Category: zerohedge

Authored by Matt Margolis via PJMedia.com,

The Democratic National Convention heavily promoted the conspiracy theory that President Trump is dismantling or undermining the postal service in an attempt to suppress the vote or undermine the presidential election in November. Democrats clearly don’t want in-person voting in November, despite the high risk of fraud with mail-in voting.

While Democrats are trying to make people afraid to vote in person, the experts are saying it can be done safely. 

And Joe Biden says that, unlike Trump, he’d listen to the experts.

Well, Dr. Fauci has insisted that in-person voting can be done safely.

“I think if carefully done, according to the guidelines, there’s no reason that I can see why that would not be the case,” Dr. Fauci told National Geographic.

Fellow White House Coronavirus Task Force Member Dr. Deborah Birx also agrees.

“If you go into Starbucks in the middle of Texas and Alabama and Mississippi that have very high case rates, then I can’t say that it would be different waiting in line at the polls,” she said.

Even the notoriously liberal National Public Radio (NPR) seems to be admitting that in-person voting isn’t as risky as Democrats are suggesting, having reported this week that “new research suggests in-person voting may be less risky than many fear.”

The NPR report cites a new peer-reviewed study published in the American Journal of Public Health, which concluded that in-person voting in Wisconsin’s April 7 election did not cause a spike in coronavirus cases despite 400,000 people voting.

In that report, researchers from Stanford University’s Graduate School of Business and the University of Hong Kong’s School of Public Health call the Wisconsin election “a large natural experiment” for better understanding the coronavirus transmission risk.

The team found that hospitalizations in Wisconsin for COVID-19 cases “steadily declined throughout April,” dropping from a high of 101 on April 3 — four days before the election — to a low of 14 on April 18, according to data from the Wisconsin Department of Health Services.

There were 71 people, that agency reported in mid-May, who did test positive for the coronavirus who had either been poll workers or voted in person in Wisconsin’s balloting.

But the study noted that many of those cases involved people who had been exposed to the coronavirus in situations unrelated to voting.

“There is no evidence to date that there was a surge of infections attributable to the April 7, 2020, election in Wisconsin,” the study says.

“It appears that voting in Wisconsin on April 7 was a low-risk activity.”

If NPR of all places can report this, maybe Democrats should stop instilling fear in people about in-person voting.

Click here to read the full study.

For the first time, a top Iranian nuclear official has described the July 2nd fire at Natanz nuclear facility as sabotage, and not due to an accident.

“The explosion at Natanz nuclear facility was a result of sabotage operations,” Behrouz Kamalvandi, a spokesman for Iran’s Atomic Energy Organization announced Sunday. “Security authorities will reveal in due time the reason behind the blast,” he added. 

Recall that before and after the fire which caused severe damage, setting back the development of advanced uranium enrichment centrifuges, there was a series of ‘mystery’ explosions and fires at various military and industrial sites across Iran, raising suspicions of a major Israeli or even US-backed covert campaign to destabilize the country’s defense infrastructure.

But the Natanz incident stood out as the most likely to have been the result of covert sabotage operations, with even The New York Times citing intelligence sources to say it was the result of “a powerful bomb”:

“A Middle Eastern intelligence official with knowledge of the episode said Israel was responsible for the attack on the Natanz nuclear complex on Thursday, using a powerful bomb,” NYT wrote last month. 

“A member of the Islamic Revolutionary Guards Corps who was briefed on the matter also said an explosive was used,” the report added.

Iranian media has at the same time suggested a cyber-attack by outside entities, but has stopped short of naming the US or Israel, while also quoting Iranian leaders as saying they would retaliate if proven.

Iranian authorities have until now kept mum on their suspicions in the midst of an investiation; however, they have assured Iran’s enemies on repeat occasions that retaliation is coming, possibly in the form of cyber-warfare or other sabotage against Israel or the US.

As first discussed two weeks ago, TikTok said on Monday that “we simply have no choice” but to sue the Trump administration over U.S. President Donald Trump’s executive order banning transactions in the United States with the popular short-form video-sharing app. In a lawsuit which is expected to be filed in federal court for the Central District of California as soon as Monday according to the WSJ, the company assets that it protects its users’ data and challenges Trump’s executive order that would effectively ban the video-sharing app if it doesn’t find an American buyer for its U.S. operations.

In a blog post, TikTok said it strongly disagreed with the White House’s position that the company was a national security threat, saying it had “taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data.”

It also said the administration has ignored its “extensive efforts” to address its concerns, and accused Trump of politicizing the dispute by calling for a ban on TikTok in an Aug. 6 executive order. “We do not take suing the government lightly,” TikTok said. “But with the Executive Order threatening to bring a ban on our U.S. operations … we simply have no choice.”

Trump has for weeks complained that TikTok, owned by Chinese internet company ByteDance, was a national security threat and might share information about users with the Chinese government. His Aug. 6 executive order called for banning transactions with the app after 45 days. Trump issued a separate executive order on Aug. 14 giving ByteDance 90 days to divest TikTok’s U.S. operations and any data.

TikTok also accused Trump of misusing the International Emergency Economic Powers Act, which lets the president regulate international commerce during a national emergency.

In May 2019, Trump  invoked that law to stop alleged efforts by foreign telecommunications companies to conduct economic and industrial espionage against the United States. But TikTok said the Aug. 6 executive order was not supported by the emergency Trump declared a year earlier, and that the company did not provide the types of technology and services contemplated at that time.

It also said the executive order was not rooted in genuine national security concerns, adding: “We believe the Administration’s decisions were heavily politicized, and industry experts have said the same.”

Meanwhile, ByteDance has been in talks to sell TikTok’s North American, Australian and New Zealand operations to companies including Microsoft Corp and Oracle Corp. Those assets could be worth between $25 billion to $30 billion.

Before buying TikTok, ByteDance had not sought advance approval from the Committee on Foreign Investment in the United States, which reviews acquisitions for potential national security risks.  CFIUS later opened an investigation, and according to TikTok “repeatedly refused” to engage with ByteDance before saying it had found national security risks associated with the purchase.

 

Authored by Alex Kimani via OilPrice.com,

It’s been disheartening for the bulls that oil prices have failed to break out over the past few weeks despite a flurry of positive news including declining inventories and reports that OPEC+  producers have mostly been sticking to their pledged cuts.

And now the pendulum has swung to the opposite end and oil markets have to climb a new wall of worry.

After a brief, half-hearted rally, oil prices have dropped back to a familiar trading range in the low-$40s after the Labor Department reported that U.S. weekly jobless claims totaled 1.106 million last week. This comes just a week after the tally dipped below the 1M mark for the first time since March, thus raising serious doubts about the sustainability of the economic recovery.

“With all the bullish headlines that we’ve seen over the last weeks regarding inventories, the inability to break higher does not bode well,’’ Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC, has told Bloomberg. 

“Crude fails to break to the upside and you’re in a contango market, so risk is to the downside.”

Oil price volatility has returned to pre-crisis levels and nothing seems to jolt the markets into action at this point.

Source: Bloomberg

Here are 3 reasons why oil prices might remain in limbo for much longer than the bulls could have hoped for.

#1. Another Supply Glut

A huge supply glut and lack of storage space is the biggest reason why oil prices sunk into negative territory in April for the first time ever. Thankfully, the situation is much better now than it was four months ago, which is the reason why oil prices have staged a nice recovery.

But here’s the alarming part: Although U.S. oil inventories have been declining over the past couple of weeks, the margin of drawdown has shrunk considerably.

According to EIA data, U.S. oil inventories declined by 10.6 million barrels during the week ending July 24 and then dropped by 7.4 million barrels, 4.5 million barrels, and just 1.6 million barrels in the three subsequent weeks, respectively. There’s a real danger that this trend could soon flip and inventories could start rising again – a very negative development for oil prices.

These inventory worries are not helped by the fact they have come at a time when OPEC+ has eased its deep production cuts. Starting this month, OPEC trimmed its historic production curbs by about 2 million barrels per day to 7.7 mb/d. But as BNP Paribas’ head of commodity strategy Harry Tchilingurian has told Bloomberg, there are genuine concerns that rising OPEC+ production could coincide with an uneven recovery in oil demand.

Rystad Energy has also warned that a renewed surplus could come knocking again following the loosening of the OPEC+ production cuts:

“OPEC’s experiment to increase production from August could backfire as we are still nowhere near out of the woods yet in terms of oil demand. The overall liquids market will flip back into a mini-supply glut and a swing into deficit will not happen again until December 2020.”

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman tried to assuage fears that the easing had come too soon by pointing out that countries that had failed to stick to their pledges in May and June would compensate by cutting production in the coming months. But we all know that with OPEC+, nothing is ever guaranteed.

#2. Covid-19 uncertainty

Much of the recent oil and equity rallies can be chalked up to optimism that a Covid-19 vaccine will soon become a reality. Indeed, the race to develop an effective vaccine is in full swing: Globally, there are 185 research teams engaged in the race to find a vaccine with seven vaccines having made it to the final stage of large-scale efficacy trials.

Unfortunately, proper vaccine development is normally a very long process with safety usually given top priority. For instance, a recent vaccine for dengue fever was discovered to actually heighten the disease in vaccinated children when they later were exposed to the dengue virus while another vaccine developed for Respiratory Syncytial Virus caused the same problem. It’s the biggest reason why many countries are discounting Russia’s so-called ‘Sputnik moment.’

With no clear timelines as to when a viable and safe vaccine could hit the mass markets, the global economy and oil markets remain particularly vulnerable to the so-called second wave of Covid-19 infections. Indeed, last month OPEC+ expressed concern that the pace of the oil market recovery has been slower than anticipated due to the growing risks of a prolonged second wave of the pandemic.

#3. The renewables boom

When investors think of the oil-renewables nexus, they usually look at it in terms of how low oil prices might slow down the shift to renewable energy. Whereas that is true in principle, so far there is no evidence that low oil prices have negatively affected the momentum of renewable energy. On the contrary, the demand for renewable energy has continued to grow during the pandemic at a time when fossil fuels are facing their biggest demand destruction in history.

The ongoing wave of massive asset writedowns in the oil and gas sector is a clear indication that executives have finally acknowledged that ‘Lower Forever’ might be the new norm for oil as Shell CEO predicted three years ago.

The bulls might have the last laugh though: Sustained underinvestment in oil projects might actually lead to a supply squeeze down the line which could cause oil prices to spike.

Earlier this year, Morgan Stanley’s Michael Wilson was the first sellside strategist to turn aggressively bullish on the market, after correctly holding on to a contrarian bearish bet for the prior year, expecting that the flood of central bank liquidity and incipient reflation would push stocks to all time highs. Not long after, one by one his Wall Steet peers jumped onboard the bullish train which earlier today hit a new all time high when the S&P rose above 3,400 for the first time, printing at 3,425.

Which is why we read with interest Wilson’s Monday Morning note, in which the strategist who has demonstrated an uncanny ability to spot market inflection points warned that the collapsing market breadth is becoming a major concern for the market, and that while an entire market defined by just one stock – Apple – won’t derail the new bull market “we do think it’s a precursor to the first tradable correction, which could begin imminently.”

We bold the last word in that quote because it reminds us of what we published just yesterday, when we said that “Horrendous” Market Breadth “Stinks To High Heaven”, Screams Imminent Risk-Off” and incidentally those who read our article won’t find much new in the guts of Wilson’s latest note.

Echoing what we said, the Morgan Stanley strategist writes that “breadth continues to narrow with Friday’s price action perhaps the most extreme example yet. Just one stock, Apple, contributed 105% of the total return of the Nasdaq 100 and S&P 500 and 88% of the total return of the Dow Jones Industrial Average. For the week, the S&P 500 traded higher by 72bps to a new all-time high while the equalweighted S&P 500 traded down -1.5% and remains almost 8 percent below its all-time high back in February.” This, readers may recall, is taken directly from chart which we posted on Sunday, which showed the divergence between the equal-weighted S&P and the normal, cap-weighted index:

Continuing on this theme, Wilson next notes that the equal-weighted S&P is “also still below its June 8th high, which is when the % of stocks making 52-week highs peaked. Finally, the cumulative advance/decline line for the S&P 500 peaked on August 12th, failing to confirm the new all-time highs.”

Of course, for those watching the ever growing concentration of just a handful of stocks, this is not news…

… and in fact, as Wilson writes, “this narrowness in breadth has been one of the most discussed features of this rally. What’s interesting to us is the fact that breadth showed a dramatic improvement in the first several months of the rally from the March lows and was one of the factors that helped us declare a new bull market early on. It’s only been more recently that narrow breadth has become a potential concern in our view.”

To Wilson, the “bottom line” is that while he still remains overall bullish and still thinks we are at the beginning of a new cyclical bull market, “the recent extreme narrowness suggests that we are now ripe for the first meaningful/tradable correction. The question is—what will cause it?”

To Wilson, last week saw several developments which could have an overall negative impact on equity markets in the short term:

• First, several universities have decided to backtrack on in-person learning due to COVID outbreaks as students returned to  campus. Unsurprisingly, other schools followed with decisions to move fully online rather than risk outbreaks of their own: “this is a negative development with respect to our reopening narrative since we first highlighted it back in mid-April.”
• Second, in addition to the heightened concerns from schools moving online, Congress remains gridlocked over the next round of fiscal stimulus. Without it, Wilson thinks “the recovery will almost assuredly roll over, which is why we think there is little chance Congress will fail to execute, especially in an election year. However, that doesn’t mean we won’t see some moments of doubt and uncertainty about the size and timing of the next package reflected in the market. Every day that goes by, households dependent on unemployment benefits will likely lose confidence in their own finances.” Just this past week we heard commentary from several retailers (WMT, TJX, KSS, and FL) suggesting they have begun to see a slowdown in spending. Some of this is likely attributable to the suspension of these benefits along with the fact that demand for certain spending categories was pulled forward in 2Q when much of the economy was locked down. The chart below from Goldman shows just how steep the drop in UI payments has been. 

• Third, Morgan Stanley notes that the heavily anticipated minutes from the Fed’s July meeting did not provide the hand holding that investors were expecting on future Fed policies. More specifically, “guidance on average inflation targeting (AIT) and yield curve control (YCC) were primary sources of the disappointment” which is a concern since “a good part of the bullish view on long-term interest rates, both nominal and especially real rates, is based on the Fed doing both.” Last week’s minutes suggested to Wilson the Fed is either not ready to, in the case of AIT, or don’t have much interest in it at all (YCC). Treasury bonds sold off after the release, followed by a very poor TIPS auction the next day. But neither nominal nor real rates have shown any real follow through: “truth be told, a 10-year Treasury yield at 64bps that leave real rates at -100bps is hardly troubling, in our opinion, for those worried about a non-linear move higher that could be disorderly to financial asset prices.”

So, as Wilson asks, “what’s going on?”

His answer is that the inability of rates to move meaningfully higher is directly related to the hold-up on fiscal policy and growing concerns about schools reopening, and staying open. Meanwhile, the dismal breadth shows that stocks have traded soft under the surface of the headline indices, “which are now being driven by just one stock—Apple.”

Ultimately, Wilson warns that a growth scare “should even start to weigh on Apple just as it’s weighed on reopening beneficiaries and some of the COVID leaders more recently.” Which, however, is good news, because if and when that happens, “Congress would be quick to act and potentially come through with a bigger stimulus than what is currently expected—i.e. $2.0-$2.5 trillion” leading to even more debt issuance from the Treasury, even more QE from the Treasury’s “helicopter money” tag team partner, the Fed, and even higher risk prices. An upside surprise combined with this week’s disappointing Fed minutes with respect to YCC is all that would be needed for a sharp move higher in back end rates, Wilson adds.

Morgan Stanley’s conclusion: “we expect a growth scare to be followed by a rate scare over the next several weeks/months that could finally give us that first tradable correction in the major US equity indices”, one which as he noted earlier, could begin imminently.

Judging by Apple’s stark intraday reversal when the stock sprinted to a new all time high of $515 out of the gate on some bullish whispers from – ironically enough from Morgan Stanley of all banks – only to turn red, we wonder if Wilson didn’t time the latest market inflection point to the day.

Well that escalated quickly…

AAPL is back below $500…

TSLA is back below $2000…

And Nasdaq is now red for the day after being up over 1.4% at the open…

Is the market finally waking up to the total lack of breadth?

 

The German hospital where Russian opposition leader Alexei Navalny is being treated has announced that the politician and investigative journalist was probably poisoned with a “cholinesterase inhibitor,” though the exact nature of the poison isn’t known.

Tests on Navalny indicate that the Russian anti-corruption campaigner was indeed poisoned, and a “broad analysis” has been launched to try and determine the exact nature of the poison.

Doctors at Charite-Universitatsmedizin Berlin, where Navalny has been treated since being transferred from Siberia on Saturday, said his “clinical findings indicate intoxication by a substance from the cholinesterase inhibitor group.”

“The specific substance has not been identified so far and a further wide-ranging analysis has been initiated. The effect of the toxin, i.e. the cholinesterase inhibition in the organism, has been proven several times and in independent laboratories.”

They said Navalny remains in an artificial coma and is in a serious condition “but there is currently no acute danger to his life.”

Navalny is reportedly in serious, but stable condition, according to a statement Monday from Berlin’s Charite hospital. He was evacuated from Russia on Saturday.

He has been in an artificial coma since Thursday after falling ill on a plane returning to Moscow from Tomsk. Read the full statement below.

Statement by @ChariteBerlin on @navalny.
/ht @RebHarms pic.twitter.com/wdMRJuS89W

— Yannis Koutsomitis (@YanniKouts) August 24, 2020

The 44-year-old was in the city meeting local activists and opposition candidates ahead of regional elections set for September. His sudden illness raised suspicions after a string of Kremlin critics fell victim to poisoning in recent years.

According to Sky News, Navalny is being treated with atropine but the doctors said they cannot currently determine whether he will have lasting issues, “especially in the area of the nervous system.”

By Michael Every of Rabobank

Fathers and Sons. Full Stop/Period

Turgenev’s ‘Fathers and Sons’ came to mind this morning; and you know it’s not going to be a tiding of joy when Russian literature is your first reference point as you read the news. Why Turgenev? Because it is being reported that Generation Z are apparently unhappy with the full stop. Period. (NB, I will use ‘full stop’ from now, being British.) Apparently this simple yet essential grammatical device, used to separate one’s written thoughts, is seen as being “too aggressive”. That’s right. Too aggressive. Presumably, a flood of thoughts with no method of grammatical segmentation is passively preferable; or a sequence of very short thoughts that don’t require clarification with commas, colons, semicolons, or hyphens – because why should they survive?

Cherish that 19th century literature. Because we won’t be seeing its like again on this kind of trend. Luckily we can still just about squeeze in Wittgenstein’s “The limits of my language are the limits of my world” into a Tweet, without a full stop, and still grasp the enormity of this inexorable linguistic entropy taking place. A thought which will itself soon just be a picture of Wittgenstein and a sad face emoticon, presumably :L

The irony, of course, is that Turgenev speaks perfectly to this generational disconnect, and to a foreboding sense of social entropy, albeit his book was published nearly half a century before the Bolsheviks ultimately seized power. Genteel petty-bourgeoisie Nikolay Kirsanov, who thinks himself a social liberal, is totally unable to understand his son Arkady after he returns home a graduate from St Petersburg a disaffected nihilist. “The fact is that previously they were simply dunces and now they’ve suddenly become nihilists,” states the confused older generation who want to talk about much-needed social reforms; and “What’s important is that twice two is four and all the rest’s nonsense” – which is something still being argued today in some circles. Arkady is happy to use full stops though, even if his replies are the 19th century equivalent of “Ok, Boomer”.

Look at the increasing political polarisation and social disconnect we are experiencing in the West, both horizontally (left-right, with the centre collapsing), and vertically (old-young, with the old moving right and the young running left). This is clear in the results from the last few UK elections as well as the Brexit vote, and in the US in Millennial attitudes vs. those of the Boomers.

Equally, look at our crumbling global architecture and stability. India and China are both digging in at their border; we have Taiwan and the South China Sea – with the Wall Street Journal alleging China is prepared to offer its Covid vaccine to those who will accept its claim to the latter; Iran, where the US is going to proceed with snapback sanctions – in isolation; Turkey, who announced a moderate-sized gas find on Friday, said it will continue to drill in waters claimed by the EU, and is apparently ordering another set of controversial S-400 Russian anti-aircraft missiles that are a red flag to the US and NATO; Ukraine, which rumbles on; and now Belarus and a potential changing of the guard there. Plus, reports -again – that Kim Jong-Un of North Korea is dead and is to be replaced by his sister, opening up unpredictable futures in another potential Asian flashpoint.

Meanwhile, of course, US-China relations continue to deteriorate. In the last few days we have seen two new bills proposed: one will not allow Xi Jinping to be called ‘president’ in any US government documentation, using his title of ‘Party Chairman’ instead – which is arguably accurate when one looks at his Chinese language title, but which also underlines the increasingly-stark systemic differences between the US and China; the second is a claim that China must repay USD1.6 trillion in pre-1949 government debt it defaulted on after the revolution. Neither sound like détente; and neither does President Trump, whose Republican National Convention will be ultra-hawkish on China this week, talking about decoupling the two countries in a Fox TV interview. Indeed, the South China Morning Post today asks “Is Donald Trump bluffing about starting a financial war with China? Chinese officials aren’t so sure.”

You wouldn’t know it from looking at stock markets (in the green across the board again in Asia this morning), but there is a real Turgenev-esque entropy, not negentropy – things being more and more in order – all around us.

Perhaps failure to see that is demographic. Try being young and/or working class or self-employed at the moment rather than middle-aged and middle-class and working from home in the country. Perhaps it’s geographic, which intersects to a large degree: much of the media virus focus is on the West (“My European holiday was simply ruined!”) rather than on the struggles of emerging markets. At the very least it’s sharply hierarchical: if you are getting that sweet, sweet flow of government/central-bank money, you don’t feel much pain right now. How much nicer it would be if we could all see things how others do. As Turgenev says:

“A man is capable of understanding everything – how the ether vibrates and what happens on the sun. But to understand how another man can blow his nose differently from the way he blows his own is something beyond his capability.”

Yet entropy is out there all the same. Even if we beat Covid-19 through a combination of new therapies, another of which Trump just green-lit, or even a vaccine, Russian, Chinese, American, or whatever, does anyone think we are going to go back to business as normal as if no new similar global shock could ever reoccur? Possibly. We have desperately short memories – and on purpose, some might argue. Hardly anybody remembers Turgenev banging on about two times two, or Orwell and two plus two. And neither were the first to say it.

Yet entropy is still accelerating. Indeed, as our global problems become ever more complex and inter-connected, and reach tipping points, the language we have to try to describe, let alone solve them, becomes less and less granular. Bigger problems, fewer words – and no full stops.

For now, the prudent case is to assume that the can-kicking fiscal and monetary policies we have recently pursued will linger – much as finance ministers try to argue it is already time to try to put fiscal genies back in bottles. So the Nikolays of the world will get richer, and the Arkadys will get even angrier. Perhaps they will even shift to ALL CAPS. As the nihilists in ‘Fathers and Sons’ cry: “I want everything or nothing. A life for a life, taking one and giving up another without hesitation and beyond recall. Or else better have nothing!”

Personally, I conclude with this:

“Whereas I think: I’m lying here in a haystack… The tiny space I occupy is so infinitesimal in comparison with the rest of space, which I don’t occupy and which has no relation to me. And the period of time in which I’m fated to live is so insignificant beside the eternity in which I haven’t existed and won’t exist… And yet in this atom, this mathematical point, blood is circulating, a brain is working, desiring something… What chaos! What a farce!”

And now back to Bloomberg…

Speaking on Bloomberg Television Friday, Nouriel Roubini warned the stock market is completely disconnected from the dire economic outlook of a waning recovery amid continued depressionary pressures. 

Roubini told “Bloomberg Surveillance” the global economy is slowing, and another downturn could be ahead if a vaccine is not found in short order. 

He said the shape of the recovery is transforming from a “V” and is “becoming a U and the U could become a W if we don’t find a vaccine and don’t have enough stimulus.”

Roubini, the chief executive of Roubini Macro Associates Inc., said the recovery on Wall Street doesn’t reflect the real economy:

 “Main Street is struggling,” he said.

Roubini said Europe’s policies to protect workers are much more robust than the U.S., where tens of millions of folks are jobless, hungry, and face eviction. 

“The European system of greater social cohesion gives you better economic outcomes than the one of the United States that is just Wild West capitalism,” he said.”That’s why the unemployment rate barely went up in Germany or even in Italy, while in the U.S. we’ve had double-digit unemployment rate and actually even worse, considering underemployment and so on.”

Jobs data this week showed the U.S. labor market recovery continues to reverse. Another million Americans filed for jobless benefits last week, back above one million and up notably from the 971k (revised higher) last week, and notably worse than the 920k expected…

The Federal Reserve’s minutes on Wednesday from its July meeting highlighted doubts about the “V-shaped” recovery, showing that the swift labor market rebound seen in May and June had likely slowed. Quoting Rabobank’s global strategist Michael Every, he told clients: “Of course, the Fed agreed that the virus is weighing heavily on the economy: is that some kind of surprise? Apparently, it was.”

While it was a surprise to many on Wall Street who have turned a blind eye to the utter destruction of the labor market and small businesses, the Fed’s monetary cannon has injected trillions of dollars into the economy markets to reinflate asset prices and distract everyone from the worst economic crash since the Great Depression in the 1930s.

The party on Wall Street, driven by liquidity via central banks has reinflated financial assets to nosebleed valuations as the labor market implodes.  

The party on Wall Street is also concentrated in a handful of technology stocks, about five to be exact. If Facebook, Amazon, Apple, Microsoft, and Google were removed from the S&P500 index, the overall main equity index would be flat on the year, as opposed to +35%.

As for the rest of the world, a resurgence of coronavirus across the Asia Pacific, Europe, and the U.S. have stalled the global recovery. The risk now is the world economy slumps in the back half of the year. 

The consequence of central banks saving Wall Street at the expense of main street will result in widening wealth inequality to unimaginable levels that will continue to lead to a socio-economic implosion of the middle class. 

Authored by Kerry McDonald via FEE.org/The Libertarian Institute,

As remote learning creates more distance between school districts and students, school and state officials are clinging to control however they can. From sending Child Protective Services (CPS) agents to investigate charges of neglect in homes where children missed Zoom classes last spring, to proposing “child well-being checks” in homes this fall, government schools and related agencies are panicking over parents having increased influence over their children’s care and education during the pandemic.

A front page article in Boston Sunday Globe days ago describes the experiences of several parents who were interrogated by CPS agents last spring when their children missed remote classes or failed to submit homework assignments amidst pandemic-related school shutdowns. Some parents didn’t have Internet access and were blindsided by the CPS investigations of “virtual truancy.” One Latina mother featured in the Globe story is Em Quiles, who, like many parents last spring, scrambled to care for her children and continue to work during tremendous upheaval and uncertainty.

According to the Globe:

Then in June, Quiles was stunned to receive a call from the state’s Department of Children and Families. The school had accused Quiles of neglect, she was told, because the 7-year-old missed class and homework assignments.

“I couldn’t believe it,” she said.

Quiles lived one of the worst nightmares for a parent: A neglect charge, if substantiated, can lead to removing a child from their home.

While most of the parents featured in the Globe story were ultimately exonerated, previous interaction with CPS, even if unfounded, can act as a Scarlet Letter for parents, haunting them for years to come. More troubling, parents singled out for CPS enforcement are disproportionately low-income and minority, often lacking the resources to defend themselves against government overreach. According to the Globe: “Most of the families caught up in remote learning allegations are Latino or Black, groups that are likely to be overrepresented in state foster care at all times.”

School districts across the country have a history of activating CPS against parents who stray from a district’s command and control. An in-depth 2018 investigative report by The Hechinger Report and HuffPost revealed that schools increasingly use child protective services as a “weapon against parents” — especially parents who lack the means to fight back.

Kamala Harris: “We Are Putting Parents On Notice”

Truancy has long been a trigger for CPS investigations, and now virtual truancy seems poised to accelerate these practices during the pandemic. This is particularly concerning because, just as in typical truancy cases, virtual truancy is often prompted by factors other than parental neglect. Special needs students and students with disabilities or health conditions may have more school absences, and they may find virtual learning to be uniquely challenging. A 2019 HuffPost article entitled The Human Costs of Kamala Harris’ War on Truancy, found that strict truancy laws and enforcement terrorized families, with parents being pulled out of their homes in handcuffs and sent to jail.

Cheree Peoples, one of the parents spotlighted in the HuffPot piece, whose daughter missed school frequently due to sickle cell anemia, was awakened in the early hours by police officers who arrested her for truancy. She told the HuffPost: “You would swear I had killed somebody.”

The HuffPost article, revealed that then Democratic presidential candidate and now the presumptive Democratic vice presidential nominee, Kamala Harris, was responsible for much of the heightened aggression toward parents regarding truancy. As California’s attorney general, Harris was a crusader against truancy and was instrumental in toughening criminal prosecution of parents whose children missed too much school. According to HuffPost, Harris “persuaded the state legislature to adopt harsher penalties for truancy. Under the new law, the parent or guardian of a young, truant child could face a fine of $2,500 or more — or one year in jail. Harris pushed hard for the law as she was running for attorney general, and it passed just as she won the election. ‘We are putting parents on notice,’ Harris said at her 2011 inauguration.”

Proposed Child Wellbeing Checks During COVID-19

Criminal investigations of child neglect tied to virtual truancy are set to skyrocket this fall, as school districts across the country adopt remote learning plans. Worried that parents can’t be trusted to care for their own children, some education officials have proposed large scale “child well-being checks,” by government agents. Earlier this month, the Tennessee Department of Education announced that it would be performing these well-being checks on children across the state. This plan created such an uproar among Tennessee parents and conservative lawmakers that the proposed initiative was withdrawn and its guidelines removed from the education department’s website.

Despite this immediate victory, all parents should remain on alert. School and state officials, aided by high-profile academics, will likely seek to increase CPS involvement in family affairs during remote learning and beyond. Elizabeth Bartholet, the Harvard Law School professor who made headlines last spring when she called for a presumptive ban on homeschooling, spoke out last week in favor of increased CPS action this fall. In an interview with Harvard Law Today, Bartholet said: “My overall general recommendation is that educators and CPS agencies need to recognize the level of problems that kids at home are now facing in terms of risk of both education and maltreatment, and come up with some creative new solutions.”

In the interview, Bartholet acknowledged the heightened interest in independent homeschooling, as more parents choose to forgo district learning this fall and consider separating from their school district going forward. According to Bartholet: “Roughly three percent of the population is now homeschooled. Let’s say that increases to six percent post-COVID. Legislators and other policymakers may look at that and say, ‘Wow, now this is a big phenomenon, it may continue to grow. Of course, it shouldn’t be just this lawless world out there with no rules and regulations and oversight. Of course, this should be part of our overall regulated educational system.’”

As I’ve written previously, homeschooling should not be part of the overall regulated education system. It is a form of private education that is separate and distinct from state schooling, and many parents are now finding that they prefer homeschooling over other education options. Parents are pulling their children out of school this fall in record numbers, dissatisfied with school reopening plans and aiming for greater educational freedom and flexibility. So many parents submitted online intent to homeschool forms in North Carolina last month that it crashed the state’s nonpublic education website. Perhaps not surprisingly, a recent report by a law professor at North Carolina’s Duke University called for greater regulation and oversight of the state’s growing ranks of homeschoolers.

As parents pull away from state-controlled education and assume greater responsibility for their children’s learning, the state will hasten efforts to maintain and expand its authority through its monopoly on the use of force. From virtual truancy claims and increased CPS investigations that disproportionately target poor parents and families of color, to calls for child well-being checks and more homeschooling regulations, the state will not willingly yield control of children’s education to parents.

Parents should strongly reject these heavy-handed efforts to interfere with family life during and after the pandemic, and be especially vigilant about helping low-income and minority parents to resist as well. Minimizing state power while maximizing individual liberty is the hallmark of a free society. Now more than ever, parents are exercising and securing their freedom to raise and educate their children as they choose. Parents may have been put on notice, but they are pushing back and opting out.