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Category: blogSource: theflyonthewallMay 26th, 2021

Futures Slide Alongside Cryptocurrencies Amid China Crackdown

Futures Slide Alongside Cryptocurrencies Amid China Crackdown US futures and European stocks fell amid ongoing nerves over the Evergrande default, while cryptocurrency-linked stocks tumbled after the Chinese central bank said such transactions are illegal. Sovereign bond yields fluctuated after an earlier selloff fueled by the prospect of tighter monetary policy. At 745am ET, S&P 500 e-minis were down 19.5 points, or 0.43%, Nasdaq 100 e-minis were down 88.75 points, or 0.58% and Dow e-minis were down 112 points, or 0.33%. In the biggest overnight news, Evergrande offshore creditors remain in limbo and still haven't received their coupon payment effectively starting the 30-day grace period, while also in China, the State Planner issued a notice on the crackdown of cryptocurrency mining, will strictly prohibit financing for new crypto mining projects and strengthen energy consumption controls of new crypto mining projects. Subsequently, the PBoC issued a notice to further prevent and dispose of the risks from speculating on cryptocurrencies, to strengthen monitoring of risks from crypto trading and such activities are illegal. The news sent the crypto space tumbling as much as 8% while cryptocurrency-exposed stocks slumped in U.S. premarket trading. Marathon Digital (MARA) drops 6.5%, Bit Digital (BTBT) declines 4.7%, Riot Blockchain (RIOT) -5.9%, Coinbase -2.8%. Big banks including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp slipped about 0.5%, while oil majors Exxon Mobil and Chevron Corp were down 0.4% and 0.3%, respectively, in premarket trading.Mega-cap FAAMG tech giants fell between 0.5% and 0.6%. Nike shed 4.6% after the sportswear maker cut its fiscal 2022 sales expectations and warned of delays during the holiday shopping season. Several analysts lowered their price targets on the maker of sports apparel and sneakers after the company cut its FY revenue growth guidance to mid-single- digits. Here are some of the biggest U.S. movers today: Helbiz (HLBZ) falls 10% after the micromobility company filed with the SEC for the sale of as many as 11m shares by stockholders. Focus Universal (FCUV), an online marketing company that’s been a favorite of retail traders, surged 26% in premarket trading after the stock was cited on Stocktwits in recent days. Vail Resorts (MTN) falls 2.7% in postmarket trading after its full-year forecasts for Ebitda and net income missed at the midpoint. GlycoMimetics (GLYC) jumps 15% postmarket after announcing that efficacy and safety data from a Phase 1/2 study of uproleselan in patients with acute myeloid leukemia were published in the journal Blood on Sept. 16. VTV Therapeutics (VTVT) surges 30% after company says its HPP737 psoriasis treatment showed favorable safety and tolerability profile in a multiple ascending dose study. Fears about a sooner-than-expected tapering amid signs of stalling U.S. economic growth and concerns over a spillover from China Evergrande’s default had rattled investors in September, putting the benchmark S&P 500 index on course to snap a seven-month winning streak. Elaine Stokes, a portfolio manager at Loomis Sayles & Co., told Bloomberg Television, adding that “what they did is tell us that they feel really good about the economy.” While the bond selloff vindicated Treasury bears who argue yields are too low to reflect fundamentals, others see limits to how high they can go. “We’d expected bond yields to go higher, given the macro situation where growth is still very strong,” Sylvia Sheng, global multi-asset strategist with JPMorgan Asset Management, said on Bloomberg Television. “But we do stress that is a modest view, because we think that upside to yields is still limited from here given that central banks including the Fed are still buying bonds.” Still, Wall Street’s main indexes rallied in the past two session and are set for small weekly gains. European equities dipped at the open but trade off worst levels, with the Euro Stoxx 50 sliding as much as 1.1% before climbing off the lows. France's CAC underperformed at the margin. Retail, financial services are the weakest performers. EQT AB, Europe’s biggest listed private equity firm, fell as much as 8.1% after Sweden’s financial watchdog opened an investigation into suspected market abuse. Here are some of the other biggest European movers today: SMCP shares surge as much as 9.9%, advancing for a 9th session in 10, amid continued hopes the financial troubles of its top shareholder will ultimately lead to a sale TeamViewer climbs much as 4.2% after Bankhaus Metzler initiated coverage with a buy rating, citing the company’s above-market growth AstraZeneca gains as much as 3.6% after its Lynparza drug met the primary endpoint in a prostate cancer trial Darktrace drops as much as 9.2%, paring the stock’s rally over the past few weeks, as a technical pattern triggered a sell signal Adidas and Puma fall as much as 4% and 2.9%, respectively, after U.S. rival Nike’s “large cut” to FY sales guidance, which Jefferies said would “likely hurt” shares of European peers Earlier in the session, Asian stocks rose for a second day, led by rallies in Japan and Taiwan, following U.S. peers higher amid optimism over the Federal Reserve’s bullish economic outlook and fading concerns over widespread contagion from Evergrande. Stocks were muted in China and Hong Kong. India’s S&P BSE Sensex topped the 60,000 level for the first time on Friday on optimism that speedier vaccinations will improve demand for businesses in Asia’s third-largest economy. The MSCI Asia Pacific Index gained as much as 0.7%, with TSMC and Sony the biggest boosts. That trimmed the regional benchmark’s loss for the week to about 1%. Japan’s Nikkei 225 climbed 2.1%, reopening after a holiday, pushing its advance for September to 7.7%, the best among major global gauges. The Asian regional benchmark pared its gain as Hong Kong stocks fell sharply in late afternoon trading amid continued uncertainty, with Evergrande giving no sign of making an interest payment that was due Thursday. Among key upcoming events is the leadership election for Japan’s ruling party next week, which will likely determine the country’s next prime minister. “Investor concerns over the Evergrande issue have retreated a bit for now,” said Hajime Sakai, chief fund manager at Mito Securities Co. in Tokyo. “But investors will have to keep downside risk in the corner of their minds.” Indian stocks rose, pushing the Sensex above 60,000 for the first time ever. Key gauges fell in Singapore, Malaysia and Australia, while the Thai market was closed for a holiday. Treasuries are higher as U.S. trading day begins after rebounding from weekly lows reached during Asia session, adding to Thursday’s losses. The 10-year yield was down 1bp at ~1.42%, just above the 100-DMA breached on Thursday for the first time in three months; it climbed to 1.449% during Asia session, highest since July 6, and remains 5.2bp higher on the week, its fifth straight weekly increase. Several Fed speakers are slated, first since Wednesday’s FOMC commentary set forth a possible taper timeline.  Bunds and gilts recover off cheapest levels, curves bear steepening. USTs bull steepen, richening 1.5bps from the 10y point out. Peripheral spreads are wider. BTP spreads widen 2-3bps to Bunds. In FX, the Bloomberg Dollar Spot Index climbed back from a one-week low as concern about possible contagion from Evergrande added to buying of the greenback based on the Federal Reserve tapering timeline signaled on Wednesday. NZD, AUD and CAD sit at the bottom of the G-10 scoreboard. ZAR and TRY are the weakest in EM FX. The pound fell after its rally on Thursday as investors looked ahead to BOE Governor Andrew Bailey’s sPeech next week about a possible interest-rate hike. Traders are betting that in a contest to raise borrowing costs first, the Bank of England will be the runaway winner over the Federal Reserve. The New Zealand and Aussie dollars led declines among Group-of-10 peers. The euro was trading flat, with a week full of events failing “to generate any clear directional move,” said ING analysts Francesco Pesole and Chris Turner. German IFO sentiment indeces will “provide extra indications about the area’s sentiment as  businesses faced a combination of delta variant concerns and lingering supply disruptions”. The Norwegian krone is the best performing currency among G10 peers this week, with Thursday’s announcement from the Norges Bank offering support In commodities, crude futures hold a narrow range up around best levels for the week. WTI stalls near $73.40, Brent near $77.50. Spot gold extends Asia’s gains, adding $12 on the session to trade near $1,755/oz. Base metals are mixed, LME nickel and aluminum drop ~1%, LME tin outperforms with a 2.8% rally. Bitcoin dips after the PBOC says all crypto-related transactions are illegal. Looking to the day ahead now, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Market Snapshot S&P 500 futures down 0.3% to 4,423.50 STOXX Europe 600 down 0.7% to 464.18 German 10Y yield fell 8.5 bps to -0.236% Euro little changed at $1.1737 MXAP up 0.4% to 201.25 MXAPJ down 0.5% to 643.20 Nikkei up 2.1% to 30,248.81 Topix up 2.3% to 2,090.75 Hang Seng Index down 1.3% to 24,192.16 Shanghai Composite down 0.8% to 3,613.07 Sensex up 0.2% to 60,031.83 Australia S&P/ASX 200 down 0.4% to 7,342.60 Kospi little changed at 3,125.24 Brent Futures up 0.4% to $77.57/bbl Gold spot up 0.7% to $1,755.38 U.S. Dollar Index little changed at 93.14 Top Overnight News from Bloomberg China Evergrande Group’s unusual silence about a dollar-bond interest payment that was due Thursday has put a focus on what might happen during a 30-day grace period. The Reserve Bank of Australia’s inflation target is increasingly out of step with international counterparts and fails to account for structural changes in the country’s economy over the past 30 years, Westpac Banking Corp.’s Bill Evans said. With central banks from Washington to London this week signaling more alarm over faster inflation, the ultra-stimulative path of the euro zone and some of its neighbors appears lonelier than ever. China’s central bank continued to pump liquidity into the financial system on Friday as policy makers sought to avoid contagion stemming from China Evergrande Group spreading to domestic markets. A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed with the region failing to fully sustain the impetus from the positive performance across global counterparts after the silence from Evergrande and lack of coupon payments for its offshore bonds, stirred uncertainty for the company. ASX 200 (-0.4%) was negative as underperformance in mining names and real estate overshadowed the advances in tech and resilience in financials from the higher yield environment. Nikkei 225 (+2.1%) was the biggest gainer overnight as it played catch up to the prior day’s recovery on return from the Autumnal Equinox holiday in Japan and with exporters cheering the recent risk-conducive currency flows, while KOSPI (-0.1%) was lacklustre amid the record daily COVID-19 infections and after North Korea deemed that it was premature to declare that the Korean War was over. Hang Seng (-1.2%) and Shanghai Comp. (-0.8%) were indecisive after further liquidity efforts by the PBoC were offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds but has a 30-day grace period with the Co. remaining quiet on the issue. Finally, 10yr JGBs were lower on spillover selling from global counterparts including the declines in T-notes as the US 10yr yield breached 1.40% for the first time since early-July with the pressure in bonds also stemming from across the Atlantic following a more hawkish BoE, while the presence of the BoJ in the market today for over JPY 1.3tln of government bonds with 1yr-10yr maturities did very little to spur prices. Top Asian News Rivals for Prime Minister Battle on Social Media: Japan Election Asian Stocks Rise for Second Day, Led by Gains in Japan, Taiwan Hong Kong Stocks Still Wagged by Evergrande Tail Hong Kong’s Hang Seng Tech Index Extends Decline to More Than 2% European equities (Stoxx 600 -0.9%) are trading on the back foot in the final trading session of the week amid further advances in global bond yields and a mixed APAC handover. Overnight, saw gains for the Nikkei 225 of 2.1% with the index aided by favourable currency flows, whilst Chinese markets lagged (Shanghai Comp. -0.8%, Hang Seng -1.6%) with further liquidity efforts by the PBoC offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds. As context, despite the losses in Europe today, the Stoxx 600 is still higher by some 1.2% on the week. Stateside, futures are also on a softer footing with the ES down by 0.4% ahead of a busy Fed speaker schedule. Back to Europe, sectors are lower across the board with Retail and Personal & Household Goods lagging peers. The former has been hampered by losses in Adidas (-3.0%) following after hours earnings from Nike (-4.2% pre-market) which saw the Co. cut its revenue guidance amid supply chain woes. AstraZeneca (+2.1%) sits at the top of the FTSE 100 after announcing that the Lynparza PROpel trial met its primary endpoint. Daimler’s (+0.1%) Mercedes-Benz has announced that it will take a 33% stake in a battery cell manufacturing JV with Total and Stellantis. EQT (-6.5%) sits at the foot of the Stoxx 600 after the Swedish FSA announced it will open an investigation into the Co. Top European News EQT Investigated by Sweden’s FSA Over Suspected Market Abuse Gazprom Says Claims of Gas Under-supply to Europe Are ‘Absurd’ German Sept. Ifo Business Confidence 98.8; Est. 99 German Business Index at Five-Month Low in Pre-Election Verdict In FX, the rot seems to have stopped for the Buck in terms of its sharp and marked fall from grace amidst post-FOMC reflection and re-positioning in the financial markets on Thursday. Indeed, the Dollar index has regained some poise to hover above the 93.000 level having recoiled from 93.526 to 92.977 over the course of yesterday’s hectic session that saw the DXY register a marginal new w-t-d high and low at either end of the spectrum. Pre-weekend short covering and consolidation may be giving the Greenback a lift, while the risk backdrop is also less upbeat ahead of a raft of Fed speakers flanking US new home sales data. Elsewhere, the Euro remains relatively sidelined and contained against the Buck with little independent inspiration from the latest German Ifo survey as the business climate deteriorated broadly in line with consensus and current conditions were worse than forecast, but business expectations were better than anticipated. Hence, Eur/Usd is still stuck in a rut and only briefly/fractionally outside 1.1750-00 parameters for the entire week, thus far, as hefty option expiry interest continues to keep the headline pair in check. However, there is significantly less support or gravitational pull at the round number today compared to Thursday as ‘only’ 1.3 bn rolls off vs 4.1 bn, and any upside breach could be capped by 1.1 bn between 1.1765-85. CAD/NZD/AUD - Some payback for the non-US Dollars following their revival, with the Loonie waning from 1.2650+ peaks ahead of Canadian budget balances, though still underpinned by crude as WTI hovers around Usd 73.50/brl and not far from decent option expiries (from 1.2655-50 and 1.2625-30 in 1.4 bn each). Similarly, the Kiwi has faded after climbing to within single digits of 0.7100 in wake of NZ trade data overnight revealing a much wider deficit as exports slowed and imports rose, while the Aussie loses grip of the 0.7300 handle and skirts 1.1 bn option expiries at 0.7275. CHF/GBP/JPY - The Franc is fairly flat and restrained following a dovish SNB policy review that left in lagging somewhat yesterday, with Usd/Chf and Eur/Chf straddling 0.9250 and 1.0850 respectively, in contrast to Sterling that is paring some hawkish BoE momentum, as Cable retreats to retest bids circa 1.3700 and Eur/Gbp bounces from sub-0.8550. Elsewhere, the Yen has not been able to fend off further downside through 110.00 even though Japanese participants have returned to the fray after the Autumn Equinox holiday and reports suggest some COVID-19 restrictions may be lifted in 13 prefectures on a trial basis. SCANDI/EM/PM/CRYPTO - A slight change in the pecking order in Scandi-land as the Nok loses some post-Norges Bank hike impetus and the Sek unwinds a bit of its underperformance, but EM currencies are bearing the brunt of the aforementioned downturn in risk sentiment and firmer Usd, with the Zar hit harder than other as Gold is clings to Usd 1750/oz and Try down to deeper post-CBRT rate cut lows after mixed manufacturing sentiment and cap u readings. Meanwhile, Bitcoin is being shackled by the latest Chinese crackdown on mining and efforts to limit risks from what it describes as unlawful speculative crypto currency trading. In commodities, WTI and Brent are set the conclude the week in the green with gains in excess of 2% for WTI at the time of writing; in-spite of the pressure seen in the complex on Monday and the first-half of Tuesday, where a sub USD 69.50/bbl low was printed. Fresh newsflow has, once again, been limited for the complex and continues to focus on the gas situation. More broadly, no update as of yet on the Evergrande interest payment and by all accounts we appear to have entered the 30-day grace period for this and, assuming catalysts remain slim, updates on this will may well dictate the state-of-play. Schedule wise, the session ahead eyes significant amounts of central bank commentary but from a crude perspective the weekly Baker Hughes rig count will draw attention. On the weather front, Storm Sam has been upgraded to a Hurricane and is expected to rapidly intensify but currently remains someway into the mid-Atlantic. Moving to metals, LME copper is pivoting the unchanged mark after a mixed APAC lead while attention is on Glencore’s CSA copper mine, which it has received an offer for; the site in 2020 produced circa. 46k/T of copper which is typically exported to Asia smelters. Elsewhere, spot gold and silver are firmer but have been very contained and remain well-within overnight ranges thus far. Which sees the yellow metal holding just above the USD 1750/oz mark after a brief foray below the level after the US-close. US Event Calendar 10am: Aug. New Home Sales MoM, est. 1.0%, prior 1.0% 10am: Aug. New Home Sales, est. 715,000, prior 708,000 Central Bank Speakers 8:45am: Fed’s Mester Discusses the Economic Outlook 10am: Powell, Clarida and Bowman Host Fed Listens Event 10:05am: Fed’s George Discusses Economic Outlook 12pm: Fed’s Bostic Discusses Equitable Community Development DB's Jim Reid concludes the overnight wrap WFH today is a bonus as it’s time for the annual ritual at home where the latest, sleekest, shiniest iPhone model arrives in the post and i sheepishly try to justify to my wife when I get home why I need an incremental upgrade. This year to save me from the Spanish Inquisition I’m going to intercept the courier and keep quiet. Problem is that such speed at intercepting the delivery will be logistically challenging as I remain on crutches (5 weeks to go) and can’t grip properly with my left hand due to an ongoing trapped nerve. I’m very glad I’m not a racehorse. Although hopefully I can be put out to pasture in front of the Ryder Cup this weekend. The big news of the last 24 hours has been a galloping global yield rise worthy of the finest thoroughbred. A hawkish Fed meeting, with the dots increasing and the end of QE potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes. Looking at the specific moves, yields on 10yr Treasuries were up +13.0bps to 1.430% in their biggest daily increase since 25 February, as both higher real rates (+7.9bps) and inflation breakevens (+4.9bps) drove the advance. US 10yr yields had been trading in a c.10bp range for the last month before breaking out higher, though they have been trending higher since dropping as far as 1.17% back in early-August. US 30yr yields rose +13.2bps, which was the biggest one day move in long dated yields since March 17 2020, which was at the onset of the pandemic and just days after the Fed announced it would be starting the current round of QE. The large selloff in US bonds saw the yield curve steepen and the long-end give back roughly half of the FOMC flattening from the day before. The 5y30y curve steepened 3.4bps for a two day move of -3.3bps. However the 2y10y curve steepened +10.5bps, completely reversing the prior day’s flattening (-4.2bps) and leaving the spread at 116bp, the steepest level since first week of July. 10yr gilt yields saw nearly as strong a move (+10.8bps) with those on shorter-dated 2yr gilts (+10.7bps) hitting their highest level (0.386%) since the pandemic began.That came on the back of the BoE’s latest policy decision, which pointed in a hawkish direction, building on the comment in the August statement that “some modest tightening of monetary policy over the forecast period is likely to be necessary” by saying that “some developments during the intervening period appear to have strengthened that case”. The statement pointed out that the rise in gas prices since August represented an upside risks to their inflation projections from next April, and the MPC’s vote also saw 2 members (up from 1 in August) vote to dial back QE. See DB’s Sanjay Raja’s revised rate hike forecasts here. We now expect a 15bps hike in February. The generalised move saw yields in other European countries rise as well, with those on 10yr bunds (+6.6bps), OATs (+6.5bps) and BTPs (+5.7bps) all seeing big moves higher with 10yr bunds seeing their biggest climb since late-February and back to early-July levels as -0.258%. The yield rise didn’t stop equity indices recovering further from Monday’s rout, with the S&P 500 up +1.21% as the index marked its best performance in over 2 months, and its best 2-day performance since May. Despite the mood at the end of the weekend, the S&P now starts Friday in positive territory for the week. The rally yesterday was led by cyclicals for a second straight day with higher commodity prices driving outsized gains for energy (+3.41%) and materials (+1.39%) stocks, and the aforementioned higher yields causing banks (+3.37%) and diversified financials (+2.35%) to outperform. The reopening trade was the other main beneficiary as airlines rose +2.99% and consumer services, which include hotel and cruiseline companies, gained +1.92%. In Europe, the STOXX 600 (+0.93%) witnessed a similarly strong performance, with index led by banks (+2.16%). As a testament to the breadth of yesterday’s rally, the travel and leisure sector (+0.04%) was the worst performing sector on this side of the Atlantic even while registering a small gain and lagging its US counterparts. Before we get onto some of yesterday’s other events, it’s worth noting that this is actually the last EMR before the German election on Sunday, which has long been signposted as one of the more interesting macro events on the 2021 calendar, the results of which will play a key role in not just domestic, but also EU policy. And with Chancellor Merkel stepping down after four terms in office, this means that the country will soon be under new management irrespective of who forms a government afterwards. It’s been a volatile campaign in many respects, with Chancellor Merkel’s CDU/CSU, the Greens and the centre-left SPD all having been in the lead at various points over the last six months. But for the last month Politico’s Poll of Polls has shown the SPD consistently ahead, with their tracker currently putting them on 25%, ahead of the CDU/CSU on 22% and the Greens on 16%. However the latest poll from Forschungsgruppe Wahlen yesterday suggested a tighter race with the SPD at 25, the CDU/CSU at 23% and the Greens at 16.5%. If the actual results are in line with the recent averages, it would certainly mark a sea change in German politics, as it would be the first time that the SPD have won the popular vote since the 2002 election. Furthermore, it would be the CDU/CSU’s worst ever result, and mark the first time in post-war Germany that the two main parties have failed to win a majority of the vote between them, which mirrors the erosion of the traditional big parties in the rest of continental Europe. For the Greens, 15% would be their best ever score, and exceed the 9% they got back in 2017 that left them in 6th place, but it would also be a disappointment relative to their high hopes back in the spring, when they were briefly polling in the mid-20s after Annalena Baerbock was selected as their Chancellor candidate. In terms of when to expect results, the polls close at 17:00 London time, with initial exit polls released immediately afterwards. However, unlike the UK, where a new majority government can immediately come to power the day after the election, the use of proportional representation in Germany means that it could potentially be weeks or months before a new government is formed. Indeed, after the last election in September 2017, it wasn’t until March 2018 that the new grand coalition between the CDU/CSU and the SPD took office, after attempts to reach a “Jamaica” coalition between the CDU/CSU, the FDP and the Greens was unsuccessful. In the meantime, the existing government will act as a caretaker administration. On the policy implications, it will of course depend on what sort of government is actually formed, but our research colleagues in Frankfurt have produced a comprehensive slidepack (link here) running through what the different parties want across a range of policies, and what the likely coalitions would mean for Germany. They also put out another note yesterday (link here) where they point out that there’s still much to play for, with the SPD’s lead inside the margin of error and with an unusually high share of yet undecided voters. Moving on to Asia and markets are mostly higher with the Nikkei (+2.04%), CSI (+0.53%) and India’s Nifty (+0.52%) up while the Hang Seng (-0.03%), Shanghai Comp (-0.07%) and Kospi (-0.10%) have all made small moves lower. Meanwhile, the Evergrande group missed its dollar bond coupon payment yesterday and so far there has been no communication from the group on this. They have a 30-day grace period to make the payment before any event of default can be declared. This follows instructions from China’s Financial regulators yesterday in which they urged the group to take all measures possible to avoid a near-term default on dollar bonds while focusing on completing unfinished properties and repaying individual investors. Yields on Australia and New Zealand’s 10y sovereign bonds are up +14.5bps and +11.3bps respectively this morning after yesterday’s move from their western counterparts. Yields on 10y USTs are also up a further +1.1bps to 1.443%. Elsewhere, futures on the S&P 500 are up +0.04% while those on the Stoxx 50 are down -0.10%. In terms of overnight data, Japan’s August CPI printed at -0.4% yoy (vs. -0.3% yoy expected) while core was unchanged in line with expectations. We also received Japan’s flash PMIs with the services reading at 47.4 (vs. 42.9 last month) while the manufacturing reading came in at 51.2 (vs. 52.7 last month). In pandemic related news, Jiji reported that Japan is planning to conduct trials of easing Covid restrictions, with 13 prefectures indicating they’d like to participate. This is likely contributing to the outperformance of the Nikkei this morning. Back to yesterday now, and one of the main highlights came from the flash PMIs, which showed a continued deceleration in growth momentum across Europe and the US, and also underwhelmed relative to expectations. Running through the headline numbers, the Euro Area composite PMI fell to 56.1 (vs. 58.5 expected), which is the lowest figure since April, as both the manufacturing (58.7 vs 60.3 expected) and services (56.3 vs. 58.5 expected) came in beneath expectations. Over in the US, the composite PMI fell to 54.5 in its 4th consecutive decline, as the index hit its lowest level in a year, while the UK’s composite PMI at 54.1 (vs. 54.6 expected) was the lowest since February when the country was still in a nationwide lockdown. Risk assets seemed unperturbed by the readings, and commodities actually took another leg higher as they rebounded from their losses at the start of the week. The Bloomberg Commodity Spot index rose +1.12% as Brent crude oil (+1.39%) closed at $77.25/bbl, which marked its highest closing level since late 2018, while WTI (+1.07%) rose to $73.30/bbl, so still a bit beneath its recent peak in July. However that is a decent rebound of roughly $11/bbl since its recent low just over a month ago. Elsewhere, gold (-1.44%) took a knock amidst the sharp move higher in yields, while European natural gas prices subsidised for a third day running, with futures now down -8.5% from their intraday peak on Tuesday, although they’re still up by +71.3% since the start of August. US negotiations regarding the upcoming funding bill and raising the debt ceiling are ongoing, with House Speaker Pelosi saying that the former, also called a continuing resolution, will pass “both houses by September 30,” and fund the government through the first part of the fiscal year, starting October 1. Treasury Secretary Yellen has said the US will likely breach the debt ceiling sometime in the next month if Congress does not increase the level, and because Republicans are unwilling to vote to raise the ceiling, Democrats will have to use the once-a-fiscal-year tool of budget reconciliation to do so. However Democrats, are also using that process for the $3.5 trillion dollar economic plan that makes up the bulk of the Biden agenda, and have not been able to get full party support yet. During a joint press conference with Speaker Pelosi, Senate Majority Leader Schumer said that Democrats have a “framework” to pay for the Biden Economic agenda, which would imply that the broad outline of a deal was reached between the House, Senate and the White House. However, no specifics were mentioned yesterday. With Democrats looking to vote on the bipartisan infrastructure bill early next week, negotiations today and this weekend on the potential reconciliation package will be vital. Looking at yesterday’s other data, the weekly initial jobless claims from the US for the week through September 18 unexpectedly rose to 351k (vs. 320k expected), which is the second week running they’ve come in above expectations. Separately, the Chicago Fed’s national activity index fell to 0.29 in August (vs. 0.50 expected), and the Kansas City Fed’s manufacturing activity index also fell more than expected to 22 in September (vs. 25 expected). To the day ahead now, and data highlights include the Ifo’s business climate indicator from Germany for September, along with Italian consumer confidence for September and US new home sales for August. From central banks, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Tyler Durden Fri, 09/24/2021 - 08:12.....»»

Category: blogSource: zerohedgeSep 24th, 2021

Allison (ALSN) & JJE Join Forces for Commercial E-Powertrains

Allison's (ALSN) partnership with JJE will bank on the latter's robust foothold in the Chinese commercial vehicle electrified powertrain market. Allison Transmission ALSN recently entered into a global strategic collaboration partnership agreement with Jing-Jin Electric (“JJE”) to accelerate the development of best-in-class electrified powertrain solutions for global commercial vehicles.China-based JJE is an electrified propulsion leader in components, assemblies and systems for the global automotive and commercial vehicle customers.The companies are highly optimistic about this partnership as it will prove beneficial for both. JJE possesses more than 10 years of experience in the industry-leading electric motors and power electronics as well as central and direct drive electrified propulsion architectures. Allison, meanwhile, brings to the table decades of experience in building reliable and valued propulsion solutions, including electrified propulsion systems development and commercialization.The collaboration aims to bank on JJE’s dominance in electric motor and inverter development, and its robust foothold in the Chinese commercial vehicle electrified powertrain market, while exploiting Allison’s expertise in the fully electric and electric hybrid commercial duty propulsion systems.Commercial vehicle’s electrification will be one of the greatest contributors toward achieving carbon neutrality in transportation. The deal will enable Allison and JEE to merge their competencies in order to create the most powerful, most efficient and most reliable electrified powertrains for global commercial vehicle customers. Amid the aggravating climate change concerns, the companies together will pivot the transformation toward carbon neutral and zero emission transportation.Moreover, the integration of their capabilities through the partnership will enable them to offer innovative and reliable electrified propulsion solutions to the commercial vehicle manufacturers across the globe. The partnership will uniquely position both parties to gain a global manufacturing presence and take advantage of their combined service networks in order to cater to customers in local markets with highly cost-competitive products. Together, the companies will further enhance their product menus, manufacturing locations and supporting resources. Additionally, Allison has pledged to provide debt financing to back JJE North America’s efforts for commercial vehicle electric drive product development, testing and manufacturing.In a separate development, Daimler’s DDAIF Truck arm has integrated Allison 3414 Regional Haul Series (RHS) into its Class 8 Freightliner Cascadia Day Cab models. The first Freightliner Cascadias, equipped with the 3414 RHS, will begin production in January 2022.The Allison 3414 RHS is an upgraded variant of Allison’s proven 3000 Series fully automatic transmission. It offers up to 8% fuel economy efficiency compared to the Allison 3000 Highway Series, and provides 25% quicker acceleration over the automated manual transmissions.Allison’s latest development in regional haul trucking provides Daimler’s Freightliner customers with an efficient solution that enhances the payload, performance, fuel efficiency and driver comfort. The latest integration creates a winning portfolio for weight-conscious segments, where acceleration and maneuverability are the most crucial aspects.Headquartered in Indianapolis, IN, Allison is a manufacturer of fully-automatic transmissions for medium- and heavy-duty commercial and heavy-tactical U.S. defense vehicles. In fact, the company is the largest producer of fully-automatic transmissions, holding the leading position in several niche markets. The firm also offers electric hybrid and fully-electric propulsion systems.Allison, peers of which include American Axle & Manufacturing Holdings AXL and Meritor MTOR, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Daimler AG (DDAIF): Free Stock Analysis Report American Axle & Manufacturing Holdings, Inc. (AXL): Free Stock Analysis Report Meritor, Inc. (MTOR): Free Stock Analysis Report Allison Transmission Holdings, Inc. (ALSN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

Wells Fargo (WFC) Asset Cap to Stay Intact Till Issues Persist

Federal Reserve Chair Jerome Powell said that Wells Fargo's (WFC) $1.95-bilion asset cap will stay in place until the company makes efforts to comprehensively correct its problems. Wells Fargo & Company’s WFC looming $1.95-billion asset cap is likely to stay put “until the firm has comprehensively fixed its problems,” Federal Reserve Chair Jerome Powell said in the September FOMC press conference when asked about Senator Warren’s letter last week that urged the Fed to break up the Wall Street biggie.Jerome Powell noted that the Fed is closely keeping an eye on the remedial efforts by Wells Fargo to mend its "widespread and pervasive" problems. The central bank continues to hold the company accountable for its deficiencies and will take stringent necessary actions if it fails to undertake corrective steps. Hence, the unprecedented asset cap placed on the bank in 2018 will continue to hinder its growth.Legal hassles escalated for Wells Fargo on Sep 9 when the Office of the Comptroller of the Currency (“OCC”) assessed a $250-million civil money penalty on the company on the grounds of “unsafe or unsound practices” related to the home-lending loss mitigation program. With the failure of the program, which required the bank to repay customers who were charged excessive or improper fees, the company has violated the terms of the 2018 consent order that condemned its risk management systems.In addition to the hefty fine, the company has been slapped with an enforcement action, with the OCC issuing a cease and desist order to curb the bank’s future activities until ongoing mortgage servicing concerns are appropriately dealt with.However, in the following week, U.S. Senator Elizabeth Warren addressed a letter to the Fed, urging the central bank to revoke Well Fargo’s license as a financial holding company.The senator stated that the latest $250-million fine against the bank shows it to be an "irredeemable repeat offender". Hence, the company’s core traditional banking activities should be separated from its other financial services and Wall Street operations. This will ensure that the bank’s customers stay protected until its transition is completed.Nonetheless, since legal hassles have been snowballing on the company, it has undertaken numerous initiatives and achieved regulatory milestones. Specifically, Wells Fargo has bifurcated three business groups into five and created four Enterprise Functions to propel greater oversight and transparency. It also launched an enterprise-wide risk and control self-assessment program to evaluate operational risks and controls as well as design appropriate mitigating controls.The company’s 2016 consent order, which was issued by the Consumer Financial Protection Bureau in relation to the bank’s retail sales practices, was terminated last week.Moreover, this January, the OCC terminated a 2015 consent order related to the Wall Street giant’s Bank Secrecy Act/Anti-Money Laundering compliance program. In May 2020, the OCC upgraded the company’s Community Reinvestment Act rating to "outstanding".Further, shares of this Zacks Rank #3 (Hold) company have outperformed its industry over the past six months, gaining 24% compared with the industry’s rally of 7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Image Source: Zacks Investment Research Several finance companies continue to encounter legal hassles and are charged with huge sums of money for business malpractices.Mitsubishi UFJ Financial Group’s MUFG U.S. banking unit, MUFG Union Bank NA, has been recently slapped with a cease-and-desist order by the OCC over its unsound technological practices.Credit Acceptance Corporation CACC announced the settlement of a lawsuit with the Massachusetts Attorney General and agreed to pay $27.2 million. In August 2020, AG Maura Healey filed a lawsuit in Suffolk County Superior Court, claiming that the company violated state consumer protection, and debt collection laws and regulations.Charles Schwab SCHW had been slapped with a class-action lawsuit over violations of its fiduciary duty by placing its interest before the protection of its clients through the bank’s robo-adviser Schwab Intelligent Portfolios’ cash sweep program. The case, filed in the U.S. District Court in Northern California, also accused the company of breach of contract and the violation of state laws. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wells Fargo & Company (WFC): Free Stock Analysis Report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Credit Acceptance Corporation (CACC): Free Stock Analysis Report Mitsubishi UFJ Financial Group, Inc. (MUFG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

The U.S. Is Losing the Global Race to Decide the Future of Money—and It Could Doom the Almighty Dollar

"I don’t think the U.S. is aware there is a race" In cities across China, the country’s central bank has begun rolling out the e-renminbi—an all-digital version of its paper currency that can be accessed and accepted by merchants and consumers without an internet connection, credit or even a bank account. Already having conducted more than $5 billion in e-renminbi transactions, China has opened its digital currency up to foreigners. Next year, when Beijing hosts the Winter Olympic Games, authorities are expecting to let the world test drive its technological achievement. The U.S., by contrast, is having trouble even concluding its multi-year exploration into the possibility of an e-dollar. In fact, an upcoming Federal Reserve paper on a potential U.S. digital currency won’t take a position on whether the central bank of the United States will, or even should, create one. [time-brightcove not-tgx=”true”] Instead, Federal Reserve Chair Jerome Powell said in recent testimony to Congress, this paper will “begin a major public consultation on central bank digital currencies…” (Once planned for July, the paper’s release has since been moved to September.) Once the world leader in digital payments and technological innovation, the U.S. is being outpaced by its top global adversary as well as much of the industrialized and the developing world. The Bahamas recently announced the integration of its digital Sand Dollar into a stock exchange, while Australia, Malaysia, Singapore and South Africa are moving forward with the world’s first cross-border central bank digital currency exchange program led by the Bank for International Settlements (BIS), which is known as the central bank of central banks. Such developments have been somewhat outshined by El Salvador’s recent decision to make bitcoin a legally accepted currency, which few expect to make significant impact in the payment space. But outside of the cryptocurrency space, nations around the globe are making significant strides in the development of the digital future of money — supported by governments and backed by powerful central banks. Leadership in this space will have implications for more than just payments: geopolitical ambitions, economic growth, financial inclusion and the very nature of money could all be dictated by who leads the charge and how. “I don’t think the U.S. is aware there is a race” Digital currencies are the next wave in the “evolution of the nature of money in the digital economy,” Hyun Song Shin, economic adviser and co-leader of the Monetary and Economic Department at the Bank for International Settlements, tells TIME. As more of our world migrates from physical brick-and-mortar to wireless and cloud-based, the way we pay for things is changing as well. A central bank digital currency would operate just like cash, but instead of having to carry it in a physical wallet or put it into a bank account, it would be stored and accessed digitally. Not only could U.S.-backed digital currency facilitate easier, modern banking, it could prove vital in protecting American international influence. Late to the party, the U.S. is “stepping up its research and public engagement” on digital currencies, the Federal Reserve says, including forming working groups on cryptocurrency and other kinds of digital money, and experimenting with technology that would be central to producing a digital dollar. The Fed’s regional Boston branch is overseeing these efforts with the Massachusetts Institute of Technology on what’s known as Project Hamilton. But the path towards a digital U.S. dollar has met many challenges, skeptics and outright opponents. All while China, and other countries, push forward. Lagging behind the world Just how far behind is the U.S. in the development of a central bank-issued digital currency (CBDC)? According to global accounting firm PwC’s inaugural CBDC global index, which tracks various CBDCs’ project status from research to development and production, the U.S. ranks 18th in the world. America’s potential efforts trail countries like Sweden, South Korea and China but also countries like the Bahamas, Ecuador, Eastern Caribbean and Turkey. China, with its government’s hyperfocus on maintaining control and overseeing data, has been working to develop a CBDC for almost a decade. And the U.S. is probably not close to catching up. Analysts like Harvard economics professor Kenneth Rogoff, who study monetary policy and digital currencies, estimate that the U.S. could be at least a decade away from issuing a digital dollar backed by the Fed. In that time, Rogoff argued in an op-ed earlier this year, the modernization of China’s financial markets and reduction or removal of its currency controls “could deal the dollar’s status a painful blow.” Read More: How China’s Digital Currency Could Challenge the Almighty Dollar China has already largely moved away from coin and paper currency; Chinese consumers have racked up more than $41 trillion in mobile transactions, according to a recent research paper from the Brookings Institution, with the lion’s share (92%) going through digital payment processors WeChat Pay and Alipay. “The reason you could say the U.S. is behind in the digital currency race is I don’t think the U.S. is aware there is a race,” Yaya Fanusie, an Adjunct Senior Fellow at the Center for a New American Security, and a former CIA analyst, tells TIME in an interview. “A lot of policymakers are looking at it and concerned…but even with that I just don’t think there’s this sense of urgency because the risk from China is not an immediate threat.” Not only is the U.S. running significantly behind in the development of a CBDC, we are trailing the rest of the world in digital payments broadly. Kenya, for example, has almost fully digitized its economy through its digital currency and payment system MPESA, making transactions free and almost instantaneous. India’s Unified Payments Interface (UPI) allows users to transfer money instantly between bank accounts with no cost. Brazil’s PIX facilitates the transfer of money between people and companies in up to 10 seconds. All of these programs work through and are overseen by the countries’ central banks rather than commercial banks or other private companies. What’s holding the U.S. back? Critics argue CBDCs are simply a solution in search of a problem and potentially harmful. Many see support from the banking sector as vital to the success of a digital U.S. dollar, however commercial banks in the U.S. have taken a largely adversarial stance. “The proposed benefits of CBDCs to international competitiveness and financial inclusion are theoretical, difficult to measure and may be elusive,” the American Bankers Association said in a statement at a recent congressional hearing on digital currencies. “While the negative consequences for monetary policy, financial stability, financial intermediation, the payments system, and the customers and communities that banks serve could be severe.” The Bank Policy Institute, which lobbies on behalf of the country’s largest banks, went so far as to argue that neither the Fed nor the U.S. Treasury even has the constitutional authority to issue a digital currency. Commercial banks dominate the U.S. financial system to such a degree that unraveling them would be ostensibly impossible, experts say, they also would be a powerful adversary. Former Goldman Sachs managing director Nomi Prins notes banks have clearly seen the writing on the wall. “Banks are centralized middlemen with respect to financial transactions,” Prins, author of Collusion: How Central Bankers Rigged The World, tells TIME. “The more popular cryptocurrency or digital currency becomes, the fewer profits the banking system can reap from traditional services and verification methods that allow them to hold, take or use their customers’ money, and the more financial power they stand to lose as a result.” Even disruptive financial technologies like PayPal, Venmo and Zelle work through the banking system, rather than around it, thanks in large part to the banks’ power. Central bankers also generally have concluded that commercial banks are a necessary piece of a potential CBDC ecosystem, thanks to their pre-existing regulatory guardrails and ability to move money. Read More: How Jay Powell’s Coronavirus Response Is Changing the Fed Forever Top policymakers at the Fed, including influential Vice Chair for Supervision Randal Quarles, have joined the banking industry in arguing that a digital dollar “could pose significant and concrete risks” and that the potential benefits “are unclear.” Fed Governor Christopher Waller said in August he was “skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system,” in a recent speech he titled “CBDC: A Solution in Search of a Problem?” Further, there’s no central U.S. authority with direct oversight or responsibility for any of this. In addition to the Fed, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, Office of Thrift Supervision, Financial Stability Oversight Council, Federal Financial Institutions Examination Council and the Office of Financial Research would all have some stake in the development of a digital currency backed by the central bank, to say nothing of state and regional authorities. “The U.S. has an active congressional debate, which is beneficial and very important,” Federal Reserve Governor Lael Brainard tells TIME in an interview. “But the U.S. also has a diffusion of regulatory responsibility with no single payments regulator at the federal level, which is not as helpful. That diffusion of responsibility is part of what creates the lags that our system is working through.” None of this exists in China where the Chinese Communist Party oversees the central bank, commercial banks and their regulators and is unconcerned with privacy. How a downgraded dollar could hamstring U.S. influence An American CBDC could have lasting geopolitical impact and curb a longstanding international effort to reduce reliance on the mighty U.S. dollar. “Why we should care about this is that the U.S. financial system is not intrinsically dominant,” Fanusie says. “Other countries, both allies and adversaries, are sincerely interested in finding ways to decrease their dependence on the dollar.” With the U.S. dollar as the world’s reserve and primary funding currency, the U.S. can restrict access to funding from financial markets, limit countries’ ability to sell their natural resources and hinder or block individuals’ access to the banking sector. “Other countries, both allies and adversaries, are sincerely interested in finding ways to decrease their dependence on the dollar” While dollar dominance has rankled much of the world for decades, there has been no suitable replacement for the U.S., with its massive economy, sophisticated banking system and sprawling international presence. China is in the midst of a long-term push to simultaneously grow its financial markets and internationalize its currency. Both have the end goal of allowing China and its allies to limit the ability of the U.S. to enforce its will through economic actions like sanctions. Fanusie wrote in a January report that being the first major economy to roll out a digital currency is “part of China’s geopolitical ambitions.” However, the renminbi will not become the world’s reserve currency — at least, not any time soon. But what China has done by being in the forefront of CBDC development is put itself in position to take the lead on development and implementation of rules and regulations for digital currencies on a global scale. “While America led the global revolution in payments half a century ago with magnetic striped credit and debit cards, China is leading the new revolution in digital payments,” writes Brookings’ economic studies fellow Aaron Klein. Why should central banks offer digital currencies? Over the past decade, digital currencies, including cryptocurrency and “stablecoins,” have sprung up like weeds. Some purport to be just as safe as dollars, but are backed by questionable assets. In a crisis regulators worry they could fluctuate wildly in value or lose their value altogether. Having central banks, which are responsible for the printing and circulation of coins and paper money, issue digital currencies is in part a reaction to this private sector activity, Shin says, “accelerated by the potential encroachment of private digital currencies, and the need to preserve the role of money as a public good.” “The status quo is not an option” Notably, a U.S. digital currency could provide benefits to everyday people. It could increase financial inclusion and fix flaws in current payments systems, Shin adds, citing findings of a recent BIS study. For example, transferring money between U.S.-based bank accounts, even those held by the same person, can take days. The process can be even longer when crossing international borders. Credit and debit card transactions similarly don’t settle for days and come with significant fees for merchants, who sometimes pass them on to customers. CBDCs could grant universal access to the banking sector and quickly facilitate the distribution of paychecks and government funds, reducing the need for costly bank workarounds like check cashing and payday loans. Championing CBDCs Brainard has been pushing the Fed to move on a digital currency for years, but there was little urgency from others at the Fed or in Congress. Companies developing their own currencies, consumers investing in cryptocurrency and the COVID-19 pandemic making paper notes anathema to many Americans changed that. Before COVID-19, Facebook’s Libra project (now known as Diem) showed lawmakers and central bankers the potential for a private company to step in and fill the void by effectively minting its own currency that could be spent by users around the world. “The status quo is not an option,” Diem co-creator David Marcus said at the International Monetary Fund’s 2019 fall meeting. “Whether it’s Libra or something else, the world is going to change in a profound way.” Brainard, for one, has taken notice. “My own thinking is that stablecoins and related private sector initiatives are moving very rapidly, which makes it incumbent on us to move more rapidly,” she tells TIME. “That is why I have been pushing to advance outreach, cross-border engagement, and policy and technology research for several years now.” So-called stablecoins — unregulated digital currencies created by private companies that purport to represent dollars but are completely unregulated — have become a significant worry for lawmakers and shown the importance of considering tying currency to a central bank. “It’s getting harder and harder for community banks to compete for new customers when big tech companies can afford to spend billions on marketing and technology,” Sen. Sherrod Brown, who chairs the Senate Banking Committee, tells TIME. “But many of these new ‘fintech’ products don’t come with the consumer protections, federal backing or customer service and relationships with the community that small banks and credit unions provide.” During a hearing on digital currencies in June, Sen. Elizabeth Warren, the ranking member of the Subcommittee on Financial Institutions and Consumer Protection, compared stablecoins to worthless “wildcat notes” that were issued by speculators in the 19th century. Her expert at that hearing, Lev Menand, an Academic Fellow and Lecturer in Law at Columbia Law School, went further in his testimony, calling stablecoins “dangerous to both their users and … to the broader financial system.” With private companies pushing deeper into the digital currency space, rival countries seeking to seize leadership and a public that is moving further away from physical currency, the U.S. is facing a world in which it may not control or even lead the world’s payment systems. That would make the future of money look very different from the past......»»

Category: topSource: timeSep 21st, 2021

The "Great Game" Moves On

The 'Great Game' Moves On Authored by Alasdair Macleod via GoldMoney.com, Following America’s withdrawal from Afghanistan, her focus has switched to the Pacific with the establishment of a joint Australian and UK naval partnership. The founder of modern geopolitical theory, Halford Mackinder, had something to say about this in his last paper, written for the Council on Foreign Relations in 1943. Mackinder anticipated this development, though the actors and their roles at that time were different. In particular, he foresaw the economic emergence of China and India and the importance of the Pacific region. This article discusses the current situation in Mackinder’s context, taking in the consequences of green energy, the importance of trade in the Pacific region, and China’s current deflationary strategy relative to that of declining western powers aggressively pursuing asset inflation. There is little doubt that the world is rebalancing as Mackinder described nearly eighty years ago. To appreciate it we must look beyond the West’s current economic and monetary difficulties and the loss of its hegemony over Asia, and particularly note the improving conditions of the Asia’s most populous nations. Introduction Following NATO’s defeat in the heart of Asia, and with Afghanistan now under the Taliban’s rule, the Chinese/Russian axis now controls the Asian continental mass. Asian nations not directly related to its joint hegemony (not being members, associates, or dialog partners of the Shanghai Cooperation Organisation) are increasingly dependent upon it for trade and technology. Sub-Saharan Africa is in its sphere of influence. The reality for America is that the total population in or associated with the SCO is 57% of the world population. And America’s grip on its European allies is slipping. NATO itself has become less relevant, with Turkey drawn towards the rival Asian axis, and its EU members are compromised through trading and energy links with Russia and China. Furthermore, France is pushing the EU towards establishing its own army independent of US-led NATO — quite what its role will be, other than political puffery for France is a mystery. It is against this background that three of the Five Eyes intelligence partnership have formed AUKUS – standing for Australia, UK, and US — and its first agreement is to give Australia a nuclear submarine capability to strengthen the partnership’s naval power in the Pacific. Other capabilities, chiefly aimed at containing the Chinese threat to Taiwan and other allies in the Pacific Ocean, will surely emerge in due course. The other two Five Eyes, Canada and New Zealand, appear to be less keen to confront China. But perhaps they will also have less obvious roles in due course beyond pure intelligence gathering. The US, under President Trump, had failed to contain China’s increasing economic dominance and its rapidly developing technological challenge to American supremacy. Trump’s one success was to peel off the UK from its Cameron/Osbourne policy of strengthening trade and financial ties with China by threatening the UK’s important role in its intelligence partnership with the US. For the UK, the challenge came at a critical time. Brexit had happened, and the UK needed global partners for its future trade and geopolitical strategies, the latter needed to cement its re-emergence onto the world stage following Brexit. Trump held out the carrot of a fast-tracked US/UK trade deal. The Swiss alternative of neutrality in international affairs is not in the UK’s DNA, so realistically the decision was a no-brainer: the UK had to recommit itself entirely to the Anglo-Saxon Five-Eyes partnership with the US, Canada, Australia, and New Zealand and turn its back on China. But gathering intelligence and building naval power in the Pacific won’t defeat the Chinese. All simulations show that the US, with or without AUKUS, cannot win a military conflict against China. But AUKUS is not a formal model on NATO lines which commits its members by treaty to aggression against a common enemy. While Taiwan remains a specific problem, the objective is almost certainly to discourage China from territorial expansion and protect and give other Pacific nations on the Asian periphery the security to be independent from the SCO behemoth. The trade benefits of closer relationships with these independent nations are also an additional reason for the UK to join the CPTPP — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It qualifies for membership through its sovereignty over the Pitcairn Islands. And that is why China has also applied to join. Therefore, AUKUS’s importance is in the signal sent to China and the whole Pacific region, following the abandonment of land-based operations in the Middle East and Afghanistan. The maritime threat to China is a line which must not be crossed. We are entering a new era in the Great Game, where the objective has changed from dominance to containment. Having lost its position of ultimate control in the Eurasian land mass America has selected its partners to retain control over the high seas. And the UK has found a new geopolitical purpose, re-establishing a global role now that it is independent from the EU. The French cannot join the CPTPP being bound into the common trade policies of the EU. Seeing the British escape the strictures of the EU and rapidly obtain more global influence than France could dream of has touched a raw nerve. Mackinder vindicated The father of geopolitics, Halford Mackinder, is frequently quoted and his theories are still relevant to the current situation. Much has been written about Mackinder’s prophecies. His concept of the World Island was first mentioned in his 1904 presentation to the Royal Geographic Society in London: “a pivot state, resulting in its expansion over the marginal lands of Euro-Asia”. In 1943 he updated his views in an article for the Council on Foreign Relations, adding to his heartland theory. Written during the Second World War, his commentary reflected the combatants and their positions at that time. But despite this, he made a perceptive comment relative to the situation today and AUKUS: “Were the Chinese for instance organised by the Japanese to overthrow the Russian Empire and conquer its territory they might constitute the yellow peril to the world’s freedom just because they would add an oceanic frontage to the resources of the great continent.” When Mackinder wrote his article the Japanese had already invaded Manchuria, but their subsequent defeat removed them from an active geopolitical role, and in place of a Soviet defeat China has entered a peaceful partnership with Russia that extends to all its old Central Asian soviet satellites. It is the focus on the ocean frontage that matters, upon which the maritime silk road depends. The article brings into play another aspect mentioned by Mackinder, and that is the Heartland’s tremendous natural resources, “…including enough coal in the Kuznetsk and Krasnoyarsk basins capable of supplying the requirements of the whole world for 300 years”. And: “In 1938 Russia produced more of the following food stuffs than any other country in the world: wheat, barley, oats, rye, and sugar beets. More manganese was produced in Russia than in any other country. It was bracketed with United States in the first place as regards iron and it stood second place in production of petroleum”. Through its partnership with Russia all these latent resources are available to the Chinese and Russian partnership. And the real potential for industrialisation, held back by communism and now by Russian corruption, has barely commenced. After presciently noting that one day the Sahara may become the trap for capturing direct power from the sun (foreseeing solar panels), Mackinder’s article ended on an optimistic note: “A thousand million people of ancient oriental civilisation inhabit the monsoon lands of India and China [today 3 billion, including Pakistan]. They must grow to prosperity in the same years in which Germany and Japan are being tamed to civilisation. They will then balance that other thousand million who live between the Missouri and the Yenisei [i.e., Central and Eastern America, Britain, Europe and Russia beyond the Urals]. A balanced globe of human beings and happy because balanced and thus free.” Both China and now India are rapidly industrialising, becoming part of a balanced globe of humanity. While the West tries to hang on to what it has got rather than progressing, China and India along with all of under-developed Asia are moving rapidly in the direction of individual freedom of economic choice and improvements in living conditions, to which Mackinder was referring. Obviously, there is some way for this process yet to go, displacing western hegemony in the process. America particularly has found the political challenges of change difficult, with its deep state unable to come to terms easily with the implications for its military and economic power. We must hope that Mackinder was right, and the shift of economic power is best to be regarded as the pains of geopolitical evolution rather than conditions for escalating conflict. But in pursuing its green agenda and eschewing carbon fuels, the West is unwittingly handing a gift to Mackinder’s Heartland, because despite diplomatic noises to the contrary China, India and all the SCO membership will continue to use cheap coal, gas, and oil which Asia has in abundance while Western manufacturers are forced by their governments to use expensive and less reliable green energy. Green obsessions and global trade Meanwhile, the West has gone green-crazy. Banning fossil fuels without there being adequate replacements must be a new definition of insanity, for which the current fuel crises in Europe attest. With over 95% of European logistics currently being shifted by diesel power, switching to battery power or hydrogen by 2030 by banning sales of new internal combustion engine vehicles is a hostage to fortune. While it is hardly mentioned, presumably the Western powers think that by banning carbon fuels they will take the wind out of Russia’s energy quasi-monopoly, because including gas Russia is the largest exporter of fossil fuels in the world. Instead, the West is creating an energy shortage for itself, a point driven home by Gazprom withholding gas flows through its pipelines to Europe, thereby driving up Europe’s energy costs sharply and ensuring a far more severe energy crisis this winter. Even if Russia turns on the taps tomorrow, there is insufficient gas storage in reserve for the winter months. And Europe and the UK have got ahead of themselves by decommissioning coal and gas-fired electricity. In the UK, a massive undersea gas storage facility off the Yorkshire coast has been closed, leaving precious little national storage capacity. As we have seen with the post-covid supply chain chaos, energy problems will not only become acute this winter, but are likely to persist through much of next year. And even that assumes Russia relents and moderates its energy stance to European customers. By way of contrast, though its partnership with Russia China is gifted unlimited access to all carbon fuels. She is still building coal-fired electricity power stations at an extraordinary rate — according to a BBC report there are 61 new ones being commissioned. A further 51 outside China are planned. As a sop to the West China has only said she won’t finance any more outside her territory. And India relies on coal for over two-thirds of its electrical energy. While Europe and America through their green obsessions are denying themselves the availability and technologies that go with carbon fuels, the Russian/Chinese axis will continue to reap the full benefits. The West’s response is likely to be to decry Chinese pollution and its contribution to global warming, but realistically there is little it can do. Demand for Chinese-manufactured goods will continue because China now has a quasi-monopoly on global manufacturing for export. In the unlikely event western consumers become avid savers while their governments continue to run massive budget deficits, their trade deficits will rise even more, allowing Chinese exporters to increase prices for consumers and intermediate goods without losing export sales. While there is nothing it can do about China’s production methods, AUKUS members will undoubtedly lean on other exporting CPTPP members to comply with global green policies. But they will be competing with China, and while they may pay lip service to the climate change agenda, in practice they are unlikely to implement it without holding out for unrealistic subsidies from the western nations driving the climate change agenda. Under current circumstances, it seems unlikely that China’s CPTPP application will lead to membership, given the CPTPP requirement for China’s central government to relinquish ownership of its SOEs and to permit the free flow of data across its borders. In any event, China is focused on developing its Regional Comprehensive Economic Partnership (RCEP), a free trade agreement with ratification signed so far by China, Japan, South Korea, Australia, and New Zealand. It will come into effect when ratified by ten out of the fifteen signatories, likely to be in the first half of 2022, and in terms of population will be two and a half times the size of the EU and the US/Mexico/Canada (USMCA) trade agreements combined. With four out of five of the signatories being American allies, RCEP demonstrates that the AUKUS defence partnership is an entirely separate issue from trade. While the US may not like it, if RCEP goes ahead freer trade will almost certainly undermine a belligerent stance in due course. Despite hiccups, the progression of trade dealing in the Pacific region promises to prove Mackinder right about the prospect of a more balanced world. All being well and guaranteed by a balance of naval capabilities between AUKUS and China, a free-trading Pacific region will render the European and American trade protectionist policies an anachronism. But the threat is now from another direction: financial instability, with western nations pulling in one direction and China in another. Since the Lehman collapse and the ensuing financial crisis, China has been careful to prevent financial bubbles. Figure 1 shows that the Shanghai Composite Index has risen 82% since 2008, while the S&P500 rose 430%. While the US has seen financial asset values driven by a combination of QE and investor speculation, these factors are absent and discouraged in China. Government debt to GDP is about half that of the US. It is true that industrial debt is high, like that of the US. But the difference is that in China debt is more productive while in America there has been a growing preponderance of debt zombies, only kept solvent by zero interest rate policies. China’s policy of ensuring that the expansion of bank credit is invested in production and not speculation differs fundamentally from the US approach, which is to deliberately inflate financial assets to perpetuate a wealth effect. China avoids the destabilising potential of speculative flows unwinding because it lays the economy open to the possibility that America will use financial instability to undermine China’s economy. In a speech to the Chinese Communist Party’s Central Committee in April 2015, Major-General Qiao Liang, the People’s Liberation Army strategist, identified a cycle of dollar weakness against other currencies followed by strength, which first inflated debt in foreign countries and then bankrupted them. Qiao argued it was a deliberate American policy and would be used against China. In his words, it was time for America to “harvest” China. Drawing on Chinese intelligence reports, in early 2014 he was made aware of American involvement in the “Occupy Central” movement in Hong Kong. After several delays, the Fed announced the end of QE the following September which drove the dollar higher, and “Occupy Central” protests broke out the following month. To Qiao the two events were connected. By undermining the dollar/yuan rate and provoking riots, the Americans had tried to crash China’s economy. Within six months the Shanghai stock market began to collapse with the SSE Composite Index falling from 5,160 to 3,050 between June and September 2015. One cannot know for certain if Qiao’s analysis was correct, but one can understand the Chinese leadership’s continued caution based upon it. For this and other reasons, the Chinese leadership is extremely wary of having dollar liabilities and the accumulation of unproductive, speculative money in the economy. It justifies their strict exchange control regime, whereby dollars are not permitted to circulate in China, and all inward capital flows are turned into yuan by the PBOC. Furthermore, domestic monetary policy appears deliberately different from that of America and other western nations. While everyone else has been inflating their way through covid, China has been restricting domestic credit expansion and curtailing shadow banking. The discount rate is held up at 2.9% with market rates slightly lower at 2.2%, and the only reason it is that low is because alternative dollar rates are at zero and EU and Japanese rates are negative. It is this restrictive monetary policy that has led to the current crisis in property developers, with the very public difficulties of Evergrande. Far from being a surprise event, with cautious monetary policies it could have been easily foreseen. Moreover, the government has a sensible policy of not rescuing private sector businesses in trouble, though it is likely to take steps to limit financial contagion. In their glass houses, Western critics continually throw stones at China. But at least her policy makers have attempted to avoid contributing to the global inflation cycle. With prices beginning to rise at an accelerating pace in western currencies, a new global financial crash is in the making. China and her SCO cohort would be adversely affected, but not to the same extent. The fruits of China’s policies of restricting credit expansion are showing in the commodity prices she pays, which in her own currency have increased by ten per cent less than for dollar-based competition, judging by the exchange rate movements since the Fed reduced its funds rate to the zero bound and instigated monthly QE of $120bn on 19-23 March 2020 (see Figure 2). And while both currencies have moved broadly sideways since January, there is little doubt that the fundamentals point to an even stronger yuan and weaker dollar. The domestic benefits of a relatively stronger yuan outweigh the margin compression suffered by China’s exporters. It is worth noting that as well as moderating credit demand, China is attempting to increase domestic consumer spending at the expense of the savings rate, so consumer demand will begin to matter more than exports to producers. It is in line with a long-term objective of China becoming less dependent on exports, and exporters will benefit from domestic sales growth instead. Furthermore, with China dominating global exports of intermediate and consumer goods and while western budget deficits are increasing and leading to yet greater trade deficits, Chinese exporters should be able to secure higher prices anyway. There can be little doubt that the budget deficits financed by monetary inflation in America, the EU, Japan and the UK, plus central bank stimulus packages are now undermining the purchasing power of all the major currencies. The consequences for their purchasing powers are now becoming apparent and attempts to calm markets and consumers by describing them as transient cuts little ice. In terms of their purchasing powers, these currencies are now in a race to the bottom. Not only are the costs of production rising sharply, but following a brief pause of three months, commodity and energy prices look set to rise sharply. Figure 3 shows the Invesco commodity tracker, which having almost doubled since March 2020 now appears to be attempting a break out on the upside. Since global competitiveness is no longer a priority, China would be sensible to let its yuan exchange rate rise against western currencies to help keep a lid on domestic prices and costs. It is, after all, a savings driven economy, with the sustainable characteristics of a strong currency relative to the dollar. Conclusions Having failed in their land-based military objectives, America’s undeclared tariff and financial wars against China are also coming to an end, to be replaced by a policy of maritime containment through the AUKUS partnership. Attempts to stem strategic losses in Asia have now ended with the withdrawal from Afghanistan and from other interventions.The change in geopolitical policy is not yet widely appreciated. But the parlous state of US finances, dollar market bubbles, persistent and increasing price inflation and the inevitability of interest rate increases will make a policy backstop of maritime containment the only geostrategic option left to America. By pursuing more cautious monetary policies, China is less exposed to the inevitable consequences of global monetary inflation. While yuan currency rates are managed instead of set by markets, it is now in China’s interest to see a stronger yuan to contain domestic price and cost inflation. Even though fiat currencies could be destroyed by imploding asset bubbles, these factors contribute to a set of circumstances that appear to lead to a more peaceable outcome for the world than appeared likely before America and NATO withdrew from Afghanistan. There’s many a slip between cup and lip; but it was an outcome forecast by Halford Mackinder nearly eighty years ago. Let us hope he was right. Tyler Durden Sun, 09/26/2021 - 08:10.....»»

Category: personnelSource: nyt18 hr. 47 min. ago

Welcome To The Central Bank Hotel, Once Inside You Can Never Leave

Welcome To The Central Bank Hotel, Once Inside You Can Never Leave Authored by Mike Shedlock via MishTalk.com, Central bank digital currencies are on the way. The German Central Bank just embraced a digital euro. Let's discuss the risks... Fintech and Global Payments  Jens Weidmann, president of the Bundesbank, Germany's central bank gave the opening speech at the digital conference “Fintech and the global payments landscape – exploring new horizons” Exploring a Digital Euro The title of Weidmann speech was Exploring a Digital Euro.  Emphasis mine with my thoughts in braces [ ] Paper money, for instance, was first introduced in China about a thousand years ago. This innovation eventually transformed the payments system. Today, digitalisation is on the cusp of overhauling payments. Central banks have to work out how to respond to this challenge. One possibility is the issuing of central bank digital currencies (CBDCs). According to a survey by the Bank for International Settlements (BIS), the share of central banks conducting work on CBDC for general or wholesale use rose to 86% last year. Many of them have made significant progress. Two months ago, the Eurosystem launched a project to investigate key questions regarding the design of a CBDC for the euro area. The aim of the investigation is to prepare us for the potential launch of a digital euro. Experiments have already shown that, in principle, a digital euro is feasible using existing technologies. As my ECB colleague Fabio Panetta has stressed, a digital euro would have “no liquidity risk, no credit risk, no market risk,” in this way resembling cash. [No Risk? Really]  The protection of privacy would thus be a key priority in terms of maintaining people’s trust. European data protection rules would have to be complied with. Nevertheless, a digital euro would not be as anonymous as cash. In order to prevent illicit activities such as money laundering or terrorist financing, legitimate authorities would have to be able to trace transactions in individual, justified cases. [Every Case] But designing CBDC involves curbing its risks. In order to prevent excessive withdrawals of bank deposits, it has been suggested that a cap be placed on the amount of digital euro that each individual can hold. Or that digital euro holdings in excess of a certain limit could be rendered unattractive by applying a penalty interest rate. [No Risk? I thought you said there was no risk.] If a digital euro were accessible for non-residents, this could impact on capital flows and euro exchange rates. What this calls for is international and multilateral collaboration. [Wait a second, is this another risk?] Self-reinforcing loops and “lock-in” effects may tie users to one platform and exclude competitors. Some observers have been reminded of “Hotel California”, the famous song by the American rock band “The Eagles”: it’s such a lovely place, with plenty of room; but once inside you can never leave. [Hotel Central Bank: Once inside you can never leave.] The Eurosystem has no commercial interest in user data or behaviour. A digital euro could therefore help to safeguard what has always been the essence of money: trust. [Ah yes, trust that interest rates won't go even more negative, money won't expire, and withdrawals won't be capped]. Central banks need to be at the cutting edge of technology. Otherwise, they cannot provide the backbone of payment systems and offer safe and trusted money for the digital age. This has prompted all major central banks to start exploring issuance of CBDC. However, our success as a money creator will depend not so much on speed, but on the trust of those who are supposed to use the money. Europe Moving Ahead It appears Europe is moving ahead faster than the Fed.  The risks are obvious. Expiring Money Increasingly Negative Interest Rates Withdrawals Capped Withdrawals Taxed  Gifts Taxed And once inside you can never leave.  Livin' it up at the Hotel Fedifornia has a nice ring to it. ECBifornia isn't as catchy.  * * * Like these reports? If so, please Subscribe to MishTalk Email Alerts. Tyler Durden Sat, 09/25/2021 - 13:00.....»»

Category: blogSource: zerohedgeSep 25th, 2021

Why Is Gold Not Rising?

Why Is Gold Not Rising? Authored by Matthew Piepenburg via GoldSwitzerland.com, Many are asking why gold is not rising, as just about every other commodity makes new highs in the backdrop of inflationary tailwinds. That’s a very fair question. Some are even saying gold is dead, a silly and “barbarous” old relic of ancient times, ancient math and ancient common sense. Needless to say, we beg to differ, not because we are Swiss-based gold bugs, but simply…well… let’s explain. Current Price vs. Current and Future Roles For those who see history and math as guides rather than “barbarous” and outdated disciplines, their convictions regarding gold’s role, and even price trajectory, do not wane or rise simply due to the paper price of gold. To some extent, and despite Basel 3, gold remains openly manipulated by a handful of central and bullion banks who are terrified of gold’s shine for no other reason than it embarrasses currencies (and mad monetary experiments) falling deeper into discredit. But we track the movement of physical gold every day, and can say with blunt clarity that the paper trade in gold has zero to do with the those otherwise “barbarous” forces of the actual supply and demand of this precious metal. Zero. In short, the paper price of gold has become a fiction accepted as reality, which is not surprising in a financial landscape (i.e., historically over-valued stocks, negative yielding bonds and central bankers allergic to transparency) which defies every measure of honest price discovery or basic capitalism. As for the never-ending gold vs. BTC debate, it would be wrong to say Bitcoin hasn’t taken (or continue to take) some market share away from gold, but at less than $1 trillion, BTC is not going to destroy gold’s $10T market share. In short, the current gold price is a less important topic than its current and future role as historical insurance against mathematically-failing financial and economic systems around the globe. That said, we are not apologists for the falling gold prices, nor do we doubt that by the end of this decade, gold will price well above $4000 per ounce and greatly reward informed investors playing the long game rather than putting green. More on that later. Gold’s Three Roles For now, let’s consider gold’s historical role as a hedge against: 1) recession risk; 2) market volatility risk; and 3) inflation/currency risk. 1. Recession Hedging As for recessions, gold is like an emotional and mathematical barometer testing the temperature of over-heated monetary expansion. As such, it moves higher even before policy makers add more inevitable “stimulus” (i.e., mouse-click fiat currencies) into the system. By the time policy makers officially announce a recession, it’s far too late for most investors to react. Fortunately, gold acts more quickly, anticipating monetary expansion even before the money printers start churning. Long before the “COVID recession” of 2020, for example, the writing was already on the wall that markets and central bankers were getting desperate. By late 2019, debt levels were off the charts, liquidity was drying up, the repo markets were drinking hundreds of billions of Fed dollars per month and an un-official QE to the tune of $60 billion per month was in full-swing. Then came COVID in March. Markets and GDP were tanking and gold was already on course to see (in dollar terms) a 25% rise in 2020, after a 19% rise in 2019. In short, as a recession hedge, gold was ahead of the central bankers in protecting investors. By the way, the Fed’s record for calling recessions and warning investors is 0 for 10… 2. Hedging Market Volatility We all remember March of 2020, when markets puked and gold fell along with it, primarily sold-off as a liquidity source for players facing margin costs which they were forced to pay off with gold holdings. As in 2008 and 2009, gold initially followed the stock ship below the waterline—though not nearly as far as BTC… But as mentioned above, gold reacted quickly, anticipating the money printing (and hence dollar debasement) to come, rising steadily for the rest of that fiscal year. Of course, stocks rose as well, thanks to the unbelievable and historically unprecedented money creation witnessed in 2020—more QE in less than a year than all of the combined QE1-QE4 and “Operation Twist” which we saw from 2009-2015. But thankfully, gold doesn’t just follow stock markets, it hedges them, as the past shows and the future will once again confirm. Such monetary stimulus creates what von Mises would call a “crack-up boom,” and near-term such liquidity is just wonderful for stocks and bonds. As we’ve written elsewhere, COVID—and the policy measures which followed– literally saved the securities bubble and made this “boom” even bigger. But the “boom”-to-volatility to sequence to come from such risk assets reaching price levels which have absolutely nothing to do with valuation will be infinitely more painful (“crack-up”) down the road for those assets than for gold the moment when, not if, this horrific financial system implodes under its own and historically un-matched weight. In short, gold will zig when the markets zag. The anti-gold crowd, of course, will smirk and hug their bonds, reminding us all that gold is a yield-less relic while forgetting to confess that the “no yield” of gold is ironically preferrable to over $19 trillion worth of negative yielding sovereign bonds… 3. Hedging Inflation & Currency Risk Which brings us to the big question of the day, why is gold not rising when it should be ripping as a hedge against what is clearly an inflationary new normal? Fair question. We are asking this ourselves, as real rates (the ideal setting for gold) fall deeper into negative depths with each new day… …as inflation, as well as inflation expectations, are on the objective rise: Last year, for example, gold saw this inflation coming and thus its rising, double-digit price moves reflected the same. But this year, with real rates still diving and inflation rising, gold is showing single single-digit losses rather than gains. What gives? The Market Still Believes the “Transitory” Meme Our ultimate opinion boils down to this: We think the market still believes the central bank myth (i.e., propaganda) that the current inflation is indeed, only “transitory.” We’ve written ad nauseum as to why inflation is anything but “transitory,” yet we can nevertheless respect the deflationists’ argument. The Deflationists The deflation camp, for example, rightly argues that recessionary forces, if left alone, are inherently deflationist, and the signs of economic (rather than market) declines are everywhere. But the key mistake which such deflation (or dis-inflation) narratives make is that these natural forces have not, nor will be, “left alone.” In other words, deflationists are somehow ignoring the monetary and fiscal elephant in the room. That is, more, not less, unnatural monetary and fiscal liquidity is entering the system at historically unprecedented levels, levels that are more than enough to quash such otherwise natural deflationary forces. Stated even more plainly, moderation at the fiscal and monetary level died long ago. Simple Realism—Inflation as Necessity Rather than Debate Central banks are desperate to reach higher inflation to inflate their way out of debt without admitting the same. This is nothing new for fork-tongued policy makers who once “targeted” 2% inflation as a ceiling, but are now effectively “allowing” 2% inflation as the new floor. Just as Nixon said the closing of the gold window was “transitory” in 1971, or as Bernanke promised that QE would be transitory in 2009, the current lie from on high about “transitory inflation” is no less a lie in 2021 as those other lies were in 1971 or 2009. Again, we all just kina know this, right? Furthermore, we just need to be realists rather than dreamers to see the inflation reality now and ahead. Central bankers, for example, may be dishonest, but they aren’t entirely stupid, just desperate and realistic. In the U.S., for example, a staggering as well as openly embarrassing $28.5 trillion public (i.e., national) debt level quickly limits one’s options at the White House or the Eccles Building. Not Many Options Other than Inflation In this realistic light, let’s consider their options. Policy makers have four tools to address such debt, namely: raise taxes, cut spending, declare bankruptcy, or devalue their currencies through inflation. The first two are already in play in the U.S., namely political efforts to raise taxes and ‘talk’ of cutting spending, both politically difficult options. Taking bankruptcy off the table, leaves devaluing the U.S. Dollar as the favored option, which is achieved by deliberately taking real interest rates to extreme negative levels. Allowing inflation to run while keeping rates low reduces the number of dollars needed to repay the debt. This hurts regular folks, but as we’ve said so many times, the Fed is not interested in regular folks. In other words, by decreasing the value of the U.S. Dollar, the U.S. is effectively paying off its current debt with devalued money. There are no permission slips needed from Congress, nor taxpayers. Given such realism, let us be repeatedly blunt and clear: Unlike gold not rising, inflation is not, nor will it be, “transitory.” Instead, deliberate inflation is an inherently and deliberately necessary tool used by the same anti-heroes who put us in this debt hole. More Fed-Speak, Less Honesty This means the Fed will come up with whatever excuses, words, phrases and lies to justify being more dovish despite publicly flirting with hawkish talk about a Fed taper. Already, Powell is taking the Fed way beyond its mandate and talking about social and environmental activism, as these are nice phrases to justify, you guessed it: More money creation and more (not “transitory”) inflation. As for me, hearing Powell talk about “labor market inequality” after the Fed has spent years making the top 1% richer at the expense of an increasingly poorer bottom-90% is so rich in hypocrisy that it makes the eyes water. In this opaque light, the notion of “Fed independence” is a complete and utter fiction. Instead, the Fed is slowly crossing the line into becoming the direct financier to the entire nation—and the only way it can do this is via monetary expansion and deliberate (as well as much higher) inflation, which is a tax on the poor and bullet to the heart of the U.S. Dollar. Period. Full stop. It’s All About Debt Again, this all comes realistically back to debt. When there’s too much unpayable debt (be it at the zombified corporate level or the embarrassed national level), rising rates becomes fatal. The Fed has learned since 2018 that even a slight rise in rates kills the debt-saturated markets whose capital gains taxes are about all that Uncle Sam can declare as income in a nation whose GDP was sold to China years ago. And yet… and yet… the markets somehow wish to believe the fantasy (and Fed-speak) that inflation is only “transitory.” What’s Ahead? We strongly think differently. As blunt realists, we see the Fed perhaps raising rates nominally, but when adjusted by openly deliberate (yet openly denied) inflation, real rates will fall deeper as inflation rises higher. This is because the simple reality (and choice) of nations with their backs against a debt wall is always the pursuit of inflation by design, not deflation. As I recently wrote, nothing is real anymore, and all taboos are broken. The Fed, through QE and/or the Repurchase Program, will print more money as fiscal policy rises alongside—a veritable double-whammy for more “liquidity” to come. This, of course, is crazy and ends badly. The Fed, along with the White House, have tried since Greenspan to outlaw natural market forces and needed austerity in order to bloat markets, keep their jobs or win re-election. Since we can never grow or default (?) our way out of the greatest debt hole in our history, the realistic playbook ahead is negative real rates—i.e., inflation rising higher and faster than repressed Treasury yields. Once this becomes obvious rather than “debated,” gold will rise along side the money supply to levels well above it’s current, yet admittedly, low price. Slowly, but surely, the $19 trillion in negative-yielding sovereign bonds will see outflows from that discredited asset and hence inflows into the “barbarous” asset: Gold. For now, we are patient realists rather than apologists, as the market seemingly continues to price gold for only “transitory” inflation. But once inflationary reality rises above the current “transitory” fantasy, gold will not only surge in price, but serve its far more important role of hedging against undeniable inflation and the equally undeniable (i.e., destructive) impact such inflation will have on global currencies in general and the U.S. Dollar in particular. Gold: Biding Its Time Despite such signposts from math, history and Real Politik, gold is currently under attack for not “doing enough,” despite two years of double-digit rises. Gold investors, however, are not greedy, they are patient, and they hold this physical rather than paper asset for the long game, as previously described. And as for that long game, the inflation ahead, as well destruction of the currency in your pocket today and tomorrow, means today’s gold price is not nearly as relevant an issue as gold’s role in protecting far-sighted investors from what’s ahead. In the end, gold’s primary role is acting as insurance for a global financial and currency system already burning to the ground. But for those naturally asking about price, forecasting and models, as any who worked in a bank know, such models are as complex as they are useless. We keep things simpler and humbler. By just tracking monetary growth rates with certain regressions, a realistic price target for gold based upon inevitable monetary expansion suggests gold at well past $4000 by the end of this decade. That may or may not seem sexy enough for those chasing returns today, but when those returns convert into losses too hard to imagine as markets reach new highs, we must genuinely remind you that even with Fed “support,” all bubbles do the same thing: “Pop.” We are not here to tell you when, as no one can. We are simply suggesting you prepare, rather than react. Tyler Durden Sat, 09/25/2021 - 10:30.....»»

Category: blogSource: zerohedgeSep 25th, 2021

The Island of Death: Visiting the gulag where my grandfather was tortured, but didn"t officially exist

My grandfather was held at Bulgaria's most notorious gulag. This summer, I saw it for the first time. A Belene survivor crosses the bridge across the Danube that connects the town of Belene and Persin island in 2015. Dimitar Dilkoff/AFP via Getty Images) This summer, Tana Ganeva traveled to Belene, Bulgaria's most notorious prison camp, where her grandfather was held in the 1950s. Bulgaria has effectively buried the history of its Communist-era gulags, where thousands were starved, tortured, and killed. Ganeva's grandfather attempted to escape Bulgaria four times, before making it to California. See more stories on Insider's business page. The island of Persin is a bird-watcher's paradise. Set on the Danube River, which divides Bulgaria and Romania, it's a nature park covered in wetlands and home to hundreds of rare bird species: the spoonbill, the pygmy cormorant, the corncrake, as well as herons, eagles, storks, and pelicans. Amid the natural beauty, it's jarring to consider that this was the location of a concentration camp where thousands of Bulgarian political prisoners were brutalized and killed from 1949 to 1953 - and in some cases for years after that. Though it's officially known as Belene after the quiet Bulgarian village that sits 750 feet away on the mainland, old-timers here call it by another name: the Island of Death.My stepgrandfather, Georgi Tutunjiev, was sent here at age 24 and spent four years and three months interred at Belene after someone (he suspected his ex-wife) told the authorities of his plan to escape the country. In his notebooks - he had planned to write a memoir about Belene but never did before he died in 2011 at 87 - he remembered the place as "brutal facilities for re-education," where he'd endured "indescribable physical and psychological abuse." He finally managed to escape Bulgaria in 1966 and settle with my grandma in California. In 1989, my parents and I left Bulgaria and joined my grandparents in California, thanks to the family-reunification policy. While many survivors of trauma shut down, my grandfather never stopped talking about the gulag. He seemed to have an unending loop of stories about Belene. For my immediate family, it could be exhausting, and we were alarmed to discover his extensive gun collection, which my grandmother gamely dismissed as a coping mechanism. But guests who came to the house were often riveted by his dark tales, which he mixed with his sense of humor. "Jeko! The Communistie shot you!" he'd shout at his terrier mix, and the dog would sprawl on his back, playing dead. An aerial view of Persin island. The gulag was known as Belene, after the nearby town. Tsvetomir Nikolaev I've come to the town of Belene on a brutally hot day in August for a tour of the Island of Death. I meet Nedyalka Toncheva, who works for the Belene Island Foundation, a nonprofit that organizes tours of the island, close to the bank of the Danube.We cross a rickety water bridge on foot and then jump aboard a Jeep driven by a 24-year-old Belene native named Peter. Toncheva, who is 35, is passionate and knowledgeable about the island's flora and fauna. Every few minutes, she tells Peter to stop the car to point out a roosting stork or a water eagle. She talks about her plans to make Persin a tourist destination comparable to Borovets, a ski resort with luxury hotels in the Rila mountains; or Koprivchitsa, a living museum honoring the Bulgarian rebels who mounted an uprising in 1876 against the Ottoman Empire.In the three decades since the fall of communism, Bulgaria has effectively buried the history of its many gulags, which operated mostly in the 1950s during the early, and most violent, days of Communist rule in the country. In Belene itself, many lower-level guards came from the village and a former mayor was also the gulag's first superintendent. It's not surprising that the village doesn't advertise its history.After 1989, survivors who had been forced to sign documents promising to never talk about the camps started speaking out. For a brief time, they became the subjects of documentaries and newspaper profiles. But soon, the consensus was that it was better to move on. An interior minister tasked with investigating the camps instead secretly ordered a purge of thousands of pages of documents - 40% of the government record. While Bulgaria's defeat of the Ottomans is central to the national identity, and much is made of the fact that Bulgaria saved its Jews during the Holocaust, the memory of the Communist era is more fraught. Georgi Tutunjiev, the author's grandfather, in around 1977. Tana Ganeva Peculiar for a tour, most of our stops lead us to what's not left of the camp. The shacks where prisoners slept have been razed - there's no trace of them.At the entrance, in what is now an open field, an inscription says, "To be human is to have dignity." From inside the camp - what would have been visible to the internees - the engraving says, "If the enemy doesn't surrender, he is destroyed." But no one I've talked to knows whether it's the original or has been recreated. There are a few abandoned, falling-apart buildings, but those were built in 1959, six years after the camp's official (but not real) closing, when it was converted into a prison, in part to kill rumors that it had operated as a secret gulag. Todor Zhivkov, the Communist premier who took power in 1954 and stayed on until 1989, reopened it in the 1980s to detain Muslims who refused to take on Slavic names in place of their own - a disastrous bid to assimilate them. I ask Toncheva whether there's a list of everyone who was held in the camp. I'm thinking of my grandfather and wondering whether there's any documentation. She tells me everyone who comes here for the camp asks the same question."There's no way to know, no list," Toncheva says, apologetic. "There's almost no proof the camp even existed."'Perfectly calculated by Satan himself'The first contingent of 300 men arrived at the Belene camp in the summer of 1949, five years after the 1944 Communist coup. My grandfather, then 24, arrived that first winter. A camp for women was founded on an adjacent island soon after.It was modeled after Josef Stalin's gulags in Siberia. Most of the prisoners had been dragged from their homes by the military police and sent here without trial. (Estimates vary, but 20,000 to 40,000 people were thought to be murdered by the Bulgarian Communist Party.) Even Stalin eventually warned them to scale down the killing of prominent oppositional figures or risk creating martyrs.The first wave of prisoners had to hack through the unpopulated island and build small shacks that were so crowded the prisoners didn't have room to lie down. In his history of the camp, Borislav Skotchev wrote that the island was dotted with towers manned by guards with machine guns. A survivor of Belene during a commemoration ceremony in 2015. Dimitar Dilkoff/AFP via Getty Images) The men held here included the former leader of the Social Democrats, Orthodox priests (many in their 70s), and the mayor of Bulgaria's capital, Sofia. Tsveti Ivanov, the editor of the newspaper Svoboden Narod, or Free People, was sent to Belene after serving 10 months in prison. He was beaten so brutally that he got tetanus from his wounds and died in the compound. Much of what we know about the place comes from survivors' memoirs. They were fed a thin soup, sometimes with a handful of beans thrown in. Their bread ration - moldy or stale when it made its way to them - was small, and could be withheld by the guards as punishment. Sometimes they got tea. My grandfather told me that, in the winter, both the soup and the tea were given to them already frozen.When Toncheva takes us on a brief walk to go look at storks, the ground gives off wet heat, and brambles and thorns claw at us, as if the island is alive and doesn't want us there. I think of the people who had to work days and nights, in sweltering summers, devoured by mosquitoes. It's unbelievable that anyone survived.An internal CIA document described the grim situation of starving prisoners. "A frequent sight is that of a prisoner eating raw green leaves and roots," it said. "To be caught doing this, however, would result in 10 days in detention in a dungeon for such an offense." The lucky ones got packages from family, though those were often taken by guards. Many had little choice but to choke down the rotting carcasses of wild cats, killed and skinned for their fur by the villagers, or pick through horse dung for undigested barley. According to a CIA information report from March 13, 1952, during one brutal winter 30 prisoners died of cold or starvation."It was an Inferno circle, perfectly calculated by Satan himself," Liliana Pirinchiva, one of the female survivors of Belene, wrote in her memoir. "We were reduced to skeletons." A group of Bulgarian anarchists. Tsvetana Dzhermanova Then there were the guards, who brought an especially sadistic approach to their work. Some would chase packs of prisoners on horseback, letting their rifles off "as if we were a flock of sheep," wrote Stefan Botchev, a survivor. When he got a severe case of scabies, the mites burrowing into his skin, he was locked up in a shed alone because the guards didn't want him to infect the cows. He recalled seeing a beating so severe that a prisoner's spine was broken, turning him into a "reptile crawling on the ground."Kouni Genchev Kounev, the chairman of the Bulgarian Youth Agrarian Union who also survived Belene, recalled one especially brutal punishment, in which the guards would pull back a prisoner's head and strike him in the trachea. They called it the "sword stroke."Years later, Krum Horozov, a survivor, would draw water colors of the camp from memory - it's virtually the only visual documentation that exists. In 2011, six years before his death, Horozov wrote: "And when we die, which will be soon, who will remember what happened on that island in the 1950s, and will they know that people were sent there without a trial and sentence?"Lilia Topouzova, a historian in Toronto who writes about the history and the memory of the camps, recalls meeting Horozov at an academic conference; he was trying to give away copies of his drawings of Belene to university students, but they avoided him as if he were a pesky street vendor.The CricketAt 93, Tsvetana Dzhermanova is the last known survivor of the women's camp, which was known as Shturets, or Cricket. We're sitting outside her home in the mountain village of Leskovets, and she's talking so fast I wonder how she manages to breathe.She smiles and laughs a lot, and she reminds me of my grandfather, who also spoke with the speed of a motorboat, frantic to tell his story."I promised to outlive the Communistie, and here I am!" she boasts. (My grandfather also took an understandable delight at outliving the Communistie. "I survived the Communistie, but I won't survive old age," he once told me, when I was 25 and had no idea about either.) Tsvetana Dzhermanova. Tsvetana Dzhermanova Dzhermanova was an anarchist in the 1950s, and still is today. "That's my personal ideology," she says. "I'm not sure humans are evolved enough to make either anarchism or socialism work the way they should, but for me, anarchism is it. Because I value freedom, family, friendship, and love."When she first heard about anarchism as a teenager, she asked her mother what it meant. "Anarchists are the people all regimes persecute," her mother had replied. That sold her. Dzhermanova joined a village group. She had no designs on power (detesting it) and mostly spent her time reading anarchist literature and working on a community vegetable garden. She estimates that 800 anarchists from the town were swept up in a night and sent to the gulags."We sang songs while we worked," Dzhermanova tells me. "That helped." Last spring the sprightly nonagenarian made the three-hour trip to Belene to speak with a group of students about the camps. "They had no idea about this. They were really surprised," she says. "No one had ever talked to them about it, and they don't learn about it in school."'Out of Fashion'Toncheva and our driver, Peter, walk through a falling-down building that was constructed in 1959, in part to hide evidence of the camp. It's covered in bird shit. Plant life is taking over its rotted remnants, and old decayed furniture has been abandoned here and there. We talk about how nobody talks about the camp.Peter tells us that despite having spent almost his entire life roughly 750 feet from Persin, in Belene village, he learned about the camp only two weeks earlier, when Toncheva hired him as a driver for her tours."To think they only gave them bread and water, and made them work so hard," he says, shaking his head in disbelief. A crumbling building built on the site of Belene. Stoyan Nenov/Reuters As far as Toncheva knows, no one from her family was held here, but she remembers asking her grandmother about the island when she was a teenager and again after reading the memoirs of survivors. "Shhh. Don't talk so much about this," her grandmother would say. "You don't want to bring trouble."There are rumors of a mass grave near Persin. Mikhail Mikailev, the head of the Belene Island Foundation, wants to find it. But money for the equipment required to find and dig up the remains eludes this two-person staff.Unlike Peter and Toncheva, my parents, who were born in the mid-1950s and grew up in Bulgaria, tell me that in the 1970s and 1980s, all their friends in Sofia knew about Belene. "We all heard the stories," my mother says.But for the authorities, maintaining official denial was worth murder.In 1969, the celebrated Bulgarian writer Georgi Markov defected to the West, where he wrote about the regime's abuses. In one essay, Markov described traveling on a boat down the Danube and approaching Belene. "I remembered how, feet dangling over the edge of the boat, a youth with a guitar once sang a strange song: Danube, white river, how quiet you flow / Danube, black river, what anguish you know." A view of Persin island. Tsvetomir Nikolaev On a rainy afternoon in London, a man jabbed the tip of his umbrella into Markov's leg. Later, Markov noticed what looked like a small bug bite but didn't think much of it. A few days later he was dead, most likely poisoned by the Bulgarian secret service.Before my visit to Belene, I met Topouzova, the historian, over Zoom to talk about the erasure of the camps in Bulgaria's consciousness. While former generals wrote best-sellers, the owner of a prominent bookstore dismissed any interest in survivors' memoirs - they were "out of fashion," he had told her.It was gaslighting in its purest form. And it showed how we're all so prone to the "just world" fallacy, a phenomenon where if something is too horribly unjust, the human brain just kind of moves on. It's not all that hard to bury inconvenient truths."It turned out that aging men and women with fragmented memories of bygone violence did not make for the faces of change," Topouzova wrote in a recent paper titled "On Silence and History" for the American Historical Association. "The interned were rendered nonexistent - their experiences and memories fated to vanish along with the files." A pile of stonesNations define themselves by their monuments. The memorial in downtown Manhattan demands that we never forget the victims of 9/11. In the past few years, American activists have torn Confederate statues from their perches, signaling a break with the passive acceptance of the history of slavery. Yet grappling with unpleasant history isn't easy. It was only in 2018 when a museum honoring the Black victims of lynching opened in Alabama. The 1619 Project, which posits that the history of the United States is rooted in slavery, has spurred a massive backlash. School districts have banned children's books about Rosa Parks. Vaunted democracies are as likely to try to bury inconvenient truths as former communist states. At an exhibition in Sofia in 2009, Belene survivors look at images of the gulag's victims. Stoyan Nenov/Reuters In Bulgaria, there are monuments everywhere. From the smallest village to Sofia, the heroes of Bulgaria's uprising against the Ottoman Empire are eternalized in stone. In Plovdiv, a giant sculpture overlooks Bulgaria's second-largest city that honors "Alyosha," an everyman Soviet soldier who helped "liberate" Bulgaria in the 1940s - even though many Bulgarians see that period as Soviet imperialism, much like the Ottoman Empire's 500 years of occupation.The victims of Belene and the other camps have no such honor. The Belene foundation does the best it can. They helped organize an art exhibit, where Korozov's pencil drawings were tacked onto the walls of the decaying structures that had been erected to mask evidence of the gulag. A man places photos of famous victims of Soviet policy in front of the Monument to the Soviet Army in Sofia, Bulgaria in 2014. Hristo Vladev/Pacific Press/LightRocket via Getty Images There is one modest monument on the island. It's an abstract stone structure, and you'd have no idea what it was if you didn't already know the history. The original idea was to build a monument that listed the names of all the known internees, something like the Vietnam wall on the Mall in Washington. But the survivors and their families who pooled their resources to build it ran out of money, and no one, including the Bulgarian government, stepped in to help. (The survivors also hoped to open a museum and to recreate the shacks where they were held, but that hasn't happened either.)My grandfather's escape Dzhermanova, the 93-year-old anarchist - and eternal optimist, apparently - has hope that younger people will dig up the buried history.As for my grandfather, his ex-wife (or whoever it was who betrayed him to the authorities) was right that he wanted to escape Bulgaria.After his release from Belene in 1953, that resolve was so much stronger. "After 4 years and three months in the Island of Death, I became determined to go to my real home: America," he explained in his notebooks. The author with her grandfather and grandmother, Tsvetana Tutunjieva. Tana Ganeva As he detailed it, it would take four harrowing attempts. Soon after his release from Belene, he managed to make it into Yugoslavia during a "sabor" - a temporary loosening of borders so family and friends in the two countries could see each other. But he got caught and was thrown into a Yugoslavian jail.From there, he organized an inmate breakout after bribing the guard dog, Jeko, with his dinner. But he and the other prisoners were caught in the woods, and the Yugoslavian authorities gave them up to the Bulgarian authorities in exchange for 10 cows. "They weren't even very good cows - scrawny," he wrote.Several years later, he tried to cross Bulgaria's mountainous border into Greece, but he was caught once again.Finally, he made it into Austria and then Germany by clinging to the underside of a freight train. And then on to California, where he gave his new dog a familiar name: Jeko.Tana Ganeva writes about policing, prisons and criminal justice. She's currently working on a book about escapees from the Soviet bloc. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 25th, 2021

"Immunity As A Service" - The Snake-Oil Salesmen & The COVID-Zero Con

"Immunity As A Service" - The Snake-Oil Salesmen & The COVID-Zero Con Authored by Julius Ruechel via Julius Ruechel.com, The Snake-Oil Salesmen and the COVID-Zero Con: A Classic Bait-And-Switch for a Lifetime of Booster Shots (Immunity as a Service) If a plumber with a lifetime of experience were to tell you that water runs uphill, you would know he is lying and that the lie is not accidental. It is a lie with a purpose. If you can also demonstrate that the plumber knows in advance that the product he is promoting with that lie is snake oil, you have evidence for a deliberate con. And once you understand what's really inside that bottle of snake oil, you will begin to understand the purpose of the con. One of the most common reasons given for mass COVID vaccinations is the idea that if we reach herd immunity through vaccination, we can starve the virus out of existence and get our lives back. It's the COVID-Zero strategy or some variant of it. By now it is abundantly clear from the epidemiological data that the vaccinated are able to both catch and spread the disease. Clearly vaccination isn't going to make this virus disappear. Only a mind that has lost its grasp on reality can fail to see how ridiculous all this has become.  But a tour through pre-COVID science demonstrates that, from day one, long before you and I had even heard of this virus, it was 100% inevitable and 100% predictable that these vaccines would never be capable of eradicating this coronavirus and would never lead to any kind of lasting herd immunity. Even worse, lockdowns and mass vaccination have created a dangerous set of circumstances that interferes with our immune system's ability to protect us against other respiratory viruses. They also risk driving the evolution of this virus towards mutations that are more dangerous to both the vaccinated and the unvaccinated alike. Lockdowns, mass vaccinations, and mass booster shots were never capable of delivering on any of the promises that were made to the public.  And yet, vaccination has been successfully used to control measles and even to eradicate smallpox. So, why not COVID? Immunity is immunity, and a virus is a virus is a virus, right? Wrong! Reality is far more complicated... and more interesting. This Deep Dive exposes why, from day one, the promise of COVID-Zero can only ever have been a deliberately dishonest shell game designed to prey on a lack of public understanding of how our immune systems work and on how most respiratory viruses differ from other viruses that we routinely vaccinate against. We have been sold a fantasy designed to rope us into a pharmaceutical dependency as a deceitful trade-off for access to our lives. Variant by variant. For as long as the public is willing to go along for the ride.  Exposing this story does not require incriminating emails or whistleblower testimony. The story tells itself by diving into the long-established science that every single virologist, immunologist, evolutionary biologist, vaccine developer, and public health official had access to long before COVID began. As is so often the case, the devil is hidden in the details. As this story unfolds it will become clear that the one-two punch of lockdowns and the promise of vaccines as an exit strategy began as a cynical marketing ploy to coerce us into a never-ending regimen of annual booster shots intentionally designed to replace the natural "antivirus security updates" against respiratory viruses that come from hugs and handshakes and from children laughing together at school. We are being played for fools.  This is not to say that there aren't plenty of other opportunists taking advantage of this crisis to pursue other agendas and to tip society into a full-blown police state. One thing quickly morphs into another. But this essay demonstrates that never-ending boosters were the initial motive for this global social-engineering shell game ― the subscription-based business model, adapted for the pharmaceutical industry. "Immunity as a service".  So, let's dive into the fascinating world of immune systems, viruses, and vaccines, layer by layer, to dispel the myths and false expectations that have been created by deceitful public health officials, pharmaceutical lobbyists, and media manipulators. What emerges as the lies are peeled apart is both surprising and more than a little alarming. “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.” - Sherlock Homes”  - Sir Arthur Conan Doyle Table of Contents:     Viral Reservoirs: The Fantasy of Eradication     SARS: The Exception to the Rule?     Fast Mutations: The Fantasy of Control through Herd Immunity     Blind Faith in Central Planning: The Fantasy of Timely Doses     Spiked: The Fantasy of Preventing Infection     Antibodies, B-Cells, and T-Cells: Why Immunity to Respiratory Viruses Fades So Quickly     Manufacturing Dangerous Variants: Virus Mutations Under Lockdown Conditions — Lessons from the 1918 Spanish Flu     Leaky Vaccines, Antibody-Dependent Enhancement, and the Marek Effect     Anti-Virus Security Updates: Cross-Reactive Immunity Through Repeated Exposure     The Not-So-Novel Novel Virus: The Diamond Princess Cruise Ship Outbreak Proved We Have Cross-Reactive Immunity     Mother Knows Best: Vitamin D, Playing in Puddles, and Sweaters     The Paradox: Why COVID-Zero Makes People More Vulnerable to Other Viruses     Introducing Immunity as a Service - A Subscription-Based Business Model for the Pharmaceutical Industry (It was always about the money!)     The Path Forward: Neutralizing the Threat and Bullet-Proofing Society to Prevent This Ever Happening Again. *  *  * Viral Reservoirs: The Fantasy of Eradication Eradication of a killer virus sounds like a noble goal. In some cases it is, such as in the case of the smallpox virus. By 1980 we stopped vaccinating against smallpox because, thanks to widespread immunization, we starved the virus of available hosts for so long that it died out. No-one will need to risk their life on the side effects of a smallpox vaccination ever again because the virus is gone. It is a public health success story. Polio will hopefully be next ― we're getting close.  But smallpox is one of only two viruses (along with rinderpest) that have been eradicated thanks to vaccination. Very few diseases meet the necessary criteria. Eradication is hard and only appropriate for very specific families of viruses. Smallpox made sense for eradication because it was a uniquely human virus ― there was no animal reservoir. By contrast, most respiratory viruses including SARS-CoV-2 (a.k.a. COVID) come from animal reservoirs: swine, birds, bats, etc. As long as there are bats in caves, birds in ponds, pigs in mud baths, and deer living in forests, respiratory viruses are only controllable through individual immunity, but it is not possible to eradicate them. There will always be a near-identical cousin brewing in the wings. Even the current strain of COVID is already cheerfully jumping onwards across species boundaries. According to both National Geographic and Nature magazine, 40% of wild deer tested positive for COVID antibodies in a study conducted in Michigan, Illinois, New York, and Pennsylvania. It has also been documented in wild mink and has already made the species jump to other captive animals including dogs, cats, otters, leopards, tigers, and gorillas. A lot of viruses are not fussy. They happily adapt to new opportunities. Specialists, like smallpox, eventually go extinct. Generalists, like most respiratory viruses, never run out of hosts to keep the infection cycle going, forever. As long as we share this planet with other animals, it is extremely deceitful to give anyone the impression that we can pursue any scorched earth policy that can put this genie back in the bottle. With an outbreak on this global scale, it was clear that we were always going to have to live with this virus. There are over 200 other endemic respiratory viruses that cause colds and flus, many of which circulate freely between humans and other animals. Now there are 201. They will be with us forever, whether we like it or not. SARS: The Exception to the Rule? This all sounds well and good, but the original SARS virus did disappear, with public health measures like contact tracing and strict quarantine measures taking the credit. However, SARS was the exception to the rule. When it made the species jump to humans, it was so poorly adapted to its new human hosts that it had terrible difficulty spreading. This very poor level of adaptation gave SARS a rather unique combination of properties: SARS was extremely difficult to catch (it was never very contagious) SARS made people extremely sick. SARS did not have pre-symptomatic spread. These three conditions made the SARS outbreak easy to control through contact tracing and through the quarantine of symptomatic individuals. SARS therefore never reached the point where it circulated widely among asymptomatic community members.  By contrast, by January/February of 2020 it was clear from experiences in China, Italy, and the outbreak on the Diamond Princess cruise ship (more on that story later) that the unique combination of conditions that made SARS controllable were not going to be the case with COVID. COVID was quite contagious (its rapid spread showed that COVID was already well adapted to spreading easily among its new human hosts), most people would have mild or no symptoms from COVID (making containment impossible), and that it was spreading by aerosols produced by both symptomatic and pre-symptomatic people (making contact tracing a joke). In other words, it was clear by January/February 2020 that this pandemic would follow the normal rules of a readily transmissible respiratory epidemic, which cannot be reined in the way SARS was. Thus, by January/February of 2020, giving the public the impression that the SARS experience could be replicated for COVID was a deliberate lie - this genie was never going back inside the bottle. Fast Mutations: The Fantasy of Control through Herd Immunity Once a reasonably contagious respiratory virus begins circulating widely in a community, herd immunity can never be maintained for very long. RNA respiratory viruses (such as influenza viruses, respiratory syncytial virus (RSV), rhinoviruses, and coronaviruses) all mutate extremely fast compared to viruses like smallpox, measles, or polio. Understanding the difference between something like measles and a virus like COVID is key to understanding the con that is being perpetrated by our health institutions. Bear with me here, I promise not to get too technical. All viruses survive by creating copies of themselves. And there are always a lot of "imperfect copies" — mutations — produced by the copying process itself. Among RNA respiratory viruses these mutations stack up so quickly that there is rapid genetic drift, which continually produces new strains. Variants are normal. Variants are expected. Variants make it virtually impossible to build the impenetrable wall of long-lasting herd immunity required to starve these respiratory viruses out of existence. That's one of several reasons why flu vaccines don't provide long-lasting immunity and have to be repeated annually ― our immune system constantly needs to be updated to keep pace with the inevitable evolution of countless unnamed "variants."  This never-ending conveyor belt of mutations means that everyone's immunity to COVID was always only going to be temporary and only offer partial cross-reactive protection against future re-infections. Thus, from day one, COVID vaccination was always doomed to the same fate as the flu vaccine ― a lifelong regimen of annual booster shots to try to keep pace with "variants" for those unwilling to expose themselves to the risk of a natural infection. And the hope that by the time the vaccines (and their booster shots) roll off the production line, they won't already be out of date when confronted by the current generation of virus mutations.  Genetic drift caused by mutations is much slower in viruses like measles, polio, or smallpox, which is why herd immunity can be used to control these other viruses (or even eradicate them as in the case of smallpox or polio). The reason the common respiratory viruses have such rapid genetic drift compared to these other viruses has much less to do with how many errors are produced during the copying process and much more to do with how many of those "imperfect" copies are actually able to survive and produce more copies.  A simple virus with an uncomplicated attack strategy for taking over host cells can tolerate a lot more mutations than a complex virus with a complicated attack strategy. Complexity and specialization put limits on how many of those imperfect copies have a chance at becoming successful mutations. Simple machinery doesn't break down as easily if there is an imperfection in the mechanical parts. Complicated high-tech machinery will simply not work if there are even minor flaws in precision parts. For example, before a virus can hijack the DNA of a host cell to begin making copies of itself, the virus needs to unlock the cell wall to gain entry. Cellular walls are made of proteins and are coated by sugars; viruses need to find a way to create a doorway through that protein wall. A virus like influenza uses a very simple strategy to get inside ― it locks onto one of the sugars on the outside of the cell wall in order to piggyback a ride as the sugar is absorbed into the cell (cells use sugar as their energy source). It's such a simple strategy that it allows the influenza virus to go through lots of mutations without losing its ability to gain entry to the cell. Influenza's simplicity makes it very adaptable and allows many different types of mutations to thrive as long as they all use the same piggyback entry strategy to get inside host cells. By contrast, something like the measles virus uses a highly specialized and very complicated strategy to gain entry to a host cell. It relies on very specialized surface proteins to break open a doorway into the host cell. It's a very rigid and complex system that doesn't leave a lot of room for errors in the copying process. Even minor mutations to the measles virus will cause changes to its surface proteins, leaving it unable to gain access to a host cell to make more copies of itself. Thus, even if there are lots of mutations, those mutations are almost all evolutionary dead ends, thus preventing genetic drift. That's one of several reasons why both a natural infection and vaccination against measles creates lifetime immunity ― immunity lasts because new variations don't change much over time.  Most RNA respiratory viruses have a high rate of genetic drift because they all rely on relatively simple attack strategies to gain entry to host cells. This allows mutations to stack up quickly without becoming evolutionary dead ends because they avoid the evolutionary trap of complexity.  Coronaviruses use a different strategy than influenza to gain access to host cells. They have proteins on the virus surface (the infamous S-spike protein, the same one that is mimicked by the vaccine injection), which latches onto a receptor on the cell surface (the ACE2 receptor) ― a kind of key to unlock the door. This attack strategy is a little bit more complicated than the system used by influenza, which is probably why genetic drift in coronaviruses is slightly slower than in influenza, but it is still a much much simpler and much less specialized system than the one used by measles. Coronaviruses, like other respiratory viruses, are therefore constantly producing a never-ending conveyor belt of "variants" that make long-lasting herd immunity impossible. Variants are normal. The alarm raised by our public health authorities about "variants" and the feigned compassion of pharmaceutical companies as they rush to develop fresh boosters capable of fighting variants is a charade, much like expressing surprise about the sun rising in the East. Once you got immunity to smallpox, measles, or polio, you had full protection for a few decades and were protected against severe illness or death for the rest of your life. But for fast-mutating respiratory viruses, including coronaviruses, within a few months they are sufficiently different that your previously acquired immunity will only ever offer partial protection against your next exposure. The fast rate of mutation ensures that you never catch the exact same cold or flu twice, just their closely related constantly evolving cousins. What keeps you from feeling the full brunt of each new infection is cross-reactive immunity, which is another part of the story of how you are being conned, which I will come back to shortly.  Blind Faith in Central Planning: The Fantasy of Timely Doses But let's pretend for a moment that a miraculous vaccine could be developed that could give us all 100% sterilizing immunity today. The length of time it takes to manufacture and ship 8 billion doses (and then make vaccination appointments for 8 billion people) ensures that by the time the last person gets their last dose, the never-ending conveyor belt of mutations will have already rendered the vaccine partially ineffective. True sterilizing immunity simply won't ever happen with coronaviruses. The logistics of rolling out vaccines to 8 billion people meant that none of our vaccine makers or public health authorities ever could have genuinely believed that vaccines would create lasting herd immunity against COVID. So, for a multitude of reasons, it was a deliberate lie to give the public the impression that if enough people take the vaccine, it would create lasting herd immunity. It was 100% certain, from day one, that by the time the last dose is administered, the rapid evolution of the virus would ensure that it would already be time to start thinking about booster shots. Exactly like the flu shot. Exactly the opposite of a measles vaccine. Vaccines against respiratory viruses can never provide anything more than a temporary cross-reactive immunity "update" ― they are merely a synthetic replacement for your annual natural exposure to the smorgasbord of cold and flu viruses. Immunity as a service, imposed on society by trickery. The only question was always, how long between booster shots? Weeks, months, years?  Feeling conned yet? Spiked: The Fantasy of Preventing Infection The current crop of COVID vaccines was never designed to provide sterilizing immunity - that's not how they work. They are merely a tool designed to teach the immune system to attack the S-spike protein, thereby priming the immune system to reduce the severity of infection in preparation for your inevitable future encounter with the real virus. They were never capable of preventing infection, nor of preventing spread. They were merely designed to reduce your chance of being hospitalized or dying if you are infected. As former FDA commissioner Scott Gottlieb, who is on Pfizer’s board, said: "the original premise behind these vaccines were [sic] that they would substantially reduce the risk of death and severe disease and hospitalization. And that was the data that came out of the initial clinical trials.” Every first-year medical student knows that you cannot get herd immunity from a vaccine that does not stop infection.  In other words, by their design, these vaccines can neither stop you from catching an infection nor stop you from transmitting the infection to someone else. They were never capable of creating herd immunity. They were designed to protect individuals against severe outcomes if they choose to take them - a tool to provide temporary focused protection for the vulnerable, just like the flu vaccine. Pushing for mass vaccination was a con from day one. And the idea of using vaccine passports to separate the vaccinated from the unvaccinated was also a con from day one. The only impact these vaccine passports have on the pandemic is as a coercive tool to get you to roll up your sleeve. Nothing more. Antibodies, B-Cells, and T-Cells: Why Immunity to Respiratory Viruses Fades So Quickly There are multiple interconnected parts to why immunity to COVID, or any other respiratory virus, is always only temporary. Not only is the virus constantly mutating but immunity itself fades over time, not unlike the way our brains start forgetting how to do complicated math problems unless they keep practicing. This is true for both immunity acquired through natural infection and immunity acquired through vaccination. Our immune systems have a kind of immunological memory ― basically, how long does your immune system remember how to launch an attack against a specific kind of threat. That memory fades over time. For some vaccines, like diphtheria and tetanus, that immunological memory fades very slowly. The measles vaccine protects for life. But for others, like the flu vaccine, that immunological memory fades very quickly. On average, the flu vaccine is only about 40% effective to begin with. And it begins to fade almost immediately after vaccination. By about 150 days (5 months), it reaches zero. Fading immunity after flu shot (Science, April 18th, 2019) The solution to this strange phenomenon lies in the different types of immune system responses that are triggered by a vaccine (or by exposure to the real thing through a natural infection). This has big implications for coronavirus vaccines, but I'll get to that in a moment. First a little background information... A good analogy is to think of our immune system like a medieval army. The first layer of protection began with generalists - guys armed with clubs that would take a swing at everything - they were good for keeping robbers and brigands at bay and for conducting small skirmishes. But if the attack was bigger, then these generalists were quickly overwhelmed, serving as arrow fodder to blunt the attack on the more specialized troops coming up behind them. Spearmen, swordsmen, archers, cavalry, catapult operators, siege tower engineers, and so on. Each additional layer of defense has a more expensive kit and takes ever greater amounts of time to train (an English longbowman took years to build up the necessary skill and strength to become effective). The more specialized a troop is, the more you want to hold them back from the fight unless it's absolutely necessary because they are expensive to train, expensive to deploy, and make a bigger mess when they fight that needs to be cleaned up afterwards. Always keep your powder dry. Send in the arrow fodder first and slowly ramp up your efforts from there. Our immune system relies on a similar kind of layered system of defense. In addition to various non-specific rapid response layers that take out the brigands, like natural killer cells, macrophages, mast cells, and so on, we also have many adaptive (specialized) layers of antibodies (i.e. IgA, IgG, IgM immunoglobulin) and various types of highly specialized white blood cells, like B-cells and T-cells. Some antibodies are released by regular B-cells. Others are released by blood plasma. Then there are memory B-cells, which are capable of remembering previous threats and creating new antibodies long after the original antibodies fade away. And there are various types of T-cells (again with various degrees of immunological memory), like natural killer T-cells, killer T-cells, and helper T-cells, all of which play various roles in detecting and neutralizing invaders. In short, the greater the threat, the more troops are called into the fight. This is clearly a gross oversimplification of all the different interconnected parts of our immune system, but the point is that a mild infection doesn't trigger as many layers whereas a severe infection enlists the help of deeper layers, which are slower to respond but are much more specialized in their attack capabilities. And if those deeper adaptive layers get involved, they are capable of retaining a memory of the threat in order to be able to mount a quicker attack if a repeat attack is recognized in the future. That's why someone who was infected by the dangerous Spanish Flu in 1918 might still have measurable T-cell immunity a century later but the mild bout of winter flu you had a couple of years ago might not have triggered T-cell immunity, even though both may have been caused by versions of the same H1N1 influenza virus. As a rule of thumb, the broader the immune response, the longer immunological memory will last. Antibodies fade in a matter of months, whereas B-cell and T-cell immunity can last a lifetime. Another rule of thumb is that a higher viral load puts more strain on your immune defenses, thus overwhelming the rapid response layers and forcing the immune system to enlist the deeper adaptive layers. That's why nursing homes and hospitals are more dangerous places for vulnerable people than backyard barbeques. That's why feedlot cattle are more vulnerable to viral diseases than cattle on pasture. Viral load matters a lot to how easily the generalist layers are overwhelmed and how much effort your immune system has to make to neutralize a threat. Where the infection happens in the body also matters. For example, an infection in the upper respiratory tract triggers much less involvement from your adaptive immune system than when it reaches your lungs. Part of this is because your upper respiratory tract is already heavily preloaded with large numbers of generalist immunological cells that are designed to attack germs as they enter, which is why most colds and flus never make it deeper into the lungs. The guys with the clubs are capable of handling most of the threats that try to make through the gate. Most of the specialized troops hold back unless they are needed. Catching a dangerous disease like measles produces lifetime immunity because an infection triggers all the deep layers that will retain a memory of how to fight off future encounters with the virus. So does the measles vaccine. Catching a cold or mild flu generally does not.  From an evolutionary point of view, this actually makes a lot of sense. Why waste valuable resources developing long-lasting immunity (i.e. training archers and building catapults) to defend against a virus that did not put you in mortal danger. A far better evolutionary strategy is to evolve a narrower generalist immune response to mild infections (i.e. most cold and flu viruses), which fades quickly once the threat is conquered, but invest in deep long-term broad-based immunity to dangerous infections, which lasts a very long time in case that threat is ever spotted on the horizon again. Considering the huge number of threats our immune systems face, this strategy avoids the trap of spreading immunological memory too thin. Our immunological memory resources are not limitless - long-term survival requires prioritizing our immunological resources. The take-home lesson is that vaccines will, at best, only last as long as immunity acquired through natural infection and will often fade much faster because the vaccine is often only able to trigger a partial immune response compared to the actual infection. So, if the disease itself doesn't produce a broad-based immune response leading to long-lasting immunity, neither will the vaccine. And in most cases, immunity acquired through vaccination will begin to fade much sooner than immunity acquired through a natural infection. Every vaccine maker and public health official knows this despite bizarrely claiming that the COVID vaccines (based on re-creating the S-protein spike instead of using a whole virus) would somehow become the exception to the rule. That was a lie, and they knew it from day one. That should set your alarm bells ringing at full throttle. So, with this little bit of background knowledge under our belts, let's look at what our public health officials and vaccine makers would have known in advance about coronaviruses and coronavirus vaccines when they told us back in the early Spring of 2020 that COVID vaccines were the path back to normality. From a 2003 study [my emphasis]: "Until SARS appeared, human coronaviruses were known as the cause of 15–30% of colds... Colds are generally mild, self-limited infections, and significant increases in neutralizing antibody titer are found in nasal secretions and serum after infection. Nevertheless, some unlucky individuals can be reinfected with the same coronavirus soon after recovery and get symptoms again." In other words, the coronaviruses involved in colds (there were four human coronaviruses before SARS, MERS, and COVID) all trigger such a weak immune response that they do not lead to any long-lasting immunity whatsoever. And why would they if, for most of us, the threat is so minimal that the generalists are perfectly capable of neutralizing the attack. We also know that immunity against coronaviruses is not durable in other animals either. As any farmer knows well, cycles of reinfection with coronaviruses are the rule rather than the exception among their livestock (for example, coronaviruses are a common cause of pneumonia and various types of diarrheal diseases like scours, shipping fever, and winter dysentery in cattle). Annual farm vaccination schedules are therefore designed accordingly. The lack of long-term immunity to coronaviruses is well documented in veterinary research among cattle, poultry, deer, water buffalo, etc. Furthermore, although animal coronavirus vaccines have been on the market for many years, it is well known that "none are completely efficacious in animals". So, like the fading flu vaccine profile I showed you earlier, none of the animal coronavirus vaccines are capable of providing sterilizing immunity (none were capable of stopping 100% of infections, without which you can never achieve herd immunity) and the partial immunity they offered is well known to fade rather quickly. What about immunity to COVID's close cousin, the deadly SARS coronavirus, which had an 11% case fatality rate during the 2003 outbreak? From a 2007 study: "SARS-specific antibodies were maintained for an average of 2 years... SARS patients might be susceptible to reinfection >3 years after initial exposure."  (Bear in mind that, as with all diseases, re-infection does not mean you are necessarily going to get full-blown SARS; fading immunity after a natural infection tends to offer at least some level of partial protection against severe outcomes for a considerable amount of time after you can already be reinfected and spread it to others - more on that later.) And what about MERS, the deadliest coronavirus to date, which made the jump from camels in 2012 and had a fatality rate of around 35%? It triggered the broadest immune response (due to its severity) and also appears to trigger the longest lasting immunity as a result (> 6yrs) Thus, to pretend that there was any chance that herd immunity to COVID would be anything but short-lived was dishonest at best. For most people, immunity was always going to fade quickly. Just like what happens after most other respiratory virus infections. By February 2020, the epidemiological data showed clearly that for most people COVID was a mild coronavirus (nowhere near as severe than SARS or MERS), so it was virtually a certainty that even the immunity from a natural infection would fade within months, not years. It was also a certainty that vaccination was therefore, at best, only ever going to provide partial protection and that this protection would be temporary, lasting on the order of months. This is a case of false and misleading advertising if there ever was one. If I can allow my farming roots to shine through for a moment, I'd like to explain the implications of what was known about animal coronaviruses vaccines. Baby calves are often vaccinated against bovine coronaviral diarrhea shortly after birth if they are born in the spring mud and slush season, but not if they are born in midsummer on lush pastures where the risk of infection is lower. Likewise, bovine coronavirus vaccines are used to protect cattle before they face stressful conditions during shipping, in a feedlot, or in winter feed pens. Animal coronavirus vaccines are thus used as tools to provide a temporary boost in immunity, in very specific conditions, and only for very specific vulnerable categories of animals. After everything I've laid out so far in this text, the targeted use of bovine coronavirus vaccines should surprise no-one. Pretending that our human coronavirus vaccines would be different was nonsense.  The only rational reason why the WHO and public health officials would withhold all that contextual information from the public as they rolled out lockdowns and held forth vaccines as an exit strategy was to whip the public into irrational fear in order to be able to make a dishonest case for mass vaccination when they should have, at most, been focused on providing focused vaccination of the most vulnerable only. That deception was the Trojan Horse to introduce endless mass booster shots as immunity inevitably fades and as new variants replace old ones.  Now, as all the inevitable limitations and problems with these vaccines become apparent (i.e. fading of vaccine-induced immunity, vaccines proving to only be partially effective, the rise of new variants, and the vaccinated population demonstrably catching and spreading the virus ― a.k.a. the leaky vaccine phenomenon), the surprise that our health authorities are showing simply isn't credible. As I have shown you, all this was 100% to be expected. They intentionally weaponized fear and false expectations to unleash a fraudulent bait-and-switch racket of global proportions. Immunity on demand, forever. Manufacturing Dangerous Variants: Virus Mutations Under Lockdown Conditions — Lessons from the 1918 Spanish Flu At this point you may be wondering, if there is no lasting immunity from infection or vaccination, then are public health officials right to roll out booster shots to protect us from severe outcomes even if their dishonest methods to get us to accept them were unethical? Do we need a lifetime regimen of booster shots to keep us safe from a beast to which we cannot develop durable long-term immunity? The short answer is no.  Contrary to what you might think, the rapid evolution of RNA respiratory viruses actually has several important benefits for us as their involuntary hosts, which protects us without the benefit of broad lifelong immunity. One of those benefits has to do with the natural evolution of the virus towards less dangerous variants. The other is the cross-reactive immunity that comes from frequent re-exposure to closely related "cousins". I'm going to peel apart both of these topics in order to show you the remarkable system that nature designed to keep us safe... and to show you how the policies being forced on us by our public health authorities are knowingly interfering with this system. They are creating a dangerous situation that increases our risk to other respiratory viruses (not just to COVID) and may even push the COVID virus to evolve to become more dangerous to both the unvaccinated and the vaccinated. There are growing signs that this nightmare scenario has already begun.  “In this present crisis, government is not the solution to our problem; government is the problem."  - President Ronald Reagan in 1981. Let's start with the evolutionary pressures that normally drive viruses towards becoming less dangerous over time. A virus depends on its host to spread it. A lively host is more useful than a bedridden or dead one because a lively host can spread the virus further and will still be around to catch future mutations. Viruses risk becoming evolutionary dead ends if they kill or immobilize their hosts. Plagues came, killed, and then were starved out of existence because their surviving hosts had all acquired herd immunity. Colds come and go every year because their hosts are lively, easily spread the viruses around, and never acquire long-lasting immunity so that last year's hosts can also serve as next year's hosts ― only those who have weak immune systems have much to worry about. In other words, under normal conditions, mutations that are more contagious but less deadly have a survival advantage over less contagious and more deadly variations. From the virus' point of view, the evolutionary golden mean is reached when it can easily infect as many hosts as possible without reducing their mobility and without triggering long-term immunity in most of their hosts. That's the ticket to setting up a sustainable cycle of reinfection, forever. Viruses with slow genetic drift and highly specialized reproductive strategies, like polio or measles, can take centuries or longer to become less deadly and more contagious; some may never reach the relatively harmless status of a cold or mild flu virus (by harmless I mean harmless to the majority of the population despite being extremely dangerous to those with weak or compromised immune systems). But for viruses with fast genetic drift, like respiratory viruses, even a few months can make a dramatic difference. Rapid genetic drift is one of the reasons why the Spanish Flu stopped being a monster disease, but polio and measles haven't. And anyone with training in virology or immunology understands this!  We often speak of evolutionary pressure as though it forces an organism to adapt. In reality, a simple organism like a virus is utterly blind to its environment — all it does is blindly produce genetic copies of itself. "Evolutionary pressure" is actually just a fancy way of saying that environmental conditions will determine which of those millions of copies survives long enough to produce even more copies of itself.  A human adapts to its environment by altering its behaviour (that's one type of adaptation). But the behaviour of a single viral particle never changes. A virus "adapts" over time because some genetic copies with one set of mutations survive and spread faster than other copies with a different set of mutations. Adaptation in viruses has to be seen exclusively through the lens of changes from one generation of virus to the next based on which mutations have a competitive edge over others. And that competitive edge will vary depending on the kinds of environmental conditions a virus encounters. So, fear mongering about the Delta variant being even more contagious leaves out the fact that this is exactly what you would expect as a respiratory virus adapts to its new host species. We would expect new variants to be more contagious but less deadly as the virus fades to become just like the other 200+ respiratory viruses that cause common colds and flus.  That's also why the decision to lock down the healthy population is so sinister. Lockdowns, border closures, and social distancing rules reduced spread among the healthy population, thus creating a situation where mutations produced among the healthy would become sufficiently rare that they might be outnumbered by mutations circulating among the bedridden. Mutations circulating among the healthy are, by definition, going to be the least dangerous mutations since they did not make their hosts s.....»»

Category: blogSource: zerohedgeSep 25th, 2021

3 Tips To Help Junior Partners Avoid Lifestyle Creep

Lifestyle creep, or lifestyle inflation – when expenses rapidly rise to match newfound income – ensnares countless newly minted partners. Often there are underlying social pressures from peers or colleagues to keep up with new levels of conspicuous consumption. New indulgences and one-time splurges quickly become everyday necessities. It may begin innocently enough with a […] Lifestyle creep, or lifestyle inflation – when expenses rapidly rise to match newfound income – ensnares countless newly minted partners. Often there are underlying social pressures from peers or colleagues to keep up with new levels of conspicuous consumption. New indulgences and one-time splurges quickly become everyday necessities. It may begin innocently enough with a new car, a small remodel to an existing home, or a generous contribution to one’s alma mater, but it can quickly snowball into completely spending bonus checks before they have even been deposited. 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 2021 hedge fund letters, conferences and more So, who cares? After all, you have sacrificed a lot to get where you are today and rewarding yourself for a job well done is your right. However, many junior partners have not considered what they are giving up by having their expenses match their income – namely, true financial freedom or the ability to say no. It is difficult to downshift your lifestyle, especially if you have no resources to fall back on other than your future earning potential. Make sure you do not find yourself in this situation by following these tips. Prepare for Lumpy Cash Flow It is important to be fiscally prepared for lumpy cash flow – expenses like estimated tax payments, firm capital commitments, and new firm sponsorship contributions, just to name a few, can potentially catch you off-guard. Without adequate planning and forethought, you can find yourself flat-footed at a very inopportune moment. The first step to addressing lifestyle creep is to be prepared. Create a short-term cash strategy to help you avoid common cashflow missteps. Start by identifying what your major outstanding liabilities will likely be for the next 12 months. After you have identified these cash needs find a ready source of liquidity to cover them. When reviewing your cash strategy look for potential mismatches between liabilities and cash flow, consider all your options. Be prepared to cover an unexpected expense in addition to the ones you identified. Remember alternative sources of potential liquidity that you could use to smooth over any cash crunches, such as: A margin loan against assets held in investment accounts. A cash reserve built up over the course of time specifically for these types of surprise liquidity events. Short term financing solutions offered by the firm. If you do not research your options in advance, it is difficult to know in the moment what your best options is. Sometimes the terms of short-term margin loans are equal or better than terms offered to new partners from other sources sometime not – having options in place and knowing what they are is paramount to helping you address your need when it arises. Preparing a short-term cash strategy will give you a better sense of what to hold in reserves for future expenditures, what you can spend on your current lifestyle needs, and what to invest for long-term growth – allowing you to avoid the trap of lifestyle inflation. Identify Your Goals and Values Making conscious decisions about what is important to you is one of the most crucial steps in combating lifestyle inflation. You may really like the idea of: Having the option to slow down when you want to. Buying a vacation home to spend quality time with family. Providing meaningful philanthropic support to a cause you believe in. Being able to offer monetary support to aging parents. There are no right or wrong choices, but you should make a choice. One of my favorite quotes is, “If you don’t know where you are going, you might wind up someplace else.” Not having your long-term goals well-defined makes it easier to succumb to lifestyle creep, potentially leaving you someplace you didn’t intend to be. Balancing short-term needs with long-term goals is a lifelong pursuit, so it is vital not to focus solely on one or the other at any given time. Clearly outlining your goals and having a financial plan in place to achieve them will help you feel comfortable living the life you want today, knowing you are going to end up where you truly want to be. Create a Financial Roadmap Without knowing what you are aiming at, you can miss your target and let other seemingly pressing things drain your ability to accomplish what you really want. After identifying what matters most to you, the next step is to create a financial roadmap to help guide you to your destination. This is done through a comprehensive financial plan that considers not only your resources and liabilities, but also incorporates an in-depth cash flow and investment return projection as well. Having your plan in place will help guide you towards your goals and remind you to maintain focus on them. To create a financial roadmap, you should gather and review information regarding: Partner Benefits: 401(k), deferred compensations plans, etc. Investment Assets: taxable and retirement accounts, physical assets, etc. Liabilities: existing mortgages, home equity lines of credit (HELOCs), credit cards, student loans, etc. Insurance: personal and group benefits – disability, life, property & casualty, etc. Estate Plan: current wills, Powers of Attorney (POAs), revocable and irrevocable trusts, etc. Tax Returns: recent returns from your accountant for reviewing income, expenses, deductions, etc. These data points allow you to create a more meaningful individual guide to help you stay on track to reach your financial goals. As assets and income projections change, risk profiles are modified, and other aspects of your personal and financial life develop with time, you should revisit and adjust your financial roadmap to reflect your new situation and goals. Your financial roadmap is a living document that will always be there to reorient you, helping to combat lifestyle creep. Conclusion Some level of lifestyle inflation is inevitable and necessary, continuing to live like you are a first-year associate is not the answer to preventing lifestyle creep. As with most things in life, the key is moderation. The transition to partner can be a challenging one – creating a comprehensive financial roadmap that takes your personal and professional situation and goals into consideration is the best way to develop and implement a plan that will help you avoid the kind of overextension that could materially impact your ability to achieve what you really want – whatever you decide that is. About the Author Eric Dostal, J.D., CFP®, Vice President at Wealthspire Advisors, works extensively with clients to help them feel in control of their financial lives. Eric has demonstrated a high degree of skill developing and overseeing the investment, insurance, retirement, tax and estate planning strategies of his clients. He seeks to understand a clients’ unique financial circumstances, get them organized and on the path to financial independence. Wealthspire Advisors LLC is a registered investment adviser and subsidiary company of NFP Corp. Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, Certified Financial Planner, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements. This information should not be construed as a recommendation, offer to sell, or solicitation of an offer to buy a particular security or investment strategy. The commentary provided is for informational purposes only and should not be relied upon for accounting, legal, or tax advice. While the information is deemed reliable, Wealthspire Advisors cannot guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with regard to the results to be obtained from its use. ©2021 Wealthspire Advisors. Updated on Sep 24, 2021, 4:05 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: valuewalkSep 24th, 2021

Flaviar"s online spirits club helped me appreciate rum and mezcal more - it"s expensive at $300, but it"s a fun way to try new and rare liquors

Flaviar provides a fun, accessible way to get into top-notch whiskey, vodka, tequila, and more via its subscription-based tasting boxes. When you buy through our links, Insider may earn an affiliate commission. Learn more. I tested Flaviar's Tasting Box, which contains one full-size bottle and a few sample vials of a variety of spirits. Connie Chen/Business Insider Flaviar is an online spirits club for people who want to explore whiskey, vodka, tequila, and more. Membership ($300/year or $95/quarter) includes a Tasting Box of samples and a full-sized bottle. Members can also access Flaviar's reviews, articles, and rare collections. See also: ReserveBar luxury wine and spirits review and 8 places to buy alcohol online now and get it delivered right to your door Table of Contents: Masthead StickyThis content is intended for readers 21+. Please drink responsibly. If you or anyone you know is dealing with alcohol abuse, get help. The Substance Abuse and Mental Health Services Administration's National Helpline at 1-800-662-HELP (4357) provides a free, confidential, 24/7, treatment referral, and information service.Annual Subscription (small)The world of fine and niche spirits can be overwhelming, especially if you're new to the scene. But if you're interested in trying small-batch whiskeys, vodkas, tequilas, and more, personalized spirits subscription service Flaviar is an excellent place to start.In addition to providing quality options (including rare bottles) at great prices, Flaviar also serves as an online community for fellow fans to get together and talk about everything spirits-related. What is Flaviar?An annual membership billed once a year is $300, while a quarterly membership is $95 and billed every three months. As a member, you can choose one tasting box and one full-size bottle every three months, plus you'll receive access to distillery and bottle profiles, member reviews, free distillery tours, and exclusive events. There's also a Digital Home Bar, where you can revisit all the bottles you own and receive personalized recommendations based on your tastes and preferences. The Tasting Box contains 1.5-ounce sample vials of a variety of spirits and there's usually a different theme every three months, like "Mezcalistas" or "The Cognac Track." Meanwhile, the full-size bottles come from popular brands like Johnnie Walker and Glenlivet, as well as smaller distilleries like Journeyman. Flaviar carries more than 20,000 different spirits, and they're all vetted by industry professionals and a "resident flavor magician." Review of Flaviar The Tasting Box was packaged well and everything arrived safely. Connie Chen/Business Insider I picked out my Tasting Box and bottle, which arrived safely and securely. I didn't want to get just one type of spirit, so I opted for the Flaviar Awards 2020 Tasting Box, a "best of" collection as voted on by the Flaviar community. It contained English whiskey, Scotch whisky, brandy, rum, and mezcal. For my bottle, I went for a Glenrothes 12-Year-Old scotch. The Tasting Box I chose is no longer available, but there are a lot of other boxes themed around whiskey, gin, cognac, and more.The site was laid out well, making it easy to browse all the different spirits and read through "specs," tasting notes, and reviews. I loved the design of the at-home tasting experience, too. The vials sit inside a sturdy container and even come with coasters that include tasting notes and "specs" of the spirits. Connie Chen/Business Insider It was packaged nicely (Flaviar even included a coaster), and it encouraged me to actually sit down and take my time with each of the samples. The box included small cards with tasting notes (which the brand calls "Flavor Spirals"), and I had to try and match each one to an unlabeled sample.I don't think I'm a spirits connoisseur just yet, but I thought the "Flavor Spirals" were spot-on and not too difficult to pair up with the corresponding samples. Still, it was fun to go into the process blindly and test my abilities to recognize flavors like the banana and honeycomb in the Larga Vida rum or the peach and blackberry in the Copper & Kings brandy. Since there was no packaging, I found myself focusing more on how each sample smelled and the sequence of different flavors that hit my tongue. Though I did this by myself, I could see the tasting process being an excellent social activity to do with a friend or family member. Ideally, the Tasting Box would help you further refine your tastes, as you explore and discover your likes and dislikes. Personally, I know I'm already a fan of rum and mezcal, but I'm hoping to become more knowledgeable about those spirits so I don't feel as lost the next time I'm shopping for myself or ordering at a bar.Surprisingly, I didn't love the mezcal in the Tasting Box and actually found myself enjoying the other types of spirits more. With so many to choose from, it seemed like a shame not to take advantage of the variety. In the end, I think I'd need another round with the Tasting Box to further hone my preferences and then decide what full-size bottle to order. Other perks of a Flaviar membershipOnce you've enjoyed your spirits, the experience isn't over. You can also spend time reading member reviews, articles about different spirits, cocktail recipes, and interviews with industry experts. Some of the member reviews are particularly intensive, which will help you make a decision when you're stuck. You can also buy individual bottles from the shop. Compared to other online stores, Flaviar's bottles are generally sold at retail price or a little cheaper. In some cases, like with this $400 Orphan Barrel Bourbon, Flaviar can be around $100 less expensive than competitors. Once a month, you'll receive free shipping credits, which can be used on one order of any size. Meanwhile, for people who love rare and exclusive varieties, there's The Vault, which is open once a month and allows access to a private collection of spirits. If you're serious about building your home bar, you may also want to consider the Flaviar Bar, which includes barware, storage, and five bottles. The full package will set you back almost $760, but it is an easy one-click solution. You can also purchase the bar without any of the bottles for $389.Finally, membership usually includes free distillery tours and events, but due to the pandemic, these are likely on hold right now. In the meantime, Flaviar hosts online shows on its Instagram, where hosts interview bartenders, hold live tastings with a variety of guests, and put on virtual pub quizzes. The bottom line Flaviar is an accessible starting point and community for people who want to expand their knowledge of spirits, and it offers no shortage of member-exclusive features to dive into and explore.Since it holds a large stock of spirits and resources all in one place, you won't need to juggle various forums, shops, and articles - instead, you'll find everything you need once you log in. For $300 a year, it's a bit pricey, but compared to the costs of doing all the work yourself and buying from more expensive competitors, Flaviar is definitely worth it. Annual Subscription (small)Read the original article on Business Insider.....»»

Category: smallbizSource: nytSep 24th, 2021

Why your PayPal money is on hold or pending, and how to resolve the issue

PayPal puts money on hold to help ensure the platform is safe to use for both buyers and sellers. There's a number of reasons why your PayPal money may be placed on hold, but there are a few solutions. Maskot/Getty Images PayPal puts money on hold to help ensure the platform is safe to use for both buyers and sellers. Your PayPal money might be on hold if you're a new seller or your account has been inactive. To help release funds faster, add tracking information to your orders or print a shipping label via PayPal. Visit Insider's Tech Reference library for more stories. PayPal is a convenient platform for small business owners to collect payment for their goods and services in a secure manner. Sometimes, PayPal will put funds on hold for up to 21 days to ensure there is enough money in your account should any issues arise with the order. There are several reasons why a payment may be on hold, and ways for sellers to expedite the release of funds. Here's everything you need to know.Table of Contents: Masthead StickyWhy does PayPal put payments on hold?PayPal notes that the company puts payments on hold to help ensure that the platform is safe and secure for both buyers and sellers. Although the money belongs to you, PayPal will temporarily keep you from accessing it to make sure there's enough money in your account to resolve issues like chargebacks or disputes. Funds are released when the buyer confirms that they received the item they ordered in the condition that was advertised.Some specific reasons why your payment might be on hold include:Your PayPal account has been inactive.The payment you received is unusual for your typical selling pattern.PayPal found an unusual change in selling price for a particular transaction.You're selling an item that customers may be dissatisfied with.You've only recently started selling items outside of eBay.Why is my payment on hold?There are a number of reasons for why funds could be placed on hold, including:You're new to selling. New sellers need to build up their buyer-seller credibility and history. Once you've established a successful transaction record, your status can change.You haven't sold anything in a long time. Similar to being a first-time seller, if you haven't sold an item in awhile, you'll need to rebuild your credibility.Customers filed formal complaints for a refund, dispute, or chargeback. If you've been flagged by multiple customers for various issues, PayPal may delay the availability of your funds. According to PayPal, the best way to remedy this is to work directly with buyers to ensure that issues are resolved as quickly as possible. To prevent complaints, be upfront about shipping costs, item condition, and return policy. You can also set up a customer service message to let customers know if an extreme incident - like a natural disaster in your area - is preventing you from shipping on time.You have a suspicious selling pattern. PayPal will flag an account that has unusual activity, including a higher than normal selling pattern or a distinct change in the type of items sold.You're selling riskier items. Examples of these kinds of items include tickets, gift cards, consumer electronics, computers, and travel packages - anything that is more expensive or event-related.When can I access my payment?As long as there aren't any issues with your transaction or account (like an undelivered package or a customer filing a dispute), PayPal will release your funds within 21 days.How can I access my money faster?There are some steps sellers can take to help release PayPal funds faster. These include:Add tracking: Use one of PayPal's approved shipping carriers, and PayPal will release the hold on funds one day after the courier confirms delivery.Print a USPS or UPS shipping label via PayPal: PayPal will track your package and release the hold on funds one day after the courier confirms delivery.Update the order status for services or intangible items: For items that aren't shipped, like e-books or knitting lessons, update the order status and PayPal will release funds in seven days.How to prevent the delay of fundsCheck your email: Review the email sent from PayPal (with the subject line "An important message about your PayPal balance") as well as the alert located in your Account Overview page. It will include information about why your funds aren't available and what you can do to avoid this in the future.Post real photos: Prevent refunds, disputes, and chargebacks from buyers by posting real photos of the items you're selling, including detailed and accurate descriptions, being transparent about shipping and handling times, costs, and methods, processing orders promptly, packing items with care so that they arrive in good condition, and being clear on your return policy upfront.Provide customer service: Do your best to communicate with and help your customers when they reach out. If you have a buyer dispute, work to resolve it as soon as possible.How to set up a PayPal account and link a bank account or credit cardIs PayPal secure? How the service protects your transactions, credit card data, and moreHow to delete your PayPal account, whether it's for business or personal useHow to remove your debit or credit card from PayPal in 5 simple stepsRead the original article on Business Insider.....»»

Category: smallbizSource: nytSep 24th, 2021

7 Best ETFs of the First Nine Months of 2021

We highlight seven ETFs from different segments that have outperformed and gained more than 40% in the first nine months of 2021. The U.S. stock market is booming this year with major bourses hitting multiple highs braving a myriad of woes. This is primarily thanks to the reopening of businesses and economies, the largest vaccination drive, an unprecedent stimulus, a huge infrastructure package and a healing job market.All these have resulted in speedy economic recovery and powered activities across all sectors and categories, resulting in increased consumer spending. Americans are spending on big-ticket items such as vacations and weddings, companies are going on hiring sprees, and the transition to new technologies such as electric vehicles is accelerating. Resumption of earnings growth also bodes well for the stock market rally.Additionally, the first full U.S. approval of the Pfizer PFE-BioNTech COVID-19 vaccine and the approval of emergency use of a booster dose bolstered risk-on trade as it will help put brakes on the ongoing surge in the COVID-19 Delta variant cases and lead to continued reopening of the economy. The U.S. economy returned to the pre-pandemic level in the second quarter, indicating a sustained recovery from the pandemic recession. Further, the Fed, in its latest meeting, kept current monetary stimulus in place for a little bit longer, fueling increased confidence among investors (read: Will Pfizer ETFs Soar on FDA's COVID-19 Vaccine Booster Approval?).However, inflation fears, resurgence in pandemic, taper talks, potential for high corporate tax rates and signs of slowdown in China economy have kept the stock market edgy throughout the year.With just a week left to end the first nine months of 2021, the S&P 500 is up about 18.4% while the Dow Jones and the Nasdaq have gained 13.6% and 16.8%, respectively. In fact, the cyclical sectors have been outperforming this year on a rebounding economy.While there have been winners in many corners of the space, we highlight seven ETFs from different segments that have outperformed and gained more than 40% in the first nine months of 2020. These are expected to continue outperforming, provided the fundamentals remain intact.North Shore Global Uranium Mining ETF URNM – Up 89.6%Uranium stocks have been on a tear buoyed by growing social media attention, restart of nuclear reactors in Japan after 10 years and the growing uranium supply deficit, being accelerated by COVID-19 pandemic related production cuts. This ETF provides exposure to companies that are involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee. The ETF holds 35 stocks in its basket and has accumulated $676.2 million in its asset base. It trades in a good volume of 298,000 shares per day on average (read: Why Uranium Stocks & ETFs are Going Nuclear).First Trust ISE-Revere Natural Gas Index Fund FCG – Up 79.7%Natural gas is surging on tightening supplies and low inventories, providing upside to the natural gas stocks and ETFs. FCG offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 40 stocks in its basket. The fund has amassed $267.8 million in its asset base while charging 60 bps in annual fees. Volume is good with 1.3 million shares exchanged per day on average. The product has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Natural Gas ETFs Heat Up on Supply Crunch Ahead of Winter).Invesco Dynamic Energy Exploration & Production ETF PXE – Up 78.4%Oil price is also rising amid the backdrop of tightening supply, lower crude stockpiles and expectations of an increase in demand as vaccination roll-outs widen. This product follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies involved in the exploration and production of natural resources used to produce energy based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value. Holding 32 stocks in its basket, the fund has amassed $75 million in its asset base while trading in an average daily volume of 45,000 shares. It charges 63 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.VanEck Vectors Rare Earth/Strategic Metals ETF REMX – Up 70.2%Rare earth metals are getting a boost from an accelerating shift to new technologies such as electric vehicles. About 27% of rare metals are used in the production of neomagnets, which are the essential components in electric vehicles (EVs). REMX offers exposure to companies engaged in producing, refining and recycling of rare earth and strategic metals and minerals. It follows the MVIS Global Rare Earth/Strategic Metals Index, holding 20 stocks in its basket. The ETF has AUM of $979.1 million and an average daily volume of 232,000 shares. From a country look, Chinese firms dominate the portfolio with a 47.6% share, closely followed by Australia (25%) and the United States (11.8%). The product charges 59 bps in annual fees.SPDR S&P Retail ETF XRT – Up 48.9%With millions of Americans being vaccinated and reopening of the economy, consumers are feeling more optimistic, about the economy, leading to increased spending. With AUM of $1.1 billion, this product targets the broad retail sector by tracking the S&P Retail Select Industry Index. It holds 108 securities in its basket with the key holdings in the Internet & direct marketing retail, apparel retail, automotive retail, and specialty stores. The fund charges 35 bps in annual fees and trades in volume of 2.3 million shares a day on average. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Buy the Dip With These Top-Ranked ETFs).Invesco S&P SmallCap Value with Momentum ETF XSVM – Up 45.2%This fund offers exposure to the companies having the highest "value scores" and "momentum scores" by tracking the S&P 600 High Momentum Value Index. It holds a basket of 117 stocks with AUM of $336.4 million and an average daily volume of 90,000 shares. Financials and consumer discretionary take the largest share at 29% and 23.3%, respectively, while industrials round off the next spot with a double-digit exposure. The ETF charges 39 bps in annual fees.ETFMG Treatments Testing and Advancements ETF GERM – Up 43%This fund offers exposure to biotech companies engaged in the testing and treatments of infectious diseases by tracking the Prime Treatments, Testing and Advancements Index. It holds 78 stocks in its basket and charges 68 bps in annual fees. The ETF has amassed $67.2 million in its asset base and trades in an average daily volume of 22,000 shares. Time to Invest in Legal Marijuana If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027. After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%. You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pfizer Inc. (PFE): Free Stock Analysis Report SPDR S&P Retail ETF (XRT): ETF Research Reports First Trust Natural Gas ETF (FCG): ETF Research Reports Invesco Dynamic Energy Exploration & Production ETF (PXE): ETF Research Reports VanEck Rare EarthStrategic Me (REMX): ETF Research Reports Invesco S&P SmallCap Value with Momentum ETF (XSVM): ETF Research Reports North Shore Global Uranium Mining ETF (URNM): ETF Research Reports ETFMG Treatments, Testing and Advancements ETF (GERM): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 24th, 2021

All You Need to Know About Bank OZK (OZK) Rating Upgrade to Buy

Bank OZK (OZK) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy). Investors might want to bet on Bank OZK (OZK), as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Since a changing earnings picture is a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may find it difficult to make decisions based on rating upgrades by Wall Street analysts, as these are mostly driven by subjective factors that are hard to see and measure in real time.As such, the Zacks rating upgrade for Bank OZK is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Bank OZK imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>>.Earnings Estimate Revisions for Bank OZKFor the fiscal year ending December 2021, this bank is expected to earn $4.21 per share, which is a change of 86.3% from the year-ago reported number.Analysts have been steadily raising their estimates for Bank OZK. Over the past three months, the Zacks Consensus Estimate for the company has increased 9.2%.Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of 'buy' and 'sell' ratings for its entire universe of more than 4000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a 'Strong Buy' rating and the next 15% get a 'Buy' rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.You can learn more about the Zacks Rank here >>>The upgrade of Bank OZK to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term. Time to Invest in Legal Marijuana If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027. After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%. You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank OZK (OZK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 24th, 2021

Five Economic Benefits From Bank And Fintech Firm Partnerships

While banking clientele have never been more frustrated than now, the global industry faces a unique opportunity to flip the current system upside down. Q2 2021 hedge fund letters, conferences and more In fact, Capgemini’s World FinTech Report of 2021 details how banks can leverage the new competitive market in depth. Just as we watched […] While banking clientele have never been more frustrated than now, the global industry faces a unique opportunity to flip the current system upside down. 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 Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more In fact, Capgemini’s World FinTech Report of 2021 details how banks can leverage the new competitive market in depth. Just as we watched large and small businesses alike drastically adapt to the digital demands of Covid in 2020, banks are facing the same reality this year. The competitive threats no longer urge, but rather require, banks to implement a digital-only approach to subsidiaries in order to stay afloat during the dawn of FinTech. Traditional banks are taking to collaboration versus competition in order to boost engagement and interaction with innovative, forward-thinking FinTech firms. The Benefits Of The Partnership Between Banks And FinTech Companies No one can deny the value of both entities, however, they’re also stronger together than apart. That’s what we’re looking at here, and the union is mutually beneficial. Here’s how. Increase In Trust From Modern Customers The connection between banks and FinTech companies means heightened trust backed by better tech, stronger security and less room for errors as a result of automation. This should be welcome for any customer in need of reliable and secure financial banking services, and especially in an age where people are uneasy about the state of their finances. According to a recent survey conducted by CreditDonkey, for instance, only a third of people under the age of 40 expressed a high level of confidence in their financial future. Another survey from April 2020 showed that just 14% of consumers sought their bank’s council when in need of financial direction following a major life event. This has definitely not been great news for the banking industry. However, it also isn’t shocking. Consumers often do not seek guidance from traditional financial sectors due to a lack of trust. This could very well be due to the 2008 recession, where 41% of the population that were surveyed stated that they were scared, and 53% were mad. Client confidence in banks has grown over the years but still, today, only equates to nearly one-third of clientele. On the other hand, trust in tech companies is a starkly different story. According to The Verge Tech Survey 2020, Americans hail Google, Amazon, Apple, Microsoft, Netflix, and YouTube as leaders in positively affecting society. Specifically, 75% of survey respondents trust Microsoft, with Amazon following at 73% and Facebook at 41%. Tech Makes Banking Accessible, Safer, Smarter And More Efficient Combining tech with banking means more ease of use with user’s smartphones. GSMA real-time intelligence data shows that there are 5.28 billion people using mobile devices in the world as of September 2021. Making banking mobile-friendly is a no brainer and boosts connection with clientele. People just don’t want to drive to their bank or ATM anymore. They want instant mobile access and complete visibility from the comfort of their homes. Users are looking for smarter ways to handle business and finances. That means being able to seamlessly switch between desktop, mobile device or tablets. Fortunately, the cloud solves this completely. Banking customers can get to their banking accounts from virtually anywhere and access their updated information in real time. The cloud has paved the way for quicker transactions, greater visibility and increased accuracy. Stronger Brand Reputation As A Result Of Partnership Partnering with a highly regarded FinTech company looks very good for a lesser known bank. More users are going to be interested in downloading a mobile app from a reputable tech company. A credible partnership gives customers more faith that their interests are held at the highest priority. To further the first point of mobile access, even greater than that is the consumer's ability to complete multiple actions digitally that just years ago they would have had to drive to the bank for. This includes, but is not limited to, money transfers, financial planning, transaction tracking, investments, check deposits, special perks and banking fee management. FinTech companies help users have an abundance of options and services right at their fingertips. This, in turn, creates greater business for banks. Security Remember when we mentioned trust earlier? Security plays a massive role in this. FinTech companies lend banks the know-how and resources to protect customers’ data from vulnerabilities. Specific steps include relying on SASE (Secure Access Service Edge) networks, utilizing AI-based fraud detection systems and, as mentioned previously, storing customer data on the cloud rather than with on-premise databases. Customers want to know that their life savings are going to be there when they wake up. Can you blame them? And it’s worth noting while customers should feel safe knowing their funds are held securely with fintech services, none of this is to say that they shouldn’t be investing in other financial safeguards as well. Building up a diversified investment and retirement portfolio, setting aside at least three months worth of expenses into an emergency fund, and investing into a comprehensive insurance policy to help cover their financial assets in the event of the family’s income provider becoming deceased or disabled are all wise strategies anyone should take to prepare for the worst. Scalability FinTech and bank partnerships can be quickly scaled up or down in order to tailor to customer response and needs. These consumer “pain points” present themselves uniquely over the course of the journey and collaboration grants both sectors more solutions to offer. Scalability is the key to sustainability. Together, FinTech and banks can wreak widespread disruption to the market. Providing the best possible products together in an ascendable way helps both teams cut through the noise of the financial industry. Conclusion At the end of the day, it’s not enough for banks to just do things the way they’ve always done with excellence. Banks must remain futuristic with tech-forward, collaborative thinking in order to serve their customers best. Banks and financial institutions alike must together keep their efficiency radars going twenty four hours a day, seven days a week in order to stay on top of new trends, startup activity, new developments, and integration opportunities. Updated on Sep 24, 2021, 12:41 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: valuewalkSep 24th, 2021

A former quant was charged in an $8.5 million insider trading scheme that included making more than 3,000 fraudulent trades from his wife"s brokerage account

The SEC discovered the scheme by using data analysis tools to detect suspicious patterns in trading activity. Andrew Kelly/Reuters A former Wall Street quant analyst was charged by the SEC in an $8.5 million insider trading scheme on Thursday.Sergei Polevikov allegedly placed nearly 3,000 front-running trades in his wife's brokerage account.The SEC discovered the scheme by using data analysis tools to detect suspicious patterns in trading activity.Sign up here for our daily newsletter, 10 Things Before the Opening Bell.A former Wall Street quant analyst was charged with pulling off a $8.5 million insider trading scheme by placing nearly 3,000 trades in his wife's brokerage account, according to a Thursday complaint from the SEC.Sergei Polevikov allegedly utilized real-time, non-public information about the timing and size of his employers' security trades to front-run the orders and make a quick profit.The defendant would rarely hold onto the positions for more than a day, and was able to capitalize on small-time movements in stocks at the expense of his employer's clients.Polevikov, 48, of Port Washington, New York, formerly worked as a senior quantitative analyst at OppenheimerFunds. He was arrested on Wednesday on charges of securities, wire, and investment company fraud.In one example of the illicit trades, the SEC says Polevikov purchased 400,000 shares of stock in a Brazilian bank ahead of a nearly 8 million-share purchase made by OppenheimerFunds. The defendant then sold the stock for a near $100,000 profit. Polevikov concealed his alleged trading scheme by placing the front-running trades in his wife's investment account, who uses a different last name. The SEC utilized data analysis tools to detect suspicious trading activity patterns, "such as improbably successful trading across different securities over time," the regulator said.Polevikov's lawyer Brooke Cucinella said, "the government has it wrong" and that her defendant plans to fight the charges. Polevikov's bail was set at $1.5 million, and he faces up to 20 years in prison. Polevikov's wife, Maryna Arystava, was sued by the SEC as the agency seeks the return of the alleged illicit profits, along with civil penalties.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 24th, 2021

Ready to invest in Bitcoin? Here are 4 steps to get started

Here's everything you need to know about how to invest in bitcoin, from choosing an exchange and crypto wallet, to picking the right trading strategy. There are a variety of ways to invest in bitcoin, even if you aren't a professional day trader or regularly play the currency markets. Alyssa Powell/Insider Table of Contents: Masthead Sticky Bitcoin investing involves choosing an exchange, verifying your identity, and withdrawing to a wallet. Investing in bitcoin is risky since it's a volatile and speculative asset. Experts recommend using a buy-and-hold strategy when buying bitcoin, in order to average out rises and falls. Visit Insider's Investing Reference library for more stories. More than a decade into its existence, Bitcoin doesn't seem to be going away. The cryptocurrency has attracted good and bad headlines as it's worked its way through multiple peaks over the years, and despite a reputation for volatility, it continues to attract new investors with its promise of market-beating returns.Here's what to know about investing in Bitcoin.What to know about Bitcoin Bitcoin is a cryptocurrency. This means it's a form of electronic money that secures and validates transactions via the use of cryptography. In Bitcoin's case, people and organizations known as "miners" use computing hardware to calculate a code - known as a "hash" - that encrypts the data contained in transactions. This data is collected into "blocks," which are linked together in a blockchain that cannot, in theory, be changed once written.On an economic level, Bitcoin's creator - the pseudonymous Satoshi Nakamoto - created it in 2008 as a form of "sound money," akin to digital gold."What makes Bitcoin so special is that it has a finite supply of 21 million coins, with only a couple million left to be mined," explains Edward Moya, chief market strategist at OANDA's MarketPulse. "Simple supply and demand for Bitcoin is the main reason why prices have skyrocketed over the past year."Despite having a fixed maximum supply, Bitcoin has shown remarkable volatility throughout most of its life with major fluctuations in its price.Such swings make Bitcoin a highly speculative asset, one that should be considered only by traders willing to stomach a fair amount of risk. That said, at least some analysts suspect that its volatility will gradually decline over time, as its market grows and reduces its destabilizing reliance on leverage.Step 1: Choose a crypto exchange For most people, the best place to buy Bitcoin is on a crypto exchange. These are online platforms dedicated to facilitating trades in cryptocurrency, usually by offering trading pairs (e.g., USD to Bitcoin) and usually by matching buyers with sellers.In the US, the leading crypto exchange by volume and customer base is Coinbase. That said, other reputable - and regulated - crypto-exchanges include Kraken, Gemini, eToro, and Crypto.com.More inexperienced traders may wish to try a more general trading platform such as Robinhood. These have the benefit of being more user-friendly than the average crypto exchange, although their major downside is that many don't let users withdraw their bitcoin.Quick tip: New investors should check the fees charged by exchanges, since these can vary quite widely. They should also check for the minimum account balance required by their chosen platform, since certain exchanges impose a minimum. Others also set minimums for account deposits via bank transfer.Step 2: Choose a payment methodExchanges also vary in terms of the payment methods they support. Most major platforms do offer the option of linking your bank account for wire and ACH transfers, as well as the option of linking a debit card. Some also let you pay via PayPal, with Coinbase also supporting Apple Pay.Quick tip: Most bank transfer deposit options incur no fees. Nonetheless, certain special services (e.g., FedWire via Silvergate or Synapse) may require a small charge (e.g., $1 or $5), while using PayPal to deposit money into your exchange incurs a 2.5% charge with Coinbase, for instance.Regardless of the option you choose, you will have to verify your identity when first signing up for an account and registering a payment method. In the US, you're usually required to submit a scan of a state-issued ID, such as a driver's license or identification card.Depending on where you are and on your chosen platform, you may also be required to provide scans of additional documentation (such as your passport), as well as being asked to submit a proof of address.Step 3: Place your order Once you're verified and have deposited cash into your account, you can then begin buying Bitcoin. This process varies according to the exchange you use, with some exchanges offering a process that simply involves clicking a Buy or Sell button and then specifying how much Bitcoin you want to buy (or sell).In general, most crypto exchanges offer at least three basic order types:Market order: the option to choose if you simply want to buy Bitcoin at its current price. This type of order is usually completed in a matter of seconds, depending on the time of day.Stop order: an order where you specify the price at which you will buy or sell Bitcoin. This type is good if you want to make sure you sell Bitcoin before it falls too sharply. This type of order can take some time to execute, depending on how quickly the market moves.Limit order: instructs the exchange to execute a buy or sell order at a specific price or better. In contrast to stop orders, limit orders are visible to the market and can take longer to fill.Again, executing any one of these options usually involves clicking a Buy, Trade, or New order button on an exchange's home screen. You'll then be able to choose from the above three (and more advanced) options, before clicking a Submit button or something equivalent.Quick tip: All exchanges will let you buy a fraction of a bitcoin (BTC). So while the price of 1 BTC may seem prohibitively expensive right now, you will be able to choose to buy 0.1 BTC, 0.01 BTC or whatever else you type into the exchange's interface.How to buy Bitcoin with PayPalPayPal has enabled its US-based customers to buy Bitcoin (and other cryptocurrencies) since October 2020. But before you can purchase Bitcoin, you'll have to agree to their terms and conditions and then set up a PayPal Balance account first. From the home screen, click the button that looks like a bar graph. Jasmine Suarez/Insider Click Bitcoin. PayPal also offers the option to buy Ethereum, Litecoin, and Bitcoin Cash. Jasmine Suarez/Insider Scroll down and select how much you'd like to purchase. Then click Buy. PayPal provides preset amounts of Bitcoin you can purchase. Jasmine Suarez/Insider Quick tip: When you press the Buy button for the first time, you'll have to prove your identity (if you haven't done so on PayPal already). This involves providing your name, physical address, date of birth, and taxpayer identification number, and may also include submitting a copy of your ID and showing proof of address.Step 4: Store your crypto in a safe place While bigger exchanges are becoming safer, hacks and fraud remain a big problem for the industry. This is why investors with significant sums in Bitcoin are advised to consider storing their cryptocurrency themselves."Experienced traders that are very good with cybersecurity might prefer to own their wallets, as this gives you the ability to move your cryptocurrencies whenever you want to and not be subject to an exchange. The saying 'Not your keys, not your coins' was popular last year, as many exchanges got hacked or shut down," says Moya.This means transferring your Bitcoin from the exchange you use to your own cryptocurrency wallet. Such wallets come in two forms:Cold wallets: also known as hardware wallets, these are small devices that store your Bitcoin address' private key, which is necessary to transfer Bitcoin out of the address. They do not connect to the internet and are therefore considered safer than online, software-based alternatives.Hot wallets: also known as software wallets, these are apps that can be used through your phone, desktop computer, or web browser. They also store the private key of your Bitcoin address, but because they do connect to the internet, they aren't considered quite as safe as hardware/cold wallets.Software wallets aren't quite as secure as hardware wallets, but the leading varieties do still offer a range of security features, such as two-factor authentication and compatibility with hardware wallets.Selling bitcoin While many traders turn to Bitcoin in the hope of making big money fast, pretty much every analyst advocates a long-term, buy-and-hold strategy. This is largely because holding for a longer period of time tends to average out gains and losses, providing a greater probability of a significant positive return by the time you sell your Bitcoin."In my opinion, it is better to buy and hold, perhaps allocating a small portion of your portfolio to cryptocurrencies, focusing on the ones typically held by institutional investors, such as Bitcoin and Ethereum at the moment," says Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase & Co.Likewise, many analysts also recommend adopting a dollar-cost-averaging (DCA) strategy, largely because this is another way of averaging out peaks and troughs."The best strategy for newcomers would be to [trade] Bitcoin on the DCA approach [...] you'll just buy a tiny bit on a monthly or weekly basis, not looking at the price movements at all," says Michaël van de Poppe, the CEO and founder of cryptocurrency consultancy, Eight.However, Moya warns that even with a long-term hold strategy, new traders are generally advised to enter the world of Bitcoin investing with the mindset that they could lose most of their money. "A new investor should only apply a very low, single-digit percentage of their trading portfolio to cryptocurrencies. Despite the many bullish calls for Bitcoin or Ethereum, massive plunges have happened in minutes. New investors may want to consider buying and holding a basket of cryptocurrencies, with an approach of scaling into positions," he says.A longer-term approach is also beneficial from a tax perspective, since Bitcoin is classified as property in the US, and therefore liable to capital gains tax when sold. Quick tip: You'll have to pay capital gains tax if you sell bitcoin after holding it for more than one year. But if you hold for less than a year, your gains are taxed as ordinary income. Investors with an annual income of $40,000 or less pay no capital gains tax on Bitcoin profits, whereas those in the next bracket pay 15%.The financial takeawayBitcoin is an interesting and exciting technological innovation, representing a form of decentralized electronic money that doesn't require a central authority (such as the Federal Reserve) to operate. It's also exciting from an investment perspective, with its high annual returns (in most years) making it one of the best-performing assets of the past decade, even if its volatility means it has suffered more than a few dramatic falls.While investing in Bitcoin may seem complicated, starting off is as simple as picking a reputable exchange and setting up an account. Once you've verified your identity and deposited some money, you're then good to go, with most exchanges offering a range of order types in addition to the ability to simply buy Bitcoin.When you've acquired a significant sum of Bitcoin, most experts recommend withdrawing it to your own cold (i.e., hardware) wallet. They also recommend a buy-and-hold strategy, so that you can iron out market dips and also avoid having your profits taxed as ordinary income.A bitcoin IRA lets you profit from the cryptocurrency's potential gains in a tax-advantaged wayAltcoins are the alternative digital currencies to bitcoin - here's what they are and how they workWhat is Ethereum? What to know before investingWhat to know about non-fungible tokens (NFTs) - unique digital assets built on blockchain technologyRead the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 23rd, 2021

AAR Reports First Quarter 2022 Results

First quarter sales of $455 million, up 14% over the prior year First quarter GAAP diluted earnings per share from continuing operations of $0.31 compared to a loss per share of $(0.40) in Q1 FY2021 Adjusted diluted earnings per share from continuing operations of $0.52, up 206% from $0.17 in Q1 FY2021 First quarter cash flow from operating activities from continuing operations of $18 million WOOD DALE, Ill., Sept. 23, 2021 (GLOBE NEWSWIRE) -- AAR CORP. (NYSE:AIR) today reported first quarter Fiscal Year 2022 consolidated sales of $455.1 million and income from continuing operations of $11.2 million, or $0.31 per diluted share. For the first quarter of the prior year, the Company reported sales of $400.8 million and loss from continuing operations of $13.9 million, or $0.40 per diluted share. Our adjusted diluted earnings per share from continuing operations in the first quarter of Fiscal Year 2022 were $0.52 compared to $0.17 in the first quarter of the prior year. Current quarter results included net pretax adjustments of $9.9 million, or $0.21 per share, primarily due to a previously disclosed customer contract termination and related asset impairment charges. Consolidated first quarter sales increased 14% over the prior year quarter. Our consolidated sales to commercial customers increased 53% over the prior year quarter primarily due to the recovery in the commercial market from the impact of COVID-19. Our consolidated sales to government customers decreased 17% primarily related to timing as the prior year quarter included significant activity across both our U.S. Marine Corps C-40 and U.S. Air Force pallet contracts. On a sequential basis, consolidated first quarter sales increased 4% over the fourth quarter. Our consolidated sales to commercial customers increased 17% over the fourth quarter while consolidated sales to government customers decreased 10%. Sales to commercial customers were 59% of consolidated sales compared to 44% in the prior year's quarter reflecting the recovery in the commercial market from the impact of COVID-19. Subsequent to the end of the quarter, we announced several new contract awards including: Exclusive distribution agreement with Arkwin Industries covering its broad line of engine actuation and commercial aviation products, which complement our existing engine parts offerings Firm, fixed price contract from the Department of Energy's National Nuclear Security Administration for the conversion and delivery of a Boeing 737-700 aircraft Extension of our long-term, component support agreement with Volotea, a growing low-cost carrier in Spain, for its fleet of Airbus narrowbody aircraft utilizing our logistics centers in Europe "We had a very strong start to the year across our commercial business. We saw robust performance in our MRO operations and continued recovery in our parts activities. We also secured new government and commercial program contract awards while adding another exclusive new parts distribution agreement, which we expect to contribute to our long-term growth," said John M. Holmes, President and Chief Executive Officer of AAR CORP. Gross profit margins increased from 12.1% in the prior year quarter to 14.2% in the current quarter and adjusted gross profit margin increased from 13.0% to 16.1%, primarily due to the favorable impact from our actions to reduce costs and increase our operating efficiency. Expeditionary Services profitability increased significantly from 10.8% to 19.0% reflecting the sale of the Composites business in the prior year quarter and improved execution in the Mobility business. Selling, general and administrative expenses increased from $45.3 million to $49.3 million mainly due to restoration of temporary compensation reductions. Selling, general and administrative expenses as a percent of sales decreased from 11.3% to 10.8% due to the favorable impact from our cost reduction actions. Operating margin increased from 0.8% in the prior year quarter to 3.3% in the current quarter and adjusted operating margin increased from 2.5% to 5.5%, primarily due to the favorable impact from our actions to reduce costs and increase our operating efficiency. Sequentially, our adjusted operating margin increased from 5.2% in the fourth quarter to 5.5% in the current quarter. In conjunction with the U.S. exit from Afghanistan, we have concluded our activities in country under our WASS and U.S. Department of Defense contracts. The operations related to our activities in Afghanistan contributed revenue of $67 million in Fiscal 2021. Holmes continued, "I am extremely proud of our WASS team and their work in Afghanistan. Our team played a vital role in helping to evacuate over 2,000 U.S. Embassy personnel over a 36 hour period. This was a very difficult operation in a challenging environment but all of our flights were completed successfully and once our mission was accomplished, all of our AAR team members were safely evacuated. We are very grateful for their service." Net interest expense for the quarter was $0.7 million compared to $1.6 million last year. Average diluted share count increased to 35.7 million from 35.0 million in the prior year quarter. Cash flow provided by operating activities from continuing operations was $17.5 million during the current quarter compared to $39.8 million in the prior year quarter, which included $48.5 million related to our receipt of funding from the CARES Act through the Payroll Support Program. Excluding our accounts receivable financing program, our cash flow provided by operating activities from continuing operations was $25.9 million in the current quarter. Holmes concluded, "Our continued focus on driving operating efficiency and working capital management led to another quarter of sequential margin improvement and strong cash flow. Looking forward, while the U.S. exit from Afghanistan will impact our government business in the near term, we are encouraged by the strong pipeline of offsetting government opportunities such as the recent contract award from the Department of Energy. In our commercial markets, the timing of the recovery has been impacted by the Delta variant, but as we continue to see demand increase, particularly in our parts activities, we expect continued growth and operating margin expansion." Conference Call Information                                         AAR will hold its quarterly conference call at 3:45 p.m. CT on September 23, 2021. The conference call can be accessed by calling 866-802-4322 from inside the U.S. or +1-703-639-1319 from outside the U.S. A replay of the conference call will also be available by calling 855-859-2056 from inside the U.S. or +1-404-537-3406 from outside the U.S. (access code 8294140). The replay will be available from 7:15 p.m. CT on September 23, 2021 until 10:59 p.m. CT on September 29, 2021. About AAR AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the Chicago area, AAR supports commercial and government customers through two operating segments: Aviation Services and Expeditionary Services. AAR's Aviation Services include parts supply; OEM solutions; integrated solutions; maintenance, repair, overhaul; and engineering. AAR's Expeditionary Services include mobility systems operations. Additional information can be found at www.aarcorp.com. Contact: Dylan Wolin – Vice President, Strategic & Corporate Development and Treasurer | (630) 227-2017 | dylan.wolin@aarcorp.com This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, which reflect management's expectations about future conditions, including but not limited to (i) the ability of our latest distribution, government and commercial programs contract awards to support continued long-term growth,(ii) the impact of our continued focus on driving operating efficiency and working capital management on sequential margin improvement and cash flow, (iii) the impact on our government business in the near term of the recent U.S. exit from Afghanistan, (iv) the impact of the strong pipeline of offsetting government opportunities on our future results and (v) our expectations regarding continued growth and operating margin expansion. Forward-looking statements often address our expected future operating and financial performance and financial condition, or sustainability targets, goals, commitments, and other business plans, and often may also be identified because they contain words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "might," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," or similar expressions and the negatives of those terms. These forward-looking statements are based on the beliefs of Company management, as well as assumptions and estimates based on information available to the Company as of the dates such assumptions and estimates are made, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including: (i) factors that adversely affect the commercial aviation industry; (ii) the continued impact of the COVID-19 pandemic on air travel, worldwide commercial activity and our and our customers' ability to source parts and components; (iii) a reduction in the level of sales to the branches, agencies and departments of the U.S. government and their contractors (which were 44.7% of total sales in fiscal 2021); (iv) non-compliance with laws and regulations relating to the formation, administration and performance of our U.S. government contracts; (v) cost overruns and losses on fixed-price contracts; (vi) nonperformance by subcontractors or suppliers; (vii) changes in or non-compliance with laws and regulations that may affect certain of our aviation and government and defense related activities that are subject to licensing, certification and other regulatory requirements imposed by the FAA, the U.S. State Department and other regulatory agencies, both domestic and foreign; (viii) a reduction in outsourcing of maintenance activity by airlines; (ix) a shortage of the skilled personnel on whom we depend to operate our business, or work stoppages; (x) competition from other companies, including original equipment manufacturers, some of which have greater financial resources than we do; (xi) financial and operational risks arising as a result of operating internationally; (xii) inability to integrate acquisitions effectively and execute our operational and financial plan related to the acquisitions; (xiii) inability to recover our costs due to fluctuations in market values for aviation products and equipment caused by various factors, including reductions in air travel, airline bankruptcies, consolidations and fleet reductions; (xiv) asset impairment charges we may be required to recognize to reflect the non-recoverability of our assets or lowered expectations regarding businesses we have acquired; (xv) limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements; (xvi) non-compliance with restrictive and financial covenants contained in certain of our loan agreements, and government funding received under the CARES Act; (xvii) restrictions on paying, or failure to maintain or pay dividends; (xviii) exposure to product liability and property claims that may be in excess of our liability insurance coverage; (xix) threats to our systems technology from equipment failures' cyber and other security y breaches or other disruptions; (xx) the costs of compliance, and liability for non-compliance, with environmental regulations, including future requirements regarding climate change; and (xxi) a need to make significant capital expenditures to keep pace with technological developments in our industry. Should one or more of those risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described. Those events and uncertainties are difficult or impossible to predict accurately and many are beyond our control. For a discussion of these and other risks and uncertainties, refer to our Annual Report on Form 10-K, Part I, "Item 1A, Risk Factors" and our Quarterly Reports on Form 10-Q. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company's control. The risks described in these reports are not the only risks we face, as additional risks and uncertainties are not currently known or foreseeable or impossible to predict accurately or risks that are beyond the Company's control or deemed immaterial may materially adversely affect our business, financial condition or results of operations in future periods. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. AAR CORP. and Subsidiaries Consolidated Statements of Operations (In millions except per share data - unaudited) Three Months Ended August 31,     2021       2020                   Sales $ 455.1     $ 400.8   Cost and expenses:               Cost of sales   390.5       352.2   Selling, general and administrative   49.3       45.3   Loss from joint ventures   (0.2 )     (0.1 ) Operating income   15.1       3.2   Loss on sale of business   ––       (19.5 ) Interest expense, net   (0.7 )     (1.6 ) Other income, net   0.7       0.2   Income (Loss) from continuing operations before income taxes   15.1       (17.7 ) Income tax expense (benefit)   3.9       (3.8 ) Income (Loss) from continuing operations   11.2       (13.9 ) Income (Loss) from discontinued operations   0.3       (0.6 ) Net income (loss) $ 11.5     $ (14.5 )                 Earnings (Loss) per share – Basic               Earnings (Loss) from continuing operations $ 0.32     $ (0.40 ) Earnings (Loss) from discontinued operations   0.01       (0.02 ) Earnings (Loss) per share – Basic $ 0.33     $ (0.42 )                 Earnings (Loss) per share – Diluted               Earnings (Loss) from continuing operations $ 0.31     $ (0.40 ) Earnings (Loss) from discontinued operations   0.01       (0.02 ) Earnings (Loss) per share – Diluted $ 0.32     $ (0.42 )                 Share Data:               Weighted average shares outstanding – Basic   35.1       34.9   Weighted average shares outstanding – Diluted   35.7       35.0                   AAR CORP. and Subsidiaries Consolidated Balance Sheets (In millions) August 31, 2021   May 31, 2021   (unaudited)     ASSETS       Cash and cash equivalents $ 48.8   $ 51.8 Restricted cash   3.8     8.4 Accounts receivable, net   180.8     166.7 Contract assets   74.6     71.9 Inventories, net   525.8     540.6 Rotable assets and equipment on or available for lease   52.3     50.4 Assets of discontinued operations   19.2     19.5 Other current assets   39.6     27.7 Total current assets   944.9     937.0 Property, plant, and equipment, net   109.1     120.0 Operating lease right-of-use assets, net   73.6     75.8 Goodwill and intangible assets, net   122.1     123.8 Rotable assets supporting long-term programs   178.0     184.3 Other non-current assets   108.0     98.8 Total assets $ 1,535.7   $ 1,539.7             LIABILITIES AND EQUITY           Accounts payable and accrued liabilities $ 304.0   $ 301.4 Liabilities of discontinued operations   20.2     35.4 Total current liabilities   324.2     336.8 Long-term debt   127.6     133.7 Operating lease liabilities   58.0     59.9 Other liabilities and deferred income   37.7     34.9 Total liabilities   547.5     565.3 Equity   988.2     974.4 Total liabilities and equity $ 1,535.7   $ 1,539.7             AAR CORP. and Subsidiaries Consolidated Statements of Cash Flows (In millions – unaudited) Three Months Ended August 31,.....»»

Category: earningsSource: benzingaSep 23rd, 2021

ETFs to Bet On as Fed Turns Hawkish, Signals Tapering

The Federal Reserve Chair Jerome Powell kept the interest rates near zero at 0-0.25% but signaled bond-buying tapering ahead followed by interest rate hikes as early as next year. In the FOMC meeting that concluded on Sep 22, the Federal Reserve Chair Jerome Powell kept the interest rates near zero at 0-0.25% but signaled bond-buying tapering ahead followed by interest rate hikes as early as next year.The central bank is expected to begin scaling back the monthly bond purchases as soon as November and complete the process by mid-2022. This is because it expects the Delta variant of the coronavirus, which has dented economic activity in the recent months, to have a short-lived effect on the recovery. Per the officials, the economy will likely make “substantial further progress” by the end of the year, a threshold needed for the central bank to begin slowing the pace of asset purchases (read: Buy the Dip With These Top-Ranked ETFs).Fed Chair Jerome Powell reiterated that he believes the U.S. economy has already surpassed the central bank's goals for inflation, and said a "reasonably good" September jobs report would indicate that the Fed's employment goals to begin tapering had been satisfied as well. Notably, the central bank has been buying $120 billion per month of Treasuries and mortgage-backed securities since the start of the COVID-19 crisis.The policy statement also revealed that nine of 18 Fed policymakers foresee a liftoff in interest rates next year, compared to seven policymakers in June. The median dot also projects three to four total rate hikes by the end of 2023. Through the end of 2024, the median FOMC member sees six to seven total rate hikes.Given this, investors should continue to focus on areas/sectors that will benefit the most from the Fed’s tightening policy. Here, we have detailed four of these and their ETFs below:FinancialsA rising interest rate scenario is highly profitable for the financial sector. This is because the steepening yield curve would bolster profits for banks, insurance companies, and discount brokerage firms. A broad way to play this trend is with Financial Select Sector SPDR Fund XLF, which has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.This is the most popular financial ETF in the space with AUM of $40 billion and an average daily volume of about 43 million shares. The fund follows the Financial Select Sector Index, holding 65 stocks in its basket. It is heavily concentrated on the top two firms, making up for double-digits share each while other firms hold no more than 7.2% share. In terms of industrial exposure, banks take the top spot at 37.5% while capital markets, insurance, and diversified financial services make up for double-digit exposure each. The fund charges 12 bps in annual fees and is up 27.5% in the year-to-date timeframe (read: 401(k) Balances at All-Time Highs: 6 ETFs to Buy).Consumer DiscretionaryConsumer discretionary stocks also seem good bets. This is because a tight policy is seemingly the result of a pickup in economic growth supported by solid job growth, wage growth and increased lending activity that result in higher spending power. One exciting pick in this space can be Vanguard Consumer Discretionary ETF VCR, which has a Zacks ETF Rank #1 with a Medium risk outlook (read: ETF Areas to Gain From the Upcoming Holiday Shopping Season).This fund follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 296 stocks in its basket. It has heavy concentration on the top firm – Amazon AMZN – at 23.5% share while the other firms hold no more than 10% of the assets. The product has managed $6.7 billion in its asset base and charges 10 bps in annual fees. In terms of industrial exposure, Internet & direct marketing, retail takes the largest share at 27.6% while automobile manufacturers, restaurants, and home improvement retail round of the next three spots. The ETF trades in average daily volume of 59,000 shares and has gained 15.8% in the same timeframe.TechnologyIn a tight policy era, technology seems one of the safest sectors as most of the companies are sitting on a huge cash pile. The cash reserves will ensure that these companies are not plagued by any financial trouble even in a rising interest rate environment. While there are several ETFs to bet on, First Trust NASDAQ-100-Technology Sector Index Fund QTEC could be an intriguing option. It has a Zacks ETF Rank #1 with a High risk outlook.    This ETF tracks the NASDAQ-100 Technology Sector Index, holding 41 stocks in its basket with almost equal allocation. From an industry look, software and semiconductors dominate the list with 34.9% and 32.7% share, respectively, while production technology equipment and consumer digital services make up for the next two spots. QTEC is a large cap centric fund with AUM of $3.9 billion and average daily volume of around 66,000 shares. It charges 57 bps in annual fees and gained 19.6% so far this year.DollarTightening policy and higher rates would attract more capital to the country from foreign investors, thereby boosting the U.S. dollar against the basket of other currencies. Invesco DB US Dollar Index Bullish Fund UUP offers exposure to a dollar against a basket of six world currencies. This is done by tracking the Deutsche Bank Long USD Currency Portfolio Index - Excess Return plus the interest income from the fund’s holdings of U.S. Treasury securities. In terms of holdings, UUP allocates nearly 57.6% in euro and 25.5% collectively in the Japanese yen and British pound. The fund has so far managed an asset base of $487.9 million and sees an average daily volume of around 697,000 shares. It charges 76 bps in annual fees and has gained 3.5% so far this year. The fund has a Zacks ETF Rank #2 with a Medium risk outlook (read: U.S. Dollar to Gain Ahead? ETFs to Gain/Lose).  More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Financial Select Sector SPDR ETF (XLF): ETF Research Reports Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports First Trust NASDAQ100Technology Sector ETF (QTEC): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

Turkish Lira Plunges To All Time Low After Surprise Rate Cut By The Erdogan Central Bank

Turkish Lira Plunges To All Time Low After Surprise Rate Cut By The Erdogan Central Bank Turkey’s currency plunged to a new all time low, with the USDTRY rising as high as 8.8017 after Erdogan's central bank unexpectedly cut its policy rate by 100 basis points to 18% on Thursday, delivering stimulus long sought by President Erdogan despite soaring inflation. The central bank was widely expected to hold interest rates steady at 19%, where they had been since March, given inflation soaered to 19.25% last month, the highest level since Turkey's FX crisis in 2018. Only two of 17 polled economists had predicted a cut. In retrospect, the cut should have been more widely expected after Governor Sahap Kavcioglu - who is the latest central bank head installed by Erdogan to serve at his behest at the "independent" bank - sounded more dovish in recent weeks, paving the way for Turkey’s first monetary easing since May 2020 and ending a tightening cycle that began 12 months ago. Kavcioglu strategically shifted his emphasis to (lower) core inflation as a reference benchmark, which stood below 17% in August, instead of headline CPI and had said policy was tight enough to cool price rises in the fourth quarter. The Turkish Central Bank is notorious for having its governors - hand picked by Erdogan in recent years - also get fired by Erdogan if they defy the core tenets of "Erdoganomics" and refuse to cut rates to tame soaring inflation. Today, the bank’s policy committee said a rate cut was “needed” because of the lower core price measures - which strip out food and some other goods - as well as shocks to supply in the wake of pandemic measures. The tightness in monetary stance has started to have a higher than envisaged contractionary effect on commercial loans. In addition, macroprudential policy framework has been strengthened to curb personal loan growth. The Committee evaluated the analyses to decompose the impact of demand factors that monetary policy can have an effect, core inflation developments and supply shocks Echoing the Fed, the TCMB said the recent rises in inflation “are due to transitory factors" and added that “the tightness in monetary stance has started to have a higher than envisaged contradictory effect on commercial loans.” “Ridiculous move by the CBRT - but not unexpected. Erdogan gets what Erdogan wants. But inflation is rising and yet they are cutting rates. The CBRT is taking a huge risk with the exchange rate” Blubeay's Tim Ash said of the rate cut. The central bank’s dovish pivot this month had prompted analysts to warn of a “policy mistake” if cuts come too soon, though most predicted they would come before year end. Foreign investors, having had enough of Erdogan's unpredictable authoritariansm, have dumped Turkish assets in recent years due in part to concerns over the political independence of the central bank, given Erdogan ousted its last three governors over a 20-month span due to policy disagreements. A self-described “enemy” of interest rates, Erdogan said in June he spoke to Kavcioglu about the need for a rate cut in August. Last month, he said “we will start to see a fall in rates”. Commenting on the turkish decision, Capital Economics' Jason Tuvey said that “Erdogan gets his way with surprise rate cut ... We think that further aggressive easing is likely over the next year. A few factors seem to have swayed the central bank to commence an easing cycle today. The first is the further decline in core inflation last month, to 16.8% y/y – CBRT Governor Sahap Kavcioglu had recently emphasised the ‘importance of core inflation indicators’ when determining the monetary policy stance.” “The second is that policymakers seem to be concerned about the impact of the tight policy stance on activity. The latest hard activity figures showed that the economy made a soft start to Q3. Finally, Mr. Kavcioglu will have been well aware of what happened to previous CBRT governor’s that defied President Erdogan’s desire for rate cuts and may have moved on policy to save his job The lira tumbled as much as 1.5% and stood at 8.76 against the dollar after earlier touching an all time low of 8.80. Depreciation brings further inflation in Turkey due to imports priced in hard currencies, but according to "Erdoganomics", lower rates lead to lower inflation in a revolutionary overhaul of conventional monetary thinking. “People were set up to be short the currency, there were the comments you had from Erdogan and the whole story of the conflict with the central bank. Obviously the currency has weakened and it will weaken further, but I don’t think you are going to see it blow up completely because there was some positioning for this” said Peter Kisler, emerging markets portfolio manager at Trium Capital. Investor jitters had led to a more than 4% currency devaluation this month. Tyler Durden Thu, 09/23/2021 - 09:00.....»»

Category: blogSource: zerohedgeSep 23rd, 2021