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Atlantic City avoids casino strike with last-minute deal

A strike by workers at four casinos in Atlantic City was averted Thursday night which could have disrupted the Fourth of July weekend, one of the busiest for that city......»»

Category: topSource: foxnewsJul 1st, 2022

Futures Flat As Traders Brace For Latest FOMC Minutes

Futures Flat As Traders Brace For Latest FOMC Minutes After yesterday's remarkable U-turn in US stocks which tumbled at the open only to recover all losses by EOD (except the energy sector which suffered a furious rout), overnight futures traded subdued, fluctuating between gains and losses ahead of today's FOMC minutes as traders debate whether the coming recession is good news (more stimulus from the Fed) or bad news (stagflationary, tying the Fed's hands). S&P futures were down 0.1% last, having traded on both sides of the unchanged line for much of the past 12 hours while Europe’s Stoxx 600 was much more excited and climbed the most since June 24. The two- and 10-year US yield curve remained inverted as investors awaited the minutes of the Federal Reserve’s last meeting; the 10-year Treasury yield held steady around 2.81%. The dollar rose for a fourth day as the Euro tumbled while bitcoin traded at $20,000. In China, Shanghai launched mass testing for Covid in nine districts after detecting cases the past two days, fueling concerns that the financial hub may once again find itself locked down in pursuit of Covid Zero. The Shanghai Composite Index slid the most since May 24. In thin premarket trading, bank stocks were lower as investors await the release of the Federal Reserve’s meeting minutes. In corporate news, crypto broker Voyager Digital filed for Chapter 11 bankruptcy protection. Meanwhile, HSBC is in talks to sell its Russia unit to local lender Expobank, according to people familiar with the matter. Stocks related to cryptocurrencies fell in US premarket trading as Bitcoin fell amid mounting concerns of a global recession. Here are some of the most notable premarket movers: Kornit (KRNT US) shares plunged 23% in US premarket trading after the inkjet printer manufacturer issued disappointing preliminary second-quarter results. Stifel cut its recommendation to hold from buy. Chip and chip equipment stocks could be active on Wednesday after Bloomberg reported that the US is pushing the Netherlands to ban ASML from selling some chipmaking tools to China. Watch shares including Applied Materials (AMAT US), Lam Research (LRCX US) and KLA (KLAC US), as well as Nvidia (NVDA US), Qualcomm (QCOM US), Intel (INTC US), Advanced Micro Devices (AMD US) Stocks related to cryptocurrencies decline as Bitcoin drop amid mounting concerns of a global recession. Riot Blockchain (RIOT US) -4.2%, Coinbase (COIN US) -3.3%, Ebang (EBON US) -5.5%, Marathon Digital (MARA US) -1.8%, BitNile -5.2% (NILE US) Shopify (SHOP US) shares slide 0.9% as The Globe and Mail reports, citing people familiar, that the company is delaying a compensation overhaul that would give its employees flexibility on how their salary is paid in stock and cash. Cazoo (CZOO US) and Carvana (CVNA US) fall as Davy cuts earnings estimates and price targets for online auto stocks, citing inflation, higher interest rates and weakening consumer sentiment as threats to operational execution. RADA Electronic Industries (RADA US) sinks 11%, after the Israeli defense firm said that it’s withdrawing its full-year 2022 revenue guidance in light of its pending merger with Leonardo DRS. Watch cybersecurity companies like Palo Alto Networks (PANW US), CrowdStrike Holdings (CRWD US) and Okta (OKTA US) as Morgan Stanley analysts said they expect durable security spending environment in the second half of 2022 against an uncertain macro backdrop. With energy names plunging on expectations of a recession, bargain hunters chased technology stocks boosting US equity indexes on Tuesday, helping mask a deepening slump in stocks linked to economic activity, such as energy, commodity and industrial names. A renewed spike in China’s Covid cases and a worsening gas crisis in Europe signaled that a worldwide slowdown is coming even as central banks tighten monetary policy to contain consumer prices. “Markets are caught between two opposing forces and that’s the place we are going to be in for the next few months,” Diana Amoa, chief investment officer for long-biased strategies at Kirkoswald Asset Management, said on Bloomberg Television. “We go from trading lower growth to trading high inflation.” Today's 2 p.m. release of the June FOMC minutes will provide one of the session highlights. European stocks gave back over half of their opening gains with the Euro Stoxx 50 up 1.25% as of 7:30 a.m. ET having added as much as 2.3% in early trade, clawing back roughly half of Tuesday’s sharp losses. CAC 40 and FTSE 100 outperform. Retail, tech and media names are the best performers among broad-based sectoral gains within the Stoxx 600. European semiconductor stocks bounced back on Wednesday, following heavy selling in the past three sessions spurred by concerns over cooling chip demand. ASML shares rise 3.2% as of 9:39am CET, halting a seven-day losing streak, despite news that the US is pushing the Netherlands to stop the chip tool maker from selling deep ultraviolet lithography systems to China. Banks remain the only European industry group in the red on Wednesday, with the Stoxx 600 Bank Index. Here are the most notable European movers: Just Eat Takeaway shares surge over 20% after the meal delivery firm struck a deal with Amazon for the e-commerce giant to take up to a 15% stake in its US unit Grubhub. Abrdn shares jump as much as 8.8% after the UK asset management firm said it will commence a return of £300m through the repurchase of its shares, with a first phase of up to £150m being undertaken by Goldman Sachs, according to a filing. Atos shares climb as much as 8.1% after a filing shows Bank of America holding a 7.77% stake in the French tech services company. Meanwhile, governance remains in focus amid a fresh news report of shareholder unrest. Airlines rise on Wednesday amid a rebound in the broader European market. Ryanair shares rally as much as 5.1%, EasyJet +4.2%, Wizz Air +4.5%. Shop Apotheke shares gain as much as 13% after jumping 12% yesterday when the online pharmacy reported preliminary 2Q results. Baader notes that e-scripts will be mandatory in all German states by January 2023, further pushing the company’s sales prospects in the country. Trainline stock surges as much as 24% as its new FY23 guidance implies a 27% upgrade to consensus, Morgan Stanley writes in note following trading update. Fresnillo stocks fall as much as 4.2%, while Endeavour rises as much as 4% after Credit Suisse starts coverage of the former with an underperform recommendation and initiates UK-listed shares of the latter at outperform. TotalEnergies and Engie fall in Paris, underperforming peers, as President Emmanuel Macron comes under increasing pressure to introduce a windfall tax on energy and transport giants to fund his bill aimed at protecting consumer purchasing power. Adidas shares fall as much as 5.4% after Hauck & Aufhaeuser double downgrades to sell from buy, also setting a Street low price target for the sports-apparel maker, whose FY22 targets are likely at risk due to a 2Q margin squeeze. Earlier in the session, Asian stocks slipped as fears of a global economic recession and fresh Covid-19 outbreaks in China weighed on sentiment. The MSCI Asia Pacific Index fell as much as 1.3%, led by energy-related shares as oil traded below $100 per barrel, while investors snapped up defensive shares. Stocks in China declined as Shanghai ramped up mass testing in nine districts after detecting cases the past two days, fueling concerns that the financial hub may once again find itself locked down in pursuit of Covid Zero. The Shanghai Composite Index slid the most since May 24. Benchmarks in the tech-heavy markets of Taiwan and South Korea also dropped. In China, Shanghai launched mass testing for Covid The fall in Asia shares came despite US stocks recouping most of their losses in a volatile session overnight. Traders are turning their attention to the minutes of the most-recent Federal Reserve meeting, which will be released later today, for a sense of policy makers’ debate about the near-term path for interest rates.   Asian equities have been stuck in range-bound trading in recent months as investors weigh higher interest rates and the prospect of an economic downturn driven by elevated inflation. Still, narratives of peak inflation are building up as the Fed ramps up its policy-tightening campaign. It’s “much too early, in our view, to think that inflation trades are over,” Frank Benzimra, head of Asia equity strategy at Societe Generale, said in a Bloomberg TV interview. For emerging-market assets, “you also have some valuation buffer, some levels of yields which are becoming interesting. So this is where we are seeing that we may be close to the peak of pain.” Equity measures in the Philippines and New Zealand bucked the regional trend to each rise more than 1.6%. Japanese stocks declined as oil tumbled and concerns of a global economic downturn damped sentiment.  The Topix Index fell 1.2% to 1,855.97 at the market close in Tokyo, while the Nikkei 225 declined 1.2% to 26,107.65. Toyota Motor Corp. contributed the most to the Topix’s loss, decreasing 2.8%. Out of 2,170 shares in the index, 572 rose and 1,520 fell, while 78 were unchanged. “Japanese stocks are seen as representative of the global cyclical economy, so when concerns about recession appear, not only in the US but globally as well, stocks overall are likely to be sold off,” said Yasuhiko Hirakawa, head of an investment department at Rakuten Investment Management.  Oil Steadies Above $100 After Plunging on Recession Concerns Key equity gauges in India rallied as commodity prices eased while a recovery in monsoon rainfall buoyed sentiment. The S&P BSE Sensex Index rose 1.2% to 53,750.97 in Mumbai, while the NSE Nifty 50 Index advanced 1.1%. Hindustan Unilever was the biggest boost to the Sensex, increasing 4%. Out of 30 shares in the index, 25 rose and five fell. Seventeen of the 19 sectoral indexes compiled by BSE Ltd. gained, led by automobile and consumer goods companies. Asia’s biggest software exporter Tata Consultancy Services will kickoff the April-June earnings season for companies on Friday. Australia's S&P/ASX 200 index fell 0.5% to close at 6,594.50, as fears of a global economic recession as well as tumbling commodity prices hit market sentiment.  The benchmark was dragged by a group of mining shares that fell to the lowest level since Nov. 2, and energy stocks that fell the most in over two years. In New Zealand, the S&P/NZX 50 index rose 1.6% to 11,141.07 Fixed income was comparatively quiet. Bunds and USTs bear-steepened as 2y Bunds outperformed. Treasuries are flat in early US trading Wednesday with front end underperforming, pushing 2s10s yield curve into deeper inversion. Yields are mostly lower led by 2-year, at 2.82%; the 10Y yield was trading just south of 2.80% last; 5- to 30-year yields hold increases of less than 2bp after touching lowest levels since late May on Tuesday amid a slump in commodity prices led by oil. 2s10s curve inverted as much as 3.6bp; maximum inversion this year was 9.5bp on April 4, reached as futures markets began to price in bigger Fed rate increases in response to persistently high inflation readings, pushing 2- year yields higher. Latest inversion, by contrast, occurred as 10- year yield declined more than 2-year, with expectations for Fed rate path in broad decline on economic-slowdown concerns. UK Gilts bear-flattened, erasing an initial decline after comments from BOE’s Pill. Peripheral spreads are marginally wider to Germany. In FX, Bloomberg dollar spot index rises 0.2%. JPY is the strongest in G-10, trading near 135.30/USD. EUR sits at the bottom of the scoreboard with EUR/USD trading through Tuesday’s lows. In commodities, crude futures drift off Asia’s best levels. WTI slips below $100, Brent trades on a $104 handle, with Goldman Sachs arguing that a plunge driven by fears a recession will hurt demand was overdone. Today’s gains were small compared to Brent’s decline of more than $10 on Tuesday, its third largest ever in dollar terms. Investors have been pricing in the consequences of a slowdown even as physical crude markets continue to show signs of vigor and the war in Ukraine drags on. Copper dropped as fears of a global economic slowdown piled pressure on industrial metals.. Spot gold holds a narrow range near $1,765/oz. Base metals are mixed; LME tin falls 1.5% while LME lead gains 1.7%. Looking to the day ahead now, today's 2 p.m. release of the June FOMC minutes will provide one of the session highlights. Prior to that, economic data will include the weekly MBA Mortgage Applications release at 7 a.m., the final June Services PMI data at 9:45 a.m. and June's ISM Services Index and the May JOLTS Job Openings at 10 a.m. Elsewhere on the central bank front, the Riksbank's Cecilia Skingsley and BOE's Jon Cunliffe will speak on central bank digital currencies. Fed's John Williams is scheduled to deliver comments at a virtual event on banking culture at 9 a.m. Otherwise from central banks, we’ll get the minutes from the June FOMC meeting, and also hear from the Fed’s Williams, the ECB’s Rehn and the BoE’s Cunliffe and Pill. Market Snapshot S&P 500 futures down 0.2% to 3,825.75 MXAP down 0.8% to 156.29 MXAPJ down 0.9% to 516.65 Nikkei down 1.2% to 26,107.65 Topix down 1.2% to 1,855.97 Hang Seng Index down 1.2% to 21,586.66 Shanghai Composite down 1.4% to 3,355.35 Sensex up 0.8% to 53,570.29 Australia S&P/ASX 200 down 0.5% to 6,594.48 Kospi down 2.1% to 2,292.01 STOXX Europe 600 up 1.4% to 406.26 German 10Y yield little changed at 1.24% Euro little changed at $1.0259 Brent Futures up 1.3% to $104.15/bbl Gold spot up 0.2% to $1,769.16 U.S. Dollar Index little changed at 106.46 Top Overnight News from Bloomberg With the European economy lurching toward a recession, traders are growing more convinced that the euro breaking parity with the dollar is imminent “If the fragmentation in bond markets is unwarranted then we should be as unlimited as possible,” European Central Bank Governing Council member Pierre Wunsch tells the Financial Times. “The case to act is strong when faced with unwarranted fragmentation” German factory orders unexpectedly rose in May, even as global momentum was affected by rampant inflation and uncertainty stoked by Russia’s war in Ukraine. Demand increased 0.1% compared to the previous month, compared to an economist estimate of -0.5% Britain’s new Chancellor of the Exchequer, Nadhim Zahawi, signaled he wants to cut taxes faster than his predecessor Rishi Sunak, as he set out plans to boost the UK’s struggling economy British Prime Minister Boris Johnson is on red alert for signs of a coordinated plot from his ministers to bring him down, according to a senior government official China’s central bank looks set to withdraw cash from its financial system in a sign that it’s moving toward normalizing monetary policy as major global peers are forcefully raising interest rates A combination of the recent bond rebound and the spiraling cost to hedge the volatile yen has wiped out the yield premium a Japanese investor once enjoyed from US debt. The yen-hedged yield on 10-year Treasuries collapsed to 0.24% Tuesday from almost 1.7% in April, just above the 0.22% yield on comparable Japanese debt Emerging-market currencies are tumbling as the twin threats of rising US interest rates and a global recession send traders scurrying to the safety of the dollar. The MSCI Emerging Markets Currency Index dropped for a second day, extending this year’s slide to 4.4%, heading for the steepest annual drop since 2015 A more detailed look at global markets courtesy of Newsquawk Asia-Pacific stocks were mostly negative with risk appetite sapped by headwinds from the global growth concerns and US recession fears. ASX 200 was marginally lower with energy leading the descent in the commodity-related sectors, although the downside in the index was stemmed by tech strength following the duration-sensitive bias stateside and lower yield environment. Nikkei 225 weakened alongside a firmer currency and with Japan said to delay the call on the start of the nationwide travel support.Hang Seng and Shanghai Comp. conformed to the downbeat mood after the PBoC continued to drain liquidity and with reports noting that US President Biden could lift tariffs on just USD 10bln of Chinese goods, while the US was also said to pressure ASML to stop selling key chipmaking equipment to China. In addition, COVID-19 concerns persisted after China’s Xi’an city entered a 7-day period of ‘temporary control measures’ and with Macau officials locking down the Grand Lisboa hotel and casino due to a cluster of infections. Top Asian News PBoC injected CNY 3bln via 7-day reverse repos with the rate at 2.10% for a CNY 97bln net drain. Shanghai suspended the operation of KTV venues due to COVID-19 but other entertainment venues can remain open, while the gradual reopening of cinemas and concert venues will go ahead from July 8th, according to Reuters. US top diplomat for East Asia Kritenbrink said the top priority for US Secretary of State Blinken's meeting with Chinese Foreign Minister Wang is to underscore US commitment to diplomacy and maintaining open lines of communication, while he expects Blinken to raise human rights in the meeting with China's Foreign Minister, according to Reuters. Two US senators called for the FTC to investigate TikTok after the disclosure about Chinese access to US data, according to Reuters. Chinese Capital Beijing will resume direct international flights in an orderly way, via Reuters. ‘Bad for EM’: Why Funds Are Furiously Selling Risky Currencies SenseTime Plunge Raises Stakes for Slew of China Lockups Lifts Goldman Sachs Sees Kotak Mahindra Bank to Double Market Value Singapore’s Price for Right to Buy a Car Hits All- Time High European bourses are firmer across the board, Euro Stoxx 50 +1.3%, continuing to take impetus from the NDX-led rebound in US hours on Tuesday and shrugging off negative APAC trade. Stateside, futures are mixed/flat at present, but like their European peers have been choppy in overnight ranges awaiting US data and Fed speak; ES -0.1%. Back to Europe, sectors exhibit a pro-cyclical bias that features Tech as the clear outperformer. China's CPCA says prelim figures show China sold 1.926mln cars in June, +22% Y/Y. Prelim. figures indicate Tesla (TSLA) sold 78k (prev. 32.1k MM) China-made vehicles in June, via Reuters. Top European News Latest British Political Drama Proves ‘Sideshow’ for Investors French Rail Strike Adds to European Summer Travel Havoc Russia Slams Macron for Breaching Diplomatic Confidentiality Bulgaria’s Gerb Holds Narrow Lead Over Ruling PP Party: Poll BOE Chief Economist Says Fighting UK Inflation Is Priority Italy Five Star Party is leaning on keeping support for PM Draghi, according to ANSA. Central Banks ECB's Wunsch said If the fragmentation in bond markets is unwarranted then we should be as unlimited as possible, via the FT. BoE's Cunliffe said we will act to ensure the inflation shock does not become imbedded. BoE's Pill says the (BoE) statement re. acting forcefully if necessary reflects both my willingness to adopt a faster pace of tightening than implemented thus far in this tightening cycle & emphasis conditionality on data; Pill will be data-dependant. Much remains to be resolved before we vote on our August policy decision. Adds, that there is a case of steady-handed approach; one-off bold moves can be disturbing to markets. FX Dollar dips, but retains firm underlying bid ahead of FOMC minutes, Fed’s Williams and services ISM, DXY holds around 106.500 within 106.760-340 range. Yen outperforms on technical grounds and with JPY crosses maintaining downward momentum; USD/JPY closer to 135.00 than 136.00, but faces stiff support if breached via recent lows . Euro remains pressured after largely weak Eurozone construction PMIs and no real compensation from mixed retail sales data, EUR/USD slips to new 20 year low nearer 1.0200. Pound precarious as more UK Tory Party MPs quit to pile pressure on PM Johnson, Cable back under 1.1950 after brief rebound from low 1.1900 area. Yuan bucks downbeat mood in EM currencies even though China suffers more outbreaks of Covid-19 as it adopts regional safe haven status; USD/CNH and USD/CNY straddle 6.7100. Lira lurches again and Forint falls to fresh all time low; USD/TRY tops 17.2550 and EUR/HUF touches 410.50. Fixed Income Bulls keep debt afloat after retreat from Tuesday peaks. Bunds subsequently breach prior session best by a lone tick, at 151.66 before running into supply issues, as new 10 year German benchmark technically uncovered. Gilts back on 116.00 handle from 115.47 Liffe low and T-note hovers nearer top end of 120-03/119-21 overnight range ahead of Fed's Williams, US services ISM and FOMC minutes. UK debt unruffled by more UK Government resignations and BoE rhetoric awaiting PMQs that will put spotlight on under fire Conservative Party leader Johnson. Commodities Crude benchmarks are firmer and having been moving with the equity space after yesterday's significant crude selloff; however, the 'recovery' is limited with WTI pivoting USD 100/bbl. Goldman Sachs said oil has overshot as the global deficit is unresolved and it is premature for oil to drop on recession concerns OPEC Secretary General Barkindo has passed away, according to Arab News. Note, from an OPEC personnel perspective, Barkindo's term as the OPEC SecGen was due to end on July 31st, after which the Kuwaiti oil executive Haitham Al Ghais was due to replace him as the new secretary-general Tengiz field in Kazakhstan continues operations following a blast, according to a source cited by Reuters. Spot gold is lacklustre after Tuesday's USD-driven downside; notably, the yellow metal has been fairly resilient to fresh advances in the DXY. While base metals continue to falter, LME copper below 7.5k/T at worst. US Event Calendar 07:00: July MBA Mortgage Applications -5.4%, prior 0.7% 09:45: June S&P Global US Services PMI, est. 51.6, prior 51.6 10:00: May JOLTs Job Openings, est. 10.9m, prior 11.4m 10:00: June ISM Services Index, est. 54.0, prior 55.9 14:00: June FOMC Meeting Minutes Central Banks 09:00: Fed’s Williams Makes Remarks at Event on Bank Culture 14:00: June FOMC Meeting Minutes DB's Jim Reid concludes the overnight wrap It's sports day at school today and I'm going to pop in for an hour to watch. However given that my 4yr old twins are the youngest in their year and my daughter is still in a wheelchair I suspect I won’t be building a new trophy cabinet. For those that have asked about Maisie (thanks by the way) she continues to be in great spirits and is exceptional at swimming for her age (6) so she would likely win that if there was such an event. Fingers crossed she'll be able to get out of the wheelchair in a few months after 8 months so far. The next scan is in 3 weeks and we’ll know if the hip ball has finished collapsing and if it is showing any early sign of regrowing. As my kids are unlikely to win a prize they've asked me to ensure I win some for them to make their tears go away. So if you value our research I would appreciate it if you would vote in the Global Institutional Investor FI survey that opened yesterday. You can see the categories I am up for in this (link here) pdf. There are a number but I've listed the priorities. If you could let us know if you voted that would be appreciated unless it is to tell me you voted for one of our competitors! It’s been another tumultuous 24 hours in markets, with a massive risk-off move reversing late in the US session as the S&P (+0.16%) climbed over 2% after Europe closed. We’ll run through the various headlines in a moment, but there was so much going on here’s a quick highlights reel. We’ve seen the euro decline to a 20-year low against the US Dollar, another round of inversions across the Treasury curve, a mammoth rally in bonds, the tightest financial conditions since the initial wave of the Covid pandemic, a market now pricing in at least two full rate cuts by the Fed in 2023, the German government starting work on bailing out the gas sector, near double-digit percentage drops in oil, and a UK Prime Minister who is getting hit with very high profile cabinet resignations. Running through the day, investor fears were evident from the get-go, with European markets swiftly giving up their gains after the open to move progressively lower through the day. An important catalyst for that was the latest bad news on the energy side, where an escalation in the Norwegian gas strike we mentioned yesterday means that nearly 60% of the country’s gas exports could have been affected from Saturday according to the Norwegian Oil and Gas Association. However, there were some optimistic signs overnight, as it appears the Norway labour minister intervened to put an end to the strike by summoning both sides to the table, saying “When the conflict can have such great social consequences for the whole of Europe, I have no choice but to intervene in the conflict”. It goes without saying that this strike would have been coming at a particularly bad time for the European economy, not least with the scheduled maintenance on Nord Stream that’s occurring from July 11-21 and the uncertainty over what happens next. Germany yesterday accelerated legislation that will allow it to rescue energy companies if the need arises with Uniper looking set to be the first to receive state support. Economy Minister Habeck has talked about gas as potentially being a Lehman Brothers moment so the stakes are high. Indeed this is a heavy cloud hanging over European assets at the moment and they were among the worst global performers yesterday as the prospect of a chaotic gas situation and recession came closer into view. Indeed, the euro itself weakened by a massive -1.50% against the US Dollar yesterday, which was its largest daily decline since March 2020, and left the single currency at its lowest level against the dollar since 2002, closing at just $1.0266. It's dipped another -0.2% overnight. Another factor behind the euro’s weakness were growing doubts that the ECB could embark on as aggressive a hiking cycle as initially thought. That expectation of more dovish central banks was present across the world yesterday in light of the recession fears, but it was particularly prevalent in Europe, where the rate priced in by the June 2023 meeting came down by -11.4bps by the close of trade. It was a similar story in the US where the rate priced in by June 2023 came down by -11.4bps, but what’s becoming increasingly apparent is that investors are now expecting that the Fed will shift towards easing policy by mid-2023, with at least a full 25bp cut now priced in between the February and July meetings in 2023, as well as a further one by year-end. Those fears of a recession were manifesting themselves in other asset classes too, with commodities more broadly (European natural gas excepted) having an awful day as the resiliency of global demand was brought into question. For instance, Brent crude oil prices (-9.45%) witnessed their largest daily move lower since March, taking prices down to their lowest level since early May at $102.77/bbl while WTI (-8.24%) broke beneath $100/bbl for the first time since April. The traditional industrial bellwether of copper was another victim of this trend, plummeting by another -5.36% yesterday to a 19-month low of its own, whilst wheat futures (-4.61%) are now trading beneath their levels prior to Russia’s invasion of Ukraine. In Asia, oil futures have pared bigger bounce back gains but are still trading slightly higher with Brent futures +1.05% and WTI futures (+0.72%) just above the $100/bbl level again. Given the rising doubts about future rate hikes and the weakening inflationary pressures from key commodities, sovereign bonds put in a strong performance as they also benefited from their usual appeal as a haven asset. Yields on 10yr Treasuries came down by -7.5bps to 2.81%, and the 10yr breakeven fell -6.2bps to 2.30%, which takes it to a level unseen since September 2021, back before the Fed had even begun to taper their asset purchases. The declines in yields were concentrated at longer maturities, with the 2s10s curve flattening by -6.2bps to -1.9bps, closing inverted for the first time in nearly a month. And speaking of inversions, another milestone was reached yesterday as the 2s5s curve inverted for the first time this cycle in trading, closing -5.0bps lower at -0.9bps. That picture was echoed over in Europe as well, where yields on 10yr bunds (-15.6bps), OATs (-13.8bps) and BTPs (-9.1bps) all moved lower on the day. This morning yields on 10yr USTs (+2.37 bps) are edging higher as I type. For equities, the layer upon layer of bad news resulted in another significant selloff until the Euro close, with the STOXX 600 shedding -2.11%. However the rate rally supported a steady tech-led march higher in the US after opening very weak and trading more than -2% lower. The S&P 500 finished +0.16% higher and the NASDAQ was up +1.75% on the day. Energy stocks led the moves lower on both sides of the Atlantic, and the index-level gains in the US were supported by a narrow subset of large cap stocks sensitive to lower rates, with only 3 S&P sectors – tech, discretionary, communications – in the green, and a massive 667bps differential between the best performing sector (communications +2.66%) and worst (energy -4.01%). Indeed, the even more concentrated mega-cap FANG+ outperformed the rest of the complex, gaining +3.01%. In line with the late US divergence, it was a tale of two credit markets, with HY credit spreads widening in Europe with the iTraxx crossover +27.4bps to 616bps, a level not seen since early April 2020 at the height of the initial lockdowns, while US HY CDX spreads tightened -11.8bps to 565bps after trading as high as 592bps intra-day. On the UK political scene, Prime Minister Johnson’s position is under significant pressure at the minute with two high profile resignations in his cabinet after yet more conduct issues were raised about the PM's leadership. Johnson has indicated he plans to stay on and has appointed replacements for the outgoing ministers, but his position looks increasingly perilous given the lack of party support. The pound was -1.41% lower versus the US dollar, but most of the decline took place before the news of the resignations and the pound was actually in the middle of the pack for G10 currency performance on the day, with the broader risk environment proving more perilous. If the PM can stay on he will likely pivot towards easier fiscal policy now the Chancellor has resigned. However it's tough to price that in as it's not clear whether the PM can survive this episode. Asian equity markets are lagging this morning even with the late US rally. Across the region, the Hang Seng (-1.56%) is the largest underperformer followed by the Kospi (-1.33%) and the Nikkei (-1.26%) in early trade. Markets in mainland China are also sliding with the Shanghai Composite (-1.20%) and CSI (-1.23%) trading in negative territory dragged down by worries about new COVID-19 cases in Shanghai risking fresh restrictions. Moving ahead, stock futures in the DMs indicate a mixed start with contracts on the S&P 500 (-0.12%) and NASDAQ 100 (-0.10%) edging lower albeit with DAX futures bouncing +1.35% after that late US rally. Moving to Covid news, Shanghai reported 24 infections yesterday, its most in three weeks although the overall case load remains small by global standards. To avert a wider spread and huge disruptions, Shanghai’s municipal government said in a statement that there’d be mass PCR testing in 9 districts and partial areas in another 3 districts, with residents required to take 2 tests within 3 days. The measures follow a reported outbreak, which has driven anxiety that the financial capital will be closed back down after just emerging from a two-month long lockdown. On the data side, US factory orders expanded by a stronger-than-expected +1.6% in May (vs. +0.5% expected), whilst the previous month’s growth was revised up four-tenths to +0.7%. Over in Europe, the final composite PMI for the Euro Area in June was revised up from the flash reading to 52 (vs. flash 51.9). To the day ahead now, and data releases from Europe include German factory orders for May, the German and UK construction PMIs for June, and Euro Area retail sales for May. Over in the US, there’s also the final services and composite PMIs for June, the ISM services index for June, and the JOLTS job openings for May. Otherwise from central banks, we’ll get the minutes from the June FOMC meeting, and also hear from the Fed’s Williams, the ECB’s Rehn and the BoE’s Cunliffe and Pill. Tyler Durden Wed, 07/06/2022 - 07:55.....»»

Category: personnelSource: nytJul 6th, 2022

Futures Fade As Yields Soar, Oil Slides And China Stocks Crater

Futures Fade As Yields Soar, Oil Slides And China Stocks Crater US equity futures held on to modest gains overnight as the market desperately clung on to hope that the latest ceasefire talks between Russia and Ukraine which started on Monday, may yield results (clearly forgetting how the rug was pulled from under the market on Friday in an identical setup), which initially sent stocks higher especially in Europe, despite a surge in 10Y TSY yields to 2.10%, the highest since July 2019, two days ahead of the first Fed rate hike, and a complete collapse in Chinese stocks. And while U.S. index futures were still pointing to a positive open around 8am ET this gain is fading fast, with spoos now up just 0.5% after rising 1% earlier... ... as headlines from the Kremlin suggested that a ceasefire is the last thing on Putin's mind. *KREMLIN: RUSSIA WILL REALIZE ALL ITS PLANS IN UKRAINE OPERATION *KREMLIN: UKRAINE OPERATION WILL BE COMPLETED ON SCHEDULE *KREMLIN: RUSSIA DIDN'T REQUEST CHINA MILITARY AID FOR OPERATION *KREMLIN: RUSSIA HAS RESOURCES NEEDED TO COMPLETE UKRAINE ACTION And while futures would normally be deep in the red by now, and will be shortly now that AAPL is at LOD... APPLE FALLS TO SESSION LOW, DROPS 1.6% IN PREMARKET TRADING ... this morning algos are confused by the drop in oil which has emerged as an inverse barometer for peace, however the reason oil is down today is due to the unprecedented lockdown of China's Shenzhen, announced over the weekend, and which the market is worried may spread to the rest of the market and lead to another Chinese shutdown (spoiler alert: it won't, but it will cripple US-facing supply chains as the Russia-China alliance makes itself felt). Meanwhile, and as previewed last night, in addition to the latest surge in covid cases and Shenzhen lockdown, Chinese stocks listed in Hong Kong had their worst day since the global financial crisis, as concerns over Beijing’s close relationship with Russia and renewed regulatory risks sparked panic selling. The Hang Seng index dropped more than 4%, sliding below 20,000 to the lowest level since 2015... ... while the Hang Seng China Enterprises Index closed down 7.2% on Monday, the biggest drop since November 2008. The Hang Sang Tech Index tumbled 11% in its worst decline since the gauge was launched in July 2020, wiping out $2.1 trillion in value since a year-earlier peak, after the southern city of Shenzhen, a key tech hub near Hong Kong, was placed into lockdown to contain rising Covid-19 infections. The broader Hang Seng Index lost 5%. “If the U.S. decides to impose sanctions on China in total or on individual Chinese companies doing business with Russia, that would be a concern,” said Mark Mobius, who set up Mobius Capital Partners after more than three decades at Franklin Templeton Investments. “The whole story is still up in the air in this case.” In premarket trading, U.S.-listed Chinese stocks resumed a steep selloff on Monday, following an 18% rout last week, as concerns about Beijing’s close relationship with Russia added to losses spurred by a Chinese crackdown on tech giants and the growing risk of U.S. delistings. Alibaba (BABA US), JD.com (JD US) both fall 5%. U.S. casinos stocks are also lower in premarket, with multiple headwinds weighing on the sector, including inflation, while listed names with exposure to Macau face additional pressure from surging Covid cases in China’s Guangdong province and in Hong Kong. Wynn Resorts (WYNN US) -1.8%; Las Vegas Sands (LVS US) and MGM Resorts (MGM US) also down in thin trade. Meanwhile, Apple is down 1.6% after supplier Foxconn announced it was halting operations at its Shenzhen sites, one of which produces iPhones, in response to a government- imposed lockdown on the tech-hub city. Apple +0.2% in premarket. Besides all the geopolitical chaos, this week’s main focus will be on the Fed’s policy meeting, with traders expecting a quarter percentage-point rate hike. “There is little a central bank can do about commodity prices -- Fed Chair Powell can hardly dig an oil well in the middle of Washington D.C.,” said Paul Donovan, chief economist at UBS Global Wealth Management. “The concern will be about second-round effects -- prices encouraging higher wage costs.” In Europe, the Stoxx 600 was 1.7% higher with automakers and banks leading gains, while miners and energy stocks underperformed.  Tech investor Prosus falls as much as 11% in Amsterdam, the most since March 2020 and touching a record low, following a continued selloff in Chinese technology shares as concerns about Beijing’s close relationship with Russia added to worries over regulatory headwinds. Naspers, which holds a 29% stake in Chinese online giant Tencent through Prosus, slides as much as 15% in Johannesburg, the steepest plunge since November 2000. Here are some of the biggest European movers today: VW preference shares jump as much as 8.7% in Frankfurt and are among the top performers in a buoyant Stoxx 600 Automobiles & Parts Index after the carmaker pre-released results late Friday. Stifel called it a strong fourth quarter and a “surprisingly confident” outlook. Uniper gains as much as 11%; the power plant operator might benefit from the U.K. government’s potential plans to extend the life of coal-fired power plants, RBC says. Telecom Italia shares rise as much as 9.7% after the firm agreed to a deeper review of KKR’s takeover proposal and said it will ask the private equity giant for more details about its business plan. Phoenix Group shares rise as much as 3.7% after reporting full-year results, with Peel Hunt saying the insurer’s cash generation was “better than expected.” Danone rises as much as 5.6% after Bernstein says the French yogurt maker “seems to be doing everything right” under new management. The brokerage raises its recommendation on Danone and downgrades Reckitt and Unilever. Prosus shares fall as much as 11% in Amsterdam, the most since March 2020, following a continued selloff in Chinese technology shares as concerns about Beijing’s close relationship with Russia added to worries over regulatory headwinds Sanofi slumps as much as 6.2% after the French drugmaker says its mid- stage trial for amcenestrant in breast cancer didn’t meet the primary endpoint. Basic resources shares drop in Europe as commodity prices decline, underperforming the benchmark Stoxx Europe 600, which is gaining on Monday. Rio Tinto falls as much -4.2%, Glencore -4.5%, Anglo American -5.3% lead drop in the Stoxx Europe 600 basic resources sub-index. As noted above, Asian stocks plunged, led by a record 11% plunge in Chinese tech shares as a lockdown in Shenzhen added to woes including Beijing’s crackdown on the sector and mounting concerns about the economic fallout from sanctions on Russia. The MSCI Asia Pacific Index dropped as much as 1.5% to reach a low last seen September 2020, with heavyweights Alibaba and Tencent diving 11% and 9.8%, respectively. The Hang Seng Tech Index plunged 11% after the southern city of Shenzhen, a key tech hub near Hong Kong, was placed into lockdown to contain rising Covid-19 infections. The broader Hang Seng Index lost 5%. “The latest coronavirus outbreak is raising uncertainties over the Chinese economic outlook while high commodity prices are a drag for the Chinese economy no less than for many other countries, limiting the room for monetary easing,” said Aw Hsi Lien, a strategist at Tokai Tokyo Research. “There’re rising perceptions that this year’s growth target of 5.5% is becoming difficult to achieve.”    Investors also remain on edge over risks for Chinese companies stemming from U.S. actions due to Russia’s invasion of Ukraine. Sentiment was also rattled late last week as U.S. regulators identified Chinese companies that could be kicked off exchanges if they fail to open their books to U.S. auditors. While the delisting risk has been known since last year, the Securities and Exchange Commission’s list served as a “wake up call,” said Willer Chen, an analyst at Forsyth Barr Asia Ltd. “I see no way to solve the dispute” between the U.S. and China under current policies, he said.  The historic sell-off in China also drove many peer Asian equity gauges into the red. Still, shares in resource-rich Australia gained and Japan’s Topix climbed amid expected benefits for exporters from the yen’s fall to a five-year low near 118 per dollar. Japanese equities climbed, rebounding after last week’s losses, as a weaker yen bolstered the outlook for exporters and a decline in oil provided a respite amid recent inflation concerns. Auto makers and banks were the biggest boosts to the Topix, which gained 0.7%. Tokyo Electron and Advantest were the largest contributors to a 0.6% rise in the Nikkei 225. The yen approached 118 per dollar, extending its loss after weakening more than 2% last week.  The Nikkei 225 dropped 3.2% last week, its worst since November, while the Topix fell 2.5%. In addition to developments on Russia’s war in Ukraine, investors this week will be monitoring monetary-policy decisions from the Bank of Japan and Federal Reserve. “As Japan’s economy and wage growth are more subdued than in the U.S., and, thus, the BOJ will be slower to tighten than the Fed, the yen may well trend weaker, although any move beyond 120 would not be encouraged by officials,” Nikko Asset Management strategist John Vail wrote in a note. In FX, the Bloomberg Dollar Spot Index inched inched lower and the greenback traded mixed against its Group-of-10 peers. European currencies, lead by the Swedish krona and Norwegian krone, were the best performers while the Australian and New Zealand dollars, as well as the yen, fell. Sweden’s krona rallied as much as 1.8% as sentiment improved and as economists expect the country’s central bank to make a policy U-turn later this year, after inflation reached a new 28-year high last month and as price increases are seen accelerating on the fallout from Russia’s invasion of Ukraine The pound was steady after falling to November 2020 lows on Friday, while gilts slumped. Focus this week will be on the Bank of England, which is expected to raise interest rates for a third time in a bid to control inflation. The yen fell to a five-year low against the dollar as traders boosted bets on the pace of the Federal Reserve’s rate hikes this year amid accelerating U.S. inflation and as risk reversals backed a less-favorable outlook for the Japanese currency. Australia’s dollar dropped for a second day as oil and iron ore lead commodity prices lower, while sliding Chinese equities weighed on risk sentiment. In rates, as noted above, Treasuries sold off, led by the belly, following wider losses across bunds as core European rates aggressively bear-steepen. Treasuries and the 5-year Treasury yield topped 2% for the first time since May 2019 while the yield on 10-year Treasuries rose to 2.10%, the highest since July 2019, before easing back to 2.06%. The US front-end slightly outperforms, steepening 2s5s and 2s10s spreads by 1.7bp and 1.3bp. IG dollar issuance slate empty so far; volumes projected for the week are around $30b, following one of the busiest weeks on record In commodities, WTI drifts ~5% lower to trade at around $103. Brent falls more than 4% to the $107 level. Spot gold falls roughly $27 to trade near $1,962/oz. Spot silver loses 2.6% near $25. Most base metals trade in the red; LME aluminum falls 3.6%, underperforming peers. Bitcoin was initially subdued beneath USD 38,000 ahead of an EU vote on environmental sustainability standards measure that could lead to a ban on Bitcoin, but later recovered with support also seen following a tweet from Elon Musk. Elon Musk tweeted "I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw". Japan demanded that cryptocurrency transactions be blocked if they are sanctions related. Besidesall that, it is a quiet start to thge week with no macro news on today's calendar. Market Snapshot S&P 500 futures up 0.5% to 4,223.50 STOXX Europe 600 up 0.4% to 433.05 German 10Y yield little changed at 0.31% Euro up 0.4% to $1.0952 MXAP down 1.4% to 168.91 MXAPJ down 2.1% to 549.22 Nikkei up 0.6% to 25,307.85 Topix up 0.7% to 1,812.28 Hang Seng Index down 5.0% to 19,531.66 Shanghai Composite down 2.6% to 3,223.53 Sensex up 1.2% to 56,207.96 Australia S&P/ASX 200 up 1.2% to 7,149.40 Kospi down 0.6% to 2,645.65 Brent Futures down 2.7% to $109.60/bbl Gold spot down 0.8% to $1,971.65 U.S. Dollar Index down 0.21% to 98.92 Top Overnight News from Bloomberg The U.S. and China plan to hold their first high-level, in- person talks since Moscow’s invasion on Monday. The meeting comes after China rejected accusations by U.S. officials that Russia had asked it for military equipment to support the invasion of Ukraine Chinese stocks listed in Hong Kong had their worst day since the global financial crisis, as concerns over Beijing’s close relationship with Russia and renewed regulatory risks sparked panic selling Global bond markets are flirting with a 10% drawdown for the first time in over a decade as surging inflation forces yields higher. The Bloomberg Global Aggregate Index, a benchmark for government and corporate debt, has fallen about 9.9% from a high in early 2021, the biggest decline from a peak since 2008, the data show Already pivoting to tightening monetary policy amid the fastest consumer price gains in four decades, Fed Chair Jerome Powell and colleagues now have to deal with the economic fallout of the war, which threatens to deliver the twin blows of weaker growth and even-quicker inflation ECB Governing Council member Martins Kazaks says “it’s very possible that the bond-buying program will end in the third quarter” Germany’s coronavirus infection rate hit a record for the third straight day on Monday, with the renewed surge prompting the country’s top health official to issue a grim warning Leveraged fund net short aggregate Treasuries bets across the curve have hit the highest in over a year, the latest CFTC data show. The U.S. Treasury market just endured one of its worst weeks of the past decade, with yields propelling toward their highest levels of the past year thanks to worsening inflation and the imminent expected shift in policy The yen’s plunge to a five-year low shows no signs of easing as surging commodity prices have worsened the outlook for Japan’s trade balance and put pressure on the currency’s haven credentials. The nation is a net importer of a long list of raw materials from crude oil and grains to metals, exposing it to higher costs as prices of all these have risen due to sanctions imposed on Russia over its invasion of Ukraine Russia has already lost access to almost half of its reserves and sees more risks to President Vladimir Putin’s war chest due to increased pressure from the West on China, said Finance Minister Anton Siluanov Nickel’s 250% price spike in little more than 24 hours plunged the industry into chaos, triggering billions of dollars in losses for traders who bet the wrong way and leading the London Metal Exchange to suspend trading for the first time in three decades. It marked the first major market failure since Russia’s invasion of Ukraine jolted global markets, showing how the removal of one of the world’s largest exporters of resources from the financial system in the space of weeks is having ripple effects across the world A more detailed look at global markets courtesy of newsquawk Asia-Pacific stocks were somewhat mixed as participants digested varied geopolitical headlines ahead of key risk events. ASX 200 was underpinned by strength in its largest-weighted financial sector and encouragement from M&A related headlines. Nikkei 225 benefitted from further currency weakness but failed to hold above the 25,500 level. Hang Seng and Shanghai Comp. were pressured amid several headwinds, including COVID-19 concerns with the technology hub of Shenzhen under a one-week lockdown, which pressured tech and weighed on Macau casino names, as well as dragged the Hong Kong benchmark beneath the 20K level for the first time since 2016 Top Asian News Developers Sink After Weak Home Mortgage Data: Evergrande Update Marcos Keeps Big Lead in Philippine Presidential Survey Funds Managing $130 Trillion Target Lobbying in Climate Plan Hang Seng China Stock Gauge Sinks 7.2%, Most Since Nov. 2008 China Locks Down Shenzhen, Entire Jilin Province as Covid Swells European bourses are firmer, Euro Stoxx 50 +2.1%, following a mixed APAC handover amid conflicting headlines as we await details of the latest Ukrainian-Russia talks. Stateside, US futures are firmer across the board but with magnitudes more contained, ES +0.9%, ahead of multiple risk events. Sectors in Europe are mostly firmer though some of the more defensive names are lagging modestly, Autos outperform post-Volkswagen Top European News European Gas Slumps as Russia, Ukraine to Hold Further Talks British Airways-Operator Comair Still Grounded in South Africa Funds Managing $130 Trillion Target Lobbying in Climate Plan ECB’s Kazaks: ‘Very Possible’ Net Bond-Buying Will End in 3Q U.S.-Listed Chinese Stocks Sink Again as China-Russia Ties Weigh In FX, Aussie bears the brunt of reversal in commodity prices; AUD/USD hovering around 0.7250 ahead of RBA minutes tomorrow. Yen extends decline on yield and BoJ policy divergence towards 118.00 vs the Dollar. Euro rebounds with risk appetite amidst hopes of constructive Russian-Ukrainian dialogue; EUR/USD finds support around 1.0900 where 1.84bln option expiries reside to trade above 1.0960. Rouble firmer on the premise that positive words will speak louder than negative actions. Yuan depreciates as Covid cases mount in China and PBoC sets a weaker than expected onshore midpoint rate, USD/CNH probes 6.3800 at one stage. Swedish Crown strong in line with latest inflation data and hawkish Riksbank rate calls from Nordea and SEB, EUR/SEK tests Fib support circa 10.5252 In commodities, WTI and Brent continue to unwind geopolitical premia amid mixed Russia-Ukraine developments and the possibility of progress soon. Currently, benchmarks lie near fresh lows of USD 103.42/bbl and USD 107.59/bbl respectively, further impeded by IEA's Birol. Iraq set April Basrah medium OSP to Asia at Oman/Dubai + USD 3.50/bbl, OSP to Europe at Dated Brent - USD 3.05/bbl and OSP to North and South America. UK PM Johnson is seeking a mega oil deal with the Saudis and is pushing for solar and nuclear energy to cut reliance on foreign oil, while the UK is also considering keeping some coal-fired power stations operational, according to Express and The Times. IEA Chief Birol says responsible producers should increase oil output. French PM Castex said the government will offer EUR 0.15/litre rebate on petrol prices from April to counter high prices with the rebate on fuel to last four months and is expected to cost around EUR 2bln. Japanese PM Kishida will look at measures for high oil prices and raw material food prices whilst watching the situation carefully, according to the Japanese ruling party secretary general; subsequently, Japanese government is to increase the petrol subsidy to around JPY 24/litre and close to the ceiling of JPY 25/litre. Gazprom says it is continuing shipping gas to Europe via Ukraine, Monday's volume is broadly unchanged at 109.5mln cubic metres; does not intend holding spot gas sale sessions on its electronic sales platform this week. China is planning to boost its coal output by as much as it imports. Spot gold and silver are pressured unwinding safe-haven appeal in-fitting with other typical havens In Fixed income, the debt rout rages on on as futures take out near term technical supports and yields reach or breach psychological levels. Curves continue to steepen on resurgent risk sentiment rather than any read respite from sharp retracement in crude prices. USTs and Gilts anticipating tightening from the Fed and BoE later this week. US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap I've tried to keep the introductory paragraphs fairly sober in recent weeks as the challenging time for the world doesn't really need my flippancy. However I have to share with you this morning that 5 minutes before I started typing this I started walking again for the first time in 6 weeks. The crutches were left by the bed and my morning coffee made without hopping between the cupboard, the sink and the fridge, and then working out how to get my coffee back upstairs while on crutches. It's amazing how good normality felt. Fingers crossed this operation will buy me a few years before knee replacement. We will see. The newsflow didn't look good late on Friday as some earlier positive signs on the conflict talks petered out. In terms of developments there was mixed news last night though as on the positive side some progress seemed to be made on talks, but on the negative side the FT reported that US officials suggested that Russia have asked China for military and economic assistance since the invasion began. The article said that the officials didn't details China's response but this came just few hours after White House officials announced that a high-level delegation from the US would meet with a top Chinese official in Rome today. On the positive side however, Ukrainian negotiator and presidential adviser Mykhailo Podolyak tweeted and posted a video online saying, "Russia is already beginning to talk constructively... ... I think that we will achieve some results literally in a matter of days,". A Russian delegate echoed the sentiment and US Deputy Secretary of State Wendy Sherman also highlighted that Russia was showing signs of willingness to engage in substantive negotiations. DM equity futures are making modest gains in Asia with contracts on the S&P 500 (+0.59%), Nasdaq (+0.35% and DAX (+0.59%) all trading higher. US Treasuries are seeing a pretty big move for an Asian session with the 5-yr yield (+6.3bps) moving above 2% for the first time since May 2019 whilst the 10-yr yield is up +5.3bps to 2.044%. Elsewhere Brent futures (-1.93%) are down to $110.50/bbl while WTI futures (-2.41%) are at $106.70/bbl. Asian equity markets are mostly trading lower though as we start the week following the broadly negative cues from Wall Street on Friday. The Hang Seng (-3.81%) is leading losses across the region with Chinese tech stocks again seeing major declines. Shares in mainland China are also weak with the Shanghai Composite (-1.30%) and CSI (-1.73%) both in negative territory after the southern Chinese tech hub Shenzhen was put under a citywide lockdown over the weekend to slow an outbreak of Covid-19. Elsewhere, the Kospi (-0.72%) is down but the Nikkei (+0.95%) is trading up this morning, reversing its previous session's losses. Coming back to the Covid news, the Chinese authorities have placed 17.5 million residents of Shenzhen under lockdown after the city reported 66 fresh Covid cases on Sunday while the nationwide official figure nearly doubled to 3,400. The lockdown and suspension of public transport will last until March 20 and will be accompanied by three rounds of mass testing of residents. At the same time, the surge in cases across China has also prompted the authorities to shut schools for students from kindergarten through middle schools next week in Shanghai. In the neighbouring Hong Kong, the health authorities reported 32,430 new Covid-cases on Sunday with city leader Carrie Lam highlighting that the outbreak has not past its peak yet despite recent number of daily cases “slightly levelling off”. Looking forward now, and as we all know it's a big central bank week with the Fed the obvious focal point mid-week. The BoE and the BoJ also hold meetings, along with some of their emerging markets counterparts. We'll also see CPI for Japan and Canada and a number of housing market statistics in the US and China. Earnings will include Volkswagen, FedEx and Enel, among others. Wednesday will also be a landmark day even outside of the Fed as this is the date that two Russian Eurobonds have coupon payments. These are small (c.$120bn out of c.$1.75bn of annual hard currency coupons) but will be hugely symbolic. Speaking to one of our EM strategists, Christian Wietoska, and one of our European economists, Peter Sidorov, over the weekend their view was that this would likely mark the start of the 30-day grace period that issuers have before a default is officially triggered. 30-days still gives time for there to be a negotiated end to the war and therefore this probably isn't yet the moment where we see where the full stresses in the financial system might reside. There has already been a huge mark to market loss already anyway with news coming through or write downs. However this is clearly an important story to watch. Onto the Fed now and the FOMC concludes on Wednesday, with the Fed expected to raise rates for the first time since December 2018. Markets are pricing in a +25bps hike, in line with the rhetoric from Chair Powell at his congressional testimonies a couple of weeks back. Before the invasion we thought a 50bps was likely this week and the problem is that by delaying such a move they may have to do more later. The market seems to agree to some degree as at Friday's close the market was pricing in 6.7 hikes this year, the most seen in this cycle and above the post invasion intra-day lows of 4.45. This morning we are at 6.92. A full preview from our US economists is available here. With regards to QT, they anticipate that the Fed will use this upcoming meeting to announce caps determining the maximum monthly runoff and, in May, announce QT that would begin in June. They think we will see $800bn of runoff this year and an additional $1.1tn drawdown in 2023, a cumulative reduction we think is roughly equal to between three and four rate increases (see "QT update: The sooner the better"). The fascinating thing for me is what this does to the yield curve if they are correct. For me nirvana for the Fed is getting to around neutral, somewhere with a 2 handle on Fed Funds and trying to ensure that 10yr yields rise enough to prevent inversion but not enough to lead to a tightening of financial conditions. So if in 12-18 months time 2 year yields are 2.25-2.5%, 10 year yields are 2.75-3% and inflation is coming back towards trend then the Fed have pulled off a masterstroke. If however, 2yr yields are above 2% and 10yr yields below this level, the inversion will likely bite. On the other hand, if the curve steepens up too much and longer end yields are notably above 3% the risk is that financial conditions tighten too much given the global debt load. So the Fed are trying to thread a needle and its possible inflation will give them an impossible task. Time will tell. Ahead of the Fed watch out for US PPI (Tuesday) and Retail Sales (Wednesday). They are highly unlikely to change the equation for this FOMC but will be important for the direction of the economy and inflation thereafter. We also get a plethora of US housing data to end the week with Thursday's housing starts and Friday's existing homes sales. These are going to be important for both activity and the rents component in CPI. Back to central banks and on Thursday, it will be the BoE's turn. Our UK economist previews the meeting here, and is expecting a +25bps hike to 0.75%, the pre-pandemic level. Their projected terminal rate is 1.75%. Finally, on Friday, the Bank of Japan will hold a meeting as well and a preview can be found here. The central bank is expected to hold the key rate steady but there is a chance of economic assessment being downgraded. The Bank of Russia's decision on the same day will be scrutinised for the response to risks to the economy from the ongoing geopolitical turmoil. Back to the week that was now. The war in Ukraine raged on, while negotiations continued to generate little tangible progress as leaders managed expectations down for any near-term resolution. However, there were various green shoots throughout the week when it appeared both Ukrainian and Russian officials left some room for compromise from their original positions. The glimmers of hope on the war front, along with a more hawkish-than-expected ECB sent sovereign bond yields higher on both sides of the Atlantic this week. Positive news about the supply of oil and gas sent futures lower on the week, despite the US and UK moving to restrict Russian imports. Oil and European natural gas prices fell -5.07% (+3.05% Friday) and -30.15% (+3.82% Friday) over the week, following a proclamation from President Putin that Russia would honor its energy export commitments, instead of unilaterally cutting off supply in retaliation to sanctions. For its part, the Iraqi oil minister noted OPEC would increase oil production were supply to reach scarcity levels. The other major story on the week was the ECB meeting, where the central bank signaled more focus on price stability than the potential downside impact to growth from the war. The governing council announced an accelerated tapering of its APP purchases, which would end in Q3, maintaining the option for increases to their policy benchmark rate sometime thereafter should the data merit. The ECB also updated their forecast for 2022 inflation to 5.1 percent and 2.1 percent for 2023. The tighter than expected policy stance gave rise to higher sovereign bond yields on both sides of the Atlantic, with 10yr bunds, OATs, gilts, and Treasuries rising +31.8bps (-2.5bps Friday), +28.9bps (-2.6bps Friday), +28.3bps (-3.2xbps Friday), and +26.1bps (+0.5bps Friday), respectively. For 10yr bunds that was the largest weekly gain since June 2015, 10yr gilts the largest weekly gain since September 2017, September 2019 for Treasuries, and March 2020 for OATs. Money markets ended the week pricing +40.5bps of ECB tightening this year, up from +24.1bps of tightening at last week’s close. European equities latched on to this week’s marginally more optimistic news, with the STOXX 600 finishing +2.23% (+0.95% Friday), the first weekly gain in a month. The DAX and CAC also finished the week +4.07% (+1.38% Friday) and +3.28% (+0.85% Friday) higher, respectively. US investors proved more pessimistic, with the S&P 500 retreating -2.88% (-1.30% Friday), with tech underperforming again, as the NASDAQ fell -3.53% (-2.18% Friday). The US indices took a leg lower Friday afternoon after Europe called it a week when Ukrainian leadership didn’t strike as optimistic a tone as Russian leaders surrounding the prospects of negotiations, as well as reports that Belarussian troops were about to join the invasion of Ukraine. University of Michigan consumer inflation expectations for the next year increased to 5.4 percent, above expectations of 5.1 percent on Friday. This followed the February US CPI data which showed headline and core measures increasing to their highest readings in four decades, which would have headlined just about any other week. In line with this, market-based measures of inflation expectations increased, with 10yr Treasury breakevens widening +27.3bps on the week. Tyler Durden Mon, 03/14/2022 - 08:15.....»»

Category: blogSource: zerohedgeMar 14th, 2022

Sunday Collum: 2021 Year In Review, Part 3 - From "Insurrection" To Authoritarianism

Sunday Collum: 2021 Year In Review, Part 3 - From 'Insurrection' To Authoritarianism Authored by David B. Collum, Betty R. Miller Professor of Chemistry and Chemical Biology - Cornell University (Email: dbc6@cornell.edu, Twitter: @DavidBCollum), I have a foreboding of an America in my children’s or grandchildren’s time when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness. The dumbing down of America is most evident in the slow decay of substantive content in the enormously influential media, the 30 second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance. ~  Carl Sagan, 1995, apparently having invented a time machine Every year, David Collum writes a detailed “Year in Review” synopsis full of keen perspective and plenty of wit. This year’s is no exception. Read Part 1 - Crisis Of Authority & The Age Of Narratives here... Read Part 2 - Heart Of Darkness & The Rise Of Centralized Healthcare here... So, here we are at the third and final part of the 2021 Year in Review and it’s no longer 2021. Sorry about that pfuck-up. Think of it as not in 2021 but from 2021. You may have noticed that the first 200 pages (parts 1 and 2) were laced with a recurring catchphrase, “WTF is happening?” It was a literary device for noting that the events ceased to make sense within a conventional worldview, suggesting it is time to torch the old model and start anew. Our response to a disease that was killing a very small slice of the population was to sequester and vaccinate the entire population with an experimental drug of real but unquantified fatality rate. The apparent scientific illiteracy was not some mass psychosis. Y’all just got suckered by America’s Most Trusted Psychopathic Mass Murderer assisted by an epic media blitz sponsored by the pharmaceutical industry that had a distinct authoritarian quality. Unthinking respect for authority is the greatest enemy of truth. ~ Albert Einstein During the brief period after uploading part 2 while grinding on this last portion, the Supreme Court took on the vaccine mandate issue, ruling that the only people forfeiting control of their own healthcare are the healthcare workersref 2 The court also illustrated their profound ignorance of the pandemic and what they were even charged to assess—the Constitutionality of mandates, not the efficacy.ref 3 The CEO of a major insurer reported a 40% spike in fatalities within the 18–65 age bracket that was not from Covid.ref 4 He said 10% would be a 3-sigma, once-every-200-year event: 40% is unheard of. Although he refrained from identifying a cause—deaths of despair, neglected healthcare, or a toxic vaccine—he knows precisely what did them in. They have been studying this stuff for centuries. I suspect his real message was that the insurance industry is about to contribute to inflation with rising premiums. Meanwhile, the pathological liars running the covid grift decided after two years the masks you’ve been wearing served no medical purpose and that the vaccines don’t work either. Wait: who said the masks and vaccines don’t work? We have known for many months that COVID-19 is airborne and therefore, a simple cloth mask is not going to cut it…Cloth masks are little more than facial decorations. ~ Leana Wen, MD, CNN medical expert with no admitted ties to the CCPref 5 Two doses of the vaccine offers very limited protection, if any. Three doses with a booster offer reasonable protection against hospitalization and deaths. Less protection against infection. ~ Albert Bourla, Pfizer CEOref 6 Here is my most heartfelt response to them: You psychopathic lying sacks of shit. You had us wear rags across our faces and put rags across the kids’ faces when clinical studies that could be read by people with half your IQs showed they were worthless. Suicide rates and other deaths of despair soared while you petty tyrants played your little games and generated billions of dollars of profits while destroying the middle class. You have maimed or killed an unknown number of gullible victims with your lockdowns, vaccines, remdesivir, and oppression of Ivermectin. You jammed a vaccine that bypassed animal trials into the fetuses of pregnant women, assuring them it was safe. If we spoke up, we got muzzled. If we refused the vaccine, we got fired. You should all hang from your necks until dead. I will piss on your graves. I feel better already. Very refreshing. Meanwhile, many of my friends and colleagues look at the same data and say, “Oh. I guess I better get the booster and a KN95 mask.” You have got to unfuck yourselves. You’ve been duped. It will get worse. The tactics used to oppress us would have made Stalin smirk. Australia was a beta test for what is to come in the rest of the west if we don’t wake up soon. They are gonna keep coming for one simple reason: we accepted it. We got bent over and squealed like pigs. What normalization does is transform the morally extraordinary into the ordinary. It makes us able to tolerate what was once intolerable by making it seem as if this is the way things have always been. ~ Jason Stanley, How Fascism Works A person is considered ‘ordinary’ or ‘normal’ by the community simply because he accepts most of its social standards and behavioral patterns; which means, in fact, that he is susceptible to suggestion and has been persuaded to go with the majority on most ordinary or extraordinary occasions. ~ William Sargant, in Battle of the Mind Meanwhile, the financial world became even more dominated by central bankers who haven’t the slightest understanding of free-market capitalism. These twits or criminals—maybe both—have blown the most colossal bubble in history if you account for both price and breadth across the spectrum of asset classes. For the layperson, that means they have set us up for a colossal failure. Go back and re-read Valuations if you cannot picture the epic financial carnage lying dead ahead. The gap between the Fed funds rate and headline inflation has never been this large. These pinheads believe that if the markets do not coincide with their world views, the markets must be wrong. I am not an economist, but it appears that none of them are either. The notion that a dozen nitwits should set the most important price of them all—the price of capital—rather than letting the markets set it through price discovery is financial authoritarianism or what some call State Capitalism. I am angry in case it doesn’t show. Meanwhile, in 2020–21 the Fed contributed to destroying upwards of a half-million mom ’n’ pop businesses—they gutted the middle class—while giving BlackRock credit at 0.15% interest rates to buy up all their houses. Here is my advice to those day trading criminals: look both ways as you enter crosswalks. What I believe the response of society to a severe downturn given the current political climate will be epic. Big downturns come after euphorias. We have never entered a downturn with society at large this grumpy. We are in the early stages of The Fourth Turning.ref 7 The deterioration of every government begins with the decay of the principles on which it was founded. ~ Charles-Louis De Secondat When a State has mortgaged all of its future revenues the State, by necessity, lapses into tranquility, langor, and impotence. ~ David Hume, 1752 So, WTF is going on here? In this final part, I address geopolitics. It begins with a relatively benign analysis of Biden’s first year in office, culminating with what I think Afghanistan is really about. The second section addresses my view of what may prove to be the most important day in US History—January 6, 2021. Although it is my best shot—Dave’s Narrative—I will not attempt to nor will I inadvertently spread the love to both sides of the political spectrum. It is a right-wing view that most right-wing politicians and pundits are too cowardly to state in polite company. The final section addresses the Rise of Global Authoritarianism. For a topic covered by thousands of treatises to call my knowledge skeletal is a reach. I have merely created an intellectual foundation—a chalk outline—to ponder why authoritarianism is here and what could stop it. (Plot spoiler: I do not believe it can be stopped.) They know where we are, they know our names, they know from our iPhones if we’re on our way to the grocery store or not. But they haven’t acted on that to put people in camps yet. They could do it. We could be East Germany in weeks, in a month. Huge concentration camps and so forth. ~ Daniel Ellsberg (@DanielEllsberg), author of The Pentagon Papers and Secrets Before moving on, let me give a plug for a book.ref 8 I have not even finished it yet, but it will change your worldview. Look at those ratings! I can guarantee none of those readers enjoyed it. Kennedy will curdle your bone marrow describing 35 years of atrocities commited by America’s Most Trusted Madman. It is emblematic of a much larger problem. Evil is powerless if good men are unafraid – Americans don’t realize what they have to lose. ~ Ronald Reagan The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary. ~ H. L. Mencken Biden – Freshman Year Scorecard Let’s go, Brandon! ~ Cheers across America Most presidents begin their reign with a calling. Reagan raised our national self-esteem after a period of economic and political malaise. Bush Sr. took on the Gulf War, for better or worse. Clinton oversaw the economic boom and bank deregulation, again for better or worse. Bush Jr. was handed 9/11 and, in my opinion, boned it badly. Obama had to wrestle with the Great Financial Crisis. Trump was charged with disturbing the peace—drain the swamp if you will. Biden undeniably needed to begin healing the social discord that, regardless of its source, left the country wounded and divided. Maybe that was not Biden’s calling, but I wanted to see him become the president of all the people. This is not revisionist history of my failing memory: Biden’s the last of the Old Guard, which is probably why he was slipped into the office by the DNC old guard. I am guessing there will be no Supreme Court stacking; that was just rhetoric (I hope). There will be wars just like every president (except Trump, who brought troops home.) Congress is more balanced again and, at the time of this writing, the Senate is still in Republican hands. Hopefully, the gridlock will usher in some garden-variety dysfunction. I have subtle concerns about a Harris presidency. Admittedly, my opinion is based on precious few facts, but Harris displays a concerning shallowness of character, a lack of a moral compass, and the potential to slide to the left of Bernie. (I sometimes reflect on what it must have been like raising the teenaged Kamala.) I am trying to reserve judgment because first impressions scavenged from the digital world are sketchy if not worthless. ~ 2020 Year in Review By this description, Biden tanked his GPA. He ushered in a Crusade to erase the Trump era and its supporters. The weaponizing of social media and censorship against one’s opponents was probably unavoidable, but the downside will be revealed when the wind changes. Team Biden took banishing of political opponents on social media to new levels by, as noted by Jen Psaki, flagging “problematic posts” and the “spread of disinformation” for censorship. NY Timeslapdog Kevin Roose called for a “reality Czar,” not noticing the Russian metaphor problem. The War on Domestic Terror may prove to be a turning point in American history, one that risks extinguishing the flame of the Great American Experiment. Significant erosions of Constitutionally granted civil liberties discussed throughout the rest of this document may not have been Biden’s fault, but they occurred on his watch. If you see an injustice and remain silent, you own it. I can’t remain silent. Biden is the epitome of the empty, amoral creature produced by our system of legalized bribery. His long political career in Congress was defined by representing the interests of big business, especially the credit card companies based in Delaware. He was nicknamed Senator Credit Card. He has always glibly told the public what it wants to hear and then sold them out. ~ Chris Hedges, right-wing hatchet man Team Biden. Books have been written about Trump’s fumbles in the first months (or four years) of his presidency. See Josh Rogin’s Chaos Under Heaven in Books or Michael Lewis’ less balanced The Fifth Risk reviewed in last year’s YIR. The Cracker Jack team assembled for Joe reveals a glob of feisty alt-left activists and omnipresent neocons. According to Rickards, two dozen players on Biden’s roster were recruited from the consulting firm WestExec Advisors (including Psaki and Blinken.)ref 1 That’s power and groupthink. David Axelrod: You must ask yourself, ‘Why are we allowing him to roll around in the hallways doing impromptu interviews?’ Jen Psaki: That is not something we recommend. In fact, a lot of times we say ‘don’t take questions.’ Young black entrepreneurs are just as capable of succeeding given the chance as white entrepreneurs are, but they don’t have lawyers; they don’t have accountants. ~ Joe Biden Joe Biden, President – Joe is the Big Guy. In an odd sense, he is immunized from criticism because he is visibly losing his marbles. His cognitive decline is on full display; this 52 seconds of gibberish about inflation is emblematic.ref 2 He’s 80 years old, for Cripes sake. I read a book this year entitled, When the Air Hits Your Brain, which derives from a neurosurgical aphorism that finishes with “you ain’t never the same.” Wanna guess who had two brain aneurysms (one rupturing) years ago leading to a miraculous recovery?ref 3 You’re the most famous African-American baseball player. ~ Joe Biden to the Pope, context unknown (possibly even a deep fake)ref 4 I am neither reveling in Joe’s problems nor do I believe he is calling the shots. Claims that the puppet master is Harris are, no offense, on the low side of clueless. Obama seems like a better guess but Barrack was a front man too. Having an impaired leader of a superpower, however, is disquieting and potentially destabilizing, especially with Taiwan in play. Biden’s energy policy that clamped down on fossil fuel production only to ask OPEC to open the spigots is one for the ages. The covid policies bridging both administrations were catastrophic, but throwing workers out of jobs into the teeth of unprecedented labor shortages makes zero sense. The nouveau inflation—Bidenflation—may stick to him like it stuck to Jimmy Carter, but that is unfair to both presidents. Look to the Fed in both cases for blame. Troubles at the southern border and the Afghanistan pullout are a couple of serious logs for a raging inferno that represents Biden’s first year in office. As discussed in a later section, demonizing “white supremacists”—not just political opponents but opponents labeled by their race—will not be viewed well by historians unless history is at a serious fork and Joe is ultimately protrayed as the founder of some new Fatherland. Kamala Harris, Vice President – Whenever situations heat up, Harris is off like a prom dress. During the crisis at the border that she was charged with overseeing, she took off to Europe, cackling about never even visiting the border. Kamala endorsed and claimed credit for the Kabul evacuation.ref 5,6 Realizing she had pulled yet another boner she pulled out before they renamed it Kamalabad. (Hey: At least I had the decency to pass on the Kamalatoe joke.) In a moment of surreal comedy, Harris hosted a public chat with Bill Clinton on “empowering women.”ref 7 She can even serve up semi-reasonable ideas with dollops of cringe. If the Democrats nominate her in 2024, may God have mercy on their souls—she is unelectable—or maybe on our souls—I could be wrong. Jen Psaki, Press Secretary – The role of any press secretary is to calm the press down with nuggets of insight—to feed the birds. When that fails, lie your ass off, all with a cold, calculating sociopathy. I would say she did the best job imaginable given the hand she was dealt. Disagree? I’ll just have to circle back with you on that. Ron Klain, Whitehouse Chief of Staff – This guy might be the rainmaker, but I haven’t quite figured him out. He has the durability of Andrei Gromyko, maintaining a central role through three democratic administrations. Keep an eye on him. Janet Yellen, Secretary of the Treasury – We have yet to find out Yellen’s role because she has not been pressed into service by a crisis. To resolve the minor “meme stock” bruhaha, which did not call for a resolution, she needed an ethics waiver owing to the soft corruption of her bank-sponsored million-dollar speaking tour. My expectations of her are quite low, and I imagine she will meet them. Antony Blinken, Secretary of State – He has a good resume. Like Psaki, he is forced to play a weak hand. He lacks Psaki’s skills. Jennifer Mulhern Granholm, US Energy Secretary – In a press conference she was asked how many barrels of oil a day the US consumes and said, “I do not have those numbers in front of me.” ‘Nuff said. Get her out of there. Merrick Garland, Attorney General – The press will tear anybody a new one so snippets with bad optics are always dangerous. I would say, however, ordering the FBI to investigate parents who get irate at school boards—even those who seem rather threatening—is over the top. Leave that to the local and state police. His role in the January 6th event and push into domestic terrorism is potentially sinister and moves him onto my shitlist. Saule Omarova, nominee for Comptroller of the Currency – This one blows my circuits. She is what in the vernacular is called “a commie” straight from Kazakhstan with a thesis on Marxism—a devout believer that the State should run the show. She also hails from Cornell Law School. (Yeah. I know. STFU.) Matthew Continetti of the National Review noted she is, “an activist intellectual who is—and I say this in the kindest way possible—a nut.”ref 8 There will be no more private bank deposit accounts and all of the deposit accounts will be held directly at the Fed. ~ Saule Omarova, Cornell Law Professor   We want them to go bankrupt if we want to tackle climate change. ~ Saule Omarova, on oil and gas companies For those who have seen the horror movie The Ring, Cornell tried to exorcise the demon by sending “the VHS tape” to Washington, D.C., but it came back stamped “Return to Sender.” She withdrew. Hey Team Biden: you could want to snatch up MIT’s Venezuelan-derived president who is already on the board of the World Economic Forum and was instrumental in pushing Aaron Swartz to off himself.ref 9 John Kerry, Climate Czar – Don’t we have enough Czars? John is charged with flying around the world in his private jet, setting the stage for a 30-year $150 trillion push to make many bank accounts much My disdain for the climate movement catches Kerry in the splash zone. Pete Buttegieg, Transportation Secretary – I must confess to liking Mayor Pete and would have been happier if he had gotten the crash course in the oval office rather than Joe. The one criticism I would make is that taking two months of paternity leave during the nation’s greatest transportation crisis seemed odd. I think when you are in such an important position you find a way. Get a nanny. Bring the twins to your office. Leave them with your spouse. For Pete’s sake (sorry), stay at your post. For the record, after my youngest son was born my wife had health problems. I used to bring him to work and lecture with him in a Snugly and changed a shitload of diapers. You could have done it too, Pete. Samantha Power, Head of the US Agency for International Development (USAID) – Sam is a garden-variety neocon, having served as ambassador to the UN and on the National Security Council, both under Obama. She was central to the planning behind destabilizing Libya,ref 10 which sure looks like a bad idea unless destabilizing the Middle East is our foreign policy. Please just don’t fuck up too much. Cass Sunstein, Homeland Security employee. This is not really an appointment, per se. Cass is the Harvard-employed husband of neocon Samantha Powers. In his 2008 book, Conspiracy Theories, Cass declared “the existence of both domestic and foreign conspiracy theories” to be our greatest threat, outlining five possible solutions, and I quote, “(1) Government might ban conspiracy theorizing. (2) Government might impose some kind of tax, financial or otherwise, on those who disseminate such theories. (3) Government might engage in counter-speech, marshaling arguments to discredit conspiracy theories. (4) Government might formally hire credible private parties to engage in counter-speech. (5) Government might engage in informal communication with such parties, encouraging them to help.” Guys like Cass who come out of Harvard’s CIA training camps are menaces to society. Marvelous hire, Joe. Victoria Nuland, Undersecretary for Political Affairs – She is famous for her hot mic “Fuck the EU” comment and for engineering the coup in Ukraine—a Wonder Bread neocon. William J. Burns, Head of the CIA – I’ve got nothing on Bill, not even a fingerprint. It would be difficult for me to grade him poorly on a curve with the likes of John Brennan, William Casey, and Alan Dulles. (I once had dinner with a former CIA head John Deutch. What a dick.) Christopher Wray, Head of the FBI – As the FBI increasingly looks like the Praetorian Guard for the power elite (both in and out of public office), Wray has followed in the footsteps of his predecessors like J. Edgar Hoover and James Comie to be both top cop and dubious scoundrel. Wray’s fate might be dictated by the ongoing Durham investigation, but I have not seen any heads roll inside the Beltway since Watergate a half-century ago. Tony Fauci, Director of NIAID – That bipartisan, power-hungry authoritarian—The Most Trusted Madman in America—is a recurring theme. He doesn’t know any science. He is a political hack—a chameleon—who survived 35 years multiple administrations by being able slither out of anybody’s claws and regrow his tail. Rochelle Walensky, Director of the CDC – She got serious attention in part 2. I am horrified by her sociopathy. I think she is evil. Amy Gutmann, Ambassador to Germany – Guttman was given the job after giving the Big Guy more than $900,000 in speaking fees and an honorary degree from UPenn when she was the University’s president. I am sure every ambassador pays market rates for the job.  Cathy Russell, Biden’s Director of Presidential Personnel–She is married to Tom Donlin, Chairman of the gargantuan multinational investment firm, BlackRock. Their daughter made it into the Whitehouse National Security Council. A talented family enjoying the political respect accorded to billionaires. Asmeret Asefaw Berhe, Head of the Office of Science – Despite scientific chops as a climate-change-supporting agronomist, she has no administrative experience and is inexperienced in the scientific programs that she is overseeing. Of course, everything is now about the $150 trillion climate grift, so she’s our girl. Jared Bernstein, Whitehouse Economic Advisor – He is highly educated, with a bachelor’s degree in music, master’s degrees in social work and philosophy, and a Ph.D. in social welfare. His greatest strength may be his complete lack of training in economics. Shalanda Baker, Deputy Director for Energy Justice in the Office of Economic Impact and Diversity at the Department of Energy – Is that a salaried position? ‘Nuff said. General Mark Milley, Chairman of the Joint Chiefs of Staff – Mark transitioned from the Trump administration. It caused a stir when he went more “woke” than Chelsea Manning. We will no longer defeat our enemy but assign them pronouns and include them. This was followed by a scandal outlined in Bob Woodward’s book in which he instructed military leaders in a secret meeting to bypass Trump on important military decisions.ref 11 He then unilaterally told his peer in the Chinese military that he would drop a dime if there was an impending military conflict. He tried to hang it on the Secretary of Defense, but the Secretary spit the bit fast.ref 12 My theory is that the sudden wokeness was to commandeer allies on the far left knowing that scandal was coming. It worked. He looks like he is right out of Dr. Strangelove without the lip gloss and eye shadow. Xavier Becerra, Secretary of Health and Human Services. He refuses to acknowledge the merits of natural Covid-19 immunity. That puts him near the top of my shitlist. Becerra has no medical or scientific training. He’s a lawyer, but at least he is from an underrepresented group. Rachel Levine, Assistant Secretary of Health and Human Services – I know little about her. She might be the most qualified candidate, certainly more so than her boss Becerra. Call me skeptical of a purely merit-based appointment. Hunter Biden. I was going to place Hunter in the bullets and call him Head of the DEA and National Association of the Arts, but I had reservations. There are sad, heartwarming, and troubling roles played by Hunter Biden. His addiction is a highly personal problem that is difficult for the first family to deal with, especially given other tragedies in their lives. Joe Rogan succinctly explained Hunter’s remarkably odd behavior: “he is a crackhead.” They are part and parcel of being dopesick. Leaked emails from the laptop show Dad to be a compassionate and loving father struggling to save his son. Ironically, old footage surfaced of Joe ranting about how we have to deal with crackheads severely no matter whom they know.ref 13 It did not age well. It is clear that Hunter Biden was selling access and influence. It appears that Joe Biden was aware of that effort. That is very serious. If these emails are false, this is a major story. If they are true, this is a major scandal. ~ Jonathan Turley Before you start blubbering, however, recall that Hunter’s laptop revealed that he was playing critical roles in Russian and Chinese dealings for the Biden family. The Kleenex gets tossed and the gloves now come off. Hunter’s business partner stepped forward admitting nefarious deals were made with Joe involved. Joe denied knowing the clown, but a then photo of the two surfaced.ref 14 This year Hunter also began selling his artwork for up to $500,000 a pop behind a “Chinese Wall”—a veil that ensures we cannot find out who bought the art.ref 15,16,17 The money might literally be from behind a Chinese wall. That buys a lot of crack even after the Big Guy’s 10% cut. Figure 1 shows two paintings, one by a Hunter and the other by two elephants. (No joke, elephants have been painting brilliant pictures free-trunk for decades.) Figure 1. Biden art (left) brought $500,000. The elephant painting (shown being painted) brought $39,000. We are a democracy…there are things you can’t do by executive order unless you are a dictator. ~ Joe Biden, several years ago Executive Orders. Before the first week of his presidency was over, Biden had signed 37 of those beauties. Some, such as the order extending rent moratoria, were overtly unconstitutional. Some merely unwound Trump’s orders that had unwound Obama’s orders. This is dodge ball. While Yale was battling a civil rights case for discriminatory admissions practices, the Biden DOJ dismissed it without comment.ref 18 Yale is said to have promptly destroyed the evidence, which shows they have good lawyers. Transgender athletes were reinstated in women’s sports, ensuring that longstanding records will be shattered.ref 19 It got surreal when UPenn’s transgender swimmer was beaten by Yale’s transgender swimmer.ref 19a An executive order giving the IRS direct access to our bank accounts seems both sinister and inevitable…death and taxes as they say.ref 20 There are a lot of Republicans out there giving speeches about how outraged they are about the situation at the border. Not many who are putting forward solutions. ~ Jen Psaki, forgetting about the wall idea Crisis at the Border. The mainstream press covered this one exhaustively. There are parallels here with the North Africans crossing into Europe several years back. It looks intentional, but why? Don’t tell me about building a democratic base. That is too far in the future and too simplistic. It is far easier to control the elections at the server level. Baffling details include the administration’s suggestion that border agents should be empowered to authorize the immigration of “climate migrants.”ref 21 That could boost a few agents salaries. Rumors of US military planes transporting illegals into the US suggests somebody could punk the elite: load up a boat and drop a couple hundred on Martha’s Vineyard. On further thought, rather than offering Vineyardians more gardeners, drop off some Afghans.ref 22Whoever is calling the shots, this is neither about civil rights nor climate change. Attorney General Merrick Garland clarified the immigration challenge: Today marks a step forward in our effort to make the asylum process fairer and more expeditious. This rule will both reduce the caseload in our immigration courts and protect the rights of those fleeing persecution and violence. If you do that, that will set off a mass migration that’s like nothing that we have ever seen in this country because the entire world will then come on through to get their asylum, essentially legalizing illegal immigration, in a very clever way. ~ Attorney General Merrick Garland WTF did Garland just say? Both his meaning and intent are unclear. The immigrants, of course, were all unvaccinated, which would have been OK by me had the administration not gone Third Reich to vaccinate US citizens. The administration also wanted to offer $450,000 to every immigrant family separated from their loved ones: why?ref 23They seemed to walk that third-trimester idea back and then walked it forward again. A half-billion-dollar, no-bid contract to manage the immigrants went to friends of the administration.ref 24 Your tax dollars at work. At least we are back to business as usual. By the way, where is Border Czar Kamala Harris while all this is going on? Making creepy videos.ref 25,26 People who like quotes love meaningless generalizations. ~ Graham Greene Miscellaneous issues surfaced that either went away or are still festering quietly. On the positive side, stacking the Supreme Court—increasing the number of justices to get a left-leaning majority—seems to have been only a political football. Granting Washington DC statehood, while to a plebe like me doesn’t seem nuts, has the trappings of a massive powershift to the left in national elections. Joe invaded the legal process by declaring Chauvin guilty and Kyle Rittenhouse a white supremacist. Would Obama have done this? I don’t think so. Rittenhouse may get his “10% for the Young Guy” in defamation suits against Joe and every media outlet on the planet. Joe checking his watch five times at the funeral of dead marines didn’t play well,ref 27 but if you put a camera on me I wouldn’t make it to lunchtime without serving up Jim Acosta fresh meat. The main drama of Biden’s first year, however, played out in a distant land.   Afghanistan—where empires go to die. ~ Mike Malloy Afghanistan. I’ve been groping for nomenclature — Afghazi, Afghazistan, Benghanistan, Benghazistan, Saigonistan, Clusterfuckistan, and Bidenistan—to describe this odd moment in history. That 20-year skirmish cost an estimated $2.3 trillion.ref 28 The idea that it was only a few thousand troops with no fatalities in the last year or two makes me question my wisdom, but I can’t start revising history. Whether for right or wrong, I was glad we were getting out. The ensuing Crisis in Kabul looked like the graveyard of a presidency—a combination of the Bay of Pigs and the Iran Hostage Crisis that would dog us for years. They are chanting “Death to America”, but they seemed friendly at the same time. ~ CNN reporter wearing a burka looking for a husband Even before the evacuation started we were hearing about huge caches of weapons that would be abandoned.ref 29 In an eat-and-dash that would make an IHOP waiter wince, we bugged out at 2:00 AM without telling anybody.ref 30Jalalabad Joe had assured us repeatedly the 300,000-strong Afghan army would hang tough. They were defeated in time to chow down on some goat stew for dinner. Images of desperate Afghan’s clinging to transport planes brought up images of the Saigon Embassy rooftop. We left service dogs in cages.ref 31 Marines would never do that. Stranded Americans and Afghan collaborators were begging for help to get to the airport and even to get into the airport.ref 32The administration used a drone to strike on some kids and their dads loading water into a truck to change the news cycle briefly.ref 33 The Afghan who is credited with saving Joe Biden and John Kerry in a disastrous excursion to Afghanistan years earlier got left behind pleading for help:ref 34 Hello Mr. President: Save me and my family. Don’t forget me here. Mercenaries like Blackwater’s Erik Prince tried to prevent Americans from taking The Final Exit,ref 35 only to get stonewalled by the Whitehouse. Meanwhile, the top commander and four-star Wokie, Mark Milley, was too mired in scandal.ref 36 Retired generals were calling for the active-duty generals to resign.ref 37 The withdrawal could not be botched worse if you tried. The populace are now facing a winter of profound famine.ref 38 Rural Afghanistan has been rocked by climate change. The past three decades have brought floods and drought that have destroyed crops and left people hungry. And the Taliban — likely without knowing climate change was the cause — has taken advantage of that pain. ~ CBS News, sticking it like a Russian gymnast This vexing story was from the Theater of the Absurd. Starting with the caches of military equipment left behind, I have two simple solutions that a group of teenagers could have concocted: Announce Blow Shit Up Friday (BSUF). Provide the military personnel with some grenade launchers and a few kegs of beer, grill up some goat burgers, and start blowing shit up. That would be a blast. If that is too unprofessional, you gather all armaments and anything of else of value into an open space. Once the wheels go up on the last troop transport, drop a MOAB—Mother of All Bombs.ref 39 Tough luck for those who were trying to hotwire the stuff when the MOAB arrives. It will take a year to get them out…If you use those billions of dollars of weapons behind I promise they’ll be using them against your grandchildren and mine someday. ~ Joe Biden, Presidential Candidate, 2007ref 40 The collapse of the Afghan Army also couldn’t have come as a surprise. The military and CIA certainly knew that those troops wouldn’t withstand a West Side Story-level brawl.ref 41 The soldiers were paid by the US for their service COD, and there was no C left. Shockingly, most of the payroll booty had long-since been snarfed up by the politicians and top military brass from the only swamp in Afghanistan.ref 42 Whocouldanode? Taliban can murder as many people as they want. But if they keep trolling Biden like this they’re gonna get kicked off of social media. ~ Jesse Kelley, noting the Taliban has an active Twitter feed Here is a script playing out in my noggin. The Crisis in Kabul was an arms deal—Fast and Furious 2.0. One of our top diplomats called the Taliban and said, “We are pulling out in a month. We’ll leave the keys in the ignition and pallets of $100 billsref 43 to help pay for upkeep. If you guys let us sneak out unmolested, you can party like it’s 999—an authentic Taliban-themed fraternity party. We will leave you guns, money, nice facilities, and even a few wives. If you fuck this up, however, we will be right back here.” The Whitehouse also lent a legitimizing tone to the regime when speaking about “working with the Taliban” as part of the deal. In return, the State Department called on the Taliban to form an “inclusive and representative government,”ref 44 so there’s that bit of risible nonsense. Neville Chamberlain couldn’t have done any better. The bottom line: 90% of Americans who wanted to leave Afghanistan were able to leave Afghanistan. ~ Jalalabad Joe Biden That might be a great poll number or inflated final exam grade at a college Joe erroneously claimed to attend, but I am not sure “90%” is impressive in this context. The actual evacuation was ineptly executed from the get-go. Mr. Rogers, with the help of his viewing audience of toddlers, could have Kabuled together a better plan based on the simple precept, “pull out the civilians then the military.” Baffling claims the Whitehouse was obstructing evacuations of charter flights containing Americans was not right-wing propaganda: Where are they going to land? A number of these planes have a handful of Americans, but they may have several hundred individuals who do not have proper documentation of identity….we don’t have manifests for them, we don’t know what the security protocols are for them, we don’t know what their documentation is…hard choices you face in government. ~ Jen Psaki, press conference WTF actually happened? When nothing makes sense your model is wrong. Glenn Greenwald got the scent that withdrawal was intentionally mishandled, suggesting this is “fully within the character of the deep-state operatives.”ref 45We also forgot to destroy our sophisticated FBI-derived software and a complete database containing the biometrics of Friends of the USA,ref 46,47,48 enabling the Taliban to find potential detractors for an attitude correction. Think of it as Afghanistan’s high-tech War on Domestic Terror. The stonewalling of help from other countries also makes no sense using a conventional model.ref 49 Biden’s CIA Director met with Taliban leadership covertly—so covertly we all knew about it—to concoct a “deal”, but what kind of deal?ref 50 During the evacuation, we gave the Taliban names of American citizens, green card holders, and Afghan allies supposedly to let them pass through the militant-controlled perimeter of the city’s airport.ref 51 They would never abuse this list, right? A large number of Afghan refugees—possibly as many as 100,000 according to Tucker Carlson—entering the US are consistent with our open border policy along the Mexican border, but what is that all about? Afghans, by the way, are reputed to be always recalcitrant to assimilate in Europe just in case you’re thinking of renting out your basement as an Airbnb.ref 52 What happened in Afghanistan is not incompetence. We are not that incompetent. ~ General George Flynn The goal is to use Afghanistan to wash money out of the tax bases of the US and Europe through Afghanistan and back into the hands of a transnational security elite. The goal is an endless war, not a successful war. ~ Julian Assange, 2011ref y I have no doubt that blood was shed after we left. More than a few US sympathizers surely lost their heads. As to the stranded Americans, why were they still there? China had evacuated their citizens months earlier.ref 53(Hmmm…Chinese citizens were there?) Two dozen students from the Cajon Valley Union School District and 16 parents there for an enriching summer trip were stranded.ref 54 How did they get visas? That field trip will generate a few college essays that will beat any written about dead grandparents, although Kabul State College may be their only option. This is now on-track, Peter, to be the largest airlift in U.S. history. I would not say that is anything but a success. ~ Jen Psaki to Peter Doucy The media can create, steer, or smother narratives at will. I have a question: Where are all the dead Americans—thousands of them—said to be left behind? Horror stories should be surfacing daily, but they’re not. We shit a mudbrick when One Dead Kashoggi (ODK) got fed to the camels in Saudi Arabia. Three thousand fatalities on 9/11 got us into Afghanistan in the first place. We supposedly left behind “thousands of Americans” but without generating a single headline? So much for that Bay of Pigs­–Iran Hostage Crisis analogy. So here are my next questions and I am deadly serious: Did we get duped? Was the whole thing more sham than farce? There is no such thing as a true account of anything. ~ Gore Vidal Here is Dave’s Narrative. We installed the Taliban as the rulers of Afghanistan as the best of many bad options. The winners are the Taliban and China. The two are inking deals for mineral rights as I type. The chaos was intentional. But why accept such a profound humiliation and dashed hopes of future alliances in global hotspots? I think that the Taliban winning the war in Afghanistan, and then the way our exit happened, has absolutely inspired jihadists all over the world. The Taliban is saying, we just didn’t defeat the United States, we defeated NATO. We defeated the world’s greatest military power, ever. I think, not only will the jihadists be inspired, but a lot of them are going to come to Afghanistan to be part of the celebration, to be part of jihadist central. We are more at risk, without a doubt. ~ Michael Morell, former CIA Director under Obama Maybe China has way more than just Hunter’s laptop to blackmail us and is about to take possession of Taiwan soon. While we await the next Kyle Rittenhouse trial to preoccupy ourselves, take a peek at this video. Skip over the election stuff since we all have rock-hard opinions on that and go to minute 55:30. Xi Jinping’s right-hand man, Di Dongsheng, publicly explained the extent Beijing controls US politics:ref 55 There is nothing in the world that money can’t fix, right? If one wad of cash can’t handle it, then I’ll have two wads. (laughter) Of course this is how I do things. In fact, to be a bit blunt, in the past 30 years or past 40 years, we manipulated the core power circle in the United States, right? I mentioned earlier that Wall Street started to have a very strong influence on U.S. domestic and foreign affairs in the 1970s. So we figured out our path and those we could be dependent on. But the problem is that Wall Street’s status has declined after 2008. More importantly, starting in 2016 Wall Street has no influence on Trump. Why? It is awkward. Trump had a soft breach of contract on Wall Street once, so the two sides had conflicts. They tried to help during the Sino-US trade war. As far as I know, friends from the U.S. told me that they tried to help, but they were too weak. But now we see that Biden has come to power. (crowd laughs) The traditional elites, political elites, and the establishment have a very close relationship with Wall Street. You all see it: Trump talked about Biden’s son, “You have investment funds around the world.” Who helped him build the funds? You understand? There are transactions involved. (laughter) So at this point in time, we use an appropriate way to express a certain kind of goodwill. (applause) ~Di Dongsheng, Vice Director and Secretary of the Center for Foreign Strategic Studies of Chinaref 55 January 6th Capitol Insurrection Alec Baldwin killed more people in 2021 than did the January 6th insurrectionists. Anybody reading this far knows that the January 6th riots stemmed from the right-wing voters who doubted the veracity of the 2020 election. Twitter polls show that view is not as partisan or as rare as the media would lead you to believe. I happen to doubt U.S. election integrity but have for quite a few election cycles. ref 1 Hacked Stratfor emails show the democrats rigged the vote in ’08 ref 2 and Republicans rigged it in ’04.ref 3 It is bipartisan Capture the Flag with red and blue pinnies.ref 4 In any event, Trump’s Green Goblin strategy was to beckon the MAGA faithful to the Capitol to protest the Electoral College signing off on the results. It was not so different than the mobs outside the courthouses trying to subvert the Rittenhouse and Chauvin trials, but the scale of January 6th was much larger and the optics were Biblical. It got out of hand and, at times, even a little Helter Skelter. Mob psychology elicits dramatic changes in brain chemistry and has been the topic of many laboratory studies.”ref 5 Temporary insanity is not a crazy defense. My Tweet got some hysterically hateful responses from the Right who missed the sarcasm and the Left who did not. I think I squandered more of my valuable time left on this planet burrowing through the January 6th story than on the Covid-Vaccine combo platter. I should preface this section by noting that I was praised by a thoughtful long-time reader for being “balanced and measured and carefully worded, even on edgy topics.” I may be on the cusp of disappointing him. It’s impossible to peer at the The Great Insurrection through a non-partisan lens. Both sides may find common ground in the belief that January 6th is a profound fork in the road of the American Experiment. The sock-starching Left will celebrate it as a national holiday every year while the bed-wetting Right will try to ignore it. Both are wrong. Look at that photo and pause to ponder its implications. Put a funny caption to it. Let’s hear from some Republicans first: We must also know what happened every minute of that day in the White House — every phone call, every conversation, every meeting leading up to, during, and after the attack. ~ Liz Cheney I think Lizard nailed it. We’re on the same page. Let’s keep going… January 6 was worse than 9/11, because it’s continued to rip our country apart and get permission for people to pursue autocratic means, and so I think we’re in a much worse place than we’ve been. I think we’re in the most perilous point in time since 1861 in the advent of the Civil War. ~ Michael Dowd, former Bush strategist I would like to see January 6th burned into the American mind as firmly as 9/11 because it was that scale of a shock to the system. ~ George Will, syndicated columnist Mike and George are as unhinged as I am but on different hinges. I think they are delusional and offensive. Edging forward… The 1/6 attack for the future of the country was a profoundly more dangerous event than the 9/11 attacks. And in the end, the 1/6 attacks are likely to kill a lot more Americans than were killed in the 9/11 attacks, which will include the casualties of the wars that lasted 20 years following. ~ Steve Smith, Lincoln Project co-founder Now I’m getting the heebie-jeebies if for no other reason than the Lincoln Project is filled with Democratic operatives (or at least neocons) pretending to be Republicans—as authentic as the Indians at the Boston Tea Party or stepmoms on PornHub. We have seen growing evidence that the dangers to our country can come not only across borders but from violence that gathers within…There is little cultural overlap between violent extremists abroad and violent extremists at home… But in their disdain for pluralism, in their disregard for human life, in their determination to defile national symbols, they are children of the same foul spirit. ~ George W. Bush, a thinly veiled allusion to January 6 George got some serious guff from more than a few of the 80 million Fox-watching extremists including the Grand Wizard: So interesting to watch former President Bush, who is responsible for getting us into the quicksand of the Middle East (and then not winning!), as he lectures us that terrorists on the ‘right’ are a bigger problem than those from foreign countries that hate America. ~ Donald Trump He nailed it. I have stated previously that Bush committed war crimes. Of course, the National Security Machine chimed in… The No. 1 national security threat I’ve ever seen in my life to this country’s democracy is the party that I’m in — the Republican Party. It is the No. 1 national security threat to the United States of America. ~ Miles Taylor, a former Department of Homeland Security (DHS) official Dude! You just tarred about 80 million asses with that brushstroke. Let’s move further left to find some middle ground: They swooned for him on 9/11 because he gave them what they most crave: the view that Al Qaeda is comparable to those who protested at the Capitol on 1/6. ~ Glenn Greenwald, on George Bush’s comments Glenn is part of a growing cadre of liberals including Matt Taibbi, Tim Pool, Bill Maher, The Weinstein Brothers, and Joe Rogan who are unafraid to extend olive branches across The Great Partisan Divide at risk of being labled white supremacists and Nazis, but they are hardly emblematic of the Left. From the elite Left… I think we also had very real security concerns. We still don’t yet feel safe around other members of Congress.  ~ AOC AOC’s comment prompted one pundit to tell her to “get a therapist”, which seems correct given her moment of maximum drama was when a security guard was screaming outside her door, “Are you OK, Ma’am?” #AlexandriaOcasioSmollett began trending on social media when it was disclosed that she was not even in the building when Ragnar and his buddies showed up.ref 6 They will have to decide if Donald J. Trump incited the erection…the insurrection. ~ Chuck Schumerref 7 What ya thinking about Chuckie? We are facing the most significant test of our democracy since the Civil War. That’s not hyperbole. Since the Civil War. The Confederates back then never breached the Capitol as insurrectionists did on Jan. 6. ~ Joe Biden Joe may be on the A-Team, but he hasn’t found his way out of the locker room. The blue-check-marked liberals did not mince words… The 9/11 terrorists and Osama bin Laden never threatened the heart of the American experiment. The 1/6 terrorists and Donald Trump absolutely did exactly that. Trump continues that effort today. ~ S.V. Dáte, Huffington Post’s senior White House correspondent The only effective way for the government to respond to an act of war by domestic terrorists is to be prepared to meet them with machine guns and flamethrowers and mow them down. Not one of those terrorists who broke through police lines should have escaped alive. ~ a Washington Post commenter Moving as far left as you can by tuning into the most cunning commie who can outfox any Western leader… Do you know that 450 individuals were arrested after entering the Congress? They came there with political demands. ~ Vladimir Putin The Cast of this Drama. This Kafkaesque narrative will be scrutinized by historians and democratic operatives for years to come. The Left will cast this event as a truly unique moment in US history, but it was precedented. I see parallels with the 1920’s Bonus Army in which World War I veterans were pissed off about unpaid post-war benefits.ref 8 In the saddest of ironies, many were killed by Army regulars. Some authorities, including a young Dwight Eisenhower, thought it was a benign protest while others thought it was an assault on America. Grumpy crowds appear at the Capitol only on days of the week that end in “y.” Recently, f.....»»

Category: blogSource: zerohedgeFeb 6th, 2022

BTFDers Unleashed: Futures, Yields, Oil Jump As Omicron Panic Eases

BTFDers Unleashed: Futures, Yields, Oil Jump As Omicron Panic Eases As expected over the weekend, and as we first noted shortly after electronic markets reopened for trading on Sunday, S&P futures have maintained their overnight gains and have rebounded 0.7% while Nasdaq contracts jumped as much as 1.3% after risk sentiment stabilized following Friday’s carnage and as investors settled in for a few weeks of uncertainty on whether the Omicron variant would derail economic recoveries and the tightening plans of some central banks. Japan led declines in the Asian equity session (which was catching down to Friday's US losses) after the government shut borders to visitors. The region’s reopening stocks such as restaurants, department stores, train operators and travel shares also suffered some losses.  Oil prices bounced $3 a barrel to recoup some of Friday's rout, while the safe haven yen, Swiss franc and 10Y Treasury took a breather after its run higher. Moderna shares jumped as much as 12% in pre-market trading after Chief Medical Officer Paul Burton said he suspects the new omicron coronavirus variant may elude current vaccines, and if so, a reformulated shot could be available early in the new year. Which he would obviously say as his company makes money from making vaccines, even if they are not very efficient. Here are some of the other notable premarket movers today: BioNTech (BNTX US) advanced 5% after it said it’s starting with the first steps of developing a new adapted vaccine, according to statement sent by text. Merck & Co. (MRK US) declined 1.6% after it was downgraded to neutral from buy at Citi, which also opens a negative catalyst watch, with “high probability” the drugmaker will abandon development of its HIV treatment. A selection of small biotechs rise again in U.S. premarket trading amid discussion of the companies in StockTwits and after these names outperformed during Friday’s market rout. Palatin Tech (PTN US) +37%, Biofrontera (BFRI US) +22%, 180 Life Sciences (ATNF US) +19%. Bonds gave back some of their gains, with Treasury futures were down 11 ticks. Like other safe havens, the market had rallied sharply as investors priced in the risk of a slower start to rate hikes from the U.S. Federal Reserve, and less tightening by some other central banks. Needless to say, Omicron is all anyone can talk about: on one hand, authorities have already orchestrated a lot of global panic: Britain called an urgent meeting of G7 health ministers on Monday to discuss developments on the virus, even though the South African doctor who discovered the strain and treated cases said symptoms of Omicron were so far mild. The new variant of concern was found as far afield as Canada and Australia as more countries such as Japan imposed travel restriction to try to seal themselves off. Summarizing the fearmongering dynamic observed, overnight South African health experts - including those who discovered the Omicron variant, said it appears to cause mild symptoms, while the Chinese lapdog organization, WHO, said the variant’s risk is “extremely high”. Investors are trying to work out if the omicron flareup will a relatively brief scare that markets rebound from, or a bigger blow to the global economic recovery. Much remains unanswered about the new strain: South African scientists suggested it’s presenting with mild symptoms so far, though it appears to be more transmissible, but the World Health Organization warned it could fuel future surges of Covid-19 with severe consequences. "There is a lot we don't know about Omicron, but markets have been forced to reassess the global growth outlook until we know more," said Rodrigo Catril, a market strategist at NAB. "Pfizer expects to know within two weeks if Omicron is resistant to its current vaccine, others suggest it may take several weeks. Until then markets are likely to remain jittery." "Despite the irresistible pull of buying-the-dip on tenuous early information on omicron, we are just one negative omicron headline away from going back to where we started,” Jeffrey Halley, a senior market analyst at Oanda, wrote in a note. “Expect plenty of headline-driven whipsaw price action this week.” The emergence of the omicron strain is also complicating monetary policy. Traders have already pushed back the expected timing of a first 25-basis-point rate hike by the Federal Reserve to July from June. Fed Bank of Atlanta President Raphael Bostic played down economic risks from a new variant, saying he’s open to a quicker paring of asset purchases to curb inflation. Fed Chair Jerome Powell and Treasury Secretary Janet Yellen speak before Congress on Tuesday and Wednesday. “We know that central banks can quickly switch to dovish if they need to,” Mahjabeen Zaman, Citigroup senior investment specialist, said on Bloomberg Television. “The liquidity playbook that we have in play right now will continue to support the market.” European stocks rallied their worst drop in more than a year on Friday, with travel and energy stocks leading the advance. The Stoxx 600 rose 0.9% while FTSE 100 futures gain more than 1%, aided by a report that Reliance may bid for BT Group which jumped as much as 9.5% following a report that India’s Reliance Industries may offer to buy U.K. phone company, though it pared the gain after Reliance denied it’s considering a bid. European Central Bank President Christine Lagarde put a brave face on the latest virus scare, saying the euro zone was better equipped to face the economic impact of a new wave of COVID-19 infections or the Omicron variant Japanese shares lead Asian indexes lower after Premier Kishida announces entry ban of all new foreign visitors. Hong Kong’s benchmark Hang Seng Index closed down 0.9% at the lowest level since October 2020, led by Galaxy Entertainment and Meituan. The index followed regional peers lower amid worries about the new Covid variant Omicron. Amid the big movers, Galaxy Entertainment was down 5.4% after police arrested Macau’s junket king, while Meituan falls 7.1% after reporting earnings. In FX, currency markets are stabilizing as the week kicks off yet investors are betting on the possibility of further volatility. The South African rand climbed against the greenback though most emerging-market peers declined along with developing-nation stocks. Turkey’s lira slumped more than 2% after a report at the weekend that President Recep Tayyip Erdogan ordered a probe into foreign currency trades. The Swiss franc, euro and yen retreat while loonie and Aussie top G-10 leaderboard after WTI crude futures rally more than 4%. The Bloomberg Dollar Spot Index hovered after Friday’s drop, and the greenback traded mixed against its Group-of-10 peers; commodity currencies led gains. The euro slipped back below $1.13 and Bunds sold off, yet outperformed Treasuries. The pound was steady against the dollar and rallied against the euro. Australian sovereign bonds pared an opening jump as Treasuries trimmed Friday’s spike amid continuing uncertainty over the fallout from the omicron variant. The Aussie rallied with oil and iron ore. The yen erased an earlier decline as a government announcement on planned border closures starting Tuesday spurred a drop in local equities. The rand strengthens as South African health experts call omicron variant “mild.” In rates, Treasuries were cheaper by 4bp-7bp across the curve in belly-led losses, reversing a portion of Friday’s sharp safe-haven rally as potential economic impact of omicron coronavirus strain continues to be assessed. The Treasury curve bear- steepened and the benchmark 10-year Treasury yield jumped as much as 7 basis points to 1.54%; that unwound some of Friday’s 16 basis-point plunge -- the steepest since March 2020.  Focal points include month-end on Tuesday, November jobs report Friday, and Fed Chair Powell is scheduled to speak Monday afternoon. Treasuries broadly steady since yields gapped higher when Asia session began, leaving 10-year around 1.54%, cheaper by almost 7bp on the day; front-end outperformance steepens 2s10s by ~3bp. Long-end may draw support from potential for month-end buying; Bloomberg Treasury index rebalancing was projected to extend duration by 0.11yr as of Nov. 22 In commodities, oil prices bounced after suffering their largest one-day drop since April 2020 on Friday. "The move all but guarantees the OPEC+ alliance will suspend its scheduled increase for January at its meeting on 2 December," wrote analyst at ANZ in a note. "Such headwinds are the reason it's been only gradually raising output in recent months, despite demand rebounding strongly." Brent rebounded 3.9% to $75.57 a barrel, while U.S. crude rose 4.5% to $71.24. Gold has so far found little in the way of safe haven demand, leaving it stuck at $1,791 an ounce . SGX iron ore rises almost 8% to recoup Friday’s losses. Bitcoin rallied after falling below $54,000 on Friday. Looking at today's calendar, we get October pending home sales, and November Dallas Fed manufacturing activity. We also get a bunch of Fed speakers including Williams, Powell making remarks at the New York Fed innovation event, Fed’s Hassan moderating a panel and Fed’s Bowman discussing central bank and indigenous economies. Market Snapshot S&P 500 futures up 0.6% to 4,625.00 MXAP down 0.9% to 191.79 MXAPJ down 0.4% to 625.06 Nikkei down 1.6% to 28,283.92 Topix down 1.8% to 1,948.48 Hang Seng Index down 0.9% to 23,852.24 Shanghai Composite little changed at 3,562.70 Sensex up 0.4% to 57,307.46 Australia S&P/ASX 200 down 0.5% to 7,239.82 Kospi down 0.9% to 2,909.32 STOXX Europe 600 up 0.7% to 467.47 German 10Y yield little changed at -0.31% Euro down 0.3% to $1.1283 Brent Futures up 3.8% to $75.49/bbl Gold spot up 0.3% to $1,797.11 U.S. Dollar Index up 0.13% to 96.22 Top Overnight News from Bloomberg The omicron variant of Covid-19, first identified in South Africa, has been detected in locations from Australia to the U.K. and Canada, showing the difficulties of curtailing new strains While health experts in South Africa, where omicron was first detected, said it appeared to cause only mild symptoms, the Geneva-based WHO assessed the variant’s risk as “extremely high” and called on member states to test widely. Understanding the new strain will take several days or weeks, the agency said All travelers arriving in the U.K. starting at 4 a.m. on Nov. 30 must take a PCR coronavirus test on or before the second day of their stay and isolate until they receive a negative result. Face coverings will again be mandatory in shops and other indoor settings and on public transport. Booster shots may also be approved for more age groups within days, according to Health Secretary Sajid Javid The economic effects of the successive waves of the Covid pandemic have been less and less damaging, Bank of France Governor Francois Villeroy de Galhau says Italian bonds advance for a third day, as investors shrug off new coronavirus developments over the weekend and stock futures advance, while bunds are little changed ahead of German inflation numbers and a raft of ECB speakers including President Christine Lagarde A European Commission sentiment index fell to 117.5 in November from 118.6 the previous month, data released Monday showed Spanish inflation accelerated to the fastest in nearly three decades in November on rising food prices, underscoring the lingering consequences of supply-chain bottlenecks across Europe. Consumer prices jumped 5.6% Energy prices in Europe surged on Monday after weather forecasts showed colder temperatures for the next two weeks that will lift demand for heating ECB Executive Board member Isabel Schnabel took to the airwaves to reassure her fellow Germans that inflation will slow again, hours before data set to show the fastest pace of price increases since the early 1990s Russia’s ambassador to Washington said more than 50 diplomats and their family members will have to leave the U.S. by mid-2022, in the latest sign of tensions between the former Cold War enemies China sent the biggest sortie of warplanes toward Taiwan in more than seven weeks after a U.S. lawmaker defied a Chinese demand that she abandon a trip to the island A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded cautiously and US equity futures rebounded from Friday’s hefty selling (S&P 500 -2.3%) as all focus remained on the Omicron variant after several countries announced restrictions and their first cases of the new variant, although markets took solace from reports that all cases so far from South Africa have been mild. Furthermore, NIH Director Collins was optimistic that current vaccines are likely to protect against the Omicron variant but also noted it was too early to know the answers, while Goldman Sachs doesn’t think the new variant is a sufficient reason to adjust its portfolio citing comments from South Africa’s NICD that the mutation is unlikely to be more malicious and existing vaccines will most likely remain effective at preventing hospitalizations and deaths. ASX 200 (-0.5%) is subdued after Australia registered its first cases of the Omicron variant which involved two people that arrived in Sydney from southern Africa and with the government reviewing its border reopening plans. Nikkei 225 (-1.6%) whipsawed whereby it initially slumped at the open due to the virus fears and currency-related headwinds but then recouped its losses and briefly returned flat as the mood gradually improved, before succumbing to a bout of late selling, and with mixed Retail Sales data adding to the indecision. Hang Seng (-1.0%) and Shanghai Comp. (Unch) weakened with Meituan the worst performer in Hong Kong after posting a quarterly loss and with casino names pressured by a crackdown in which police detained Suncity Group CEO and others after admitting to accusations including illegal cross border gambling. However, the losses in the mainland were cushioned after firm Industrial Profits data over the weekend and with local press noting expectations for China to adopt a more proactive macro policy next year. Finally, 10yr JGBs shrugged off the pullback seen in T-note and Bund futures, with price action kept afloat amid the cautious mood in stocks and the BoJ’s presence in the market for over JPY 900bln of JGBs mostly concentrated in 3yr-10yr maturities. Top Asian News Hong Kong Stocks Slide to 13-Month Low on Fresh Virus Woes Li Auto Loss Narrows as EV Maker Rides Out Supply-Chain Snarls Singapore Adds to Its Gold Pile for the First Time in Decades China Growth Stocks Look Like Havens as Markets Confront Omicron Bourses in Europe are experiencing a mild broad-based rebound (Euro Stoxx 50 +1.0%; Stoxx 600 +0.9%) following Friday's hefty COVID-induced losses. Desks over the weekend have been framing Friday's losses as somewhat overstretched in holiday-thinned liquidity, given how little is known about the Omicron variant itself. The strain will likely remain the market theme as scientists and policymakers factor in this new variant, whilst data from this point forth – including Friday's US labour market report - will likely be passed off as somewhat stale, and headline risk will likely be abundant. Thus far, symptoms from Omicron are seemingly milder than some of its predecessors, although governments and central banks will likely continue to express caution in this period of uncertainty. Back to price action, the momentum of the rebound has lost steam; US equity futures have also been drifting lower since the European cash open – with the RTY (+0.9%) was the laggard in early European trade vs the ES (+0.8%), NQ (+1.0%) and YM (+0.7%). European cash bourses have also been waning off best levels but remain in positive territory. Sectors are mostly in the green, but the breadth of the market has narrowed since the cash open. Travel & Leisure retains the top spot in what seems to be more a reversal of Friday's exaggerated underperformance as opposed to a fundamentally driven rebound – with more nations announcing travel restrictions to stem the spread of the variant. Oil & Gas has also trimmed some of Friday's losses as oil prices see a modest rebound relative to Friday's slump. On the other end of the spectrum, Healthcare sees mild losses as COVID-related names take a mild breather, although Moderna (+9.1% pre-market) gains ahead of the US open after its Chief Medical Officer suggested a new vaccine for the variant could be ready early next year. Meanwhile, Autos & Parts reside as the current laggard amid several bearish updates, including a Y/Y drop in German car exports - due to the chip shortage and supply bottlenecks – factors which the Daimler Truck CEO suggested will lead to billions of Euros in losses. Furthermore, auto supbt.aplier provider Faurecia (-5.9%) trades at the foot of the Stoxx 600 after slashing guidance – again a function of the chip shortage. In terms of Monday M&A, BT (+4.7%) shares opened higher by almost 10% following source reports in Indian press suggesting Reliance Industries is gearing up for a takeover approach of BT – reports that were subsequently rebuffed. Top European News U.K. Mortgage Approvals Fall to 67,199 in Oct. Vs. Est. 70,000 Johnson Matthey Rises on Report of Battery Talks With Tata Gazprom Reports Record Third-Quarter Profit Amid Gas Surge Omicron’s Spread Fuels Search for Answers as WHO Sounds Warning In FX, the Buck has bounced from Friday’s pullback lows on a mixture of short covering, consolidation and a somewhat more hopeful prognosis of SA’s new coronavirus strand compared to very early perceptions prompted by reports that the latest mutation would be even worse than the Delta variant. In DXY terms, a base above 96.000 is forming within a 93.366-144 band amidst a rebound in US Treasury yields and re-steepening along the curve following comments from Fed’s Bostic indicating a willingness to back faster QE tapering. Ahead, pending home sales and Dallas Fed business manufacturing along with more Fed rhetoric from Williams and chair Powell on the eve of month end. AUD/CAD/NZD - No surprise to see the high beta and risk sensitive currencies take advantage of the somewhat calmer conditions plus a recovery in crude and other commodities that were decimated by the prospect of depressed demand due to the aforementioned Omicron outbreak. The Aussie is back over 0.7150 vs its US counterpart, the Loonie has pared back losses from sub-1.2750 with assistance from WTI’s recovery to top Usd 72/brl vs a Usd 67.40 trough on November 26 and the Kiwi is hovering above 0.6800 even though RBNZ chief economist Ha has warned that a pause in OCR tightening could occur if the fresh COVID-19 wave proves to be a ‘game-changer’. JPY/EUR - The major laggards as sentiment stabilses, with the Yen midway between 112.99-113.88 parameters and hardly helped by mixed Japanese retail sales data, while the Euro has retreated below 1.1300 where 1.7 bn option expiry interest resides and a key Fib level just under the round number irrespective of strong German state inflation reports and encouraging pan Eurozone sentiment indicators, as more nations batten down the hatches to stem the spread of SA’s virus that has shown up in parts of the bloc. GBP/CHF - Both narrowly divergent vs the Dollar, as Cable retains 1.3300+ status against the backdrop of retreating Gilt and Short Sterling futures even though UK consumer credit, mortgage lending and approvals are rather conflicting, while the Franc pivots 0.9250 and meanders from 1.0426 to 1.0453 against the Euro after the latest weekly update on Swiss bank sight deposits showing no sign of official intervention. However, Usd/Chf may veer towards 1.1 bn option expiries at the 0.9275 strike if risk appetite continues to improve ahead of KoF on Tuesday and monthly reserves data. SCANDI/EM - Although Brent has bounced to the benefit of the Nok, Sek outperformance has ensued in wake of an upgrade to final Swedish Q3 GDP, while the Cnh and Cny are deriving support via a rise in Chinese industrial profits on a y/y basis and the Zar is breathing a sigh of relief on the aforementioned ‘better’ virus updates/assessments from SA on balance. Conversely, the Try is back under pressure post-a deterioration in Turkish economic sentiment vs smaller trade deficit as investors look forward to CPI at the end of the week. Meanwhile, Turkish President Erdogan provides no reprieve for the Lira as he once again defending his unorthodox view that higher interest rates lead to higher inflation. In commodities, WTI and Brent front-month futures consolidate following an overnight rebound – with WTI Jan back on a USD 71/bbl handle and Brent Feb just under USD 75/bbl – albeit still some way off from Friday's best levels which saw the former's high above USD 78/bbl and the latter's best north of USD 81/bbl. The week is packed with risks to the oil complex, including the resumption of Iranian nuclear talks (slated at 13:00GMT/08:00EST today) and the OPEC+ monthly confab. In terms of the former, little is expected in terms of progress unless the US agrees to adhere to Tehran's demand – which at this point seems unlikely. Tehran continues to seek the removal of US sanctions alongside assurances that the US will not withdraw from the deal. "The assertion that the US must 'change its approach if it wants progress' sets a challenging tone", Citi's analysts said, and the bank also expects parties to demand full access to Iranian nuclear facilities for verification of compliance. Further, the IAEA Chief met with Iranian officials last week; although concrete progress was sparse, the overall tone of the meeting was one of progress. "We remain of the opinion that additional Iranian supplies are unlikely to reach the market before the second half of 2022 at the earliest," Citi said. Meanwhile, reports suggested the US and allies have been debating a "Plan B" if talks were to collapse. NBC News – citing European diplomats, former US officials and experts – suggested that options included: 1) a skinny nuclear deal, 2) ramp up sanctions, 3) Launching operations to sabotage Iranian nuclear advances, 4) Military strikes, 5) persuading China to halt Iranian oil imports, albeit Iran and China recently signed a 25yr deal. Over to OPEC+, a rescheduling (in light of the Omicron variant) sees the OPEC and JTC meeting now on the 1st December, followed by the JMMC and OPEC+ on the 2nd. Sources on Friday suggested that members are leaning towards a pause in the planned monthly output, although Russian Deputy PM Novak hit the wires today and suggested there is no need for urgent measures in the oil market. Markets will likely be tested, and expectations massaged with several sources heading into the meeting later this week. Elsewhere, spot gold trades sideways just under the USD 1,800/oz and above a cluster of DMAs, including the 50 (1,790.60/oz), 200 (1,791.30/oz) and 100 (1,792.80/oz) awaiting the next catalyst. Over to base metals, LME copper recoups some of Friday's lost ground, with traders also citing the underlying demand emanating from the EV revolution. US Event Calendar 10am: Oct. Pending Home Sales YoY, prior -7.2% 10am: Oct. Pending Home Sales (MoM), est. 0.8%, prior -2.3% 10:30am: Nov. Dallas Fed Manf. Activity, est. 17.0, prior 14.6 Central Bank speakers: 3pm: Fed’s Williams gives opening remarks at NY Innovation Center 3:05pm: Powell Makes Opening Remarks at New York Fed Innovation Event 3:15pm: Fed’s Hassan moderates panel introducing NY Innovation Center 5:05pm: Fed’s Bowman Discusses Central bank and Indigenous Economies DB's Jim Reid concludes the overnight wrap Last night Henry in my team put out a Q&A looking at what we know about Omicron (link here) as many risk assets put in their worst performance of the year on Friday after it exploded into view. The main reason for the widespread concern is the incredibly high number of mutations, with 32 on the spike protein specifically, which is the part of the virus that allows it to enter human cells. That’s much more than we’ve seen for previous variants, and raises the prospect it could be a more transmissible version of the virus, although scientists are still assessing this. South Africa is clearly where it has been discovered (not necessarily originated from) and where it has been spreading most. The fact that’s it’s become the dominant strain there in just two weeks hints at its higher level of contagiousness. However the read through to elsewhere is tough as the country has only fully vaccinated 24% of its population, relative to at least 68% in most of the larger developed countries bar the US which languishes at 58%. It could still prove less deadly (as virus variants over time mostly are) but if it is more contagious that could offset this and it could still cause similar healthcare issues, especially if vaccines are less protective. On the other hand the South African doctor who first alerted authorities to the unusual symptoms that have now been found to have been caused by Omicron, was on numerous media platforms over the weekend suggesting that the patients she has seen with it were exhausted but generally had mild symptoms. However she also said her patients were from a healthy cohort so we can’t relax too much on this. However as South African cases rise we will get a lot of clues from hospitalisation data even if only 6% of the country is over 65s. My personal view is that we’ll get a lot of information quite quickly around how bad this variant is. The reports over the weekend that numerous cases of Omicron have already been discovered around the world, suggests it’s probably more widespread than people think already. So we will likely soon learn whether these patients present with more severe illness and we’ll also learn of their vaccination status before any official study is out. The only caveat would be that until elderly patients have been exposed in enough scale we won’t be able to rule out the more negative scenarios. Before all that the level of restrictions have been significantly ramped up over the weekend in many countries. Henry discusses this in his note but one very significant one is that ALL travellers coming into (or back to) the UK will have to self isolate until they get a negative PCR test. This sort of thing will dramatically reduce travel, especially short business trips. Overnight Japan have effectively banned ALL foreign visitors. I appreciate its dangerous to be positive on covid at the moment but you only have to look at the UK for signs that boosters are doing a great job. Cases in the elderly population continue to collapse as the roll out progresses well and overall deaths have dropped nearly 20% over the last week to 121 (7-day average) - a tenth of where they were at the peak even though cases have recently been 80-90% of their peak levels. If Europe are just lagging the UK on boosters rather than anything more structural, most countries should be able to control the current wave all things being equal. However Omicron could make things less equal but it would be a huge surprise if vaccines made no impact. Stocks in Asia are trading cautiously but remember that the US and Europe sold off more aggressively after Asia closed on Friday. So the lack of major damage is insightful. The Nikkei (-0.02%), Shanghai Composite (-0.14%), CSI (-0.22%), KOSPI (-0.47%) and Hang Seng (-0.68%) are only slightly lower. Treasury yields, oil, and equity futures are all rising in Asia. US treasury yields are up 4-6bps across the curve, Oil is c.+4.5% higher, while the ZAR is +1.31%. Equity futures are trading higher with the S&P 500 (+0.71%) and DAX (+0.84%) futures in the green. In terms of looking ahead, we may be heading into December this week but there’s still an incredibly eventful period ahead on the market calendar even outside of Omicron. We have payrolls on Friday which could still have a big impact on what the Fed do at their important December 15 FOMC and especially on whether they accelerate the taper. Wednesday (Manufacturing) and Friday (Services) see the latest global PMIs which will as ever be closely watched even if people will suggest that the latest virus surge and now Omicron variant may make it backward looking. Elsewhere in the Euro Area, we’ll get the flash CPI estimate for November tomorrow (France and Italy on the same day with Germany today), and we’ll hear from Fed Chair Powell as he testifies (with Mrs Yellen) before congressional committees tomorrow and Wednesday. There’s lots of other Fed speakers this week (ahead of their blackout from this coming weekend) and last week there was a definite shift towards a faster taper bias, even amongst the doves on the committee with Daly being the most important potential convert. Fed speakers this week might though have to balance the emergence of the new variant with the obvious point that without it the Fed is a fair bit behind the curve. Importantly but lurking in the background, Friday is also the US funding deadline before another government shutdown. History would suggest a tense last minute deal but it’s tough to predict. Recapping last week now and the emergence of the new variant reshaped the whole week even if ahead of this, continued case growth across Europe prompted renewed lockdown measures and travel bans across the continent. Risk sentiment clearly plummeted on Friday. The S&P 500 fell -2.27%, the biggest drop since October 2020, while the Stoxx 600 fell -3.67%, the biggest one-day decline since the original Covid-induced risk off in March 2020. The S&P 500 was -2.20% lower last week, while the Stoxx 600 was down -4.53% on the week. 10yr treasury, bund, and gilt yields declined -16.1bps, -8.7bps, and -14.5bps, undoing the inflation and policy response-driven selloff from earlier in the week. The drop in 10yr treasury and gilt yields were the biggest one-day declines since the original Covid-driven rally in March 2020, while the drop in bund yields was the largest since April 2020. 10yr treasury, bund, and gilt yields ended the week -7.3bps lower, +0.7bps higher, and -5.4bps lower, respectively. Measures of inflation compensation declined due to the anticipated hit to global demand, with 10yr breakevens in the US and Germany -6.8bps and -8.8bps lower Friday, along with Brent and WTI futures declining -11.55% and -13.06%, respectively. Investors pushed back the anticipated timing of rate hikes. As it stands, the first full Fed hike is just about priced for July, and 2 hikes are priced for 2022. This follows a hawkish tone from even the most dovish FOMC members and the November FOMC minutes last week. The prevailing sentiment was the FOMC was preparing to accelerate their asset purchase taper at the December meeting to enable inflation-fighting rate hikes earlier in 2022. Understanding the impact of the new variant will be crucial for interpreting the Fed’s reaction function, though. The impact may not be so obvious; while a new variant would certainly hurt global demand and portend more policy accommodation, it will also likely prompt more virus-avoiding behaviour in the labour market, preventing workers from returning to pre-Covid levels. Whether the Fed decides to accommodate these sidelined workers for longer, or to re-think what constitutes full employment in a Covid world should inform your view on whether they accelerate tapering in December. It feels like a lifetime ago but last week also saw President Biden nominate Chair Powell to head the Fed for another term, and for Governor Brainard to serve as Vice Chair. The announcement led to a selloff in rates as the more dovish Brainard did not land the head job. In Germany, the center-left SPD, Greens, and liberal FDP agreed to a full coalition deal. The traffic-light coalition agreed to restore the debt break in 2023, after being suspended during the pandemic, and to raise the minimum wage to €12 per hour. The SPD’s Olaf Scholz will assume the Chancellorship. The US, China, India, Japan, South Korea, and UK announced releases of strategic petroleum reserves. Oil prices were higher following the announcement, in part because releases were smaller than anticipated but, as mentioned, prices dropped precipitously on Friday on the global demand impact of the new Covid variant. The ECB released the minutes of the October Governing Council meeting, where officials stressed the need to maintain optionality in their policy setting. They acknowledged growing upside risks to inflation but stressed the importance of not overreacting in setting policy as they see how inflation scenarios might unfold. Tyler Durden Mon, 11/29/2021 - 08:01.....»»

Category: dealsSource: nytNov 29th, 2021

Hollywood IATSE union closes last-minute deal to avert industry-wide strike

The Hollywood crew member's union pushed for the strike after months of failed negotiations over pay disparities and working conditions on set. Los Angeles is hoping to see more of this on city streets. David McNew/Getty Images Unions for film and TV crews have reached a last-minute deal, avoiding an industry-crippling strike. Members have pushed longer rest breaks and higher wages for lower-paid crafts, amid outrage over dangerous working conditions. Had they pursued a strike, some members would have stopped working on numerous sets starting Monday. Negotiators for the International Alliance of Theatrical Stage Employees (IATSE) and the Alliance of Motion Picture and Television Producers (AMPTP) have settled on a deal to avert a potential industry-crippling workers' strike.The unions announced the agreement Saturday evening. IATSE released a statement saying the agreement included provisions such as a living wage for the lowest-paid earners, daily rest periods of 10 hours, weekend rest periods of 54 hours, and newly adopted diversity, equity, and inclusion initiatives.The unions entered eleventh-hour virtual marathon meetings late on Friday, according to Variety, with AMPTP President Carol Lombardini addressing details surrounding problematic working conditions in the industry. Lombardini and Matt Loeb, IATSE president, came to an agreement on multiple fronts, understanding the repercussions a crew member strike would have on the industry as it recovers from COVID-19.Industry sources also told Variety that Walt Disney Television chief Peter Rice was among those present at the meeting who helped bridge the gap between the two parties.IATSE union members have pushed longer rest breaks and higher wages for lower-paid crafts, after multiple accounts of dangerous working conditions spread throughout social media, sparking support from the industry's actors, directors, and writers, among others.Had IATSE pursued a strike, members of the crew member union would have stopped working on numerous sets, including some big-name productions, starting Monday. Shows like the Tonight Show with Jimmy Fallon and SNL, daytime soaps like Days of Our Lives, and scripted shows like Grey's Anatomy and Law and Order: SVU would have gone= without editors, lighting crews, and costumers. In the longer term, a strike could have delayed streaming hits like Bridgerton and Ted Lasso, and bigger budget films like Marvel Studios blockbusters.Ninety-eight percent of IATSE members voted to authorize a strike in October. The IATSE and AMPTP resumed bargaining negotiations last week after the Loeb announced the former would go on strike unless the parties could reach a deal by the weekend. Negotiations have gone on since July, with the threat of an impending strike hanging overhead.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 16th, 2021

There Is A Giant Illusion For The Majority Of Market Commentators Choosing Not To See It

There Is A Giant Illusion For The Majority Of Market Commentators Choosing Not To See It By Michael Every of Rabobank Holy Illusions Hands up how many of you had 528K down as your US payrolls guess? Nobody, because the Bloomberg survey low was 50K and the high 325K. While there are question marks over these data given Covid --nearly 3m people weren’t/couldn’t work due to it-- and the “birth/death” model, the household survey saw jobs +179K; backwards payroll revisions were +28K; total employment was back to pre-pandemic levels, albeit with reallocation away from sectors such as leisure and hospitality (-1,214K) towards others, such as transport (+745K); the participation rate edged down to 62.1%, so the jobless rate fell to 3.5%, but even using pre-Covid participation rates unemployment would have been 5.4%, down from 5.5%; and average hourly earnings rose much faster than expected at 0.5% m-o-m, 5.2% y-o-y (and 6.0% annualized). If it’s an illusion, and look at full-time vs. part-time and multiple jobs as a clue... ... it still convinced Larry Summers to warn that if US CPI falls back this week, the Fed must not pivot, and Krugman to add it’d be “no justification for a pivot toward easier money.” Indeed, it now seems the Fed may go another 75bps in September, and Bowman implies afterwards as well perhaps, and the Wall Street Journal underlines, “Witness the small army of Fed officials who have fanned out to warn markets that the Chairman didn’t mean what he supposedly wasn’t saying last week.” In short, the illusion of a Fed dovish pivot is dispelled, with 2-year Treasury yields up 16bp to 3.23% Friday, and 10s up 14bp to 2.83%. More to come: or record yield curve inversion. Add a Fed pivot to “transitory” inflation on the list of illusions fading for the same underlying reason: the global system is crumbling. They join EU energy, economic, and foreign policy, as the German regulator calls for 20% cuts in household gas usage, and the West’s ‘Great Illusion’ that war just can’t happen (to it) in the modern world. On which, Ukraine just got another $1bn in US arms as a new phase of the war looms around Kherson: a counter-attack appears imminent. However, don’t be under the illusion that the US can keep up that pace of arms supply - and its stocks can’t be replaced quickly once depleted. The same is true for Russia, and in terms of men, but their media says North Korea might strike a deal to send 100,000 soldiers to fight in Ukraine in exchange for food and energy(!) If so, the war escalates further, and the EU energy outlook darkens further. NATO member Turkey on Friday also struck a deal with Russia to deepen economic ties: that is a terribly muddied picture for the EU and US as they try to isolate Moscow. However, illusions abound on all sides: Russia just released a video aimed at attracting people to move there due to its ‘hospitality, vodka, and an economy that can withstand thousands of sanctions’. Elsewhere, Reuters warns Chinese military exercises around Taiwan could disrupt key shipping lanes, and Taipei states they “simulate an attack” on its main island, drawing condemnation from the G7, but Russian support. China has now halted: communication with US military theatre leaders; defence meetings; maritime security dialogue; and co-operation over illegal migration, criminal justice, transnational crime, narcotics, and the climate - the US says this “punishes the world." The White House is now leaning on Congress to delay the bipartisan Taiwan Policy Act of 2022, which designates it a major non-NATO ally, provides $4.5bn in military aid, upgrades its international status, and allows the imposition of sanctions, including SWIFT bans, on major Chinese financial institutions. As the Carnegie Endowment think-tank notes, “The US and China are seriously talking past each other…That disconnect will lead to a very unstable new baseline.” Linking back to today’s title, Friday saw the release of ‘Holy Illusions’, a report from a key think-tank backing UK PM candidate Truss. It argues, “Just as in the 1970s, the country faces many interconnected, serious but superficially very different problems.” True. Controversially, it diagnoses that “The most significant underlying economic problem… is the malign consequences of low to negative interest rates over a prolonged period.”  Artificially low rates, it says, have “gradually prevented the normal mechanisms of a market economy from working properly… there has been a greater and greater search for yield on riskier and riskier assets, with everything that follows upon that, notably, market instability, huge asset price inflation, and inequality. The lack of rewards to enterprise and the ease with which fundamentally unproductive “zombie” companies can be maintained have made it difficult to generate those normal improvement mechanisms of a market economy which drive productivity and growth.” It’s hard to disagree with that Austrian and Marxist assessment. The report then says other UK problems are manifold: “Implausible energy policies”; over-regulation, antipathy to risk; “Unsustainable” welfare; a shrinking labour force; a declining birth-rate (an issue in all major economies, except one); “Education systems that don’t educate”; and, it claims, high immigration. It warns that if current UK growth rates continue --and this was presumably before the BOE’s latest awful assessment-- then by 2035 the likes of Poland will “overtake” the UK: will they then import British plumbers? It unsurprisingly argues Brexit is not an issue, even if it means short-term costs (and clearly more immigration is not on the cards). It says the UK isn’t willing or able to do anything with the “full democracy” Brexit grants it, as “Our governing class seems to have forgotten how to govern, how to guide a state, and how to set a goal and direction of travel.” Then --perhaps contradicting itself for some readers-- it argues, “Given this set of daunting problems… there really ought to be strong political movements… to analyse and begin to deal with them. That is not the case. Instead we see the reverse - a refusal to get to grips with the problems or even to acknowledge them. It is easier to ignore the most pressing economic and societal issues of the day, pretend they don’t exist, or claim they will be solved automatically as normal conditions return. We are, it seems, studiously pretending to be asleep.” Again, no arguments here. To show it is not like the others, it dares to ask, “What is to be done?” - and it tells us government must: “Convince the public that change is needed. The public must come to feel that we have taken a wrong path and to react against it.” They are already there! Just as we have mortgage strikes in China, we may see energy strikes in the UK; and some warn of a looming ‘winter of discontent. (And don’t think Putin doesn’t see this too, and won’t act accordingly.) “Show the electorate an alternative,” which is “to increase the productive capacity of our economy (because without that other problems simply cannot be solved)”. They are with you! But here comes the rub. What does that mean on energy? Silence. Moreover, the government must “persuade the public… that collectivist, socialist solutions are incapable of achieving that.” But how do you get the private sector to invest productively when other governments will? See ‘how the US gave away a breakthrough battery technology to China’, because the inventor “talked to almost all major investment banks; none of them [wanted to] invest in batteries," as they “wanted a return on their investments faster than the batteries would turn a profit.” Will higher rates, lower taxes, and deregulation force banks to make loans to productive rather than “fictitious capital”? Austrians say yes: Marxists say not, and with the better track record; and they add that even productive loans will just be made abroad, where it is cheaper to invest. That gaping theoretical/policy hole is more evident when we are then told the government must “persuade the public that this alternative route is actually possible; that [it] has a plan to get the country onto it; that continuing on the current path will simply make the inevitable correction measures more painful; and that failure to take such measures will mean a materially worse outcome. [It must] make this alternative politically feasible and hence potentially attractive.” --But what alternative?!-- Its conclusion avoids the answer in saying that: “A successful nation state needs market economics to create prosperity, and requires solidarity and a clear sense of identity to sustain itself. A reform programme must be similarly broad-based. It should reject the artificial polarity between the “market”  --“right wing” economics and economic globalisation-- and “society” --“left wing” statism and solidarity-- but recognise instead that running a successful country involves elements of both.” It just doesn’t say how beyond rates, taxes, and fostering ‘national unity’: yet the latter alone was *wrongly* presumed by Smith and Ricardo to stop capitalists investing abroad at all, which we just edit out of our textbooks! If only we could edit it out of our financial flows so easily. Ironically, the report also says, ”the political difficulty is that governments and politicians have not for many years set out the reality of how economies work and how prosperity is created. Levels of understanding are low.” Yes, they are: if it was as simple as ‘getting the state out of the way’, China would not be an economic superpower and Afghanistan might be. Yet the underlying message that we been ‘getting GDP wrong’, and we can’t get it right by only focusing on GDP is arguably very valid, as is the criticism of relying on low rates policy. We *do* need a higher common purpose, and higher rates, and others are saying similar things: here is an example arguing, “Without that, any aspiring state is just a gated community for the working wealthy, much like the ones for old retirees in South Florida.” It’s just that we need *more* than that structurally to boot, and ‘Holy Illusions’ still seems to cling to its own in avoiding that conclusion. It *could* be seen as backing a neo-Hamiltonian free market behind high tariff barriers, with industrial policy, which was how the US (and China) developed. Yet that mercantilist model is also an illusion for the UK and others not large enough for economies of scale and a modern army, especially as large rivals *are* state-backed and have one; and as high debt levels logically require MMT and higher interest rates, if just to pay for that military. The flurry of legislation coming out of the US is not a million miles away from some of those ideas and developments. But if we need ‘Hamilton’ in blocs, the UK still just rejected being a member of one. Does that mean it will end up in a new Holy Anglosphere? Some say that’s no illusion, other that it is. Regardless, the above still implies global national-security/commodity/supply-chain/tech/values fragmentation ahead; and higher interest rates; and lower asset prices; and more productive, higher-wage investment - as we had already projected as a 2030 scenario. Unless that’s just my own holy illusion. What isn’t is that if you don’t keep track of these seemingly-esoteric developments, you won’t be in a position to call where rates are going - which is why nobody in markets called three (or four?) back-to-back 75bps Fed hikes this year. That was “not how the political economy works”. But the political economy had changed. To paraphrase Keynes, “When the facts change, I change my forecast. What do you do?” That is what you should be focused on: not the illusion of the relevance/positivity of Chinese July trade data released Sunday, which showed exports up 18% y-o-y and imports only 2.3%, for a staggering trade surplus of $101.3bn. Does anyone think this $1.2 trillion annualised figure is good news for anyone: not China (where it means no demand); not globally (where it means no local supply). There is a giant illusion for the majority of market commentators choosing not to see it. Tyler Durden Mon, 08/08/2022 - 09:04.....»»

Category: blogSource: zerohedgeAug 8th, 2022

Spirit is merging into JetBlue and will disappear from the skies. See the full history of the airline, from trucking company to low-cost giant.

Soon, the iconic Spirit brand that has become a household name may leave the industry forever. Spirit Airlines old and new aircraftMichael Carter/Airliners.net, Felipe | Santiago/Shutterstock Spirit Airlines has agreed to merge with JetBlue Airways instead of Frontier Airlines. The merger is worth $3.8 billion and could provide more comfort to customers while maintaining low fares. Spirit's history dates back to 1964, when it started as a trucking company in Michigan. Spirit Airlines is one of the most recognizable airlines in the US, serving over 80 destinations across the Americas with its bright yellow aircraft and ultra-low-cost business model.Spirit AirlinesGetty ImagesSource: Spirit AirlinesHowever, the iconic yellow paint job could soon fade from the skies.Spirit Airlines A320 at Boston airportTaylor Rains/InsiderI flew Spirit across the US for $35 after it canceled thousands of flights in August. I wouldn't hesitate to do it again but it wasn't without risks.Denver-based Frontier Airlines announced in February that it reached an agreement with Spirit to merge the two airlines in a $6.6 billion deal.Frontier AirlinesCarlos YudicaBudget airlines Frontier and Spirit to merge in $6.6 billion deal that could create the US' 5th largest airlineHowever, in April, JetBlue Airways threw a wrench in Frontier's plans. JetBlue's bid, which Spirit at the time called "unsolicited," has now been accepted by the low-cost giant.JetBlue A321neo.Business WireSpirit and Frontier Airlines cancel merger deal. It could be good news for JetBlue's competing bid — but bad news for cheap tickets.The Spirit and JetBlue deal is worth $3.8 billion, and JetBlue CEO Robin Hayes says the merger will allow the airline to "grow faster."Marcus Mainka/ShutterstockJetBlue and Spirit have agreed to merge. Passengers may enjoy better service on the combined airline, but Spirit's low prices will vanish."We can go head-to-head with the legacies in more places to lower fares and improve service for everyone," he said in a Thursday press release.JetBlue Airways A321neo.Lukas Wunderlich/ShuttestockHowever, legislators, including Senator Elizabeth Warren of Massachusetts, Senator Bernie Sanders of Vermont, and Representative Alexandria Ocasio-Cortez of New York, have said in the past that the deal could increase fares and worsen customer service.Sen. Elizabeth Warren.Tom Williams/CQ-Roll Call, Inc via Getty ImagesSource: New York TimesThe lawmakers have asked Transportation Secretary Pete Buttigieg and the Justice Department to closely review the merger and to oppose any union if it violates antitrust laws or goes against public interest.Buttigieg is taking an even more high-profile turn as he sells a trillion-dollar infratructure package around the nation. He took his first international trip as a Cabinet member to COP26 in Glasgow last week.Photo by Ian Forsyth/Getty ImagesSource: New York TimesIf the deal does go through, JetBlue said it plans to scrap Spirit's brand by retrofitting all of the budget carrier's planes into JetBlue's product. This would leave Frontier as the US' only large ultra-low-cost airline.Inside Spirit's A320 plane.Thomas Pallini/InsiderSource: InsiderAnalysts say that Frontier being a standalone airline will actually be a good thing because its low-cost competition will put pressure on JetBlue to keep fares low.Frontier Airlines.nyker/ShutterstockOnce it is all said and done, Spirit becoming a part of JetBlue means the famous yellow brand will be no more. Here's a look at the airline's full history from trucking company to low-cost giant.Spirit Airlines aircraft.Carlos Yudica/ShutterstockI prefer to fly low-cost carriers like Spirit and Frontier over major airlines — here's how I avoid the extra fees for tickets, luggage, and foodSpirit was not originally founded as an airline but started as Clippert Trucking Company in 1964. In 1974, the company was refounded as Ground Air Transport Inc. by Michigan-native Ned Homfeld.Tractor trailers roll along the highway in Miami, Florida.Joe Raedle/Getty ImagesSource: Spirit Airlines Association of Flight Attendants AFA-CWAHomfeld eventually founded the first passenger version of Spirit in 1980 — Detroit-based Charter One Airlines. The charter tour company officially launched operations in 1983 using turboprop aircraft.Convair 580 turboprop (not Charter One Airlines)Josef Hanus/ShutterstockSource: Spirit Airlines Association of Flight Attendants AFA-CWACharter One focused on gambling trips, offering routes to Atlantic City, New Jersey from Chicago, Detroit, Boston, and Providence, Rhode Island.Atlantic City, New JerseyJohn Greim/LightRocket via Getty ImagesSource: Spirit Airlines Association of Flight Attendants AFA-CWAAs gambling soon became popular in other states, Charter One began ferrying northerners to warmer destinations, including Florida, the Bahamas, Las Vegas, and San Juan.Las Vegas casinoJohn Locher/AP PhotoSource: Spirit Airlines Association of Flight Attendants AFA-CWACharter One's operation in the Bahamas is notable because it means Spirit has always offered passenger service beyond the US.Spirit Airlines aircraftThomas Pallini/Business InsiderSource: Simple FlyingIn 1990, a decade after its founding, Charter One launched scheduled air service from Boston, Detroit, and Providence to Atlantic City, marking the start of the company's commercial operations.Spirit Airlines aircraftThomas Pallini/InsiderSource: Spirit Airlines Association of Flight Attendants AFA-CWACharter One leased two Convair 580 turboprops for the service. It would operate the planes for only a couple of years before rebranding to Spirit Airlines.Convair 580 turboprop (not Charter One Airlines).Carlos Yudica/ShutterstockSource: Spirit Airlines Association of Flight Attendants AFA-CWASpirit Airlines was born on May 29, 1992, after changing its name from Charter One and integrating four DC-9 jets into the fleet.Spirit Airlines DC-9.Torsten Maiwald/JetPixSource: Spirit Airlines Association of Flight Attendants AFA-CWA, Airliners.netThe company was able to secure the planes for cheap after the demise of Midway Airlines brought down used aircraft prices.Midway Airlines at Midway Airport in Chicago.Ralf-Finn Hestoft/CORBIS/Corbis via Getty ImagesSource: The Washington Post, International Directory of Company Histories Volume 31On June 1 of the same year, the company launched its first flight from Detroit to Atlantic City, which operated twice daily. The airline's code is NK for "Ned's Kids."Spirit Airlines MD80Mark Kopczak/Airliners.netSource: Simple Flying, International Directory of Company Histories Volume 31, Airliners.netSpirit's early fleet also consisted of McDonnell Douglas MD80 aircraft. According to Plane Spotters, 44 DC-9 and MD80 planes were delivered through the 1990s and early 2000s, with the last MD80 leaving the company in July 2010.Spirit Airlines McDonnell Douglas MD-80Ivan Cholakov/ShutterstockSource: PlaneSpotters, International Directory of Company Histories Volume 31In its early years, Spirit was referred to by Travel Agent Magazine as the "most successful small carrier you've never heard of," flying over a quarter-million people in 1993 and bringing in $21 million in revenue.Spirit AirlinesEQRoySource: International Directory of Company Histories Volume 31The carrier was able to win over customers with cheap fares powered by its low-cost business model, despite axing amenities like inflight meals.Snacks will cost passengers a fee on SpiritThomas Pallini/InsiderSource: ABC News, International Directory of Company Histories Volume 31Furthermore, the company's background as a tour operator helped it fill planes, which averaged about 80% full.Spirit Airlines interior.Thomas Pallini/InsiderSource: International Directory of Company Histories Volume 31Spirit also thrived during the early 1990s because established airlines struggled to turn a profit during the global recession.Vintage TWA aircraftLouLouPhotos/ShutterstockSource: LA Times, International Directory of Company Histories Volume 31This opened doors for startups to acquire cheap planes and nonunion staff that had been employed by collapsed Pan Am, Eastern, and Midway.Pan Am flight attendant serving drinks on the company's 747.Bettmann/Contributor/Getty ImagesSource: LA Times, International Directory of Company Histories Volume 31From 1993 to 1999, Spirit expanded its route network, offering flights to Philadelphia, Orlando, St. Petersburg, Myrtle Beach, Los Angeles, and New York City.Spirit Airlines at Fort Lauderdale-Hollywood International AirportCarlos Yudica/ShutterstockSource: Orlando Airports, International Directory of Company Histories Volume 31However, some major carriers did get in the way of Spirit's expansion. In 1994, Norwest Airlines bought two gates from US Airways at Detroit's main airport for about $1 million, beating out Spirit. Northwest then resold the gates to Trans World Airlines.Northwest Airlines aircraftIvan Cholakov/ShutterstockSource: Spirit Airlines vs. Northwest Airlines, International Directory of Company Histories Volume 31The setbacks continued throughout 1994. One of Spirit's biggest PR nightmares occurred when it inadvertently overbooked and canceled 1,400 passenger tickets.Spirit Airlines aircraftThomas Pallini/Business InsiderSource: The Plain Dealer, International Directory of Company Histories Volume 31Without realizing it, Spirit gave the wrong booking instructions to travel agents, causing the 1,400 tickets to be invalid even though customers paid for them.Spirit Airlines gateThomas Pallini/Business InsiderSource: The Plain Dealer, International Directory of Company Histories Volume 31The carrier responded to the crisis by saying it guaranteed all paying passengers would get to their destination even if it meant Spirit had to rebook them on a competitor airline.Spirit Airlines passengersVIAVAL TOURS/ShutterstockSource: The Plain Dealer, International Directory of Company Histories Volume 31Despite the setback, Spirit's low-cost strategy continued to drive the company's success. In 1995, Spirit launched its "Freedom Fare" service from Detroit to Philadelphia for $49 one-way. Soon after, Boston was added for $69 one-way.Spirit Airlines MD-80Mark Kopczak/Airliners.netSource: Predatory Pricing in the Airline Industry, International Directory of Company Histories Volume 31By 1996, the company had $60 million in revenue and owned five out of the 11 aircraft in its fleet.Spirit Airlines MD80Michael Carter/Airliners.netSource: Spirit Airlines vs. Northwest Airlines, International Directory of Company Histories Volume 31While the company was growing, it was starting to face tougher competition. So, it started to seek out a "big brother" to help it along the way, and Delta's regional carrier Comair wanted to buy Spirit for $20 million.Comair Delta Connection aircraftQualityHD/ShutterstockSource: AvGeekery, International Directory of Company Histories Volume 31However, the deal never materialized. Comair pulled out after an incident with budget carrier ValuJet crashed into the Everglades in 1996, which created a stigma about the safety of low-cost airlines.ValuJet aircraftRobert Sullivan/Getty ImagesSource: The Palm Beach Post, Journal of Air Transportation World Wide, International Directory of Company Histories Volume 31To combat customer concerns, Spirit sent out thousands of postcards to reassure the safety of its planes. It also launched the "Catch the Spirit" media campaign that included TV, radio, and billboard ads to sell Spirit's perfect safety record and involved adding a new logo to its aircraft.Catch the Spirit liveryMark Kopczak/Airliners.netSource: Crain's Detroit, Spirit Airlines, International Directory of Company Histories Volume 31, Airliners.netSpirit's only unprofitable year was 1996, mostly due to a 25% rise in fuel prices, consumer hesitation to fly low-cost carriers, and Northwest matching Spirit's fares on its Detroit-Philadelphia route, which pushed the budget airline out of the market.A Northwest Airlines Airbus A319.Rebecca Cook/ReutersSource: Spirit Airlines vs. Northwest Airlines, International Directory of Company Histories Volume 31, Leonard N. Stern School of Business, NYUHowever, Spirit's planes began filling again in 1997.An aerial view shows Spirit Airlines jets parked at McCarran International AirportEthan Miller/Getty ImagesSource: International Directory of Company Histories Volume 31In June of that year, Spirit took over defunct carrier Sun Jet's routes from New Jersey to Florida after it declared bankruptcy. Sun Jet and Spirit had been flying chartered tours on behalf of reservation company World Technology Systems.Sun Jet International AirlinesTrevor Bartlett/AB PicSource: Crain's Detroit, International Directory of Company Histories Volume 31, AB PicSpirit operated the flights for WTS in partnership with Myrtle Beach Jet Express. However, the partnership ended in August 1997 after finger-pointing began between the two carriers.Myrtle Beach Jet ExpressMichael Bernhard/Airliners.netSource: Myrtle Beach Online, International Directory of Company Histories Volume 31, Airliners.netA Jet Express spokesperson commented on Spirit's poor performance, and Homfeld responded by questioning Jet Express' financial status, pointing out it owed the city of Myrtle Beach $770,000 it borrowed for advertising.Spirit Airlines greyscale liveryIvan Cholakov/ShutterstockSource: Myrtle Beach Online, International Directory of Company Histories Volume 31Myrtle Beach Jet Express filed bankruptcy in 1999, but Sun News writer David Wren blamed Spirit for its collapse, claiming the carrier copied its rival's marketing plan and business strategy.Spirit Airlines aircraftOmar F Martinez/ShutterstockSource: Department of Transportation, International Directory of Company Histories Volume 31Nevertheless, by 1998, Spirit was starting to boom. It took advantage of Northwest's looming pilot strike by acquiring more aircraft to increase capacity on its competitor's routes.Northwest Airlines pilot strikeJEFF KOWALSKY/Getty ImagesSource: New York Times, International Directory of Company Histories Volume 31That year, Spirit saw a revenue of $121 million, had 20 aircraft in its fleet, and posted the industry's highest load factor that year with 76.4% full. Moreover, it carried 1.4 million passengers, increasing its customer traffic by 80% compared to 1997.Spirit AirlinesSkycolors/ShutterstockSource: International Directory of Company Histories Volume 31Spirit got a new home in 1999 when it moved its corporate headquarters from Eastpointe, Michigan to Miramar, Florida. The airline had been courted by a number of other cities before making its decision, including Detroit and Atlantic City.Spirit Airlines headquarters in Miramar, FLJoe Raedle/Getty ImagesSource: Tribune Business News, International Directory of Company Histories Volume 31Miramar made sense because it was in the Fort Lauderdale area where Spirit's tour company was already based, and the airline had been serving Fort Lauderdale-Hollywood International Airport since 1993.Spirit Airlines counter at Fort Lauderdale-Hollywood International AirportJoe Raedle/Getty ImagesSource: Sun-Sentinel, International Directory of Company Histories Volume 31In 2000, Spirit got the attention of the FAA for discrepancies in the marking and placarding of cabin and seats on its DC-9 and MD80 aircraft. The federal regulation violation cost the airline $67,000.Spirit Airlines MD80Mark Kopczak/Airliners.netSource: Federal Aviation Administration, International Directory of Company Histories Volume 31, Airliners.netDespite the hiccup, Spirit continued to expand throughout the 2000s. It added San Juan, Puerto Rico to its scheduled service in 2001. Meanwhile, Boston, Grand Cayman, and San Francisco were added in 2006.Spirit Airlines plane in San Juan, Puerto RicoRICARDO ARDUENGO/Getty ImagesSource: Aviacionline, Massport, Cayman Compass, San Francisco International AirportIn 2002, Spirit began growing its Airbus A320 fleet, which is the only aircraft family in its fleet today. The first livery was greyscale...Spirit Airlines greyscale liveryAngel DiBilio/ShutterstockSource: Aviation Week, Norebbo...the second was the blue paint scheme...Spirit Airlines blue paint schemeCarlos Yudica/ShutterstockSource: USA Today...and the third, which is the most recognized today, is the all-yellow "Bare Fare" livery, introduced in 2014.Spirit Airlines "Bare Fare" liveryCarterAerial/ShutterstockSource: Orlando SentinelIn 2005, Spirit brought on its new CEO and President Ben Baldanza who transitioned the airline to the US' first ultra-low-cost carrier.Former Spirit Airlines CEO Ben BaldanzaCNBC/Getty ImagesSource: Simple FlyingIn 2007, the airline rebranded its business class, Spirit Plus, with the Big Front Seat, which passengers could secure for an extra fee.Spirit Airlines Big Front SeatThomas Pallini/InsiderSource: Spirit Airlines, SeatMaestroIn June 2010, Spirit pilots went on strike for six days amid poor wages and benefits, causing hundreds of flight disruptions. At the time, Spirit Airbus crews were some of the lowest-paid pilots in the US.Spirit Airlines pilot strikeJoe Raedle/ShutterstockSource: The New York TimesAlso that year, Spirit became the first airline to charge for carry-on bags. The move reduced its operating costs because it lowered the aircraft's fuel consumption. It also sped up the boarding process and ensured there was enough overhead bin space.Spirit Airlines bag size checkerEQRoy/ShutterstockSource: ABC NewsIn 2011, the carrier began charging for boarding passes printed at the airport ticket counter and reduced its maximum checked baggage weight from 50 to 40 pounds.Spirit Airlines check in kioskThomas Pallini/InsiderSource: CNNWhile it kept costs low, Spirit's no-frills business strategy has been controversial throughout its history. In 2011, the DOT fined the airline $50,000 for deceptive advertising, claiming it did not include hidden fees, like bags, added to its discounted fares.Spirit Airlines check-in areaThomas Pallini/InsiderSource: Consumer ReportsThen, in 2012, the airline came under fire after it refused to refund dying Vietnam veteran Jerry Meekins' ticket after he was told by his doctor not to fly due to terminal cancer. Spirit cited its strict no-refunds policy as the reason, but still received immense backlash from the veteran community.Spirit AirlinesKen Wolter/Shutterstock.comSource: HuffPostAfter threats to boycott, Baldanza apologized to the vet and personally issued the $197 refund, saying "sometimes we make mistakes." The company also donated $5,000 to the Wounded Warriors Project in Meekins' name.Wounded Warrior ProjectGlynnis Jones/ShutterstockSource: HuffPostDespite its history of controversy and complaints, Spirit continues to be a successful airline. "Spirit is consistently incredibly profitable," said Madhu Unnikrishnan, editor of Skift Airline Weekly.Spirit Airlines blue paint schemeCarlos Yudica/ShutterstockSource: Marker MediumAccording to Unnikrishnan, Spirit was never really concerned about the passenger experience. When a customer emailed Baldanza about a bad flight experience, the CEO responded, "Let him tell the world how bad we are. He's never flown us before anyway and will be back when we save him a penny."Flying Spirit Airlines from Santa Ana, California to Newark, New Jersey.Thomas Pallini/InsiderSource: Marker MediumIn 2008, Spirit was the number one airline for customer complaints but still managed to fly five million passengers and achieve a net profit during the recession, making it one of the few carriers to do so.Spirit Airlines boarding doorThomas Pallini/InsiderSource: Department of TransportationIn 2014, Spirit was the top pick airline for growth for investors, and in 2016, Spirit was the first US carrier to receive the A320neo into its fleet.Spirit Airlines A320neoThomas Pallini/Business InsiderSource: The Motley Fool, AirbusIn November 2017, Spirit's on-time performance ranked second behind Delta. This was a major improvement after coming in dead last among 13 US airlines in 2015.Spirit AirlinesThomas Pallini/InsiderSource: SkiftThe same year, the company announced plans to Wifi equip its aircraft, making it the first ultra-low-cost carrier to do so.Spirit Airlines app on phoneSOPA Images/Getty ImagesAmerica's leader in cheap flights is adding a new feature to its planes that customers will loveIn 2019, Spirit introduced its new President and CEO, Ted Christie. During the same year, the airline was operating 600 daily flights to 72 destinations across the US, Mexico, Central America, and the Caribbean.Spirit Airlines in the CaribbeanSkycolors/ShutterstockSource: Tampa Bay TimesLike every airline, Spirit was hit hard during the coronavirus pandemic, posting a 2020 net loss of $428 million. Nevertheless, Spirit continued to fight back in 2021, expanding operations with new city pairs and new airports.Spirit Airlines passengers during the pandemicPATRICK T. FALLON/Getty ImagesSource: StatistaHowever, Spirit's 2021 full-year earnings revealed its revenue came in at $987.6 million, which was "better than expected" considering the impact of the Omicron variant. The income was 1.8% more than the same time in 2019.Spirit Airlines aircraftGreg K_ca/ShutterstockSource: Spirit AirlinesDespite the strong end of the year, Spirit did face operational issues in August 2021. The chaos was due to a mix of poorly timed weather, system outages, and staff shortages.AP Photo/Eugene GarciaSource: InsiderWhile the setback caused outrage from customers and a warning from the DOT, the company's flight schedule was still growing. On October 6, Spirit reached a major milestone, launching the first of 31 routes from Miami International Airport.Spirit destinations from MiamiSpirit AirlinesSource: Spirit AirlinesSpirit continued to improve into 2022. The carrier has reported strong demand since February and reported a "record-high non-ticket revenue per passenger segment" for the first quarter of 2022. Non-ticket revenue is ancillary fees, like luggage and snacks.Taylor Rains/InsiderSource: Spirit AirlinesTo this day, Spirit has never had an air crash, including during its time as Charter One Airlines. Most impressively, Spirit was the only airline in North America to make the top 10 list for safest airlines in the world in 2018, according to JACDEC data.Spirit Airlines aircraftThiago B Trevisan/ShutterstockSource: JACDECThe airline ranked 26 in 2019, 23 in 2020, and 30 in 2021, coming in third behind JetBlue and Delta last year.Delta Air Lines at JFK.Ron Adar/ShutterstockSource: JACDECDespite its growth, Spirit is merging with JetBlue, pending regulatory approval. It is still unknown which routes will stay and which will go, but what we do know is the new mega-carrier is going to shake up the industry.Spirit Airlines aircraft at the gate.EQRoy/ShutterstockSpirit Airlines is expanding its network with 7 new routes from Philadelphia to the Caribbean and across the USRead the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 29th, 2022

Global Air Travel Logjam Stumps Airlines, Disrupts Countless Summer Travel Plans

Global Air Travel Logjam Stumps Airlines, Disrupts Countless Summer Travel Plans By Janice Hisle, of Epoch Times Summertime is supposed to be joyful for travelers heading to vacation destinations—and airlines, too, because that’s when they typically rake in cash by the barrel. But 2022 has ushered in a summer of discontent for passengers and airlines worldwide, as airlines’ plans for rebounding from the COVID-19 pandemic travel slump have hit one logjam after another. Across the globe, especially in Europe, there’s a new epidemic: canceled, overbooked, and delayed flights—and airport storage areas overflowing with lost and misdirected baggage. These once-rare annoyances of air travel are now more commonplace; travelers who took smooth operations for granted now expect snafus—a new mindset that has changed the way they plan trips. To prevent issues, savvy travelers are increasingly entrusting delivery services like FedEx or UPS to transport luggage to their destinations. Some are putting GPS-enabled devices into their luggage, such as Apple’s AirTag or the Tile tracker. And people traveling in groups are sprinkling a few pieces of clothing per person into each checked bag instead of risking having someone lose an entire vacation wardrobe. Airport information screens are showing “ON TIME” less frequently this summer. (Stock photo/Matthew Smith/Unsplash) For now, if an air traveler manages to have a leisurely getaway and hassle-free experience, they might feel like they’ve won the lottery. Chances for bad experiences have increased, a trend likely to continue as the summer progresses, says Jay Ratliff, an aviation expert with more than three decades of experience. “Travel used to be something we enjoyed. But it’s turned into something we endure,” he said. One day last week, Ratliff’s email was brimming with more than 800 new messages, many of them from fed-up airline customers turning to him for help—or to vent. “I’ve never seen it this bad, industry-wide,” said Ratliff. “There are a lot of things contributing to this mess that we’re in, but it comes down to the airlines trying to operate too many flights, and they simply didn’t have enough employees to pull it off,” Ratliff said, noting the situation is “10 times worse in Europe.” Ratliff said that the percentage of flight delays serves as a barometer for how bad the problems are. During average years, he would see single-digit percentages of delayed flights for many airlines across the globe. But one day last week, 54 percent of British Airways flights were behind schedule, for example. He rattles off other recent jaw-dropping statistics at major hubs: In Brussels, Belgium, up to 72 percent of flights were late, and in Frankfurt, Germany, 68 percent of flights were delayed. In many cases, flight delays cause missed connections. When those passengers seek rebooking, the airlines often cannot find seats for them because flights are filled. That can leave passengers stranded at unintended destinations for hours, or even days. Ratliff said that several airports have been “begging airlines to stop selling tickets because terminals are filling up” with travelers waiting for rebooked flights. Adding to the mess: rental cars are scarce, another COVID-created problem. When pandemic was raging, few people were renting cars. That prompted rental companies to sell portions of their fleets. They also halted plans to buy replacements. Now that travelers are back, rental agencies are having problems securing new vehicles, which are selling at inflated prices. So when people try to get a rental car at the last minute, either because they failed to plan or were stranded by flight disruptions, they often rely on Uber or Lyft, or they may roam the airport for a prolonged period. Lufthansa was forced to cancel flights affecting about 130,000 passengers because of a worker strike set for July 27, 2022. (Kai Pfaffenbach/File Photo, 2020/Reuters) This week, Europe’s woes worsened. German-based Lufthansa airlines announced it was canceling “almost all flights to and from Frankfurt and Munich.” The cancellations took effect July 27 because a union representing ground workers was waging a single-day walkout to demand higher pay. In a statement, the airline said the impact was “massive;” cancellations affected more than 130,000 passengers. Ratliff, who worked in management for Northwest Airlines from 1981-2001, explained how the COVID-19 pandemic set the stage for the current crisis. Airlines were forced to cut their workforces through layoffs and early retirements. Those measures were necessary to stay afloat when demand for air travel slowed to a trickle during the pandemic’s worst surges in 2020-21. “What business can survive with 95 percent of their customers no longer knocking on the door?” he asked. Airline executives reasoned that travel demand would eventually come roaring back—and when it did, they’d hire replacements for the former employees. But it wasn’t that simple. “They found they weren’t able to hire as fast as they thought they could,” Ratliff said. Background screenings and training for new workers can be time-consuming, too. As a result, many airlines and airports remain understaffed in many job categories, ranging from pilots to baggage handlers to ticketing agents and customer service reps. Suitcases are seen uncollected at Heathrow’s Terminal Three baggage reclaim, west of London, on July 8, 2022. (Paul Ellis/AFP via Getty Images) Anticipating a staffing shortfall, airlines cut back flights during summer, when they would typically add flights. Those cutbacks surely made airline executives wince, Ratliff said. “They want as many of those ‘silver revenue tubes’ flying as they can during the summer,” he said, “because that’s the time when they make their money.” However, Ratliff said that even the curtailed flight schedules “assumed a perfect scenario” from May-June this year. During the Memorial Day weekend travel rush, it became clear that those ideal projections were unrealistic; systems disintegrated if bad weather rolled in or if a handful of employees called in sick, sometimes suffering from COVID-19. Such unpredictable events are capable of touching off a domino effect of airport problems. That was true even in the pre-pandemic era. But this summer, the airport house-of-cards is so precarious, a major thunderstorm could cause “a coast-to-coast cascading problem” that might persist for weeks, Ratliff said. Still, U.S. airlines are faring better than European ones. Airlines in Europe are having more trouble adjusting because demand for travel in those nations continued to lag while U.S. travel demand gradually picked up. During that ramp-up period, especially in the past year or so, U.S.-based airlines “learned some things,” Ratliff said; executives could see that they would need to curtail flights because they lacked the personnel to keep pace. Meanwhile, Europe faced a 77-percent drop in international traffic—or more—“and then, all of a sudden, here they come,” travelers flocking to Europe to fulfill long-delayed travel itineraries, Ratliff said. Europe’s air-travel landscape is “a crazy, crazy mess,” Ratliff said, blaming it on flight schedules that were even more “aggressive” than many American air carriers’ schedules. “This is a self-inflicted airline problem,” Ratliff said. “They rolled out this summer schedule thinking they could operate more flights than they were able to do. They miscalculated. And who’s paying for it? The poor passengers.” Travelers who expected to follow a nice, curved arc from their point of origin to their destination instead ended up bouncing along a zigzag path. In the worst single travel nightmare that Ratliff had heard of, a family started its journey with seven boarding passes—and ended up with 96 of them. KLM, a Dutch airline, recently suffered a baggage system malfunction. This 2020 file photo was taken in Amsterdam. (Piroschka van de Wouw/Reuters) A synopsis of that family’s odyssey: After leaving Washington’s Dulles Airport, the group ended up missing flights, then being rebooked in multiple international hubs. “And, of course, their bags—did they keep up?” Ratliff asked. “Ha, not a chance!” Additional problems with flights and baggage seem to grab headlines every few days. Last week, a baggage-system malfunction at Amsterdam Airport Schiphol caused KLM (Royal Dutch Airlines) in the Netherlands to take an unusual step. On July 20, the airline could not process luggage for most of the day, the airline said in a statement. As a result, “thousands of suitcases” were left behind while their owners traveled to other places. The next day, July 21, KLM refused to accept checked bags for passengers traveling between European cities. The goal was to “free up as much space as possible” on that day’s flights so that left-behind baggage could be transported. In the U.S., there is a shortage of baggage handlers partly because of uncompetitive wages, Ratliff said. In some places, those jobs pay about $16 an hour, he said, “and you could go work at McDonald’s in that same airport for $20 an hour—so why would you want to go out and work in all kinds of weather when you can be inside and make more money?” Many travelers are putting tracking devices on their luggage—but that doesn’t always help. Even if the tracker reveals the bag’s location, some passengers are reporting that airlines are telling them to travel to distant cities to retrieve their bags. Existing methods for reuniting lost bags with their rightful owners are being stretched to their limits by the current crisis—which affected Joanne Prater and her family in ways they never anticipated. Prater, who is Scottish and lives in the United States, says her 50-day quest to recover a checked bag has made her painfully aware of the inconvenience, stress, and emotional impact that people can experience over checked items that go missing. Longing to visit her family in Scotland, Prater scored a deal for half-price airfare: $500 per person, including checked bags. She, her husband, and their three sons drove from their Cincinnati-area home to Chicago. On June 6, they boarded an Aer Lingus flight and were bound for Dublin, Ireland, and Glasgow, Scotland. But when the family arrived at their destination, one bag belonging to her two youngest sons, ages 12 and 8, was missing. As a result, the boys had only “the clothes on their backs,” Prater said. Worse yet, the bag contained a varsity jacket that holds special meaning for the family, along with team jerseys that the boys wanted to show off to their relatives. “How do you explain to your children that their favorite clothes are missing?” Prater said. After it became clear that the boys’ bag wouldn’t materialize anytime soon, the family purchased several outfits for them, paying the U.S. equivalent of about $500. Prater repeatedly called the airline, sometimes stuck on hold for 45 minutes, only to have the call disconnected or to be in touch with a representative with whom she had communication difficulties. She finally resorted to returning to the Glasgow airport during her vacation, hoping that in-person contact would prove more fruitful than phone calls or electronic messages. At the airport, an Aer Lingus employee did seem sympathetic to her concerns. To Prater’s surprise, the employee escorted her into a corridor that was outside public view. There, a sight took Prater’s breath away: the hallway was lined with hundreds of pieces of luggage and other lost articles, such as strollers, car seats, and golf clubs. “People save all their lives for a dream vacation to come to my country, Scotland, where golf was invented, only to have their golf clubs lost? I mean, men collect clubs, and they’re expensive; you’re not bringing Fisher-Price clubs to Scotland to play golf,” Prater said. “It was just gut-wrenching to me. I’m standing there thinking about all of these poor families without their strollers, without their car seats, without their clothing.” Despite repeated attempts to find the missing suitcase,  the Praters returned home to the United States without it.  Prater continued her attempts to file various complaints with the airline, to no avail. Prater said she feels a kinship with other people who have formed groups on social media to vent their frustrations and to try to help each other locate their lost belongings. As of July 26, there was still no sign of the Praters’ bag, which was last seen in Dublin in early June, Prater said she was told. When The Epoch Times asked Aer Lingus for comment on Prater’s situation, the airline responded via email: “We understand the concern and frustrations felt by our customers whose baggage has been delayed and the impact this has had on their travel plans. Regrettably, our airline is being impacted by widespread disruption and resource challenges.” The airline also said it is taking steps to resolve the issues, including enlisting help from third-party companies to return items to their owners. Prater said she isn’t holding out much hope that the lost bag can be found, yet she still isn’t giving up because, “at this point, it’s about accountability.” It angers her that airlines seem to have offered flights and baggage services that they were ill-equipped to provide. “I’m probably never going to check a bag again because of this experience,” she said. Ratliff, the aviation expert, said he doesn’t see the airline crisis abating quickly. He predicts issues could persist into mid-2023. In his view, “If the airlines have packed airplanes now, treating passengers the way they’re treating them, there’s not really an incentive for them to change how they’re doing things.” Troubleshooting Tips for Travelers Jay Ratliff, an aviation expert, provides these tips for avoiding airline-related hassles: Make your reservations as far in advance as possible, which also protects you from fare increases. Catch the first flight in the morning. “There is no more important flight of the day for an airline than that first flight of the day,” he said because airlines know that if that flight goes out on time, it’s more likely that the rest of that day’s flights will follow suit. “And,” Ratliff said, “it’s going to be the cleanest airplane because no one has been flying in it yet.” Put a copy of your itinerary into your bag before you close it, increasing the chances that an airline employee will be able to return your bag to you if it is lost. Consider purchasing a tracking device such as Apple’s AirTag or a Tile. Take a photograph of your bag as you’re checking in to aid in locating it. Make sure you never put essential items such as medication or car keys into a checked bag. Allow extra time at the airport, reducing the chance you’ll miss your flight and face a nightmare rebooking it. “Let’s not play the game of ‘let’s see how close we can cut it,’” he said. If you have an important event such as a cruise ship departure or a wedding to attend at your destination, build a “buffer” into your travel plans. If your flight is delayed or canceled, use social media to contact airlines because they likely have more people working on social media than they do working the phones, Ratliff said. Be succinct in sharing what’s going on and what you need. If all else fails and you have a horrible experience with your flight or luggage, fill out an airline complaint form with the U.S. Department of Transportation (DOT). “That completely changes the tone of the conversation,” Ratliff said. “The airlines can ignore us (individual passengers), but they can’t ignore the DOT.” Tyler Durden Thu, 07/28/2022 - 23:10.....»»

Category: dealsSource: nytJul 29th, 2022

Here"s what it"s like to take the 4-hour train journey on Eurostar from London to Amsterdam

The train was very clean but the WiFi was unreliable and passengers were warned of "luggage thieves" when we stopped in Rotterdam. The interior of a Eurostar carriage.Grace Dean/Insider I spent almost $200 to take the Eurostar from London to Amsterdam and it took four and a half hours. The train was very clean and modern and I could even go to a duty free shop at St Pancras station.  However, the train wasn't as luxurious as I'd expected, with unreliable WiFi and a limited menu. I can't count how many hours I've spent on trains. I grew up taking the train to school and to visit friends, and as someone who doesn't drive I use it for almost all of my trips in the UK. But recently I took the Eurostar for the first time to travel from London to Amsterdam.The interior of a Eurostar carriage.Grace Dean/InsiderThe Eurostar departs from St. Pancras, right next to King's Cross station in central London.St. Pancras station.Grace Dean/InsiderThough St. Pancras is known mainly for its Eurostar connections, it also serves a variety of destinations in England.St. Pancras has more than a dozen platforms.Grace Dean/InsiderEurostar gates at St. Pancras close 30 minutes before the train departs. There were huge Tube strikes on the day I traveled, and I arrived just a few minutes after the gates closed.Tube stations were closed on the day I traveled.Grace Dean/InsiderBut I wasn't the only passenger with this problem, and Eurostar staff at the station were switching people onto later services. I hadn't expected this as it wasn't the company's fault I failed to arrive with enough time to make it through security.My Eurostar boarding pass.Grace Dean/InsiderThree other train operators offer services from St. Pancras ...The platforms at St. Pancras.Grace Dean/Insider... but Eurostar has a separate section in the station. This included customer service desks and counters where you could buy and collect tickets.Eurostar ticket counters at St. Pancras.Grace Dean/InsiderTickets are scanned at the barriers before passing through security like at airports. Passengers also get their passports stamped. Despite a long queue, it was relatively fast-moving, and the process only took about 30 minutes.Eurostar security at St. Pancras.Grace Dean/InsiderThen you're through to the waiting area for Eurostar passengers. The company advises Eurostar advises arriving 90 minutes before your train departs, so I had a while to wait.Eurostar waiting area at St. Pancras.Grace Dean/InsiderIt was very similar to being in an airport lounge, with departure screens dotted about.Eurostar waiting area at St. Pancras.Grace Dean/InsiderThere was a coffee shop with quite a long line ...Eurostar waiting area at St. Pancras.Grace Dean/Insider... as well as a duty-free store, which I hadn't expected to see.Eurostar waiting lounge at St. Pancras.Grace Dean/InsiderThe waiting area was busy – it seemed that a lot of people planned to travel that day, and the room was littered with suitcases too. About 20 minutes before our train to Amsterdam was due to leave, the screens updated and said we could start boarding.Eurostar waiting area at St. Pancras.Grace Dean/InsiderThe interior of the train had a dark blue color scheme with hints of yellow, like the Eurostar logo.The interior of a Eurostar carriage.Grace Dean/InsiderThe seats were arranged as pairs on either side of the aisle ...The interior of a Eurostar carriage.Grace Dean/Insider... with small tables that fold down. There were also small foot rests, though I didn't find mine very comfy.The interior of a Eurostar carriage.Grace Dean/InsiderA few seats in each carriage were arranged in fours around a small table, although each passenger could extend the table out a little.The interior of a Eurostar carriage.Grace Dean/InsiderThe train was really clean. Eurostar has three travel classes – standard, standard premier, and business premier. I opted for the former.The interior of a Eurostar carriage.Grace Dean/InsiderThere were racks at the ends of each carriage for passengers to store suitcases, big bags, and foldable bikes ...The luggage racks in a Eurostar carriage.Grace Dean/Insider... as well as racks above the seats where you could put smaller bags and coats. Unlike on a plane, you didn't have to pay extra for large luggage – passengers in standard class can bring two pieces of luggage plus hand luggage for free.The luggage racks in a Eurostar carriage.Grace Dean/InsiderSource: EurostarMy train stopped off at four destinations: Lille, France; Brussels, Belgium; Rotterdam, and Amsterdam, both in The Netherlands.The screens on board a Eurostar train.Grace Dean/InsiderMessages on screens throughout the train told you information such as the time, the next stop, the train's maximum speed, and the length of the tunnel ...The screens on board a Eurostar train.Grace Dean/Insider... switching between English, French, and Dutch. Announcements were made in all three languages, too.The screens on board a Eurostar train.Grace Dean/InsiderThe Eurostar also had a cafe on board, but it only sold food and drink to take back to your seat. It accepted payment in both euros and pounds.The cafe on board a Eurostar train.Grace Dean/InsiderWhen I first went to the cafe at around 1:20 p.m., I was told that its staff was on break. I returned after 10 minutes and ordered the risotto but was told there wasn't any left. I opted for a falafel sandwich, brownie, and orange juice under its 10.20 euro ($10.22) meal deal. I thought that was expensive but not entirely unexpected.My lunch on the train.Grace Dean/InsiderThere were restrooms at the end of each carriage. They looked very much like normal train toilets – but I'd expected them to be a bit nicer given the price of the tickets and the length of Eurostar journeys.Eurostar journey London to AmsterdamGrace Dean/InsiderThe train did have free WiFi, but it was very unreliable. I kept losing my connection and ultimately gave up.The interior of a Eurostar carriage.Grace Dean/InsiderInstead, I passed my time reading a book. Other passengers spent the journey talking with fellow travelers, reading, sleeping, and watching films and TV shows. I presumed they downloaded the video to watch offline.I read during the journey.Grace Dean/InsiderI also tried to enjoy the view, but most of it wasn't very exciting, especially when we passed through the Channel Tunnel and could only see darkness.The view wasn't inspiring.Grace Dean/InsiderMost of the other passengers looked like groups of friends and family, alongside a few solo travelers. They were largely dressed in casual clothing and looked like holidaymakers. Because it was a Monday morning train, I had expected there to be more people in business attire working on their laptops, but maybe they were in business class.The interior of a Eurostar carriage.Grace Dean/InsiderI enjoyed the journey – until we got to Rotterdam, where we had a long stop. Upon arrival, an announcement on the train warned us of "pickpockets and luggage thieves" known to operate in the area. I dashed over to check on my suitcase, but thankfully it hadn't been taken. I had never heard a warning like this before on a train and it made me feel quite unsafe.The luggage racks in a Eurostar carriage.Grace Dean/InsiderBut that was the only incident I had during the journey. Other than that, my first trip on the Eurostar was similar to any other train journey I'd been on, apart from the fact that it took four and a half hours. At almost $200, it was more expensive than flying – but it included up to two large suitcases and took me between two city-center stations, rather than airports on the outskirts. Train travel also has a much smaller carbon footprint.The interior of a Eurostar carriage.Grace Dean/InsiderI'd definitely travel on the Eurostar again, but I plan to keep my eyes peeled for discounts and special offers. And next time, I won't travel on a Tube strike day.The interior of a Eurostar carriage.Grace Dean/InsiderRead the original article on Business Insider.....»»

Category: worldSource: nytJul 17th, 2022

60,000 S/F Renewal a Bellwether for Office Recovery

JLL announced that Berkley Insurance Company has renewed its lease at 757 Third Ave., a 504,953 square foot office building in Midtown East owned by BentallGreenOak. Berkley Insurance Company will continue to occupy 60,000 square feet  across the 10th and 11th floors under an eight-year lease in the building that it... The post 60,000 S/F Renewal a Bellwether for Office Recovery appeared first on Real Estate Weekly. JLL announced that Berkley Insurance Company has renewed its lease at 757 Third Ave., a 504,953 square foot office building in Midtown East owned by BentallGreenOak. Berkley Insurance Company will continue to occupy 60,000 square feet  across the 10th and 11th floors under an eight-year lease in the building that it has called home since 2014. Berkley Insurance Company is a member of W. R. Berkley Corporation, a Fortune 500 company. Only the second deal over 60,000 square feet signed on Third Avenue this year, the renewal comes as the landlord continues to add value to the asset with a dedicated amenity center designed to meet demand from tenants seeking facilities and services that help attract and retain employees.  Accessed from the grand staircase in the main lobby, the facility provides space where tenants can collaborate, relax and socialize in spacious quarters that include The Library lounge, a full kitchen, pantry, coffee bar, wellness club, event, and conference space. The property includes a prestigious roster of tenants in the financial services, accounting, real estate, technology, media and marketing sectors. Constructed by Emery Roth &  Sons, the historic, mid-century building has been magnificently maintained by institutional ownership to compete directly for tenants with adjacent properties on nearby Lexington, Park and Madison Avenues. 757 Third has EPA Energy Star certification and was one of the first US office buildings to receive Viral Response Approval from Fitwel for mitigating the spread of COVID-19. The building has single-tenant and multi-tenant floor plates with bespoke pre-built environments, tower floors with abundant natural light, sweeping views and meeting rooms. Located a seven-minute walk from Grand Central Terminal and two minutes from the 53rd Street Station, 757 Third Avenue has seamless access to seven subway lines as well as the new LIRR connection. The property is surrounded by some of the city’s most in-demand restaurants, cafes, and fitness centers in a vibrant neighborhood that provides an opportunity for tenants to attract the best talent in a tight market. “Since acquiring 757 Third Avenue in 2015, BentallGreenOak has invested significant capital to improve the building’s interiors, façade, and amenity package. We believe that our ongoing capital improvements, including extensive lobby upgrades and revamped, best-in-class community spaces, and unique pre-built packages will continue to attract and retain tenants and solidify the property’s position as one of the best Class A office buildings on the Third Avenue corridor,” said Anil Erdem, managing director at BentallGreenOak. JLL is the exclusive leasing agent for the 26-story Emery Roth & Sons-designed tower. Vice chairman Mitchell L. Konsker, executive managing director Clark Finney, executive vice president Simon Landmann, and associate Lance Yaskinsky represented BentallGreenOak in the transaction. Tim Gibson, executive managing director at Newmark, represented Berkley Insurance Company. Finney hailed the deal as a bellwether of a recovering office leasing market. “This renewal is further confirmation of a strengthening office market bolstered by landlords’ commitment to the health and wellness of their tenants through expanded amenity offerings,” he said. “Berkley Insurance’s commitment demonstrates New York City’s continued appeal as a home for the world’s leading corporations.” The post 60,000 S/F Renewal a Bellwether for Office Recovery appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJul 15th, 2022

Wynn Resorts, Sands And MGM Resorts CEOs On The Industry’s Future

The following is the unofficial transcript of a CNBC interview with Craig Billings, Wynn Resorts (NASDAQ:WYNN) CEO, Robert Goldstein, Sands Chairman and CEO, and Bill Hornbuckle, MGM Resorts International (NYSE:MGM) CEO, from the CNBC Evolve Global Summit, which took place today, Wednesday, July 13th. Video from the interview will be available at cnbc.com/evolve. Interview With […] The following is the unofficial transcript of a CNBC interview with Craig Billings, Wynn Resorts (NASDAQ:WYNN) CEO, Robert Goldstein, Sands Chairman and CEO, and Bill Hornbuckle, MGM Resorts International (NYSE:MGM) CEO, from the CNBC Evolve Global Summit, which took place today, Wednesday, July 13th. Video from the interview will be available at cnbc.com/evolve. Interview With Wynn Resorts, Sands And MGM Resorts CEOs CONTESSA BREWER: So I want to thank you for joining me today. Part of the reason I wanted to invite you, Craig billings, Bill Hornbuckle, Rob Goldstein, to this conversation is because you’re all leading companies that are iconic global casino brands whose imprint of the founders are clearly visible, not just in your properties or just in Las Vegas but around the world. I guess I’ll just begin with can you set the scene for me about where we are when we know that people are here and they’re enjoying what Las Vegas has to offer and the demand is persistent in spite of rising inflationary pressures. Bill, what are you seeing – what do you see for the next half of the year and where’s the industry going? if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. BILL HORNBUCKLE: I do believe there's been a change. I do believe that how people are going to experiences how they think about travel, how they think about whether there was initially Covid money or not, how they think about what they want to do with their free time is a creed to Las Vegas and to us in a large way. And we're seeing it. Is there a recession around the corner? Time to tell. You wouldn't know by looking at this place last night, or what we've experienced over the last couple of quarters. And I think about the environment we're in today in employment and getting people to come to work. It's an interesting environment that we're all in. But I'm extremely optimistic about the space, about the experience economy, and where we belong in it. And so you know, I'm very positive, generally speaking. BREWER: What are you seeing right now, Craig? CRAIG BILLINGS: We spent much of the Covid period really just continuing to invest. Invest in our people, invest in our business, and that's borne fruit. And I think we see that every day both in our customer satisfaction surveys and in our numbers. So it's been great over the course of the past few months. On the founder point that you raised, you know, obviously, our founder changed very rapidly. Our founder left very rapidly. And for us, it was really there were kind of three buckets of things that we had to think about. The first was what needed to change very quickly – certain points on governance, the board, etc. The second is that which would never change, really that founder’s mindset, that sense of ownership all the way down to the line level, accountability and our design and development capabilities. And then that which we could evolve. And that's really a multi-year journey. And so much of what we've seen over the course of the past six months is the fruit of that evolution. So you see it in our food and beverage program, you see it in the way we use social media, you see it in our entertainment program. And so we've started to see, you know, that bear fruit and really it's early days in that evolution. BREWER: What do you think? ROB GOLDSTEIN: Well, I’m not in Las Vegas anymore. We sold our properties as you well know, and these guys know. Thrilled to see the rebound of Las Vegas. I’ve been a citizen here for almost 30 years and very proud of the city. A huge fan of it. We are experiencing a different situation because we're Asia- bound. Macao we both have properties – all of us have properties there and it's struggling, as you know. For me, having been with Sheldon Adelson for decades, it's a very difficult time for us emotionally. We sold Las Vegas, it was very hard for me. We sold it for different reasons than people understand. And I think, you know, Sheldon did something that I'll never forget during the Covid time when everybody else was laying people off and I had made a proposal to the board to follow suit. And he tapped me on the shoulder like this. He said, “Rob, not doing that.” I said, “Not doing what?” He said, “I'm not laying people off.” I thought he was confused. So I took him aside explained to him. He said, “I'm not confused.” He said, “I'm not laying people off.” He had a very strong belief in culture and people. And that today resonates with us since we succeed him and try carry on the legacy both in Macao and Singapore. Maybe again in the U.S. at some point. BREWER: But it's really expensive. I mean, if you're in an industry that – GOLDSTEIN: Yes, very expensive. When I told him how much it was, he was very sweet. He said, “Rob I can afford it. We can afford it.” And he said, “I'm not going to fire people. They have made me very wealthy, it's my time to give back to them.” And Sheldon, I had the privilege of watching him on two fronts. Very much a believer in culture and longevity and sustainability with the staff, with the people working with us. And secondly, a big believer in strategic thinking. Sheldon never did anything – whether it being Macao, Singapore, Pennsylvania, Las Vegas, any jurisdiction we tried to go to his first thought was, “what do I bring the table strategically? Why am I different?” And he did it here in Las Vegas and he authored this whole MICE strategy which people thought was hilarious – BREWER: Which is basically convention business, right? Making this – GOLDSTEIN: Yeah, I'm sorry. Yes, convention-based group business was Sheldon's calling card. He grew up in it through Comdex. But my point is all these people we are referencing had a strong strategic perspective of a people, culture thought process. And say what you want about those. Different people have different perspectives. And I think so the fellas that we all came to work for they saw things a different way. They had huge vision and a huge appetite for risk. BILLINGS: Steve was a true founder at heart in every way. And you know, the way that he ran the business was as a founder. Very high accountability, very small corporate staff. And you have to make sure that that continues. And you have to actually take that legacy, be a steward to that legacy, and evolve it. And I think Rob, you said that, too. You can't be afraid to evolve it and make sure that you can meet changing consumer needs and changing consumer trends and stay relevant. But you have to maintain the core and soul of who the business is and who the team is. BREWER: Did that make a difference for Wynn when we saw this massive hiring squeeze when everybody around the nation were desperate for workers? Did that soul of Wynn make a difference in how you were able to retain talent? Attract talent? BILLINGS: No doubt. No doubt it did. I mean, we similar to what Rob was talking about, we too, didn't lay anybody off during the shutdown because you can't reassemble our team in a short period of time. It takes years and years and years to do. And so when we reopened, we actually had a team that was energized, that felt great about where they worked. And our turnover has reflected that. BREWER: You know, it strikes me too, that you're seeing all this boom here. I just can't get over that you can look at Encore Boston Harbor and see that it is out earning any single property you have in Macao. The thought of that before the pandemic would have just been impossible to imagine. That there's been sort of this reversal of fortune. HORNBUCKLE: You know what has been interesting in our business I'm sure, you know, technology and Covid drove us to a couple different places. Even if you go look at this gaming floor, and everyone's doing this. The way we position games just for distance and safety. But we create these unique pods that sit out here now. Well guess what? People enjoy them. And it's worked. And it's brought particularly the type of games that are now demonstrate out here, it's brought millennials to the table in a way that they have not been before in our industry. And so at least we have seen historically, not only here, but universally across all of our properties domestically, we have more millennial business than we've ever had by like 20%. It is a compelling and interesting thing. BREWER: Do you think that the younger people who may not have been really exposed to casinos and gambling before the pandemic, are they drawn by the digital technology? I mean, now there are games where you can sit and only interact with the machine the way that most of us are now used to interacting with our phones, right? So you can sit in a casino where you're near other people but not actually be interacting with a human being. BILLINGS: I think when you smash together the proliferation of sports betting and i-gaming, and the demographic that is engaging with sports betting in particular, which is a younger demographic, you think about the fact that all the effort, time and money that we've spent as an industry here in Las Vegas, investing in non-gaming amenities and things that bring people here despite the casino, all those are going to come together naturally and have a spillover effect that are going to cause consumers – some consumers – to find an affinity for what's on the casino floor. I think it's just a natural happenstance of all of those things. BREWER: I'm really interested if the draw is the experience, if that's the thing that people are hungry for, how does digital play into that yen for experiences? HORNBUCKLE: Look, for a brand like ours, it gives us a chance to connect 360 days a year. It gives us a chance to have a constant dialogue with a customer. It gives them exposure and ultimately a reward mechanism like any loyalty program to be participating in. Yeah, I can do this. I can bet the Mets at home because I’m from New York and I enjoy the Mets and it ultimately translates into something more for them. It's pretty straightforward in that context. And it works. It's big enough scale now. This thing has grown to a point where there is absolute connectivity – the notion of a simple omnichannel relationship with the customer. And what we have all seen is to the extent a customer participates in all three activities, their activity with us is far superior than what it was historically. BILLINGS: Look, sports betting isn't new. I mean people have been betting on sports online for years and years and years. So now you have the opportunity to bet with a brand that you trust and a brand that oftentimes has other physical assets that you can interact with and be entertained by. And so it is a pretty compelling proposition over the longer term. You know, the past couple of years have been interesting for a whole bunch of reasons in sports betting. I think there was a race to get to market and to acquire customers at any cost. I think the industry is becoming increasingly more disciplined in terms of how they approach that, which is great, you know, for us to see. But that omnichannel relationship is important. And I really believe it's a winner in the long run. BREWER: Rob, Sheldon Adelson was such an opponent of internet gambling and invested in it and really was vocal about it and made sure that with all of his political connections, he made it clear where he stood on it. Have you decided to take a very different approach? Have you turned the company in a direction that is very different from what he saw and thought? GOLDSTEIN: Sheldon, the underpinning of his thinking may be different than most people realize. He was a big believer that young people were at risk. He had young boys. He felt people were on their phone at the ballgame. He felt the wrong people could access it. And Bill mentioned 24 hours a day you can bang one in your phone and lose money. And it bothered Sheldon from a pure moral perspective. I know people don't want to believe that, they think he was protecting his land base. The fact is our business has been 90% Asia forever. And so it doesn't affect us because Asia does not have digital gambling. And so it's a nonevent for us from that perspective. So that was Sheldon’s mindset. Would we go into it? Sure we would. We would definitely – and I think Sheldon later in life came to realize it could be managed perhaps. And if it's profitable and we saw the right path, we would pursue it. I'm watching it. It's fascinating to watch what Bill's going through and Craig's been through it and the people at Caesars. And it's fun to watch and see where it goes. I believe it will be very profitable in the long term but there’s some impediments to getting there. BREWER: I overheard you asking Bill about the sort of the backlash in Europe to sports gambling and the way that net there are now very serious limits on how people gamble. Are you guys worried that in your digital venture there could be a backlash here? HORNBUCKLE: Well, let me back up. Backlash in many of those markets – they were gray markets – save the UK. So they weren't regulated at all. They were kind of regulating, they used to call them. So when they are — and again in Germany is a great example – as it's getting regulated, some of the constraints and some of the restrictions are clearly more than they were without any regulations. UK is taking a look at time on device, spending limits, all of the things that would obviously drive addictive behavior. There are, particularly because it's an automated world, there's a lot of things that can be put into play that protect people, that keep things in check, that help responsible gaming in a universal way. And so it is being adopted there. It's going to be transitional to here. We're already starting to put many of those things in play. We've learned from our partner Entain into our BetMGM products. And so yeah, if somebody – you always have to be mindful of it. We do not want to take anyone's last dime full stop. It is not in our business interest to do that. And so we're all mindful of it. On the other side of the coin, we just bought a company will hopefully close next month called LeoVegas. You know, it's a company that's based in Sweden. They have a great footprint, we think great technology. We are very focused on a digital growth pattern not only here domestically, obviously with BetMGM in Canada and ultimately rest of world. We see it as a – not an unlimited because nothing is unlimited, but from a platform where we stand in the scale we have, there's only so many places to go and do what we do and keep our brands true in terms of brick and mortar. And so for us it's a big piece of the next horizon. BREWER: I want to talk a little bit about international too, because you all have international properties and aspirations. I'm especially interested in when going in and co-developing an integrated resort in the Middle East, again, you know, groundbreaking in so many ways. Can you talk about growth internationally and especially where we now see the geopolitical landscape changing. Where we're seeing a lot of uncertainty about what, you know, superpowers, former superpowers, rising superpowers can and will do. BILLINGS: So I think over the course of the past 20 years, you've seen both consumers and governments embrace IRs. I mean, tax revenue, tourism, great experiences, there's all kinds of reasons to support integrated resorts. And I think you are going to continue to see that. I think it'll be interesting to see how the industry – if we do see a proliferation – how the industry keeps pace. I mean, all of us together only have so much development capacity over the course of any given year. And it's not like there's 100 companies like ours. So that'll be interesting to see. But you know, specifically with respect to the UAE, the UAE is obviously a very progressive, transformative place and they're doing a lot of things. A lot of things socially, a lot of things from a legal and regulation perspective. And so we're really excited about that opportunity. You know, puts our brand within 95% of consumers if they want to take an eight hour flight or less. And so it's a meaningful extension of our brand. It's a meaningful opportunity for our team to put their imprint on the company. It's the first property we will do subsequent to Steve. And so it's a very, very important event for us. And I feel great about it. BREWER: Talk to me a little bit about Asia and your feeling now that you sold Las Vegas ahead of this massive rebound. I know because you've told me on multiple occasions that you truly believe in the future of Macao and Singapore. But the Covid restrictions are still at present and an obstacle. GOLDSTEIN: Most of Asia's opening, I mean, Japan's opening, Indonesia, Malaysia, Korea, Vietnam. The market is opening. The biggest challenge there is employees and airlift getting in and out of these countries are still challenging into Singapore. But Singapore is, you know, leading the way in terms of it's a great government, great place to operate. We're thrilled to be there. At its peak was a $1.7 billion property. My guess is that we'll do better than that in the future. Macao I feel even I find it funny that people question Macao's return. Of course it's been a hard couple of years no question. We employ 33-34,000 people. We've not laid anyone off, we’ve been paying them for 30 months. And it's a tough time. You got to basically hunker down and wait for it to turn. But the idea it doesn't turn is kind of hard to imagine it's going to turn probably this year or next. And when it does, Macao will go back to making – you know, we made at the peak $3.5 billion EBITDA. I think we’ll make a lot more than that in the future there. BILLINGS: I agree with Rob. The only thing that keeps me up at night about Macao is the state of my team. I mean, you know, they've been essentially trapped there for years. GOLDSTEIN: Yeah. Brutal. BILLINGS: It's very, very difficult and I appreciate everything they do for us. It is a difficult time to be there. But if you think about the latent demand across the border, you think about the importance of Macao frankly within the Greater Bay area, we're huge, huge bulls on Macao just like Rob. HORNBUCKLE: Again, for the audience, I mean, Macao was seven, eight times Las Vegas in scale. I mean, okay? So it comes back half to begin with and then some and then some. I just, it's the largest gaming market in the world bar none, and it will forever be. BREWER: Are there lessons that you learn from reacting to the pandemic that now you apply toward climate change or geopolitical risk, or the threat – I mean, especially with digital businesses, the threat of cyber attack? BILLINGS: We have always really as a company tried to stay as nimble as possible and have paid dividends during that period. So we were incredibly transparent with our people. And we really empowered our folks to help us adapt, plan, and frankly, just get scrappy. There were many times when we just had to get scrappy and deal with things in the moment. And so I think that reflects within the team, whether we start talking about recession, or geopolitical events that are changing, you know, changing the demand profile – if that happens at some point. I think that that nimbleness particularly as we flexed it during Covid will pay dividends. And so I really believe we are more wired as a company, particularly here in Las Vegas and in Boston than we ever have been. HORNBUCKLE: And we obviously had to take a different approach. I had the unfortunate task of laying off 62,000 employees over Covid. It was painful, but it was costing us 300 million a month. And so we just didn't have the liquidity and the ability to sustain. Now the good news is by and large, we had about half of them back in nine or 10 weeks. But it did present an opportunity because we weren't as nimble at this scale. It's hard to be this nibble at this scale. We did take the organizational opportunity to kind of rethink about the structure, think about the organization, what we were focused on, what we should be focused on. I think one thing that Las Vegas and all of these properties at scale are really good at is corralling around an event, championing it, getting something accomplished in terms of you know, like we've spent $21 million on plexiglass. It was amazing how quickly we all got into that business of making the right environment. And on and all the testing and all of the things that go into something with those kinds of logistics. These companies are just wired to do. We do the convention – the thing about convention business every day, it's that same kind of psyche about task and orientation and go. BILLINGS: Difficult things at scale. HORNBUCKLE: Yeah. And so we are good at that generally. So it enabled us to get quickly into this. So we went up and down, in a matter of three months we had closed everything and we opened it all again. We were in massive Covid protocols in the context of what we're doing, how we're letting customers interact with us. Digitalization, you know, something we planned for 10 years to get silly check in in on a mobile device did it in three months because we had to do it. You know and to this day 25% of our people using it now. It's a big deal. It's a big change. GOLDSTEIN: Necessity. HORNBUCKLE: Yeah, necessity. The reservations 30% of our people are now making reservations online. Because guess what? They checked in digitally and so there's been a lot of benefits and for us, particularly as an organization, we learned a lot, we did a lot. It was little bit more in command and control as a culture I want to set going forward, but we had to just get it done. And so there's a lot of taking some that have been meaningful, but painful. BREWER: The other interesting thing is that we seem to be at this inflection point in the nation, the political divide, the issues over guns and abortion and racial equality. And I'm just wondering where you stand on taking a stand. Your predecessor Bill, felt very comfortable standing up and talking about his political position. Do you think that there's a place for that as the head of a publicly traded company or what's the risk? HORNBUCKLE: Take any issue. Take abortion. 30% of the people are adamantly, you know, thinking that what just happened is appropriate. I don't want to lose 30% of our customers. I think we have an obligation to our stakeholders to be very responsible, be moderate, be measured. Having said that, we employ 62,000 employees across the system who have values who care. That issue alone has impacted some of our employees in Mississippi and Ohio and other states that we operate, so we have to pay attention. Making political statements as the CEO however, I don't know that it's in everyone's best interest. Putting policies in play, doing things that are appropriate for staff and ultimately the communities that I care about not making statements and eventually – Black Lives Matter I put a statement out because I thought it was important to. It got a lot of social media. Good news and not so good news. It's not a place I think that we want to find this company. BILLINGS: I agree with Bill. I think the – I lump it, I put it together with ESG. You know, consumers, particularly younger consumers want companies to stand for something and they want them to do it authentically. And I think that authenticity is what’s really important. So figuring out what you can do for your employees, for your communities, and to reduce your impact on the planet that you can really do. That's what it's about. And it's not about marketing. It's not performative. It's doing. And so, I agree, I don't think it's about wading into politics. I think it's about having an impact. GOLDSTEIN: I will say that I can’t add a thing to that. Well said. I think it's about policies, but I think I'm not sure for public companies, CEOs, that's a role I would take on my political views shouldn't matter. They're not important, in my opinion. Important to me, my family but not to my shareholders. And I think it's better we address – I think Bill and Craig’s comments about your employees and how you think about them. They're our constituents and we want to make sure we're responsive to them and our customers. But my political views I think are not relevant in a public forum. BREWER: Is there a canary in the coal mine about recession coming? Jim Moran has mentioned to me that – he said, “I totally missed the onslaught of the great financial recession of 2007, 2008, 2009 because in our last quarter – fourth quarter of 2007, we had our best quarter ever lifted by the luxury properties like Bellagio.” HORNBUCKLE: Those were good days. GOLDSTEIN: Good days. We remember those days. BREWER: He said, “I should have been looking at Circus Circus.” We've already heard some of your competitors talk about that lower demographic. HORNBUCKLE: We have a pretty obviously broad view on this because we have properties all over the country and obviously we have every marketplace here in Las Vegas as well. We have not seen it, particularly here in Las Vegas. Now, what's happened over the last 18 months has literally been historic and so records. But if you look about how we thought we'd be performing against how we are performing, we're exactly where we thought we would be. We're not naive to think that consistent gas prices, consistent increase in inflation is not going to impact our business. It hasn't yet. BILLINGS: I would agree with Bill. We're in a similar situation. Now how much of that is our customer type? I don't know. But I do think that the industry particularly here in Las Vegas is better prepared strangely, because of because of Covid, frankly, to know the levers that we need to pull to make it through whatever does happen. BREWER: I wonder what keeps you up at night. I'm curious about it. Generally, when you look at your whole company, if there's a thing that you see as a niggling challenge that you haven't quite figured out. BILLINGS: I really have two things to do in my job. Take the legacy. We talked about it earlier. Take the legacy that I've been handed, and make sure that I both maintain it and evolve it and grow the business. And grow the business for us often means development. So when I get up in the middle of the night, it's thinking about those two things, which aren’t, you know, existential threats to our business, rather they are the opportunities for our business. So there is no one particular point that I would think about. BREWER: So you sleep like a baby? BILLINGS: Definitely not. Definitely not. But it's not an existential threat that keeps me up at night. HORNBUCKLE: You know, if you had asked me that question two years ago – BILLINGS: It would be a different answer. HORNBUCKLE: Completely different. We're just in such a different place as a company. Our balance sheet, just how we are capitalized, what we're doing, how we're thinking about going forward. We've just done such an amazing reversal in so many respects, got fortunate in timing, and made some smart moves I think ultimately – we’re sitting on $4.5B in cash. And so we're all operators. We’ve been doing this a long time. The day to day is not the concern. It is the things that are outside our control. So while I don't have the same pressure they do in Macao,  we still have Macao pressure and that's not in our control. Water at Lake Mead, we're going to do everything we can. That's a longer term, you know, just the general environment, what's going to happen over time. You wake up at night and think not only about yourself and the company but your employees and the community. Those are real issues. The continue of social divide of politics and what it's doing to our employees and customers. Not a great place. We're just not in a great place in America in that context. GOLDSTEIN: I do sleep like a baby. I’m up every two hours. At our company, we went through the most dramatic couple of years. It's hard even to even fathom. We lost Sheldon. We lost our business in Macao temporarily. We went to closure in Singapore. And of course, we sold Las Vegas. But looking back on it, we’re in a great place liquidity wise. We got lots of money in the bank. We're very solid. The business climate in Singapore is coming back beautifully. The whole city state. Our license renewals recently we're on the right path. Macao which was a big impediment to the future and that's been resolved looks like to me. And so the one thing we can't do much about is waiting for Covid resolution in China which is inevitable. And when that happens, I think our company returns to a very nice place and hopefully it's sooner than later. But other than that, I don't think about – the bigger issues Bill referenced, I mean, it's painful to watch this country. I'm the oldest guy in the room probably here and I think it's for me it's hurtful and painful to watch this country go into such huge divide on so many issues and it's sad and I hope we can find a way out. We'll get through it. We'll figure it out. But that doesn't keep me up at night because I'm not – I can't solve it. But it sure does make me feel sad. BREWER: The thing about gaming is that figuring it out has been sort of the MO of the industry, of the town, of the leaders. Do you think that there's a takeaway for other industries and other leaders about the adaptability and the flexibility in the innovation of gaming? GOLDSTEIN: Yeah, there's a definite lesson in terms of the same lessons any manager – they are professional managers. How do you apply into evolving environments that change all the time? It's never easy. How do you manage your employee base? How do you manage your customer base? How do you think and stay nimble and stay focused? Life is full of challenges. The only constant is change, right? And these things change every day. Managing these behemoths, these monster buildings, is a really good lesson for any manager and I think it does translate beyond our industry. HORNBUCKLE: And one of the reasons it could and should is, and you know, we are the melting pot of America. We get 40 million visitors, we get everybody that comes here. We know a lot about customer behavior today. And I think we're adept at reacting to that. And I think there's a lot to be learned from that for others. So they're very complex businesses. They're interesting as hell. We've been doing this for a long time because we love it. Hasn't killed us yet, but it’s trying. GOLDSTEIN: It will, Bill. HORNBUCKLE: No one is getting out alive. BILLINGS: I can’t speak for gaming as a whole, obviously, but you know, part of what we do is we really steadfastly do not over corporatize. We have a very small corporate staff. We push a lot of decisions down to the asset, to the property level, to the individual line level. And now, to be fair, we're blessed with quite a small geographic portfolio. Okay, we essentially have four assets. So I think that's easier for us to do than some others in the industry. But you talk about evolution and you talk about change. You have to cascade that down throughout the entire business. And the more your people understand and own their respective pieces of the business, the easier that is to do. And the more you centralize it, the harder that is to do. So it's been in ways heartening and inspiring to go through Covid and to watch what our teams were able to do and what they were able to accomplish and it really was them. HORNBUCKLE: We have a mantra I've been on for about 18 months. A culture of Yes. Given scale, things happen and it's easy to wake up one day and have policies in play and why aren’t we – why are we saying no to a customer. Well, because 15 years ago this happened. And you just wake up one day, you just have this monstrosity of a bureaucratic thing. Culture of Yes down to the line level employees, please say yes to a customer. We will protect you, we will give you the security you think you need, we will honor that decision, and ultimately we'll make it right for both the customer and you. Big deal in these scale places because if you don't, it just, you know, you got 4,000 rooms, you got 8,000 customers, you got 25,000 people in the building every day. Bumping into people all the time and giving and empowering employees to make those decisions is essential. BILLINGS: No doubt. HORNBUCKLE: Essential. BILLINGS: No doubt. BREWER: I just want to thank you again, like you all have very busy schedules and things to do. Thank you for making time for us, Craig, Bill, Rob. GOLDSTEIN: Thank you. HORNBUCKLE: Pleasure. BILLINGS: Thank you. Appreciate it. About CNBC: CNBC is the recognized world leader in business news, providing real-time financial market coverage, business content and general news consumed by more than 544 million people per month across all platforms. The network's 15 live hours a day of news programming in North America (weekdays from 5:00 a.m. - 8:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries. Updated on Jul 13, 2022, 4:59 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJul 13th, 2022

New York released a PSA on surviving a nuclear strike, which Mayor Eric Adams said was a "very proactive step" in response to the war in Ukraine

"So there's been a nuclear attack," a person in the step-by-step video says. "Don't ask me how or why, just know that the big one has hit." A leftover fallout shelter sign is seen on a building in New York.Spencer Platt/Getty Images New York City released a video teaching residents how to survive a nuclear attack. The video provides step-by-step instructions on what to do after a nuclear warhead explodes. Mayor Eric Adams said it was a "proactive step" in light of the war in Ukraine. New York City residents now have a YouTube video teaching them how to deal with a nuclear strike, which Mayor Eric Adams described as a "proactive step" in light of the war in Ukraine.The city's Department of Emergency Management launched the public service announcement video on Monday detailing step-by-step instructions on how to survive such an attack.The video sparked some confusion on social media, especially concerning the timing of its release. However, Adams defended the PSA during a press conference on Tuesday, stating that he did not feel the video was "alarmist" and that he is a "big believer in better safe than sorry."He said the city's Office of Emergency Management had taken a "very proactive step" in producing the video "right after the attacks the Ukraine," adding that it was meant to convey the message: "Let's be prepared."Adams also said that New York City is still a top target for terrorists. "There are no imminent threats to the city that we know about, but we always have to be prepared as New Yorkers," he continued. The instructional video outlines three steps that New Yorkers can follow to increase their chances of surviving a nuclear strike."So there's been a nuclear attack," a person in the video says. "Don't ask me how or why, just know that the big one has hit."In the event of a nuclear strike, the Emergency Management Department advised New Yorkers to:Get inside a building fast and don't stay in a car.Stay inside, shut all doors and windows, and head into the basement if you can. Clean yourself immediately and remove all outer clothing.Stay tuned to the media for updates. New Yorkers are also encouraged to sign up for wireless emergency alerts sent by officials."While the likelihood of a nuclear weapon incident occurring in/near NYC is very low, it is important New Yorkers know the steps to stay safe," the New York City government website said.The guidelines are the same as those provided by Ready.Gov, a national public service campaign by the US government that aims to teach people how to respond to disasters and attacks.However, Ready.Gov noted that cell service, text messaging, TV, and internet services could be disrupted by a nuclear blast and pointed to battery or hand-crank radios as devices one could use instead.The New York City Office of Emergency Management did not immediately respond to a request for comment from Insider.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 13th, 2022

Why All The Attacks On Dissent?

Why All The Attacks On Dissent? Authored by Marie Hawthorne via The Organic Prepper blog, Attacks on dissent have ramped up. The Organic Prepper was just downgraded, as Daisy wrote about recently. We’re not alone.   It’s not just alternative media sites like ZeroHedge or Mercola. Mainstream media turns on their own people the second they ask the wrong questions. For example, in 2020 and 2021, British nursing educator and YouTuber Dr. John Campbell spouted the official Covid narrative, assuring everyone that the shots were safe and effective. He was considered a trusted purveyor of health information. However, in 2021, he discussed data surrounding ivermectin usage and thought it showed promise. His Wikipedia page was immediately changed to label him a purveyor of misinformation. Downgrading websites and professional humiliation have not been the only methods used to crush dissent.  Tucker Carlson just did a segment outlining the FBI’s attacks on Joe Biden’s political opponents. Watch for yourself. Someone filmed Trump advisor John Eastman getting his phone confiscated by the FBI. He repeatedly asks them for a warrant, which they don’t give him until after taking his phone. He’s never been charged with anything. This is a clear violation of the Fourth Amendment.  But our current crop of politicians seems to find the Constitution outdated. Right now, First Amendment rights are being violated on a massive scale. It’s getting more and more difficult to communicate online unless you adhere to specific narratives. As far as this site is concerned, most of our facts come from blue-checked sources or personal experiences. We just ask people to think about what’s being presented and how it may affect their day-to-day lives.   There should be nothing wrong with asking people to do their own research and think for themselves, but unfortunately, that’s been labeled “malinformation.” The Election Infrastructure Government Coordinating Council says, “Malinformation is based on fact, but used out of context to mislead, harm, or manipulate.”  Well, who decides the official context? The entire definition is predicated on the notion that one context exists. Anything outside of that lumps you in with malicious actors. So, what’s behind the current push to bury alternative news?   Maybe it’s because things are finally crashing. I think mainstream media wants us to stay mad at each other over abortion rights, gay rights, or whatever current thing will distract us. They don’t want us to pay attention to the real issues. Notice how NewsGuard tried to get Daisy to declare a side?  They want us to divide ourselves into camps. They do not want us sitting back, watching, thinking, and supporting each other in our various prepping endeavors.   Sure, there are plenty of people that still laugh at prepping. But time keeps proving the conspiracy theorists right. In November 2020, the OP published an article about so-called conspiracy theories that had come true that year. A lot of people are seeing that the narrative pressed by our government administration and major news outlets simply doesn’t match up with what they encounter in their day-to-day lives. The public is gradually becoming more open to alternative explanations, but the people currently holding power cling to it more and more tightly. They know they can’t win via reasoned debate, so they kick anyone they dislike off social media platforms or make it impossible for small, independent sites to make enough money to stay operational.    The public is becoming more open to alternative news because disaster signals are all around us. The OP has run multiple articles about food and energy crises, but honestly, they just get worse every minute. It’s not just American policies either. Politicians throughout the Western world, on the one hand, decry inflation and “price gouging,” but on the other, implement policies that throw fuel on the fire.   For example, on June 10, the Dutch government issued a plan to curb nitrogen emissions by between 12 and 70 percent. The government freely admitted that “There is not a future for all [Dutch] farmers within [this] approach.” This defies reason. The Netherlands is the world’s fifth-largest food exporter, and they’re forcing farmers out of business for the sake of “climate change” as people in Third World countries starve. Meanwhile, in the U.S., our own government continues to make life harder and harder for farmers to do business. The Securities and Exchange Commission wants companies to disclose their carbon emissions throughout their entire supply chain.  The kind of legal and technical expertise that this kind of reporting requires will push small, independent companies, including farms, out of business. The SEC is still finalizing plans regarding the implementation of its reporting requirements. Issues such as this greatly influence what food is available and how much we pay for it. But are we hearing about this from politicians? No, they’re too busy blaming Russia, and the above-referenced article is not front-page news.   The energy situation warrants our attention as well. President Biden has been blaming everyone from Russians to gas station owners for high prices, but what has he done this week?   On July 1, the Department of the Interior invited comments for its Proposed Five-Year Program for Offshore Oil and Gas Leasing. Without getting overly technical, when we were energy independent during the Trump administration, the Draft Proposed Program proposed 47 lease sales for future oil and gas projects. The current administration is asking people to weigh in on whether we should have eleven or zero. What this means is that we will definitely be producing less energy. The only question is, how much less.   Our administration does not try to hide its agenda. Secretary Deb Haaland said, “From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy. Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing. The time for the public to weigh in on our future is now.” Well, with Biden’s historically low approval ratings, I’m pretty sure the public is weighing in.  The administration is just not listening. And Europe keeps going from bad to worse. Protests over fuel prices have erupted. Spanish farmers are blocking highways, and Dutch fishermen are blocking ports. Dutch farmers have also been spraying their government buildings with manure to protest the climate regulations. The S is literally HTF in the Netherlands right now. Norwegian oil workers are striking because their pay has not increased at a rate commensurate with inflation. This will hit the rest of Europe particularly hard because, after Russia, Norway is Europe’s biggest energy provider.   My 25-year-old idealistic self might have thought people are being greedy and that we should all band together for the sake of Ukraine, climate change, or whatever. But lower- and middle-income people worldwide are being asked to make huge sacrifices at the same time that the wealth of billionaires has exploded like never before. By 2020, the wealth of the world’s ten richest men increased from $700 billion to $1.5 trillion. Meanwhile, the rest of us are supposed to eat less meat and take fewer showers. Oh, and hundreds of millions of people in the Global South are at risk of starvation.   (It’s probably a good time to check out our free QUICKSTART Guide to how to starve the beast.) The stable world in which most of us grew up is falling apart, and we have a right to know why.  We have a right to know what policies have led to such dramatic wealth transfers; why we were energy independent  only three years ago and now are begging the Saudis for more oil; why young parents can’t find formula; why much of the U.S. no longer feels like a First World nation. And we have the right to question the mainstream narrative. Whether you’re a trucker coping with $6/gal diesel or a medical technician short on laboratory supplies, problems surround us all. And yet we’re just being told to point fingers at Russia and corporate greed. The ability to discuss problems publicly facilitates understanding and, hopefully, solutions.  The lockdowns during Covid had some unexpected effects. Look at remote schooling. On the one hand, it was miserable, particularly for lower-income children. However, it gave parents a chance to see what children are actually being taught in schools, which has led to parental pushback against divisive education programs  Parents became more informed and took action. In my area, the already-stark divisions between urban and rural became more so. Driving downtown in the city for much of 2020, it was a ghost town; in the town where I get my animals processed, the only change was that I saw more children out and about. I saw kids riding shotgun as their parents hauled cattle trailers because the schools were closed and, well, you can’t process cattle remotely.   Many people holed up dutifully as we were all told to quarantine. For those of us that couldn’t, for one reason or another, we started talking a lot more.   (Want uninterrupted access to The Organic Prepper? Check out our paid-subscription newsletter.) Klaus Schwab saw Covid as an opportunity to “reimagine” society. You know what? I see it as a chance to reimagine things too. I see it as a chance for people in all parts of the economy to openly discuss what’s going on. If enough people from enough different walks of life can listen to each other, we may find some common solutions. The real division is not so much red vs. blue. It is people that just want to work, raise their kids, and leave everyone else alone vs. autocrats and those willing to game the system.   Authoritarian control and regulatory overreach are behind most of our current problems. We may get most emotional over Roe vs. Wade, or trans rights, or whatever, but the reasons why so many people cannot pay bills and are using their credit cards to buy gas are not “culture war”-type issues.   Our problems right now stem from decades of letting local control slip through our fingers. At this stage of the game, I’m not sure I see a way to fix our problems without a great deal of economic stress and uncertainty.  But, as preppers, we hope for the best and plan for the worst, and right now, increasing numbers of people want to plan for the worst. Sites like the OP are here for people that want to start planning. Americans have a long history of making do. Whether you want to become more self-sufficient by producing your own food, energy or even homeschooling your kids, we all have options to exercise a little more control over our own lives.   The Founding Fathers never envisioned the U.S. as a globe-spanning empire where everyone lives in a cushy suburb and has access to every possible convenience. The U.S. was simply supposed to be a country where, if you worked hard and were honest, you could keep the fruits of your labor. I would love it if, after the current upheavals, we could go back to that, but we have to make it through what our president has called this “incredible transition” first.  There are still a lot of resourceful, hardworking, independent people out there, people who can survive a lot. But we will all function better if we can communicate with each other, both for practical advice and emotional support. Collectively, we have a lot to share if we can avoid being divided and distracted.    Tyler Durden Tue, 07/12/2022 - 23:45.....»»

Category: personnelSource: nytJul 13th, 2022

Transcript: Spencer Jakab

     The transcript from this week’s, MiB: Spencer Jakab on Reddit, Gamestop & Meme Stocks, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ,… Read More The post Transcript: Spencer Jakab appeared first on The Big Picture.      The transcript from this week’s, MiB: Spencer Jakab on Reddit, Gamestop & Meme Stocks, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My special guest this week is Spencer Jakab. He is an editor at The Wall Street Journal’s Heard on the Street column. Before that, he wrote the Ahead of the Tape column and was the Lex Column author for the Financial Times. He just wrote a new book “The Revolution That Wasn’t: GameStop, Reddit and the Fleecing of Small Investors.” Spencer Jacob, welcome to Bloomberg. SPENCER JAKAB, WRITER AND EDITOR, WALL STREET JOURNAL: Thank you. RITHOLTZ: So first of all, I really enjoyed the book. I read it on the beach this summer and a couple of weekends, really reads like a fascinating novel. If it wasn’t a work of nonfiction, it could never have been made into a work of fiction because it just wouldn’t be believable, would it? JAKAB: It’s crazy, right? It lends itself to a book and I knew that right away. When the story began to unfold, I sent an email. I had a three-quarters written book proposal about something else, sitting at home during the pandemic, and wrote an email to the Acquisitions editor at Penguin Random House, a person I don’t even know, didn’t know then. And when I saw this story begin to unfold, the first article had not been written about it. One of my sons brought to my attention — yeah? RITHOLTZ: Yeah. Let me stop you and just say the book came about, and please pardon my language, because your sons’ self-described themselves as degenerates, apes, and retards. Can you explain why a group of people would self-describe themselves that way? JAKAB: So I have three sons, and two of them are very online. They’re all online, but two of them are very online. They are on Reddit all the time, and they were on this forum on Reddit called WallStreetBets, which was at the epicenter of this story. And the people on this forum, it’s an investing forum but not really an investing forum. There’s a different investing forum on Reddit called r/Investing. This is r/WallStreetBets, which is an entirely different place. RITHOLTZ: Speculative, lots of axes to grind, lots of social issues come up. It’s not a straight-up investing group. JAKAB: No. It’s like Jackass for finance. What it is, it’s like, you know, you do crazy stuff on there, and you show off crazy stuff. And you — I don’t know if a lot of the crazy stuff actually ever happens because you can’t tell. People are using pseudonyms, but they were all over that. And my oldest boy, he’s now 23. He was a college senior when this happened, came over and he said, “Dad, are you going to write something about GameStop?” And so GameStop, they’re all into video games. I’ve driven them there lots of times. They were going there less and less over time, which is a problem with GameStop as a business. RITHOLTZ: Right. It’s, you know — it’s in a mall. It’s old school. It’s the blockbuster of video games. JAKAB: Totally. Totally. That’s the problem. That’s why it had been losing money for years. That’s why — that’s how it found itself at the center of the story. The book is not really about GameStop and people always ask me about “Don’t you think this? Don’t you think that about GameStop?” Like, I can talk to you about GameStop, but that’s not really the interesting thing here. RITHOLTZ: Right, right. JAKAB: The interesting thing is this unprecedented thing that made it the most traded security in the world for a while, the most searched term in the world for a while, you know, and from just total obscurity and I said, “No.” Why? You know, a friend of mine, this kid who I’ve known since he was, you know, as tall as my knee, had bought it. And I took a look and he’s doubled his money in the last two days, maybe he should sell. They’re talking about it on WallStreetBets. And I’ve seen this dozens of times before, you know, it’s a kind of a flash in the pan and — RITHOLTZ: Right. JAKAB: — I really wouldn’t hang on too long. And what kind of got my attention was he said, “No, he’s not going to sell ever. No, he can’t sell.” So what do you mean he can’t sell? And so, you know, I started reading the board, and I was like, “Oh, my God, they’re executing a corner on this stock.” So they all sort of agreed online to buy as much as they could, and not sell, and then buy options too, which forces further buying by options dealer. So it was this trap. It’s this thing that you can’t really do, as you know, Barry, like you can’t — RITHOLTZ: Not legally. JAKAB: Not legally. Right. RITHOLTZ: Like, you and I can’t get together and do this. But a bunch of anonymous teenagers and others, it wasn’t just teenagers, could talk about it in this venue without real fear of reprisal because they’re a bunch of little guys engaging in some speculative wishful thinking. JAKAB: That’s right. And if you take it at that point, there were about 1.9 million people on the forum. By the end of the next month, there were 11 million people. So they quadrupled in four days. The number of people in this forum is big, people got so excited by it. And so those people, individually, may not have had a lot of money, but they did two things. First of all, there are a lot of them. JAKAB: And they all rushed in, in the same way, into the same stocks, especially GameStop. And also, people were telling them, “Hey, if you want to get real bang for your buck, don’t even buy the stock, by way out of the money, call options on the stock RITHOLTZ: Right. JAKAB: And then the options dealers will have to basically, as it goes up, they’ll have to buy and they’ll buy a lot more than the money that you put down. RITHOLTZ: In professional terms, that’s a gamma squeeze. JAKAB: Yes, it’s a gamma squeeze. And most of these kids — well, very few of these kids know what a gamma squeeze was, but it was all explained there. I was reading all about it on the board. I don’t think they were breaking the law because they’re talking about it openly. RITHOLTZ: Right. Right. This was no dark conspiracy. So let’s talk a little bit about WallStreetBets. When it first started to erupt, I think the knee-jerk response, and I’m as guilty as anybody, was how is this any different than the 1990s in Yahoo message boards and Raging Bull? But there was a slightly different factor. What made this so different than what we saw 30 years ago? JAKAB: So you’ve heard it, it’s a cliche by now, but it is true, more or less, that “The four most dangerous words in investing are: this time it’s different,” right? And that’s something, I’m a real student of financial history. I was really — RITHOLTZ: John Templeton very famously said that. JAKAB: Totally. And I went into this, with that echoing in my head. I go into everything with that echoing in my head. Whenever there’s a crash, or mania or panic, that people — human psychology is basically unchanged since Paleolithic times. And so the way that we react to something financially is never good, but it’s always very similar. So history rhymes, it doesn’t repeat, but it rhymes. That’s the reason. It’s the way that our brains are wired. But this was different. And — RITHOLTZ: And tell us — tell us what was different about it. JAKAB: The difference is that private companies understand psychology too. They have psychologists who work for them. They have social psychologists who work for them. And the same people who you go into a Vegas casino. And there are no clocks on the wall, there are no windows, people are bringing you drinks. The same people who designed sports gambling apps and things like that, designed social media and designed brokerage apps that that these young people were using to access this. And they induced all kinds of — they just put these speculative tendencies on steroids basically, is what they did. Social media and the investing apps together on the same device, on your smartphone, being used by the same people together — RITHOLTZ: Along with — along with WallStreetBets and Reddit. JAKAB: Yeah. RITHOLTZ: So the difference — this time was different because — and to the fact that everybody is stuck at home. Most of us got stimulus checks, so people have cash in their pocket. And there’s no gambling, there’s no sports, their usual entertainment is shut down. This really seems — and you described it in the book as a perfect storm that just teed up to send this — to use their power lens to the moon. JAKAB: Yeah. I mean, it’s so interesting because several things had to happen really all at once, for this to happen. And so I traced that and explained the social forces, because I think that’s — I mean, that’s how you tell the whole story, and it’s very interesting, but it’s also how you understand what it means going forward. And I want them, you know — and I hope that there are lessons in the book for people who invest, people who invest their own money, people on Wall Street to take away from this, to understand how it happened. Not that it’s going to happen exactly this way again because, as I said, it was a perfect storm. But you have to go back to 2018 when you had sports gambling legalized outside of Vegas, in most of the U.S. RITHOLTZ: Right. JAKAB: And so you had all these young, mainly men, playing daily fantasy sports. They had the apps already, the FanDuel, DraftKings and what have you on their phones. And all of a sudden, they were actually gambling. There’s this legal distinction between daily fantasy sports and gambling-gambling. So it’s the only type of sports that negatively correlates with age is sports gambling. Then — RITHOLTZ: Oh, really? JAKAB: Totally. Everything else is — the older you are, the more likely you are to play slots and things like that, but not this. Then you had, in late 2019, so you had a five-year period when half of the new brokerage accounts opened in the U.S. were opened by Robinhood, which is a tiny broker, even though at this time. RITHOLTZ: Give that data point again, half of all new brokerage accounts were Robinhood/ JAKAB: Yeah. Not in dollar value because they were tiny, so the median value of those accounts was $241, which is peanuts. RITHOLTZ: Right. JAKAB: But the number of accounts, that’s something and I would love to go into what made Robinhood possible, okay, because there’s some changes there that you need to understand but — RITHOLTZ: So let’s explore that right now. Why was Robinhood — and PS, you know, I looked at Robinhood in 2014 in a seed round and I weighed. You want to give free trading to millennials? This is the single dumbest investing idea I’ve ever heard of. And I passed on it. What made that possible, Robinhood possible, where 20 years ago, you couldn’t have had the sort of app on your phone like Robinhood? JAKAB: Well, our mutual friend Howard Lindzon was one of the early investors in Robinhood. RITHOLTZ: He’s the one who pitched me on it. JAKAB: He was? Okay. And then so he — RITHOLTZ: Literally, Howard, that’s the dumbest, blank idea I’ve ever weighed. The trades are free, and you’re giving it to the least wealthy people in the world? How are they ever going to make money? JAKAB: It was Howard in video. He was kind of a dummy about it too because he was smart enough to invest. RITHOLTZ: Yeah. JAKAB: But then he was dumb enough to say, “Guys, this is a great app. You should charge like $1 or $2 for it, like people will pay that,” which was totally wrong because the fact that — and so — RITHOLTZ: You still had to link it to a bank account. JAKAB: Right. RITHOLTZ: But you could download it for free. And once you went through the process of opening the account, that’s when you found out they need this info, they need your phone number, they need that. JAKAB: Right. RITHOLTZ: They need your bank account. And before you know it, you’ve opened up your financial life completely to Robinhood. JAKAB: And your first brokerage account and it costs 75 bucks to get out, to sort of — you know, to move your account to somewhere else. RITHOLTZ: Well, you don’t — you don’t — JAKAB: So if you have $241, you know — yeah. RITHOLTZ: You liquidate it and move on. JAKAB: Exactly. Yeah, that’s — that would be the smarter thing to do, not that their customers always did the smarter thing, but we’ll get into that later, but yeah. So they — I mean, in late 2019, every other broker said, “Well, screw this. You know, we’re — if you can’t, you know, can’t beat them, then join them.” And for a Schwab or a Fidelity that has much wealthier customers, they sell all kinds of services that Robinhood doesn’t, they’re like, “Wow, we’re going to lose some money on this, but we have to match them.” RITHOLTZ: Right. JAKAB: And it shows you how dumb they were because they all were wringing their hands about cutting their commissions to zero. It was no longer the bulk of the money they made anyway. RITHOLTZ: Right. JAKAB: But it was still a pretty nice chunk of change for them. And they thought that it would cost them money, and it made them money because you had an explosion in trading activity as a result of everyone going to zero and so that — there’s a psychological concept that’s not appreciated. I mean, you have — you learn all about elasticity of demand, and you learned that when things get cheaper, people will desire more of it, but it depends what kind of thing it is. RITHOLTZ: And this is only up to a point. JAKAB: Only up to a point. But there’s a special kind of product where people — once you go from costing something, it doesn’t matter how little to nothing, but people will go crazy, they will explode, and that’s specifically fun thing. And so you don’t think about buying a stock as a fun thing, but Robinhood made it fun. RITHOLTZ: It’s the same dopamine hit as gambling or getting on a roller coaster, or just a little smidgen of heroin for the weekend. JAKAB: Totally. And it’s the same thing as think about when you’re a few years old, I mean, so you’ll remember like if you had to call somebody long distance, I mean, you know, my family, my parents are immigrants and we had, you know, relatives far away. And I remember like, you know, the very rare occasion they would spring for a phone call, like everyone had to be lined up next to the phone and you got your one minute on the phone and then hand the phone to the next person. And then it was like, oh, they’re tearing their hair about how much it would cost. Now, calling anyone in the world anywhere is free, and so people do it all the time. You know, they do it way, way more than if it just cost a tiny amount of money because there’s no cost to it. There’s no incremental cost to it. RITHOLTZ: Right. And as a note with Schwab, when they — and they were the first major broker that seemed to have introduced free trading, and then all the other dominoes fell after them. When you looked at their revenue the next quarter, I think something like 59% of their pre-free revenue came from just float on cash. JAKAB: Right. RITHOLTZ: And trading volume was really, really, you know, that high single digits, low double digits. And then eventually payment for order flow more than made that up so — and a lot of assets flowed into them. So all told, this was a win-win, at least, for established Wall Street firms. JAKAB: Yeah. And they were like, “Why did we wait so long to do this? This is great.” They were all, you know, just gushing about how smart they were to do this, even though they had held off on doing it for a while. That was late 2019. And then what happened in the early 2020 is you had the pandemic, and the pandemic was just the perfect thing to kick off the speculative excess. Of course, you know, you’d had free money for many years, basically. You know, you’d have zero — RITHOLTZ: You would, low cost credit, but literal free money showing up in the mail, in the form of a check or direct deposit that kicked in the second quarter of 2020. JAKAB: Yeah. If you were 23 years old and you had been, let’s say, working, maybe living with friends. All of a sudden, you’re in mom and dad’s basement. You get this check for 1,200 bucks. You might be getting extended unemployment benefits. You’re not spending money going out every night. You know, you’re at the age where you spend money as soon as you make it. All of a sudden, you weren’t. You’re bored. You’re sitting there looking at your phone for 12 hours a day. And you’re looking at social media. All of a sudden, all these new social media people are popping up, talking about stocks, the stock market, you know, this whole rise of influencers. And so you go in — you know, your buddy tells you to open up a Robinhood account. And you opened up a Robinhood account because he already has a Robinhood account. And he’ll get — he got a free share of stock when he opened it. And he’ll get another free share of stock. Mystery, it’s like a sweepstakes because it could be a $2 stock, but it could possibly be a $50 stock, right? RITHOLTZ: Right. JAKAB: You don’t know. It’s like a, you know — I mean, it’s like — RITHOLTZ: All told, that’s a cheap cost of acquisition for a brokerage firm, right? JAKAB: All told, the average payback period was five months for that investment. RITHOLTZ: That’s unbelievable. JAKAB: So they didn’t really need to — they did have advertisements. Their advertisers were really kind of to — kind of, you know, make themselves look good, basically. It wasn’t to get new customers. Their ads were all touchy feely, “You were born an investor. I never thought I could do this.” And the people they showed their ads are not the typical lucrative customers they had either. They were, you know, mainly female, a few older people. It was young males primarily. And the thing is most of their customers, they don’t make money on, but there’s a subset on which they make a lot of money. And so those are the people they’re trying to get. It was young, risk-seeking, you know, kind of maybe not two wise men. And as a father of three young men, I can — I know what I’m talking about. And you know, and so that’s when you had the explosion during the pandemic. And you had all this volatility which was just addictive. It was like crack cocaine, you know, you couldn’t stop. And then in the year from the pandemic bear market bottom to a year after, 96% of American stocks rose, which was crazy. RITHOLTZ: It’s huge. JAKAB: It’s unprecedented. RITHOLTZ: It’s a huge, huge number. (COMMERCIAL BREAK) RITHOLTZ: So let’s talk a little bit about the revolution that was and by using GameStop as an example, as you did so well in the book, and it has to begin with a guy whose name we now know as Keith Gill. Since this is a family station, I can only use an acronym, he went by DFV on Reddit. And on YouTube, he was Roaring Kitty. And he basically takes all of his money, some 50,000-something dollars, buys LEAPS like a year or two, off in the future, way out in the money. And this just looks like wild. So he buys calls, betting the stock will go up on GameStop, which is a couple of bucks, a buck or two, or three at that time. And he posts it without a whole lot of commentary on WallStreetBets on Reddit, just a picture of his brokerage account with the options there in his portfolio, apparently nothing else, and the phrase, “I like the stock.” JAKAB: Yeah, YOLO, you only live once. So he is a really, really fascinating character, an unusual character. And the one of the interesting things is — let me tell you that — I mean, of course, this whole history is there to be seen. But for 90% of this story, he’s there in the background, doing these videos, four-hour, five-hour long, you know, videos, talking about the stock and talking about investing, making these posts, responding to people who mainly made fun of him on his message board, like a lot — he took a lot of heat. And you know, he was — he was unusual in a lot of ways on this forum WallStreetBets. One thing is he wrote in complete sentences. The other is like he was — I mean, you might not think it’s — RITHOLTZ: He didn’t advocate people go out and buy it. He just said, “I like the stock.” JAKAB: Yeah. Right. RITHOLTZ: Basically, as much as — as much influencing as he did was “Here’s a picture of my account. I’m going to live and die on it. You guys go do you want.” JAKAB: You want a textbook example of not — how not to influence people online. RITHOLTZ: Right. JAKAB: And that’s it. Because he was cerebral, he was polite. You know, people would kind of make fun of him. He said, “Well, that’s not the way I think about it because, you know, behavioral finance dictates that blah, blah, blah. And as I follow the teachings of Aswath Damodaran,” whatever, like, you know, stuff like that. RITHOLTZ: Yeah. No one knows NYU. JAKAB: Yeah, exactly. The valuation guru at NYU. None of these kids know who that was, you know, right? RITHOLTZ: Right. JAKAB: I mean, and so he was just basically sort of — you know, it was like a tree falling in the woods. I mean, some people were like — you know, sometimes he would make money and then say, “Hey, you should sell.” I’m like, “No, no. no.” And then he’d lose half of it. And people who were following said, “Wow, what an idiot. You know, for the money that you lost, I could have done this and that. You could have bought a GameStop franchise.” Yeah. So he invested $53,000 of his money. He’s not a rich guy at all. He was working — he didn’t say anything about himself, by the way. And he was — and I think had he said this, he probably would have had less influence, he’s a chartered financial analyst, which was a difficult qualification to get. RITHOLTZ: CFA. Sure. One, two and three have — each have like a 50-something percent fail rate. JAKAB: Yeah. RITHOLTZ: So he’s in the industry. And then being smart and hardworking is always good. but getting a little lucky is better. And not long afterwards, along comes Michael Burry of “The Big Short” fame and basically takes a position in GameStop saying, “Hey, you know, this is a classic cigar butt. There’s some value here and there’s way too much negativity about it.” What happens from there? JAKAB: Well, I’ll tell you, this is interesting too because I won’t say the entire name, but DFV is Deep Effing Value. So value is part of his moniker. And he was upset, he said, you know, “Thanks a lot, Burry, for jacking up my cost basis,” because — RITHOLTZ: I can’t buy more. JAKAB: Well, he said, “Now it’s going to be more expensive to buy more.” Thanks for nothing. RITHOLTZ: Right. You would build the position over a couple of years. The technical term is pyramiding. You keep adding to an existing position as prices gradually rise, but they practically doubled overnight. JAKAB: Right. And he — and most people, I mean, 99.9% of people on this board would be like — RITHOLTZ: Especially option traders. JAKAB: — “I bought these options and, like, now doubled my money, you know, because the stock went up, because Michael Burry shows up, who was played by Christian Bale. That’s why most people think of Christian — RITHOLTZ: Right. JAKAB: — the picture of Christian Bale instead of Michael Burry himself. RITHOLTZ: At the drum set in “The Big Short.” JAKAB: Yeah. Totally. And so — and people are like, “What’s wrong with you? Like, you should sell.” Like, you know, he — this is like a stroke of luck. And it’s not how he viewed it at all, which is a very rare form of thinking. So he — I think like — RITHOLTZ: He was surprisingly long time for someone buying options. JAKAB: Totally. And I think — I would not be surprised if this guy shows up one day, five years, 10 years, maybe not even that long, you know, managing some kind of value fund, just sort of like a kind of a hip Warren Buffett or something, because he really — he has that way of thinking. First of all, obviously, he has analytical chops by having had a CFA — RITHOLTZ: Right. JAKAB: — maybe not Buffett-like, but he certainly knows what he’s talking about. But he just has that kind of unusual way of looking at things and inverting things that you need for success. But at the same time, as we’ll see later, he’s got that — you know, he’s cool and young. And he was 33, 34 during this episode. And the point at which he became really super influential, one of the most followed people on the planet, basically, for a couple of weeks, he wasn’t posting any kind of analysis. You know, he was like — he became the hero briefly of this whole movement. RITHOLTZ: So following Michael Burry, not much longer than that, Ryan Cohen, who is the founder of Chewy, which essentially is the most successful online pet food and goods store, essentially what Pets.com couldn’t do, Chewy became. And Ryan Cohen then says, “Hey, we think GameStop can become an online purveyor of video games. Forget the brick-and-mortar, that’s just where they were. Let’s talk about the future.” And now, the stock takes another leg up from $1 and $2and $3 to $5 and $10. Tell us what happens next. JAKAB: Yeah. So he shows up, and then things start to get interesting. It starts going up to the point that it was at the point that Deep Effing Value would have sold. You know, he said, like, “I think, you know, this” — he had made enough money, he was a millionaire. RITHOLTZ: Right. On paper. JAKAB: Just a million, just 1 million, 1 million then 2 million, a couple of million, no big deal and life-changing money for him. RITHOLTZ: Before taxes? JAKAB: Exactly. Before taxes. But then a light bulb goes off. And even before this, a light bulb kind of went off in his head, some months before, because someone had pointed out on this board, like, “Hey, this could be the greatest short squeeze of your life.” RITHOLTZ: The mother of all short squeeze. JAKAB: The mother of all short squeezes, you know, the kind of the Saddam language. RITHOLTZ: Yeah. JAKAB: And it briefly doubled, and then settled back down. But that was a foretaste and that’s the first time he mentioned like, “Hey, in addition to all the good stuff I think about GameStop, there’s this additional possibility, I’m not going to really count on it, there could be a short squeeze.” Because, you know, the thing that GameStop and the other, they call the meme stocks, you know, had in common was that they’re all kind of losers. They weren’t — RITHOLTZ: AMC, the big movie chain, which was dying on the vine during the pandemic; Hertz, which had already declared bankruptcy and was waiting for the court to just dole out the assets, which is insane. What were some of the other ones that — JAKAB: Blackberry, remember those? RITHOLTZ: That’s right. Nokia was another one that popped up. JAKAB: Yes. RITHOLTZ: Like, we used to call — JAKAB: Bed Bath & Beyond. RITHOLTZ: We used to call that dumpster diving, when you’re looking through the wreckage on Wall Street to find that cigar stub, what can I still smoke that someone else has thrown away? JAKAB: And 2020 was possibly the worst year ever for short sellers, for people who bet that stocks are going to decline, usually by borrowing the stock and selling it. So basically, they opened themselves up to unlimited losses, in theory, and limited gains. And so 2020 was a terrible year. You had all kinds of dumb stuff going up, that they were betting against, Nikola and you know, I can go on and on and on about them. RITHOLTZ: So let’s put — let’s put some flesh on those bones, and this is data from the book. In the 2020 market, we saw a 34% drop. And then beginning on March 25th, markets rallied to finish up more than 20% for the year. And during that year, short sellers lost collectively $245 billion, which is pretty astounding. But then when you look at the three months leading into January 2021, when the meme stocks really exploded, a basket of the 50 most shorted stocks that had a market cap of at least a billion dollars, that basket doubled. Those are some insane stats if you’re a short seller. JAKAB: Yeah. That is just a world of pain if you’re a short seller. And so think about it, if you’re — I mean, there are people out there, Jim Chanos and what have you, who are dedicated short sellers. There are a lot more people out there who have short selling as part of their strategy. That’s the bulk of short selling, RITHOLTZ: Right. Some people just find bad companies to bet against them. Others run what’s called like 130-30, a long/short portfolio, where you’re 130% long and then 30% short. So net, you’re 100% long, but you have a hedge if the market goes down. And you bet that, the worst stocks will fall more than the best stocks. JAKAB: Totally. And that’s usually a smart bet because usually you don’t worry about something terrible happening to you, being ruined, right? I mean, you don’t think “What’s the worst thing that’s going to happen?” Then you bet against GameStop. And let’s say somebody shows — the best buyer shows up and buys it — RITHOLTZ: Pays double. JAKAB: Pays double. Okay. You had a really bad day. RITHOLTZ: (Inaudible), right? JAKAB: Right. You got a terrible day, but that’s it. Not a terrible day, but you had a bad day. It’s probably some small part of your — RITHOLTZ: Right. JAKAB: — huge portfolio. And so what these meme stocks had in common was that they’re all losers like that. They’re all companies that have not made money in years, were headed for bet possible bankruptcy, were sort of just anachronisms like Blackberry. They’re the companies, like in 2001, were sort of hot, not in 2021, right? And so, they were in a horrible year for short selling, they felt safe betting against these companies, but they felt too safe. And that was the kind of the dry kindling that started this fire was that they felt so safe betting against some of these companies, that their short positions left them no exit if things really went wrong. But no one — as we said, at the beginning of the show, it’s not like you and I, it would be illegal for us to gang up and say, “Hey, I happen to know that XYZ hedge fund is very heavily short this thing. And we can ambush him by basically colluding, putting all our money together, and pushing it, you know, to the moon.” But because then he would be forced to buy back, then his money — he would pile his buying on top of ours to buy back the stock, and then there’ll be a stampede for the sort of — it’s like shouting fire in a crowded theater. RITHOLTZ: Right. JAKAB: Short squeezes happen all the time, but you don’t — like those ambushes, they used to happen before there was an SEC. Now, you can’t do that. RITHOLTZ: So again, more data points, you know, a normal stock, a billion dollar-plus stock might have a short interest of 10% or 20%. If that gets up to 30%, 40%, 50%, that’s called a crowded short, “Hey, too many people are betting against it.” Some of these small cap and micro-cap stocks had shortest interests of 80%, 90%, 100%. GameStop had a short interest of 140%. This was a lot of dry kindling and people lighting sparks, wasn’t it? JAKAB: It totally was. I mean, 140% of the float. And people — and of course, there are ongoing sort of, you know, complaints and conspiracy theories, like that’s illegal. You can’t — you know, it is not illegal because there’s a process called rehypothecation, where if you — you know, if you go in the market today and you buy a stock, and then it’s in your account at Schwab or whatever, Schwab might lend that stock out even if you purchase that stock from a short seller. They don’t know where it came from. So — RITHOLTZ: Right. A stock can rehypothecate that and — RITHOLTZ: Right. Right. It could be lent twice or three times. It happens. RITHOLTZ: Right. There’s no ceiling on the amount of short interest other than, hey, at 200% or 300%, you know, it’s financial suicide. At a 100%, there’s no room for error — JAKAB: No, no. RITHOLTZ: — you know, as we clearly saw. So let’s talk a little bit about short selling, and what’s good and bad about it. But I got to start by asking about a story you tell about the history of the paperwork crisis on Wall Street, and how does that relate to what’s going on with Reddit and GameStop, and the meme stocks? Tell us about the paperwork crisis. JAKAB: Sure. Well, there’s a great book by John Brooks called “The Go-Go Years,” where I think I first heard about that. I’ve read about it in other places, too. But the paperwork crisis was something that happened during a previous speculative mania in the late 1960s, when you had just an explosion in trading activity. And this was before things were computerized. RITHOLTZ: Right. JAKAB: There was so much paperwork, in fact, that the stock market had to be for a long, long time closed on Wednesdays, just in order to allow people to catch up, you know, settling all the trades and making — RITHOLTZ: This was the Nifty Fifty era and a lot of stocks. The postwar bull market was still running from, you know, the late ‘40s right up to the mid ‘60s. Wall Street was hot. JAKAB: Wall Street was hot. And that was at a time that it was really expensive to trade, which is the — that’s the reason that I — one reason that I brought it up because it wasn’t until 1975 that commissions were deregulated. So for years and years and years, this is a complaint saying that, like, brokers could charge fixed commissions, and it was just really expensive for brokers to help themselves to your money, basically, on Wall Street. RITHOLTZ: Right. JAKAB: So you know, all these people who were involved in this never could have been involved because the hurdle, financially, to get into trading was just too high, and then you couldn’t be hyperactive, and even then people were hyperactive. Then when you brought commissions down, and down and down, you know, you had dot-com and whatever, and then — you know, then now you had this, which was — RITHOLTZ: That was $8 tradings down to — now to free. JAKAB: Down to free, that kind of makes it a little bit easier for there to be a speculative mania. And so, that was just kind of part of the kind of long arc of history on Wall Street that I tell, and yeah, and so making it free. You really crossed the Rubicon, but even making it cheaper made things easier. Of course, it’s made cheaper in the middle of the worst decade ever really, except the 1930s. For Wall Street, 1975 was a terrible time. You know, if you had gone to like these brokers with like, you know, sideburns and white ties and polyester suits and stuff in 1975, who were like having a terrible time financially in 1975, and you’re like, “Oh, this is the first step in, you know, this kind of revolution.?.....»»

Category: blogSource: TheBigPictureJul 12th, 2022

Futures Slide On Renewed China Covid Lockdown Fears As Traders Brace For Q2 Earnings, Red Hot CPI

Futures Slide On Renewed China Covid Lockdown Fears As Traders Brace For Q2 Earnings, Red Hot CPI US equity futures and global markets started the second week of the 3rd quarter on the back foot, with spoos sliding on Monday morning as traders were spooked by fears that Covid may be making a return to China leading to more virus restrictions sending Chinese stocks tumbling the most in a month, amid growing concern about an ugly second-quarter earnings season which begins this week. A closely watched CPI print on Wednesday which is expected to rise again, will also keep markets on edge. Contracts on the S&P 500 and Nasdaq 100 traded 0.7% lower, suggesting last week’s rally in US stocks my stall as concerns about China’s Covid resurgence weigh on risk appetite. The dollar jumped, reversing two weeks of losses and trading around the highest level since 2020 while Treasuries gained. Bitcoin dropped, oil declined and iron ore extended losses on concern about the demand outlook in China. Adding to the risk-off mood were the latest covid news out of China, whose stocks had their worst day in about a month as a Covid resurgence combined with fresh fines for the tech giants sent investors running for the door.  Both the Hang Seng and Shanghai traded negative after a rise in Shanghai’s COVID-19 cases prompted authorities to declare more high-risk areas and the city also reported its first case of the BA.5 omicron subvariant, as well as two more rounds of mass testing in at least 9 districts. Casino stocks were heavily pressured in Hong Kong after Macau announced to shut all non-essential businesses including casinos, while shares in tech giants Tencent and Alibaba weakened after reports that they were among the companies fined by China’s antitrust watchdog concerning reporting of past transactions. There was more bad news out China including a rejection by China Evergrande Group’s bondholders on a proposal to extend debt payment, as well as a warning by a prominent investor’s wife that a key lithium maker’s stock is overvalued. The Chinese selloff is a reminder that the nation’s Covid Zero policy and lingering uncertainty toward tech crackdowns remain key risks for investors betting on a sustained rebound in Chinese shares. The Hang Seng China gauge has recorded just one positive session in the last eight after rallying nearly 30% from a March low.  Anyway, back to the US where in premarket trading, Twitter shares slumped in premarket trading after Elon Musk terminated his $44 billion takeover approach for the social media company. Some other social media stocks were lower too, while Digital World Acquisition (DWAC US), the SPAC tied to Donald Trump, jumps as much as 30%. Bank stocks are also lower in premarket trading Monday amid a broader decline in risk assets as investors await the release of key inflation data later this week. S&P 500 futures are also lower, falling as much as 1%, while the US 10-year Treasury yield holds above the 3% level. In corporate news, UBS is considering a plan to promote Iqbal Khan to sole head of the bank’s global wealth management business. Meanwhile, Klarna is shelling out loans for milk and gas with cash-strapped customers looking for ways to cover basic necessities. Here are some other notable premarket movers: US-listed Macau casino operators and Chinese tourism stocks fall after local authorities in the gambling hub shut almost all business premises as a Covid-19 outbreak in the area worsened. Las Vegas Sands (LVS US) down 3.5%, MGM Resorts (MGM US) -3.5%, Wynn Resorts (WYNN US) -3.1%. Cryptocurrency-exposed stocks were lower after the latest MLIV Pulse survey suggested that the token is more likely to tumble to $10,000, cutting its value roughly in half, than it is to rally back to $30,000. Crypto stocks that are down include: Marathon Digital (MARA US) -6%, Riot Blockchain (RIOT US) -4.5%, Coinbase (COIN US) -3.8%. Lululemon (LULU US) cut to underperform and Under Armour (UAA US) downgraded to hold by Jefferies in a note on athletic apparel firms, with buy-rated Nike (NKE US) “still best-in-class.” Lululemon drops 1.8% in US premarket trading, Under Armour -3.1% Morgan Stanley cut its recommendation on Fastly (FSLY US) to underweight from equal-weight, citing a less favorable risk/reward scenario heading into the second half of the year. Shares down 5.2% in premarket. Price pressures, a wave of monetary tightening and a slowing global economy continue to shadow markets. the June CPI print reading on Wedensday is expected to get closer to 9%, a fresh four-decade high, buttressing the Federal Reserve’s case for a jumbo July interest-rate hike. Company earnings will shed light on recession fears that contributed to an $18 trillion first-half wipe-out in global equities. “The real earnings hit will come in the second half as we’re hearing from companies, especially retailers, saying they’re already seeing weakness from consumers,” Ellen Lee, portfolio manager at Causeway Capital Management LLC, said on Bloomberg Television. The Stoxx Europe 600 index pared a decline of more than 1% as an advance for utilities offset losses for carmakers and miners. The Euro Stoxx 50 was down 0.8% as of 10:30 a.m. London time, having dropped as much as 1.9% shortly after the cash open. DAX and CAC underperform at the margin. Autos, miners and consumer products are the worst-performing sectors.  Copper stocks sank as fear of global recession continues to suppress metals prices; miners suffered: Anglo American -5.1%, Antofagasta -5.3%, Aurubis -3.7%, Salzgitter -5.1%. Copper was hit hard, with futures down 1.9% today. Here are the top European movers: Dufry shares rise as much as 11%, while Autogrill falls as much as 9.4% after the Swiss duty-free store operator agreed to buy the Italian company from the billionaire Benetton family, with the offer price being below Autogrill’s closing price on Friday. Danske Bank declines as much as 6.4% after the lender cut its outlook for the year. Fincantieri advances as much as 7% after the Italian shipbuilder said it secured an ultra-luxury cruise ship order that will be built by the end of 2025. Joules drops as much as 25% after the British retailer said it hired KPMG to advise on how to shore up its cash position. MJ Gleeson jumps as much as 7.4% after the homebuilder published a trading update stating that it sees full-year earnings being “significantly ahead of expectations.” Peel Hunt says it was a “strong finish to the year.” Uniper falls as much as 12%, adding to its declines in recent weeks, after the German utility last week asked the government for a bailout. Wizz Air declines as much as 5.3% after the low-cost carrier provided a 1Q update, with ticket fares down 12% versus FY20. Nordex rises as much as 7.8%, reversing early losses after the wind-turbine maker said it plans to raise EU212m via a fully-underwritten rights issue. Mining stocks sink as fear of global recession continues to suppress metals prices. Anglo American and Antofagasta are among the decliners. “Earnings expectations will come down this year and probably next year as well, which is somewhat priced,” Barclays Private Bank Chief Market Strategist Julien Lafargue said on Bloomberg Television. “The question is how big are the cuts we are going to see,” he added. The declines in Europe came as Chinese stocks had their worst day in about a month as the Covid resurgence combined with fresh fines for tech giants hit markets Earlier in the session, Asian stocks tumbled as resurging Covid-19 cases in China dented investor sentiment and raised fears of lockdowns that could hurt growth and corporate earnings. The MSCI Asia Pacific Index dropped as much as 1.1%, erasing an earlier gain of as much as 0.5%. Chinese stocks had their worst day in about a month as a Covid resurgence combined with fresh fines for the tech giants sent investors running for the door. Japan was a bright spot, buoyed by the prospect of administrative stability after the ruling coalition expanded its majority in an upper house election. Alibaba and Tencent dragged the gauge the most after China’s watchdog fined the internet firms. All but two sectors declined, with materials and consumer discretionary sectors leading the retreat. Chinese stocks were the region’s notable losers, with benchmarks in Hong Kong slumping about 3% and those in mainland China down more than 1%. A bevy of bad news from the world’s second-largest economy ahead of major economic data releases later this week dampened the mood. The first BA.5 sub-variant case was reported in Shanghai in another challenge to authorities struggling to counter a Covid-19 flare-up in the financial hub. Macau shuttered almost all casinos for a week from Monday as virus cases remain unabated.  “Sentiment got weakened again as Covid-19 cases spread again in China,” said Cui Xuehua, a China equity analyst at Meritz Securities in Seoul. “There are also worries about lockdowns as companies will start reporting their earnings.”   Meanwhile, benchmarks in Japan outperformed the region, gaining more than 1% following the ruling bloc’s big election victory.   Traders in Asia are awaiting for a set of data from the world’s second-largest economy this week, including its growth and money supply figures. Also on the watch are corporate earnings, which would give investors more clues about the impact of lockdowns in China and rising costs of goods and services. Japanese equities climbed after the ruling coalition expanded its majority in an upper house election held Sunday, two days after the assassination of former Prime Minister Shinzo Abe.  The Topix index rose 1.4% to 1,914.66 as of the market close in Tokyo, while the Nikkei 225 advanced 1.1% to 26,812.30. Toyota Motor Corp. contributed the most to the Topix’s gain, increasing 1.9%. Out of 2,170 shares in the index, 1,862 rose and 256 fell, while 52 were unchanged. “In the next two years or so, the government will be able to make some drastic policy changes and if they don’t go off in the wrong direction, the stability of the administration will be a major factor in attracting funds to the Japanese market,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Australia's S&P/ASX 200 index fell 1.1% to close at 6,602.20, with miners and banks contributing the most to its drop. All sectors declined, except for health. EML Payments was the worst performer after its CEO resigned. Costa slumped after Credit Suisse downgraded the stock. The produce company also said it’s faced quality issues from weather. In New Zealand, the S&P/NZX 50 index fell 0.6% to 11,106.14 India’s benchmark stock index declined following the start of the first quarter earnings season, with bellwether Tata Consultancy Services Ltd. disappointing amid worsening cost pressures faced by Indian companies.  The S&P BSE Sensex Index fell 0.2% to 54,395.23 in Mumbai, after posting its biggest weekly advance since April on Friday, helped by a recent correction in key commodity prices. The NSE Nifty 50 Index ended little changed on Monday.  Tata Consultancy contributed the most to the Sensex’s drop, falling 4.6%, its sharpest decline in seven weeks. Bharti Airtel slipped as Adani Group’s surprise announcement of participating in a 5G airwaves auction potentially challenges its telecom business. Still, 15 of the 19 sub-sector gauges compiled by BSE Ltd. gained, led by power producers. Software exporter HCL Technologies Ltd. slumped more than 4% before its results on Tuesday. In FX, the pound fell as the race to replace Boris Johnson as UK premier heats up. Over in Europe, the main conduit for Russian gas goes down for 10-day maintenance on Monday. Germany and its allies are bracing for President Vladimir Putin to use the opportunity to cut off flows for good in retaliation for the West’s support of Ukraine following Russia’s invasion. The Bloomberg Dollar Spot Index snapped a two-day decline as the greenback rose against all of its Group-of-10 peers. The Norwegian krone and the Australian dollar were the worst performers. The Aussie declined amid the greenback’s strength, and poor sentiment triggered by Covid news and political strife with China. Australian Prime Minister Anthony Albanese has ruled out complying with a list of demands from the Chinese government to improve relations between the two countries. Shanghai reported its first case of the BA.5 sub-variant on Sunday, warning of “very high” risks as the city’s rising Covid outbreak sparks fears of a return to its earlier lockdown. The yen dropped to a 24-year low above 137 per dollar. Japanese Prime Minister Fumio Kishida’s strong election victory presents him with a three-year time frame to pursue his own agenda of making capitalism fairer and greener, with no need to quickly change course on economic policy including central bank stimulus In rates, Treasuries are slightly richer across the curve with gains led by the front end, following a wider rally seen across bunds and, to a lesser extent, gilts as stocks drop. Sentiment shifts to second-quarter earnings season, while focus in the US will be on Tuesday’s inflation print. Bunds lead gilts and Treasuries higher amid haven buying. Treasury yields richer by up to 3.5bp across front end of the curve, steepening 2s10s and 5s30s spreads by almost 2bp; 10-year yields around 3.06%, with bunds and gilts trading 3bp and 1bp richer in the sector.  Auctions are front loaded, with 3-year note sale today, followed by 10- and 30-year Tuesday and Wednesday. Auctions resume with $43b 3-year note sale at 1pm ET, followed by $33b 10-year and $19b 30-year Tuesday and Wednesday. WI 3-year around 3.095% is above auction stops since 2007 and ~17bp cheaper than June’s stop-out. Bitcoin caught a downdraft from the cautious start to the week in global markets, falling as much as 2.6% but holding above $20,000. In commodities, crude futures decline. WTI trades within Friday’s range, falling 1.3% to trade near $103.48. Base metals are mixed; LME copper falls 1.4% while LME lead gains 1.4%. Spot gold maintains the narrow range seen since Thursday, falling roughly $4 to trade near $1,739/oz. It is a quiet start tot he week otherwise, with nothing scheduled on the US calendar today. Market Snapshot S&P 500 futures down 0.6% to 3,877.75 STOXX Europe 600 down 0.8% to 413.75 MXAP down 0.9% to 157.30 MXAPJ down 1.6% to 516.87 Nikkei up 1.1% to 26,812.30 Topix up 1.4% to 1,914.66 Hang Seng Index down 2.8% to 21,124.20 Shanghai Composite down 1.3% to 3,313.58 Sensex down 0.2% to 54,349.37 Australia S&P/ASX 200 down 1.1% to 6,602.16 Kospi down 0.4% to 2,340.27 German 10Y yield little changed at 1.28% Euro down 0.6% to $1.0122 Brent Futures down 2.2% to $104.66/bbl Gold spot down 0.3% to $1,738.11 U.S. Dollar Index up 0.47% to 107.51 Top Overnight News from Bloomberg Foreign Secretary Liz Truss entered the race to replace Boris Johnson as UK premier, the latest cabinet minister to make her move in an already fractious contest Price action in the spot market Friday for the euro was all about short-term positioning, options show The Riksbank needs to prevent high inflation becoming entrenched in price- and wage-setting, and to ensure that inflation returns to the target, it says in minutes from latest monetary policy meeting The probability of a euro-area economic contraction has increased to 45% from 30% in the previous survey of economists polled by Bloomberg, and 20% before Russia invaded Ukraine. Germany, one of the most- vulnerable members of the currency bloc to cutbacks in Russian energy flows, is more likely than not to see economic output shrink ECB Governing Council member Yannis Stournaras said a new tool to keep debt-market turmoil at bay as interest rates rise may not need to be used if it’s powerful enough to persuade investors not to test it The number of UK households facing acute financial strain has risen by almost 60% since October and is now higher than at any point during the pandemic A more detailed look at global markets courtesy of Newqsuawk Asia-Pac stocks traded mostly lower as the region digested last Friday’s stronger than expected NFP data in the US, with sentiment also mired by COVID-19 woes in China. ASX 200 was led lower by underperformance in tech and the mining-related sectors, while hopes were dashed regarding an immediate improvement in China-Australia ties following the meeting of their foreign ministers. Nikkei 225 bucked the trend amid a weaker currency and the ruling coalition’s strong performance at the Upper House elections, but with gains capped after Machinery Orders contracted for the first time in 3 months. Hang Seng and Shanghai Comp. traded negative amid COVID concerns after a rise in Shanghai’s COVID-19 cases prompted authorities to declare more high-risk areas and the city also reported its first case of the BA.5 omicron subvariant, as well as two more rounds of mass testing in at least 9 districts. Casino stocks were heavily pressured in Hong Kong after Macau announced to shut all non-essential businesses including casinos, while shares in tech giants Tencent and Alibaba weakened after reports that they were among the companies fined by China’s antitrust watchdog concerning reporting of past transactions. Top Asian News Shanghai’s COVID-19 cases continued to increase which prompted authorities to declare more high-risk areas and is fuelling fears that China’s financial hub may tighten movement restrictions again, according to Bloomberg. In relevant news, Shanghai reported its first case of the BA.5 omicron subvariant and authorities ordered two more rounds of mass testing in at least 9 districts. An official from China's Shanghai says authorities have classified additional areas as high risk areas. Macau will shut all non-essential businesses including casinos this week due to the COVID-19 outbreak, according to Reuters. It was separately reported that Hong Kong is considering a health code system similar to mainland China to fight COVID. China’s Foreign Minister Wang said he had a candid and comprehensive exchange with US Secretary of State Blinken, while he called for the US to cancel additional tariffs on China as soon as possible and said the US must not send any wrong signals to Taiwan independence forces, according to Reuters. US Secretary of State Blinken stated that the US expects US President Biden and Chinese President Xi will have the opportunity to speak in the weeks ahead, according to Reuters. US Commerce Secretary Raimondo said cutting China tariffs will not tame inflation and that many factors are pushing prices higher, according to FT. China’s antitrust watchdog fined companies including Alibaba (9988 HK) and Tencent (700 HK) regarding reporting of past deals, according to Bloomberg. Japan's ruling coalition is poised to win the majority of seats contested in Sunday's upper house election and is projected to win more than half of the 125 Upper House seats contested with a combined 76 seats and the LDP alone are projected to win 63 seats, according to an NHK exit poll cited by Reuters. Japanese PM Kishida said that they must work toward reviving Japan’s economy and they will take steps to address the pain from rising prices, while he added they will focus on putting a new bill that can be discussed in parliament when asked about constitutional revision and noted that they are not considering new COVID-19 restrictions now, according to Reuters. European bourses are pressured, Euro Stoxx 50 -0.5%, but will off post-open lows amid a gradual pick-up in sentiment. Pressure seeped in from APAC trade amid further China-COVID concerns amid a relatively limited docket to start the week. Stateside, futures are directionally in-fitting but with magnitudes less pronounced with earnings season underway from Tuesday; ES -0.4%. Toyota (7203 JP) announces additional adjustments to its domestic production for July; volume affected by the adjustment will be around 4000 units, global production plan to remain unchanged, via Reuters. Top European News Fitch affirmed European Stability Mechanism at AAA; Outlook Stable and affirmed Greece at BB; Outlook Stable, while it cut Turkey from BB- to B+; Outlook Negative. UK Companies are bracing for a recession this year with multiple companies said to have begun “war gaming” for a recession, according to FT. In other news, local leaders warned that England’s bus networks could shrink by as much as a third as the government’s COVID-19 subsidies end and commercial operators withdraw from unprofitable routes, according to FT. Senior Tory party figures are reportedly seeking to narrow the leadership field quickly, according to FT. It was separately reported that only four Tory party leadership candidates are expected to remain by the end of the week under an accelerated timetable being drawn up by the 1922 Committee of backbenchers, according to The Times. UK Chancellor Zahawi, Transport Minister Shapps, Foreign Secretary Truss, junior Trade Minister Mordaunt, Tory MPs Jeremy Hunt and Sajid Javid have announced their intentions to run for party leader to replace UK PM Johnson, while Defence Secretary Wallace decided to not run for PM and several have declared the intention to cut taxes as PM, according to The Telegraph, Evening Standard and Reuters. FX Buck firmly bid after strong US jobs report and pre-CPI on Wednesday that could set seal on another 75bp Fed hike this month, DXY towards top of 107.670-070 range vs last Friday's 107.790 high. Aussie undermined by rising Covid case count in China’s Shanghai, AUD/USD loses grip of 0.6800 handle Yen drops to fresh lows against Greenback after BoJ Governor Kuroda reiterates dovish policy stance amidst signs of slowing Japanese growth, USD/JPY reaches 137.28 before waning. Euro weak due to heightened concerns that Russia may cut all gas and oil supplies, EUR/USD eyes bids ahead of 1.0100. Pound down awaiting Conservative Party leadership contest and comments from BoE Governor Bailey, Cable under 1.2000 and losing traction around 1.1950. Hawkish Riksbank minutes help Swedish Crown avoid risk aversion, but Norwegian Krona declines irrespective of stronger than forecast headline inflation; EUR/SEK sub-10.7000, EUR/NOK over 10.3200. Yuan soft as Shanghai raises more areas to high-risk level; USD/CNH and USD/CNY nearer 6.7140 peaks than troughs below 6.6900 and 6.7000 respectively. Fixed Income Debt regains poise after post-NFP slide, with Bunds leading the way between 151.00-149.75 parameters Gilts lag within 114.94-33 range awaiting Conservative leadership contest and comments from BoE Governor Bailey 10 year T-note firm inside 118-00+/117-18+ bounds ahead of USD 43bln 3 year auction Commodities Crude benchmarks are curtailed amid the COVID situation with broader developments limited and heavily focused on Nord Stream. French Economy and Finance Minister Le Maire warned there is a strong chance that Moscow will totally halt gas supplies to Europe, according to Politico. Canada will grant a sanctions waiver to return the repaired Russian turbine to Germany needed for maintenance on the Nord Stream 1 gas pipeline but will expand sanctions against Russia’s energy sector to include industrial manufacturing. The US does not expect any specific announcements on oil production at this week’s US-Saudi summit, according to FT sources. JPMorgan (JPM) sees crude prices in the low USD 100s in H2 2022, falling to high USD 90s in 2023. Spot gold remains relatively resilient, torn between the downbeat risk tone and the USD's modest advances; attention on the metal's reaction if DXY surpasses Friday's best. Copper pulls back as Los Bambas returns to full output and on the China readacross. US Event Calendar Nothing major scheduled Central Banks 14:00: Fed’s Williams Takes Part in Discussion on Libor Transition DB's Jim Reid concludes the overnight wrap If you're in Europe over the next week good luck coping with the heatwave. In the UK I read last night that there's a 30% chance that we will see the hottest day ever over that period. The warning signs are always there when at 5am you're sweating and not just because of the immense effort put in on the EMR. Talking of red hot, it's that time of the month again where all roads point to US CPI which will be released exactly half way through the European week. This will be followed by the US PPI release (Thursday) and the University of Michigan survey for July on Friday where inflation expectations will be absolutely key. With US Q2 GDP currently tracking negative Friday's retail sales and industrial production could still help swing it both ways. Staying with the US it's time for Q2 earnings with a few high profile financials reporting. This is a very important season (aren't they all) as the collapse in equities so far in 2022 is largely due to margin compression and not really earnings weakness. Elsewhere China’s Q2 GDP on Friday alongside their main monthly big data dump is a highlight as we see how data is rebounding after the spike in Covid. In Europe, it will be a data-packed week for the UK. Going through some of this in more detail now and US CPI is the only place to start. Our economists note that while gas prices fell in the second half of June, the first half strength will still be enough to help the headline CPI print (+1.33% forecast vs. +0.97% previously) be strong on the month but with core (+0.64% vs. +0.63%) also strong. They have the headline YoY rate at 9.0% (from 8.6%) while core should tick down from 6.0% to 5.8%. Aside from an array of Fed speakers, investors will be paying attention to speeches from the BoE Governor Bailey (today and tomorrow). Markets will be also anticipating the Bank of Canada's decision on Wednesday, and another +50bps hike is expected based on Bloomberg's median estimate. Finally, G20 central bankers and finance ministers will gather in Bali on July 15-16. In Europe, it will be a busy week for the UK, with monthly May GDP, industrial production and trade data due on Wednesday, among other indicators. Germany's ZEW Survey for July (tomorrow) will also be in focus as European gas prices continue to be on a tear amid risks of Russian supply cut-offs. Speaking of which, Nord Stream 1 will be closed from today to July 21st for maintenance with much anticipation as to what happens at the end of this period. Elsewhere, Eurozone's May industrial production (Wednesday) and trade balance (Friday) will also be due. Finally, as Q2 earnings releases near for key US and European companies, key US banks will provide an early insights on the economic backdrop and consumer spending patterns. Results will be due from JPMorgan, Morgan Stanley (Thursday), Citi and BlackRock (Friday). In tech, TSMC's report on Thursday may provide more insight into the state of supply-demand imbalance in semiconductors. In consumer-driven companies, PepsiCo (tomorrow) and Delta (Wednesday) will also release their results. The rest of the day by day week ahead is it the end as usual. Asian equity markets are starting the week mostly lower on rising concerns around a fresh Covid flare-up in China as Shanghai reported its first case of the highly infectious BA.5 omicron sub-variant on Sunday. Across the region, the Hang Seng (-2.89%) is the largest underperformer amid a broad sell-off in Chinese tech shares after China imposed fines on several companies including Tencent and Alibaba for not adhering to anti-monopoly rules on disclosures of transactions. In mainland China, the Shanghai Composite (-1.50%) and CSI (-2.05%) both are trading sharply lower whilst the Kospi (-0.30%) is also weaker after see-sawing in early trade. Bucking the trend is the Nikkei (+1.02%) after Japan’s ruling party, the Liberal Democratic Party (LDP) and its coalition partner, Komeito, expanded its majority in the upper house in the country’s parliamentary vote held on Sunday and following the assassination of former Prime Minister Shinzo Abe last week. Outside of Asia, US stock futures are pointing to a weaker start with contracts on the S&P 500 (-0.60%) and NASDAQ 100 (-0.85%) moving lower. Early morning data showed that Japan’s core machine orders dropped -5.6% m/m in May (v/s -5.5% expected) and against an increase of +10.8% in the previous month. Over the weekend, China’s factory gate inflation (+6.1% y/y) cooled to a 15-month low in June (v/s +6.0% expected) compared to a +6.4% rise in May. Additionally, consumer prices rose +2.5% y/y in June (v/s +2.4% expected), widening from a +2.1% gain in May and to the highest in 23 months. Elsewhere, oil prices are lower with Brent futures down -0.36% at $106.63/bbl and WTI futures (-0.77%) at $103.98/bbl as I type. Treasury yields are less than a basis point higher at the moment. Recapping last week now and a return to slightly more optimistic data boosted yields and equities, as central bank pricing got a bit more hawkish after a dovish run. More pessimistically, natural gas and electricity prices in Europe skyrocketed, as another bout of supply fears gripped the market. Elsewhere, the resignation of Prime Minister Johnson left a lot of questions about the medium-term policy path for the UK. After global growth fears intensified at the beginning of the month, a combination of stronger production and labour market data allayed short-term aggressive slow down fears. This sent 10yr Treasury and bund yields +20.6bps (+9.1bps Friday) and +11.3bps (+2.7bps Friday) higher last week. In the US, the better data coincided with expectations that the Fed would be able to tighten policy even more, which drove 2yr yields +27.2bps higher (+9.1bps Friday), and drove the 2s10s yield curve into inversion territory, closing the week at -2.5bps. The market is still anticipating that the FOMC will reach its terminal rate this cycle around the end of the first quarter next year, but that rate was +24.4bps (+12.2bps Friday) higher over the week. A large part of the jump in yields came on Friday following the much stronger than expected nonfarm payrolls figures, which climbed +372k in June, versus expectations of +265k. It’s hard to have a recession with that much job growth, so hiking will continue. Elsewhere in the print, average hourly earnings were in line at 0.3%, with the prior month revised higher to 0.4%, while the unemployment rate stayed at an historically tight 3.6% as consensus expected. Contrary to the US, yield curves were steeper in Europe, with 2yr bund yields managing just a +1.1bp climb (-3.1bps Friday). The continent had more immediate concerns in the form of a potential energy crisis. Fears that Russia would use the planned Nord Stream maintenance period beginning this week as a chance to squeeze supplies, alongside a now averted strike in Norway, sent European natural gas prices +14.44% higher (-4.24% Friday), ending the week at €175 per megawatt-hour, levels last rivaled during the initial invasion of Ukraine. German electricity prices also took off, increasing +20.26% (-7.54% Friday), setting off fears of a genuine energy crisis on the continent. That, combined with more expected Fed tightening priced in versus the ECB over the week, drove the euro -2.23% (+0.21% Friday) lower versus the US dollar, to $1.018, the closest to parity the single currency has come in over two decades. The fears were somewhat tempered by the end of the week, when it was reported that Canada would send a necessary turbine to Russia via Germany, enabling Russia to in theory remit gas supply back to Germany post the shutdown. Through all the macro noise the S&P 500 posted its 12th weekly gain of the year, climbing +1.94% (-0.08% Friday), driven by a particularly strong performance among tech and mega-cap stocks, with the NASDAQ (+4.56%, +0.12% Friday) and FANG+ (+5.82%, -0.22% Friday) both outperforming. European equities also managed to climb despite the energy fears, with the STOXX 600 gaining +2.35% (+0.51% Friday), the DAX gaining +1.58% (+1.34% Friday), and the CAC +1.72% higher (+0.44% Friday). UK equities underperformed, with the FTSE 100 gaining just +0.38% (+0.10% Friday). The pound was in the middle of the pack in terms of G10 currency performance versus the US dollar, however losing -0.53% (+0.05% Friday). Tyler Durden Mon, 07/11/2022 - 08:03.....»»

Category: personnelSource: nytJul 11th, 2022

I traveled between London and Amsterdam by train and plane. Here"s how they compare.

My rail journey took four and a half hours. My flight only took 75 minutes and was $50 cheaper - but I also got stuck in airport queues. I traveled from London to Amsterdam by train and back by plane.Grace Dean/Insider On a recent trip from London to Amsterdam, I took the train there and returned by plane. The Eurostar journey took 4.5 hours, whereas my flight was just 75 minutes and cost $50 less. However, I had to spend about two hours queueing at airports due to staff shortages. I recently traveled from London to Amsterdam for work. I got the Eurostar there and flew back. I've taken many flights before, including journeys to Amsterdam, but had never traveled by Eurostar.I got the Eurostar to Amsterdam and flew back.Grace Dean/InsiderOne of the first things many people look at when they book transport is price. My Eurostar journey, which was on a Monday morning, cost $198, whereas the Thursday evening flight I took with budget airline EasyJet was far less.My standard class Eurostar ticket cost $198.Grace Dean/InsiderMost airlines charge to bring luggage on board beyond a small bag. When I added on hold luggage, the price of my flight went up to $147 – meaning it was only $50 less than the Eurostar. The train doesn't make passengers pay extra to bring large luggage on board – an item of hand luggage plus two pieces of large luggage were included with my standard-class ticket.It was free to bring suitcases on the Eurostar.Grace Dean/InsiderThe flight was much quicker than the train. My flight took around 75 minutes to travel from Amsterdam's Schiphol Airport to London Gatwick, whereas the Eurostar journey was four and a half hours. But other things added up to mean that both journeys took a similar amount of time.The flight took 75 minutes.Grace Dean/InsiderEasyJet emailed me two days before my flight, saying: "There may be delays at the airport security control before your flight and we recommend that you arrive at Amsterdam airport 3 hours before your flight time."EasyJet warned me of delays at Schiphol.Grace Dean/InsiderSource: InsiderPhotos shared on social media over recent weeks have shown huge lines of passengers waiting to pass through security at airports because of labor shortages coupled with a surge in the number of people flying. Some passengers have been arriving hours in advance of their flight as a result. Signs inside Schiphol told people not to arrive more than four hours before their flight.Schiphol told people not to arrive more than four hours before their flight.Grace Dean/InsiderWhen I got up there I was confronted with a huge line of passengers queueing to drop off bags at the easyJet desk. Most of the counters at the desk were closed.There was a huge line of passengers queueing to drop their bags off.Grace Dean/InsiderDespite the airline telling people to arrive at the airport around three hours before their flight, a screen by the EasyJet check-in desk said that check-in wouldn't actually open until two hours before the flight departed. There were no members of staff round to ask, so I just decided to join the line anyway. It all seemed a bit chaotic and disorganized.A screen said that EasyJet check-in wouldn't actually open until two hours before the flight departed.Grace Dean/InsiderIt took about half an hour for me to get to the front of the line and drop my suitcase off.There were long queues at Schiphol.Grace Dean/InsiderI then had to join a series of other lines to scan my boarding pass, pass through security, and have my bags checked.There were long queues at Schiphol.Grace Dean/InsiderA sign said that customers face longer lines than usual "due to crowds and staff shortages." Overall, I stood in lines for about 90 minutes to make it through to the departure lounge.There were long queues at Schiphol.Grace Dean/InsiderSource: InsiderEurostar, in contrast, recommended that I arrived at St. Pancras 90 minutes before my train was due to depart – much later than at Schiphol.The Eurostar departs from St. Pancras station in London.Grace Dean/InsiderThere was a big queue for the Eurostar too, but it was relatively fast-moving and only took me about 30 minutes to scan my boarding pass, go through security like at airports, and get my passport stamped. Though I had to send my suitcase through a scanner, I didn't have to join a separate queue to check it in as hold luggage like I did at the airport.There were queues at St. Pancras, too.Grace Dean/InsiderI also was able to keep liquids in my bags when traveling by Eurostar, whereas hand luggage on planes is limited to 1 liter from bottles of up to 100ml each. Larger containers of liquids can be brought in your hold luggage on flights, but if I were traveling with cabin luggage only then this would have been a real perk to traveling by Eurostar.I was able to keep liquids in my bags when traveling by Eurostar.ShutterstockDespite the huge queues for check-in and security, departures didn't seem too busy. There was a big line for the Jamie Oliver restaurant, though.Schiphol's departure lounge really didn't seem too busy.Grace Dean/InsiderAs a major international airport, Schiphol had loads of shops and restaurants. But what surprised me was that so many were closed. It was only around 5:30 p.m. and there were dozens of flights still due to depart that day.A lot of the concessions in the airport were closed.Grace Dean/InsiderThere was still a lot to do while you waited for your flight, though. As well as €2 ($2.10) massage chairs, various types of seats, and even some individual workspaces, the airport has a "library". This was home to books about Dutch culture available in more than 40 languages.Schiphol has a "library" in departures.Grace Dean/InsiderSeating in the departure lounge at St. Pancras for Eurostar passengers.St. Pancras has a departure lounge for Eurostar passengers.Grace Dean/InsiderAs well as a couple of cafés, it also a duty-free store, which I hadn't expected to see.St. Pancras has a departure lounge for Eurostar passengers.Grace Dean/InsiderOverall there wasn't as much to do in the Eurostar departures compared with Schiphol.St. Pancras had a departure lounge for Eurostar passengers.Grace Dean/InsiderOn the easyJet flight, seats are three abreast on either side of the aisle. Each seat had a fold-down table and space for luggage in the overhead lockers, although these got full quite quickly.There are three seats on either side of the aisle on the plane.Grace Dean/InsiderI was the only passenger in my row, which meant I had plenty of leg room and could stow my rucksack by the seat next to me, though being short may have helped. My seat was by the window, and I spent the journey reading my book and trying to sleep. The 75-minute flight was over very quickly.I had plenty of leg room.Grace Dean/InsiderOn the Eurostar, there were pairs of seats on each side of the aisle, also with small fold-down tables. A few seats in each carriage were arranged in fours around a (very thin) table.The Eurostar was split into two and four-person seating configurations.Grace Dean/InsiderThere were racks at the ends of each carriage for passengers to store large luggage as well as racks above the seats. Considering it was free to bring suitcases aboard, I was surprised the luggage racks weren't fuller.I stowed my suitcase at the end of the carriage.Grace Dean/InsiderThe seat next to me was taken, but I still had plenty of space, and I felt like there was more leg room than on the easyJet flight. But the four-and-a-half hour trip felt very long, stopping off at Lille, France; Brussels, Belgium; and Rotterdam, the Netherlands before reaching Amsterdam.I had plenty of space on the train.Grace Dean/InsiderUnlike on my flight, where electronic devices had to be kept in airplane mode, the train did have free WiFi – but it was very unreliable. I tried to use my laptop but kept losing my connection, and ultimately gave up and read my book instead.The free Eurostar WiFi was very unreliable.Grace Dean/InsiderI grabbed something to eat on both journeys. They both offered a meal deal with a sandwich, snack, and cold drink, costing 10.20 euros ($10.38) on the Eurostar and 8 euros ($8.14) on the EasyJet flight. Both meals were expensive and the menus limited, but you generally expect this for food on flights and trains.Both companies sold food onboard, but it is expensive.Grace Dean/When I arrived in Amsterdam on the Eurostar, I could simply grab my bag, hop off the train, and scan my ticket at the barriers to leave the station. Flying into London, however, I had to wait to be allowed off the plane, queue for passport control, and then grab my suitcase from luggage reclaim – this all took about half an hour, bringing my total queueing time for that journey to about two hours.The Eurostar took me straight to the center of Amsterdam.Grace Dean/InsiderIn addition, the Eurostar took me between stations in the center of each city – London St. Pancras and Amsterdam Centraal – which were much quicker, cheaper, and easier to get to than the airports my flight went between – London Gatwick and Amsterdam Schiphol, located in the outskirts of each city.The Eurostar took me to Amsterdam Centraal station.Grace Dean/InsiderWhile the actual length of the flight was much shorter than the Eurostar, the two journeys took nearly the same amount of time when you factored in traveling to and from the airports, being told to arrive three hours before my flight departed, and waiting to get my bag and have my passport checked when I got off the plane in London.I had to spend a lot of time sitting around or queueing in airports before and after my flight.Grace Dean/InsiderAnd once you added hold luggage, the price difference wasn't too great either. Ultimately I preferred traveling by Eurostar because of its lower carbon footprint, slightly more spacious seats, and roomier carriages, but traveling standard-class on the Eurostar wasn't all that different from getting economy seats on a plane.Ultimately I preferred traveling by Eurostar.Bryn Colton/Getty ImagesRead the original article on Business Insider.....»»

Category: dealsSource: nytJul 10th, 2022

All Macau Casinos Will Shut Down Monday As COVID Outbreak Worsens

All Macau Casinos Will Shut Down Monday As COVID Outbreak Worsens The world's largest gambling hub, Macau, will shutter almost all casinos and non-essential businesses for a week from Monday as an outbreak of COVID-19 spreads across the autonomous region on the south coast of China.  AFP quotes Macau's top city official Andre Cheong in a press conference Saturday who said the gambling hub would enter "static management" between July 11-18, during which casinos will be closed. Only essential businesses like supermarkets, gas stations, and pharmacies will remain open. The measure comes as Macau on Saturday reported 71 new COVID infections. A total of 1,374 infections have been recorded since June 18, a low number though high enough for the city to implement mainland China's strict zero-COVID policy.   Last week, authorities closed Macau's most popular casino, the Grand Lisboa, after 13 infections were reported at the casino/resort complex.  Macau is the largest casino hub in the world and trumps Las Vegas. More than half the city's GDP is derived from the gambling industry, and casinos employ 20% of the population. The curb will deal a hard blow to the town because of the economic impact of enforcing harsh lockdowns and mass testing.  The zero-COVID policies (especially locking down Shanghai for two months) have triggered an economic slowdown in the world's second-largest economy after President Xi Jinping made clear weeks ago that "COVID zero" isn't going anywhere. Probabilities are waning that Beijing's 2022 growth target of 5.5% can be achieved because of the lingering threat of new lockdowns.  Last week, Bloomberg reported Beijing has opted to unleash a massive 1.5 trillion yuan ($220 billion) of "special" local bonds in the second half of the year for infrastructure spending to offset the downturn.  And how will Macau gaming stocks react to the news this weekend -- well -- we suspect very negatively following an index of casino stocks in the town has failed to find support around a 2015/16 low which points to more downside.  US casino companies operating in Macau are Wynn Macau Ltd, Sands China Ltd, and MGM China Holdings Ltd, which will likely see lower shares on the news come Monday.  "Beyond the virus, the casino industry's facing other challenges, including a new law that significantly increases government control over operations and Beijing's crackdown on high-rolling gamblers to curb capital outflow," Bloomberg adds.  The lockdown policy of #CCP has devastated Macau's economy, no tourist visit and all shops have to be closed.The channel for Chinese to launder money through casinos in Macau has also been completely closed. #Macau has no future under rule of CCP. #TakeDownTheCCP pic.twitter.com/YFjKs7mOuY — Meeno (澳喜特战旅) (@Meeno17043089) July 9, 2022 Is the lockdown more about COVID or ratcheting down on capital outflows?    Tyler Durden Sat, 07/09/2022 - 21:00.....»»

Category: personnelSource: nytJul 9th, 2022

Hard Rock deal ends casino strike threat in Atlantic City

Atlantic City's main casino workers union reached an agreement with the Hard Rock Casino, removing the last threat of a strike during the busy holiday weekend......»»

Category: topSource: foxnewsJul 3rd, 2022

Drugs, blood, confetti, and broken glass: Atlantic City housekeepers share what they wish guests knew — and why they need a raise

Housekeepers said they make $16.25 an hour or less to clean casino hotel rooms that have gotten much filthier since the pandemic started. Service workers and their employers are negotiating a new contract at Caesars Atlantic City.Charles Davis/Insider Atlantic City housekeepers say the hotel rooms they clean are dirtier than ever. Staff told Insider they had just 30 minutes to clean rooms that have been completely trashed. Workers are threatening to strike if they don't receive raises before the July 4 weekend. ATLANTIC CITY, New Jersey — Ana Maldonado was animated when she described how the job she'd been performing for 18 years was worse than ever.Originally from Honduras, the mother of four moved to the East Coast's oceanfront gambling mecca — a modest answer to Las Vegas, with the advantage of a boardwalk and a beach — to clean rooms in casino hotels, persevering through multiple recessions, natural disasters, and the outbreak of a novel coronavirus.In the best of times, which may well have been decades ago, a resort city that formally billed itself as "always turned on" was not associated with dignity and class. Atlantic City was where people went to engage in sin, of the legally permissible variety or otherwise. But 2 1/2 years of COVID-19, labor shortages, and inflation have made life less bearable for the workers who make possible the overindulgence of others."It's not a job that's really valued, by society or by the companies," Maldonado told Insider, speaking rapidly in Spanish outside a ballroom in Caesars Atlantic City, where employees like her are engaged in negotiations for a new contract. That was true before 2020, but workers like her now feel they are being asked to do more for even less money and respect."Since the pandemic, everything changed," she said.For one, fewer people are willing to scrub floors and bathroom tiles for little more than New Jersey's $13 minimum wage. But Maldonado said the rooms themselves are also being left more disgusting than they used to be, making an already unpleasant job that much more difficult."The day these people leave," Maldonado said, "the rooms are three times as dirty."Seven workers at Atlantic City casinos told Insider they're struggling to make ends meet cleaning rooms they say are filthier than ever. They described rooms full of shattered glass and linens, stained with bodily fluids from intravenous drug use, and carpets caked in food waste and confetti or soiled by dogs and cats that are practically impossible to sanitize in the 30 minutes or less that workers have to prepare rooms for the next guest.Maldonado, who works at Tropicana Atlantic City, said she regularly encountered cockroaches and ants swarming over the remains of food, with some guests turning their rooms into makeshift kitchens to avoid the rising costs of eating out. She said she's also been yelled at for trying to clean rooms where guests don't want to be caught taking "all kinds of drugs," though they leave behind both syringes and blood."This creates a personal risk for us," she said, adding that she and other housekeepers who spoke with Insider — mostly women of color, many of them immigrants, and all working for $16.25 an hour or less — were being asked to enter these sometimes occupied rooms alone.A receptionist at the Golden Nugget told Insider that rooms were cleaned every other day on average.Charles Davis/InsiderGuests declining cleaning services actually leads to more workIn Atlantic City, and elsewhere, hotels have been encouraging guests to decline daily cleaning services, citing concern for the environment, the threat of COVID-19, and, more recently, staff shortages.In a recent report, Unite Here Local 54, the union that represents housekeepers and other casino service workers, highlighted a photo of a sign in the lobby of the Golden Nugget that told guests: "Daily Housekeeping services are unavailable at this time."When Insider visited the Golden Nugget, there was no sign in the lobby. But when asked how often guests could expect rooms to be cleaned, an employee at reception said: "Usually every other day."Legally, that's not supposed to be the case. In June 2020, Gov. Phil Murphy of New Jersey, a Democrat, signed into law a measure that required occupied hotel rooms to be "cleaned and sanitized every day."Lisa M. Ryan, a spokesperson for the New Jersey Department of Community Affairs, said the state has sent letters to hotels informing them of their obligations under the law. "Complaints will be investigated by [the department's] inspection staff," she added.Golden Nugget did not respond to Insider's request for comment.Laws aside, guests may believe they're being more considerate by not insisting on daily cleaning. It's less work for others, right? And those sheets can last another day. But the workers interviewed for this story don't see it like that.Ronette Lark, a mother of two who's worked at Harrah's Resort Atlantic City for 24 years, handles room deliveries. Before the pandemic, that meant an extra towel or pillow. Now it's the whole shebang: blankets, sheets, and whatever else guests need to essentially clean their rooms themselves.By declining or not requesting daily cleaning services, Lark said, "you think you're doing me a favor, but you're not — you're just offloading more work."And that's more work for not much more money — indeed, for less money these days, considering inflation and the rising cost of everything. Outside a recent $0.25 hike in her hourly rate, bringing her up to $16.25, "I hadn't seen a raise since probably, like, Sandy came," Lark said, referring to the destructive 2012 hurricane.Not counting overtime, a $16.25 an hour wage translates to less than $32,000 a year in a region where, according to MIT's Living Wage Calculator, an adult with no children needs more than $37,000 to cover the annual cost of food, housing, and healthcare while maintaining a decent standard of life.Atlantic City offers one of few beaches in New Jersey where visitors do not need to pay a fee.Charles Davis/Insider'It's just terrible'Guests often do not clean rooms to which they have no long-term attachment, even if they're trying to be polite.Most leave their room worse than they found it — and many are not trying to do any work when they're on vacation and paying for the privilege of not caring."Now we have a situation where there are people not requesting service for two or three or four days a week, and when they leave, the work is much harder," Teresa Lopez, who has worked at Caesars for 20 years after moving from Puerto Rico, said in Spanish."When people don't want service, they throw their food, mixing everything together on the floor," she said, referring to sheets, towels, and other things in the room. "They even fight. There is even blood."Iris Sanchez, a mother of three and nine-year veteran of Caesars, said she regularly encountered the aftermath of hotel brawls."Glass all over the floor," she said. "They break stuff. They throw stuff. It's just terrible."The partiers aren't much better."There's 10 people where there should only be two people," she said.Sometimes because they don't want to get caught, these large groups often refuse daily service — leaving poorly ventilated showers covered in mold, Sanchez said."You throw water and just black stuff comes down," she said. And then there's the confetti that sticks to everything. "To vacuum that? Oh, my God, it's terrible," she added.And because guests aren't regularly having their rooms cleaned, they often aren't tipping, either."I could do 14 checkouts, and I'm lucky if I take home $20. That's how bad it is," Sanchez said.Mercedes Cuadros, an immigrant from Mexico who makes $16 an hour after 11 years as a housekeeper at Caesars, said she now has to work six days a week to make ends meet, at the expense of time with her two children."I would like to rest for two days because I have grandchildren. I have children, but I need to work," she said.In addition to her employer hiring more staff, she wants the state government to enforce daily cleaning requirements, saying that guests have been blaming — and verbally abusing — housekeepers like her when they're surprised to find their rooms have not been cleaned."I don't know much English," she said, "but I understand the curse words."Caesars Entertainment operates three of the casino hotels in Atlantic City: its namesake, Harrah's, and Tropicana.Charles Davis/InsiderWorkers threaten to strikeHousekeepers aren't just complaining.On June 15, a supermajority of unionized service staff at five Atlantic City casinos — Caesars, Tropicana, and Harrah's, which are operated by the same company, as well as the Borgata and Hard Rock — voted to authorize a strike if their negotiating committee failed to reach a new agreement with their employers ahead of the July 4 weekend. Unite Here said that in a survey of more than 1,900 of its members, 61% reported struggling to pay the cost of housing, with nearly one-third saying they struggled to pay for food.All of the casinos involved didn't respond to Insider's email requests for comment.Workers believe their employers have the money. Revenues have rebounded since the pandemic started, with Atlantic City casinos posting higher gambling wins than they did before COVID-19 — its best month in nearly a decade was May, according to the New Jersey Casino Control Commission."Over the years, casino workers have sacrificed wage increases for the health of the industry," Unite Here Local 54, which represents about 10,000 employees in Atlantic City, said in a statement. "Workers have persevered through casino closures, Hurricane Sandy, and a global pandemic. Now, they're falling behind. As industry's profits and gaming revenues surpass pre-pandemic levels, wages for Atlantic City's casino workers have not kept pace.""It's not enough," Rodney Mills, who fields guests' room requests at Tropicana for $16.25 an hour, said in an interview.The single father of three spent the first 17 months of the pandemic laid off from his job as a casino buffet server. He wants a livable wage, he said, without being required to work mandatory overtime because no one else wants to do the job for the advertised rate."We want to be treated as human beings," he said.Luana Molley, a grandmother with three kids of her own, described her work as "more dirty" and "more hazardous" than ever. She's spent 11 years working as a housekeeper at Harrah's and now makes $16.25 an hour. She said the current workload is affecting her quality of life."It's harder for me to help with the homework. It's harder for me to walk the dog. It's harder to spend time with my grandbaby. It's just harder," she said.But she was defiant when asked if that hardship would ever lead her to give up on life in the city where she was born."I will never be pushed out of my home. This is my hometown. This is where my sand is in my shoes, and I'm not letting anybody take that from me," she said. "I will do what I have to do. And if that's striking, then we will strike."Have a news tip? Email this reporter: cdavis@insider.com.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 30th, 2022

Friday strike deadline looms for 4 Atlantic City casinos

A strike by workers at four casinos in Atlantic City could happen over the Fourth of July weekend, one of the busiest for that city if a deal can't be reached......»»

Category: topSource: foxnewsJun 30th, 2022