Category: zerohedge

By Brian Straight of FreightWaves

Does DoorDash set up fake landing pages for restaurants in an effort to steer customers to preferred restaurants? That is the basis of a potential class action lawsuit filed by Lona’s Lil Eats, a St. Louis Asian fusion restaurant.

The suit, originally filed in September in the United States District Court for the Northern District of California, where DoorDash is based, alleges DoorDash posted a Lona’s landing page on its app, even though the restaurant had no existing relationship with the delivery service. Lona’s further alleges that when a customer clicked the landing page, the customer was able to see a complete menu and proceed as if an order could be placed. In the end, though, the customer was shown one of two messages: that Lona’s was closed or that it was “too far away” for delivery, even when the customer was standing within 200 feet of the location, the suit alleges.

Lona’s lawyers argue that DoorDash, which takes up to a 30% commission on each order, is impacting Lona’s business and other potential members of the class.

“Accordingly, DoorDash is publishing false and deceptive information about the ability to get food from Lona’s as a means of punishing it for not partnering with it, and/or pressuring it to partner with it and to redirect would-be Lona’s business to its partner restaurants,” the suit alleges. “Defendant’s conduct has an obvious, significant and unfair impact upon the competitive landscape within the restaurant industry and results in damage to plaintiff and members of the class.”

On Monday, U.S. Magistrate Judge Thomas Hixson for the San Francisco-based District Court denied DoorDash’s motion to dismiss, allowing the suit to move forward. The judge has ordered DoorDash to file its answer to the amended complaint within 14 days.

In the original complaint, Lona’s attorneys said that DoorDash engaged in “unfair, deceptive and anticompetitive practice regarding the manner in which it displays information about businesses with whom it does not have an agreement to provide service.” It further alleged that DoorDash “has engaged in a pattern of behavior whereby customers are deceptively steered away from restaurants with whom DoorDash does not have a relationship by DoorDash’s practice of affirmatively representing to consumers that those restaurants are closed, cannot deliver to them or are not accepting orders at the time.”

The attorneys – led by Francis J. Flynn Jr. of the Law Office of Francis J. Flynn Jr. – are asking for a jury trial with class action status for similarly impacted businesses, seeking damages and injunctive relief for false advertising in violation of the Lanham Act, of California’s False Advertising law (FAL) and of California’s unfair competition law (UCL).

“DoorDash takes advantage of the existing market demand for Lona’s and other restaurants to drive traffic to its site, at which time it will redirect customers to other partner restaurants by suggesting that Lona’s is not an option,” the suit alleges.

DoorDash argued that Lona’s lacked standing and failed to offer “specificity as required by Rule 9(b)” and that its Lanham Act claim is false.

The court rejected each of these arguments.

“We’re proud of the role DoorDash plays in helping restaurants connect with new customers and generate additional revenue, and remain committed to demonstrating the value of the DoorDash platform and the variety of options available to support the merchant community,” a DoorDash spokesperson said in an emailed statement to FreightWaves.

A request for comment from Flynn’s law office had not been returned as of publishing time.

In arguing that Lona’s did not have standing, DoorDash said that “to have standing under the FAL, [Lona’s] must allege that it suffered an injury due to its own actual and reasonable reliance on the purported misleading statements.”

The additional claims were similarly dismissed by the court. The court also acknowledged that while one part of Lona’s allegations have been remedied – the removal of the listing saying the restaurant was closed – the notice that the restaurant was out of delivery range persisted for more than a month after the original complaint was made.

The food delivery app went public in early December, raising $3.37 billion on the offering of 33 million shares at $102 per share. It spiked 78% in its first day of trading, closing at a market value of $68 billion. In midmorning trading Thursday, the stock was at $186.09.

In its IPO filing, DoorDash reported revenue of $1.92 billion for the first nine months of 2020, more than triple that of the same period a year earlier, and a profit of $23 million in the second quarter of 2020.

“‘Why does Joe Biden hate Black teenagers?’ should be the question. Why does Joe Biden want to destroy all of these jobs?”

During an interview with Fox host Sean Hannity, GOP Senator Rand Paul pummeled the Biden administration’s decision to push for a minimum wage increase that would put 4 million people out of work.

“The people who lose their jobs first when you hike up the minimum wage are Black teenagers,” Paul said.

And despite the ramblings of various left-ist economists, claiming this or that study shows no impact from such a drastic minimum wage hike…

…common sense (and historical experience) for anyone who has ever run an actual business is that raising costs on the lowest-skilled workers in your organization will ripple all the way up, forcing either higher prices to the end-user (eradicating the ‘living wage’ improvement) and or forcing layoffs as management hold margins and reduce costs (the least-skilled first).

And if all that sounds very racist, the following chart shows that Senator Paul is, of course, correct…

Source: @McClellanOsc

That’s not an “alternative” fact, that’s the awkward reality of ‘unintended consequences’ from nanny-state intervention write large for the last 70 years.

Need some more ‘facts’?

According to a recent nonpartisan analysis by the Congressional Budget Office, President Biden’s effort to raise the federal minimum wage from $7.25 to $15 per hour is estimated to kill as many as 3.7 million jobs, 

Based on the CBO’s median estimate,1.3 million workers who would otherwise be employed would be jobless in an average week in 2025, an 0.8% reduction. However, the CBO also noted that a federal minimum wage of $15 per hour would increase the wages of 17 million workers in an average week in 2025.

While the $15 federal minimum wage would boost workers’ earnings, the CBO says that some of the higher earnings would be offset by higher rates of joblessness.

Paul also blasted Biden for canceling the Keystone XL oil pipeline:

“It’s kind of a strange beginning to an administration,” Paul said.

“You’re going to put your best foot forward and the first thing you say is, ‘This is how I’m going to kill jobs’ … ‘I’m going to kill thousands of jobs of the Keystone pipeline with ending it.'”

Watch the full interview below:

Authored by Brett Wilkins via CommonDreams.org,

Digital rights advocates reacted with alarm to a report published Friday detailing how Defense Intelligence Agency analysts in recent years bought databases of US smartphone location data without first obtaining warrants. 

The Defense Intelligence Agency (DIA) is part of the Department of Defense and is tasked with informing military and civilian policymakers about the activities and intentions of foreign governments and nonstate actors. 

The new revelation, first reported by the New York Times, initially came in the form of DIA responses to questions from Sen. Ron Wyden (D-Ore.) regarding the agency’s warrantless purchase of commercial location data generated by phones both inside and outside of the United States. 

Wyden asked the DIA to clarify its interpretation of Carpenter v. United States, a 2018 U.S. Supreme Court decision barring law enforcement agencies from requesting personal location information from a cellphone company without first obtaining a search warrant from a judge.

“DIA does not construe the Carpenter decision to require a judicial warrant endorsing purchase or use of commercially-available data for intelligence purposes,” the agency replied, implicitly acknowledging its exploitation of an apparent loophole in the case that DIA believes permits its warrantless acquisition of location data from third-party brokers. 

Furthermore, Wyden asked whether DIA operatives differentiated between phone location data obtained inside the U.S. and abroad. 

“DIA’s data provider does not supply separate streams of U.S. and foreign location data,” the agency explained, “and so DIA processes the location data as it arrives to identify U.S. location data points, which it segregates in a separate database.”

here’s the defense intelligence agency memo confirming that the government is buying commercially available smartphone location data w/o a warrant pic.twitter.com/DXGH24PRph

— chris mills rodrigo (@chrisismills) January 22, 2021

“DIA personnel can only query this database of U.S. location data when authorized by the DIA chief of staff and DIA’s office of general counsel,” it added. “Permission to query DIA’s database of commercially acquired US device location data has been granted five times in the past two-and-a-half years, when DIA first started buying this source of data.” 

Last September it was revealed that the US military was purchasing device location data from apps—including a Muslim prayer app used by tens of millions of people around the world—and using it for counterterrorism purposes. 

“The military industrial complex and the surveillance state have always had a cozy relationship with tech,” Rep. Ilhan Omar (D-Minn.) said at the time. “Buying bulk data in order to profile Muslims is par for the course for them—and is absolutely sickening. It should be illegal!”

To that end, the ACLU in December filed a lawsuit to determine how and why federal agencies are buying access to bulk databases of Americans’ cellphone location information and skirting  the Fourth Amendment’s warrant requirement.

And as The Hill reported Friday, Wyden plans to introduce legislation—the Fourth Amendment Is Not for Sale Act—which would prohibit government agencies from buying personal information from data brokers. 

The U.S. Defense Intelligence Agency shouldn’t be spying on Americans, without a warrant, by paying data brokers for location info generated by our phone apps. https://t.co/1KUtaJG1jw

— EFF (@EFF) January 22, 2021

“I think we’ve really reached the point where you have so much data floating around that governments can essentially buy their way around the Fourth Amendment,” Wyden lamented last November. 

In a Senate speech on Wednesday, Wyden condemned the status quo “in which the government, instead of getting an order, just goes out and purchases the private records of Americans from these sleazy and unregulated commercial data brokers who are simply above the law.”

Digital and pivacy rights advocates agree. 

“The government cannot simply buy our private data in order to bypass bedrock constitutional protections,” senior ACLU staff attorney Ashley Gorski told The Hill. “Congress must end this lawless practice and require the government to get a warrant for our location data, regardless of its source.”

News of the DIA warrantless data acquisition came a day after Avril Haines was sworn in as President Joe Biden’s director of national intelligence. Haines will oversee the nation’s 18 intelligence agencies, including the DIA.

Wyden supports Haines’ appointment, in part due to what he called her “commitments related to transparency issues.” A broad range of progressive groups, however, strongly opposed her nomination. 

During her Senate confirmation hearing earlier this week, Wyden asked Haines about government abuse of commercially available location data.

“I would seek to try to publicize, essentially, a framework that helps people understand the circumstances under which we do that and the legal basis that we do that under,” she replied. “I think that’s part of what’s critical to promoting transparency generally so that people have an understanding of the guidelines under which the intelligence community operates.”

During the final months of the Trump administration Chinese PLA military exercises near Taiwan grew as part of the tit-for-tat escalation of Washington moves in support of the self-declared Republic. 

Lately Chinese jets have breached Taiwan’s claimed airspace as part of ongoing ‘show of force’ maneuvers in the contested area. But on Saturday, a mere few days following President Joe Biden’s entry into the White House, China’s military undertook one of its biggest flyovers yet.

According to local press “Taiwan recorded no fewer than 13 incursions by Chinese military planes into its air defense identification zone (ADIZ) in a single day Saturday (Jan. 23), the most of any such incidents within one day so far this year.” As Reuters adds, “Eight Chinese bomber planes and four fighter jets entered the southwestern corner of Taiwan’s air defense identification zone on Saturday, and Taiwan’s air force deployed missiles to ‘monitor’ the incursion, the island’s Defense Ministry said.” Additionally, a Chinese Y-8 anti-submatine aircraft also entered Taiwan’s ADIZ.

Taiwan reportedly scrambled its American-supplied fighter jets to “warn off” the Chinese formation.

“Airborne alert sorties had been tasked, radio warnings issued and air defense missile systems deployed to monitor the activity,” a Taiwan military statement said.

PLA military flyovers of contested territory around the island have now become an almost daily occurrence, but as Reuters points out:

However they have generally consisted of just one or two reconnaissance aircraft.

The presence of so many Chinese combat aircraft on this mission – Taiwan said it was made up of eight nuclear-capable H-6K bombers and four J-16 fighter jets – is unusual.

In this instance it was said to be in the vicinity over the contested waters of the Paracel islands.

The new White House National Security Council has this week vowed that America’s commitment to Taiwan would remain “rock-solid”. But it remains to be seen if Biden keeps up the provocative level of Trump’s weapons sales to Taiwan, which reached a historic peak in the latter part of 2020.

Authored by Ned Barnett via AmericanThinker.com,

The media has been buzzing with this news about the young forensic psychologist from Oegstgeest, Netherlands and her amazing creation.  A quick Google review of this story found more than 100 news stories about this innovation – not just (or even primarily) in fringe online media outlets – but in mainstream media from the Reuters to the New York Post.

“If we have this hierarchy that the king is worth more than the queen,” Ms. Mellink said in a press interview, “then this subtle inequality influences people in their daily life (sic) because it’s just another way of saying ‘hey, you’re less important.’  Even subtle inequalities like this do play a big role.”

Toxic masculinity?

Despite their hearts being in the right place on the left side of their chests, both Ms. Mellink and the fawning media who’ve been both reporters and cheerleaders for this long-overdue innovation have managed to miss the main point. 

Playing cards – and indeed most, if not all – games, are politically incorrect, and for a variety of reasons. 

Consider, for instance, a deck of cards – even Ms. Mellink’s gender-neutral deck of cards.  They have four suits – Hearts, Diamonds, Clubs and Spades – as well as two colors – Red and Black.  “Red,” obviously, is a not-so-subtle allusion calling to mind the Red States, where – in the most recent two Presidential elections – white supremacists voted overwhelmingly for Trump.  “Black,” especially when connected to the name of one of the four suits in the card deck, is an obvious and historically-offensive racist reference to a pejorative label for black men.  This clearly racist sub-text is also present in the game of checkers, where Red and Black compete for power and dominance.

Another major offender is the board game Scrabble. The fact that the game’s rules contain no restriction on the use of specific words ignores the risk of allowing players to use excluding terms. It is well within the rules to marginalize individuals or groups, and insult groups of disadvantaged or discriminated-against people.   Verbal micro-aggressions, such as the use of demeaning gender-specific pronouns, are freely permitted in the game.  Specifically, trigger words, hate speech and the cultural appropriation of words – all of which must be avoided at all cost – are freely permitted in Scrabble.  The game does nothing to prevent their use, nor does it encourage virtue signaling by players offended by their opponents’ use of hurtful and exclusionary words.  That signaling should be rewarded as a necessary part of the process of excluding hateful, hurtful words from the game.

Monopoly – in some ways the worst offender – is symbolized by a cartoon caricature of a white male capitalist, an oligarch and almost certainly a Republican … a Trump Republican.  This raises some important questions, including, “Is Donald Trump consciously channeling the Monopoly icon, or is this merely a coincidence of cosmic proportions?”  Other questions include: “How does this paternalistic affirmation of the patriarchy makes right-thinking people feel while playing such a game?”  Or, “What does Monopoly’s embrace of rapacious exploitation of workers and tenants teach our children about life in a society dominated by unfettered capitalism?  Shades of Gordon Gekko …

However, perhaps the most offensive game – as well as perhaps the oldest board game in human history, is chess. This game is also the most blatantly offensive of the lot.  The reason is obvious to even the color-specific visually-impaired around us.  Chess pieces are either white or black, and white ALWAYS goes first, while black ALWAYS goes second.  The racist message of chess is hardly obscure or subtle.  Players are told that white is always better than black.

So, while Ms. Mellink has identified the risk of politically-incorrect games and gaming devices, she has barely scratched the surface.  If we want a “safe space” for games and gaming, we must take collective action to enforce decent, inoffensive standards on those games.

The exodus of city dwellers from New York City continued into late 2020 as homebuying in Greenwich surged, according to Bloomberg. 

A new report from appraiser Miller Samuel Inc. and Douglas Elliman Real Estate said 317 single-family homes were listed in the tiny town, located in southwestern Fairfield County, at the end of December. 

A shortage of Greenwich homes prompted a fierce bidding war among buyers who were willing to pay at least 14% above the seller’s asking price, compared with 2.6% in 2019. 

The average listing time for homes on the market was 142 days in 2020, compared with 183 days one year earlier. The pace at which Greenwich homes are selling is the the fastest in seven years. 

Completed transactions jumped 141% in the fourth quarter from a year earlier to 282, Miller Samuel and Douglas Elliman said.

In a separate report, Brokerage Houlihan Lawrence said pending home sales in the town soared as well. The number of homes in Greenwich under contract at the end of December was up 97% from a year earlier. 

A combination of the virus pandemic, social unrest, remote working, and violent crime has resulted in hundreds of thousands of people fleeing New York City. 

The great escape to Greenwich began in April and has continued ever since. Last month, we noted that condo interest in New York City suburbs was erupting in the fourth quarter, especially in Greenwich.

New York City’s trend is to either downsize and find a house in the suburbs or unload real estate and never return as the metro transforms into a violent hellhole. The city’s economic recovery times will undoubtedly lag the rest of the country.

Authored by Jonathan Turley,

Speaker Nancy Pelosi ramped up the attacks on members of her own house this week, accusing them of giving “aid and comfort” to those who want to destroy the nation. 

The comments came after Rep. Lauren Boebert, R-Colo., denied a public accusation by Rep. Steve Cohen, D-Tenn., that she personally took rioters around the capitol for a tour before the attack on January 6th.  Boebert pointed out that the “rioters” were her family members and she has never given such tours. Rather than encouraging colleagues to avoid baseless and inflammatory accusations pending review of what occurred on January 6th, Pelosi threw gasoline on the fire and accused her colleagues of giving “aid and comfort” to those who were trying to destroy the Constitution and the country.  It is, in my view, another failure of leadership by the Speaker in her duties to the institution as a whole.

Like many, I support a commission to look into how these rioters gained such rapid entry into the Capitol Hill.  However, Democratic members have claimed that Republican members were actual co-conspirators in the riot in supplying access to the building to plan out the attack. Rep. Mikie Sherrill (D., N.J.) went public with an extraordinary allegation against some of her colleagues that they conducted secret surveillance in a conspiracy with rioters at the Capitol. Sherrill stated in a Facebook live address to her constituents that she witnessed the surveillance personally. She said unidentified members of Congress “had groups coming through the Capitol” in “a reconnaissance for the next day.”

Sherill has still not supplied any of the names of her colleagues to who worked as inside co-conspirators. As noted earlier, this is an unambiguous allegation of criminal conduct against colleagues.  Either members were conspiring in a crime or Sherill unfairly defamed her colleagues. Article I, Section 5, the Constitution says, “Each House (of Congress) may determine the Rules of its proceedings, punish its members for disorderly behavior, and, with the concurrence of two-thirds, expel a member.”  The House may discipline members for violations of both unlawful conduct as well as any conduct which the House of Representatives finds has reflected discredit upon the institution. In re Chapman, 166 U.S. 661, 669-670 (1897). A House Select Committee in 1967 stated:

Censure of a Member has been deemed appropriate in cases of a breach of the privileges of the House. There are two classes of privilege, the one, affecting the rights of the House collectively, its safety, dignity, and the integrity of its proceedings; and the other, affecting the rights, reputation, and conduct of Members, individually. Most cases of censure have involved the use of unparliamentary language, assaults upon a Member or insults to the House by introductions of offensive resolutions, but in five cases in the House and one in the Senate [as of 1967] censure was based on corrupt acts by a Member, and in another Senate case censure was based upon noncooperation with and abuse of Senate committees.

If members did conspire as alleged by Rep. Sherrill, they could be expelled for that criminal act.  They would also face prosecution.  It would be a betrayal of not just Congress but the country.

One would think that this rising level of acrimony would prompt a Speaker to calm her members and call for an investigation. Speaker Pelosi however proceeded to ramp up the rhetoric. She started out well by stating, “You have to have evidence for what has happened.” She then took a shot at Republicans and stated:

“There is no question that there were members in this body who gave aid and comfort to those with the idea that they were embracing a lie — a lie perpetrated by the president of the United States that the election did not have legitimacy.”

The language comes from the treason language in the Constitution Article III, Section 3 states:

“Treason against the United States, shall consist only in levying War against them, or, in adhering to their Enemies, giving them Aid and Comfort.”

In the context of alleged criminal conspiracy by members, the use of this language clearly suggested members were more than just politically at fault for their positions. It suggested that they were traitors.

These attacks are coming as some members are calling for the possible expulsion of members for challenging the electoral votes, an act expressly allowed under federal law and repeatedly done by Democrats in prior elections.  It is an example of the rage-filled politics that continues to build in our country, including calls for blacklists and punitive measures against anyone deemed supportive of Trump.  As I noted in today’s column, it is a crisis of leadership in this country when we desperately need leaders who can unite us rather than capitalize on our divisions.

Earlier on Saturday as pro-Navalny protests began “sweeping across Russia” – as CNN dubiously put it (which have not numbered more than in the thousands in any one place) – we asked the question: are we witnessing the start of a manufactured ‘color revolution’ targeting Putin and the ruling government under the banner of the Navalny ‘nerve agent’ saga?

Of course, it’s too early to tell. But already on ‘day one’ of major protests across several Russian cities the US Embassy in Moscow is highlighting the protests and their locations on its website. While ostensibly the embassy is directing citizens to “avoid” these demonstrations, given the possibility of violence, the State Department-sponsored public notice lists in surprisingly specific detail the location and times of a dozen protests in large cities.

Russia’s foreign ministry is livid, and has charged the US Embassy with giving unnecessary “cover” to the ‘unauthorized’ protests. Essentially the Kremlin is alleging that the ‘notification’ is a US Embassy ploy to actually publicize and promote the protests.

#Hypocrisy is an instrument of American democracy, which has become especially dangerous during the #COVID19 pandemic.

☝️ See to your own problems and stop interfering in domestics affairs of other countries. pic.twitter.com/7bQbBJRr8m

— MFA Russia 🇷🇺 (@mfa_russia) January 23, 2021

Here’s the full Russian foreign ministry response to the provocative US Embassy webpage as featured in TASS:

Russia plans to view the attempts of the US embassy in Moscow to “cover” the unauthorized rallies in Russia as interference in internal affairs, the Russian Foreign Ministry wrote on its Telegram channel on Friday.

“All that coincides with Washington’s provocative doctrinal guidelines to encourage ‘protests in the countries with unwanted governments’,” the Foreign Ministry said. “Any attempts of this ‘coverage’ of unauthorized rallies will be regarded as gross interference in our country’s domestic affairs and will lead to a corresponding response.”

The Russian Foreign Ministry pointed out that the information, posted on the US embassy’s site, on the time and venues for the unsanctioned rallies goes beyond concern for US nationals in Russia.

Under the pretext of “avoiding ” the planned for today anti-government meetings in Russia , US Embassy published the exact times & locations of the planned meetings, as a guide where actually the riots are expected. https://t.co/rGGw3scRrj
How do they know, where & when, btw? https://t.co/1eMtvPo2hQ

— Elena Evdokimova (@elenaevdokimov7) January 23, 2021

The chaotic scene in central Moscow on Saturday after jailed Kremlin critic Alexei Navalny called on supporters to take the streets…

Via the @AvtozakLIVE telegram channel, it’s getting increasingly brutal out there pic.twitter.com/YsDbyFzXTP

— Ilya Lozovsky (@ichbinilya) January 23, 2021

Мирный протест, ага. Не понимаю, почему парни должны рисковать здоровьем в этом зоопарке? Есть же спецсредства pic.twitter.com/tPbgVHSRIm

— Дегтярёв Леонид (@leon_elk) January 23, 2021

Below is the remarkably detailed information posted to the US Embassy in Moscow’s website.

The “Demonstration Alert” provided the list of planned protests a full day ahead of the demonstrations actually taking place.

* * *

In Moscow, demonstrators plan to gather near Pushkin Square at approximately 1400 and march towards the Kremlin.

In St. Petersburg, demonstrators plan to gather near Senate Square at approximately 1400 and march towards Gostiny Dvor (located on Nevsky Avenue).

In Yekaterinburg, demonstrators plan to gather at the entrance to Dinamo Stadium, 12 Ulitsa Yeryomina at approximately 1400 and march along the embankment of the city lake toward the Drama Theater.

In Perm, demonstrators plan to gather at the intersection of Komsomolskiy Prospekt and Ulitsa Poliny Osipenko at approximately 1400 and march towards Komsomolskiy Prospekt and some other central streets.

In Chelyabinsk, demonstrators plan to gather at Slavy Boulevard at approximately 1400 and march towards Lenin Prospekt to Kurchatov Monument.

In Krasnoyarsk, demonstrators plan to gather in Krasnaya (Red) Square at approximately 1400 and march towards the downtown area.

In Novosibirsk, demonstrators plan to gather at 63 Krasny Prospekt, near House of Officers at approximately 1400 and march towards Lenin Square.

In Omsk, demonstrators plan to gather at Leningrad Square, at the intersection of Karla Marksa Prospekt and Ulitsa Maslennikova at approximately 1400 and march towards Sobornaya (Cathedral) Square.

In Vladivostok, demonstrators plan to gather at the Fighters for Soviet Power Monument on Svetlanskaya Street at 1400.

In Khabarovsk, demonstrators plan to gather at Lenin Square at 1200.

In Ulan Ude, demonstrators plan to gather at Teatralnaya Square at 1400.

In Irkutsk, demonstrators plan to gather at the Square on Ulitsa Uritskogo on the square near the consumer services center “Dom Byta”

* * *

Time for another US-sponsored Color Revolution in Eastern Europe?

Russian authorities arresting peaceful protesters, journalists – appears to be concerted campaign to suppress free speech, peaceful assembly. This continues years of Russia tightening restrictions, repressive actions against civil society, independent media, political opposition.

— Rebecca Ross (@USEmbRuPress) January 23, 2021

Russians are taking to the streets today in the freezing cold to peacefully demand freedom, human rights for all their citizens, an end to corruption, and the immediate release of Alexei @Navalny.

I stand with them. The United States, and the world, must stand with them, too. https://t.co/OtKebHgMBm

— Adam Schiff (@RepAdamSchiff) January 23, 2021

Meanwhile…

He’s back. pic.twitter.com/90zhypFeap

— 38Parrots (@Parrots38) January 23, 2021

Many commentators have pointed out that if the Russian Embassy in Washington D.C. had done the same thing related to either pro-Trump or BLM protests at any point, US leaders would explode in anger and there’d be a flood of the usual denunciations of “Russian interference”. 

By now it is clear to everyone that: i) we are living in an “epic” market bubble (as defined by Jeremy Grantham, who also see s “spectacular” crash coming), and ii) one which is made all that more acute by a historic level of euphoria (according to Citi, Goldman and BofA), with Citi’s euphoria sentiment indicator at the euphoria-est stage in history as the latest Panic/Euphoria model shows

Ok, fine, the market is now more insane than it has ever been and the result are Volkswagen-esque short-squeeze explosions like the one we just saw in Gamestop, which made the Big Short (Squeeze) Michael Burry even richer.

But while everyone knows this is a bubble of unprecedented euphoria proportions, what everyone wants to know is how – and more importantly when – it will end.

Just yesterday we got two attempts to answer that question, the first from Jeremy Grantham, who told Bloomberg that he sees a “spectacular” crash in “the next few months.” Another, less alarmist prediction, came from BofA CIO Michael Hartnett, who while not expecting anything “spectacular”, predicted a sharp drawdown in risk as soon as this quarter, as this simply has to happen to reduce the record froth in this “late-stage speculative blow-off” and allow the normal move higher to resume.

Adding to the pile up, in his latest Weekly Kickstart note even the ever-cheerful Goldman head equity strategist, David Kostin, admits that a part of the market that appears frothy “and may pose a broader risk is extremely high-growth, high-multiple stocks.” As the Goldman strategist points out, “like negative earners and penny stocks, trading volumes and share prices of stocks with EV/sales multiples over 20x have soared.”

However, these firms are much larger, collectively accounting for 23% of trading volumes during the past month (96thpercentile since 1985) and 9% of market cap. Some of this appreciation is appropriate given record low interest rates. Firms with EV/sales ratios greater than 20x accounted for 2% of trading volumes in 2019. That share rose to 10% in August 2020 as interest rates plunged. However, their share of volumes has doubled again during the most recent market rally.

Another way of showing this: the Fed’s injections of trillions have made it so investors have run out of new trash to buy, so they are piling into the same old trash to the point where the riskiest assets are also the most attractive ones.

The chart above should come as no surprise to our regular readers: after all for the past decade we have said that we are now in a (non) “market” where fundamentals and logic don’t matter, so instead you have armies of retail daytraders rushing into the most shorted names – something we said was the best trading strategy as far back as 2013 – and also everyone turning into a momentum trader, and just buying anything that goes up (and selling anything that doesn’t). The FT had an amusing take on that:

… the stock market has totally lost its marbles, and in a bid to make as much money in as little time as possible has decided to become one giant momentum trade which consumes ever more of itself as it feeds itself.

Incidentally, those who wonder what may be the “next Gamestop” where an violent short squeeze sends the stocks soaring, yesterday we showed a handful of companies where the short interest as a % of float is over 50% and are ripe to explode higher.

Now, these staggering meltups across stocks, sectors and the broader market, are starting to be a problem for Wall Street, whose analysts are once again badly behind the curve. Take Bank of America, which has a 2021 year end target of 3,800, or below the S&P’s Friday close. Or Wells Fargo which is at 3,850 and also below the recent all time high in the S&P, which was reached before January was even over.

So are strategists rushing to lift their price targets as they so always do when they chase prices and try to justify their recos to clients? Some – like Goldman, JPMorgan and Morgan Stanley are. Others, however, like Wells Fargo head strategist Chris Harvey refuses to do so and is keeping his S&P target of 3,850. Speaking with Bloomberg’s “What Goes Up” podcast, he discussed why he’s not ready to throw in the towel on his conservative target. He also discussed how Tesla Inc.’s entrance into the S&P 500 reminds him of when AOL joined the benchmark index more than 20 years ago, and why he sees it as a potential signal of the end of “growth-at-any-price” (not to be confused with GARP) type of investing,

Here are the highlights from his interview starting with why he’s sticking with his S&P 500 target:

“We knew that this is a very conservative target and we bias ourselves on the conservative side. Last year, we also had a lower target than the marketplace. And one of the things that was different from us is we had a lot of confidence in it. We never cut our price target. And when things got really dicey, we found real value. We felt comfortable in and around the market lows, telling people to put money to work. Also at this time last year, we ran into a similar situation where people were saying, ‘Hey Chris, are you going to raise your price target? Or what are you going to do?’ We said no. And right now the answer is no.”

“We have very conservative earnings estimates. Part of that is because we don’t know what the tax regime is going to look like. It’s a long year and we’ll see, and we have no problems raising our targets or changing when the information changes. What we really don’t want to do is to cut our target because we don’t want to tell people there’s value there when there really isn’t. And so we tend to err on the more conservative side.”

On why investment opportunities based on stimulus may be short-lived:

“To get to the tax situation: One of the reasons why we see the opportunity being much shorter is it appears to be a rent, not own, type situation. We’re super cheap, right? And frugal as the day is long. We don’t want to stick around for the bill. You’re going to have to pay that bill. You’re going to have to do that before the midterm elections. So that’s saying somewhere in the second half of this year, or the beginning of next year. It’s hard to say granularly what’s going to occur, but we know that we’ve spent a lot of money and sooner or later we do have to pay the bill and we think it’s coming. And so, unlike a lot of my peers, I’m a little bit worried about that because that’s not going to be a whole lot of fun.”

Why Tesla gives him an AOL flashback:

“The Spidey sense is starting to tingle, right? I remember 1998, 1999 and I remember what was happening. You had a lot of speculation, you had a lot of retail investors getting involved. And we have a lot of funny things going on now. But what was amazing to me is AOL at the time was a game changer. It was an amazing technology. The stock had an incredible run, a run I really hadn’t seen before.”

“And it was added to the S&P late in the year at a very large market cap, or very large weighting. That to me was the beginning of the end, right? ‘99 was a fantastic year for stocks, but after ‘99, many of your tech companies and many of your growth companies lost 50% to 100% of their value. Now you have another game-changing technology in Tesla. And you have a stock that has performed amazingly well. And it’s going into the S&P 500 when? December last year. At a very large weight or market cap. This is signaling that we’re close to the end of the ‘growth-at-any-price’ type investment strategy. It’s not a call-out on a particular stock, but what it shows you is that we’ve reached that level.”

“And so back in the late ‘90s, it took 12 months for that, for the regime change to occur. And what I’m telling clients now is in 2020, everything is accelerated, right? Everything that I thought was going to happen more or less occurred, but just in a very compressed time period. So if it took 12 months in the late ‘90s, we think it probably takes six months now for that regime change really to occur.”

Finally, on the potential “pain trade” for 2021:

“Funny enough, I think the big pain trade for a lot of people on the buy side is a recovery or a strong recovery, because many people haven’t traded in a post-recessionary environment. Many people have been trading in a low-growth or recessionary environment. And when growth is abundant, different things happen. The market rewards value and small caps and cyclicals and that could cause a lot of pain for much of the buy side, because they’re so steeped in that growth trade.”

There is one more reason why the second half of 2021 will be very painful. As we first explained one month ago, the Chinese credit impulse has just peaked and is now set for a period of freefall as China scrambles to contain its recent lending spree, a move which will send its first derivative, the impulse, reeling and will have profoundly adverse impacts not only on Nominal GDP…

… but virtually every other asset class too.

To listen to the complete podcast with Harvey, click here.

Authored by Bruce Wilds via Advancing Time blog,

The failure of anyone to win two of America’s largest lotteries recently caused the jackpots to soar unleashing a bout of “Lotto Madness.” This spread like a wildfire across America revealing something very significant about our culture.

While this might not reach the level of needing a post-event “debriefing” a closer look at how these large lotteries affect our culture may be important and meaningful. A close inspection of how people react to the idea of winning a large sum of money exposes more than a few flaws in our values and the way we think.

It seems that society has reached the point where it thinks the road to riches is not through the valley of hard work and savings and that we can by-pass the important area known as sacrifice.

Family Guy Wins The Lottery!

When we have a large jackpot, lotto madness can even extend into the media and influenced television shows like the animated comedy “Family Guy.” During one of the big payouts years ago, an episode had the Griffin family living on a strict budget until a local news story on the lottery influences Peter to buy a ticket in hopes that he will win and set the family on a better financial platform. In fact, Peter reveals to his family that he has not bought just one, but several thousand lottery tickets, admitting that he has taken out a second mortgage on the house to buy them. After watching the results of the lottery that night, they discover that they have indeed won it yes, they have obtained the American dream.

Articles occasionally appear in the media with in your face revelations of incomes and comparing salaries. One showed an athlete making $15,900,000 a year, next to a government employee making $165,000, a CEO at $120,000,000 a year, and a business owner at $24,000 a year, this is the sort of thing that gives us a reason to pause.  No wonder we as a society are totally screwed up as to how we value and relate to money.  We must question our values, we must question the fairness of such inequality. It is hard to measure the discontent generated by such fluff pieces and irresponsible articles like these that are often inaccurate or fail to tell the full story.

It is clear that many people feel the trade-offs we face by living in a free market-consumer-based society and it wears away at them. The fact is economic growth is accompanied by  “wheel spinning”, inefficiencies and waste.  While the benefits of our system often outweigh the negatives we find society is paying a toll through increased rates of addiction, depression, and economic inequality.  On the emotional side, many people are not achieving the degree of being content or happy they had hoped for and are left with feelings of insecurity. This all contributes to people going totally bonkers and off the deep end at the prospect of winning a great deal of money even if the odds are massively against them doing so.

Government sanctioned gambling and especially lotteries send a message to the populace that conflicts with many important cultural values. These can have far-reaching effects. These messages promote a “let it roll” mentality.  Simply allowing such activities and promoting them are two different issues.  The government has climbed into bed with the devil to gain revenue from taxing these activities.  Gaming does not benefit the average man.  Truth is the laws of nature and the odds are against you, that’s why they call it gambling and not winning. It might be interesting to place more focus on how many people suffer post lotto depression when they do not win.

Many people who can least afford it spend $5 or $10 a week on lottery tickets in a futile attempt at striking it rich. The problem is, few people comprehend the chance to win a lottery is very small. These lotteries redistribute wealth from the working poor to the government which wins every week. Some studies indicate when lower-income players do buy tickets, they spend far more money on lottery tickets than wealthier players. A study published in the Journal of Gambling Studies found that those in the bottom fifth of income spent the most on lottery tickets, and more than twice as much as the richest lottery players – $433 a year vs. $193 a year.

Huge sums of money from lotteries are unmanageable by the average man and often cause adjustment difficulties, resulting in pain and not happiness.  Large jackpots also result in a disconnect in true and associated values causing unrealistic expectations.  The thought that we might at anytime win a jackpot in excess of one hundred million dollars gives a false impression of reality that is harmful in cultivating positive work ethics and makes a mockery of those who toil to produce a better life. In the past, some winners have used the line “be careful what you wish for” after having their life turned upside-down and disrupted by good fortune. One person that won big and experienced having his brutalized is Jack Whitaker. He has been quoted as saying he wished he had torn up his ticket after he was afflicted numerous times by the “lottery curse”.

Our modern consumer-based society has made us slaves to material objects and producers of waste.  Many economists urge us to consume, even when we must borrow to do so, saying it creates more jobs. We follow Governments and leaders that we often neither like nor trust.  Today’s youth growing up besieged by marketers are now vilified for being materialistic, marred by too little perspective, they find themselves angry and disappointed. During the latest lotteries that sported a massive well-publicized jackpot people used covid-19 relief money that was intended to be used to pay rent and even the food stamp money given to them by taxpayers to buy tickets. Bottom-line this is indeed madness.