Tag: finance

In a dramatic 216-209 vote, Nancy Pelosi secured her fourth term as Speaker (which she vowed would also be her last).

In order to secure the narrower than expected victory, reporter John Bresnehan pointed out that at least three members broke COVID quarantine to attend swearing-in ceremonies and the all-important speakership election Sunday, and in addition to those three, as Breitbart’s Matthew Boyle reports, Rep. Gwen Moore (D-FL), attended the vote to back Pelosi after testing positive for the deadly virus just six days ago.

“3 members who are still in COVID quarantine will be allowed to cast a today, per a statement from Brian Monohan. 2 Dems, 1 R. They will cast vote in special area in House gallery. This shows stakes of today’s Speaker vote. Members were not named in statement.

Rodney Davis, top Republican on the House Administration Cmte, is very upset about this “Popemobile” built in the House Gallery for quarantined members.

He says the “only reason this is happening is because Speaker Pelosi needs to be re-elected speaker.” “It’s shameful.”

Davis says Monahan won’t tell him who members in quarantine are but says they’ve had negative tests.

“It’s horseshit. You can quote me on that.”

A senior GOP congressional aide ripped Pelosi, calling the decision to bring these coronavirus risks into the House solely to secure a second term as Speaker a “speakership election super spreader event.”

And so, as Congress gets back to the people’s business, first up is the “gender neutral”-zation of speech on the floor:

According to Pelosi, the Democrats’ House rule changes will “honor all gender identities” by “changing pronouns and familial relationships… to be gender-neutral.”

Terms like “father” and “mother” would be replaced by “parent.” “Brother” and “sister” would be axed in favor of “sibling.” Under these rules, House members would be required to refer to their “husband” or “wife” as their “spouse” or their son(s) and daughter(s) as child(ren).

Pelosi has yet to set any kind of example for following the rules she would demand of others.

This is her Twitter bio as of the authoring of this very post. Notice any gender-specific terms?

Both “mother” and “grandmother” would be verboten under Pelosi’s new rules for the House.

Finally, as a reminder, before Pelosi was re-elected as Speaker in 2018, House Democrats and Pelosi agreed to term limits for the top three Democratic leaders in the House, which Pelosi agreed would stop her from another run at speaker in 2022, Roll Call reported.

Senator Louie Gohmert (R-TX) suggested that Republicans should be ‘as violent as Antifa and BLM‘ after US District Judge Jeremy Kernodle tossed out his lawsuit which argued that Vice President Mike Pence has the authority to unilaterally overturn the 2020 election results based on widespread claims of fraud in several states, according to Bloomberg.

“If the bottom line is, the court is saying, ‘We’re not going to touch this. You have no remedy’ — basically, in effect, the ruling would be that you gotta go the streets and be as violent as Antifa and BLM,” Gohmert told Newsmax in a Friday night interview.

Hilariously, Bloomberg describes Antifa as “a loosely-aligned movement that opposes fascism.”

On Thursday, Kernodle ruled that Gohmert hadn’t sufficiently argued that he suffered an injury by any action by Pence, and therefore had no legal standing to sue. The judge didn’t consider the merits of the case in his decision.

“Congressman Gohmert’s alleged injury requires a series of hypothetical — but by no means certain — events,” wrote Kernodle – a 2018 Trump appointee, adding “Plaintiffs presuppose what the Vice President will do on January 6” and “which electoral votes the Vice President will count or reject from contested states.”

Gohmert argued that Pence has the power to hand Trump a second term by simply rejecting swing states’ slates of Democratic electors, and instead choosing competing GOP electors when the Senate and House meet jointly to open and count certificates of electoral votes on Jan. 6. Election experts have said such a finding would create a major conflict of interest. -Bloomberg

Gohmert filed a notice of appeal late Friday, which was promptly dismissed Saturday morning.

Pence, who constitutionally presides over the Senate, will oversee the counting of Electoral College votes on January 6. In a Thursday filing via the Justice Department, Pence urged the judge to reject Gohmert’s suit, arguing that the Texas congressman should have sued the US Senate or House of Representatives if he disagreed with the way Electoral College votes are counted.

Between record-low mortgage rates (thank you Federal Reserve), Congress’ fiscal stimulus checks, record debt-fueled demand, and extremely low supply, the housing market entering 2021 is in bubblelicious territory, surpassing levels not seen since the 2006/7 housing bubble. 

Of course, surging home prices mean that millennials can’t afford to buy as this has pushed affordability to a 12-year low.

Blomberg, citing a new report from Attom Data Solutions, said homebuyers in the fourth quarter had to spend at least 30% of their wages to afford the average American home, the largest share of any quarter since 2008. 

Thanks to the Fed, which has been on an MBS buying spree, purchasing more than $100 billion in mortgage-backed notes in November – borrowing costs are now below 3% for a 30-year loan, have spurred a buying frenzy, driving up prices across the country as bidding wars for homes erupt amid shrinking supply, as per a new Goldman Sachs report. 

“The future remains wholly uncertain and affordability could swing back into positive territory,” said Todd Teta, chief product officer at Attom. “But, for now, things are going in the wrong direction for buyers.”

And the wrong direction indeed as more millennials than ever are living with their parents. 

With that in mind, here is Goldman’s housing activity tracker. 

If this isn’t a bubble… Then what is? 

Authored by Adrea Widburg via AmericanThinker.com,

An ugly story emerged on New Year’s Day: Vandals had attacked Nancy Pelosi’s San Francisco house, leaving behind graffiti on her garage complaining about the stimulus bill, along with a pig’s head in a puddle of red paint. People less credulous than the media, though, noticed that the vandals were kind enough to do their dirty deed without touching the brick facing on Pelosi’s house. These may have been polite vandals, or there may be more here than meets the eye.

A local media outlet, KPIX, reported the story:

The new year brought a disturbing discovery at the San Francisco home of U.S. House of Representatives Speaker Nancy Pelosi, where, early Friday morning, vandals spray-painted her house and left a severed pig’s head in front of her garage.

The graffiti says “Cancel rent” and “We want everything” — possibly referencing coronavirus stimulus checks. There was also a severed pig’s head in a pool of red paint left in front of the garage door.

The original story made Antifa look simultaneously sympathetic and really bad. The good part was the “cancel rent” statement. The bad part was the vandalism itself. No civilized people want to be victims of ugly graffiti nor do they want it to happen to others, including San Fran Nan, no matter how vile her politics. Moreover, Pelosi’s position may make the vandalism a federal crime.

At first pass, the photo of the damage is very ugly. The garage door is completely covered with graffiti and the pig’s head is disturbing:

#BREAKING: House Speaker Nancy Pelosi’s San Francisco home was reportedly vandalized over night with fake blood and a pig’s head, according to reports https://t.co/kDhIPiFbNT

— KRON4 News (@kron4news) January 2, 2021

People quickly noticed something peculiar, though, about the graffiti. If you look at the upper right side, where the letter “A” in a circle appears, the circle abruptly cuts off on the far, right side, where it might have touched the bricks:

Unless the spray can coincidentally stopped spraying paint just as it got to the “three o’clock” side of the circle, it looks very much as if the graffiti artist went out of his (or her) way to protect the bricks from getting paint splashed on it, perhaps by taping off the area before spraying. This care is important because it’s easy to repaint a garage door and “notoriously difficult” to get spray paint off of a porous surface such as brick.

Likewise, the encircled “A” on the left side also has a completely vertical stripe on its “nine o’clock” side, which again looks as if someone held up a barrier to ensure that no paint got on the bricks:

When you think of your average Antifa type (these mug shots may be representative), does that Antifa guy or gal strike you as the kind of person who would carefully avoid getting any paint on bricks so as to spare Pelosi the inconvenience of getting the paint off the bricks?

It’s entirely possible that this was an Antifa effort and the person spraying paint had some residual compassion for Pelosi. But it’s also possible that this is a false flag effort. I am not offering any suggestions as to who might have raised this false flag. I note only what others have pointed out before: Something’s peculiar here. 

In late 2019 into early 2020 Iran was among the first countries outside of China to be hit hard by the coronavirus pandemic (alongside Italy). Due to its international isolation and the crippling US-led sanctions on the Islamic Republic, it is also likely to be the last to access a vaccine for its vulnerable population.

While the US State Dept. has repeatedly claimed sanctions don’t restrict humanitarian goods like medicines, the reality is that Western and international companies have remained too concerned about punitive consequences for doing any level of business with Iran. Restrictions on Iran’s access to international banking has also severely limited its ability to procure a vaccine.

This means Tehran will naturally look to US rivals like Russian and China for help. At the same time, Iran is reportedly rushing to produce and test its own domestic-made vaccine. Cuba is reportedly assisting Iran in these efforts, according to state sources.

And according to Russian media, talks for the Islamic Republic to potentially procure one of two Russian vaccines are already in the works.

“Iran and Russia are preparing a personal meeting on cooperation in producing the vaccine against the novel coronavirus, Iranian Ambassador to Russia Kazem Jalali said in an interview with Izvestia newspaper published on Sunday,” reports TASS.

“The phone conversations in April-October 2020 between the presidents of Iran and Russia underlined Iran’s interest in cooperation with Russia in the field of producing the coronavirus vaccine and exchanging the experience. Currently, Russian documents on the vaccines are being studied. It has been decided that soon a personal meeting will take place,” the Iranian envoy said.

Meanwhile, here’s what state media sources had to say on the joint Iranian-Cuban vaccine venture:

The first batch of coronavirus vaccine which will reach Iran will be probably purchased directly from a foreign country, Health Ministry spokesman Kianoush Jahanpour said on Friday. 

“Following that, Iran will receive its share of the COVAX vaccines and then the Pasteur Institute of Iran will co-produce a vaccine with a Cuban company, and finally, the domestically-made vaccine will be produced,” he explained, IRNA reported.

He went on to say that the human trial phase of the vaccine has been carried out successfully in Cuba. “The second phase of the human trial is being conducted under the supervision of the Pasteur Institute of Iran in Cuba. Provide that the second phase is successful, the third phase will be implemented in Iran.” On December 29, 2020, the first coronavirus vaccine made by Iranian researchers, was unveiled and injected into three volunteers. 

The production line of the Iranian coronavirus vaccine with a capacity of 1.5 million doses per month will be launched within the next 40 days. By the next six months, vaccine production will reach up to 12 million doses per month.

Iran has over 1.2 million confirmed cases thus far, among these 55,540 deaths, but Iranian health authorities have long said the true infected numbers are in the multiple millions, given the rapid community spread and lack of testing that was a problem early on in 2020.

By Tsvetana Paraskova of OilPrice.com

The United States is doubling down on nuclear power and propulsion systems in the new space race with China.  The Trump Administration unveiled in the middle of December a National Strategy for Space Nuclear Power and Propulsion, the so-called Space Policy Directive-6, aiming to develop and use space nuclear power and propulsion (SNPP) systems to achieve scientific, national security, and commercial objectives.  

In the new space race between Western nations and China, the United States is betting on developing and demonstrating the use of new SNPP capabilities in space.  

The strategy on nuclear power and propulsion sets a goal for the U.S. to develop uranium fuel processing capabilities that enable fuel production that is suitable to lunar and planetary surfaces and in-space power, nuclear electric propulsion (NEP), and nuclear thermal propulsion (NTP) applications. Another objective is to “demonstrate a fission power system on the surface of the Moon that is scalable to a power range of 40 kilowatt-electric (kWe) and higher to support a sustained lunar presence and exploration of Mars.” 

Collaboration with the private sector is also a pillar of the nuclear power and propulsion strategy. 

NASA strongly supports the nuclear space strategy, pointing out the advantages of nuclear power and propulsion in driving spacecraft. 

“Space nuclear systems power spacecraft for missions where alternative power sources are inadequate, such as environments that are too dark for solar power or too far away to carry sufficient quantities of chemical fuels. Space nuclear systems include radioisotope power systems and nuclear reactors used for power, heating, or propulsion,” NASA said, commenting on the new national strategy. 

NASA believes that nuclear thermal propulsion (NTP) is an attractive option for in-space propulsion for exploration missions to Mars and beyond. NTP offers virtually unlimited energy density and specific impulse roughly double that of the highest-performing traditional chemical systems, according to NASA. 

As part of the U.S. strategy, NASA’s near-term priority will be to mature and demonstrate a fission surface power system on the Moon in the late 2020s, in collaboration with the Department of Energy and industry. Such a system could provide power for sustainable lunar surface operations and test the potential for use on Mars. 

Earlier in 2020, the Department of Energy said that NASA plans to build a base and a nuclear power plant on the Moon by 2026 and is inviting proposals from companies ready to take on the challenge. The plan will involve the construction of a 10-kW class fission surface power system to be used for demonstrative purposes. The plant is to be manufactured and assembled on Earth and then shipped to the Moon on a launch vehicle. This vehicle will take the plant to Moon orbit, from where a lander will take it to the surface of the satellite. The demonstration will continue for one year, and if successful, it could open the door to other missions on both the Moon and Mars.

“Space nuclear power and propulsion is a fundamentally enabling technology for American deep space missions to Mars and beyond. The United States intends to remain the leader among spacefaring Nations, applying nuclear power technology safely, securely, and sustainably in space,” Scott Pace, Deputy Assistant to the President and Executive Secretary of the National Space Council, said in a statement, carried by SpacePolicyOnline.com.

The U.S. should continue to enable American entrepreneurs and innovators to further bolster its commercial space industry to continue leading the space race, U.S. Secretary of Commerce Wilbur Ross wrote in an op-ed in December.  

“Competition is increasing, especially between Western nations and China. Our advantage in this new space race is the U.S. commercial space industry. It is critical that we continue to enable American entrepreneurs and innovators, lest we miss the opportunity and potentially lose the race,” Secretary Ross said. 

Given the loose national guidelines for reporting deaths attributed to COVID-19, is it any wonder that, around the country, potentially tens of thousands of deaths have been wrongly attributed to the virus?

In Washington State, as we recently pointed out, hundreds of “COVID-19 deaths” have been recorded even if the manner of death had nothing to do with the virus. In some cases, deaths caused by gunshot wounds were counted in the “COVID-19 death” column since the patients had previously tested positive. A report from the Freedom Foundation, a Washington State think tank, found the number may have been inflated by as much as 13%:

In May, a report released by the Freedom Foundation, an Olympia-based free-market think tank, revealed the DOH was attributing to COVID-19 every death in which the deceased previously tested positive for the virus. However, it’s clear that catching the disease and dying of it are two very different matters.

Washington’s data was riddled with cases – as much as 13 percent of the total – in which the death certificate made no reference to COVID-19 as a cause of death. In several cases, even gunshot deaths were chalked up to the virus.

While the Department of Health did remove 200 deaths from the count, the Freedom Foundation did another analysis. Combining data sources from the Department of Health for nearly 2,000 deaths as of early September, the new analysis found that 170 death certificates did not mention COVID-19. Another 171 deaths had no causal connection to the virus. According to the Post Millennial, the group estimates Washington’s death counts could be inflated by as much as 20%.

Additionally, as Epoch Times’ GQ Pan recently noted, two Minnesota legislators who believe their state’s COVID-19 death count is inaccurate are calling for a nationwide audit to find out how many people died from something other than the CCP (Chinese Communist Party) virus but were added to the pandemic death totals.

Republican State Rep. Mary Franson said she has enlisted a team to examine data provided by Minnesota’s health department. Her team allegedly found that COVID-19 was blamed for some deaths clearly not linked to the respiratory disease.

“We found clear-cut examples from the Minnesota Department of Health’s own files—public records—of suicide, a drowning, an auto accident where the passenger was ejected from the vehicle, we found dementia … and strokes,” Franson said during an interview with Fox News, adding that she was “so shocked at what I found that I just could not keep silent.”

“The citizens of our country are being led in fear, and that fear is leading them to make irrational decisions based on the governors with their shutdowns,” she added.

“So we need this audit. We need the truth.”

Franson was joined by Republican State Sen. Scott Jensen, a practicing physician. Jensen has become the subject of two state probes earlier this year for arguing that the federal and state guidelines on reporting COVID-19 deaths could pressure local authorities to misclassify and inflate their numbers, and that doctors and hospitals are motivated to do so for more health care dollars.

“If you could hit a threshold of 161 admissions to your hospital with COVID-19 diagnosis between January and June, you received $77,000 of additional money for each one of those admissions” through the CARES Act, Jensen told Fox News.

“I don’t think there’s any questions that reverse incentives have been created.”

In response to the allegations, the Minnesota Department of Health said the way it classifies COVID-19 deaths is consistent with the guidelines from the U.S. Centers for Disease Control and Prevention.

Most Americans probably don’t realize that, in some states, up to 70% of the COVID-19-linked deaths involved residents of long-term care homes. In many cases, extremely elderly patients who died of COVID-19 had other “co-morbidities” that likely would have been the primary cause of their demise if COVID-19 had never arrived in the US.

Now, ahead of what could be a critical week for his presidency, Donald Trump is lashing out at the CDC, claiming the health agency has exaggerated the pandemic in the US by using a broad definition of what constitutes a COVID-19 case or death.

The number of cases and deaths of the China Virus is far exaggerated in the United States because of @CDCgov’s ridiculous method of determination compared to other countries, many of whom report, purposely, very inaccurately and low. “When in doubt, call it Covid.” Fake News!

— Donald J. Trump (@realDonaldTrump) January 3, 2021

Here’s some context: Back in April, the CDC began including “probable” cases and deaths in its tallies, although some states chose not to report such figures. A “probable” case or death means that health workers can label someone as COVID-19 positive even if they haven’t been tested, as long as the patient’s symptoms meet the “clinical criteria” associated with the virus.

Even Deborah Birx, a member of the White House COVID taskforce who plans to step down from her post once Trump leaves office, acknowledged back in April that “in this country we’ve taken a very liberal approach to [COVID-19] mortality.”

Now, with 20MM ‘confirmed cases’ and 350K+ ‘confirmed deaths’, the US leads the world on both fronts, even as China, the country where the virus originated (possibly in a lab), continues to claim fewer than 100K confirmed cases.

Americans deserve transparency and accuracy at this point. It is a dereliction of duty for the CDC and NCHS not to tailor their guidelines to the disease progression of a COVID-19 infection capable of contributing to a person’s death.

Authored by Robert Wright via The American Institute for Economic Research,

Spontaneous food banks, mayoral recall efforts around the country, kneeling during the Star Spangled Banner, and the Nashville bombing are each borne of desperation and frustration with the statist status quo. It boiled over in 2020, and could have profound consequences on politics, economics, and every aspect of life next year. 

The Boston Globe recently reported that “underground” food pantries dare to operate throughout Beantown, a.k.a. “The City of Kind Hearts.” Not content to merely imply that spontaneous acts of charity might be illegal by using the term “underground” in the headline, the article’s author explicitly notes that some charities operate in a “legal gray area.”

It is now official: the people who sparked the American Revolution at Lexington, Concord, and Bunker Hill would no longer recognize Massachusetts. The proverbial frog has been boiled to death and its legs are probably slated to be served to a politician at Deuxave, a fancy French restaurant at the intersection of Commonwealth and Massachusetts Avenues that apparently is open for sit-down service. 

The governor of Rhode Island recently joined the Hall of Lockdown Shame by drinking in a wine bar without a mask. (The Founders would have hung her in effigy from Westerly to Woonsocket.)

Thankfully for us, the denizens of colonial Massachusetts jumped out of the pot before their frog was cooked. It took the Coercive Acts to really rile them but eventually they realized that their putative leaders in London wanted to be their rulers. In the parlance of the day, Britain no longer sought to mother the colonists but to enslave them through increasingly minute regulation of their everyday lives.

The colonists of Massachusetts and the other rebellious colonies sought to protect their liberty, their lawful right to conduct their lives as they saw fit, subject only to a few laws promulgated by their fellow citizens under a strict system of formal and informal checks and balances, from honest elections to sunset clauses.

One major component of liberty was the right to associate for commercial or charitable purposes. Those who sought to formally incorporate for- or non-profit organizations to ensure certain legal protections, most especially the right to hold property and access courts as a distinct legal entity without having to dissolve and reorganize every time a member joined or left, were put at some trouble and expense (see my Corporation Nation for details) but any group of volunteers could associate under rules of their own making for any activity that would be lawful for any one of their number to undertake.

More generally the right to associate constituted a big chunk of what Francis Scott Key meant by “the Land of the Free” in his poem “The Defence of Fort McHenry,” which formed the lyrical basis of the current national anthem.

No wonder people of all races and genders have started to kneel during the anthem. Land of the free? Pshaw! (Incidentally, the fact that the archaic expression of disbelief I just employed is now considered new internet slang shows how far our educational system has degraded.) In what kind of a free country would a journalist unquestioningly report on the inherent evil of neighbors sharing cans of sustenance to get through tough times because a placeman didn’t endow the act with his stamp of government approval? (Stamp, get it?)

Government officials are concerned about “food safety and storage,” the Globe article gravely intones. Ah, the giant loophole we must close if we are to be able to stand once again for the anthem. In the mid-nineteenth century, a couple of poor court decisions began to enlarge government’s power to punish those who deliberately hurt others into a general power to regulate under the pretext of health and safety, a power that in many states had apparently waxed to limitless proportions in 2020.

And that brings us to the Christmas Nashville bombing. The matter behind the clatter is that one or more persons became so disgusted with America that s/he/they thought it needed a wake up call a bit louder than kneeling for the anthem or even the summer’s “mostly peaceful” protests. 

The latest report suggests the culprit may have deliberately died in the blast. Regardless of the details that emerge, expect protests, from bombings and riots to simple acts of civil disobedience like littering, to increase as Americans mark their lives to market. 

Rhetoric about whose lives matter and the preciousness of all human life aside, rational people value their lives based on their expected future well-being. Dash their hopes and dreams with increasingly arbitrary attempts to end liberty and they will be more likely to commit desperate acts of violence and (self)-destruction that serve only to decrease the expected future well-being of the survivors yet more. 

Only liberty can restore the vibrancy of our dreams and end the vicious cycles of violence that have too long permeated many of our communities.

Economist and President Trump’s economic adviser Stephen Moore dismissed the need for a “massive stimulus bill” to generate economic growth in 2021, according to The Hill. 

Moore, speaking with radio host John Catsimatidis on WABC 770 AM, said the latest economic estimates show the economy should recover “without all of this government spending.” 

“I’m not so sure we need this massive stimulus bill. We just need to get the vaccine out there,” Moore said. “And we need to get the businesses open in New York City and Los Angeles and Chicago and San Francisco.”

With the vaccine rollout already underway and some 3.5 million doses have already been distributed – the government has fallen behind in its goal of vaccinating 20 million people by the end of December. At the current rate, it could take years to vaccinate the whole population. Goldman Sachs’ latest research note shows about 1% of the US population has been vaccinated. 

To mitigate the threat of a double-dip recession, Trump signed a $2.3 trillion omnibus spending bill late last month, which included $900 billion in virus relief for low-income folks and businesses. Taxpayers who qualify have already started receiving $600 stimulus checks. This is the second round of direct transfer payments to the working poor since Trump signed a similar stimulus bill when the pandemic began. 

The latest round of checks is coming just in time as Chase consumer credit and debit card spending data shows spending trends among Americans have stalled. 

Trump, disgusted with Republicans, has joined Democrats and urged Congress to increase direct transfer payments to $2,000 for the working poor. However, Senate Majority Leader Mitch McConnell repeatedly shut it down. 

In a separate interview, Moore told Fox News last week that $2,000 checks are “absurd.” 

“I think it’s important to realize, we have spent now, already $2.5 trillion. That’s more money than we collect and income taxes for an entire year. Plus, this would add another $500 billion to the debt,” he explained. “Plus, President-elect Biden is now saying he wants another one or 2 trillion dollars stimulus on top of that.”

Moore said the federal government has “spent money like it’s M&M’s” throughout the coronavirus pandemic.

“It’s not a way to stimulate the economy,” he warned, suggesting, “We are passing these costs onto our children and grandchildren.”

The federal government will soon learn that repeated helicopter drops this year will have to continue, or the people will get angry. On Saturday, Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi’s homes were vandalized by activists displeased by the politicians for failing to pass the $2,000 direct transfer payment last week.  

From Adam Virgadamo and Michelle Weaver, equity strategists at Morgan Stanley

As we enter 2021, vaccines bring hopes of reopening and a return to normal, but the reality is that markets and the world are constantly evolving. That evolution creates alpha opportunities, so each year Simon Bound, our Global Director of Research, hosts senior analysts from around the world to discuss ideas that will shape investment returns in the years ahead. This year’s meeting over videoconference felt a bit different, but the format didn’t limit the breadth of discussion.

Here are some high-level thoughts on trends that we expect to shape markets in 2021 and beyond.

• Post-pandemic economies will look different: We see a V-shaped recovery, but history tells us that every recession brings economic scarring. Given the scale of the Great Covid Recession (GCR), this time won’t be different, and how we heal matters. Proactive fiscal policy has been a pillar of the recovery and we expect structurally higher spending going forward, but it will prompt debate. There’s a real possibility that higher spending means higher rates, higher inflation, and sharper and shorter business cycles, all of which come with higher volatility and a broader role for active management.

• Reopening will bring wallet share shifts: The GCR accelerated digital adoption trends, propelling tech to new all-time highs as a percentage of market cap. A reopening will bring some wallet share reversion, but 2020’s winners won’t sit still and tech’s giants will push to make this year’s share gains permanent. We see opportunities in identifying how much 2021 spending patterns resemble 2020 versus 2019.

• Covid-19 made us more productive: One trend too powerful for even Covid-19 to derail is the deployment of technology to disrupt existing business models. We’ve written about the coming Productivity Boom, the Data Era, and the 2nd Machine Age, and 2020 saw these secular trends continue with robust demand for investment in AI, automation, and industrial software. The application of technology in response to the pandemic led to new ways of operating that made companies more efficient and protected their margins. We suspect that these efficiency gains are just the beginning as the continued diffusion of technology across industries boosts productivity for years to come.
  

• Disruption isn’t stopping: As an example, Alibaba digitized retail and logistics in China. Manufacturing may be next as BABA’s scale and data give it the ability to predict demand and reduce costs upstream via better inventory management. Downstream, the reach of social networks means it’s never been easier to build a brand or harder to maintain one, raising questions about the benefits of scale and the long-term value of brand equity. Social commerce and community purchasing are also evolving in ways that help to shift advertising dollars and lower the cost of last mile delivery, opening new markets. Given rapid evolutions on these fronts in China, we think that global investors should watch closely as good ideas tend to be exported quickly.

• Tech is a differentiator: New ways of operating and higher productivity also raise questions about whether the market is appropriately valuing the embedded tech within companies. Covid-19 may have been a catalyst for change to unlock this value – our Data Era basket of companies investing in tech to generate shareholder value has outperformed the market by ~25% since Covid-19’s onset.

• Rate of change ESG investing is going mainstream: With more money moving into ESG, pure play green investments have seen valuations skyrocket – across our US clean energy coverage, average EV/EBITDA multiples were up ~440% in 2020. Is a fundamental shift in the valuation of green assets under way? Will premium ‘green’ valuations create a halo effect for companies trying to become ‘greener’? We think that the power behind green investing and the common sense investment approach of buying at lower prices mean that the market may embrace rate of change ESG investing and reward companies improving their ESG characteristics. To that end, we’re adding an ESG element specifically focused on rate of change to our Risk Reward 2.0 platform across our global coverage to help clients spot these inflections early.

• Policy debates don’t end with elections: With a new US administration taking office, we’ll have a lot to discuss on policy in the coming year, but here are two broader policy topics to monitor: (1) A push for green investment and first-mover penalties mean that the tariffs we focus on next may be carbon border adjustment taxes. (2) As humans increasingly encroach on animal lands, zoonotic disease transmission is increasing. How prepared are our healthcare systems and policymakers for the ‘next pandemic’?

We hope that 2021 brings some return to normal. We also know that with change as a constant in our line of work, 2021’s normal will be different. As the world both reverts and evolves, we look forward to leveraging our global footprint and collaborative DNA to help our clients generate alpha in 2021 and beyond.

Enjoy your Sunday and best of luck this year.