Author: admin

Georgia-based attorney Lin Wood could be a wolf in sheep’s clothing, according to a recent Breitbart story. And his recent rallying cry against voting in the upcoming January Senate runoff in his home state could be a ploy by Democrats to stop Republicans from voting in one the most important Senate races in modern political history.

Sara Carter, of SaraACarter.com, reports that Wood says Breitbart’s story is hogwash. Who knows. Politics is dirty but here’s both sides of the Wood versus Breitbart saga that has unraveled in the past few days.

First, Wood, along with former federal prosecutor Sidney Powell, has been asking Georgia Republicans to stand against alleged voter fraud by telling them with urgency not vote in the Georgia Senate run-off election on January, 5. It is a position that runs contrary to President Donald Trump’s urging to get Georgians out to vote for GOP Sens. David Perdue, R-GA, and Kelly Loeffler, R-GA, in an effort to keep the Senate Republican controlled.

WOOD: “The people are the rock and we’re going to slay Goliath, the communist, the liberals, the phonies.

Joe Biden will never set foot in the Oval Office of this country. It will not happen on our watch. NEVER GONNA HAPPEN!” pic.twitter.com/XIsPhoMEes

— Washington Examiner (@dcexaminer) December 2, 2020

Guess what? It appears Wood may have ulterior motives if you read the Breitbart story. They say Wood’s strong past political leanings as a Democratic donor and the fact that he was a political opponent of Perdue in 2014 could be the reason he’s asking Georgians not to vote in the runoff. That’s exactly what the Democrats want, Breitbart says.

According to Breitbart there are no records of Lin Wood ever voting for President Donald Trump but there are records of him supporting Democrats, making donations and voting for President Barack Obama.

Wood could not be immediately reached for fair comment to respond to Breitbart’s story. I believe, however, that it is only right to hear Wood’s side of the story. Everyone has the right to change their mind and support whomever they choose in politics even if it is outside party lines.

But Wood did slam back against the accusations on Twitter. He posted Wednesday night saying “Breitbart is dishonest.”

“Historically, I am nonpartisan,” he said.

“This year, I was partisan because I love @RealDonaldTrump.”

He said he donated $375,000 to a Trump PAC and gave his former opponent Perdue $25,000. He also noted that he gave Rep. Doug Collins $5,600.

1. Breitbart is dishonest. Historically, I am nonpartisan. This year, I was partisan because I love @realDonaldTrump.

I donated $375K to Trump PAC. @sendavidperdue solicited a $25K donation & I gave it to him. I gave $5,600 to @RepDougCollins & hosted a fundraiser for him. https://t.co/CuhZoI6V7K

— Lin Wood (@LLinWood) December 3, 2020

3. I gave $5,000 at a fundraiser in which @RichardGrenell spoke. That is all I can remember at the moment.

How did Briebart miss these facts? Guess some people do not want the fraud in GA election to be discovered. I did not donate to. @BrianKempGA.

Now back to my dessert. pic.twitter.com/QRR1HzR7bW

— Lin Wood (@LLinWood) December 3, 2020

From Breitbart:

While Wood made his comments purportedly as a self-described supporter of Trump, while donning a red “Make America Great Again” ball cap, the real story here is that Wood is by no means a Republican and there is no record in Georgia of him ever voting for President Trump—in 2016 or in 2020—in the Republican primaries. While Wood did vote in the 2020 and 2016 general elections in Georgia—there are no records in Georgia of him pulling a GOP primary ballot in 2016 or 2020, the two years President Trump was on the ticket. Ironically, in both the 2020 and 2016 general elections, state records show that Wood voted absentee—by mail—in Georgia, part of the same system he is now railing against.

In addition to Trump himself, Vice President Mike Pence is making a second trip to Georgia later this week to campaign for Loeffler and Perdue and the president’s eldest son Donald Trump Jr. has been vocal in his support for them as well.

– Breitbart

For the full story on Breitbart and to see Wood’s long list of Democratic donations go here…

*  *  *

While we acknowledge the anger of millions of MAGA-supporting Americans at these two candidates’ refusal to step up and back Trump in his election fraud challenges; it would appear that the greater good is ultimately to vote, and elect them anyway. This is not the hill to die on, and biting your own nose off to spite your face is unlikely to lead to any improvement in ‘America’ for the 70-plus million who supported the incumbent on November 3rd.

After House and Senate Democrats significantly lowered their “ask” from over $2 trillion to just $907BN as per the bipartisan proposal they backed, this morning there was more optimism on a targeted fiscal deal when Republican Tom Reed, co-chairman of House Problem Solvers Caucus, said in a CNBC interview that McConnell had increased the amount of stimulus funding he’s comfortable with to $600b.

Then moments ago stimulus optimism got a fresh boost after the latest soundbites from the Senate GOP leader who spoke on the Senate floor saying “It’s been heartening to see a few hopeful signs in the past few days” if caveating that “the underlying reality … is still with us. There are many important policies that have strong bipartisan support. There are many others that do not. And the way to help the country is … to finally let the former group be signed into law while we keep arguing over the rest.”

This, however, was followed by even more optimism from McConnell who sounded “pretty optimistic”, saying Congress should pass a stimulus bill now that covers areas where there is agreement and continue to debate the parts where lawmakers disagree.

The Senator also said that his targeted aid bill would help small business now, adding that Congress should not keep Americans waiting, and that “compromise is within reach … We can do this. and we need to do this. so let’s be about actually making a law.”

NEW: @senatemajldr on #COVIDrelief says, “Compromise is in reach.” but insists the GOP targeted bill is the best path forward noting POTUS will sign it.

“The way to help the country is to let the former group be signed into law while we argue over the rest”#NexstarDC pic.twitter.com/eJJ5jPNKGj

— Raquel Martin (@RaquelMartinTV) December 3, 2020

McConnell’s growing optimism was enough to push the Dow sharply higher, rising above 30,000 with the S&P hitting a fresh all time high of 3,680…

… helping small caps/Russell 2000 stocks outperform a tech/Nasdaq basket…

… even if bonds aren’t quite buying it just yet.

One of of the world’s most well known short sellers, Jim Chanos, said on Monday that his Tesla short has been “clearly painful” for his firm Kynikos Associates. Chanos has been skeptical of Tesla and Elon Musk for years. 

The firm once had a 5% short position in the name that has now been reduced to a smaller size, despite the fact that Chanos still “takes issue” with the company’s business model and valuation. He noted that the company’s last 5 quarters of profits have been from the sale of regulatory credits, something we have expounded on in depth on Zero Hedge. 

“It’s been painful, clearly,” Chanos said on Bloomberg’s ‘Front Row’. When asked about what, exactly, the company is and how it should be valued, he replied: “It’s whatever people want to believe Elon Musk is touting.”

“I’ve never met Elon Musk. I’ve never had a conversation with him,” Chanos said. He said if the two were to ever meet he would tell Musk: “Job well done so far.”

On top of Tesla going parabolic, which may or may not have had to due with a massive gamma squeeze, Kynikos’ long-short strategy has been muted by a Federal Reserve that has once again offered up unlimited QE and even lower interest rates to keep a more than decade long stock bubble growing, despite the economic collapse from the pandemic. 

Chanos told Bloomberg that retail investors have also helped keep stocks higher. He said the time has never been betting to find shorts, but that unfortunately a lot of bearish bets are “simply not working”. 

He said that Fed policy is creating a “golden age of fraud” that will be exposed over time. Now, he says, investors are more likely to bid up prices of questionable stocks than they would have been in the past. Kynikos runs a short book that Chanos says consists of 30% to 35% frauds. This is higher than his usual 10% to 15%.

Chanos concluded: “Right now, people are doing really dumb things with their money. It can go on for a while, and you can lose lots of poker hands to people that are doing dumb things with their money. But over time, I would hope that basically, if you’re playing properly, you’re going to come out ahead.”

Authored by Bill Blain via MorningPorridge.com,

“Just when you thought it was safe to get back in the water… another time..”

How Great is 2021 going to be? 

Strategizing about markets is a really, really fun way to start the day. I wake up with something to do and think about every day! I often get asked about when do I find time to write the Morning Porridge. Does it take all my time? Nope. I down tools on it by 9.00 am most days. I really do have a day-job – financing private debt and equity deals. Yesterday was spent working out how to restructure a UK aerospace and satellite launch project, and then how to present an infrastructure deal in the most effective way to potential investors. 

Occasionally something big happens in markets that sets the Morning Porridge’s tone for the coming day, but most days it’s freshly produced from personally sourced global ingredients, or from thoughts leaping off the pages I scour as I wake up. Some days I have a very clear idea what I’m going to write about, and others, I wake up wondering what is there to say that hasn’t already been written about where the markets are going next. 

Occasionally a theme or an idea will germinate or fester slowly in my head and it takes me a while to think it through and develop it. I’m having one of these days… I’m trying to think through the Consequences of the Year of the Pandemic. My thinking is its nowhere near complete.. and I’m beginning to scare myself.. 

The coronavirus has been the defining theme of 2020 – but what did it actually reveal in terms of markets? Its set the narrative. Everything else reacted to it. We saw enormous shifts in terms of policy and business strategies. All these shifts have consequences on future demand, supply, investment and growth, but also on expectations. Markets think its over so they are enthusiastic. Get back in the box… 

The virus thread is a loop that has now turned positive as the vaccines are rolled out– each day we get a news reinforcing the uptrend, building on a growing sense that markets will be fundamentally stronger in 2021. The investment banks are saying it’s going to be a bumper year for growth across South East Asia and swifter than expected recovery in Europe and the USA. 

If you squint your eye’s hard enough it may even look like a V-Shaped recovery when all is done. Everyone is hi-fiving themselves about how resilient the global economy has proven to be. Even damaged sectors – like cruises and air travel will take off next year on the back of repressed consumer demand being freed up. 

As I wrote yesterday, I’m not convinced markets really understand how all the forces underlying prices have come together. Most importantly, the way markets have operated through the crisis has largely been set by the central bank polices put in place post 2008 – QE and Ultralow rates. These have been the critical aspects of how markets have performed this year – they have risen as result of ongoing distortion! 

That’s not what the rising market sees. It sees only upside because the global economy will recover from the swift, sharp shock of 2020. It’s far too simple an analysis. The global economy just went through a really dangerous and stressful moment – worse in many ways that the Global Financial Crisis of 2008. I reckon there will be years of consequences to come – the equivalent of PTSD: post-traumatic stress disorder. 

There is a is a difference from a pretty line on a chart showing growth and global recovery, and reality on the street. Consider how we really put the global economies back on track, and address the global consequences of the pandemic, such as: how to balance the devastating losses suffered across certain sectors versus other parts of the economy emerging relatively unscathed. 

Or what about the risk of policy mistakes? Governments are talking about the need to balance the books and raise taxes to pay for a year of ramped up stimulus and support packages – including socialising wages. What are the dangers governments plunge us back into austerity and recession, or central banks trigger market collapse by talking about normalising rates? 

What strikes me is how themes seem to be repeating and entrenching themselves through these final days of the 2020 markets. It all feels a bit fractal – and I wonder if the computer simulation we exist in might be some great Mandelbrot set where the same themes and patterns are constantly repeating.

Probably not. In terms of markets, I’m coming to the conclusion 2020 might prove to be the year everything changes – and the scale of crisis becomes even more apparent, lifting scales from our eyes. We just don’t know it yet. 

I’ve written before about the Global Financial Crisis 2007-2031. I’m more and more convinced we are still nowhere near the end of that still festering economic and market dislocation.

• I’m not just thinking about how markets have moved in apparent defiance of the economic reality, or how stocks have become hyper-inflated by their relative value to artificially low interest rates and easy money, or how bonds now represent absurd levels of risk for minimal returns. 

• I’m not just thinking about how zero returns have generated and enhanced bubble formations.

• I’m not just thinking about what rising debt levels at sovereign, corporate and individual levels means in terms of future austerity threats. 

• I’m not just thinking about rising inequity and inequality – how government stimulus has largely resulted in the rich getting richer – and what that does politically. 

What I’m trying to figure out is whether the Pandemic might just prove to be a catalyst to a major rethink. These issues I’ve listed above are not going to be solved overnight by the end of the virus threat. They might get bigger!

All you need to do is read the comments on places like Zerohedge to find out exactly how the 8 foot Lizardmen who control the global economy on behalf of the Rothchilds et al are planning a “global financial reset”. The lunatic fringe do love their conspiracy theories. Sadly, their fantasies gain enormous traction by the way social media and fake news targeting reinforces what folks want to believe. 

The reality is the virus was a shock. Its disrupted everything. But the most dangerous stage of the pandemic for markets is as we come out of it. That’s when all the negative effects the Pandemic has created, plus the ongoing consequences of the government and central polices that followed the last Global Financial Crisis are going to combine. 

I suspect, the only way to address the consequences of the government created financial mess we’ll find ourselves in.. is probably yet more government and ongoing central bank intervention and direction in terms of maintaining stability and managing a way out of the distortion. That’s a recipe for trouble. The friction between more of less government is getting to civil war levels in some nations. 

The Big Big question is whether governments are up to the challenge of unravelling the financial mess we now find ourselves in. I seriously question it…

After a mixed picture on Manufacturing (ISM down, Markit up):

• Markit US Manufacturing PMI ROSE to 56.7 (vs 56.7 flash vs 56.7 exp vs 53.4 prior) – best since Sept 2014

• ISM Manufacturing DROPPED to 57.5 (vs 58.0 exp vs 59.3 prior)

…and weakness in Manufacturing employment, today’s Services surveys were expected to show a mixed picture also (ISM down, Markit up), and that’s what we got…

• Markit US Services PMI SURGED to 58.4 (vs 57.7 flash vs 57.5 exp vs 56.9 prior) – highest since March 2015

• ISM Services DROPPED to 55.903 (vs 55.8 exp vs 56.6 prior) – weakest since May 2020

Even as ‘hard’ data continues to tumble…

Source: Bloomberg

Markit notes that firms took on extra staff at the steepest rate on record, as pressure on capacity accumulated. Business expectations also strengthened to the most buoyant since January 2014.

Meanwhile, input prices rose at the quickest pace since data collection began in October 2009, while firms also raised their output charges at the fastest rate for more than a decade in an effort to pass on steeper cost burdens to customers.

On the other hand, ISM’s index of new orders at service providers eased 1.6 points to 57.2. The measure of service-related business activity, which parallels the ISM’s factory production index, fell to 58 from 61.2 a month earlier.

The group’s measure of services employment increased 1.4 points to 51.5, marking the third straight month in which respondents indicated payrolls gains.

WTF!?

This sent the Composite US PMI to 58.6 – its highest since March 2015 – and ahead of the rest of the world’s PMIs…

Source: Bloomberg

Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

“November saw US business activity surge higher at a rate not seen since early-2015 as companies enjoyed sharply rising demand for goods and services. Confidence has picked up considerably, with encouraging news on vaccines coinciding with reduced political uncertainty following the presidential election, hopes of greater stimulus spending and fresh stock market highs. Optimism about the future is running at its highest since early-2014.

“The recent improvement in demand and the brightening outlook encouraged firms to take on extra staff at a rate not previously seen since the survey began in 2009, underscoring how increased optimism is fuelling investment and expansion.

“Pricing power is also being regained, with firms pushing up average charges for goods and services at a rate not seen for at least a decade, boding well for stronger profits growth.”

Of course this is all before the new round of lockdowns is set to crush the Services sector, and hope is entirely reliant on more fiscal stimulus… so take it with a pinch of salt.

By Michael Every of Rabobank

Agreeing to disagree

We have an agreement! Or rather a series of agreements. However, it still seems that we are really agreeing to disagree all over.

On the US fiscal front, Nancy Pelosi and Mitch McConnell have elbow-bumped to approve in principle a USD908bn fiscal stimulus package. That’s the apparent agreement. The disagreeable part is that, as noted yesterday, this is less than half of what was seen as not enough even before more of the US economy was placed under tougher virus restrictions.

On the US political front, the House of Representatives has passed a bill that will force Chinese firms listed in the US to delist if they do not undergo audits to US standards. Off that goes to President Trump to sign imminently. Of course, as the optimists would see it, there is still a three-year window before any firm will suffer this fate according to the text of the bill, giving lots of potential wiggle room ahead, or at least enough time for the political winds to perhaps blow back in the other direction.

After all, as the Wall Street Journal reported yesterday, surprising absolutely no one with a brainstem, “China Has One Powerful Friend Left in the US: Wall Street”. (No! Never! Say it ain’t so! Inconceivable!) Yet it is Main Street that elects Congress, and looking at the make-up of this one, and the likely make-up of the one that will follow the 2022 mid-terms after re-districting, there is arguably less room to be bullish on that particular front. Still three years is three years, and Wall Street infamously cares more about milliseconds. Of course, Chinese firms now have lots of other options to raise capital internationally: unless something were to happen to their access to USD in other locations – though that threat does seem to be far less likely under a Biden administration. Notably, on that particular political front it is still President Trump for now though, and yesterday saw the US ban imports of cotton from China due to alleged human rights abuses in Xinjiang. What else will we be enacted through to 20 January? Anything that might impact the USD, perhaps?

Meanwhile, on the whole US presidency issue there is also still only agreement to disagree. Trump isn’t conceding looking at the video he posted on Twitter (with one of the strangest jump-cut I have ever seen), and his lawfare continues to roll on. A deep dive into the bowels of Twitter shows:

• In Nevada a new Trump claim says 40,000 people voted twice, and some voting machines may have already been looked at under court supervision;

• Republicans in Arizona were given permission by a judge to sample 100 duplicate ballots, which were discovered to have 2 ballots (a 2% rate) wrongly allocated to Biden, well above the margin of his victory in the state. The judge has now approved a sample of 2,500 ballots in Maricopa County’s 20,000 duplicates. Of course, this only applies to duplicate, not the vastly larger stock of original ballots across Arizona, but the legal door may perhaps have opened a crack to suggest the same ratio might hold more broadly;

• A new case filed by Sydney Powell in Arizona claims over 470,000 votes were illegitimate;

• Powell herself was on stage at a rally with fellow attorney Wood in Georgia yesterday, where the latter claimed China rigged the election because they need US land to grow their food (which is not part of any of the cases he has brought so far);

• A case brought by the Amistad Project in Georgia claims hundreds of thousands of ballots are potentially fraudulent, and the lawyer bringing the case, a former AG of Kansas, claims the FBI is interested in his data;

• A Trump case against the constitutionality and procedural irregularity of over 220,000 votes has been lodged with the Wisconsin Supreme Court; and

• There are rumors (and, yes, Twitter rumors are the worst kind), allegedly from the RNC, that the Supreme Court may indeed hear the case being brought in Pennsylvania by Kelly/Parnell over the constitutionality of mail-in voting in that state. Which would make a real splash.

You know when they call it an ‘election year’? It really feels like that at the moment. At the very least, the mainstream media agrees that even if all of the above amounts to a Twitter hill of beans, Trump will be running again in 2024 as some kind of de facto head of the official opposition in a parliamentary sense. In short, we will be seeing a lot more disagreements over the next four years whatever happens next.

Relatedly, Slate claims the same Supreme Court which might also throw markets a curve ball with a ruling about the US “non-delegation doctrine”. The new conservative majority may be willing to rule against that the way the US is governed –administrative agencies such as the EPA or the Department of Labor or Education do most of the heavy lifting on day-to-day rules and regulations– on the basis that the US constitution was not supposed to see Congress delegate so much of its power. Were this to happen, it would be revolutionary. Congress, which cannot agree on much except China, would have to pass specific laws on all relevant matters, and previous administrative regulation could be undone as unconstitutional. The presidency would also see limits placed on the use of executive orders. As Slate puts it “The Supreme Court Wants to Revive a Doctrine That Would Paralyze Biden’s Administration” (or any other). Quite the wild card, one has to agree. (One wonders if the vehemently agree/disagree idea of court packing would come up again rapidly if this were to transpire?)

Of course, this is probably about as bullish for equities as it gets –not much government at all!– and yet one could also argue just as bullish for bonds too given it would hardly be part of the global reflation trade everyone seems to be so drunk on right now. Would it be bullish or bearish USD though? Bearish given the deflationary impact(?) Or bullish given USD would be more like Bitcoin without regulators regulating it(?)

Wrapping up for today, in the background Europe is still split between Hungary and Poland and everyone else, with the increasing risk that no EU budget is passed and hence fiscal spending will drop back by EUR25-30bn next year. Yes, that is again a hill of beans fiscally, but it sure ain’t any stimulus in a locked down economy. Need I add that the UK and the EU are still deadlocked over Brexit? France is reportedly now threatening ‘Le veto’. The Brits are preparing to inject their population with Scotch eggs as soon as possible.

And Down Under, Australia just passed legislation allowing the Commonwealth government veto over Australian states’ or councils’ foreign agreements, widely seen as aimed at Victoria, which signed itself up to China’s Belt and Road Initiative with no transparency on what that deal actually entails. That, plus a message from PM ScoMo being blocked from WeChat, suggests full on agreement to disagree between Canberra and Beijing. Which might be part of the reason why Australia and Japan are soon set to sign the military exchange deal agreed in principle back in November, which will allow their firepower to be pooled if needed.