Remember when Dr. Fauci foretold thousands more deaths this fall due to a stunning combination of COVID-19 and the flu?
So far, at least, it looks like those warnings were about as exaggerated as the early projections forecasting millions of deaths, because, Instead, while COVID-19 makes a tremendous comeback, the flu simply isn't spreading like it used to, for reasons that aren't yet clear to virologists studying the issue.
This isn't only an issue for the US. The WHO acknowledged that flu levels remain low around the globe.
"Globally, influenza activity remained at lower levels than expected for this time of the year," the WHO wrote earlier this month, "though increased detections were reported in some countries." "In the temperate zones of the southern hemisphere," the organization continued, "the influenza season remained low or below baseline. Despite continued or even increased testing for influenza in some countries in the southern hemisphere, very few influenza detections were reported."
"In the temperate zones of the southern hemisphere," the organization continued, "the influenza season remained low or below baseline. Despite continued or even increased testing for influenza in some countries in the southern hemisphere, very few influenza detections were reported."
Some have cited the ongoing social distancing restrictions as one reason why flu numbers are down so sharply.
"It does seem that the rates are lower," Phyllis Kanki, an infectious disease professor at Harvard University's T.H. Chan School of Public Health, told Just the News. "I think COVID mitigation measures are likely to lower levels. Some of these mitigation measures may have been particularly effective for high-risk groups for flu, like the elderly and immunosuppressed."
Perhaps also many people who think they have COVID-19 simply assume they have the flu after testing negative for COVID-19, lowering the official count.
Nevertheless, one CDC scientist maintained that there are "more questions than answers".
Ce document est réalisé par Tripalio, legaltech spécialisée en assurance santé collective.
Surtout, retenez bien que, à compter du 1er décembre 2020, les entreprises pourront résilier à tout moment leur contrat d’assurance santé à destination des salariés. Plus besoin d’attendre l’échéance annuelle du 31 octobre pour le faire ! Ne manquez pas de suivre nos conseils réguliers.
L’un des intérêts du dossier présenté est aussi de formaliser un certain nombre de vos obligations en matière de santé et de prévoyance, notamment celle de recueillir le besoin des salariés, en application d’une directive européenne.
Un dossier à ne pas manquer.
L’article Patrons et salariés du SYNTEC, quelles mutuelles sont conformes avec votre convention collective ? est apparu en premier sur Le courrier des stratèges.
An audio recording exclusively obtained by the National Pulse reveals Hunter Biden discussing business involvement with a “spy chief of China” and how his business partner Devon Archer named him and his father as witnesses in a Southern District of New York Criminal case.
Hunter Biden – in an audio file labelled “Most Genius Shit Ever” – appears to be referencing Patrick Ho, who was a former Secretary for Home Affairs in Hong Kong, as a “spy chief of China” while lamenting how his business partner Ye Jianming of CEFC China Energy had disappeared.
Ho was also involved in the CEFC venture, as originally reported by the New York Post and suppressed by the media and Big Tech firms.
The audio breaks the mainstream media’s narrative that the hard drive is somehow “fake” or does not implicate Hunter or Joe Biden in criminal investigations and/or business deals with the Chinese Communist Party.
The former veep’s son also bemoans longtime business partner Devon Archer naming him and his father Joe as witnesses “in a criminal case” without notifying him.
I get calls from my father to tell me that The New York Times is calling but my old partner Eric, who literally has done me harm for I don’t know how long, is the one taking the calls because my father will not stop sending the calls to Eric. I have another New York Times reporter calling about my representation of Patrick Ho – the fucking spy chief of China who started the company that my partner, who is worth $323 billion, founded and is now missing. The richest man in the world is missing who was my partner. He was missing since I last saw him in his $58 million apartment inside a $4 billion deal to build the fucking largest fucking LNG port in the world. And I am receiving calls from the Southern District of New York from the U.S. Attorney himself. My best friend in business Devon has named me as a witness without telling me in a criminal case and my father without telling me.
The recording adds to the litany of e-mails and stories broken by The National Pulse about the grift of the Biden family, including yesterday’s scoop about the VP’s son using White House access in exchange for resort villa stays and artwork.
Listen to Hunter's "Most Genius Shit Ever" at The National Pulse.
This is just the first of the Hunter tapes— Jack Posobiec 🇺🇸 (@JackPosobiec) October 27, 2020
The most remarkable fact about today's 2Y Treasury auction is that at $54 billion, it was $2 billion more than the September 2Y auction and the largest on record. As a reference, all 2Y auctions in the period 2015-2017 were $26 billion, or more than 50% smaller than what the Treasury currently needs to keep funding itself.
The second most remarkable fact about today's record-breaking big auction, is that the yield of 0.151%, which tailed the WI of 0.150% by 0.1bp, was the second lowest on record, just fractionally above the previous record low of 0.136% hit last month. All of this, of course, is due to the Fed depressing short-term yields to unprecedented levels courtesy of $120BN in QE every month.
The other metrics of the auction were less notable: the bid to cover of 2.41 was effectively unchanged from 2.42 last month and well below the six-auction average of 2.63.
The internals were also forgettable, with Indirects taking down 52.4%, also virtually unchanged from last month's 52.5%, and just below the recent average of 52.8%. And with Directs taking down 15.6%, or the most since June, Dealers were left holding 32% of the auction, or about $17.2BN, which they will of course flip back to the Fed at the first possible opportunity while picking up a few million in capital appreciation in the process.
Summarizing the auction and putting the metrics aside, the core "money helicopter" trend remains intact: the larger the auction the lower the yield, and all thanks to the Fed. Which begs the question - what happens to yields if and when the Fed ever steps away (which is a pointless thought experiment: as Clarida said two weeks ago, the Fed may never be able to step away and stop manipulating the market as the alternative is unthinkable).
With just one week to go until the Nov 3 election, Goldman's Alessio Rizzi finds that options markets are still pricing uncertainty beyond Election Day, "partly due to the risk of a contested election."
As has been discussed ad nauseam before, the Goldman strategist writes that a clear result with less uncertainty on fiscal policy could be supportive for risky assets, and that "a decline in volatility and related uncertainty can boost investor sentiment which has historically been weak ahead of the election and has improved afterwards." To wit, he notes that in the months post elections, S&P 500 3m implied volatility has usually decreased (although it is safe to say that extrapolating the future from any previous election would be borderling idiotic).
None of this is new. What is, however, is that one day after JPMorgan flipped the latest Wall Street narrative - the one where a Joe Biden victory and a Blue Sweep would be the best outcome for stocks - on its head, instead now suggesting that a Trump victory is the "Most Favorable Outcome", and would push the S&P to 3,900, Goldman appears to join this latest bandwagon, warning that a Blue Sweep is no longer guaranteed, something we first observed late on Sunday when we wrote "Odds Of A "Blue Wave" Tumble, Hammering Risk"
This is how Rizzi spins the latest data: "since the end of September, according to prediction markets and Superforcasters, the likelihood of a ‘blue wave’ has increased and with it the prospect of larger fiscal spending which could drive a rotation into more reflationary assets."
Of course, until this weekend, this was the prevailing narrative on Wall Street, and markets had priced in much of this outcome. As Rizzi notes, long-term US rates are close to June’s highs driven by the combined increase of real rates and breakevens, something we observed last week when we showed that the record-long, 7-month decoupling stretch between BEs and real rates had finally come to an end.
Other risk-on pair trades such as cyclicals vs defensives, copper vs gold, equity vs bonds had also outperformed, betting on a Democratic Sweep. In such a "blue wave" scenario, Goldman's rates team saw the potential for US rates to increase further with pro-inflation rotation within equity likely to continue. The bank also said that "EM equity also has further upside as it could benefit from lower risks related to trade tensions, dollar downside and a more risk-friendly environment." Finally, call options on MSCI EM could perform well considering the 2w skew is now one of the most expensive across assets.
All of this collapsed - if briefly - on Sunday after we first observed that the odds of a Blue Sweep was tumbling.
Fast forward to today when the Goldman strategist writes that while the likelihood of a Democratic Senate majority has risen since September, "more recently it fell from 69% on Oct 8 to 60% based on prediction markets." And although a Biden victory with a divided congress might also be market friendly, Goldman "thinks it could introduce renewed risks to the current reflationary rotation."
If a "blue wave" is not coming, Goldman recommends trading such a "shock" outcome by betting on lower rates with leverage, to wit:
a Call vs put 2w skew on US long-term bond is close to an historical low and risk reversals could be an attractive hedge for lower rates. While the rotation could have a cap, headline equity should still perform well given the lower risk of tax hikes.
That said, the lack of a blue wave would not have a major impact on stocks, with Goldman writing that the bank's strategists see "the S&P 500 at 3700 in the near term in a Biden victory with a divided congress."
Submitted by Market Crumbs
Plenty has been written about the rise of new retail traders turning to stock trading during the coronavirus pandemic. While these new traders have benefitted from a market that has mostly gone straight up since the lows earlier this year, the sports card market has also experienced a boom as a result of the pandemic.
As a matter of fact, blue chip sports cards may actually be a better investment than blue chip stocks, at least over the last decade. The Daily Mail says data from PWCC—which manages the largest trading card auction venue in the world, shows the index of the top-performing 500 cards had a return on investment of 216% since 2008 compared to 135% for the S&P 500.
"The market's just on fire," PWCC director of business development Jesse Craig told the DailyMail.com. "We're very fortunate to be in the business that we're in right now during a pandemic and still be thriving."
Just this month the Holy Grail of sports cards, the T206 Honus Wagner, sold for a record $3.25 million, exceeding the previous record of $3.15 million. The seller, who chose to remain anonymous, purchased the card for $130,000 twenty years ago.
The total is still short of the record $3.9 million paid in August for a one of a kind Mike Trout rookie card, proving collectors are increasingly turning to current athletes. Two different Lebron James rookie cards—the 2003 Topps rookie card and a chrome version of it, have increased 800% and 600%, respectively, on Stockx since last year.
Another measure—sports card sales on eBay, shows just how strong the market has been as of late. In a span of less than a month from May to June, more than 40 cards sold on eBay for more than $50,000. Through the end of July, the total more than doubled to 96 as more than 35% sold for $90,000 or more. eBay reported more than $600 million in card sales in 2019, marking a 40% increase from 2016. Executives from sports card companies such as Upper Deck and Topps say the past few years have been the best the industry has ever seen.
So what may be causing the renewed interest in sports cards? Similar to what has been suggested as causing the spike in interest in stock trading, people may simply just be looking for something to do to kill time.
"I think it was kind of this perfect storm this year with coronavirus," Craig said. "Everybody's sitting at home with time on their hands. … They started going through their old stuff, got reinvigorated, started paying more attention."
Experts say some collectors are drawn to sports cards because of nostalgia and their limited supply. Demand from countries such as China, the Philippines and Australia is also bringing fresh money into the market.
It will be interesting to see if the sports card market can continue its hot streak and how it will hold up if the stock market has another sharp selloff similar to earlier this year.
C'est une première : cinq décrocheurs de portraits d'Emmanuel Macron ont été relaxés par le tribunal d'Auch (Gers), mardi 27 octobre, au nom de la liberté d'expression.
Les activistes avaient décroché et emmené des affiches présidentielles en juin puis juillet 2019, à l'appel du mouvement Action non violente COP21, pour alerter sur l'inaction climatique et sociale du gouvernement. Poursuivis pour vol en réunion, ils encouraient cinq ans de prison et 75.000 euros d'amende.
Lors de leur audience, le 13 (...)
For those who have not followed David Einhorn's crusade against central bank money printing, and the epic bubble these cluless academic hacks have created, his views on the "enormous tech bubble" we are currently living through and published in his latest letter to investors of his Greenlight hedge fund (which returned 5.9% in Q3) will provide some unique perspective.
To everyone else who is familiar with how his fund has been hammered by his tech short basket - and especially Tesla - over the past five years, as the most overvalued tech stocks in history continued to rip even higher year after year, we doubt his latest thoughts will come as a surprise, although his observations on the endgame are certainly remarkable, if for no other reason that he has dared to declare the time of death of said "enormous tech bubble" as Sept 2, 2020, the day the S&P500 and the Nasdaq both hit an all time high.
Why is Einhorn confident that this time he has finally timed the exact moment the bubble popped? He explains:
Bubbles tend to topple under their own weight. Everybody is in. The last short has covered. The last buyer has bought (or bought massive amounts of weekly calls). The decline starts and the psychology shifts from greed to complacency to worry to panic. Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped. If so, investor sentiment is in the process of shifting from greed to complacency. We have adjusted our short book accordingly including adding a fresh bubble basket of mostly second-tier companies and recent IPOs trading at remarkable valuations
So without further ado, below we excerpt his key thoughts on the biggest asset bubble that the Fed has inflated:
* * *
We are now in the midst of an enormous tech bubble. We prematurely identified what we thought was a bubble in early 2016. Part of our thinking at the time was that the height of the 1999-2000 bubble was a once-in-a-career experience and that investors would not repeat that level of insanity. Clearly, we were mistaken.
Four years later, there is a consensus that we are in a bubble. Barron’s recently ran this on the cover:
All the signs of a bubble are there, including:
There are many anecdotes of toppy behavior. We will share one: We recently received a job application with the email subject, “I am young, but good at investments” from a 13-year-old who purports to have quadrupled his money since February.
Some analysts and commentators are comparing this bubble to the prior one. Have the valuations reached the prior insanity’s? Is the IPO mania just as large? Are the companies better today? Are they growing faster? Have the specific events that popped the last bubble happened? Are they likely to happen soon?
We believe these questions are a fool’s errand. The bubbles will never be exactly the same. In 2000, the Nasdaq peaked at 5,000. Why not 4,000? Why not 10,000? Or 20,000? Would there really have been a difference? If the Nasdaq had peaked at 3,500 instead of 5,000, the losses would have been 65% instead of 80%. Had it peaked at 3,500, it would be easier to argue that this bubble has surpassed that one. Had it peaked at 20,000, it would be easier to argue that there is still a long way to go. This analysis is arbitrary. Is a bubble only dangerous when it has exceeded the prior one on every metric?
What matters in a bubble is market psychology, not valuation. Valuation is irrelevant; that’s what makes it a bubble. Jeremy Grantham has done some of the best work on bubbles and by his criteria this one is a “Real McCoy.” The question at hand is where are we in the psychology of this bubble? On March 10, 2000, nobody knew that it was the top. Even by September 2000, it wasn’t clear. There was no obvious event that marked the top. Only in hindsight do people try to back fit an explanation.
Bubbles tend to topple under their own weight. Everybody is in. The last short has covered. The last buyer has bought (or bought massive amounts of weekly calls). The decline starts and the psychology shifts from greed to complacency to worry to panic. Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped. If so, investor sentiment is in the process of shifting from greed to complacency. We have adjusted our short book accordingly including adding a fresh bubble basket of mostly second-tier companies and recent IPOs trading at remarkable valuations.
The Kappa Delta sorority deleted and apologized for a congratulatory message for Amy Coney Barrett, who was a member of the sorority during her time at Rhodes College.
The sorority tweeted an image of a statement, saying “KD alumna Amy Coney Barrett was nominated to serve on the Supreme Court. While we do not take a stand on political appointments, we recognize Judge Coney Barrett’s significant accomplishment. We acknowledge our members have a variety of views and a right to their own beliefs.”
The next day, the sorority deleted the tweet and posted an apology statement.
The organization stated that it was “deeply sorry” for the “hurtful” original statement.
“Our approach was disappointing and hurtful to many,” said the new statement.
“We did not intend to enter a political debate, take a stand on the Supreme Court nomination, cause division among our sisters, or alienate any of our members.”
The sorority also recalled its new “intentional journey” to focus on diversity, equity, and inclusion.
“Thank you for holding us accountable,” it concluded.
However, many on Twitter expressed disappointment in the apology.
“Don’t let the internet bully you,” said one user.
“It’s an amazing accomplishment that one of our sisters was nominated to the highest court in the land! Regardless of politics or not. Also, judges judge based off the constitution and law, not opinions and politics.”
“What’s disappointing is that you let yourself be bullied and showed that ‘once a KD always a KD’ isn’t true. Amy Coney Barrett, regardless of her political affiliation, is a Kappa Delta sister. She deserves acknowledgement for her achievement from her sorority. Disgraceful,” said another.
Alumni also launched a petition titled “Kappa Deltas Against Judge Amy Coney Barrett,” which alleges that Barrett “does not intend to defend the rights of marginalized peoples,” including “BIPOC and LGBQT+ communities.”
The petition has garnered more than 11,500 signatures.
Eli Dueker, a Kappa Delta alum, professor at Bard College, and self-professed transgender man, wrote an op-ed denouncing Barrett’s potential influence on the Supreme Court. Dueker recalled Barrett as “a dedicated new sister, whip-smart, and incredibly kind,” but expressed concern that “access to healthcare and abortion” for “women, men, non-binary people — whether queer, trans, or straight” would be threatened if Barrett is confirmed.
“I reject the idea of a Judge Coney Barrett, whose views undermine the health and safety of others, having a lifetime sway on the Supreme Court stage,” said Dueker.
Bard College promoted Dueker's letter on its official website.
Campus Reform reached out to Kappa Delta for comment and will update this article accordingly.
Today in news we find to be highly unlikely, federal regulators at the NHTSA are supposedly watching Tesla's roll out of its "Full Self Driving" beta closely, according to The Verge.
Though, we're not sure this means anything at all, since this is the regulatory agency that has sat idly by and watched one Tesla on Autopilot after another wreak havoc on city streets and highways, sometimes resulting in fatal consequences.
Regardless, the NHTSA has commented that it would “monitor the new technology closely and will not hesitate to take action to protect the public against unreasonable risks to safety.”
The agency also seemed to take the wind out of the sails of the name "Full Self Driving", stating: “As we have stated consistently, no vehicle available for purchase today is capable of driving itself. The most advanced vehicle technologies available for purchase today provide driver assistance and require a fully attentive human driver at all times performing the driving task and monitoring the surrounding environment. Abusing these technologies is, at a minimum, distracted driving. Every State in the Nation holds the driver responsible for the safe operation of the vehicle.”
Yet despite the obvious differences the NHTSA has with Tesla - and the very stark exception it takes with the product's name - it simply allows it to run amok on U.S. streets, potentially putting other drivers (who did not sign up for Tesla's beta test) at risk.
Recall, on Monday of this week we shared videos of the "Full Self Driving" beta being put to work on the open roads.
One video shows a driver saying "this is kind of challenging" approaching an intersection with construction. His Tesla display seems to show the vehicle unsure of whether it is turning left or right, before the car makes an awkward left turn, which the driver appears to have to assist with.
A second video shows a Tesla "really hitting the accelerator" then braking quickly seconds later, as the driver narrates.
"It makes you feel a little queasy," the driver says.
Then, the car appears to far overshoot a left turn while a surprised and scared driver yells: "Holy shit!". After the driver rights the vehicle's turn, he exclaims: "Good lord almighty."
In a third video, a Tesla is seen clearly confused about what lane it should be in after driving through an intersection. The car bucks back and forth between the lane it is currently in and the lane to the left of it.
Finally, there's this video of a Tesla stopping in the middle of an intersection in the midst of making a left hand turn. After the car behind it honks, it completes the turn while crossing over a solid white line.
"Full Self Driving" beta test car stops in the middle of an intersection, causing the car behind it to honk. Then the #Tesla cuts across a solid white line to make the turn.— Greta Musk (@GretaMusk) October 25, 2020
(Video of Kristen Yamamoto) cc: @Tweetermeyer $TSLA $TSLAQ pic.twitter.com/jOB9O26nrC
Recall, a couple of weeks ago we noted that FSD is supposed to allow Tesla vehicles to react to stop signs, stop lights and freeway exits. Days prior to that we noted that after Tesla released its much awaited beta that it had also warned drivers that the software "may do the wrong thing at the worst time."
And as far as the NHTSA stepping in and doing something even-handed and in the best interest of the public? We'll believe it when we finally see it.
By Bloomberg macro strategist and former Lehman trader, Mark Cudmore
Monday’s global equity losses were a preview of the coming months rather than just a case of pre-election jitters. Investors are finally realizing that the coronavirus is a 2021 story too.
After the initial weeks of fear, it was easy for many wealthy people to dismiss the pandemic as an overblown threat. There have been fewer than two Covid-19 fatalities for every 10,000 people on the planet, meaning it’s unlikely any random individual knows someone personally who has died from the disease. The majority of those who contract the virus experience relatively mild symptoms or even none at all.
On top of that, the financial elite saw their savings and investments bolstered by extraordinary stimulus packages and were most likely to be be able to easily transition to a remote-working lifestyle, supported by their employer.
And then there’s been the constant promises of a vaccine being ready by year end. All this combined to mean that unless they experienced the trauma of personal loss, the most accessible narrative was that the pandemic was a one-off shock to earnings that would soon be recovered as life normalized again.
But the world isn’t going to “normalize” any time soon. Quite the opposite. As of Sunday, the seven-day average daily case count was 432,475 -- up from 356,343 a week earlier. At current trends, daily case counts will be regularly above half a million from later this week (we know that the highest counts usually come Wednesday to Friday). The running mortality rate for those global cases is 2.68%. That rate should continue to drop as testing improves but late November is still on track to see daily fatalities above 10,000 on a too-frequent basis.
This is completely separate from the potentially much larger problem of overloaded hospital systems and the dire related consequences of society forgoing other treatments and check-ups. These factors will combine to severely alter consumer behavior well into 2021, whether mandated by government restrictions or not.
There will be winners and losers from the rotation to a new type of economy but the transition will overall result in a massive real net cost on society and for many individuals. Many established businesses will go bankrupt and millions of jobs will be lost, destroying the consumer base.
But there’s a bigger problem for optimistically priced stocks. Everyone has been hyping up the arrival of the vaccine on the assumption that it will be a game-changer. But vaccinating a sufficiently large part of the global population to resume “normal” activities will be a long, drawn-out process - spanning many months or even years - rather than an event. Especially as many people appear reluctant to be early in the vaccine queue.
The K-shaped recovery has helped the fortunate remain relatively insulated from the pandemic but the financial bubble is set to burst. And none of this even hinges on the complacent pricing around the U.S. election risks.
Alors que l’indignation vis-à-vis des caricatures du prophète Mahomet s’intensifie dans les pays d’Orient, le président du Conseil français du culte musulman (CFCM) appelle à « encadrer » la liberté de caricaturer. « Savoir renoncer à certains droits » Ce matin, le président du CFCM Mohammed Moussaoui était l’invité d’Appoline de Malherbe sur RMC. Amené à développer le point de […]
L’article Pour le président du CFCM : « la liberté de caricaturer n’est pas absolue » est apparu en premier sur Le Média pour Tous.
We have been taking exception with the environmental, social and governance (ESG) con for the better part of the last few months, inconveniently pointing out that the funds that make "woke" investors feel warm and fuzzy on the inside are turning around and pouring their money into the very same corporate giants many investors likely think they are avoiding by investing in ESG funds.
But, since regulators haven't weighed in on use of the term "ESG", the con continues to roll on.
Inflows to ESG funds have skyrocketed to $22 billion in 2020 so far, which is about 3x the total inflows in 2019, according to Bloomberg. This is despite the fact that funds like BlackRock Inc.’s iShares ESG Aware MSCI USA ETF (ESGU) include names like Exxon and Chevron. In fact, its largest holdings are big tech companies under investigation for antitrust violations, Bloomberg notes.
Eric Balchunas, ETF analyst for Bloomberg Intelligence, said: “If you go in there thinking that you want to ‘woke’ up your portfolio, and you see those companies, you’re going to be like, ‘What? That’s not what I signed up for.’”
The ESGU, ESGE and ESGD make up $13.4 billion of those $22 billion. MSCI helps set inclusion and exclusion rules for the ETFs. The ESGU apparently tries to rule out "civilian firearms, controversial weapons, tobacco, thermal coal and oil sands" while Vanguard's ESGV steers clear of "adult entertainment, alcohol, tobacco, weapons, fossil fuels, gambling and nuclear power".
But the "social responsibility score" of other names included in many funds - even names like Amazon, who has been accused of poor work environment - can be easily challenged.
Ben Johnson, Morningstar’s global director of ETF research, said: “The preponderance of assets in ESG funds are in ESG light funds. The level of spiciness, if you will, goes from mild to medium to hot -- in terms of where the assets are right now, it’s all in pico de gallo.”
And until the SEC decides to weigh in with criteria on what constitutes an ESG fund, there is going to continue to be subjective differences in how ESG rating companies rate funds. One analyst for Bloomberg, who is developing an ESG rating service, said: “The question on everybody’s mind now revolves around green washing.”
Dylan Tanner, executive director of InfluenceMap, said: “Some of the data providers who rate companies on ESG tend to firstly rely on a company’s own disclosures and sustainability reports too much. How meaningful those numbers are, when you’re blending climate with labor, should be questioned.”
We documented back in September what some of the most popular ESG fund holdings were. The list included many of the same massive corporations one would find in the SPY or QQQ funds: Microsoft, Apple, Google, Cisco, Verizon, Nike, Pepsi and many other massive corporate conglomerates associated with all types of "socially responsible" behavior, including overseeing sweat shops and employing underpaid Foxconn workers who routinely hurl themselves off of the top of skyscrapers due to their work environment.
As we noted then, the ESG term is just a brilliant hook with which to attract the world's most gullible, bleeding-heart liberals and frankly everybody else into believing they are fixing the world by investing when instead they are just making Jeff Bezos richer beyond his wildest dreams.
Here is Bank of America's summary of the 50 most popular ESG funds. Try not to laugh:
As confirmation here are the Top 10 Holdings of the purest ESG ETF available: the FlexShares ESGG fund. Below we present, without further commentary, its Top 10 holdings:
As we said in September:
Two centuries ago, PT Barnum said "there's a sucker born every minute."
Little did he know how appropriate that phrase would be more than a hundred years later to describe investors in the virtue-signaling craze that has taken over markets today.
Le docteur Gérard Maudrux, bien connu dans le milieu médical et dans le monde de la protection sociale pour sa liberté de pensée et son indépendance d’esprit, maintes fois démontré lorsqu’il présidait la CARMF, vient de produire une intéressante revue de littérature sur les bienfaits ou méfaits de l’hydroxychloroquine appliquée au COVID. Cet article de référence est publié sur le Quotidien du Médecin.
Cet article est à lire car il tempère fortement le discours répété en boucle par les pouvoirs publics et leurs vassaux sur la dangerosité de l’hydroxychloroquine, qui justifierait que celle-ci soit interdite ou, en tout cas, fortement entravée, dans ce pays. Et il ne le tempère pas sur la base d’une prise de position idéologique, mais sur des constats factuels et sourcés. Redisons-le, il ne s’agit pas de dire que l’hydroxychloroquine est un médicament miracle. Il s’agit seulement de dire qu’elle n’est pas cette manifestation du diable diffusée par un sorcier qui s’appellerait Didier Raoult.
Et nous rappelons ici nos propos tenus précédemment : rien n’explique (sinon la déraison) la fièvre hystérique qui s’empare de nos élites dès que les mots d’hydroxychloroquine ou de Raoult sont prononcés. Et, comme nous l’indiquions la semaine dernière, il est étrange que la technostructure sanitaire française n’ait pas soutenu des recherches actives sur des traitements propulsés par des laboratoires français.
Qu’en est-il de la synthèse des méta analyses, sur plus de 100 publications et qui excluent les publications douteuses ? Elles confirment toutes l’efficacité significative à tous les stades, moins que dans la phase précoce. Les auteurs trouvent que les résultats, toutes études confondues sont mitigés, mais ils signalent quand même que 68% montrent des effets positifs. Ils constatent également que : « les études négatives entrent principalement dans les catégories suivantes : elles montrent des preuves de confusion non ajustée significative, y compris la confusion par indication ; l’utilisation est extrêmement tardive ; ou ils utilisent une dose trop élevée. » Nous l’avons constaté depuis des mois dans les seules études publiées en France, avec les cas les plus graves volontairement mis dans le groupe HCQ, moyennes d’âges plus jeunes, surdosages, prescriptions « in extremis »,…
Abonnez-vous à cette newsletter quotidienne gratuite, énergisante, qui vous dit l'essentiel pour rester libre dans un monde de plus en plus autoritaire.
Vous vous êtes bien abonné·e à notre newsletter !
L’article Dr Maudrux : « Pourquoi il faut laisser une chance à l’hydroxychloroquine » est apparu en premier sur Le courrier des stratèges.
Stocks sold off Monday as markets fretted over the lack of progress on stimulus and a rise in COVID-19 cases. In his podcast, Peter talked about the sell-off and the political dynamics driving the markets right now. He also drove down to a question nobody seems to want to grapple with: why are the markets and the economy so dependent on and desperate for stimulus?
The Dow was down 650 points on Monday. A 300 point rally off the interday low kept the carnage from being even worse. The Nasdaq fell 189 points and the S&P 500 lost 1.86%. It was the worst day on Wall Street since mid-September. Two factors drove stocks lower – the lack of progress on a stimulus deal and a surge in COVID-19 cases.
The selloff could have been worse if it wasn’t for a big move out of recovery stocks into the “stay-at-home” stocks benefiting from the pandemic. But Peter wondered how long these stay-at-home stocks can continue to buoy the market given they are already significantly overvalued.
And of course, if all of the people who are staying at home and shopping never go back to work and never actually have a job, and the only money they have to spend is the money the Fed creates out of thin air, eventually the dollar is going to collapse and their real purchasing power is going to go down along with it. And a lot of these stocks are going to crash because they’re not going to have any real revenue because their customers are going to be broke and they’re not going to be able to sell these higher-cost products because inflation will drive up the cost of producing all these products that their consumers really can’t afford to buy.”
Nervousness about the election may have also played in the stock selloff. The markets are concerned about their worst-case scenario – gridlock – coming to pass. This would occur if Biden won the White House but the GOP retains control of the Senate. Polling shows some of the Senate races tightening up. Peter has said this would likely be the best outcome for the overall economy, as it would probably mean less stimulus, less borrowing and less money printing. But stimulus is exactly what the markets want, regardless of the effect on the dollar and the actual economy.
If we end up with divided government, with Republicans holding the Senate, I think Republicans in the Senate will actually put more pressure on President Biden than they would have on a President Trump. They’re more likely to cooperate with Trump to give him the spending he wants. But they are more likely, for their own political reasons, for their own base so they don’t get primaried and lose, they will finally find some religion and they will push back against Biden stimulus.”
As a result, Wall Street doesn’t like the possibility of the Republicans maintaining control of the Senate.
Peter said he’s not buying any of this “nonsense.” He thinks the markets are just trying to convince everybody that a Biden win is good for the economy despite the likelihood of higher taxes. We’ll offset the negatives of higher taxes with the positives of more stimulus, so the thinking goes.
But remember, more stimulus comes with bigger government. Bigger government is not a recipe for economic success and it’s not a recipe for stock market success.”
Peter said if Biden does win, he thinks any Biden-related market rally will be short-lived, just like the sell-off after Trump won was short-lived.
When investors have a chance to really think about what a Biden win means, just like when they actually had a chance to think about what a Trump win was supposed to mean - the Trump win was lower taxes and less regulations. That is good for the market. A Biden win means higher taxes and more regulation. That’s bad for the market.”
Peter said we got a small taste Monday of the downside that’s coming in the US stock market.
Nevertheless, the focus has been almost exclusively on stimulus. The conventional wisdom holds that people and businesses need help and it’s time to stop playing politics and provide the help that’s necessary. But the question nobody asks is why are people in such dire straits to begin with?
Most people will point to the pandemic. But as Peter pointed out, we’ve dealt with other big shocks to the economy without a bunch of government stimulus. Just consider World War II. How did people manage? Because they were prepared. They had savings. The economy wasn’t completely levered up on debt going into the crisis.
The fact that we weren’t prepared at all, that’s the problem no one wants to talk about. Why is it that Americans are loaded up with debt and living paycheck to paycheck? Why is the same thing true for so many businesses? Why are the credit losses now going to be horrific? … Because the Federal Reserve kept interest rates so low for so long that people and companies were able to borrow far more money than they ever would have been able to borrow during a normal lending environment. So, it’s because of the Federal Reserve that the society, the country, is so levered up. That’s why we’re so vulnerable. That’s why everybody needs so much help. Because the government crippled everybody with its monetary policies, and also the fiscal policies, and so now, of course, we can’t walk, so we need more government crutches so we can limp around without realizing that all that is doing is exacerbating the problems that already exist. I mean, we’ve got to fess up to reality and stop trying to sober up by drinking more alcohol. But it is a very sobering understanding to have to do that – for reality to be dealt with and stop pretending there’s a government cure for what ails us.
We’re sick because we overdosed on government cures. So, nobody has these conversations. Yeah, people need money. Companies need money. And so we have to stop playing politics and give them the money. Playing politics is giving them the money.
The reason everybody needs the money is because we played politics in the past by making them so dependent on that money, by trying to delay and mitigate every single recession – now we’re in a depression. Had we allowed market forces to operate, we would have had a much healthier economy going into COVID-19 instead of a bubble. And the problem with bubbles is sooner or later, they always find a pin.”
Widespread coolness is expected for more than half the country this week as a late-October Arctic blast makes temperatures feel like winter for millions of Americans across the Plains.
The EC Operational Forecast (With Gray 32 Degree Fahrenheit Line) shows extreme temperature deviations could be more than 15 degrees below-average for much of the Plains this week. The Gray 32 Degree Fahrenheit Line dove into Northern Mexico on Monday and will stay there through Friday.
The Arctic blast is the first season, with temperatures dipping to single digits in Denver on Tuesday morning. Albuquerque, New Mexico, recorded 15 degrees as the bitterly cold air pours in from the Arctic.
US Temperature Map Tuesday 0700 ET
Colder weather will expand to the Northeast Wednesday, with the Gray 32 Degree Fahrenheit Line moving below the Mason–Dixon line by Saturday morning. Here's the EC Operational Forecast (With Gray 32 Degree Fahrenheit Line) for Saturday morning:
"The 6 to 10-day temperature outlook keeps temperatures below average in parts of the Northeast and the South, then above-average temperatures return for most of the country in the 8 to 14-day outlook as we head into the first two weeks of November," said NewsNation Chief Meteorologist Albert Ramon.
For much of the country, US-Lower 48 Heating Degree Days for the next 15 days show Americans will likely turn up their thermostats as temperatures dip from now through Nov. 2, but as Ramon explained above, warmer weather could be ahead of the first half of next month.
US-Lower 48 Heating Degree Days for the next 45 days more or less shows Old Man Winter is arriving.
Natgas hit two-year highs on Monday on the prospects of colder weather.
Goldman recently forecasted dropping temperatures will dramatically slow down consumer activity.
Colder weather and surging COVID-19 cases could be a double whammy that plunges the US economy into a double-dip recession.
The Libertarian Party presidential candidate makes her case for why a third party is needed to bring the troops home.
The 2016 Republican presidential primary debates revealed a sea change. From 2008 to 2012, then-congressman Ron Paul was routinely booed for his criticism of America’s foreign policy. It was even common to hear Republican office holders, commentators, and activists say they “agreed with Ron Paul on everything but foreign policy.” Yet in 2016, candidate Donald Trump was cheered for calling the Iraq war the biggest blunder in American history.
One would have thought Trump’s victory would have resulted in a major reduction of America’s military presence in the Middle East and Afghanistan. However, three years and 10 months after President Trump was sworn into office, at least 3,000 troops will remain in Iraq at the end of the year if Trump’s troop reductions go into effect. How many troops will remain in Afghanistan depends on how successful the military-industrial complex, and their allies on Capitol Hill and in the media, are at undermining Trump.
How did a candidate who was elected in part on a promise of no more useless, endless wars wind up keeping the warfare machine humming along?
Trump also called for dramatically increasing the military budget, repeating the lie that Obama had decimated the military. But U.S. military spending has continually gone up, not down.
Trump has been more successful at stirring up hostilities with Iran than at withdrawing from Afghanistan and Iraq. The biggest reason his actions have not matched his campaign rhetoric is that the entire foreign policy infrastructure in D.C. is controlled by pro-war factions. Even a truly non-interventionist Republican or Democrat would likely fail to roll back America’s military presence overseas.
The House versions of the fiscal year 2021 National Defense Authorization Act (NDAA) contained provisions designed to block Trump from fulfilling his promise to withdraw troops from Afghanistan.
The Senate’s version of the NDAA warned against a “precipitous” withdrawal from Afghanistan. It also expressed concerns about closing any U.S. base located in Europe without offering an alternative, thus putting a monkey wrench in President Trump’s attempt to draw down the number of American troops in Germany.
Even worse, the Senate rejected an amendment by Senator Rand Paul to withdraw troops from Afghanistan. Paul’s measure failed by a vote of 60-33.
For all the often-justified handwringing over how the Republican Party has become a “cult of Trump,” the sad truth is, for most Republican representatives and senators, devotion to Trump stops at the water’s edge.
One reason for the GOP’s fidelity to the warfare state is the military-industrial complex’s outsized influence on Capitol Hill. For starters, the defense industry donated $27 million to political campaigns in 2016.
But the main reason military contractors wield clout with many federal lawmakers is their business model. Instead of manufacturing a complete product at one plant, they make components at various plants spread across the country. This means that many representatives and senators have a vested interest in supporting a large military budget—and thus an interventionist foreign policy—because those weapons produce high-paying jobs in their districts and states.
Too many conservative Republicans, who usually denounce stimulus spending bills, claim that throwing money at failed weapons projects like the F-35 creates jobs and helps grow the economy. The truth is that money heaped on the Pentagon creates less than half the number of jobs that the same amount would create if spent by the taxpayers who had earned it.
The defense industry also maintains its influence through generous donations to D.C.-based think thanks. Recipients of these funds produce research papers, op-eds, congressional testimony, and presentations given to congressional staffers that promote an interventionist foreign policy beneficial to their donors’ bottom lines.
Defense contractors’ support for think tanks is not limited to conservatives. Center-left think tanks and foreign policy scholars also receive funding.
This enables the defense industry to control both sides of the foreign policy debate, no matter the election results. The military-industrial complex wins while U.S. troops fight and die in unnecessary, unconstitutional wars. Taxpayers who fund these wars are saddled with debt and high taxes.
And defense contractors are not the only ones funding pro-defense D.C. think tanks. Foreign governments also provide money in exchange for justification of U.S. interventions on behalf of their countries.
The funding given to pro-war think tanks breeds pro-war political operatives who fill presidentially appointed civil service positions and congressional staffs. This is why President Trump has staffed his administration with neocons like John Bolton, who spend their careers promoting the disastrous foreign policy that Trump had promised to reverse.
The Democratic Party is just as welded to the warfare state as are the Republicans, as was shown by the bipartisan effort in Congress to stop President Trump from withdrawing most of the troops from Afghanistan. Further evidence is provided by the presidency of Democrat Barack Obama. His opposition to the Iraq war was a major reason he bested uber-hawks Hillary Clinton and John McCain in 2008. Yet Obama expanded America’s military presence around the world and infamously made a “kill list” of individuals—including American citizens—subject to summary execution without due process.
The modern Democrats’ love for the war party was also shown by their attacks on Representative Tulsi Gabbard for meeting with Syrian President Bashar-al-Assad. By the logic of Gabbard’s critics, John F. Kennedy should never have negotiated a peaceful end to the Cuban missile crisis. They were willing to attack her, even though she’s a down-the-line progressive and a mixed-race military veteran who would seem an ideal presidential candidate for the Democrats.
The Democratic Party is now fielding presidential and vice-presidential candidates who are all in with the war party. Joe Biden was an instigator of the Iraqi war. Senator Kamala Harris recruited her foreign policy advisors for her presidential bid from the Center for a New American Security, which has long pushed Democrats to embrace war.
While I am grateful for pro-liberty, antiwar Republicans such as Rand Paul, Thomas Massie, and, of course, former congressman and 1988 LP presidential candidate Dr. Ron Paul, the fact is that the war party is too embedded in the infrastructure of the two major parties and the D.C. establishment. Neither Republicans nor Democrats will change our disastrous foreign policy.
If we are to adopt a policy of peace, antiwar activists must work outside the two-party system. We should be guided by independent think tanks that are free of the corrosive influence of the military-industrial complex, citizen groups that pressure elected officials to stand up to the warfare state, and alternative parties that are not beholden to the military-industrial complex.
As the Libertarian nominee for president, I am proud to build on the work of former Libertarian presidential candidates Ron Paul and the late Harry Browne to bring the message of peace, prosperity, and liberty to the American people. As I campaign from coast to coast, the reception I have gotten convinces me that the majority of Americans want peace.
If I am elected, I will begin to bring troops home from the Middle East on day one of my presidency. As a member of a party that is not beholden to any part of the military establishment, I will not budge under pressure from the military-industrial-think-tank-media complex. Instead of seeking a “benevolent global hegemony,” I will make America like a giant Switzerland: armed and neutral. Furthermore, I will remove barriers to free trade with all nations, which will reinforce peaceful relations.
Republicans and Democrats cannot deliver peace because they are loyal to special interests that benefit from continual war.
Libertarians, who have been fiercely committed to a non-interventionist policy throughout their party’s 49-year existence, stand ready and eager to deliver the peace and neutrality that Americans want and need.
“In America, anyone can become President. That’s the Problem.”
This morning’s Porridge is very much written for the non-American audience – please don’t be offended at the temerity of a Scotsman opining on US politics.
With only a week to go before the most important US election ever (since the last one, and before the next one), do we get four more years of Chaotic Trump or will Sleepy Joe Biden take the Presidency? The choice has profound implications for the direction of the global economy, growth, trade, jobs, welfare and the future path of the pandemic-ravaged and financially-crippled West versus an economically resurgent China. The consequences of the next week will be with us for decades – and maybe longer.
The election comes at a nadir for the democratic political system under which Western Economies once thrived. The pandemic has capped out an extraordinarily damaging era of populist politics through which the quality of our elected leaders has declined, while our nations have struggled with low growth, low value jobs, and the growing dysfunctionality of capitalism as a result of the misapplication of monetary policy and regulatory mission-creep since 2008. The West looks tired as we struggle to cope with low growth, financial instability, rising inequality and fraxious social tensions.
What we definitely don’t need is more of the same….
I think we can all agree that if you were looking for the right politician to lead the US, and therefore the West, Donald Trump or Joe Biden would not be anywhere on your list. Trump is generally reviled in Europe for his behaviour and character – but is probably not as bad as he’s portrayed. We don’t really know Biden except as a long-term Washington insider, but, over here we prefer him because he’s not Trump.
Determining who will win is not like a European election. American politics, a bit like US sport, is all about numbers and data. Trying to work out what that data means can be somewhat off-putting. Here in Europe we play the beautiful game of Football, and the fast-paced entertaining battle that is Rugby. Our American cousins have merged these into a micromanaged nonsense that’s all about yards gained and interminable stops where commentators spout numbers and more numbers.
And when you are trying to place your market and investment bets on the Election, you need to understand these numbers – especially at the State Level in the Presidential and Senate races. Just like in US sport, numbers are what matter in US elections.
This morning RealClear Politics shows recent polls to be mixed.
A Rasmussen poll put Trump ahead by 1 point this morning. Rasmussen tends to be an outlier from other polls (and does seem to favour Trump), but they were the most accurate pollster in the 2016 election. Other national polls yesterday put Biden ahead by 7 points – a broadly consistent trend. Biden’s apparent lead is narrowing.
I don’t know how much credence to put on the US polls. There is just so much background noise, too many questions and too many hints and suggestions they may not be reliable. (Let me caveat that – the polls in the UK in 2019 were essentially correct after getting it wrong in 2016.) The fact we don’t trust the polls is a great success for the trailing party – the Republicans will stop at nothing to convince the electorate the race is really close. They were unlikely to ever admit they were losing. If they did, why would supporters bother to turn up?
I’ve been listening, reading, watching, and taking advice from a number of sources, including some very smart US market contacts on both sides of the political spectrum.
For a while it looked as if the election could result in a Biden Presidency and a Republican Senate. Depending on your political perspective, that would be a recipe for either complete gridlock, or could mitigate excessive Democrat tax and spend policies. That option now looks off the table – an all-out win for either side now looks probable. Many of the senate races are now described a “toss-up”. In such a situation any big swing towards one candidate or the other become more important. Let’s not forget; 33% of Americans have already voted.
Let’s briefly discuss the competing narratives around the election.
Democrats have wisely played the Coronavirus card – arguing Trump failed. It’s played to concerned voters and worked as a strategy. In addition, they are happy to point to swings against Trump from younger and female voters, and all the predictable stuff about the electorate turned off by Trump and his family. They talk about White House chaos, leadership by twitter, but are pretty much content to ride with the polls and let the virus lead. Trump hasn’t hit them with anything as strong as the “Crooked Hillary” theme or MAGA. His campaign has lacked the enthusiastic momentum that won in 2016 and turned key states like Pennsylvania and Michigan.
The Republicans are working much harder to argue why the polls are wrong. They raise their success in registering new voters. They explain the polls are wrong because of “shy-Trump syndrome”; how many professionals in cities are scared to admit being a Trump supporter. (More than a few of my Republican chums admit Trumps’ bad, and feel “dirty” voting for him.) Accusing the Biden family of corruption is a key deflection strategy. They attack Biden’s tax and spend policies and accuse him of being a socialist stooge. It’s all pretty much playbook dirty politics stuff.
Yet there are some good reasons to think the Trump vote may be underestimated – in last week’s debate Trump’s success was Biden upsetting critical voters with his comments on phasing out Fossil Fuels and his anti-fracking stance. In some states police forces are successfully mobilising friends and family campaigns against “defunding” programmes. Many Americans find Trump distasteful, but will vote for him because they agree with his trends. That doesn’t make them bad people.
I find it extraordinary Trump called UK journalist and breakfast TV host Piers Morgan over the weekend to tell him why he is winning. Why Trump thinks a UK journalist regarded as a second-rate Boris will swing his election we will never know… except it might address the domestic perception Trump has damaged the Western Alliance (a fact) by showing “highly-esteemed” foreign journalists rate him highly. Last month there was a similar “puff” piece by Nigel Farage.
Whatever the top-line polls say, even hardened Trump supporters admit Biden is likely to win the popular vote by 3-5%. Biden could well win by 7 million votes. Turnout looks set to be the highest in decades at 150mm; 65% of the electorate. High turnout is said to favour Democrats. But, high turnouts in New York and California and Illinois don’t help Biden win the critical electoral college votes.
Biden can win the vote and lose the election.
That’s why the US Election will be decided in the key 16 states. How these states vote will determine the electoral college and also impact senate races.
Florida is the big one for Trump. If he loses Florida he probably loses the White House
Pennsylvania and Michigan are the key states for Biden. If he loses either, he probably loses his chance at the presidency.
What states do the candidates have to win?
· Trump needs to win Texas, Arizona, North Carolina, Iowa, and Georgia.
· Biden needs to win Texas and/or Florida, Wisconsin, Iowa, Ohio, Minnesota, Arizona, New Hampshire, New Mexico and Nevada.
(Maine and Nebraska are also battle grounds, but are a little funny as they send electors by district… but let’s not worry about that.)
Let’s take a look at the latest polls in each key state from RealClear Politics
Florida: Ranges from Biden+2 (CBS), Trump+4 (Rasmussen) – call it a Tie.
Pennsylvania: Biden +5 – Biden to Win – 20 EC votes
Michigan: Biden +9 – Biden to Win - 16 EC votes
Texas: Trump +5 – Trump to Win – 38 EC votes
Iowa: Tie – 6 EC Votes
North Carolina: Trump +1 – Tie – 15 EC votes
Georgia: Biden +1 – Tie – 16 EC votes
Maine: Biden +11 – Biden to Win – 4 EC votes
Wisconsin Ranges from Tie to Biden +5 – Bidento Win – 10 EC votes
Ohio Trump +3 – Trump to Win – 18 EC votes
Minnesota: Biden +6 – Biden to Win – 10 EC votes
Arizona: Trump +1 – Tie - 11 EC votes
New Hampshire: Biden + 12 – Biden to Win – 4 EC votes
New Mexico: Biden + 14 – Biden to Win – 5 EC votes
Nevada: Biden +4 – Biden to Win – 6 EC votes
Nebraska: Biden +7 – Biden to Win – 5 EC votes
There are 538 electoral college votes to be won. There is a great map you can play with on ABC News: https://abcnews.go.com/Politics/2020-Electoral-Interactive-Map
Trump starts with at least 137 safe votes from solid Red Republican states. (Some analysts have that number as 125.) He therefore needs at least a further 133 votes to win the 270 hurdle. Trump looks vulnerable in Florida, North Carolina and Georgia (60 votes) and could lose Texas (38 votes) which was polled at +4 to Biden last week. He could win 29 votes from other battleground states like Ohio and Arizona. Even if he wins all these target states, he still falls short, meaning he needs to win the other states like Iowa and even Biden’s home state of Pennsylvania to win.
Biden starts with 180 safe votes from True Blue Democrat states. (Other estimates go as high as 232 safe votes.) He needs 90 additional votes to win. The polls show Biden is likely to hold his key states and win most of his target states – gaining a comfortable 108 Electoral college votes not counting the tied states. A state that could smash Biden is Texas – if he loses in Texas and Trump wins everything else, Biden will lose in the electoral college unless he takes Florida or a combination of other tied states.
It is going to be “interesting”… There are so many possibilities out there.
There are 28 Senate Seats up for election. 9 will go Republican, 8 will go Democrat, but the remaining 11 are “toss-ups”. All it will take for the Senate to flip Democrat is a few of these to swing in line with a Biden taking Red states. In a worst case scenario we might not know the result on one of Georgia Senate seats till Jan 5th next year, meaning the Senate could be hung and under Republican control till then.
This week it is all about numbers.. This time next week we might be worrying about how the election will play out not in the ballot box, but in the court-room and twitter tantrums.
Scientists have now obtained evidence that one source described as virtual confirmation that COVID-19 antibodies are seasonal, meaning that those with particularly weak immune responses might be susceptible to reinfection, while most people infected with COVID-19 will see their antibody levels degrade over a period of 4-6 months.
Most MSM outlets framed it as a setback for the scientists behind the Great Barrington Declaration. One scientist said this finding could mean that vaccines create a more potent immune response to the virus than the natural response. At the very least, it's a higher bar for vaccines, and could mean a more lucrative outcome if people need to be vaccinated at the start of every "COVID" season.
At the very least, Dr. Fauci has said the first vaccines should be ready for mass inoculation within six months.
The study, carried out by researchers at Imperial College of London, found that antibody prevalence fell by a quarter, from 6% of the population around the end of June to just 4.4% in September, down from levels seen earlier this year.
Immunity has been a hot topic ever since a Dutch woman became the first patient to pass away after being reinfected with the virus.
Th sample size used in the ICL study was massive: some 365,000 randomly selected adults were tested in three waves.
Large, randomized trials like this are considered a "gold standard" in scientific research.
Notably, there was no change in the antibody levels of health-care workers, a sign that repeated exposure potentially can bolster one's immunity to the virus.
Here's more on the study from Reuters.
Scientists at Imperial College London have tracked antibody levels in the British population following the first wave of COVID-19 infections in March and April.
Their study found that antibody prevalence fell by a quarter, from 6% of the population around the end of June to just 4.4% in September. That raises the prospect of decreasing population immunity ahead of a second wave of infections in recent weeks that has forced local lockdowns and restrictions.
Although immunity to the novel coronavirus is a complex and murky area, and may be assisted by T cells, as well as B cells that can stimulate the quick production of antibodies following re-exposure to the virus, the researchers said the experience of other coronaviruses suggested immunity might not be enduring.
"We can see the antibodies and we can see them declining and we know that antibodies on their own are quite protective," Wendy Barclay, head of the Department of Infectious Disease at Imperial College London told reporters.
On the balance of evidence I would say, with what we know for other coronaviruses, it would look as if immunity declines away at the same rate as antibodies decline away, and that this is an indication of waning immunity at the population level."
Those for whom COVID-19 was confirmed with a gold standard PCR test had a less pronounced decline in antibodies, compared to people who had been asymptomatic and unaware of their original infection.
There was no change in the levels of antibodies seen in healthcare workers, possibly due to repeated exposure to the virus.
After insisting for months that there was no evidence of reinfection with COVID-19, even after the first evidence of reinfection emerged, the WHO said via spokesman Tarik Jasarevic that uncertainty over how long immunity would last meant that "acquiring this collective immunity just by letting the virus run through the population is not really an option."
Once again, scientists who signed the Great Barrington Declaration are proposing that we end lockdowns, and rely on other less restrictive ways to fight the virus.
The WHO issued a recommendation of its own recently claiming that lockdowns place disproportionate stress on the poor, and argued that there are better ways to combat the virus.
Are retail bagholders about to get "muppet"-ed again?
Nomura's Charlie McElligott warns that the “election narrative overshoots” continue to swing wildly on the imminent event-risk approach - and partially as a function of horrific market illiquidity, with banks / dealers on facilitation lockdown, as per Risk Management “VaR shock” muscle-memory from 4 yrs ago:
First, it was the “Extended Election Chaos” scenario as vols out into Dec and Jan went super sticky ‘bid’ into what was at the time an almost consensual “buy-in” to the worst-case-scenario of a disputed outcome with vote recounts / Supreme court involvement, fraud allegations, civil disorder and general policy confusion which in-turn scared hedgers straight and saw the bid vol expiries well past the event itself;
Then it was “Blue Wave” mania, which was based upon a rather sudden shift in market view away from “standard” Wall Street views on (negative) Democrat policy implications for the economy and market, and instead, into one where a unified Dem WH / Congress / Senate would see unpredented government spending and fiscal largesse (“Fiscal as the new QE”), in turn creating a growth- and reflation- impulse which could then theoretically offset concerns surrounding tax hikes and re-regulation in one big vol compression trade;
Yesterday, we witnessed a broad repricing of vols higher (at first blush, lots of negative COVID-related headlines especially focused in Europe) - BUT, particularly back into the election event date itself - on what I believe is the increasing concern of a “Split Leadership Outcome,” with Democrats taking the White House and holding Congress but with Republicans holding onto the Senate, where they would act as a thorn in the side of the new Administration and likely see a swing back towards fiscal conservative roots as “last line of defense” on perceived wreckless government spending and overreach - ultimately meaning less incrementally “tighter” deficit- & fiscal- spend from the government.
But, most importantly, McElligoot notes that Nomura's “Intraday ES1 Traded Imbalance” model then too showed that “large lots” - i.e. Asset Manager type flows for lots 100-500 - showed an all day, passive VWAP / TWAP -type offer, as they seemingly reduced down from what was their 92.3%ile net long notional exposure (back to ’06).
In other words, the big boys are leaving the market...
And as SpotGamma notes, while we did get a strong rush of selling off of the 3400 break yesterday, the updated data seems to confirm last nights reading that the 10/26 OPEX flows and dip buyers forced a market recovery.
Its also clear that the selling lacked any real follow through in S&P based on little new SPX put additions. There is now a big put zone at 3300 and a large call zone at 3500. We maintain that it’s a slippery slope if markets shift lower due to the put positions at 3350 on down. The mechanics of negative gamma could push selling, but there is little dealer buying pressure above 3425 and this picture likely holds into 11/3.
For today 3400 is the key pivot area, with Combo Strike resistance at 3420. To the downside we note 3350 as first support, and expect negative gamma to increase sharply if we test that area.
...and don't be a muppet.
The K-shaped recovery continues, and even as some states seeing a sharp pullback in economic conditions, others are thriving. The mid-Atlantic states that comprise the Richmond Fed district are among the latter, and in fact according to the latest Richmond Fed manufacturing index, conditions have never been better with the index hitting the highest in its post-1993 record.
After sliding to a record low -54 in March, the index jumped to 21 in September, just shy of the all time high. The momentum then continued in October, when the mfg. survey hit a record 29, smashing both consensus expectations of 18 and the highest estimate among the 10 economist surveyed which was 19.
The record print was "buoyed by increases in the shipments and new orders indexes, while the third component—the employment index—was unchanged. Firms reported improving business conditions and growing backlogs of orders, overall. Manufacturers were optimistic that conditions would continue to improve in the coming months"
There were two areas of concern: capex declined from 20 to 13, while number of employees was flat at 23:
Looking at employment, the survey results indicated that many manufacturers continued to increase employment and wages in October. However, firms struggled to find workers with the necessary skills. Contacts expected these trends to continue in the next six months.
Finally, in perhaps the best sign of a recovery, the survey find nascent inflationary signs, with average growth rates of both prices paid and prices received by survey participants increased slightly in October. Growth of prices paid continued to outpace that of prices received, but contacts expected the gap to narrow in the near future.
That said, now that the mid-Atlantic region is getting hit by a second (and in some cases third) wave of infections, it's all downhill from the record print.
After September's surprise rebound in confidence, The Conference Board reported a drop in sentiment in October with 'hope' fading. The headline confidence print fell from 101.3 to 100.9 with current conditions ticking up and future expectations fading:
Present situation confidence rose to 104.6 vs 98.9 last month
Consumer confidence expectations fell to 98.4 vs 102.9 last month
The Labor Differential improved to 6.6 (jobs are easier to get) - its highest since March - but plans to buy cars and major appliances slumped (homes rose modestly) as expectations for income gains in the next 12 months dropped.
“If you must break the law, do it to seize power: in all other cases observe it.”
– Julius Caesar
The illegal invasion of Libya, in which Britain was complicit and a British House of Commons Foreign Affairs Committee’s report confirmed as an illegal act sanctioned by the UK government, over which Cameron stepped down as Prime Minister (weeks before the release of the UK parliament report), occurred from March – Oct, 2011.
Muammar al-Gaddafi was assassinated on Oct. 20th, 2011.
On Sept 11-12th, 2012, U.S. Ambassador to Libya Christopher Stevens, U.S. Foreign Service information management officer Sean Smith, and CIA contractors Tyron Woods and Glen Doherty were killed at two U.S. government facilities in Benghazi.
It is officially denied to this date that al-Qaeda or any other international terrorist organization participated in the Benghazi attack. It is also officially denied that the attack was pre-meditated.
On the 6th year anniversary of the Benghazi attack, Barack Obama stated at a partisan speech on Sept 10th, 2018, delivered at the University of Illinois, that the outrage over the details concerning the Benghazi attack were the result of “wild conspiracy theory” perpetrated by conservatives and Republican members of Congress.
However, according to an August 2012 Defense Intelligence Agency report (only released to the public in May 2015), this is anything but the case. The report was critical of the policies of then President Obama as a direct igniter for the rise of ISIS and the creation of a “caliphate” by Syria-based radical Islamists and al-Qaeda. The report also identified that arms shipments in Libya had gone to radical Islamist “allies” of the United States and NATO in the overthrowing of Col. Muammar al-Gaddafi. These arms shipments were sent to Syria and became the arsenal that allowed ISIS and other radical rebels to grow.
The declassified DIA report states:
“AQI [al-qaeda –iraq] SUPPORTED THE SYRIAN OPPOSITION FROM THE BEGINNING, BOTH IDEOLOGICALLY AND THROUGH THE MEDIA… WESTERN COUNTRIES, THE GULF STATES AND TURKEY ARE SUPPORTING THESE EFFORTS… THE WEST, GULF COUNTRIES, AND TURKEY SUPPORT THE [SYRIAN] OPPOSITION… THERE IS THE POSSIBILITY OF ESTABLISHING A DECLARED OR UNDECLARED SALAFIST PRINCIPALITY IN EASTERN SYRIA (HASAKA AND DER ZOR), AND THIS IS EXACTLY WHAT THE SUPPORTING POWERS TO THE OPPOSITION WANT, IN ORDER TO ISOLATE THE SYRIAN REGIME…” [emphasis added]
Another DIA document from Oct 2012 (also released in May 2015), reported that Gaddafi’s vast arsenal was being shipped from Benghazi to two Syrian ports under the control of the Syrian rebel groups.
Essentially, the DIA documents were reporting that the Obama Administration was supporting Islamist extremism, including the Muslim Brotherhood.
When the watchdog group Judicial Watch received the series of DIA reports through Freedom of Information Act lawsuits (FOIA) in May 2015, the State Department, the Administration and various media outlets trashed the reports as insignificant and unreliable.
There was just one problem; Lt. Gen. Flynn was backing up the reliability of the released DIA reports.
Lt. Gen. Flynn as Director of the DIA from July 2012 – Aug. 2014, was responsible for acquiring accurate intelligence on ISIS’s and other extremist operations within the Middle East, but did not have any authority in shaping U.S. military policy in response to the Intel the DIA was acquiring.
In a July 2015 interview with Al-Jazeera, Flynn went so far as to state that the rise of ISIS was the result of a “willful decision,” not an intelligence failure, by the Obama Administration.
In the Al-Jazeera interview Flynn was asked:
Q: You are basically saying that even in government at the time you knew these groups were around, you saw this analysis, and you were arguing against it, but who wasn’t listening?
FLYNN: I think the Administration.
Q: So the Administration turned a blind eye to your analysis?
FLYNN: I don’t know that they turned a blind eye, I think it was a decision. I think it was a willful decision.
Q: A willful decision to support an insurgency that had Salafists, al-Qaeda and the Muslim Brotherhood?
FLYNN: It was a willful decision to do what they’re doing.
Flynn was essentially stating (in the 47 minute interview) that the United States was fully aware that weapons trafficking from Benghazi to the Syrian rebels was occurring. In fact, the secret flow of arms from Libya to the Syrian opposition, via Turkey was CIA sponsored and had been underway shortly after Gaddafi’s death in Oct 2011. The operation was largely run out of a covert CIA annex in Benghazi, with State Department acquiescence.
This information was especially troubling in light of the fact that the Obama Administration’s policy, from mid-2011 on, was to overthrow the Assad government. The question of “who will replace Assad?” was never fully answered.
Perhaps the most troubling to Americans among the FOIA-released DIA documents was a report from Sept. 16, 2012, which provided a detail account of the pre-meditated nature of the 9/11/12 attack in Benghazi, reporting that the attack had been planned ten days prior, detailing the groups involved.
The report revealed that it was in fact an al-Qaeda linked terrorist group that was responsible for the Benghazi attack. That despite this intelligence, the Obama Administration continued to permit arms-trafficking to the al-Qaeda-linked Syrian rebels even after the 9/11/12 attacks.
In August 2015, then President Obama ordered for U.S. forces to attack Syrian government forces if they interfered with the American “vetted, trained and armed” forces. This U.S. approved Division 30 Syrian rebel group “defected” almost immediately, with U.S. weapons in hand, to align with the Nusra Front, the formal al-Qaeda affiliate in Syria.
Obama’s Semantics War: Any Friend of Yours is a Friend of Mine
“Flynn incurred the wrath of the [Obama] White House by insisting on telling the truth about Syria… He thought truth was the best thing and they shoved him out.”
– Patrick Lang (retired army colonel, served for nearly a decade as the chief Middle East civilian intelligence officer for the Defense Intelligence Agency)
Before being named Director of the DIA, Flynn served as Director of Intelligence for the Joint Staff, as Director of Intelligence for the U.S. Central Command, and as Director of Intelligence for the Joint Special Operations Command.
Flynn’s criticisms and opposition to the Obama Administration’s policies in his interview with Al-Jazeera in 2015 was nothing new. In August 2013, Flynn as Director of the DIA supported Gen. Dempsey’s intervention, as Chairman of the Joint Chiefs of Staff, in forcing then President Obama to cancel orders to launch a massive bombing campaign against the Syrian government and armed forces. Flynn and Dempsey both argued that the overthrow of the Assad government would lead to a radical Islamist stronghold in Syria, much like what was then happening in Libya.
This account was also supported in Seymour Hersh’s paper “Military to Military” published in Jan 2016, to which he states:
“Lieutenant General Michael Flynn, director of the DIA between 2012 and 2014, confirmed that his agency had sent a constant stream of classified warnings to the civilian leadership about the dire consequences of toppling Assad. The jihadists, he said, were in control of the opposition. Turkey wasn’t doing enough to stop the smuggling of foreign fighters and weapons across the border. ‘If the American public saw the intelligence we were producing daily, at the most sensitive level, they would go ballistic,’ Flynn told me. ‘We understood Isis’s long-term strategy and its campaign plans, and we also discussed the fact that Turkey was looking the other way when it came to the growth of the Islamic State inside Syria.’ The DIA’s reporting, he [Flynn] said, ‘got enormous pushback’ from the Obama administration. ‘I felt that they did not want to hear the truth.’
[According to a former JCS adviser]’…To say Assad’s got to go is fine, but if you follow that through – therefore anyone is better. It’s the “anybody else is better” issue that the JCS had with Obama’s policy.’ The Joint Chiefs felt that a direct challenge to Obama’s policy would have ‘had a zero chance of success’. So in the autumn of 2013 they decided to take steps against the extremists without going through political channels, by providing U.S. intelligence to the militaries of other nations, on the understanding that it would be passed on to the Syrian army and used against the common enemy, Jabhat al-Nusra and Islamic State [ISIS].” [emphasis added]
According to Hersh’s sources, it was through the militaries of Germany, Israel and Russia, who were in contact with the Syrian army, that the U.S. intelligence on where the terrorist cells were located was shared, hence the “military to military”. There was no direct contact between the U.S. and the Syrian military.
Hersh states in his paper:
“The two countries [U.S. & Syria] collaborated against al-Qaida, their common enemy. A longtime consultant to the Joint Special Operations Command said that, after 9/11, ‘Bashar was, for years, extremely helpful to us while, in my view, we were churlish in return, and clumsy in our use of the gold he gave us. That quiet co-operation continued among some elements, even after the [Bush administration’s] decision to vilify him.’ In 2002 Assad authorised Syrian intelligence to turn over hundreds of internal files on the activities of the Muslim Brotherhood in Syria and Germany. Later that year, Syrian intelligence foiled an attack by al-Qaida on the headquarters of the U.S. Navy’s Fifth Fleet in Bahrain, and Assad agreed to provide the CIA with the name of a vital al-Qaida informant. In violation of this agreement, the CIA contacted the informant directly; he rejected the approach, and broke off relations with his Syrian handlers.
…It was this history of co-operation that made it seem possible in 2013 that Damascus would agree to the new indirect intelligence-sharing arrangement with the U.S.”
However, as the Syrian army gained strength with the Dempsey-led-Joint Chiefs’ support, Saudi Arabia, Qatar and Turkey escalated their financing and arming of al-Nusra and ISIS. In fact, it was “later” discovered that the Erdogan government had been supporting al-Nusra and ISIS for years. In addition, after the June 30th, 2013 revolution in Egypt, Turkey became a regional hub for the Muslim Brotherhood’s International Organization.
In Sept. 2015, Russia came in and directly intervened militarily, upon invitation by the Syrian government, and effectively destroyed ISIS strongholds within Syrian territory. In response, Turkey shot down a Russian Sukhoi Su-24 on Nov 24th, 2015 for allegedly entering Turkish airspace for 17 seconds. Days after the Russian fighter jet was shot down, Obama expressed support for Erdogan and stated at a Dec. 1st, 2015 press conference that his administration would remain “very much committed to Turkey’s security and its sovereignty”. Obama also said that as long as Russia remained allied with Assad, “a lot of Russian resources are still going to be targeted at opposition groups … that we support … So I don’t think we should be under any illusions that somehow Russia starts hitting only Isil targets. That’s not happening now. It was never happening. It’s not going to be happening in the next several weeks.”
Today, not one of those “opposition groups” has shown itself to have remained, or possibly ever been, anti-extremist. And neither the Joint Chiefs nor the DIA believed that there was ever such a thing as “moderate rebels.”
Rather, as remarked by a JCS adviser to Hersh, “Turkey is the problem.”
China’s “Uyghur Problem”
Imad Moustapha, was the Syrian Ambassador to the United States from 2004 to Dec. 2011, and has been the Syrian Ambassador to China for the past eight years.
In an interview with Seymour Hersh, Moustapha stated:
“‘China regards the Syrian crisis from three perspectives,’ he said: international law and legitimacy; global strategic positioning; and the activities of jihadist Uighurs, from Xinjiang province in China’s far west. Xinjiang borders eight nations – Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India – and, in China’s view, serves as a funnel for terrorism around the world and within China. Many Uighur fighters now in Syria are known to be members of the East Turkestan Islamic Movement – an often violent separatist organisation that seeks to establish an Islamist Uighur state in Xinjiang. ‘The fact that they have been aided by Turkish intelligence to move from China into Syria through Turkey has caused a tremendous amount of tension between the Chinese and Turkish intelligence,’ Moustapha said. ‘China is concerned that the Turkish role of supporting the Uighur fighters in Syria may be extended in the future to support Turkey’s agenda in Xinjiang. We are already providing the Chinese intelligence service with information regarding these terrorists and the routes they crossed from on travelling into Syria.’ ” [emphasis added]
This view was echoed by a Washington foreign affairs analyst whose views are routinely sought by senior government officials, informing Hersh that:
“Erdoğan has been bringing Uighurs into Syria by special transport while his government has been agitating in favour of their struggle in China. Uighur and Burmese Muslim terrorists who escape into Thailand somehow get Turkish passports and are then flown to Turkey for transit into Syria.”
China understands that the best way to combat the terrorist recruiting that is going on in these regions is to offer aid towards reconstruction and economic development projects. By 2016, China had allegedly committed more than $30 billion to postwar reconstruction in Syria.
The long-time consultant to the Joint Special Operations Command could not hide his contempt, according to Hersh, when he was asked for his view of the U.S. policy on Syria. “‘The solution in Syria is right before our nose,’ he said. ‘Our primary threat is Isis and all of us – the United States, Russia and China – need to work together.’“
The military’s indirect pathway to Assad disappeared with Dempsey’s retirement in September 25th, 2015. His replacement as chairman of the Joint Chiefs, General Joseph Dunford, testified before the Senate Armed Services Committee in July 2015, two months before assuming office, “If you want to talk about a nation that could pose an existential threat to the United States, I’d have to point to Russia.”
Flynn’s Call for Development in the Middle East to Counter Terrorism
Not only was Flynn critical of the Obama Administration’s approach to countering terrorism in the Middle East, his proposed solution was to actually downgrade the emphasis on military counter-operations, and rather focus on economic development within these regions as the most effective and stable impediment to the growth of extremists.
Flynn stated in the July 2015 interview with Al-Jazeera:
“Frankly, an entire new economy is what this region needs. They need to take this 15-year old, to 25 to 30-year olds in Saudi Arabia, the largest segment of their population; in Egypt, the largest segment of their population, 15 to roughly 30 years old, mostly young men. You’ve got to give them something else to do. If you don’t, they’re going to turn on their own governments, and we can solve that problem.
So that is the conversation that we have to have with them, and we have to help them do that. And in the meantime, what we have is this continued investment in conflict. The more weapons we give, the more bombs we drop, that just fuels the conflict. Some of that has to be done, but I’m looking for other solutions. I’m looking for the other side of this argument, and we’re not having it; we’re not having it as the United States.” [emphasis added]
Flynn also stated in the interview that the U.S. cannot, and should not, deter the development of nuclear energy in the Middle East:
“It now equals nuclear development of some type in the Middle East, and now what we want… what I hope for is that we have nuclear [energy] development, because it also helps for projects like desalinization, getting water…nuclear energy is very clean, and it actually is so cost effective, much more cost effective for producing water from desalinization.”
Flynn was calling for a new strategic vision for the Middle East, and making it clear that “conflict only” policies were only going to add fuel to the fire, that cooperative economic policies are the true solution to attaining peace in the Middle East. Pivotal to this is the expansion of nuclear energy, while assuring non-proliferation of nuclear weapons, which Flynn states “has to be done in a very international, inspectable way.”
When In Doubt, Blame the Russians
How did the Obama Administration respond to Flynn’s views?
He was fired (forced resignation) from his post as Director of the DIA on April 30th, 2014. Defense Secretary Chuck Hagel, who was briefed by Flynn on the intelligence reports and was also critical of the U.S. Administration’s strategy in the Middle East was also forced to resign in Feb. 2015.
With the election of Trump as President on Nov. 8 2016, Lt. Gen. Flynn was swiftly announced as Trump’s choice for National Security Adviser on Nov. 18th, 2016.
Just weeks later, Flynn was targeted by the FBI and there was a media sensation over Flynn being a suspected “Russian agent”. Flynn was taken out before he had a chance to even step into his office, prevented from doing any sort of overhaul with the intelligence bureaus and Joint Chiefs of Staff, which was most certainly going to happen. Instead Flynn was forced to resign on Feb. 13th, 2017 after incessant media attacks undermining the entire Trump Administration, accusing them of working for the Russians against the welfare of the American people.
Despite an ongoing investigation on the allegations against Flynn, there has been no evidence to this date that has justified any charge. In fact, volumes of exculpatory evidence have been presented to exonerate Flynn from any wrongdoing including perjury. At this point, the investigation of Flynn has been put into question as consciously disingenuous and as being stalled by the federal judge since May 2020, refusing to release Flynn it seems while a Trump Administration is still in effect.
The question thus stands; in whose best interest is it that no peace be permitted to occur in the Middle East and that U.S.-Russian relations remain verboten? And is such an interest a friend or foe to the American people?
The author can be reached at firstname.lastname@example.org
Authored by Michael Every via Rabobank,
Because 2020 isn’t finished being 2020 yet we shouldn’t really be surprised: there is water on the moon. As my wife said to me on that news breaking, this explains why Nokia was recently talking about being the first to bring the internet there too; after all, H2O and 5G are the main ingredients of modern life. Yes, the moon is only getting 4G for now, and there isn’t any atmosphere or economy: but that’s already true of lots of place in the Covid-19 world (ba doom tish). 2020 still being 2020, will the next shock be the release of uncropped pictures of the US moon landings which have Moonians in the background sitting in deckchairs and sipping water?
Meanwhile, it’s now a week to US Election Day, and ACB has replaced RBG on the Supreme Court, handing Trump a major political victory.
Some opinion polls are also tightening back into the kind of range they sat in back at this point in 2016. We also have the equivalent jaw-dropping alleged scandals stemming from a drip-drip set of e-mails. Despite the fact the mainstream media and social media have largely opted to ignore or censor such scandal this time round, information, like water, still finds its own level: see the Rasmussen poll yesterday suggesting a majority of all voting demographics, except Democrats, see the allegations as “likely” or “very likely” to perhaps hold some water.
A different kind of pole-star (pollster?)...
However, Nate Silver at fivethirtyeight.com, who still argues his 2016 election prediction for a Clinton win was accurate as he had also given Trump a 30% chance(!), still has Biden with an aggregate 9.5ppt lead and an 87% chance to win, with only a 3% chance of 2020 being a repeat of the 2016 Red Wave that took the White House, Senate, and House. Real Clear Politics has average polling projections of the same general kind.
At the same time, however, a Berkeley Haas study of 1,400 polls from 11 election cycles finds that although they all claim a 95% confidence interval, their outcomes are only 60% accurate – and that is for polls a week ahead of time, with earlier polls even less accurate.
Of course, there are less well-covered polls out there using a different methodology (and dubbed “quasi-partisan” by Silver) which do not sit within the mainstream election narrative. Theirs is a hypothesis, backed by most non-poll signs on the ground (including literal signs), that points to the potential for another Brexit-style class-based voting realignment, and another shock to an Establishment that once again didn’t see it coming in its models. Thus the Daily title derived from the fact that “The water in Majorca doesn’t taste quite how it ought to” should all rhyme perfectly if one is the kind of stereotypical British voter who was usually excluded in predictive likely voter modelling. One week until we know if for a Bloomberg reporter, things will turn out how they ought to. Lots is at stake.
Indeed, another well-known pollster, Frank Luntz, has stated that if the major polls are completely off in 2020 again then “People like me are going to have to find a new profession.” Frank, Frank, Frank. You are too hard on yourself. There will be no need to do anything new or more socially useful a week tomorrow regardless of the outcome. We can be more than 95% sure of that. There will always be a Gramscian market for political-economy narrative dressed up as data analysis.
Look at academic economists: they show one can sell demonstrably failed theories and models for decades and still keep one’s job; and if we treat pollsters the way we do central banks, we will simply increase their budgets so they can tell us --inaccurately-- what more people are thinking about more aspects of their lives. (“Today, 76.5% of men think toothpaste is made of cheese. Our model agrees.”) Or perhaps we can just fold those pollsters into our central banks?
Anyway, stocks were already down on Monday because of risk-off sentiment due to the lack of pre-election fiscal stimulus; one wonders what the markets will do if they start to worry that 2020 is not ‘how it oughta’, and instead 2016 redux. Only a week at most to wait.
On which note, Bloomberg market comment today says that the recent CNY rally will now pause (not linked to the above point, honest guv); that CNY is 40% undervalued; and that “regulators have already started lifting capital controls.”
Now there is a water on the moon story, if so. Because if China really does lift its capital controls ahead, considered opinion is that the currency will be trading at around 10 to the US in very short order. Far, far more liquidity would flood out, not in. That is why they don’t do it. Does that, like the inaccuracy of opinion polls, really need to be made clear in 2020?
Elon Musk, whose company is valued at around $400 billion as a result of what continues to appear to be interesting options activity and continued quarterly profits due to EV credit sales, growing accounts receivable and other interesting accounting anomalies, has now become the world's fourth richest person.
It's a fitting development for a capital market system that has, thanks to the Federal Reserve and a lack of action by the SEC, turned into nothing more than a running joke.
Musk's aggregate compensation from a pay plan put into place only about three years ago has been $11.8 billion. Musk's latest 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.
Musk's total fortune has more than quadrupled this year, to over $100 billion.
As a reminder, the pay plan that has netted Musk more than $10 billion had a 10 year runway. Somehow, Musk has been able to cash in on the plan in about 40% of the time allocated for him to do so.
And it certainly doesn't appear to be due to robust growth for the company. As we noted a couple days ago after Tesla's earnings, it is bizarre that a company valued more than most other automakers in the world combined on its prospective growth, and is larger than both the entire US and European auto sector, shows muted growth ex-regulatory credits:
While superficially, Tesla reported a fifth consecutive quarter of profits, an earnings streak which could add momentum for Tesla’s inclusion in the S&P 500 Index, as noted below a sizable $397MM (up 197% Y/Y, and just under 50% of non-GAAP Net Income) was from the sale of regulatory credits. The amount was fractionally below the record $428MM reported last quarter.
Putting this number in context, TSLA reported GAAP Income of $331MM which were entirely due to the $397MM in regulatory credits.
Musk's compensation goals - as was pointed out by many in early 2018 - have little to do with GAAP profitability and consistent cash flow and instead are focused on 12 market capitalization milestones and 16 revenue and/or EBITDA milestones; the easiest figures to manipulate, should one be so inclined 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".
But instead, Musk did it. And he did it in less than three years. For a stunning comparison, while Musk was working his way to $11.8 billion in compensation, Tesla was was working on a $5.6 billion accumulated deficit, as per the company's last 10-Q.
Après l’attentat de Conflans-Sainte-Honorine qui a coûté la vie à Samuel Paty, plusieurs éléments de l’affaire font état d’une situation délicate pour l’État français, confronté à certains choix du passé. Le 16 octobre 2020, à la sortie du collège du Bois-d’Aulne, à Conflans-Sainte-Honorine, le professeur d’histoire-géographie Samuel Paty (47 ans) est sauvagement décapité par Abdoullakh Anzorov, 18 ans. Fait notable, […]
L’article Critères d’asile, politique en Syrie : la France au pied du mur après l’attentat de Conflans ? est apparu en premier sur Le Média pour Tous.
Yet another night of looting and rioting in America...
As Summit News' Paul Joseph Watson reports, the rioters hit the streets after the police shooting of Walter Wallace Jr. in an incident being described as yet another unprovoked murder of a black man.
In reality, footage of the incident shows Wallace Jr. ignoring numerous warnings from police officers to drop the weapon as he advances on them before being shot.
His name was Walter Wallace Jr. He was given repeated warnings to drop the knife. Rather than listen to those warnings, he charged at officers while brandishing the knife. This was 100 percent a justified shooting, as any rational person can see. https://t.co/BUsYX37ngw— Matt Walsh (@MattWalshBlog) October 27, 2020
NOTE - the tweet of the actual incident has now been deleted from Twitter
However, as we have seen multiple times over the past 5 months, Black Lives Matter agitators don’t let the facts get in the way of yet another chance to riot.
A female sergeant suffered a broken leg as she was struck by a speeding vehicle.
At the Philadelphia BLM riot, a cop got hit or run over by a speeding vehicle. pic.twitter.com/S12XuEoNAi— Andy Ngô (@MrAndyNgo) October 27, 2020
Other videos show BLM criminals looting a clothing store.
Mass looting breaks out at clothing and shoe store during tonight’s BLM riot in Philadelphia. pic.twitter.com/htXN1rsbCk— Andy Ngô (@MrAndyNgo) October 27, 2020
Another clip shows a police car on fire.
Video of the police vehicle that was set on fire in Philadelphia by BLM rioters. pic.twitter.com/vgpIe1mw3q— Andy Ngô (@MrAndyNgo) October 27, 2020
Cops were chased down the street by the mob, who threw projectiles at officers who weren’t wearing full protective riot gear.
Police run away and retreat from a mob of BLM rioters in Philadelphia. pic.twitter.com/mcRONzebDl— Andy Ngô (@MrAndyNgo) October 27, 2020
“Get em, yeah! That’s what I like!” shouts the man filming the scene.
Another video shows riot cops being pelted with trash cans and other objects.
Philadelphia police are outnumbered by hundreds of Black Lives Matter rioters. pic.twitter.com/q2jqvTsLnb— Ian Miles Cheong (@stillgray) October 27, 2020
A total of 30 police officers were injured during the clashes.
* * *
Amid a resurgent US housing market, it is perhaps no surprise that Case-Shiller reports that August (the latest lagged data) saw a serious surge in home prices across the 20 largest US cities. Against expectations of a 4.2% YoY rise, Case-Shiller reported a 5.18% YoY gain - the fastest pace of acceleration since August 2018.
Finally, we note that yesterday's new home sales for September did disappoint, so maybe this is the peak of pent-up demand optimism. Although we note that the average new home price also rose to a new record high.
Phoenix, Seattle and San Diego reported the highest year-over-year gains among the 19 cities (Detroit excluded from report due to virus-related reporting constraints). Chicago and New York reported the weakest YoY gains.
Record temperatures across the West, including a record 121 degrees in southern California by Los Angeles. Massive wildfires charring millions of acres including record large blazes in Oregon, Colorado, Arizona, and California, with the smoke that spread across the entire West. Half of the country is experiencing “severe drought”. Hurricanes ravage the Southeast. Do we need more evidence that climate change is real?
In the face of climate change society must accelerate the storage of atmospheric carbon if we hope to slow and eventually reverse the worse effects of the climate crisis. One of most effective and inexpensive ways store carbon is in our forests (Law et al. 2018).
Yet we have many misinformed politicians, foresters and the US. Forest Service proposing that we log more forests based on the flawed assumptions that timber harvest will slow or preclude large blazes.
The “let cuts more trees” narrative runs directly counter to the climate science which finds that logging is one of the factors contributing significant Green House Gas emissions (GHG) to the atmosphere, intensifying climate warming (Moomaw et al. 2019).
Across the lower 48 states, logging-related emissions are 7.6 times higher than the combined release from all-natural disturbances like fire and insects (Harris et al 2016). Indeed, in Oregon logging contributes to 35% of the state’s emissions—more than all transportation from cars to jets (Koehler 2017).
Even the charred landscapes resulting from large fires store significant amounts of carbon. Keep in mind that what burns in a high severity fire is the fine fuels like needles, cones and small branches. What remains are the boles (snags), roots and in the soil which is where the bulk of all carbon is stored.
Snags left after a fire in the Absaroka Beartooth Wilderness serve as carbon storage. Photograph by George Wuerthner.
By contrast, when a tree is logged, we remove the large boles, and effectively reduce the carbon storage for decades to centuries.
A logged site that has removed all snags and above ground wood near Darby, Montana. Photo by George Wuerthner.
For instance, one study found that 65% of the forest carbon removed by logging Oregon’s forests in the past 115 years was released to the atmosphere with 16% winding up in landfills, with only 19% stored in long-lived products like wood houses (Hudiburg et al.2019).
Fires and insects are both symptoms of climate-driven natural events (Shafer el al. 2010). The warmer the climate, the more intense and large wildfires and insect outbreaks that will occur. Thus logging, by releasing large amounts of carbon into the atmosphere promotes these events.
Unfortunately, there is a push to log our forests in the name of “forest health” and fire prevention.
Ironically, logging will only release more carbon into the atmosphere exacerbating the very factors that enhance fire spread and insect attacks. Logging effects on carbon storage are long-lived. it takes upwards to 350 years to restore carbon in forests degraded by logging.
Soda Mountain Wilderness, Cascades Siskiyou National Monument, Oregon. Photo by George Wuerthner.
One of the best ways to create carbon storage reserves is to designate more wilderness and other preserves like national parks where logging is prohibited.
Beyond the roadless lands that might qualify for wilderness, we should also immediately begin the proforestation of other federal lands degraded by past logging, roading and forest “deforestation” (Moomaw, et al. 2019).
All large fires are the result of climate/weather driven extreme events. Logging, by releasing more carbon into the air, contributes to these large blazes.
It’s time to get off the “reduce the fuels” bandwagon and begin to focus on making communities safe by reducing the flammability of homes, and by keeping as much carbon in the forest as possible. Logging won’t do that.
Harris, NL et al. 2016. Attribution of net carbon change by disturbance type across forest lands of the conterminous United States. Carbon Balance Manage 11:24. https://cbmjournal.biomedcentral.com/articles/10.1186/s13021-016-0066-5
Hudiburg, TW, BE Law, WR Moomaw, ME Harmon, JE Stenzel. 2019. Meeting GHG reduction targets requires accounting for all forest sector emissions. Environ. Res. Lett. 14: 095005. https://iopscience.iop.org/article/10.1088/1748-9326/ab28bb
Law, BE, TW Hudiburg, LT Berner, JJ Kent, PC Buotte, ME Harmon. 2018. Land use strategies to mitigate climate change in carbon dense temperate forests. Proc. Nat. Acad. Sci. 115(14):3663-3668. https://doi.org/10.1073/pnas.1720064115
Moomaw, WR, SA Masino, EK Faison. 2019. Intact Forests in the United States: Proforestation Mitigates Climate Change and Serves the Greatest Good. Front. For. Glob. Change https://doi.org/10.3389/ffgc.2019.00027
Shafer, Sarah, Mark E. Harmon, Ronald P. Neilson, Rupert Seidl, Brad St. Clair, Andrew Yost. 2010. The Potential Effects of Climate Change on Oregon’s Vegetation. Climate Change.
China keeps telling the world to stop buying the yuan, and the world keeps refusing to listen.
Just over two weeks after Beijing made it easier to short the yuan after the PBOC cut the reserve requirement ratio for FX derivative sales from 20% to 0%, a move which was "an attempt to moderate the yuan's increase", and which Goldman said "likely signals the PBOC's discomfort with the recent rapid appreciation of CNY", yet which failed to lead to a sustainable drop in the yuan, On Tuesday China lobbed another shot across the bow of the increasingly strong yuan when a statement on website of China Foreign Exchange Trade System announced that some banks that contribute to the yuan’s daily reference rate have recently halted the use of the counter-cyclical factor (CCF).
The confirmation followed a Reuters reports that the PBoC has asked banks to neutralize the counter-cyclical factor which is typically used when the currency is weakening at a pace that is uncomfortable for the central bank i.e. effectively removing it in the midpoint fixing. Under the reported tweak, lenders would have more room to submit quotes for a weaker fixing and guide the currency lower in the spot market, which is precisely Beijing's goal in light of the recent yuan appreciation. The move comes as Goldman writes that the "countercyclical factor has been muted recently" as a result of the recent strength in the Yuan.
As a reminder, the counter-cyclical factor was introduced by the PBOC on May 26, 2017 to reduce exchange-rate volatility while undermining efforts to increase the role of market forces. At the time, the move was seen as Beijing "moving the goalposts" in its bid to reduce yuan volatility, to punish currency manipulators (read Yuan shorts) and limit capital outflows (the currency had weakened for three straight years, triggering draconian capital controls and the surge of bitcoin). The CCF was then suspended in January 2018 when the yuan surged, only to be reinstalled later that year when the Yuan slumped again.
And now the CCF has been re-suspended again.
According to Citi FX trader Charmaine Cheok this is "yet another signal from the central bank that they are loosening the reins on the currency and allowing for more flexibility. I reckon the reason the market is moving higher on spot now is merely a reflection of positioning, this announcement doesn't have any immediate impact on spot."
Other trading desks agreed, noting that this is in line with the policy direction to allow the FX to be more market driven and ties into the goal to promote RMB internationalization. Or at least allowing it to be market driven when it is strong, hoping the recent deflationary appreciation in the yuan will end.
In any case, now that China has confirmed the move, strategists expect higher volatility of the CNH/CNY given the CCF typically dampens stronger USD impact on fixing more than the appreciation side, even if the actual impact could be relatively limited.
While the market impact was muted indeed, the offshore yuan fell after the Reuters report, dropping as much as 0.34% to 6.7234 a dollar afterward. The currency has rallied 6.9% from a low in May and last week reached a two-year high.
And now that the PBOC has both cut reserves and re-suspended the CCF in hopes of weakening the yuan, and seemingly failed...
... the question everyone should be asking is what will China do now to further devalue its currency which continues to surge on the back of dollar weakness and China's "V-shaped recovery" One wonders: is China's economy about to suffer an "unexpected" sharp spike in covid cases to help the PBOC hammer the yuan?
This post was originally my comment to a person on Facebook, which somebody then deleted. This person repeatedly throws out the 1.2 M deaths worldwide number and I finally lost it and posted a response to him after he scolded people for “spreading disinformation and not listening to science”. He actually told people disputing the Second Wave Hysteria to “shut up and listen to the government and science”.
As one of my all-time favourite economists, Thomas Sowell, would say…. “Oh dear, where to begin?”
1 million or 1.2 million deaths worldwide sounds like a big number and on its own you can use it to club “Covidiots” into silence, that is, until you actually look at it.
For starters, bandying out a number, any number in isolation is meaningless. For any number to have any relevance, to anything, it has to be part of a data set or otherwise part of some meaningful comparison.
If we take the 1.2 million COVID deaths worldwide, at it’s face (more on that below), the obvious question then becomes “is that good or bad?”
The most useful signal we can get from a global COVID death toll is how it compares to what is called the “Absolute Fatality Rates” globally, which is simply the rate of all fatalities from all causes.
Source https://ourworldindata.org/excess-mortality-covid You can pick different countries. Canada was not an option, but most of the curves look the same.
From the charts, we can clearly see, there was a lot of excess mortality in March and April, and then, like every other meaningful metric around Coronavirus, it drops off drastically and starts to level out, with a slight seasonal rise as we head into the winter.
Interestingly, in “no lockdown” Sweden, it turns out their absolute death toll is much lower than one would think:
It could possibly come in lower by the end of the year, but if not, will come in not that much higher. Not as high as, say, the US or England.
Sadly, a lot of people die every day, and I’m sure you’ve seen memes on social media on how many more people die from other causes like Tuberculosis (1.4M in 2019) than COVID-19.
In the US, where the COVID death toll currently sits at 225K, it is estimated that medical malpractice kills 250K Americans a year.
But an even bigger number, according to the WHO, is that alcohol abuse kills 3 million people annually, and that number will surely go even higher this year given the massive spike in mental illness, domestic violence, child abuse, depression and suicide caused by the lockdowns.
If this is about saving lives, we could literally bring those alcohol related deaths to zero, turning it off like the flick of a switch by instituting a global ban on alcohol. We could do it tomorrow. Should we? The lives we save may include your own.
In fact if we banned alcohol then we could let Coronavirus run and still be ahead nearly 2M preventable deaths annually, provided COVID-19 kept going with the same intensity it was going in March and April, which it clearly isn’t (see below).
Of course, nobody would seriously entertain that, and they could probably articulate some decent logic around why we shouldn’t.
But they may dismiss it without considering how closely the lockdown approach toward reducing COVID fatalities is analogous to a worldwide ban on alcohol to eliminate alcohol related deaths would be. Especially since we also know that a large portion of coronavirus fatalities die with COVID-19 and numerous other comorbidities* than of it (however, see my footnote on that at the end of this post).
In that sense, alcohol related carnage is very similar. Few alcoholics drink themselves to death outright. Comparatively more kill themselves (and others) in car accidents, commit suicide, or generally wreck their livers, hearts, kidneys, brains or generally run themselves down so low nearly anything else will finish them off.
Case counts are clearly rising again globally, that much is true and we have oodles of data to track it. With it, there come fears of the dreaded “Second Wave” of fatalities.
In the often cited Spanish Flu of 1918, the bulk of the fatalities came in the second wave. However, the Spanish Flu was a very different pandemic than the one we have today. That one attacked people right in the early years of the prime-of-life age curve:
Scientists believe the nature of that strain caused “cytokine storms”, the phenomenon where the immune system overreacts and attacks itself. In a perverse twist of fate, this made the population with the strongest immune systems more vulnerable to the flu.
Contrast with COVID-19 where nobody disputes that the most vulnerable members of the population are the elderly and those with underlying medical conditions that render them immuno-compromised. In this sense, comparing 1918 to COVID-19 is not accurate or useful.
So, bear this in mind as I put in the graph below of how the Coronavirus Second Wave is playing out when it comes to case counts vs fatalities:
If we were in for a 1918-style Second Wave fatality overrun, we would see it in the data. As I pointed out in my previous post, the above data comes from the Province of Ontario, but pretty well all graphs from locales undergoing second waves in case counts, look the same. The fatalities are riding the floor (that “spike” in the fatality count was a data correction where they took previously missed data from the proceeding 90 days, and added them all to 2 data points), but the case counts are going up, as are the number of tests.
Right now the slope of the case count far exceeds the slope of the fatalities.
For the fatalities to come in anywhere near the Second Wave of 1918 scenario, the slope of the fatality line needs to blast off in a near vertical line right now. In the Ivor Cummins interview he mentioned Dr. Sunetra Gupta’s work indicating that COVID seems to peter out when it hits 20% of the population (but I can’t find the cite). If true, it is hard to envision a scenario where that is mathematically possible.
If not true, and we’re about to experience a Second Wave of fatalities, it would be impossible to occur without seeing it in the data and right now, all of the data, everywhere is showing either a moderate rise with seasonality, or an aggregate, overall decrease in fatalities.
All of this should be good news, but for some reason, people become very upset when you try to walk them through this. I’m open to all logic, data and science based objections or counter-points to where I am wrong on this, bearing in mind that “SHUT UP AND LISTEN TO THE GOVERNMENT AND SCIENCE” isn’t a logical, scientific or data driven counter-argument.
I would close out with two additional reading exercises, one, I would go look at and sign The Great Barrington Declaration and two, have a look at the comparison of The Great Barrington Declaration with what’s called “The John Snow Memorandum“.
(*The number you see bandied around a lot is 94% of all COVID-19 fatalities had comorbidities. This number largely keys off CDC data that only 6% of fatalities list only COVID-19 as a c.o.d. If you look at the CDC data on what the comorbidities are, the biggest one accounting for close to half of all fatalities, especially in the elderly, is pneumonia and influenza. I think it’s inaccurate to just net-out all of those cases and dismiss them as comorbidities because that is one of the most common ways respiratory viruses manifest. But that said, the data, when you consider comorbidities and the looseness with which COVID gets added to c.o.d’s, what all this means is that the headline number for fatalities is the top boundary. They aren’t higher, and they are probably for all practical purposes, lower).
August's significant slowdown in the rebound of US Durable Goods Orders was expected to continue in early September data, but instead the Census Bureau printed a big surprise beat, rising 1.9% MoM (against +0.5% exp).
However, headline durable goods orders remain (marginally) lower on a YoY basis (-0.4%) and below February's pre-COVID levels...
Core capital goods orders, a barometer for business investment which excludes aircraft and military categories, rose 1% in September, also more than forecast, after an upwardly revised 2.1% advance a month earlier.
Finally, we note that there is a significant rise in inventories relative to shipments across many sectors...
If you build it, they will come? They better!!
* * *
Update (1200ET): It's noon in the US, so here's a handful of major COVID-19 headlines that have hit this morning.
In Arizona, new cases ticked back above 1,000 (1,157) on Tuesday, while deaths climbed by the largest margin in nearly a week. That's up from 801 on Monday, and 1,040 from last Tuesday.
In England, deaths due to the virus have jumped 5x in a month as the spread picks up pace once again, especially in the northern parts of the country like Greater Manchester where local governments have battled with BoJo over terms of lockdowns and other restrictions.
Switzerland has "no time to lose" and faces another national lockdown as the virus puts the Alpine Country in danger of running out of ICU beds. The head of the Swiss advisory task force, which has been recommending policy related to the virus, said the country is facing a more serious outbreak than in March, though deaths have remained subdued. The country of just 8.5 million reported 5,949 new cases on Tuesday. The Swiss governing council, which makes the ultimate decision,, will meet on Wednesday to discuss next steps.
"We have no time to lose. There are no alternatives to drastic measures," the president of the advisory Covid-19 taskforce said on Tuesday, adding that the situation is more serious than in March during the peak of the first wave of the pandemic.
Russia has begun production of a second COVID-19 vaccine that hasn’t completed trials as the Kremlin rushes to develop a shield against the pandemic, with output for the vaccine, developed by former biological weapons lab Vector State Virology and Biotechnology Center in Novosibirsk, set to ramp up by the end of the year, Anna Popova, the head of Russia’s public-health watchdog, said at a conference Tuesday, according to Bloomberg. Putin announced approval of the vaccine by Russian regulators earlier this month.
* * *
Update (1115ET): Pfizer's CEO Albert Bourla may no longer be President Trump's favorite, after confessing that preliminary data on the efficacy of Pfizer's vaccine candidate won't be coming later this week, like he had promised during a recent letter to investors, where he said the vaccine would be ready at "the speed of science", before explaining that the company was shooting to apply for an EUA from the FDA by late November.
And like liberals like to remind us, science doesn't conform to political priorities.
On a call with investors Tuesday, Pfizer CEO Albert Bourla said that the company doesn’t expect to make any announcement on its trial until at least a week after the data and safety monitoring board conducts its review of the company’s phase three vaccine trial. The board, which will assess whether its trial with German drugmaker BioNTech has been successful, has not conducted an interim efficacy analysis yet, Pfizer said.
Bourla urged "patience", but savvy investors probably understood that is initial timeline was overly optimistic, slanted to appeal to shareholders, along with the so-called "Audience of One".
"Let’s all have patience," Bourla said on the call. "I know how much the stress levels are growing. I know how much the vaccine is needed for the world." The phase three trials are a critical last step needed to get the vaccines cleared for distribution. Three other U.S.-backed candidates are in phase three: Moderna, AstraZeneca and Johnson & Johnson.
Pfizer expects to apply for an emergency use authorization with the Food and Drug Administration next month. Since early September, Bourla has repeatedly said the company could have late-stage vaccine trial data as early as October. The timeline drew concerns and skepticism from infectious disease experts and scientists who also feared a vaccine authorization could be influenced by politics, not science. President Donald Trump has insisted a Covid-19 vaccine could be ready before Election Day.
Earlier in the day, Pfizer said it had enrolled more than 42,000 volunteers in its late-stage trial. It said nearly 36,000 of the volunteers have already received the second of its two-dose Covid-19 vaccine. In September, Pfizer expanded the enrollment of its phase three trial to up to 44,000 volunteers from the initial target of up to 30,000. The vaccine contains genetic material called messenger RNA, or mRNA, which scientists hope provokes the immune system to fight the virus.
Meanwhile, WSJ pointed out that coronavirus fatigue is real, and might be spreading as quickly as the virus itself.
* * *
Already Tuesday morning we are seeing some headlines out of Europe that portend more headlines that could spook markets later on in the session. For starters, a second Bavarian county has declared a partial lockdown. Rottal-Inn has recorded well over 200 new infections per 100,000 inhabitants over the past week, well above the threshold of 50 new infections per 100,000 people at which new measures are required.
On Tuesday, the Robert Koch Institute reported 11,409 new infections, bringing Germany's total to 455,829. Another 42 people died on Tuesday, bringing the country's overall virus death toll to 10,098. Hospitals and ICUs are filling up again and German Chancellor Angela Merkel has expressed grave concern, saying the current restrictions are not strong enough to slow down the spread of the virus, as the country widely expects her government to impose more nationwide rules shortly. These could include closing restaurants and stopping live events.
Merkel will meet with the state governors Wednesday. The German press has reported that new restrictions are expected, including taking school closures and restrictions on nonessential businesses nation-wide. It comes after Italy, Spain and a host of other European countries imposed new COVID-inspired restrictions over the weekend.
But looking ahead, all eyes are on France, where a government minister recently warned the pace of infections might be as high as 100k/day, 2x the official total. On Wednesday, President Emmanuel Macron, Prime Minister Jean Castex (Macron's virus point man) and other top officials are meeting to discuss new nationwide restrictions, possibly including another brief lockdown, something that Macron has said would be 'unavoidable' if the condition deteriorates beyond a certain point.
The Local published a handy guide to the different types of measures reportedly under consideration, which, at this point, is either localized lockdowns (Paris, Lyon and Marseille and possiby other cities and metro areas) or a nationwide closure (text below courtesy of the Local).
1. Total lockdown
The first option is a total, nationwide lockdown such as the one France imposed in March. Back then, the whole country was confined to their homes and only allowed out for short periods to run essential errands such as grocery shopping, medical appointments and walking the dog.
French political commentators say this is the least likely scenario because of the high economic and psychological costs that would entail.
"I think that Macron is desperate to avoid another complete lockdown - for economic reasons but also for reasons of public order. A second “confinement” would be resisted much more widely than the first," The Local's political commentator John Lichfield said.
Delfraissy said the main goals of the government was to protect France's elderly and vulnerable and maintain economic activity, while at the same time reducing the spread of the virus.
If the government were to impose a new lockdown, it would likely be adapted to the lessons drawn from this spring, avoiding to close down parts of society where the health gains were small compared to the economic and social costs - such as primary schools.
"It would probably allow for a certain level of educational activity and a certain number of economic activity," Delfraissy said, adding that this kind of lockdown "could be set in place for a shorter period of time if it were to be introduced now."
He also said this kind of lockdown would likely be followed by a period of curfew such as the one in place now.
2. Local lockdowns
Another option is to continue the government's strategy to adapt measures to local conditions and introduce lockdowns in the country's hardest hit areas.
This would target areas with high levels of spread and areas where hospital struggle to cope with the pressure of new Covid-19 patients, such as Paris, Marseille and Lyon.
"I'd rather have local lockdowns now than a nationwide lockdown at Christmas," Damien Abad, parliament chief for the rightwing opposition Les Republicains, told France Info radio.
3. Weekend lockdowns
The third option would be a lighter and adapted version of lockdown, which could include measures such as a weekend confinement and an earlier curfew than the 9pm curfew currently in place in roughly half of the country.
"This would be much tougher than the curfew currently in place," Delfraissy said about that option.
Such a strategy has received support from a group of doctors in Lyon, who called for a 7pm curfew and a weekend lockdown.
"The situation is serious and we cannot afford to take half-measures any longer," they said in a press statement.
This strategy could also entail closing secondary schools, high schools and universities, such as suggested by Antoine Flahault, Director of the Institute for Global Health at the University of Geneva, which monitors the development of Covid-19 in the world.
We already have taken lockdown measures, they might be sufficient," he told French media.
* * *
Meanwhile, France's small businesses are understandably anxious. On Tuesday morning, the CPME confederation of small and medium-sized businesses warned that a partial or total lockdown could risk provoking an economic collapse. Companies are "much more fragile than in March" and many, especially the smallest, would be incapable of taking on additional debt, the CPME says in statement on Tuesday "We would risk seeing a collapse in the French economy, a sort of unprecedented third wave, this time an economic one," CPME says
Here's some more COVID-19 news from overnight and Tuesday:
Russia is balking at reintroducing tough measures even as its outbreak explodes and deaths hit record highs. Masks will be compulsory in some public places starting on Wednesday, but the authorities are avoiding action that could hurt businesses. The consumer health watchdog recommended on Tuesday to close bars and restaurants from 11 p.m. to 6 a.m. amid reports that many hospitals are at capacity. Kremlin spokesman Dmitry Peskov said earlier the authorities are confident they can handle the latest wave without a lockdown (Source: Bloomberg).
Eli Lilly said last night that it would be ending clinical trials for patients in a hospital setting after NIH researchers found that BAMLANIVIMAB, one of the antibody therapeutics the company is working on, doesn't help to improve hospitalized patients recovery from advanced stages of the virus, although Eli Lilly noted that all other studies related to its treatment are ongoing. It's the latest setback to therapeutics. The FDA recently gave remdesivir, a drug developed by Gilead originally to treat ebola, the greenlight for widespread use, even as studies show it has little to no benefit (Newswires).
The French government is reportedly mulling a localized lockdowns for the Paris, Lyon and Marseille metro areas, which would include 7pm curfew, a public transport shutdown and closing non-essential shops, while reports noted that a three-week lockdown could start from Friday evening with the details to be announced on Wednesday (Source: Bild).
Germany Economy Minister says that the number of new infections in the nation are rising exponentially and will likely have 20k daily new infections by the end of the week (Newswires).
Imperial College London/Ipsos MORI study among 365k randomly selected adults which conducted tests at home, showed that 4.4% had antibodies in September vs. 6.0% in June which suggested the antibody immunity may not last over time in some of those that were infected. (Newswires) Russia is to impose new COVID-19 restrictions (Source: RIA Novosti).
Here we go again. After plunging to new lows, the calls for the end of the “bond bull” market mount each time rates rise. Is this time the end of the “bond bull?” Or, is there another huge bond-buying opportunity to come?
We recently reduced our exposure to bonds, the first time in years, due to the more extreme overbought condition of Treasury bonds following the pandemic’s onset. The long-term chart of yields below shows this to be the case.
There are two critical points to take away from the chart above.
Interest rates are currently extremely oversold (top and bottom panels), suggesting that rates could indeed rise over the next few months. Such could coincide with another stimulus package or the passage of an “infrastructure” bill that leads to short-term inflationary concerns.
When rates do rise from deeply oversold levels, there is a point where high rights collide with debt levels triggering either a credit-related event, a stock-market correction, or worse.
There are currently two significant risks from rising interest rates, which investors should heed.
One of the primary themes used by the “Permabulls” is that “valuations are cheap due to low interest rates.” That argument has been the clarion call of a generation of investors who have ignored fundamentals and valuations to chase market returns.
Since 2019, when earnings growth began to deteriorate in earnest, investors bid up shares. As such, the primary driver of returns, as shown below, has come from “multiple expansion.”
The “hope” remains that earnings growth will eventually catch up with valuations. However, despite being 3/4ths of the way through 2020, the outlook for earnings continues to deteriorate. In just the last 15-days, the estimates for 2021 have declined by almost $7 per share despite repeated statements of a recovering economy.
There are two problems with the thesis that “low rates justify high valuations.”
Historically, such has not ever been the case; and,
When rates rise, valuations quickly become an issue.
However, since stock prices reflect economic growth, the impact of rising rates on the economy is a far more significant issue.
People don’t buy houses or cars. They buy payments. Payments are a function of interest rates, and when interest rates rise sharply, mortgage activity falls as payments rise above expectations. In an economy where roughly 70% of Americans have little or no savings, an adjustment higher in payments significantly impacts consumption.
Rising interest rates raise the debt servicing requirements, which reduces future productive investment.
As stated above, rising interest rates will immediately slow the housing market taking that small contribution to the economy. People buy payments, not houses, and rising rates mean higher payments.
An increase in interest rates means higher borrowing costs. Such leads to lower profit margins for corporations reducing corporate earnings and financial markets.
The negative impact on the massive derivatives and credit markets is the Fed’s worst fear.
As rates increase, so does the variable rate interest payments on credit cards. With the consumer struggling with stagnant wages and increased living costs, higher credit payments lead to a contraction in spending and rising defaults.
Rising defaults on debt service will negatively impact banks, which are still not adequately capitalized and still burdened by massive levels of bad debts.
Many corporate share buyback plans and dividend issuances are accomplished through cheap debt, leading to increased corporate balance sheet leverage. That will end.
Corporate capital expenditures are dependent on borrowing costs. Higher borrowing costs lead to lower CapEx.
The deficit/GDP ratio will begin to soar as borrowing costs rise. The many forecasts for lower future deficits will crumble as new forecasts begin to propel higher.
I could go on, but you get the idea as we discussed concerning debt-to-income ratios:
“Such is also why interest rates CAN NOT rise by very much without triggering a debt-related crisis. The chart below is the interest service ratio on total consumer debt. (The graph is exceptionally optimistic as it assumes all consumer debt benchmarks to the 10-year treasury rate.) While the media proclaims consumers are in great shape because interest service is low, it only takes small increases in rates to trigger a ‘recession’ or ‘crisis’ event.”
Am I saying rates can’t rise at all?
Absolutely not. However, there is a limit before it negatively impacts the economy, and ultimately the stock market.
In June of 2013, when the cries of the “death of the bond bull market” were rampant, I made repeated calls that then was an ideal time to be a “buyer” of bonds.
“However, the recent spike in interest rates has certainly caught everyone’s attention and begs the question is whether the 30-year bond bull market has indeed seen its inevitable end. I do not think this is the case and, from a portfolio management perspective, I believe this is a prime opportunity to increase fixed income holdings in portfolios.”
As shown in the chart below, that was the correct call and, despite repeated wrong calls by the mainstream analysts, bonds remained in an ongoing bullish trend.
Since interest rates are the inverse of bond prices, we can look at a long-term chart of rates to determine when bonds are overbought or oversold.
In 2019, rates began to slide slower as the realization that economic growth was weakening weighed on outlooks. As the yield curve began to invert, the Federal Reserve stepped in with expanded “repo” operations to shore up financial institutions.
Rates kept going lower.
In March of 2020, the economy was shut down due to the pandemic causing rates to plunge to record lows.
The plunge in rates and massive Fed liquidity caused stocks to surge to new highs despite an underlying recessionary economy.
Currently, the plunge in interest rates pushed bonds to an extreme “overbought” condition.
Such suggests the most likely target for rates in the near term could be as high as 2.0%. While an increase of 1.2% from current levels doesn’t sound like much, that increase would push bonds back to “oversold.” That move will provide the best opportunity to increase bond exposure in portfolios.
We can confirm the same using a very long-term chart (50-years) of 10-year interest rates overlaid with a 10-year moving average. As you can see, that moving average has provided formidable resistance and denoted every peak in rates going back to 1988.
Currently, with interest rates at the bottom of their long-term trend, the risk is that rates could indeed rise in the months ahead.
What could cause such an increase in rates?
A massive debt-funded stimulus package that sends increased amounts of funds directly to households.
More debt-funded infrastructure programs.
If the government further increases deficit spending programs that fail to produce economic benefits such as universal basic incomes.
An increase of economic activity as the economy reopens, and a post-recessionary recovery occurs.
If there is a point where the Federal Reserve is unable or unwilling to monetize the entirety of the debt issuance
A lack of demand by foreign buyers of U.S. debt over concerns on economic strength and financial stability due to debt-to-GDP ratios.
These lead to concerns over temporary inflationary spikes, which could drive interest rates back to the top of the long-term downtrend.
While bond prices currently remain overbought, such a condition will likely not last very long. As shown below, markets and volatility have an inverse relationship with rates, hence the non-correlation for portfolios. The long-term log-chart of interest rates and the stock market tells the tale.
This analysis also suggests that the correction that started in March is likely not over as of yet in the longer term. If rates rise back toward the long-term downtrend, bond prices will come under pressure as the stock market corrects.
“The 4 best performing sectors are:
The 4 worst performing sectors are:
The 2 best performing broad categories are:
The 2 worst performing sectors are:
Commodities: Crude and Copper are positive over half the time. Crude is the best performing commodity, historically.
Gold is the worst-performing commodity; it is only positive 14% of the time.
2 more focus items:
TECH beat the S&P500 100% of the time
Utilities underperformed the S&P500 100% of the time”
In the short term, we have cut our bond exposure and have begun to shift our allocations to protect portfolios for a rise in interest rates.
However, as rates rise within their technical downtrend, the media will be replete with headlines about the death of the 40-year “bond bull market.”
It won’t be.
The stock market will defy higher rates initially until rates start to undermine the valuation story.
A weaker economy will undermine the valuation story as higher interest rates impede consumption.
The bullishly biased media will find themselves lost as to why stocks crashed and earnings fell.
While in the very short-term, the current overbought condition suggests we could see more downside pressure in bonds over the next few months. Such would not be surprising.
However, as we approach that point where the market begins to realize the impact of higher rates on economic growth and corporate profitability, bonds will again emerge as a haven for investors against market declines.
In an economy that is $75 Trillion in debt, requires $5.50 of debt per $1 of growth, and running a $3 Trillion deficit, rates can’t rise much.
Which is also why the Federal Reserve is now forever trapped at zero.
U.S. index futures and European stocks rebounded on Tuesday following the S&P 500’s worst day in a month as investors parsed through strong corporate earnings which offset Monday's SAP shocker, while bracing for volatility ahead of Election Day, assessing rising coronavirus cases across the globe and conceding that a fiscal stimulus deal just won't happen now that the Senate has closed for recess after rushing through the appointment of Amy Coney Barrett to the SCOTUS late on Monday night, which was also Hillary Clinton's birthday. AMD's $35 billion acqusition of Xilinx also helped boost trader optimism.
The S&P 500 and Nasdaq hit three week lows on Monday as record number of new coronavirus infections in the United States and some European countries and a lack of agreement in Washington over the next U.S. fiscal stimulus raised worries about the economic recovery. The chances are "very, very slim," Appropriations Chairman Richard Shelby said talking about a stimulus, pointing out the patently obvious. Differences between the two sides “have narrowed,” but “the more it narrows, the more conditions come up on the other side,” White House economic adviser Larry Kudlow told reporters. Of course, Nancy Pelosi remains optimistic, her spokesman said, but she's used similar language throughout three months of talks as she does not want to take the blame for the continued gridlock.
Also on Monday, the VIX spiked to its highest closing level in nearly two months on "concerns" about President Donald Trump's unexpected victory or the uncertain election outcome we first reported on Sunday night. As we also reported, while Joe Biden leads the official polls, the race is much tighter in battleground states which determine the election outcome.
In premarket trading, Drugmaker Eli Lilly fell 4% after it reported a fall in quarterly profit. Industrial companies 3M Co and Caterpillar Inc were also slightly lower after results. Investors are looking forward to results from Apple, Amazon.com, Alphabet and Facebook Inc in an earnings-heavy week as the technology giants have managed to stand out during the coronavirus pandemic. Chipmaker Xilinx soared after AMD announced a $35BN takeover offer, while Merck climbed after the drugmaker boosted its guidance.
At 8am S&P 500 E-minis rose 0.47% to 3,409.5 points.
The Stoxx Europe 600 Index erased most of its decline after earlier heading toward its lowest close since June on coronavirus lockdown fears. France’s benchmark CAC 40 Index underperformed other major European stock indexes on Tuesday, amid concerns that tougher restrictions may be introduced in the country as soon as tomorrow to curb a spike in coronavirus cases. Declines in miners and energy firms offset positive earnings from banking powerhouses HSBC Holdings and Banco Santander, which both signaled a brighter outlook for dividends. Following two tumultuous quarter, HSBC said it would consider paying a 2020 dividend after the bank unveiled a better-than-expected third quarter profit on lower provisions for bad loans. The bank on Tuesday reported a 36 per cent year-on-year drop in pre-tax profits to $3.1bn for the third-quarter, which was above analysts’ forecasts. Noel Quinn, HSBC’s chief executive, labelled the results “promising." Energy giant BP Plc warned of many challenges ahead as the pace of recovery in oil demand remained uncertain. Meanwhile, Europe took a step closer to the strict rules imposed during the initial wave of the pandemic, with leaders struggling to regain control of the spread while confronting growing opposition to restrictions.
Earlier in the session, Asian stocks fell, led by the energy and finance sectors, after falling in the last session. Most markets in the region were down, with Australia's S&P/ASX 200 dropping 1.7% and South Korea's Kospi falling 0.6%, while India's S&P BSE Sensex Index increased 0.5%. The Topix was little changed, with Nintendo climbing and Nidec slipping.
As Bloomberg notes, with time effectively over to finish an aid package before Americans vote, investors are looking for market catalysts later on Tuesday from data and earnings. Durable-goods orders and consumer confidence reports are due, as well as results from Microsoft Corp. and AMD after market.
In rates, Treasuries were steady overnight, holding Monday session gains despite gains in S&P 500 e-minis amid poor volumes, trading around 60% of recent average during Asia, early Europe. Preliminary open interest data shows some unwind of long-end short positions into Monday’s rally. Yields were mixed, although within a basis point of Monday’s close across the curve; 10-year steady at around 0.80%, trading inline with bunds and outperforming gilts by ~1bp. Treasury auctions kick-off with $54b 2-year note sale today, followed by 5- and 7- year sales Wednesday and Thursday, respectively.
On Monday, BlackRock strategists downgraded U.S. Treasuries and upgraded their inflation-linked peers ahead of the U.S. election on a growing likelihood of significant fiscal expansion. They said Covid infections in Europe threaten to derail a fragile recovery as they recommended investors hold a neutral position on bunds to hedge a downturn.
“As Covid infections have picked up, the focus on further policy response has shifted to more monetary easing including additional asset purchases,” said strategists Mike Pyle, Scott Thiel and Beata Harasim.
In Fx, a gauge of the dollar’s strength edged lower after Monday's bounce, while the euro and the pound were little changed; cable slipped earlier with strategists predicting limited gains in the currency on a Brexit trade-deal breakthrough. The Norwegian krone and the Japanese yen led G-10 currency gains, while the Swiss franc and the Swedish krona weakened the most. China’s currency weakened after Reuters reported the country’s central bank asked lenders to suspend a key factor used to calculate the yuan’s daily reference rate.
Elsewhere, crude oil nudged higher while gold remains largely unchanged.
In terms of data today we will get the preliminary September durable goods orders and nondefence capital goods orders ex-air. There will also be August’s FHFA house price index, the Richmond Fed manufacturing index and the October Conference Board consumer confidence reading. The Fed’s Kaplan is the only major speaker on the docket. Lastly the second major week of earnings ramps up as Microsoft, Novartis, Pfizer, Merck & Co., Eli Lilly & Co, Caterpillar, HSBC and BP all report.
Top Overnight News from Bloomberg
Asian equity markets resumed the weak performance seen across global peers amid the ongoing risk-averse themes including the worsening COVID-19 pandemic, tougher lockdown restrictions in Europe and the continued US stimulus stalemate which culminated in Wall St’s worst day in more than a month. ASX 200 (-1.7%) and Nikkei 225 (-0.1%) were lower with the Australian benchmark the underperformer amid losses across all sectors and the declines led by energy as the COVID-19 situation did no favours for the demand outlook, while sentiment in Tokyo was also lacklustre but with downside limited by a relatively stable currency and the KOSPI (-0.9%) briefly nursed opening losses after better than expected GDP data and stronger revenue from Kia Motors which drove shares in the automaker higher by nearly double-digits. Hang Seng (-0.9%) and Shanghai Comp. (Unch.) were both lacklustre after data showed Industrial Profit growth in September moderated to 10.1% from 19.1% and due to lingering US-China tensions after the US government approved potential USD 2.4bln in arms sale to Taiwan despite an earlier announcement by China's Foreign Ministry to impose sanctions on US entities that partake in arms sales to Taiwan, although there were some bright spots with HSBC shares rallying around 5% on return from the lunch break following better than expected Q3 results and with Tencent also buoyed after US Appeals Court rejected an attempt by the Justice Department to impose an immediate ban on WeChat. Finally, 10yr JGBs traded higher as prices conformed to the mild upside seen in T-notes and with demand also spurred by the risk aversion, although gains were capped by the 2 year auction results which were marginally weaker than prior.
Top Asian News
Ahead of the cash open, index futures indicated a positive open in Europe with the DAX Dec’20 contract at one stage showing gains of 0.7% in what was initially a paring of yesterday’s heavy losses. However, as cash products opened, indices faced a bout of selling pressure with the DAX Dec’20 contract now lower by 0.5%; Eurostoxx 50 cash is down -0.6% - notably, both are off session lows. In terms of fundamental drivers, downbeat sentiment from yesterday has been carried over into today’s session as the spread of COVID across the region saps investor risk appetite. One of the more concerning updates this morning has comes from Germany with the economy minister warning that the number of new infections in the nation are rising exponentially and will likely have 20k daily new infections by the end of the week (on October 24th it posted 14.7k new infections). From a sectoral standpoint, banking names have bucked the downbeat trend this morning with HSBC (+6.6%) one of the Stoxx 600’s best performers following Q3 earnings. HSBC exceeded expectations for revenues, net income and adj. pretax profits, whilst noting that it will reduce 2022 costs by more than the initially targeted USD 31bln. Santander (+3.6%) are also firmer on the session and providing support to peripheral banks after the Co. reported a marked improvement in Q3 earnings, compared to Q2 and noted a 14% decline in quarterly provisions. Other large cap earnings include BP (+1.6%), who trade firmer on the session after reporting an unexpected Q3 profit of USD 86mln with results underpinned by a lack of significant write-offs and a recovery in the broader oil & gas environment. Despite opening higher, Novartis (-1.3%) have drifted lower throughout the session in the wake of Q3 earnings, which saw revenues miss analyst estimates
Top European News
In FX, although the Dollar is somewhat mixed vs major counterparts, the DXY looks firmly anchored around 93.000 and eclipsed Monday’s high amidst underlying safe-haven demand when EU stocks lost their initial/early recovery momentum due to ongoing COVID contagion, exacerbated by Germany’s Economy Minister warning of the pandemic’s exponential resurgence that may see the daily rate of new cases reach 20k by the end of this week. The index has stalled at 99.137 for now with some technical resistance in the form of a double top around 93.100 perhaps weighing, but the latest pull-back was relatively shallow, at 92.875 vs 92.784 yesterday and last week’s 92.469 base.
In commodities, WTI and Brent front month futures are holding in positive territory of around USD 0.30/bbl as the session stands in-spite of the deterioration in risk-sentiment post the European cash equity open. The current relative resilience is largely a factor of Hurricane Zeta which as of yesterday had shuttered around 16% of Gulf of Mexico oil production and 6% of gas output. The BSEE will provide another update later in the session at 18:00GMT/14:00ET which could well see further impact as the NHC believes the storm will re-strengthen as it progress to the Northern side of the Gulf prior to making landfall. Additionally, it’s worth highlighting that yesterday’s BSEE survey only focused on 7 companies in the Gulf compared to the survey’s sample contained in excess of 20 companies during Hurricane Delta earlier in the month. Elsewhere, post-earnings this morning BP noted that the Hurricane has shut down 20/30k BPD of its oil & gas production thus far. Storm updates aside, the sessions scheduled focus point explicitly for crude is the private inventory release which is expected to show a build of around 1.1mln barrels for the prior week as the effect of Delta diminishes but Zeta is yet to be included in the survey period. Moving to metals, spot gold has come under pressure this morning as while the metal isn’t currently suffering from USD strength as the DXY has dropped into negative territory it has failed to benefit from traditional safe-haven demand with silver & JPY seemingly receiving some of this allure.
US Event Calendar
DB's Jim Reid concludes the overnight wrap
Nice to be back luxuriating in the home office again after a few days of high intensity childminding over part of half-term. The drive through safari park was the highlight with lions, tigers and cheetahs brushing up to the car and monkeys climbing on top of it. The last time I went on safari was during a school cricket tour to Kenya in 1991. We were told before the trip not to take expensive cameras as the risk was they would get stolen. I didn’t have an alternative option anyway as I only had a basic one I’d bought for 10 pounds with my paper round money. However some of the other kids ignored this and brought cameras with big telescopic lenses. As such with my photos you were unable to tell whether the orangish blobs were rocks or lions whereas with my friends you could tell whether the lions had recently flossed or not. 29 years later my trusty iPhone got me some very decent pictures even if it did cost more than 10 pounds.
Looking at the finance pages on my iPhone this morning, it’s quite clear that global equities have taken a large step back at the start of this week after a weekend that saw covid-19 cases hit new highs in the US and fresh restrictions seemingly building daily in Europe. The S&P 500 finished down -1.86% last night, its worst daily performance since 23 September as the US saw its highest weekly cases of the pandemic so far. Sentiment was not helped by the ever dropping probability of a fiscal stimulus agreement prior to the election. Nearly 92% of stocks in the S&P were lower by the end of the session, led by declines in the energy sector (-3.47%) as oil prices fell sharply. WTI and Brent crude fell -3.24% and -3.14% respectively, as the global demand outlook worsened. Tech hardware (-0.58%) and Biotech (-0.85%) were among the more resilient industries, however the NASDAQ was still down -1.64%. The VIX rose +4.9pts to 32.5pts in its biggest move since 3 September.
Overnight Asian markets have tracked Wall Street’s move though the declines are more modest. The Nikkei (-0.24%), Hang Seng (-0.97%), Shanghai Comp (-0.37%), Kospi (-0.50%) and Asx (-1.70%) are all down. Meanwhile, in a sign of abating risk off sentiment, the US dollar index is down -0.11% this morning and futures on the S&P 500 are up +0.18%. HSBC is trading up +1.86% after reporting better than expected earnings as the bank paired back its expected credit losses. They also said that they are considering paying a conservative dividend for 2020 contingent on economic conditions in early 2021, subject to regulatory consultation. In terms of overnight data, South Korea’s Q3 GDP print came in better than expectations at 1.9% qoq (vs. 1.3% qoq expected).
Earlier European equities, and the DAX (-3.71%) in particular, pulled back strongly on news that SAP was lowering its revenue forecast for the full year of 2020 and that the pandemic could weigh on demand into the first half of next year. The largest tech company in Europe was down -22.20% and is now -18.55% YTD. Contrast this to Apple - the largest US tech company - which is +56.7% YTD with the NYFANG index +76.9% against Europe’s tech index at -8.0% YTD.
With risk sentiment souring, core sovereign bond yields fell on both sides of the Atlantic. After rising sharply last week, US 10yr Treasuries yields fell -5.0bps to 0.793%, while 10yr bund yields fell a surprising modest -0.6bps to -0.58% given the risk-off. In other havens, the dollar rose (+0.30%) for just the second session in the last seven, while gold (+0.00%) was unchanged.
Every sector in the Stoxx 600 (-1.81%) declined led by Technology (-7.37%) and Travel & Leisure (-3.29%). The latter was heavily influenced by the new restrictions across the continent, which outweighed the positive vaccine news from Astrazenca and Johnson and Johnson that we highlighted yesterday morning. After the positive vaccine news yesterday, our CoTD highlighted the work of our colleague Robin Winkler, looking at different R0 and efficacy scenarios to see what is required for herd immunity. We likely remain multiple quarters away from a mass rollout however the upcoming efficacy data should in theory have a major impact on life and markets going forward. As a benchmark the FDA has set its threshold as 50% - similar to the flu vaccine. See the CoTD here to see how much of the population would have to be vaccinated if the efficacy was only 50%, as well as the link to Robin’s note.
We are now just one week away from Election Day in the US. However, over 58.6 million ballots have already been cast across the country. This is more early votes (both in-person and mail-in) than in all of 2016, and there is still a week to go. Early indications point to a possible record turnout, if this pace continues, especially given the number of “new and infrequent” voters. The AP reported as many as 26.3% of Georgia’s early voters and just over 30% of Texas’s early voters are either a new or infrequent voter, which points to just how much important some feel this election is.
National polls have tightened slightly in the last 2 weeks. Former Vice President Biden led by as much +10.7% in fivethirtyeight.com’s polling average back on October 17 but that has come in to +9.4% as of today. This is still a substantial lead and Biden still holds the polling advantage in key battleground states such as Michigan (+8.3%), Wisconsin (+7.1%) and Pennsylvania (+5.1%). The fivethirtyeight.com model gives Biden an 87% chance of winning the Electoral College and therefore the election.
Lastly on US politics, late last night the Senate confirmed Amy Coney Barrett to the Supreme Court of the US, thereby giving the court a 6-3 conservative majority. The vote was 52-48 and mostly along party lines, with one Republican, Senator Susan Collins, joining Democrats in opposition.
Coronavirus cases remain in focus as more regions of Europe contemplate or enact further restrictions to quell the current wave. France reported over 250,000 new cases over the last week and nearly 70% of ICU beds in the Paris region are occupied, according to local authorities. President Macron is expected to convene a defense cabinet meeting later today to address the issue, which may lead to further restrictions. This comes as the head of the scientific council that advises the French government on the pandemic said the situation is moving towards that of early March, and that the second wave will probably be worse than the first one. The Netherlands passed 300,000 confirmed cases yesterday, after over 10.3k new cases yesterday. Dutch Prime Minister Rutte has said he wants to wait for the new data over the coming days before making a final call on further restrictions for the country.
Elsewhere, German Chancellor Angela Merkel convened her task force yesterday and it was reported she plans to present a “lockdown light” plan which would see bars, restaurants and public events shut in order to minimise a second wave. Furthermore, shops would remain open and schools would not have to close under the new plan. Meanwhile, Italy’s new rules went into effect yesterday after Prime Minister Conte approved the government’s plan to limit hours for bars and restaurants as well as shutting down gyms and entertainment venues. Italians have also been asked not to travel under the new restrictions, which are currently in place until November 24. Meanwhile on top of the national curfew that was set in Spain, the country’s parliament approved an extension of the state of emergency until May 9, in order for the Prime Minister to avoid continually seeking approval to implement further restrictions.
In the US, the rolling 7-day Covid-19 case count hit a new high with over 480,000 cases. This surpasses the high of 472,083 we saw back in late July. While testing capacity is higher, the number of newly confirmed weekly cases as a percent of weekly US tests is over 6% for the first time since August and has been rising sharply over the last 2-3 weeks. On therapeutics, Eli Lilly has confirmed overnight that its US clinical trial of experimental antibody therapy will end as data suggested that the treatment is unlikely to help hospitalised patients recover from advanced forms of the virus. The stock is down -1% in after-hours trading. In other worrying news, according to a large Imperial College London covid study, the proportion of people in England with antibodies dropped by more than a quarter in the space of three months. This will raise concerns about how long people can go without risking being reinfected.
European risk sentiment was not helped by the German October Ifo business climate indicator, which fell to 92.7 (93.0 expected). This is -0.5pts down from last month and was the first monthly decline since April. In the US, the September reading of the Chicago Fed national activity index missed expectations by quite a bit, down to 0.27 (0.73 expected) from an upwardly revised 1.11 last month. A reading above ‘0’ translates to above-trend growth, indicating that while growth is positive it has slowed significantly. Similarly, new home sales dropped to 959k from 994k the month prior, and well below the 1,025k homes expected. Lastly, the October Dallas Fed manufacturing index beat expectations at 19.8 (vs 13.5 expected) in its highest reading since October 2018.
In terms of data today we will get Euro Area M3 money supply for September as well as slew of US data. In hard data there is the preliminary September durable goods orders and nondefence capital goods orders ex-air. There will also be August’s FHFA house price index, the Richmond Fed manufacturing index and the October Conference Board consumer confidence reading. The Fed’s Kaplan is the only major speaker on the docket. Lastly the second major week of earnings ramps up as Microsoft, Novartis, Pfizer, Merck & Co., Eli Lilly & Co, Caterpillar, HSBC and BP all report.
Is it the elites or the average Americans that hate Russia? Political panic over Russia goes back to times before the Revolution. Watch the video and read more in the Editorial article.
On 19 October the BBC reported that “A Royal Navy officer has been sent home from the U.S. after reporting to take charge of a submarine’s Trident nuclear missiles while unfit for duty. Lt Cdr Len Louw is under investigation at Faslane naval base in Scotland amid reports he had been drinking. Colleagues raised concerns when the weapons engineering officer arrived for work on HMS Vigilant last month.”
It must be made clear that there was no possibility this officer or any other single person could in some way commit the submarine to despatch of its weapons. It simply could not happen. But the squalid little incident did draw attention to the fact that a British nuclear submarine was in the United States for some reason and although the UK’s over-staffed and infamously incompetent Ministry of Defence condescendingly announced that “the Royal Navy does not comment on matters related to submarine operations” it was apparent that the boat was in port at the U.S. submarine base in Kings Bay, Georgia, probably to update and recalibrate technical devices and to load a number of Trident II D5 nuclear missiles.
The UK keeps insisting it has an independent nuclear weapons capability, so it has to be asked why the Royal Navy needs to send submarines to the U.S. to pick up missiles. But as with so many defence matters the government tries to keep the British public in the dark as much as possible. According to the U.S. Naval Institute, “Vigilant is one of four U.K. Vanguard-class boomers that the Royal Navy maintains as part of the British nuclear deterrent force. While the MoD maintains its own nuclear warheads, British and U.S. submarines share a common stockpile of Trident II D5 missiles stored at Kings Bay.”
It can also be asked why the United Kingdom government thinks the country needs nuclear weapons at all.
London’s reluctance to provide information to the public about nuclear weapons is likely based on the government’s desire to disguise the vast expenditure involved. When it is demanded by law that information be provided, it is released on a carefully timed basis. The public relations operators have it all planned, and choose a day when more exciting news can be either expected or manipulated, rather like the FBI’s notification of the preposterous allegations that “Iran and Russia Seek to Influence Election in Final Days” that — surprise, surprise! — were headlines on the same day that former President Obama gave a speech in support of presidential candidate Joe Biden.
But the Brits didn’t succeed in one particular case concerning vast expenditure on systems to replace the existing Trident nuclear missiles on its four submarines. It had been stated in the annual update to Parliament by the Ministry of Defence in December last year that “Work also continues to develop the evidence to support a government decision when replacing the warhead” and there matters rested — until in February Admiral Charles Richard, commander of U.S. Strategic Command, “told the Senate defence committee that there was a requirement for a new warhead, which would be called the W93 or Mk7. Richard said ‘This effort will also support a parallel replacement warhead programme in the United Kingdom’.”
The disclosure forced the underhand of the UK government, and on February 25 Defence News reported Defence Secretary Ben Wallace as stating that “To ensure the Government maintains an effective deterrent throughout the commission of the Dreadnought Class ballistic missile submarine we are replacing our existing nuclear warhead to respond to future threats and the security environment” which is a weasel-worded admission that did not mention the colossal sums of money involved.
(But then, Ben Wallace is no stranger to large sums of money, and during the 2009 revelations by the UK’s Daily Telegraph concerning fiddling and greed on the part of politicians it was revealed that in 2008 he had the fourth highest expenses of any Member of Parliament, claiming £175,523 (on top of his £63,000 salary), including £29,000 a year to employ his wife as a part-time research assistant.)
The cost of replacing Trident missiles by the “life extension programme” of the warheads is not known, as the only estimate available, given in a 2006 government paper on ‘The Future of the United Kingdom’s Nuclear Deterrent’, is £250 million which is obviously a small fraction of the true amount.
Not only is the UK committing massive sums to replace the weapons systems of existing nuclear submarines, it has embarked on an enormous programme to build four new ones to replace the Vanguard class vessels. A House of Commons research briefing of June 2020 (produced by the House Library whose researchers are not influenced by sleazy political fandangos) states that the programme involves “design, development and manufacture of four new Dreadnought class ballistic missile submarines (SSBN) that will maintain the UK’s nuclear posture of Continuous at Sea Deterrence” and that “the cost of the programme has been estimated at £31 billion, including defence inflation over the life of the programme.”
The United Kingdom is in a parlous economic state. The International Monetary Fund assesses that the effects of the Covid-19 pandemic will hit Britain’s economy much harder than much of the rest of the world, and while nobody can forecast what will befall the UK if it abandons trade negotiations with the European Union, it is certain that there can be no economic benefit from its current policies.
The last thing the UK needs to do is to commit billions of pounds to nuclear weapons. (Although its Members of Parliament do count the pennies on occasions. They’ve just been told they are to get a pay increase of over 3,000 pounds a year, and on October 21 voted overwhelmingly to reject a plan for poor children to receive midday school meals during school holidays in this period of extreme financial insecurity. They’re all heart.)
At the moment, UK nuclear policy is that “we are committed to maintaining the minimum amount of destructive power needed to deter any aggressor” and as noted by Scientists for Global Responsibility, “The UK’s nuclear warheads are carried on Trident missiles – leased from the USA – in nuclear-powered submarines. Currently, eight missiles can be fired, carrying 40 x 100kT warheads, with a few hours’ notice from a submerged submarine. The UK’s total nuclear weapons arsenal consists of 195 warheads.”
There is no doubt that 195 warheads would destroy enormous areas, but there is no point in going into detail, because if the submarines fired off any nuclear weapons at Russia (the only conceivable target), retaliation would ensure that the UK would cease to exist.
Just who does London imagine is being deterred by its expensive nuclear missiles? America is the only western country that would commit to firing nuclear weapons, and there is no possibility that Washington would consult London about its decision. Once Washington went to nuclear war, all that the UK could do would be to pop off its missiles to pile destruction on destruction. That’s not deterrence, and Britain would be well advised to refrain from spending countless billions on a new set of nuclear toys and commit its resources to betterment of its citizens.
Industrial giant Caterpillar dropped on on Tuesday after the company reported lower Q3 earnings as equipment sales fell across all three primary segments. The heavy equipment maker whose stock price had nearly doubled from the March lows on expectations of a V-shaped recovery and massive stimulus...
... reported adjusted Q3 profit of $1.34 per share, down 50% compared with $2.66 per share a year ago, but better than the $1.13 expected. The company also beat on revenue, reporting $9.88BN, down 23% Y/Y, but above the $9.19BN consensus estimate.
Despite the sharp decline in Y/Y results, the company said it sees "positive signs in certain industries and geographies" while failing to give reassurance that the worst of the hit from the coronavirus pandemic is behind the heavy-equipment maker, and refusing to provide guidance.
The Deerfield, Illinois-based company suspended its earnings forecast earlier this year because of uncertainty stemming from the coronavirus. The only hint of an outlook came in presentation slides, in which Caterpillar said it sees less of a decline in end-user demand in the fourth quarter than in the third, and that operating margins should improve. The company also said that dealers inventories are being run down more quickly, expected to decline by $2.5 billion for the full year, which should point to better sales going forward.
As Bloomberg notes, CAT "is typically seen as a bellwether for the economy, so analysts looking for hints as to how the recovery from the pandemic is progressing were likely disappointed."
Some more details from Q3:
Separately, Caterpillar, which has been cutting costs to blunt the impact of still-sluggish orders in energy and mining, said machine sales fell 20% in October on a rolling three-month basis, unchanged on a Y/Y basis since July.
Despite the depressed sales, there was some silver lining in Caterpillar's presentation slides, where the company’s order backlog increased by $500 million in the third quarter from the previous three months, after dropping $1.2 billion in the previous quarter.
As Bloomberg notes, the report comes as a resurgent virus hampers efforts to reopen economies, renewing concerns over the global demand outlook. Caterpillar was among the best-performing stocks the past few months on bets that the worst of the pandemic hit was behind the industrial bellwether.
"We’re encouraged by positive signs in certain industries and geographies," Caterpillar Chief Executive Officer Jim Umpleby said in the a statement. “We’re executing our strategy and are ready to respond quickly to changing market conditions.”
Caterpillar CFO Bonfield said there’s strength in their sales to China overall, particularly in 10-ton or above excavators. These excavator sales in China are something investors pay close attention to, given that they act as a sort of proxy as to how much construction is going on in the country.
Yet despite the favorable spin, the lack of blowout earnings for the company which had priced in more than perfection and a V-shaped recovery, saw its stock drop premarket amid concerns that a global second (or third) wave of infections would cripple demand for heavy industrial equipment.
La polémique autour du film de Maïmouna Doucouré « Mignonnes » a visiblement mis un coup au géant Netflix. La plateforme a compté huit fois plus de désabonnements durant la première quinzaine de septembre, lors de la sortie du film, que durant le mois précédant. Une polémique née aux États-Unis Le film de Maïmouna Doucouré a fait parler de lui, […]
L’article Record de désabonnements chez Netflix suite à la polémique autour du film « Mignonnes » est apparu en premier sur Le Média pour Tous.