COVID Twisted This Pretzel-Maker in Knots. A Devastating Fire Could Put Him Out of Business.

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It was the day before New Year’s Eve and the outdoor Union Square Greenmarket, despite temperatures in the low 30s, was busy with shoppers buying Hudson Valley apples and Vermont maple syrup and pretzels from Pennsylvania Dutch country, the last of which sat on a table below a pretzel flag snapping in the wind. 

I’d first tried Martin’s Handmade Pretzels two weeks earlier. As a pretzel fanatic, I knew a good one by sight, and the deep brown palm-sized twist turned out to be just right: the perfect dryness, the proper saltedness, super crunchy without being so hard it made your jaw hurt to chew it. Later that day, I posted an Instagram video about how amazing the pretzels were, maybe the best I’d ever had, to which someone replied, “One of their bakeries burned down last week.”

This was the same week I’d been covering the continuing ruination of the food and beverage industry in New York City, knocked out due to people’s fears of catching COVID-19, certainly, but absolutely gutted by an escalating series of city and state regulations. Every day, there were new stories about places that would never reopen; of innovations that stood no chance against bad weather, or against politicians treating the restaurant industry as both a trial balloon and a punching bag. Restaurants and bars in New York City, since the start of the pandemic, had been shut, partially reopened, allowed to have outdoor dining, and had that taken away. This was already having a massive impact as of last August, when The New York Times reported that one-third of New York’s small businesses might never reopen. More recently, Eater NYC reported that more than 1,000 restaurants have closed permanently since March 2020

For a food purveyor to have a fire on top of that? In the weeks leading up to Christmas? I asked Ethan Gallagher, co-owner of Martin’s who, when I got to the Greenmarket, was on the phone with a family member dealing with a health issue, if it felt like the trials of Job.

“One more thing,” he said, as the former-employee-turned-volunteer beside him handed out eight-ounce and one-pound bags of pretzels.

“Everybody got laid off during COVID, so now it’s just Dondrea helping and standing outside in the cold,” Gallagher said, and also, that the only reason they had any pretzels to sell was because Martin’s has a second bakery. Based on the customers queuing up two- and three-deep, it would not be able to meet demand.cov

“We’re one of four families left in the country that still do this all by hand,” he said. “People know of us because we’ve been around for so long. We’ve been at Greenmarket since 1982, when the former owner, Alfred Milanese, who I worked for for seven years before buying the business off him, started selling here.” 

Milanese, a writer who’d been living part time in Lancaster County, Pennsylvania, tasted the pretzels made by a Mennonite baker and brought them to New York City. His first customer was Giorgio DeLuca, founder of the gourmet store Dean & DeLuca. The pretzels would wind up being sold at 55 greenmarkets across the city and at countless wholesale locations. French Chef Jean-Georges Vongerichten grabs pretzels at the Union Square Greenmarket “on the regular,” says Gallagher; Sarah Jessica Parker nibbled a Martin’s Homemade on an episode of Sex and the City; and Businessweek once wrote, “Those who snack in times of stress will find no finer hard pretzels than the hand-twisted beauties from Martin’s.”

Gallagher himself probably could have gnawed a few the morning of Saturday, December 12 when, while setting up at the Greenmarket, he got a call from his business partner.

“He said, ‘The bakery is currently in flames,'” Gallagher recalled, and that he knew, instantly, that any earnings they’d managed to eke out in 2020 were now literally up in smoke.

“On Friday before the bakery burned, we ran a sale of flavored pretzels and sold $13,000 worth,” he said. “Half of those orders were fulfilled, but they weren’t picked up by UPS on Friday night. On Monday morning, I refunded $14,000 worth of orders.” 

It’s not as though Gallagher had not been suffering all year, with the loss of nearly all his wholesale accounts due to mandatory restaurant and bar closures. 

“The tricky thing about this world is that a big part of my business was wholesale,” Gallagher said. “That was gone right away when COVID hit.”

He listed some of the places that can no longer take orders. “ABC Kitchen, City Market, 232 Bleecker, The Untitled at the Whitney; immediately gone. To say nothing of people like Santos. He was a forager for ABC Kitchen who would come [to the market] every week, I’ve known him my entire New York experience, he was two years younger than me; died from COVID,” said Gallagher, who is 43. “It’s so impactful and there’s no way to not empathize with that. I try to keep everything perspective and know that if not for what [the Greenmarket] is, which is an outdoor grocery store essentially, we would have been shut down, too. It’s the only reason that I still have a job, have this business; without it we would have folded completely. There’s no way we would have survived.” 

Did Martin’s customers know about the fire?

“I put up a little sign, and Greenmarket put out a really great post,” he said. “I actually held it together really well for the first week, and then that following Saturday when I was here, we have longtime customers whose kids have teethed on these, who teethed on them when they were kids, so it’s such a history here and customers opened up to me in the most beautiful ways. I can’t even talk about it; it was pretty overwhelming.” 

Overwhelming, too—or perhaps infuriating is a better word—to know that there was no relief coming from the offices that had forbidden food operations to operate. What did they expect people to do? How, with no revenue, does any business survive? As one restaurant owner recently told me, had officials told him, out of an abundance of caution, to close for a few months and paid for him to be closed, he would have had no problem with it. Instead, people have been left in the figurative and literal cold, to work things out for themselves. 

Which is where Gallagher was as he worked that first shift after the fire. 

“What was going through my mind that Saturday morning was, how do I pivot from this?” he said. “One of the plans I’d had approved for the new year was to bring a soft pretzel to the market. People ask all the time [because] there’s no really great soft pretzel gig in town.”

As a kid growing up in New York City, grabbing a hot soft pretzel from a street vendor, before my dad took me to a Knicks game, say, was a total religion. I told Gallagher I still buy them but now they’re gummy or barely warm or oversalted, and always the size of a dinner plate. You eat basically a third and throw the rest in the trash or onto the subway tracks for the rats. They’re always terrible.

“They’re always terrible,” he said.

And yet I keep getting them, hoping this street staple has been reclaimed, to have something good about New York be good again. If Gallagher can sell a great soft hot pretzel at the Greenmarket…

“We will crush it,” he said.

He will crush it, and speaking of crushing, how about the customer trying to shove the sack of pretzels he just bought into a too-small cloth sack? How many pretzels did he have there?

“Eight pounds,” said the customer. Then, to Gallagher, “I heard you burned down.”

Gallagher listened as the customer explained he usually bought online but they were sold out so he made a trip to the market today. “They’re very good, they’re very crunchy, just delicious,” he said, and then apologized for having to run.

“I’m going to Mass,” he said, and took off with his sack of pretzels.

“That’s a whole eight-pound box,” said Gallagher, watching the customer go. “That’s a real pretzel commitment.”

I told Gallagher I was going to buy some, too; that we had them earlier in the week with margaritas and they were delicious.

“They go very well with everything,” he said, nodding at the winemaker at the stall next door, who nodded back. “In simpler times, we would drink wine together and eat pretzels.” 

May we have simpler times again.

“One day,” he said. “They’re coming.”

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‘Antifa Scumbags’ Terrorize Sen. Hawley’s Wife And Newborn Daughter After Showing Up To DC House

‘Antifa Scumbags’ Terrorize Sen. Hawley’s Wife And Newborn Daughter After Showing Up To DC House

Senator Josh Hawley (R-MO) says that a group of ‘Antifa scumbags’ showed up at his house in Washington D.C. while he was in Missouri and ‘screamed threats, vandalized, and tried to pound open our door.’

A video posted to YouTube by activist group ShutdownDC showed several protesters gathered outside Hawley’s house, with at least one using a bullhorn to rant in the street. The group later issued a statement saying they approached Hawley’s front door and placed a copy of the constitution on it – which was not seen on the recording.

Tyler Durden
Tue, 01/05/2021 – 10:35

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S&P 500 Is Trading At Historical Extremes: “It’s Not The Winning, It’s The ‘Not Losing’ That Counts”

S&P 500 Is Trading At Historical Extremes: “It’s Not The Winning, It’s The ‘Not Losing’ That Counts”

Authored by Lance Roberts via RealInvestmentAdvice.com,

Welcome to 2021. As we kick off a new year, we begin with the S&P 500 trading at historical extremes. It is essential to have some perspective to set reasonable expectations for future returns and quantify the “risk” of something going wrong.

As we discussed with our RIAPRO.NET subscribers yesterday, the real risk to the market in 2021 is over-confidence.

“Currently, Wall Street analysts are wildly exuberant on expectations of explosive economic growth, rising interest rates, and inflation. The problem with those expectations is that in an economy that is $85 Trillion in debt, higher rates and inflation are a ‘death knell’ to economic growth.

Yes, while the Fed may come to the rescue with more QE, with markets already trading at 36x times earnings it is becoming increasingly difficult to justify overpaying for earnings. Eventually, corporate earnings are going to have to markedly improve, or prices will revert.”

There is a high long-term correlation between the index and earnings of 88%. As shown, extreme deviations from the long-term correlation have always preceded short- to intermediate-term corrections.

Short-Term It’s A Coin Toss

In the short-term, which equates from a few days to a few weeks, markets are sentiment-driven. As we showed in “2020-A Year Of Speculative Mania,” investor sentiment is just about as “bullish” as it can get.

“The chart below shows the combined average of institutional and individual investor valuation confidence subtracted from future returns confidence. When the reading is positive, the confidence the market will be higher one year from now is more elevated than the confidence in the market’s valuation.  The opposite is the case when the reading is in negative territory.

The key takeaway is that investors think simultaneously, the market is over-valued but likely to keep climbing.” 

“Such is the same phenomenon famously described by former Fed Chair Alan Greenspan in a December 1996 speech on ‘Irrational Exuberance.’”

However, it is that “sentiment,” or more commonly known as the “Fear of Missing Out,” that can continue to drive prices higher in the short-term.

As shown, the S&P index is currently overbought and trading significantly above its 200-dma. However, with the Bollinger Bands narrowing, the market could trade higher over the next month.

Such a move higher would align with our expectations of the current bullish trade to continue into January.

However, with the more extreme deviation from the 225-day moving average, somewhere between February and March, we could see a correction take hold. Such would be akin to what we saw during the first half of the last 3-years.

Intermediate-Term Is Worrisome

For investors, the outlook becomes much more troubling as we look further out.

The market is trading 3-standard deviations above its long-term mean and is incredibly overbought on a weekly basis. At the same time, there is a negative divergence in relative strength (RSI), which is also a cause of concern.

Since weekly charts are slower moving, such does not mean the markets will crash immediately. Long-term charts indicate that price volatility will likely be higher in the months ahead, and investors should monitor their risk accordingly. While momentum-driven markets can remain irrational much longer than logic would predict, eventually, a reversion has always occurred.

The chart below shows the price deviation from the one-year weekly moving average. Given the deviation is above 15%, price corrections have always been nearby. (Such does not mean a market crash. A correction of 10-20% is well within norms.)

Watch: The Risk of Markets Trading at Historic Extremes

Long-Term View Is Bearish

The monthly chart of the S&P 500 is likewise just as problematic. Again, long-term charts predict long-term outcomes and are NOT SUITABLE for trading portfolios short-term. As shown, the deviation from long-term monthly means and negative divergences in relative strength has previously been warning signs for more significant corrections.

We see the same problematic setup when viewing the market’s current deviation from its 2-year monthly moving average. The current deviation has only occurred 5-times since 1960 and has always led to a correction over the next several months. (Some worse than others.)

However, since 1900, using QUARTERLY analysis, the picture is bearish for returns over the next decade. The research below aligns valuation, relative strength, and deviations into one chart.

There is little to suggest investors who are currently extremely “long equity risk” in portfolios now won’t eventually suffer a more severe “mean-reverting event.” 

While valuations and long-term deviations suggest problems for the markets ahead, such can remain the case for quite some time. It is this long lead time that always leads investors to believe “this time is different.” 

Because of the time required for long-term data to revert, monthly and quarterly data is more useful as a guide to managing expectations, allocations, and long-term exposures. In other words, this data is not as valuable as a short-term market-timing tool.

What Could Cause A Correction In 2021? 

Lots of things.

The market is currently priced for perfection betting on explosive economic growth, a falling dollar, interest rates remaining low, consumer spending surging sharply, and inflation remaining muted. The reality is that none of those things will likely turn out to be the case.

The one thing that always trips of the market is the one thing that no one is paying attention to. For me, that risk lies with the US Dollar. As noted previously, everyone expects the dollar to continue to decline, and the falling dollar has been the tailwind for the emerging market, commodity, and equity-risk trade. Whatever causes the dollar to reverse will likely bring the equity market down with it.

That is the risk we are paying attention to right now.

What This Means And Doesn’t Mean

Let me repeat the following just so there is no confusion.

“What this analysis DOES NOT mean is that you should ‘sell everything’ and ‘hide in cash.’”

As always, long-term portfolio management is about managing “risk” by “tweaking” things over time.

If you have a “so so” hand at a poker table, you bet less or fold.

It doesn’t mean you get up and leave the table altogether.

What this analysis does suppest is that we should use rallies to rebalance portfolios. 

  1. Trim Winning Positions back to their original portfolio weightings. (ie. Take profits)

  2. Sell Those Positions That Aren’t Working. If they don’t rally with the market during a bounce, they will decline more when the market sells off again.

  3. Move Trailing Stop Losses Up to new levels.

  4. Review Your Portfolio Allocation Relative To Your Risk Tolerance. If you have an aggressive allocation to equities at this point of the market cycle, you may want to try and recall how you felt during 2008. Raise cash levels and increase fixed income accordingly to reduce relative market exposure.

Could I be wrong? Absolutely. But what if the indicators are warning us of something more significant?

What’s worse:

  1. Missing out temporarily on the initial stages of a longer-term advance, or;

  2. Spending time getting back to even, which is not the same as making money.

Conclusion

For most investors, the recent rally has been a recovery of what was lost last year. In other words, while investors have made no return over the previous eighteen months, they have lost 18-months of their retirement saving time horizon.

Yes, if the market corrects and reduces some of its current overbought condition without violating supports and maintaining the current bullish trend, we will miss some of the initial upside. However, we can quickly realign portfolios to participate from that point with a much higher reward to risk ratio than what currently exists.

However, if I am right, the preservation of capital during an ensuing market decline will provide a permanent portfolio advantage in the future. The real power of compounding is not in “the winning” but in the “not losing.”

As I noted recently in our blog on trading rules: 

Opportunities are made up far easier than lost capital.” – Todd Harrison

Tyler Durden
Tue, 01/05/2021 – 10:15

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ISM Manufacturing Unexpectedly Soars As ‘Supplier Delivery Times’ Spike

ISM Manufacturing Unexpectedly Soars As ‘Supplier Delivery Times’ Spike

After yesterday’s debacle in Markit’s US Manufacturing PMI (which rose against expectations of a drop thanks to supplier delivery times rising being judged as a ‘positive’ instead of a clear negative due to trade flow disruption on lockdowns), analysts expected ISM’s Manufacturing survey to signal further deterioration occurred in December (unless slow supplier delivery times are also attributed as a positive).

As hard data has declined aggressively, Manufacturing PMI is at its highest since 2014 while ISM’s Manufacturing survey prints at 60.7 – smashing expectations of 56.8 and well above the 57.5 in November…

Source: Bloomberg

And this is whySupplier Delivery Times are rising fast…


…and as far as the models are concerned that must be an indication of huge demand… rather than disruption in the global supply chain

Source: Bloomberg

We await the correction from ISM to “fix” this issue and downwardly revise ISM once again.

Tyler Durden
Tue, 01/05/2021 – 10:07

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The Violence of Two Words

At the Assizes in Salisbury in 1631, a prisoner threw a brickbat at the judge, and it narrowly missed. The judicial response to this contempt of court was gruesome and can be described as judicial murder. What exactly did the prisoner do? The Shorter OED defines “brickbat” this way: “a piece of brick, esp. one used as a missile; fig. an uncomplimentary remark.” (I recognize of course that looking into a twenty-first century dictionary does not do much to determine the usage of a seventeeth-century word, especially when as here the word was not even in English but in Law French. But I digress.)

As violent and harsh as the judicial response was, it still appears different based on how we resolve what might seem from our vantage point to be a verbal ambiguity. Was the prisoner executed for attempted murder? Or was the prisoner executed for an oral retort?

I thought of that ambiguity this morning when I was looking up the word potshot. It seemed like the right word for a sentence, but I wasn’t certain, so I went checking. The Shorter OED gives three senses. The first was hunting for food (a shot for the pot), which meant one didn’t have to follow the rules of the sport. The second is a random shot (and here “shot” is still in a literal sense, a shot with a firearm or perhaps a bow), “esp. unexpectedly or without giving any chance for self-defense.” The third sense is “a piece of esp. random or opportunistic criticism.” This third sense, I hasten to add, is how I was using the word.

It’s interesting to think about how these three senses might have been related. We can speculate about the historical progression. It’s easy to see how the usage in this second sense might develop out of the first: the first combines a positive (for food) with a negative (not according to rules or norms); in the second sense the particularity of the positive is falling away (random, not just for food) but the negative aspect is still there (not according to rules or norms, maybe softened now to conventions and expectations). And once the second sense is there, it’s easy to see how you would get the third, metaphorical sense. The metaphor would be quite different if it was closely tied to sense one (i.e., if sense two had never developed and the jump had been from one to three).

What is the point? It’s the importance of context. Nothing about the word brickbat tells you what the prisoner did in the summer of 1631 in Salisbury. Nothing about the word potshot tells you, in 2021, whether someone is using the word metaphorically of a critic or unmetaphorically of a sniper. (Context, context, context is a point on my mind, because today I am working on edits to The Mischief Rule.)

But let me push the point slightly further. If we have an account of two people who are, in 2021, going hunting, and the literary text is full of words that are connected to hunting, firearms, etc., and then the text says that one of them “took a potshot at their friend Bill,” was the shot literal or metaphorical? I think the probability of it being a metaphorical shot is almost 100 per cent. For an American English text in 2021, unless it is written coyly (with the reader expected to think one thing is happening, perhaps until the denouement of the story, while really something else is happening), the burden would overwhelmingly be on the author to clarify that she means a literal potshot. The expectation that a potshot at a person will be metaphorical is very, very strong. And that is so without any regard to syntax. And without any regard for whether the text has a profusion of vocabulary that fit the more literal senses.

In other words, context matters, but (in this instance) what is needed as context is not the appearance or prevalence of words in a certain semantic field, or even a knowledge of what activity the characters are involved in. Instead I’m suggesting that for a human target of a potshot we have now almost a kind of clear statement rule, one that has developed without any sharp moment of promulgation. My last speculation: it may be that potshot seems slightly playful, not quite serious, and so we attach it to verbal aggression instead of physical aggression. Perhaps that is because of its rhyme (which might then be tied into shifting cultural perceptions of the significance of rhyme, given twentieth-century changes in poetic form). But that is now speculation on top of speculation.

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For Trump, the Georgia Senate Runoff Is All About Him

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Ahead of today’s pair of crucial Senate runoff elections in Georgia, President Donald Trump ostensibly campaigned for the two Republican candidates, but instead used his time to air more grievances about the last election. Trump is convinced that he won Georgia in November’s presidential election, even though the official numbers say he lost by nearly 12,000 votes and despite the fact that Trump’s lawyers have been unable to find evidence of widespread voter fraud in the state. A day after The Washington Post published an audio recording of a phone call where Trump cajoled the state’s Republican secretary of state to “find” enough votes to flip the results, the president continued to push his discredited conspiracy theories at a Monday rally to reelect incumbent Sens. David Perdue and Kelly Loeffler, the two GOP candidates who are on the ballot Tuesday.

“That was a rigged election. But we are still fighting it,” Trump told a crowd in Dalton, Georgia. He promised to return to the state next year to campaign against Georgia Gov. Brian Kemp, another Republican whom Trump blames for his loss in November.

Trump’s refusal to accept the results of the presidential election has left Republicans in a bind. If Democrats win the two runoff elections on Tuesday, they will have a slim Senate majority (with incoming Vice President Kamala Harris as the tiebreaking vote). The latest polls show Democratic candidates Jon Ossoff, a former journalist and political activist, and Raphael Warnock, a pastor, with slim leads in their respective races. That means turnout will likely decide the outcome, and if Trump has proven anything since his entry into politics in 2015, it’s that he’s a turnout machine for the Republican base.

But the president’s behavior—and the fact that both Perdue and Loeffler have refused to reject a wild plot by some Republican senators to challenge the certification of the presidential election’s results—may have alienated enough mainstream Republicans to tip Tuesday’s races toward the Democrats. Alternatively, Trump’s repeated (and false) attacks on the legitimacy of elections in Georgia may encourage his supporters to stay home.

That inconsistency has been on full display in the president’s Twitter feed where he has alternated between condemning Georgia’s election process as fraudulent—even going so far as to say that Tuesday’s runoff elections are “illegal and invalid“—and encouraging his supporters to participate in them. It leaves the impression, once again, that Trump sees elections as legitimate only when the results favor him.

Regardless of what happens on Tuesday night, we can all breathe a welcome sigh of relief that the seemingly interminable 2020 election season is finally over. It began with a Democratic primary debate on June 26, 2019. At 7 p.m. today, 559 days later, the polls will close and it will finally come to an end.


FREE MINDS

Maximizing COVID-19 vaccinations means sometimes ignoring the government’s guidelines for who gets vaccinated first, especially when the alternative is throwing vaccine doses in the trash. More of the D.C. approach, please. And less of New York Gov. Andrew Cuomo’s heavy-handed approach to vaccine distribution, which is likely to be a disaster.


FREE MARKETS

Americans moved from big metropolises to smaller cities and away from high-cost, high-tax states during 2020, according to annual migration data tracked by United Van Lines, a major moving company. Idaho was the state with the highest percentage (70 percent) of inbound moves last year, followed by South Carolina and Oregon—while New Jersey (70 percent) had the highest percentage of outbound moves, just narrowly ahead of New York, Illinois, Connecticut, and California.


QUICK HITS

  • The results of Tuesday’s runoff elections in Georgia will determine how ambitious President-elect Joe Biden’s first-term agenda will be.

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The Violence of Two Words

At the Assizes in Salisbury in 1631, a prisoner threw a brickbat at the judge, and it narrowly missed. The judicial response to this contempt of court was gruesome and can be described as judicial murder. What exactly did the prisoner do? The Shorter OED defines “brickbat” this way: “a piece of brick, esp. one used as a missile; fig. an uncomplimentary remark.” (I recognize of course that looking into a twenty-first century dictionary does not do much to determine the usage of a seventeeth-century word, especially when as here the word was not even in English but in Law French. But I digress.)

As violent and harsh as the judicial response was, it still appears different based on how we resolve what might seem from our vantage point to be a verbal ambiguity. Was the prisoner executed for attempted murder? Or was the prisoner executed for an oral retort?

I thought of that ambiguity this morning when I was looking up the word potshot. It seemed like the right word for a sentence, but I wasn’t certain, so I went checking. The Shorter OED gives three senses. The first was hunting for food (a shot for the pot), which meant one didn’t have to follow the rules of the sport. The second is a random shot (and here “shot” is still in a literal sense, a shot with a firearm or perhaps a bow), “esp. unexpectedly or without giving any chance for self-defense.” The third sense is “a piece of esp. random or opportunistic criticism.” This third sense, I hasten to add, is how I was using the word.

It’s interesting to think about how these three senses might have been related. We can speculate about the historical progression. It’s easy to see how the usage in this second sense might develop out of the first: the first combines a positive (for food) with a negative (not according to rules or norms); in the second sense the particularity of the positive is falling away (random, not just for food) but the negative aspect is still there (not according to rules or norms, maybe softened now to conventions and expectations). And once the second sense is there, it’s easy to see how you would get the third, metaphorical sense. The metaphor would be quite different if it was closely tied to sense one (i.e., if sense two had never developed and the jump had been from one to three).

What is the point? It’s the importance of context. Nothing about the word brickbat tells you what the prisoner did in the summer of 1631 in Salisbury. Nothing about the word potshot tells you, in 2021, whether someone is using the word metaphorically of a critic or unmetaphorically of a sniper. (Context, context, context is a point on my mind, because today I am working on edits to The Mischief Rule.)

But let me push the point slightly further. If we have an account of two people who are, in 2021, going hunting, and the literary text is full of words that are connected to hunting, firearms, etc., and then the text says that one of them “took a potshot at their friend Bill,” was the shot literal or metaphorical? I think the probability of it being a metaphorical shot is almost 100 per cent. For an American English text in 2021, unless it is written coyly (with the reader expected to think one thing is happening, perhaps until the denouement of the story, while really something else is happening), the burden would overwhelmingly be on the author to clarify that she means a literal potshot. The expectation that a potshot at a person will be metaphorical is very, very strong. And that is so without any regard to syntax. And without any regard for whether the text has a profusion of vocabulary that fit the more literal senses.

In other words, context matters, but (in this instance) what is needed as context is not the appearance or prevalence of words in a certain semantic field, or even a knowledge of what activity the characters are involved in. Instead I’m suggesting that for a human target of a potshot we have now almost a kind of clear statement rule, one that has developed without any sharp moment of promulgation. My last speculation: it may be that potshot seems slightly playful, not quite serious, and so we attach it to verbal aggression instead of physical aggression. Perhaps that is because of its rhyme (which might then be tied into shifting cultural perceptions of the significance of rhyme, given twentieth-century changes in poetic form). But that is now speculation on top of speculation.

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Peter Schiff: Are Global Financial Markets Beginning To Decouple?

Peter Schiff: Are Global Financial Markets Beginning To Decouple?

Via SchiffGold.com,

The first trading day of 2021 was, as Peter Schiff put it, “atypical.”

In his first podcast of 2021, Peter analyzed the unusual day on Wall Street and explored a significant question: are we beginning to see the decoupling in the global financial markets that he’s been predicting for years?

The major indexes opened up but then closed sharply down on the day. The Dow Jones set a new record before falling 382 points. The S&P 500 set a record and then dropped 1.5%. The NASDAQ started strong, although it didn’t set a record, but then followed the other indexes lower, closing down 189.8 points.

Meanwhile, the dollar continued to show weakness against the euro, the yen and particularly the Chinese yuan. The dollar dropped just over 1% against the Chinese currency. Peter called this move “extremely rare.”

This has happened occasionally, but it’s very rare to see this big a move in that particular pair. You’re more likely to see the dollar move 1% against the euro of the Aussie dollar than you will against the Chinese yuan. But to see it happen on the first trading day of the year — I look back for 30 years and I couldn’t find a single day, first trading day, where you saw this big a move, the US dollar dropping against the yuan.”

Peter said he doesn’t think this is an insignificant move. He thinks it’s the sign of something bigger happening.

The US has ratcheted up its economic war with China in recent months. It goes beyond the trade war. For instance, the New York Stock Exchange recently delisted three Chinese companies based on an executive order from the Trump administration. The US government claims it’s “illegal” for Americans to own shares in these companies.

I don’t think it’s a coincidence that we are clamping down on China and the dollar is getting clobbered against the yuan. China is obviously going to retaliate, even though I don’t believe this hurts China. They don’t like it. They don’t like, in principle, the US government saying Americans can’t invest in Chinese companies, can’t own stock in Chinese companies. So, I think the Chinese need to save face and they need to retaliate. And believe me, they have the heavy artillery if they want to use it. They are still America’s biggest creditor. They own more US government debt, US agency debt than anybody else. And thus far, they have been gradually paring back their position. They can certainly increase the pace at which they’re doing that.”

In fact, even with the stock market dropping sharply, there was no safe haven rally in the bond market. Yields on 10-year and 30-year Treasuries actually went up.

So, no flight to safety today in US Treasuries. No flight to safety in the US dollar as the dollar sold off against the euro, the Swiss franc and the yen.”

So where did the money flow?

Gold and silver.

Gold was up about $45 on the day and silver was up about 87 cents. Gold mining stocks also enjoyed a strong rally, along with some of the industrial metals.

This is the inflation trade. And it’s not just playing out in industrial metals. It’s playing out in commodities.”

For instance, soybeans are above $13 a bushel.

‘Beans in the teens.’ You know, that was a rallying cry, I think, during the stagflation of the 1970s. Well, we’ve got beans in the teens right now. They are rarely in the teens.”

Peter called this an inflationary wave.

It’s the wave that I’ve been positioning my clients to ride for many, many years. And I think that this ride is just beginning. I think it’s going to be a hell of a ride for everybody who’s on board. But it’s certainly not too late to get on board.”

While US stocks were falling, there was strength in many foreign markets.

To me, this shows a deliberate reallocation of investment capital from institutions. This is not mom and pop investors. This is not Robin Hood that was driving the action today. I believe this is real money and these are planned moves. This is happening on the first trading day of the new year of a new quarter. I don’t think portfolio managers just woke up this morning and on no news decided to make these huge trades. I think these are reallocations that have been planned.”

Peter said if he’s right about this assessment, what we saw on Jan. 4 won’t be a one-day event.

I think this is a process and the process is going to be playing out over time. What I think is actually happening is the decoupling that I have been positioning for and talking about for years. … It’s been my thesis that eventually, foreign markets would decouple from the US stock market and gold stocks would decouple from the general stock market. That trade was certainly evident today. Now, that doesn’t necessarily mean that the decoupling is here. But I think that there’s a good indication that this is the beginning.”

Peter went on to do some comparative analysis between what happened yesterday and some past years.

Tyler Durden
Tue, 01/05/2021 – 09:45

via ZeroHedge News https://ift.tt/3b580fo Tyler Durden

For Trump, the Georgia Senate Runoff Is All About Him

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Ahead of today’s pair of crucial Senate runoff elections in Georgia, President Donald Trump ostensibly campaigned for the two Republican candidates, but instead used his time to air more grievances about the last election. Trump is convinced that he won Georgia in November’s presidential election, even though the official numbers say he lost by nearly 12,000 votes and despite the fact that Trump’s lawyers have been unable to find evidence of widespread voter fraud in the state. A day after The Washington Post published an audio recording of a phone call where Trump cajoled the state’s Republican secretary of state to “find” enough votes to flip the results, the president continued to push his discredited conspiracy theories at a Monday rally to reelect incumbent Sens. David Perdue and Kelly Loeffler, the two GOP candidates who are on the ballot Tuesday.

“That was a rigged election. But we are still fighting it,” Trump told a crowd in Dalton, Georgia. He promised to return to the state next year to campaign against Georgia Gov. Brian Kemp, another Republican whom Trump blames for his loss in November.

Trump’s refusal to accept the results of the presidential election has left Republicans in a bind. If Democrats win the two runoff elections on Tuesday, they will have a slim Senate majority (with incoming Vice President Kamala Harris as the tiebreaking vote). The latest polls show Democratic candidates Jon Ossoff, a former journalist and political activist, and Raphael Warnock, a pastor, with slim leads in their respective races. That means turnout will likely decide the outcome, and if Trump has proven anything since his entry into politics in 2015, it’s that he’s a turnout machine for the Republican base.

But the president’s behavior—and the fact that both Perdue and Loeffler have refused to reject a wild plot by some Republican senators to challenge the certification of the presidential election’s results—may have alienated enough mainstream Republicans to tip Tuesday’s races toward the Democrats. Alternatively, Trump’s repeated (and false) attacks on the legitimacy of elections in Georgia may encourage his supporters to stay home.

That inconsistency has been on full display in the president’s Twitter feed where he has alternated between condemning Georgia’s election process as fraudulent—even going so far as to say that Tuesday’s runoff elections are “illegal and invalid“—and encouraging his supporters to participate in them. It leaves the impression, once again, that Trump sees elections as legitimate only when the results favor him.

Regardless of what happens on Tuesday night, we can all breathe a welcome sigh of relief that the seemingly interminable 2020 election season is finally over. It began with a Democratic primary debate on June 26, 2019. At 7 p.m. today, 559 days later, the polls will close and it will finally come to an end.


FREE MINDS

Maximizing COVID-19 vaccinations means sometimes ignoring the government’s guidelines for who gets vaccinated first, especially when the alternative is throwing vaccine doses in the trash. More of the D.C. approach, please. And less of New York Gov. Andrew Cuomo’s heavy-handed approach to vaccine distribution, which is likely to be a disaster.


FREE MARKETS

Americans moved from big metropolises to smaller cities and away from high-cost, high-tax states during 2020, according to annual migration data tracked by United Van Lines, a major moving company. Idaho was the state with the highest percentage (70 percent) of inbound moves last year, followed by South Carolina and Oregon—while New Jersey (70 percent) had the highest percentage of outbound moves, just narrowly ahead of New York, Illinois, Connecticut, and California.


QUICK HITS

  • The results of Tuesday’s runoff elections in Georgia will determine how ambitious President-elect Joe Biden’s first-term agenda will be.

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Washington D.C. Bans Guns, Calls Up National Guard Ahead Of Pro-Trump Election Protests

Washington D.C. Bans Guns, Calls Up National Guard Ahead Of Pro-Trump Election Protests

On Sunday, the Washington D.C. Metropolitan Police Department posted notices prohibiting firearms in the downtown district ahead of the pro-Trump protest beginning on Wednesday, according to Fox 5. 

The notice states that a firearms ban went into effect on Monday and will last through Thursday. “All firearms prohibited within 1000 feet of this sign,” read one of the notices posted near Freedom Plaza. 

Also, on Sunday, Washington D.C. Mayor Muriel Bowser released a statement about the upcoming First Amendment demonstrations, permitted by the National Park Service, scheduled for Jan. 5 and Jan. 6. 

“Members of the public and anyone attending the events are reminded that District law prohibits anyone from carrying a firearm within 1,000 feet of any First Amendment activity. Under federal law, it is illegal to possess firearms on the U.S. Capitol grounds and on National Park Service areas, such as Freedom Plaza, the Ellipse, and the National Mall.

“Additionally, members of the public are reminded that the District of Columbia does not have reciprocity with other states’ concealed pistol licenses; unless a person has been issued a concealed pistol license by the District of Columbia, they cannot conceal carry a firearm in the city. Finally, it is illegal to open carry firearms in the District,” the release stated. 

Pro-Trump supporters attending the rally are demanding Congress overturn the election results on Jan. 6, which is when lawmakers certify electoral college votes, confirming President-elect Joe Biden’s win.

A handful of Republican senators led by Sen. Ted Cruz are now planning to reject the Electoral College’s certification tomorrow unless there is an emergency audit.

On Saturday, President Trump tweeted a promotional video, hyping up his base to attend the “biggest event in Washington D.C. history.”

Ahead of the protests, the chairman of the Proud Boys – a Latin man by the name of Enrique Tarrio – was arrested by Metropolitan Police last week on suspicion of burning a Black Lives Matter banner torn from a historic Black church in Washington during protests last month that led to several violent clashes, including stabbings, around the city.

On Parler, Tarrio posted a message that read: “ProudBoys will turn out in record numbers on Jan. 6 but this time with a twist.” 

Bowser has also activated the National Guard ahead of the demonstration as the threat of violence with opposition protesters could materialize. 

Tyler Durden
Tue, 01/05/2021 – 09:32

via ZeroHedge News https://ift.tt/3hMwB9S Tyler Durden