Author: admin

The market distortions created by an engineered gamma squeeze of the NASDAQ know no bounds.

Yesterday we published a report highlighting Bloomberg’s ETF expert Eric Balchunas’ take on how ARK Funds could wind up becoming victims of their own success. 

Many of Balchunas’ assumptions relied on sustained massive inflows into the ARK family of ETFs – notably its ARKK ETF – which we noted yesterday is currently seeing inflows of about $400 million per day.

And heading into the end of the holiday week, it doesn’t look like those inflows are going to let up in the slightest. Balchunas took to Twitter on Thursday morning to note that ARKK had another record inflow of $380 million yesterday and that ARK Funds as a whole took in $814 million, lifting the family’s AUM to $36.2 billion. 

In fact, that haul was so massive that Balchunas noted that ARK has a chance of taking in more cash than Blackrock in December. The funds are on pace to bring in $11 billion, he said.

ARK has legit shot at taking in more cash than BlackRock in December. They on pace to hit about $11b for the month, altho BlackRock can see big bumps, esp in Dec. pic.twitter.com/6fPPjEb9sg

— Eric Balchunas (@EricBalchunas) December 24, 2020

As we said, the continued flows are notable because Balchunas put out a great piece on Wednesday describing how the ARKK ETF could actually become a victim of its own success if cash continues to come in at the rate with which it has stacked up the last few years. 

ARK Innovation ETF, AUM…
Dec 2015: $8.2 million
Dec 2016: $12 million
Dec 2017: $376 million
Dec 2018: $1.1 billion
Dec 2019: $1.9 billion
Dec 2020: $18.4 billion$ARKK

Data via @ycharts pic.twitter.com/KthCtHxhVr

— Charlie Bilello (@charliebilello) December 23, 2020

Balchunas noted the ETF could have capacity issues due to it taking “in more in the past two weeks than in its first five years”. ETFs don’t have the option of closing, like mutual funds do, if they become to big. He notes that ARKK’s $18 billion could “make it difficult to move in and out of smaller stocks”.

“This one ETF has more in assets than the other 240 actively managed equity ETFs combined,” he pointed out.

He also noted that the fund is naturally going to have to morph into a large-cap fund. “ARKK has shown a notable shift away from smaller companies and toward larger ones this year,” he wrote, claiming the firm’s “bulging assets” are likely the reason.

ARK’s large cap exposure has jumped 10% to 77% of its portfolio this year, while small cap exposure has gone to “almost nothing” from its previous 13%. The number of small cap investments has also been cut in half, coinciding with the firms “massive” inflows. 

Most of the ARK ETFs saw record flows last night. All told the ARK Fam took in about $1b based on Monday’s $2b in volume, which means 50% of its volume was creates, wow. So lookout for another $1b+ in flows tonight based off Tue’s $2.3b in volume (ARK reports shares T+1). pic.twitter.com/WvTfQeYIzR

— Eric Balchunas (@EricBalchunas) December 23, 2020

The company now owns substantial portions of other companies, as noted above. It holds 10% of the float of 15 companies – including 12% of PagerDuty – which it only owned 3% of at the beginning of the year. 

“At $50 billion in assets, a 2% allocation to a typical small-cap company would translate to about 40% ownership,” Balchunas said. 

Balchunas predicted that unless there is a market correction, inflows will continue – just as we are seeing this week.

The ETF, which traded $2 billion in volume earlier this week, is trading about 44x more than it averaged this spring. He called ARKK the “biggest craze” since the DXJ – the currency hedged ETF that saw its outperformance turn to underperformance before losing “almost all of its $19 billion in assets”. 

Dude.. $ARKK and $ARKG are 5th & 6th OVERALL in volume today. Trading more than $EEM, $HYG, all the Sector SPDRs. It’s a literal stampede to get in. This is not normal. pic.twitter.com/GkVyCwGMwc

— Eric Balchunas (@EricBalchunas) December 22, 2020

The note also pointed out that ARKK charges about 3x the average ETF at 75 bps. It also says that the ETF is 6th in potential fee revenue versus being 69th in assets. 

One note for context. Yes, ARKK makes a lot for an ETF, but it’s nickel dime for legacy active MFs. EG Fidelity contrafund alone pulls in about 8x ARKK despite seeing like $35b in outflows (doesnt’ matter tho aum still higher bc bull mkt subsidy)

— Eric Balchunas (@EricBalchunas) December 23, 2020

Recall, last week we noted that Cathie Wood would likely maintain control of ARK. Last month, the news broke that she was at risk of losing control due to Resolute Investment Managers exercising a call option from years prior that would make it majority owner of the business. 

We noted that back in November, ARK was delivered notice from Resolute Management Investors that they would be taking control of her firm due to an option in a deal Wood had negotiated back in 2016. The power shift, which Pensions & Investments noted last month wasn’t especially amicable, came due to a 2016 agreement between Resolute and ARK, where RIM acquired a minority stake in the investment manager – with a call option “to purchase a controlling voting and equity interest in (ARK) that is exercisable in 2021.”

At the time the intent to exercise was announced, Wood had said: “On behalf of the employee-owners of ARK, we are disappointed that Resolute Investment Managers and its private equity owner, Kelso & Co., have chosen to issue this unwelcome notice that they intend to seize control of our business.”

In speaking to Bloomberg last week about the potential power shift, Wood said: “That has quieted down and we are in negotiations, We wanted to be fair and square with our partner, and I think things will work out.”

By Mark Solomon of FreightWaves,

For decades, an immutable law of business has been that whenever FedEx changed its pricing or related terms and conditions, rival UPS would soon follow suit. Or vice versa. However, a few changes to peak-season delivery surcharges that the two carriers announced within a week of each other signal that the long-held duopoly bond continues to fray.

There are still similarities: Both carriers will reduce their levies to $3 per package to cover the “additional handling” of shipments that are difficult to manage. UPS will reduce its per-package charge on oversize shipments to $31.45 per piece from $50, not far from FedEx’s revised charge to $30 from $52.50. The effective date of the new UPS levies is Jan. 17, just one day before the revised FedEx surcharges kick in. All the revised charges will stay in effect until further notice, both carriers have said.

But there are differences. For example, UPS, which disclosed its surcharges in a website post yesterday, will maintain its U.S. ground residential surcharge but cut it to 30 cents per piece from surcharge tiers of $1 to $3 per package that expire Jan. 16. FedEx’s residential delivery surcharges, which ranged from $1 to $5 a parcel and were imposed Nov. 2, will disappear entirely on Jan. 17.

UPS wilI reduce surcharges on its SurePost parcel-induction service offered in conjunction with the U.S. Postal Service to 30 cents per package from the $1- to $3-per-piece surcharge thresholds that expire Jan. 16. FedEx, by contrast, will drop a similar surcharge by just 25 cents per parcel to 75 cents from $1.

The revised parcel-induction surcharges indicate a clear divergence between the two. While UPS will cut its levies by at least 70 cents a parcel, UPS is a regular user of the Postal Service and will likely remain so for the foreseeable future. FedEx, by contrast, has nearly finished a multiyear process to move all its former Postal Service traffic into its own residential delivery network. FedEx’s lower surcharge cut may be designed to recoup the costs of migrating and operating the service, or it may be a way to embed profitable surcharges into what is now an in-house offering. FedEx’s objective in moving the volumes in-house is to add more parcel density to its ground-delivery network.

UPS, along with other high-volume providers, dumps massive parcel volumes deep into the Postal Service’s shipping network for last-mile deliveries to residences. UPS remains a heavy user of the Postal Service’s last-mile delivery service. 

UPS will set volume thresholds to determine who will get slapped with surcharges. The levy on standard-size parcel shipments will apply only to customers whose combined volume of ground residential and SurePost traffic exceeded 25,000 packages during any week following February 2020. The move is designed to shield small to midsize businesses, a coveted customer segment, from the effects of the surcharges.

UPS’ surcharges on shipments requiring special handling will apply to customers who have shipped more than 1,000 total domestic and U.S. export packages, or more than 10 of the specialized pieces, during any week after the end of February. The special-handling levies are believed to be relatively easy for shippers to exceed.

A major Marine Corps base in southern California is under emergency evacuation orders as a wildfire has grown out of control and is now encroaching on the area. 

Marine base Camp Pendleton, which is home to the 1st Marine Division, Marine Expeditionary Force, infantry training schools and many other key units, is under threat by the Creek Fire.

#CreekFire on Camp Pendleton [update] Fire is 300 acres, 0% contained. Significant new evacuation orders for 7,000 residents on west side of Fallbrook (roughly south of Main Ave/S. Mission Rd). Please visit https://t.co/kFNyPzwgZX for the latest info. pic.twitter.com/TeoHoFSsNz

— CAL FIRE/SAN DIEGO COUNTY FIRE (@CALFIRESANDIEGO) December 24, 2020

The fast-moving brush fire resulted in the overnight emergency evacuation of about 7,000 residents. The fire is said to be burning entirely on Camp Pendleton, which given its vast mountainous training areas includes a lot of brush areas.

The fire has scorched some 3,000 acres of the base’s about 125,000 total acres. The base lies along the coastline in northwestern San Diego County.

The fire is said to be at least 35% contained as of Thursday morning.

A number of grids on the county map identified by local North County Fire personnel were designated for a mandatory evacuation notice early Thursday.

“We have a lot of populated areas both on and off base, so we’re still very concerned,” Cal Fire Capt. Thomas Shoots said.

One local news report described conditions as follows: “Crews are battling the fire under critical conditions fueled by Santa Ana winds bringing 30-50 mph wind gusts over the county. A Red Flag Warning has been called for the inland and mountain areas until 12 p.m. Christmas Eve. Gusty winds and low humidity levels between 5 and 15% will create critical fire danger.”

High winds are now said to be pushing the blaze further into the base.

By Wouter van Eijkelenburg of Rabobank

Summary

• We have updated our emerging markets heatmap which provides a comprehensive overview of the relative vulnerability of 18 emerging markets
• Asian countries are in relatively good shape, while Latin American countries are most vulnerable, with Argentina ‘topping’ the ranking
• Emerging markets are recovering at different speeds, ranging from single digit growth (China, Vietnam) to double digit contractions (Chile, the Philippines) in Q3
• Public debt levels are surging in all economies, limiting future fiscal space
• In terms of currencies, Philippine Peso, Hungarian Forint and Chilean Peso are outperforming while the Russian Rouble and Indian Rupee are underperforming relative to their vulnerability
• Going forward we expect EM currencies to be relatively strong on the back of a weak dollar and global economic recovery
• But if downside risks materialize, the local currencies of countries that are vulnerable according to our heatmap will be most heavily impacted

The vulnerability of EMs after rollercoaster 2020

Concluding that 2020 was a turbulent year would be an understatement. In light of all recent developments we have updated our emerging market vulnerability heatmap (Table 1) to provide guidance on a range of economic indicators and present the relative performance of emerging markets in an intuitive manner.

Diverging economic recovery

Amid the reverberations of the global pandemic we observe different speeds of recovery among emerging markets. Countries like China and Vietnam showed positive growth figures while countries like the Philippines and Chile are still showing a double digit contraction y/y. Figure 1 presents the fastest growing economy in Q3 on the left and the slowest on the right. The difference in speed of recovery can be attributed to a number of factors. First and foremost, the level of containment of the virus, which, for example, explains why China is doing well (it has been relatively successful in containing the virus). But other factors also play into these developments. For example, countries like the Philippines and Thailand are very dependent on tourism and are hit hard by closed borders. Other countries like Malaysia and China are exporting medical or electronic equipment and could benefit from a rise in demand for these products rose as a result of the pandemic and lockdowns. On the flipside, this implies that countries suffering from closed borders in recent months can expect to rebound quickly whenever vaccines are widely available and international travel returns to pre-pandemic levels.

Rising debt levels

In order to limit the impact of the pandemic, governments reacted with large stimulus packages. In an earlier publication we elaborated in depth on COVID-19 monetary and fiscal stimulus packages among developed and developing countries. The additional fiscal stimulus has resulted in large increases of public debt. In Figure 2 we see the countries with the largest public debt as a % of GDP, ordered from left to right. Countries that stand out are Argentina, Brazil and India. These countries have increased their public debt as a result of large fiscal deficits in order to finance COVID-19 support packages: Argentina 6% of GDP, Brazil 8.4% of GDP and India 8.5% of GDP. Going forward, limiting large budget deficits helps governments to keep the public debt level sustainable and retain fiscal headroom to stimulate the economy if needed. High debt levels are a constraint to future economic growth. They limit future fiscal spending for a number of reasons: i) A higher share of the government budget needs to be allocated towards debt repayments and cannot be used to stimulate the economy ii) higher debts lead to higher default risks and iii) higher debt levels could increase interest rates on future government bond issuance.

Another important measure is how much of the debt is denominated in a foreign currency. Large shares of foreign-currency denominated debt increase the vulnerability to currency volatility. In Figure 3 we observe that Argentina, Turkey and Indonesia have the largest share of their debt denominated in foreign currency, which makes them the most sensitive to currency movements within their region. This dependence on foreign capital constrains the set of monetary or fiscal mechanisms that can be used to stimulate the economy. For example, cutting central bank interest rates depreciates the local currency, indirectly increasing government debt levels in terms of the local currency. On the other side of the spectrum we see that mainly Asian countries (Thailand, China, South Korea) are in good shape with regard to foreign currency-denominated debt.

Overall rankings

In Table 2 we show the aggregated rankings. The countries shown at the top are the most vulnerable according to our framework while countries at the bottom are least vulnerable. In general, we observe that Asian countries are performing quite well, while countries in Latin America are showing a higher degree of vulnerability. We already showed (Figures 2 & 3) that countries like Argentina, Turkey and Chile are relatively vulnerable with regard to their debt levels. At the same time, the Philippines, Chile, Colombia and Mexico are struggling to rebound from the economic dip caused by the pandemic. Alongside economic performance, institutional quality is another driver.

Zooming in on institutional indicators like political risk we note that Latin American countries are more vulnerable than countries in, for example, Asia (Figure 4). However, these are all relatively low with the highest score being around 3 on a 0-10 scale.

Finally, trade figures provide another important economic indicator. Figure 5 shows which countries have the largest trade surplus left to right and the vulnerability with regard to FX export cover, which indicates how many months of imports can be covered by current foreign reserves. The figures point out that a relatively solid trade position supports to a country’s relatively good position in the overall rankings, especially in the case of Thailand, South Korea and Russia.

Vulnerability heatmap vs. performance of local currencies

In figure 6 we compare the vulnerability rankings to the performance ranking of the local currencies since the start of 2020. Overall, we observe that the vulnerability is a good gauge of the relative performance of the local currencies. There is a decent fit between the vulnerability and depreciation of currencies. Currencies above the 45 degree line are relatively underperforming based on the relative vulnerability ranking, while currencies under the 45 degree line are relatively outperforming their relative vulnerability ranking. Although these indicators provide a comparison based on fundamentals, other very important factors must be considered when evaluating the value of these currencies, for instance current local economic circumstances, global events and global investor sentiment. In this way, the Philippine Peso’s strength can be attributed to the increase in remittances and collapsed imports during the pandemic and recovery from strong typhoons in November. The Rouble’s weakness could be attributed to foreign policy risks and associated risks for investors, constraining them from investing in Rouble-denominated assets.

The year ahead

The vulnerability heatmap provides an intuitive framework to assess the fundamental performance of emerging markets and their relative performance on a range of indicators. But we should not look at these in isolation. Next year the individual performance will be driven by economic recovery, virus containment, political stability, budget prudence and central bank policy as well as global investor sentiment.

In general, emerging market currencies have the opportunity to appreciate on the back of a weak dollar, as a result of ample liquidity provided by the FED and ECB. In turn, this provides governments and central banks of EMs to loosen their policy in order to stimulate their economies. The divergence in monetary and fiscal policies will be one of the main drivers in relative performance of the EM local currencies.

The economic recovery, spurred by the implementation of vaccines is another important factor. EMs will benefit from developed markets opening up, increasing the global demand for products and commodities, which will benefit production countries like China and Malaysia and commodity exporters like Indonesia and Brazil. Likewise, opening borders to tourism will benefit countries like the Philippines and Thailand.

On the flipside, downside risks like new outbreaks or a shift towards risk-averse investor sentiment will have a more severe impact on currencies of countries that are most vulnerable according to our vulnerability heatmap. Countries that are least vulnerable according to the heatmap will be less impacted by negative events and a risk-averse investor environment.

Summary:

• Singapore confirms first case of UK virus strain
• US hospitalizations hit new record
• Brazil study shows China vaccine 50% effective
• India confirms 24K+ new cases
• China confirms 17 new cases
• NY extends eviction moratorium
• Sydney residents asked to “limit mobility”

* * *

As we head further into what’s already been a busy day before Christmas (a day when markets close early and many Americans take off from work), millions of Americans, and other Christians around the world, are preparing to celebrate a holiday that, for many, will probably be a markedly different holiday than what they’re accustomed to.

According to Johns Hopkins, global cases have reached 78.6MM, while the worldwide death toll is nearing 1.8MM.

In the UK, a Brexit deal has finally been reached, but citizens are seemingly more concerned with the line of lorries at the border and news reports about super-infectious COVID-19 mutations prompt people to doubt or question the efficacy of vaccines (despite all that trial data) than about fisheries, especially after Britain reported a record 39K+ new cases the other day.

In the US (and the rest of the world) the situation isn’t much better. China has joined the list of countries that has cut off some or all travel/trade with the UK by halting passenger flights over fears tied to the new viral “variant”. Singapore, meanwhile, has become the latest country to confirm its first case of the UK variant.

While Mexico administered the first dose of a non-trial COVID vaccine in Latin America, a vaccine developed by China’s Sinovac Biotech was found to be more than 50% effective in a Brazilian clinical trial. That number, which is much lower than the 90%+ numbers reported by Pfizer, Moderna and, of course, Russia’s Gamaleya Institute (which developed “Sputnik V”) was released without key supporting data, potentially delaying deployment of the shot in the west. Rival Sinopharm, meanwhile, submitted an application to have its vaccine approved by Chinese authorities, a local website said. According to a count maintained by Bloomberg, nearly 3MM people worldwide have been vaccinated (figures that likely leave out millions given the vaccine on an “emergency” basis in China).

According to JHU figures, US hospitalizations hit a fresh record high of 115K+, while the number of new cases and deaths declined off of recent records.

The 7-day average for hospitalizations hit a new record as well.

As the world waits to learn more about the new virus strains discovered in the UK and South Africa, here’s some more COVID news from Thursday morning:

New York Governor Andrew Cuomo said he will extend the state’s moratorium on evictions, which is set to expire Jan. 1. Cuomo also implored federal officials to do more to stop or contain the spread of the new Covid-19 variant reported in the U.K, such as blocking flights from that country or requiring those passengers to test negative before boarding planes.

India reports 24,712 new cases in the past 24 hours, up from 23,950 for the previous day, bringing the country total to 10.12 million.

Millions of Sydney residents have been asked to limit their mobility over Christmas, with some families in lockdown and indoor gatherings limited to 10 visitors, as officials try to contain an outbreak that has reached 100 transmissions.

South Korea has signed deals with Pfizer and Johnson & Johnson’s Janssen to import coronavirus vaccines, enough for 10 million people from Pfizer and for 6 million from Janssen, Prime Minister Chung Sye-kyun says.

China records 17 new cases for Wednesday, up from 15 the previous day. Of the new cases, 11 were imported. The six locally transmitted cases are in the northeastern province of Liaoning.

In one of his many TV interviews, Dr. Fauci said Thursday that he has been working 7-days a week, 16+ hours a day since January, nobly marshaling the federal effort to combat the coronavirus. We can’t help but wonder: is that an actual accounting of Dr. Fauci’s media screen time?

Another week, another all time low mortgage rate.

With 2020 now almost over, we can calculate how many times the benchmark 30Y fixed mortgage has hit record lows this past year. And according to the latest weekly update from Freddie Mac which showed that the 30Y FRM dropped another 1 basis point to a fresh-all time low 2.66%, we can now declare that in 2020 the 30Y mortgage hit a record low on 16 weekly occasions… which is also a record.

The chart below explains all you need to know, showing the 30Y mortgage yield plunging by half from 5.0% in late 2018 to its current level just above 2.50%

The plunge in borrowing costs helped fuel a new housing bubble that has helped boost the broader economy during the pandemic (see “Visualizing The U.S. Housing Frenzy In 34 Charts“). Lower rates, combined with an exodus from big cities to ride out the pandemic, have pushed buyers into the market. Current owners have also been able to save money by refinancing their loans.

A low inventory of homes to buy, combined with the surging demand, has driven up prices. That’s raised concerns that the housing boom will run out of steam, particularly if rates start to tick up. Meanwhile, with the economy sliding into a double dip the real estate market has cooled off a bit in November amid surging coronavirus cases, and with Congressional unable to pass a fiscal stimulus bill there is concern about how long the rally can last.

The latest housing data suggested weakness dead ahead: new-home sales tumbled to a five-month low in November, dropping 11% in a sign the market is cooling off as coronavirus cases surge, while existing homes were also down last month, slipping for the first time in six months. That came as the median selling price jumped 14.6%, the fourth straight month of double-digit increases.

“The housing market is poised to finish the year strong as low mortgage rates continue to fuel homebuyer demand,” said Sam Khater, chief economist at Freddie Mac. “Moving into 2021, we expect rates to hold steady but the key driver in the near term will be the trajectory of the Covid-19 pandemic and the execution of the vaccine.”

Authored by Bruce Wilds via Advancing Time blog,

With all the things that are going on would it surprise you that before long the government may take away your right to drive. While this may sound absurd, please bear with me. For years in my state, a question that is on every driver’s test is, Is driving a right or a privilege?  Of course, the answer is, it is a privilege. If you ask the Department of Motor Vehicles (DMV) in your state expect them to agree. Driving isn’t something just anyone can do. Not legally anyway. It’s a privilege that’s earned by showing you have the skills and knowledge to drive safely.

Sorry, This Car Only Comes As A Self-driver

The point they want to make it clear is that you know driving is a privilege and something they can take away from you. To most Americans who have grown up with an automobile, the idea may sound foreign or strange but within a few years, only a small percentage of us may be allowed to own or operate a vehicle. I’m not predicting this will happen overnight but it is something that is likely to unfold over three to seven years as big tech slowly tightens the screw and asserts more control over our lives.

After only a few months of living in a Covid-19 world, it has become clear those in charge can change the rules in a blink of an eye. The idea the world is moving in the direction of removing this so-called privilege started to emerge just a few years ago. Now several trends are rapidly coming together which makes this much more probable, a few are listed below. 

   * self-driving vehicle technology is rapidly improving 

   * People are becoming more comfortable with the idea of car sharing  

   * Many people cannot afford an automobile

   * Central banks are rapidly moving into social engineering and fighting climate change

   * Several companies have floated the idea of developing fleets of robo-taxis  

Just the other day Apple threw its hat into the ring when it announced its intention to move forward with developing self-driving car technology.  According to Reuters, Apple is targeting 2024 to produce a passenger vehicle. Make no mistake, this has the potential to derail Elon Musk’s plan for Tesla to put out a million robotaxis. This places Apple in the position of competing with others with major self-driving projects, including Tesla and Google/Alphabet’s Waymo project which stands for a new way forward in mobility.

Adding to the validity that Apple is serious about moving in this direction, Reuters also reported Apple’s cars might include sensors and a new “monocell designed battery” that has been developed internally at Apple. Such a battery could be a much-needed breakthrough in battery technology. The lack of better batteries is one of the biggest problems currently facing the EV industry. A new battery design that could “radically” reduce battery cost and increase a vehicle’s range. A better battery has been seen as the holy grail of the EV industry.

And It’s Gone

As to how “they” might remove your driving privileges, the answer is, slowly at first then rapidly after they reach a certain point. Simply by raising the cost of owning and operating a vehicle they can dent the number of people desiring to drive. This can be done by raising the price and requirements to get and maintain a driver’s license or hiking fees and excise taxes on various types of vehicles. Making the claim this new technology is much safer we might see insurance rates for individuals skyrocket compared to those paid for autonomous vehicles. 

They could also ban human-operated vehicles from entering certain areas. Another way to choke off our desire to own and operate a vehicle is to sever our ability to get fuel or parts by making them either more expensive or impossible to get. One or all of these tools would substantially reduce the desire to drive for many people. Remember this is about those in power being able to assert their power over the masses. This can be tied to a narrative that it is being done for the greater good and the claim it will massively reduce climate change by cutting waste and making society more efficient.

While some of you may have a difficult time imagining a world in which you would be totally dependent on a self-driving vehicle to get around, the writing is already on the wall. Even at the early stage of their development, some carmakers are already suggesting or claiming that self-driving vehicles will reduce accidents to nearly zero and save thousands of lives each year. The problem is many people enjoy driving and the freedom that comes with it. Some of us have absolutely no desire to own a self-driving car. 

In the world I have described, only the rich and powerful would have a car and be granted the privilege to drive them. For those of you that doubt this could happen or be the goal of our new masters, I remind you few people would have ever predicted many of the Orwellian tactics governments across the world have used to squelch this pandemic that has killed far fewer people than originally predicted.

Who would have though there would be a massive, suspension-related recall in December and it wouldn’t be from Tesla?

General Motors announced this week it is recalling about 840,000 vehicles in the U.S. for both suspension problems and because its front seat belts can fail, according to Yahoo. 

The seat belt recall involves trucks that have split bench seats, and does not affect models with bucket seats. 

624,000 vehicles are covered as a result of the seat belt recall, which includes 2019 to 2021 Chevrolet Silverado 1500 and GMC Sierra 1500 pickup trucks. GM is also recalling its 2021 Chevrolet Suburban and Tahoe and GMC Yukon XL, and the 2020 and 2021 Silverado 2500 and 3500 and GMC Sierra 2500 and 3500.

GM revealed to the government in its recall documents that the seat belt brackets “may not have been secured to the seat frame”, meaning they may not restrain people properly during a crash. The company said it will start to notify owners on February 1 and that dealers can inspect and fix seat belt brackets, if necessary. 

The suspension recall involves the 2012 and 2013 Buick Regal, the 2013 Chevrolet Malibu, and the 2010 through 2013 Buick Lacrosse. Rear toe links can rust and fail on 213,000 of the vehicles, GM says. 

GM says it does not know of any crashes or injuries from the defects yet.