Tag: finance

Donald Trump has been branded “loser of the year” by one of Europe’s biggest news magazines.

Der Spiegel, one of Germany’s most widely read German-language news websites, published a long article in German about the president under the headline “Der Verlierer des Jahres,” which translates as “The Loser of the Year.”

The article, published on Thursday, criticised the president for refusing to concede the election to Biden and described him as “a man who … was never concerned with the common good, but always with one thing – himself.”

“Nothing is normal under Trump,” the article, written by the publication’s Washington bureau chief and a Berlin-based correspondent, said.

“He refuses to admit defeat. Instead, he speaks of massive electoral fraud, although there is no evidence for it. The whole thing is not surprising. Trump’s presidency ends as it began. Without decency and without dignity.”

And, rubbing salt in this wound, Time Magazine has named Joe Biden and Kamala Harris as “Person of the Year” for 2020.

The magazine announced the shortlist of candidates Thursday morning and unveiled the winner late Thursday night. 

Joe Biden, President Donald Trump, frontline health care workers and Dr. Anthony Fauci, and the racial justice movement were Time’s shortlist candidates. 

Time editor-in-chief Edward Felsenthal wrote that this year’s selection was the first time a president-elect and vice president-elect appeared on a Person of the Year cover. Biden is also the oldest person to have been selected.

“For changing the American story, for showing that the forces of empathy are greater than the furies of division, for sharing a vision of healing in a grieving world, Joe Biden and Kamala Harris are TIME’s 2020 Person of the Year,” Felsenthal wrote.

Time’s choice to name Biden and Harris over Trump “seemed calculated more to twist the knife in President Trump than anything else – avowedly anti-Trump musician Bruce Springsteen was selected to deliver the news,” said RT News.

Many liberals celebrated the selection of Biden and Harris as a way to mock President Trump. 

TRUMP LOST AGAIN. #Timepoy https://t.co/TtZ5g0HoxS

— Kosoko “PREORDER YESTERDAY IS HISTORY” Jackson (@KosokoJackson) December 11, 2020

However, not everyone was pleased with the selection. One Twitter user said, “I am disappointed that Biden and Harris are #TimePOY. In a year when we learned how important doctors, nurses, grocers, postal workers, and other every day, ordinary, but utterly essential workers are, it seems odd to pick arguably the two more powerful and famous people on earth.” 

I think in any other year I’d say yea, fair dos. But this year, damn did we learn who our society can function with and who it can’t, and picking two politicians just feels tone-deaf #TimePOY

— Skylar Baker-Jordan (@SkylarJordan) December 11, 2020

In the past, Time has selected controversial figures for “Person of the Year.”

In 1938, Time selected Adolf Hitler as “Man of the Year”.

Soviet leader Joseph Stalin was chosen in 1939 and 1942.

President Trump was named in 2016. 

And, of course, Time nominated Greta Thunberg in 2019. 

While Trump and frontline health care workers were on the battlefield protecting the nation from COVID-19 – what exactly did Biden and Harris do to deserve Time’s “Person of the Year”, rather than ‘save our democracy.’ 

Authored by Steve Watson via Summit News,

Appearing on CNN Thursday, Dr Anthony Fauci declared that face masks are here to stay unless enough Americans get the coronavirus vaccination, and even then it will take at least six months before the masks can be left behind.

Speaking to Chris Cuomo, Fauci was asked if the masks could come off, to which he replied “Well, the answer is not unless you get the overwhelming majority of the country vaccinated and protected and get that umbrella of what we call herd immunity.”

“We as a nation need to continue to wear the mask, to keep the physical distance, to avoid crowds. We’re not through with this just because we’re starting a vaccine program.”

– Dr. Anthony Fauci on protecting against Covid-19 while the vaccine is being distributed pic.twitter.com/pSsLJoybYh

— CNN (@CNN) December 11, 2020

“There’s still a lot of virus out there,” Fauci declared, adding “So just because you’re protected, so-called protected by the vaccine, you should need to remember that you could be prevented from getting clinical disease and still have the virus that is in your nasopharynx because you could get infected.”

“But until you have virus that is so low in society we as a nation need to continue to wear the mask, to keep the physical distance, to avoid crowds,” Fauci proclaimed.

“We’re not through with this just because we’re starting a vaccine program. Even though you as an individual might have gotten vaccinated, it is not over by any means. We still have a long way to go and we’ve got to get as many people as possible vaccinated. Of all groups,” he further urged.

Cuomo asked when the masks could come off, assuming enough people take the shot, to which Fauci replied that if enough Americans “step up to the plate,” we could see the back of the masks by June.

“If 75 or more percent of the population decides they want to get vaccinated, I would hope by the time we get to the end of the second quarter into the summer that we will have enough people vaccinated that by the time we get to the fall in the third quarter of the year that we will have that veil of protective herd immunity that would really essentially protect all the vulnerable,” Fauci said.

Fauci’s remarks echo those of The UK’s deputy chief medical officer, who said last week that despite the arrival of COVID vaccines, face masks will still have to be worn “for years” to come.

New guidance from the World Health Organization (WHO) has also suggested that everyone should be wearing a face mask everywhere indoors at all times, as well as outdoors whenever they cannot keep more than a metre away from others.

The health body issued a new information sheet with the guidelines, but admits that there is “limited evidence” that masks have any effect on stopping the spread of coronavirus.

An in depth study by Danish scientists at Copenhagen University recently found no evidence that masks protect anyone from the virus.

A massive Danish study on mask usage found no statistically significant difference in coronavirus infection rates between mask-wearers and non-mask-wearers. In fact, according to the data, mask usage may actually increase the likelihood of infection. https://t.co/ijUy8hfNTY pic.twitter.com/gYDtA8ac0p

— Sean Davis (@seanmdav) November 18, 2020

Global markets dropped on Friday as Brexit negotiations appeared on the verge of collapse, while delays over a new fiscal stimulus package and surging coronavirus infections  hit risk appetite pushing S&P futures and sterling lower as Treasurys rose and the dollar and the dollar jumped most in two weeks.

At 7am, Dow futures were down 213 points, or 0.7%, S&P 500 E-minis were down 28. points, or 0.8%, and Nasdaq 100 E-minis were down 92.75 points, or 0.7%. Global stock markets were also subdued, with the MSCI world equity index, sliding into the red after scaling record highs earlier this week as the UK became the first country in the world to begin a mass COVID-19 vaccination program. Cyclical stocks led declines in premarket trading on Friday, with energy, industrial and financial sectors all lower. Wells Fargo and JPMorgan slid more than 1%, while industrial bellwethers Boeing and 3M fell 1.6% and 0.9% respectively. Mastercard dropped 1.4% after the UK Supreme Court gave the green light for a $18.5 billion class action against the company for allegedly overcharging more than 46 million people in Britain over a 15-year period.

Global markets slumped after the latest episode in the neverending drama that is Brexit, when Prime Minister Boris Johnson said on Thursday there was “a strong possibility” Britain and the European Union would fail to strike a trade deal. Britain and the EU have set a deadline of Sunday to find an agreement, before Britain’s exit from the bloc on Jan. 1. The odds of a disorderly Brexit rose to 61% on Friday from 53% a day before, according to the Smarkets exchange.

With fresh lockdowns in many states and the US economy rapidly sliding into a double dip, investors are hoping for more fiscal relief to sustain a nascent economic recovery. But an agreement remains elusive after Nancy Pelosi said wrangling over a spending package and coronavirus aid could drag on through Christmas. It wasn’t all bad news: on Thursday, a panel of outside advisers to the FDA voted overwhelmingly to endorse emergency use of Pfizer’s COVID-19 vaccine, sending shares of the drugmaker up 1.9% in premarket trading.

European equities fell, with the broad Euro STOXX 600 down 1.2% and indexes in Paris and London losing 1.2% and 1% respectively on the abovementioned Brexit fears and after Germany said the continent’s biggest economy had record virus cases and deaths. Sanofi dropped on news that its Covid-19 shot failed to produce a strong enough response in older people. The FTSE 250 index underperformed, with Brexit-sensitive stocks declining and travel and leisure names pulled lower by concerns about higher restrictions on London. U.K. Prime Minister Boris Johnson warned businesses and the public to get ready for a no-deal Brexit as negotiations with the European Union falter.

Earlier in the session, Asian shares rose led by energy shares and putting the regional benchmark stock gauge on course for a sixth straight weekly gain. The MSCI Asia Pacific Index was up 0.3%; Hong Kong-listed Cnooc rallied 6.1%, recovering from recent declines following its addition to a U.S. blacklist. China Petroleum & Chemical climbed 4.5% as oil prices headed for a weekly advance, while in India, Oil & Natural Gas Corp. surged as much as 14% after Morgan Stanley upgraded the stock. Meanwhile, investors in China’s stock market are getting uneasy after a stellar year as insiders step up share sales and concerns about liquidity surface. The Shanghai Composite Index’s 2.8% drop this week has made it the second worst-performing major equity benchmark globally. Malaysia’s equity benchmark rallied 1.8% on Friday to be the top performer in Asia, as the ringgit erased virus-fueled losses for the year to climb to the strongest level since July 2018.

As Bloomberg notes, stocks were choppy this week as the fate of an additional relief package in Washington remained unresolved as Democrats and Republicans continue to negotiate. A disappointing jobs report and a strong 30-year auction of Treasuries on Thursday signaled investor caution over whether fresh economic stimulus will come before year-end. On the other hand, stellar demand for recent U.S. initial public offerings suggested investors remain upbeat on equities, even as job data pointed to weakness in the world’s biggest economy. Shares of Airbnb Inc more than doubled in their stock market debut on Thursday, valuing the home rental firm at just over $100 billion in the biggest U.S. initial public offering of 2020. DoorDash stocks doubled in their first day of trading.

In rates, Treasuries followed gilts higher during London session after Bank of England Governor Andrew Bailey said the central bank had a lot in its armory in the event of Brexit disruption. Yields dropped by 1bp-2bp across intermediates; 10-year almost 2bp lower at 0.888%, near low end of 0.88%-0.974% weekly range and ~8bp lower on week. U.K. 10-year ~4bp lower on the day, nearly 20bp on week.  

In FX, the dollar rebounded the most in two weeks, rising 0.2% against a basket of six major currencies; the pound lost 0.5%, and was set to end five straight weeks of gains as currency traders weighed an expected hit to the British economy should the sides fail to agree a deal. “Investors are right to be worried,” said Olivier Marciot, a portfolio manager at Unigestion. “If there is no deal, there will be implications. There could be some sort of correction.”  Emerging-market currencies were poised for a sixth week of gains, thanks in part to the dollar’s recent weakness. The euro held not far from two-and-a-half-year highs of $1.2140 after the European Central Bank delivered a fresh stimulus package that was broadly in line with market expectations on Thursday.

In commodities, oil prices were flat after Brent hit levels not seen since early March on Thursday, as coronavirus vaccination rollouts fuelled hopes that crude demand would pick up in 2021. Brent crude rose 0.1% to $50.36 per barrel.

Looking at the day ahead,  data releases from the US include the November PPI reading and the University of Michigan’s preliminary consumer sentiment index for December, while from Europe there’s Italian industrial production for October. Central bank speakers include the ECB’s Holzmann, Hernandez de Cos and Centeno, along with the Fed’s Quarles and George.

Market Snapshot

• S&P 500 futures down 0.5% to 3,651.25
• STOXX Europe 600 down 0.7% to 390.32
• MXAP up 0.3% to 194.85
• MXAPJ up 0.2% to 644.89
• Nikkei down 0.4% to 26,652.52
• Topix up 0.3% to 1,782.01
• Hang Seng Index up 0.4% to 26,505.87
• Shanghai Composite down 0.8% to 3,347.19
• Sensex up 0.2% to 46,054.37
• Australia S&P/ASX 200 down 0.6% to 6,642.58
• Kospi up 0.9% to 2,770.06
• German 10Y yield fell 2.5 bps to -0.628%
• Euro down 0.08% to $1.2128
• Italian 10Y yield fell 2.0 bps to 0.451%
• Spanish 10Y yield fell 2.0 bps to 0.002%
• Brent futures down 0.6% to $49.97/bbl
• Gold spot little changed at $1,837.04
• U.S. Dollar Index up 0.1% to 90.91

Top Overnight News from Bloomberg

• European Commission President Ursula von der Leyen warned that a no-deal split with the U.K. is the likeliest outcome on Dec. 31 as last-ditch talks to try to reach a deal before Sunday continue in Brussels
• Germany’s daily coronavirus cases and deaths rose the most since the pandemic began, increasing pressure on authorities to impose a hard lockdown over the holiday season
• London Mayor Sadiq Khan beefed up the policing of Covid rules and announced more community testing in the capital in an effort to avoid having the city placed under the U.K.’s toughest virus restrictions
• Sanofi and GlaxoSmithKline Plc, two of the world’s biggest vaccine makers, delayed advanced trials of their experimental Covid-19 shot after it failed to produce a strong enough response in older people, pushing its potential availability to the end of next year
• Wall Street’s biggest banks are predicting the coronavirus-hit world economy will crawl through the early days of 2021 before bouncing back as vaccines and more fiscal stimulus flow into it
• The average forecast from strategists is that the Stoxx Europe 600 Index will climb 6.6% from Wednesday’s close. After a year that’s seen the index plummet 36% in just a few weeks and then claw back most of those losses, it’s an outlook that seems downright undramatic
• A group of 30 asset managers overseeing a combined $9 trillion of assets said they will support efforts to limit global warming by running carbon-neutral investment portfolios by 2050 or sooner
• After wobbling in November, when several European nations imposed fresh lockdowns to combat the spread of Covid-19, demand for gasoline and diesel is accelerating again, according to an index compiled by Bloomberg News tracking dozens of high frequency indicators for road usage, and traffic in countries accounting for more than 70% of global petroleum consumption

Courtesy of Nesquawk, here is a breakdown of the latest developments in global markets:

Asian equity markets traded mixed following a similar subdued performance on Wall Street where sentiment was mired by an increase in jobless claimant numbers and as congressional leaders remained at loggerheads on COVID-19 relief, with rampant infections stateside and no-deal Brexit concerns across the pond also contributing to the cautious tone. ASX 200 (-0.6%) was pressured by underperformance in healthcare after CSL abandoned trials of its COVID-19 vaccine as it generated antibodies that caused false positives on HIV tests, although losses in the index were initially tempered by strength in tech and with mining names buoyed by upside in iron ore and nickel prices. Nikkei 225 (-0.3%) was dragged by currency effects and amid weak same-store sales from convenience store operators Seven & I and Lawson, while KOSPI (+1.0%) was underpinned after preliminary data showed South Korean Exports during the first 10 days in December jumped 26.9% Y/Y. Hang Seng (+0.5%) and Shanghai Comp. (-1.1%) were varied with Hong Kong lifted by notable gains in the energy giants, although the mainland was subdued after the PBoC drained CNY 350bln liquidity for the week and China’s Foreign Ministry announced reciprocal sanctions to target members of US Congress. Finally, 10yr JGBs eked mild gains amid the mostly uninspired risk appetite and with prices spurred by the BoJ rinban operation in which the central bank was in the market for over JPY 1.3tln of JGBs in 1yr-10yr maturities.

Top Asian News

• Sri Lanka Debt Concerns Mount After Downgrade Deeper Into Junk
• China Toymaker Joins Global IPO 1st-Day Pop Party with 79% Jump
• Chinese Authorities Detain Bloomberg News Beijing Staff Member
• Singapore’s Sea Raises $2.6 Billion in Upsized Stock Offering

European equities (Eurostoxx 50 -1.3%) have extended on opening losses as Brexit jitters continue to resonate ahead of Sunday’s self-imposed “deadline”. More specifically, losses after the cash open accelerated after EU Commission President von der Leyen stated that after her meeting with UK PM Johnson on Wednesday, a no deal Brexit is now the most likely option. Although this has echoed comments from other officials in recent days, as Sunday nears and differences remain unresolved, markets will continue to price in the likelihood of an no deal outcome. Accordingly, analysts at Morgan Stanley suggest that a no deal outcome could trigger a 6-10% sell-off in the FTSE 250 and 10-20% decline in banking stocks amid a move into NIRP for the BoE. These fears have subsequently weighed on the likes of Natwest (-6.7%), Lloyds (-4.2%) and Barclays (-3.7%) and overshadowed yesterday’s announcement by the PRA that it judges there is scope for banks to recommence some distributions. Other risks on the horizon, albeit of greater interest stateside is the ongoing logjam on Capitol Hill amid ongoing divisions in stimulus discussions and with the Senate still to vote on the stopgap bill to avert a government shutdown heading into today’s midnight deadline; equity index futures in the US are softer, with the e-mini S&P lower by 0.5%. Sectors in Europe trade lower across the board with telecoms lagging amid losses in Ericsson (-5.5%) after the Co. launched legal action filed against Samsung in the US for non-compliance to FRAND commitments. Sanofi (-2.5%) have acted as a drag on the CAC after the Co. and GSK (+0.6%) announced a delay in their adjuvanted recombinant COVID-19 vaccine programme, in order to improve the immune response in the elderly. Rolls Royce (-6.3%) sit at the foot of the Stoxx 600 after it downgraded its 2020 cashflow forecast and continued to warn over the challenging outlook for the industry.

Top European News

• Italy to Buy Majority Stake in Steel Mill From ArcelorMittal
• Germany Eyes Hard Lockdown After Record Covid Cases, Deaths
• EU Warns No Deal Is Likeliest Outcome of Talks: Brexit Update
• EU Chiefs Back Tough Emission Goal After Last- Minute Scuffle

In FX, sterling sees another session of losses amid compounded Brexit pessimism telegraphed by various sources – whereby EU’s von der Leyen reportedly told leaders she has ‘low expectations’ that they can reach a Brexit deal and that a no deal scenario is the most likely outcome following her dinner with UK PM Johnson and heading into Sunday’s newly set deadline. Further, BoE’s Governor Bailey stated the Central Bank has a lot in its arsenal to tackle disorderly markets, but there are limits to what the BoE can do. Cable has receded from its overnight high at 1.3324 (21 DMA) to a current intraday base at 1.3186 with the next support levels on watch the 50 DMA at 1.3150. The EUR meanwhile experienced a pullback following verbal intervention from ECB GC member Villeroy who highlighted that the central bank is vigilant on the exchange rate and all instruments are available on this if needed, in turn prompting EUR/USD to a current low of 1.2115 from a 1.2162 high – but with losses somewhat cushioned by the EUR/GBP cross extending gains to levels just shy of 0.9200 from its 0.9116 daily low.

• DXY – The index trades firmer but remains contained sub-91.000 within a tight 90.613-989 range as the Sterling’s slip provides support for the Buck, whilst State-side stimulus and government funding remains up in the air. Senate Majority Leader McConnell last night poured cold water on COVID-relief hopes as reports stated the official does not see a path on the two main sticking points but wants a narrow package, although talks are set to continue today behind the scenes. Meanwhile, the Senate ended up not voting on the government funding stopgap bill with the today’s deadline to avert a shutdown nearing.
• JPY, AUD. NZD, CAD – Notwithstanding the firmer Buck, the Yen stands as the G10 gainer amid the deteriorating risk sentiment triggered by a barrage of downbeat Brexit commentary. USD/JPY resides around 104.00 having had briefly dipped below the level to a current low at 103.93 from 104.27 at best. High-beta FX have lost steam and reside towards session lows as the risk environment eroded in early European hours. AUD/USD waned from its overnight peak at 0.7572 to a low at 0.7521, whilst its Kiwi counterpart yielded its 0.7100 handle to print a base at 0.7075 (vs. high 0.7112). USD/CAD meanwhile remains sub-1.2800 but off its 1.2719 low and closer to the 1.2771 intraday high.
• TRY – A double whammy for the Turkish Lira amid two separate geopolitical developments whereby the US is reportedly mulling CAATSA sanctions over Turkey’s purchase of the Russian-made NATO-incompatible S-400, whilst the EU is considering restrictions amid Turkey’s behaviour in the Easter Mediterranean. USD/TRY rose from its 7.8861 base to eclipse 8.000 before waning off highs.

In commodities, WTI and Brent front-month futures trade choppy within tight ranges but with upside limited amid the subdued risk sentiment on the back of pessimistic Brexit updates. Nonetheless, crude futures hold onto a bulk of yesterday’s gains with Brent Feb still north of USD 50/bbl (vs. high 57.74), just off yesterday’s 51.06 best, whilst WTI Jan trades sub-47/bbl after reaching a high of USD 47.72/bbl yesterday. New flow for the complex has remained light throughout the European morning, but note the JMMC will now be meeting on the 16th Dec, a day earlier than scheduled. The upcoming JMMC meeting will see a review secondary source data alongside current market fundamentals before proposing policy recommendations – thus no policy decision will be taken at this meeting. The findings of the gathering are likely to be overlooked as the overall environment is little changed since the start of the month. Elsewhere, spot gold and silver see lacklustre trade once again with the former meandering around USD 1835/oz and spot silver trading sub-24/oz. In terms of base metals, Dalian iron ore futures soared almost 10% spurred by Chinese demand and Sino-Aussie woes, with some traders also citing a cyclone which could affect loadings in Australia. LME copper meanwhile sees losses in tandem with the firmer Buck and deteriorated risk sentiment.

US Event Calendar

• 8:30am: PPI Final Demand MoM, est. 0.1%, prior 0.3%
• 8:30am: PPI Ex Food and Energy MoM, est. 0.2%, prior 0.1%
• 8:30am: PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.2%
• 8:30am: PPI Final Demand YoY, est. 0.7%, prior 0.5%
• 8:30am: PPI Ex Food and Energy YoY, est. 1.5%, prior 1.1%
• 8:30am: PPI Ex Food, Energy, Trade YoY, prior 0.8%
• 10am: U. of Mich. Sentiment, est. 76, prior 76.9

DB’s Jim Reid concludes the overnight wrap

It’s been a pretty strange 24-48 hours in many ways. We’ve had a IPO market in the US that’s partying like its 1999 while US jobless claims spiked higher, Covid-19 restrictions mount, US stimulus talks still appear gridlocked, Brexit trade talks are not looking encouraging, and with a sober reminder of the structural problems Europe faces yesterday as the ECB expanded its stimulus package yet further and seemingly locked in negative rates for longer.

Ahead of the ECB, Spanish 10-year yields were briefly admitted into the “10yr negative yield” club, which is not that exclusive at the moment. On my calculations in Europe they briefly joined Switzerland, Germany, Slovakia, Netherlands, Denmark, Austria, Finland, Belgium, France, Ireland, Slovenia, Sweden and Portugal. See my CoTD yesterday here where we showed the Spanish dip in the context of 230 years of constantly positive yields until yesterday including a peak yield of over 70% in 1819! If you want to be on the daily chart email, please send a message to jim-reid.thematicresearch@db.com.

Sovereign bond yields rose a bit after the ECB though and the euro strengthened as markets were somewhat underwhelmed by the ECB’s latest package of stimulus measures. To be fair, they had been well flagged. To run through the main headlines, the ECB expanded their PEPP programme of bond-buying by a further €500bn to €1.85tn, with the purchases extended by 9 months until March 2022. Furthermore, their TLTRO III programme, which offers cheap loans for banks was extended until June 2022, and four pandemic emergency longer-term refinancing operations (PELTROs) will also be offered next year. However, what markets didn’t like was the fact that President Lagarde said that this additional envelope “need not be used in full”, and sovereign bond yields rose after the decision was announced. By the close, both 10yr bunds (+0.2bps) and OATs (+0.6bps) had reversed their morning gains, though they’d pared back some those losses by the end of the session, and the euro was up +0.47% against the US Dollar.

The fresh stimulus from the ECB came as their latest forecasts revised down their medium-term inflation projections, with the most recent inflation data showing the single currency bloc remained mired in deflationary territory. Though the ECB’s 2021 forecast for HICP remained at +1.0%, the 2022 reading was downgraded two-tenths to 1.1% and the new 2023 reading was still only at 1.4%, so somewhat less than their aim of “below, but close to, 2% over the medium term”. Furthermore, investors’ expectations of future inflation didn’t seem to be helped much either by the latest action, with five-year forward five-year inflation swaps down -2.0bps to 1.23%.

With that backdrop, global equity markets had a mixed performance yesterday. By the close, the S&P 500 had fallen slightly (-0.13%) in spite of a buoyant performance from energy stocks, which came as both Brent Crude (+2.84%) and WTI Oil (+2.77%) rose to post-pandemic highs of $50.25bbl and $46.78/bbl, respectively. Remember when they were negative in the early days of lockdown! Technology stocks, in particular hardware (+0.84%), actually rose on the day. The majority of the underperformance took place in the Autos (-2.59%), Telecoms (-1.80%) and Transportation stocks (-1.37%). 15 of the 24 S&P 500 industry groups moved lower on the day, and the Dow Jones was down -0.23%, as Europe’s STOXX 600 also experienced a -0.44% decline.

Stimulus talks continued with the congressional calendar-end quickly approaching. Yesterday, Treasury Secretary Mnuchin and House Speaker Pelosi both indicated progress was being made toward a new Covid-19 relief deal; however, both sides continue to differ on state and local taxes as well as the liability protections for employers. Democratic Congressional leaders continue to put their weight behind the bipartisan bill that originated in the Senate over Treasury Secretary Mnuchin’s bill. With a new deadline to get a funding deal done by the end of next week, House Minority Leader McCarthy said, “next week will be the week we get it done.” US 10yr Treasuries gained slightly throughout the day with yields down -0.3bps at 0.906%.

In a concerning sign in the face of the lack of stimulus progress, the weekly initial jobless claims in the US rose to 853k (vs. 725k expected) for the week through December 5, which is their highest level since mid-September, and raises the prospect that the labour market progress seen in recent months is slowing significantly. Indeed, the +137k increase in claims from the previous week was the largest one-week jump since the pandemic began back in March.

Overnight Asian markets are mixed with the Hang Seng (+0.46%) and Kospi (+0.84%) up while the Nikkei (-0.34%), Asx (-0.61%) and Shanghai Comp (-0.93%) are down. Futures on the S&P 500 are also down -0.10% and European equivalents are pointing to a weaker open as well. In Fx, the US dollar is down -0.18% overnight after yesterday’s -0.29% move lower.

Here in the UK, the BoE indicated yesterday that it is easing its ban on dividends with the PRA saying that “An extension of the exceptional and precautionary action taken in March is not necessary” and added, “There is scope for banks to recommence some distributions should their boards choose to do so, within an appropriately prudent framework.” The BoE approach is in contrast with developments at the ECB where the central bank is leaning towards extending their own dividend ban well into next year, though with some exceptions for the strongest lenders. European banks were one of the laggards yesterday (-2.09%) on this news and an ECB meeting that reminded investors of the tough yield/rates environment and offered up limited Xmas treats for the sector.

On Brexit, Prime Minister Johnson issued a warning last night – after European markets had closed – that businesses and the public should be prepared for the UK to leave the EU single market without a trade deal in place. While the government is still actively seeking a deal with the European Commission, the Prime Minister continues to see major obstacles. Johnson sees a, “strong possibility we will have a solution that’s much more like an Australian relationship with the EU than a Canadian relationship with the EU.” This would mean that the UK would rely on the rules of the WTO and could face tariffs and quotas when the transition ends on New Year’s Eve.

On the topic of no-deal scenarios, the European Commission put forward some contingency measures on reciprocal air and road connectivity with the UK, as well as fishing access, in the event that a no-deal outcome to the trade talks does indeed come to pass. Regardless of the somewhat negative tone to yesterday’s proceedings, discussions are currently continuing in Brussels ahead of the new Sunday deadline, where President von der Leyen has said a “decision will be taken.” Interestingly, it’s getting more vague about what the specific disagreements are. There is a possibility that politicians from both sides are keen to massively downplay the chances of a deal only to pull one out of the hat by Sunday or at least say one is starting to emerge. We will see.

Through all of this, Sterling ended the session as the worst-performing G10 currency yesterday, falling by -0.78% against the US Dollar and -1.27% against the euro. Furthermore, volatility is being increasingly priced into the exchange rate, with 1 week implied sterling/dollar volatility rising for an 8th consecutive day to its highest level since the start of the pandemic back in March. Paradoxically, however, other UK assets performed relatively strongly, with the multinational-dominated FTSE 100 gaining +0.54% on the back of sterling’s depreciation, while 10yr gilt yields fell -6.0bps as the perceived likelihood of monetary stimulus rose in response to the economic shock of a no-deal outcome.

One European deal did get done yesterday, with EU leaders finally coming together on the massive €1.82 trillion seven-year budget and recovery package to support the region’s economies through the pandemic and beyond. The delegations from Poland and Hungary had been the two dissenting voices after initially agreeing to the budget due to a “rule of law mechanism” they felt might be used to target them for potential breaches of the bloc’s democratic standards. Under the compromise, the European Commission will draw up guidelines for using the new “rule of law” standard and what would trigger it, and no country can be in violation until then.

Elsewhere, the Pfizer/BioNTech vaccine passed a committee of independent vaccine experts with a vote of 17 to 4, with one abstention. They concluded that the benefits of the vaccine outweigh the risks in those 16 and older. The FDA authorization could follow within a few days, after which shots could be immediately distributed across the US. Part of the panel was concerned that there was not enough data on 16 and 17 year olds and some pediatricians were said to be uncomfortable voting for the shot on those grounds. The shots will be distributed to the states, who will make the final decisions about which residents get inoculated first. Advisers to the CDC have recommended health-care workers and elderly care facility residents be prioritized, followed by the elderly. Shares of Pfizer gained +2.46% in after-market trading following the news.

Here in the UK there was rising speculation that London was set for Tier 3 restrictions, following data which showed that it had the highest regional case numbers in England. The measures in England are next being reviewed on December 16, while in Wales it was announced that secondary schools would move online from the start of next week because of the high number of cases. Elsewhere, it was reported that the French PM was set to announce an 8pm curfew from December 15. While in Germany, it was announced that Berlin would close non-essential shops and extend the school break until January 10. Denmark announced that the partial lockdown would be extended to additional municipalities. Meanwhile, in the US, Virginia announced a limited nightly stay-at-home order until January 31 while Pennsylvania announced that it is temporarily suspending indoor dining at bars and restaurants until January 4. Ohio has also extended its night curfew until January 2. Across the other side of world, South Korea has further strengthened social distancing rules and has limited restaurant hours while ordering closure of high-risk facilities such as nightclubs and karaoke bars.

Finally, the US CPI data for November showed month-on-month inflation of +0.2% (vs. +0.1% expected), which meant the year-on-year number remained at +1.2% (vs. +1.1% expected). In the UK, GDP expanded by just +0.4% in October, which was the economy’s slowest monthly growth since the economic rebound from the pandemic began. And in France, industrial production for October was up +1.6% (vs. +0.4% expected), bringing the year-on-year number up to -4.2%.

To the day ahead now, data releases from the US include the November PPI reading and the University of Michigan’s preliminary consumer sentiment index for December, while from Europe there’s Italian industrial production for October. Central bank speakers include the ECB’s Holzmann, Hernandez de Cos and Centeno, along with the Fed’s Quarles and George.

Via SchiffGold.com,

Saxo Bank projects silver will soar to a record $50 an ounce in 2021, powered by loose Federal Reserve monetary policy and a weak dollar, and turbocharged by surging demand for the white metal in the solar energy sector.

According to the Saxo Bank report, the “usual suspects” will continue to power silver upward, referring to the extraordinary monetary policy we’ve seen in response to the coronavirus pandemic in 2020.

Saxo analysts expect the US dollar to continue to weaken even as the pandemic eases with the rollout of a vaccine next year.

The vaccine has killed the virus, but not killed the debt that is still flushing around the world.”

This reflects Peter Schiff’s view that a vaccine can’t cure what ails the economy.

The problem is not really the fact that we have a disease, but that we’re addicted to the cure, which was cheap money and all this debt. And so now, it’s the addiction to the cure that’s the real problem. The disease doesn’t even matter anymore. Because even if we get rid of the disease, we’re still addicted to the cure. And the Fed can’t take away the cure without causing an even bigger problem than the initial disease that the cure was meant to cure because now the problem isn’t the disease.”

Saxo Bank also projects rising price inflation in 2021. The report predicts policymakers will be slow to respond to rising prices because they want to “offer maximum support for their still-recovering economies.”

With a Covid-19 vaccine in rapid roll-out by the middle of the year, the excessive liquidity and over-easy policy drives a powerful bid into any hard asset.”

This is bullish for both silver and gold.

Earlier this year, the Federal Reserve moved the goalposts to allow inflation to run hot. As Schiff noted at the time, by injecting so much stimulus into the economy in the past, the central bank has created a situation where it can never actually fight the inflation that it creates.

That’s why the Fed is now saying we’re going to let inflation run hotter – because they have no choice. It’s not because this is good for the economy. It’s not. It is necessary to keep the bubble from deflating.”

With the monetary fundamentals already looking strong for silver, the white metal will get a further boost from growing demand for applications related to the “green transformation,” particularly photovoltaic cells used in solar panel production. Saxo projects demand will outstrip supply.

In fact, a real silver supply crunch is on the cards in 2021, and it frustrates the full-throttle political support for solar energy investments under a Biden presidency, the European Green Deal, and China’s 2060 carbon-neutral goal, among other initiatives.”

Solar power generation is expected to nearly double by 2025 according to a report released last summer by the Silver Institute.

Silver possesses the lowest electrical resistance among all metals at standard temperatures. According to the report, “Potential substitute metals cannot match silver in terms of energy output per solar panel.”

Further, due to technical hurdles, non-silver PVs tend to be less reliable and have shorter lifespans, presenting serious issues for their widespread commercial development.”

Even if the global economy recovers more slowly than expected in the wake of the pandemic, green energy demand for silver will likely remain robust. Analysts expect many government stimulus plans will include funding for green initiatives.

On the supply side, silver mine output was hit hard by the pandemic. Production is projected to fall by 6.3% to about 780.1 million ounces in 2020.  The big drop in silver output is largely a function of mine shutdowns due to coronavirus, but mine output was already trending down before the pandemic. Global mine production fell by 1.3% in 2019.

Long-term, Saxo Bank points out 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.”

Silver is historically more volatile than gold because due to industrial demand, but the solar power industry should help steady overall industrial demand for the white metal.

Looking at the bigger picture, at its core, silver is a monetary metal and it tends to track with gold over time. The silver-gold ratio of over 76-to-1 tells us the white metal is still significantly undervalued compared to gold. History tells us silver will eventually close the gap, meaning either gold will drop or silver will rise. Given the economic dynamics and the current extraordinary monetary policy, a continued gold bull run seems more likely and silver will probably come along for the ride boosted by increasing industrial demand.

Former Goldman Sachs President and Trump 1.0 economic policy advisor Gary Cohn just got the better of his former employer, thanks to a loophole often exercised by captains of industry traveling through the “revolving door” connecting Wall Street and Washington.

Cohn, along with four other current and former Goldman executives, was supposed to pitch in a nearly $70MM in aggregate (his personal contribution was supposed to be roughly $10MM).

But unlike his four former colleagues, a group that includes both CEO David Solomon and former CEO Lloyd Blankfein, Cohn was able to cash out all of the options and payouts owed to him by Goldman when he departed the bank to take on a role in the Trump Administration.

Goldman’s gesture of rounding up and returning cash from top executives was intended to be a high-profile “act of contrition.” All five top Goldman executives played a role in the 1MDB deal, including circumventing red flags raised by compliance, to help a corrupt leader and his cronies loot $5BN from a sovereign wealth fund financed with cash raised by the Vampire Squid and its clients.

But extracting money from Cohn posed a unique challenge. That’s because the bank had accelerated payments to him when he joined President Donald Trump’s White House in 2017 as director of the National Economic Council. The cash-out — a standard practice when executives jump to senior government posts — was meant to avoid the appearance of a conflict of interest as he shaped policy.

Goldman’s plan called for executives to give up most or all of a long-term incentive created in 2011 and some other compensation. For Cohn, that would have totaled in excess of $10 million.

Cohn walked away with roughly $200MM in stock, investments etc when he left Goldman back in 2017. Six months later, he was unemployed again after some headline-grabbing strife between him and the prison. He didn’t disclose how much he’s giving to charity. But we suspect it’s short of the $10MM he was supposed to hand over to

“Mr. Cohn is a team player, and as a good corporate citizen, he volunteered many weeks ago to make a significant charitable contribution to Goldman Sachs-sponsored organizations,” a representative for Cohn said in a statement. He “looks forward to doing so.” Cohn didn’t disclose how much he’s giving to charity, which will go to pandemic relief and supporting social justice.

Giving credit where credit is due, it looks like Cohn has outfoxed his former employer, the federal government and the Davos set. And now, in addition to escaping the Trump Administration, Cohn will be able to write off this charitable contribution on his taxes as well.

Authored by Patrick Hill via RealInvestmentAdvice.com,

“I don’t see any way of avoiding a great deal of pain in the commercial real estate market in 2021. It is almost inevitable. My friends at the Federal Reserve and FDIC are becoming increasingly uncomfortable with what’s going on in the commercial real estate world.”

Cam Fine, Former President of Independent Community Bankers of America

WFH Threatens Commercial Real Estate Valuations

Investors hold $3.4T in commercial real estate debt via bonds, direct loans, and securitized loan bundles.  Core city commercial real estate valuations could decline if millions of employees work from home (WFH) permanently. Most analysts assume that once virus infections are contained or ended by vaccinations, workers will flock back to cities.  The question is: will tens of thousands of workers commute to offices after buying homes in exurbs and other states?  The following chart shows the top metro areas for migration based on USPS move data.  Information services and banking centers are hotspots of migration to suburbs or other regions. A total of 238k workers have moved out of the top five urban areas since the pandemic started.

Source: Visual Cap – 12/1/20

Migration to secondary regions will become permanent once workers feel comfortable, and managers see WFH productivity at pre-pandemic levels or higher.

The largest WFH segment is those workers living outside of cities and working from home but not relocating. A survey of 238 corporations reported that 44% of their employees work from home currently.

Understanding this historic migration requires a review of a variety of different factors. So, we will examine six major migration events, business losses, and work style changes which are likely to impact commercial real estate values:

1. Professionals Who WFH Buy Distant Homes

2. City Properties Lose Value

3. City Based Small Business Sales Decline 40 – 50%

4. The Commercial Real Estate Unwind

5. Regulators Are Concerned About Commercial Real Estate Debt

6. Cities Will Have A Long Transformation

We will start our analysis by examining the suburban boom as professionals move to less expensive regions looking for more living space.

Professionals Who WFH Buy Distant Homes

The massive migration of professionals from cities to suburbs creates economic winners and losers.  This suburban migration will permanently shape consumer and business buying patterns for many years.

Professional moves triggered by continuing work-from-home policies are pulling forward housing sales to a 14-year record high.

Sources: National Association of Realtors, Wall Street Journal – 11/11/20

Affluent professionals with incomes higher than pre-pandemic buyers were 25% of all home purchasers than just 14% of buyers in February. Wealthy buyer demand triggered a 14.8% jump in median home prices to $311,800 versus a year ago. Professional migration is strong in major cities like New York and San Francisco, where from 11 – 15% of all job holders have moved permanently.

For example, in the San Francisco Bay Area, professionals are moving to Arizona, Texas, Oregon, and Utah, where homes are 25 – 50% less expensive. Housing sales drive purchases in household furnishings, and appliances sales are up 13.4% over last year. Most buyers financed their home purchase with 20% down payments. So, buyers were planning their investment before the pandemic. They pulled forward their purchase with the opportunity to keep a well-paying job and move to a less expensive area. Sales of existing homes will begin to fall as pending home sales fell 1.1 % in October for the second consecutive month.  

The pulling forward of future home sales will likely result in a sales decline by the 1st or 2nd  quarter of 2021. For workers who moved, they face a possible reduction in income.  As 30% of S & P 500 executives say, they will reduce employee wages for remote workers in less expensive regions. Today, the bottom 80% in income have tight budgets.  So, moderate-income workers will not be entering the home market until their income recovers sufficiently to purchase a home.

City Properties Lose Value

WFH policies are creating ghost areas in dense office cities like San Francisco and New York. Bloomberg estimates 1.6M workers commute into Manhattan daily. Yet, downtown Manhattan has become a ghost town. Kastle Systems, a building security firm, provides weekly reports of key fob check-ins for 2,681 buildings in the U.S.  New York City has an average occupancy rate of just 15.9%.  Manhattan office space for rent is at the highest level since 2003.

Other less dense cities like Dallas have an occupancy rate of 40.3% and Los Angeles a 33.1% rate. The average occupancy rate across ten cities is 25.7% for the week of November 18th.  For the nation, the occupancy rate reached a peak in the summer of 27% and fell to last month’s level of 20%. Nine of the ten cities have declining occupancy rates.

Source: Kastle Systems – 11/23/20

The Squeeze Is On

Commercial property companies are squeezed between mortgage and lease payments as companies delay payments and reduce office space. U.S. banks hold $2Tr of property loans.  In 2008, banks wrote off $110B in commercial real estate losses or 25% of their total losses. 2008 was significantly smaller in scope than the demand/supply shock of the present recession.  If the current WFH migration shift becomes permanent or even slowly recovers, the loss in office property values alone could reach 20 – 25% Barclays Bank estimates. Property values for hotels and retail have fallen even further by 40 – 50%.

However, with the announcements of vaccines, some property owners have obtained bridge loans hoping that commuters return by the end of next year. Yet, there still considerable risk that the WFH migration may signify a change in work location and consumer buying behavior.   A permanent shift to remote work and online consumer spending will undermine segments of commercial real estate debt valued at $3.4T.

City Based Small Business Sales Decline 40 – 50%

Core city small businesses report 40 – 60% declines in sales.  Sales declines range across various small companies who depend upon commuters to buy their services or products. Restaurants, hotels, and personal services such as hair salons, barbershops, gyms, and laundries report the most significant losses.  Adding to small business income strain is the requirement that many of these businesses close for shelter in place rules or drastically cut their operational capacity.

In most major cities, restaurants had to maintain 6-foot social distancing and cut capacity to 25 – 50% for indoor dining.  Due to soaring virus infection rates, San Francisco has ended indoor and outdoor dining allowing only meal pick up for the foreseeable future.  Each day, cities are announcing more social activity restrictions to contain the outbreak of the virus.

New York City small business revenue declined 51% from January to November 16th of this year and continues to fall. Note that across the U.S., in cities like San Francisco, small business revenue declined about 60%, and others like New Orleans by 60%, Washington D.C. 65%, Detroit 45%, and Boston 50%.

Source: Opportunity Insights – 11/16/20

PPP is Running Out

The end of the Paycheck Protection Program (PPP) on July 31st has left many small businesses with mounting debt to vendors and leaseholders. Thousands of small businesses in core cities with high rents and drastically reduced income are likely to default on commercial property owners’ leases. Small business chain franchisees run 55% of all hotels and 84% of restaurants. Both sectors employ a total of 6M workers.  Ninety-six percent of franchise small businesses received PPP grants. The grants or loans helped them to continue operating until their PPP funds ran out. Franchisees pay rent to chain corporations who often own the local hotel or restaurant buildings.  Owner-operators squeezed by 40 – 50% declines in revenue have been delaying rent payments to chain landlords. There is a significant risk for city location operators that an enduring loss of commuters will force them to close.

The Commercial Real Estate Unwind

Small businesses short on cash reserves and lacking the ability to go to bond markets or qualify for bridge loans are likely to default first. Their defaults will send the first cash squeeze wave through commercial property holders and their banks. In the future, thinly financed office property owners not able to handle businesses defaulting on their loan payments will begin to fold.  The first indication of a soft office space market in core cities is starting to appear. San Francisco and New York office space prices are down 20 – 25% from last January. Long-term property vacancy rates will possibly snapback by 15 – 20% upon virus containment. But, cities like New York may continue to have 30 – 35% vacancy rates for years to come.

With high vacancy rates, property values drop. In the future, loans based on increased property values will go underwater and are called. It looks like déjà vu of the subprime mortgage collapse. Just like that crisis, JPM Chase and Goldman Sachs have securitized about $550B in commercial real estate debt sold to investors.  One significant difference from that crisis is that most of the home market was solid, even with the sub-prime market collapsing. Plus, in 2008, the economy was expanding, and unemployment was at 5%.  Today, the economy is in a deep recession. The unemployment rate is 9 – 13%, and 20.4M workers are on continuing unemployment assistance. Are regulators concerned about this immense risk to commercial real estate values and debt?  Yes.

Regulators Are Concerned About Commercial Real Estate Debt

The Federal Deposit Insurance Corporation (FDIC) has identified 356 banks concentrated in the commercial real estate market.  Most of these banks are community banks rated as concentrated in commercial real estate based on their loan to capital base and growth of loans. Some core community banks are already under regulatory guidance.

With $60B in assets, Manhattan-based Signature Bank has 60% of its loan portfolio in commercial real estate but has raised loan loss provisions by $53M in the last month. Valley National Bank, Wayne, NJ, has $42B in assets with an 81% increase over three years in its New York metro commercial real estate portfolio. These banks are leveraging low-interest rates to make bets on commercial real estate.

Eric Rosengren, President of the Federal Reserve Bank of Boston, has voiced concerns about banks bingeing on low-interest borrowing. In recent presentations, he has warned about commercial property values being artificially “inflated by more than a decade of ultra-easy money.”  Fed Chair Jerome Powell testified to a House committee last September that smaller banks have more exposure to the commercial real estate market and have less financial resources to deal with the stress to balance sheets. Powell implied that the Fed would rescue community banks if necessary.

When Will Workers Return?

Of concern for investors is how long it will take to see any weakness in commercial real estate markets. In the last recession, commercial real estate losses did not peak until three years after the 2008 recession peak. The three-year delay allowed regulators to provide liquidity to cushion the impact. With so many real estate loans outstanding in core city centers, regulators may not have as much time to mitigate the effects.  Loan delinquencies have increased by five times to 10.2%. To reduce delinquencies, some loans were rolled over to bring the delinquency rate down to a still-high 8.2%. Regulators, banks, and property owners anticipate a quick return of workers to core inner cities are safe.  How and when might workers return to city centers?

Cities Will Have A Long Transformation

Forecasting the number of workers who return to their offices is problematic. It is difficult to predict due to rapidly changing work lifestyles, housing, and social trends.  There are indications of what the future may be if workers decide to leave core cities permanently. A recent survey of the San Francisco labor market found that 15% of all workers made long term moves.

However, some executives see synergy in employees working together face to face. There will be a push-pull between workers desiring to WFH and management. For example, JPM Chase CEO Jamie Dimon wants all employees back at their offices when it is safe to create a ‘creative combustion’ environment. Yet, other companies like Microsoft and Facebook are offering their employees the ability to WFH permanently.  We expect that cities for information services companies, that up to 50% of the workers will opt for WFH.

For consulting companies, personal services, or event-oriented businesses, probably 75 – 80% of workers will return.  Hard-hit businesses like hotels and restaurants are not likely to call back workers until business picks up, maybe by Q3 of 2021. A July survey by the Society of Human Resource Management of 283 corporations with 4.4M workers found executives expect 20% of their employees to WFH permanently. This about half of the current 44% working from home.  Thus, if 20% of employees WFH will mean a 20% reduction in office space requirements nationwide. In the same survey, employers expected to bring back only 16% of permanently laid-off workers. Managers will look for ways to reduce office space costs by increasing the number of employees who WFH. Executives will find WFH an excellent way to increase profit margins.  Thus, corporations are interested in leveraging WFH culture and are doing it with fewer employees overall.

Summary – The Commercial Real Estate Market Faces Significant Headwinds

The commercial office real estate market faces significant headwinds for at least the next several years. The lengthy transition is due to companies working out their new WFH and office cultures. Certainly, once it is safe, many workers will want to return to the office.  Plus, some managers will require them to return to the office.  An underlying concern is that the small business sector is on a financial cliff, barely holding on. The New Jersey Federation of Small Businesses reports that 31% of all small businesses’ were closed either temporarily or permanently in November.

If there is long-term unemployment resulting in a drop in consumer spending, then the economy may take several years to return to pre-pandemic levels. A stimulus bill will mitigate the short-term financial squeeze for businesses and leaseholders.  But, the funding will not change the migration to WFH.  More likely, if employees feel the economy is stabilizing, they are more likely to move and request a WFH option.  A possible second wave of WFH employees looking to move will likely increase the office vacancy rate for many cities for years to come. Thus, new moves will cause a continuing increase in vacancy rates and further devaluation of properties.

A Pennsylvania elementary school principal is suing her school district after she says she was fired for posting conservative memes on her personal Facebook account. She’s seeks a return to her position and $500,000 for ’emotional turmoil’ due to her ouster.

Amy Sacks, a teacher for 20 years, posted on Thanksgiving Day that she was fired by the Perkiomen Valley School District after Superintendent Barbara Russell “decided that the First Amendment Freedom of Speech has no place in public schools and that teachers and administrators are unfit to serve if they hold and express political beliefs that are right of center.“

According to the Daily Mail, Sacks was removed as principal of Evergreen Elementary School in July. Her attorney says she was “mysteriously removed with little explanation,” implying Russell found her social media postings “offensive, unacceptable, and unprofessional,” and that Sacks is a “racist.”

A sample of the memes in question via the Mail:

“Many of you know that I am no longer the Principal of Evergreen Elementary at this time. However, the circumstances surrounding this situation have been kept quiet until now,” Sacks said in her Thanksgiving post, adding: “I am reaching out to you today to share with you that as Principal of Evergreen Elementary School I was terminated because I expressed right of center political views – PRIVATELY. Political memes caused me to lose my job. Nothing that I did was even borderline unacceptable – they were simply political viewpoints.”

“Perkiomen Valley School District and Superintendent Barbara Russell have decided that the First Amendment Freedom of Speech has no place in public schools and that teachers and administrators are unfit to serve if they hold and express political beliefs that are right of center. This cancel culture within the public school system has to stop,” her post continues. “I was Principal of one of the best performing elementary schools in Pennsylvania and still fell victim to being cancelled out by liberal bureaucrats who don’t believe in diversity of thought, speech, opinion, or political affiliation.

With the support of my husband and family, I have decided to challenge the school district by filing a lawsuit against them to save my job. I hope to lead by example and inspire others to stand against the erosion of our constitutional rights in America.”

More memes:

Sacks’ lawyers say the school board’s actions were illegal, and that she never received so much as a warning.

“At no point was Amy advised to get counsel, nor was she informed of her rights; instead she was viciously threatened with career ruination if she tried to contest anything happening,” her lawyers argue.

The school board approved her termination but then stated that Sacks had ‘resigned’.   

‘The conduct was wildly illegal. Amy has a near absolute right to free speech on her private Facebook account. Furthermore, before any action can be taken against a public employee, Due Process requires that the school provide her notice of the charges against her,’ Sacks’ lawyers state. 

The lawsuit claims Superintendent Russell told Sacks that her posts had offended a parent who then got in touch with the school district. 

Other postings from around the same time showed her clear opposition to having Joe Biden as president.

‘This is a potato’, read one, next to an image of a potato. ‘If this potato was running against Joe Biden, I’d vote for the potato.’ –Daily Mail

 Land of the free indeed…

Submitted by Market Crumbs,

Porsche, which many would argue makes one of the finest cars in the world, has been a leader in innovation since its founding nearly 100 years ago but remains true to it origins. A perfect example is remarks by Porsche CEO Oliver Blume last month saying the automaker’s flagship vehicle—the 911, won’t be going electric anytime soon, if ever.

“Let me be clear, our icon, the 911, will have a combustion engine for a long time to come,” Blume said.

“The 911 is a concept of the car that is prepared for the combustion engine. It’s not useful to combine it with pure electric mobility. We believe in purpose-designed cars for electric mobility.”

Despite remaining devoted to the combustion engine, Porsche has made strides to prepare for a future where vehicles don’t run on gasoline. The company pulled out of the World Endurance Championship’s top-flight at the end of 2017 season, despite being one of the most successful manufacturers in the history of the sport, so it could focus on Formula E, which is an all-electric single seater championship.

Porsche also offers hybrid versions of its popular Panamera sedan and Cayenne SUV. Earlier this year the company began delivery of the Taycan, which is the first all-electric car designed and produced by Porsche.

Back in September, Porsche said it wants to “significantly and independently drive forward the development of synthetic fuels, known as eFuels.” Porsche director of research and development Michael Steiner said the company was looking for partners to prove the process works and can be industrialized.

“This technology is particularly important because the combustion engine will continue to dominate the automotive world for many years to come,” Steiner said.

Porsche announced last week it has partnered with Siemens Energy, energy firm AME, Chilean petroleum company ENAP and energy company Enel to advance the development of eFuels. The companies are working to develop the “Haru Oni” pilot project in Chile that will result in the world’s first integrated, commercial, industrial-scale plant for making eFuels.

The first phase will see the project produce 130,000 liters of eFuels as early as 2022 before capacity increases to 55 million liters per year by 2024 and 550 million liters by 2026. Porsche will be the primary customer for the eFuel and will use it in the Porsche motorsport fleet, at Porsche Experience Centers and eventually in series production sports cars. Porsche is making a 20 million euro initial investment in the project.

“eFuels can be used in combustion engines and plug-in hybrids, and can make use of the existing network of filling stations,” Porsche CEO Oliver Blume said. “By using them, we can make a further contribution toward protecting the climate.”

Calling eFuels the “alternative fuels of the future,” Blume made it clear Porsche has the experience and knowledge to find a solution to help the climate while still enjoying the thrill of driving a Porsche.

“As a maker of high-performance, efficient engines, we have broad technical expertise,” Blume said. “We know exactly what fuel characteristics our engines need in order to operate with minimal impact on the climate.”

While Porsche believes electrified models will make up 50% of sales by 2025, the automaker’s ambitions with eFuels show the company doesn’t intend on completely writing off the combustion engine.

For a brand that has built its reputation on speed, its own R&D chief said it best when he said “With electricity alone, you can’t move forward fast enough.”

Authored by Jonathan Turley,

We have been discussing how reporters, editors, commentators, and academics have embraced rising calls for censorship and speech controls, including President-elect Joe Biden and key advisers. 

This includes academics rejecting the very concept of objectivity in journalism in favor of open advocacy. Now, Columbia Journalism Dean and New Yorker writer Steve Coll has denounced how the First Amendment right to freedom of speech was being “weaponized” to protect disinformation.

That’s right. A journalism dean and writer declaring that the problem is that free speech itself is allowing too much freedom on the Internet and other forums.

Coll’s comments came in a discussion on MSNBC’s “Morning Joe” when he was asked by Kasie Hunt about the need for Big Tech to censor speech.

Rather than defend the right of people to express themselves freely, Coll lashed out at companies like Facebook as “motivated, as all companies are, to make money” though at the same time is “acting like a public square.”  He decried the failure to have more expansive regulation of free speech and showed little concern or merit for arguments from free speech advocates.  Like Harvard academics who recently declared “China was right” about censorship, Coll just assumed that it was self-evident that too much free speech is a bad thing and that these companies need to protect people from harmful or false ideas.

“And yes, Facebook has moved somewhat. They’ve had a better election in 2020 than they did in 2016. They’ve learned to put some brakes on, you know, here and there, but you can’t get away from the fact that their mission is to connect everybody in the world. That’s what motivates Mark Zuckerberg and it’s his passion and he profoundly believes in free speech.”

What is most maddening is that Coll spoke on behalf of journalists in calling for less freedom:

“Those of us in journalism have to come to terms with the fact that free speech, a principle that we hold sacred, is being weaponized against the principle of journalism and what do we do about that,. As reporters, we kind of march into this war with our facts nobly shouldered as if they were going to win the day and what we’re seeing that is because of the scale of this alternative reality that you’ve been talking about, our facts, our principles, our scientific method–it isn’t enough. So what do we do?”

That used to be an easy question. What you do is allow free speech to combat bad speech. What you do is support the right of citizens and journalists to publish without censorship.  What you do is to embrace the freedom of expression while reinforcing the need to use that freedom to counter disinformation.  Instead, Coll is joining the forces seeking to silence or curtail the speech of others.  You do not support free speech by calling for its curtailment. For free speech advocates, it is as compelling as saying that we needed to “save” villages by destroying them in Vietnam. Worse yet, he is doing it in the names of “good journalism.”