy. But the signals already sent to the Chinese are that the Western alliance is too divided, too weak to prevent a Chinese takeover. This surely is the reasoning behind China’s attempts to provoke an attack on its air force by invading Taiwan’s airspace. And all the West can do is indulge in finger-wagging by sailing aircraft carriers through the Taiwan Strait. Taiwan matters, being the source of two-thirds of the world supply of microchips. Faced with a pusillanimous west, this fact hands great power to China — which with Taiwan corners the market. Furthermore, the big Wall Street banks are salivating over the prospects of participating in China’s $45 trillion financial services market and are preparing for it. China has thereby ensured the US banking system has too much invested to support the US administration in any escalation of the Taiwan issue. The actual timing of China’s escalation of the Taiwan issue appears related to the AUKUS nuclear submarine deal. That being so, the posturing between China and the Western Alliance has just begun. There are four possible outcomes: China backs off and the tension subsides, America and the Western Alliance back off and China gets Taiwan, there is a negotiated settlement, or a military war against China ensues. In this context it is important to understand the civilisation issue, which increasingly divides China and America. There is little doubt that the hitherto normal relationship between America and China was disrupted by President Trump becoming nationalistic. His “make America great again” policy was a declaration of a trade war. That was accompanied by a political attack on Hong Kong, which provoked China into taking Hong Kong under direct mainland control. There followed a technology war, leading to the arrest of the daughter of Huawei’s founder in Canada. There appears to be little change in President Biden’s policy against China. Now that his administration has bedded in, China is beginning to test it over Taiwan. To give it context, we should understand the Chinese culture and why the state is so defensive of it, and how the leadership views America and its weaknesses. For that is what is behind its economic divergence from the West. China’s changing political culture Since becoming President, Xi has reformed China’s state machinery. After assuming power in 2012, he needed to clear out the corrupt and vested interests of the previous regime. He instigated Operation Fox Hunt against corrupt officials, who, it was estimated, had salted away the equivalent of over a trillion dollars abroad. By 2015 over 180 people had been returned to China from more than 40 countries. Former security chief Zhou Yongkang and former vice security minister Sun Lijun ended up in prison and Hu Jintao’s powerful Communist Youth League faction was marginalised. By dealing ruthlessly with corrupt officials Xi got rid of the vested interests that would have potentially undermined him. He consolidated both his public support and his iron grip on the Communist Party for the decade ahead. His public approval ratings remain extraordinarily high to this day. On the economic front Xi faced major challenges. Having become the world’s manufacturer, a sharp wealth divide opened between China’s concentrated manufacturing centres and rural China. Some 600 million people are still subsisting on a monthly income of less than 1,000 yuan ($156) a month. A rapidly increasing urban population has been denuding the rural economy of human resources and undermining the family culture. The wealth disparity between city and country has become an important political issue, which is why as well as refocusing resources towards agriculture Xi has clamped down on super-rich entrepreneurs and their record-breaking IPOs. In his Common Prosperity policy, Xi declared that he was not prepared to let the gap between rich and poor widen, and that common prosperity was not just an economic issue but “a major political issue related to the party’s governing foundations”. Following decades of communism under Mao, after China’s initial recovery and development Xi is now clamping down on unfettered capitalism. He and his advisers have observed the disintegration of family values in America and the rise of individualism at the expense of family life; and with popular culture how these trends are being adopted by China’s youth. The state has now shut down western-style social media, and erased celebrity culture. The social impact of cultural change is often overlooked, but it is at the forefront of China’s policy-makers’ consideration. For millennia, a state-controlled Chinese civilisation endured. Despite the Cultural Revolution, the post-war Mao Zedong years failed to erase it. Never sympathetic to free markets, statist thoughts have turned inwardly to Confucius and Marx to escape the obvious failings of American capitalism and its decline from familial values to individualism and rampant speculation. This is what Xi reflects in his presidency. His chief adviser, his éminence grise, is Wang Huning who operates in the political shadows. From all accounts, Wang is extremely clever, speaks French and English, spent a year in America and is a deep thinker who, having examined them, has rejected western values in favour of Chinese tradition. NS Lyons, an analyst and writer living in Washington, DC, has written an interesting article about Wang, published on Palladium Magazine — it is well worth reading. As we saw with the UK’s temporary éminence grise, Dominic Cummings, the power to influence possessed by such a person is considerable, but always in a statist context. The economics of free markets are not involved, except as a source of revenue to fund statist ambitions. The result is an assumption, an ignorance of economic affairs concealed by an automatic acceptance of the status quo. This is Wang’s weak point, and insofar as Xi relies on his advice, it is the President’s as well. Wang appears to be promoting a Confucian/Marxist hybrid civilisation which is intended to unify China’s many ethnic groups in a government-set culture, reverting to a morality of yesteryear. Comparing China’s future with that of American democracy and its moral degradation, the approach is understandable and enjoys popular support. But the consequences are that the state is drifting backwards towards its Marxist roots. The central command over the economy is exemplified in energy policy: power entities have been instructed to keep factories running without power outages, irrespective of coal and natural gas costs. In fact, the management of the economy was never relinquished by the state, which is now redoubling its efforts to retain control over economic outcomes. All one can say is that so far, the Chinese appear to have made considerably less of a mess managing their economy and currency compared with America’s Federal Government and its central bank. The political consequences are also important. By stemming the tide of Western moral decadence in her own territory China is insulating herself from the rest of the American-dominated world. This is being bolstered by steps to shift the emphasis from the export trade towards domestic consumption to improve living standards. In the process China will become more of an economic fortress, mainly interested in Africa and the Americas as sources of raw materials and commodities rather than as export markets to be fostered. China’s internationalism of the last four decades is increasingly redirected and confined to the Eurasian continent over which she exercises greater degrees of political and economic control. Which brings us back to the issues of Taiwan and the South China Sea, which China sees as consolidating her rightful political and cultural borders. However, the increasing autarky of both China and America is making the Taiwan issue more difficult to resolve peacefully. And we must also consider the opposing directions of drift for their two economies, which could decide the outcome. The US’s economic condition and outlook There is a mistaken assumption that the US’s economic troubles relate solely to the consequences of the covid lockdowns. Certainly, the Fed timed its funds rate cut to the zero bound and its current and unprecedented rate of quantitative easing of $120bn every month to March 2020, when lockdowns in Europe and the UK commenced. And it was becoming clear, despite President Trump’s prevarication, that the US would follow. But that ignores developments which preceded covid. Probably due to earlier tapering of QE in 2019, financial markets signalled a developing slump, with the S&P 500 falling 35% in 23 trading sessions to mid-March 2020 — eerily replicating the Wall Street Crash between end-September and late October 1929. It took the reduction of the Fed funds rate to the zero bound, and $120bn of monthly QE feeding into pension funds and insurance companies to turn markets higher. The yield on 10-year US Treasuries fell to 0.5% and equities markets soared on the back of a new basis of relative valuation. After the repo blow-up in September 2019, it became clear that bank balance sheets were too constrained to extend additional bank credit, and conventionally, that might have marked the turn of the bank credit cycle, which was why the comparison with late-1929 was so apt. Furthermore, the banks became less interested in extending credit to Main Street than to Wall Street after financial markets stabilised. The recovery in equities and their move into new high ground is simply asset inflation. Speculators have been quick to add to the Fed’s QE liquidity by drawing on bank and shadow bank credit to play the game. Figure 1 shows how margin loans have nearly doubled as the bull market in equities proceeded from late-March 2020. Never has so much leverage been seen in US securities markets. During covid lockdowns, beyond pure survival few in industry made judgements about the future. It was commonly assumed that when lockdowns ceased business would return to normal. But this made no allowance for the passage of time and the evolution of consumer needs and wants. Eighteen months later, we find that supply chains are still wrongfooted, disrupted by covid shutdowns and not supplying newly needed goods. Consumer demand patterns are not where they left off — they have radically changed. Buoyancy in the US economy is now proving short-lived. The flood of initial spending following lockdowns has receded and different factors are now at play. Supply bottlenecks due to lack of components, transport, and labour are forcing up prices at a pace not reflected in official statistics. In effect, GDP is insufficiently deflated by price rises on the high street to give a reasonable estimate of real GDP. With prices probably rising at over 15% annualised (Shadowstats.com estimated 13.5% three months ago and pressures on rising prices have increased significantly since) the US economy is in a slump which is beginning to replicate that of ninety years ago. The difference is that in 1930-33 the dollar was on a gold coin standard increasing its purchasing power as bank credit was withdrawn, while today it is pure fiat and declining at an increasing pace. Rising prices across the board are another way of saying that the currency’s purchasing power is declining, which given the Fed’s monetary policies of recent years is not surprising. Figure 2 shows the impact of the Fed’s monetary policy on commodity prices, which reflects the dollar’s weakness as a medium of exchange. Given that it takes anything between a few weeks and six months for energy and commodity prices to work through to consumer prices, the recent spurt in commodity prices strongly suggests that consumer prices are going to continue to rise into next year. Yet, only now are the Fed and other central banks beginning to accept that rising prices are not going to be as temporary as they first hoped. This is because it is not prices rising, but the dollar’s purchasing power falling. When they fully realise it, foreign holders of dollars, totalling $33 trillion held in securities, short-term instruments, and bank deposits will require higher interest compensation to persuade them to continue holding dollars. And this is where a conflicting problem arises. A rise in interest rates sufficient to compensate foreign holders of dollars for the currency’s loss of purchasing power will undermine the values of their US stock holdings, totalling $14 trillion, of which $12 trillion is held by private sector foreign investors. Furthermore, a further $12.5 trillion of foreign private sector funds are invested in long-term bonds which will also decline in value. Higher interest rates will certainly trigger private sector selling of these assets across the board. The fate of $6.6 trillion of foreign official holdings of long-term securities will be partly political, demonstrated by the most recent Treasury TIC figures which showed China selling $21bn of US Treasuries, and Japan and the UK buying $39bn between them. This is strongly suggestive of swap lines being drawn down to support the US Treasury bond market, while presumably the US, either through the Treasury, the Exchange Stabilisation Fund, or the Fed itself has bought JGBs and gilts as the quid pro quo. It is worth noting this point because it shows how low bond yields are perpetuated by cooperation between major central banks – along with the attendant monetary inflation. That being the case, private sector holders are misled by price stability while bonds are being wildly overvalued. Another way of looking at it is that if John Williams at Shadowstats is right about inflation statistics, then US Treasuries should be yielding as much as 10% along the whole yield curve. Perhaps the recent rise in the 10-year US Treasury yield in Figure 2 is indicating the start of the process of this discovery for foreign and domestic investors alike. The chart shows that once the 1.75% level is overcome, there is considerable upside in the yield, with a golden cross forming under the spot value. If yields rise from here, it will not be long before equity markets take note and enter a full-blown bear market. The first reaction from the Fed to these events will almost certainly be to claim that falling equities are a leading economic indicator, suggesting the economy faces a post-covid recession. Interest rates cannot be eased further, but QE can be stepped up to cap bond yields and encourage pension funds and insurance corporations to increase their investments. This would be a U-turn from the projected policy of reducing QE due to inflation concerns. But at that point the neo-Keynesian argument can be expected to claim that the developing recession more than negates prospective inflation concerns. Facing the same dynamics, the other leading central banks are certain to fall in line with the Fed’s new policy. But as John Law found in a similar situation in France in 1720, rigging a failing stock market (in his case the Mississippi venture) by currency and credit expansion ultimately fails and undermines the currency. Law destroyed the French economy, contrasting with the British South Sea Bubble, where the Bank of England was not involved and did not deploy its currency to ramp markets. Today, it appears that Law’s experiment is about to be repeated on a grander scale by the issuer of the world’s reserve currency. The other major western central banks will follow suite. The whole fiat money system is at risk of being driven into a similar failure as that which faced the French livre. So, where would that leave China? China’s economic and monetary outlook As noted above, China has followed a different monetary path from that of the Fed for some time — most pointedly since March 2020. Consequently, the yuan has risen against the dollar since then, illustrated in Figure 4. After some initial uncertainty, the yuan began to rise against the dollar and is now about 10% up on the late-March 2020 level. This is not significant yet, because the dollar’s trade-weighted index has fallen by a similar amount. But with China’s monetary policy of clamping down on shadow banking and excessive bank credit creation, compared against the Fed’s more expansionary monetary policies, we can expect the trend for a stronger yuan relative to the dollar to continue. In neo-Keynesian language, China is in a period of deflation, leading to falling prices relative to those measured in dollars. But that misses the point: China has been careful not to encourage speculation in financial assets, reflected in relative stock market performances, shown in Figure 5. While the Fed has been inflating stock prices through interest rate and monetary policies, the Chinese have discouraged speculation. The result is that financial assets in China should be less vulnerable to a general market downturn. It has been a deliberate policy to protect the Chinese economy from 2014 onwards, after the PLA’s chief strategist, Major-General Qiao Liang convinced Beijing that permitting unfettered speculation would leave markets vulnerable to a pump-and-dump attack by America. To the Chinese, excessive financial speculation aided and abetted by the Fed must look like a cover for underlying economic failure. Every thread of their analysis must point to economic disintegration from which China must protect herself. Rates of credit expansion must be restricted, and the yuan be permitted to rise on the foreign exchanges. The change in policy emphasis from export markets towards increasing domestic consumption should be accelerated. In any event, China is the world’s dominant manufacturer, so she has a good degree of control over prices in international trade for consumer goods anyway. The prices of imported commodities and raw materials matter more today and rising dollar prices for commodities and energy can be countered by a higher exchange rate for the yuan. The state’s policy of least risk is to quietly divorce the Chinese economy from the dollar’s influence. In switching some of its trade into the yuan and other currencies, it has been doing this since the Lehman failure, which was another seminal moment in Chinese thinking. The cultural analysis is that America is now destroying its own currency towards a terminal event, an outcome forecast by economics professors in China’s Marxist universities over fifty years ago. The post-Mao ride, piggybacking on American capitalistic methods, is no longer tenable. The golden backstop Like the Marxist professors in the universities, China’s thinkers, such as Wang Huning and President Xi himself, always believed America to be politically and morally rudderless and would destroy itself. Presumably the election of an unpredictable Trump followed by a President Biden who appears to be in a geriatric decline is seen in Beijing as evidence that American society is indeed rudderless and imploding. It was against this likely event that in 1983 far-sighted Chinese strategists began to accumulate gold and to corner the word market for bullion. It would have been obvious to them that one day, dancing with the capitalist devils would become too dangerous and China’s future would have to be secured at the outset long before a capitalist collapse. Accordingly, the Regulations on the Control of Gold and Silver were promulgated on 15 June that year, appointing the People’s Bank (PBOC) with sole responsibility for managing China’s gold and silver while private ownership remained banned. The PBOC then began to acquire gold from foreign markets, a task made easier by the 1980-2002 bear market. Meanwhile, the government threw substantial resources into developing gold mining, and became the largest gold producer in the world by a substantial margin, overtaking South Africa, Russia, and the United States. State owned refineries took in doré from abroad, adding to the accumulation. It was only after the PBOC had accumulated sufficient bullion from imports and domestic production that she set up the Shanghai Gold Exchange in 2002 and permitted Chinese citizens to acquire gold. The government even ran advertising campaigns encouraging the purchase of gold, and since then, over 19,000 tonnes have been delivered into private sector ownership from the SGE’s vaults. Together with the total ban on exports of Chinese refined gold, the pre-2002 ban on private ownership while the state acquired sufficient bullion for its purposes, coupled with the subsequent encouragement to the public to do the same, China clearly regarded gold as her most important strategic asset. It has still not shown its hand, but given the likely amounts involved, to do so would risk destabilising the dollar-centric fiat currency world. Until it happens, we should assume that the 20,000-30,000 tonnes likely to have been accumulated in various state accounts since 1983 is an insurance policy against the failure of American capitalism and the world’s reserve currency. This brings us back to the Taiwan question. For China, the re-absorption of Taiwan may become a simpler matter when the capitalistic Americans are economically at their weakest and the dollar is collapsing. Taiwan itself might face up to this reality. A few steps to push America on its way may be tempting, such as selling down their holdings of US Treasuries (already in process) or disclosing a significantly higher level of gold reserves. The latter may wait until a dollar crisis really develops, which is now surely only a matter of a little time. Tyler Durden Sat, 10/23/2021 - 22:30.....»»

Category: personnelSource: nytOct 24th, 2021

Weiss: We Got Here Because Of Cowardice, We Get Out With Courage

Weiss: We Got Here Because Of Cowardice, We Get Out With Courage Authored by Bari Weiss via Commentary.org, A lot of people want to convince you that you need a Ph.D. or a law degree or dozens of hours of free time to read dense texts about critical theory to understand the woke movement and its worldview. You do not. You simply need to believe your own eyes and ears.  Let me offer the briefest overview of the core beliefs of the Woke Revolution, which are abundantly clear to anyone willing to look past the hashtags and the jargon. It begins by stipulating that the forces of justice and progress are in a war against backwardness and tyranny. And in a war, the normal rules of the game must be suspended. Indeed, this ideology would argue that those rules are not just obstacles to justice, but tools of oppression. They are the master’s tools.  And the master’s tools cannot dismantle the master’s house. So the tools themselves are not just replaced but repudiated. And in so doing, persuasion—the purpose of argument—is replaced with public shaming. Moral complexity is replaced with moral certainty. Facts are replaced with feelings. Ideas are replaced with identity. Forgiveness is replaced with punishment. Debate is replaced with de-platforming. Diversity is replaced with homogeneity of thought. Inclusion, with exclusion. In this ideology, speech is violence. But violence, when carried out by the right people in pursuit of a just cause, is not violence at all. In this ideology, bullying is wrong, unless you are bullying the right people, in which case it’s very, very good. In this ideology, education is not about teaching people how to think, it’s about reeducating them in what to think. In this ideology, the need to feel safe trumps the need to speak truthfully.  In this ideology, if you do not tweet the right tweet or share the right slogan, your whole life can be ruined. Just ask Tiffany Riley, a Vermont school principal who was fired—fired—because she said she supports black lives but not the organization Black Lives Matter. In this ideology, the past cannot be understood on its own terms, but must be judged through the morals and mores of the present. It is why statues of Grant and Washington are being torn down. And it is why William Peris, a UCLA lecturer and an Air Force veteran, was investigated for reading Martin Luther King’s “Letter from Birmingham Jail” out loud in class. In this ideology, intentions don’t matter. That is why Emmanuel Cafferty, a Hispanic utility worker at San Diego Gas and Electric, was fired for making what someone said he thought was a white-supremacist hand gesture—when in fact he was cracking his knuckles out of his car window. In this ideology, the equality of opportunity is replaced with equality of outcome as a measure of fairness. If everyone doesn’t finish the race at the same time, the course must have been defective. Thus, the argument to get rid of the SAT. Or the admissions tests for public schools like Stuyvesant in New York or Lowell in San Francisco.  In this ideology, you are guilty for the sins of your fathers. In other words: You are not you. You are only a mere avatar of your race or your religion or your class. That is why third-graders in Cupertino, California, were asked to rate themselves in terms of their power and privilege. In third grade.  In this system, we are all placed neatly on a spectrum of “privileged” to “oppressed.” We are ranked somewhere on this spectrum in different categories: race, gender, sexual orientation, and class. Then we are given an overall score, based on the sum of these rankings. Having privilege means that your character and your ideas are tainted. This is why, one high-schooler in New York tells me, students in his school are told, “If you are white and male, you are second in line to speak.” This is considered a normal and necessary redistribution of power. Racism has been redefined. It is no longer about discrimination based on the color of someone’s skin. Racism is any system that allows for disparate outcomes between racial groups. If disparity is present, as the high priest of this ideology, Ibram X. Kendi, has explained, racism is present. According to this totalizing new view, we are all either racist or anti-racist. To be a Good Person and not a Bad Person, you must be an “anti-racist.” There is no neutrality. There is no such thing as “not racist.”  Most important: In this revolution, skeptics of any part of this radical ideology are recast as heretics. Those who do not abide by every single aspect of its creed are tarnished as bigots, subjected to boycotts and their work to political litmus tests. The Enlightenment, as the critic Edward Rothstein has put it, has been replaced by the exorcism.  What we call “cancel culture” is really the justice system of this revolution. And the goal of the cancellations is not merely to punish the person being cancelled. The goal is to send a message to everyone else: Step out of line and you are next.  It has worked. A recent CATO study found that 62 percent of Americans are afraid to voice their true views. Nearly a quarter of American academics endorse ousting a colleague for having a wrong opinion about hot-button issues such as immigration or gender differences. And nearly 70 percent of students favor reporting professors if the professor says something that students find offensive, according to a Challey Institute for Global Innovation survey. Why are so many, especially so many young people, drawn to this ideology? It’s not because they are dumb. Or because they are snowflakes, or whatever Fox talking points would have you believe. All of this has taken place against the backdrop of major changes in American life—the tearing apart of our social fabric; the loss of religion and the decline of civic organizations; the opioid crisis; the collapse of American industries; the rise of big tech; successive financial crises; a toxic public discourse; crushing student debt. An epidemic of loneliness. A crisis of meaning. A pandemic of distrust. It has taken place against the backdrop of the American dream’s decline into what feels like a punchline, the inequalities of our supposedly fair, liberal meritocracy clearly rigged in favor of some people and against others. And so on. “I became converted because I was ripe for it and lived in a disintegrating society thrusting for faith.” That was Arthur Koestler writing in 1949 about his love affair with Communism. The same might be said of this new revolutionary faith. And like other religions at their inception, this one has lit on fire the souls of true believers, eager to burn down anything or anyone that stands in its way.  If you have ever tried to build something, even something small, you know how hard it is. It takes time. It takes tremendous effort. But tearing things down? That’s quick work.  The Woke Revolution has been exceptionally effective. It has successfully captured the most important sense-making institutions of American life: our newspapers. Our magazines. Our Hollywood studios. Our publishing houses. Many of our tech companies. And, increasingly, corporate America.  Just as in China under Chairman Mao, the seeds of our own cultural revolution can be traced to the academy, the first of our institutions to be overtaken by it. And our schools—public, private, parochial—are increasingly the recruiting grounds for this ideological army.  A few stories are worth recounting: David Peterson is an art professor at Skidmore College in upstate New York. He stood accused in the fevered summer of 2020 of “engaging in hateful conduct that threatens Black Skidmore students.” What was that hateful conduct? David and his wife, Andrea, went to watch a rally for police officers. “Given the painful events that continue to unfold across this nation, I guess we just felt compelled to see first-hand how all of this was playing out in our own community,” he told the Skidmore student newspaper. David and his wife stayed for 20 minutes on the edge of the event. They held no signs, participated in no chants. They just watched. Then they left for dinner. For the crime of listening, David Peterson’s class was boycotted. A sign appeared on his classroom door: “STOP. By entering this class you are crossing a campus-wide picket line and breaking the boycott against Professor David Peterson. This is not a safe environment for marginalized students.” Then the university opened an investigation into accusations of bias in the classroom. Across the country from Skidmore, at the University of Southern California, a man named Greg Patton is a professor of business communication. In 2020, Patton was teaching a class on “filler words”—such as “um” and “like” and so forth for his master’s-level course on communication for management. It turns out that the Chinese word for “like” sounds like the n-word. Students wrote the school’s staff and administration accusing their professor of “negligence and disregard.” They added: “We are burdened to fight with our existence in society, in the workplace, and in America. We should not be made to fight for our sense of peace and mental well-being” at school. In a normal, reality-based world, there is only one response to such a claim: You misheard. But that was not the response. This was: “It is simply unacceptable for faculty to use words in class that can marginalize, hurt and harm the psychological safety of our students,” the dean, Geoffrey Garrett wrote. “Understandably, this caused great pain and upset among students, and for that I am deeply sorry.”  This rot hasn’t been contained to higher education. At a mandatory training earlier this year in the San Diego Unified School District, Bettina Love, an education professor who believes that children learn better from teachers of the same race, accused white teachers of “spirit murdering black and brown children” and urged them to undergo “antiracist therapy for White educators.”  San Francisco’s public schools didn’t manage to open their schools during the pandemic, but the board decided to rename 44 schools—including those named for George Washington and John Muir—before suspending the plan. Meantime, one of the board members declared merit “racist” and “Trumpian.”  A recent educational program for sixth to eighth grade teachers called “a pathway to equitable math instruction”—funded by the Bill and Melinda Gates Foundation—was recently sent to Oregon teachers by the state’s Department of Education. The program’s literature informs teachers that white supremacy shows up in math instruction when “rigor is expressed only in difficulty,” and “contrived word problems are valued over the math in students’ lived experiences.”  Serious education is the antidote to such ignorance. Frederick Douglass said, “Education means emancipation. It means light and liberty. It means the uplifting of the soul of man into the glorious light of truth, the light only by which men can be free.” Soaring words that feel as if they are a report from a distant galaxy. Education is increasingly where debate, dissent, and discovery go to die. It’s also very bad for kids.  For those deemed “privileged,” it creates a hostile environment where kids are too intimidated to participate. For those deemed “oppressed,” it inculcates an extraordinarily pessimistic view of the world, where students are trained to perceive malice and bigotry in everything they see. They are denied the dignity of equal standards and expectations. They are denied the belief in their own agency and ability to succeed. As Zaid Jilani had put it: “You cannot have power without responsibility. Denying minorities responsibility for their own actions, both good and bad, will only deny us the power we rightly deserve.” How did we get here? There are a lot of factors that are relevant to the answer: institutional decay; the tech revolution and the monopolies it created; the arrogance of our elites; poverty; the death of trust. And all of these must be examined, because without them we would have neither the far right nor the cultural revolutionaries now clamoring at America’s gates.  But there is one word we should linger on, because every moment of radical victory turned on it. The word is cowardice. The revolution has been met with almost no resistance by those who have the title CEO or leader or president or principal in front of their names. The refusal of the adults in the room to speak the truth, their refusal to say no to efforts to undermine the mission of their institutions, their fear of being called a bad name and that fear trumping their responsibility—that is how we got here. Allan Bloom had the radicals of the 1960s in mind when he wrote that “a few students discovered that pompous teachers who catechized them about academic freedom could, with a little shove, be made into dancing bears.” Now, a half-century later, those dancing bears hold named chairs at every important elite, sense-making institution in the country.  As Douglas Murray has put it: “The problem is not that the sacrificial victim is selected. The problem is that the people who destroy his reputation are permitted to do so by the complicity, silence and slinking away of everybody else.” Each surely thought: These protestors have some merit! This institution, this university, this school, hasn’t lived up to all of its principles at all times! We have been racist! We have been sexist! We haven’t always been enlightened! I’ll give a bit and we’ll find a way to compromise. This turned out to be as naive as Robespierre thinking that he could avoid the guillotine.  Think about each of the anecdotes I’ve shared here and all the rest you already know. All that had to change for the entire story to turn out differently was for the person in charge, the person tasked with being a steward for the newspaper or the magazine or the college or the school district or the private high school or the kindergarten, to say: No. If cowardice is the thing that has allowed for all of this, the force that stops this cultural revolution can also be summed up by one word: courage. And courage often comes from people you would not expect. Consider Maud Maron. Maron is a lifelong liberal who has always walked the walk. She was an escort for Planned Parenthood; a law-school research assistant to Kathleen Cleaver, the former Black Panther; and a poll watcher for John Kerry in Pennsylvania during the 2004 presidential election. In 2016, she was a regular contributor to Bernie Sanders’s campaign. Maron dedicated her career to Legal Aid: “For me, being a public defender is more than a job,” she told me. “It’s who I am.” But things took a turn when, this past year, Maron spoke out passionately and publicly about the illiberalism that has gripped the New York City public schools attended by her four children.  “I am very open about what I stand for,” she told me. “I am pro-integration. I am pro-diversity. And also I reject the narrative that white parents are to blame for the failures of our school system. I object to the mayor’s proposal to get rid of specialized admissions tests to schools like Stuyvesant. And I believe that racial essentialism is racist and should not be taught in school.” What followed this apparent thought crime was a 21st-century witch hunt. Maron was smeared publicly by her colleagues. They called her “racist, and openly so.” They said, “We’re ashamed that she works for the Legal Aid Society.”  Most people would have walked away and quietly found a new job. Not Maud Maron. This summer, she filed suit against the organization, claiming that she was forced out of Legal Aid because of her political views and her race, a violation of Title VII of the Civil Rights Act.  “The reason they went after me is that I have a different point of view,” she said. “These ideologues have tried to ruin my name and my career, and they are going after other good people. Not enough people stand up and say: It is totally wrong to do this to a person. And this is not going to stop unless people stand up to it.” That’s courage. Courage also looks like Paul Rossi, the math teacher at Grace Church High School in New York who raised questions about this ideology at a mandatory, whites-only student and faculty Zoom meeting. A few days later, all the school’s advisers were required to read a public reprimand of his conduct out loud to every student in the school. Unwilling to disavow his beliefs, Rossi blew the whistle: “I know that by attaching my name to this I’m risking not only my current job but my career as an educator, since most schools, both public and private, are now captive to this backward ideology. But witnessing the harmful impact it has on children, I can’t stay silent.” That’s courage.  Courage is Xi Van Fleet, a Virginia mom who endured Mao’s Cultural Revolution as a child and spoke up to the Loudoun County School Board at a public meeting in June. “You are training our children to loathe our country and our history,” she said in front of the school board. “Growing up in Mao’s China, all of this feels very familiar…. The only difference is that they used class instead of race.” Gordon Klein, a professor at UCLA, recently filed suit against his own university. Why? A student asked him to grade black students with “greater leniency.” He refused, given that such a racial preference would violate UCLA’s anti-discrimination policies (and maybe even the law). But the people in charge of UCLA’s Anderson School launched a racial-discrimination complaint into him. They denounced him, banned him from campus, appointed a monitor to look at his emails, and suspended him. He eventually was reinstated—because he had done absolutely nothing wrong—but not before his reputation and career were severely damaged. “I don’t want to see anyone else’s life destroyed as they attempted to do to me,” Klein told me. “Few have the intestinal fortitude to fight cancel culture. I do. This is about sending a message to every petty tyrant out there.” Courage is Peter Boghossian. He recently resigned his post at Portland State University, writing in a letter to his provost: “The university transformed a bastion of free inquiry into a social justice factory whose only inputs were race, gender and victimhood and whose only output was grievance and division…. I feel morally obligated to make this choice. For ten years, I have taught my students the importance of living by your principles. One of mine is to defend our system of liberal education from those who seek to destroy it. Who would I be if I didn’t?” Who would I be if I didn’t? George Orwell said that “the further a society drifts from the truth, the more it will hate those that speak it.” In an age of lies, telling the truth is high risk. It comes with a cost. But it is our moral obligation. It is our duty to resist the crowd in this age of mob thinking. It is our duty to think freely in an age of conformity. It is our duty to speak truth in an age of lies.  This bravery isn’t the last or only step in opposing this revolution—it’s just the first. After that must come honest assessments of why America was vulnerable to start with, and an aggressive commitment to rebuilding the economy and society in ways that once again offer life, liberty, and the pursuit of happiness to the greatest number of Americans. But let’s start with a little courage. Courage means, first off, the unqualified rejection of lies. Do not speak untruths, either about yourself or anyone else, no matter the comfort offered by the mob. And do not genially accept the lies told to you. If possible, be vocal in rejecting claims you know to be false. Courage can be contagious, and your example may serve as a means of transmission. When you’re told that traits such as industriousness and punctuality are the legacy of white supremacy, don’t hesitate to reject it. When you’re told that statues of figures such as Abraham Lincoln and Frederick Douglass are offensive, explain that they are national heroes. When you’re told that “nothing has changed” in this country for minorities, don’t dishonor the memory of civil-rights pioneers by agreeing. And when you’re told that America was founded in order to perpetuate slavery, don’t take part in rewriting the country’s history. America is imperfect. I always knew it, as we all do—and the past few years have rocked my faith like no others in my lifetime. But America and we Americans are far from irredeemable.  The motto of Frederick Douglass’s anti-slavery paper, the North Star—“The Right is of no Sex—Truth is of no Color—God is the Father of us all, and all we are brethren”—must remain all of ours. We can still feel the pull of that electric cord Lincoln talked about 163 years ago—the one “in that Declaration that links the hearts of patriotic and liberty-loving men together, that will link those patriotic hearts as long as the love of freedom exists in the minds of men throughout the world.” Every day I hear from people who are living in fear in the freest society humankind has ever known. Dissidents in a democracy, practicing doublespeak. That is what is happening right now. What happens five, 10, 20 years from now if we don’t speak up and defend the ideas that have made all of our lives possible? Liberty. Equality. Freedom. Dignity. These are ideas worth fighting for. Tyler Durden Sun, 10/17/2021 - 23:05.....»»

Category: personnelSource: nytOct 18th, 2021

Welcome to #Striketober. Thousands of workers are walking off the job at Kellogg"s and John Deere amid the labor shortage, with Hollywood employees up next.

Over 100,000 workers are preparing to go on strike - with thousands already on the picket line. Kellogg's Cereal plant workers demonstrate in front of the plant on October 7, 2021 in Battle Creek, Michigan. Rey Del Rio/Getty Images Thousands of workers across the US are on strike, and thousands more are preparing to walk out. It's being called "Striketober," and it shows a revitalized labor movement ready to down tools. Workers are flexing their power across the economy by quitting, striking, and demanding better conditions. A new month has been born in 2021. Instead of October, it's "Striketober."That's because thousands of workers in every industry are saying no to current working conditions. They're not joining the wave of workers quitting during "the Great Resignation" phase of the labor shortage. They're staying at their current work - but demanding it change.From Alabama coal miners to Hollywood theater hands and from Kellogg's to John Deere, American workers are flexing their power across the economy.-Alexandria Ocasio-Cortez (@AOC) October 14, 2021 All told, The Hill reports that in the midst of a national labor shortage, more than 100,000 workers have voted to authorize strikes. That means that many employees will walk out of their jobs and stop working completely until they reach agreements with management on issues such as pay transparency, more manageable hours, and better benefits.It could mark a new chapter in American labor history, while touching everything from your favorite snack to your favorite movies.Dan Osborn - the president of the Bakery, Confectionery, Tobacco Works and Grain Millers Union local 50G in Omaha, Nebraska - is one of the workers across four different Kellogg's plants who are currently striking for an equal wage system and stronger benefits. Osborn, who's been a mechanic at Kellogg's for 18 years, said, "there seems to be a movement sweeping across America with labor right now. People are finally standing up for what they believe and the workers are trying to get what they deserve."-Bernie Sanders (@BernieSanders) October 14, 2021The labor movement largely slumbered in 2020. Striketober could stir it back to life.These strikes are huge in scaleOver 60,000 Hollywood-based workers in the International Alliance of Theatrical Stage Employees (IATSE) are preparing to strike on Monday, while over 24,000 healthcare workers at Kaiser Permanente have authorized a work stoppage, The Washington Post reports, if they don't get an equal pay system, raises, and more hires to help ease shortstaffing.Thousands more are already actively striking. Besides the 1,400 Kellogg workers who have been on strike since October 5, over 10,000 John Deere workers went on strike at midnight on Thursday. In Alabama, 1,100 coal miners have been on strike since April, Mic's Kim Kelly reports."Without an end date, we could keep talking forever. Our members deserve to have their basic needs addressed now," IATSE President Matthew Loeb said in a Wednesday statement.It's the first time that IATSE has authorized a strike, showcasing a breaking point. Insider's Elaine Low reports it could essentially shut down Hollywood. The number of IATSE workers on strike alone would be more than double the number of workers involved in major work stoppages last year.Indeed, this round of strikes will be felt by consumers and workers alike. An IATSE walkout could slow the production of television shows and movies; Osborn is asking that strike supporters boycott Kellogg's products as the strike continues on. In a statement, Kellogg's said "our proposals have been grossly misrepresented by the Union," and the company is "ready, willing, and able to continue negotiations at any time."Workers are fighting back against unequal gainsMike Mitchell, the director of policy and research at Groundwork Collaborative, told Insider the strikes reflect a "huge, significant shift in power from workers to corporations and businesses." He says this is because the pandemic and ensuing recession created so much uncertainty for workers, while inequality increased and wages remain stagnant.However, as inequality become more pronounced during the pandemic, stimulus measures also led to personal income hitting record highs. Also, wages have actually moved significantly upward for the first time in decades - something that unemployed Americans previously told Insider made them reconsider what they want or need from work.In a tweet, IATSE Communications Director Jonas Loeb wrote that "#Striketober is a function of greedy bosses trying to recoup the un-recoupable. Workers across every sector in our economy are being pushed to the brink to make up for the lost time during the pandemic shutdown."-Bernie Sanders (@BernieSanders) October 14, 2021American billionaires added $1.8 trillion to their fortunes during the pandemic, according to a report from the left-leaning Institute for Policy Studies and Americans for Tax Fairness. In 2020, CEOs got paid 351 times more than the typical worker, an analysis from EPI found.Over the past 40 years, the rate of workers covered by unions has shrunk by half, according to a report from the left-leaning Economic Policy Institute. !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: personnelSource: nytOct 16th, 2021

Companies are mentioning the words "supply chain" more than ever before during earnings calls

Issues like labor shortages and port congestions are contributing to delays and disruptions retail companies face ahead of the 2021 holiday season. Companies have relied on lean supply chains until the pandemic disrupted things. Justin Sullivan/Getty Images The term "supply chain" has been reference about 3,000 in investors' earning calls this year. A supply chain crisis is expected to slow down retail operations, especially during the holidays. President Biden met with retailers to tackle alleviating supply chain pressures across the country. Companies from Apple to Costco are echoing the same words in their third-quarter earnings calls, which could foreshadow major delays in the retail industry in the coming months.S&P 500 executives have mentioned "supply chain" and related terms almost 3,000 times on company investor calls as of Tuesday, Bloomberg reported, surpassing last year's tally of about 2,000 mentions."Supply chain is taking center stage on earnings calls as the supply chain is a disaster," Scott Mushkin, an analyst at R5 Capital, told Bloomberg. "Honestly, there is a chance the system breaks down during the holidays."Supply chain disruptions caused by COVID-19 continue to strain retail schedules, especially as the markets head into the holiday season. Big retailers like Walmart, Ikea, and Home Depot have resorted to chartering their own bulk shipping vessels to sidestep shipping delays, while companies like Amazon and Lululemon invested more on their air freight delivery operations.Meanwhile, executives are telling their customers to brace for continued shortages and imminent price hikes. McCormick & Co. CEO Lawrence Kurzius cited "additional pressure on our supply chain due to strained transportation capacity and labor shortages and distribution" in an earnings call in September, which "negatively impact sales." Pepsi CEO Ramon Laguarta said in an earnings call that the company pulled back some perimeter inventory in the summer "voluntarily" because of "supply chain constraints."However, companies can also use global supply chain issues as reasons to explain poor quarterly performances, some market experts say, using the term as a PR cushion to soften the impact of a company's pandemic-era performance."Any company missing earnings can and will now freely employ the supply chain excuse," lead market strategist and founder of NorthmanTrader Sven Henrich said in a tweet.President Biden met Wednesday with officials from the Port of Los Angeles, which is facing a large onslaught of incoming cargo vessels stuck at port, to expand hours of operation to off-peak and night hours and hopefully lessen the stress of supply chain woes. But the discussions about the effects of supply chain problems isn't going away."Holiday goods are waiting at the ports," Stephanie Wissink, an analyst at Jefferies who covers retailers and consumer-product companies, told Bloomberg. "For retailers and brands alike, it's a race against the clock."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 13th, 2021

Elon Musk keeps attacking Jeff Bezos over the billionaires" rival space companies. Here"s a history of the Tesla CEO"s weirdest beefs, including with Azealia Banks and Pablo Escobar"s brother.

Musk has got into spats and even long-running feuds with an eclectic bunch of people, often over his preferred medium of Twitter. Tesla CEO Elon Musk has a history of strange spats. Getty Images Elon Musk has a habit of getting into bizarre fights. Recently he's been attacking Jeff Bezos over the billionaires' rival space companies. Bezos is one of an eclectic bunch of people Musk has feuded with, including rapper Azealia Banks. See more stories on Insider's business page. Elon Musk has a serious combative streak.The Tesla and SpaceX CEO is famously unpredictable as chief executives go, a personality trait which has sometimes landed him in trouble - particularly with the US Securities and Exchange Commission.But Musk's combative side doesn't just express itself in skirmishes with government bodies. The Tesla billionaire has ended up in bizarre spats with a strange array of people - from fellow billionaires to artists to rescue divers - and often via his preferred medium of Twitter.Recently, he has repeatedly attacked Amazon founder Jeff Bezos, whose space exploration company Blue Origin has been a thorn in the side of Musk's rival company SpaceX.The twists and turns in the stories of Musk's various battles are often baffling, and it can be hard to remember all the different ways Musk has squared up to various public figures and regular citizens.We've catalogued his weirdest fights. In May 2020 Musk challenged Alameda County officials to arrest him for reopening the Tesla factory during the coronavirus pandemic. AP Photo Reports surfaced in May 2020 that Tesla was asking workers in its California factory to return to work despite Alameda County's shelter-in-place order forbidding the factory from re-opening as only essential businesses are allowed to operate in California due to the coronavirus pandemic.Musk confirmed the reports on May 11 in a tweet. "Tesla is restarting production today against Alameda County rules, I will be on the line with everyone else. If anyone is arrested, I ask that it only be me." Tesla threatened to sue Alameda County. The view of Tesla Inc's US vehicle factory in Fremont, California Reuters Tesla's suit hinged around the fact that California Gov. Gavin Newsom said manufacturers in the state would be allowed to reopen, but Alameda County extended its shelter-in-place order only allowing essential businesses to open.Tesla's suit argued that Alameda County's forced shutdown ignored an order from California Gov. Gavin Newsom allowing businesses from "16 crucial infrastructure industries" to remain open, one of which is transportation.The fight prompted Musk to leave California altogether. "Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen on how Tesla is treated in the future. Tesla is the last carmaker left in CA," Musk tweeted in May 2020.This prompted California Assemblywoman Lorena Gonzalez to tweet: "F--- Elon Musk."Musk confirmed in December 2020 he had moved to Texas. Alameda County gave the Tesla factory the go-ahead to reopen on May 13, 2020. Alameda County officials said on May 13 Tesla would be allowed to reopen its Fremont factory so long as it implemented robust safety plans for its workers, and a Tesla executive sent a letter to employees saying it would resume "full production" the following week.Tesla dropped its lawsuit against Alameda County the same week it resumed production. Musk picked numerous fights over the severity of the coronavirus. Elon Musk speaks during the Satellite 2020 at the Washington Convention Center on March 9, 2020, in Washington, DC. Brendan Smialowski / AFP via Getty Images Musk has consistently espoused the theory that the threat posed by the coronavirus is overblown, and tweeted misinformation about the virus including that children are "basically immune."He has also been openly hostile towards state lockdowns, calling them "fascist," and questioned the official death count as it includes people with underlying health conditions.As Business Insider's Dave Mosher and Aylin Woodward write, Musk's rhetoric is dangerously misguided. Scientific evidence overwhelmingly suggests lockdowns help curb the spread of the virus and slow the death rate, and underlying health conditions make people more vulnerable to the virus, and so should not be discounted from death tolls. Musk's frustrations were tied to Tesla's fortunes. A worker descends from the top deck of a car carrier trailer carrying Tesla electric vehicles at Tesla's primary vehicle factory after CEO Elon Musk announced he was defying local officials' coronavirus disease (COVID-19) restrictions by reopening the plant in Fremont, California on May 11, 2020. REUTERS/Stephen Lam Musk said during Tesla's Q1 2020 earnings call that the forced closure of the Tesla factory posed a "serious risk" to business."I should say we are a bit worried about not being able to resume production in the Bay Area, and that should be identified as a serious risk," Musk said.During the same call, Musk went on a tirade against lockdowns in general. "I would call it forcibly imprisoning people in their homes against all their constitutional rights. That's my opinion, and breaking people's freedoms in ways that are horrible and wrong and not why people came to America or built this country — what the f---. Excuse me, the outrage. It's just outrage," Musk said. In 2018 Musk called a complete stranger "pedo guy." British caver Vernon Unsworth looks to Tham Luang cave complex during a search for members of an under-16 soccer team and their coach, in the northern province of Chiang Rai, Thailand, June 27, 2018 REUTERS/Soe Zeya Tun Vernon Unsworth is a British diver who participated in the rescue of 12 Thai boys and their soccer coach from a flooded cave system in June 2018. It was a difficult, complex operation and the boys were successfully rescued after being trapped for 17 days by international divers and Thai Navy SEALs. Unsworth, an experienced cave explorer, was asked by Thai officials to aid in the rescue.He had never met Elon Musk, but would go on to spend most of 2019 locked in a legal battle with the Tesla billionaire.Musk had inserted himself into the Thai rescue operation and offered to build a mini-submarine to fetch the boys. The idea never materialized.Unsworth was asked about Musk's submarine in an interview with CNN, and described it in unflattering terms, describing it as a PR stunt. He added that Musk could "stick his submarine where it hurts."That angered Musk, who subsequently wrote a post on Twitter calling Unsworth a "pedo guy." When a Twitter user challenged him over it, he replied "bet ya a signed dollar it's true."His remarks immediately triggered headlines around the world, despite the fact he provided no proof for the "pedo" claim. Musk doubled down on the allegation by emailing BuzzFeed reporter Ryan Mac and calling Vernon Unsworth a "child rapist", with no evidence. Brendan McDermid/Reuters Censured by critics for using the slur, Musk deleted his tweet and apologised, but he didn't leave it there. A month later he responded to a Twitter user who criticised him. "You don't think it's strange he hasn't sued me? He was offered free legal services," Musk tweeted, referring to Unsworth.Then in September 2018, he doubled down. BuzzFeed reporter Ryan Mac emailed Musk asking for comment on a legal threat made by Unsworth's lawyer. Musk replied, suggesting Unsworth was a "child rapist" and "I hope he fucking sues me." Musk prefaced the email to Mac with "off the record," but the journalist had never agreed to go off the record, and published the entire exchange. Documents later revealed Musk called himself a "fucking idiot" for sending the email to Mac in the first place.A few weeks after Mac's article was published Unsworth sued Musk for defamation. Court filings revealed Musk hired a detective to investigate Unsworth - but the PI turned out to be a conman. Chicago Mayor Rahm Emanuel listens to engineer and tech entrepreneur Elon Musk of The Boring Company talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Joshua Lott/Getty Images The case threw up some bizarre findings.Court filings revealed that Musk paid a man named James Higgins-Howard $50,000 to investigate Unsworth and relay reports to Musk's family office.Higgins-Howard emailed Musk out of the blue following the initial "pedo guy" tweet to offer his services as a private detective. "You may want to dig deep into Mr. Unsworth['s] past to prepare for his defamation claim," Higgins-Howard wrote, adding "no smoke without fire!"Higgins-Howard didn't find any evidence, however, and BuzzFeed's Ryan Mac later reported that the would-be PI had previously been convicted of fraud. Musk admitted in a deposition that he later realised Higgins-Howard was "just taking us for a ride."In depositions Musk has also argued that by calling Unsworth "pedo guy" he wasn't literally accusing him of being a pedophile because the term was used to be synonymous with "creepy old man" when he was growing up in South Africa. He also claimed he was genuinely worried Unsworth could be "another Jeffrey Epstein."The trial began on December 3, 2019.   On December 6, 2019, Elon Musk won the defamation case. Elon Musk arriving at court in California. AP Photo/Mark J. Terrill After a four-day trial in California, the jury found Musk not guilty of defamation.The jury took less than half an hour to reach their decision, which reportedly hinged on the fact that Musk did not identify Unsworth in his tweet, according to the Times of London.The foreman also said that Unsworth's lawyers had made the case too emotive. "The failure probably happened because they didn't focus on the tweets... I think they tried to get our emotions involved in it. In a court of law you have to prove your case, which they did not prove," said foreman Joshua Jones, per The Guardian."My faith in humanity is restored," Musk said following the verdict.Unsworth's lawyer Lin Wood said in a tweet that his team would "explore legal options" for challenging the verdict.  In June 2018, Musk took a liking to some farting unicorn art but didn't pay for it, leading to a copyright dispute with a potter. Tom Edwards' farting unicorn mug. Tom Edwards, Wallyware  Musk locked horns with another unlikely member of the public in June 2018.Colorado-based potter Tom Edwards caught Musk's attention with a mug. The mug carried a painting of a unicorn farting rainbows to power an electric car. Musk tweeted a picture of a mug in February 2017 calling it "maybe my favorite mug ever." Two months later friends of Edwards' told him they had seen the same farting unicorn image used as an icon on Tesla screens, and the image was later used on Tesla's company Christmas cards.The Christmas card spurred Edwards into action. "I decided to make it my New Year's resolution to pursue getting compensation, because artists are always seeing their work just taken, and it happens all the time," he told Insider in June 2018.In later-deleted tweets Musk attacked Edwards, saying taking legal action would be "kinda lame.""If anything, this attention increased his mug sales," he said. Musk also claimed (also in subsequently deleted tweets) to have offered to pay for the work twice. Edwards said he'd had no contact from Musk or Tesla at that point. Despite Musk's protestations, the two eventually settled. Brendan McDermid/Reuters A month after the farting unicorn argument erupted on Twitter, Musk and Edwards came to a settlement. The terms of the settlement were not made public, but Edwards posted on his blog that it "resolves our issues in a way that everyone feels good about.""It's clear there were some misunderstandings that led to this escalating, but I'm just glad that everything has been cleared up," he added.Musk for his part tweeted a link to the blog accompanied by three emojis: a unicorn, a gust of wind, and a peace symbol.—Elon Musk (@elonmusk) July 21, 2018  Azealia Banks waded into Tesla's regulatory troubles in August 2018. Rapper Azealia Banks became embroiled in Elon Musk's infamous "funding secured" saga. Getty On August 7, 2018, Elon Musk sent his infamous "funding secured" tweet, in which he claimed to be taking Tesla private at $420 a share.Tesla did not go private, and Musk landed himself with a $20 million fine from the Securities and Exchange Commission (SEC) for the tweet. He lost his position as chairman of Tesla's board, leading to long-running bad blood with the agency.It triggered another unlikely feud with rapper Azealia Banks.A week after Musk sent his fateful Tweet, Banks wrote on her Instagram that she had been at Musk's house at the time when he'd sent it. She had visited to collaborate with Musk's then-partner Grimes (real name Claire Boucher), and claimed she had been annoyed when the crisis caused by "funding secured" dominated Grimes' time."I waited around all weekend while grimes coddled her boyfriend," Banks wrote, and compared the weekend to the horror film "Get Out.""I saw him in the kitchen tucking his tail in between his legs scrounging for investors to cover his ass after that tweet," Banks told Insider at the time.   Banks accused Musk of taking her phone. Getty Images On August 20, Banks was back on Instagram, tagging Elon Musk. Banks posted "@elonmusk you need to contact me. ASAP." and "I need my phone back now.  @elonmusk," on her Instagram story — she later deleted the posts.Banks then shared a screenshot with Insider that appeared to show a text from Grimes saying the choice of share price ($420) was a weed reference. "He just got into weed cuz of me and he's super entertained by 420 so when he decided to take the stock private he calculated it was worth 419$ so he rounded up to 420 for a laugh and now the sec is investigating him for fraud," the text read.Musk told The New York Times that he rounded up the price because $420 had better "karma" than $419, and denied using weed. Musk didn't really respond publicly to Banks except to say he had never met her. Reuters / Rebecca Cook Musk told Gizmodo that he hadn't met Banks "or communicated with her in any way," but confirmed to the New York Times that he had seen her at his house."I saw her on Friday morning, for two seconds at about a 30-foot distance as she was leaving the house... I'd just finished working out. She was not within hearing range. I didn't even realize who it was. That's literally the only time I've ever laid eyes on her," he told the Times. The Banks-Musk feud dragged on for months after the story blew up. Isaiah Trickey/FilmMagic In January 2019, a court granted a motion to subpoena Banks, Grimes, and publications including Insider.In July 2021 Grimes posted in a Discord chat that she'd written a song, called "100% Tragedy," which was about "having to defeat Azealia Banks when she tried to destroy my life."Musk announced in September 2021 that he and Grimes had broken up after three years together. Banks responded to the news on her Instagram, saying: "Ok girl, can we finally make those darn songs now that apartheid Clyde is out of the way?"The nickname "Apartheid Clyde" is an apparent reference to Musk's South African upbringing. Musk was accused of stealing an idea from Pablo Escobar's brother in July 2019. Roberto Escobar (left). YouTube Musk ended up in a spat with Roberto Escobar, brother of deceased Colombian drug kingpin Pablo Escobar, over an accusation of intellectual property theft.TMZ first reported that Escobar had accused Musk of stealing his idea for a flamethrower when Musk's venture The Boring Company announced its "Not-A-Flamethrower" flamethrower in January 2018, beating Escobar's own flamethrower to market.Escobar claimed to TMZ that one of Musk's engineers had stolen the idea while visiting an Escobar family compound in 2017. "It's not a flamethrower, Mr. Escobar." iJustine/YouTube/Joe Rogan Experience Elon Musk responded to the story in classic Muskian style — on Twitter.Musk tweeted a link to the TMZ story accompanied by the words, "It's not a Flamethrower, Mr. Escobar," a tongue-in-cheek reference to the device's name.—Elon Musk (@elonmusk) July 11, 2019In a follow-up tweet he added he stole the idea from the comedy movie "Spaceballs." Musk has traded jibes with Amazon CEO Jeff Bezos about which parts of space to conquer. Jeff Bezos unveils Blue Moon, a lunar lander designed by his spaceflight company, Blue Origin, on May 9, 2019. Blue Origin Jeff Bezos owns a space exploration company called Blue Origin, a rival to Musk's own space exploration company SpaceX.Bezos and Musk have sporadically interacted about their companies' successes, sometimes applauding each other, but more often locking antlers.When Blue Origin unveiled its new lunar lander Blue Moon in May 2019 Bezos reportedly took a swipe at SpaceX's plans to colonize Mars during his presentation, saying that the moon was a much more realistic prospect. According to Bloomberg, Bezos showed a slide with a picture of Mars accompanied by the labels "Round-trip on the order of years" and "No real-time communication."Musk responded by mocking the lander's name."Competition is good. Results in a better outcome for all... But putting the word "Blue" on a ball is questionable branding," Musk said in a pair of tweets on May 10, 2019. Musk also called Bezos a "copycat" over his plan to launch thousands of satellites. Clodagh Kilcoyne/Reuters In April 2019, Amazon announced its plan to launch 3,236 satellites with the aim of providing broadband to communities without high-speed internet, nicknamed Project Kuiper.The project bears some resemblance to a SpaceX project called Starlink, which won FCC approval in November 2018 to launch almost 12,000 satellites into orbit. CNBC also reported that Amazon hired a former SpaceX executive to head up Kuiper.After news of Project Kuiper broke, Musk tagged Bezos and tweeted the word "copy" followed by a cat emoji.—Elon Musk (@elonmusk) April 9, 2019Bezos did not respond.  Musk tweeted in June 2020 that Amazon should be broken up after it de-listed a book written by a coronavirus skeptic. AP Photo/Pablo Martinez Monsivais When Amazon's Direct Kindle Service refused to publish a book called "Unreported Truths about COVID-19 and Lockdowns," it caught Musk's eye.The author of the book, Alex Berenson, is a former New York Times reporter who has written claiming the threat posed by the coronavirus has been overblown.Musk, who has also been vocal in his opinion that the virus was not dangerous enough to warrant lockdown measures (despite evidence to the contrary) spotted a tweet by Berenson presenting the email he got from Amazon saying his book did not comply with its guidelines."This is insane @JeffBezos. Time to break up Amazon. Monopolies are wrong!" Musk tweeted.—Elon Musk (@elonmusk) June 4, 2020 Amazon later confirmed to Business Insider the book had been removed in error and would be reinstated.  In mid-2021 Musk started attacking Bezos repeatedly claiming the Amazon founder retired so he could sue SpaceX. Blue Origin CEO Jeff Bezos (left) and SpaceX CEO Elon Musk. Joe Raedle/Getty Images/Axel Springer On August 26, Elon Musk tweeted saying Bezos had "retired in order to pursue a full-time job filing lawsuits against SpaceX."Musk repeated the joke on September 1, and during an interview at the Code Conference on September 28 said he can't "sue your way to the moon."These attacks were prompted by both Amazon and Blue Origin mounting challenges against SpaceX.Amazon filed a protest letter with the Federal Communications Commission (FCC) in August 2021 urging it to block SpaceX's Starlink from putting up more satellites.Blue Origin also sued NASA in August after the agency granted an exclusive moon-lander contract to SpaceX.While Bezos tends not to engage personally in his feud with Musk, Amazon and Blue Origin have openly criticized Musk's companies. Amazon sent an unprompted 13-page list to The Verge of all the legal actions SpaceX has taken stretching back as far as 2004, claiming it showed SpaceX is just as litigious as itself. In a complaint submitted to the FCC on September 8 Amazon also said: "The conduct of SpaceX and other Musk-led companies makes their view plain: rules are for other people, and those who insist upon or even simply request compliance are deserving of derision and ad hominem attacks." Musk has a long-running animosity towards David Einhorn, a billionaire short seller he loves sending short shorts to. Greenlight Capital president David Einhorn. REUTERS/Brendan McDermid Musk has a pretty well-documented hatred for short sellers, tweeting in October 2018 "what they do should be illegal."One short seller, in particular, has drawn Musk's ire. David Einhorn is president of Greenlight Capital, and is typically pretty scathing in his notes about Tesla and Musk.When Einhorn blamed Tesla's good performance in the first half of 2018 for denting Greenlight's hedge fund, Elon Musk promised to send him a box of "short shorts" — and he followed through.—David Einhorn (@davidein) August 10, 2018In November 2019, Musk renewed the offer of short shorts after Einhorn published a damning note on Tesla's Q3 results, drawing attention to a shareholder's lawsuit against Tesla, which alleges that Musk acquired his cousin's company SolarCity at an inflated value to bail it out.Musk posted an incredibly sarcastic note on Twitter following Einhorn's letter, addressing him as "Mr. Unicorn." Einhorn is German for unicorn. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 1st, 2021

Futures Fade Rally With Congress Set To Avert Government Shutdown

Futures Fade Rally With Congress Set To Avert Government Shutdown US equity futures faded an overnight rally on the last day of September as lingering global-growth risks underscored by China's official manufacturing PMI contracted for the first time since Feb 2020 as widely expected offset a debt-ceiling deal in Washington and central-bank assurances about transitory inflation. The deal to extend government funding removes one uncertainty from the minds of investors, amid China risks and concerns over Federal Reserve tapering. Comments from Fed Chair Powell and ECB head Christine Lagarde about inflation being transitory rather than permanent also helped sentiment, even if nobody actually believes them any more.In China, authorities told bankers to help local governments support the property market and homebuyers, signaling concern at the economic fallout from the debt crisis at China Evergrande As of 7:15am ET, S&P futures were up 18 points ot 0.44%, trimming an earlier gain of 0.9%. Dow eminis were up 135 or 0.4% and Nasdaq futs rose 0.43%. 10Y TSY yields were higher, rising as high as 1.54% and last seen at 1.5289%; the US Dollar erased earlier losses and was unchanged. All the three major indexes are set for a monthly drop, with the benchmark S&P 500 on track to break its seven-month winning streak as worries about persistent inflation, the fallout from China Evergrande’s potential default and political wrangling over the debt ceiling rattled sentiment. The index was, however, on course to mark its sixth straight quarterly gain, albeit its smallest, since March 2020’s drop. The rate-sensitive FAANG stocks have lost about $415 billion in value this month after the Federal Reserve’s hawkish shift on monetary policy sparked a rally in Treasury yields and prompted investors to move into energy, banks and small-cap sectors that stand to benefit the most from an economic revival. Among individual stocks, oil-and-gas companies APA Corp. and Devon Energy Corp. led premarket gains among S&P 500 members. Virgin Galactic shares surged 9.7% in premarket trading after the U.S. aviation regulator gave the company a green-light to resume flights to the brink of space. Perrigo climbed 14% after reporting a settlement in a tax dispute with Ireland.  U.S.-listed Macau casino operators may get a boost Thursday after Macau Chief Executive Ho Iat Seng said the region will strive to resume quarantine-free travel to Zhuhai by Oct. 1, the start of the Golden Week holiday, if the Covid-19 situation in Macau is stable. Here are some of the other biggest U.S. movers today: Retail investor favorites Farmmi (FAMI US) and Camber Energy (CEI US) both rise in U.S. premarket trading, continuing their strong recent runs on high volumes Virgin Galactic (SPCE US) shares rise 8.9% in U.S. premarket trading after the U.S. aviation regulator gave co. a green-light to resume flights to the brink of space Perrigo (PRGO US) rises 15% in U.S. premarket trading after reporting a settlement in a tax dispute with Ireland. The stock was raised to buy from hold at Jefferies over the “very favorable” resolution Landec (LNDC US) shares fell 17% in Wednesday postmarket trading after fiscal 1Q revenue and adjusted loss per share miss consensus estimates Affimed (AFMD US) rises 4.3% in Wednesday postmarket trading after Stifel analyst Bradley Canino initiates at a buy with a $12 price target, implying the stock may more than double over the next year Herman Miller (MLHR US) up ~2.8% in Wednesday postmarket trading after the office furnishings maker posts fiscal 1Q net sales that beat the consensus estimate Orion Group Holdings (ORN US) shares surged as much as 43% in Wednesday extended trading after the company disclosed two contract awards for its Marine segment totaling nearly $200m Kaival Brands (KAVL US) fell 18% Wednesday postmarket after offering shares, warrants via Maxim An agreement among U.S. lawmakers to extend government funding removes one uncertainty from a litany of risks investors are contenting with, ranging from China’s growth slowdown to Federal Reserve tapering. “Republicans and Democrats showed some compromise by averting a government shutdown,” Sebastien Galy, a senior macro strategist at Nordea Investment Funds. “By removing what felt like a significant risk for a retail audience, it helps sentiment in the equity market.” Still, president Joe Biden’s agenda remains at risk of being derailed by divisions among his own Democrats, as moderates voiced anger on Wednesday at the idea of delaying a $1 trillion infrastructure bill ahead of a critical vote to avert a government shutdown. The big overnight economic news came from China whose September NBS manufacturing PMI fell to 49.6 from 50.1 in August, the first contraction since Feb 2020, likely due to the production cuts caused by energy constraints. Both the output sub-index and the new orders sub-index in the NBS manufacturing PMI survey decreased in September. The NBS non-manufacturing PMI rebounded to 53.2 in September from 47.5 in August on a recovery of services activities as COVID restrictions eased. However, the numbers may not capture full impact of energy restrictions as the NBS survey was taken around 22nd-25th of the month: expect far worse number in the months ahead unless China manages to contain its energy crisis. Europe’s Stoxx 600 Index advanced 0.3%, trimming a monthly loss but fading an earlier gain of 0.9%, led by gains in basic resources companies as iron ore climbed, with the CAC and FTSE 100 outperforming at the margin. Technology stocks, battered earlier this week, also extended their rebound.  Miners, oil & gas and media are the strongest sectors; utility and industrial names lag. European natural gas and power markets hit fresh record highs as supply constraints persist. Perrigo jumped 13.8% after the drugmaker agreed to settle with Irish tax authorities over a 2018 issue by paying $1.90 billion in taxes Asian stocks were poised to cap their first quarterly loss since March 2020 as Chinese technology names fell and as investors remained wary over a recent rise in U.S. Treasury yields.  The MSCI Asia Pacific Index is set to end the September quarter with a loss of more than 5%, snapping a winning streak of five straight quarters. A combination of higher yields, Beijing’s corporate crackdown and worry over slowing economic growth in Asia’s biggest economy have hurt sentiment, bringing the market down following a brief rally in late August.  The Asian benchmark rose less than 0.1% after posting its worst single-day drop in six weeks on Wednesday. Consumer discretionary and communication services groups fell, while financials advanced. The Hang Seng Tech Index ended 1.3% lower as Beijing announced new curbs on the sector, while higher yields hurt sentiment toward growth stocks.  “Because there’s growing worry over U.S. inflation, we need to keep an eye on the potential risks, globally,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. “Also, there’s the Evergrande issue. The market is in a wait-and-see mode now, with a focus on whether the group will be able to make future interest rate payments.”  Benchmarks in Thailand and Malaysia were the biggest losers, while Indonesia and Australia outperformed. Japan’s Topix and the Nikkei 225 Stock Average slipped for a fourth day as investors weighed Fumio Kishida’s election victory as the new ruling party leader. Global stocks are poised to end the quarter with a small loss, after a five-quarter rally, as investors braced for the Fed to wind down its stimulus. They also remain concerned about slowing growth and elevated inflation, supply-chain bottlenecks, an energy crunch and regulatory risks emanating from China. A majority of participants in a Citigroup survey said a 20% pullback in stocks is more likely than a 20% rally. In rates, Treasuries were slightly cheaper across the curve, off session lows as stock futures pare gains. 10-year TSY yields were around 1.53%, cheaper by 1.2bp on the day vs 2.3bp for U.K. 10-year; MPC-dated OIS rates price in ~65bps of BOE hikes by December 2022. Gilts lead the selloff, with U.K. curve bear-steepening as BOE rate-hike expectations continue to ramp up. Host of Fed speakers are in focus during U.S. session, while month-end extension may serve to underpin long-end of the curve.   A gauge of the dollar’s strength headed for its first drop in five days as Treasury yields steadied after a recent rise, and amid quarter-end flows. The Bloomberg Dollar Spot Index fell as the dollar steady or weaker against most of its Group-of-10 peers. The euro hovered around $1.16 and the pound was steady while Gilts inched lower, underperforming Bunds and Treasuries. Money markets now see around 65 basis points of tightening by the BOE’s December 2022 meeting, according to sterling overnight index swaps. That means they’re betting the key rate will rise to 0.75% next year from 0.1% currently. The Australian dollar led gains after it rose off its lowest level since August 23 amid exporter month-end demand and as iron ore buyers locked in purchases ahead of a week-long holiday in China. Norway’s krone was the worst G-10 performer and slipped a fifth day versus the dollar, its longest loosing streak in a year. In commodities, oil surrendered gains, still heading for a monthly gain amid tighter supplies. West Texas Intermediate futures briefly recaptured the level above $75 per barrel, before trading at $74.71. APA and Devon rose at least 1.8% in early New York trading. European gas prices meanwhile hit a new all time high. Looking at the day ahead, one of the highlights will be Fed Chair Powell’s appearance at the House Financial Services Committee, alongside Treasury Secretary Yellen. Other central bank speakers include the Fed’s Williams, Bostic, Harker, Evans, Bullard and Daly, as well as the ECB’s Centeno, Visco and Hernandez de Cos. On the data side, today’s highlights include German, French and Italian CPI for September, while in the US there’s the weekly initial jobless claims, the third estimate of Q2 GDP and the MNI Chicago PMI for September. Market Snapshot S&P 500 futures up 0.7% to 4,379.00 STOXX Europe 600 up 0.6% to 457.59 MXAP little changed at 196.85 MXAPJ up 0.3% to 635.71 Nikkei down 0.3% to 29,452.66 Topix down 0.4% to 2,030.16 Hang Seng Index down 0.4% to 24,575.64 Shanghai Composite up 0.9% to 3,568.17 Sensex down 0.3% to 59,239.76 Australia S&P/ASX 200 up 1.9% to 7,332.16 Kospi up 0.3% to 3,068.82 Brent Futures up 0.4% to $78.98/bbl Gold spot up 0.4% to $1,732.86 U.S. Dollar Index little changed at 94.27 German 10Y yield fell 0.5 bps to -0.212% Euro little changed at $1.1607 Top Overnight News from Bloomberg U.K. gross domestic product rose 5.5% in the second quarter instead of the 4.8% earlier estimated, official figures published Thursday show. The data, which reflected the reopening of stores and the hospitality industry, mean the economy was still 3.3% smaller than it was before the pandemic struck. China has urged financial institutions to help local governments stabilize the rapidly cooling housing market and ease mortgages for some home buyers, another signal that authorities are worried about fallout from the debt crisis at China Evergrande Group. The U.S. currency’s surge is helping the Chinese yuan record its largest gain in eight months on a trade-weighted basis in September. It adds to headwinds for the world’s second- largest economy already slowing due to a resurgence in Covid cases, a power crisis and regulatory curbs. The Swiss National Bank bought foreign exchange worth 5.44 billion francs ($5.8 billion) in the second quarter, part of its long-running policy to alleviate appreciation pressure on the franc   A few members of the Riksbank’s executive board discussed a rate path that could indicate a rate rise at the end of the forecast period, Sweden’s central bank says in minutes from its Sept. 20 meeting French inflation accelerated in September as households in the euro area’s second-largest economy faced a jump in the costs of energy and services. A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded somewhat varied with the region indecisive at quarter-end and as participants digested a slew of data releases including mixed Chinese PMI figures. ASX 200 (+1.7%) was underpinned by broad strength across its industries including the top-weighted financials sector and with the large cap miners lifted as iron ore futures surge by double-digit percentages, while the surprise expansion in Building Approvals also helped markets overlook the 51% spike in daily new infections for Victoria state. Nikkei 225 (+0.1%) was subdued for most of the session after disappointing Industrial Production and Retail Sales data which prompted the government to cut its assessment of industrial output which it stated was stalling. The government also warned that factory output could decline for a third consecutive month in September and that October has large downside risk due to uncertainty from auto manufacturing cuts. However, Nikkei 225 then recovered with the index marginally supported by currency flows. Hang Seng (-1.0%) and Shanghai Comp. (+0.4%) diverged heading into the National Day holidays and week-long closure for the mainland with tech names in Hong Kong pressured by ongoing regulatory concerns as China is to tighten regulation of algorithms related to internet information services. Nonetheless, mainland bourses were kept afloat after a further liquidity injection by the PBoC ahead of the Golden Week celebrations and as markets took the latest PMI figures in their strides whereby the official headline Manufacturing PMI disappointed to print its first contraction since February 2020, although Non-Manufacturing PMI and Composite PMI returned to expansionary territory and Caixin Manufacturing PMI topped estimates to print at the 50-benchmark level. Top Asian News S&P Points to Progress as Bondholders Wait: Evergrande Update Bank Linked to Kazakh Leader Buys Kcell Stake After Share Slump Goldman Sachs Names Andy Tai Head of IBD Southeast Asia: Memo What Japan’s Middle-of-the-Road New Leader Means for Markets The upside momentum seen across US and European equity futures overnight stalled, with European cash also drifting from the best seen at the open (Euro Stoxx 50 +0.1%; Stoxx 600 +0.4%). This follows somewhat mixed APAC handover, and as newsflow remains light on month and quarter-end. US equity futures are firmer across the board, but again off best levels, although the RTY (+0.8%) outperforms the ES (+0.4%), YM (+0.4%) and NQ (+0.5%). Back to Europe, the periphery lags vs core markets, whilst the DAX 40 (-0.3%) underperforms within the core market. Sectors in Europe are mostly in the green but do not portray a particular risk bias. Basic Resources top the chart with aid from overnight action in some base metals, particularly iron, in turn aiding the large iron miners BHP (+2.2%), Rio Tinto (+3.4%) and Anglo American (+2.9%). The bottom of the sectors meanwhile consists of Travel & Leisure, Autos & Parts and Industrial Goods & Services, with the former potentially feeling some headwinds from China’s travel restrictions during its upcoming National Day holiday. In terms of M&A, French press reported that CAC-listed Carrefour (-1.3%) is reportedly looking at options for sector consolidation, and talks are said to have taken place with the chain stores Auchan, with peer Casino (Unch) also initially seeing a leg higher in sympathy amid the prospect of sector consolidation. That being said, Carrefour has now reversed its earlier upside with no particular catalyst for the reversal. It is, however, worth keeping in mind that regulatory/competition hurdles cannot be ruled out – as a reminder, earlier this year, France blocked the takeover of Carrefour by Canada’s Alimentation Couche-Tard. In the case of a successful deal, Carrefour will likely be the acquirer as the largest supermarket in France. Sticking with M&A, Eutelsat (+14%) was bolstered at the open amid source reports that French billionaire Patrick Drahi is said to have made an unsolicited takeover offer of EUR 12.10/shr for Eutelsat (vs EUR 10.35 close on Wednesday), whilst the FT reported that this offer was rejected. Top European News European Banks Dangle $26 Billion in Payouts as ECB Cap Ends U.K. Economy Emerged From Lockdown Stronger Than Expected In a First, Uber Joins Drivers in Strike Against Brussels Rules EU, U.S. Seek to Avert Chip-Subsidy Race, Float Supply Links In FX, The non-US Dollars are taking advantage of the Greenback’s loss of momentum, and the Aussie in particular given an unexpected boost from building approvals completely confounding expectations for a fall, while a spike in iron ore prices overnight provided additional incentive amidst somewhat mixed external impulses via Chinese PMIs. Hence, Aud/Usd is leading the chasing pack and back up around 0.7200, Usd/Cad is retreating through 1.2750 and away from decent option expiry interest at 1.2755 and between 1.2750-40 (in 1.3 bn and 1 bn respectively) with some assistance from the latest bounce in crude benchmarks and Nzd/Usd is still trying to tag along, but capped into 0.6900 as the Aud/Nzd cross continues to grind higher and hamper the Kiwi. DXY/GBP/JPY/EUR/CHF - It’s far too early to call time on the Buck’s impressive rally and revival from recent lows, but it has stalled following a midweek extension that propelled the index to the brink of 94.500, at 94.435. The DXY subsequently slipped back to 94.233 and is now meandering around 94.300 having topped out at 94.401 awaiting residual rebalancing flows for the final day of September, Q3 and the half fy that Citi is still classifying as Dollar positive, albeit with tweaks to sd hedges for certain Usd/major pairings. Also ahead, the last US data and survey releases for the month including final Q2 GDP, IJC and Chicago PMI before another raft of Fed speakers. Meanwhile, Sterling has gleaned some much needed support from upward revisions to Q2 UK GDP, a much narrower than forecast current account deficit and upbeat Lloyds business barometer rather than sub-consensus Nationwide house prices to bounce from the low 1.3600 area vs the Greenback and unwind more of its underperformance against the Euro within a 0.8643-12 range. However, the latter is keeping tabs on 1.1600 vs its US peer in wake of firmer German state CPI prints and with the aforementioned Citi model flagging a sub-1 standard deviation for Eur/Usd in contrast to Usd/Jpy that has been elevated to 1.85 from a prelim 1.12. Nevertheless, the Yen is deriving some traction from the calmer yield backdrop rather than disappointing Japanese data in the form of ip and retail sales to contain losses under 112.00, and the Franc is trying to do the same around 0.9350. SCANDI/EM - The tables have been turning and fortunes changing for the Nok and Sek, but the former has now given up all and more its post-Norges Bank hike gains and more as Brent consolidates beneath Usd 80/brl and the foreign currency purchases have been set at the same level for October as the current month. Conversely, the latter has taken heed of a hawkish hue to the latest set of Riksbank minutes and the fact that a few Board members discussed a rate path that could indicate a rise at the end of the forecast period. Elsewhere, the Zar looks underpinned by marginally firmer than anticipated SA ppi and private sector credit, while the Mxn is treading cautiously ahead of Banxico and a widely touted 25 bp hike. In commodities, WTI and Brent futures are choppy but trade with modest gains heading into the US open and in the run-up to Monday’s OPEC+ meeting. The European session thus far has been quiet from a news flow standpoint, but the contracts saw some fleeting upside after breaking above overnight ranges, albeit the momentum did not last long. Eyes turn to OPEC+ commentary heading into the meeting, which is expected to be another smooth affair, according to Argus sources. As a reminder, the group is expected to stick to its plan to raise output by 400k BPD despite outside pressure to further open the taps in a bid to control prices. Elsewhere, as a mild proxy for Chinese demand, China’s Sinopec noted that all LNG receiving terminals are to be operated at full capacity. WTI trades on either side of USD 75/bbl (vs low USD 74.54/bbl), while its Brent counterpart remains north of USD 78/bbl (vs low USD 77.66/bbl). Turning to metals, spot gold and silver continue to consolidate after yesterday’s Dollar induced losses, with the former finding some support around the USD 1,725/oz mark and the latter establishing a floor around USD 21.50/oz. Over to base metals, Dalian iron ore futures rose to three-week highs amid pre-holiday Chinese demand and after Fortescue Metals Group halted mining operations at a Pilbara project. Conversely, LME copper is on a softer footing as the Buck holds onto recent gains. US Event Calendar 8:30am: 2Q PCE Core QoQ, est. 6.1%, prior 6.1% 8:30am: 2Q GDP Price Index, est. 6.1%, prior 6.1% 8:30am: 2Q Personal Consumption, est. 11.9%, prior 11.9% 8:30am: Sept. Continuing Claims, est. 2.79m, prior 2.85m 8:30am: 2Q GDP Annualized QoQ, est. 6.6%, prior 6.6% 8:30am: Sept. Initial Jobless Claims, est. 330,000, prior 351,000 9:45am: Sept. MNI Chicago PMI, est. 65.0, prior 66.8 Central Bank speakers 10am: Fed’s Williams Discusses the Fed’s Pandemic Response 10am: Powell and Yellen Appear Before House Finance Panel 11am: Fed’s Bostic Discusses Economic Mobility 11:30am: Fed’s Harker Discusses Sustainable Assets and Financial... 12:30pm: Fed’s Evans Discusses Economic Outlook 1:05pm: Fed’s Bullard Makes Opening Remarks at Book Launch 2:30pm: Fed’s Daly Speaks at Women and Leadership Event Government Calendar 10am ET: Treasury Secretary Yellen, Fed Chair Powell appear at a House Financial Services Committee hearing on the Treasury, Fed’s pandemic response 10:30am ET: Senate begins voting process for continuing resolution that extends U.S. government funding to December 3 10:30am ET: Senate Commerce subcommittee holds hearing on Facebook, Instagram’s influence on kids with Antigone Davis, Director, Global Head of Safety, Facebook 10:45am ET: House Speaker Nancy Pelosi holds weekly press briefing DB's Jim Reid concludes the overnight wrap I’ll be getting my stitches out of my knee today and will have a chance to grill the surgeon who I think told me I’ll probably soon need a knee replacement. I say think as it was all a bit of a medicated blur post the operation 2 weeks ago. These have been a painfully slow 2 weeks of no weight bearing with another 4 to go and perhaps all to no avail. As you can imagine I’ve done no housework, can’t fend much for myself, or been able to control the kids much over this period. I’m not sure if having bad knees are grounds for divorce but I’m going to further put it to the test over the next month. In sickness and in health I plea. Like me, markets are hobbling into the end of Q3 today even if they’ve seen some signs of stabilising over the last 24 hours following their latest selloff, with equities bouncing back a bit and sovereign bond yields taking a breather from their recent relentless climb. It did feel that we hit yield levels on Tuesday that started to hurt risk enough that some flight to quality money recycled back into bonds. So the next leg higher in yields (which I think will happen) might be met with more risk off resistance, and counter rallies. The latest moves came amidst relatively dovish and supportive comments from central bank governors at the ECB’s forum yesterday, but sentiment was dampened somewhat as uncertainty abounds over a potential US government shutdown and breaching of the debt ceiling, after both houses of Congress could not agree on a plan to extend government funding. Overnight, there have been signs of progress on the shutdown question, with Majority Leader Schumer saying that senators had reached agreement on a stopgap funding measure that will fund the government through December 3, with the Senate set to vote on the measure this morning.However, we’re still no closer to resolving the debt ceiling issue (where the latest estimates from the Treasury Department point to October 18 as the deadline), and tensions within the Democratic party between moderates and progressives are threatening to sink both the $550bn bipartisan infrastructure bill and the $3.5tn reconciliation package, which together contain much of President Biden’s economic agenda. We could see some developments on that soon however, as Speaker Pelosi said yesterday that the House was set to vote on the infrastructure bill today. Assuming the vote goes ahead later, this will be very interesting since a number of progressive Democrats have said that they don’t want to pass the infrastructure bill without the reconciliation bill (which contains the administration’s other priorities on social programs). This is because they fear that with the infrastructure bill passed (which moderates are keen on), the moderates could then scale back the spending in the reconciliation bill, and by holding out on passing the infrastructure bill, this gives them leverage on reconciliation. House Speaker Pelosi and Majority Leader Schumer were in the Oval Office with President Biden yesterday, and a White House statement said that Biden spoke on the phone with lawmakers and engagement would continue into today. So an important day for Biden’s agenda. Against this backdrop, risk assets made a tentative recovery yesterday, with the S&P 500 up +0.16% and Europe’s STOXX 600 up +0.59%. However, unless we get a big surge in either index today, both indices remain on track for their worst monthly performances so far this year, even if they’re still in positive territory for Q3 as a whole. Looking elsewhere, tech stocks had appeared set to pare back some of the previous day’s losses, but a late fade left the NASDAQ down -0.24% and the FANG+ index down a greater -0.72%. Much of the tech weakness was driven by falling semiconductor shares (-1.53%), as producers have offered investors poor revenue guidance on the heels of the ongoing supply chain issues that are driving chip shortages globally. Outside of tech, US equities broadly did better yesterday with 17 of 24 industry groups gaining, led by utilities (+1.30%), biotech (+1.05%) and food & beverages (+1.00%). Similarly, while they initially staged a recovery, small caps in the Russell 2000 (-0.20%) continued to struggle. One asset that remained on trend was the US dollar. The greenback continued its climb yesterday, with the dollar index increasing +0.61% to close at its highest level in over a year, exceeding its closing high from last November. Over in sovereign bond markets, the partial rebound saw yields on 10yr Treasuries down -2.1bps at 1.517%, marking their first move lower in a week. And there was much the same pattern in Europe as well, where yields on 10yr bunds (-1.4bps), OATs (-1.3bps) and BTPs (-3.1bps) all moved lower as well. One continued underperformer were UK gilts (+0.3bps), and yesterday we saw the spread between 10yr gilt and bund yields widen to its biggest gap in over 2 years, at 120bps. Staying on the UK, the pound (-0.81%) continued to slump yesterday, hitting its lowest level against the dollar since last December, which comes as the country has continued to face major issues over its energy supply. Yesterday actually saw natural gas prices take another leg higher in both the UK (+10.09%) and Europe (+10.24%), and the UK regulator said that three smaller suppliers (who supply fewer than 1% of domestic customers between them) had gone out of business. This energy/inflation/BoE conundrum is confusing the life out of Sterling 10 year breakevens. They rose +18bps from Monday morning to Tuesday lunchtime but then entirely reversed the move into last night’s close. This is an exaggerated version of how the world’s financial markets are puzzling over whether breakevens should go up because of energy or go down because of the demand destruction and central bank response. Central bankers were in no mood to panic yesterday though as we saw Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey and BoJ Governor Kuroda all appear on a policy panel at the ECB’s forum on central banking. There was much to discuss but the central bank heads all maintained that this current inflation spike will relent with Powell saying that it was “really a consequence of supply constraints meeting very strong demand, and that is all associated with the reopening of the economy -- which is a process that will have a beginning, a middle and an end.” ECB President Lagarde shared that sentiment, adding that “we certainly have no reason to believe that these price increases that we are seeing now will not be largely transitory going forward.” Overnight in Asia, equities have seen a mixed performance, with the Nikkei (-0.40%), and the Hang Seng (-1.08%) both losing ground, whereas the Kospi (+0.41%) and the Shanghai Composite (+0.30%) have posted gains. The moves came amidst weak September PMI data from China, which showed the manufacturing PMI fall to 49.6 (vs. 50.0 expected), marking its lowest level since the height of the Covid crisis in February 2020. The non-manufacturing PMI held up better however, at a stronger 53.2 (vs. 49.8 expected), although new orders were beneath 50 for a 4th consecutive month. Elsewhere, futures on the S&P 500 (+0.50%) and those on European indices are pointing to a higher start later on, as markets continue to stabilise after their slump earlier in the week. Staying on Asia, shortly after we went to press yesterday, former Japanese foreign minister Fumio Kishida was elected as leader of the governing Liberal Democratic Party, and is set to become the country’s next Prime Minister. The Japanese Diet will hold a vote on Monday to elect Kishida as the new PM, after which he’ll announce a new cabinet, and attention will very soon turn to the upcoming general election, which is due to take place by the end of November. Our Chief Japan economist has written more on Kishida’s victory and his economic policy (link here), but he notes that on fiscal policy, Kishida’s plans to redistribute income echo the shift towards a greater role for government in the US and elsewhere. There wasn’t a massive amount of data yesterday, though Spain’s CPI reading for September rose to an above-expected +4.0% (vs. 3.5% expected), so it will be interesting to see if something similar happens with today’s releases from Germany, France and Italy, ahead of the Euro Area release tomorrow. Otherwise, UK mortgage approvals came in at 74.5k in August (vs. 73.0k expected), and the European Commission’s economic sentiment indicator for the Euro Area rose to 117.8 in September (vs. 117.0 expected). To the day ahead now, and one of the highlights will be Fed Chair Powell’s appearance at the House Financial Services Committee, alongside Treasury Secretary Yellen. Other central bank speakers include the Fed’s Williams, Bostic, Harker, Evans, Bullard and Daly, as well as the ECB’s Centeno, Visco and Hernandez de Cos. On the data side, today’s highlights include German, French and Italian CPI for September, while in the US there’s the weekly initial jobless claims, the third estimate of Q2 GDP and the MNI Chicago PMI for September. Tyler Durden Thu, 09/30/2021 - 07:49.....»»

Category: blogSource: zerohedgeSep 30th, 2021

Futures Rise On Taper, Evergrande Optimism

Futures Rise On Taper, Evergrande Optimism US index futures jumped overnight even as the Fed confirmed that a November tapering was now guaranteed and would be completed by mid-2022 with one rate hike now on deck, while maintaining the possibility to extend stimulus if necessitated by the economy. Sentiment got an additional boost from a strong showing of Evergrande stock - which closed up 17% - during the Chinese session, which peaked just after Bloomberg reported that China told Evergrande to avoid a near-term dollar bond default and which suggested that the "government wants to avoid an imminent collapse of the developer" however that quickly reversed when the WSJ reported, just one hour later, that China was making preparations for Evergrande's demise, and although that hammered stocks, the report explicitly noted that a worst-case scenario for Evergrande would mean a partial or full nationalization as "local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion." In other words, both reports are bullish: either foreign creditors are made whole (no default) as per BBG or the situation deteriorates and Evergrande is nationalized ("SOEs step in") as per WSJ. According to Bloomberg, confidence is building that markets can ride out a pullback in Fed stimulus, unlike 2013 when the taper tantrum triggered large losses in bonds and equities. "Investors are betting that the economic and profit recovery will be strong enough to outweigh a reduction in asset purchases, while ultra-low rates will continue to support riskier assets even as concerns linger about contagion from China’s real-estate woes." That's one view: the other is that the Fed has so broken the market's discounting ability we won't know just how bad tapering will get until it actually begins. “The Fed has got to be pleased that their communication on the longer way to tapering has avoided the dreaded fear of the tantrum,” Jeffrey Rosenberg, senior portfolio manager for systematic fixed income at BlackRock Inc., said on Bloomberg Television. “This is a very good outcome for the Fed in terms of signaling their intent to give the market information well ahead of the tapering decision.” Then there is the question of Evergrande: “With regards to Evergrande, all those people who are waiting for a Lehman moment in China will probably have to wait another turn,” said Ken Peng, an investment strategist at Citi Private Bank Asia Pacific. “So I wouldn’t treat this as completely bad, but there are definitely a lot of risks on the horizon.” In any case, today's action is a continuation of the best day in two months for both the Dow and the S&P which staged a strong recovery from two-month lows hit earlier in the week, and as of 745am ET, S&P 500 E-minis were up 25.25 points, or 0.6%, Dow E-minis were up 202 points, or 0.59%, while Nasdaq 100 E-minis were up 92.0 points, or 0.60%. In the premarket, electric vehicle startup Lucid Group rose 3.1% in U.S. premarket trading. PAVmed (PVM US) jumps 11% after its Lucid Diagnostics unit announced plans to list on the Global Market of the Nasdaq Stock Market.  Here are some of the biggest movers today: U.S.-listed Chinese stocks rise in premarket trading as fears of contagion from China Evergrande Group’s debt crisis ease. Blackberry (BB US) shares rise 8.7% in premarket after co.’s 2Q adjusted revenue beat the average of analysts’ estimates Eargo (EAR US) falls 57% in Thursday premarket after the hearing aid company revealed it was the target of a Justice Department criminal probe and withdrew its forecasts for the year Amplitude Healthcare Acquisition (AMHC US) doubled in U.S. premarket trading after the SPAC’s shareholders approved the previously announced business combination with Jasper Therapeutics Steelcase (SCS US) fell 4.8% Wednesday postmarket after the office products company reported revenue for the second quarter that missed the average analyst estimate Vertex Energy Inc. (VTNR US) gained 2.1% premarket after saying the planned acquisition of a refinery in Mobile, Alabama from Royal DutVTNR US Equitych Shell Plc is on schedule Synlogic (SYBX US) shares declined 9.7% premarket after it launched a stock offering launched without disclosing a size HB Fuller (FUL US) climbed 2.7% in postmarket trading after third quarter sales beat even the highest analyst estimate Europe's Stoxx 600 index rose 0.9%, lifted by carmakers, tech stocks and utilities, which helped it recover losses sparked earlier in the week by concerns about Evergrande and China’s crackdown on its property sector. The gauge held its gain after surveys of purchasing managers showed business activity in the euro area lost momentum and slowed broadly in September after demand peaked over the summer and supply-chain bottlenecks hurt services and manufacturers. Euro Area Composite PMI (September, Flash): 56.1, consensus 58.5, last 59.0. Euro Area Manufacturing PMI (September, Flash): 58.7, consensus 60.3, last 61.4. Euro Area Services PMI (September, Flash): 56.3, consensus 58.5, last 59.0. Germany Composite PMI (September, Flash): 55.3, consensus 59.2, last 60.0. France Composite PMI (September, Flash): 55.1, consensus 55.7, last 55.9. UK Composite PMI (September, Flash): 54.1, consensus 54.6, last 54.8. Commenting on Europe's PMIs, Goldman said that the Euro area composite PMI declined by 2.9pt to 56.1 in September, well below consensus expectations. The softening was broad-based across countries but primarily led by Germany. The peripheral composite flash PMI also weakened significantly in September but remain very high by historical standards (-2.4pt to 57.5). Across sectors, the September composite decline was also broad-based, with manufacturing output softening (-3.3pt to 55.6) to a similar extent as services (-2.7pt to 56.3). Supply-side issues and upward cost and price pressures continued to be widely reported. Expectations of future output growth declined by less than spot output on the back of delta variant worries and supply issues, remaining far above historically average levels. Earlier in the session, Asian stocks rose for the first time in four sessions, as Hong Kong helped lead a rally on hopes that troubled property firm China Evergrande Group will make progress on debt repayment. The MSCI Asia Pacific Index climbed as much as 0.5%, with Tencent and Meituan providing the biggest boosts. The Hang Seng jumped as much as 2.5%, led by real estate stocks as Evergrande surged more than 30%. Hong Kong shares later pared their gains. Asian markets were also cheered by gains in U.S. stocks overnight even as the Federal Reserve said it may begin scaling back stimulus this year. A $17 billion net liquidity injection from the People’s Bank of China also provided a lift, while the Fed and Bank of Japan downplayed Evergrande risks in comments accompanying policy decisions Wednesday. Evergrande’s stock closed 18% higher in Hong Kong, in a delayed reaction to news a unit of the developer had negotiated interest payments on yuan notes. A coupon payment on its 2022 dollar bond is due on Thursday “Investors are perhaps reassessing the tail risk of a disorderly fallout from Evergrande’s credit issues,” said Chetan Seth, a strategist at Nomura. “However, I am not sure if the fundamental issue around its sustainable deleveraging has been addressed. I suspect markets will likely remain quite volatile until we have some definite direction from authorities on the eventual resolution of Evergrande’s debt problems.” Stocks rose in most markets, with Australia, Taiwan, Singapore and India also among the day’s big winners. South Korea’s benchmark was the lone decliner, while Japan was closed for a holiday In rates, Treasuries were off session lows, with the 10Y trading a 1.34%, but remained under pressure in early U.S. session led by intermediate sectors, where 5Y yield touched highest since July 2. Wednesday’s dramatic yield-curve flattening move unleashed by Fed communications continued, compressing 5s30s spread to 93.8bp, lowest since May 2020. UK 10-year yield climbed 3.4bp to session high 0.833% following BOE rate decision (7-2 vote to keep bond-buying target unchanged); bunds outperformed slightly. Peripheral spreads tighten with long-end Italy outperforming. In FX, the Bloomberg Dollar Spot Index reversed an earlier gain and dropped 0.3% as the dollar weakened against all of its Group-of-10 peers apart from the yen amid a more positive sentiment. CAD, NOK and SEK are the strongest performers in G-10, JPY the laggard.  The euro and the pound briefly pared gains after weaker-than-forecast German and British PMIs. The pound rebounded from an eight-month low amid a return of global risk appetite as investors assessed whether the Bank of England will follow the Federal Reserve’s hawkish tone later Thursday. The yield differential between 10-year German and Italian debt narrowed to its tightest since April. Norway’s krone advanced after Norges Bank raised its policy rate in line with expectations and signaled a faster pace of tightening over the coming years. The franc whipsawed as the Swiss National Bank kept its policy rate and deposit rate at record lows, as expected, and reiterated its pledge to wage currency market interventions. The yen fell as a unit of China Evergrande said it had reached an agreement with bond holders over an interest payment, reducing demand for haven assets. Turkey’s lira slumped toa record low against the dollar after the central bank unexpectedly cut interest rates. In commodities, crude futures drifted lower after a rangebound Asia session. WTI was 0.25% lower, trading near $72; Brent dips into the red, so far holding above $76. Spot gold adds $3.5, gentle reversing Asia’s losses to trade near $1,771/oz. Base metals are well bid with LME aluminum leading gains. Bitcoin steadied just below $44,000. Looking at the day ahead, we get the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Market Snapshot S&P 500 futures up 0.7% to 4,413.75 STOXX Europe 600 up 1.1% to 468.32 MXAP up 0.5% to 200.57 MXAPJ up 0.9% to 645.76 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 1.2% to 24,510.98 Shanghai Composite up 0.4% to 3,642.22 Sensex up 1.4% to 59,728.37 Australia S&P/ASX 200 up 1.0% to 7,370.22 Kospi down 0.4% to 3,127.58 German 10Y yield fell 5.6 bps to -0.306% Euro up 0.4% to $1.1728 Brent Futures up 0.3% to $76.39/bbl Gold spot up 0.0% to $1,768.25 U.S. Dollar Index down 0.33% to 93.16 Top Overnight News from Bloomberg Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds China’s central bank net-injected the most short- term liquidity in eight months into the financial system, with markets roiled by concerns over China Evergrande Group’s debt crisis Europe’s worst energy crisis in decades could drag deep into the cold months as Russia is unlikely to boost shipments until at least November Business activity in the euro area “markedly” lost momentum in September after demand peaked over the summer and supply chain bottlenecks hurt both services and manufacturers. Surveys of purchasing managers by IHS Markit showed growth in both sectors slowing more than expected, bringing overall activity to a five-month low. Input costs, meanwhile, surged to the highest in 21 years, according to the report The U.K. private sector had its weakest month since the height of the winter lockdown and inflation pressures escalated in September, adding to evidence that the recovery is running into significant headwinds, IHS Markit said The U.K.’s record- breaking debut green bond sale has given debt chief Robert Stheeman conviction on the benefits of an environmental borrowing program. The 10 billion-pound ($13.7 billion) deal this week was the biggest-ever ethical bond sale and the country is already planning another offering next month A more detailed look at global markets courtesy of Newsquaw Asian equity markets traded mostly positive as the region took its cue from the gains in US with the improved global sentiment spurred by some easing of Evergrande concerns and with stocks also unfazed by the marginally more hawkish than anticipated FOMC announcement (detailed above). ASX 200 (+1.0%) was underpinned by outperformance in the commodity-related sectors and strength in defensives, which have more than atoned for the losses in tech and financials, as well as helped markets overlook the record daily COVID-19 infections in Victoria state. Hang Seng (+0.7%) and Shanghai Comp. (+0.6%) were also positive after another respectable liquidity operation by the PBoC and with some relief in Evergrande shares which saw early gains of more than 30% after recent reports suggested a potential restructuring by China’s government and with the Co. Chairman noting that the top priority is to help wealth investors redeem their products, although the majority of the Evergrande gains were then pared and unit China Evergrande New Energy Vehicle fully retraced the initial double-digit advances. KOSPI (-0.5%) was the laggard as it played catch up to the recent losses on its first trading day of the week and amid concerns that COVID cases could surge following the holiday period, while Japanese markets were closed in observance of the Autumnal Equinox Day. China Pumps $17 Billion Into System Amid Evergrande Concerns China Stocks From Property to Tech Jump on Evergrande Respite Philippines Holds Key Rate to Spur Growth Amid Higher Prices Taiwan’s Trade Deal Application Sets Up Showdown With China Top Asian News European equities (Stoxx 600 +0.9%) trade on the front-foot and have extended gains since the cash open with the Stoxx 600 now higher on the week after Monday’s heavy losses. From a macro perspective, price action in Europe has been undeterred by a slowdown in Eurozone PMIs which saw the composite metric slip to 56.1 from 59.0 (exp. 58.5) with IHS Markit noting “an unwelcome combination of sharply slower economic growth and steeply rising prices.” Instead, stocks in the region have taken the cue from a firmer US and Asia-Pac handover with performance in Chinese markets aided by further liquidity injections by the PBoC. Some positivity has also been observed on the Evergrande front amid mounting expectations of a potential restructuring at the company. That said, at the time of writing, it remains unclear what the company’s intentions are for repaying its USD 83.5mln onshore coupon payment. Note, ING highlights that “missing that payment today would still leave a 30-day grace period before this is registered as a default”. The most recent reports via WSJ indicate that Chinese authorities are asking local governments to begin preparations for the potential downfall of Evergrande; however, the article highlights that this is a last resort and Beijing is reluctant to step in. Nonetheless, this article has taken the shine off the mornings risk appetite, though we do remain firmer on the session. Stateside, as the dust settles on yesterday’s FOMC announcement, futures are firmer with outperformance in the RTY (+0.8% vs. ES +0.7%). Sectors in Europe are higher across the board with outperformance in Tech and Autos with the latter aided by gains in Faurecia (+4.6%) who sit at the top of the Stoxx 600 after making an unsurprising cut to its guidance, which will at least provide some clarity on the Co.’s near-term future; in sympathy, Valeo (+6.6) is also a notable gainer in the region. To the downside, Entain (+2.6%) sit at the foot of the Stoxx 600 after recent strong gains with the latest newsflow surrounding the Co. noting that MGM Resorts is considering different methods to acquire control of the BetMGM online gambling business JV, following the DraftKings offer for Entain, according to sources. The agreement between Entain and MGM gives MGM the ability to block any deal with competing businesses; MGM officials believe this grants the leverage to take full control of BetMGM without spending much. Top European News BOE Confronts Rising Prices, Slower Growth: Decision Guide La Banque Postale Eyes Retail, Asset Management M&A in Europe Activist Bluebell Raises Pressure on Glaxo CEO Walmsley Norway Delivers Rate Lift-Off With Next Hike Set for December In FX, not much bang for the Buck even though the FOMC matched the most hawkish market expectations and Fed chair Powell arguably went further by concluding in the post-meeting press conference that substantial progress on the lagging labour front is all but done. Hence, assuming the economy remains on course, tapering could start as soon as November and be completed my the middle of 2022, though he continued to play down tightening prospects irrespective of the more hawkish trajectory implied by the latest SEP dot plots that are now skewed towards at least one hike next year and a cumulative seven over the forecast horizon. However, the Greenback only managed to grind out marginally higher highs overnight, with the index reaching 93.526 vs 93.517 at best yesterday before retreating quite sharply and quickly to 93.138 in advance of jobless claims and Markit’s flash PMIs. CAD/NZD/AUD - The Loonie is leading the comeback charge in major circles and only partially assisted by WTI keeping a firm bid mostly beyond Usd 72/brl, and Usd/Cad may remain contained within 1.2796-50 ahead of Canadian retail sales given decent option expiry interest nearby and protecting the downside (1 bn between 1.2650-65 and 2.7 bn from 1.2620-00). Meanwhile, the Kiwi has secured a firmer grip on the 0.7000 handle to test 0.7050 pre-NZ trade and the Aussie is looking much more comfortable beyond 0.7250 amidst signs of improvement in the flash PMIs, albeit with the services and composite headline indices still some way short of the 50.0 mark. NOK/GBP/EUR/CHF - All firmer, and the Norwegian Crown outperforming following confirmation of the start of rate normalisation by the Norges Bank that also underscored another 25 bp hike in December and further tightening via a loftier rate path. Eur/Nok encountered some support around 10.1000 for a while, but is now below, while the Pound has rebounded against the Dollar and Euro in the run up to the BoE at midday. Cable is back up around 1.3770 and Eur/Gbp circa 0.8580 as Eur/Usd hovers in the low 1.1700 area eyeing multiple and a couple of huge option expiries (at the 1.1700 strike in 4.1 bn, 1.1730 in 1 bn, 1.1745-55 totalling 2.7 bn and 1.8 bn from 1.1790-1.1800). Note, Eurozone and UK flash PMIs did not live up to their name, but hardly impacted. Elsewhere, the Franc is lagging either side of 0.9250 vs the Buck and 1.0835 against the Euro on the back of a dovish SNB Quarterly Review that retained a high Chf valuation and necessity to maintain NIRP, with only minor change in the ordering of the language surrounding intervention. JPY - The Yen is struggling to keep its head afloat of 110.00 vs the Greenback as Treasury yields rebound and risk sentiment remains bullish pre-Japanese CPI and in thinner trading conditions due to the Autumn Equinox holiday. In commodities, WTI and Brent have been choppy throughout the morning in-spite of the broadly constructive risk appetite. Benchmarks spent much of the morning in proximity to the unchanged mark but the most recent Evergrande developments, via WSJ, have dampened sentiment and sent WTI and Brent back into negative territory for the session and printing incremental fresh lows at the time of publication. Back to crude, newsflow has once again centred around energy ministry commentary with Iraq making clear that oil exports will continue to increase. Elsewhere, gas remains at the forefront of focus particularly in the UK/Europe but developments today have been somewhat incremental. On the subject, Citi writes that Asia and Europe Nat. Gas prices could reach USD 100/MMBtu of USD 580/BOE in the winter, under their tail-risk scenario. For metals, its very much a case of more of the same with base-metals supportive, albeit off-best given Evergrande, after a robust APAC session post-FOMC. Given the gas issues, desks highlight that some companies are being forced to suspend/reduce production of items such as steel in Asian/European markets, a narrative that could become pertinent for broader prices if the situation continues. Elsewhere, spot gold and silver are both modestly firmer but remain well within the range of yesterday’s session and are yet to recovery from the pressure seen in wake of the FOMC. US Event Calendar 8:30am: Sept. Initial Jobless Claims, est. 320,000, prior 332,000; Continuing Claims, est. 2.6m, prior 2.67m 8:30am: Aug. Chicago Fed Nat Activity Index, est. 0.50, prior 0.53 9:45am: Sept. Markit US Composite PMI, prior 55.4 9:45am: Sept. Markit US Services PMI, est. 54.9, prior 55.1 9:45am: Sept. Markit US Manufacturing PMI, est. 61.0, prior 61.1 11am: Sept. Kansas City Fed Manf. Activity, est. 25, prior 29 12pm: 2Q US Household Change in Net Wor, prior $5t DB's Jim Reid concludes the overnight wrap My wife was at a parents event at school last night so I had to read three lots of bedtime stories just as the Fed were announcing their policy decision. Peppa Pig, Biff and Kipper, and somebody called Wonder Kid were interspersed with Powell’s press conference live on my phone. It’s fair to say the kids weren’t that impressed by the dot plot and just wanted to join them up. The twins (just turned 4) got their first reading book homework this week and it was a bit sad that one of them was deemed ready to have one with words whereas the other one only pictures. The latter was very upset and cried that his brother had words and he didn’t. That should create even more competitive tension! Back to the dots and yesterday’s Fed meeting was on the hawkish side in terms of the dots and also in terms of Powell’s confidence that the taper could be complete by mid-2022. Powell said that the Fed could begin tapering bond purchases as soon as the November FOMC meeting, in line with our US economists’ forecasts. He left some room for uncertainty, saying they would taper only “If the economy continues to progress broadly in line with expectations, and also the overall situation is appropriate for this.” However he made clear that “the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff.” The quarterly “dot plot” showed that the 18 FOMC officials were split on whether to start raising rates next year or not. In June, the median dot indicated no rate increases until 2023, but now 6 members see a 25bps raise next year and 3 members see two such hikes. Their inflation forecasts were also revised up and DB’s Matt Luzzetti writes in his FOMC review (link here) that “If inflation is at or below the Fed's current forecast next year of 2.3% core PCE, liftoff is likely to come in 2023, consistent with our view. However, if inflation proves to be higher with inflation expectations continuing to rise, the first rate increase could well migrate into 2022.” Markets took the overall meeting very much in its stride with the biggest impact probably being a yield curve flattening even if US 10yr Treasury yields traded in just over a 4bp range yesterday and finishing -2.2bps lower at 1.301%. The 5y30y curve flattened -6.7bps to 95.6bps, its flattest level since August 2020, while the 2y10y curve was -4.2bps flatter. So the market seems to believe the more hawkish the Fed gets the more likely they’ll control inflation and/or choke the recovery. The puzzle is that even if the dots are correct, real Fed funds should still be negative and very accommodative historically for all of the forecasting period. As such the market has a very dim view of the ability of the economy to withstand rate hikes or alternatively that the QE technicals are overpowering everything at the moment. In equities, the S&P 500 was up nearly +1.0% 15 minutes prior to the Fed, and then rallied a further 0.5% in the immediate aftermath before a late dip look it back to +0.95%. The late dip meant that the S&P still has not seen a 1% up day since July 23. The index’s rise was driven by cyclicals in particular with energy (+3.17%), semiconductors (-2.20%), and banks (+2.13%) leading the way. Asian markets are mostly trading higher this morning with the Hang Seng (+0.69%), Shanghai Comp (+0.58%), ASX (+1.03%) and India’s Nifty (+0.81%) all up. The Kospi (-0.36%) is trading lower though and is still catching up from the early week holidays. Japan’s markets are closed for a holiday today. Futures on the S&P 500 are up +0.25% while those on the Stoxx 50 are up +0.49%. There is no new news on the Evergrande debt crisis however markets participants are likely to pay attention to whether the group is able to make interest rate payment on its 5 year dollar note today after the group had said yesterday that it resolved a domestic bond coupon by negotiations which was also due today. As we highlighted in our CoTD flash poll conducted earlier this week, market participants are not too worried about a wider fallout from the Evergrande crisis and even the Hang Seng Properties index is up +3.93% this morning and is largely back at the levels before the big Monday sell-off of -6.69%. Overnight we have received flash PMIs for Australia which improved as parts of the country have eased the coronavirus restrictions. The services reading came in at 44.9 (vs. 42.9 last month) and the manufacturing print was even stronger at 57.3 (vs. 52.0 last month). Japan’s flash PMIs will be out tomorrow due to today’s holiday. Ahead of the Fed, markets had continued to rebound from their declines earlier in the week, with Europe’s STOXX 600 gaining +0.99% to narrowly put the index in positive territory for the week. This continues the theme of a relative outperformance among European equities compared to the US, with the STOXX 600 having outpaced the S&P 500 for 5 consecutive sessions now, though obviously by a slim margin yesterday. Sovereign bonds in Europe also posted gains, with yields on 10yr bunds (-0.7bps), OATs (-1.0bps) and BTPs (-3.2bps) all moving lower. Furthermore, there was another tightening in peripheral spreads, with the gap in Italian 10yr yields over bunds falling to 98.8bps yesterday, less than half a basis point away from its tightest level since early April. Moving to fiscal and with Democrats seemingly unable to pass the $3.5 trillion Biden budget plan by Monday, when the House is set to vote on the bipartisan infrastructure bill, Republican leadership is calling on their members to vote against the bipartisan bill in hopes of delaying the process further. While the there is still a high likelihood the measure will eventually get passed, time is becoming a factor. Congress now has just over a week to get a government funding bill through both chambers of congress as well as raise the debt ceiling by next month. Republicans have told Democrats to do the latter in a partisan manner and include it in the reconciliation process which could mean that a significant portion of the Biden economic agenda – mostly encapsulated in the $3.5 trillion over 10 year budget – may have to be cut down to get the entire Democratic caucus on board. Looking ahead, an event to watch out for today will be the Bank of England’s policy decision at 12:00 London time, where our economists write (link here) that they expect no change in the policy settings. However, they do expect a reaffirmation of the BoE’s updated forward guidance that some tightening will be needed over the next few years to keep inflation in check, even if it’s too early to expect a further hawkish pivot at this stage. Staying on the UK, two further energy suppliers (Avro Energy and Green Supplier) ceased trading yesterday amidst the surge in gas prices, with the two supplying 2.9% of domestic customers between them. We have actually seen a modest fall in European natural gas prices over the last couple of days, with the benchmark future down -4.81% since its close on Monday, although it’s worth noting that still leaves them up +75.90% since the start of August alone. There wasn’t much data to speak of yesterday, though US existing home sales fell to an annualised rate of 5.88 in August (vs. 5.89m expected). Separately, the European Commission’s advance consumer confidence reading for the Euro Area unexpectedly rose to -4.0 in September (vs. -5.9 expected). To the day ahead now, the data highlights include the September flash PMIs from around the world, while in the US there’s the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Tyler Durden Thu, 09/23/2021 - 08:13.....»»

Category: blogSource: zerohedgeSep 23rd, 2021

Sleepy Truckers Get Forgotten in Supply Crisis Choking Economy

Government regulations force drivers off roads to take 10-hour breaks after driving 11 hours, but parking is an issue Bloomberg — President Joe Biden’s sweeping infrastructure law was supposed to ease problems for the trucking industry and relieve supply chain woes, but the law overlooked a vital necessity for truckers: Parking. Overcrowded truck stops force drivers to often spend hours scavenging for parking wherever they can find it, even in illegal and unsafe spots. The problem has simmered for decades, as transportation has been overwhelmed by the online shopping boom, lower inventories and federal mandates on driver rest. But truckers say the coronavirus pandemic has brought the issue to a breaking point. The word “parking” doesn’t appear anywhere in the Biden administration’s 2,333-word “Trucking Action Plan” released last month as part of the rollout of the new infrastructure law during the height of the pre-holiday emphasis on supply-chain snags. [time-brightcove not-tgx=”true”] While the Biden administration is focused on congestion at coastal ports and a broader truck driver shortage, the lack of safe and legal parking spaces for rigs also causes ripples throughout the supply chain. Government regulations typically force drivers off roads to take 10-hour breaks after driving 11 hours. Precious time spent searching for parking means lengthier delivery times to stores. “The supply chain clog will not unclog until drivers are able to utilize their whole 11-hour drive time driving, not driving around in circles, fighting for the next parking spot or stopping early so they can maybe count on a spot,” Merry Leach, a driver from Niota, Illinois, told transportation officialslast month. “Adding truckers to fill the ‘driver shortage’ is only going to make the situation worse, like adding players to a game of musical chairs without adding chairs.” Leach, now 72, wasn’t ready to retire, but said she’d had enough last year. She quit and sold her truck out of frustration. Finding a legal spot often means shortening the day. And that means a smaller paycheck and delays in deliveries. “If you don’t find a spot by 2 o’clock in the afternoon, you’re done. You’re not going to find a spot, particularly in the Northeast,” Leach said. Most companies don’t reimburse drivers for parking, and over-the-road truckers get paid by the mile, not the hour. That means an early exit to grab an available spot — an average of 56 minutes early, according to a 2016 study of trucker diaries — costs drivers an average of $4,600 a year, or 10% of their annual pay. Pandemic-related closures of rest areas in 2020 made parking the most critical issue for commercial truck drivers in a survey that year. It’s now tied with compensation as their top concern. The American Transportation Research Institute found that 48% of drivers said they aren’t willing to pay to park; only 10% say they would pay more than $10. Overnight parking at Pilot Flying J Inc. truck stops near Tulsa, Oklahoma — the most-searched city in its online reservation system — ranged from $12 to $26. Last month, the Federal Highway Administration asked for public input on how to best implement the infrastructure law, and truck parking was a top complaint. “PARKING, PARKING, PARKING,” wrote one trucker. Another mentioned it six times on his top 10 listof most pressing issues. Without additional funding from Congress, the infrastructure bill simply asks each state to assess its truck parking needs. NATSO, a truck-stop operators association, said any additional parking should complement the services already supplied by commercial truck stops. “NATSO has long maintained that the best way to address any truck parking capacity concerns is for motor carriers to negotiate truck parking in their contractual relationships with truck stops and travel plazas,” NATSO’s Tiffany Wlazlowski Neuman wrote in a memo to member truck stops last year. The problem is most pressing in the Northeast. Outside of Hawaii, which doesn’t have long-haul routes, the states with the fewest spaces per truck mile traveled are Massachusetts, Maine, Tennessee, Connecticut, Delaware and New York. Drivers say staging just outside of metropolitan areas is key to making narrow pick-up and delivery windows. The Federal Highway Administration says the biggest need is within 20 miles of urban areas. Local zoning laws and not-in-my-back-yard political pressure have constrained new parking in suburban areas where it’s most needed, business leaders say. “That’s why the federal government needs to be involved. We don’t see it as a competition between the public and private sector,” said Ed Mortimer, the U.S. Chamber of Commerce’s vice president of Transportation and Infrastructure. “There is definitely a role for the private sector to do this. We need both.” A pilot program in Midwestern states tries to solve the problem with technology: Real-time highway signs showing the number of spaces available at upcoming truck stops, with the data also fed to smartphone apps. The Biden administration says it hopes to build on those solutions while encouraging states to pay for more parking. “Truck drivers need safe areas to take a break from long stretches of highway miles. We have heard several personal accounts of the need for additional truck parking,” said Meera Joshi, the former acting administrator of the Federal Motor Carrier Safety Administration, in a statement. She said formula grants to states could pay for truck parking projects, but those decisions are up to states......»»

Category: topSource: timeJan 22nd, 2022

Social Justice Slams Into Europe, Part 2: In Scotland, They"ll Take the Woke Road

Social Justice Slams Into Europe, Part 2: In Scotland, They'll Take the Woke Road Authored by Richard Bernstein, submitted by RealClearInvestigations, Read Part 1 here... The online class on gender, feminism, and the law was underway when Lisa Keogh, a 29-year-old student and mother of two, introduced a note of unwoke contention into the discussion. “We were talking about equal rights for women, and I said I don't believe a trans woman is really a woman,” said Keogh, then attending Abertay University Law School here. “I said that my definition of a woman is someone with a vagina.” Keogh, disagreeing with another point of view expressed in the same meeting, also voiced the apparently retrograde opinion that not all men are rapists. Lisa Keogh, law student who endured investigation: “I said that my definition of a woman is someone with a vagina.” In response, some students accused Keogh of “making offensive comments and behaving in a disrespectful manner during class discussion.” Abertay undertook a formal investigation, claiming, as a university spokesman told the media, that the school was “legally obliged to investigate all complaints.”  After two months and two sessions before the investigating committee, Keogh was exonerated. Still, her supporters say her ordeal took its toll — and sent a chilling message to other students about the risk of expressing opinions that contradict the tenets of the campus radical left. “The process is the punishment,” Stuart Waiton, a sociology and criminology lecturer at Abertay, told me over lunch in Dundee. Keogh has filed suit against the university for the stress, anxiety, and the loss of sleep while also claiming the process has hurt her chances of getting a job. “I'm quite a controversial figure,” Keogh said. “Somebody in a law firm told me, 'We can't even be seen publicly agreeing with what you said.’ A friend told me, 'There's no point in you even looking for work in Dundee.'” Instead, Keogh said, she's considering going elsewhere in Scotland where, she hopes, her notoriety won't follow her. Scotland illustrates how American-style “wokeness,” complete with its identity-politics, victim-culture assumptions and lexicon, has seeped across the Atlantic to Europe. While the U.S. media has given broad coverage to the rise of far-right anti-immigrant parties in countries like France, Germany, Hungary and Poland, it has paid less attention to the emergence of a mirror-image phenomenon on the left, which demands an orthodoxy of opinion and punishes dissenting ideas, like those expressed by Keogh.  But wokeness is a hot topic in Europe. As in Scotland, its flare-ups and the arguments about it take place mostly in elite circles, the universities, and the press. It usually surfaces in incidents, sometimes so small and geographically scattered as to seem isolated and unimportant. Nevertheless, they have a cumulative effect. They show the contagious, globalized power of a rising leftist ideology whose adherents are convinced of their own assumptions – chiefly the supposedly pervasive evils of white-dominated societies, the vulnerability of minority groups disadvantaged by the structures of oppressive power, and on the need to protect those groups from insult and slight, even unintended. And taxpayers are underwriting it. Earlier this year, the European Commission, the main administrative body of the 27-member European Union, created a Gender Equality Strategy aimed at “eliminating the inequalities between the sexes and the socio-economic intersectionality of inequality throughout research and innovation.” The effort is to be funded by a program called Horizon Europe with a budget of more than $100 billion for 2021-2027. “Sexual equality and openness to the question of inclusion are our priorities,” a Horizon mission statement says.  To further that mission, Horizon Europe requires that any governmental or private entity applying for a grant present as part of the application a “Gender Equality Plan” that, among other things, shows the hiring of “equality officers” to help “tackle unconscious gender bias among staff, leaders and decision makers.” “Don't think that woke ideology is a delirium limited to certain American universities,” the right-of-center French magazine Causeur wrote of these requirements, noting the deployment of a vocabulary that seems to come straight from the gender and sexuality studies departments of U.S. academe. In Europe, the magazine continued, these assumptions are based on an “imaginary sexism, ideological submission, and coercion in the academic world.” Each country seems to have its woke eruptions, and in many places they have prompted spirited counterreactions. In Germany over the course of this year, some 600 people, mostly university professors, have become members of a Scientific Freedom Network, the stated purpose of which is “to help victims of cancel culture” — that phrase “cancel culture” having entered the German vocabulary in its original English form. “More and more academics feel they are restricted in the research questions they can address without feeling any fear of being professionally sidelined,” Sandra Kostner, a specialist on migration at the Schwãbisch Gmünd University of Education who founded the group earlier this year, told me in a Zoom conversation. “I wrote an article two years ago expressing the idea that something is going wrong at German universities,” she continued. “Within a day or so I got about 800 emails agreeing with me, but in many cases, the last sentence was 'This is just between the two of us.' There were university presidents and vice presidents saying, 'Please don't tell anybody what I've told you.'” Some of the incidents cited by members of the new group seem almost trivial when taken individually, but reflect a widespread and growing trend. For instance, a report on the Freedom Network describes an incident in Cologne when a professor asked a dark-skinned student and German citizen where she was from. The student took the question as an insult, stemming from “institutional racism,” and complained about it both to the local government and on social media, where she got 50,000 responses. Commenting on the incident, Kostner pointed out that up until a decade or so ago, teachers were encouraged “to ask the questions about one's origins because it was a sign of politeness, signaling interest.” But now, under the pressure of the new victim-culture ideology, such questions are seen “as a denial of belonging, even as a sign of racism.” Behind this shift, the report on the incident noted, is the view of the West as first and foremost having “a history of colonialism, racism, misogyny, and white domination,” all of which has, until the new awakening came along, been “obscured by Eurocentrism and patriarchal rule.” A 2021 survey of a thousand academics carried out by the Allensbach Institute, a leading German social research organization, found that 40% of respondents feel restricted by formal or informal political correctness rules, mostly due to gender guidelines. This compares to 32% two years ago. More than half of respondents in the arts and social sciences said they feel restricted in the topics they can research, compared to 35% two years ago. “Only representatives of certain groups are allowed to talk about certain topics,” the German journalist Thomas Thiel wrote in the daily Frankfurter Allgemeine Zeitung, “and the value of a statement is based on the origin of a speaker, not on the plausibility of the argument.” As the complaint about Lisa Keogh and the subsequent investigation shows, no corner of Europe is immune from these kinds of incidents, seemingly isolated and yet illustrating the spread and influence of a rising victim-culture ideology.  Earlier this year in Edinburgh, the government-funded James Gillespie High School made national headlines when it dropped the American classics “To Kill a Mockingbird” and “Of Mice and Men” from its reading lists, saying that “Mockingbird” was flawed because of its “white savior” theme (a white lawyer defends a falsely accused black man) and that John Steinbeck’s novel was flawed because none of the main characters were people of color. British newspapers quoted Allan Crosbie, the English Department head at James Gillespie, telling a school meeting, “Those novels are dated and problematical in terms of decolonizing the curriculum.” Replacing the books removed from reading lists, Crosbie said, would be “The Hate U Give” by the American writer Angie Thomas, which tells the story of an unarmed black teenager shot dead by a white policeman. (An email sent to James Gillespie High School asking for an interview went unanswered.)  St. Stephen’s University, one of the oldest and most prestigious in the United Kingdom, now requires matriculating students to pass a test in “sustainability, diversity, consent, and good academic practice.” The test asks, for example, whether a student agrees or disagrees with the statement, “Acknowledging your personal guilt is a useful starting point in overcoming unconscious bias.” The embrace of such ideas might seem strange in a nation like Scotland with its homogeneous population — 96% white; only 4% African, Caribbean, Asian, or mixed — and its Scottish Enlightenment heritage. The stomping ground of classical “Great Books” figures like David Hume and Adam Smith wouldn't seem to present fertile ground for critical race theory or Black Lives Matter. In contrast with the U.S. – or European countries with long colonial pasts such as France, Belgium, Spain and the United Kingdom — Scotland has no history of domestic slavery and very little of the kind of racial tensions or racial obsessions that are central to American history. Yet Scottish “wokeness” exemplifies the broad appeal of a globalized demand that the West in general engage in an apologetic self-examination, one predicated on the idea of some previously unacknowledged fault lying at the heart of Western civilization, and only at the heart of Western civilization. “Nothing is more Western,” the French essayist and novelist Pascal Bruckner has written on this phenomenon, “than hatred of the West.” The spread of “woke” ideas in this sense also demonstrates a negative power of the American example and its globalization. America, in this view, being the most powerful Western country, is therefore the one with the gravest intrinsic fault. “When Black Lives Matter happened in America, it was almost as if the incident that incited it happened here, Stuart Waiton, the Abertay lecturer, told me. “It wasn't a British policeman who killed a black man. The killing didn't happen here. And yet, everyone became a participant in BLM. People formed racial awareness groups. There were massive demonstrations. If it's happening in America, it will probably happen in Scotland as well.” Pyramid themes: types of racism according to a government body advising Scotland's public schools Consider Education Scotland, a governmental entity that provides advice to the country's centralized public school system and has in recent times created and promoted a program aimed at “decolonizing the curriculum” through “anti-racist education.” A booklet titled “Promoting and Developing Race Equality and Anti-Racism Education” describes “race” as “a concept that tried to justify exploitation, domination, and violence against people who were deemed non-white” and “made it easier for Britain to downplay the brutality of slavery and colonization.” But if there's mention of British colonialism as a kind of original sin, the program is certainly heavily influenced by similar “diversity and inclusion” programs formulated in the United States.  Another booklet posted on the Education Scotland website, titled “Anti-Racist Praxis,” is written by Titilayo Farukuoye, who, according to the booklet's introduction, “aspires to dismantle oppressive structures and to transcend race and gender constructs.” It lays out a full anti-racist program, with, for example, instructions to teachers on how to handle “white fragility.” “Teachers will,” the booklet says: Define white fragility Identify white fragility Practice overcoming white fragility Practice how to centre the person who has experienced harm. But perhaps the greatest acrimony arising out of a “woke” ideology, illustrated by the case of Lisa Keogh, has another powerful American echo. It has to do with trans rights, and the battle over gender definition, much of it spurred by leglislation being considered by the Scottish parliament that would reform the UK's Gender Recognition Act of 2004, which enabled people throughout Great Britain to legally change their gender.  The reform would make the process much easier, essentially by what's called “self-identification,” enabling people to change their gender without the need for a medical diagnosis. Worried that men could simply declare themselves to be women and thereby gain access to such women's spaces as girls’ sports teams, bathrooms, and shelters, some people, including some leading Scottish feminists, either outright opposed the change or at least urged a discussion of it. The reaction from the transgender lobby has been swift and harsh. An example is an ongoing incident that started three years ago when Ann Henderson, only the second woman in 170 years to be elected rector of the University of Edinburgh, another of Scotland's renowned institutions of higher learning, retweeted a message from a feminist group that opposes the move to allow people to identify their own gender. Harassment for what she called “repeated, unfounded accusations” continued for her entire three-year term; it was led by student groups, against which, Henderson says, she got very little support from the university. Ann Henderson, university rector: Harassed for years for retweeting a message from a feminist group that opposes Scotland's move to allow people to identify their own gender. The acrimony over trans rights has a political dimension in Scotland, where the majority group in the Scottish parliament, the Scottish National Party, has avidly supported the proposed reform, to the point of excluding party members who expressed doubts. The most widely known such case involves Joan McAlpine, a former member of the parliament with impeccable feminist credentials. But because of her dissenting ideas about trans self-identification, McAlpine was placed so far down on the SNP's election list that she was effectively removed from office. Among her offenses was her opposition to adding a “non-binary” option to the British census form, on the grounds that it would weaken protections for women. Earlier this year, she was uninvited from a meeting on climate change because, as the organizers of the meeting put it, “We do not believe her views on transgender rights align with our views on equality.” “It's been incredibly toxic,” Mandy Rhodes, the editor of Holyrood, a biweekly publication focused on Scottish politics, told me at a meeting in her office in Edinburgh. “I've been a campaigning journalist my whole career, over three decades, always focused on equality and social justice issues, but I find myself in the ridiculous position of being accused of being anti-trans and siding with the right-wing press when all I've really done is understand that human rights can conflict with each other and we always need to question and explore the consequences, however unintended, of that." Recently, a senior police officer in Scotland caused a stir when he said that the police could record a suspected rapist as a woman in cases involving “a person born male but who identifies as female and does not have a gender recognition certificate.” “This would potentially mean that a woman who has been raped would have to address her alleged assailant as ‘she,’” Rhodes said. “In Scots law, rape can only be committed by someone with a penis, and so the absurdity and potential harms to women victims of sexual assault have been exposed by this line of discussion, where proponents of self-identification for trans people basically have to defend the rights of rapists against the rights of women who have been raped.” Some critics of Scottish wokeness in general identify it as part of a broad cultural shift toward what they call a therapeutic society, as opposed to a society of individual agency, with a strong emphasis on the idea that vulnerable groups need state protection. A couple of years ago, the courts required the government to scrap a planned program by which every child in Scotland under 18 years of age would be assigned a “named person” who would have responsibility for that child's welfare, which its critics construed as an effort to take authority out of the hands of parents and give it to the government. “More and more we feel like we're living in a one-party regime ruled over by a bunch of managers and where what's been decided is now in process and you have to comply with it,” Penny Lewis, a lecturer in the Department of Architecture and Urban Planning at the University of Dundee, told me. “It's not people in jackboots marching down the street,” she continued.  “It's all wrapped up in this ideology of caring.”  According to Lewis and others who share her views, the Scottish government, led by the SNP, sees itself as a kind of world leader in bringing about a kind of therapeutic state. “The SNP barely existed before the referendum on independence,” she said, referring to the 2014 vote that defeated a move for Scottish independence from Great Britain. “A lot of them actually have very limited political experience, so it's easier for them to take these supposedly virtuous ideas off the shelf, than it is to figure out what to do in a country that's got serious problems.” “The new authoritarianism isn't about authorities imposing their will, but protecting supposedly vulnerable groups,” Waiton said.  And if there are no truly vulnerable groups desperately in need of state protection, it's necessary to invent them.  “We've moved from people as a social subject to people as the vulnerable subject,” Waiton said, “and if you think people are vulnerable, then they have to be protected.” Tyler Durden Sat, 01/22/2022 - 07:00.....»»

Category: blogSource: zerohedgeJan 22nd, 2022

See inside the Airbus A400M Atlas military cargo plane made famous by Tom Cruise that reportedly cost more than $30 billion to produce

European Airbus is challenging the dominance of the Lockheed C-130 Hercules that has been flying longer than Airbus has existed. An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/Insider One of Airbus' latest innovations isn't an airliner but a military troop and cargo transport plane.  The Airbus A400M Atlas can carry up to 37 tons of cargo and be used for transport, air-to-air refueling, and paratroop missions.  European, Middle Eastern, and Asian countries have been Airbus' top customers for the Atlas. Airbus sells more than just commercial airliners, it also sells military transport aircraft.An Airbus A400.A Periam Photography / Shutterstock.comCommercial aircraft manufacturers have long engaged in lucrative endeavors in support of the defense industry, and Airbus is no different. While the public marvels at Airbus' latest passenger jets, the top brass of national militaries marvel at its war-ready troop transport, aerial refueling, and military cargo aircraft.An Airbus A400 of the German Luftwaffe.SpaceKris/Shutterstock.comAirbus launched the A400M Atlas program in 2003 with the goal of supplying countries of the Organisation for Joint Armament Cooperation. The first A400M was delivered to France in 2013 after 10 years of development and a four-year delay.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: Airbus and Financial TimesNow, 11 countries have placed 176 orders for the aircraft. Nations that have orders with Airbus include Malaysia, Belgium, France, Germany, Luxembourg, Spain, Turkey, Saudi Arabia, UAE, Kazakhstan, and the UK.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: AirbusThe A400M is powered by turboprop engines and takes aim at the Lockheed C-130 Hercules. One of the most iconic planes in US military history, the C-130 has been in every US war since the Vietnam War.A Lockheed C-130 Hercules transport aircraftU.S. Air Force photo by Cynthia GriggsTom Cruise also famously latched onto the side of an Airbus A400 in the movie "Mission: Impossible – Rogue Nation," in the aircraft's first appearance in a Hollywood blockbuster.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThe UK Royal Air Force brought one of its Airbus A400Ms to the Dubai Airshow in November. Here's what it's like.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderA truly European aircraft, assembling the A400M requires three European countries. The A400's wings are built in the UK, its fuselage is built in Germany, and assembly takes place in Spain.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: AirbusAirbus designed the A400M to be much like, well, an Airbus. The A400M boasts performance capabilities and qualities traditionally found in the commercial airliners that Airbus produces that places it a step ahead of older models like the C-130 Hercules.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderFour EuroProp International TP 400 turboprop engines power the A400M and enable a top speed of Mach 0.72 and a cruising altitude of 37,000 feet that can be extended up to 40,000 feet in special circumstances.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: AirbusDistance is also a key feature of the A400M as its maximum range of 4,800 nautical miles gives the aircraft a truly intercontinental purview. Under the right conditions, flights between London and San Francisco; Paris and Seattle; and New York and Honolulu are possible.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThough, the A400M can have an unlimited range thanks to its aerial refueling capabilities. Other fixed-wing aircraft and helicopters can even be refueled by the A400M.An Airbus A400M being refueled.AirbusPut simply, the A400M "can fly further, higher, and faster" than the C-130, Ed Horne, a wing commander with the UK RAF that formerly flew the Hercules and now flies the Atlas, told Insider.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAround 160 passengers can fit in the cargo compartment of the A400M when fitted with extra rows of passengers seats down the center.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderBuilt-in passengers can be found onboard the aircraft alongside its cabin walls.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThe seats, however, are quite basic with minimal cushioning, as is standard on military transport aircraft, and far from what can be found on Airbus' airliners.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAnd while the maximum passenger count is around 160, the RAF flew as many as 203 passengers on one evacuation flight during the Afghanistan refugee airlift in August.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderMedical litters can be affixed in the cargo compartment to transport the injured and ill.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAs many as 66 stretchers can be loaded onto the aircraft with room for 25 medical support personnel.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: Airbus and Financial TimesWartime operations may see the A400M conduct everything from military cargo flights to para trooping over enemy territory, tasks for which the aircraft is more than capable.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThe A400M’s cargo compartment can hold up to 37 tons, or 74,000 pounds, of cargo across 340 cubic meters of space.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: AirbusDigital and autonomous systems on the aircraft help expedite the loading and offloading process while also reducing the workload of the loadmaster.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThere's room for seven pallets on the main deck and two additional pallets on the ramp. A Boeing CH-47 Chinook helicopter can even be transported on the aircraft if need be.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: AirbusParatroop operations are a critical function of the A400M, especially when training for a wartime scenario.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderParatroopers that are jumping out of the A400M will typically do so via the two side doors at the rear of the aircraft. A static line parachute will typically be used that automatically deploys during the jump.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAnd one feature of the A400M is that winches are available to retract each static line after the drop is complete.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderHigh-altitude paratroop operations, however, are conducted use the rear cargo door as a different type of parachute, known as freefall parachute, that's more conducive to jumping from the rear of the aircraft.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderParatroopers making a high-altitude jump are usually also carrying equipment that can't fit through the side doors.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAs of November, however, the UK Royal Air Force was still breaking in the A400M and developing procedures for paratroop operations.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThe A400M's cockpit can be found above the cargo compartment, which Airbus says is to maximize the aircraft's available cargo space.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderOne unique feature about the A400M is that its cockpit actually has the look of a traditional airline cockpit in many ways, as opposed to previous generations of American military aircraft.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderPilots have large high-definition displays to feed them flight data and navigational information, just like on an airliner such as the Airbus A380 or Airbus A350 XWB.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/Insider"Everything that is close to you is things that you will use every day," Horne said. "Everything is placed very nicely for the pilots."An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderEmbedded in the heads-up display is an enhanced vision system that lets pilots see through the clouds during periods of reduced visibility.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAirbus’ iconic sidestick is what pilots use to maneuver the A400M with fly-by-wire technology allowing for a smoother flight experience.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAnd pilots can access navigational charts through their flight displays.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderA third seat allows for a third crewmember to assist the two pilots during high-intensity missions, including "package" flights when a group of aircraft fly together.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderPilots also have multiple ways of escaping the cockpit in case of an emergency, including through the cockpit windows or an emergency hatch above the cockpit.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThe loadmaster for the flight is tasked with ensuring the safety and integrity of the cargo and passengers onboard.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderDigital and autonomous systems on the aircraft help expedite the loading and offloading process while also reducing the workload of the loadmaster.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderCrew rest areas on the aircraft are quite meager but consist of bunks in the cockpit.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderFlight crews on long-haul missions can retreat to the bunks to rest if the mission allows.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderLavatories on the aircraft are, however, very similar to those found on airliners.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThis A400M had separate lavatories for crew and passengers.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAnother unique feature of the A400M is that the nose avionics bay can be accessed through the lavatory.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderThe aircraft also has a galley area, similar to those found on an airliner.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderAnd the most important part of the A400M's galley, for some pilots, is the coffee maker.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderCost overruns, delivery delays, and capability issues first plagued the A400M during its development and the first few years of operations, as the Financial Times reported.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: Financial TimesFrance received its first A400M four years later and the aircraft program cost Airbus more than 30 billion euros, according to Reuters.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderSource: Financial Times and Reuters But the end result has been a highly capable aircraft that's slowly but surely proving itself to be a fitting alternative to the C-130.An Airbus A400M at the Dubai Airshow 2021.Thomas Pallini/InsiderRead the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 22nd, 2022

JPMorgan Models War Between Russia And Ukraine: Sees Oil Soaring To $150, Global Growth Crashing

JPMorgan Models War Between Russia And Ukraine: Sees Oil Soaring To $150, Global Growth Crashing With Morgan Stanley joining Goldman and calling for $100 oil, and Bank of America's commodity strategist Francisco Blanch one-upping both, and today laying out the case for $120 oil... ... on Friday afternoon JPMorgan trumped all of its banking peers with a report that is especially troubling if not so much for the implications from its "theoretical" modeling, but for the fact that Wall Street is now actively assessing what may be the start of World War 3. In a note from the bank's economists Joseph Lupton and Bruce Kasman (available to pro subs) which picks up where our article "Shades Of 2008 As Oil Decouples From Everything" left off, JPM writes that oil shocks have a long history of driving cyclical downturns, with US recessions often associated with oil price spikes... ... most recently of course the surge in oil to all time highs in 2008, which some say sealed the fate of the global financial crisis. So looking at the latest geopolitical tensions between Russia and Ukraine, JPM warns that "these raise the risk of a material spike this quarter." That this comes on the back of already elevated inflation and a global economy that is being buffeted by yet another wave of the COVID-19 pandemic, JPMorgan sees the risk of a kinetic war breaking out as adding "to the near-term fragility of what is otherwise a fundamentally strong recovery." Drilling down, JPM considers a scenario in which an adverse geopolitical event between Russia and Ukraine materially disrupts the oil supply. This scenario envisions a sharp 2.3 million b/d contraction in oil output that boosts the oil price quickly to $150/bbl—a 100% rise from the average price in 4Q21. Given that this would be solely a negative supply shock, the impact on output is to reduce global GDP by 1.6% the bank calculates based on its general equilibrium model. And with global GDP projected to expand at a robust 4.1%ar in 1H22, the economist due project that "this shock would damp annualized growth to 0.9% assuming the adjustment takes place over two quarters. Inflation would also spike to 7.2%ar, an upward revision of 4%-pts annualized." It gets worse: in addition to the drag from a sharp contraction in oil supply our models estimate, there are two other channels through which this shock could damage global growth. The first relates to the repercussions of a Russian intervention in Ukraine. The US, coordinating with allies, would likely impose sanctions on Russia. While the possibilities vary widely in scope, they will likely impact negatively on sentiment and global financial conditions. Second, JPM estimates incorporate the realized behavior of major central banks over the past two decades whereby oil price shocks associated with geopolitical turmoil have been perceived to pose a greater threat to growth than inflation. Against the backdrop of a year of already elevated inflation and extremely accommodative policies, JPM warns that central banks may display less patience than normal—particularly in the EM, where rising global risk aversion may also place downward pressure on currency values. To be sure, as with any Wall Street analysis that models war, JPM is quick to caveat its findings, noting that "it is important to recognize that the scenario of a jump in the oil price to $150/bbl is premised on a sharp and substantial shock to the oil supply. History has proven that such large and adverse shocks do material damage to the macroeconomy. In this regard, the results reported here should not be a surprise but seen as useful for quantifying the damage based on a carefully specified general equilibrium model using generally accepted elasticities." Boilerplate language aside, what is notable is that for months we have been wondering what "latest and greatest" crisis will replace covid as the "green light" that central banks and governments need to perpetuate not only QE and NIRP, but also the all important helicopter money. Now we know. Tyler Durden Fri, 01/21/2022 - 15:27.....»»

Category: blogSource: zerohedgeJan 21st, 2022

People Want Business Leaders to ‘Break the Cycle of Distrust’ and Address Societal Issues, According to New Report

After another year marred by the COVID-19 pandemic and rapid spread of disinformation, a new report reveals that business leaders could be key to breaking out of “a vicious cycle of distrust fueled by government and media.” The Trust Barometer, a study published annually by global communications firm Edelman, unveiled its findings on Tuesday after… After another year marred by the COVID-19 pandemic and rapid spread of disinformation, a new report reveals that business leaders could be key to breaking out of “a vicious cycle of distrust fueled by government and media.” The Trust Barometer, a study published annually by global communications firm Edelman, unveiled its findings on Tuesday after conducting more than 36,000 online surveys in 28 countries between Nov. 1 and Nov. 24, 2021. The firm found that public trust eroded even further in the past year among world governments and the media—largely due to mishandling of the pandemic, lack of progress on climate change and increased partisanship among media organizations. Yet, as companies develop vaccines and find cleaner energy sources, the report highlighted an increased desire for the private sector to play a larger role in addressing societal challenges, despite growing concerns about its commitment to social equity and workplace practices. [time-brightcove not-tgx=”true”] “Business must now be the stabilizing force delivering tangible action and results on society’s most critical issues,” CEO Richard Edelman said in a press release. “Societal leadership is now a core function of business.” Edelman The 2022 Edelman Trust Barometer found that trust in government and media globally declined in the last year. According to Edelman, every stakeholder group surveyed expects business to help “fill the void” on issues such as climate change, economic inequality, workforce reskilling and racial injustice. U.S. climate envoy John Kerry has already called on the private sector to help find solutions to climate change, in large part by funding the trillions needed for a global clean energy transition, and companies like Unilever and Alphabet have set goals to reduce their environmental footprints. These are positive signs, the report suggests, as trust in business was found to be higher than all other institutions. In an essay published alongside the report, Edelman explained that business leaders should continue taking active policy stances and serve as models of long-term thinking for other institutions. Nearly 60% of the survey’s respondents also said they buy brands based on values, and nearly two-thirds of investors look to back businesses aligned with their values. However, the study found that the public considers non-governmental organizations (NGOs) to be the most ethical institutions, while businesses were found to be the most competent. Meanwhile, Edelman wrote that government and media have entered a “distrust spiral” and are considered by the public to be neither ethical nor competent. Just under two years ago, prior to the start of the pandemic in 2020, the same survey found government to be the most trusted institution, at a time when the world sought leadership to stop the spread of the virus. A failure to do so, Edelman wrote, combined with “a stark partisan divide” in the news media has contributed to a rapidly decreasing level of trust among the public. Read More: With the State of the World in the Hands of Big Business, Some Executives Think It Can Pay to Do Good “The media business model has become dependent on generating partisan outrage, while the political model has become dependent on exploiting it,” he said. “Whatever short-term benefits either institution derives, it is a long-term catastrophe for society.” Now, as governments bear those consequences, many are already predicting that outcome. Only 4 in 10 respondents say government can execute and achieve results, and the survey also found that people in every democracy studied believe they will be worse off financially in five years. In addition, Edelman says class divides became more apparent with this year’s survey: people with higher incomes were found to have slightly increased trust in public institutions, while trust among those with lower incomes either plateaued or plummeted, which Edelman attributes to the lack of job opportunities due to automation and inadequate working conditions for those holding frontline jobs. Overall, the study concludes that business must fill the void left by government and deliver tangible actions while helping restore trust to all societal institutions, even though many private enterprises were not designed to fill this role. “As business steps up, we need to move from outrage to optimism, fears to confidence, insinuation to fact,” Edelman wrote......»»

Category: topSource: timeJan 21st, 2022