Zero Hedge

Countdown To Chaos

Countdown To Chaos Tyler Durden Fri, 10/30/2020 - 18:20

Authored by MN Gordon via EconomicPrism.com,

On Wednesday, while the broad stock market was getting shellacked, and companies like Everbridge, Bed Bath & Beyond, and Dynatrace were suffering double digit freefalls, something else was going on.  Gold and silver were also getting shellacked.

But it wasn’t all crash and burn.  First Solar, Rolls-Royce Holdings, and CoreLogic all notched double digit gains.  The dollar, as measured by the dollar index, gold, silver, and most stocks, was also up.  And something else was up too…

Most investors likely didn’t notice that American firearm manufacturer Sturm, Ruger & Company managed to eke out a small return.  Why would they?  A return of 0.43 percent is nothing to write home about.

Nonetheless, we contend that Ruger’s modest gain in the face of a massive selloff is something that should get the attention of investors.  It’s something that should also get the attention of non-investors.  Guns are in high demand.  So is ammo.

Naturally, guns and ammo should be in high demand.  They are useful.  Sometimes they are especially useful.  And right now happens to be one of those times.

Without question something wicked is brewing.  Politicians, academics, and the media have been fermenting public divisions for decades.  Now a volatile cocktail of rage threatens to blow its top off sometime on or shortly after election day.  People are gunning up just in case the chaos – something more than things that go bump in the night – arrives at their doorstep.

What to make of it...

“Death to America!”

The weather may have cooled down.  But the populace still burns hot.  Factions and fanatics look for any excuse to destroy public usufructs.  And they don’t have to look far to find one.

For example, this week, following the fatal police shooting of Walter Wallace Jr. in West Philadelphia, people went mad.  First they took to the streets.  Then they took to setting dumpsters on fire.  After that, they took to looting Walmart and other stores.

The main intent of Philadelphia’s violent mobs was not to protest the shooting of Wallace.  Rather, it was to get free stuff.  Flat screen TVs were particularly popular.

Here at the Economic Prism we don’t agree with theft of any kind…be it currency debasement, confiscatory taxes and fees, or mob looting.  But at least the mobs in Philadelphia were clear of their intent.  They wanted free stuff.  So they took it.

The mobs in Portland, Seattle, and Kenosha were of a different variety.  The Wall Street Journal offers the following distinction:

“‘Death to America!’ is a common refrain from antifa rioters from Portland, Ore., to Kenosha, Wis.  Children are in the streets calling for the country’s destruction while mobs of college kids trash public spaces, filming themselves as though part of a performance-art spectacle.  […]

“These acts of violence encapsulate five decades of neo-Marxist indoctrination in American schools, colleges and universities.  The left’s ‘long march’ through the institutions is all but complete.  […].  America’s young, especially those raised in middle-class or affluent homes, have been so brainwashed that they no longer notice how absurd it is to call for the eradication of their own nation-state, and to do so in the lingo of Iran’s mullahs.”

‘Death to America!’ is a hollow mantra.  Just what is it that these soft minded brats think they’re shouting death to?  The American republic has been dead since at least 1913.

Countdown To Chaos

A great boon for Washington was attained that year.  Honest and prudent statesmen offering small government and sound financial policies were forever rendered powerless.  So, too, the hallowed reach along the banks of the Potomac River where politics and money mix forever slipped into venality.  Democratic mob rule supplanted the limited government of a republic.

In the year 1913, the Sixteenth Amendment was ratified giving Congress the power to collect taxes on incomes.  That same year the states also ratified the Seventeenth Amendment, which established direct election of Senators by popular vote.  Then, before the year concluded, the Federal Reserve Act of 1913 was passed delegating the right to issue money from Congress to the Federal Reserve.

After the events of 1913, the American republic ceased to exist.  The federal government was given carte blanche authority to consolidate and centralize power.  Moreover, the federal government had the power to plunder the lives of its citizens on a grand scale.  That is, it had near limitless power to tax, borrow, spend, and inflate the currency.

The effects of the Sixteenth Amendment and the Federal Reserve Act are themes we commonly explore.  However, the effects of the Seventeenth Amendment are equally destructive.

In short, the Seventeenth Amendment allows the Senate to buy votes from their constituents in exchange for delivering federal money back to their districts.  This ensures the government acts to meet the collective demand for private security through public spending.  It also rewards political corruption and public graft.

These realities are not taught at universities.  They require self-study, independent learning, and deep thinking to uncover.  By this, shouts of ‘Death to America!’ by radicalized youth fall short of past grievances.

At least shouts of ‘Bread or Blood’ by rioters of East Anglia, Britain, in 1816, were clear in their rage.  Bread prices had inflated beyond wages.  Stomachs were empty.

Today’s ‘Death to America!’ rioter is unaware that the American republic is long gone.  Thus, what they are rampaging for is more of the policies that brought us to this disagreeable place.  Wealth redistribution and corruption are two of the fundamental canons of progressive socialism.  Throw a ‘woke’ hyper focus on race into the mix and progressive socialism can take a far more dangerous turn.

Perhaps next week’s election day will come and go without a hitch.  But with all the idiots on parade, this is highly doubtful.  The countdown to chaos is on.  Plan accordingly.

The Crashing Rental Market Could Set Off The Next Housing Crisis

The Crashing Rental Market Could Set Off The Next Housing Crisis Tyler Durden Fri, 10/30/2020 - 18:00

We have extensively followed the collapse in rental prices since the beginning of the pandemic here on Zero Hedge (for examples, look here  and here and here). In addition to prices collapsing, some tenants affected by the lockdowns have simply decided they no longer want to pay rent and are stiffing their landlords with little consequences

There's not doubt that many renters - including many businesses - don't have the means they once did to pay their rents. 

And though we knew the fall in prices was likely to get worse before it got better, the Wall Street Journal is taking it one step further and now asking the question of whether or not the rental price plunge could actually set off the next housing crisis. 

Another question also remains: how bad will the eviction scene be when the protections against eviction put into place by federal and local government expire? It is estimated that such moratoriums may wear off by January 2021, or even sooner. At that point, renters will need to pay up for the months they've missed.

The Federal Reserve Bank of Philadelphia released a study of unemployed workers last week that estimated outstanding rent debt could reach $7.2 billion before the end of 2020. Moody's has estimated that it could reach an astounding $70 billion if there is no further stimulus. 

Moody's estimates that 12.8 million Americans would owe an average of $5,400 from missed rent payments. 

Though the $70 billion pales in comparison to the $1.3 trillion that set off the subprime mortgage crisis, the 12.8 million Americans affected far surpasses the 3.8 million people who were foreclosed on during the housing crisis. At the same time, housing prices are actually rising as a wave of owners move from the city to the suburbs. 

However about 25% of renter households that have children are now on the hook for back rent. Women and people of color are disproportionately more likely to owe back rent while black and Latino Californians are twice as likely to face rent insecurity than white Californians, according to the U.S. Census. 

The debt could be enough to stifle a recovery coming out of the pandemic, the WSJ notes. Mark Zandi, Moody’s chief economist, said: “These households will have to make some pretty massive financial choices and pull back on other spending to pay their rent. That’s a hit to the economy.”

During the beginning of the pandemic, many households made a shift to credit cards to try and stay afloat. The Philadelphia Federal Reserve noted that "credit payments to small and medium-size businesses connected to rental real estate increased by more than 70% in the spring". Those numbers remain elevated, near 50% higher than 2019, still.

Kate Bulger, a financial counselor specializing in housing debt at the Money Management International counseling firm, said: “Even if now they are able to make their rent payment, that huge inflation to their credit-card debt has become a new threat to their budget and their ability to cover all their expenses.”

She says the number of clients she has worked with who have put rent on credit cards "has exploded".

The only question is whether or not the economy is next to "explode"...

Wall Street Braces For "Terrifying Risk" And A 20% Plunge In Just A Few Days

Wall Street Braces For "Terrifying Risk" And A 20% Plunge In Just A Few Days Tyler Durden Fri, 10/30/2020 - 17:55

As we first discussed over a month ago, with a likely unprecedented volume of mail-in ballots, prospects for volatility enduring post-election day have rarely been higher, and is in fact higher today than a month ago when concerns about post-election vol initially spiked.

To be sure, back in July we reported that  according to Goldman's David Kostin, the biggest concerns expressed by its clients is that a contested election could drag on, resulting in little clarity for weeks if not months, in a rerun of the contested 2000 election between Al Gore and George W. Bush, when it took a Supreme Court challenge and 34 days for the winner to be decided. This is what Goldman said then:

Health concerns and social distancing protocols suggest that more voters than ever will decide not to cast ballots at traditional polling stations on Election Day and instead vote by mail. In the case of a close election, it will take time to count – and invariably re-count – all the absentee and mail-in ballots. The deadline for each state to certify its result and finalize electors is December 8th (35 days after the election) or six days before the Electoral College convenes on December 14th (first Monday after the second Wednesday in December).

Echoing this, in early September, Deutsche Bank strategist Parag Thatte wrote that the pricing of VIX futures with November and December expiries are likely too sanguine that there will be a quick and clear outcome of the elections. In fact, if indeed the election won't be resolved until mid-December (at the earliest), the kink needs to move by at least 2 months, presenting a major arbitrage opportunity. In retrospect, he was right.

Then on Sept 14, JPM's chief equity strategist Misla Matejka joined this chorus of warnings about a contested election result, which he saw as the "worst-case scenario" for the market (Matejka also said it as the top risk for market performance into the year-end), adding that potential legislative paralysis could be "even more damaging" than Bush vs Gore for economy, as key stimulus measures to support economy might be delayed at a time when a fiscal stimulus deal already seems unlikely before the election.

And while early October experienced a brief period of inexplicable optimism that the election would be resolved quickly and painlessly (bizarre because if Trump does lose, it's amazing that anyone thinks he would leave quietly and without a SCOTUS fight), fears - and in some cases outright panic - that a contested outcome after the election is once again the base case, have stormed back to center stage, only unlike 6 weeks ago when there was still some hope that a fiscal stimulus could get passed before the election, the most immediate concern now is that a delay in declaring a new president would also mean a delay in delivering more much needed pandemic aid. That, as Bloomberg writes and as the market action today confirms, will "disappoint investors who’ve been counting on additional stimulus in the wake of the election, regardless of who wins, to help the economy recover from its coronavirus-induced malaise. It would also let down those betting a Democratic sweep of both the White House and Congress will release a torrent of government spending."

And as fears about a contested election soar, so does the hyperbolic rhetoric, and according to Daniel Ahn, BNP Paribas chief U.S. economist, there is a "terrifying risk" that an unresolved election could put investors in "completely uncharted territory." Speaking to Bloomberg, Ahn said that "if there is a constitutional crisis, we believe that the loss of political credibility and standing of the United States as a stable country could threaten its status as a safe haven with unfathomable consequences for the economy and for markets."

Which, of course, is nothing new and is precisely why Goldman's clients were freaking out about a contested election all the way back in July, but the market's soothing upward levitation successfully masked those fears... until this week when the plunge in stocks once again exposed all the terrors floating just below the surface.

And while some on Wall Street are hoping for the best and buying VIX puts - with put open interest now exceeding calls - on expectations that VIX will collapse after Nov 3, others are far less sanguine, such as Stefanie Miller, managing director at FiscalNote Markets, who said that an outcome that isn’t immediately known is both “severely underappreciated” and the most likely scenario.

"The Trump team has made it very clear that they intend to pursue as many legal avenues as possible to right the fraud they see inherent in the current system of mail-in/drop-off ballot casting," Miller told Bloomberg, noting that this makes it very clear that it’s reasonable to anticipate delays if hundreds of thousands of ballots are in question.

Miller also said that without a clear winner, it would be very difficult to advance stimulus legislation through Congress during the weeks after the election (even assuming a Blue Sweep), which would coincide with the holiday season, jeopardizing a bounce in consumer spending and crippling the all important holiday spending season.

In short, Miller believes stocks could drop in all sectors as investors aren’t accounting for that.

So what kind of a drop are we talking? According to a Thursday note from Bank of America's Michelle Meyer and Savita Subramanian, stocks could slide as much as 20% if there’s a contested election. This means that as soon as Wednesday once it emerges if the election will not have a clear winner, we could see a bear market.

"A landslide victory for either Trump or Biden and rapid election conclusion would likely be welcomed by markets while a severely contested election could see risk-off and drive 10-year rates materially lower"...

... and even though probability of a contested election has subsided  (or perhaps, acceptance of a contested election has increased) VIX futures still remain elevated, clearly discounting risks of a contested election.

The flipside, of course, is that "if markets sell off violently and the economic data deteriorate, we could see Washington facilitate the passage of stimulus even in a highly contentious environment."

Others are similarly concerned (and likely selling now when they can, not when they have to): Brian Gardner, chief political strategist at Stifel Nicolaus last week cautioned that markets may not be taking into account a closer-than-expected election and outlined a range of market reactions if what he referred to as "chaos" were to prevail in the wake of the Nov. 3 vote.

He assigned a low-alert level if there’s a delay of a day or two, with a more serious alert level if in the event of something like what happened after 2000’s contest between George W. Bush and Al Gore. His risk escalated all the way to the off chance that Congress would decide the election amid widespread riots and civil unrest.

Wells Fargo analyst Mike Mayo chimed in too, warning that "markets may be in for a very choppy ride on Nov. 4 and possibly for much longer if it becomes clear that the election will be contested" adding that a disputed election could hurt bank stocks more than others, based on the three weeks after the disputed 2000 election, when banks shed 10% versus the broader market’s 5% drop, Mayo said.

Yet not everything will be a loser: some financial stocks would clearly benefit from volatility, mostly exchanges such as the Intercontinental Exchange Inc. and MarketAxess Holdings according to Frederick Cannon, global director of research at Keefe, Bruyette & Woods.

One ominous beneficiary would be cryptos as a contested election would usher in a period of extended volatility and might rattle people’s faith in government and fiat currencies, Cannon said in recent interview phone interview. “A loss of trust is good for gold and crypto,” Cannon said, although it we indeed have a bear market in a few days, the wholesale liquidation that follows will likely mean that everything is sold, as babies are thrown out not only with the bathwater but the bathtub itself.

The Growing Fear Of Speaking Out

The Growing Fear Of Speaking Out Tyler Durden Fri, 10/30/2020 - 17:40

Authored by Bruce Wilds via Advancing Time blog,

There is a growing trend where people are feeling compelled to deny their opinions and remain silent. This is because we are seeing a blatant disregard for the opinions of others by both those on the left and the right. Democracy as a form of government is far from perfect. Its greatest weakness is rooted in the ability of a vocal minority to force their opinions on others.

Governments Are Adding To The Fear

This growing fear of speaking out is not limited to America, we are seeing it in countries that claim to be free across the world. The tech giants, governments, and extremist groups are all throwing fuel on the fire and adding to the feeling retaliation is a fair response to speaking our mind. The tech giants' effort to closely watch, silence, and censor those not marching in line with their desired narrative is a dagger in the heart of free speech. This effort is also apparent when we hear about groups threatening to block highways, shut down ports, and occupy state capitols if things fail to go their way. It even extends to harassing elected officials, we are hearing more threats from groups vowing to hound and badger members of Congress at their own homes. Another sign of intolerance is seen in the mass arrest of nonviolent protesters by governments.

Vandalism Like This Is A Sign Of The Times

Consider what we are witnessing as a sign of the times. Above is a picture showing a sign that vandals wrote curse words on, they also egged the house where it was displayed. This started several years ago and ramped up when the term "politically correct" moved front and center. In the minds of some individuals if you say anything that they consider "incorrect" it justifies a harsh response. 

In such an environment it is little wonder that many people have become less vocal and afraid to speak their mind. This could help explain why so many people doubt the recent political polls showing Joe Biden leading President Trump by a large margin. Ironically, it is the Democrats that continue to demand the President disavow violence and those associated with it. The cornerstones of democracy are  freedom of assembly and speech, inclusiveness and equality, membership, consent, voting, right to life, and minority rights. When these are trampled upon for any reason, the system is in danger of being cast aside.

Boy In Picture Assaulted Over MAGA Hat

In one of the most disgusting acts occurring in an election year, some Joe Biden supporters shoved and stole the hat of a young boy. The reason they assaulted Riley was that he was wearing a MAGA hat. His mother, Abbey Wigton, 27. Said “We were standing outside peacefully minding our own business,” she continued.

“Suddenly, two Joe Biden supporters began to yell political epithets at my child. They ripped the sign from my arms and assaulted my seven-year-old son.

“The Joe Biden supporters laid hands on my child and ripped his “Make America Great Again” hat from his head while cursing at him and pushing him over."

She went on to say, "The two Joe Biden supporters verbally and physically assaulted my child. My 7-year-old child was sobbing and screaming.” Riley, was distraught following the incident because learning how absolutely hideous people can be at an early age can be difficult to handle. The boy wanted to call the police. He wanted his hat back. He wanted the evil people who attacked him to apologize. While the police can do little and the chance of getting an apology very slim, at least one of his wishes is coming true as he has a replacement hat on the way. He found this out when the  White House called to tell him. 

But this article is not about a small boy being assaulted, it is about how most people are now thinking twice before saying what they think. This article is about the ability of a vocal minority to make people so uncomfortable they become silent. It is about how we should be appalled by those that justify violence, aggression, and force towards those that simply disagree with them. It is about how the threat you may be demonized if you say what you feel tends to breed silence. Watching this unfold is leaving a sickening feeling in those valuing free speech.

A recent survey of 2,000 Americans by Cato Institute/YouGov found most Americans say "the political climate these days prevents them from saying things they believe because others might find them offensive". The survey indicated 52% of Democrats, 59% of independents, and 77% of Republicans now say they have political opinions they are afraid to share. Most people do not enjoy confrontations or being harassed and as a result, are self-censoring themselves. With the free exchange of opinions and ideas being the foundation of a free and healthy democracy the sign public discourse is being destroyed does not bode well for our continued freedom.

*  *  *

Read here for more on the Riley Wigton story...

Biden Advisers Sound Red Alert Over Black, Latino Turnout

Biden Advisers Sound Red Alert Over Black, Latino Turnout Tyler Durden Fri, 10/30/2020 - 17:20

Senior Biden campaign officials are 'becoming increasingly worried' over low turnout among black and latino voters in key states such as Pennsylvania and Florida, according to Bloomberg, citing people familiar with the matter.

Despite record early-vote turnout around the country, there are warning signs for Biden. In Arizona, two-thirds of Latino registered voters have not yet cast a ballot. In Florida, half of Latino and Black registered voters have not yet voted but more than half of White voters have cast ballots, according to data from Catalist, a Democratic data firm. In Pennsylvania, nearly 75% of registered Black voters have not yet voted, the data shows. -Bloomberg

"I would like to see turnout increase – and yes, we need improvement," said Biden super PAC president, Steve Schale in a Tuesday blog post.

According to the report, top campaign leaders are confident that blacks and latinos will show up on election day, however some Biden advisers have expressed concerns about a lack of participation - and are urging the campaign to spend more money to target minority voters in the final stretch.

Perhaps minorities found out that Biden didn't want to raise his children in a racial jungle when he opposed desegregation?

Or that he drafted the 1994 crime bill, which sent tens of thousands of black men to prison for minor crimes, something Biden was proud of as recently as four years ago.

Or that Biden said blacks 'aren't black' if they don't vote for him.

Or that his 'guide and mentor' was an 'Exalted Cyclops' in the KKK (who renounced his racist ways when it became a political liability he saw the light.)

Or that he equates being poor to being black.

Or that rapper 20 cent endorsed Trump (until his ex-girlfriend Chelsea Handler yanked his leash), while Lil' Wayne, Kanye and Ice Cube have thrown their support behind Trump, or at least a new 'platinum plan' intended to help the black community.

Biden campaign spokeswoman Symone Sanders (who mocked a white Trump supporter who was beaten in Chicago, and is apparently OK with all of the above)says Bloomberg's sources are trippin'.

"No campaign in American history has devoted this level of resources that we have to outreach to voters of color, and we’re deeply proud of it," said Sanders, adding "In community-specific advertising alone, we’ve dedicated tens of millions of dollars to each community, with a total into 9 figures. And we’ve committed tens of millions on in-person GOTV programs unique to communities of color. Earning the support of diverse voters is the beating heart of our operation. We’re also the most diverse general election campaign in American history, including at senior levels, and all of our strategic decisions are driven by our diverse leadership team."

The anonymous advisers, however, fear the Biden campaign has become overconfident - especially after weak turnout among people of color for Hillary Clinton in 2016, and she had hot-sauce on her side.

The Election Day Weather Forecast: Who Will It Favor?

The Election Day Weather Forecast: Who Will It Favor? Tyler Durden Fri, 10/30/2020 - 17:00

Via Cliff Mass' Weather blog,

I got a call today from a political science professor from California:  he wanted to know how to get reliable weather forecast information for next week because weather can favor one party over another.

I helped him, but this got me thinking about the weather on election day, particularly since we are now close enough in time to have some skill.

I was familiar with a number of studies that have been done on this subject, and their suggestion that bad weather favors Republicans (see an example below).

So what do the latest and best model forecasts predict for election day?

Since my blog readers deserve the best, I examined the world-leading guidance from the European Center model.

The forecast for election day over much of the U.S. is extreme..... extremely pleasant, with minimal storminess and precipitation.

To give you the best possible forecast let's examine the European Center ensemble model predictions in which they run their model 51 times, each slightly differently,  The average or mean of  these ensemble forecasts is usually a good prediction.

The ensemble-mean upper level (500 hPa, about 18,000 ft) weather map for 11 AM PDT shows a HUGE area of high heights/pressures dominating nearly the entire U.S., while a trough of low pressure/height is offshore.    Such a pattern will bring warmer than normal and dry condition for the western two-thirds of the U.S.

To show his, there are the temperatures forecast for the same time. Toasty in California, the southwest, the central and southern Plains states, the Gulf Coast and Florida.  The only locations that will be below freezing will be northern New England and New York.

Precipitation that day?  Almost nothing except for a few sprinkles in New England.  Even Seattle will be dry

Considering this forecast, the classical papers, such as the one noted above, would suggest an enhancement of Democratic voting.

But I suspect there are some surprises ahead.   How will the COVID pandemic and huge numbers of mail-in ballots change the story?  The percentage voting on election day will be much smaller than normal.

Trump supporters are probably different that the Republican voters of 20-30 years ago.  And can one really trust telephone-based polling?  Many people are solely using smartphones and conservative voters may well be fearful of expressing their honest views to someone that calls their home out of the blue.

One thing is for certain:  the weather this weekend looks quite pleasant here in the Northwest--a perfect time enjoy the fall colors. 

A pleasant way to forget the election for a few hours.

Shops Boarded Up In San Francisco Ahead Of Anticipated Election Night Unrest

Shops Boarded Up In San Francisco Ahead Of Anticipated Election Night Unrest Tyler Durden Fri, 10/30/2020 - 16:40

The Nov. 03 presidential election is just a few days away - and for weeks - we've outlined security consultants, insurers, contractors, and even employees of retailers confirmed businesses are boarding up shops and increasing security measures ahead of Tuesday night. 

Earlier this week, the looting and social unrest in Philadelphia following the fatal police shooting of a black man could be an eye-opener of what's to come after the elections. Demonstrations started peacefully on Monday and Tuesday but quickly went downhill as mobs of people looted stores in the city. 

The fact that law enforcement officials across the nation have been preparing for widespread violence on election night and after should be troubling to ordinary business owners with brick and mortar presence in metro areas. 

For more color on the rising fears of social unrest next week, Harmeet Dhillon, a civil rights attorney and former California Republican Party vice chairwoman, tweeted that shops in San Francisco "are boarding up this week in anticipation of opportunistic rio-looting. Some thugs got started early at Coach earlier this week, which was boarded up today." 

On Wednesday, the San Francisco Business Times posted a photo of the Salesforce Tower, which was also boarded up. 

"Bracing for potential violence after next week's election, several landlords near Salesforce Tower and Union Square freshly boarded up their storefronts this week," the Times said. 

Marc Intermaggio, executive vice president at BOMA San Francisco, who represents businesses in the metro area, said owners who have already boarded up their shops are just taking "precautionary" action ahead of the election. 

"Just pre-election precaution against any civil unrest," Intermaggio told the Times. "Protecting private property."

Many businesses in the downtown and Union Square area were boarded up during the virus pandemic and George Floyd protests, but recently had plywood boards removed as reopening plans were beginning. However, much of that could be in reverse with virus cases surging and threats of unrest next week are elevated. 

"Given the heightened attention and emotion around this year's election, many businesses out of an abundance of caution are boarding up their entrances and windows in case of public unrest or protests across the political spectrum," said Karin Flood, head of the Union Square BID. "Given events of this past spring and summer, it is not an unexpected precaution."

 

US COVID-19 Cases Top 9 Million, Belgium Announces 6-Week National Lockdown: Live Updates

US COVID-19 Cases Top 9 Million, Belgium Announces 6-Week National Lockdown: Live Updates Tyler Durden Fri, 10/30/2020 - 16:38

Summary:

  • US tops 9 million cases
  • France reports most new deaths since April 20
  • Belgium announces 6-week lockdown
  • CDC unveils guidance for cruise lines
  • Italy suffers 2nd straight record
  • NJ cases, hospitalizations highest since May
  • Regeneron follows Eli Lilly, halts enrollment of seriously ill patients
  • Iceland tightens restrictions
  • Sweden introduces new economic support
  • Czech Republic won't shut down manufacturing as country braces for new restrictions
  • Global cases top 45 million
  • Taiwan celebrates record COVID-19-free streak, best growth in developed world
  • US reports 89k new cases
  • UK accelerates vaccine approval
  • Germany reports record jump
  • Japan tops 100k
  • HK customs agents seize counterfeit masks
  • Indonesia reports most cases in 2 months

* * *

Update (1630ET): As expected, the US has surpassed the 9 million mark in new COVID-19 cases, with nearly all of the states on the east coast and the middle of the country (which is seeing record case numbers) reporting Friday's numbers (remember, these numbers are reported with a 24-hour lag).

Meanwhile, in France, officials reported 545 new COVID-19 deaths, the highest daily count since April 20.

* * *

Update (1415ET): As was widely expected, Belgian Prime Minister Alexander De Croo has announced a nationwide coronavirus lockdown that will apply to the entire nation, and last for at least 6 weeks.

He said he imposed the lockdown to try and avoid a complete collapse of Belgium's health-care system as more than 6,000 patients are currently occupying the country's COVID-19 beds.

Per the lockdown, which will be more restrictive than the 'lockdown-light' imposed by France and Germany. Belgium will extend a school holiday until Nov. 15, while ordering hairdressers and all nonessential retailers to close. Outdoor gatherings will be limited to 4 people (despite researchers repeated claims that outdoor gatherings are largely safe).

The lockdown will start at midnight Sunday, and continue for at least 6 weeks.

In other news, the CDC has, as promised, released guidelines for cruise companies to reinstate phased resumption of cruises.

Meanwhile, J&J announced that it will soon start testing vaccines for minors aged 12-18.

* * *

Update (1215ET): Italy has just reported 31,084 new cases in Friday, a new daily record. It also reported another 199 deaths, and 1,125 new hospitalizations (with 95 new patients in the ICU). The record number comes amid a record daily tally in tests, with 215,000 run over the last 24 hours.

* * *

Update (1100ET): It's 1100 on the East Coast of the US, and markets are dominating the conversation again on Friday as new GDP data offers more insight into how badly Europe's economy has been rocked by the virus.

The Czech Republic isn't planning to shut down manufacturing production or factories when it imposes new COVID-19 restrictions, according to Prime Minister Andrej Babis. Infection rates have slowed slightly in the Central European country, which has emerged as one of the continent's worst hot spots.

A $500 million "vaccine bond" floatedto finance vaccination programs across the developing world was inundated with orders, ending up 3x oversubscribed. The debt, which is being sold by an institution on behalf  of a UN-backed vaccination program, is likely seeing high demand due to the trend of "socially conscious" investing.

Iceland has tightened its cap on public gatherings back to 10 people, down from 20 and all sports events and performances will again be banned on Saturday. Bars will be closeed and restaurants will be forced to shut before 9.

In the latest blow to the hoped-for class of therapeutics, Regeneron, the maker of the antibody therapy that President Trump credited (along with dexamethasone, a steroid) for his swift recovery has stopped enrollment in its trial for seriously ill patients after an independent authority wared of a safety issue.

Sweden is considering additional economic support according to its finance minister, who said "it's a question of saving jobs, saving businesses and supporting the Swedish economy."

Shares of the company sold off on the news that the therapy would no longer be given to patients requiring high levels of oxygen. It comes after a trial of one of Eli Lilly's antibody treatments also stopped enrollment earlier this week after research showed patients were unlikely to benefit from the treatment in the later stages of the disease.

Regeneron has already submitted an emergency-use application ot the FDA to allow patients with mild to moderate symptoms to use the treatment.

New Jersey just reported more than 1,000 hospitalizations related to COVID-19 for the third day.

Cases and hospitalizations are at their highest levels since May, marking a five-month high.

* * *

Global COVID-19 cases topped 45 million on Thursday as France outlined its plan for trying to mitigate the impact of the new quasi-lockdown (which began Friday) after European economies reported their Q3 GDP figures, with most coming in hotter than expected, even as deflation across the eurozone endured.

As Europe saw better-than-expected economic growth in the quarter, Taiwan, which has become - much to Beijing's dismay - an exemplar of COVID-19-fighting efficiency, saw the fastest growth rate among any developed economy in Q3. Its economy actually expanded 3.3% year over year, its fastest rate of grwoth in more than 2 years, and a reversal from a 0.6% drop from Q2.

Health authorities from around the world reported another near-record on Thursday, with new cases again coming in above 530k for the second time ever (the first time was Monday):

Daily deaths topped 7k again yesterday, driving the 7-day average even higher as higher infection & hospitalization rates have finally started to cause mortality to creep higher.

The US, meanwhile, reported another record jump in new COVID-19 cases on Thursday, with 88k+ new cases, bringing the US total to 8,947,862, within striking distance of the 9 million mark.

Deaths in the US came in just below 1,000.

Perhaps the biggest vaccine-related news last night comes out of Europe, where the UK's drug regulator is said to have ordered accelerated reviews of vaccines under development from Pfizer and AstraZeneca as UK PM Boris Johnson faces growing pressure to order a lockdown for before and after the Christmas holiday, to allow families to gather during the holiday.

German cases exceeded 500,000 after officials reported a new daily record of 18,681 new cases on Friday, as authorities added almost all of Austria and Italy to the list of high-risk areas, warning German travelers not to go there.

In Asia, Japan finally crossed the 100,000-case mark 9 months after reporting its first infection.

Here's some more COVID-19 news from Friday and overnight:

Confirmed coronavirus infections in Slovakia have hit a new record high as the country gets ready for a nationwide testing. The Health Ministry says the day-to-day increase in the country of 5.4 million reached 3,363 on Thursday, over 300 more than the previous record set on Saturday (Source: AP).

Customs agents in the southern Chinese city of Hong Kong have seized 100,000 counterfeit face masks and arrested one person in what the government called the largest operation of its kind on record. The masks were set to be shipped overseas and had a market value of almost $400,000, the government’s Information Services Department reported Friday (Source: AP).

Indonesia reported 2,897 confirmed cases in the 24 hours through midday Friday, the least in almost two months. The country remains the site of Southeast Asia’s largest outbreak, and the government has been wary a long weekend doesn’t lead to a spike in infections (Sources: Bloomberg).

Sweden’s government has underestimated the cost of testing and tracing Covid-19 patients and the money that’s been earmarked for the purpose is now running out, TV4 reports (Source: Bloomberg).

Poland’s health-care system is “stretched to its limits,” Michal Dworczyk, chief of staff in Prime Minister Mateusz Morawiecki’s office, says in interview with public radio 1 (Source: Bloomberg).

"Capitalism" Is No Longer Attractive To Capitalists

"Capitalism" Is No Longer Attractive To Capitalists Tyler Durden Fri, 10/30/2020 - 16:20

Authored by Charles Hugh Smith via OfTwoMinds blog,\

This "capitalism" is only attractive to parasites, predators, kleptocrats, legalized looters, embezzlers, fraudsters and all those insiders whose palms get greased along the way.

Back of the envelope definition of classical capitalism:

1. Transparency in markets, including pricing, information on quality and reliability of products, sellers and buyers, and of rules of conduct and rights governing all participants;

2. Risk is tightly bound to reward, i.e. everyone has skin in the game, those who lose are forced to absorb the entire loss.

3. Open competition, i.e. no monopolies or cartels limiting supply or setting prices;

4. Free flow of capital and labor;

5. Everyone pays the same rates of taxes, duties and fees on every transaction.

Needless to say, what is presented as "capitalism" in America today is not actually capitalism; it is monopoly-state-socialism for the wealthy, a kleptocracy incompetently cloaked by a rigged simulacrum market in which risk and losses are transferred to the debt-serfs and tax donkeys and the "socialism for the rich and powerful" is enforced by a pay-to-play simulacrum democracy and kleptocratic, totalitarian central bank, the Federal Reserve.

In this winner take most, anything goes if you're rich casino, the weaker players are ruthlessly stripmined and exploited and those enterprises without political protection are cannibalized by rapacious, predatory monopolies and cartels.

Parasitic elites take a skim from every table: student loans over here, state junk fees over there; everyone gets clipped by self-serving insiders and entrenched interests.

Transparency is an illusion. Complexity thickets protect monopolies and cartels, and the fine print... try getting a set price for healthcare services. (You must be joking.) Sign the form for the $30 oil change and come back to an $800 bill for "work you authorized." (You didn't read the fine print? Too bad.)

Quality has gone downhill across the board but there's no recourse or competition. All the items regardless of brand come from the same factory in China. So what if your new oven turns on by itself randomly (true story, happened to me); the once-proud American brand's warranty is only one year, so tough luck, bucko, the repair bill for the defective $5 sensor will cost you as much as a new range.

In American "capitalism," the name of the game is scale up with cheap debt supplied by the Federal Reserve, use the "Fed free money" to buy up any potential competitors and then start buying back your own shares, jacking your share price even as sales and profits stagnate. (Charts of Apple below).

Once you're too big to fail or jail, then you can gamble to your heart's content because all the winnings will be yours to keep and if you lose big, the Fed or the Treasury will step in and transfer the losses to the debt-serfs and tax donkeys.

In America, as Warren Buffett jacks up the price of Sees candy, etc. to maximize his profits and add more billions to his net worth, and Amazon uses its quasi-monopoly power to relentlessly jack up the price of Prime membership, nobody asks Warren or Jeff "don't you have enough already?"

The answer is "no". It's never enough, because as long as the Fed and federal government enforce, enable or allow your monopoly, quasi-monopoly or cartel to kill transparency and competition, and offer you limitless "Fed free money" while students pay 8% on their loans, then why not add another $10 billion to your personal wealth?

Go ahead and lie, cheat, embezzle, rig markets, commit fraud, collude--everything is allowed if you're a powerful corporation because all your execs have get out of jail free cards from the Department of Justice. Nobody in Corporate America ever goes to prison no matter how egregious the fraud or theft. And you get to keep all the loot, other than a wrist-slap fine if you're caught. But that's just a modest cost of doing business in American "capitalism."

If this "capitalism" was actually attractive to capitalists, why would everyone pile into the same six Big Tech monopolies? Is that really the only opportunity left to "create shareholder value," to pour hundreds of billions of dollars in "Fed free money" into a handful of Big Tech monopolies?

Paraphrasing the late Immanuel Wallerstein, "Capitalism" is no longer attractive to capitalists. This "capitalism" is only attractive to parasites, predators, kleptocrats, legalized looters, embezzlers, fraudsters and all those insiders whose palms get greased along the way.

If you think this "capitalism" is sustainable, the future holds a big surprise.

*  *  *

My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF).

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

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Shocktober: Stocks Suffer Worst Pre-Election Plunge In History

Shocktober: Stocks Suffer Worst Pre-Election Plunge In History Tyler Durden Fri, 10/30/2020 - 16:00

The Hunt for a Red October is over... must be the Russians...

Global stocks suffered their worst week since March as it appears the constant liquidity pukage is losing its impact...

Source: Bloomberg

And US stocks (down 6-7% across the board) also saw their biggest weekly drawdowns in 7 months...

In fact, as Bloomberg notes, the second half of October - essentially since earnings reports began to flood in - the S&P 500 is down 5%. That is the worst performance for the final two weeks of the month of October since 1987's 10.9% plunge - a year that certainly had other extenuating circumstances to account for such a disastrous performance in the back-half of the month. While it bears little resemblance to this year’s market context, know that in 1987 equities did not bounce back by the end of that year.

Source: Bloomberg

Additionally, the S&P just suffered its biggest-ever loss in the week before a US presidential election...

Source: Bloomberg

But we note that the S&P was down 9 straight days into 2016 election... will the pattern repeat this time?

Source: Bloomberg

This was also the worst week for any balanced portfolio as aggregate stock and bond returns were the worst since March...

Source: Bloomberg

Stocks were also down for the 2nd straight month (Dow was the laggard with it's worst month since March) leaving the S&P barely holding green YTD. Small Caps bucked the trend with a modest 1.5% gain on the month...

Source: Bloomberg

The Dow and the Nasdaq are both in correction, down 10% or more from their recent highs.

All the US majors are at critical technical levels (Dow at 200DMA, S&P and Nasdaq < 100DMA, Russell ~100DMA)

Russell 2000 dramatically outperformed Nasdaq for the second straight month...

Source: Bloomberg

European markets bloodbath'd even more this week (worst since March also) and worst month since March (closing at lowest since May)...

Source: Bloomberg

It seem Einhorn was right - the launch of the SPAC ETF marked the top...

Source: Bloomberg

Back in the US, FANG Stocks ended down for the second month in a row...

Source: Bloomberg

AAPL has slumped into a bear market from its early September highs...

Source: Bloomberg

Rough day for Jack Dorsey's net worth...

Bank stocks ended unch on the month...

Source: Bloomberg

VIX jumped almost 6 vols on the week - its biggest rise in vol since March...

And the VIX curve is now in full backwardation (with the forward curve similar to how it was a month ago but the spike in front-month vol must have crushed any vol carry traders)...

Source: Bloomberg

And while credit spreads have started to crack wider, compared to equity risk, there is a long way to go...

Source: Goldman

On the week, Treasury yields were practically unch - ramping higher after gains early on as liquidations appeared widespread...

Source: Bloomberg

On the month, yields were notably higher (30Y +18bps) and the curve steeper...

Source: Bloomberg

Not exactly a 'rout' in bonds...

Source: Bloomberg

Despite gains this week, the Dollar was lower on the month (after September's big surge) for the 6th month lower in the last 7...

Source: Bloomberg

Cryptos were very mixed this week with a major rotation apparent as altcoins were offered and Bitcoin bid...

Source: Bloomberg

On the month, Bitcoin led the way, with Ripple lagging...

Source: Bloomberg

This was Bitcoin's best month since April, closing above $13500...

Source: Bloomberg

Ethereum notably underperformed after a solid DeFi-driven surge in July/August...

Source: Bloomberg

Crude was clubbed like a baby seal this week (PMs also slipped lower), and also on the month (but PMs managed to hold)...

Source: Bloomberg

WTI traded down to a $34 handle this week - its lowest level since May...

Finally, just on thing to think... "mother's milk" appears to have left the building

Source: Bloomberg

This could never happen again, right?

Source: Bloomberg

Oh, and don't panic!! The "Casedemic" will be over soon...

Source: Bloomberg

BidenGate, Bobulinski, & The Campaign Of Fear

BidenGate, Bobulinski, & The Campaign Of Fear Tyler Durden Fri, 10/30/2020 - 15:40

Authored by Tom Luongo via Gold, Goats, 'n Guns blog,

Everyone has a limit. Everyone.

And when pushed to that limit we all have a choice, push back or submit.

Tony Bobulinski reached his. And it has doomed the Democrats’ chances in this election cycle regardless of what happens on Tuesday.

In his widely-censored interview with Tucker Carlson Bobulinski’s ‘disgust circuit’ was on full display. I’ve talked about this in the past.

Normally the disgust circuit is triggered through the classic “Nuts and Sluts” shaming technique used on Republicans or anyone else the powers that be want removed from the public stage.

“Nuts and Sluts” is easy to understand. Simply accuse the person you want to destroy of being either crazy (the definition of which shifts with whatever is the political trigger issue of the day) or a sexual deviant.

This technique works because it triggers most people’s Disgust Circuit, a term created by Mark Schaller as part of what he calls the Behavioral Immune System and popularized by Johnathan Haidt.

The disgust circuit is also easy to understand.

It is the limit at which behavior in others triggers our gut-level outrage and we recoil with disgust.

The reason “Nuts and Sluts” works so well on conservative candidates and voters is because, on average, conservatives have a much stronger disgust circuit than liberals and/or libertarians.

Bobulinski’s disgust circuit kicked in the second House Intelligence Committee Chairman Adam Schiff crossed the line, accusing him of being a Russian disinformation agent.

It was clear as day for anyone watching. Bobulinski didn’t try to hide it.

And that was quite enough of that.

That’s where his deadline to the Bidens and Schiff came from and that’s where this story is at its most interesting.

He told Schiff, the Bidens and everyone else on Capitol Hill, “You can play your reindeer games but you cannot under any circumstance make me the fall guy for it.”

Whatever he did in his business with the Biden’s he’s owning up to. Sure, his motivations for coming forward now may be as suspect as Hunter Biden’s dealings with the Chinese government.

He may have seen the writing on the wall, covering himself in the case of a Trump victory next week. He may even be a key witness in the FBI’s investigation opened in 2019 into the Bidens’ shady business dealings.

But I don’t really care about all of Bobulinski’s reasons. There may in fact be a lot of them. But the primary one on display the other night with Tucker Carlson was that of disgust.

That’s when he was at his most authentic. That’s where his real motivation came from. Adam Schiff is up to his eyes in the corruption in Ukraine.

So is Nancy Pelosi. So is Mitt Romney. So is Cindy McCain by proxy. Victoria Nuland, Hillary Clinton and likely Barack Obama himself.

Schiff has been given cover for over three years to make the most outrageous accusations and they be allowed to stand.

The media is not only complicit in this outrage, they have been rewarded with attention, showered with money by desperate victims of Trump Derangement Syndrome stoked by that same media through the crudest of propaganda techniques.

Now that we’ve reached the eve of the election the stakes for them are so high, since we can see them, that they’ve now sunk even further into the abyss of D.C. Swamp.

This prompted Gleen Greenwald to loudly resign from The Intercept, the company he helped found, when his story on BidenGate had to be gutted to be published.

We found Greenwald’s limit as well.

But Greenwald is supposed to do this. This is the minimum a good journalist is supposed to do when confronted with censorship and cover up. Good on Glenn, this was his moment to lead.

Bobulinski, on the other hand, is different.

Given the way things work in D.C. I’m sure no one ever thought Bobulinski would go through with his threat, because he’s opening himself up to loss.

And yet he did.

Because he has a limit. Joe Biden and his skeezy family haven’t found theirs yet.

That limit defines who we are and what we’re willing to fight for. It stares back at us in the mirror every morning.

And it’s obvious that Bobulinski’s limit was his family’s name and what that name was going to stand for. They figured he would cower in fear because of their power.

Schiff et. al. never thought this guy would be the one to finally break ranks and stand tall. People like Schiff never think that because of the guy they see in the mirror every day.

It’s their Achilles’ heel.

We’re a few days from an election that can best be described as a singularity. A black hole sucking the light out of the world where all of the narratives and agendas of the post-World War II era of human history boil down to a simple choice.

Courage or fear.

Joe Biden and the whole of The Davos Crowd are running a campaign of fear.

Fear of COVID-19, fear of Trump, fear of phantom white supremacists, fear of intimacy, race, color, the words we speak and, worst of all, our children.

Remember them? The ones told they have to isolate themselves lest they kill grandma? Imagine, partisan hacks, cheering on the political chaos in the U.S., being a six-year old again living with that guilt.

These are the people Tony Bobulinski finally woke up to who he was dealing with and what their limits were.

Trump, for all of his faults, has done nothing but project courage and bravery. And those are words I would never have ascribed to him in all the years of watching him manipulate the press and politicians in New York.

I watched him appease his enemies in the early days of his first term, terrified of the media backlash, and wasn’t shocked. Disappointed? Yes. But not shocked.

And he wobbled early on with the vipers surrounding him during the early days of the Coronapocalypse.

But as this year has gone along he’s risen to the task. Gotta give credit where it’s due. He led with his chin out and his Twitter feed sharp.

He’s leaving it all on the field, as Scott Adams put it the other day.

We forget that in 2016 we voted for Trump because Hillary Clinton triggered so many people’s disgust circuit.

No. Not. Her.

As my wife told a female friend of ours, “I’ve waited 25 years to vote against that bitch.” And she did.

We took a flyer on Trump because he wasn’t Hillary and he would be hilarious. Mission mostly accomplished. Today I give him credit for raising his game.

Today men of dubious character have stood up against men without any shred of it.

What’s your limit? And what do you do after Tuesday when the real fight or our future begins?

*  *  *

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Buchanan: What The Next President Faces

Buchanan: What The Next President Faces Tyler Durden Fri, 10/30/2020 - 15:05

Authored by Pat Buchanan via Buchanan.org,

Of the presidents in the modern era, many have been dealt a difficult hand by history, but perhaps none more so than Donald Trump.

In 1952, Harry Truman was in his third year of a stalemated war in Korea that was costing 200 American lives every week. He lost the New Hampshire primary to Sen. Estes Kefauver and decided to pack it in.

In 1968, Lyndon B. Johnson had also been challenged in New Hampshire, by Sen. Eugene McCarthy. And, he, too, had on his hands a seemingly endless Asian war if he was not prepared to escalate militarily and add hundreds of thousands more troops to the 500,000 already in Vietnam.

Like Truman before him, LBJ stood down.

In 1980, Jimmy Carter also had a challenge from within his party — Edward Kennedy. And for the entire last year of his presidency, 52 U.S. hostages were held in Teheran while Carter presided over an economy where the interest rates had hit 21% and inflation 13%.

Trump had no primary challenger. He had not taken us into any new wars. And he had begun 2020 with the U.S. economy firing on all cylinders. But it all crashed in March and April in the worst pandemic in a century, which destroyed his economy and has since consumed a quarter of a million American lives.

October of Trump’s reelection year saw a new wave of COVID-19 infections and the bottom fall out of the stock market.

Given the cards he has been dealt in 2020, and the hatred of the media he daily confronts, it is astonishing that Trump retains his energy and enthusiasm for the battle. Most presidents would have long ago been broken.

Thus it is that, four days before the election, Trump is decidedly the underdog. With the popular vote surely lost, Trump has to sweep almost all the battleground states - Florida, Georgia, North Carolina, Arizona, Ohio, Wisconsin, Michigan and Pennsylvania - while holding onto all the states he won in 2016. A tall order.

Should Joe Biden win, he would be, on Jan. 20, 2021, the oldest and most visibly enfeebled leader to win the presidency in the history of the republic, with the possible exception of Franklin Delano Roosevelt in 1945.

Biden would have to deal with an economy that, if the stock market remains a reliable lead indicator, may be tanking anew even as the COVID-19 epidemic consumes a thousand American lives daily.

And foreign policy, that lost issue of the campaign of 2020, will be clamoring anew for the president’s attention.

In the Asia-Pacific region, China is increasingly defiant of the U.S. and openly applying military pressure upon Taiwan, matching U.S. arms sales to the island with ever more direct threats.

Earlier this month, Beijing celebrated the 75th anniversary of China’s intervention in the Korean War, where its troops suffered heavy losses but caused most of the 36,000 U.S. dead in that conflict.

And, this fall, a war broke out in the South Caucasus that, if not contained, could draw in Russia, Turkey and Iran.

The conflict between Armenia and Azerbaijan over Nagorno-Karabakh — an Armenian-populated enclave contained wholly within Azerbaijan’s borders — has resisted efforts by Russia and the U.S. to mediate a truce. The Azeris appear determined to resolve the territorial dispute in the way Narendra Modi of India lately resolved the dispute with Pakistan over Kashmir.

Russia has an alliance with Armenia and bases inside. The Turks are supporting Muslim Azerbaijan, and, with the Israelis, have been providing the Azeris with modern weaponry such as advanced drones, which have taken a devastating toll on Armenian troops and armor.

On the cultural war front, France and Turkey, both members of the NATO alliance, are trading national insults over a crackdown on Islamists by President Emmanuel Macron after a Chechen Muslim beheaded a French teacher who used the Charlie Hebdo cartoons of the prophet as examples of protected speech and press freedoms in secular France.

Macron’s perceived attacks on Islam triggered a personal insult from Turkey’s President Erdogan. This led to the recall of the French ambassador to Turkey. The clash over the blasphemous cartoons and the beheading of the teacher have provoked anti-French demonstrations across the Muslim world.

In the latest affront, Charlie Hebdo published a cartoon of Erdogan lifting the burqa of a woman, similar to the cartoon of the prophet that precipitated the 2015 massacre at the Paris offices of Charlie Hebdo.

European nations are lining up behind France, while the leaders of Muslim nations such as Bangladesh and Pakistan are damning the French for tolerating the ridicule of their religious beliefs.

“I disapprove of what you say, but I will defend to the death your right to say it,” Voltaire is said to have responded to Rousseau.

That may reflect French values. But, as Kipling wrote, “East is East, and West is West, and never the twain shall meet, Till Earth and Sky stand presently at God’s great Judgment Seat.”

Kyle Bass Feuds With Texas Real Estate Developer Over Anonymous Blog Post

Kyle Bass Feuds With Texas Real Estate Developer Over Anonymous Blog Post Tyler Durden Fri, 10/30/2020 - 14:49

Short sellers have largely been riding high this year, with a handful of notable victories, including Nikola, Wirecard and Luckin Coffee. But for every example of a short play hitting the jackpot, it seems there are another five where the investor got burned. And even when investors' independent research stokes the interest of federal regulators and prosecutors, sometimes, the company can still come out on top (as we learned from Bill Ackman's unsuccessful bet against Herbalife).

But in a rare example of a firm fighitng back against a successful short-seller campaign, Bloomberg on Friday published a lengthy feature chronicling a legal battle involving Kyle Bass and his firm, hedge fund Hayman Capital, and a Texas-based REIT called United Development Funding, or UDF.

For the bulk of this year, Bass has focused his attention on attacking China's assault on freedoms in Hong Kong (back in 2019, he unveiled a long-shot bet that Hong Kong's currency peg to the dollar might break). But the lawsuit brought against Bass by UDF has implications for the broader industry. Like everyboyd else, hedge funds have a first-amendment right to publish reports, even anonymously, outlining allegations of fraud or other irregularities that have, for whatever reason, been withheld from shareholders.

So when Kyle Bass logged in to Harvest Exchange, a popular Seeking Alpha-type platform, and posted his report outlining allegations of fraud at UDF under a pseudonym (allegedly because he wanted readers to focus on the information, not the source), he didn't feel like he was wading into some grey area.

UDFs' shares tanked on Bass's research, and after more than a year of pestering the SEC and the DoJ, an investigation into UDF was eventually launched, and the firm's offices were raided, sending its stock even lower.

Bass's firm made only $10 million on the trade, a sum that was "not worth the five years of aggravation" that Haymen spent investigating UDF, including doing some serious forensic accounting, hiring PIs and investigating development sites.

An analyst at Hayman brought the idea to Bass back in 2014, after Bass's fund had suffered several consecutive years of underperformance. UDF raised money from investors and then loaned it out to developers at above-market rates. UDF had continued to pay strong dividends despite the damage wrought by the financial crisis, which aroused suspicion, Bass's analyst said. 

Here's more from Bloomberg:

Bass’s analyst, Parker Lewis, learned about UDF from a friend, but at the time it didn’t have any publicly traded securities. Months later a large REIT raising money for UDF disclosed accounting errors, which prompted an FBI investigation. That led Lewis to question whether UDF was hiding its true financial situation. After months of research, he locked onto an explanation: When borrowers struggled to repay their loans, UDF used cash raised by newer funds to pay investors in older ones. Sometimes the newer funds would buy pieces of loans owned by the older ones in an effort to ensure that cash was available. These actions allowed UDF to keep paying the sizable dividends investors had grown to expect, which meant that it could continue attracting new investments.

To Lewis, it looked like a Ponzi scheme. By then, one of UDF’s funds had listed on Nasdaq and was a potential short target. Bass dismissed Lewis’s idea at first as being too small and too local. But Lewis was persistent. They had a massive fraud in their sights, he argued.

Bass alerted the SEC - via Hayman's general counsel - but after burning through millions just borrowing the shares to finance the short against UDF, Bass made his move in December 2015, when he published the abovementioned anonymous report, which immediately went viral. Short-seller Andrew Left, who runs Citron Research, warned that the stock could go to zero. Banks immediately started pulling credit lines, and business partners cut ties, including blocking UDF from a lucrative deal. Then, the FBI raided the firm's offices. Two years later, five executives agreed to a civil settlement with the SEC, and moved on.

But clearly, Hollis Greenlaw, a former tax lawyer who is the founder and driving force behind UDF, has been nursing a grudge, and is now trying to exact his revenge on Bass in the courts.

And in a bitter twist for the short-seller, Greenlaw's lawsuit triggered the SEC to launch an investigation into Bass and whether he "knowingly published" false information, as Greenlaw alleges. His lawyers are now trying to get the government to turn over more nonpublic communications detailing Bass's role in sparking the investigation into UDF.

Bass and Hayman have dismissed Greenlaw's allegations as a "nuisance lawsuit". But the argument being made is certainly interesting at a time when social media companies, and our society at large, struggles to parse the implications, and even the substance, of "misinformation".

Watch: CNN's Lemon Says Trump Supporters Are Like Drug Addicts

Watch: CNN's Lemon Says Trump Supporters Are Like Drug Addicts Tyler Durden Fri, 10/30/2020 - 14:35

Authored by Steve Watson via Summit News,

CNN clown Don Lemon directly compared supporters of President Trump to drug addicts during a live broadcast Thursday.

Lemon also laboured on the point that he has “had to get rid of” friends because of their support for Trump, particularly on the issue of not living in fear of COVID-19.

“I have many people who I love in my life. I come from a red state, and I’ve lived in several red states,” Lemon ranted.

There are a lot of friends who I had to get rid of because they are so nonsensical when it comes to this issue. They have every single talking point that they hear on state TV and that they hear from this president. They repeated, and they are blinded by it,” the host continued.

“I had to get rid of them. They are too far gone. I will try and try and try. They’ll say something stupid, and I will show them the science and give them the information, and they still repeat those talking points,” he continued to froth.

Imagine disowning a friend because they have a different opinion. That is the kind of twisted mindset Lemon and his fellow CNN activists have.

“If you look at the information that we put up last night that showed you how red states taken over where the blue states were.” He continued to rant.

“People came in from bigger cities where there is more transmission, obviously where people are closer together. Now the red states are the problem. I just had to get rid of a lot of people in my life because sometimes you have to let them go,” Lemon said, speaking as if his ‘friends’ are stray cats.

“I think they have to hit rock bottom like an addict. Right? They have to want to get help. They have to want to know the truth,” Lemon said, comparing Trump supporters to drug addicts.

90% of those who support either Trump or Biden believe the country will imploded if their candidate loses. They’re both right about that. Both candidates are only looking after THEIR family’s interest. Who’s looking after your family’s interest?

Imagine finding yourself being Don Lemon’s friend, and then having him tell you he is getting rid of you. It would be a kind of confirmation that you are a normal human being after all.

Judging by his previous rantings, the man actively dislikes anyone who wants to spend their income on having ‘fun’, while looking down on everyone from his huge swank pad in Sag Harbor.

“They have to want to live in reality and want to be responsible not only for other people’s lives but for their lives. It is so sad,” Lemon ordained.

Such wise and philosophical words old sage.

“I don’t know if, after this, I will ever be able to go back and be friends with those people,” Lemon added, again making it clear that he has gotten rid of friends, which definitely explains why he doesn’t have any left.

“At a certain point, they’re too far gone, and I got to let them go. If they’re willing to come back and willing to live in the reality, then I will welcome them with open arms. I can’t do it anymore.”

Maybe, in reality, it was the friends who got rid of Lemon.

Over 10,000 Robinhood Account Credentials Are Being Sold On The Dark Web, Bloomberg Discovers

Over 10,000 Robinhood Account Credentials Are Being Sold On The Dark Web, Bloomberg Discovers Tyler Durden Fri, 10/30/2020 - 14:20

Robinhood's account security issues look like they have just gone from "bad" to "worse".

When reports about Robinhood hacks started making their rounds earlier this month, the company said it only affected a "limited number" of accounts. Now, it looks as though that may be far from the truth.

Upon investigation by Bloomberg, it was discovered that a marketplace on the dark web is selling alleged access to over 10,000 email login credentials for Robinhood accounts. The number of Robinhood e-mail accounts available for purchase outnumber other brokerages by a factor of "5 to 1", according to the report. 

Eli Dominitz, chief executive officer of Q6 Cyber, an e-crime intelligence firm explained to Bloomberg why he thought Robinhood emails were so much more prominent: “If they feel that Robinhood gives them greater upside than trying to steal money from Bank of America, that’s what they’re going to do.” 

In other words, hackers likely think that Robinhood's response is going to be lackluster. 

Robinhood offered up the following excuse: “It is not uncommon for cyber-criminals to target customers of financial-services companies by attempting to use information sourced from the dark web.”

"This is a very common occurrence in corporations as large as ours. You have nothing to worry about."​​​​

Robinhood also said there were "no signs" that its systems had been breached. But, again, this appeared to be the same boilerplate response we saw earlier this month after many accounts were confirmed to have been breached. 

 

While dark web data being sold isn't always accurate, it often is, Dominitz noted. One of the latest offers made on the marketplace for the tranche of 10,000 emails was for just $3.50 per email. 

One Robinhood user, Ryan Bordner, hired an identity theft protection service after being hacked in mid-August. They told him that his information was "among those whose email credentials were sold on the dark web."

Recall, in mid-October we pointed out that 2,000 Robinhood accounts had been hacked, with some having funds siphoned off to external accounts. 

Days prior to that report, we published  a story about Robinhood users who had seen their accounts looted and were at their wits' end with the company's customer service. Many affected claimed they were unable to contact anyone at the company after logging into their accounts and seeing their funds withdrawn. Robinhood claimed it was only “a limited number” of accounts that had been affected. 

But full credit to Bloomberg: at the time, they noted that these users weren't just one-offs, but rather part of a larger group of customers who had been compromised.

This now looks like it could be the case.

Some users said they saw no signs of hacking and had two-factor authentication enabled on their phones for extra protection. Soraya Bagheri is one such example. She had 450 shares of Moderna liquidated from her account and saw that $10,000 in withdrawals were pending. She tried to alert Robinhood, but instead got an email back saying the company would investigate and respond within "a few weeks". In the interim, her money was gone. 

Bagheri said she contacted the SEC and FINRA alongside of three other users who had a similar problem. Two of the four users said that the SEC has sought more information from them. 

 

One user, Miah Brittany Laino, said that two factor stopped one person from accessing her account on September 13 and then, after following Robinhood's suggestion to change her password, her account was still hacked. The next morning she woke up to a nightmarish barrage of messages: “It said ‘This stock sold. This stock sold. This stock sold.’ It’s like if you wake up at 4
a.m. and your house is on fire.”

She said she received no response from the company and was unable to find a customer service phone number. She got a call from Robinhood on September 25, she said, informing her someone had created a fake ID under her name to re-activate her account, which had already been locked down for security reasons.

Robinhood eventually restored her money and her stock, but she said she will likely leave the brokerage: “I don’t want to sell right now. But I’m not going to put any more money into it. I don’t really trust them.”

Another customer, Robert Riachi, said his account is still "in limbo". He told Bloomberg that "thousands of dollars" had gone missing from his account and that the company assigned him 10 different case numbers, even after submitting his ID to try and straighten out the issue. He had four years of savings in his account and says he will move to Schwab when he gets his money back.

“I feel like my money could be put somewhere else, somewhere that has a human person that I can talk to. It’s kind of ridiculous that an investment app that’s handling people’s livelihoods, people’s money, has the audacity to make people wait several weeks to hear back anything,” he said.

The (Other) Bull Market That Won't Die

The (Other) Bull Market That Won't Die Tyler Durden Fri, 10/30/2020 - 14:05

Authored by James Rickards via The Daily Reckoning,

Investors have been hearing for years that “interest rates are near all-time lows,” and “rates have nowhere to go but up,” and finally, that “the bond bear market is right around the corner.”

These warnings have come from notable bond gurus including Bill Gross, Jeff Gundlach and PIMCO’s Chief Investment Officer Dan Ivascyn.

Investors are told that the time has come to dump bonds, short them if you can, and brace for much higher interest rates.

There’s only one problem with these warnings. The bond gurus have been dead wrong for years, and they’re wrong again now. Rates are going lower, and the bond market rally that began in 1981 has further to run. The bull market still has legs.

To paraphrase Mark Twain, reports of the death of the bond market rally have been “greatly exaggerated.”

The key is to spot the inflection points in each bear move and buy the bonds in time to reap huge gains in the next rally.

That’s where the market is now, at an inflection point. Investors who ignore the bear market mantra and buy bonds at these levels stand to make enormous gains in the coming rally.

“The Much Feared Bond Bear Market Never Materializes”

Let’s look at the record. The 10-year U.S. Treasury Note had a yield-to-maturity of 3.64% on February 11, 2011. That soon fell to 1.83% by September 23, 2011. Then the yield spiked to 2.23% on March 16, 2012. It fell back again to 1.46% on June 1, 2012.

Yields spiked again to 3.0% on December 27, 2013. Then yields fell back to 1.68% by January 30, 2015. And, so it continued through 2016 and 2017. Yields staged one last major back-up reaching 3.22% on October 5, 2018, before crashing once again to 0.54% on July 31, 2020.

Notice the pattern? Yes, yields are back up with some regularity. But they have never broken through the 3.25% level in nine years. The much feared bond bear market never materializes.

When yields get above 3%, the economy stalls out, disinflation takes over, the Fed panics and either “pauses” rate hikes or cuts rates resulting in yields coming back down to earth. Every time yields fall, bond investors make huge capital gains.

That’s exactly why the opportunity to go long Treasuries is so attractive. With all of the big players (hedge funds, banks, wealth managers) leaning on one side of the boat, it only takes a small perturbation causing lower yields and higher prices to trigger a massive short-covering rally, where these short investors scramble to exit their positions and buy bonds to cut their losses.

That’s not all. This technical history exhibits a pattern called “lower lows.” The rate spikes run out of steam around 3%, but each rate collapse goes lower than the one before. The history of rate bottoms is 1.46% on June 1, 2012, 1.36% on July 8, 2016, and the recent low of 0.54% on July 31, 2020.

Every time the bears say yields are going to the moon, they crash to a new low. That means bigger gains for investors.

Basic Bond Math

A bit of bond math is always helpful in these discussions since it’s counterintuitive for many investors. Yields and prices move in opposite directions. When bond yields go up, bond prices go down. When bond yields go down, bond prices go up.

Investors hoping for higher yields may not realize that the bond prices in their portfolio go down when that happens.

The best trading strategy is to buy a bond just when yields spike, and then hold it as yields fall back down to earth. That way, you keep the high yield on your bond and accrue huge capital gains as market yields decline. You can hold the bond to maturity, of course, but you can also sell it for a gain, move to the sidelines with cash and buy a new bond when yields get toppy again. Wash, rinse and repeat.

There’s another bit of bond math that is not intuitive to most investors. It’s called convexity or duration. In plain English, it means that as interest rates get lower, the capital gains get larger for each basis point decline in rates.

As an example, rates can decline from 3.50% to 3.25%. They can also decline from 1.00% to 0.75%. In each case, interest rates dropped by the same 0.25%. And, in each case, an outstanding bond would realize a capital gain.

But, the capital gain is larger in the second case than the first. Not all interest rate declines are created equal. Gains are bigger when rates are lower. Right now, rates are quite low, so the potential for capital gains is spectacular.

But, with rates so low already, what is the potential for rates to fall even more?

Rates on 10-year Treasuries rose from 0.513% on August 4 to 0.848% on October 22. Rates are 0.768% as of today. Right now, my models are telling me that bond yields will continue to fall, which means that bond prices will continue to rise.

Don’t Buy Into the Consensus

What’s been driving this increase in rates? The answer is simple. Markets expect a new deficit spending stimulus package from Congress. The package is still under negotiation, but the expectation is that it will be around $2 trillion, comparable to the $3 trillion of spending packages passed between March and June, during the worst stages of the pandemic.

Markets expect that this much new debt will flood the markets with new Treasury borrowings, which will drive bond prices lower. Markets also expect that this much stimulus will be inflationary because the Fed may have to monetize the new debt. The combination of more supply with a higher risk premium for inflation will result in much higher yields.

Both assumptions are probably wrong. The spending package depends on the election.

Democrats are confident that Joe Biden will win, so they are holding out, both to avoid giving Republicans a pre-election win and to get a better deal under President Biden.

Republicans take the opposite view and are holding out for a more conservative package under a reelected President Trump. The result is a stalemate.

My forecast is that Trump will win, and markets will be disappointed at the size (and spending priorities) of any package that results. This will cause rates to crash again.

Too Much Debt for Stimulus to Work

Even if a large spending package passes in the next few days or shortly after the election, it will not have the inflationary impact markets expect. Congress knows how to spend, but they do not know how to provide stimulus.

In fact, stimulus in the Keynesian sense is impossible when government debt levels are 130% of GDP. Research shows that any stimulus effect goes into reverse when debt-to-GDP levels pass 90%.

What you end up with is more spending, higher debt, but lower growth. Everyday Americans respond not by spending more but by saving more in anticipation of higher taxes or inflation down the road.

The short-term impact of that is not inflation, but disinflation or outright deflation. That means lower rates and bigger capital gains for Treasury bond investors.

As for rates being “low,” they’re not. It’s true that nominal interest rates (the kind you see on screens and TV) are near all-time lows. But real interest rates (nominal rates minus inflation) are quite high by historical standards. Real rates have to go much lower to help growth.

With inflation dropping, that means nominal rates have to go deeply negative in order to get real rates low enough to help. My forecast is for 10-year Treasury note rates to go to negative 0.50% or lower over the next year. That means large capital gains for investors in Treasury bonds.

Don’t go along with the crowd on this one. If you’re on the wrong side of this overcrowded trade, you could get trampled.

Private Equity Titan Henry Kravis Says In 50 Years He Has Never Seen Markets This Volatile

Private Equity Titan Henry Kravis Says In 50 Years He Has Never Seen Markets This Volatile Tyler Durden Fri, 10/30/2020 - 13:50

Private Equity titan Henry Kravis has seen a lot during his half century on Wall Street. But he says he has never seen turmoil like this. Thanks to COVID-19, and the Fed's attempt to backstop markets for fear that a crash could translate into harm for the real economy, 500-point swings back and forth have become routine.

"I’ve been investing for over 50 years, I don’t remember a time when I’ve seen such volatility as we see today," Kravis, the co-founder of KKR & Co., said Friday during a live Bloomberg webcast.

"Just look at our markets in the US, we’re up one day 300, 400 points and then the next day, for almost no reason, we’re down 400 to 500 points."

Kravis praised central banks' global stimulus efforts for staving off economic collapse, but warned that markets remain unnerved by the virus, and that any news related to a vaccine or therapeutic would likely impact sentiment.

This year has seen nigh-unprecedented volatility has stocks sunk to levels unseen since the Obama era before bouncing back to record highs. According to Bloomberg, the VIX, the market's gauge of implied volatility, has averaged 33 since February, which is 14 points higher than the average level over the last 30 years.

KKR has taken advantage of the turbulence, with Kravis's firm (which he has long since ceased managing) doing some $40 billion in deals already this year.

“When we shut down our offices in the U.S. on about March 12, I was wondering, ‘What are we going to do, how are we going to even keep busy?’” Kravis, 76, said. “As it turned out, we’ve probably had the busiest year and (most) productive year that we’ve had almost ever."

Kravis has enjoyed a reputation as a ruthless capitalist for years While buying and selling companies still drives Kravis, he said the pandemic has changed his outlook on life and work and, possibly, softened him up a bit.

“You see so many people in the US, in New York City in particular earlier on, become ill and so many of them pass away,” he said. “It makes you think about what’s really important in life and to me, it’s family, my wife without a doubt.” Beyond that, “I probably have become more patient than I was. I’ve always been known to be impatient,” he said. “Probably my empathy levels have gone up, and trying to show more empathy toward everybody that I come into contact with, people at our firm and make sure they are OK."

His "empathy levels" have gone "way up," Kravis added.

Beyond that, “I probably have become more patient than I was. I’ve always been known to be impatient,” he said. “Probably my empathy levels have gone up, and trying to show more empathy toward everybody that I come into contact with, people at our firm and make sure they are OK.”

Later in the interview, Kravis discussed the firm's management philosophy, which he said centers around allowing all the employees to be fully engaged in deals, handling different responsibilities and learning new things.

Aside from the firm's new deals, Kravis said KKR had also sold "a number" of assets this year, before moving on to wax poetic about how he analyzes a prospective target.

"Every company is a living organ...it's a series of still shots that make into a movie...and where is that movie going? If you're only going to think of the photo of the company and think 'well, this is what it is'...it's being able to see where the puck is going. If you can anticipate that, then bring in the right group of operating people...and they will work with various companies to improve the operation, while at the same time we think how can we improve the balance sheet."

Not that investors care - at least not right now - about corporate profits, but as volatility has surged, earnings have become more decoupled from share price than at any time in the last 70 years (dating back to 1950).

Could that portend more volatility ahead? We'll let you be the judge.

The conversation continued for roughly 45 minutes. Readers can watch the whole thing below:

SEC Scraps Proposed Rule To Raise 13F Reporting Threshold

SEC Scraps Proposed Rule To Raise 13F Reporting Threshold Tyler Durden Fri, 10/30/2020 - 13:35

The Securities and Exchange Commission looks like it is abandoning a rule that would have raised the Form 13F threshold for lare investors. The proposed change, which we first highlighted months ago, would have been a major blow for hedge fund transparency and would have reduced the amount of holdings that fund managers would have to disclose to the public. 

Now, some within the SEC have been informed that the proposed rule change "is dead", according to Bloomberg

As the proposed change got closer, even the two largest lobbying groups for hedge funds questioned whether or not the amount saved by hedge funds in compliance costs due to the new rule was worth it. The SEC's decision was further swayed by an onslaught of public comments from hedge funds. 

James Angel, a finance professor at Georgetown University, said: “This shows the value of the public comment process. More people should monitor what our regulators are proposing and submit comments. The SEC is a political agency, and they do pay attention to public opinion.”

The SEC responded: “It remains clear that the current threshold is outdated. The comments received illustrate that the form is being used in ways that were not originally anticipated when the form was adopted. We are focused on examining these important issues before we move forward with determining the appropriate threshold.”

All told, the SEC received 2,238 letters opposing the rule change and 24 letters in favor of it. Despite 90% of fund managers no longer having to file 13F's, more than 90% of U.S. stock holdings would still need to be publicly disclosed due to funds with $3.5 billion in equities owning a majority of stocks.  

Recall, back in July of this summer, we first noted that the SEC was proposing the change when, in a press release they wrote that they were considering amending Form 13F to update a reporting threshold for institutional investors to a new standard that would all but eliminate the point of the filings to begin with.

Form 13F was put into place in 1978 to give transparency about larger institutions and their holdings. The threshold has not been changed for the last 40 years, which prompted Jay Clayon's SEC to attempt to raise the reporting threshold to $3.5 billion.

SEC Chairman Jay Clayton said at the time that the change was to reduce the burden on smaller managers while keeping the same oversight on large positions from the biggest institutional managers.

“Monitoring equity holdings of large institutional investment managers is an important part of our regulation and oversight of the securities markets. Today’s proposal will update, for the first time in over 40 years, the 13F reporting threshold to a level that furthers the statutory goal of enabling the SEC to monitor holdings of larger investment managers while reducing unnecessary burdens on smaller managers,” Clayton said over the summer.

Back then, the agency had estimated that $68 million to $136 million in compliance costs could be saved by smaller managers: "The proposal estimates that, for smaller managers that would no longer file reports on Form 13F under the proposed threshold, these direct compliance costs could range from $15,000 to $30,000 annually per manager, depending on certain factors, resulting in direct compliance cost savings for these managers per year ranging from $68.1 million to $136 million."

The SEC justifies the move by citing the growth in public equities since 1975. "In 1978, when Form 13F was adopted, the threshold for filing the form was set at $100 million, the amount in the underlying statute and representing a certain proportionate market value of U.S. equities," it said. 

It continued: "Since then, the overall value of U.S. public corporate equities has grown over 30 times (from $1.1 trillion to $35.6 trillion), and the relative significance of managing $100 million has declined considerably. The Commission and staff have received recommendations to revisit the Form 13F reporting threshold from a variety of sources over the years, including from the Commission’s Office of the Inspector General."

 

The SEC also admitted at the time that the new rules would retain 90% of the dollar value that is currently being reported: "Today’s proposal would raise the reporting threshold to $3.5 billion, reflecting proportionally the same market value of U.S. equities that $100 million represented in 1975, the time of the statutory directive."

 

Professors Call Out Beer And Beethoven As Latest Examples Of Racist Bias

Professors Call Out Beer And Beethoven As Latest Examples Of Racist Bias Tyler Durden Fri, 10/30/2020 - 13:20

Authored by Jonathan Turley,

There is a virtual cottage industry among academics in publishing papers that declare common terms or items as forms of white supremacy. This inexhaustible source for publication expanded this week with professors finding new forms of prejudice in common parlance and drinks. The problem is that if you really need a drink after reading that your referencing “Beethoven” is proof of your racism, you cannot even reach for a beer without reinforcing a separate beverage-based bias.

In column in Slate, the University of Massachusetts-Amherst’s Christopher White declared that referring to composers like Beethoven and Mozart by one name is a form of white supremacy. After all, White explained, it creates a “habitual, two-tiered” method where white composers are referenced by one name while women and minority composers are referred to by their first and last names:

“These canonized demigods became so ensconced in elite musical society’s collective consciousness that only one word was needed to evoke their awesome specter.”

White calls for an end to such “mononyms of music history.” I guess I will have to research the full names of Beyonce, Madonna, Sting, Cher, Bono, Pink, Seal, Adele and others.

For many, messing with Beethoven is still better than messing with beer. However, Virginia Tech sociology professor David L. Brunsma, has declared that beer also reinforces white supremacy. His co-authored book, Beer and Racism: How Beer Became White, Why It Matters, and the Movements to Change It, is marketed as a game changer: 

 “From the racist marketing of malt liquor to the bearded-white-dude culture of craft beer, readers will never look at a frothy pint the same after reading Beer and Racism.”

Craft beers are singled out as examples of racism. As explained by University of New Mexico professor Eli Wilson, it is long overdue to call out such beer lovers:

 “maybe a little bit of guilt: after the 10th beer festival you’ve been to where it is a bunch of pretzel-necklaced white dudes with beards and potbellies, it gets kind of old, you know?”

The ultimate racism recreation is presumably having an actual “Beethoven Beer.” 

Brusma also declared on Twitter that Vice President Mike Pence’s usage of the term “the American people” during the vice presidential debate was racist and a dog whistle.

If so, it is a dog whistle blown daily by Joe Biden and Kamala Harris:

COVID Vaccine Fallout: General Air Cargo, Wait Your Turn

COVID Vaccine Fallout: General Air Cargo, Wait Your Turn Tyler Durden Fri, 10/30/2020 - 12:45

By Eric Kulisch, air cargo editor at American Shipper,

Shippers of general commodities such as auto parts, wine, apparel and telecommunications equipment should be prepared for air transportation delays in the coming months, because any new releases of COVID-19 vaccines will take priority, logistics experts say.

UPS employees at the Worldport hub in Louisville, Ky., move iPhones and iPads on the ramp

Cargo carriers, including airlines operating passenger aircraft as mini-freighters, are likely to bump general cargo from flights to make room for emergency shipments of lifesaving vaccines, which also will command the highest rates because of requirements for expedited delivery and special handling.

“COVID-19 is going to be the biggest product launch in the history of mankind. We all know when Apple launches a new product what it does to capacity for everybody else. It’s a big sucking sound and all of that capacity goes toward moving that single product,” said Neel Jones Shah, global head of airfreight at Flexport, a San Francisco-based freight forwarder with advanced technological capabilities to connect supply chain partners.

Apple chartered many freighter aircraft to get the iPhone 12 and iPad Air to warehouses and stores ahead of last week’s highly anticipated product launch. 

Potential shipping delays for nonpharmaceutical businesses stem from the severe shortage of airfreight capacity that already exists, because most of the international, widebody passenger fleet remains suspended in the face of weak travel demand caused by the pandemic. About 60% of global air cargo capacity resides in the bellies of passenger aircraft, according to industry analysts.

Fully integrated express carriers like FedEx, UPS and DHL are expected to carry the first wave of vaccines, especially ones requiring ultra-cold storage. 

There are nine vaccines in the third, and final, phase of clinical trials around the world, and its possible health regulators could issue some emergency use authorizations by the end of the year. Pfizer expects to provide two months of safety data about its trial, following the final dose of the vaccine, to the U.S. Food and Drug Administration by the third week of November and will then apply for emergency use authorization, company officials said on Tuesday’s earnings call with analysts.

A research assistant at Walter Reed Army Institute of Research, studies coronavirus protein samples.

Satish Jindel, president of freight analytics company ShipMatrix, said the integrators won’t divert aircraft and other assets to exclusively handle vaccines, “but some of their customers may get delayed.”

The extent a vaccine will impact general air cargo depends on several factors, including the timing of a vaccine approval, how much medicine gets produced and distributed regionally by truck, and how much packaging and dry ice are required.

“Once we get a little bit more clarity on that and the exact volumes, and what types of aircraft are best suited [for the job], I think we’ll have a much clearer picture on the overall commercial impact of this project,” Jones Shah said during a press briefing this month organized by The International Air Cargo Association and Pharma.aero.

Vaccine deployment will take place over the better part of two years, although planning should get easier over time as drugmakers ship doses on regular schedules instead of making emergency hotshot shipments, according to logistics companies.

“This isn’t a four-week effort. This is a 2021 into 2022 effort. So it will be spread out over a number of months and not just impact the Christmas logistics season,” Jones Shah said.

Christopher Spyrou, CEO and founder of Neutral Air Partner, said consumer and industrial goods always take a back seat to pharmaceutical products when space is scarce on flights.

“In a normal environment, pharma gets priority over general cargo anyway. So imagine what will happen with a vaccine,” he said, adding that small and medium-size shippers will be impacted the most. 

Neutral Air Partner is a Hong Kong-based international freight cooperative designed to increase the buying power and collective expertise of independent forwarders. 

Spyrou said access to air cargo aircraft will be determined by who can pay.

Airfreight rates have been elevated all year and are escalating again as the peak shipping season for the holidays hits full stride. Rates from China to the U.S. and Europe have increased 25% to 45% in the past two weeks, according to data from Freightos. And shipping prices could go even higher when vaccines get released.

“The general cargo shippers might not be able to afford to pay the $10, $12, $15 per kilo to make their cargo a priority over the vaccines,” Spyrou said.

Pfizer, which has begun parallel production alongside the clinical trials to speed up distribution upon approval, has a contract with the U.S. government to provide 100 million doses by March, but officials said it’s possible they could meet a provision to provide 30 million doses by the end of the year. That initial tranche would cover 15 million people, likely targeted for health care workers, first responders and nursing homes. 

“As we move into the first months of 2021, then we are going to have a much more massive distribution of the vaccine around the world,” said Albert Bourla, Pfizer’s CEO and chairman. 

If a vaccine comes out during the peak shipping season before Christmas, airfreight capacity will get even tighter, Bryan Schreiber, manager of air cargo business development for the Columbus Regional Airport Authority in Ohio said Monday on the FreightWaves TV show/podcast “WHAT THE TRUCK?!?” 

The airport authority manages Rickenbacker International Airport, which mostly caters to all-cargo aircraft.

With ocean capacity from Asia essentially maxed out and rates to the U.S. nearly double or triple last year’s level at this time, many companies are converting shipments to air. 

“You throw vaccine transportation on top of that and it’s going to be interesting, particularly for the integrated carriers … that are going to be carrying your holiday packages,” Schreiber said.

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