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Rabo: Powell Can’t Wait To See “Actual Inflation” To Hike… But What Do We Have Right Now

Rabo: Powell Can’t Wait To See “Actual Inflation” To Hike… But What Do We Have Right Now

By Michael Every of Rabobank

Inflection/Infection Point

If you are still in the camp that all that really matters is what central banks say, then note “the US is now at an inflection point”. So says Fed Chair Powell on CBS TV. While positive, this does seem to lean in a more hawkish direction: could his credibility be “Gone in 60 Minutes”, after repeated messaging that rates are on hold for years to come? Or is this a special kind of inflection point which still necessitates the lowest rates and most QE ever? It seems so, as Powell added: “We can wait to see actual inflation before we raise interest rates.” What do we have right now, chopped liver?! Yet the primary concern for the Fed is not inflation, but infection. If Covid gets worse again, then the Fed needs to be there: but what if infection doesn’t?

Infection point is what markets will see as: France goes into another lock-down for schools; by contrast, the UK finally begins to open up; Australia and New Zealand launch a trans-Tasman travel bubble; Thailand, with a mass break-out of the UK variant, is nonetheless allowing the whole country to travel for a week for its new year; India is seeing huge vaccination success – and also huge daily Covid case numbers; a Chinese official admits their Covid vaccine isn’t very effective –as the Malaysian press reports several Chinese tourists in Sarawak tested positive for Covid despite having been vaccinated twice in China; and the EU is admitting that even if it buys Russia’s Sputnik vaccine, it will take months to get production numbers up to where they need to be, so no quick fix. This all seems to leans towards a market bias for the US and UK.

Yet one infection inflection point should terrify us: the island of St. Vincent is seeing a massive volcanic eruption – and yet only those with proof of vaccination, just 10% of the population, are being evacuated. And there you were worrying about the idea of needing to show papers or have a facial scan to sit in a pub garden in the UK.

Many other potentially-volcanic inflection points are evident. In China, Alibaba has been hit with a record USD2.8bn anti-monopoly fine, which follows Beijing forcing an elite business school backed by Jack Ma to halt enrolments. China analysts are trying very hard not to see the writing on the wall as large as that from a key scene in ‘The Life of Brian’: “Foreign capital they go the house?” Some things need even larger fonts, however.

The excited tech coverage of China’s launch of its digital CNY last week failed to notice one key detail: according to the Wall Street Journal, “The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump start.” A point long made here is that a sovereign digital currency would not only mean all economic anonymity being removed; and capital flight, short of trading money for goods and shipping them offshore; and that interest rates could be set as negative as needed given no ability to hoard cash; but, crucially, that digital money could be switched off to force you to spend it on what the state wants – or ‘on’, to circumvent the banking system entirely. Would you, as a market player or a CFO, want to hold a digital currency that can disappear from your bank balance as needed?

The White House is catching on to the Great Power and Great Currency game here, Bloomberg reporting: “Biden Team Eyes Potential Threat From China’s Digital Yuan Plans”. For now the US remains concerned about the risk of sanctions evasion (as if that doesn’t already happen): yet the US is also considering a digital Dollar. All the criticisms of DNCY would apply to DUSD too.

Perhaps the more important question is if you will get a choice or not: this is going to be a political, not an economic decision. In May 2017, former Fed Chair Bernanke echoed my earlier warnings (e.g., 2015’s ‘FX Wars’ and 2016’s ‘Thin Ice’) and gave a speech flagging the next downturn would see fiscal and monetary policy cooperation: here we are four years later and that long-untouchable policy is suddenly normal. The same Kalecki/Polanyi logic that predicted Bernanke’s prediction says digital currency is likely to happen at some point too, because fiscal and monetary policy together still isn’t enough in a globalized world unless everyone is doing it – and not everyone can or will.

True, a digital inflection point could still just mean a cashless DUSD and DCNY battling it out for global economic favor. However, at any point they could be used in a truly radical manner. Indeed, digital currencies allow us to more easily replicate the 1930’s splitting of the global gold standard into bifurcated rival currency blocs: how about holding DCNY that can only be spent in China, or a DUSD that works the same way? (Some would say we already have that if you include US financial assets.)

Of course, this isn’t just political but geopolitical. After all, our global financial architecture sits on geopolitical plates. Day to day these don’t move, and markets don’t know how to price for them if they do: yet that doesn’t mean we aren’t moving closer to such an epic move:

  • US Secretary of State Blinken has warned China against encroaching on Taiwan – and also blamed it for helping the initial spread of Covid-19. That’s as the bill mandating deeper US-Taiwan ties works its way through Congress. The US is also sending more warships to the South China Sea, and the Philippines seems to be moving closer to the US once again given what it claims is further Chinese encroachment on its maritime territory. The very fat tail risks here are self-evident: more so given neither side can back down without a serious loss of relative power (which would flow through to FX markets);

  • Blinken has warned Russia any offensive against Ukraine would have “consequences”. It’s not clear what these would be, but military does not appear high on the list. Yet markets thinking this is “’A Small Country Far Away about Which We Know Little” fail to see the tail risks against the broader backdrop;

  • Iran’s Nantaz nuclear reactor was subject to Israeli sabotage (“nuclear terrorism”) according to Tehran, which follows an attack on an Israeli ship by Iran, and one on an Iranian ship by Israel. The Middle East is simmering on an axis involving key sea lanes for global energy; and

  • John Kerry is due in Beijing this week to try to get Chinese cooperation on all matters green. It may well suit Beijing to play nice here in an attempt to leverage that promise against other US actions. Let’s see if the climate crisis provides a genuine geopolitical inflection point or not.

Tyler Durden
Mon, 04/12/2021 – 09:56

via ZeroHedge News https://ift.tt/3tfCf9u Tyler Durden

CNN Says 10 Percent of Vaccinated Air Travelers May Catch COVID. That’s Completely Wrong.


cewitness061362

Are airplanes more dangerous now than they were during the height of the COVID-19 pandemic? No, of course not. Yet that’s what CNN implied on Sunday, in an article on “how to fly safely.” Correctly noting that the Pfizer and Moderna vaccines are only 90 percent protective against COVID-19, CNN went on to assert (incorrectly) that “translated into reality, that means for every million fully vaccinated people who fly, some 100,000 could still become infected.”

COVID-19 can and has spread on flights, of course. But even before people started getting vaccinated, confirmed cases of transmission were relatively small. “The risk of contracting coronavirus disease 2019 (COVID-19) during air travel is lower than from an office building, classroom, supermarket, or commuter train,” an article in The Journal of the American Medical Association noted last fall. If CNN’s estimate were true, that would mean many more vaccinated people getting infected on planes as overall case counts dwindle than unvaccinated people did at the pandemic’s peak.

Luckily, CNN’s estimate is dead wrong. “NO NO NO. That’s not what that number means,” tweeted University of North Carolina at Chapel Hill Professor Zeynep Tufekci yesterday, adding “this didn’t even happen when millions flew unvaccinated. So how could it make sense now?”

When we talk about a 90 percent vaccine efficacy rate, it does not mean that every single vaccinated person who is exposed to COVID-19 has a 10 percent chance of getting it; individual immune responses and other factors still apply. And it certainly doesn’t mean that 10 percent of vaccinated people in the world, a country, or a given place will catch COVID-19.

“What a ‘90% effective vaccine’ means is that the number of people who would otherwise have gotten COVID is 90% lower. It doesn’t mean that only 90% of vaccinated people are immune,” Australian journalist and University of Technology Sydney fellow Josh Szeps points out.

One million vaccinated people flying does not mean all one million people will be on flights where another passenger has COVID-19.

Even if that were the case, it does not follow that conditions—air circulation patterns, ventilation system operation, masking, proximity to the infected person, etc.—would make it possible for each vaccinated person on a flight to be significantly exposed.

And even if that were the case—the highly, highly unlikely scenario that every vaccinated person is exposed to COVID-19 in-flight—it does not follow that 10 percent of those travelers will definitely catch it. Who catches it upon exposure isn’t just a pure percentages game; it also depends on individual immune responses, amount of exposure, and more.

“One common misunderstanding is that 95% efficacy means that in the Pfizer clinical trial, 5% of vaccinated people got COVID,” writes Anna Nowogrodzki at LiveScience. “But that’s not true; the actual percentage of vaccinated people in the Pfizer (and Moderna) trials who got COVID-19 was about a hundred times less than that: 0.04%.”

Reason‘s Ronald Bailey recently looked “at what a 95 percent vaccine efficacy rate would mean in a hypothetical case in which a population of 100,000 people have all been vaccinated.”

“Applying the 1 percent rate at which unvaccinated folks became ill during the vaccine trials over three months suggests that 1,000 people in an unvaccinated population of 100,000 would fall ill,” notes Bailey. “But because all 100,000 people are vaccinated, the actual rate in the vaccinated population would be just 50 cases (0.05 x 1,000 = 50 cases).”

The CNN article has since been updated to say that while the vaccines are 90 percent protective, “that means it’s still possible to get infected.” A correction at the end of the article says “A previous version of this article incorrectly extrapolated vaccine efficacy and the probability of becoming infected with Covid-19 aboard airplanes. The risk is much lower than stated in the original version.”

FREE MINDS

Tyler Cowen sketches out a new vision of libertarianism, after declaring last year that the libertarian movement was “pretty much hollowed out.” Taking a second look, Cowen asks: “What does it mean to be libertarian now? I would say that the purer forms of libertarianism are evolving: from a set of policy stances on political questions to a series of projects for building entire new political worlds.” With many past battles around regulation and communism won, and other old battles seemingly lost forever (health care) or unable to sustain much public interest (anti-war efforts), Cowen suggests that “much of the intellectual effort in libertarian circles is concentrated in two ideas in particular: charter cities and cryptocurrency.”

But Cowen’s piece ignores many areas where U.S. libertarians have long been focused, continue to focus, and could do real good—for the movement, and for the country more broadly—by focusing even more. Things like ending the drug war (which is arguable just as strong and destructive as ever, despite moving away from marijuana as a target), other criminal justice/police/prison reform efforts, fighting the surveillance state, dismantling oppressive occupational licensing, staving off a bloated and all-powerful antitrust regime, and fighting for free markets and free speech despite major political party figures who increasingly can’t stand either, to name a few. And anti-war efforts seem valuable even—or especially—in the face of waning popularity.

Cryptocurrency is great, and charter cities intriguing. But U.S. cities and systems as they exist leave plenty of room for valuable, influential, and perhaps even some winnable libertarian fights, too. Building new political worlds is all good, but libertarians shouldn’t give up just yet on the one we have, either.

FREE MARKETS

Are we headed for 1970s-style inflation? Reports about current commodity markets are eerily reminiscent of the ’70s, The Wall Street Journal says:

In 1973, the U.S. was coming off a two-year experiment in wage and price controls, which artificially depressed prices and muted signals that the economy was overheating. Then, too, the Fed pursued an easy-money policy, keeping interest rates low—though considerably higher than now, and without today’s purchases of bonds and mortgage securities….

In 2021 we’re emerging from the pandemic shutdown, which cratered growth and slammed the economy—depressing price pressures, not unlike what the price-control program did 50 years ago. Today’s Fed policies are even more expansive. And Congress has just enacted a $1.9 trillion stimulus bill—on top of earlier relief bills costing another nearly $2 trillion, a lot of which remains unspent and will continue to fuel demand this year and beyond.

Does that mean that we’re doomed to repeat the earlier disaster? Today’s fiscal stimulus clearly dwarfs anything even considered in the 1970s. Moreover, there is a palpable excitement that Americans will finally be able to discard the shackles of Covid and spend the money they saved last year and the wages they’re starting to earn again. So demand is likely to soar.

As was the case 50 years ago, there are constraints on supplies: shipping delays are blocking deliveries; manufacturers can’t get parts to ramp up production; real-estate values are skyrocketing, while lumber shortages constrain home building; and most commodity prices are rising precipitously. Experts reassure us that the annual inflation rate will rise only to about 2%. We hope they’re right, but when demand increases faster than supply, prices tend to go up.

QUICK HITS

• Minnesota police “fatally shot Daunte Wright, a 20-year-old Black man, during a traffic stop near Minneapolis Sunday, sparking protests and unrest that lasted into the night,” reports Axios.

• The Supreme Court says California can’t ban religious meetings in households.

• President Joe Biden is walking back a pledge to create a national commission on police oversight.

• Cartoonist Peter Bagge looks at the life of Henry David Thoreau.

• The term “‘BIPOC’ isn’t doing what you think it’s doing,” write Andrea Plaid and Christopher Macdonald-Dennis at Newsweek.

• “The Texas Supreme Court voided a restraining order against a salon owner who was jailed and fined last year for keeping her store open despite executive actions requiring the business to be closed,” reports The Hill.

• Maryland is passing a slew of criminal justice reforms.

• Defense Department police officer David Dixon, arrested last week on murder charges, is also being accused of assault.

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Key Events This Very Busy Week: CPI, Retail Sales And Q1 Earnings Start

Key Events This Very Busy Week: CPI, Retail Sales And Q1 Earnings Start

Looking at the busy week ahead, the pandemic will remain in focus as the new case count is still moving higher at the global level even if the US now appears to have left covid behind. In the week ending last Friday April 9, the numbers recorded by John Hopkins University showed a 4.45m increase in cases globally, which compares with increases of 4.11m, 3.78m and 3.29m in the 3 weeks before that, so as Deutsche Bank notes, we’ve seen an acceleration in the past month, although the rate of increase is still shy of the peaks in December and January. Some countries have been hit particularly badly by the latest wave, with India seeing another record 152,879 cases on Saturday. Japan is another that’s seen some sharp rises lately, and the governor of Osaka prefecture said over the weekend that he could request a state of emergency be declared if the latest measures weren’t enough to stem the virus.

Over in Europe, there’s been more positive news in recent days, since the latest numbers from the biggest countries (Germany, France and Italy) indicate that cases have now begun to fall from their peak, albeit still at elevated levels. Furthermore, there are signs of the market narrative turning as the pace of vaccinations are continuing to pick up in the region, with the Euro strengthening +1.19% against the US dollar last week, in its best of 2021 so far, while 5y5y forward inflation swaps for the Euro Area closed at 1.57% on Friday, a level not seen since the very start of 2019. On top of that, the UK reported fewer than 2,000 cases yesterday for the first time since early September, which comes as today marks a notable easing of restrictions in England, with the reopening of non-essential retail and outdoor hospitality venues. Finally in other vaccine news, Pfizer and BioNTech said on Friday that they’d requested their Emergency Use Authorization for their vaccine in the US be extended to 12-15 year olds, following trial results that showed the vaccine was 100% effective among this group.

It’s a big week on the data side too, with a number of important releases out of the US set to offer more details on the strength of the recovery there. This comes against the backdrop of a very strong jobs report for March and an ISM services reading that was the highest since the series began back in 1997.

This week’s highlight will be the CPI report on Tuesday, as market participants have focused on the potential for a sharp rise in the reading over the months ahead. DB’s economists expect a blistering +0.48% month-on-month increase in the headline CPI, along with some strong releases elsewhere as well, with a projected +8.9% increase in retail sales for March thanks to the latest round of stimulus checks and payback from bad weather in February. As a reminder, BofA’s economists expect an even more blowout retail sales print, one in the 11%+ range.

The other big data release this week will come from China, where they’re releasing their Q1 GDP number on Friday. DB economists expect a surge in growth to +21.3% year-on-year, up from +6.5% in Q4, as the comparison will now be against the quarter when the pandemic first impacted the Chinese economy.

On the central bank side, we’ll have to wait until next week before the latest round of policy decisions, with the ECB announcing a week on Thursday, before the Fed and the Bank of Japan follow the week after that. Nevertheless, this week is the last chance various Fed speakers will have to offer their thoughts before their blackout period begins on Saturday, and markets will be looking out for Fed Chair Powell on Wednesday, who’s giving an interview at the Economic Club of Washington, as well as from Vice Chair Clarida later that day, who’s giving a speech on the Fed’s new framework and outcome-based forward guidance. In terms of what to expect, our US economists are expecting them to reiterate their familiar inflation mantra, in that they’ll look through the upcoming sharp rise in the year-on-year growth rate of consumer price measures, along with the “transitory” spikes caused by temporary supply-demand imbalances as the economy reopens.

It will be a busy week for US Treasury issuance, with the US auction cycle starting today with $58BN in 3-year notes auctioned off at 11:30am ET, followed by $38BN 10-year reopening at 1pm also today; It concludes with $24b 30-year reopening Tuesday.

Elsewhere, the latest earnings season will kick into gear over the week ahead, with the highlights including a number of US financials. In their preview of the Q1 season, our asset allocation team write that they see S&P 500 earnings coming in 7.5% above consensus, which although lower than the last 3 quarters, would still be well above the historical average (+4%). Looking at the biggest names releasing this week, they include JPMorgan Chase, Wells Fargo, Goldman Sachs and Tesco on Wednesday. Then on Thursday we’ll hear from UnitedHealth Group, Bank of America, PepsiCo, Citigroup, Charles Schwab, BlackRock and Delta Air Lines. And on Friday, releases will include Morgan Stanley and BNY Mellon.

Source: Earnings Whispers

A quick recap of the key daily events in the coming week courtesy of Deutsche Bank

Monday April 12

  • Data: Japan March PPI, preliminary March machine tool orders, Euro Area February retail sales, US March monthly budget statement
  • Central Banks: BoE’s Tenreyro speaks

Tuesday April 13

  • Data: UK February GDP, Italy February industrial production, Germany April ZEW survey, US March CPI, NFIB small business optimism index, China March trade balance
  • Central Banks: Fed’s Harker, Daly, Mester, Bostic and Rosengren speak

Wednesday April 14

  • Data: Japan February core machine orders, Euro Area February industrial production, US March import price index
  • Central Banks: Federal Reserve releases Beige Book, remarks from Fed Chair Powell, Vice Chair Clarida and Fed’s Williams and Bostic, ECB Vice President de Guindos and ECB’s Panetta and Schnabel, and BoE’s Haskel
  • Earnings: JPMorgan Chase, Wells Fargo, Goldman Sachs, Tesco

Thursday April 15

  • Data: Final March CPI from Germany, France and Italy, US weekly initial jobless claims, March retail sales, industrial production, capacity utilisation, April Empire State manufacturing survey, Philadelphia Fed business outlook, NAHB housing market index
  • Central Banks: Monetary policy decisions from the Bank of Korea and the Central Bank of Turkey, Fed Vice Chair Clairda, Fed’s Bostic, Daly and Mester speak
  • Earnings: UnitedHealth Group, Bank of America, PepsiCo, Citigroup, Charles Schwab, BlackRock, Delta Air Lines

Friday April 16

  • Data: China Q1 GDP, March industrial production, retail sales, EU27 March new car registrations, Euro Area February trade balance, final March CPI, US March housing starts, building permits, preliminary April University of Michigan consumer sentiment index
  • Central Banks:BoE Deputy Governor Cunliffe speaks

* * *

Finally, as Goldman summarizes, the key economic data releases this week are the CPI report on Tuesday and the retail sales and Philadelphia Fed manufacturing reports on Thursday. There are several speaking engagements from Fed officials this week, including speeches from Powell, Clarida, and Williams on Wednesday.

Monday, April 12

  • There are no major economic data releases scheduled.

Tuesday, April 13

  • 06:00 AM NFIB small business optimism, March (consensus 98.0, last 95.8)
  • 08:30 AM CPI (mom), March (GS +0.61%, consensus +0.5%, last +0.4%); Core CPI (mom), March (GS +0.26%, consensus +0.2%, last +0.1%); CPI (yoy), March (GS +2.63%, consensus +2.5%, last +1.7%); Core CPI (yoy), March (GS +1.57%, consensus +1.5%, last +1.3%): We estimate a 0.26% increase in March core CPI (mom sa), which would boost the year-on-year rate by three tenths to 1.6% on a rounded basis. Our monthly core inflation forecast reflects a reopening-driven rebound in airfares, hotel prices, and recreation prices. We also expect ARP Act stimulus payments and supply chain disruptions to boost core goods inflation in this week’s report, including for new and used cars, furniture, and apparel (despite negative residual seasonality in the apparel category). We estimate housing rent categories rose at a firm pace (we estimate rent and OER increases of 20-25 basis points), reflecting stabilization in our shelter tracker and the reversal of rent forgiveness effects. On the negative side, we believe college aid in the ARP Act could weigh on education CPI, and we note the possibility of normalizing alcohol prices in the wake of bars reopening. We estimate a 0.61% increase in headline CPI (mom sa), due to higher oil prices.
  • 12:00 PM Philadelphia Fed President Harker (FOMC non-voter) speaks: Philadelphia Fed President Patrick Harker will discuss the economic outlook at a virtual event hosted by the Delaware State Chamber of Commerce. Prepared text and audience Q&A are expected.
  • 12:00 PM San Francisco Fed President Daly (FOMC voter) speaks: San Francisco Fed President Mary Daly will participate in a Fed event on racism and the economy.
  • 04:00 PM Cleveland Fed President Mester (FOMC non-voter), Atlanta Fed President Bostic (FOMC voter), and Boston Fed President Rosengren (FOMC non-voter) speak: Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, and Boston Fed President Eric Rosengren will take part in a virtual discussion on racism and the economy.

Wednesday, April 14

  • 08:30 AM Import price index, March (consensus +1.0%, last +1.3%)
  • 12:00 PM Fed Chair Powell (FOMC voter) speaks: Fed Chair Jerome Powell will participate in a virtual discussion at the Economic Club of Washington. Moderated Q&A is expected.
  • 02:00 PM Beige Book, April FOMC meeting period: The Fed’s Beige Book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. In the April Beige Book, we look for anecdotes related to growth, labor markets, wages, price inflation, and the economic impacts of the ongoing coronavirus outbreak.
  • 02:30 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will participate in a virtual discussion hosted by Rutgers Finance Society. Moderated Q&A is expected.
  • 03:45 PM Fed Vice Chair Clarida (FOMC voter) speaks: Fed Vice Chair Richard Clarida will discuss the Fed’s new policy framework at the Shadow Open Market Committee meeting.
  • 04:00 PM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will participate in a virtual discussion on cities and systemic racism. Audience Q&A is expected.

Thursday, April 15

  • 08:30 AM Initial jobless claims, week ended April 10 (GS 700k, consensus 700k, last 744k); Continuing jobless claims, week ended April 3 (consensus 3,700k, last 3,734k); We estimate initial jobless claims decreased to 700k in the week ended April 10.
  • 08:30 AM Retail sales, March (GS +9.0%, consensus +5.5%, last -3.0%); Retail sales ex-auto, March (GS +9.0%, consensus +4.8%, last -2.7%); Retail sales ex-auto & gas, March (GS +9.0%, consensus +6.5%, last -3.3%); Core retail sales, March (GS +8.0%, consensus +7.0%, last -3.5%): We estimate that core retail sales (ex-autos, gasoline, and building materials) jumped by 8.0% in March (mom sa). High-frequency data suggest a very sharp rebound in retail goods spending from the winter storm-depressed February levels, and the intra-month spending pattern is consistent with a stimulus-driven spending surge. We believe the reopening of the economy shifted spending towards restaurants from grocers, which would create a positive wedge between the higher-level aggregates and retail control in this week’s reading. We estimate a 9.0% rise in the ex-auto ex-gas category. We also estimate a 9.0% rise in both the headline and ex-auto measures, due to large increases in gasoline prices and auto sales.
  • 08:30 AM Philadelphia Fed manufacturing index, April (GS 45.0, consensus 40.0, last 51.8): We estimate that the Philadelphia Fed manufacturing index declined by 6.8pt to 45.0 in April, after rising to the highest level since 1973 in March.
  • 08:30 AM Empire State manufacturing survey, April (consensus +18.0, last +17.4)
  • 09:15 AM Industrial production, March (GS +2.5%, consensus +2.7%, last -2.2%); Manufacturing production, March (GS +3.7%, consensus +4.0%, last -3.1%); Capacity utilization, March (GS 75.3%, consensus 75.6%, last 73.8%): We estimate industrial production rose by 2.5% in March, reflecting a rebound following winter storm-related weakness in February. We expect mining and manufacturing production to rebound while the utilities category likely retrenched following a large increase in February.
  • 10:00 AM Business inventories, February (consensus +0.5%, last +0.3%)
  • 10:00 AM NAHB housing market index, April (consensus 84, last 82)
  • 11:30 AM Atlanta Fed President Bostic (FOMC voter) speaks; Atlanta Fed President Raphael Bostic will participate in a virtual discussion on economic inequality.
  • 02:00 PM San Francisco Fed President Daly (FOMC voter) speaks: San Francisco Fed President Mary Daly will give a speech on financial stability and monetary policy. Prepared text and audience Q&A are expected.
  • 04:00 PM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Fed President Loretta Mester will discuss economic inclusion at an event hosted by Swarthmore College. Prepared text and audience Q&A are expected.

Friday, April 16

  • 08:30 AM Housing starts, March (GS +13.5%, consensus +12.7%, last -10.3%); Building permits, March (consensus +1.7%, last -8.8%): We estimate housing starts increased by 13.5% in March. Our forecast incorporates higher permits and a sizeable rebound following delays in starts in February due to winter storms.
  • 10:00 AM University of Michigan consumer sentiment, April preliminary (GS 90.0, consensus 89.0, last 84.9): We expect the University of Michigan consumer sentiment index to increase by 5.1pt to 90.0 in the preliminary April reading.

Source: BofA, DB, Goldman

Tyler Durden
Mon, 04/12/2021 – 09:44

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100 Top CEOs Plot To Punish States Which Pass ‘Restrictive’ Voting Laws

100 Top CEOs Plot To Punish States Which Pass ‘Restrictive’ Voting Laws

100 top CEOs and business leaders have agreed to band together and fight ‘restrictive’ voting laws designed to strengthen the integrity of elections, such as voter ID, after a weekend Zoom summit during which the CEOs threatened to withhold campaign contributions and punish states by pulling investments in factories, stadiums and other projects and endorsements.

Kenneth Chenault, left, a former chief executive of American Express, and Kenneth Frazier, the chief executive of Merck

According to Axios, the call included “a long list of business luminaries, including James Murdoch, Ken Chenault, Ken Frazier, LinkedIn co-founder Reid Hoffman, Levi Strauss CEO Chip Bergh, Atlanta Falcons owner Arthur Blank, and executives of Delta, United and American Airlines,” which expanded on a March initiative by 72 black executives to oppose election legislation in Georgia deemed to suppress the vote (yet nobody can articulate how).

During the call, Kenneth Chenault, the former CEO of American Express, and Kenneth Frazier, the CEO of Merck & Co., asked the leaders to “collectively call for greater voting access,” according to the Wall Street Journal.

Chenault and Frazier, two of the most prominent Black business leaders in the US, also reportedly told businesses not to walk away from the voting right issue and requested that CEOs sign a statement “opposing what they view as discriminatory legislation on voting.” –Business Insider

“CEOs who participated in a live poll indicated they will re-evaluate donations to candidates supporting bills that restrict voting rights and many would reconsider investments in states which act upon such proposals,” read a post-summit statement.

According to the Journal, the initiative is also backed by AMC CEO Adam Aron, Estée Lauder Cos. director Lynn Forester de Rothschild, and CyberCore Technologies CEO Tina Kuhn.

The weekend call built on a March effort by 72 black executives led by Chenault and Frazer, which itself was based in part on of the effort is based on a lie the mainstream media peddled about Georgia’s voting law (SB 202) that voting hours would be restricted, when in fact they were expanded.

The Zoom call – which consisted of 90 CEOs and 30 other experts and aides – comes 10 days after Major League Baseball signaled its virtue by moving the All Star Game from Atlanta to one of the whitest cities in America.

In short, corporate America is making sweeping economic threats to states which pass laws designed to improve election integrity.

Meanwhile, GOP leaders including Georgia Gov. Brian Kemp and Senate Minority Leader Mitch McConnell have pushed back against the woke CEOs, accusing them of adhering to “cancel culture.” McConnell also warned the CEOs not to become “a vehicle for far-left mobs.”

Tyler Durden
Mon, 04/12/2021 – 09:25

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Pubs, Gyms Reopen As England Eases COVID Lockdowns

Pubs, Gyms Reopen As England Eases COVID Lockdowns

Crowds queued up outside retailers, gyms and pubs on Monday as barkeeps pulled pints and millions of English  celebrated national reopening day, even as many of the UK’s European neighbors continued to struggle.

The UK is easing its COVID restrictions while other European nations are cranking them up. Restrictions have been in place across England (while other UK constituent nations were allowed to set their own restrictions) since early January, which is when public health officials cranked up the restrictions to try and combat the spread of a deadly, hyper-infectious new variant known as B.1.1.7, otherwise known as “the Kent Strain”.

The BBC dispatched a squadron of photographers to document the historic reopening.

Britain has suffered one of Europe’s worst coronavirus outbreak, with more than 127K confirmed deaths.

Source: Worldometer

Infections, hospitalizations and deaths have all declined in recent months, and a mass vaccination program has administered at least one dose to more than 60% of the adult population.

Still, as the economy reopens,  Prime Minister Boris Johnson and epidemiologists have urged caution, saying that many people remain unvaccinated and relaxing social distancing rules or allowing foreign holidays this summer could bring a new spike in infections.

“The situation in the U.K. is becoming clear and is stabilizing, but people have to remember that’s not the case elsewhere,” said Peter Horby, who chairs the government’s New and Emerging Respiratory Threats Advisory Group. “The pandemic is still raging globally.

According to the FT, demand for cash surged in March as British consumers stocked up on cash to take with them to the pub, or elsewhere. Cash withdrawals from Post Office counters totaled £590M in March, the highest amount since last September, excluding a Christmas surge in December.

Gareth Shaw, head of money at consumer group Which?, said that access to cash was still important.

“Millions of people still rely on cash to pay for essential goods and services, however ATM and bank branch closures continued at pace during the pandemic making it harder for people to access the cash that they desperately need,” said Shaw. “As businesses and shops reopen, the FCA must also closely track cash acceptance, as protecting access to cash will be undermined if there is nowhere to spend it,” he added.

However, elsewhere in the world the pandemic is worsening.

India overtook Brazil as the 2nd worst affected by COVID-19 after cases increased by a record 168,912 to a total 13.53mln and deaths increased by 904 to a total of 170,179. It was also reported that India banned the exports of Remdesivir and its respective active pharmaceutical ingredients amid the surge in domestic COVID-19 cases with the ban to last until the situation improves.

Source: BBC

Fortunately, the UK isn’t the only economy shaking off the paralysis of a long COVID winter. Hong Kong plans to relax its travel restrictions for people who have been inoculated, in an effort to boost the low vaccination rate. Across England, indoor drinking and dining won’t be allowed until May 17 at the earliest, while movie theaters and night clubs will remain closed, per the AP.

“The situation in the U.K. is becoming clear and is stabilizing, but people have to remember that’s not the case elsewhere,” said Peter Horby, who chairs the government’s New and Emerging Respiratory Threats Advisory Group. “The pandemic is still raging globally. “And many countries in Europe even are still seeing racing case numbers or having to reintroduce lockdowns. So it’s very hard to predict what will happen in the next couple of months,” he told Times Radio.

The FTSE 100 has started the week on a lower note, down 0.42% after being weighed down by banking and mining stocks.

Finally, vaccine passports, or “COVID Status Certificates” as they are officially known, are being tested at major sporting events in the UK this month, with the hope that mass events can open as safely as possible, and could provide a model for the future.

Tyler Durden
Mon, 04/12/2021 – 09:10

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

Biden’s Gun-Limitation Schemes Make a Mockery of His ‘Unity’ Message


admphotostwo740263

Just months into President Joe Biden’s tenure, his early calls for “unity” look not only insincere—something we expect of any politician—but positively laughable. Last week, he threatened executive action to tighten restrictions on privately owned firearms in a move bound to infuriate gun owners, including millions of people who purchased tools for self-defense for the first time amid the chaos of the past year. Much of the country is certain to ignore his dictates, including state and local governments who have already vowed that they won’t enforce such rules. Forget unity—the president has found an effective means of deepening the country’s divisions.

“I asked the Attorney General and his team to identify for me immediate, concrete actions I could can take now without having to go through the Congress,” the president huffed from the White House on April 8. “And today, I’m announcing several initial steps my administration is taking to curb this epidemic of gun violence.”

The legality and wisdom of his proposed restrictions on arm braces and “ghost guns” aside—Jacob Sullum ably dissected those schemes elsewhere—Biden’s plan to bypass Congress is a wild departure from his insistence at his inauguration that “my whole soul is in this: Bringing America together. Uniting our people. And uniting our nation.” After all, he’s bypassing Congress specifically because lawmakers are very definitely not unified around an anti-gun agenda. That includes Sen. Joe Manchin (D-W.Va.), from Biden’s own party.

Also not unified around attempts to restrict self-defense rights are states and localities the federal government relies on for most of the muscle to enforce its laws.

“On Thursday President Biden is expected to announce a series of executive actions addressing gun violence,” Arizona’s ABC 15 affiliate noted before the president’s speech. “No matter what those actions are, there is a very good chance that in Arizona, they’ll be ignored.” The news story came after Gov. Doug Ducey signed a bill prohibiting all political subdivisions of the state from using personnel or resources to enforce laws incompatible with Arizona’s own gun regulations. 

Wait. States can go their own way on gun policy? You bet. 

“Although the federal government may use its power of the purse to encourage states to adopt certain criminal laws, it is limited by the Tenth Amendment—which prevents the federal government from directing states to enact specific legislation—in its ability to directly influence state policy or requiring state officials to enforce federal law,” a 2014 Congressional Research Service report concluded with regard to marijuana. The results of the constitutional principle are seen in the in the states that have legalized marijuana, as well as sanctuary cities that refuse to cooperate with federal immigration enforcement. Guns are just another area in which states can tell the feds to enforce their own laws without local assistance.

Many individual gun fanciers are equally unimpressed by the president’s desire to limit access to firearms. In March, as gun control bills worked their way through Congress and Biden hinted at executive action, FBI background checks for commercial firearm sales hit a new record at almost 4.7 million, up from 3.7 million a year earlier. The AR-15 pistols and DIY gun kits targeted by the president’s orders are in especially high demand among buyers picking them up while they’re still available. Presumably, people rushing to pay rising prices for soon-to-be restricted items aren’t doing so because of their eagerness to surrender them once the rules change.

So much for unity.

Biden doesn’t require state, local, or individual cooperation for his pick to head the Bureau of Alcohol, Tobacco, Firearms, and Explosives, but the selection of David Chipman is a clear indicator that “unity” isn’t a priority at the moment. As an advisor to Giffords, a group dedicated to severely restricting self-defense rights, Chipman mocked gun owners, saying in 2020, “They might think that they’re die-hard, ready to go, but unfortunately they’re more like Tiger King and they’re putting themselves and their family in danger.” He also advocates to the point of dishonesty for the federal government’s bloody conduct during the 1993 Waco fiasco. His nomination is a red flag to gun owners.

“David Chipman, whom President Biden seeks to empower in order to continue his long train of abuses going back to the Waco, Texas murders committed by agents of the federal government, has led a career marked by outright lies, opportunism, and a brazen willingness, if not outright desire, to assault the natural rights of the American people,” the pro-gun Firearms Policy Coalition objected.

There’s no guarantee that Chipman will formally gain the ATF post (only one nominee has been confirmed to the position since Senate approval was first required in 2006) but no “unity” can be found in an appointee who is openly contemptuous of, and despised by, a large segment of the population.

That’s a large and growing segment of the population, as FBI figures demonstrate. Nine of the ten top recorded weeks for firearm background checks occurred in the past year, and two of them were last month. Last year concluded with a total of 39.7 million background checks, the highest annual count recorded. While there’s not a one-to-one correlation between background checks and sales, there’s no doubt that ownership is through the roof, including millions of new owners: “40 percent of sales were conducted to purchasers who have never previously owned a firearm,” the National Shooting Sports Foundation, a trade association, revealed last August.

Gun ownership is increasingly diverse, too. It’s surging among African-Americans repelled by biased law enforcement. It’s also soaring among people with left-of-center political views who would normally be expected to constitute the constituency for tighter restrictions and nominees like Chipman. These new owners joined the ranks of people who realize that a chaotic era and a politically divided population require them to look to themselves for self-defense rather than rely on government institutions. Biden is going to face some challenges convincing even many of those who voted for him to unite behind his attacks on their ability to defend themselves.

Of course, politicians often rely not on a united population, but on one that’s fragmented in ways that help them attain and hold office. Despite his inaugural verbiage, that’s certainly what Joe Biden is doing. Like many of his predecessors, he strokes just enough of the population to maintain power while antagonizing the rest. That’s been an effective strategy for lots of political officials who don’t care about the long-term consequences, but it’s brought the country to brink of disaster and made thoughts of unity a national joke.

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“Carpet-Bombing The Economy With Stimulus & Liquidity Is A Huge Mistake…”

“Carpet-Bombing The Economy With Stimulus & Liquidity Is A Huge Mistake…”

Via Global-Macro-Monitor.com,

The bond market might, however, assuming Kashkari’s  quote is true.

We are reposting a piece, which we recieved tremendous pushback when it was posted.   Now the Fed Heads are climbing aboard.  NK is one of the smartest but a bit of an opportunist, in our opinion.

Wall Street’s “everything is bullish” mantra is why the U.S. stock market cap to GDP is now close 200 percent (almost 50 percent above prior bubble peaks) and why we now see no way out of this rabbit hole but to print, print, print.   And print some more.

Asset valuations are so out whack, the Fed has lost control of the markets.  Just a hint of normalizing rates — a positive real interest rate across the curve — would cause stocks to correct 50 percent, in our opinion,  and throw us back into the “ice age.”

The policymakers are “up on a tightwire, one side is ice and one is fire.”    Ice as in deflation, fire as in hyperinflation,  the ultimate corner solution.  Write it down.

Ready For 4 Percent CPI By Mid-Year?

Origninal Posted on February 9, 2021 by macromon

Starting to hear lots of talk about inflation these days, something we have been seeing in the pipeline for the past six months.

Input price inflation accelerated to a near-decade high in January. Costs increased to the greatest extent since April 2011, reflecting stronger rises in both the manufacturing and service sectors. This was partly passed on to clients in the form of higher charges, the main factor underlying the steepest rise in output prices for 27 months. – JPMo Global PMI, January

We’ve crunched a boatload of numbers over the past few days.  Sit back and enjoy.

What Deflation?

Since 1957, 888 monthly observations of the Consumer Price Index, there have only been 106 monthly negative prints and only 12 negative monthly prints on Core CPI (excluding food and energy).    Monthly year-on-year inflation has only printed 40 times on the main CPI and Core CPI has never printed a negative year-on-year number.

You read that right, never.

Three Consecutive Negative Monthly Prints Are Rare

Three consecutive negative monthly CPI prints are rare, only 15 times for main CPI and just once for Core, which happened just recently after the COVID shock.

The Coming Base Effect

The following FRED chart of the Consumer Price Index illustrates how it bottomed last May after the COVID shock, which is going to set up for some very high year-on-year CPI inflation prints by mid-year.  In part, because of the lower base but also the surprisingly quick snapback in the price index after the government temporarily shut off the lights and the Fed turned on the printing press.

We have constructed in the following chart a couple paths for CPI inflation in 2021, one based on an average 0.3 percent monthly rate, which takes the year-on-year inflation rate to 4.1 percent by May, which is sustained and translates to a core CPI of 3.5 percent.  Given what we currently see in the PMIs, including major problems in the global supply chain, and the excess stimulus already in the system, a 0.3 percent monthly CPI may be too stingy.

A Different Kind Of Economic Shock 

We also think very few understand the current economic situation and that this crisis is unlike those in the recent past.  The labor force and employment problems are not so much the result of too little demand but a forced reduction in supply due to the COVID restrictions.  More than 70 percent of the 10 million jobs that have been lost and have not been recovered are in three sectors: 1) leisure and hospitality; 2)  education and health services, and 3) government.

Once COVID begins to fade – it has already started – and the economy opens fully, pent-up demand, especially for leisure and hospitality will be huge, and with capacity already reduced in this area, hiring will rebound sharply and so will prices.

Why Are Average Hourly Earnings (AHE) Spiking? 

While crunching the numbers, we also found an interesting anomaly with AHE, which is now running at multi-year highs.  We have warned many times on this site about going deeper with the macro data and the problems of averaging.

Though we have not engaged in much second-order thinking or analysis on this issue — you don’t pay us enough to do so — we are pretty certain the spike in earnings is the result that most of the job losses have been in the lower-paying service sector, such as leisure and hospitality.   If, for example, all the sub .250 hitters on the Yankees are given their walking papers, the team batting average naturally goes up.  The same goes for the macro.

We are also kind of amazed that those soaking up the sun at the genius bar on bubble vision are not using the “spike in AHE” as a rationale to justify the market’s irrational and outrageous valuations.  Maybe they will or already have?

Market Impact

Personally,  I have given up on the market, which has become almost farcical, well, not even almost.  One would think that if inflation is rising the Fed’s hands will be tied and there is a risk they may panic, or the bond market will panic first, which could send risk markets into a tailspin.   But that’s too rational.

We also know that we mortal humans tend to think linearly but markets, the economy, and society move forward on a nonlinear trajectory.  In other words, it impossible to predict the future, especially when it comes to timing.

Nevertheless, we still hold to the instruments and signals that have guided us in the past and continue to heed the words of one of our heroes,

In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could. – Rudiger Dornbusch

Sweet Carol K.  

Finally, I am thankful to my partner at GMM,  Carol K., who has taught me “you have got to ride the gravy train as long as it lasts.”    I guess you can tell who is making the money at the Global Macro Monitor.   Keep fighting, CK.

Appendix 

O.M.G!

Carpet bombing the economy with stimulus and liquidity is a huge mistake and will end in a river of tears, in my opinion.   Surgical strikes to help the sectors most in need, please.

Inflation is always and everywhere a monetary phenomenon. – Milton Friedman

Tyler Durden
Mon, 04/12/2021 – 08:50

via ZeroHedge News https://ift.tt/3mMYFg8 Tyler Durden

Cryptos Reach New Record High Ahead Of Coinbase Listing

Cryptos Reach New Record High Ahead Of Coinbase Listing

Ahead of Wednesday’s scheduled direct listing of on Nasdaq, interest in cryptocurrency exchange Coinbase has soared (along with prices for the underlying cryptocurrencies).

The exchange, which didn’t exist a decade ago, is expected to go public this week at a staggering valuation of about $100 billion.

“Coinbase is one of the most prominent cryptocurrency exchanges in the world,” Mira Christanto, an analyst who covers the company for Messari, said in a research report. “The market has shown that investors are hungry for crypto exposure through equity markets.”

And in a virtuous circle of FOMO, the crypto market has reached a new record high of almost $2.1 trillion.

Source

Helped overnight by a new surge in Bitcoin back above $61,000….

Source: Bloomberg

And Ethereum hit a new record high…

Source: Bloomberg

As Bloomberg notes, the opportunity for Coinbase now is to capture the increasing number of institutional and corporate customers, such as MicroStrategy, and Tesla, that are buying Bitcoin for the long haul.

“That’s going to be the Holy Grail for them if they can hold on to that business, because those folks are seen more as holders than traders,” said Julie Chariell, a senior analyst at Bloomberg Intelligence for fintech and payments firms.

Based on figures provided by the company, Chariell calculated that 5.5 million monthly users equates to $3 billion in 2020 revenue. The top 12 fintech firms to go public in the last six months have had price-to-sales ratios of 36 times, she said. Multiplying that by 2020 revenue gets you a very large number.

“You’re easily over $100 billion in market cap,” she said.

Of course, Coinbase’s fortunes will tend to correspond to Bitcoin’s volatile history and for now, if futures markets are anything to go by, that future looks bright:

Source: bitcoinfuturesinfo.com

With Dec 2021 futures trading at an extremely bullish premium to spot…

Source: Skew.com

However, there is a catch – as JPMorgan recently noted, the lack of a bitcoin ETF forced buyers to synthetically create a massive contango which leads to a trade-off going forward. A bitcoin ETF will probably mean more demand, but the bitcoin curve will flatten.

Specifically, if JPM is right, should the SEC reverse itself and allow one or more bitcoin ETFs, while the immediate outcome would be far greater demand, the consequences on the crypto market where curve and yield normalization would promptly follow, could be – paradoxically – quite devastating especially for the DeFi space which has seen exponential growth in the past year.

While the Securities and Exchange Commission has thrown out all applications for Bitcoin ETFs in the US (unlike Canada where three local bitcoin ETFs have been approved), citing a manipulable market, a new administration, SEC chair and renewed institutional interest, means ETF applications are on the rise and the SEC is taking another look at them. Ironically, would an ETF approval be the worst thing possible for bitcoin?

Meanwhile, away from the biggest players, altcoins have been soaring with Ripple’s XRP up dramatically in the last two weeks…

Source: Bloomberg

CoinTelegraph reports that the main catalysts for the 160% rally came from victories in the company’s legal battle. Ripple lawyers were granted access to internal SEC discussion history regarding cryptocurrencies, and a court denied the SEC the ability to disclose the financial records of two Ripple execs, including CEO Brad Garlinghouse.  

Another reason may be the convergence trade between Bitcoin (BTC) and altcoins, particularly as BTC sees sideways price action, allowing alternative cryptocurrencies to rally and catch up. 

Kelvin Koh, managing partner at Spartan Group — one of the largest DeFi-focused funds in Asia — said that large quant funds try to trade the convergence between Bitcoin and major altcoins.

Hence, the trend of capital moving into altcoins and back into Bitcoin occurs periodically. Koh wrote:

“The reason this happens periodically is because there are a bunch of quant funds out there that play the convergence trade between $BTC and a handful of liquid alts. Whenever there alts look cheap relative to $BTC, they pile in. When they look expensive, they rotate back to $BTC. No fundamentals involved so don’t try too hard to rationalize the moves. This strategy has proven effective over time and there are enough managers playing this that it becomes self-fulfilling and keep recurring.”

Meanwhile, hot on the heels of China’s digital currency launch, we suspect Powell and Yellen are avidly watching what’s occurring…

Tyler Durden
Mon, 04/12/2021 – 08:31

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

Biden’s Gun-Limitation Schemes Make a Mockery of His ‘Unity’ Message


admphotostwo740263

Just months into President Joe Biden’s tenure, his early calls for “unity” look not only insincere—something we expect of any politician—but positively laughable. Last week, he threatened executive action to tighten restrictions on privately owned firearms in a move bound to infuriate gun owners, including millions of people who purchased tools for self-defense for the first time amid the chaos of the past year. Much of the country is certain to ignore his dictates, including state and local governments who have already vowed that they won’t enforce such rules. Forget unity—the president has found an effective means of deepening the country’s divisions.

“I asked the Attorney General and his team to identify for me immediate, concrete actions I could can take now without having to go through the Congress,” the president huffed from the White House on April 8. “And today, I’m announcing several initial steps my administration is taking to curb this epidemic of gun violence.”

The legality and wisdom of his proposed restrictions on arm braces and “ghost guns” aside—Jacob Sullum ably dissected those schemes elsewhere—Biden’s plan to bypass Congress is a wild departure from his insistence at his inauguration that “my whole soul is in this: Bringing America together. Uniting our people. And uniting our nation.” After all, he’s bypassing Congress specifically because lawmakers are very definitely not unified around an anti-gun agenda. That includes Sen. Joe Manchin (D-W.Va.), from Biden’s own party.

Also not unified around attempts to restrict self-defense rights are states and localities the federal government relies on for most of the muscle to enforce its laws.

“On Thursday President Biden is expected to announce a series of executive actions addressing gun violence,” Arizona’s ABC 15 affiliate noted before the president’s speech. “No matter what those actions are, there is a very good chance that in Arizona, they’ll be ignored.” The news story came after Gov. Doug Ducey signed a bill prohibiting all political subdivisions of the state from using personnel or resources to enforce laws incompatible with Arizona’s own gun regulations. 

Wait. States can go their own way on gun policy? You bet. 

“Although the federal government may use its power of the purse to encourage states to adopt certain criminal laws, it is limited by the Tenth Amendment—which prevents the federal government from directing states to enact specific legislation—in its ability to directly influence state policy or requiring state officials to enforce federal law,” a 2014 Congressional Research Service report concluded with regard to marijuana. The results of the constitutional principle are seen in the in the states that have legalized marijuana, as well as sanctuary cities that refuse to cooperate with federal immigration enforcement. Guns are just another area in which states can tell the feds to enforce their own laws without local assistance.

Many individual gun fanciers are equally unimpressed by the president’s desire to limit access to firearms. In March, as gun control bills worked their way through Congress and Biden hinted at executive action, FBI background checks for commercial firearm sales hit a new record at almost 4.7 million, up from 3.7 million a year earlier. The AR-15 pistols and DIY gun kits targeted by the president’s orders are in especially high demand among buyers picking them up while they’re still available. Presumably, people rushing to pay rising prices for soon-to-be restricted items aren’t doing so because of their eagerness to surrender them once the rules change.

So much for unity.

Biden doesn’t require state, local, or individual cooperation for his pick to head the Bureau of Alcohol, Tobacco, Firearms, and Explosives, but the selection of David Chipman is a clear indicator that “unity” isn’t a priority at the moment. As an advisor to Giffords, a group dedicated to severely restricting self-defense rights, Chipman mocked gun owners, saying in 2020, “They might think that they’re die-hard, ready to go, but unfortunately they’re more like Tiger King and they’re putting themselves and their family in danger.” He also advocates to the point of dishonesty for the federal government’s bloody conduct during the 1993 Waco fiasco. His nomination is a red flag to gun owners.

“David Chipman, whom President Biden seeks to empower in order to continue his long train of abuses going back to the Waco, Texas murders committed by agents of the federal government, has led a career marked by outright lies, opportunism, and a brazen willingness, if not outright desire, to assault the natural rights of the American people,” the pro-gun Firearms Policy Coalition objected.

There’s no guarantee that Chipman will formally gain the ATF post (only one nominee has been confirmed to the position since Senate approval was first required in 2006) but no “unity” can be found in an appointee who is openly contemptuous of, and despised by, a large segment of the population.

That’s a large and growing segment of the population, as FBI figures demonstrate. Nine of the ten top recorded weeks for firearm background checks occurred in the past year, and two of them were last month. Last year concluded with a total of 39.7 million background checks, the highest annual count recorded. While there’s not a one-to-one correlation between background checks and sales, there’s no doubt that ownership is through the roof, including millions of new owners: “40 percent of sales were conducted to purchasers who have never previously owned a firearm,” the National Shooting Sports Foundation, a trade association, revealed last August.

Gun ownership is increasingly diverse, too. It’s surging among African-Americans repelled by biased law enforcement. It’s also soaring among people with left-of-center political views who would normally be expected to constitute the constituency for tighter restrictions and nominees like Chipman. These new owners joined the ranks of people who realize that a chaotic era and a politically divided population require them to look to themselves for self-defense rather than rely on government institutions. Biden is going to face some challenges convincing even many of those who voted for him to unite behind his attacks on their ability to defend themselves.

Of course, politicians often rely not on a united population, but on one that’s fragmented in ways that help them attain and hold office. Despite his inaugural verbiage, that’s certainly what Joe Biden is doing. Like many of his predecessors, he strokes just enough of the population to maintain power while antagonizing the rest. That’s been an effective strategy for lots of political officials who don’t care about the long-term consequences, but it’s brought the country to brink of disaster and made thoughts of unity a national joke.

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Criminal Impersonation and Criminal Libel

Most states no longer have criminal libel laws, which generally punish knowing lies that damage people’s reputations. But some have created criminal impersonation statutes, which (among other things) punish a particular kind of libel: one accomplished by pretending to be a person, and then saying offensive things in that role, which damages the person’s reputation.

The New York Rafael Golb / Dead Sea Scrolls case offers one example of how the criminal impersonation statute can be applied. And I just came across another, in California, which just led to a man to be “sentenced to serve 180 days in jail [suspended, provided he not reoffend for the next year], placed on probation for one year, and ordered to pay victim restitution.” Here’s the People’s Version of the Facts from the prosecution’s sentencing brief:

On June 28, 2020 Carmen Gonce … entered the Sandbox Coffee wearing a mask and complained because the cashier was unmasked. The cashier, Cebriana Habicht, was a trainee and the daughter of Gina Bacon …. Habicht told the customer she should do her homework. Gonce started filming Habicht and Habicht photographed Gonce.

When Gonce left, Habicht photographed Gonce’s car and got her name off of the receipt because Gonce used a credit card. Habicht told Bacon what occurred and provided Bacon her video. Bacon then allegedly posted the photos and Gone’s name on Bacon’s group’s Facebook page This kicked off an Internet campaign for and against Gonce/Habicht and Sandbox Coffeehouse (where Habicht only worked for one day.) Sandbox Coffeehouse suffered lost business, reputation and vandalism.

Starting on or about July 13, 2020, the defendant Edgar Castrejon began impersonating Gina Bacon, Yoshi Arelas and the We Have Rights Corporation, organizers of the Open Ventura County protests. Bacon was an organizer of the large but peaceful protest at the Ventura Government Center.

Castrejon copied Bacon’s real Facebook (FB) page in order to make a fraudulent account in her name. The defendant used his fake Bacon account to make fraudulent virulently racist posts and to claim Bacon’s group were bringing guns to a protest at Dr. Levin’s house. Dr. Levin is the Ventura County Public Health Officer. He then posted a screen shot of those fraudulent posts in many FB community forums for approx.. two weeks and they went viral.

Predictably, Bacon and her daughter were subjected to violent threats, doxing and contacts with Bacon’s employer. “BLM” was spray painted on her house and the coffee shop where her daughter had worked for three days. She had to move out of her house. Her former employer publicly criticized her….

Castrejon’s first impersonation of Bacon on Facebook was on approx. July 15, 2020, and contained a screen shot of a post made under the name “Gina Bacon” which stated, “We must keep Ventura county white. We got to get rid of all those #blm things out of here. I would say people but blacks are ruining our way of like and should not be considered human .#keepventurawhite #whitelivesmatter #blacklivesdontmatter”

Following the above post, Castrejon, writing under the name “Johnny Ahpleseed.” made the following statement about Bacon’s comment, “Hi! My name is Gina Bacon and Im your local neighborhood racist here in Ventura County. Keep an eye out for me when you see me. # GinaBacon #Ventura #VVenturaCounty #RRacist #BBlackLivesMatter #Dox” According to the Urban dictionary, the term “dox” means to put “personal information about people on the Internet, often including real name, known aliases, address, phone number, SSN, credit card number, etc.” In Bacon’s case, her residence was vandalized….

After articles were written in the newspaper, other victims came forward or were identified. For example, Candy Herzog argued with Castrejon on Facebook regarding a church opening up during COVID. Soon thereafter, Castrejon impersonated Herzog in a FB post by posting the following under her name:

“I hope you and your nigger kids get raped and murdered. If I ever find you I will put a bullet in your head.” Another forged post read, “why is it people like you just don’t die. Someone should rape your family.” Much like what happened to Bacon, Herzog’s employer was called and alerted of the post….

The main charge in the case appears to be under Cal. Penal Code § 528.5, a misdemeanor punishable by up to a year in jail and a $1000 fine (plus possibly an order for restitution to compensate the victims):

(a) Notwithstanding any other provision of law, any person who knowingly and without consent credibly impersonates another actual person through or on an Internet Web site or by other electronic means for purposes of harming, intimidating, threatening, or defrauding another person is guilty of a public offense punishable pursuant to subdivision (d).

(b) For purposes of this section, an impersonation is credible if another person would reasonably believe, or did reasonably believe, that the defendant was or is the person who was impersonated.

(c) For purposes of this section, “electronic means” shall include opening an e-mail account or an account or profile on a social networking Internet Web site in another person’s name.

I assume that the purpose to harm a person’s reputation would qualify under the “purpose[] of harming” language; compare People v. Golb (N.Y. 2014), which concluded that the New York statute’s requirement of “intent … to injure” included intent to injure reputation. (A purpose to get some readers to damage the person’s property, or physically injure the person, would also qualify, but such a specific purpose might often be hard to prove.)

I’d love to hear what our readers think about this. Are these criminal statutes a good idea? If you think “purposes of harming” or “intimidating” are too broad, would they be a good idea if limited to credible impersonation intended to damage reputation (or to threaten or to defraud)?

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