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DARPAtv live-streamed AlphaDogfight Trials Competition on Thursday (Aug. 20), which featured an AI-controlled virtual fighter jet beating a human pilot in a series of simulated dogfights.

The AI-system, developed by Heron Systems, a Maryland-based defense contractor, beat one of the Air Force’s top General Dynamics F-16 Fighting Falcon pilots, reported Breaking Defense. 

Fully-autonomous fighter jets are years away, but the Air Force and DARPA appear to be honing in on the possibilities of integrating artificial intelligence systems into combat flying machines. The live event was streamed on several platforms, including YouTube and Zoom, which shows AI systems have the ability in 2020 to operate an aircraft with skill and in a one-on-one combat scenario, out-gunning a human pilot, even though it was in a simulation. 

One of the hosts during the simulated dogfight noted the AI system has “superhuman” shooting capabilities that produced an edge over the human pilot. 

Video: AlphaDogfight Trials Final Event

Timothy Grayson, director of the Strategic Technology Office at DARPA, described the simulation as successful and said it’s a victory for humans and machines to team up for combat:

 “I think what we’re seeing today is the beginning of something I’m going to call human-machine symbiosis… Let’s think about the human sitting in the cockpit, being flown by one of these AI algorithms as truly being one weapon system, where the human is focusing on what the human does best [like higher order strategic thinking] and the AI is doing what the AI does best,” Grayson said. 

While fully autonomous fighter jets conducting dogfights are years outs, if not at the end of the decade, what’s more, plausible, in the next five years, is AI integrating into the flight systems of fighter jets, especially stealth ones, to assist pilots during complex combat situations. 

Authored by Megan Fox via PJMedia.com,

Governor Cuomo has become Reverend Shaw Moore from the movie Footloose after issuing a new set of commands for New Yorkers that includes a ban on dancing.

This is not a joke. Syracuse.com reported the story.

There is no dancing allowed in New York’s bars and restaurants, even at a wedding reception, according to the New York State Liquor Authority.

To control the spread of the coronavirus, Gov. Andrew Cuomo’s liquor authority has also specifically banned darts, pool, cornhole, karaoke and exotic dancing.

Bar owners are already struggling to stay open after being shut down for months. The new rules are causing a lot of anxiety as business owners are being threatened with their licensing if they don’t comply.

The intent is to reduce the number of people congregating in bars. If you go to a bar, you must sit at a table or move along, according to the liquor authority’s guidelines.

“I don’t let people dance,” said Dan Palladino, who owns Heritage Hill Brewhouse in Pompey. “I think it’s kind of sad, but I don’t want to risk my license.”

I’ve already been to an illegal wedding where there was a lot of dancing— and they’re becoming more popular. People having weddings in New York have to hide the location until the last minute and keep all signs of partying out of sight. It’s kind of exciting in a speakeasy sort of way but also extremely stupid. You cannot keep people from living their lives. And if you try to outlaw fun, they’re just going to break those laws and do it anyway.

Not only has dancing been outlawed, but pool, darts, cornhole, and karaoke are also off-limits. How much longer do the dictators in charge really think they can keep this up? I never thought I’d see the day when Democrats became pulpit-pounding puritans keeping the kids from dancing, but here we are.

And is it necessary? It sure doesn’t seem so with coronavirus deaths plummeting all over the country. But what do we know? We just pay the bills here. Let’s all leave the hard stuff to the crooked politicians, who have been wrong about everything, to figure out. I heard someone on the radio today ask, “how much more will we take?” and the answer is “a whole lot more.” New Yorkers may be rebelling privately, but publicly they’re all on board 100% — “for our safety” — and making sure everyone knows it.

I went to Mass for the first time and people really didn’t sing! I couldn’t believe it. There is nothing that New Yorkers won’t do when told to do it. If we were told that crawling on the sidewalk would protect us from coronavirus I would expect to see a majority of people around here wearing kneepads and inching along to the grocery store.

I don’t expect that this new string of asinine directives will motivate anyone to vote against Governor Cuomo. Democrats in New York seem to hate Democrat policies yet continue to vote them into office, no matter what they do.

Does anyone know when we’ll be allowed to dance again? #Coronavirus #nodancing #manchester #manchesterlockdown #Footloose pic.twitter.com/HPpTafmDf4

— Melissa Manchester (@MelissaBingham) August 10, 2020

What we need here in New York is the spirit of Ren McCormack to take the mic.

Colleges that are reopening campuses this fall understand outbreaks of COVID-19 are certainly possible on school grounds and in the surrounding communities. To safeguard students against the virus, Albion College, located in Albion, Michigan, is requesting all students to download a smartphone app that tracks their location to create a “COVID-bubble.” 

According to The Washington Free Beacon, Albion College’s COVID-bubble will require students to stay within a 4.5-mile perimeter of the school. If students violate bubble rules, such as stepping outside the bubble, the app will automatically notify school officials who could slap the violater with a “temporary suspension.”

The move to track students comes as college, health experts, and government officials have been in several months of disputes about reopening for the fall semester. Many schools are opting for remote courses to mitigate the spread of the virus, though such actions will be disastrous on enrollment and school budgets. 

Readers may recall a higher education bust is underway, one where the virus pandemic accelerated the trend (see: Higher Education Bust – Vermont College Goes On Auction Block With $3 Million Bid). 

So far, not everyone is thrilled about Albion’s reopening plan to maximize a contact tracing app. Students and parents had this to say: 

A father of an Albion student said that he is upset that he must choose between keeping his daughter home from school or signing off on a university-sanctioned “invasion of privacy.”

“The school wants my daughter to sign a form consenting to specimen collection and lab testing,” he told the Washington Free Beacon on condition of anonymity. “I have a ton of concern with that…. Why is the state of Michigan’s contact tracing not enough?”

Though students are required to remain on campus, professors and administrators are not. When asked about this potential loophole in its “COVID-bubble,” the school declined to comment.

Rising senior Andrew Arszulowicz said that he is upset with both the mandatory use of the app and the manner in which students are being treated. “I feel like I am being treated like a five-year-old that cannot be trusted to follow rules,” Arszulowicz told the Free Beacon. “If the school believes masks work … why are we not allowed to leave if they work? It does not make sense to me.” -The Washington Free Beacon

Albion’s courses will only be offered in-person, and students who reject downloading the tracing app will be deferred to the spring semester. 

Does this sound Orwellian to you?

Authored by attorney Shipwreckedcrew via RedState (emphasis ours),

John Brennan’s long-time advisor Nick Shapiro put out a statement yesterday at the conclusion of Brennan’s eight-hour interview with John Durham and his investigators.

It might all be true.  All I have are opinions on the text and circumstances.

But I also know that the CIA is an institution designed to engage in manipulation using lies and deception — in a good way.  It’s how they accomplish their mission in defense of the country.

John Brennan is an embodiment of the CIA — it’s all he’s ever known.  Its ethos oozes from his pores.

John Brennan wanted to send a message to the world yesterday after he finished his interview with John Durham. Oddly, he chose to do it through Nick Shapiro, and not himself. Nothing about Brennan or his history suggests Shapiro’s message needs be credited with being truthful.

There are several reasons to read this message with a “jaundiced eye” and to recognize the ulterior motives for it.

First, it’s not Brennan’s statement. Shapiro issued the statement to Obama Administration scribe Natasha Bertrand at Politico — guaranteed to dutifully publish anything requested of her by a former Obama era intelligence official now living in fear. Shapiro then posted a string of eight Tweets on Twitter with the same text.

Both are devoid of any words actually spoken by Brennan — there are no quotations — nor is there any support offered for Shapiro’s claims by anyone actually in the room, such as Brennan’s attorneys.

Since when has Brennan been shy about saying anything on Twitter?  Why would Brennan go “third person” and have his thoughts about the interview expressed only in the words of someone else? The most obvious reason is the statements are not going to be exactly accurate. Running them through a third person builds in a level of “deniability” on Brennan’s part. Shapiro wasn’t in the room for the interview. Shapiro is only putting out for public consumption what was told to him, and by phrasing it in the “third person” the way he has, it’s not a statement “by John Brennan” nor is it endorsed by Brennan’s counsel in the room. It is put out by a guy who has historically been in the role of misleading and misdirecting the press and the public on John Brennan’s behalf. Yesterday’s mission was no different.

Second, conducting the interview at the CIA facility is an interesting decision. Why not question him at DOJ or FBI HQ? The CIA is not a law enforcement agency. John Brennan no longer works for the CIA. Any CIA records that may have been needed over the course of the interview could have been made available in a secured facility at both those locations.

But that “records” excuse may have been the very justification given for the selection of the CIA HQ as the location for the interview.

DOJ and the FBI HQ are in Washington DC. CIA Headquarters is in Langley, Virginia.

If you are geographically challenged, you can read the distinction as “United States District Court for the District of Columbia” v. “United States District Court for the Eastern District of Virginia.” If John Brennan offered any false answers to the investigators during the interview, the venue for that “false statement” crime is in the EDVA, not in DC federal court.

Third, Shapiro’s statement claims that Brennan was told by Durham that he is neither a “target” nor “subject,” and that he is only a witness to events under review. Maybe that’s true, but it does not sound true to me. And the statement does not say that comment was made to Brennan yesterday before the interview took place.

I can say that I had several occasions during my career as a prosecutor where criminal defense lawyers asked me similar questions about their client in response to an interview request. I can’t say that I always refused to answer, but as a general matter my response was something that I learned when I was starting out from more experienced federal prosecutors —

“Counsel, this interview today is voluntary. Your client is free to leave right now, and answer none of the questions we have. He’s free to stop answering questions at any time while the interview is underway. He’s free to ask to take a break, step outside the room with you, and then return to answer the question or not answer the question.  What does he want to do?”

John Brennan could have been questioned before a grand jury, without the presence of his attorney in the room. That would be true IF, as suggested by Shapiro’s statement, Brennan was only a “witness”.

To explain that, let’s take a moment to address the whole “Target” v. “Subject” v. “Witness” construct the press is so happy to report about.

Labeling an individual a “target” has a clear meaning in federal criminal prosecutions.  It refers to someone about whom the prosecutor believes there is already sufficient admissible evidence to seek an indictment from a grand jury, and obtain a conviction at trial.  The investigation is ongoing, but the grand jury already has identified a “target” for eventual prosecution.

Anyone who is “not a target” is — “not a target”.  There is no other “classification” of individuals with meaning.  Many people in the business toss around the term “subject”, but that is a “made-up” classification that does not exist.  I have received “Subject” letters from prosecutors on behalf of clients, but those all involve a request to interview my client.

A “Target” letter is different.  When you receive a “Target” letter it advises you that a federal grand jury has already received evidence upon which criminal charges may be issued in the future.  It advises the “Target” that they should seek counsel, and if they cannot afford counsel they should contact the Federal Defender’s Office in their district for legal representation.  Once they have secured counsel, their lawyer should contact the prosecutor to discuss the matter.

The purpose behind a “subject” letter is merely to instill fear in the recipient and to “encourage” them to talk about others before others talk about them — as information from others might push them closer to the “target” category. Unwitting lawyers think there is meaning behind the “subject” designation but there is not.  Fear is a great motivator. “Doing unto others before they do unto you” is sort of a universal maxim among the idiot criminal class.

So if you are not a “target” — meaning there isn’t sufficient evidence at this time to charge you with a crime — then by default you are a “witness.”

But “witnesses” can, and often do talk themselves into being “targets” during such interviews. That was the purpose of the interview, Mr. Brennan, not because you have some wonderful insights to provide Mr. Durham and his investigators to make their job easier.

One important distinction between “target” and “witness” that is not well understood, but might be in play here, is that it is against DOJ policy to issue a grand jury subpoena to someone who is already a “target”.

A grand jury subpoena is a court order, under threat of contempt, to appear and answer questions under oath without the presence of counsel. If a person is already a “Target”, the subpoena intrudes upon their Fifth Amendment right to remain silent and to be represented by counsel while undergoing “custodial” interrogation — they are under subpoena after all. Witnesses before the grand jury are allowed to assert their Fifth Amendment right, but it forces them to assert that right before the grand jurors considering charges against them. The government is not allowed to call a criminal defendant to take the stand in his trial and force him to assert his Fifth Amendment right to remain silent in front of the jury. It is deemed prejudicial, and suggest to the jury that the defendant has something to hide. The same principle applies to calling a “Target” in front of a grand jury and forcing them to assert their right to remain silent in front of the grand jurors without counsel present.

So, if John Brennan isn’t at least a potential “target,” why was he not called to explain historical events to the grand jury?

Finally, John Brennan has many times expressed the belief that any investigation initiated by the Trump Administration into the actions of Obama Administration officials to examine their conduct as it pertains to the investigation of the 2016 campaign, and the aftermath of Trump’s election victory, is illegitimate.  John Brennan has all but declared Trump’s election to be illegitimate — heck, he might have said so outright.

So, it is not surprising at all that Shapiro — not Brennan — would claim:

Brennan questioned why the analytical tradecraft and findings of the ICA are being scrutinized by the Department of Justice, especially since they have been validated by the Mueller Report as well as the bipartisan Senate Select Committee on Intelligence review.

The idea that Brennan “questioned” Durham on this topic does not confirm that Durham had any response to offer to Brennan’s question. I suspect Durham did not react favorably — if it happened at all — to Brennan’s suggestion that Durham’s work was illegitimate or superfluous because of what others might have done, or not done as the case may be.

But John Brennan cannot help himself in this regard. The CIA is rarely put in a position of having to explain or defend its conduct — purposely and by design. But when John Brennan has been in that position in the past, he’s been quite comfortable with lying in his responses. More of the same here.

John Durham and his team did not come to the decision to interview Brennan over the course of eight hours for the purpose of “filling in the blanks” on “events that are under review.”

The purpose of the interview was to get Brennan to confirm or deny information that others have provided up to this point about Brennan, and what he instructed others to do.

John Brennan was placed into a perjury trap yesterday because he’s shown himself willing to perjure himself in the past in order to evade scrutiny.

Yesterday, the ability to avoid the trap was completely within his control — all he had to do was tell the truth.  For the most part, Durham’s investigators knew the truth.

John Brennan doesn’t come from a world of objective “truths” and “lies”. For Brennan, the “truth” is always malleable to fit his needs at any given moment.

That’s CIA tradecraft.  He sees himself as a master of such “dark arts” based on his decades in DC.  Others have long viewed him as a clown.

That’s why, as a prosecutor, you save a liar like John Brennan for last.  He can’t help you because you can’t rely on what he tells you.

So your interview is not done for the purpose of helping your case.

And you do it in Virginia and not DC because of what you plan to do next.

Short sellers betting against Tesla have lost a collective $25 billion so far this year, according to data from S3 partners and Business Insider. 

Those short Tesla are down $25.4 billion mark to market on Tesla in 2020 so far as Tesla stock has rallied nearly 400% on the year. The company now has a fully diluted market cap approaching $400 billion. 

Short sellers are down about $7 billion in August alone and added over $1 billion to their loss tally last Thursday as the stock eclipsed the $2,000 mark for the first time. On Friday, they lost another $619 million as mindless retail buyers drove the stock higher ahead of its upcoming 5 for 1 split. 

Ihor Dusaniwsky, managing director of predictive analytics at S3, said: “Tesla continued steady short covering for over a year as shorts continue to get squeezed.”

But Tesla remains the biggest short in the U.S. market, with $21.31 billion in short interest and 10.65 million shares still shorted. This is about 7.18% of the company’s float, according to S3 data. In July, it became the first company to have $20 billion in short interest bet against it. 

So are short sellers just gluttons for pain at this point? Or are they simply convinced they are riding out what could be the largest stock bubble in the history of human kind?

Even acknowledging the castrated response that regulators have taken toward Tesla thus far, the overwhelming amount of evidence stacked against the company – from faking an $80 billion buyout, to pumping non-existent solar roof tiles, to the Solar City bailout, to lax warranty accounting, to retaliating against whistleblowers, to claiming millions of Robotaxis are coming, to the lack of a General Counsel, to the CEO indemnifying his own board, to charging thousands for a full self driving product that doesn’t exist, to beta testing autonomous driving on unaware participants and to selling ZEV credits to turn a profit – still has us wondering if shorts will eventually have their day.

Or, is Elon truly bulletproof?

Despite the fact that Postmaster General Louis DeJoy has delayed his most controversial cost-saving measures until after the November vote, and endured a shellacking at the hands of Senate Democrats on the Homeland Security Committee, House Speaker and Democratic leader Nancy Pelosi forged ahead with the help of 26 defecting Republicans to pass a bill calling for $25 billion in financial assistance for the Post Office.

As more states announced plans to hold their elections largely by mail in November (a system that some used for the primaries) the Postal Service announced earlier this month that too much voting by mail could delay the arrival of some votes. Pelosi called a special session of the House during recess and on a Saturday to lend this piece of political theater even more impact.

The vote is the culmination of a Democratic crusade about late mail – literally, a few people complained about their mail being late, a few others posted some context-free photos of mail sorting machines being destroyed, and – boom – Democrats suddenly had an army of twitter trolls shrieking about veterans dying because their medication came a day late. One Connecticut family even complained that USPS had lost the cremated remains of a loved one and veteran (they were found 12 days later thanks to one dedicated worker who supposedly delivered the remains personally). They blamed DeJoy personally for the mistake, and ever since, the state’s AG William Tong has seized every opportunity to draw attention to “out of service” mail sorting machines.

DeJoy is due for round two before the House Oversight Committee on Monday, which should be even more brutal than Friday’s pile-on (at least, for DeJoy’s sake, the Senate is controlled by Republicans).

But in the latest transparent bit of political theater organized by “political mastermind” Nancy Pelosi – and surely this is right up there with her wardrobe choices during the unveiling of the Dems’ police reform bill  – is the victorious vote on Saturday, which has almost no chance of passing the Republican-controlled Senate.

As we mentioned above, 26 Republicans defected to help Democrats pass the bill 257 votes to 150. In addition to the money, the bill called for reversing certain operational changes imposed under DeJoy. Six states are also suing USPS and DeJoy personally (along with the chairman of the USPS board) claiming these changes infringe on states ability to hold free and fair elections.

House Oversight Chairwoman Carolyn Maloney, who introduced the bill, has said the postal service should not “become an instrument of partisan politics.”

On Twitter, Trump raged about the vote.

….that they are trying to pull off in violation of everything that our Country stands for. Vote NO to the Pelosi/ Schumer money wasting HOAX which is taking place now. Then fight the $51 million unasked for Ballots. Only ABSENTEE BALLOTS are acceptable!

— Donald J. Trump (@realDonaldTrump) August 22, 2020

Now, get ready for some strongly worded statements from Pelosi when Mitch McConnell inevitably refuses to call it for a vote. The Senate has introduced its own, scaled down, plan to help USPS as part of a proposed COVID relief bill that thanks to Democrats, likely will never become a reality.

Authored by Sven Henrich via NorthmanTrader.com,

Reality Check

This week the headlines declared the bear market over as the S&P 500 joined the Nasdaq to make new all time highs. A new bull market has begun so the celebratory narratives. It is true these indices have made new all time highs, but the actual market hasn’t. Not even close. These indices have made new all time highs as 6-7 stocks are experiencing the largest and most aggressive market cap expansion in human history distorting everything.

Yet perception is reality and the bullish narratives keep mounting as key tech stocks and their oversized weight are contributing to the main indices relentlessly drifting higher so let me at least provide some perspective as to what’s going on with the larger market.

Firstly note we continue to be in uncharted waters here in terms of the concentration of individual stocks vs GDP as well as the Fed’s balance sheet:

The market cap of just 7 stocks now equals 39% of US GDP.
The balance sheet of the US Fed now equals 36% of US GDP.

— Sven Henrich (@NorthmanTrader) August 21, 2020

The first top 5 stocks now represent 25% of the S&P 500, a concentration in weighting we’ve not seen since 2000. The market cap expansions we see on a daily basis in some of these stocks, such as $AAPL and $TSLA for example, put even the year 2000 bubble to shame.
Just on Friday $AAPL added over $100B in market cap out of thin air on no fundamentally driven news. The stock now having added over $1.1 trillion in market cap since the March lows.

None of this has even a historic approximate reference point and so one must recognize that this market phase is a unique one on its own.

And of course $TSLA is the other popular post child of this era:

1 year ago in August 2019 $TSLA was trading as low as $211, now it’s trading north of $2,000.

— Sven Henrich (@NorthmanTrader) August 20, 2020

None of these companies have produced results that justify these historic market cap expansions in such a short period of time, but they provide cover for the illusion that the bear market is over and that a new bull market has begun. There is little doubt these stocks are in a bull market. I call it a historic bubble, but don’t let anyone tell you the “market” is in a bull market.

It’s not and the value line geometric index shows you this clearly:

While the index made new highs the $XVG produced lower highs versus June and remains far below the 2020 highs or the 2018 highs for that matter.

Even in the almighty Nasdaq the internal picture is atrociously crumbling before our very eyes, be it on new high/vs new lows:

Or be it on the cumulative advance/decline:

Indeed we can observe that the relentless crawl to new highs on the index shows a correction underneath with $NYMO hitting below -50 while $SPX closed the week on a new high with equal weight deteriorating and volume entirely collapsing:

Banks dropped over 10% from the August peak and remain below the December 2018 lows and far below the June highs:

No, it’s all tech, and select tech at that as investors are relentlessly piling into $QQQ, an ETF that has a 56% market cap weighting exposed to just 10 stocks:

No, the “market” is weak underneath and is more reflective of the reality that 7 stocks and relentless artificial liquidity are masking:

This economy is far from recovered, yet markets are now trading at an all-time high of 179% market cap to GDP and the potential fuel of shorts has all but disappeared:

The most valued market in history, everybody long and the shorts are gone.
Have a good weekend!https://t.co/2SriTc7ckf pic.twitter.com/i1BPyoYseM

— Sven Henrich (@NorthmanTrader) August 21, 2020

Next week Jay Powell, who is personally killing it in this market, will speak at Jackson Hole. If there is any conscious recognition on his part as to the historic distortions created by his unprecedented liquidity injections shall remain unknown to all of us. If he has any sense of the enormity of the distortions created he’ll aim to softly try to ease participants off of the dangerous chase into tech stocks for fear that a bursting bubble will cause more damage down the road. But that would require him to not only have cognition of the distortions created, but also take some pain in his personal ETF portfolio. The obvious conflict of interest appears to be a taboo in the financial media for some reason.

Why not ask him: “Mr Powell, how much money have you personally made this year as a result of the liquidity injections you have implemented? In light of these amounts, while over 28M Americans are still claiming unemployment benefits, how can you claim the Fed does not contribute to wealth inequality?” Let him go on record:

Imagine being in charge of deciding unlimited QE while holding this long index portfolio and then saying the Fed does not increase wealth inequality. pic.twitter.com/m73AsAeZwb

— Sven Henrich (@NorthmanTrader) June 12, 2020

I’m sure these 28M Americans would love to know how the Fed is helping them by buying bonds in a $2.1 trillion market cap company.

Bottomline: The larger market is struggling, correcting even as the rotation trade once again was left in the dust of another vertical chase into key tech stocks which are now historically overvalued, technically extremely stretched and at ever higher risk of a violent technical reversion. Month end is again approaching and perhaps the rotation trade may once again be a vehicle of choice as these February gaps remain (see also $DJIA and $VIX).

I’ll leave you with a replay of an 30 min interview I recorded this Thursday evening with the folks over at PeakProsperity with my latest views on the current situation:

* * *

For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.

New York property owners are begging the city’s largest businesses to return to work. 

Names like Goldman Sachs and BlackRock have been on the speed dials of New York landlords, who are reportedly reaching out to the businesses begging them to get back to work and, in turn, save the city’s economy. The landlords have formed a “loose coalition” according to a new report by Bloomberg. 

The group includes RXR Realty’s Scott Rechler, Rudin Management’s William Rudin and Marc Holliday of SL Green Realty. These landlords, facing a catastrophic collapse in the price of commercial real estate, argue that it’s safe to return to work and that most NYC businesses simply can’t survive a shutdown much longer. Some are even calling it the “patriotic” thing to do. 

So far, the reception hasn’t been overwhelming. And with every day that passes, it becomes a tougher sell. As businesses close up, there becomes less reason to return to work. As a result, landlords could see a major demand drought and prices could crater. 

Jeff Blau, the head of Related Cos., said: “I’ve been really pushing the CEOs to bring people back into the office. I’ve been using a little bit of guilt trip and a little bit of coaxing.”

He continued: “I am watching the city decay as nobody is here. Now is not the time to abandon the city and expect it to be in the same way you wanted it when you get back in a year from now.”

The landlords are also reaching out to corporations like law firms and tech companies to assure them that their buildings are safe. They are promising to make whatever concessions renters want in terms of safety and are also petitioning the governor’s office to start a “Get Back To Business” campaign. 

But employers have to weigh the risks of sending employees back to work – at the same time that they just figured out the advantages of having their employees work from home. Many businesses have considered keeping the “work from home” model regardless of how the virus pans out. 

Landlords argue that every commercial real estate spot also supports adjacent small businesses. Real estate companies are leading by example, recalling half of their workers and expecting the rest to return to work by next July. 

“The CEOs of several companies I’ve talked to have mentioned that it’s a patriotic duty to have their people come back to the office,” Rudin commented.

Blau continued: “This place is a pain in the ass. It’s crowded and it’s not the easiest place to live. But you make that trade because it’s got so many great things. We want to make sure that it stays that way and people continue to make that trade and have those things to come back to.”

Rechler concluded: “We’re creating our own fate by not bringing people back and restarting the largest economic engine in the country. It’s as much of a civic obligation as anything else.”

Authored by Jeffrey Snider via Alhambra Investments,

There is simply no way to spin these figures as anything good. Not just the usual ones were talk about here, but more so some new data that you probably haven’t seen before.

Beginning with the regular, it doesn’t matter that the level of initial jobless claims has declined substantially over the past few weeks. The fact of the matter is after 22 weeks of dislocation, at least eleven of them under reopening, these continue to rip along at around 1 million per week.

One million.

We’d never seen so much as 700k before (though the labor market is getting into the top range of 1981-82 adjusting for population, as if that’s some good thing). Forget about the first half of the contraction (which the shutdown caused) and just focus on this second set of weeks since early May. There’s no way to describe them, more than double anything we’ve ever seen before.

Not shutdown but the visible display of economic damage.

The rebound isn’t being very bouncy, for one thing, no matter how many gigantic gobs of purported “stimulus” has been thrown at the economy. It ain’t stimulating. The number of jobs still being lost this late into it is unthinkable; historic.

I wrote a couple days ago about another key factor which appears to be what the productivity estimates have revealed; the terrifying possibility that though there’s been more job losses than at any time in history there may not yet have been enough of the longer-run variety to balance business perceptions of far lower post-GFC potential.

Before even getting to July, this divergence between hours and headline payrolls had already suggested that companies may have been holding on to more workers than the decline in output would’ve demanded. In other words, the level of output and actual work performed had declined more than the reduction in headcounts, by a lot more, leaving us to suspect businesses were holding back a sort of reserve of their own workers (who were still on the books but idle nonetheless) having them at-the-ready for when reopening got started.

Those are both (unemployment and productivity) relatively familiar numbers. Now along comes the IRS, of all places, to put even more disturbing emphasis on this idea. The government’s tax collector is preparing itself for severe, and permanent, shrinking in the labor market.

Yesterday, the agency released its estimates for Publication 6961 (h/t Bloomberg). And the update to that release will make your blood run cold (while oddly explaining the NASDAQ).

Before getting to the latest publication, let’s start by going back to happier days or what had seemed like reasonably less awful days during 2017. Globally synchronized growth was the mandate as well as widely accepted as some meaningful acceleration in US and global growth.

Recovery at last.

Under 6961, the IRS estimates how many pieces of tax filings it will have to collect, sort, and manage. Perhaps the most important of all of them are the nation’s W-2’s, the way in which all workers report their incomes to verify withholding and calculate tax liabilities before the federal Leviathan.

A job means a W-2, but many workers hold more than one job at a time or during the year they may change jobs. So, it’s not an exact one-for-one, but when we’re dealing with big things it needn’t be perfectly precise. Even when we look at how 2017’s globally synchronized growth actually turned out in terms of managing all those paper and e-filed submissions:

The first year listed in each update series is the actual number of W-2’s (not including W-2 G’s) that were collected. As you can see already, the labor market disappointed right from the start; the IRS had expected to process closer to 275mm W-2s during 2017 but ended up with less than 260mm. Reflation #3, as it turned out, as bonds had warned the whole time, not Recovery #1.

Following that less robust labor market than expected, the IRS in 2018 and 2019 adjusted itself to lower levels – particularly after the big slowdown in employment that happened in 2018 when Euro$ #4 converted globally synchronized growth into the pre-COVID globally synchronized downturn.

Which brings us to the 2020 update to Publication 6961 released yesterday…and holy sh$%. Sorry, but an expletive is demanded in this situation:

The taxman thinks there may have been an uptick in W-2’s earlier this year associated with last year’s filing (I think they’ll found out that didn’t happen). But then, for next year, in 2021 as 2020’s W-2’s come rolling in, the agency anticipates receiving 37 million fewer of them than what it had been thinking this time last year.

Thirty-seven million.

Even more frightening, the IRS doesn’t believe the labor market is going to recover before 2028. And that is the biggest downside of all. Time is the greatest enemy.

That doesn’t mean 37 million jobs have been eliminated. Some of the gap is gig workers (a very small part) while much of it is probably going to be a whole lot less turnover; workers changing jobs and getting a W-2 for each during a year. If workers change fewer jobs because they’re uncertain or scared, as so often happens during the worst economic circumstances, then that would account for fewer total W-2’s being issued and turned in.

But at the baseline of these estimates, it has to be this or worse:

The “V” is not a V; the rebound is not a recovery. The IRS could be wrong, of course, but when it has been, like so many other official predictions, in which direction is it typically wrong? Using mainstream models, as they’ve done here, when are the models ever overly pessimistic about longer run situations?

More importantly, these numbers are all consistent with each other; horrible. Combined with real unemployment filings and productivity estimates, each coming at the same piece, the labor market, of what looks to be the stark reality of our economic situation.

These right here are the huge jobs numbers, not what got posted by the BLS several Fridays ago. How can the most gigantic of payroll positives in history possibly be disappointing to the point of being irrelevant? Quite easily, it may turn out.

An emerging trend in the classic car space is electric vehicle conversion, otherwise known as EV conversions, which is swapping out a car’s combustion engine and connected components with an electric motor and batteries to create an all-electric vehicle. 

In the last five years or so, EV conversion kits have allowed folks to transform the 1980s Porsche 911s to 1970s Volkswagen Super Beetles to many other vehicles into all-electric cars.

However, wealthy folks don’t have the time to purchase EV conversion kits and tinker with motors and wires – they rather buy a complete package, and that’s where Lunaz Design comes in. 

Lunaz, based in Silverstone, England, is the world’s leading restoration and electrification company, focusing on EV conversions of some of the most iconic post-World World II automobiles from Western nations. 

Lunaz has re-engineered, or let’s say electrified the Rolls-Royce Phantom V, Jaguar XK120, Royce-Royce Cloud, and Bentley S2 Flying Spur.

“Lunaz is basing their re-engineered Rollers on the 1961 Phantom V, which is certainly an iconic-looking Rolls design. Lunaz is only planning on building 30, and says the conversions will utilize its proprietary powertrain,” said Jalopnik. 

The electric Phantom will use a 120 kWh battery, larger than the Tesla Model S’ 100 kWh battery option, allowing the range of the vehicle to reach around 300 miles. 

Jalopnik said ‘Electrolls-Royce’ Phantoms have a list price of about $655,000, but EV conversions for a Rolls-Royce Silver Cloud are much cheaper, around $458,000.