Military Coup Underway In Myanmar As Civilian Leaders Arrested – State TV Off Air, Internet Cut 

Military Coup Underway In Myanmar As Civilian Leaders Arrested – State TV Off Air, Internet Cut 

It appears a military coup is underway in the Southeast Asian country of Myanmar (formerly Burma), where a state of confusion has descended on the population with soldiers now patrolling major city streets, and given state TV has also been taken off the air, according to Reuters. 

The national army says a recent major vote won by the National League for Democracy (NLD) party was “fraudulent,” as a breaking BBC report details:

Aung San Suu Kyi, leader of Myanmar’s governing National League for Democracy (NLD) party, has been arrested, the spokesman for the party said. It comes amid tensions between the civilian government and the military, stoking fears of a coup.

The NLD won enough seats in parliament to form a government in November, but the army says the vote was fraudulent.

The army has called on the government to postpone convening parliament, which was due to take place on Monday.

Image: A rift between Myanmar State Counsellor Aung San Suu Kyi, left, and commander in chief Min Aung Hlaing had been growing over the past week over contested election results.

Additionally President Win Myint and senior party figures have been detained as of early morning (local time). 

Reuters is saying the coup was sparked by an overnight raid:

Spokesman Myo Nyunt told Reuters by phone that Suu Kyi, President Win Myint and other leaders had been “taken” in the early hours of the morning.

“I want to tell our people not to respond rashly and I want them to act according to the law,” he said, adding he also expected to be detained.

And Reuters further suggests a state of chaos in the capital given “phone lines to Naypyitaw, the capital, were not reachable in the early hours of Monday,” and with the military initially refusing to speak to international press.

International reports are also saying that the internet has been cut in the capital of Naypyitaw, further with soldiers having taken over the streets.

The situation is incredibly tense not only as a near total information blackout is underway, but also also as supporters of the NLD could hit back at the army with sporadic violence or organized militia activity, potentially sliding the country into civil war.

Tyler Durden
Sun, 01/31/2021 – 19:55

via ZeroHedge News Tyler Durden

Yes, Virginia, The System Is Clearly Rigged

Yes, Virginia, The System Is Clearly Rigged

Authored by Omid Malekan via,

Before sharing my opinion on the WallStreetBets events of last week, I want to make one thing clear: I believe strategies like the ones used to drive the price of Gamestop stock higher are reckless and dangerous. I would never participate in them. They are likely to end badly for the majority of those who get involved.

With that out of the way, let’s review something important that happened last year, when big cap tech stocks like Tesla and Apple started exhibiting unusual volatility to the upside. It turned out that Softbank, one of the largest institutional investors in the world, had been executing a dangerous strategy of buying record amounts of out of the money call options on those stocks. Their actions forced some of the options trading establishment into something called a gamma squeeze, a positive feedback loop that can be thought of as the options markets’ equivalent of a short squeeze. Here’s the FT:

The surge in purchases of call options — derivatives that give the user the right to buy a stock at a pre-agreed price — has been the talk of Wall Street, as the sheer size of the trades appears to have exacerbated a “melt-up” in many big technology stocks over the past few months. In August alone, Tesla’s share price shot up 74 per cent, while Apple gained 21 per cent, Google’s parent Alphabet rose 10 per cent and Amazon 9 per cent.

One person familiar with SoftBank’s trades said it was “gobbling up” options on a scale that was even making some people within the organization nervous. “People are caught with their pants down, massively short. This can continue. The whale is still hungry.”

As the article also points out, it was generally understood that what Softbank was doing (with billions of dollars, no less) was dangerous. Not only could it end badly for them, but it had painted other players into a corner, creating a dangerous dynamic that could reverse abruptly.

Now, knowing all of that, and having seen the systematic crackdown on retail investors executing a similar strategy last week, we can ask a few simple questions:

  1. How many of Softbank’s service providers refused to execute their trades? How many banks, prime brokers or options dealers said “sorry, this a dangerous strategy that will end badly, plus it puts the rest of the market at risk. You can no longer buy call options on these particular stocks”?

  2. How many veteran financial reporters working in TV or print expressed shock and outrage? How many pontificated out loud about the blatant disregard for fundamental analysis?

  3. How many people at the SEC, Federal Reserve, U.S. Treasury or even the White House actively monitored the situation and worried about the safety of the market?

  4. How many people within the traditional financial establishment argued that perhaps we need tighter regulations to prevent this sort of thing from happening?

You already know the answer to all of these questions. Even if you don’t understand the technical aspects of how Wall Street works, you know in your heart that so-called institutional investors often do risky, dangerous, and (in retrospect) stupid things, but nobody ever stops them. This despite the fact that every once in a while those same strategies end in disaster and put the rest of the financial system, not to mention the broader economy, in jeopardy.

You know this because in the back of your mind, you remember something about a fund called Long Term Capital, which was run by Nobel prize winners, blowing up in the late 1990s. You lived through the 2008 crisis and may have read a book like Too Big to Fail or seen a movie like The Big Short. You vaguely remember reading about something called a repo crisis in 2019. You recall how just last year, at the start of the Covid crash, central banks like the Federal Reserve had to pump ten times more money into Wall Street than Main Street, even though ordinary people needed the money more.

What you understand intuitively about all of these events is that the pros — the supposedly sophisticated investors who control the vast majority of capital in the world — somehow fucked up. They did things that enriched them, but ended up costing society as a whole. And yet, not only did nobody in a position of power try to stop them, but regulators and government representatives — the people who are supposed to be looking out for your best interests — argued that your tax dollars should be used to bail them out. Their gambling didn’t make you any richer, but their crapping out still cost you.

Despite what the financial media would like you to believe, the most surprising thing about last week wasn’t the fact that a bunch of beaten down stocks went flying. Crazy shit happens in the stock market all of the time, especially in an era of record monetization when the Federal Reserve prints money faster than Taylor Swift releases albums.

Most of the self-righteous hand wringing was an act. Aggressive investors utilizing leverage in herd-like fashion to pursue a risky bet is nothing new. It’s called trading, and that’s what most money mangers do. They don’t invest. There’s a reason why banks and hedge funds have trading desks and people call it the trading day.

No. The real controversy last week was about who was winning and who was losing. Retail people on apps like Robinhood aren’t supposed to stick it to the big boys. They are supposed to be the so-called dumb money, the schools of tiny fish that exist so whales like Softbank and Citadel have something to feast on. People who go to Davos aren’t supposed to lose money to kids from Denver. But last week, they did. That’s why the financial establishment reacted so strongly.

Let me pause here to reiterate my belief that I think this kind of trading is extremely risky and not that far removed from betting at the track, regardless of who is doing it. I strongly advise everyone I know to stay way from margin trading, options and short squeezes. That said, I think people should be free to do whatever they want with their money, especially now that their central bank is doing everything it can to destroy its integrity.

I am outraged by the hypocrisy of the financial services industry. Any doubt that the system is rigged has been eliminated. Why do the rich only ever get richer? Because of what happened last week.

In all my years of working in this industry, I have never heard of brokers pulling the plug on their clients because they were making too much money.

If anyone is to be banned from putting on risky trades, it should be the supposedly sophisticated hedge funds who’ve needed to be bailed again and again, not your cousin who recently bought a few shares of GME in her Robinhood app. Your cousin wasn’t the one who fucked up in 1998 or 2008 or 2019 or 2020. She didn’t drive Lehman Brothers into the ground or destroy MF Global.

But the financial establishment — the same establishment who’s always gone out of its way to celebrate people like John Meriwether, Dick Fuld and John Corzine — decided that your cousin wasn’t allowed to play the same game, and had the audacity to pretend this was for her own protection.

The fact that she was making money off of hedge funds like D1 (one of Robinhood’s biggest investors) and Citadel (one of Robinhood’s biggest sources of revenues) had nothing to do with it. The fact that Ben Bernanke has been a senior advisor to Citadel and Janet Yellen has collected almost a million dollars in speaking fees from the same firm had nothing to do with it.

The issue here isn’t how the aggressive buying of stocks like Gamestop ends, because it’ll probably end badly. The issue is that nobody ever tries to stop hedge fund managers from doing the same exact thing. When they gamble with our futures, it’s called capitalism. But when retail people do it, it’s a menace to society that must be stopped.

Firms like Robinhood are now claiming that they didn’t freeze trading in a handful of stocks because of some nefarious conspiracy. They did it because the back-end clearinghouses like DTCC who process their trades forced them to put up too much capital for those names. Here’s the New York Times:

A more detailed explanation: Brokerages post money with the D.T.C.C. to cover customers’ transactions while they wait for the trades to settle. With such a big surge in trading, the clearing hub wanted more assurance: “It’s the D.T.C.C. saying ‘This stuff is just too risky,’ ” said the Bloomberg Intelligence analyst Larry Tabb.

Other online brokerages also cited the D.T.C.C. as a factor in decisions to impose trading restrictions.

The brilliance of this excuse is that it only proves the skeptics and conspiracy-theory believers right. DTCC is a for-profit monopoly that sits at the heart of America’s financial system. It is controlled by the biggest Wall Street institutions and responsible for all public equity settlement. A subsidiary of it literally owns every single share of publicly traded stock in America. Yes, you read that correctly. You don’t actually own your shares of Apple or Microsoft, they do. You are only allowed to enjoy the financial benefits of being an investor because your corporate overlords let you. Why? Because the government wants it that way (the fact that financial firms like DTCC always donate a lot of money to politicians has nothing to do with it.)

It’s quite possible that the above justification for the crackdown is technically true: clearinghouses and firms like DTCC suddenly jacked up their collateral requirements because they were afraid the short squeeze would reverse and end badly. On the surface, this is plausible.

But why have we never heard of the same thing happening to the institutions who also pursue risky trades, use margin, trade options, and often pile into the same crowded trades? Why didn’t this sort of thing happen last year, at the start of the pandemic? Surely an environment where everything is crashing is more dangerous to the back-end plumbing of Wall Street than one where only a few stocks are going up.

And therein lies the rub. Hedge funds and billionaires didn’t have to be restricted last year because the government intervened and used trillions of dollars of your money to make sure “the system” kept working for them. Just like it had in 2019, 2008 and 1998.

Ordinary people don’t get that kind of protection, so they aren’t allowed to play. The billionaires who build ridiculous mansions too close to the water get free flood insurance, but you are a mere renter, so you don’t qualify.

If our financial system was remotely fair, or at least consistent in its response to unusual developments, then the Fed would have been on the phone with DTCC and Robinhood all week, offering liquidity injections and credit lines to keep the system working. The Treasury department would have begun planning an emergency fund to bail out Gamestop and AMC shareholders if the need arose, and Congress would have begun deliberations on the Troubled Retail Investor Relief Program.


Years from now, when most of the world has moved on to a different kind of financial system, a fully transparent one built on fundamental properties of equality and censorship resistance, we will look back on the events of this past week as a key turning point.

Tyler Durden
Sun, 01/31/2021 – 19:30

via ZeroHedge News Tyler Durden

Make Standard Oil Great Again: Exxon, Chevron Have Discussed A Merger

Make Standard Oil Great Again: Exxon, Chevron Have Discussed A Merger

Just this past Friday, we lamented that amid the marketwide meltup, one of the very few companies that actually deserves to be higher with or without the help of WSB, oil giant Exxon, simply refuses to do so, and so we begged Melvin Capital to short it (although it now appears that Gabe Plotkin is busy razing a 1930s house to build a tennis court on his Miami mansion).

That was, of course a joke, but what isn’t a joke is that the two largest US oil companies clearly believe they are undervalued because as the WSJ reported on Sunday afternoon, the CEOs of Exxon and Chevron “spoke about combining the oil giants after the pandemic shook the world last year, according to people familiar with the talks, testing the waters for what could be one of the largest corporate mergers ever.”

The discussions – which took place after the plunge in oil prices last year – between the Exxon CEO Darren Woods and Cheveron CEO Mike Wirth, “were described as preliminary and aren’t ongoing but could come back in the future” according to the WSJ sources.

And with XOM’s market cap of $190BN and Chevron’s $164BN, a combination would result in a $350BN E&P behemoth, which would be the world’s second largest oil company by market capitalization and production, producing about 7 million barrels of oil and gas a day, based on pre-pandemic levels, second only in both measures to Saudi Aramco.

Such a deal would significantly surpass in size the mega-oil-mergers of the late 1990s and early 2000s, which included the combination of Exxon and Mobil and Chevron and Texaco Inc.

It also could be the largest corporate tie-up ever, depending on its structure. That distinction currently belongs to the roughly $181 billion purchase of German conglomerate Mannesmann AG by Vodafone AirTouch PLC in 2000, according to Dealogic.

If it proceeds, a deal would also reunite the two largest descendants of John D. Rockefeller’s Standard Oil monopoly, which was broken up by U.S. regulators in 1911, and reshape the oil industry. In other words, if this deal happened, it would go a long way to making Standard Oil Great Again:

Which is also why such a merger would likely encounter regulatory and antitrust challenges under the Biden administration. President Biden has said climate change is one of the biggest crises the country faces. In October, he said he would push the country to “transition away from the oil industry” whatever that means (conventional energy is responsible for about 90% of US energy production); Still, a deal is not impossible: Biden hasn’t been as vocal about antitrust matters, and the administration has yet to nominate the Justice Department’s head of that division.

As the Journal adds, in an interview discussing Chevron’s earnings Friday, Wirth, who like his Exxon’s Woods also serves as his company’s board chairman, said that consolidation could make the industry more efficient. He was speaking generally and not about a possible Exxon-Chevron merger.

“As for larger scale things, it’s happened before,” Wirth said, referring to the 1990s and early-2000s megamergers. “Time will tell.”

It now appears that he was explicitly envisioning a merger with Exxon.

According to energy analyst Paul Sankey, who first floated the idea of a merger between Chevron and Exxon last October, a combined company would have a market capitalization of about $300 billion and $100 billion in debt. A merger would allow them to cut a combined $15 billion in administrative expenses and $10 billion in annual capital expenditures, he wrote.

As for the stock price of XOM and CVX, they certainly wouldn’t need a massive short squeeze to soar, which would be welcome news to the activists who have recently circled around Exxon.

Some investors have grown increasingly concerned about Exxon’s direction under Mr. Woods as the company faces a rapidly changing energy industry and growing global consciousness about climate change. Some are also worried that Exxon may have to cut its hefty dividend, which costs it about $15 billion annually, due to its high debt levels. Many individual investors count on the payments as a source of income.

The company’s woes have helped draw the attention of activist investors. One of them, Engine No. 1 LLC, has argued that the company should focus more on investments in clean energy while cutting costs elsewhere to preserve its dividend. The firm nominated four directors to Exxon’s board Wednesday and called for it to make strategic changes to its business plan. Last month it also emerged that Exxon had been in talks with activist hedge fund D.E. Shaw and is preparing to announce one or more new board members, additional spending cuts and investments in new technologies to help it reduce its carbon emissions.

Unlike virtue signaling European peers BP and Shell, both of which would love to be included in some ESG basket, Exxon and Chevron have had the intellectual honesty of staying the course and haven’t invested substantially in renewables, instead choosing to double down on oil and gas. Both companies have argued that the world will need vast amounts of fossil fuels for decades to come, and that they can capitalize on current underinvestment in oil production.

They are of course right, and after the next crash, when the faddish ESG idiocy is long forgotten, shareholders will reward the two companies handsomely for having been honest in a time when every company lies.

Tyler Durden
Sun, 01/31/2021 – 19:05

via ZeroHedge News Tyler Durden

Treating Lin Wood’s Wild Conspiracy Theories As a Psychiatric Symptom Invites Him to Play Free Speech Martyr


The State Bar of Georgia has asked pro-Trump lawyer L. Lin Wood to undergo a psychiatric examination in response to complaints stemming from his role in promoting bizarre conspiracy theories about the presidential election. Wood is refusing, which may result in the suspension of his license to practice law.

By focusing on Wood’s mental state rather than his conduct, the state bar invites him to portray himself as a First Amendment martyr. A psychiatric evaluation “will violate my First Amendment right to free speech,” Wood told The Atlanta Journal-Constitution. “And if they do that and this harms me, then I will strongly consider suing them, and it will be a significant lawsuit.”

Millions of Americans, including former President Donald Trump and his personal lawyer, Rudy Giuliani, believe (or at least claim to believe) that the election was stolen through an elaborate scheme involving tricky voting machines and massive paper-ballot fraud. That extraordinary popular delusion can be understood as a political phenomenon driven by familiar human frailties such as tribalism and confirmation bias. But it is not in any meaningful sense a medical issue.

Psychiatry routinely treats weird things people say as evidence of mental illness. But if believing wild claims about election fraud were enough to qualify for a psychiatric label, most Republicans would be diagnosable. That premise is not just condescending and pseudoscientific but morally misleading, since it lets people off the hook for endorsing grave allegations with no basis in fact, whether sincerely or cynically.

If Trump’s election fantasy is caused by a mental disorder beyond his control, it would be manifestly unjust to hold him legally accountable for recklessly promoting it, as his impeachment aims to do. Likewise with Giuliani, who last week was hit with a $1.3 billion defamation lawsuit for repeatedly making false claims about the involvement of Dominion Voting Systems in the imaginary plot that supposedly denied Trump a second term. Ditto former Trump campaign lawyer Sidney Powell, whom Dominion sued on January 8.

“Sidney Powell is a crazy person,” the New York Post declared in a December 27 editorial urging Trump to “stop the insanity.” The Post was speaking figuratively. But if its description of Powell is taken literally, meaning that her conspiracy mongering is a product of mental illness, shouldn’t her behavior elicit sympathy and “treatment” rather than anger and lawsuits?

Maybe Wood is a special case. Even in the company of florid fabulists such as Trump, Giuliani, and Powell, he stands out as a purveyor of outlandish allegations. While Trump called Chief Justice John Roberts (along with the rest of the Supreme Court) cowardly and incompetent for turning away lawsuits challenging the election results in battleground states, he did not join Wood in trying to implicate Roberts in murder and pedophilia. And while Trump castigated Vice President Mike Pence for failing to block congressional affirmation of the election results (a power the vice president does not actually have), Wood suggested that Pence should be executed for treason. “Get the firing squads ready,” Wood said in a January 7 Parler post. “Pence goes FIRST.”

Around the same time, Wood was permanently banned from Twitter. His online comments recently prompted one of his best-known clients, Nicholas Sandmann, to terminate their relationship. A Delaware judge this month barred Wood from representing former Trump adviser Carter Page.

“The conduct of Mr. Wood, albeit not in my jurisdiction, exhibited a toxic stew of mendacity, prevarication, and surprising incompetence,” Judge Craig Karsnitz wrote. He called an election lawsuit that Wood filed in Georgia “textbook frivolous litigation” and said a complaint that Wood filed in Michigan “would not survive a law school civil procedure class.”

Karsnitz also noted Wood’s threat against Pence and his claims about Roberts, which the judge called “too disgusting and outrageous to repeat.” More generally, he said Wood’s promotion of baseless election-fraud claims had helped incite the Capitol riot—the same charge that Trump will face when the Senate takes up his impeachment this week.

Such behavior could be cause for disciplinary action, including disbarment. Among other things, the Georgia state bar’s rules prohibit “professional conduct involving dishonesty, fraud, deceit or misrepresentation.” But it’s not clear why a  psychiatrist’s opinion is relevant in determining whether Wood violated the bar’s code of professional conduct. Paula Frederick, the state bar’s general counsel, says the demand that Wood be evaluated by a psychiatrist is based on the concern that he “may be impaired or incapacitated.” That concern, in turn, is based on the odd, inflammatory stuff Wood has said.

Wood described his comments about Pence as “rhetorical hyperbole.” But like Trump’s incendiary pre-riot speech, which did not legally qualify as incitement but nevertheless led to his impeachment, Wood’s talk of executing Pence was, at best, grossly irresponsible given the political context. And his defamatory charges against Roberts, which he claimed were based on “information from [a] reliable source,” clearly did not qualify as mere rhetoric. Crazy tweets aside, Wood’s conduct in post-election litigation is obviously relevant in evaluating his professional behavior to the extent that it involved “dishonesty, fraud, deceit or misrepresentation.”

By making an issue of Wood’s mental health, the state bar allows him to complain that it is using psychiatry to punish dissent. “I have done nothing wrong,” he said in a Telegram post last week. “I have only exercised my right of free speech. I will not allow the State Bar to persecute me for doing so and thereby violate my Constitutional rights.”

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