Stephanie Kelton On MMT & Blurring The Lines Between Debt And Money

Stephanie Kelton On MMT & Blurring The Lines Between Debt And Money Tyler Durden Sat, 10/31/2020 - 14:55 Thanks to the public fascination with MMT, Stephanie Kelton has become one of a handful of rockstar economists, known for her frequent appearances on cable news on behalf of the Bernie Sanders campaign (she served as one of the campaign's top economic advisers), Kelton is also the author of "the Deficit Myth", a bestselling book arguing, essentially, that the US government can run perennial deficits, then order the Fed to simply vacuum up excess debt, leaving plenty for the global dollar-based financial system. In such a system, taxation would be fine-tuned by Congress to carefully stave off inflation, preventing the dollar from devaluing like the Argentine peso, or worse, the Venezuelan bolivar. Kelton's ideas have been widely discussed in the financial press and we'd rather not reiterate, or relitigate, them here. Rather, Kelton's MacroVoices interview serves as a helpful overview of her ideas, and touches on very basic concepts at the center of her thinking, like answer the question "if the government can simply print money to finance its budget, then why do taxes exist?" Kelton and interviewer Erik Townsend delve into this pretty early in the interview. Why Pay Taxes? Erik: Now, let's go a little bit deeper on those taxes and bonds because what a lot of people would say is, well, if you figured out that there's kind of a magic source of income here and we don't need those taxes. Let's eliminate taxes and never have them again, because we don't need taxes, we can print new money. But the study of MMT says actually taxes are very important, but maybe for an unobvious reason pertaining to inflation. So why do we still need taxes? Stephanie: Okay, well, remember I just want to go take one tiny step back and just sort of reassert the point that it's not that we can print money. It's that there is no other way for the government to spend but to create new money as it's been so its newly created digital dollars, and there's no other way for it to work. And so your question is a very good one, so once you recognize that the government spends its currency into existence, then you say, well, then why do we have to pay any taxes at all? Why not just let the government spend and forget the tax piece, which, by the way, is exactly what Congress has been doing. Let's just take the cares act as one example, the biggest relief package that has so far gotten through both the House and the Senate and signed into law that was $2.2 trillion. And that bill was Congress writing what we in the DC beltway circles call a clean bill, in other words, it was not offset the spending was not offset. The Congress said, listen up fed, we are ordering up $2.2 trillion, get ready, because you're going to carry out the payments that we have authorized on behalf of the US Treasury, that's how it works. So, this is an example of Congress committing to spending money it did not have, it's just what it has is the power of the purse it can commit to spending $2.2 trillion. And the Fed as the government's fiscal agent will carry out those payments by changing the numbers in the appropriate bank account. So for people who got that $1,200 stimulus check, the way that the money got into your account is that the Federal Reserve and the bank that you bank at change the numbers upward in your account. And so there was no pairing of higher taxes to go along with this, so why do we sometimes increase taxes? Why do we have taxes at all? So in the book, I go into a lot of detail on this, if you wanted to start up a currency from scratch then a tax or something like it fees, fines. Also, other obligations governments impose to get a population to put a population of people in a position where they need to earn the state's currency in order to settle their tax or other obligation to the state. And we could talk a lot about this, but we don't have time, so I'll just say that one reason for taxes is that they allow governments to start up a currency from scratch. Once that currency has been started up and now people are accustomed to having this currency around, they begin making their own payments and transacting in that currency. And the government can use the tax lever to pull some of those dollars back out of our hands. "A Much More Nuanced Conversation" About Inflation Erik: Now, I know that one of the ways that you do think about taxes in MMT is as a preventive measure to overcome the tendency of that spending to bring about inflation. What I haven't seen addressed and maybe I just haven't read enough about it is, wait a minute, inflation tends to be a vicious cycle with a long lead time. That has to do with inflation leading to inflation expectations, leading to acceleration of velocity of money, and it feeds on itself and once it gets going, it's hard to break it. So it seems to me like I worry about whether, how do you know the taxes enough to prevent that cycle from starting and how do you break out of that cycle. If some of the money that's being created through MMT by the government financing more of its spending just by printing new money does start to lead to that widespread inflation? The other problem that I have understanding this inflation argument is at least some people, and maybe this is the politicians as opposed to the MMT scholars are saying, well, it's really what we have to do to prevent the inflation, we've got to tax the rich specifically. Tax the rich, well, wait a minute, the rich are the people whose spending habits are not really directly impacted by their tax burden and their inflation because they've got enough assets that they can continue spending. So how do you overcome the potential of creating a vicious cycle of inflation? Is it just taxes? Or are there other measures that MMT uses to overcome that inflation risk? Stephanie: Okay, so let me start by saying there's a terrific, short, accessible piece, but your audience is very smart so they can handle the higher order stuff. There's a piece in the Financial Times that was coauthored by three MMT scholars and I think the title of the piece is something like "How MMT Thinks About Inflation" or "How MMT manages inflation" [ZH: "An MMT Response On What Causes Inflation"] Something along those lines, people can find it because I wouldn't have time to do it all justice here. But look, okay, let's start by recognizing that inflation, as you say, is a dynamic process, it is a continuous increase in the price level, it's not a one off. It's a complex phenomenon, there isn’t economist on Earth who can write down for you a model of inflation that will apply in all times across, space and time, nobody can do it. The Federal Reserve, Daniel Tarullo, who was a Fed Board of Governors member, he rolled off the board of governors and went out. And one of the early speeches he gave just made huge headlines, because he went out and he said, the Fed does not have a working model of inflation, we don't know. So once upon a time, there was a quantity theory of money and man, you could write that equation down, everybody could see it. And you said, inflation happens because velocity is constant, and the real economy tends to full employment. And once you apply a little calculus to the quantity theory to the equation of exchange, then you know that inflation is always in everywhere, a monetary phenomenon. Money supply growth rate accelerates, inflation will accelerate to the same degree, well, that's clearly silly and wrong. And you know, we have decades of experience with QE where people who relied on that thinking expected quantitative easing to drive inflation or possibly hyperinflation. Of course, it didn't do any of that, then you had the Phillips Curve and you say, well, it's the Phillips Curve, that's the model I'll write down and that's my inflation model. Well, listen, nobody believes this stuff anymore and you can expectations augment the Phillips Curve all you want, and it still isn't workable. So I don't believe that we should think of inflation as something that happens because expectations become unanchored and people formulate ideas about where prices are headed, and then it becomes self fulfilling. That's just silly stuff that we make up, I think we need to be more serious than that, price has changed, because producers raise prices, people change prices. They don't just happen and they certainly don't just happen across all categories of consumer goods, so let's think a little bit harder. If I go down stairs after this interview, and I hope this doesn't happen, but if I go downstairs and find my basement is flooded, I don't just run to one part of the house and say, oh, I have to stop the flooding in the basement. I don't know what caused the flooding in the basement, I don't know if a kid left a faucet running if a toilet overflowed, if a pipe burst, if you know the dishwasher is leaking, I got to find the source of the problem. And I think that's the way we in MMT think about inflationary pressures, you have to look under the hood, you have to go to what is driving that headline price inflation. I'll give you just one quick example, the supreme court's going to take up the case on the Affordable Care Act that's going to happen soon. And there is a chance that the Supreme Court will say the ACA is unconstitutional, and provisions like protections against pre existing conditions that could go away some of the cost controls around medical reimbursements and prescription drug prices and so forth. Blurring The Line Between Debt And Money Erik: I want to move on to what you actually have identified as the next myth in the book, which would also be the feedback that you'd probably get from a lot of people who would say, look, what you're talking about doing here amounts to stealing from future generations. You're just scribing away without having to raise taxes, which makes it more politically viable for the government to spend more money that we don't have and increase the national debt. That's going to have to be paid off someday by our children and grandchildren, that's immoral. Why is that a myth? Stephanie: Well, it's a myth because none of it makes any sense whatsoever. I mean, I'm sorry, I'll just be as kind of upfront and candid as I can, I think that's just really silly. And I know that it's common, and I know that people repeat it and I know that sometimes serious people repeat these kinds of things. So this falls right back into the household analogy, right back into that trap of thinking like government as a household. And when we use words, like borrowing, like paying it back, calling this thing the dead, we are falling back into that household trap. The Federal Government's nothing like a household, it doesn't operate its budget like a household. So here's just one example, okay, when the government runs a deficit, it matches up the deficit spending by selling treasuries, right. We know that and that's something it chooses to do not something it must do. The government sovereign government doesn't need to borrow its own currency from anyone in order to spend but the government currently matches up its deficit spending with bond sales. So what happens? So the government spends $100 into the economy, taxes let's say $90 back out, we say the government has run a deficit, we look at it as a shortfall. That's not a shortfall, this government's the scorekeeper for the dollar, right? It's adding 100 and subtracting 90, somebody gets 10 points, that's those $10. Now the government comes along and says, well, because I ran a deficit I'm going to sell these treasuries, which means the government is going to subtract back out the $10 and replace them with 10 treasuries. So what the way that I look at it isn't that the government is borrowing in any meaningful sense. If I go to a bank for a loan and I sit down with the loan officer I don't plop the money down on the desk in front of the loan officer and then ask for the loan I came there because I don't have the money, that's why I'm there to borrow. The federal government is the issuer of the currency, it doesn't borrow because it doesn't have the money. What it's doing is first supplying its currency and then transforming those dollars into a different financial instruments into US Treasuries. So it's allowing us to hold dollars that amplify themselves over time, that those are amplifying dollars. Why? Because they pay interest. So I look at the treasuries as a form of payment, not a form of debt, there's nothing being borrowed, there's something being paid out. And when the Treasury matures, when the bond matures, it simply converts back into its original form, it converts back to the currency form. So paying it back quote, unquote involves nothing more than shifting funds from one account at the fed a securities account into what's effectively a checking account, a reserve account at the Fed. That's all the more complicated it is to quote, unquote pay it back, but I think that we have a communications problem. We don't have a debt problem, we just have chosen very unhelpful words to narrate what's actually taking place? * * * Source: MacroVoices During the opening of the interview, Townsend noted that he and his team had reached out to Warren Mosler, an economist whom Kelton credited as one of the Godfathers of MMT thinking. Readers can listen to the interview in full below.
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The 'adults in the room' with Trump weren't adults at all

(Natural News) When President Donald Trump took office, his aides promised there would always be adults in the room. Especially when it came to foreign policy, learned, stable professionals would ensure responsible and intelligent actions. (Article by Doug Bandow republished from TheAmericanConservative.com) Except the adults turned out to be idiots. They fought the president at...
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Glenn Greenwald: The Aftermath Of My Move Back To Independent Journalism

Glenn Greenwald: The Aftermath Of My Move Back To Independent Journalism Tyler Durden Sat, 10/31/2020 - 12:50 Authored by Glenn Greenwald via greenwald.substack.com The last twenty-hours have been exhilarating. I had no idea what to expect when I decided to leave The Intercept and move my journalism here, but the outpouring of support — both words of encouragement from readers and those subscribing and supporting my work here — has been beyond what I can describe and it is incredibly gratifying and appreciated. Thank you to everyone who has subscribed and reached out. This morning I discussed various aspects of my resignation from The Intercept on the outstanding YouTube program Rising with Krystal Ball and Saagar Enjeti. We discussed more in-depth my rationale for leaving, my response to various criticism and accusations from former colleagues and other assorted journalists, why I speak to both conservative and liberal media outlets, and what this episode reflects about broader media pathologies: Last night, I was on with Tucker Carlson to discuss not only the reporting of mine that was censored, but also the severe acceleration of intelligence community propaganda and interference in our domestic politics and the increasingly restrictive media and political climate: My appearances on Tucker Carlson’s programs typically provoke some controversy and even consternation among some of my long-term readers on the left. In addition to discussing my rationale for doing so in that above Rising interview, I also explained my reasoning on the Rolling Stone podcast “Useful Idiots” with Matt Taibbi and Katie Halper. Those interested can hear part of my answer in these two short clips: Here's Part 2 of my discussion about going on Fox and being a sympathizer of white supremacy and enabler of fascism. The full discussion can be watched here: https://t.co/77CpN0j9U7 Their program is great. pic.twitter.com/F11DfUXD4z — Glenn Greenwald (@ggreenwald) January 18, 2020 Finally, for those who did not see it, I appeared earlier this week, for the first time, on Joe Rogan’s program. It was an extraordinary three-hour discussion that covered a very wide range of topics, from my experience in reporting on the Snowden story and our exposés last year in Brazil, the state of free speech generally in the U.S. and in journalism, regulation of our discourse by unaccountable Silicon Valley overlords, the 2020 election, the need for dialogue across partisan and ideological lines, and a great deal of personal introspection and examination. Having done the show, I understand much more why he has built up such a massive and loyal audience. It is very worth thinking about why that has happened and what it says about what is missing from our media ecosystem (we discussed that as well): The last twenty-four hours have been intense, exciting, draining and so energizing — not just for me but for my family as well. The predictable attacks from journalists trapped in repressive institutions were easily endured as a result of the far more organic and principled support I received. I am very enthusiastic about what is possible on this platform and the journalism it will enable. And I want to thank all of you again with great sincerity and gratitude for making the launch of this platform so successful, and for making my resolve and determination to deliver honest, unique and impactful journalism and commentary higher than it has been in quite a long time. Click here to subscribe to greenwald.substack.com
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Record Number of Expatriate Americans Have Renounced US Citizenship in 2020 – Report

from Sputnik News: According to a firm that handles US expatriate affairs, 2020 is shaping up to be a record year for Americans renouncing their US citizenship, going by data from the year’s first nine months. The news is all the more notable, since US consulates have truncated their affairs since March when the COVID-19 […]
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Win or Lose, Dems Have Big Plans for America

by William L. Gensert, American Thinker: Only a victory large enough to preclude the theft of the presidency by the Democrats and their minions in the media can forestall their plans for America’s future. The rioting, physical violence, and destruction of property estimated in the billions of dollars experienced by Americans since the death of […]
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Kyle Bass Feuds With Texas Real Estate Developer Over Anonymous Blog Post

Kyle Bass Feuds With Texas Real Estate Developer Over Anonymous Blog Post Tyler Durden Fri, 10/30/2020 - 14:49 Short sellers have largely been riding high this year, with a handful of notable victories, including Nikola, Wirecard and Luckin Coffee. But for every example of a short play hitting the jackpot, it seems there are another five where the investor got burned. And even when investors' independent research stokes the interest of federal regulators and prosecutors, sometimes, the company can still come out on top (as we learned from Bill Ackman's unsuccessful bet against Herbalife). But in a rare example of a firm fighitng back against a successful short-seller campaign, Bloomberg on Friday published a lengthy feature chronicling a legal battle involving Kyle Bass and his firm, hedge fund Hayman Capital, and a Texas-based REIT called United Development Funding, or UDF. For the bulk of this year, Bass has focused his attention on attacking China's assault on freedoms in Hong Kong (back in 2019, he unveiled a long-shot bet that Hong Kong's currency peg to the dollar might break). But the lawsuit brought against Bass by UDF has implications for the broader industry. Like everyboyd else, hedge funds have a first-amendment right to publish reports, even anonymously, outlining allegations of fraud or other irregularities that have, for whatever reason, been withheld from shareholders. So when Kyle Bass logged in to Harvest Exchange, a popular Seeking Alpha-type platform, and posted his report outlining allegations of fraud at UDF under a pseudonym (allegedly because he wanted readers to focus on the information, not the source), he didn't feel like he was wading into some grey area. UDFs' shares tanked on Bass's research, and after more than a year of pestering the SEC and the DoJ, an investigation into UDF was eventually launched, and the firm's offices were raided, sending its stock even lower. Bass's firm made only $10 million on the trade, a sum that was "not worth the five years of aggravation" that Haymen spent investigating UDF, including doing some serious forensic accounting, hiring PIs and investigating development sites. An analyst at Hayman brought the idea to Bass back in 2014, after Bass's fund had suffered several consecutive years of underperformance. UDF raised money from investors and then loaned it out to developers at above-market rates. UDF had continued to pay strong dividends despite the damage wrought by the financial crisis, which aroused suspicion, Bass's analyst said.  Here's more from Bloomberg: Bass’s analyst, Parker Lewis, learned about UDF from a friend, but at the time it didn’t have any publicly traded securities. Months later a large REIT raising money for UDF disclosed accounting errors, which prompted an FBI investigation. That led Lewis to question whether UDF was hiding its true financial situation. After months of research, he locked onto an explanation: When borrowers struggled to repay their loans, UDF used cash raised by newer funds to pay investors in older ones. Sometimes the newer funds would buy pieces of loans owned by the older ones in an effort to ensure that cash was available. These actions allowed UDF to keep paying the sizable dividends investors had grown to expect, which meant that it could continue attracting new investments. To Lewis, it looked like a Ponzi scheme. By then, one of UDF’s funds had listed on Nasdaq and was a potential short target. Bass dismissed Lewis’s idea at first as being too small and too local. But Lewis was persistent. They had a massive fraud in their sights, he argued. Bass alerted the SEC - via Hayman's general counsel - but after burning through millions just borrowing the shares to finance the short against UDF, Bass made his move in December 2015, when he published the abovementioned anonymous report, which immediately went viral. Short-seller Andrew Left, who runs Citron Research, warned that the stock could go to zero. Banks immediately started pulling credit lines, and business partners cut ties, including blocking UDF from a lucrative deal. Then, the FBI raided the firm's offices. Two years later, five executives agreed to a civil settlement with the SEC, and moved on. But clearly, Hollis Greenlaw, a former tax lawyer who is the founder and driving force behind UDF, has been nursing a grudge, and is now trying to exact his revenge on Bass in the courts. And in a bitter twist for the short-seller, Greenlaw's lawsuit triggered the SEC to launch an investigation into Bass and whether he "knowingly published" false information, as Greenlaw alleges. His lawyers are now trying to get the government to turn over more nonpublic communications detailing Bass's role in sparking the investigation into UDF. Bass and Hayman have dismissed Greenlaw's allegations as a "nuisance lawsuit". But the argument being made is certainly interesting at a time when social media companies, and our society at large, struggles to parse the implications, and even the substance, of "misinformation".
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Private Equity Titan Henry Kravis Says In 50 Years He Has Never Seen Markets This Volatile

Private Equity Titan Henry Kravis Says In 50 Years He Has Never Seen Markets This Volatile Tyler Durden Fri, 10/30/2020 - 13:50 Private Equity titan Henry Kravis has seen a lot during his half century on Wall Street. But he says he has never seen turmoil like this. Thanks to COVID-19, and the Fed's attempt to backstop markets for fear that a crash could translate into harm for the real economy, 500-point swings back and forth have become routine. "I’ve been investing for over 50 years, I don’t remember a time when I’ve seen such volatility as we see today," Kravis, the co-founder of KKR & Co., said Friday during a live Bloomberg webcast. "Just look at our markets in the US, we’re up one day 300, 400 points and then the next day, for almost no reason, we’re down 400 to 500 points." Kravis praised central banks' global stimulus efforts for staving off economic collapse, but warned that markets remain unnerved by the virus, and that any news related to a vaccine or therapeutic would likely impact sentiment. This year has seen nigh-unprecedented volatility has stocks sunk to levels unseen since the Obama era before bouncing back to record highs. According to Bloomberg, the VIX, the market's gauge of implied volatility, has averaged 33 since February, which is 14 points higher than the average level over the last 30 years. KKR has taken advantage of the turbulence, with Kravis's firm (which he has long since ceased managing) doing some $40 billion in deals already this year. “When we shut down our offices in the U.S. on about March 12, I was wondering, ‘What are we going to do, how are we going to even keep busy?’” Kravis, 76, said. “As it turned out, we’ve probably had the busiest year and (most) productive year that we’ve had almost ever." Kravis has enjoyed a reputation as a ruthless capitalist for years While buying and selling companies still drives Kravis, he said the pandemic has changed his outlook on life and work and, possibly, softened him up a bit. “You see so many people in the US, in New York City in particular earlier on, become ill and so many of them pass away,” he said. “It makes you think about what’s really important in life and to me, it’s family, my wife without a doubt.” Beyond that, “I probably have become more patient than I was. I’ve always been known to be impatient,” he said. “Probably my empathy levels have gone up, and trying to show more empathy toward everybody that I come into contact with, people at our firm and make sure they are OK." His "empathy levels" have gone "way up," Kravis added. Beyond that, “I probably have become more patient than I was. I’ve always been known to be impatient,” he said. “Probably my empathy levels have gone up, and trying to show more empathy toward everybody that I come into contact with, people at our firm and make sure they are OK.” Later in the interview, Kravis discussed the firm's management philosophy, which he said centers around allowing all the employees to be fully engaged in deals, handling different responsibilities and learning new things. Aside from the firm's new deals, Kravis said KKR had also sold "a number" of assets this year, before moving on to wax poetic about how he analyzes a prospective target. "Every company is a living organ...it's a series of still shots that make into a movie...and where is that movie going? If you're only going to think of the photo of the company and think 'well, this is what it is'...it's being able to see where the puck is going. If you can anticipate that, then bring in the right group of operating people...and they will work with various companies to improve the operation, while at the same time we think how can we improve the balance sheet." Not that investors care - at least not right now - about corporate profits, but as volatility has surged, earnings have become more decoupled from share price than at any time in the last 70 years (dating back to 1950). Could that portend more volatility ahead? We'll let you be the judge. The conversation continued for roughly 45 minutes. Readers can watch the whole thing below: NOW: What lies ahead for global markets after a tumultuous year? And what does economic recovery look like in the wake of Covid-19? @jasonkellynews talks with @KKR_Co's Henry Kravis at #BloombergInvest Talks. https://t.co/94R6lD1aDd — Bloomberg Live (@BloombergLive) October 30, 2020
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COVID Vaccine Fallout: General Air Cargo, Wait Your Turn

COVID Vaccine Fallout: General Air Cargo, Wait Your Turn Tyler Durden Fri, 10/30/2020 - 12:45 By Eric Kulisch, air cargo editor at American Shipper, Shippers of general commodities such as auto parts, wine, apparel and telecommunications equipment should be prepared for air transportation delays in the coming months, because any new releases of COVID-19 vaccines will take priority, logistics experts say. UPS employees at the Worldport hub in Louisville, Ky., move iPhones and iPads on the ramp Cargo carriers, including airlines operating passenger aircraft as mini-freighters, are likely to bump general cargo from flights to make room for emergency shipments of lifesaving vaccines, which also will command the highest rates because of requirements for expedited delivery and special handling. “COVID-19 is going to be the biggest product launch in the history of mankind. We all know when Apple launches a new product what it does to capacity for everybody else. It’s a big sucking sound and all of that capacity goes toward moving that single product,” said Neel Jones Shah, global head of airfreight at Flexport, a San Francisco-based freight forwarder with advanced technological capabilities to connect supply chain partners. Apple chartered many freighter aircraft to get the iPhone 12 and iPad Air to warehouses and stores ahead of last week’s highly anticipated product launch.  Potential shipping delays for nonpharmaceutical businesses stem from the severe shortage of airfreight capacity that already exists, because most of the international, widebody passenger fleet remains suspended in the face of weak travel demand caused by the pandemic. About 60% of global air cargo capacity resides in the bellies of passenger aircraft, according to industry analysts. Fully integrated express carriers like FedEx, UPS and DHL are expected to carry the first wave of vaccines, especially ones requiring ultra-cold storage.  There are nine vaccines in the third, and final, phase of clinical trials around the world, and its possible health regulators could issue some emergency use authorizations by the end of the year. Pfizer expects to provide two months of safety data about its trial, following the final dose of the vaccine, to the U.S. Food and Drug Administration by the third week of November and will then apply for emergency use authorization, company officials said on Tuesday’s earnings call with analysts. A research assistant at Walter Reed Army Institute of Research, studies coronavirus protein samples. Satish Jindel, president of freight analytics company ShipMatrix, said the integrators won’t divert aircraft and other assets to exclusively handle vaccines, “but some of their customers may get delayed.” The extent a vaccine will impact general air cargo depends on several factors, including the timing of a vaccine approval, how much medicine gets produced and distributed regionally by truck, and how much packaging and dry ice are required. “Once we get a little bit more clarity on that and the exact volumes, and what types of aircraft are best suited [for the job], I think we’ll have a much clearer picture on the overall commercial impact of this project,” Jones Shah said during a press briefing this month organized by The International Air Cargo Association and Pharma.aero. Vaccine deployment will take place over the better part of two years, although planning should get easier over time as drugmakers ship doses on regular schedules instead of making emergency hotshot shipments, according to logistics companies. “This isn’t a four-week effort. This is a 2021 into 2022 effort. So it will be spread out over a number of months and not just impact the Christmas logistics season,” Jones Shah said. Christopher Spyrou, CEO and founder of Neutral Air Partner, said consumer and industrial goods always take a back seat to pharmaceutical products when space is scarce on flights. “In a normal environment, pharma gets priority over general cargo anyway. So imagine what will happen with a vaccine,” he said, adding that small and medium-size shippers will be impacted the most.  Neutral Air Partner is a Hong Kong-based international freight cooperative designed to increase the buying power and collective expertise of independent forwarders.  Spyrou said access to air cargo aircraft will be determined by who can pay. Airfreight rates have been elevated all year and are escalating again as the peak shipping season for the holidays hits full stride. Rates from China to the U.S. and Europe have increased 25% to 45% in the past two weeks, according to data from Freightos. And shipping prices could go even higher when vaccines get released. “The general cargo shippers might not be able to afford to pay the $10, $12, $15 per kilo to make their cargo a priority over the vaccines,” Spyrou said. Pfizer, which has begun parallel production alongside the clinical trials to speed up distribution upon approval, has a contract with the U.S. government to provide 100 million doses by March, but officials said it’s possible they could meet a provision to provide 30 million doses by the end of the year. That initial tranche would cover 15 million people, likely targeted for health care workers, first responders and nursing homes.  “As we move into the first months of 2021, then we are going to have a much more massive distribution of the vaccine around the world,” said Albert Bourla, Pfizer’s CEO and chairman.  If a vaccine comes out during the peak shipping season before Christmas, airfreight capacity will get even tighter, Bryan Schreiber, manager of air cargo business development for the Columbus Regional Airport Authority in Ohio said Monday on the FreightWaves TV show/podcast “WHAT THE TRUCK?!?”  The airport authority manages Rickenbacker International Airport, which mostly caters to all-cargo aircraft. With ocean capacity from Asia essentially maxed out and rates to the U.S. nearly double or triple last year’s level at this time, many companies are converting shipments to air.  “You throw vaccine transportation on top of that and it’s going to be interesting, particularly for the integrated carriers … that are going to be carrying your holiday packages,” Schreiber said.
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Fed Triggers Huge Buy Program With News It's Easing "Main Street Lending" Terms

Fed Triggers Huge Buy Program With News It's Easing "Main Street Lending" Terms Tyler Durden Fri, 10/30/2020 - 11:15 Moments before 11am, with stocks tumbling and at session lows, we had just one question: where was Jerome Powell, the man who according to NY Mag's very own Fed apologist and sycophant, Josh Barro, is now the people's Hero 2.0 (not to be confused with Hero 1.0 as defined by another socialist rag)? Where hero? pic.twitter.com/XCcuu1TFgc — zerohedge (@zerohedge) October 30, 2020 Well, we literally got the answer just milliseconds later when Bloomberg headlines hit that the Fed would further ease terms on its Main Street Lending Program targeting smaller businesses: * *FED LOWERS MINIMUM LOAN IN MAIN ST PROGRAM TO $100K FROM $250K * *FED: PPP LOANS OF UP TO $2M CAN BE EXCLUDED FROM BORROWER DEBT * *FED: MAIN ST. TO DATE HAS MADE ALMOST 400 LOANS TOTALING $3.7B Clearly the Fed felt that it needed a flashing red Bloomberg headline to stop and reverse the rout, and as such it huddled early on Friday, when it decided to adjust "the terms of the Main Street Lending Program in two important ways to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic." This is what the Fed announced: * the minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced from $250,000 to $100,000 and the fees have been adjusted to encourage the provision of these smaller loans. * The Board and Department of the Treasury also issued a new frequently asked question clarifying that Paycheck Protection Program loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the Main Street Lending Program, if certain requirements are met, which should also help smaller businesses access Main Street loans. The Fed also revealed that so far, the Main Street program has made "almost 400 loans" - which is a laughably small number totaling $3.7 billion. Of course, none of that mattered. What did matter is that the moment algos saw a flashing red headline with the word Bloomberg in it, they unleashed a buying frenzy and as shown in the TICK chart below, nanoseconds after the news hit, we saw the highest TICK print of the day... ... which came just as stocks were about to drop below a critical support level, and reversed the day's rout, if only for the time being.
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Melbourne Parties As 112-Day COVID-19 Lockdown Comes To An End

Melbourne Parties As 112-Day COVID-19 Lockdown Comes To An End Tyler Durden Fri, 10/30/2020 - 02:45 After 112 days and countless arrests, fines and protests, Australia's second-most-populous state is finally free from lockdown. The city of Melbourne, the capital and largest metro center of Australia's coronavirus-hammered Victoria state, exited lockdown on Wednesday, leaving businesses and residents to cope with the aftermath of months of forced closures for an virus that has so far killed fewer than 1,000 people in the entire country. One resident told the SCMP about going to "an end of lockdown party" at a popular bar in the city to ring in the end of lockdown. She said the vibe at the event was "electric" and everybody was "giddy" about the restrictions finally coming to an end. What began as a six-week stretch in lockdown ultimately left Melbourne's 5 million residents shut up inside for months, depriving them of the cultural attractions like bars, cafes and live music. Victoria premier Daniel Andrews said more than 16,000 shops, 5,800 cafes and 1,000 beauty salons reopened on Wednesday, though he acknowledged that the restrictions had taken their toll on the city and its economy. The lockdown comes to an end more than 2 months after Melbourne's 'peak' of more than 700 new daily cases in a day. Some restrictions remain in place: Gyms in the city won't be able to reopen until Nov. 8. Melbourne residents must also continue to comply with restrictions on movement that bar them from visiting towns outside the city, a measure that had led many to complain that Melbourne and Victoria had been "cut off" from the rest of Australia. In total, Australia has recorded about 27,500 cases, with 20,344 in Victoria, and 907 deaths, compared with a population of 25 million. Total active cases in the state have fallen to just 76, almost all of which are within the city limits of Melbourne.  
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US Might Not See Life Get "Back To Normal" Until 2022, Dr. Fauci Warns

US Might Not See Life Get "Back To Normal" Until 2022, Dr. Fauci Warns Tyler Durden Thu, 10/29/2020 - 14:32 With Larry Kudlow back in front of the cameras on Thursday talking up Thursday's record-breaking GDP report and promising - with a newsman's confidence - that the American economy will have made a "full recovery" by the Spring of next year. Though he acknowledged that his take was "optimistic", he reiterated that the president doesn't want to shut down the economy again, adding that he doesn't think shutdowns are "helpful". It's unsurprising to see the White House dispatch Kudlow to carry out a string of TV interviews: Because as the Trump Campaign pushes its message that Trump's response to the pandemic wasn't as fatally flawed as critics have claimed, Dr. Fauci is on the other end, claiming that President Trump's projections for when a vaccine might be approved are fanciful. And as the outbreak has accelerated these past few weeks (with Europe hit much harder than the US), the good doctor has been pushing his estimates for when we might expect a vaccine to be widely available further and further back. On Wednesday evening, Dr. Fauci appeared on CNBC for an interview with Shep Smith, the latest Fox News refugee to try his luck as restarting his career, only to be hectored by the reporter who repeatedly pressed Dr. Fauci to unreservedly declare that a mandatory mask order must be passed across all of the US. Nationwide, Covid has never been this bad. "This is going to get worse," Dr. Fauci told us last night. Follow the latest pandemic news here: https://t.co/zjSdSomZ5F #FollowTheFauci pic.twitter.com/bBHImV5LpF — The News with Shepard Smith (@thenewsoncnbc) October 29, 2020 After acknowledging last night that he "hasn't spoken to the president in quite a while", on Thursday, Dr. Fauci is cranking up his warnings to '11', claiming that life in the US might not go "back to normal" until 2022, or late 2021 at the very least, and that mask wearing would likely continue until around this time next year. That is, unless Americans change things up and start taking the virus more seriously. The comments were apparently made during a live virtual interview held by the NIH "in cooperation with Facebook and Twitter live". I will be joined by my colleague @NIAIDNews Director Dr. Anthony Fauci for a LIVE Q&A today (10/29) at 12:00 pm ET to provide updates on the #COVID19 @Moderna_tx #clinicaltrial, other vaccine research, & answer questions about vaccine safety. Tune in on @NIH & #NIH’s Facebook! pic.twitter.com/C3UBiSuG7e — Francis S. Collins (@NIHDirector) October 29, 2020 Earlier, some news outlets reported that Dr. Fauci has just come out in favor of a national mask mandate - Joe Biden's stated preference for combating COVID-19 - for the first time, which is of course nonsense. He's essentially been advocating for a national mandate since it became clear that restrictions and enforcement would vary dramatically from place to place. When it comes to evaluating how much faith we should place in Dr. Fauci's warnings, just remember, we've been here before... 1. Fauci doing all he can to sabotage Trump election with endless dire predictions; the same Fauci who failed the American people by saying early on the coronavirus wasn't any worse than a flu and told the public not to wear masks; — Mark R. Levin (@marklevinshow) October 29, 2020 2. and to this day has not even commented on the decision by Cuomo and others to send coronavirus positive patients into nursing homes. The same Fauci who blew the swine flu in 2009 with his buddies Obama and Biden. He's a disgrace and a political hack. https://t.co/4xSJx9PqTo — Mark R. Levin (@marklevinshow) October 29, 2020 As Dr. Joseph Ladapo argued in a commentary piece published Thursday by WSJ, data garnered so far shows that widespread mask wearing has made little difference (one widely cited study claimed just a 2% difference in the rate of growth. Though compounding is certainly a factor, the circumstances of the study are hardly definitive. As Dr. Lapado writes: "By paying outsize and scientifically unjustified attention to masking, mask mandates have the unintended consequence of delaying public acceptance of the unavoidable truth. In countries with active community transmission and no herd immunity, nothing short of inhumane lockdowns can stop the spread of Covid-19, so the most sensible and sustainable path forward is to learn to live with the virus."
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Texas Ballot Snafu Latest Example Of America Headed For Election Crisis

Texas Ballot Snafu Latest Example Of America Headed For Election Crisis  Tyler Durden Thu, 10/29/2020 - 13:45 Days before the Nov. 03 presidential election, more problems emerge as some mail-in ballots are unreadable by scanning machines, increasing fears of election uncertainty.  Ballot-scanning machines in Tarrant County, Texas, are facing severe problems this week. They can't read mail-in ballots - causing panic among local officials who are running election workers around the clock to replicate certain ballots for a recount, reported CBS DFW.  These problems have developed as Texas, a traditionally Republican state, is now considered a "toss-up" between President Trump and former Vice President Joe Biden.  So far, Tarrant County ballot-scanning machines have rejected about one-third of mail-in ballots, or about 22,000.  County elections administrator Heider Garcia addressed this issue Tuesday night to county commissioners. Garcia said bar codes on some ballots are illegible by machines causing them to be automatically rejected.  Tarrant County normally uses in-house ballot printing - but the virus pandemic forced local officials earlier this year to outsource ballots from Runbeck Election Services in Phoenix, Arizona, due to the expectations of social distancing would keep people at home and vote via mail.  For readers who are interested in how the "ballot replication" process works. CBS DFW explains: "Ballot replication is done yearly, Garcia said, but not at this volume. The process usually involves ballot board members, from more than one political party, manually filling out a new ballot that matches the one that was damaged or unreadable. "Because of the volume of work, Garcia said in this case an employee will likely use an electronic machine to replicate the ballot. Ballot board members will then compare a print out of those choices, to the original ballot that was sent in, to verify the choices match." In response to the ballot-machine debacle, Runbeck Elections Services released this statement: "We were concerned to learn that some Tarrant County ballots are not able to be scanned properly by Hart Intercivic tabulation machines, as Runbeck Election Services is a certified ballot printer for Hart Intercivic. This election year alone we have printed nearly 100 million ballots, many of which have been the same type of ballot used in Tarrant County, without experiencing any scanning issues. Runbeck Election Services is working with Tarrant County elections officials to investigate if the problem is printing-related or scanning-related. Once the investigation is complete, we will offer our support to all partners and vendors involved to determine the appropriate next steps to ensure that all ballots are properly tabulated." Here's CBS DFW's video reporting of the ballot-machine debacle in Tarrant.  As counties and states scramble with processing mail-in ballots, there will be unexpected errors, such as the one in Texas. Counting tens of millions of mail-in ballots by election night seems complicated to meet that deadline. Election uncertainty is the consensus among the latest Bank of America Fund Manager Survey, where 74% of respondents believe that a contested election is possible.  What this all means is that mail-in voting has opened up a can of worms that will allow either political party to easily contest election results 
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United Airlines To Rapid Test Passengers For COVID

United Airlines To Rapid Test Passengers For COVID  Tyler Durden Thu, 10/29/2020 - 12:40 For people who want to fly but are worried about contracting COVID-19, United Airlines is offering rapid virus testing for transatlantic flights starting next month.  United announced Thursday morning that from Nov. 16 to Dec. 11, "rapid tests to every passenger over two years old and crew members onboard select flights from Newark Liberty International Airport (EWR) to London Heathrow (LHR), free of charge."  So here's the kicker, anyone who refuses to be tested "will be placed on another flight," read the press release.  "We believe the ability to provide fast, same-day COVID-19 testing will play a vital role in safely reopening travel around the world and navigating quarantines and travel restrictions, particularly to key international destinations like London," said Toby Enqvist, chief customer officer for United. Enqvist continued: "Through this pilot program, we'll guarantee that everyone* onboard has tested negative for COVID-19, adding another element to our layered approach to safety. United will continue to lead on testing, while at the same time exploring new solutions that contribute to the safest travel experience possible."  United has required all passengers to wear masks, disinfected airplanes and cabins between flights, and upgraded planes' air filtration systems with hospital-grade HEPA filters, resulting in lower probabilities of spreading and contracting the virus, even on a packed flight.  Rapid testing is just one more layer of defense for passengers, a move that could hopefully restore confidence among people to fly once more, comes at a time when the entire airlines and travel and tourism industries remain in financial ruin.   United said the test would be administered on United Flight 14 (EWR to LHR), departing at 7:15 p.m., Mondays, Wednesdays, and Fridays.  According to Bloomberg, United will use Abbott Laboratories ID Now rapid molecular tests for the program, noting the carrier will also offer these tests for passengers in San Francisco for flights to Hawaii.   The next big push to resurrect the airline industry is for carriers and airports to rush out pre-flight virus testing.  While many passengers are still objecting to wearing masks on planes, what makes you think people will allow carriers to test them for a virus? Also, bear in mind, this is the same rapid-test as was used by The White House... ... there will be uproar. 
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"This Was A Terrible Mistake": Apollo's Black Regrets Giving Epstein A "Second Chance"

"This Was A Terrible Mistake": Apollo's Black Regrets Giving Epstein A "Second Chance" Tyler Durden Thu, 10/29/2020 - 11:15 In the aftermath of the widespread blowback amid Apollo clients, many of whom have frozen their new capital allocations to the private equity giant in response to recent reports that co-founder Leon Black had paid "suicided" pedophile Jeffrey Epstein $50 million after he was released from jail, during a conference call on Thursday morning discussing Apollo’s third-quarter results, Black said he regretted doing business with sex offender Jeffrey Epstein, even though other prominent people had done the same. "Like many people I respected, I decided to give Epstein a second chance," Black said Thursday during a conference call to discuss Apollo’s third-quarter results. "This was a terrible mistake", the former Drexel banker added pointing out the obvious, although it still remains unclear just what "second chance" services Epstein provided to Black that was worth a whopping $50 million in compensation, but we are confident we will find out soon enough. And in what may be the greatest example of "whataboutism" in modern history, Black said that Epstein worked with many prominent individuals after he was released from jail, and that "the distinguished reputations of these individuals gave me misplaced comfort." Laughably, Black - who is surrounded by the most brilliant financial minds of his generation 24/7 - has said he sought advice from Epstein for matters such as taxes, estate planning and philanthropy. Apollo hired law firm Dechert LLP to conduct a review that’s expected to take 60 to 90 days, according to people familiar with the matter. That said, we doubt their reputations will be just as "distinguished" once it emerges just what "services" underage girls Epstein was providing them. Also on the call we learned that despite the posturing, Apollo's clients were not really turned off by the ongoing scandal, and the PE giant raised another $4 billion in the third quarter even though it expects fundraising to slow, co-founder Joshua Harris said on the call.
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France's Charlie Hebdo Sparks Turkish Fury With Cartoon Of "Erdogan In Private"

France's Charlie Hebdo Sparks Turkish Fury With Cartoon Of "Erdogan In Private" Tyler Durden Thu, 10/29/2020 - 02:45 A new satirical cartoon from the French weekly Charlie Hebdo has sparked fury in Turkey and is worsening the diplomatic spat between Turkey and France after Paris already recalled its ambassador when President Erdogan questioned Macron's mental health while accusing the French president of attacking Islam over remarks made in the wake of the horrific beheading of a middle school teacher Samuel Paty on October 16. The latest edition of the newspaper, first released online Tuesday night, features a front page cartoon mocking President Recep Tayyip Erdogan - he's in his underpants, holding a can of beer and gazing up a skirt of a hijab wearing woman.  "Ooh, the prophet!" the character says in the French speech bubble, with the title reading: "Erdogan: in private, he's very funny". Erdogan : dans le privé, il est très drôle ! Retrouvez : 👉 Laïcité : zoom sur le CCIF par @LaureDaussy 👉 Voyage dans la crackosphère parisienne par @AntonioFischet8 et Foolz 👉 Reportage à Lunéville et son théâtre par Juin ➡ Disponible demain ! pic.twitter.com/jxXqKrvXbK — Charlie Hebdo (@Charlie_Hebdo_) October 27, 2020 It has set off outrage among the Turkish public especially after Erdogan shot back Wednesday saying the "worthless" cartoon had nothing to do with free speech but is in reality an attack on Islam. He accused European countries of wanting to "relaunch the Crusades". There's also been growing demonstrations in other parts of the Middle East over charges of France's "anti-Islamic" stance. Erdogan's top press aide, Fahrettin Altun, additionally said in a tweet: "We condemn this most disgusting effort by this publication to spread its cultural racism and hatred." "French President Macron's anti-Muslim agenda is bearing fruit! Charlie Hebdo just published a series of so-called cartoons full of despicable images purportedly of our President," he added. On Monday Erdogan called for a Turkish boycott of all French goods over what he called France's 'anti-Islamic' stance towards Muslims and the Turkish people. Erdogan had said during a televised speech in Ankara: "As it has been said in France, 'don't buy Turkish-labelled goods', I call on my people here. Never give credit to French-labelled goods, don't buy them." Meanwhile Erdogan is threatening to sue every European leader that posts or defends the cartoons, as is happening with a Dutch politician: European leaders were out in force again today against Turkish President Recep Tayyip Erdoğan, amidst news that he is suing a Dutch politician for posting a cartoon of him. Here’s how the growing standoff between Europe and Ankara started 🧵https://t.co/cGIKykOOWs — POLITICOEurope (@POLITICOEurope) October 27, 2020 Macron has emphasized a freedom of speech message, vowing that the French "not give up our cartoons" - in reference to both the latest row but also the events and controversy surrounding the January 7, 2015 Charlie Hebdo massacre, which left 12 people dead after the newspaper published a series of cartoons perceived as mocking the founder of Islam Muhammad. According to Reuters, Turkey has launched an investigation into the French newspaper, saying it will take "all necessary legal, diplomatic steps against Charlie Hebdo caricature on President Recep Tayyip Erdogan."
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Disinformation By Popular Demand: How The Authenticity Of Hunter's Laptop Became Immaterial

Disinformation By Popular Demand: How The Authenticity Of Hunter's Laptop Became Immaterial Tyler Durden Wed, 10/28/2020 - 14:30 Authored by Jonathan Turley, Yesterday, former Vice President Joe Biden was again insisting that the scandal involving Hunter Biden’s laptop was Russian disinformation despite the direct refutation of that claim by the FBI. No mainstream reporter bothered to ask the simple question of whether this was his son’s laptop and emails, including emails clearly engaging in an influence peddling scheme and referring to Joe Biden’s knowledge.  Instead, media has maintained a consistent and narrow focus. Indeed, in her interview, Leslie Stahl immediately dismissed any “scandal” involving Hunter in an interview with the President on 60 Minutes. It was an open example of what I previously noted in a column: “After all, an allegation is a scandal only if it is damaging. No coverage, no damage, no scandal.” In her interview with Joe Biden, CBS anchor Norah O’Donnell did not push Biden to simply confirm that the emails were fake or whether he did in fact meet with Hunter’s associates (despite his prior denials). Instead O’Donnell asked: “Do you believe the recent leak of material allegedly from Hunter’s computer is part of a Russian disinformation campaign?” Biden responded with the same answer that has gone unchallenged dozens of times: “From what I’ve read and know the intelligence community warned the president that Giuliani was being fed disinformation from the Russians. And we also know that Putin is trying very hard to spread disinformation about Joe Biden. And so when you put the combination of Russia, Giuliani– the president, together– it’s just what it is. It’s a smear campaign because he has nothing he wants to talk about. What is he running on? What is he running on?” It did not matter that the answer omitted the key assertion that this was not Hunter’s laptop or emails or that he did not leave the computer with this store. Recently, Washington Post columnist Thomas Rid  wrote said the quiet part out loud by telling the media:  “We must treat the Hunter Biden leaks as if they were a foreign intelligence operation — even if they probably aren’t.” Let that sink in for a second. It does not matter if these are real emails and not Russian disinformation. They probably are real but should be treated as disinformation even though American intelligence has repeatedly rebutted that claim.  It does not even matter that the computer has seized the computer as evidence in a criminal fraud investigation or that a Biden confidant is now giving his allegations to the FBI under threat of criminal charges if he lies to investigators. It simply does not matter. It is disinformation because it is simply inconvenient to treat it as real information.
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David Stockman On The Mother Of All Stock Market Manias

David Stockman On The Mother Of All Stock Market Manias Tyler Durden Wed, 10/28/2020 - 13:40 Authored by David Stockman via InternationalMan.com, It seems that only 0.1% of the time during the last 70 years has the S&P 500 traded at a higher forward PE (price-to-earnings) multiple than it does today. That’s equal to 4 weeks out of the 3,640 weeks since 1950. In a world faced by COVID lockdowns, staggering amounts of debt, central bank money-pumping extremes, and outright fiscal insanity in Washington, why is the present moment more propitious for the valuation of corporate earnings than during 99.9% of the time since the Korean War? Of course, it is not. Not remotely so. Instead, the Fed and the other central banks have led the robo-machines, day-traders, and Robinhood waifs into the most hideous stock-chasing mania in recorded history. Here are just a few of the market extremities: * Amazon is now 43% of the S&P 500 consumer discretionary index; * Nearly two-thirds of the market is underperforming so far this year; * Year-to-date, only one in three stocks is actually in the green; * One in five stocks is down 50% or more from its all-time high; * The five largest stocks in the S&P 500 have a combined market cap that equals that of the “smallest” 389 stocks; * Apple, Amazon, Microsoft, and Google—four companies—have a combined market cap (over $6 trillion) that is greater than the GDP of every country in the world, minus the US and China; * Tesla, having surpassed Walmart (with one-twentieth of the revenue!), has become the ninth-largest stock in the US. How could the S&P 500 be trading at its highest multiple in 70 years when the growth rate of corporate earnings has been sinking for more than two decades? The recent S&P index value implies a PE multiple of 36.8X - a place the S&P 500 has never been before. The forward PE is now above the record high reached during the dot-com madness at the turn of the century. PE multiples at these levels imply double-digit earnings growth rates in the year ahead; it is relevant to start with the trend now in place. The only accurate way to measure the latter is on a peak-to-peak basis throughout the business cycle. Corporate earnings peaked in Q4 2019, which was 12.5 years after the prior peak in June 2007. As it happens, the S&P 500’s earnings-per-share growth during that period - massive monetary stimulus to the contrary notwithstanding - was far below the rate of the two previous cycles. Growth per annum: * Q2 2007–Q4 2019: 4.0% * Q3 2000–Q2 2007: 7.0% * Q2 1990–Q3 2000: 9.5% Moreover, the 4.0% growth rate for the most recent cycle is not what it’s cracked up to be relative to prior cycles. That’s owing to the massive stock buyback campaigns and deterioration of corporate balance sheets since the June 2007 peak—as well as the one-time reduction in the corporate tax rate in 2017, a non-repeatable boost to cumulative S&P 500 earnings growth during the 12.5-year cycle. Worse still, pretax corporate earnings in Q2 2020 plunged by 23% from their Q4 2019 peak - meaning that they have a huge hole to dig out of before there can be any growth in the post-Covid cycle. Given today’s frenzied stock market, you would never guess that the $1.774 trillion level of profits reported for Q2 2020 was nearly identical to the $1.773 trillion level reported way back in Q4 2005. In other words, corporate profits have been thrown backward by 15 years. If you believed that current market levels had anything to do with the economic fundamentals, you would have to argue that the long-term trend of corporate earnings growth is fixing to pivot from the sinking pattern shown above to a new phase of parabolic rise. This very idea is preposterous - besides, earnings don’t have anything to do with the casino’s current speculative frenzy. Instead, what we have is pure, unadulterated inflation of PE multiples. That’s a monetary phenomenon - the AWOL inflation that the Fed heads keep gumming about. It’s the PE multiple, stupid! *  *  * The economic, political, and social volatility in the days and weeks ahead promises to be extreme. The impact on your savings, retirement funds, and personal freedoms could be unlike anything we’ve ever seen. Do you want to know exactly what you should be doing differently with your portfolio and in your personal life? It reveals what you can do to prepare so that you can avoid getting caught in the crosshairs. Click here to watch it now.
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US Commander Provokes China: Troops Can Be Sent To Defend Japan's Senkaku Islands

US Commander Provokes China: Troops Can Be Sent To Defend Japan's Senkaku Islands Tyler Durden Wed, 10/28/2020 - 12:39 Two weeks ago we detailed the latest flare-up in maritime tensions between Japan and China after Chinese ships intruded into the Japanese-claimed Senkaku Islands area in disputed East China Sea waters, staying for a record amount of time according to Japan's Defense Minister, who previously called the situation "intolerable". The stakes have now been raised as of early this week given the head of US forces in Japan has said the Pentagon could send American troops to defend the Senkaku Islands from future Chinese aggression.  US Navy image: ships assigned to Ronald Reagan Carrier Strike Group joined ships of Japan Maritime Self-Defense Force (JMSDF) Escort Flotilla 1, Escort Flotilla 4, and the Royal Canadian Navy, in formation during Keen Sword 21. "Our arrival today was simply to demonstrate the ability to move a few people but the same capability could be used to deploy combat troops to defend the Senkaku Islands or respond to other crisis and contingencies," Lt. Gen. Kevin Schneider said on Monday. He further went through a list of "malign activities" by Beijing in the region during his briefing from the deck of a Japanese destroyer. The occasion was the commencement of Keen Sword 21, a major ten day joint annual exercises between the US and Japanese navies. It involves almost ten thousand US troops and some 37,000 Japanese troops along with 170 aircraft and 20 ships, according to international reports. Here's how Japanese media presented US commander Schneider's provocative remarks: Schneider said the countries' ability to transport personnel "can and could be used to deliver combat troops to defend the Senkakus." Officials from Japan's Defense Ministry view his remarks as a warning to China, which has been stepping up its activities in waters near the Senkaku Islands. China refers to the Senkaku islands as Diaoyu - which Beijing claims as its own. Local reports suggest the crisis of two weeks ago was finally resolved when Chinese Coast Guard ships left of their own accord. The incident was widely described as the longest breach of Japan's waters in almost a decade. TODAY: @INDOPACOM and units from the Japan Maritime Self-Defense Force began exercise Keen Sword 21, designed to enhance 🇯🇵 🇺🇸 combat readiness and interoperability while strengthening bilateral relationships and a #FreeAndOpenIndoPacific. READ MORE: ➡️ https://t.co/9LHrjsg8gz pic.twitter.com/tQuSfmMhiU — U.S. Navy (@USNavy) October 26, 2020 It doesn't appear either side plans to budge:  Tensions over the uninhabited rocky chain, 1,200 miles (1,900 kilometers) southwest of Tokyo, have simmered for years, and with claims over them dating back centuries, neither Japan nor China is likely to back down. Chinese vessels have been spending record amounts of time in the waters around the islands this year, drawing condemnation from Tokyo. Recall that any potential military confrontation between Japan and China in the Senkakus could theoretically draw in the US given the mutual defense treaty  between Washington and Tokyo.
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Liquidation? Gold, Silver, & Bitcoin Battered As Dollar Spikes

Liquidation? Gold, Silver, & Bitcoin Battered As Dollar Spikes Tyler Durden Wed, 10/28/2020 - 11:06 If we didn't know better we would suggest that today's stock market puke was reflexively driving a desperate rush for liquidity as the dollar spikes higher as bonds (barely moving despite the massive puke), bullion (gold and silver slammed), Bitcoin (a recent favorite hiding place) are all exhibiting signs of liquidation... Since the open, stocks are being dumped... Bitcoin is back below $13000... Bullion is puking (gold
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French Ambassador After Islamist Beheading: "France Is A Muslim Country"

French Ambassador After Islamist Beheading: "France Is A Muslim Country" Tyler Durden Wed, 10/28/2020 - 02:00 Authored by Paul Joseph Watson via Summit News, Responding to the beheading of a school teacher by an Islamist in Paris, French ambassador to Sweden Etienne de Gonneville told broadcaster SVT, “France is a Muslim country.” Yes, really. Samuel Paty was decapitated by an 18-year-old Chechen jihadist in revenge for showing cartoons of the Prophet Muhammad to pupils in a class on free speech. The country responded with mass protest marches in major cities and President Emmanuel Macron vowed to protect freedom of expression in honor of the victim. However, Macron’s vow to take the fight to Islamists has caused uproar in many Muslim countries, notably Turkey, who have effectively sided with jihadism by announcing boycotts on French products. Now France’s ambassador to Sweden has himself appeared to capitulate to Islamists by declaring, “France is a Muslim country.” Etienne de Gonneville told Sweden’s national broadcaster SVT, “First, France is a Muslim country. Islam is the second-largest religion in France. We have anywhere between 4 and 8 million French citizens who have a Muslim heritage.” The ambassador then claimed that “al-Qaeda propaganda” and not “Islam” was to blame for Paty’s murder, despite the fact that the local Muslim community had incited retribution against the teacher for showing the cartoons. “The media must know how to address the issue of Islamic terrorism and not fall into the trap of that idea that it would supposedly offend Islam. Islam is very diverse,” said de Gonneville. “Those who we hear now are speaking for these radical Islamist outfits. We should not give them more weight than they have. They are a tiny minority.” As we highlighted yesterday, following the beheading of Paty, 79% of French people believe Islamism has “declared war” on their country. *  *  * New limited edition merch now available! Click here. In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Also, I urgently need your financial support here.
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WaPo Owner & World's Richest Man Jeff Bezos Reportedly In Talks To Buy CNN

WaPo Owner & World's Richest Man Jeff Bezos Reportedly In Talks To Buy CNN Tyler Durden Tue, 10/27/2020 - 14:30 His credibility rejuvenated by a series of timely scoops about the TikTok deal talks which eventually went nowhere, Fox Business Senior Business Correspondent Charles Gasparino has just broken what, if accurate, would be one hell of a media industry scoop. Gasparino reports that Amazon founder and CEO Jeff Bezos, the proprietor of the Washington Post since he bought what was then a struggling national paper with shrinking appeal beyond the Beltway, is in talks to also buy CNN from AT&T as the telecoms giant looks to shed assets to pay down some of the massive debt accrued from building out 5G networks nationwide. BREAKING: Is @amazon chief and @washingtonpost owner @JeffBezos looking to create a media empire? Investment bankers talking up the possibility of Bezos buying @CNN as @ATT looks to shed assets amid massive debt load following TimeWarner deal. Will discuss at 1pm @FoxBusiness $T — Charles Gasparino (@CGasparino) October 27, 2020 Combining CNN and the Washington Post officially under the same media umbrella, with Bezos as a kind of Rupert-Murdoch-On-Steroids, would hand the world's richest man even more power to influence public opinion and implement his agenda. On Twitter, Gasparino's tweet is already drawing attention from MSM reporters. Bezos seems to be playing media Monopoly, wants CNN in addition to WaPo https://t.co/VSrUrQaTl2 — Emily Jashinsky (@emilyjashinsky) October 27, 2020 Others found the reports amusing. talks that Jeff Bezos may be purchasing CNN LOLOL — Lois Grippin (@jermesz) October 27, 2020 We don't need to go into more detail here about what a difficult year it has been for the media business. If Bezos wants to combine both the cable news station and the paper, ensuring various "synergies" (aka layoffs) in the process, then he certainly has the checkbook for it. hahaha so funney 😂 CNN Business: Jeff Bezos and the rest of America's billionaires saw their fortunes skyrocket over the past six months during the coronavirus pandemic — while millions of Americans are now earning less than they were before the crisis began, according to a ne https://t.co/Me8VuYuoho — Bret Filups (@BananaSlapdick) October 26, 2020 To be sure, talks about massive media deals often pans out. A few years ago, people were reporting that Trump was going to resign in order to start his own competitor to Fox News. But if it did happen, some questions to keep in mind: Would Jeff Zucker, Trump's former top producer at "The Apprentice" and the head of CNN, remain in place? Or would Bezos push him out. And would he use the channel to settle petty scores with lawmakers who pushed for the breakup of Amazon? Trump is of course a hated enemy of Bezos, and has attacked the billionaire not only on Twitter, but by pushing for the antitrust scrutiny that Amazon is now facing under Trump's watch. We can't imagine Trump would sit back and just let such a deal proceed, though if he doesn't win next Thursday, he might not have a choice. Would he bring in his mistress, a former TV anchor, for an on-camera spot? Maybe even as management?
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New York Post uncovers new Hunter Biden emails indicating his alleged deals with military-linked Chinese executive

(Natural News) The New York Post has obtained a new set of emails linking Hunter Biden to a Chinese executive with close links to the Chinese military. In a report by The Epoch Times, the recent emails followed an earlier story by the Post about a Ukrainian executive who met with Hunter’s father, former Vice President...
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Sorority Apologizes For Congratulating Amy Coney Barrett

Sorority Apologizes For Congratulating Amy Coney Barrett Tyler Durden Tue, 10/27/2020 - 12:25 Authored by Ben Zeisloft via Campus Reform, 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. pic.twitter.com/uhf5wsKbLF — Kappa Delta Sorority (@KappaDeltaHQ) September 29, 2020 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.
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The Government’s Case Against Michael Flynn Is Falling Apart

by Eric Zuesse, Strategic Culture: On October 17th, a document in the case of USA v. Michael T. Flynn was docketed (placed onto the court’s calendar for consideration), which could free Mr. Flynn, and which might even lead to a transformation of the American criminal-justice system. The legal case against Flynn cannot be truthfully understood unless and […]
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China’s Gold & Silver Buying Spree Tightens Physical Supply

from Silver Doctors: China’s making an UNPRECEDENTED move into physical silver, and it’s having a SIGNIFICANT impact both the physical and paper markets… Samuel Briggs via Kinesis Andrew Maguire explores the marketwide implications of China buying up vast quantities of gold and silver. TRUTH LIVES on at https://sgtreport.tv/ Andrew Maguire reveals China’s making an unprecedented move into physical silver, […]
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WSJ Reporter Documents How The Pandemic Turned Her Once-Frugal Parents Into Daytraders

WSJ Reporter Documents How The Pandemic Turned Her Once-Frugal Parents Into Daytraders Tyler Durden Mon, 10/26/2020 - 14:25 We have already documented at length how the pandemic has been a boon for Robinhood and other discount brokerages. Many people forced to stay home and quarantine went on to become day-traders, to varying degrees of success. The result for brokerages was profound: massive boosts in the numbers of new accounts opened, with Robinhood being the most obvious beneficiary.  Put simply: the retail euphoria phase of the stock market bubble was supercharged during the virus lockdown where millennials, with no sports to watch, stuck in their parents' basements, unemployed, and receiving stimulus checks, decided to become day traders. For example, we pointed out last month that retail investors were piling into options and, more specifically, calls. In fact, the retail call-buying frenzy has accelerated to such an extent that as the following stunning chart shows, retail traders are on pace to soon have a majority share in all bullish call option activity (currently at 45% and up from 30% at the beginning the year), concluding a process we first discussed in May called "How Retail Investors Took Over The Stock Market". The Wall Street Journal highlighted another group of stories this past week in a piece called "The Pandemic Turned My Parents Into Daytraders". The article highlights how the author's once frugal "coupon clipping" parents have thrown caution to the wind and are now chasing highly overvalued momentum stocks like Zoom and Tesla. "During my four years writing about financial markets for The Wall Street Journal, my parents and I almost never discussed stock trading—in fact, the newsroom has strict rules about journalists’ investing activities and I don’t dispense advice about markets. When I returned to Iowa to visit them in August, it was all they wanted to talk about," WSJ's Stephanie Yang wrote.  She said her father, who had never asked her about the market before, was now asking her about Tesla stock over dinner.  "Dad, please don’t buy Tesla," she told him. "You don’t know anything about the company." He wound up buying Tesla anyway. And Nikola, to boot.  Yang shared a photograph of a text exchange with her mother, wherein her mom tells her that the "price is getting low" with Apple and Tesla priced at $107 and $379, respectively. The text looks similar to exchanges that many on Fin Twit share with their parents, when they inquire with questions about the market.  Yang goes on to talk about how her parents grew up with modest means and a modest lifestyle - waiting tables and working side jobs - to get to where they were today. They had always urged her to save her money and invest in her 401(k). Their frugal lifestyle was enough to send the author and her brother to college without loans - and for her father to retire before 60.  Now, they are taking on more risks. Yang says 15% to 20% of her parents net worth has moved from traditional index funds to money they daytrade with. While her mother remains measured to a degree, and is learning about stock valuations, she says her father is more likely to take "calculated risks". For example, he considered buying shares of Luckin Coffee after it plunged following questions about its accounting.    "Since then, they’ve been following the ups and downs of individual stocks with a single-minded fervor. Whereas they would once chat about errands or family matters, now they list the trading prices of their favorites, such as Zoom Video Communications Inc. and Roku Inc., and debate whether to buy or sell," Yang wrote. You can read her full account here.  The retail boon hasn't come without its problems, however. We noted months ago that US consumer protection agencies were being flooded with complaints about Robinhood. In fact, four times as many complaints were being filed about Robinhood than other traditional brokerages like Schwab and Fidelity, according to Bloomberg; in 2020 alone more than 400 complaints had been lodged against the "free" daytrading app.  
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New York’s anti-gun attorney general plans to use NRA’s assets as a slush fund for “Black Lives Matter”

(Natural News) There’s no doubt that the Marxist attorney general in New York, Letitia Jones, hates the Second Amendment — because all Marxist-Leninists do: Armed people stand in the way of Communist revolution.  We’ve seen it time and again throughout the 20th and 21st centuries: Revolutionaries encourage their followers to help them achieve their political...
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Ranks Of The Long-Term Unemployed Growing

Ranks Of The Long-Term Unemployed Growing Tyler Durden Mon, 10/26/2020 - 12:15 Via SchiffGold.com, The mainstream spin on unemployment is that things are improving. The unemployment rate is coming down. The number of weekly jobless claims recently fell below 800,000 for the first time since government lockdowns in response to the pandemic went into high gear last March. But there are some troubling signs that undercut this good-news narrative. The number of long-term unemployed workers is steadily rising. The ranks of the long-term unemployed – those out of work for 27 weeks or more – grew to 2.4 million in September, according to Bureau of Labor Statistics data. That’s the highest number since the beginning of the pandemic. The last time we saw this kind of jump in long-term unemployment was during the Great Recession. Meanwhile, the number of Americans out of work for 15 weeks to 26 weeks stands at 5 million. To put the growing number of long-term unemployed workers into some historical context, long-term unemployment hit a record high of 6.5 million and made up 44% of all unemployed workers in March 2010. That was 10-and-a-half months after the official end of the Great Recession in the summer of 2009. Long-term unemployed workers already make up 20% of the total unemployed just 8 months after the US economy fell into recession. “You had all these people who were long-term unemployed in the Great Recession, they trickled in,” Martha Gimbel, an economist and labor market expert at Schmidt Futures, told CNBC. “But this is all hitting at once.” Roughly 13.5 million Americans currently collect benefits under the various federal unemployment programs that expire at the end of 2020. According to the August Job Opening and Labor Turnover Summary, there are roughly two unemployed people for every open job. This data dovetails with our recent report that many “temporary” layoffs are becoming permanent job losses. According to the Bureau of Labor Statistics, the number of job losses categorized as permanent grew by 345,000 to 3.8 million people in September. In other words, nearly 4 million people laid off by small businesses during the pandemic have no jobs to go back to. There are plenty of signs that the job market won’t improve in the near future. Some states and cities are locking things down again as coronavirus cases rise. Regal Cinemas closed all of its locations earlier this month with no timetable for reopening. Disney announced plans to lay off 28,000 workers. US airlines are shedding jobs at a dizzying pace. In a recent podcast, Peter Schiff said he thinks a lot of the people who have gone back to work in recent weeks will eventually find themselves in the unemployment line again. I think a lot of these people who have been recalled, who have come back to work, I think ultimately their employers are going to realize, after the fact, that they don’t really need a lot of these workers, and a lot of these workers are going to be re-fired. Except next time it is going to be permanent, not temporary.” There is also the looming prospect of more corporate bankruptcies and business closures, putting more pressure on the jobs market.  More than 420,000 small businesses have closed their doors permanently since the beginning of the pandemic. That represents a staggering 7.1% of all small businesses. Brookings estimates that the US economy has lost some 4 million jobs in the small business sector “that will only return with the creation of new businesses.” On top of all this, Goldman Sachs projects even more permanent job losses coming down the pike as a wave of mergers, acquisitions and corporate takeovers sweeps through the economy. Lockdowns and the government/central bank response to the ensuing economic fallout may have permanently scarred the labor market and there are signs of deep wounds that won’t quickly heal. In a nutshell, a lot of people will likely never return to work.
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Wall Street Begins Hedging: JPM Says Trump Victory Is "Most Favorable Outcome", Would Push S&P To 3,900

Wall Street Begins Hedging: JPM Says Trump Victory Is "Most Favorable Outcome", Would Push S&P To 3,900 Tyler Durden Mon, 10/26/2020 - 10:33 Over the past month, Wall Street's strategists have engaged in a comprehensive campaign to "ease" client fears that a Biden administration and/or a "Blue Sweep" would be just as good for stocks if not better than a continuation of the status quo, thus avoiding a selloff should Nov 3 prove to be a rout for Republicans, to wit: * Higher corporate taxes under Biden? No worries, it will be offset by up to $7 trillion in fiscal stimulus under a joint Democratic congress. * A doubling of capital gains taxes? No worries, it only will affect the super-rich and while it may hit stocks in late 2021, the dip will be quickly bought as, after all, stocks always go up, with Goldman predicting that  "regardless of the election outcome, we expect roughly 10% upside to the S&P 500 by the middle of next year." * Higher bond yields under a Democratic sweep? No worries, after all we need higher yields to telegraph that the economy is improving and reflation is returning. A recent Bank of America analysis laid out the 4 possible election outcomes, which were more dependent on the composition of the Senate than who is president (the worst scenarios for markets were those where "president Biden" faced a Republican Senate and vice versa for Trump): The bottom line however was clear: the best possible outcome for markets is a Blue Sweep. However, now that said Blue Sweep scenario has been fully priced in a new risk has emerged: what is polls are wrong - again - and we get either a Trump victory or a mixed Congress? Would that mean that the consensus trade would fall apart, leading to sharp stock market losses as the reflation trade is puked into an illiquid market? Judging by the latest report from JPMorgan head of global equity strategy, Dubravko Lakos-Bujas - published over the weekend, Wall Street is about to pull a U-turn and begin pre-emptive damage control should Trump win. Indeed, in a dramatic reversal from the recent narrative which present a "Blue Sweep" as the most beneficial outcome from the election, the JPMorgan strategist writes that he maintains a probability weighted S&P 500 price target of 3,600 for year-end, and sees "an orderly Trump victory as the most favorable outcome for equities (upside to ~3,900)." Just as amusing, Lakos-Bujas says that he also views gridlock outcomes "as a net positive with market volatility likely subsiding and driving mechanical re-leveraging within equities." But the most entertaining spin is that a "Blue Sweep" scenario - which as we noted last night is suddenly looking unlikely with PredictIt odds tumbling, "is expected to be mostly neutral in the short term as it would likely be accompanied by some immediate positive catalysts (i.e. larger fiscal stimulus / infrastructure) but also negative catalysts (i.e. rising corporate taxes)." But... but... Wall Street spent so much time explaining just why this scenario is the best possible one, since the "positive catalysts" would greatly outweigh the negative ones. Or is Wall Street only starting to hedge in case the priced-in "sweep" does not happen, and traders need a fall back "narrative cushion" in case of a Trump win and/or Congress gridlock. Finally, in response to the question of why JPMorgan is suddenly getting cold feet, the Croatian strategist writes that "last week we analyzed voter registration data and their possible implication for State outcomes, while this week we analyzed Twitter sentiment on US election and compared it with the traditional polling data – they all point to a tightening race." Which of course means that JPM needs to prepare a narrative for why a Biden victory is bullish but a Trump victory is even more bullish: just in case anyone gets the crazy idea of selling on Nov 4. * * * While we wait to see if other banks now jump on this "pro-Trump" bandwagon, here is JPM's update of what market signals it is watching to determine the outcome of the election: We find that Energy, Financials and Healthcare sectors could likely see the most outsized moves as they have been explicitly referenced by each candidate on the campaign trail. The Biden basket (JPAMBDEN ) is outperforming the Trump basket (JPAMTRMP ) by 66%, see Fig 1. At the individual theme level, the performance is even more bifurcated. For example, Alternative Energy / Green Tech stocks (key beneficiaries under Biden basket) are outperforming Traditional Energy / Fossil Fuels (beneficiaries under Trump basket) by ~84% since June, see Figure 2. The Biden basket also happens to be more  aligned with Momentum, ESG and COVID Beneficiaries, while the Trump basket aligns with Value and COVID Recovery / Epicenter stocks. Given the large divergence between these two baskets (i.e. similar to momentum/value), coupled with our expectation that COVID-19 headline risk likely declines post-election, we see an increasingly compelling case for Value in the coming period. Deep Value, namely Energy and Financials, would likely be key beneficiaries of an ‘orderly’ Trump victory and could see a large short squeeze. Under a Biden scenario we could also see profit taking from high momentum stocks, especially as investors start to price in risk of higher capital gains tax. This could also trigger a rotation within Growth from US-domiciled to non-US domiciled long duration / secular growth equities which could benefit from (1) low-to-no sensitivity to potential corporate tax hikes; and (2) better insulated from capital gains tax increase due to a more diversified investor base. We are introducing COVID-19 Vaccine Tactical Short Candidates. This is a list of stocks that are in the upper echelon of Momentum and have crowded positioning, that could see the second derivative of their profit growth decrease as consumer / corporate activity normalizes. These screens should be viewed as tactical opportunity to express a view on the catalyst rather than a fundamental call on these companies.
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