As Stocks Tumble, “Market Is In Control Of Puts” Tyler Durden
Wed, 10/28/2020 – 08:55
An ugly overnight session for US equity markets echoed Europe’s bloodbathery but has shifted the underlying technicals in the market to favor the downside. DAX is now down 12% from its October highs.
As Art Cashin wrote earlier
“.. the heaviest part of the selloff coincided with announcement that Macron of France would make a national address at 8:00 p.m. Paris time (around the New York close). Speculation runs to multi-week lockdown and possibly even closing the borders.”
And that is dragging on US stocks…
As SpotGamma details, futures have broken down to 3340 which now places the market in control of puts.
As we have discussed at length the big concern at this price level is for volatility to rapidly expand. This is because there are large Dec put positions and as the market pushes lower it may activate heavier put hedging.
This also likely makes the market more sensitive to changes in implied volatility[IV]. As volatility(ie VIX) rises the value of puts increases and additional dealer short hedges may be required (this hedge adjustment around IV changes is that “Vanna” buzzword).
Gamma is tilted towards Puts, may indicate puts are expensive. Negative gamma is moderate, favoring further swings in the market
Of course puts being closed and/or IV coming down could push dealers to buy back short hedges. The issue here is that most of the puts are related to election and/or end of year hedges, and as such the bulk of them will likely be held through any “pre election” selling.
For today we think monitoring IV (VIX) is key – higher VIX likely means lower markets and vice versa.
3300 is the obvious downside level and the Delta Neutral Price level is at 3276, with 3400 the the only resistance area we see above.
Is it time for a call yet?
via ZeroHedge News https://ift.tt/3kD3A10 Tyler Durden
Europe On The Cusp Of New Lockdowns As Brussels Plots Pan-EU Restrictions: Live Updates Tyler Durden
Wed, 10/28/2020 – 08:39
Summary:
Brussels to discuss EU-wide measures
Germany prepares return to partial lockdown
France mulls new measures
Czech Republic and Poland suffer new records
Texas cases see biggest jump in 2 months
Mainland China reports 42 more cases
BoJo faces pressure for new lockdown
UK vaccine task force warns: prepare for imperfect vaccines
* * *
The drumbeat of European economies moving back toward lockdown intensified Wednesday morning after German Chancellor Angela Merkel pushed for stronger curbs on movement and contact, including closing bars, restaurants, gyms and other nonessential businesses through the end of November.
It comes as Italy and Spain impose their toughest nationwide restrictions since the end of lockdown, while France, which has relied heavily on localized restrictions targeting the worst-hit metro areas, weighs a potential return to lockdown, with President Emmanuel Macron reportedly favoring a one-month return to nonessential business closures.
France, widely seen as Europe’s epicenter as it booked upwards of 50k new cases a day over the weekend, reported 523 new deaths, including 235 in nursing homes and other government facilities, the highest total death toll since April.
Among the smaller Western European economies, the Netherlands, Belgium and Denmark are all struggling with outbreaks raging well beyond their springtime levels. Belgium, the seat of the EU, has become the worst hit country in the bloc.
Merkel has pledged to do all she can to avoid imposing another lockdown as strict as the one that hammered Europe’s biggest economy in the second quarter. The latest measures — which would take effect Nov. 4 — are designed to stem the spread of the disease while broadly allowing activity to continue, though they’re likely to provoke protests from industry groups and from citizens already weary of what they see as government intrusion into their private lives. She’s expected to join talks with local leaders of Germany’s 16 states on Wednesday to discuss proposed new curbs. According to a draft seen by Reuters, Merkel wants to keep schools and nurseries open, while much else would shut.
Thanks to surging case numbers in the US and Europe, global cases topped 44 million on Wednesday morning, according to Johns Hopkins, while global deaths numbered 1,168,568. Worldwide, another 450k+ new cases were reported yesterday.
European stocks were understandably rattled by the surprisingly rapid acceleration in the virus over the past week, and US stock futures pointed to a lower open.
Already, though, Germany’s latest restrictions are provoking a backlash with the vice president of Germany’s lower house of parliament to declare on national radio that he won’t follow the new rules. The country saw new cases rise Wednesday by a record 14,964 to a total of 464,239.
Meanwhile, European Commission President Ursula von der Leyen is expected to release a set of proposals later on Wednesday ahead of a Thursday conference call with EU leaders. Charles Michel, her counterpart at the European Council of EU leaders, called for enhanced bloc-wide measures, including to boost testing capabilities and the deployment of vaccines once they are ready.
Here’s some more news from overnight and Wednesday morning:
Texas cases +7,055 which is the largest daily increase in more than 2 months and deaths +81 (Newswires/Twitter).
New York Governor Cuomo is said to be seeking to keep 95% of the US out of New York due to COVID-19 after he included California to the list of 39 states that would require quarantines. Elsewhere, Illinois Governor announced to suspend indoor dining in Chicago beginning on Friday (Newswires).
Cases in Belgium rose by 13,571 and that COVID-19 hospitalizations in Belgium were expected to surpass the peak of the first wave within 24 hours (Newswires/Twitter).
India’s total cases are on the edge of crossing the 8 million mark as the country reports 43,893 new infections for the past 24 hours, up from 36,470 the previous day. The country’s death toll climbed by 508 to 120,010 (Source: Nikkei).
Mainland China reported 42 new COVID-19 cases for Tuesday, the highest daily toll in more than two months due to a rise in infections in the northwestern Xinjiang region (Source: Nikkei).
UK PM Johnson is said to be pressured for a new lockdown as the government assumes a deadlier second wave, with a lower but longer peak expected for COVID-19 deaths (Source: the Telegraph).
UK vaccine task force chair Bingham said the first generation of COVID-19 vaccines will likely be imperfect and that people should be prepared vaccines may not prevent infection but rather lessen symptoms, while she also suggested that vaccines may not work for all people or for long period (Source: the Lancet).
via ZeroHedge News https://ift.tt/34BJKOe Tyler Durden
In this post I’ll consider the original meaning of the second requirement of the Constitution’s citizenship clause: that a person be born “subject to the jurisdiction” of the United States. (More detailed discussion and citations can be found in Part II.B of my forthcoming article.)
As noted in my introductory post, writers such as John Eastman and Michael Anton claim the original meaning of “subject to the jurisdiction” excludes from citizenship the U.S.-born children of temporary visitors and undocumented migrants (and, perhaps, of all alien parents). I think they’re clearly mistaken.
I’ll start with a methodological point. Much past debate on this subject has focused on parsing the clause’s drafting debates or speculating about the drafters’ intent. These matters may be worth considering, but they shouldn’t be the starting point. Instead, we should start with the text and with the contemporaneous meaning of the key phrase.
The citizenship clause’s text begins, as discussed in my prior post, with the requirement of birth “in the United States.” It then adds the further requirement of birth “subject to the jurisdiction” of the United States. So our inquiry is framed as: in the nineteenth century language and context in which the clause was written, who was in the United States yet not subject to its jurisdiction?
As with the first part of the clause, Chief Justice Marshall provides a good beginning. In Schooner Exchange v. McFaddon (1812), writing for the Court, Marshall discussed “a nation’s jurisdiction,” which he equated with national sovereign authority. Generally, Marshall said, a nation had jurisdiction over all people and things within its territory. But there were three exceptions, which he listed: foreign sovereigns themselves, foreign ambassadors and foreign armies. These exception apart, though, Marshall emphasized that aliens within sovereign territory were otherwise “amenable to the jurisdiction” of the United States (meaning governed by U.S. law).
Henry Wheaton, the leading nineteenth-century American writer on international law, described national jurisdiction in a similar way, using the phrase “subject to the jurisdiction.” Ordinarily, Wheaton wrote in Elements of International Law (1836), a nation had “jurisdiction,” meaning “sovereign power of municipal legislation,” within its territory. But, he continued, foreign ambassadors and their households had diplomatic immunity under international law and so were “excluded from the local jurisdiction.” Immunity thus was an exception from the territorial jurisdiction to which they, as aliens within sovereign territory, would otherwise be subject.
There was another category of people described in the nineteenth century as in the United States but not subject to U.S. jurisdiction: tribal Native Americans. This sounds odd to modern ears because the U.S. claimed ultimate authority over the tribes. But the U.S. commonly (at the time) entered into treaties guaranteeing tribes authority over internal matters, including governance of tribal members. Some treaties expressly referred to tribal “jurisdiction.” And key nineteenth-century writers such as James Kent described the situation (in Goodell v. Jackson, 1823): “Though born within our territorial limits, the Indians are considered as born under the jurisdiction of their tribes.”
The nineteenth-century idea of national jurisdiction was interrelated with citizenship law. Prior to the Fourteenth Amendment, citizenship law was mostly common law, and U.S. common law tracked the British principle of jus soli (birth within sovereign territory). A longstanding exception to jus soli citizenship was the children of diplomatic households, who were not U.S. citizens although born in U.S. territory. A similar exception existed (in theory) for children of foreign armies, again arising from their exclusion from U.S. jurisdiction; Justice Story, for example, directly linked these ideas in describing citizenship law in Inglis v. Trustees of Sailor’s Snug Harbor (1830). And likewise, Native Americans were not treated as citizens if they were born within tribal society because, as Kent explained in the passage quoted above, they were under the jurisdiction of the tribes, not the jurisdiction of the United States.
Also consistent with the idea of jurisdiction, the U.S.-born children of aliens (other than diplomats and armies) were considered U.S. citizens. In McCreery’s Lessee v. Somerville (1824), for example, the Supreme Court (per Justice Story) treated as uncontroversial the U.S. citizenship of the U.S.-born child of Irish alien parents. In Lynch v. Clarke (1844), a New York court directly held that U.S.-born children of alien temporary visitors were U.S. citizens.
Thus when the Fourteenth Amendment’s drafters picked the phrase “subject to the jurisdiction,” it had an established meaning that was already closely connected to citizenship. The first part of the citizenship clause (“born in the United States”) adopted the territorial principle of jus soli. The second part embraced the longstanding exclusions from the jus soli principle: people in U.S. territory but nonetheless not under U.S. sovereign authority, namely diplomats, foreign armies and tribal Native Americans, who had not traditionally been born citizens.
The Senate debates, where the citizenship clause was developed, bear this out. Initially, the proposed Amendment guaranteed rights to citizens without defining citizens. Senator Wade pointed this out and suggested guaranteeing rights to all persons born in the United States. Senator Fessenden objected that some U.S.-born people were not citizens under existing law (which Wade acknowledged, mentioning ambassadors). Senator Howard then proposed the language that became the citizenship clause, describing the “subject to the jurisdiction” language as excluding children of ambassadors.
Senators next debated whether Howard’s language continued the exclusion of tribal Native Americans from citizenship (which they favored). Howard said that it did, adopting the prior explanation that U.S. laws didn’t extend to the tribes’ internal affairs. A revision to expressly exclude tribal members was defeated as unnecessary.
Finally, the Senators considered the citizenship of U.S.-born children of aliens. Senator Cowan objected (in overtly racial terms) that the proposal would make citizens of U.S.-born children of Chinese immigrants on the West Coast. California Senator Conness (himself an Irish immigrant) agreed it would have this effect, but enthusiastically endorsed it. No Senator disagreed with the Cowan/Conness interpretation, including Howard (who wrote the clause) and Senator Trumbull (who originally introduced the proposed Amendment). Indeed, in an earlier exchange with Cowan, Trumbull said that U.S.-born children of Chinese immigrants (like all U.S.-born children of immigrants) should be considered citizens. And the Senate then adopted Howard’s language without further revision.
Thus, as with the first part of the clause, the drafting history confirms the pre-drafting ordinary meaning of the relevant language. “Subject to the jurisdiction” of the U.S. meant people under U.S. sovereign authority. That included everyone within U.S. territory, excluding only foreign diplomats, foreign armies and native tribes. (As shown by the Court’s decision in Fleming v. Page, discussed in my last post, it was possible to be subject to U.S. jurisdiction outside U.S. territory; anyone in this category would be excluded from citizenship by the first part of the clause).
In my next post, I’ll discuss why this original meaning includes the U.S.-born children of undocumented migrants, and consider some leading counterarguments.
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Boeing Beats As It Burns $5 Billion In Q3, Will Cut Another 11,000 Workers Tyler Durden
Wed, 10/28/2020 – 08:24
Boeing stock rebounded after the struggling aerospace giant reported sales, EPS and cash burn that were stronger than expected, and announced it was looking to fire another 7,000 workers while 4,000 would be lost through attrition as it now expects a workforce of only 130,000 by the end of 2021, down sharply from 160,000 at the start of 2020. The reason: the company said it was still “significantly impacted” by Covid-19, and the ongoing 737 Max woes.
A quick recap of Boeing’s Q3 numbers:
Revenue $14.14 billion, -29% y/y, beating the estimate $13.84 billion
Core loss per share $1.39 vs. EPS $1.45 y/y, beating the estimate loss/share $2.08
Boeing said Q3 operating margin decreased to 7.3% primarily due to lower commercial services volume and additional severance costs.
On the production front, the total backlog dropped 16% Y/Y to just $393 billion, or about 4,300 commercial planes
Commercial plane deliveries were ugly, tumbling 56%Y/Y to just 28, if a +40% improvement q/q; Commercial Airplanes revenue of $3.60 billion was in line with estimates of $3.60 billion.
Elsewhere, Defense, Space & Security revenue was $6.85 billion, estimate $7.12 billion, while Global Services revenue $3.69 billion, estimate $3.59 billion.
In a presentation slide on 737 Max, Boeing said Commercial Airplanes expensed $590MM of abnormal production costs during three months ended Sept. 30.
Boeing also reported that Q3 operating cash burn rose to $4.82 billion, doubling from a year ago, if slightly better than the estimated cash burn of $4.92 billion.
Amusingly, the company which last quarter was on the verge of collapse, still has an investment grade BBB-/Baa2 rating with a debt load of over $60 billion. Meanwhile, its cash declined by over $5 billion in the quarter, from $32.4BN to $27.1BN.
Of course, one could argue that none of the company’s earnings matter and the only thing investors want to know is when will things get back to normal, and according to the report, passenger traffic will returning to 2019 levels in 3 years.
Until then, the company has to slash costs, which is why Boeing’s CEO Dave Calhoun told employees that the company aims to have a staff of 130,000 by the end of 2021 according to CNBC. Earlier this year, Boeing targeted a 10% cut to its staff, which stood at 160,000 people at the start of the year.
“As we align to market realities, our business units and functions are carefully making staffing decisions to prioritize natural attrition and stability in order to limit the impact on our people and our company,” CEO Dave Calhoun said in a staff note. “We anticipate a workforce of about 130,000 employees by the end of 2021. Throughout this process, we will communicate with you every step of the way.”
Meanwhile as Boeing sill struggles with its “cost-cutting” 737 MAX crisis which started two years ago and grounded the fleet of airplanes, the pandemic’s impact on air travel demand, which is still not back to half of last year’s levels, has further worsened Boeing’s plight. Regulators are at the tail-end of the planes’ review but have still not signed off on them, preventing Boeing from delivering them to customers and crimping its cash flow as a result.
In response to the slightly stronger than expected results and the continued cost-cutting, the stock was modestly higher in pre-market trading.
via ZeroHedge News https://ift.tt/3oCljbi Tyler Durden
Gundlach: Trump Will Win Next Week, And By 2027 “There Will Be Some Sort Of Revolution” Tyler Durden
Wed, 10/28/2020 – 08:14
Back at the start of 2016, when nobody else would even consider such an outcome, DoubleLine Capital CEO Jeff Gundlach shocked the economic, financial and political establishments when during the January Barron’s roundtable of that year, he predicted that Donald Trump would become the next US president. He was right.
Fast forward to today when one week before the elections, and in an environment when most polls predict that Biden will crush Trump and where Nate Silver gives Trump just as 13% chance of defeating Trump, Jeffrey Gundlach is predicting another victory for President Donald Trump.
As Financial Advisor magazine reported, during a Tuesday webcast as part of Schwab’s 2020 IMPACT conference, Gundlach said that despite polls, analysis and betting odds that suggest otherwise, Trump is likely to outpace former Democratic vice president Joe Biden in the contest.
“The polls right now say he isn’t going to win, but they said that four years ago,” said Gundlach referring to the following chart.
“Mind you, my conviction is way lower than it was four years ago. But back in [that period], when Trump was little more than an asterisk in the betting odds, I predicted he was going to win. This one is much more murky, but in my eyes, it favors a Trump win.”
Addressing the elephant in the room, Gundlach said that public political polls are often “designed to create impressions” rather than illustrate reality, said Gundlach, and shouldn’t be trusted (for more on this read our post from 2016 “New Podesta Email Exposes Playbook For Rigging Polls Through “Oversamples“). He also argued that many Trump voters are unwilling to engage with pollsters and the media because they fear retribution for their political beliefs, also known as the “shy voter” phenomenon according to which “Over 10% Of Trump Voters Won’t Admit Preferences To Pollsters.” Biden also faces an enthusiasm problem, said Gundlach.
Gundlach then went on to crush hopes of a Blue Wave, arguing that Republicans will likely keep the Senate regardless of who wins – mainly because of uncertainty around Biden. “Some people will hedge their bets and split their vote towards retaining the Republican Senate because they view Biden as risky,” said Gundlach, who noted that Trump is often portrayed as riskier than Biden. And yet, in the four years of his presidency, there have been no international conflicts, despite some outrageous and bellicose language.
“You might dislike Trump or some of his policies, but risk is not what you’re getting with him, particularly compared to turning the presidency over to another party, and particularly when that party’s candidate isn’t saying what some of his policy positions are.”
If Gundlach is wrong, and Biden wins the election and eventually rolls back or eliminates the corporate tax reduction from 2017’s Tax Cuts and Jobs Act, U.S. equity valuations would increase sharply, said the DoubleLine CEO, but he added that the reduction in after-tax earnings would mean that stock prices would not appreciate. Interest rates, volatility and inflation would also rise, said Gundlach.
“Markets don’t like certainty, and with Trump, I think you have more certainty,” said Gundlach. “With Biden, you have peak uncertainty because there’s been very little information given to the public.”
Gundlach clarified that he doesn’t think Biden is a socialist, but that pressured by the Democratic Party’s base, his administration would pursue higher taxation and “socialist policies,” but it’s hard to be sure because Biden has changed many of his positions over his long political career.
The opposite is true of Biden’s running mate, California Senator Kamala Harris, who Gundlach called “one of the most left-leaning people in all of the Senate” who is not shy about sharing her opinions.
Gundlach then said that Americans should consider the all too real possibility that a Biden victory means that at some point within the next four years, Harris will ascend to the presidency.
“We have to discount the probability of outright socialist policies with outrageous amount of deficit spending,” said Gundlach. “That would pose a big problem for stock and bond markets.”
Yet no matter who the winners is on Nov 3, Gundach said that 2020 is just another in a series of election cycles that have increased in their tumult and oddity.
At this point Gundlach went “full Zero Hedge“, and predicted that by 2027, economic inequality, strained by fiscal and monetary policy, would come to the point of some sort of revolution, which would put the 2024 presidential election directly in the path of massive social, economic and political change. Which, incidentally, is more or less everything that we have been saying for the past 12 years.
“When I said that I think Trump is going to win in 2016, I also said that if you think 2016 is weird, just wait for 2020,” said Gundlach.
“Well, if you think 2020 is weird, just wait until 2024. You ain’t seen nothing yet.”
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In this post I’ll consider the original meaning of the second requirement of the Constitution’s citizenship clause: that a person be born “subject to the jurisdiction” of the United States. (More detailed discussion and citations can be found in Part II.B of my forthcoming article.)
As noted in my introductory post, writers such as John Eastman and Michael Anton claim the original meaning of “subject to the jurisdiction” excludes from citizenship the U.S.-born children of temporary visitors and undocumented migrants (and, perhaps, of all alien parents). I think they’re clearly mistaken.
I’ll start with a methodological point. Much past debate on this subject has focused on parsing the clause’s drafting debates or speculating about the drafters’ intent. These matters may be worth considering, but they shouldn’t be the starting point. Instead, we should start with the text and with the contemporaneous meaning of the key phrase.
The citizenship clause’s text begins, as discussed in my prior post, with the requirement of birth “in the United States.” It then adds the further requirement of birth “subject to the jurisdiction” of the United States. So our inquiry is framed as: in the nineteenth century language and context in which the clause was written, who was in the United States yet not subject to its jurisdiction?
As with the first part of the clause, Chief Justice Marshall provides a good beginning. In Schooner Exchange v. McFaddon (1812), writing for the Court, Marshall discussed “a nation’s jurisdiction,” which he equated with national sovereign authority. Generally, Marshall said, a nation had jurisdiction over all people and things within its territory. But there were three exceptions, which he listed: foreign sovereigns themselves, foreign ambassadors and foreign armies. These exception apart, though, Marshall emphasized that aliens within sovereign territory were otherwise “amenable to the jurisdiction” of the United States (meaning governed by U.S. law).
Henry Wheaton, the leading nineteenth-century American writer on international law, described national jurisdiction in a similar way, using the phrase “subject to the jurisdiction.” Ordinarily, Wheaton wrote in Elements of International Law (1836), a nation had “jurisdiction,” meaning “sovereign power of municipal legislation,” within its territory. But, he continued, foreign ambassadors and their households had diplomatic immunity under international law and so were “excluded from the local jurisdiction.” Immunity thus was an exception from the territorial jurisdiction to which they, as aliens within sovereign territory, would otherwise be subject.
There was another category of people described in the nineteenth century as in the United States but not subject to U.S. jurisdiction: tribal Native Americans. This sounds odd to modern ears because the U.S. claimed ultimate authority over the tribes. But the U.S. commonly (at the time) entered into treaties guaranteeing tribes authority over internal matters, including governance of tribal members. Some treaties expressly referred to tribal “jurisdiction.” And key nineteenth-century writers such as James Kent described the situation (in Goodell v. Jackson, 1823): “Though born within our territorial limits, the Indians are considered as born under the jurisdiction of their tribes.”
The nineteenth-century idea of national jurisdiction was interrelated with citizenship law. Prior to the Fourteenth Amendment, citizenship law was mostly common law, and U.S. common law tracked the British principle of jus soli (birth within sovereign territory). A longstanding exception to jus soli citizenship was the children of diplomatic households, who were not U.S. citizens although born in U.S. territory. A similar exception existed (in theory) for children of foreign armies, again arising from their exclusion from U.S. jurisdiction; Justice Story, for example, directly linked these ideas in describing citizenship law in Inglis v. Trustees of Sailor’s Snug Harbor (1830). And likewise, Native Americans were not treated as citizens if they were born within tribal society because, as Kent explained in the passage quoted above, they were under the jurisdiction of the tribes, not the jurisdiction of the United States.
Also consistent with the idea of jurisdiction, the U.S.-born children of aliens (other than diplomats and armies) were considered U.S. citizens. In McCreery’s Lessee v. Somerville (1824), for example, the Supreme Court (per Justice Story) treated as uncontroversial the U.S. citizenship of the U.S.-born child of Irish alien parents. In Lynch v. Clarke (1844), a New York court directly held that U.S.-born children of alien temporary visitors were U.S. citizens.
Thus when the Fourteenth Amendment’s drafters picked the phrase “subject to the jurisdiction,” it had an established meaning that was already closely connected to citizenship. The first part of the citizenship clause (“born in the United States”) adopted the territorial principle of jus soli. The second part embraced the longstanding exclusions from the jus soli principle: people in U.S. territory but nonetheless not under U.S. sovereign authority, namely diplomats, foreign armies and tribal Native Americans, who had not traditionally been born citizens.
The Senate debates, where the citizenship clause was developed, bear this out. Initially, the proposed Amendment guaranteed rights to citizens without defining citizens. Senator Wade pointed this out and suggested guaranteeing rights to all persons born in the United States. Senator Fessenden objected that some U.S.-born people were not citizens under existing law (which Wade acknowledged, mentioning ambassadors). Senator Howard then proposed the language that became the citizenship clause, describing the “subject to the jurisdiction” language as excluding children of ambassadors.
Senators next debated whether Howard’s language continued the exclusion of tribal Native Americans from citizenship (which they favored). Howard said that it did, adopting the prior explanation that U.S. laws didn’t extend to the tribes’ internal affairs. A revision to expressly exclude tribal members was defeated as unnecessary.
Finally, the Senators considered the citizenship of U.S.-born children of aliens. Senator Cowan objected (in overtly racial terms) that the proposal would make citizens of U.S.-born children of Chinese immigrants on the West Coast. California Senator Conness (himself an Irish immigrant) agreed it would have this effect, but enthusiastically endorsed it. No Senator disagreed with the Cowan/Conness interpretation, including Howard (who wrote the clause) and Senator Trumbull (who originally introduced the proposed Amendment). Indeed, in an earlier exchange with Cowan, Trumbull said that U.S.-born children of Chinese immigrants (like all U.S.-born children of immigrants) should be considered citizens. And the Senate then adopted Howard’s language without further revision.
Thus, as with the first part of the clause, the drafting history confirms the pre-drafting ordinary meaning of the relevant language. “Subject to the jurisdiction” of the U.S. meant people under U.S. sovereign authority. That included everyone within U.S. territory, excluding only foreign diplomats, foreign armies and native tribes. (As shown by the Court’s decision in Fleming v. Page, discussed in my last post, it was possible to be subject to U.S. jurisdiction outside U.S. territory; anyone in this category would be excluded from citizenship by the first part of the clause).
In my next post, I’ll discuss why this original meaning includes the U.S.-born children of undocumented migrants, and consider some leading counterarguments.
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Futures Tumble, European Stocks, Oil Plummet As Europe Imposes Partial Lockdowns Tyler Durden
Wed, 10/28/2020 – 07:56
U.S. futures continued their slump, hitting a three-week low as shares in Europe and crude oil tumbled after tighter covid restrictions in Germany and France sparked fear of even broader lockdowns. European stocks dropped to a 5 month low with all 20 sectors were in the red, while safe havens such as the dollar and Treasuries rose. Oil and gold slipped, while Bitcoin surged to the highest since January 2018. The VIX Index climbed to the highest level since June, rising as high as 37 overnight.
With hopes for a new fiscal stimulus deal before the election dead and buried and all attention shifting to covid, Wynn Resorts and United Airlines Holdings, companies sensitive to restrictions, dropped more than 1% in premarket trading. Energy firms such as Occidental Petroleum Corp fell 2.8% on concerns over fuel demand. Microsoft’s quarterly results smashed analysts targets, benefiting from a pandemic-driven shift to working from home and online learning. However, its shares fell 2% after rising 35% so far this year after its sales forecasts in key units missed estimates, overshadowing a revenue beat on cloud demand. The other Big Tech companies – Apple, Alphabet, Amazon and Facebook – which are due to report results on Thursday, fell between 0.9% and 1.6%. GE jumped in early trading after posting a surprise profit and positive industrial free cash flow.
Spiraling pandemic, elevated unemployment levels and U.S. lawmakers failing to strike a deal on fresh fiscal stimulus before the Nov. 3 election sent the S&P 500 and tech-heavy Nasdaq to their lowest close in three weeks on Tuesday.
“We’ve been warning investors over the last few days in particular to maybe pare back a little bit of their strong risk position,” Laura Fitzsimmons, JPMorgan Australia’s executive director of macro sales, said on Bloomberg TV. “As you see the odds start to wane a little bit more for Biden, maybe that continues a bit more. We all remember four years ago when markets were very much surprised.”
Meanwhile, surging new cases and hospitalizations set records in the U.S. Midwest, while in Europe, concerns over a national lockdown in France hammered risk appetite. Overnight Germany proposed closing bars and restaurants for a month, while France reportedly favors a one-month lockdown from midnight tomorrow. Turkey barred doctors and nurses from taking leave, resigning or retiring.
Europe’s Stoxx 600 Index fell as much as 2.7%, before trimming its decline to 2%. Earlier in the session, Asian stocks fared better. The MSCI Asia Pacific Index was almost flat on Wednesday, and markets in South Korea and Shanghai posted modest gains. In China, indicators tracked by Bloomberg showed the recovery continued to display mixed signals while remaining broadly steady in October.
On the political front, Trump plans 11 rallies across 10 states in the final 48 hours of campaign travel, CBS reported. The president is also considering issuing an executive order requiring an economic analysis of fracking as he tries to woo Pennsylvania and Ohio.
China’s yuan depreciated as local banks abandoned inclusion of a key factor used to calculate the currency’s fixing. The offshore yuan weakened 0.1% to 6.7211 per dollar.
As reported yesterday, some banks stopped using the counter-cyclical factor in their formulas for the fixing recently, according to an official statement released Tuesday. The removal of the factor, which was first introduced in 2017 to rein in depreciation, suggests Beijing hopes to slow a rapid advance in the currency since May. “The change could increase renminbi volatility ahead,” Citigroup Inc. strategists led by Sun Lu wrote in a note, using the yuan’s official name. “We think the risk-reward for bullish offshore yuan exposure may start to look attractive again” when the currency edges close to 6.75-6.80.
In rates, Treasuries extended this week’s gains with yields as much as 1.5bp richer across 5- to 30-year sectors as S&P futures touch fresh three-week lows. Treasury 10-year yields around 0.753%, lagging bunds by ~1bp as risk-off backdrop supports European fixed income; gilts also slightly outperform. Bunds outperform with euro-area stocks plunging almost 3% amid rising coronavirus infections and toughening lockdowns. Auctions resume Wednesday with $55b 5-year note sale.
In FX, the dollar rose with the yen and Treasuries, amid broad based risk aversion. The Bloomberg Dollar Spot Index rose to its highest level in more than one week and the Treasury curve bull-flattened as a continued rise in coronavirus infections and an approaching U.S. election boosted demand for havens. The euro slipped to a session low of $1.1743, and was set for its steepest three-day decline versus the dollar in five weeks, as Europe’s governments prepared to tighten restrictions due to the rising virus count, which may aslo fuel more dovish rhetoric from the European Central Bank at Thursday’s review. The yen advanced to a five-week high, and was the only Group-of-10 currency to rise versus the dollar while Sweden’s krona and Norway’s krone led losses among peers. The Australian dollar gave up an Asia-session gain which followed a rebound in the nation’s quarterly consumer prices.
Elsewhere, oil retreated back below $38 a barrel in New york after an industry report pointed to a bigger-than-expected increase in U.S. crude stockpiles. Brent plunged 4%, dropping below $40 for the first time in a month on slowing global demand concerns.
Economic data include mortgage applications, wholesale inventories. Visa, Mastercard and Amgen are among the highlights of a busy earnings day. Earnings season continues, with Visa, Mastercard, United Parcel Service, Amgen, Boeing, GlaxoSmithKline, Ford Motor Company, General Electric and Nomura all reporting.
Market Snapshot
S&P 500 futures down 1.5% to 3,333.75
MXAP down 0.2% to 175.60
MXAPJ down 0.2% to 583.26
Nikkei down 0.3% to 23,418.51
Topix down 0.3% to 1,612.55
Hang Seng Index down 0.3% to 24,708.80
Shanghai Composite up 0.5% to 3,269.24
Sensex down 1.8% to 39,790.97
Australia S&P/ASX 200 up 0.1% to 6,057.74
Kospi up 0.6% to 2,345.26
STOXX Europe 600 down 2.6% to 343.47
German 10Y yield fell 2.1 bps to -0.636%
Euro down 0.4% to $1.1753
Brent Futures down 3.1% to $39.91/bbl
Italian 10Y yield fell 3.8 bps to 0.498%
Spanish 10Y yield rose 2.3 bps to 0.181%
Brent Futures down 3.1% to $39.91/bbl
Gold spot down 0.2% to $1,903.48
U.S. Dollar Index up 0.4% to 93.32
Top Overnight News from Bloomberg
German Chancellor Angela Merkel proposed closing bars and restaurants for a month and French President Emmanuel Macron prepared to announce tougher restrictions that may include a lockdown as hospitals fill up across Europe
As the European Union seeks to disburse funds from its 750 billion-euro ($888 billion) recovery program as soon as next year, some of the countries hardest hit by the pandemic are struggling to work out how to best keep their finances in check once they take on billions of euros of new loans
Data due Thursday are forecast to show U.S. gross domestic product surged an annualized 32% in the third quarter, almost double the previous high. That figure will reflect activity switching back on across the country after Covid-19 fears and government stay-at-home orders ground the economy to a halt in April
China’s economic recovery displayed mixed signals while remaining broadly steady in October, with small businesses turning more cautious and the property market weakening even as car sales soar. The aggregate index combining eight early indicators tracked by Bloomberg was unchanged from the previous month
A quick look at global markets courtesy of NewsSquawk
Asian equity markets lacked firm direction following the mixed performance of stateside peers as earnings season and the upcoming election provided a cautious setting, while US stock index futures were further pressured after-hours on European shutdown concerns after reports stated that France and Germany were both mulling nationwide lockdowns. ASX 200 (+0.1%) was indecisive with initial declines due to underperformance in the energy sector amid weaker oil prices and with financials also subdued after ANZ Bank flagged a AUD 528mln hit to earnings, although the losses in the index were eventually pared by ongoing tech resilience. Nikkei 225 (-0.3%) and KOSPI (+0.6%) were varied as participants reflected on quarterly results and with the BoJ kickstarting its 2-day policy meeting where no major fireworks are expected. Hang Seng (-0.3%) and Shanghai Comp. (+0.5%) conformed to the choppy price action amid earnings and with Hong Kong resuming the underperformance against the mainland, despite the continued rally in tech heavyweight Tencent which extended on record highs and flirted with the HKD 600 level after it having recently averted a US WeChat ban. Finally, 10yr JGBs mildly extended above the psychological 152.00 level as prices benefitted from the cautious risk tone in Japan and following recent upside in T-notes, but with gains capped as the BoJ began its 2-day policy meeting where the central bank is widely expected to hold off from any policy tweaks.
Top Asian News
The Pessimist’s Guide to Jack Ma’s Record-Breaking Ant IPO
Bharti Airtel Jumps After 14 Million New Users Boost Sales
Korea Consumer Confidence Jumps Most Since 2009 as Virus Eases
Nomura’s Overhaul Pays Off With Help From Traders, Dealmakers
European equities (Eurostoxx 50 -2.5%) trade with heavy losses as the prospect of further lockdown restrictions in the Europe triggers investor concern over the region’s recovery prospects. In Germany, the DAX (-2.7%) is enduring significant downside amid reports that German Chancellor Merkel is pushing for tougher restrictions which would see the closure of restaurants and bars and limit people’s movements until the end of November. Losses for the index have also been exacerbated by Beiersdorf (-6.2%) and BASF (-4.0%) post-earnings with the former unable to reassure investors despite posting an encouraging performance in Q3. Delivery Hero (+4.4%) are the only gainer in the DAX after Q3 orders reached a new record, with the Co. also likely to benefit from any restrictions that limit seated restaurant bookings. CAC 40 (-2.7%) is also lagging its peers amid reports that the French government may impose a month-long national lockdown to combat the COVID pandemic which could take effect from midnight on Thursday. From a sectoral standpoint, losses are hitting some of the more cyclically exposed sectors hardest with laggards comprising of autos, banking and oil & gas names. Of note for the banking sector, Deutsche Bank (+1.9%) have seen shallower losses than peers after posting a Q3 profit of EUR 128mln (vs. a prior Y/Y loss of EUR 942mln) amid strong performance in its investment banking division with the Co. also upgrading its FY20 revenue outlook. Elsewhere for the industry, Danske Bank (-1.1%) raised its FY20 net profit outlook alongside Q3 earnings with the Co. citing more favourable market conditions. In what has been a particularly downbeat session thus far, bucking the trend are the likes of Next (+4.4%), Carlsberg (+1.6%) and Morphosys (+0.8%) post-earnings.
Top European News
Aston Martin Soars After Securing Mercedes’s Help Out of Crisis
Novachuk, Kim Agree to Buy KAZ Minerals for 640 Pence/Share
European Stocks Dive Again With More Lockdowns Piling Up
Johnson’s Unhappy Tories Fight Each Other Over U.K. Virus Plans
In FX, the Buck has reclaimed its safe-haven mantle and is firmer vs all G10 peers, bar the Yen amidst a severe downturn in risk sentiment on heightened concerns about the exponential 2nd coming of COVID-19 that is threatening to shutdown several European economies, while forcing others to reimpose stricter measures to combat the pandemic. The index has duly rebounded above 93.000 after an agonisingly close test of Monday’s low yesterday, and has registered a fresh w-t-d peak at 93.401 to expose half round number resistance at 93.500 that is arguably only being protected by the fact that Usd/Jpy has retreated further from recent highs and further towards 104.00.
AUD – Aside from the generally deteriorating tone, fractionally firmer than forecast q/q inflation in Q3 has partly countered more dovish overtones from the RBA to keep the Aussie afloat on the 0.7100 handle, albeit some distance from 0.7150+ highs due to headwinds from weaker PBoC midpoint Cny fix without the counter-cyclical quotient (6.7195 vs 6.6989 previously).
GBP/NZD/CAD/EUR/CHF – Sterling has finally succumbed to what seemed like the inevitable as clearly substantial support and bids around the 1.3000 mark in Cable has yielded to a breach of DMAs sitting on top of 1.2990 stops that have now been triggered to a circa 1.2964 trough. Similarly, the Kiwi has relinquished 0.6700+ status vs its US counterpart, while running into offers in Aud/Nzd ahead of 1.0600 and the Loonie has lost underlying support from crude prices as the clock ticks down to the BoC, as Usd/Cad rebounds from around 1.3178 to 1.3240. Elsewhere, the Euro is sub-1.1750 as the coronavirus cases mount, but could yet be drawn back to decent option expiry interest between 1.1750-60 (1 bn) and the Franc has fallen beneath 0.9100 following a near miss on Tuesday.
SCANDI/EM – No shock that the Nok is also tracking the reversal in oil and unwinding outperformance vs the Eur from 10.8000+ at best this week so far to under 10.9000 again, but the Sek has gleaned some encouragement from relatively upbeat Swedish retail sales, in contrast to Norway’s much weaker than expected consumption, plus improvements in consumer and industrial sentiment, with Eur/Sek holding below 10.3500 and well away from very large expiries at 10.4000 (2.2 bn). Conversely, not even a rise in Turkish economic confidence to compliment an upturn in consumer morale or the CBRT flagging a V-shaped GDP rebound in Q3 have rescued the Try from more pronounced depreciation as President Erdogan sticks to a tough line on defending its border with Syria. Hence, the Lira continues to sink and is now eyeing 8.3000 vs 8.2920 at worst, so far.
In commodities, WTI and Brent front-month futures succumbed to the early pressure in sentiment around the European equity cash open (see equity section); fresh fundamental drivers were lacking but the move was seemingly driven by intensifying COVID-19 concerns with various areas considering/to implement lockdowns. Alongside having a broad sentiment effect such newsflow would have directly impacted crude prices given the demand-side implications that further lockdowns would likely entail. At present, WTI and Brent Dec’20 & Jan’21 respectively are posting losses in excess of 3% and are in proximity to session lows with Hurricane Zeta unable to offset the decline via its supply-side implications; particularly as a number of rigs have indicated they will continue operations through the storm. The most recent BSEE update showed just shy of 50% of oil production shut-in for the Gulf of Mexico, with the survey encapsulating a much more representative 38 companies compared to the 7 in the initial report for Hurricane/Strom Zeta. Data wise, the private inventories showed a build of 4.58mln last night and expectations for today’s EIA’s are for a slightly more modest build of 1.23mln. Moving to metals, spot gold is subdued this morning in-spite of the risk tone as the metal succumbs to pressure from the DXY which has continued to print highs throughout the morning; at present, spot gold is in proximity to the USD 1900/oz mark.
8:30am: Wholesale Inventories MoM, est. 0.4%, prior 0.4%
8:30am: Retail Inventories MoM, est. 0.5%, prior 0.8%
DB’s Jim Reid concludes the overnight wrap
The pandemic has interfered with my once in every five year trip to the theatre. We were going to see Hamilton this past weekend but of course it was cancelled some time ago. However after buying a subscription to Disney+ for the children we stumbled across their exclusive film recording of the show over the last two nights (too long for one sitting). I must admit for someone who doesn’t really like musicals I was seriously impressed.
Given the mounting covid restrictions our family may be getting good value out of our Disney+ subscription over the coming weeks. France and Germany look set to move towards some form of “lockdown lite” over the next 24-48 hours with more info likely today and tomorrow. For France it was reported that this could be based around a new one-month lockdown starting midnight on Thursday, though it will be more flexible than the initial one from last Spring. We’ll find out more tonight from President Macron’s address to the nation. Meanwhile, German Chancellor Merkel, according to reports out of Germany, is aiming for tough restrictions of her own that will be released to Germany’s 16 state premiers at a meeting tomorrow. While schools and daycares will remain open, restaurants will be shuttered and all major events would be cancelled as of tomorrow if reports on Bloomberg are correct. Germany’s Bild newspaper has confirmed this theme this morning adding that Merkel wants to close fitness studios, casinos, bars and cinemas with restaurants only offering take-outs.
So the virus news doesn’t get much better and I suppose the problem with the second wave is that although we are far better prepared than we were for the first wave the reality is that the first wave occurred late in the traditional flu/cold/virus season. The second wave still hasn’t even hit November or December yet and we’re still seeing cases soar in many places.
More on the virus later but in terms of markets, US equities moved between gains and losses most of yesterday before the S&P 500 settled down -0.30%. Technology stocks gained as chipmaker Advanced Micro Devices announced a $35bn stock deal for competitor Xilinx. The massive deal boosted sentiment across the industry and saw tech (+0.52%) help lead the S&P, though the overall index was not able to overcome losses in the Energy (-1.38%) and Industrials (-2.18%) sectors. With the tech outperformance the Nasdaq rose +0.64%, rebounding after Monday’s large losses. The VIX rose just under one point to 33.25, its highest level since September 3rd.
Asian markets are mixed this morning with the Shanghai Comp (+0.36%) and Kospi (+0.30%) up while the Nikkei (-0.45%) and Hang Seng (-0.18%) are down. Futures on the S&P 500 are also down -0.56%. In FX, the US dollar index is up +0.18%. Elsewhere, WTI crude oil prices are down -2.20% and Microsoft was down -1.74% in after hours trading as forecast for revenue in some divisions fell short of the highest analysts’ projections.
Earlier European equities gave ground for the second straight day as worries over rising case numbers and the ensuing restrictions continued to take hold. The STOXX 600 closed down -0.95% to its lowest level since 29 May. The overall negative sentiment bled through markets and pulled down European Banks (-3.27%), even as HSBC rose +5% initially (+3.37% at the close) after signaling it could resume dividends, while Spain’s Santander initially rose +3.8% (-1.46% at the close) after beating earnings expectations. Other bourses saw deeper loses with the IBEX (-2.14%), CAC 40 (-1.77%), FTSE 100 (-1.09%), and FTSE MIB (-1.53%) falling further.
The fading risk sentiment globally saw sovereign yields decline once more. US 10yr Treasury yields came in -3.3bps while 10yr gilt yields were down -4.3bps and bund yields down -3.5bps. There was a slight amount of widening in peripheral spreads to bunds, except for Italy where the possible passage of a €5bn fiscal stimulus bill may have helped the spread of 10yr BTPs to bunds to tighten (-0.4bps) slightly. Other havens were mixed, as the dollar ticked slightly lower (-0.11%) and gold rallied +0.31% to $1908/oz.
With regards to the election this time next week we will be waking up to the morning after the night before. It is not yet clear that we will have a winner at this time as many State Secretaries and voting commissions are hedging their bets that they will indeed be able to project the winner by next Wednesday morning. We are likely to have some states counted though, particularly from those who are able to process and count mail in ballots ahead of November 3. Former Vice President Biden remains +9.1pts and +7.4pts ahead in the fivethirtyeight and realclearpolitics polling averages respectively, while the former’s model gives him an 88% chance of winning – the highest yet – even if the poll lead has fallen from the recent peaks. Florida is likely one state to pay close attention to next Tuesday night as the state has experience with large numbers of mail ballots, polls close fairly early in the night, and without that state President Trump’s paths to victory dwindle precipitously. Realclearpolitics has the race effectively tied in the state now, with Mr Trump technically edging ahead for the first time by +0.4pp, though fivethirtyeight, which weights polls on quality, has Mr Biden up by +2.0pps.
Rising covid-19 cases continue to be in focus. Russia, which is seeing record highs in newly confirmed cases and deaths in recent days, is not expected to reintroduce new mobility restrictions. However, as of today, mask-wearing will be mandatory in some public places and the country may look to limit restaurant hours. Much of Eastern Europe which largely missed the first wave is currently seeing record numbers of weekly cases per 10k including the Czech Republic (81.3), Romania (15.2), Hungary (14.1) and Bulgaria (13.7). While testing has been a clear differentiator, the latter three still trail the sharp rise seen in parts of Western Europe that are seeing the virus for the second time including Belgium (89.2), France (41.1), Netherlands (39.4), Switzerland (47.2) and the UK (22.9). Meanwhile, France reported 530 fatalities yesterday, the largest one day jump since April 22.
In the US, Covid-19 hospitisations are up at least 10% in the last week in 32 states as the current case spike is translating into hospital visits. Illinois, which has been a hot spot in recent weeks announced that indoor dining will be suspended in Chicago starting Friday, as hospital admissions have doubled in the last month. Similarly positivity rates for tests have doubled since early October there. Denver, Colorado also expanded restrictions by limiting business capacity to 25% as of yesterday, with stay-at-home orders being considered.
We got some vaccine news as Novavax announced they would need to delay their late-stage study of its Covid-19 vaccine until late November. Competitor Pfizer indicated that its late-stage trial had not yet conducted an interim efficacy analysis as fewer than 32 cases of Covid-19 have occurred among the trial’s participants. Once that level is reached, in a trial that currently has over 42,000 patients, the first of four efficacy analysis can be conducted. This pushes back the vaccine timeline slightly as there were hopes we would have their efficacy data this week. There was some talk about it being delayed to avoid it being politicised this close to the election although this was only speculation. The company remains “cautiously optimistic” that the vaccine will work though based on the robust immune response from early trials. Overnight, Pfizer’s CEO has reiterated that the company may know by the end of October whether its vaccine is effective.
There was a slew of US data yesterday that showed that the recovery still had momentum, with most data points beating estimates. The preliminary September durable goods orders outperformed (1.9% vs 0.5% expected) while nondefence capital goods orders ex-air came in above expectation as well (1.0% vs 0.5). It was a good sign for manufacturers who have seen steady recent demand. August’s FHFA house price index was +1.5%, well above the +0.7% expected and July’s +1.0% reading. The Richmond Fed manufacturing index was up to 29 (vs 18 expected), the largest reading for the index since September 2018. Lastly, October’s Conference Board consumer confidence reading just missed at 100.9 (vs 102.0 expected) and down a touch from last month’s 101.3 reading.
Data today will include France’s October consumer confidence as well as the US’s weekly MBA mortgage applications and preliminary September wholesale inventories. From global central banks there will be monetary policy decisions from the Bank of Canada and the Central Bank of Brazil. Earnings season continues, with Visa, Mastercard, United Parcel Service, Amgen, Boeing, GlaxoSmithKline, Ford Motor Company, General Electric and Nomura all reporting.
via ZeroHedge News https://ift.tt/3jCwBso Tyler Durden
National Guard Responds As 1000s Of Looters Ransack Philly In 2nd Night Of Chaos; Reporter Brutalized By “BLM Rioters” Tyler Durden
Wed, 10/28/2020 – 07:24
After 30 officers were wounded on Monday evening, including one who remains hospitalized with a broken leg after being hit by a truck, thousands of looters massed in downtown Philadelphia on Tuesday for a second night of chaos, where entire big box department stores were emptied of merchandise, while officers were attacked and at least one reporter was badly beaten.
Fewer police were injured on Tuesday, possibly due to the fact that they gave the worst of the rioters a wide berth, at one point reporting that there were several thousand people in the afflicted area of West Philadelphia, looting stores and carrying off everything from food to big-screen TVs.
Some on social media couldn’t help but make light of the situation (after all, humor is one of the most effective coping mechanisms).
Of course, it’s not a riot without copious video of masked thieves pouring out of department stores clutching whatever merchandise they could grab.
This is America. This is your country. These are your fellow citizens who share with you all of the attendant rights and responsibilities of living in the greatest country in the world. Think about that. What would you tell them if you were there? pic.twitter.com/WBHfXmauyq
At one point, the rioters stopped to terrorize a Jewish neighborhood.
Black Lives Matter rioters in Philadelphia threaten, assault, and chase out Jewish residents claiming “you don’t live here” and call them members of the “Synagogue of Satan.” pic.twitter.com/pKEssPeGLi
The driver of a stolen car recklessly slammed into another driver, tipping over a truck, before the occupants of the stolen vehicle quickly scurried away.
As a CVS was being looted in Philadelphia, the driver of a suspected stolen car rams right into a truck that was stopped at the intersection and tipped it over. The occupants of the car promptly fled the scene following the collision. pic.twitter.com/iLSAnnXP1q
Philly’s national guard mobilized Tuesday in response to the prior night’s unrest, and the police department said even more officers were on the streets. Some reported that a U-Haul was driven up to a Wal-Mart in Philly, where it was quickly filled with merchandise.
Looters are reportedly carrying TVs & other electronics out of a Walmart in Philadelphia; other reports say some looters have loaded U-Haul trucks with stolen goods https://t.co/5qDujKMZ5v
Notably, PA’s Dem Governor Tom Wolf broke with other democratic governors and ordered in the guard without hesitation, a clear sign that he’s aware the unrest could impact the results of the upcoming presidential race, in which Philly is a critical swing state (some say whoever wins Philadelphia will carry the day).
In a statement, the White House denounced the violence and looting as yet another consequence of Democratic officials
Philly’s Mayor Jim Kenney yesterday urged everybody to withhold their judgment pending an investigation, though he acknowledged that the footage of the incident was alarming and presents “difficult questions.”
Like many of you, I viewed the video of the tragic shooting of Walter Wallace, Jr. that occurred yesterday. It presents difficult questions that must be answered. The Officer Involved Shooting Investigation Unit of @PhillyPolice will conduct a full investigation.
Meanwhile, the official account for the Philly police tweeted throughout the night, first warning citizens to avoid the area of Castor and Aramingo where most of the looting took place.
Outside West Philly (where a certain Fresh Prince was memorably born and raised), about 1,000 other looters hit shops in the Port Richmond neighborhood in the northern section of the city.
*Alert* A large crowd of appx 1000 is looting businesses in the area of Castor and Aramingo. Avoid the area
The Philadelphia Police Department is requesting that all residents in the 12, 16, 18, 19, 24, 25, and 26th Districts remain indoors except when necessary. These areas are experiencing widespread demonstrations that have turned violent with looting.
The violent protests broke out hours after Philadelphia cops shot and killed 27-year-old Walter Wallace Jr. on Monday, after his family summoned police to the house once again for help dealing with his mental health issues. At one point, he advanced on police with knife, after refusing orders to drop it, provoking police to open fire. Police officials said the men weren’t armed with tasers due to budget cuts. Video of the incident went viral on social media. The man’s father told the press that his son had been shot at least ten times, though he denounced the violence and looting.
At least 90 people have been charged in the violent protests so far, police said Tuesday, and that number could rise as investigations continue and the unrest intensifies.
BlazeTV reporter Elijah Shaffer was badly beaten after being jumped by “BLM rioters” while filming inside a store that was being actively looted.
He published footage of the encounter, and its aftermath, below.
BREAKING: I was jumped by BLM rioters while they were looting more than a dozen stores,
Unfortunately, Philly wasn’t the only American city brutalized by riots last night. To recap.
Tuesday recap:
– Philly looted, several killed, journalists assaulted, Jews abused
– Brooklyn trashed by rioters, police run over
– Dodgers fans loot semi-truck in LA, rioting
– Seattle rioters assault drivers
– DC rioters attack precinct, riot over man who died in police pursuit
And that was just in the US: In Nigeria, demonstrations continued as international support for a burgeoning police reform movement after soldiers opened fire on protesters a few nights ago.
via ZeroHedge News https://ift.tt/37Nc4PH Tyler Durden
Turkish Bloodbath: Lira Plunges To Record Low After CBRT Hikes Inflation Target Tyler Durden
Wed, 10/28/2020 – 07:22
Another day, another bloodbath for the Turkish lira.
After tumbling to an all time low of 8.20 against the dollar late in Tuesday trading, the Turkish currency plunged to a new all time low this morning sliding 1.4% to 8.302 and extending earlier losses after the Turkish central bank raised its inflation outlook by more than 3% after a series of surprise interest-rate decisions failed to bolster a lira weakened by policy steps and international spats, and strongly hinting that the central bank appears resigned to a much weaker currency .
Consumer-price growth will finish the year at 12.1%, compared with a previous forecast of 8.9%, Governor Murat Uysal said Wednesday in Istanbul as he unveiled the final inflation report of 2020. He added that the central bank will maintain its tight monetary policy until inflation improves, warning that a weak lira poses risks to price stability.
Well, price stability only worsened because the currency extended its drop as the governor spoke…
… as it is now unclear what else the CBRT can do: having first eased monetary policy to boost the currency, then tightening, no matter what the central bank does the Turkish lira remains a one-way trade where any remaining longs get steamrolled on a daily basis.
“In the period ahead, we can take all the necessary steps, including on policy interest rates, to control inflation by monitoring price developments,” Uysal said. The lira is “extremely undervalued,” he said.
Uysal also crushed hopes for a possible central bankafter saying that the central bank has no target for the the nominal or real exchange rate but is sensitive to volatility that could jeopardize stability.
Some more highlights of his speech:
Inflation to decline to 9.4% by the end of 2021, also an upward revision from 6.2%
End-2020 food inflation estimated at 13.5%, compared with 10.5% previously
The central bank’s 2020 average oil price forecast remains unchanged at $41.6 per barrel
Inflation to slow following the first quarter next year
As Bloomberg notes, the central bank’s latest projections suggest an even bleaker outlook for inflation this year than forecast by the government. Treasury and Finance Minister Berat Albayrak raised government forecasts in September to 10.5% at the end of 2020 and 8% the following year. The projections came a week after the central bank delivered a surprise 200-basis-point rate hike that was intended to stem the slide in the currency.
Investors considered it insufficient, however, and the lira continued to fall, buffeted by geopolitical risk as Turkey intervened in conflicts and renewed diplomatic tussles over energy finds in the Mediterranean.
Another unexpected decision followed on Oct. 22, when the central bank held the benchmark while raising the upper bound of its interest-rate corridor. That rattled markets as it signaled the central bank’s once more focused on stealth tightening to support the currency.
“Pressures on inflation and the lira are likely to push the Turkish central bank to being more conventional,” according to VTB Capital analyst Akin Tuzun, who expects an outright rate hike in November.
In devising policy, the governor must weigh market reaction with the demands of President Recep Tayyip Erdogan, who continues to cast a long shadow over monetary policy.
Erdogan handpicked Uysal to replace a governor who had failed to comply with his wishes to cut interest rates. The Turkish leader is a firm believer that high borrowing costs fuel inflation. Most economists and central banks around the world believe the opposite. And now, the Turkish currency which is in absolute collapse, is paying the price for Erdogan’s “monetary unorthodoxy.”
The currency’s slide of over 27% this year has distorted previous central bank inflation projections. Uysal predicted earlier this year that annual price growth would drop to single digits from the second half, only for it to end the third quarter at 11.8%.
The governor also said he expects the exchange rate to normalize in the medium term saying that state banks are active in the currency market from time to time, alas not today with the Turkish population increasingly rushing to converts its worthless lira into something tangible.
Finally, the central banker said reserves are sufficient to meet short-term needs, with Turkey in the final stage of securing new currency swap deals. Unfortunately, the market now appears focused on the medium and long-term needs, and it is there that it sees the all too real possibility the country runs out of FX reserves…
via ZeroHedge News https://ift.tt/3oztNA3 Tyler Durden
