Russia’s Track-and-Trace System Will Make Consumer Goods More Expensive

Russia’s digital track-and-trace system already includes identification measures for some products, such as pharmaceutical drugs and alcohol. The government now intends to expand it to almost all common goods.

Launched in 2018, the Chestny ZNAK system is designed to authenticate merchant transactions by assigning unique IDs to physical goods—sometimes with a QR code, sometimes with a radio-frequency identification (RFID) tag, sometimes both. The code is scanned when the product is purchased, and the transaction is then registered in a government database. If a product is mislabeled, the business owner can be held criminally liable.

Russia isn’t the only country with such a system. But the Russian approach stands out in that the government wants it to cover all products eventually, from medicine to tobacco to clothes to groceries. Authorities claim this will combat the distribution of counterfeit products.

Whether or not it will do that, it will certainly burden businesses. “Russia’s dairy industry will have to pay around 20 billion rubles ($319.6 million) per year,” writes Julia Osipova, managing partner at Uvarovsky, one of the largest dairy producers in the Moscow region. That amount is greater than the subsidies the industry receives from the state.

Artem Belov, general director of the milk company Soyuzmolok, argues that the dairy market doesn’t have a contraband problem. The real issue, he says, is if the dairy products don’t contain the ingredients outlined in the label.

Alexander Afonin, deputy director of the Saratov pharmacy chain, also bemoans mandatory labeling’s expensive process—for example, the cost of buying multiple code scanners. One scanner costs approximately 7,000 rubles ($111), and businesses like pharmacies typically require several. The mandates are also a problem for small town businesses with limited internet access.

And while Chestny ZNAK’s defenders claim the labeling will benefit consumers, it could easily cause price increases for basic goods such as food and clothing, as businesses try to cover their higher costs. The government’s attempt to crack down on counterfeit goods is not only burdening consumers with expensive prices, but also confusing them about the effectiveness of the labels. Whether they have significantly reduced the amount of counterfeit goods in circulation is yet to be determined.

Moreover, the system’s ability to trace products from manufacturing to point of sale makes it easier for the state to monitor consumer activity under the guise of promoting market transparency.

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No Bonus For JPM Bankers As Goldman Self-Monitors For Deadly Virus       

No Bonus For JPM Bankers As Goldman Self-Monitors For Deadly Virus       

As the real economy continues to decelerate and the Federal Reserve’s ‘Not QE’ catapulted growth stocks to the moon, well not anymore since coronavirus has spooked global markets, bankers across the industry have seen their annual bonuses stagnate.  

JPMorgan Chase & Co. recently decided to keep annual bonuses flat across its investment bank segment for the 2019 year, reported Bloomberg. 

JPM bankers should not complain about the lack of pay increases, at least they still have a job, considering an industrywide cut has shocked many in the last year, as macroeconomic headwinds continue to rise. 

The bank noted compensation expense grew 4% to $10.6 billion for the corporate and investment bank units last year as headcount rose 3%.

Bloomberg said pay for top management increased by 1.6% to 2.4% last year, a small boost compared to 2018 figures. 

Even CEO Jamie Dimon’s compensation only increased by a mere 1.6% to $31.5 million, a reduction in growth seen over the prior year.

Despite employment compensation growth waning, JPM recorded some of the highest profits ever with $36.4 billion, due to a 56% increase in stock and bond trading in the fourth quarter, after it single-handedly triggered the repo crisis, forcing the Fed to launch ‘Not QE.’

Across the industry, we’ve noted as the stock market hit record highs, thousands of bankers have been laid off. 

Morgan Stanley last month fired 2% of its workforce, or approximately 1,500 workers, due to a slowdown in the economy. 

Earlier this month, Barclays Plc slashed 100 senior staff at its investment bank unit. These cuts were primarily made in Europe and the U.S. 

Goldman Sachs has had its fair share of layoffs and pay reduction in 2019. Now bankers at the firm, who have recently visited China, have been told to quarantine themselves at home for two weeks for fears they might have coronavirus.

It seems coronavirus could be the next excuse by banks to reduce pay or layoff staff members.


Tyler Durden

Tue, 01/28/2020 – 10:30

Tags
Business Finance

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‘Sacrilegious’ Trader Warns “Not All Problems Can Be Solved With Excess Liquidity”

‘Sacrilegious’ Trader Warns “Not All Problems Can Be Solved With Excess Liquidity”

This morning’s modest rebound in stocks has many proclaiming the worst is over and everything is awesome once again, on the premise that The Fed will soothe all fears with their magical money-printing sentiment savior…

Bloomberg’s Richard Breslow suggests, correctly, that a little more caution is warranted given the off-side positioning, extreme valuation, and unknown unknowns involved – no matter what The Fed promises.

By all accounts the volumes being traded are running at strong levels. Some of that has to do with the Chinese markets being closed and proxy outlets have to be found elsewhere. Obviously portfolios have to be managed. And from the look of things, what appeared to be safely out-of-the-money options that were sold to pick up some “easy” money, in lieu of being able to earn a reasonable level of interest, don’t look quite as benign as before and need to be dealt with. That’s certainly been a driver of the overnight Treasury trade. There are all sorts of reasons to fully justify being active, including the old-fashioned one of trying to make a living.

But, interestingly enough, unlike when the trade headlines where popping up or Christmas was rapidly approaching, there doesn’t seem to be the usual chorus from advice-givers to lay low or avoid being involved altogether. Yet, this should be a much more difficult set of events to navigate than ones we’ve had a lot of practice with. And, unlike the others, we don’t always know what a given development even means. Of course, until investors get back on-side with their positions, we won’t really know what the next stage will look like.

Let’s stipulate that very few of us really have a clear understanding how this will play out and whether there will be lasting ramifications. Turning this into an exercise of equity sector rotation isn’t nearly as straightforward as it seems and may need to be unwound just as fast as it was implemented. But it’s what we do. Just keep in mind that every market gyration doesn’t imply that the trader or algorithm has a useful new insight.

The time of year is probably a factor. It’s harder to justify shutting up shop in January than December. And, it may not seem like it, as traders are spending a lot of time discussing what is a safe haven or not and risk-off was certainly the order of the day on Monday, but greed remains as much on people’s minds as fear. As ugly as is the news on the ground, investors are of the mindset to be looking for the renewed rally they are still sure will be coming.

The expectation that, if need be, the central banks will jump into the fray, is just too ingrained in our own reaction functions to be ignored. And that clearly affects investor behavior. Futures are moving toward greater and sooner potential cuts. Frankly, it strikes me as a dangerous game. At the risk of being accused as sacrilegious, not all problems can be solved by expediting some additional liquidity.

Negative rates won’t cause quarantined people to run out and spend. No matter what the theory says. But they very well might decide that increased saving is prudent.

Is this the dip for buying (like in 2000)?

There is little question, nor should there be, that the virus outbreak is the lead story driving markets and the news. But it’s worth keeping in mind that it isn’t the only one. Just make sure you don’t attribute absolutely everything that happens to some new development that you can’t find.


Tyler Durden

Tue, 01/28/2020 – 10:15

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Americans Haven’t Been This Confident In The Current Economy Since The Peak Of The DotCom Bubble

Americans Haven’t Been This Confident In The Current Economy Since The Peak Of The DotCom Bubble

After a mixed December (headline flat, current up, future down), analysts expected the ongoing ramp in stocks to have lifted the Conference Board consumer confidence survey in January.

Both present situation and futures expectations jumped, lifting the headline to its highest since August.

  • Consumer confidence in January rose to 131.6 vs 128.2 in prior month.

  • Present situation confidence rose to 175.3 vs 170.5 last month

  • Consumer confidence expectations rose to 102.5 vs 100.0 last month

Source: Bloomberg

The present situation reading is back at the highest level since the dotcom bubble peak…

Source: Bloomberg

The Labor Differential (Jobs Plentiful – Hard to Get) surged back near record highs…

Source: Bloomberg

Presumably this survey was undertaken before the latest downturn in stocks amid global pandemic concerns.

Finally, we wonder if – as we have seen in the past – if the spread between dis-saving and consumer confidence has once again been stretched too wide…

Source: Bloomberg

Still, as long The Fed promises to keep stock prices high, everything in the ‘economy’ must be awesome, right?


Tyler Durden

Tue, 01/28/2020 – 10:08

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Public Schools Are Teaching The 1619 Project in Class, Despite Concerns From Historians

The 1619 Project—The New York Times Magazine‘s much vaunted series of essays about the introduction of African slavery to the Americas—will now be taught in K-12 schools around the country.

School districts in Chicago, Washington, D.C., and Buffalo, New York, have decided to update their history curricula to include the material, which posits that the institution of slavery was so embedded in the country’s DNA that the country’s true founding could be said to have occurred in 1619, rather than in 1776.

“One of the things that we are looking at in implementing The 1619 Project is to let everyone know that the issues around the legacy of enslavement that exist today, it’s an American issue, it’s not a Black issue,” Dr. Fatima Morrell, associate superintendent for culturally and linguistically responsive initiatives for Buffalo Public Schools, told Buffalo’s NPR station.

Buffalo teachers and administrators have already begun studying the 1619 material so they can implement it into their curricula. The NPR story correctly notes that the essays examine “lesser-known consequences of slavery,” like “how plantation economics led to modern corporate, capitalist culture.”

Many historians, though, have questioned The 1619 Project’s accuracy. Five of them penned a letter to The New York Times expressing dismay “at some of the factual errors in the project and the closed process behind it.” These historians said the project’s contention that the American Revolution was launched “in order to ensure slavery would continue” was flat-out wrong.

Another historian, Phil Magness of the American Institute for Economic Research, has criticized Matthew Desmond’s 1619 Project essay, which claimed that modern American capitalism has its roots in plantation slavery. Magness has persuasively argued that this claim lacks verification, and that Desmond relied on bad data about cotton-picking rates in the pre-Civil War south.

“Desmond’s thesis relies exclusively on scholarship from a hotly contested school of thought known as the New History of Capitalism (NHC),” wrote Magness in a second article. “Although NHC scholars often present their work as cutting-edge explorations into the relationship between capitalism and slavery, they have not fared well under scrutiny from outside their own ranks.”

Some conservative critics have overreached: Former Republican Speaker of the House Newt Gingrich called The 1619 Project “propaganda” and suggested that the Times was trying to brainwash readers. That line of attack goes too far, but there are valid criticisms of the project’s ideological slant.

Citing Magness’ article, New York magazine’s Jonathan Chait hailed The 1619 Project as a valuable corrective, but cautioned that it shouldn’t be taught in schools a history. Magness agrees.

“Mandating the use of The 1619 Project in K-12 curricula is at best premature until these issues are resolved and the Times makes a good faith effort to answer its critics,” Magness tells Reason. “While there is merit to some of the themes raised by The 1619 Project, it continues to be marred by its empirically debunked and explicitly anti-capitalist assessment of the economics of slavery.”

Nikole Hannah-Jones, the Times reporter who spearheaded the project, has in general taken umbrage at the idea that there’s anything seriously wrong with the work. She came close to accusing The Atlantic‘s Conor Friedersdorf of racism for mildly critiquing the project. In an interview with Friedersdorf’s Atlantic colleague Adam Serwer, she insisted that history was not objective.

“I think my point was that history is not objective,” said Hannah-Jones. “And that people who write history are not simply objective arbiters of facts, and that white scholars are no more objective than any other scholars, and that they can object to the framing and we can object to their framing as well.”

Hannah-Jones is correct that the keepers of histories have always employed spin: History is written by the victors is a great aphorism because it’s true. School textbooks have often been filled with ideological nonsense—sometimes as part of a conservative or religious agenda. But that’s the irony of requiring The 1619 Project in high school history courses: It is itself a form of spin, and significant aspects of it are up for debate.

“The Buffalo school district’s decision also risks further politicizing the classroom with explicitly ideological content, not unlike the notorious cases we often hear about coming from the other side of the spectrum such as the Texas textbook review process, which has long been a bastion of the religious right,” says Magness.

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Public Schools Are Teaching The 1619 Project in Class, Despite Concerns From Historians

The 1619 Project—The New York Times Magazine‘s much vaunted series of essays about the introduction of African slavery to the Americas—will now be taught in K-12 schools around the country.

School districts in Chicago, Washington, D.C., and Buffalo, New York, have decided to update their history curricula to include the material, which posits that the institution of slavery was so embedded in the country’s DNA that the country’s true founding could be said to have occurred in 1619, rather than in 1776.

“One of the things that we are looking at in implementing The 1619 Project is to let everyone know that the issues around the legacy of enslavement that exist today, it’s an American issue, it’s not a Black issue,” Dr. Fatima Morrell, associate superintendent for culturally and linguistically responsive initiatives for Buffalo Public Schools, told Buffalo’s NPR station.

Buffalo teachers and administrators have already begun studying the 1619 material so they can implement it into their curricula. The NPR story correctly notes that the essays examine “lesser-known consequences of slavery,” like “how plantation economics led to modern corporate, capitalist culture.”

Many historians, though, have questioned The 1619 Project’s accuracy. Five of them penned a letter to The New York Times expressing dismay “at some of the factual errors in the project and the closed process behind it.” These historians said the project’s contention that the American Revolution was launched “in order to ensure slavery would continue” was flat-out wrong.

Another historian, Phil Magness of the American Institute for Economic Research, has criticized Matthew Desmond’s 1619 Project essay, which claimed that modern American capitalism has its roots in plantation slavery. Magness has persuasively argued that this claim lacks verification, and that Desmond relied on bad data about cotton-picking rates in the pre-Civil War south.

“Desmond’s thesis relies exclusively on scholarship from a hotly contested school of thought known as the New History of Capitalism (NHC),” wrote Magness in a second article. “Although NHC scholars often present their work as cutting-edge explorations into the relationship between capitalism and slavery, they have not fared well under scrutiny from outside their own ranks.”

Some conservative critics have overreached: Former Republican Speaker of the House Newt Gingrich called The 1619 Project “propaganda” and suggested that the Times was trying to brainwash readers. That line of attack goes too far, but there are valid criticisms of the project’s ideological slant.

Citing Magness’ article, New York magazine’s Jonathan Chait hailed The 1619 Project as a valuable corrective, but cautioned that it shouldn’t be taught in schools a history. Magness agrees.

“Mandating the use of The 1619 Project in K-12 curricula is at best premature until these issues are resolved and the Times makes a good faith effort to answer its critics,” Magness tells Reason. “While there is merit to some of the themes raised by The 1619 Project, it continues to be marred by its empirically debunked and explicitly anti-capitalist assessment of the economics of slavery.”

Nikole Hannah-Jones, the Times reporter who spearheaded the project, has in general taken umbrage at the idea that there’s anything seriously wrong with the work. She came close to accusing The Atlantic‘s Conor Friedersdorf of racism for mildly critiquing the project. In an interview with Friedersdorf’s Atlantic colleague Adam Serwer, she insisted that history was not objective.

“I think my point was that history is not objective,” said Hannah-Jones. “And that people who write history are not simply objective arbiters of facts, and that white scholars are no more objective than any other scholars, and that they can object to the framing and we can object to their framing as well.”

Hannah-Jones is correct that the keepers of histories have always employed spin: History is written by the victors is a great aphorism because it’s true. School textbooks have often been filled with ideological nonsense—sometimes as part of a conservative or religious agenda. But that’s the irony of requiring The 1619 Project in high school history courses: It is itself a form of spin, and significant aspects of it are up for debate.

“The Buffalo school district’s decision also risks further politicizing the classroom with explicitly ideological content, not unlike the notorious cases we often hear about coming from the other side of the spectrum such as the Texas textbook review process, which has long been a bastion of the religious right,” says Magness.

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Watch: CNN Calls Trump Supporters Stupid Illiterate Rednecks

Watch: CNN Calls Trump Supporters Stupid Illiterate Rednecks

Authored by Steve Watson via Summit News,

Don Lemon howls with laughter as panel imitate southern accents

This is CNN. During a discussion regarding the impeachment show trial, Don Lemon and a pair of talking heads devolved into imitating southern accents and declaring that anyone who can read or spell is an elitist, in an effort to mock Trump voters as stupid rednecks.

In an unbridled show of arrogance, Lemon cackled while blowhard Rick Wilson and New York Times op-ed writer Wajahat Ali suggested that anyone who voted for Trump is an illiterate dummy.

Wilson declared that “Donald Trump couldn’t find Ukraine on a map if you had the letter ‘U’ and a picture of an actual, physical crane next to it,” then asserted that Trump is backed only by a “credulous boomer rube demo” of Americans.

“Donald Trump’s the smart one, and there all y’all, y’all elitists are duuuumb.” Wilson shouted in a faux Southern accent.

“You elitists, with your geography and your maps and your spellin’.”  Ali joined in, with his own redneck impression.

“Your math and your readin!’” Wilson added, the hilarity in full flow.

“Yeah, your readin’, your geography, knowing other countries, sipping your latte,” said Ali.

“All those liiines on the map,” said Wilson.

“Only them elitists know where Ukraine is,” Ali added.

When Lemon finally composed himself,  he admitted “I needed that.”

This display is a prime example of why Trump will win a second term.

Sitting in a television studio on the East cost, calling Americans stupid and illiterate doesn’t tend to go over too well.

The ultimate irony is that Y’all elitists really are duuuumb.


Tyler Durden

Tue, 01/28/2020 – 09:50

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Bitcoin Surges Back Above $9,000; No, Coronavirus Is Not ‘Good For Crypto’

Bitcoin Surges Back Above $9,000; No, Coronavirus Is Not ‘Good For Crypto’

Bitcoin has extended its gains overnight, soaring back above $9,000…

Source: Bloomberg

Breaking back above its 200DMA…

Source: Bloomberg

The rest of the crypto space is also accelerating higher…

Source: Bloomberg

Many have noted the recent resurgence is in line with the bid for bonds and gold as safe-haven assets since the Coronavirus spreads, but that is being downplayed broadly by the crypto community.

As CoinTelegraph’s William Suberg reports, a report by the Financial Times with the headline “Coronavirus is good for Bitcoin” came in for particular criticism. Notably, the report cited two random Twitter accounts dedicated to altcoin XRP as sources.

image courtesy of CoinTelegraph

As Cointelegraph reported, Bitcoin has long exhibited increasingly strong technical fundamentals, which preceded recent price moves. 

Vays: virus would “hurt” BTC in epidemic scenario

Discussing the impact of coronavirus, trader Tone Vays nonetheless stopped short of agreeing with the idea that the disease could perpetually fuel further gains. 

If it were to spread internationally, for example, panicked investors would likely reduce speculative activity, meaning less interest in non-traditional assets such as Bitcoin. 

On the latest episode of his Trading Bitcoin YouTube series, Vays told viewers:

“The coronavirus does bring some economic fear, so the fear that the coronavirus could start to spread is certainly helping the rise of Bitcoin versus hurting the rise of Bitcoin.”

Vays also noted that Bitcoin would need to stay above $9,000 for several days to cement its recent bullish gains.


Tyler Durden

Tue, 01/28/2020 – 09:38

Tags
Business Finance

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CDC Issues Level 3 Warning: Avoid All Non-Essential Travel To China

CDC Issues Level 3 Warning: Avoid All Non-Essential Travel To China

Following comments from the WHO chief that the coronavirus is only a China problem, not a global problem – which seems false given the apparent first non-Chinese death this morning in Thailand (and is perhaps only designed to maintain elevated risk asset prices around the world) – the Centers for Disease Control and Prevention (CDC) has raised its travel warning to level 3 for China – Avoid all non-essential travel.

  • CDC recommends that travelers avoid all nonessential travel to China. In response to an outbreak of respiratory illness, Chinese officials have closed transport within and out of Wuhan and other cities in Hubei province, including buses, subways, trains, and the international airport.  Additional restrictions and cancellations of events may occur.

  • There is limited access to adequate medical care in affected areas.

A novel (new) coronavirus is causing an outbreak of respiratory illness that began in the city of Wuhan, Hubei Province, China. This outbreak began in early December 2019 and continues to grow. Initially, some patients were linked to the Wuhan South China Seafood City (also called the South China Seafood Wholesale Market and the Hua Nan Seafood Market).  

Chinese health officials have reported thousands of cases in China and severe illness has been reported, including deaths. Cases have also been identified in travelers to other countries, including the United States. Person-to-person spread is occurring in China. The extent of person-to-person spread outside of China is unclear at this time.

Coronaviruses are a large family of viruses. There are several known coronaviruses that infect people and usually only cause mild respiratory disease, such as the common cold. However, at least two previously identified coronaviruses have caused severe disease — severe acute respiratory syndrome (SARS) coronavirus and Middle East respiratory syndrome (MERS) coronavirus. 

Signs and symptoms of this illness include fever, cough, and difficulty breathing. This novel coronavirus has the potential to cause severe disease and death. Available information suggests that older adults and people with underlying health conditions or compromised immune systems may be at increased risk of severe disease.

In response to this outbreak, Chinese officials are screening travelers leaving some cities in China. Several countries and territories throughout the world are reported to have implemented health screening of travelers arriving from China.

On arrival to the United States, travelers from China may be asked questions to determine if they need to undergo health screening. Travelers with signs and symptoms of illness (fever, cough, or difficulty breathing) will have an additional health assessment.

What can travelers do to protect themselves and others?

CDC recommends avoiding nonessential travel to China. If you must travel:

  • Avoid contact with sick people.

  • Discuss travel to China with your healthcare provider. Older adults and travelers with underlying health issues may be at risk for more severe disease.

  • Avoid animals (alive or dead), animal markets, and products that come from animals (such as uncooked meat).

  • Wash hands often with soap and water for at least 20 seconds. Use an alcohol-based hand sanitizer if soap and water are not available.

If you were in China in the last 14 days and feel sick with fever, cough, or difficulty breathing, you should:

  • Seek medical care right away. Before you go to a doctor’s office or emergency room, call ahead and tell them about your recent travel and your symptoms. 

  • Avoid contact with others.

  • Not travel while sick.

  • Cover your mouth and nose with a tissue or your sleeve (not your hands) when coughing or sneezing.

  • Wash hands often with soap and water for at least 20 seconds. Use an alcohol-based hand sanitizer if soap and water are not available.

*  *  *

Does any of that sound like this is “contained”… or just a China problem?


Tyler Durden

Tue, 01/28/2020 – 09:23

Tags
Health Medical Pharma

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Despite Soaring Mask Demand, 3M Slashes 1,500 Jobs In Global Restructuring

Despite Soaring Mask Demand, 3M Slashes 1,500 Jobs In Global Restructuring

Despite soaring demand for their products (anti-virus masks are sold out worldwide), shares of 3M are slipping after the company will slash 1,500 jobs in a global restructuring program as its auto parts and electronics segments come under pressure amid slowing global growth. 

In a statement, the company said the restructuring program would span across “all business groups, functions, and geographies.” The company expects pretax savings of $110 to $120 million from the changes.

The company reduced its profit forecast several times last year as the global synchronized slowdown showed limited signs of abating, along with continued deceleration in China and imploding automotive and electronics markets. 

CEO Mike Roman said the restructuring would create a soft-landing for the company to capitalize on a rebound. 

Roman said 3M would “continue to manage challenges in certain key end markets.” He added that today’s results were in line with the company’s expectations. 

The coronavirus could be a massive boost for 3M Medical, as their masks are in high demand across the world.

Still, China shutting down cities and factories across industrial zones could spark a more pronounced slowdown for the global economy in the first quarter, ultimately weighing on aggregate future 3M earnings. 


Tyler Durden

Tue, 01/28/2020 – 09:12

Tags
Business Finance

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