China Sells Dollar Bonds Directly To US Buyers For The First Time, Gets Record Demand

China Sells Dollar Bonds Directly To US Buyers For The First Time, Gets Record Demand

Tyler Durden

Thu, 10/15/2020 – 18:00

On Thursday, China for the first time sold dollar-denominated bonds directly to US buyers and with the Chinese 10Y offering a record 2.5% pickup in yield compared to 10Y Treasuries, it’s hardly a surprise that demand was off the charts.

The $6 billion bond offering which took place in Hong Kong,  drew record demand, in part due to the attractive yield offered by Chinese paper and in part due to China’s impressive recovery from the coronavirus, with an orderbook more than $27 billion, or roughly $10 billion more than an offering of the same size last November, according to the FT, which added about 15% of the offering went to American investors.

The $6BN USD-denominated bond offering was as follows:

  • $1.25BN in 3-year dollar bonds at 0.425%
  • $2.25BN 5-year dollar bonds at 0.604%
  • $2BN 10-year dollar bonds at 1.226%
  • $500MM 30-year dollar bonds at 2.310%

The yield on the 10-year bond was about 0.5% above the equivalent US Treasury, and helped the bond sales receive “a strong reception from US onshore real money investors”, said Samuel Fischer, head of China onshore debt capital markets at Deutsche Bank, which helped arrange the deal. Other arrangers of the bond sale included Standard Chartered, Bank of America, Citigroup, Goldman Sachs and JPMorgan.

What was unique about today’s offering is that unlike previous issuance, “the debt was sold under a mechanism that gave institutional investors in the US the chance to buy in.”

Somewhat surprising is that frictions between Beijing and Washington had no impact “at all” on demand from US buyers, which included an American pension fund, one banker told the FT. In fact, the strategic timing of the bond sale which was arranged by the Chinese government just weeks before Americans head to the polls for the presidential election was meant to show “how tightly the financial systems of the two countries are linked, despite a trade war and tensions over technology and geopolitics.”

“This is the investor community showing confidence in [China’s] recovery,” said another banker on the sale, who added that “US investor participation in Chinese paper is not reduced by any means.”

Analyst responses were broadly enthusiastic about the offering:

Frances Cheung, head of macro strategy for Asia at lender Westpac, said the issuance suggested Beijing believed restrictions on access to dollar funding were “very unlikely to become a policy option” for Washington.

Hayden Briscoe, head of fixed income for Asia Pacific at UBS Asset Management, said the bonds would help “set the benchmark” for Chinese corporates such as petrochemical groups Sinopec and Sinochem, which also borrow in dollars.  “A lot of their expenses are in US dollars, and they borrow in the dollar market to match funds to that.”

He added that the bonds benefited from strong demand partly due to their scarcity value. “There’s so few of them and they suit sovereign wealth fund type buyers — they tend to just disappear.”

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Amy Coney Barrett’s Confirmation Hearings Were a Master Class in Political Posturing

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“I think it’s good for the country to have this,” said Sen. Lindsey Graham (R–S.C.) on Monday, the first day of Amy Coney Barrett’s Supreme Court confirmation hearing. “I doubt it’s going to change any minds in terms of how we vote. But I like the idea that a lifetime nominee to the Supreme Court can be challenged, can be tested, and can be understood by the public.”

As the fourth and final session came to a close Thursday, it was hard to believe that the Senate Judiciary Committee met those standards in the way Graham intended.

Barrett was challenged, yes, but mostly by Democrats who pushed her to stake out positions on political questions and feigned outrage when she responded that a good judge does not make decisions based on her own opinions: “My personal views don’t have anything to do with how I would decide cases,” she said. Even so, Barrett’s patience was almost certainly tested by a series of lectures from Democrats on her purported views and by monologues from Republicans on why Democrats are bad. 

After a week of hearings, it’s very unlikely that the public understands Barrett better now than they did on Monday, considering that the committee spent more time posturing than probing the judge’s judicial philosophy. Grandstanding may be an effective political strategy, but it didn’t tell us anything useful or significant about Barrett, and it won’t affect the outcome of her confirmation vote. 

The format for the hearings went something like this: Several Democrats began their allotted time slots, reserved for questioning the nominee, with complaints of procedural unfairness, invoking the COVID-19 pandemic and harkening back to the GOP’s unwillingness to confirm Merrick Garland to the Supreme Court during former President Barack Obama’s last year in office. The word “unprecedented” was thrown around a lot. 

Senators would typically then transition into a speech—emphasis on speech, it was often question-free—about politically-charged issues to which they posit Barrett is a threat: the Affordable Care Act, abortion, same-sex marriage, immigration, and climate change. On day three, we actually heard some questions, but they usually pertained to how Barrett feels about hot-button political topics and corresponding legal precedents—questions that would be unprofessional and unwise to answer given that her feelings are irrelevant. Good jurists should cast aside personal policy preferences when scrutinizing the law, a point Barrett reminded the committee of repeatedly.

Here’s a representative exchange from Wednesday on Obergefell v. Hodges (2015), the Supreme Court ruling legalizing same-sex marriage nationwide:

Sen. Richard Blumenthal (D–Conn.): Think of how you would feel as a gay or lesbian American, to hear that you can’t answer whether the government can make it a crime for them to have that relationship. Whether the government can enable people who are happily married to continue that relationship. Think of how you would feel.

Barrett: Well, Senator, implying that I’m poised to say that I want to cast a vote to overrule Obergefell, and I assure you I don’t have any agenda. And I’m not even expressing a view in disagreement of Obergefell. You’re pushing me to try to violate the judicial canons of ethics and to offer advisory opinions, and I won’t do that.

Such was the common thread that tied the hearings together. Barrett’s judicial philosophy was mentioned on occasion—she considers herself an originalist—though not often in a way that would help the American public better understand that strain of legal thought. Sen. Amy Klobuchar (D–Minn.) mentioned it, for instance, in commenting on the parallels between Barrett and the late Justice Antonin Scalia, for whom Barrett clerked. But Klobuchar’s comments implied that a conservative or originalist approach somehow disqualifies Barrett for the position.

“You said you consider Justice Scalia one of the most conservative judges in our nation’s history as a mentor,” Klobuchar said Wednesday. “So, to me, these tracks lead us to one place. And that is that you will have the polar opposite judicial philosophy of Justice Ginsburg. And, to me, that would change the balance of this court, which is already 5-4 and known as very conservative when you look back through history to 6-3. 6-3. And that would have great repercussions for the American people.” It’s worth mentioning that, though Ruth Bader Ginsburg was an accomplished woman and jurist, she did not own her Supreme Court seat. The American people do.

Other senators preferred to actively campaign. Consider the speech Sen. Kamala Harris (D–Calif.) gave on Tuesday: “After President Trump was elected, Washington Republicans spent nearly a year trying to repeal the ACA [Affordable Care Act], but I will always remember the thousands of Americans from all over our country in all walks of life, who crowded into the halls of the United States Capitol to require that lawmakers see their faces and understand how they would be hurt if there was a repeal of the Affordable Care Act,” Harris said. “Together, with many of my colleagues, I joined civil rights and community leaders to speak to the thousands of people who gathered outside the Capitol, as they pleaded, as they begged with lawmakers to do the right thing.” 

Graham wasn’t above this approach. In response to the complaints he heard on Monday, he opened Tuesday’s hearings with the opposite pitch: “From my point of view, Obamacare has been a disaster for the state of South Carolina,” he said. “All of you over there want to impose Obamacare on South Carolina. We don’t want it. We want something better. We want something different. You know what we want in South Carolina? South Carolina care, not Obamacare.”

The ACA was a popular topic throughout the hearings, and Democratic senators treated Barrett as if she were running to be a senator herself, with the power to make laws rather than evaluate their constitutionality. As Reason‘s Jacob Sullum writes,  the idea that Barrett will overturn the ACA is based on fear, not fact. But such an approach is par for the course for the modern U.S. Congress, which has offloaded much of its legislative duties to the judiciary and the executive branch. 

Nowhere was that mindset more relevant than in Wednesday’s discussions on climate change. Another exchange between Blumenthal and Barrett is instructive:

Blumenthal: You believe that human beings cause global warming?

Barrett: Well, Senator Blumenthal, I don’t think I am competent to opine on what causes global warming or not.

Blumenthal: We all have views on it. I’m asking for your opinion.

Barrett: I don’t think that my views on global warming or climate change are relevant to the job I would do as a judge, nor do I feel like I have views that are informed enough, and I haven’t studied scientific data. I’m not really in a position to offer any kind of informed opinion on what I think causes global-

Blumenthal: Do you agree with the President on his views of climate change?

Barrett: I don’t know that I have seen the President’s expression of his views on climate change.

Though there were some exceptions—Sen. Ben Sasse (R–Neb.) comes to mind—most Republican Senators spent their time railing at their colleagues across the aisle. Sometimes it felt appropriate, as when senators tried to counteract what they saw as unfair characterizations of Barrett’s opinions on the 7th Circuit. Other times, not so much.

“I think it speaks volumes that collectively, they’ve had very few questions for you,” began Sen. Ted Cruz (R–Texas) on Tuesday. He then lobbed two softball questions before launching into a 25-minute speech that appeared more appropriate for a campaign stop.

Sen. Josh Hawley (R–Mo.) used a chunk of his time Wednesday to cover Section 230 of the Communications Decency Act, antitrust, and economic concentration, which are now his pet issues in the Senate. And while he stopped short of probing her opinion, he may as well have: “Whether it’s Section 230 or the antitrust laws, one effect of this is to see growing concentrations of power in this country economically that I think are very significant threats to the ongoing operation of our democracy, to the basic ability of the people to control the levers, both of the economy and of culture and of government,” he said. “So I won’t ask for your view on this because these are cases, these are issues, that you very may well be called upon to weigh in on. I hope that you are. But I hope that you will give these issues consideration.”

For her part, Sen. Marsha Blackburn (R–Tenn.) used both her Tuesday and Wednesday slots to talk about the left’s “attack machine” against conservative women. “Women can have it all,” she said, addressing Barrett, who is a mother of seven children, “just not at the same time.” Sen. John Kennedy (R–La.) asked Barrett who does the laundry in her household.

Much has been made about a return to normalcy in politics, and this week provided a preview of that. “I just want to thank you,” said Sen. Dianne Feinstein (D–Calif.) to Graham. “This has been one of the best set of hearings that I’ve participated in.” Graham expressed similar sentiments. The hearings were generally civil and a far cry from Justice Brett Kavanaugh’s hearings in September 2018. But they’re also a reminder of why congressional business-as-usual doesn’t serve the American people.

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Judge Barrett on the Lochner Era and the “Switch in Time”

Most law professor finish their careers as law professors. Not these two. Former-Professor Josh Hawley is now a Senator from Missouri. And former-Professor Amy Coney Barrett is on the cusp of the Supreme Court. Hawley asked Barrett about Justice Holmes’s Lochner dissent. Her answer expanded into the Lochner era, and the “Switch in Time.” I searched the Gorsuch transcript, and there were no references to Lochner. The Kavanaugh record is not yet prepared, but I do not recall any discussions of Lochner.

The exchange runs from 6:38-9:03.

SEN. HAWLEY: Justice Oliver Wendell Holmes, Jr. said in the famous Lochner case, in his famous dissent in that case, over a century ago, he said “the 14th Amendment does not enact Mr. Herbert Spencer’s Social Statics.” Do you agree with that statement? What do you think he was getting at with that?

JUDGE BARRETT: Justice Holmes‘ famous dissent in Lochner, which was later the position adopted by the Court [in Williamson v. Lee Optical], was that courts should not pour their ideas of good economic policy into the 14th Amendment to stand in the way of policies that the legislatures enact. For example, on questions of maximum hours for bakery workers, minimum wages, those kind of things.

SEN. HAWLEYYou mentioned economic policy. Talk to us a little bit about how a court could substitute its own views in the place of legislature or congress.

JUDGE BARRETT: In the Lochner era, and we saw it also in the cases that preceded the “Switch in Time,” the Court was standing in the way of reforms for workers that legislatures were enacting. If one had a preference for free trade, or if one had a preference of having no minimum wage, or having a minimum wage, to hold such a statute that did the opposite of your policy preference unconstitutional because it did’t comport with your idea of the best economic policy would be to thwart the will of the people without warrant in the Constitution.

SEN. HAWLEY: Most judges are not economic experts. Are there dangers in general with courts acting as economic policymakers, the setting economic policy—deciding economic policy? Is that something courts should be wary of outside their area of expertise?

JUDGE BARRETT: I’m certainly not an economist. I think courts are experts in interpreting law. We’ve been trained in law school, and that is what we are good at and what we should stick with.

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Judge Barrett on the Lochner Era and the “Switch in Time”

Most law professor finish their careers as law professors. Not these two. Former-Professor Josh Hawley is now a Senator from Missouri. And former-Professor Amy Coney Barrett is on the cusp of the Supreme Court. Hawley asked Barrett about Justice Holmes’s Lochner dissent. Her answer expanded into the Lochner era, and the “Switch in Time.” I searched the Gorsuch transcript, and there were no references to Lochner. The Kavanaugh record is not yet prepared, but I do not recall any discussions of Lochner.

The exchange runs from 6:38-9:03.

SEN. HAWLEY: Justice Oliver Wendell Holmes, Jr. said in the famous Lochner case, in his famous dissent in that case, over a century ago, he said “the 14th Amendment does not enact Mr. Herbert Spencer’s Social Statics.” Do you agree with that statement? What do you think he was getting at with that?

JUDGE BARRETT: Justice Holmes‘ famous dissent in Lochner, which was later the position adopted by the Court [in Williamson v. Lee Optical], was that courts should not pour their ideas of good economic policy into the 14th Amendment to stand in the way of policies that the legislatures enact. For example, on questions of maximum hours for bakery workers, minimum wages, those kind of things.

SEN. HAWLEYYou mentioned economic policy. Talk to us a little bit about how a court could substitute its own views in the place of legislature or congress.

JUDGE BARRETT: In the Lochner era, and we saw it also in the cases that preceded the “Switch in Time,” the Court was standing in the way of reforms for workers that legislatures were enacting. If one had a preference for free trade, or if one had a preference of having no minimum wage, or having a minimum wage, to hold such a statute that did the opposite of your policy preference unconstitutional because it did’t comport with your idea of the best economic policy would be to thwart the will of the people without warrant in the Constitution.

SEN. HAWLEY: Most judges are not economic experts. Are there dangers in general with courts acting as economic policymakers, the setting economic policy—deciding economic policy? Is that something courts should be wary of outside their area of expertise?

JUDGE BARRETT: I’m certainly not an economist. I think courts are experts in interpreting law. We’ve been trained in law school, and that is what we are good at and what we should stick with.

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COVID Is Not A “Categorically Different Danger”

COVID Is Not A “Categorically Different Danger”

Tyler Durden

Thu, 10/15/2020 – 17:40

Authored by Donald Boudreaux via The American Institute for Economic Research,

Since March, the coronavirus has been treated as if it is a danger categorically different from other dangers, including other viruses. But this treatment is deeply mistaken. The coronavirus is not a categorically different danger. It occupies a location on the same spectrum that features other viruses. Reasonable people can and do debate just where this location is – that is, how much more dangerous is the coronavirus than are ordinary flu viruses and other ‘novel’ viruses that plagued us in the past. But the coronavirus is well within the same category as other viruses.

Yet humanity has reacted – and continues to react – to the coronavirus as if it is a beast that differs from other health risks categorically. The hysterical overreaction by the press, public-health officials, and politicians – an overreaction undoubtedly supercharged by social media – has convinced many people that humanity is today being stalked by a venomous monster wholly unlike anything to which we are accustomed.

Only by assuming that this virus differs fundamentally from other risks can governments continue to get away with unprecedented and arbitrary restrictions on peaceful human activities – restrictions on activities such as working at the factory or office, on dining out, on attending religious services, on going to school, and even on seeking medical treatments for non-Covid-related ailments. Only by being convinced that the coronavirus poses a threat categorically unique are ordinary men and women led to change their ways of living and interacting as fundamentally as many have done, and to tolerate the categorical change in governments’ responses to epidemics.

Quaking with fear that the angel of death lurks as never before in every stranger’s breath, on every person’s fingertips, and around every corner, people today treat each other categorically differently from how they treated each other until this past March. They leap frantically away from approaching strangers on sidewalks. They “meet” their co-workers only online. Neighbors no longer visit each other’s homes, while those who still dare to chat outside stand far apart, as if each is about to morph any moment from a Dr. Jekyll into a Mr. Hyde. When they stage athletic events, the stands are filled not with human beings but with eerie cardboard cutouts.

Other human beings are no longer treated as potential partners in productive social cooperation, whether for work or pleasure. Now regarded as meaty and mobile vials of unprecedented poison, other human beings are treated by so many of us in a way that differs categorically from how we treated them for centuries up until just a few months ago. “Social distancing” is undermining social cooperation – which means that it’s undermining civilization itself.

Is there any evidence to justify this categorical change in behavior?

Covid’s Risks

My always wise friend and sometime co-author Lyle Albaugh has from the start understood that Covid, while certainly no nothingburger, is not remotely close to being the extraordinary monster that it has become in the popular mind. And so he’s having the following information printed on business-card-sized notices:

COVID-19 INFECTION SURVIVAL RATES (per CDC)

  • Ages 0-19:    99.997%

  • Ages 20-49:  99.98%

  • Ages 50-69:  99.5%

  • Ages 70+:     94.6%

Seasonal Flu Infection Survival Rate (for population as a whole): 99.90%

This single slice of information should be sufficient to put Covid-19 in proper perspective. It makes plain that the risk that this disease poses to humanity as a whole does not differ categorically from the risk of seasonal flu – or, for that matter, from any of the many other perils that we humans routinely encounter. And because these figures show the estimated chances of survival of those who are infected with Covid, even for persons 70 years of age or older Covid obviously is not a categorically unique threat.

And yet, again, humanity has reacted to Covid in a manner categorically unique. It’s as if a hornet rather than a honeybee found its way into our home, and so to protect ourselves from the somewhat-more-threatening invader we commenced to frantically scour every room of our home with a flamethrower.

But I despair that the information shared by Lyle – or even the more extensive information shared by my courageous colleagues at AIER – will have any noticeable impact. Very many people today seem almost eager to be misled about the danger posed by Covid. Much of humanity today appears to perversely enjoy being duped into the irrational fear that any one of us, regardless of age or health, is at the mercy of a brutal beast categorically more lethal than is any other danger that we’ve ever confronted. I hope that my despair proves misguided. 

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Goldman Sachs Explains Everything Traders Need To Know About COVID-19 Vaccines

Goldman Sachs Explains Everything Traders Need To Know About COVID-19 Vaccines

Tyler Durden

Thu, 10/15/2020 – 17:20

In its latest research note on the subject, Goldman Sachs analysts wrote that their outlook for COVID-19 vaccines receiving their first EUA (emergency approval authorizations) from the FDA in either late December or early January is a key pillar of the firm’s “above consensus” outlook for global growth in 2021. The firm expects growth to peak next summer (between Q2 and Q3) in the US, or next fall (Q3/Q4) in the Euro Area.

Recently, analsyts at the firm have warned that the vaccine outlook is “highly uncertain” and complicated by the issue of public trust, as recent halts to vaccine and therapeutic trials have rattled pubic confidence in the rushed nature of the process.

But assuming the best-case scenario for the vaccine outlook, initial results from Pfizer are expected in October, while Moderna is expected in November. Those “readouts” should show whether the vaccines are effective, or not. Still, with so many people in need of the vaccine, the bank says it believes it willl take “a few quarters” to vaccinate sufficiantly large shares of the population to stop the virus from spreading.

Finally, the firm says it expects vaccines to make the biggest difference in the US and Europe. The impact on EM won’t be as immediately felt, since China has already managed to revive economic growth with substantial state support, while India will likely face a slower rate of acquisition and innoculation, meaning it will likely take longer to rub out the virus.

To offer more clarify, the Goldman team has published a “Q&A” on its vaccine outlook. Read it in full below (text courtesy of Goldman Sachs):

* * *

Q: Superforecasters have lowered the odds of inoculating 25mn doses in the US by March to 47%, down from 70% in September. What happened?

A: Declining optimism likely reflects (1) the AstraZeneca trial pause, (2) slower Moderna trial enrollment, and (3) FDA guidelines for emergency approval.

First, the odds started falling with AstraZeneca’s suspension of its trials on September 9 following a second serious spinal inflammatory disorder. While the trial has restarted elsewhere, it is still on hold in the US. Around the same time, the major developers pledged not to rush to market under political pressure. Second, Moderna slowed down trial enrollment to increase participation among Black, Latino and Native American populations, which has now picked up. Third, the FDA issued stricter guidance for approval.

Q: What are the criteria for the FDA to provide Emergency Use Authorization

A: In addition to safety, the key criterion is that the “vaccine efficacy” (VE)—the percent difference of disease between the vaccinated group and unvaccinated control group—is estimated to be at least 50% and that there is sufficient statistical confidence in the VE.2

The EUA guidelines also recommend (1) a median follow-up of at least two months after full vaccination, (2) a submission of a manufacturing plan one month prior, and (3) five or more severe COVID-19 cases in the placebo group.3 While 50% efficacy is necessary for EUA, comments by Peter Marks (FDA) and by Tal Zaks (Moderna) suggest some flexibility on the two months follow-up criterion.4

Q: Pfizer and Moderna have signaled that data readouts are likely to be available by the end of October and in November, respectively. What do successful results look like?

A: While the FDA bar for eventual approval is 50%, vaccine efficacy (VE) rates above 75% would be good news because they would imply high odds of approval by year-end and would bode well for virus control.

Once trials reach a predetermined number of total covid cases, companies can release data readouts. The higher the VE, the earlier (i.e. with fewer total cases) producers will be able to statistically claim VE. For instance, Moderna would have to demonstrate a VE point estimate of at least 75%, implying that at least 42 of the 53 cases occur in the placebo group to claim success in the first interim, whereas for the second interim, Moderna has to pass a point estimate of 57%, and 50% for the final analysis (Exhibit 2). All other things equal, a delay in the data readouts could therefore also send a negative signal about VE.5 A successful readout would also show significant declines in severe diseases, diseases among the elderly, and infections. Crucially, elevated vaccine efficacy would also boost demand and bode well for the ability to (quickly) control the virus.

Q: When do you expect Emergency Use Authorization (EUA) and distribution of the first US dose?

A: Our assumption is that the FDA grants EUA in December, with risks skewed towards January, and that the first dose is inoculated by January

Our assumption of December EUA and a rapid subsequent start to inoculation is consistent with guidance from companies and public health officials (Exhibit 3). Dr. Marks (FDA) expects his staff to analyze data for a “few weeks” and then brief the Advisory Committee meeting, quickly followed by a decision. The risks to the December baseline are skewed towards January, especially if the first interims do not hit the vaccine efficacy- or 5 severe cases criteria.

Q: What is the next approval step after Emergency Use Authorization (EUA)?

A: The FDA expects vaccine producers to prepare a general approval called Biologics License Application (BLA) by finishing the full placebo-controlled trial.

While an EUA requires that a product may be effective and that its benefits outweigh known and potential risks, a BLA requires substantial evidence of safety and effectiveness. While the EUA would likely be processed in a few weeks and plausibly be limited to high risk groups, the BLA would likely take a “few months” to process given the more stringent safety criteria for vaccinating the full population.

Q: Would Europe also relatively rapidly approve a safe and effective vaccine?

A: While we have less visibility on the timeline, that seems quite likely.

The European Medicines Agency (EMA) has an “emergency procedure” which allows for fast-track pandemic approval with an accelerated decision (~70 days vs. 210 days). The EMA also expects the process to be shorter due to the rolling review which has started for AstraZeneca, Pfizer/BioNTech, and likely soon for Moderna too. The UK could issue its own temporary authorization. Successful trials in the US/Europe might also accelerate EMA/FDA approval as agencies can analyze foreign data.

Distribution:

Q: How are countries positioned for success of the leading vaccines?

A: The US would likely benefit from early Pfizer and especially Moderna approvals. AstraZeneca success could quickly benefit multiple regions, including EMs.

The US has sizeable year-end supply commitments with all leading firms. In the EU, approvals of AstraZeneca and Pfizer/BioNTech, both on a rolling review, would especially boost supply. The UK would likely benefit from early approvals of Pfizer/BioNTech and AstraZeneca, given expected year-end doses, while Japan has evenly disbursed contracts, starting in 2021. Many EMs likely depend on AstraZeneca for early widespread access.

Q: Which countries have the lowest measures of vaccine demand?

A: Globally, a July-August survey shows that 74% of the respondents agree that they would get a vaccine when available (Exhibit 5). In most major economies, reported demand exceeds standard estimates of herd immunity with near universal acceptance in China, Brazil, India and Australia but relatively low levels in Russia, France and South Africa.

Q: What do you make of the decline in some measures of US vaccine confidence?

A: Our base case assumes broad vaccine uptake but this will likely require a safe and very effective vaccine, trust in the approval process, minimal out-of-pocket costs, public campaigns, and time for local evidence and acceptance to build up.

Some measures of US vaccine demand have edged down (Exhibit 6), with slightly less than 40% saying “yes” and 36% currently reporting to be “not sure”. Demand is particularly low in Black, low income and education, and rural communities.7 Four factors are likely weighing on demand:

1. Safety concerns stand out with about 60% of the respondents against getting a vaccine identifying safety/side effects concerns as the key reason.

2. Efficacy concerns around 35% of those against taking a vaccine being concerned. Pew Research Center finds that 55% of respondents would reconsider their decision to take the vaccine if it was only 60% effective.

3. Politicization has likely played a role too with less than half of Americans thinking the FDA should fast-track approval.

4. Out-of-pocket costs worry US respondents. While the CARES Act requires health insurers to cover the vaccine after full FDA approval, it doesn’t require coverage under EUA. The Biden/Harris campaign has pledged to distribute vaccines at no cost, in line with the National Academy of Medicine recommendation.

Q: Who will get the vaccines first?

In the US, the National Academy of Medicine (NAM) plan defines three prioritized phases in order of fatality, infection, and transmission risk, while also focusing on important societal functions (Exhibit 7, left panel).

The UK plans to distribute primarily by age starting with the elderly, while EU countries have their own frameworks. Most nations, including China, have subscribed to the WHO’s COVAX Plan, which pledges to evenly distribute pooled vaccines for healthcare and social care workers first (up to 3% of the population) and then for the elderly (>65) and people with comorbidities (up to 20% of the population).

While highly uncertain and contingent on take-up, tiered distribution of a safe and effective vaccine should lead to front-loaded public health benefits, starting in Q1 in the US.

Q: When do you expect widespread US vaccination to start?

A: We expect Phase 2, targeting 105mn people in moderate risk and high impact professions, to start in March.

We expect inoculation to begin in the US in January with an estimated 50-80mn doses of supply by year-end.10 The initial supply and ongoing production will likely quickly cover Phase 1 of healthcare workers and very high risk populations. Given potential supply chain hiccups, startup costs in the distribution, and the CDC’s goal to maximize vaccine acceptance with the initial doses, we assume that the Phase 2 will not start until March, from which point onward vaccine supply could exceed demand. US vaccine adoption will then likely ramp up in line with demand through Q2 until reaching widespread levels sometime later in 2021 according to Dr. Fauci (NIH) and Dr. Redfield (CDC), as shown in Exhibit 3.

Q: When will widespread vaccination start in Europe?

A: Probably in early Q2 in the UK and late Q2 in the EU. That is bit later than in the US due to lower visibility on the approval timeline and less front-loaded EU supply contracts.

Front-loaded supply contracts position the UK well to start distribution in Q1 and distribute widely in early Q2, shortly after the US (even if public health officials appear more focused on vulnerable groups than rapid widespread adoption). Germany, France, Italy and the Netherlands could begin soon after the UK with large national supply contracts, which allowed Germany and France to opt out of Covax. Elsewhere in Europe, widespread distribution might not begin until early Q3 due to the potential dependence on EU supply contracts, distributed based on population, and Covax.

Q: What about widespread vaccination in EMs?

A: While targeted vaccination has already started in China and Russia, the EM vaccination outlook is more uncertain, very heterogeneous, and less positive, on net, than in DMs.

On the positive side, vaccination has already begun in Russia and China. Russia’s Gamaleya’s Sputnik V vaccine is approved for vulnerable populations with broader usage announced for January. China has approved three vaccines for emergency civilian use (two from the China National Biotec Group and one from Sinovac) and the CanSino vaccine for the military. While the absence of Phase 3 results creates uncertainty, the decision to rapidly vaccinate “hundreds of thousands” of people with relatively low virus circulation suggests officials might be confident in the vaccines. It is also plausible that a nonnegligible fraction of the population in several EMs such as India and Brazil may already have been infected by early next year and would therefore not need a vaccine assuming protection lasts. Additionally, the much lower hospitalization and fatality rates among young individuals and their larger population share may also help EM policymakers to manage scarcity by targeting the elderly.

On the negative side, the available EM advance purchases are generally much smaller than in DMs, especially on a per capita basis, despite support from COVAX and CEPI. Currently, COVAX has commitments that amount to 500mn doses and targets 1000mn doses. Overall, vaccine adoption will likely lag significantly behind in several lower income economies with Adar Poonwalla (Serum Institute of India) not expecting widespread global vaccination until four-five years from now. Seasonal or annual shots rather than a multi-year or lifelong vaccine due to potentially short-lived protection could also pose challenges to EMs with poor health infrastructure.

Growth effects:

Q: Achieving virus control and normalization with a vaccine likely requires elevated vaccine efficacy (VE) and elevated demand.12 Which of the two factors poses the largest downside risk?

A: While both are highly uncertain, we see the largest downside risk from demand.

Experts such as Dr. Krammer and Dr. Saville are constructive on the outlook for vaccine efficacy, reflecting (1) evidence of protection in animal studies, (2) the level of neutralizing antibodies, and (3) few natural reinfections (so far).13 Experts including Dr. Fauci are more concerned about vaccine demand (Exhibit 3). Demand concerns reflect limited vaccine confidence (Exhibit 6) and the risk it erodes further with insufficient efficacy, “expected” adverse reactions (e.g. fever), short-lived protection, or misattribution of unrelated negative health outcomes to the vaccine.

Q: How large will the vaccine boost to GDP be?

A: We expect the vaccine to boost the end-2021 level of US and Euro Area GDP by around 2%, with the largest boost to growth in Q2-Q3 in the US and Q3-Q4 in the Euro Area.

Exhibit 8 updates our model of the growth effects of a vaccine through a more complete recovery in high-contact industries such as restaurants and travel and through more limited scarring effects.

The simulations generate three results. First, we estimate that the vaccine boosts the end-2021 level of GDP by around 2% both in the US and the Euro Area. The US boost is somewhat less large than estimated previously, mostly because of the faster-than-expected recovery. Second, under our timing assumptions for widespread distribution, the largest growth boost occurs in Q2-Q3 in the US and Q3-Q4 in the Euro Area.14 The boost is somewhat gradual because potentially later broad-use approval and measures of vaccine confidence suggest that distributing to sufficiently large shares of the population will likely take a few quarters. Third, the China boost is much smaller because virus control and activity are already solid.

Q: More broadly, which countries are likely to see the largest vaccine boost to GDP?

A: We expect a larger vaccine boost to 2021 growth in DMs such as the US, the UK, and Spain than in EMs such as India and China.

We qualitatively extend the insights from our model to more countries. The vaccine GDP boost rises with (1) an earlier and more widespread vaccination and (2) a larger virus GDP hit without a vaccine. Exhibit 9 plots (1) a vaccination index on the horizontal axis (using data on year-end supply contracts, a demand index using covid-19 vaccine surveys and actual vaccination rates, and GDP per capita) and (2) the expected virus hit to 2020Q4 GDP on the vertical axis.15 The upshot is that the vaccine boost to 2021 growth should be larger in DMs such as the US and the UK (strong placement for early widespread vaccination) and Spain (large virus GDP hit) than in EMs such as India and Mexico (slower vaccine acquisition and distribution) and China (output already close to normal).

* * *

Source: Goldman Sachs

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Judge Barrett Refuses To Accept the Mythicized Account of Brown

Generations of law students are taught about the majesty of Brown v. Board of Education. As the story goes, Chief Justice Warren was able to craft a narrow, unanimous opinion, to ensure the opinion would be widely accepted. And, with Brown, the Court finally overruled Plessy and the separate-but-equal doctrine. Most casebooks do not describe what happened next. Most students do not learn about Brown v. Board of Education II. Most students do not learn about the massive resistance. Most casebooks do not include  Cooper v. Aaron.

The truth is far more complicated. Chief Justice Warren was able to finagle a unanimous opinion that said very little. It didn’t overrule Plessy. It didn’t require immediate desegregation. The majority decision allowed the lower courts to supervise desegregation with “all deliberate speed.” And the standoff at Central High School in Little Rock, Arkansas demonstrated that the federal courts, standing by themselves, were feckless. Indeed, after the Court decided Cooper v. Aaron, school districts simply shut down rather than comply with court orders. (See my article, The Irrepressible Myth of Cooper v. Aaron). The Court’s assertion of judicial supremacy was met with silence. This decision, better than any other, reaffirms that the Court is the least dangerous branch.

But judicial nominees do not dare recite this actual history. During his first hearing, Judge Kavanaugh repeatedly brought up the mythicized version of Brown. Even when he was not asked about Brown. (He also repeatedly brought up the unanimous U.S. v. Nixon decision, which was a prelude to his Vance dissent.) Over and over again, he praised Chief Justice Warren for reaching a unanimous decision. Kavanaugh certainly knows the true impact of Brown. But he wouldn’t say it, because the myth signals the right virtues. Here is how Kavanaugh described Brown during a colloquy with Senator Grassley:

But Brown v. Board, as I’ve said publicly many times before, the single greatest moment in Supreme Court history by—in so many ways; the unanimity that Chief Justice Warren achieved which is a—just a great moment; the fact that it lived up to the text of the Equal Protection Clause; the—the fact that it understood the real world consequences of the segregation on the African American students who were segregated into other schools and stamped with a badge of inferiority.

(“Lived up to the text”?! Come on.  The text speaks of equal protection, not equal treatment. The opinion did not engage the text at all. And it affirmatively rejected history.)

Judge Barrett refused to buy into this mythicized account of Brown. I encourage you to watch her colloquy with Senator Leahy. It runs from 9:41 through 13:50. (All things considered, I think Leahy is still one of the most effective Democrats on the committee; he has not lost a step.).

First, Leahy reminded Barrett that Judges Gorsuch and Kavanaugh said that the President would have to follow the Supreme Court’s judgment.

SEN. LEAHY: Now, I asked you last time what Justice Barrett would do if a President or even a Senator did not follow a Supreme Court decision. You declined. You said the question may come before you. I then asked you if the Supreme Court would have the final word. You stated the Supreme Court would have the final word as far as the lower courts are concerned. That surprised me, and it concerned me. I’ll tell you why. I asked Justice Gorsuch and Justice Kavanaugh those questions. I asked them what happens, and they made it clear that a President cannot refuse to comply with a court order, and the Supreme Court’s word is the final word on that matter. Justice Gorsuch and Justice Kavanaugh said that. So I would ask you this. Do you agree a president must follow a court order, and the Supreme Court’s word is final, or is the Supreme Court’s word only final as far as the lower courts are concerned?

Barrett’s original comments were exactly right. The Constitution does not give the Court the power to order the President. Perhaps the Court could assert that power. But it is an expansion of authority. I am not even sure the Constitution gives the Supreme Court absolute authority over the lower courts, but vertical stare decisis is a debate for another day.

In response, Judge Barrett segues, and explains that Gorsuch and Kavanaugh repeated the platitude that no one is “above the law.” But she explains that this platitude is just a platitude. No man is above the law, but not all men are subject to the same laws. The Constitution grants the President certain powers, privileges, and immunities, that regular people lack.

JUDGE  BARRETT: Senator, I’m glad to have the opportunity to clarify from our conversation. First, I know that both Justices Gorsuch and Kavanaugh said that “no man is above the law,” and I agree with that.

Next, Judge Barrett goes where other nominee would not. She highlights how feckless the courts actually are:

JUDGE  BARRETT:  But I conversed with Senator Lee yesterday about Federalist 78, which says that courts have neither force nor will. In other words, we can’t do anything to enforce our own judgments. And so what I meant in the conversation with you is that as a matter of law, the supreme court may have the final word, but the Supreme Court lacks control over what happens after that. The Supreme Court and any federal court has no power, no force, and no will, so it relies on the other branches to react to its judgments accordingly.

She is 100% correct. The Court issues its judgments, but relies on others to enforce them. Everyone knows this fact to be true. But I do not recall a judicial nominee acknowledging this constraint on the courts. (Please email if I missed anyone).

Senator Leahy was disturbed by this comment. He then recounts a great story where he had lunch with Hugo Black during the early 1960s.

SEN. LEAHY: I remember as a young law student having lunch, our honor society had lunch with members of the Supreme Court. I sat with Justice Hugo Black. He told me what happened with Brown v. Board of Education. The Court knew that was going to be a very, very tough case, and what did they do? They waited until they had the unanimous opinion, because they knew that the President would have to, and the Congress would have to enforce their law. So let me ask you this. Of course the supreme court has no army. They have no force, but they do have a force of law, and is a President who refuses to comply with a court order a threat to our constitutional system of checks and balances?

Leahy echoed the mythicized version of Brown. But Barrrett will not accept this mythicized account. She explains that the massive resistance illustrated the weakness of Brown. She specifically referenced Cooper v. Aaron. And she managed to namedrop Orval Faubus from memory. You cannot cram that fact. She knew it on her own.

JUDGE  BARRETT: Senator Leahy, I think the example of Brown is a perfect one in the sense that Supreme Court and Brown held that segregation violated the Equal Protection Clause. That was the law, but as you know, there was resistance to that decision, and so it wasn’t until the national guard came in and forced Governor Faubus to allow desegregation that it could happen because the Supreme Court couldn’t do so itself, and in Cooper v. [Aaron]

Leahy interrupts again, and asks if the President can ignore a court order.

SEN. LEAHY: I understand that, but they made the order. And could a president—if a President refused to follow what they said, could that be a threat to our constitution form the government?

Judge Barrett refuses to accept the premise.

JUDGE  BARRETT: Well, as I said, the Supreme Court can’t control whether or not the President obeys.

Once again, she is right. We would hope that the President would follow a Supreme Court judgment, but the Supreme Court has no control over that matter.

Alas, Judge Barrett took one misstep at the end. She recounted the common myth that President Lincoln ignored Chief Justice Taney’s order in Ex Parte Merryman

JUDGE  BARRETT: Abraham Lincoln once disobeyed an order during the Civil War of a circuit court. So a court can pronounce the law and issue a judgment, but it lacks control over how the political branches respond to it.

Alas, she is wrong on the last part. President Lincoln never ignored an order from Chief Justice Taney in Ex Parte Merryman. Seth Barrett Tillman made this case, and I have yet to see anyone respond. Here, one Barrett can learn from another.

I am proud of Judge Barrett. She must have known this answer would create some vulnerabilities for her. but she gave it anyway. Moreover, this answer tells me a lot about how she understands the notions of judicial supremacy. She does not accept the mythical account of the all-powerful Supreme Court. This answer bodes well for the future.

One final fun fact. I recently re-watched the Dark Knight. There was a scene where the Joker, played by Heath Ledger, gets into a confrontation with members of a corporate board. One of the board members looked just like Pat Leahy. I googled it. It was Pat Leahy! He is apparently a huge Batman fan. He had cameos in Batman Forever (1995), Batman & Robin (1997), the Dark Knight (2008), the Dark Knight Rises (2012), and Batman v. Superman: Dawn of Justice (2016).

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The Washington Post, Which Endorsed Biden, Says Biden Did Nothing Wrong

The Washington Post, Which Endorsed Biden, Says Biden Did Nothing Wrong

Tyler Durden

Thu, 10/15/2020 – 17:00

Authored by Paul Joseph Watson via Summit News,

The Washington Post, which endorsed Joe Biden for president, has investigated his alleged foreign lobbying scandal and concluded that Biden did nothing wrong.

Well, that’s that then.

Yesterday, the New York Post revealed details of emails recovered from Hunter Biden’s laptop that showed Biden had introduced his father, then-Vice President Joe Biden, to a top executive in a Ukrainian energy firm a year before Biden pressured the government of Ukraine to fire a prosecutor who was investigating the company.

The story went viral despite the best efforts of both Twitter and Facebook to censor it by blocking links to the article and locking the accounts of anyone who shared it.

“However, according to The Washington Post, then-Vice President Biden played no role in pressuring Ukraine officials into firing the prosecutor, who also was not investigating the energy firm,” states a Twitter summary of the Post’s investigation. “It also doesn’t detail whether the elder Biden actually met with Hunter’s Ukrainian business associate.”

Late last month, the Washington Post editorial board announced the least shocking news ever, that the newspaper was officially endorsing Joe Biden for president, asserting that he “would restore decency, honor and competence to America’s government.”

So in other words, a Democratic Party establishment mouthpiece that has a long history of supporting Democratic presidential candidates and recently threw its weight behind Joe Biden’s presidential campaign, has concluded that Joe Biden did nothing wrong.

Wow, time to wrap it up. Scandal over.

Meanwhile, Goldilocks has concluded the official investigation into herself over claims of ‘eating the porridge’.

The investigation found that she didn’t eat the porridge.

*  *  *

In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Also, I urgently need your financial support here.

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Judge Barrett Refuses To Accept the Mythicized Account of Brown

Generations of law students are taught about the majesty of Brown v. Board of Education. As the story goes, Chief Justice Warren was able to craft a narrow, unanimous opinion, to ensure the opinion would be widely accepted. And, with Brown, the Court finally overruled Plessy and the separate-but-equal doctrine. Most casebooks do not describe what happened next. Most students do not learn about Brown v. Board of Education II. Most students do not learn about the massive resistance. Most casebooks do not include  Cooper v. Aaron.

The truth is far more complicated. Chief Justice Warren was able to finagle a unanimous opinion that said very little. It didn’t overrule Plessy. It didn’t require immediate desegregation. The majority decision allowed the lower courts to supervise desegregation with “all deliberate speed.” And the standoff at Central High School in Little Rock, Arkansas demonstrated that the federal courts, standing by themselves, were feckless. Indeed, after the Court decided Cooper v. Aaron, school districts simply shut down rather than comply with court orders. (See my article, The Irrepressible Myth of Cooper v. Aaron). The Court’s assertion of judicial supremacy was met with silence. This decision, better than any other, reaffirms that the Court is the least dangerous branch.

But judicial nominees do not dare recite this actual history. During his first hearing, Judge Kavanaugh repeatedly brought up the mythicized version of Brown. Even when he was not asked about Brown. (He also repeatedly brought up the unanimous U.S. v. Nixon decision, which was a prelude to his Vance dissent.) Over and over again, he praised Chief Justice Warren for reaching a unanimous decision. Kavanaugh certainly knows the true impact of Brown. But he wouldn’t say it, because the myth signals the right virtues. Here is how Kavanaugh described Brown during a colloquy with Senator Grassley:

But Brown v. Board, as I’ve said publicly many times before, the single greatest moment in Supreme Court history by—in so many ways; the unanimity that Chief Justice Warren achieved which is a—just a great moment; the fact that it lived up to the text of the Equal Protection Clause; the—the fact that it understood the real world consequences of the segregation on the African American students who were segregated into other schools and stamped with a badge of inferiority.

(“Lived up to the text”?! Come on.  The text speaks of equal protection, not equal treatment. The opinion did not engage the text at all. And it affirmatively rejected history.)

Judge Barrett refused to buy into this mythicized account of Brown. I encourage you to watch her colloquy with Senator Leahy. It runs from 9:41 through 13:50. (All things considered, I think Leahy is still one of the most effective Democrats on the committee; he has not lost a step.).

First, Leahy reminded Barrett that Judges Gorsuch and Kavanaugh said that the President would have to follow the Supreme Court’s judgment.

SEN. LEAHY: Now, I asked you last time what Justice Barrett would do if a President or even a Senator did not follow a Supreme Court decision. You declined. You said the question may come before you. I then asked you if the Supreme Court would have the final word. You stated the Supreme Court would have the final word as far as the lower courts are concerned. That surprised me, and it concerned me. I’ll tell you why. I asked Justice Gorsuch and Justice Kavanaugh those questions. I asked them what happens, and they made it clear that a President cannot refuse to comply with a court order, and the Supreme Court’s word is the final word on that matter. Justice Gorsuch and Justice Kavanaugh said that. So I would ask you this. Do you agree a president must follow a court order, and the Supreme Court’s word is final, or is the Supreme Court’s word only final as far as the lower courts are concerned?

Barrett’s original comments were exactly right. The Constitution does not give the Court the power to order the President. Perhaps the Court could assert that power. But it is an expansion of authority. I am not even sure the Constitution gives the Supreme Court absolute authority over the lower courts, but vertical stare decisis is a debate for another day.

In response, Judge Barrett segues, and explains that Gorsuch and Kavanaugh repeated the platitude that no one is “above the law.” But she explains that this platitude is just a platitude. No man is above the law, but not all men are subject to the same laws. The Constitution grants the President certain powers, privileges, and immunities, that regular people lack.

JUDGE  BARRETT: Senator, I’m glad to have the opportunity to clarify from our conversation. First, I know that both Justices Gorsuch and Kavanaugh said that “no man is above the law,” and I agree with that.

Next, Judge Barrett goes where other nominee would not. She highlights how feckless the courts actually are:

JUDGE  BARRETT:  But I conversed with Senator Lee yesterday about Federalist 78, which says that courts have neither force nor will. In other words, we can’t do anything to enforce our own judgments. And so what I meant in the conversation with you is that as a matter of law, the supreme court may have the final word, but the Supreme Court lacks control over what happens after that. The Supreme Court and any federal court has no power, no force, and no will, so it relies on the other branches to react to its judgments accordingly.

She is 100% correct. The Court issues its judgments, but relies on others to enforce them. Everyone knows this fact to be true. But I do not recall a judicial nominee acknowledging this constraint on the courts. (Please email if I missed anyone).

Senator Leahy was disturbed by this comment. He then recounts a great story where he had lunch with Hugo Black during the early 1960s.

SEN. LEAHY: I remember as a young law student having lunch, our honor society had lunch with members of the Supreme Court. I sat with Justice Hugo Black. He told me what happened with Brown v. Board of Education. The Court knew that was going to be a very, very tough case, and what did they do? They waited until they had the unanimous opinion, because they knew that the President would have to, and the Congress would have to enforce their law. So let me ask you this. Of course the supreme court has no army. They have no force, but they do have a force of law, and is a President who refuses to comply with a court order a threat to our constitutional system of checks and balances?

Leahy echoed the mythicized version of Brown. But Barrrett will not accept this mythicized account. She explains that the massive resistance illustrated the weakness of Brown. She specifically referenced Cooper v. Aaron. And she managed to namedrop Orval Faubus from memory. You cannot cram that fact. She knew it on her own.

JUDGE  BARRETT: Senator Leahy, I think the example of Brown is a perfect one in the sense that Supreme Court and Brown held that segregation violated the Equal Protection Clause. That was the law, but as you know, there was resistance to that decision, and so it wasn’t until the national guard came in and forced Governor Faubus to allow desegregation that it could happen because the Supreme Court couldn’t do so itself, and in Cooper v. [Aaron]

Leahy interrupts again, and asks if the President can ignore a court order.

SEN. LEAHY: I understand that, but they made the order. And could a president—if a President refused to follow what they said, could that be a threat to our constitution form the government?

Judge Barrett refuses to accept the premise.

JUDGE  BARRETT: Well, as I said, the Supreme Court can’t control whether or not the President obeys.

Once again, she is right. We would hope that the President would follow a Supreme Court judgment, but the Supreme Court has no control over that matter.

Alas, Judge Barrett took one misstep at the end. She recounted the common myth that President Lincoln ignored Chief Justice Taney’s order in Ex Parte Merryman

JUDGE  BARRETT: Abraham Lincoln once disobeyed an order during the Civil War of a circuit court. So a court can pronounce the law and issue a judgment, but it lacks control over how the political branches respond to it.

Alas, she is wrong on the last part. President Lincoln never ignored an order from Chief Justice Taney in Ex Parte Merryman. Seth Barrett Tillman made this case, and I have yet to see anyone respond. Here, one Barrett can learn from another.

I am proud of Judge Barrett. She must have known this answer would create some vulnerabilities for her. but she gave it anyway. Moreover, this answer tells me a lot about how she understands the notions of judicial supremacy. She does not accept the mythical account of the all-powerful Supreme Court. This answer bodes well for the future.

One final fun fact. I recently re-watched the Dark Knight. There was a scene where the Joker, played by Heath Ledger, gets into a confrontation with members of a corporate board. One of the board members looked just like Pat Leahy. I googled it. It was Pat Leahy! He is apparently a huge Batman fan. He had cameos in Batman Forever (1995), Batman & Robin (1997), the Dark Knight (2008), the Dark Knight Rises (2012), and Batman v. Superman: Dawn of Justice (2016).

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Airline Crew Spots ‘Guy In Jetpack’ Flying 6,000 Feet Over LAX In 2nd ‘Dangerous’ Incident

Airline Crew Spots ‘Guy In Jetpack’ Flying 6,000 Feet Over LAX In 2nd ‘Dangerous’ Incident

Tyler Durden

Thu, 10/15/2020 – 16:40

Another bizarre jetpack incident outside Los Angeles International Airport has left eyewitnesses and authorities scratching their heads. Recall that an initial mysterious incident over a month ago made headlines after a man soaring through the air via jetpack was seen an alarming mere 300 yards away from an American Airlines flight.

While the FBI is still investigating that first sighting, another incident occurred Wednesday, the Federal Aviation Administration has confirmed. This new spotting occurred at about 1:45pm Wednesday, with “someone in a jet pack” was seen flying near a China Airlines flight at about 6,000 feet altitude, and seven miles northwest of LAX.

Jetpack illustrative file image, via Air Live

The flight crew alerted the tower to the new sighting, which once again has spurred speculation over if it’s the same individual, or perhaps a copycat. 

An official FAA statement confirmed that “A China Airlines crew reported seeing what appeared to be someone in a jet pack at an approximate altitude of 6,000 feet, about seven miles northwest of Los Angeles International Airport.” Needless to say that’s an incredibly high altitude for what remains largely an experimental technology.

“The FAA alerted local law enforcement and will look into the report,” it added.

ABC News was quick to air audio of the urgent air traffic control call on Wednesday: “Flying object? Was it a UAV or or was it a jet pack?” someone is heard saying on the call. Air traffic control can also be heard notifying a nearby aircraft:

“There was a jet pack reported about seven miles west of you. There’s no way you can go and check that out can you?”

Aviation authorities are emphasizing that it remains illegal and highly dangerous to operate a jetpack in commercial airline space.

Possibly aiding the FBI and FAA investigation is that there’s likely only a handful of operable jetpacks in the world, especially ones capable of reaching 6,000 feet, which would have to be advanced, well tested, with the flyer having vast experience.

After all, this is not something that can be picked up at a local electronics store.

Again, this narrows things down to what must be a tiny handful of elite operators who own and are experienced with such equipment.

* * *

Over the past few years jetpack technology and testing has advanced enough to put on stunning demonstrations like this:

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