Tag: finance

Authored by Thomas J. Farnan via The National Pulse

In June, Attorney General Bill Barr sat for an interview in CNN’s Situation Room with Wolf Blitzer and predicted widespread fraud with mail in voting.

He said: “People trying to change the rules to this, to this methodology – which, as a matter of logic, is very open to fraud and coercion – is reckless and dangerous and people are playing with fire.” 

At the time, Barr was the nation’s top law enforcement officer with an obligation to prevent election fraud under a bevy of federal statutes. 

What Barr Could’ve Done.

Maybe an investigation of Silicon Valley billionaires ballot harvesting in black neighborhoods, for starters, and then a warrant for surveillance cameras at counting facilities in Philadelphia, Milwaukee, Atlanta and Detroit, with federal agents on hand to double check the chain of custody of boxes coming through the back door.

Instead, election integrity was preserved with federal investigations to prevent nonexistent seditious activity emanating from dubious white militias. The “reckless and dangerous” mail-in ballot operation the Attorney General warned about was ignored. 

Trump’s political rise is because our institutions no longer work for the common good and instead serve the idiosyncratic preferences of the sclerotic establishment. Picking a bombastic outsider is the only way that 75-million Americans know to tell them to cut it out.

Barr, A Typical Washingtonian Creature.

In private practice, Barr was a highly compensated conduit to power, because being the former Attorney General, or ex-FBI Director, or alum of any office that confers a vendable credential pays big bucks in DC. 

He is sufficiently deluded by beltway noise that he does not realize his pandering to shallow political interests as George H.W. Bush’s Attorney General – for instance by authoring in 1992 The Case for More Incarceration – was simply grist for the outrage mill that perpetuates the swindle.

Based on the musings of General Barr, Senator Joe Biden spearheaded a crime bill in 1993. He sold the bill as a way to take “predators” who were “beyond the pale” off the streets.

Because that’s how Washington works.

Insiders on both sides help one another perform their Kabuki dance as public servants for the next election even as they pocket a Delaware mansion’s worth of foreign money.

H.L. Mencken observed that, “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”

The Shill Continues.

Barr was appointed AG the second time because he penned a 20-page memo proposing that when the president protests against a ridiculous investigation into whether he colluded with Vladimir Putin to steal an election, he is not obstructing justice.  

You know, like how nobody is suggesting that Joe Biden’s protests against election fraud investigations means he should get indicted for obstruction under 18 U.S. Code CHAPTER 73.

Any first year law student could tell you that. If you were a warm body willing to help Trump escape a frivolous criminal charge, though, you got a promotion from the practice squad straight into the starting lineup.

As Trump’s Attorney General, Barr served the same cadre of Washington insiders as he did the first time, many of whom were still there because the game works so flawlessly.

The Hard Drive From Hell.

Weeks before the 2020 election, a concerned citizen turned over to federal authorities a laptop that had irrefutable evidence of a Biden family operation to sell influence in China, with 10 percent of the take going to “the big guy” – who happened to be the democratic candidate then running for president.

The nation’s intelligence agencies mobilized on behalf of the Biden family to call the concerned citizen a Russian stooge, and the contents of the laptop Russian disinformation.

At the time – we didn’t know it – the Justice Department had been investigating the very activities confirmed in the laptop.

Barr knew, obviously, that the slander against the concerned citizen was just deep state tripe to protect the Bidens.

Yet Barr sat on his hands, kept his mouth shut, and let the whistleblower suffer vicious public attack, because Washington insiders put the establishment first even against the heroic decency of the little guy.

The Russia Lie.

For two years Barr had investigated the greatest political scandal in American history.  

The Washington establishment, along with the FBI, the CIA, and foreign intelligence services, ran protection for the democratic candidate in 2016 by calling embarrassing disclosures about her Russian disinformation – and, when that dirty trick somehow did not get her elected, carrying the hoax into the Trump presidency to cause maximum political damage.

For more on that, please do yourself a favor and read about the sordid scandal in my short ebook, The Russia Lie. I propose in the book that the scam was a political operation to vilify Donald Trump by falsely claiming Russian election interference.

A week after publication, the DNI released notes John Brennan took of a meeting with Barack Obama that confirmed my controversial take. 

Brennan wrote that Hillary Clinton was planning to “vilify Donald Trump by stirring up a scandal claiming interference by the Russian security service.” 

Yeah, but I said it better. 

If someone like me sitting at a desk in Pittsburgh can figure this out, then the Attorney General’s head-in-the-sand failure to expose the lie amounts to an intentional cover-up sourced in deliberate indifference. 

As with the Biden laptop, Barr’s first impulse investigating the investigators was to protect his friends and neighbors in Washington, the Republic be damned.  Some minor flunky at the FBI will go to jail, and everyone else is going to escape to their lucrative cable television deals.  

Because the fix, as always, was in. 

Now What?

The 75-million who voted for Trump feel cheated but they’re not going anywhere. Their ranks will increase as Washington’s Rube Goldberg-ian governance wreaks havoc and the dissatisfied look for an alternative.

Our side should win the next few election cycles. That would be a “will definitely win” except Republican officials in various key states passed permanent mail-in voting laws ostensibly to address the short-term contingencies of a temporary pandemic. 

Yes, the Republican Party is staffed with a bunch of “bilbars” (inventing a word here) at the highest levels.

The “reckless and dangerous playing with fire” will continue, with Republican hopes pinned on electing conscientious candidates even though state elections will be fixed by vote harvesting and back door shenanigans into the foreseeable future.

It is dire but hopeful. Popular movements are best when they overcome even official corruption.    

When Trump wins in 2024, he must avoid hiring swamp dwellers to drain the swamp. Of all the things I’ve written about Trumpism in the last four or so years, my favorite is this – nailed the problem a few months into the presidency.

There’s got to be a law professor in Ohio who actually voted for Trump who can be tapped for the position of Attorney General next time. 

No more bilbars, please. As Hannah Arendt knew, beholden insiders who prefer prestige to principle is the banality of evil.

Oh, and whoever came up with the idea of landing Air Force One and Marine One at small airports to hold rallies, give that person whatever job he or she wants.

It contributed to one of the greatest landslides in American presidential history.

Following a handful of reports, including one involving a priest from the Philadelphia area who volunteered as a trial participant, about patients who received a vaccine dying in the weeks following the second dose, one man in Israel has died 2 hours after receiving the vaccine.

According to reports in the Israeli press, a 75 year old man from Beit Shean died Monday morning from a hear attack about 2 hours after receiving the vaccine.

The patient has received the vaccine at 0830 in the morning, then waited for the customary time at the health clinic before he was released to his home after reportedly feeling well. Some time after that, the man lost consciousness, then was pronounced dead.

The Israeli Health Ministry released a statement on the death: “A 75-year-old man from the north of the country suffering from active heart disease and malignant disease, who has undergone a number of heart attacks, was vaccinated this morning against the coronavirus and died at home shortly after the procedure.”

An investigation into the man’s death has been ordered by the Director General of the Ministry of Health, Prof. Hezi Levy, who has appointed a case investigation committee to be led by the head of the MoH’s Safety and Quality Division.

News of the man’s death follows reports that 5K out of the first 215K recipients of the vaccine in the US reported some kind of “adverse health impact event”, which could be anything that seriously limits an individual’s ability to function and/or complete daily tasks. These events should be severe enough to require medical attention, but exact details are unclear.

Authored by Jim Quinn via The Burning Platform blog,

“It’s like in the great stories, Mr. Frodo. The ones that really mattered. Full of darkness and danger they were. And sometimes you didn’t want to know the end. Because how could the end be happy? How could the world go back to the way it was when so much bad had happened? But in the end, it’s only a passing thing, this shadow. Even darkness must pass. A new day will come. And when the sun shines it will shine out the clearer. Those were the stories that stayed with you. That meant something, even if you were too small to understand why. But I think, Mr. Frodo, I do understand. I know now. Folk in those stories had lots of chances of turning back, only they didn’t. They kept going, because they were holding on to something. That there is some good in this world, and it’s worth fighting for.”

– J.R.R. Tolkien

With all the talk about dark winters from Biden, Harris, Fauci, tyrannical Democrat governors, pandemic hysteria medical “experts”, and the corporate media paid to propagate the vital narrative, my mind was naturally drawn to the words of J.R.R. Tolkien and his Lord of the Rings trilogy. It is a story of good versus evil, with a foreboding mood of darkness and doom.

To those of us of a conspiratorial nature, according to those who conspired to overthrow a duly elected president for four years and are currently conspiring to steal the presidency through blatant election rigging and mail-in ballot fraud, we believe the darkness engulfing our nation has been initiated by the billionaire globalist evildoers marshaling dark forces in their Mordor on the Potomac.

The globalist elites, along with the Deep State and social media tyrants of Silicon Valley are rich, influential, and arrogant. They have stepped out from the shadows and are now blatantly flaunting their capture of our government, electoral systems, financial systems, mainstream media, social media, and medical complex.

They have gauged the intellectual, ethical, and mathematical aptitude of the masses and found them wanting. They have no fear of significant pushback as they commit treason by stealing a presidential election, trashing the Constitution, destroying small business owners, impoverishing what remains of the middle class, and imposing totalitarian restrictions upon a compliant obedient populace.

A nation once populated by independent minded, self-reliant, frontiersmen has rotted from within, as the country is now populated by millions of weak minded, submissive, docile sheep, allowing themselves to be bullied and propagandized into paralysis, while texting, tweeting and facebooking their every mindless thought to their followers.

Unless the Trump forces can prove fraud on a multi-state basis or are willing to take the drastic step of utilizing the September 12, 2018 Executive Order regarding foreign interference in elections as justification for using the Insurrection Act in overturning the fraudulent outcome of the election, the end of the nation as we know it will have arrived. Losing the two Senate runoff elections in Georgia would greatly accelerate the decline.

If more Americans had the ability and/or desire to think critically, rather than choosing to be willfully ignorant and entranced by their electronic gadgets, they would understand how they are being manipulated and played by global elites, corporate fascists, billionaire totalitarians, and a corporate media using a common narrative as propaganda to mold their minds and play upon their emotions. It is not a coincidence when common phrases and narratives are propagated by those pulling the strings behind the scenes of this Potemkin village of villainy.

It has never been more apparent than during this year of pandemic hysteria. Phrases like “dark winter”, “lockdown”, “build back better”, “we are all in this together” (we’re not), “flatten the curve”, “social distancing”, “stop the spread”, “self-quarantine”, “contact tracing”, “new normal”, “remote learning”, “black lives matter”, and of course “The Great Reset”, have been introduced into our vocabulary as a means of controlling, dehumanizing, and invoking fear among the population.

Biden’s handlers have had him fear mongering with the “Dark Winter” jargon since October, as their plan was to not pass a relief bill for poverty stricken unemployed workers and small businesses; ramp up testing to extraordinary levels using a PCR test guaranteed to produce millions of false positives; and classify the deaths of thousands of very old people as Covid deaths, no matter what they really died from; all to seize power over the government.

The propaganda of “Dark Winter” is designed to scare the population into submitting to lockdowns, canceling Thanksgiving and Christmas, begging for the Big Pharma vaccines, and allowing totalitarian mandates from Washington DC, state capitols, and localities to be executed without resistance. With the unceasing support of left-wing media outlets, the use of dire warnings by your overlords isn’t based upon facts, but a purposeful effort to appeal to the emotions of the non-critical thinking masses.

When doing a search regarding “Dark Winter” you find a conspiracy theorist bonanza. Operation Dark Winter was the code name for a bio-terrorist simulation conducted in June 2001 by John Hopkins, high-level government officials and the media regarding a widespread small-pox attack scenario. The similarities to the release of a virus from a Chinese bio-weapon lab in Wuhan are a little eerie.

The findings from this simulation should be familiar to anyone who has been paying attention for the last ten months. Dark Winter outlined the possible breakdown in essential institutions, resulting in a loss of confidence in government, followed by civil disorder, and a violation of democratic processes by authorities attempting to restore order. Shortages of vaccines and other drugs affected the response available to contain the epidemic, as well as the ability of political leaders to offer reassurance to the American people.

State government leaders wanted to invoke mandatory quarantining and border control. The lack of coordinated healthcare response exacerbated the fear of the population and overwhelmed the capacity in hospitals. The most pertinent finding from the simulation was information management would be the critical element in manipulating the crisis. They would need to manage the narrative to convince the population lockdowns, mandatory vaccinations, and disease containment measures were good for society, and most importantly, the government knew what was best.

It seems those who believe they know what is best for the world – Gates, Soros, Schwab, Bezos, Zuckerberg, Dorsey, Obama, Clinton, along with other Deep State operatives – have put these lessons to good use. They understand the power of Bernays’ propaganda techniques, combined with modern day technological algorithms and psychological manipulation, along with population dumbed down by decades of government school indoctrination where they were taught to feel rather than think.

They know if they can successfully market their desired narrative through plugging paid “expert” opinions, unceasing mainstream media messaging, social media promotion of the narrative and suppression of counter-narratives through censorship, and politicians mouthing what they are told to regurgitate by their puppeteer controllers, they will achieve their objectives.

You can even use their own technology to prove their duplicitous intentions. Google Trends reveals the phrase “Dark Winter” was virtually non-existent until October 2020. The Deep State public relations leeches running Biden’s campaign did some psychological testing on potential propaganda victims and found having Biden, his minions, and co-conspiratorial media utter this phrase thousands of times per day would invoke enough fear to convince the plebs to stay locked down, masked up, and pleading for the vaccine.

The message was designed to scare enough people into voting for Biden, that the election rigging wouldn’t seem as blatant as it became. The “Dark Winter” narrative peaked in the weeks following the election but is now being revived as part of the Big Government/Big Pharma marketing campaign to shame and fear the ignorant masses into compliantly getting injected with an experimental Big Pharma vaccine, with unknown long-term effects.

So, what is the ultimate purpose of this propaganda campaign? There are no coincidences when it comes to the narrative being utilized to manipulate the minds of the masses during this deliberately over-hyped pandemic. Is the virus real? Based on personal anecdotes of numerous people who have had this China flu, it most certainly makes some people extremely sick and contributes to the deaths of some people. Most people barely notice any symptoms.

People less than 70 years old and in relatively good health have a 99.7% chance of not dying from this flu. Even those over 70 have a 94.6% chance of surviving if they get this flu. This flu contributes to the deaths of the very old and very sick, probably shortening their lives by months, not years. Maybe that is why the study done by a doctor at Johns Hopkins showing no excess mortality in the U.S. during 2020, needed to be scrubbed, deleted and memory holed – it revealed the pandemic hysteria narrative to be false. Amazingly, reported flu cases are down 98%, with no deaths, and deaths from heart disease and other respiratory ailments have plummeted. What a coincidence.

Based on the positivity rate from the mass testing, it appears 10% of the population has had or has this flu. There have been 326,000 deaths classified as Covid since March. We know this is a grossly exaggerated number because the medical industrial complex is highly compensated by the government with your money to classify deaths as Covid. Actual data shows only 6% of the total deaths are from Covid alone.

Also, for those incapable of critical thinking, a case is not a sickness. Most people testing positive (due to faulty PCR tests) don’t know they even have this dreadful disease. And now that everyone entering a hospital for a procedure gets tested, a positive test means they are classified as a Covid hospitalization. The “masking saves lives” narrative is a complete and utter joke, as proved by any factual analysis – which will be immediately suppressed by Facebook, Twitter, and Google.

How many tik-tok nurse dance routines does it take for people to realize the “hospitals at capacity” narrative is bullshit? We also know for a fact over 40% of all deaths have occurred in long-term care facilities, thanks to best selling author on leadership and Emmy award winner Andrew Cuomo and his fellow left wing totalitarian governors – Newsom, Wolf, Murphy and Whitmer. As the election approached, the daily testing was ramped from 1 million to over 2 million because the “Resistance” needed cases to surge and make it appear the situation was getting dramatically worse to help steal the election.

All part of the plan, along with the necessity of mass mail-in ballot voting because it was too dangerous to stand in line at polling places, but perfectly safe to be in massive lines at Wal-Mart, Target and Costco. And now we have the full press “life-saving” vaccine marketing campaign, on par with the rollout of version 6,875 of the Apple iphone, designed to enrich Pfizer, Moderna, Astra Zeneca, and the other dozen Big Pharma mega-corporations and their billionaire benefactors.

The televised vaccine injections by politicians, Hollywood actors, Fauci, and other “important people” are broadcasted breathlessly by the vacuous bimbo and brainless male model talking heads on CNN, MSNBC and the other propaganda media to convince the ignorant masses they need to blindly comply to save themselves from a horrible disease with a 99.7% survival rate.

The concerted effort to scorn, ridicule, censor and disallow any discussion about the tremendous effectiveness of Hydroxychloroquine + Zinc + Zpack in curing this virus is another example of the Big Pharma profits mantra as the dominant theme. This perfectly safe and effective treatment only costs a few bucks and doesn’t enrich the pandemia crowd, so it had to be squashed. How many people died because politicians banned this treatment until after the election?

Ivermectin, generally used to treat parasite infestations, has also proven to be highly effective in treating Covid-19, but you will never hear Fauci or a MSM talking head admit this is true. There are billions to be made. And if cases begin to peak, just announce a new “mutant” strain with no proof or data, and the fearful masses will again beg the government to keep them locked down. There is a population to control – and reduce.

They expect you to believe the 95% vaccine success rate after 9 months, when they haven’t achieved a 40% success rate with the annual flu after decades. And they absolutely know the long-term effects of a product they just produced with far less testing than has been done to test the safety of previous vaccines. Five years from now when negative impacts begin to reveal themselves, they will say “how could we have known?”.

And since the mega-corporation Pharma companies have been granted immunity from liability for their negligence, their hundreds of billions in profits will be safe. How long before Fauci is sitting on the Boards of Pfizer and Moderna, collecting six figure board fees? It is fascinating how the WHO suddenly changed their definition of herd immunity on their website to say that it can only be achieved through vaccinations, which is categorically untrue.

When you realize the breadth of this conspiracy of billionaire oligarchs, the UN, WHO, CDC, corrupt politicians, Big Pharma, the entire medical complex, corporate media, and feckless bureaucrats, to plunder the wealth of the masses and implement their command-and-control agenda, you might understand Mencken’s rage.

In Part Two of this article I will lay out Klaus Schwab’s master plan to reset the world in the warped vision of the globalist elites. In Part Three I will use the wisdom of J.R.R. Tolkien to try and map a path through these dark times.

*  *  *

The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation. 

Once again, the WHO has stepped in to offer some confusing comments about the coronavirus vaccine, warning that there is “no evidence to be confident shots prevent transmission” and that people who receive the vaccine should continue wearing masks and following all social distancing and travel guidelines.

The comments were made by WHO chief scientist Soumya Swaminathan during what appears to have been a virtual press conference held Monday.

“I don’t believe we have the evidence on any of the vaccines to be confident that it’s going to prevent people from actually getting the infection and therefore being able to pass it on”, says WHO Chief Scientist @doctorsoumya pic.twitter.com/QdTvzj7Nyd

— Disclose.tv 🚨 (@disclosetv) December 28, 2020

A clip of the offending line has begun circulating on social media.

“At the moment, I don’t believe we have the evidence on any of the vaccines, to be confident that it’s going to prevent people from getting the infection and passing it on,”

Of course, a close look at the research released by Pfizer and Moderna shows the studies haven’t actually tested whether the vaccines actually prevent transmission of the virus; the goal of the trials was to see whether vaccinated patients presented with COVID symptoms at a rate that was substantially less frequent than individuals who hadn’t been vaccinated. That’s pretty much it. Though the data might hint at lowering transmission rates, that’s still tbd, apparently.

WHO: NO EVIDENCE TO BE CONFIDENT SHOTS PREVENT TRANSMISSION

wait. what?

— zerohedge (@zerohedge) December 28, 2020

Some on twitter scoffed at the comment.

Lmao is this how they force everyone to get it?

— Pruvate (@Pruvate1) December 28, 2020

The doctor went on to explain that there’s no evidence to suggest that those who have been vaccinated wouldn’t be a risk if they traveled to a foreign country, say Australia, with relatively low COVID rates.

At this point, it might be helpful for the WHO to produce some kind of clarification that either offers substantially more context to explain this remark.

But we suspect they won’t.

Why? Well, perhaps because that context might undermine certain government officials’ insistence that there’s absolutely no reason to question the efficacy, and potential side effects (both long-term, and short) tied to the new COVID-19 vaccines.

Authored by Robert Burgess, op-ed via BloombergQuint.com,

When it came to financial markets in 2020, the most frequently asked question was why. Why, in the midst of a global pandemic that has killed some 1.7 million people worldwide and plunged the economy into the worst crisis since the Great Depression, did equity markets stage a historic rebound to reach new highs and become completely disconnected from reality? And it wasn’t just stocks, as anything smacking of carrying any semblance of risk, from junk bonds to Bitcoin, had epic rallies.

Everyone has an explanation for how markets performed. They range from the cerebral (markets are “forward-looking” and investors are anticipating a roaring economy once Covid-19 has been eradicated) to the cynical (just buy the dip). True, the market is always about what will happen rather than what has happened, and it’s been highly profitable in recent years to buy whenever the market pulls back. Still, neither adequately explains the jaw-dropping 66% surge in the MSCI All-Country World Index of stocks from its low in late March, the record-low yields in junk bonds, the more than five-fold increase in the price of Bitcoin or any of the other seemingly inexplicable market moves.

The answer is much simpler and comes down to one number: $14 trillion. That’s the amount by which the aggregate money supply has increased this year in the U.S., China, euro zone, Japan and eight other developed economies.

To put the surge in perspective, the jump to $94.8 trillion exceeds all other years in data going back to 2003 and blows away the previous record increase of $8.38 trillion in 2017, according to data compiled by Bloomberg (how did equities do back then? The MSCI All-Country World Index soared 21.6%, the result of a steady climb all year. Although the MSCI is up a smaller 12.4% this year, it has surged 65% from its low in late March).

Knowing what was behind the performance of markets is only part of the story; it’s also important to understand the mechanics. The place to start is with the central banks, which were instrumental in printing the money they needed to inject directly into the financial markets by purchasing bonds and other assets on a scale never seen before. As of Nov. 30, the collective balance sheet assets of the Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England stood at 54.3% of their countries’ total gross domestic product, up from about 36% at the end of 2019 and about 10% in 2008, data compiled by Bloomberg show. The Fed alone is pumping at least $120 billion a month into the financial markets through its purchases of fixed-income assets.

The purchases by central banks helped to suppress bonds yields globally, with the average tumbling to below 1% this year, as measured by the Bloomberg Barclays Global Aggregate Index. Not only that, but the amount of bonds with yields below zero surged above $18 trillion, adding to the financial repression suffered by savers since the financial crisis.

Of course, nobody wants to own bonds that pay next to nothing, or even negative rates, unless they have to for regulatory or other reasons. The result has been a scramble for yield, primarily for the debt obligations of companies and others with below-investment-grade credit ratings. Rising demand pushed yields on bonds issued by these companies to a record low 4.59% worldwide on average. Even so-called frontier nations such as Ghana, Senegal and Belarus are benefiting.

Many realize that these low yields don’t offer a lot of compensation in return for lending money to borrowers at higher risk of default. After all, they’re not called “junk bonds” for nothing. Which is why much of the money that landed in the laps of investors this year found its way into the stock market, pushing the global value of stocks to more than $100 trillion for the first time and the average stock price for a member of the MSCI All-Country World Index to a stratospheric 31 times earnings.

All the money created by governments and central banks also raised some hard questions about the true value of currencies. There’s no small number of people who believe foreign-exchange regimes are on the verge of collapsing because of all of the money-printing — not just this year, but since the financial crisis more than a decade ago. This explains much of the stunning rally in Bitcoin and other cryptocurrencies, as well as gold.

While many governments deserve criticism for their response to the pandemic from a social-welfare context, the swift action they took – in conjunction with their central banks – to support their economies warrants praise despite the worries about permanent “moral hazard,” never-ending central bank support of financial markets and the wealth inequality it exacerbated. It will be years, perhaps a generation, before we know whether too much (or perhaps too little?) money was created to support the economy through the pandemic, nurturing the biggest bubble of all time and uncontrollable inflation.

But imagine the alternative if nothing was done.

 

$600 checks for all, vaccines for all, and stocks are hitting record highs as economic data collapses…

Source: Bloomberg

The message is – Biden’s here, all is well! (Oh, apart from the “dark winter” he keeps on warning about)…

Crypto deserves the main headlines since Xmas Eve’s close with Bitcoin up over 15% and altcoins even more…

Source: Bloomberg

Bitcoin tagged new highs and fell back to stabilize around $27,000…

Source: Bloomberg

But today it was Ethereum that really ripped, surging up towards $750…

Source: Bloomberg

Which reversed the recent trend in ETH/BTC, which is back above the Maginot Line of 0.025x…

Source: Bloomberg

Bitcoin is on track for its longest monthly winning streak in more than a year after touching a record above $28,000 over the weekend. The largest cryptocurrency reached an all-time high of $28,365 on Sunday before paring some of the advance, according to a composite of prices compiled by Bloomberg. The run of outsize returns over October, November and December so far is the longest such stretch since mid-2019.

“My sense is we’re very close to a top — we could hit $30,000 though,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.

“We should definitely see a pullback, but the magnitude is probably lesser. We might only see 10% to 15% drops.”

But while crypto was ripping, gold and oil were rollercoastering.

Gold futures spiked back above $1900 before giving it all back…

WTI screamed up towards $49 after reports of Trump signing the COVID Lockdown Relief only to retreat back below $48 as the cash equity market opened…

Notably, as ETH/BTC reversed course today, so did Small Caps / Big Tech as Nasdaq dramatically outperformed. Russell 2000 tumbled into the red late in the day (and the rest of the market was also hit) but there was no clear catalyst

Erasing Russell 2000’s outperformance since 12/22…

Energy stocks were the worst performers as Tech and Consumer Discretionary outperformed…

Source: Bloomberg

Treasuries ended the day practically unchanged after pushing notably higher in yield overnight…

Source: Bloomberg

Once again, the magic hand of Covfefe stepped in a compressed 10Y yields back below 95bps…

Source: Bloomberg

The dollar managed gains after overnight weakness was erased during the Europe session…

Source: Bloomberg

Finally, it appears the call-buying panic of the last couple of months is taking a break. Will the shortened week breathe life back into the leveraged long crowd?

Source: SpotGamma

For now, the Put-Call ratio continues to push to new 14 year lows…

Source: Bloomberg

With December on track to be the deadliest month for the virus since the outbreak began (more than 63K people have died in the US so far this month), Dr. Fauci and others have been in the press constantly warning that the situation is on track to worsen in January and February.

And on Monday, he was joined by Dr. Celine Gounder, a clinical assistant professor of medicine and infectious diseases at NYU’s Grossman School of Medicine and member of Biden’s COVID task force, who reiterated Dr. Fauci’s warnings about already-overwhelmed hospitals being poorly equipped to handle the next wave of patients.

But while the MSM focused on remarks about President Biden likely invoking the Defense Production Act to try to ensure the US catches up to its lofty vaccination targets (we’re already about 18MM behind the OWS target of 20MM doses by year’s-end), Dr. Gounder added an off-hand line about the need for using “genomic surveillance” to track mutations like the B.1.1.7 mutated “variant” that has been making headlines for the past week or so.

“We’re also going to see an increase in genomic surveillance which is where you track the changes in…virus genetic materials…we can do that…we have the technology…we just chose not to spend the money on public health surveillance…”

Offering up some math to demonstrate why the US needs to dramatically ramp up the pace of vaccinations if it wants to reach whatever the new herd immunity threshold is, Dr. Gounder insisted there is “no question” about another surge due to the number of people traveling during the holiday.

And when this next wave hits, more rural areas will likely scramble to convert hallways and stadiums into excess capacity wards. However, she warned that while NYC has plenty or resources – physical, and human –  many smaller cities will have a much harder time due to limited human resources.

“You can’t stand up new doctors and nurses the way you can with field hospitals…so this is going to be the limiting factor here in treating all of these patients,” she warned.

Dr. Gounder also told CNBC that Biden will almost definitely invoke the WWII-era “Defense Production Act” to help ensure America’s pharmaceutical companies have enough access to enough raw materials to keep cranking out new doses. An unanticipated shortage of raw materials was blamed by Pfizer earlier this month for cutting its year-end delivery target from the absurdly high 100MM doses, to the slightly more realistic target of 50MM.  The company has refused to say much more than that, with WSJ reporting that the company sources these raw materials from “the US and Europe.”

Biden will invoke the act to ensure that whatever these raw materials are, that Pfizer and Moderna have enough of the stuff on hand to keep production humming, while also controlling the number of tests and protective equipment to ensure supplies remain ample across the country.

“You will see him invoking the Defense Production Act,” Dr. Gounder said. “The idea there is to make sure the personal protective equipment, the test capacity and the raw materials for the vaccines are produced in adequate supply.”

NBC News reported last week that the Biden team was considering invoking the act, and this would appear to cement that notion.

If anything, it’s just the latest reminder of how wildly optimistic many of the vaccination timelines – timelines for the developed world, at least – have been.

The Transportation Security Administration (TSA) released new figures Monday that showed it screened 1.28 million passengers at airports across the country on Sunday, the highest amount of travelers in one given day since mid-March. 

Even though Sunday’s passenger volume at airports was 50% lower than the same day last year, it was the sixth day out of the last ten that volume surpassed one million. The rise in air travel comes during the holiday season as Americans come together for Christmas and New Year’s celebrations despite warnings from top public health officials.

 

Dr. Anthony Fauci warned on Sunday that cases could surge after the holidays due to the mixing of households. 

“We very well might see a post-seasonal — in the sense of Christmas, New Year’s — surge, and as I’ve described it, as a surge upon a surge,” Fauci said on CNN’s “State of the Union.”

Last week, the country’s top infectious disease specialists warned that “our darkest days in this battle against Covid are ahead of us, not behind us.”

“I share the concern of President-elect Biden that as we get into the next few weeks it might actually get worse,” Fauci said.

There is some good news in the overnight session, President Trump signed a COVID-19 relief measure, which means airlines are set to receive $15 billion in additional payroll assistance. 

Fauci also said, “traveling and the likely congregating of people for the good warm purposes of being together for the holidays” adds pressure to the worsening crisis.

Nevertheless, a mutation of the coronavirus is on the loose in Europe and could already be spreading in the US undetected. 

Authored by Doug Kass of Seabreeze Partners Management,

This is my 19th year of compiling my Surprise List!

In 2020 (despite broad February-March weakness) equities rose faster, valuations expanded far greater, and interest rates fell sharper than the consensus expected. 2021 could be a year in which the S&P Index shows little movement in the first half of the year – but market pressures might mount over the last six months of 2021.

“In this age of infinite distraction, when the entitled elect themselves, the party accelerates and the brutal hangover is inevitable.”

— Dr. Michael Burry (he profited from “The Big Short”), 2012 UCLA Commencement Speech

“Never make predictions, especially about the future.”

— Casey Stengel (also short in stature)

“Those who are easily shocked should be shocked more often.”

— Mae West (she liked only two types of men — long and short)

“You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”

— Legendary value investor Ben Graham (who in the short term recognized the market was a voting machine, not a weighing machine)

“Timid men prefer the calm of despotism to the tempestuous sea of liberty.” [Think: Central-bank intervention!]

— Thomas Jefferson (Founding father and long of stature)

It’s that time of the year again! Time here on Monday morning for my 15 Surprises for 2021, which I’ll unveil in a bit.

I’ve never walked the same path in my investment career that others have found comfortable and I’m not going to start now. You see, I find beauty in a variant view. It’s satisfying intellectually, analytically and financially (at least when you’re correct). There’s something special about adopting a non-consensus view and watching it become reality despite protests from many corners. This notion forms the basis for my annual “15 Surprises” list.

The purpose of my annual list is to get readers to think more deeply about a variety of issues. As you read the installments to follow, it will become clear that my surprises this year are substantially out of consensus — more so than in any year I can remember. As The Dude says in The Big Lebowski: “Yeah, well, you know, that’s just, like, my opinion, man.”

By means of background and for those new to Real Money Pro, 19 years ago I set out and prepared a list of possible surprises for the coming year, taking a page out of the estimable Byron Wien’s playbook. Byron is a longtime friend of mine (and I am having dinner with him and Anita later this month). Byron originally delivered his list while chief investment strategist at Morgan Stanley, then Pequot Capital Management, and now at Blackstone. (Click here to read his “Surprises” list for 2020).

It takes me about four weeks of thinking and writing to compile and construct my annual list. I typically start with about 40 surprises, which are accumulated during the months leading up to my annual column on the subject. I cull the list to come up with my final 15 surprises. (Sometime I include also-ran surprises, as I did last year). The preparation of my list, as it was this year, often is not completed until the early hours before publication.

I often speak to and get input from some of the wise men and women that I know in the investment and media businesses (you can probably guess some of their names — two close ones and very smart buddies are with me in the list’s preparation in recent years. We call each other “the three stooges.”) My other go-to sources are two brilliant hedge hogger acquaintances from New York City and South Florida. I always have associated the moment of writing the final draft (in the weekend before publication) of my annual list with a moment of lift, of joy, and hopefully with the thought of unexpected investment rewards in the new year. This year is no different. I think this year’s list is pretty intriguing and many of the surprises have a good chance of occurring!

I set out as a primary objective for my list to deliver a critical and variant view relative to consensus that can provide alpha or excess returns. The publication of my annual list is in recognition that economic and stock market histories have proven that more often than generally thought, consensus expectations of critical economic and market variables may be off-base.

History demonstrates that inflection points are relatively rare and that the crowds often outsmart the remnants. In recognition, investors, strategists, economists and money managers tend to operate and think in crowds. They are far more comfortable being a part of the herd rather than expressing — in their views and portfolio structure — a variant or extreme vision.

It is important to emphasize that these are not forecasts. Rather, they are events with a greater than a 50% chance of occurring that are deemed deeper outlier events (with a probability of 20% or less) relative to consensus expectations. In other words, my Surprises are anti “Group Stink.”

Confidence is the most abundant quality on Wall Street as, over time, stocks climb higher. Good markets mean happy investors and even happier investment professionals.

The factors stated above help explain the crowded and benign consensus that every year seems to begin with, whether measured by economic, market or interest rate forecasts. But an outlier’s studied view can be profitable and add alpha.

Consider the course of interest rates and commodities in 2014, which differed dramatically from the consensus expectations. And consider my outlier view in late 2014 that the drop in oil prices would fail to help the economy and that OPEC would come close to dissolution and oil prices would plummet. An investor could have done quite well by following that message of avoiding energy stocks over the last few years. Or consider the value of my surprise that in 2019 the Federal Reserve would reverse its stance and cut rates, leading to a 2.25% yield on the 10-year U.S. note. That surprise was in marked contrast to the almost universal view that the Fed would tighten and interest rates would rise.

To a large degree, the business media perpetuate group-think and coddle investors, often into a false sense of security. Consider the preponderance of bullish talk in the financial press. All too often the opinions of guests who failed to see the crippling 2007-2009 drama are forgotten and some of the same (and previously wrong-footed) talking heads are paraded as seers in the media after continued market gains in recent years. Memories are short, especially of a media kind. Nevertheless, if a criterion for appearances was accuracy, there would have been few available guests in 2009-2010 qualified to appear on CNBC, Bloomberg and Fox Business Network.

As we began 2021, after more than 10 years of market and economic prosperity, the few secular investment bears remaining were often ridiculed openly by the business media in their limited appearances, reminding me of Mickey Mantle’s quote: “You don’t know how easy this game is until you enter the broadcasting booth.”

And then there was 2020! What a year it was!! But more on this later…

Abba Eban, the Israeli foreign minister in the late 1960s and early 1970s, once said that the consensus is what many people say in chorus but do not believe as individuals. GMO’s James Montier, in an excellent essay published several years ago, made note of the consistent weakness embodied in consensus forecasts:

“Economists can’t forecast for toffee … They have missed every recession in the last four decades. And it isn’t just growth that economists can’t forecast; it’s also inflation, bond yields, unemployment, stock market price targets and pretty much everything else … If we add greater uncertainty, as reflected by the distribution of the new normal, to the mix, then the difficulty of investing based upon economic forecasts is likely to be squared!”

Lessons Learned Over the Years

“I’m astounded by people who want to ‘know’ the universe when it’s hard enough to find your way around Chinatown.”

– Woody Allen

“Let’s face it: Bottom-up consensus earnings forecasts have a miserable track record. The traditional bias is well-known. And even when analysts, as a group, rein in their enthusiasm, they are typically the last ones to anticipate swings in margins.”

– UBS (Top 10 Surprises for 2012)

There are five core lessons I have learned over the course of my investing career that form the foundation of my annual surprise lists:

1. How wrong conventional wisdom can consistently be.

2. That uncertainty will persist.

3. To expect the unexpected.

4. That the occurrences of Black Swan events are growing in frequency.

5. With rapidly changing conditions, investors can’t change the direction of the wind, but we can adjust our sails (and our portfolios) in an attempt to reach our destination of good investment returns.

Again, it’s important to note that my surprises are not intended to be predictions, but rather events that have a reasonable chance of occurring despite being at odds with the consensus. I call these “possible-improbable events.” In sports, betting my surprises would be called an “overlay,” a term commonly used when the odds on a proposition are in favor of the bettor rather than the house.

The real purpose of this endeavor is a practical one — that is, to consider positioning a portion of my portfolio in accordance with outlier events, with the potential for large payoffs on small wagers/investments.

Since the mid-1990s, Wall Street research has deteriorated in quantity and quality due to competition for human capital at hedge funds, brokerage industry consolidation and reforms initiated by former New York Attorney General Eliot Spitzer. It remains, more than ever, maintenance-oriented, conventional and group-think — or group-stink, as I prefer to call it. Mainstream and consensus expectations are just that and, in most cases, they are deeply embedded into today’s stock prices.

It has been said that if life were predictable, it would cease to be life, so if I succeed in making you think (and possibly position) for outlier events, then my endeavor has been worthwhile.

Nothing is more obstinate than a fashionable consensus, and my annual exercise recognizes that, over the course of time, conventional wisdom is often wrong. As a society and as investors, we are consistently bamboozled by appearance and consensus.

Too often, we are played as suckers, as we just accept the trend, momentum and/or the superficial-as-certain truth without a shred of criticism. Just look at those who bought into:

• The success of Enron;

• The existence of Saddam Hussein’s nonexistent weapons of mass destruction;

• The heroic home-run production of allegedly steroid-laced Major League Baseball players Barry Bonds and Mark McGwire;

• The “financial-supermarket” concept at Citicorp, which was once the largest money-center bank;

• The uninterrupted profit growth at Fannie Mae and Freddie Mac;

• Housing’s “new paradigm” in the mid-2000s of non-cyclical growth and ever-rising home prices;

• The uncompromising principles of former New York Governor Eliot Spitzer;

• The morality of other politicians (John Edwards, John Ensign, Larry Craig, etc.);

• The consistency of Bernie Madoff’s investment returns (and those of other hucksters);

• The clean-cut image of Tiger Woods.

But enough of that rant.

How did I do last year?

White House Politics:

(When asked what he wanted to give thanks for during a press gaggle Thanksgiving Thursday, Trump responded), “for having a great family and for having made a tremendous difference in this country. I’ve made a tremendous difference in the country. This country is so much stronger now than it was when I took office that you wouldn’t believe it… And I mean, you see, but so much stronger people can’t even believe it. When I see foreign leaders they say we cannot believe the difference in strength between the United States now and the United States two years ago.”

– President Trump (Comments on Thanksgiving)

Policy:

“You only think I guessed wrong! … You fool! You fell victim to one of the classic blunders – the most famous of which is “never get involved in a land war in Asia” – but only slightly less well-known is this: Never go in against a Sicilian when death is on the line!”

– Vizzini, The Princess Bride

The Economy:

“The missing step in the standard Keynesian theory (is) the explicit consideration of capitalist finance within a cyclical and speculative context… finance sets the pace for the economy. As recovery approaches full employment… soothsayers will proclaim that the business cycle has been banished (and) debts can be taken on. But in truth neither the boom nor the debt deflation… and certainly not a recovery can go on forever. Each state nurtures forces that lead to its own destruction.”

– Hyman Minsky

The Markets:

“Every new beginning comes from some other beginning’s end.”

–Seneca the Elder

So, I said we’d be grading the surprises for 2020 that I unveiled a year ago.

Turns out I had a near average year relative to my historic percentages – with 40% of my Surprises were correct. (My worst hit rate was in 2013 when only 20% of my Surprises occurred. My best was over 60% in 2018).

But, more importantly, I had four of my first five (and most important rated Surprises) correct this year. In the case of the Presidential election, my forecasts for voter turnout, popular and Electoral College votes was eerily accurate.

As we entered 2020, most strategists expressed a constructive economic view of a self-sustaining domestic recovery, held to an upbeat corporate profits picture (abetted by the 2018 corporate tax rate reduction), there was a unanimous view that interest rates would climb and generally shared the view that the S&P 500 would rise in the range of 8% to 10%. As well all now know, the S&P Index rose by about 15% and interest rates fell hard as the world suffered under Covid-19.

Many readers of this annual column assume that my Surprise List will have a bearish bent (and to be sure, that was the case in the last few years and back in 2007-08). But I have not always expressed a negative outlook in my Surprise List and I often have positive (and out of consensus) things to say about individual companies and sectors.

Below is a report card (40% correct) of my 15 Surprises for 2020 (the surprise is in boldface and my analysis follows each surprise):

Surprise #1 Trump Popularity Falters Badly, the Progressive Wing of the Democratic Party Fails to Catalyze Voters, Biden Easily Wins the Presidency and Democrats Have a Clean Election Sweep (As Women and Millennials Show Up in Droves)… Voter Turnout rises by over +6% (from 2016) – most of the incremental change is captured by Biden who wins 50.7% of the popular vote compared with 46.3% for Trump – a plurality of over 6 million votes. (That compares to 48% for Secretary Clinton and 46% for President Trump in 2016 – a difference of 2.9 million votes). Senator Biden also wins a surprisingly large majority in the electoral college (304 to 234). After the election, there are violent demonstrations around the country by Trump supporters in mid- to late- November. Trump does little to squash or calm down the protests and instead holds a number of rallies against Democrats and the election results. In December, 2020, President Trump announces his plans to launch Trump TV. Sean Hannity leaves Fox News – assuming a duel role as CEO of Trump TV as well as the station’s chief commentator. Rush Limbaugh and several Fox News commentators join Trump TV… Biden was dismissed in the early stages of the Democratic primaries but beginning in South Carolina the President-elect’s fortunes turned. Biden ultimately received 306 electoral votes against Trump’s 232 votes (ALMOST EXACTLY THE 304 VOTES I EXPECTED). Voter turnout was indeed robust (turnout was 66.5% of eligible voters, highest since 1900) – with 20 million more votes in 2020 over 2016. Biden received 81 million votes (or 51% of the total and shattering President Obama’s 69.5 million votes) compared to Trump’s 74 million votes (47% of the total) – again, almost the exact percentages I projected 12 months ago! VERY RIGHT

Surprise #2 Disappointing Global Growth, Weakening Corporate Profits, a Fed Pivot and Political and Geopolitical Instability Produce a “Garden Variety” Bear Market in 2020… Though the Fed did not pivot there was a dramatic drop in global economic growth and in U.S. corporate profits. We had a Bear Market in 2020. VERY RIGHT

Surprise #3 The China Trade Deal Falls Apart, China’s Patience With Hong Kong Runs Out and There Is a Global Shortage of Protein… The trade war is reignited and tariffs are reimposed on China. Capital spending, consumer and business confidence falters. China doesn’t comply with “Phase One” of the trade deal which offers little more than purchasing needed agriculture products and fails to protect U.S. intellectual property. China’s patience in Hong Kong runs out and it takes action that sets off both a geopolitical and stock market crisis. China’s aggression ends any chance for a “Phase Two” trade deal. VERY RIGHT

Surprise #4 Watch Out Below! Automobile Industry Sales Plummet and Threaten the Domestic and Global Economies… Auto industry sales closed out 2019 at a 17.1 million SAAR rate for the month of December. SAAR fell to a 8.6 million rate within four months! VERY RIGHT

Surprise #5 With Draghi Gone, ECB Monetary Policy Abruptly Changes and Interest Rates Are Increased. VERY WRONG

Surprise #6 Despite Weakening Economic and Profit Growth the Federal Reserve Does Not Lower Interest Rates This Year. VERY RIGHT

Surprise #7 Berkshire Hathaway and Warren Buffett Surprise the Markets – On Several Fronts… Berkshire Hathaway, with over $130 billion of cash, acquires FedEx (for $55 billion) in a spirited bidding contest against Walmart (WMT) . There are several important catalysts to the transaction – Buffett understands FDX’s business and the deal would expand his scale in transportation – where he already enjoys a stronghold in rails with subsidiary Burlington Northern. Moreover, despite the recent Amazon issue, FedEx has a wide business moat with a vast distribution presence and a large fleet of vehicles. Finally, FedEx’ shares have been pummeled (-20%) because of a difficulty in adopting to digital commerce and the company could be purchased on the cheap at under 20x earnings…Berkshire makes two more large acquisitions – reducing its cash position by $100 billion to $30 billion. Fires in California grow entirely out of control, shutting down much of the power grid in California – and hobbling the state’s economy. President Trump does not come to the aid of the state until too much damage is done. But Buffett helps and provides bankruptcy financing by Pacific Gas and Electric (PCG) . While it is normally impossible to buy a regulated utility, at the request of regulators Berkshire ultimately takes control of the company. Contrary to being a “forever holding,” Berkshire unloads a portion of its Apple (AAPL) long investment after the stock becomes too large a percentage of its portfolio… Though Berkshire did sell down some of its Apple holdings the rest of the surprise was incorrect. VERY WRONG

Surprise #8 Goldman Sachs (In An Attempt To Expand Its Retail Presence) Acquires The Vanguard Group (with over $5.3 trillion of assets under management)… Goldman Sachs was quiet but Morgan Stanley acquired Eaton Vance. WRONG

Surprise #9 Stock Surprises Abound – Boeing, General Electric, Tesla, ViacomCBS, Comcast, Google, Facebook, Kohl’s, Ford, Square, Twitter, Federal Express, European Banks, U.S. Pharma/Healthcare and U.S… Most of these did not come to pass. WRONG

Surprise #10 The SoftBank Unraveling Spreads to Sand Hill Road WeWork isn’t the last failed unicorn that tries to IPO itself. The private values on a basket of money losing unicorns falls by over 30%… Venture capital becomes scarce. There are negative knock on effects throughout the Northern California economy. Late in the year Facebook (FB) , Alphabet (GOOGL) and Amazon (AMZN) begin to show the signs that a chunk of their revenue comes from venture based start-ups – their share prices suffer. Private equity does not escape the turmoil in venture capital… There was no “contagion.” WRONG

Surprise #11 A Well Known Trader\Investor Who Frequently Appears on Bloomberg, Fox Business and CNBC is Indicted By the SEC For Failure to Disclose His Transactions and Investment Positions In a Proper and Timely Manner… Didn’t happen but I see this in the future. WRONG

Surprise #12 A Large Sell-Side Brokerage Firm Abandons its Research Department Owing to Unbundling of Services and the General Lack of Profitability Associated With Their Efforts… Didn’t happen but I also see this in the near future. WRONG

Surprise #13 FANG(A) Gets Redubbed FAMG(A) With Microsoft Replacing Netflix… The competition from other streaming services causes Netflix (NFLX) to lose millions of domestic subscribers. The whole pricing power story unravels and market loses faith in the cash burning narrative. Netflix’s shares trade down to $200/share… Netflix signed up only 2.2 million new paid subscribers between July and September of 2020, its smallest quarterly increase since 2016, bringing the company’s total number of subscribers worldwide to just over 195 million – but it did not lose subs. The shares fell to $290 in March. WRONG

Surprise #14 Market Structure Haunts Our Markets Throughout the Year… The dominance of ETFs and quant strategies (e.g. risk parity) shows its ugly side…The 2019 movie is in reverse this year – the ETFs and quant products and strategies that delivered a recipe for the relentless advance last year are reversed and, with so many looking to exit, liquidity evaporates. ETF prices, in particular, exhibit greater volatility than the underlying constituent holdings. The dominance of passive strategies is threatened and active strategies begin to garner inflows after a lengthy period of losing market share. Over one quarter of the listed ETFs are delisted… A “Flash Crash” takes the S&P Index down by over -5% in one day. Volatility rockets to over 35 and stays elevated for most of the year… The February March decline in equities was unprecedented in time and magnitude. RIGHT

Surprise #15 A Credit-Related Event Causes a Market Liquidity Crunch as Covenant-Lite, Leveraged Loans, BBB-rated Downgrades All Pose a Potential Threat to Both the Debt and Equity Markets. Credit conditions tighten with more differentiation between CCC and BBB corporate and consumer credit. More companies fall out of CCC and out of BBB into high yield. VERY WRONG

*  *  *

Like Diogenes with his lantern, I am, again in 2021, a cynic looking for truth (and an honest investor) – as I engage in my annual assault on the consensus and “Group Stink.”

Last year I wrote:

“More than any year in the last decade, the contour of the U.S. stock market will likely be importantly influenced and shaped by politics and profits in 2020. Surprises in the political arena and in corporate profitability are my first two and most important deviations from the consensus. 2020 could be the year of mean reversion – a year of the vanishing Fed (and global central banker) put and a surprising turn in central bank policy (by the ECB), weakening global economic growth and less than expected corporate profits (again), political upsets (again), rising geopolitical risks (and global conflicts), a general recognition of the risks associated with untamed deficits and large debt loads and general market instability.”

The politics of 2020 initially set the stage for the markets and the global economies but it was Covid-19 (and the policy responses) – a Black Swan and virus that no one expected – that framed the markets throughout the year. NO ONE expected the magnitude and swiftness of the recovery of the capital markets to all-time highs in December, 2020 as multiples reset higher based on the confidence in a hockey stick rebound to both domestic economic growth and in S&P profits in 2021.

However, in 2021 we may return to fundamentals and a year of the vanishing Fed (and global central banker) put coupled with some mean reversion (lower) in valuations. This year might mark the return of the hibernating “bond vigilantes” as inflation and interest rates also mean revert as a general recognition of the risks associated with untamed deficits and large debt loads lead to general market instability later in the year.

Remember, my Surprise List is not a set of forecasts. Rather, the List represents events that the consensus views as having a low probability of happening (25% or less) but, in my judgment, have a better than 50% chance of occurrence. In betting parlance this is called an “overlay.”

I would note a change in the format of my Surprise List this year, as, in the age of social media, attention spans are shrinking — so this year’s Surprise List will reflect this new reality (of fewer characters and less words) by being noticeably shorter than in the past two decades.

Here are my 15 Surprise for 2021: 

Surprise #1 Tesla’s Stock Declines By Two Thirds – Elon Musk loses his liberal audience. Tesla’s mistreatment of customers, suppliers, employees, subsidy providers and safety regulators and the general population hits a wall. A movement to kick Tesla out of ESG Indices gains steam, as proponents give Tesla the lowest possible rating in S and G. The Chinese retaliate over Musk’s racist comments, where he blames Chinese drivers for a series of accidents. A high profile celebrity or athlete dies while using autopilot. Under new leadership, the National Highway Safety Administration (HTSA) orders recalls for suspension problems, computer screen failures, battery fires, sudden acceleration. Regulators put a stop to so called Full Self Driving due to predictable abuse. Tesla announces it will be transitioning its Fremont, California manufacturing to Austin, Texas in 2022, but after years of union busting, Austin workers vote to join the UAW. Meanwhile, Tesla’s market share collapses under an avalanche of new entrants. Rivian and GM (GM) beat the cybertruck to market with better products. VW (VLKAF) becomes the leading global manufacturer of electric cars. GM, Waymo and Zoox become the leaders in self-driving. Toyota (TM) demonstrates a solid state battery making them the leader in batteries. Tesla stock falls by almost -70% — Greenlight’s David Einhorn jokes that “it’s like an unannounced stock split.” John Bogle rolls over in his grave as “passive” investors lose most of their “investment” in Tesla. Congress conducts an investigation into Tesla’s inclusion in the S&P Index.

Surprise #2 Political Normalcy Is Not Obsolete and Biden is The Calm After the Storm – Biden breaks the party deadlock in Washington and governs with a centrist coalition of key Senators and Congressmen – to the frustration of the far left. There are several Republicans like Romney, Murkowski, Collins, Ernst, Perdue and Tillis that realize they have a ton of power (and control of the Senate) to support a centrist agenda. They join Democrat centrists including Warner, Bennet, Carper and Shaheen to drive a bipartisan agenda. There will be no bold Green New Deal (though a more moderate deal is delivered), confiscatory tax law changes, defunded police, mass forgiveness of student loans or single payor health. There will not be two new states or Supreme Court packing – even if the senate goes 50-50. There will be an infrastructure bill (with Green energy emphasized), changes to taxes on foreign corporate earnings, police reform, immigration reform and other attempts to reduce institutional racism, limited forbearance on hardship student debt, and fixes to Obamacare. 

Surprise #3 Former President Trump No Longer Remains A Dominant Political Force in the U.S. – The Republican party comes to the realization that Trump is a liability at the same time the Democrats realize that the far left hurts their party. Trump proceeds with “Trump TV” (he is in “pre-production” already!). Launched in the spring, he recruits Sean Hannity, Roger Stone, Mike Flynn and Joe Kernen to become the enterprise’s primary commentators. By year-end it is clear that this is but another one of Trump’s multiple business failures and “Trump TV” closes almost before it started. Facing numerous lawsuits and a sweeping State of New York indictment, Donald Trump declares personal bankruptcy by year-end. There is no cliffhanger this time and, disgraced, Trump sells Mar A Lago and liquidates several of his other properties. 

Surprise #4 Stocks Experience Their Least Volatility Ever in the First Half of 2021 and the Most Volatility Ever in the Second Half of 2021 – The S&P Index is tightly range bound between 3600-3800 over the first six months of the year – but, under the weight of regulatory assault of technology, and higher inflation and interest rates, falls to under 3300 later in 2021. 

Surprise #5 Bottlenecks Multiply and Inflation Surges – There are bottlenecks everywhere in 2021 and inflation in places beyond financial assets. As the economy reopens, there are shortages of almost everything. Commodities boom, but so do service prices. It seems that prices of everything from shipping to manicures are on the rise. The infrastructure bill sends construction material prices through the proverbial roof. Pent up savings are unleashed in robust consumer demand. Concerts, sporting events reopen with limited capacity and tickets are in hot demand. Residential real estate (single and multi family) soar in price, as people put stimulus, the recovery and stock market winnings into real estate. By mid-year, even the badly manipulated CPI is running up +4%. 

Surprise #6 Inflation and Interest Rates Rip Higher Leading to A Valuation Reset (Lower) For Equities in 2021 – At first, the bond market reacts “normally” to rising inflation. The 10 year yield breaks 2% (to the upside). The stock market has a late spring/early summer wobble in response to rising rates and the possibility that target inflation will force higher rates. A mid-year Treasury auction goes poorly. The Federal Reserve, faced with the dilemma of choosing between a lower stock market and higher inflation, chooses to accept higher inflation. The Fed announces a cap on the 10 year yield at 1.5% and expresses its willingness to do whatever it takes to enforce it. In effect, the Fed becomes the Treasury buyer of first resort. This sends stocks, commodities and most everything briefly higher (towards the upper end of the 3600-3800 S&P trading range) – except the dollar, which falls 10%-15%. Though temporarily ignored by infinite liquidity and easing financial conditions at all costs, it grows clear that Covid-19 spurred a dangerous leveraging up in the global economy that has been almost constantly in place since The Great Decession of 2008-09. Higher inflation and interest rates bring the “bond vigilantes” out of their long hibernation. Stocks fall by -15% over the last six months of the year as price earnings multiples contract in the face of the highest level of corporate defaults in over a decade (led by companies in the retail space and others that were already struggling prior to the virus). Credit spreads (now at record lows), widen dramatically, the CLO market collapses and private equity companies are among the worst market performers of the year. 

Surprise #7 A Decline in the U.S. Dollar Spurs an Advance In Gold (to $3,000/oz) and a Ramp of +50% in Bitcoin (to $40,000) – But Silver Is The Big Winner As It Doubles to Over $50/oz – Over easy policy, excessive liquidity, higher inflation and a rapid rollout in the Covid-19 vaccine powers the prices of cryptocurrencies and precious metals higher. Silver, however, is the league leader as the rapidly rising demand for silver in industrial applications creates a supply crunch late in the year. Another challenge on the supply side for silver is that more than half of mined silver supply is a by-product of zinc, lead and copper mining, making it tough for miners to meet the surging excess proportional demand for silver. Precious metals and crypto currency prices peak in the third quarter. 

Surprise #8 Congress Acts On the SALT Deduction – Congress either repeals the SALT deduction limit or raises the cap from $10,000 to $25,000. Centrist Ray McGuire wins the June Democratic primary for New York City Mayor and, upon his election in November initiates bold moves to revitalize NYC. Residents move back and housing activity and prices fall in the suburbs under the weight of those initiatives and stretched home affordability. 

Surprise #9 The Fallout From Brexit Causes Trade and Other Chaos in Europe – Badly Shaking the UK and European Economies 

Surprise #10 France’s Economy Approaches The Financial Brink – Weighed down by one of the worst debt to GDP ratios in Europe and sub zero interest rates, two of the country’s largest banks fail. In a desperate position, in which France actually faces systemic risk, the country begs for assistance from Germany in order to get the ECB to print enough currency to posture a bailout of France’s banking system. President Emmanuel Micron steps down. 

Surprise #11 Broad Regulatory Actions Against Big Tech Results In A More Rapid Pivot From Growth to Value – FANG Becomes GATFAT! – Antitrust actions against Facebook (FB) , Alphabet (GOOGL) and Amazon (AMZN) become a genuine worry. In response to Derek Chauvin being acquitted in the George Floyd case, rioting ensues and the social media platforms are blamed for fanning the literal flames as Minneapolis is all but burned to the ground. The Rule 230 exemption is repealed. Meanwhile Europe begins imposing punitive taxes on U.S. internet giants. Finally, China retaliates to Biden continuing Trumps policy of going after Chinese companies with its own claims about Apple (AAPL) (illegal monopoly) and Tesla (TSLA) (unsafe cars). Google, Apple, Twitter (TWTR) , Facebook, Amazon and Tesla get redubbed GATFAT, as the impact of their prior overblown markets caps on portfolios is broadly felt by the Indexers and other investors. 

Surprise #12 China’s Economy Sputters Under Massive Debts and Crackdown on Tech Giants – Leading To Some Moderation In Xi’s Policies 

Surprise #13 Despite Strong 4Q2020 Performance, Bank Stocks Lead the Market in The First Half of the Year – As tech falters under the weight of an existential antitrust threat, financials prosper. Citigroup (C) trades at $75, Wells Fargo (WFC) and Bank of America (BAC) trade at $35 and JP Morgan’s (JPM) price approaches $140/share by the early summer. 

Surprise #14 Goldman Sachs Goes Private In 2Q2021 – The announcement marks a high-water mark for equities in 2Q2021. 

Surprise #15 Trump Is Barred From Twitter – Within one week after President-Elect Biden’s inauguration, Twitter suspends former President Trump’s Twitter account for tweeting false claims about the “stolen” Presidential election. Upon the news of the Twitter suspension announcement, Twitter’s shares fall by over -$7 to $8/share (or by about -15%) in one day. (The shares bottom in the high $30s, where I load up!)

*  *  *

Long GS (small), MS (small), GLD (large), AMZN (small), GOOGL (small), GM (small), GLD (large), C, JPM, WFC, BAC, XLF.

Short TLT, SPY (large), QQQ (large), AAPL, TSLA (large).

As Europe begins vaccinating the first wave of high-priority patients, a “glitch” has already emerged: many health-care workers and others have refused to take the vaccine, as skepticism and suspicion remain elevated.

A similar phenomenon has played out in the US, but to a less intense degree. But the situation, which we discussed last night, is now one of a variety of reasons, from a shortage of supplies and raw materials, to an uncooperative populace, that public-health officials are growing worried about hitting lofty vaccination targets.

And so, in Spain at least, government bureaucrats are fighting back, as Health Minister Salvador Illa warned the country would set up a “registry” for everybody who refuses the vaccine.

“What will be done is a registry, which will be shared with our European partners… of those people who have been offered it and have simply rejected it,” he said.

“It is not a document which will be made public and it will be done with the utmost respect for data protection.”

He added that the registry would not be made public, or delivered to employers, which begs the question: why else would the government keep a database of that information?

An AFP report on the health minister’s remarks wasn’t exactly clear about the motive, which leads us to believe that it’s just another tactic by the Spanish government, which has sworn up and down, like other European governments, that vaccinations wouldn’t be mandatory,.

Polls released over the last couple of months appear to reflect a steep and unexplained drop in the number of respondents who claim to be skeptical, or otherwise indicate that they would like to wait before getting the vaccine, has plunged as the first doses have been doled out and administered.

Spain’s government expects to have between 15MM and 20MM people out of its population of 47MM vaccinated against the virus by June in order to salvage next summer’s tourism season.

“The way to defeat the virus is to vaccinate all of us or the more the better,” Illa said.

Speculation has also been brewing about what might happen to those who refuse to inoculate themselves, and/or their children, even as public officials have talked up the importance of “transparency” and – of course – freedom of individual choice.

To be sure, the Spanish aren’t alone. Many other Europeans share their anxieties, which have been stoked by government table-pounding about vaccine safety (any skepticism is verboten), the rapid pace of development, and the use of the new mRNA technology. For example, independent pollster Alpha Research said its recent survey suggested that fewer than one in five Bulgarians from the first groups to be offered the vaccine – frontline medics, pharmacists, teachers and nursing home staff – planned to volunteer to get a shot. A recent IFOP poll found that roughly 41% of French would take the shot if available, which means nearly 60% would not.

Which is why, looking ahead, we wouldn’t be surprised to see more heavy handed measures employed (immunity passports?) as officials grow increasingly desperate to hit their (largely speculative) herd immunity targets.