Zero Hedge

De Blasio Unleashes 'COVID Checkpoints' To Catch & Fine NYC Travelers Who Violate Holiday Quarantine

De Blasio Unleashes 'COVID Checkpoints' To Catch & Fine NYC Travelers Who Violate Holiday Quarantine Tyler Durden Tue, 11/24/2020 - 11:40

As millions of Americans defy the CDC's warning not to travel for the holiday season, NYC Mayor Bill de Blasio has once again dispatched police to key traffic chokepoints where his quarantine rules will be strictly enforced.

New York City Sheriff Joseph Fucito said the sheriff's office (a separate entity from the NYPD) will conduct spot checks when out-of-state buses drop riders off at the curb, and will also check cars will out of state and New York licenses plates. Test-and-trace teams will also be on the ground to help direct people to testing sites while providing "education" about quarantine.

New York's statewide 14-day holiday quarantine mandates that travelers quarantine, or take a test showing they're negative. Violations of self-quarantine will be enforced, and may carry fines of $1,000 to $2,000, the mayor's office has said.

Around the US, few jurisdictions have actually enforced quarantine and social distancing rules, though people have been killed in fights spurred by mandatory mask requirements. Some governors, including Kristi Noem in South Dakota, have refused to make wearing masks and other social distancing measures mandatory.

But most governors who have imposed mandatory mask orders and other measures typically haven't enforced those measures by doling out fines, unlike authorities in Europe.

According to anecdotal reports, travels through NYC's airports have had to complete contact tracing forms for weeks now. The city will continue to enforce those measures at both of the city's airports, as well as Grand Central and Penn Station, as well as the Port Authority bus terminal.

Lines at NYC testing centers reached record numbers over the weekend, a sign that many New Yorkers still planned to travel, and were hoping to get tested before leaving. This is irritating many self-appointed COVID travel referees...

...who chimed in to remind their followers that a negative COVID test doesn't mean you can safely socialize with others. We're curious to see how many people adhere to that guidance.

Turkish Lira Plunges After Banking Regulator Removes Asset Ratio

Turkish Lira Plunges After Banking Regulator Removes Asset Ratio Tyler Durden Tue, 11/24/2020 - 11:32

Two weeks ago, Erdoganomics ended with a thud when the president of Turkey, Erdogan fired his central bank puppet - who has been programmed to only cut rates in the process sending the Turkish lira plummeting - and replaced him with a new surrogate, this time one meant to restore confidence in the currency by hiking rates - a U-turn to what had been Erdogan's preferred monetary approach since 2018 - which is what Turkey did last week when it hiked rates by 475bps to 15%.

It also provided solid support for the lira, which after plunging as low as the mid-8s against the USD in the first week of November, only to soar as high as 7.50 when it emerged that Erdogan had capitulated on his low rates policy. However, slowly the realization appears to have dawned on traders that hiking rates in a decimated economy, where net FX reserves are now negative...

... may not be the best course of policy after all, and the lira started to slide a few days ago, a move which was accelerated sharply today with the lira dropping back below 8 against the USD after the The Turkish Banking Regulation and Supervision Agency (BRSA) decided to remove the asset ratio rule as of December 31.

The asset ratio rule stipulates that banks' ratio of loans, securities and TCMB swaps to deposits have to be above 90% for deposit banks and 70% for participation banks. In the numerator, loans, securities and TCMB swaps have coefficients of 1.00, 0.75 and 0.50, respectively. In the denominator, deposits have a coefficient of 1.00 except for FX deposits in excess of FX loans, which have a coefficient of 1.75. With this measure, the BRSA aimed to encourage lending and discourage dollarization.

The only problem is that according to Goldman, following this decision, it is likely that banks will do just the opposite and cut back on lending, either as they actively deleverage, cutting back on supply, or as they respond to lower loan demand — the weighted average consumer and commercial loan rates have already reached 19.8% and 17.0%, respectively.

Lower loan growth will likely lead to slower domestic demand and, as a result, lower imports. And while this decision would in theory be supportive for the Lira over time by its contribution to a higher current account balance, it is sparking fresh questions about just how acute the economic hit to the Turkish economy will be as fundamentals slowly reinstitute themselves beyond merely using the lira as a carry pair.

Worse, as Goldman notes, banks deleveraging can lead to lower external debt rollover ratios and more outflows from the banking sector. Furthermore, since the asset ratio rule also discouraged holding FX deposits so its removal may not be positive for dollarization in the short run.

The bottom line is that this decision can be interpreted as Erdogan allowing for lower credit growth and, hence, accepting lower economic growth to support the current account balance going forward. Lending rates have also reached levels that are contractionary, all of which have led to the sharp drop in the lira today which is ironic as the move was meant to further stabilize what has been the worst performing currency of 2020. Finally, with the weighted average rate on TRY deposits still at 12.3%, Goldman thinks that higher rates will be required to restore domestic confidence among depositors and expect the policy rate to eventually rise to 17%. As such it is hardly a surprise that the TRY is plunging again, daring the CBRT to hike rates again at the first possible opportunity, a move which paradoxically will only make the near-term economic rout that much worse.


Dow Tops 30k (After Flood Of $14 Trillion In Global Liquidity)

Dow Tops 30k (After Flood Of $14 Trillion In Global Liquidity) Tyler Durden Tue, 11/24/2020 - 11:25

Mission Accomplished?

For the first time ever, The Dow Jones Industrial Average has reached 30,000 (and all it took was $14 trillion in global liquidity)...

That's quite a run...and quite an inflection after Nixon and Greenspan...

It turns out Barron's cover in January 2017 was not a curse after all...

Or its cover in January 2020...

Because, it's not the economy, stupid!!

It's The Fed and their global central planning pals!!

So, when do we reach Dow 300,000?

Mysterious Metal Monolith Discovered In Remote Area Of Utah Desert

Mysterious Metal Monolith Discovered In Remote Area Of Utah Desert Tyler Durden Tue, 11/24/2020 - 11:20

Authored by Paul Joseph Watson via Summit News,

As if 2020 couldn’t get any more bizarre, a mysterious Space Odyssey-style metal monolith has been discovered in a remote area of the Utah desert.

While state workers were counting bighorn sheep from a helicopter, they spotted something out of place – a 12 feet tall metal monolith that had been installed in a secluded area of rock.

The Utah Department of Public Safety said the object was found in a “very remote” area of the desert, deliberately withholding its location to prevent people from attempting to visit.

“It is illegal to install structures or art without authorization on federally managed public lands, no matter what planet you’re from,” said the department’s statement.

“That’s been about the strangest thing that I’ve come across out there in all my years of flying,” helicopter pilot Bret Hutchings told Salt Lake City broadcaster KSL-TV.

“One of the biologists is the one who spotted it and we just happened to fly directly over the top of it,” Hutchings added. “He was like, ‘Whoa, whoa, whoa, turn around, turn around!’ And I was like, ‘What.’ And he’s like, ‘There’s this thing back there — we’ve got to go look at it!’ We were thinking, is this something NASA stuck up there or something? Are they bouncing satellites off it?”

Respondents immediately drew comparisons to the mysterious monolith featured in Stanley Kubrick’s 1968 classic 2001: A Space Odyssey.

The monolith in the movie is a black stone tablet first discovered by a group of apes who then begin to evolve by learning to use tools. Another monolith is then found on the moon which points to a third one near Jupiter.

Although ostensibly linked to advances in human consciousness and evolution, the real meaning of Kubrick’s monolith has been debated for decades, with one of the more interesting explanations being that it represents a movie screen, a metaphor for Kubrick trying to signal that the space race of the 1960’s wasn’t real.

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As Oil Soars, Former NHL Player Turned Hedge Fund Manager Says "Inevitable" It Will Go Higher

As Oil Soars, Former NHL Player Turned Hedge Fund Manager Says "Inevitable" It Will Go Higher Tyler Durden Tue, 11/24/2020 - 10:58

Update (1100ET): WTI just broke above $45, and Brent tagged $48, up 34% in November, as today's move goes vertical.

This is the highest price for oil since March, which is remarkable given that Cushing storage is near capacity.

*  *  *

If you're bullish on oil, we've got good news and bad news. The good news is that one hedge fund manager is finally taking an outsized bet on oil and is making headlines. The bad news is that the "hedge fund manager" isn't exactly Sam Zell or Steve Cohen, but rather a former professional hockey player. 

Regardless, Xavier Majic, who founded Maple Rock Capital in Toronto - and who manages $700 million - says that he thinks oil is becoming a better bet as the pandemic ends. His firm recently upped its exposure to energy to 38%, which marks the highest it has been since the fund's inception.

He told Bloomberg:

“Covid has done things to oil demand that were unimaginable to a commodity investor. It’s inevitable that oil prices have to go much higher.”

The fund's exposure to energy stood at about 4% at the end of March. Heading into Q3, his fund has 15 positions in energy, ranging between a 0.2% and 4.3% weighting. His firm recently posted a 5.7% stake in SM Energy Co. last week. 

The firm is forecasting a return of 150% to 200% for the funds holdings if oil can reach $55 - a relatively small tick higher from current crude levels around $43. Some of the companies it owns are cash flow neutral with oil at $40, he told Bloomberg.

For now, Majic is right, as oil just reached its highest level since March, buoyed by the start of the U.S. presidential transition process and with the demand outlook strengthening after a string of positive COVID-19 vaccine breakthroughs.

”The oil market is tightening because of strong Asian demand and production curtailments, leading to falling inventories,” said Carsten Fritsch an analyst at Commerzbank AG.

“We are still far away from normal. It will take some time to vaccinate the population.”

And Majic hasn't quite caught on to the EV boom that is driving the rest of the market. He says that EV production would still have to rise 10x from here to have a meaningful impact on oil demand. He noted that EV sales only make up 3% of all new car sales and also says hydrogen is still 25 years out. 

“I feel like we are some of the only people at the table here that are even playing poker,” he said of the industry's outlook on oil.

We wonder if anyone has ever informed him that oil supply, however, is essentially unlimited and under the control of the Middle East and Russia, who can basically choose to set the price wherever they'd like - whenever they want.

Majic founded his firm in 2014 after playing for the Vancouver Canucks and Team Canada. 

We hope OPEC and Putin are Canucks fans. 

Ron Paul On COVID-19: We Must Not Allow Politics To Dictate Science

Ron Paul On COVID-19: We Must Not Allow Politics To Dictate Science Tyler Durden Tue, 11/24/2020 - 10:40

Authored by Ron Paul via The Ron Paul Institute for Peace  & Prosperity,

In these past couple of weeks, two important studies have been published that could dramatically increase our understanding of the Covid-19 disease. Adding to the science of how we understand and treat this disease is something that should be welcomed, because properly understood it can save lives.

The only problem is that because the results from these two studies challenge what the media has established as conventional wisdom about the disease, the reports are at best being ignored and at worst being openly distorted by the mainstream media.

This is in my view a dangerous and foolish subjugation of science to politics and it may well end up causing many more unnecessary deaths.

First is the Danish mask study, which was completed several months ago but was only recently published in a peer-reviewed journal. The study took two groups and gave the first group masks to wear with instruction on how they should be used. The other group was the mask-free control group.

The study found that coronavirus spread within the statistical margin of error in each group. In other words, wearing the mask did little if anything to control the spread of the virus.

As the wearing of masks is still being mandated across the country and the globe, this study should be reported as an important piece of counter-evidence. At the very least it might be expected to invite a rush of similar studies to refute or confirm the results.

However, while mostly ignored by the media, when it was covered the spin on the study was so strange that the conclusion presented was opposite to the findings. For example, the Los Angeles Times published an article with the headline, “Face mask trial didn’t stop coronavirus spread, but it shows why more mask-wearing is needed.”

Similarly, a massive new study conducted in Wuhan, China, and published in the respected scientific journal Nature, reports that asymptomatic persons who have tested positive for Covid-19 do not pass on the infection to others. Considering that mask mandates and lockdowns are all based on the theory that asymptomatic “positive cases” can still pass on the sickness, this is potentially an important piece of information to help plan a more effective response to the virus.

At the least, again, it should stimulate additional, far-reaching studies to either confirm or deny the Wuhan study.

We do know, based on information from widely-accepted sources as the CDC and World Health Organization, that lockdowns can have a very serious negative effect on society. On July 14th, CDC Director Robert Redfield told a seminar that lockdowns are causing more deaths than Covid.

So if there is a way to continue fighting Covid and protecting those most at risk while drastically reducing deaths related to lockdowns, isn’t this worth some consideration? Isn’t this worth at least some further research?

Well, not  according to the mainstream media. They have established their narrative and they are not about to budge. The two studies are fatally flawed, they report. Of course that might be the case, but isn’t that an argument to attempt to replicate the studies to prove it?

That would be the scientific approach. Sadly, “trust the science” has come to mean “trust the narrative I support.” That is a very dangerous way of thinking and can prove to be deadly.

Kiwi Soars After New Zealand Central Bank Asked To Add Home Prices To Monetary Policy

Kiwi Soars After New Zealand Central Bank Asked To Add Home Prices To Monetary Policy Tyler Durden Tue, 11/24/2020 - 10:26

The New Zealand dollar soared overnight, reaching a two year high, bid up by shocked FX traders who learned that Finance Minister Grant Robertson sent a letter to the central bank expressing concerns over how low rates have stoked home prices.

In a stunning development, Robertson asked the Reserve Bank of New Zealand to add home prices to its monetary policy remit, a proposal which would crash any prospects for further rate cuts or additional bond-buying programs.

Remarkably, just two weeks ago traders had been pricing in over a 50% chance of a rate hike implying negative rates by the end of 2021; however then the central bank projected a more upbeat view of the economic recovery and added a lending program that led traders to price out the chance for negative rates. Following the Robertson letter, the odds of a rate cut tumbled to less than 25%.

"Today’s announcement just reinforces the notion that negative rates are less likely in New Zealand,” said Prashant Newnaha, senior rates strategist at TD Securities in Singapore. “The economy has held up remarkably well."

In kneejerk response, the kiwi surged as much as 1.1%, briefly topping 70 U.S. cents, the highest level since June 2018. The currency has risen almost 6% this quarter, leading gains among the Group-of-10 peers against the dollar.

"We were already positive on the New Zealand dollar, largely reflecting a bearish U.S. dollar view, but more confirmation of the end of the easing cycle in New Zealand supports that prevailing view," Jason Wong, strategist at Bank of New Zealand, told Bloomberg.

The dramatic reversal meant that while at the start of the month, the OIS market priced more than 40 bps of cuts by end of 2021, after the finance minister’s statement this tumbled to just 5bps. And as rates markets traded out the likelihood of rate cuts, New Zealand’s 10-year bond yields jumped over 10 basis points to 0.905%, more than double a low in September.

The turnaround in expectations has come swiftly, and surprised most traders. Consider that it was just one month ago, on Oct. 14, when Assistant Governor Christian Hawkesby said that the RBNZ wasn’t bluffing on the prospect of negative rates. The central bank’s ownership of the nation’s outstanding nominal sovereign bonds has also surged from 6% to just just under 40% in the seven months since it introduced an aggressive quantitative easing program.

The problem is that just like in the US, this has translated into runaway house inflation. Home prices, which were expected to drop in the pandemic, have jumped with a record low policy rate of 0.25%. Average prices gained an annual 8% in October, spurring Robertson to urge the RBNZ to consider how it may contribute to a stable housing market.

In short, at least one central bank is starting to realize that keeping rates lower for ever may not work in an economy where the housing market is already overheating. We wonder how far US home prices will rise before Powell (and Brainard after) decide that it's time to do similar damage control in the US...

Peter Schiff: The Fed's COVID Cure Is Making The Economy Sicker

Peter Schiff: The Fed's COVID Cure Is Making The Economy Sicker Tyler Durden Tue, 11/24/2020 - 10:10


A lot of people are turning more bullish on the economy with the possibility of an effective COVID-19 vaccine. But in his podcast, Peter Schiff argued that coronavirus isn’t the problem.  COVID-19 isn’t making the economy sick. All of the Federal Reserve stimulus and money printing is making the economy ill. And coronavirus vaccine isn’t going to make it well.

Peter said he recently read an article saying that hedge funds have never been more net-long in history as they are right now.

So the guys that run the hedge funds, supposedly the smartest people in the room, have never been more optimistic and more bullish, and they are just long. So, in other words, hedge funds have never been less hedged than they are today. So, they’re really not hedge funds at all, they are risk funds. And when everybody is loaded up on one side of the trade, there’s a pretty good indication that the markets are getting ready to move in the other direction.”

What is providing the impetus for all this bullishness?

The Fed – and the idea that QE infinity is here to stay.

That is the only thing driving stock prices.”

JP Morgan recently projected GDP in Q1 of 2021 would be negative. But they are predicting the economy will come roaring back in Q2 and Q3 of next year. Why?

Obviously, it’s because of massive government stimulus that they’re expecting, probably even more from the Fed than from Congress, because I don’t know how long it’s going to take the Biden administration and Congress to actually enact their initial stimulus.”

If we do have a negative GDP for the first quarter, that will put even more political pressure on Congress, in particular the Republicans in the Senate, assuming that they win the Georgia special elections, to compromise and deliver more stimulus.

So, it’s the anticipation of this stimulus which is driving the market.”

A lot of people think a COVID vaccine might ease the need for stimulus.

But the real burden is not the COVID, but all the debt the economy accumulated while the Fed was trying to fight COVID. It’s the COVID cure that is far more harmful to the economy than the disease. So, even after the disease is gone, the cure is going to linger and is going to continue to do damage because we accumulated all this extra debt, because the Fed’s balance sheet is now so much bigger, because the stock market bubble is so much bigger, because the real estate bubble has gained new strength, because everybody has more leverage than they did before. And of course, the US economy is going to be less efficient in this post-COVID world as US companies are still going to have to be covering the costs of being able to prepare for the next lockdown or the next virus that comes up. We already know what the playbook is.”

Simply put, we have a less efficient, more highly indebted, more highly leveraged economy that will need stimulus more than ever.

We don’t need the stimulus to deal with the COVID disease. We need more stimulus to deal with the COVID cure. That’s what we’re addicted to. We’re addicted to the cure. It’s not about the disease. It’s all about the cure.”

Peter pointed out that the Fed will likely start focusing QE on the longer end of the yield curve and may well eventually own the entire long end. Private investors will be wary of holding long-term bonds because of the risk of rising interest rates. Of course, eventually, the central bank could well own the entirety of the bond market. The Fed currently holds a record percentage of US debt.

Last week, Fed data showed another $67.7 billion added to the balance sheet. It now stands at $7.243 trillion. Meanwhile, the money supply increased by $172.4 billion.

This is why the US dollar is so weak. And it’s going to get a lot weaker.”

Peter said at some point prices will collapse – but not in dollars. The Fed will print enough money to keep that from happening. But they will collapse priced in gold.

The Fed will stop the nominal collapse in asset prices or goods prices. But they will cause an even bigger collapse in real terms pricing those assets and goods in gold. So, if you hide out in US Treasuries, you get wiped out. That’s not a safe haven. The real safe haven would be real money, which would be gold.

In this podcast, Peter also talked about bitcoin and Trump’s executive order to lower the price of prescription drugs.

US Consumer Confidence Slumps In November As Hope Fades

US Consumer Confidence Slumps In November As Hope Fades Tyler Durden Tue, 11/24/2020 - 10:05

After a mixed bag in October (present situation up, future hope down), analysts expected The Conference Board to report a worsening in overall consumer confidence in November (despite soaring stocks), and in fact things were worse than expected.

Headline consumer confidence slipped to 96.1 from 100.9 (well below the 98.0 expectation) as expectations tumbled from 98.2 to 89.5 and the present situation dropped modestly from an upwardly revised 106.2 to 105.9.

Source: Bloomberg

If stock markets are forward-looking then this should be worrisome...

Interestingly, despite the drop in confidence, buying expectations rose for homes, cars, and major appliances, and expectations for rising incomes also rose modestly.

Gold Tumbles Below $1800, Tests Critical Technical Support

Gold Tumbles Below $1800, Tests Critical Technical Support Tyler Durden Tue, 11/24/2020 - 09:52

As Crypto soars, non-digital-gold is plunging, with futures breaking below $1800 for the first time since July. Since the election and vaccine news, gold futures have crashed from $1960 to $1798...

The big question is, will gold find support at its 200DMA, or is this a systemic breakdown that ignores the future deficit-spending collapse of credibility in the global reserve currency?

As it appears - for now - that digital gold is preferable to real gold...

Is Benoit back?


Herd Immunity Threshold Now Expected By Mid-2021

Herd Immunity Threshold Now Expected By Mid-2021 Tyler Durden Tue, 11/24/2020 - 09:45

By Jim Reid, chief credit strategist at Deutsche Bank

Monday’s are the new Friday’s. AstraZeneca/Oxford Uni kept the vaccine Monday theme going this morning by revealing their vaccine is effective (70% average) albeit with the tantalising prospect that the technique that suggested 90% effectiveness (half dose first followed by the full dose) could be used for all rather than the 62% effective treatment (two full dosages). In terms of why a half dose might be more effective first it could be with how it better primes the immune system.

Today’s chart of the day updates when we could first vaccinate the vulnerable and then achieve herd immunity in the G10 if we assume that AstraZenenca/Oxford eventually migrates to the 90% efficacy rate, one and a half doses are used, and we assume pre-orders are filled on time for the three vaccines to report so far. Japan and the UK would be first, shortly followed by the US with Australia and the EU lagging a bit but there by around the end of H1. Although logistics may slow things down, remember other vaccines could come on stream and accelerate the process.

For EM much is hanging on AstraZeneca/Oxford. It is substantially cheaper with EM countries being offered it at cost which is part of the reason it has been pre-ordered by so many of them. It has the real opportunity to provide a global solution. If the half dose/full dose technique is proved to be more effective it will also reduce the volume of vaccine used meaning more can go around.

Other advantages are that it uses well known vaccine technology rather than the new m-MRA technique used by Pfizer/BioNTech and Moderna which may encourage wider uptake, and also that it can be stored at fridge temperature for six months relative to the -70C to -20C for Pfizer, and -20C for Moderna (can be stored in a fridge for a week before use).

Overall the Monday news from the last couple of weeks has been an incredible victory for science and a personal view is that we’ll be getting back very close to normal life in Q2 2021.

Premature Exacerbation: Nomura Warns Market Meltup "Has Escalated Beyond Anything Anticipated"

Premature Exacerbation: Nomura Warns Market Meltup "Has Escalated Beyond Anything Anticipated" Tyler Durden Tue, 11/24/2020 - 09:31

The post-election plunge in fear and surge in greed has not gone unnoticed by Nomura's Charlie McElligott:

...the speed by which implied vols have continued to collapse since then (with the latest risk boost from the announcement of Janet Yellen as Treasury Secretary - more on that later) has simply escalated beyond anything I could have anticipated...

Why? McElligott explains:

Well, US financial conditions are hitting all-time easiest levels in real-time (UST yield curves low and flat, Credit at tights, lower USD and said destruction of Eq vol)...

...which after the failed QT experiment and the scar-tissue contained therein has made “loose fin conds” an unspoken “de facto mandate” of the Fed and global CB’s.

Additionally, McElligoot notes that the announcement of Janet Yellen as Biden’s Treasury Secretary effectively greenlights:

1) “lower forever” policy support, big fiscal advocacy (even though the magnitude of that is dependent on the Republican Senate coalescing, which is difficult to imagine at this juncture) and, 

2) quasi-debt monetization, as the Fed and Treasury evolve closer to one like-minded entity

And everyone's all-in, as the cross-asset-strategist notes that

The feedback from clients is universally bullish into year-end, where any sort of corrective move would be a dip to buy - aligning into the post-election vol compression pairing with pro-cyclical YE seasonality and the upcoming financial conditions crush from uber-dovish CB’s in December ECB and Fed meetings

But McElligott does have a warning about this apparently premature exacerbation...

This actually / perversely brings forward the timing on profit-taking on the Calendar Spreads we’ve been advocating discussed to take advantage of this anticipated 2020 YE vol collapse vs stickier 2021 optionality, as the term structure steepening nears overshooting

Finally, we do note that while Nomura's clients are buying every dip with both hands and feet, it appears the 'Insiders' are the ones selling to them...

Source: Bloomberg

Who are you going to believe - fast-money momo-chasers or the executives at the firms dumping into ever more stratospheric valuations?

UK Supreme Court Judge Slams "Totalitarian" COVID "Control Freaks" In Government

UK Supreme Court Judge Slams "Totalitarian" COVID "Control Freaks" In Government Tyler Durden Tue, 11/24/2020 - 09:15

Authored by Steve Watson via Summit News,

A British Supreme Court judge has slammed the UK government as ‘control freaks’ for attempting to control people’s lives under the guise of COVID, and labeled it “morally and constitutionally indefensible” to define what freedoms the public should and shouldn’t have.

In an op-ed published Sunday, Lord Sumption noted that the “debate about whether to let us have a family Christmas perfectly sums up what is wrong with this Government’s handling” of the crisis.

Sumption wrote that there are “many different answers to the dilemmas of a Covid Christmas”, yet the crux of the matter is “whether we should be allowed to make the choice for ourselves, instead of having it imposed on us by law.”

“But for the Jacobins of the Scientific Advisory Group for Emergencies (SAGE) and the control freaks in the Department of Health, theirs is the only answer,” Sumption urged.

The British government has posited allowing people to spend 5 days in the company of their relatives over Christmas, but with the caveat that in January they will have to pay back the privilege with more lockdown time, specifically another 25 days.

Lord Sumption, who served as a senior judge on the Supreme Court of the UK between between 2012 and 2018, slammed the Prime Minister Boris Johnson, suggesting he is engaging in “public relations management” rather than leadership.

“Boris Johnson knows that restrictions over Christmas would be deeply unpopular, widely ignored and catastrophic for the retail and hospitality industries,” Sumption asserted.

“So he will soon announce their temporary suspension, behaving as if our lives belonged to the state and Christmas was an act of indulgence on his part,” the judge added.

Sumption further wrote that “control freaks and the rest of the sackcloth and ashes brigade will demand a payback” afterwards, claiming that some “are already pressing for two, three or even five days of extra lockdown for every day of release over Christmas. ”

Sumption proclaimed that the state is exercising an “insistence on coercing the entire population,” saying it is “morally and constitutionally indefensible in a country which is not yet a totalitarian state, like China.”

“The Government has not earned our trust. Sooner or later, people will take back control of their own lives and do the right thing, whatever Ministers say,” he predicted.

Sumption’s comments come in the wake of reports that the UK government is planning to issue ‘freedom passes’ for people who agree to vaccination or twice testing negative for the virus in one week.

Trump Blasts "World's Most Overrated General" After Mattis Urges Biden To "Eliminate America First" Policy

Trump Blasts "World's Most Overrated General" After Mattis Urges Biden To "Eliminate America First" Policy Tyler Durden Tue, 11/24/2020 - 09:13

Update (0910ET): It didn't take long for President Trump to respond to General Mattis' comments:

Ouch! Who's the mad-dog now?

*  *  *

As Summit News' Steve Watson detailed earlier, globalist general James Mattis has called on Joe Biden to ‘eliminate’ the America first policy instituted by President Trump where foreign policy is concerned, claiming that it has ‘damaged’ US national security.

Mattis, who served as Secretary of Defense under Trump from 2017 until last year, is still annoyed that Trump refused to carry on the endless war policy in the middle east, instead ordering troop drawdowns.

In an op-ed published by Foreign Affairs, Mattis writes that “The United States today is undermining the foundations of an international order manifestly advantageous to U.S. interests, reflecting a basic ignorance of the extent to which both robust alliances and international institutions provide vital strategic depth.”

“In practice, “America first” has meant “America alone.” That has damaged the country’s ability to address problems before they reach U.S. territory and has thus compounded the danger emergent threats pose,” Mattis also claims.

The retired four star general then effectively calls on Joe Biden to take America back to the mire it was in after the Bush and Obama administrations.

“In January, when President Joe Biden and his national security team begin to reevaluate U.S. foreign policy, we hope they will quickly revise the national security strategy to eliminate “America first” from its contents, restoring in its place the commitment to cooperative security that has served the United States so well for decades,” Mattis writes.

“The best strategy for ensuring safety and prosperity is to buttress American military strength with enhanced civilian tools and a restored network of solid alliances—both necessary to achieving defense in depth,” he adds, echoing the neo-conservative advocation of interventionism and  ‘peace through strength’ (war) doctrine.

Mattis also threw in a dig at Trump’s coronavirus response, noting “The pandemic should serve as a reminder of what grief ensues when we wait for problems to come to us.”

Mattis earlier this year compared Trump to a ‘Nazi’, and called the President a threat to the Constitution, yet here is is literally calling for the next President to ‘eliminate’ America first.

It is no surprise that such characters are again circling the halls of power with the prospect of a Joe Biden presidency.

US Home Prices Accelerate At Fastest Pace In Over 30 Months

US Home Prices Accelerate At Fastest Pace In Over 30 Months Tyler Durden Tue, 11/24/2020 - 09:03

Analysts expected US home prices to continue their re-acceleration in September (the latest monthly data from Case-Shiller), but the actual data crushed expectations, soaring 6.57% YoY (20-City Composite) versus +5.3% expected (and +5.33% in August)...

Source: Bloomberg

Phoenix, Seattle, San Diego reported highest year-over-year gains among 19 cities surveyed (Detroit excluded from report due to virus-related reporting constraints)

"This month’s increase may reflect a catch-up of COVID-depressed demand from earlier this year," Craig J. Lazzara, global head of index investment strategy at S&P Dow Jones Indices, said in a statement. 

"It might also presage future strength, as COVID encourages potential buyers to move from urban apartments to suburban homes."

As we detailed earlier, three factors are driving home prices higher:

  1. Buyers kept on benefiting from favorable market conditions with mortgage rates reaching the lowest level on record

  2. Demand for second homes skyrocketed amid pandemic

  3. Housing supply remained limited

As Freddie Mac's Chief Economist (@TheSamKhater) noted:

"While economic growth remains unstable, strong housing demand continues to have a domino effect on many other segments of the economy.”

And given the collapse in rates, and the lagged effect of that drop, some might argue that home prices will continue to accelerate for a while longer...

Source: Bloomberg

Of course, there is always the possibility of no stimulus raining on the housing market's parade as Lockdown 2.0 strikes.

Elon Musk Is Now The Second Richest Person In The World

Elon Musk Is Now The Second Richest Person In The World Tyler Durden Tue, 11/24/2020 - 08:46

It seems fitting that Elon Musk has become the second richest person in the world during the month we have written about:

  • a major Chinese recall over Model S and Model X suspensions falling apart 

  • 159,000 Tesla vehicles that can likely expect their infotainment systems to die at some point soon

  • the Model X having an "exploit" that allows you to clone its key and steal it for "about $300 in equipment"

  • a Tesla wreck that launched scalding hot battery parts into the homes of innocent bystanders

  • Jay Clayton preparing to step down from the SEC

And that's just this month.

Did we mention that Musk was also accused of having committed securities fraud? And that there's vaguely odd options buying and accounting practices that appear to be driving his company's value - and his net worth - higher at the same time?

But we digress. We guess, with all those things out of the way, we can congratulate Musk, who is now second only on the rich list to Jeff Bezos after passing Bill Gates, who Musk called a "knucklehead" back in September. 

Musk's wealth now stands at $127.9 billion after adding $100.3 billion to his net worth in just this year alone. 

It isn't just Musk who is making out like a bandit while the rest of the world forges through unprecedented economic turmoil as a result of the Covid-19 shutdowns. Thanks to the Fed's unlimited QE bazooka in March of this year, members of Bloomberg's Billionaire Index have seen their wealth rise 23% - or $1.3 trillion - since the beginning of the year, per Bloomberg

Meanwhile, the market's relentless driving up of Tesla stock (for whatever reason it is happening) has taken Tesla's perceived market value by the stock market to nearly half of all remaining global automakers.

We noted back in October that Musk's compensation had reached $11.8 billion at the same time Tesla was was working on a $5.6 billion accumulated deficit, as per the company's last 10-Q

Musk's latest pay award comes as a result of Tesla reaching milestones for "adjusted EBITDA" (yes, there was a multi-billion dollar compensation plan award for an adjusted number) and market cap. 

As a reminder, the pay plan that has netted Musk more than $10 billion had a 10 year runway. Somehow, Musk had been able to cash in on the plan in about 40% of the time allocated for him to do so.

Many who were critical of Musk's compensation plan said it offered little incentive for the company to reach profitability, only to grow in size of market cap. Back in 2018, even the New York Times called Musk hitting his pay plan goals "laughably impossible"

Musk's huge payday came at the same time we noted in October that half of all American workers made less than $34,300 last year. 

Russian Sovereign Wealth Fund Says "Sputnik 5" COVID Vaccine Is 95% Effective

Russian Sovereign Wealth Fund Says "Sputnik 5" COVID Vaccine Is 95% Effective Tyler Durden Tue, 11/24/2020 - 08:33

Update (0800ET): Apparently, Russia is taking a page out of the Pfizer playbook as the final data released by the government regarding the efficacy of Sputnik 5 shows that the vaccine is actually 95% effective, not the 91%-92% reported earlier.

Russian authorities also claimed their vaccine had greater efficacy than the Oxford-AstraZeneca vaccine because of Russia’s proprietary technology. The two vaccines both rely on the adenovirus-vector technique, though each follows its own procedure.

"Sputnik shows very high effectiveness, higher than 95%," Kirill Dmitriev, the head of the Russian Direct Investment Fund, said on Tuesday. "This is indisputably positive news not just for Russia, but for the entire world, for all countries."

The preliminary results were released as competition heats up among vaccine developers to mass produce a coronavirus jab and try to bring about an end to the pandemic.

* * *

Russia has two coronavirus vaccine projects that are in the final stages of development (one of which infamously became the first vaccine to receive the approval of state regulators back in August), but despite the fact that many Russians (including, reportedly, one of the president's adult daughters) were given the option of receiving the experimental vaccines, President Vladimir Putin has yet to be vaccinated.

Putin's spokesman Dmitry Peskov said Tuesday that Putin wouldn't be eligible to take an experimental vaccine since, as the head of state, that would be against the rules.

"We have not yet begun widespread vaccination and the head of state can’t take part in vaccination as a volunteer. It’s impossible," Kremlin spokesman Dmitry Peskov told reporters Tuesday. "The president can’t use an uncertified vaccine."

Apparently, the question of whether or not Putin had been vaccinated had become a major issue in the Russian press. To be sure, 68-year-old Putin is in a higher risk category due to his age. But the president is also known to keep up a demanding fitness routine that includes Judo training.

According to TASS, one of Russia's state-run newswires, the first group of volunteers aged 60 and older only just began trials on Oct. 28, according to the doctor who is supervising the tests.

In mid-October, roughly two months after Russia's first vaccine was approved, Russian health authorities approved a second COVID-19 vaccine, this one created by a former biological weapons research laboratory, the Vector State Virology and Biotechnology Center in Siberia.

Putin said during televised comments at the time: “We need to increase production of our first and now our second vaccine...First of all we should supply the domestic market.”

Russia has also made deals with international partners to share its vaccine. "Sputnik V" will cost less than $20 - half the price of the Moderna vaccine and also less than Pfizer's - in international markets for a two-shot course of treatment, making it one of the cheapest options on the market.

After preliminary results purported to show Russia's "Sputnik 5" vaccine to be 92% effective, final results released Tuesday that initial testing showed it was 91% effective in preventing infections, although it has not yet published final results in a peer-reviewed journal. Russia has already started vaccinating teachers, health-care workers and other high-risk individuals as the brutal Russian winter ushers in a resurgence of the virus. Russia has the fifth-highest tally of confirmed virus cases, but one of the lowest per-capita mortality rates (though many believe Russia is suppressing the true number of COVID-related deaths).


































Whale Accumulation Sends Bitcoin Above $19,000 As Gold Tumbles

Whale Accumulation Sends Bitcoin Above $19,000 As Gold Tumbles Tyler Durden Tue, 11/24/2020 - 08:32

For the first time since 2017, Bitcoin price pushed above $19,000, and multiple indicators suggest the rally may continue. There's less good news for lovers of more traditional economic-curmudgeon plays with gold dropping for a second day to trade at $1,815

Source: Bloomberg

Within $400 of the record high from Dec 2017...

Source: Bloomberg

Ethereum is steady today after yesterday's surge as Eth2’s beacon chain genesis has been confirmed for Dec. 1 following the transfer of 524,288 Ether (ETH) from 16,384 validators into the Eth2 deposit contract since it went live on Nov. 4.

Source: Bloomberg

Bitcoin bounced off support versus Ethereum...

Source: Bloomberg

CoinTelegraph's Ray Salmond points out that the main factors buoying BTC’s ongoing rally is whale accumulation, decreasing exchange supply and explosive volume trends.

image courtesy of CoinTelegraph

Whales are still accumulating Bitcoin

All throughout November, Cointelegraph reported that whale clusters were steadily forming as the price of Bitcoin rallied.

These clusters emerge when Bitcoin whales buy BTC at a certain price point and do not move them. Analysts have interpreted this as a signal that whales are accumulating and that they have no intention of selling in the near term.

The difference between the ongoing Bitcoin rally and previous price cycles is that the recent uptrend has proven to be more sustainable. In fact, each whale cluster shows that every major support level BTC reclaimed was accompanied by whale accumulation.

Unspent Bitcoins at each whale cluster. Source: Whalemap

On Nov. 18, when Bitcoin dropped to as low as $17,200, analysts at Whalemap said that the new whale support is located at $16,411. They said:

“Bubbles indicate prices at which whales have purchased BTC that they are currently holding. Bubbles also visualize support levels. Last time we bounced from $15,762 and had a 15% price increase. Is the new bubble at $16,411 going to hold this time as well?”

Since then, Bitcoin has seen several more dips below $18,000 but has since recovered above $18,800, sustaining its strong momentum.

Furthermore, data from Santiment, an on-chain market analysis platform, shows a similar trend. Santiment researchers found that the number of BTC whales significantly increased in recent months. They explained:

“The amount of #Bitcoin whales with at least 10,000 coins (currently $185M or more) has ballooned to 114 the past couple days as prices soared above $18k. Additionally, the amount of holders with at least 1,000 $BTC ($18.5M) has hit an ATH of 2,449!”

Additionally, as Reuters reports, investors like Stanley Druckenmiller, founder of hedge fund Duquesne Capital, and Rick Rieder, BlackRock Inc’s chief investment officer of global fixed income, have recently touted bitcoin.

Retail investors though are still mostly sidelined due to the pandemic’s effect on the economy. But with the entry of Square and PayPal, Lennard Neo, head of research at crypto index fund provider Stack Funds, expects a deluge of retail demand more intense than in 2017.

Neo forecasts bitcoin to reach $60,000-$80,000 by the end of 2021., but that pales compared to Tom Fitzpatrick, a strategist at Citigroup, who forecast earlier this month the token could potentially reach as high as $318,000.

Going from $18,000 to $100,000 in one year is not a stretch, Brian Estes, chief investment officer at hedge fund Off the Chain Capital, said.

“I have seen bitcoin go up 10X, 20X, 30X in a year. So going up 5X is not a big deal.”

Estes predicts bitcoin could hit between $100,000 and $288,000 by end-2021, based on a model that utilizes the stock-to-flow ratio measuring the scarcity of commodities like gold.

That model, he said, has a 94% correlation with the price of bitcoin.

Bitcoin's supply is drying up

One consistent trend throughout the 2020 bull cycle was the continuous drop in Bitcoin exchange reserves.

Investors and whales deposit BTC to exchanges when they want to sell BTC. Hence, the recent drop in exchange reserves means there are fewer sellers in the market.

A pseudonymous trader known as “Byzantine General” said that every time spot exchanges expand their BTC reserves, they get accumulated. He said:

“Everytime spot exchanges add to their $BTC reserves it gets depleted almost immediately. Don't you get it? There's literally not enough supply.”

Volume is surging

The volume of both institutional and spot exchanges has been increasing rapidly since September. Open interest on Bitcoin futures and options at CME surpassed $1 billion in November and Binance’s BTC/USDT pair has consistently delivered over $1.5 billion in daily volume.

Various data points also show that the spot market has been leading the rally, not derivatives or futures markets. This trend makes the rally more stable and reduces the risk of massive corrections.

When the futures market accounts for the majority of the volume during a Bitcoin uptrend, there is a large risk of cascading liquidations. This time, the spot market has been leading the rally, thus making it more sustainable.

'Digital' Gold

Finally, there is one more factor worth noting. It appears there is a preference for 'digital gold' over the barbarous relic as the correlation between the two crashes into negative territory..

Source: Bloomberg

As Tom Luongo recently noted, the current rally in bitcoin is telling us clearly that there is a new premier store of value asset because of the current state of the world. Maybe that’s really what Schiff is decrying, a world that has passed him by.

What’s becoming clear even to me is that gold will only be valued in relation to bitcoin going forward, not the other way around.

It’s sad but true. In my heart of hearts I wish it were different and not because of the structure of my portfolio or the name of my business.

It’s sad because it proves that we are moving into a different age where technology is depreciating the value of an asset which materially improved the life of billions for millennia towards its commodity extraction value limit.

And while many gold advocates don’t want to admit that they have stood by while the fortune of two lifetimes has passed them by. That’s the bad news.

Germany's DAX Index Announces Biggest Overhaul Since Inception, Expanding From 30 To 40 Companies

Germany's DAX Index Announces Biggest Overhaul Since Inception, Expanding From 30 To 40 Companies Tyler Durden Tue, 11/24/2020 - 08:21

Imagine if the Dow Jones just announced it would expand by a third, growing from 30 member stocks to 40. Well, that's what happened overnight in Germany, when the operator of Germany's DAX index announced its most sweeping overhaul since its inception, adding 10 new companies and new quality controls after the implosion of Wirecard rocked investor confidence in the gauge.

According to Bloomberg, the changes will trigger "billions of euros of passive flows for the new members" which are likely to come from the largest stocks in Germany’s MDAX gauge, which include Airbus SE, Siemens Healthineers AG, Sartorius AG and Zalando SE.

Qontigo, which operates the DAX index, said in a statement that it will boost the number of DAX members to 40 from 30 in the third quarter of next year, while reducing MDAX membership to 50 from 60 companies.

“In general, the larger volume, the slightly higher diversification and the slightly increased share of dynamically growing companies is positive for the DAX and should slightly improve the leading German index,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg Bank.

Qontigo, which is a unit of Deutsche Boerse AG, will also impose new criteria on both existing and prospective DAX members, including a requirement to publish quarterly statements and audited annual results, with a fast exit for those failing to release them on time (this begs the question why there wasn't such a requirement in the past).

A roadmap of the new DAX rules which will begin taking place in 2021 is shown below:

The earnings reporting requirements will become effective during the first-quarter index review, along with a mandate for companies to include an audit committee on their supervisory board. Existing members that don’t yet have an audit committee will get until August 2022 to adapt to the new rule. The only proposal that was not adopted would have banned companies involved in “controversial weapons.” According to Qontigo, this would have affected one current member of the MDAX.

In addition to facilitating passive flows, the changes were prompted by the implosion of the Wirecard fraud, which was a DAX member for two years despite repeated allegations of irregularities. When it collapsed in June, pressure to overhaul the index mounted as existing rules didn’t allow for the benchmark’s first-ever insolvent member to be ejected right away. After that, the index makers undertook a four-week long consultation with more than 600 market participants before adjusting the rules.

The winners from this reshuffle, of course, as the new entrants: for prospective new members, the potential benefits are big, with about 14 billion euros ($17 billion) in exchange-traded funds tracking the index, according to data compiled by Bloomberg.

Entry will be based on market cap, a general liquidity threshold and the new qualitative criteria, with the index owner dropping its previous methodology of rankings which included the volume of shares traded. New members will also need to have been profitable for the past two years.

While the 10 new members has yet to be determined, possible new members include Airbus, Symrise AG, Zalando, Sartorius, Qiagen NV, Siemens Energy AG, LEG Immobilien AG, Brenntag AG, Siemens Healthineers and Hannover Rueck SE, according to Landesbank Baden-Wuerttemberg index analyst Uwe Streich. HelloFresh SE, Scout24 AG, Knorr-Bremse AG, Puma SE and TeamViewer AG are next in line, he added.

Delivery Hero joined the DAX in August to replace Wirecard, and some investors expressed unease about the fact that the Berlin food-delivery firm had never reported an annual profit (wait until they hear about Tesla). Had the new rules already been in place, it would not have been eligible to join.

One tangential benefit of the overhaul is that the change to 40 members brings Germany in line with France’s benchmark CAC index, and may help to minimize the impact of heavyweights on the gauge.

"Europe’s benchmark indexes are generally too narrow compared to U.S. equity indices,” said Frederik Hildner, Salm-Salm & Partner portfolio manager. “I very much like the fact that these are a better proxy for the economy, whereas narrow large-cap indices are oftentimes heavily impacted by sharp moves of large constituents."

Most investors welcomed the changes and the new quality controls, but some expressed concern about the impact on the midcap gauge. Quoted by Bloomberg, Tarek Saffaf, Greiff Capital Management AG portfolio manager said that "due to the fact that small companies will join the DAX the weights of the bigger ones won’t change much and cluster risks remain. It is even more tragic for the MDAX index as the gauge will lose a lot of liquidity. The quality measures are a good step."

Millions Defy CDC Travel Warnings; Hong Kong Shutters Bars, As Global COVID Cases Near 60MN: Live Updates

Millions Defy CDC Travel Warnings; Hong Kong Shutters Bars, As Global COVID Cases Near 60MN: Live Updates Tyler Durden Tue, 11/24/2020 - 08:06

No matter how many celebrities tweet or share Instagram posts imploring Americans to 'just stay home' this holiday season, more than a million Americans per day have continued to board planes, trains and automobiles as we reach the peak of the Thanksgiving travel season.

About 1 million Americans a day packed airports and planes over the weekend even as coronavirus deaths passed 250,000. Though traffic is down by roughly 50% compared with last year, it's worth noting that millions of Americans - particularly younger millennials who are relatively new to the workforce - have been living with family since moving back in with mom and dad while working remotely this spring.

To be sure, the crowds are only expected to swell, with next Sunday likely to be the busiest day of the holiday period. To be sure, the number of people flying for Thanksgiving is down by more than half from last year because of the rapidly worsening outbreak.

The 3 million who went through US airport checkpoints from Friday through Sunday marked the biggest crowds since mid-March, when the COVID-19 crisis took hold in the US. According to Bloomberg, "many travelers are unwilling to miss out on seeing family and are convinced they can do it safely. Also, many colleges have ended their in-person classes, propelling students to return home."

As hospitals across the Midwest struggle with overcapacity and New York reopens an overflow ward on Staten Island, it looks like new case numbers have started to trend lower, suggesting that numbers may have peaked, despite increasingly dire predictions for mortality heading into inauguration day.

Only 4 US states have fewer than 100 people per million hospitalized due to COVID.

In the southwest, New Mexico is standing out as new cases, deaths and hospitalizations are all at all-time highs.

Looking abroad, Hong Kong authorities announced Tuesday that they would shut bars, nightclubs, and bathhouses from Thursday until Dec. 2 - a period of less than a week - as local coronavirus cases rise, Secretary for Food and Health Sophia Chan said during a briefing on Tuesday.

The number of tables allowed at banquets will be capped at 10, with four people per table. The 4-person public gathering limit, 4-per-table rule at restaurants and mandatory mask- wearing will remain in place even after the rest of the restrictions end. The news comes as Hong Kong reports 80 coronavirus cases, of which 69 are local, said Department of Health official Chuang Shuk-kwan.

Although the number of new cases being reported worldwide has slowed over the past week, the international total of confirmed COVID-19 cases stands just below 60 million, while deaths are on the verge of 1.4 million.

Here's more COVID news from overnight and Tuesday:

North Carolina Gov. Roy Cooper issued an executive order Monday that extended a mask mandate and Covid-19 restrictions through Dec. 11, with one-fifth of the state’s counties seeing critical levels of spread. His order limits indoor gatherings to 10 people, closes indoor bar service and restricts occupancy for retail stores, restaurants and other public businesses (Source: Bloomberg).

Turkey reported a record number of deaths from the coronavirus, highlighting the dilemma facing policy makers who are trying to contain the current surge in new cases without shutting down the economy again (Source: Bloomberg).

France reported 4,452 Covid cases on Monday, the lowest number of confirmed new infections in 24 hours since Sept. 28. The seven-day average of cases fell to 21,918, the fewest in more than a month (Source: Bloomberg).

New York City residents received $40 billion in stimulus benefits that have been critical to the city’s recovery from the coronavirus, Mayor Bill de Blasio said (Source: Bloomberg).