Tag: finance

Authored by Jeffrey Tucker via The American Institute for Economic Research,

In a wide-ranging interview in the New York Times, Melinda Gates made the following remarkable statement:

“What did surprise us is we hadn’t really thought through the economic impacts.”

A cynic might observe that one is disinclined to think much about matters than do not affect one personally. 

It’s a maddening statement, to be sure, as if “economics” is somehow a peripheral concern to the rest of human life and public health. The larger context of the interview reveals the statement to be even more confused. She is somehow under the impression that it is the pandemic and not the lockdowns that are the cause of the economic devastation that includes perhaps 30% of restaurants going under, among many other terrible effects. 

She doesn’t say that outright but, like many articles in the mainstream press over this year, she very carefully crafts her words to avoid the crucial subject of lockdowns as the primary cause of economic disaster. It’s possible that she actually believes this virus is what tanked the world economy on its own but that is a completely unsustainable proposition. 

Further, her comments provide a perfect illustration of the core problem all along: most of the people who have been advocating lockdowns in fact have no actual experience in managing pandemics. To many of these, Covid-19 became their new playground to try out an unprecedented experiment in social and economic management: shutting down travel, businesses, schools, churches, and issuing stay-at-home orders that smack of totalitarian impositions. 

Here is what she says: 

You can project out and think about what a pandemic might be like or look like, but until you live through it, it’s pretty hard to know what the reality will be like. So I think we predicted quite well that, depending on what the disease was, it could spread very, very, very quickly. The spread did not surprise us.

What did surprise us is we hadn’t really thought through the economic impacts. What happens when you have a pandemic that’s running rampant in populations all over the world? The fact that we would all be home, and working from home if we were lucky enough to do that. That was a piece that I think we hadn’t really prepared for.

There are plenty of specialists who have lived through pandemics in the past and managed them by maintaining essential social and economic functioning. A major case in point is Donald A. Henderson, who as head of the World Health Organization is given primary credit for the eradication of smallpox. He wrote as follows in 2006:

Experience has shown that communities faced with epidemics or other adverse events respond best and with the least anxiety when the normal social functioning of the community is least disrupted. Strong political and public health leadership to provide reassurance and to ensure that needed medical care services are provided are critical elements. If either is seen to be less than optimal, a manageable epidemic could move toward catastrophe.

Melinda together with her husband Bill have been the major funding source for pro-lockdown efforts around the world, giving $500M since the pandemic began, but also funding a huge range of academic departments, labs, and media venues for many years, during which time they have both sounded the alarm in every possible interview about the coming pathogen. Their favored policy has been lockdown, as if to confuse a biological virus with a computer virus that merely needs to be blocked from hitting the hard drive. 

We can look at how this disease traveled around the world and see that the countries who locked down first, they’re doing better. Many African countries saw it coming and locked it down early. Their replication rate just never got as high as many other countries. And that is a good thing.

While it is true that Africa is an odd outlier, the claim that this is due entirely to early lockdowns has no support. Those who have looked at the anomaly in Africa point to the very young population (just 3% are over 65), cross immunities with other coronaviruses as the main reason for the low death rate, and stronger overall immunities. Indeed, the demographics alone could account for nearly the whole of the mortality difference with Europe and the U.S. In addition, Melinda says here what Bill has said for years: the only solution to a virus is to suppress it and develop a vaccine – the previously untested experiment that has brought poverty, death, and despair to the entire world. Africa in particular was devastated by lockdowns. 

It’s still a good thing that she is opening up to the New York Times so that we can gain better perspective on her outlook. There will be a reckoning in the coming year concerning why and how all this happened to us. There will be no chance of suppressing the reality of what has happened. Indeed the center-left press is already starting to admit what AIER has been saying since March 2020. 

Consider this roundup from just the last several days:

What Has Lockdown Done to Us? By Drew Holden (New York Times):

Some researchers worry that the social isolation has inflicted damage to mental health that will outlast even the worst of the pandemic. We may not have a full accounting of the consequences for years to come….There will be significant long term consequences from school closures as well. About half of the country’s school districts held remote classes, either exclusively or partially, at the start of the year. This approach has meaningfully reduced educational quality, particularly for children of color.

These losses don’t even take into account the direct effects of the lockdowns on the economy. Small businesses have closed their doors at very high rates as the American economy sputtered in response to stay-at-home orders. One study estimates that 60 percent of the millions of jobs lost between January and April were a result of the lockdowns, not the virus itself. The economic uncertainty caused by unemployment comes with its own health risks….

These tragedies have become an ambient backdrop to everyday life: present but forgotten, real but ignored. Perhaps America has simply gotten comfortable ignoring the quiet suffering of others.

“The Problem With Underestimating How Much People Want to Be Together” by Julia Marcus (The Atlantic) 

When a public-health approach isn’t producing the desired outcome, it’s time to try something different. Instead of yelling even louder about Christmas than about Thanksgiving, government officials, health professionals, and ordinary Americans alike might try this: Stop all the chastising. Remember that the public is fraying. And consider the possibility that when huge numbers of people indicate through their actions that seeing loved ones in person is nonnegotiable, they need practical ways to reduce risk that go beyond “Just say no.” 

“Covid used as pretext to curtail civil rights around the world, finds report” (The Guardian) 

The state of civil liberties around the world is bleak, according to a new study which found that 87% of the global population were living in nations deemed “closed”, “repressed” or “obstructed”…..A number of governments have used the pandemic as an excuse to curtail rights such as free speech, peaceful assembly and freedom of association, according to Civicus Monitor, an alliance of civil society groups which assessed 196 countries.

The parental burnout crisis has reached a tipping point by Anna North (Vox) 

Lack of child care is likely a big reason more than 850,000 women dropped out of the workforce in September — more than in any other month on record except for this April, Covert reports. Overall, moms have borne a bigger share of the pandemic parenting burden than dads, with 80 percent of mothers of kids under 12 saying they are responsible for the majority of distance learning in their homes in one April survey. And single moms have been the hardest-hit of all: The share of unpartnered moms in the workforce dropped from 76.1 percent in September 2019 to 67.4 percent in September 2020, a significantly larger drop than those seen among partnered parents or single dads, according to a Pew analysis.

“Many aren’t buying public officials’ ‘stay-at-home’ message. Experts say there’s a better way” (Los Angeles Times) 

Health officials are up against a fatigued public, as well as a number of people who don’t believe in the danger of the virus, (Dr. Monica) Gandhi said. But she is also part of a growing number of experts who think there’s a better way to engage those who do want to take the pandemic seriously — by taking a lesson from the public health strategy known as harm reduction.

Finally, it’s tremendously gratifying that the last column of the mighty genius Walter Williams specifically named the Great Barrington Declaration as the answer:

What about the benefits and costs of dealing with the COVID-19 pandemic? Much of the medical profession and politicians say that lockdowns, social distancing, and mask-wearing are the solutions. CDC data on death rates show if one is under 35, the chances of dying from COVID-19 is much lower than that of being in a bicycle accident. Should we lock down bicycles? Dr. Martin Kulldorff, professor of medicine at Harvard University, biostatistician, and epidemiologist, Dr. Sunetra Gupta, professor at Oxford University and an epidemiologist with expertise in immunology, and Dr. Jay Bhattacharya, professor at Stanford University Medical School, a physician and epidemiologist were the initiators of the Great Barrington Declaration. More than 50,000 scientists and doctors, as well as more than 682,000 ordinary people, have signed the Great Barrington Declaration opposing a second COVID-19 lockdown because they see it doing much more harm than good.

The authors of the Great Barrington Declaration never had any doubt that eventually most everyone would come to see that the traditional principles of public health prevail over the previously untested and now failed policy of lockdowns.

They spoke out when they did as a means of forcing the issue, and their courage will long echo in the annals of history. Now if we could only get Melinda Gates to see it. 

The Pentagon ordered two B-52 bombers to conduct a 36-hour ‘show-of-force’ mission in the Persian Gulf on Thursday, which military officials told the New York Times was intended to “deter Iran and its proxies from carrying out attacks against United States troops in the Middle East” amid rising tensions.

The massive warplanes embarked on the 36-hour trip from Barksdale Air Force Base in Louisiana – and is unusual in that it’s the the second such long-range flight by Air Force bombers near Iranian air space within a month. The US periodically conducts ‘show-of-force’ flights to the Middle East and Asia.

The multinational mission, which included aircraft from Saudi Arabia, Qatar and Bahrain, was routed well outside Iranian air space. The American warplanes were in the broader gulf region for about two hours before returning home, officials said. Two other B-52s from Minot Air Force Base in North Dakota conducted the same type of long-range mission in the area on Nov. 21.

The flight on Thursday comes on the heels of the assassination last month of Iran’s top nuclear scientist, an attack Iran has blamed on Israel with possible American complicity. The bomber missions also come just weeks before the anniversary of the American drone strike in January that killed a senior Iranian commander, Maj. Gen. Qassim Suleimani, in Iraq.

Iran has vowed to avenge both deaths. –New York Times

“Potential adversaries should understand that no nation on earth is more ready and capable of rapidly deploying additional combat power in the face of any aggression,” said Gen. Kenneth F. McKenzie Jr., head of the US military’s Central Command, in a Thursday statement, adding “The ability to fly strategic bombers halfway across the world in a nonstop mission, and to rapidly integrate them with multiple regional partners, demonstrates our close working relationships and our shared commitment to regional security and stability.”

The Times also claims that President Trump was dissuaded from bombing Iran’s primary nuclear site in the coming weeks – an escalation which the Biden administration, should Trump’s bids at the Supreme Court fail to overturn the results of the election – would need to unwind carefully to avoid appearing friendly to the Islamic Republic. Iran, meanwhile, may not know what to make of the Trump administration’s intentions.

A senior military official told a small group of reporters before Thursday’s flyover that US intelligence analysts had detected a “planned going on,” which may have included preparations for possible rocket strikes or worse – by Iran and the Shia militias in Iraq that it supports.

Another senior military official who spoke on condition of anonymity said there was no evidence of a larger, imminent attack against US military personnel despite mounting tensions in the region.

Over the past year, Iranian-aligned proxies in Iraq have conducted more than 50 rocket attacks on bases where United States troops are housed, as well as on the American Embassy in Baghdad, and launched 90 attacks on convoys carrying supplies to American troops, according to the Pentagon. -NYT

“In short, Iran is using Iraq as its proxy battleground against the United States, with Iran’s ultimate objective being to eject the United States and our forces from Iraq and the broader Middle East,” General McKenzie said during a November virtual conference on the Middle East. The Times also notes that Iran’s control over the Shia militias in Iraq may have weakened since President Trump ordered the assassination of General Suleimani, who led the elite Quds force of the Islamic Revolutionary Guards Corps.

Before the daytime assassination of top Iranian scientist Mohsen Fakhrizadeh late last month, believed to have been conducted by Israeli forces, Iran appeared to be laying low in order to ‘wait out’ the Trump administration. Now, military experts worry that the assassination may change the calculus in Iran.

“The Iranians are going to be in a position where they have to retaliate,” Adm. William H. McRaven, the former commander of the military’s Special Operations Command, told ABC “This Week” two days after the strike. “They’re going to have to save face. And so now the issue becomes, what does that retaliation look like?”

“The Iranians don’t want to go to war with us,” McRaven continued. “We don’t want to go to war with Iran. So everybody needs to do the best they can to kind of lower the temperature and try not to get this into an escalation mode.”

Authored by Steve Watson via Summit News,

Yet another airline boss has said that it is fully expected that vaccination against coronavirus will become mandatory in order to travel.

AirAsia CEO Tony Fernandes told an aviation conference Wednesday that Asian countries may soon demand that anyone crossing their borders has received a Covid-19 jab.

“I foresee in Asia, anyway, I think they won’t let anyone in without a vaccination,” Fernandes said at the CAPA Centre for Aviation event.

“It’s not up to the airlines to decide,” he added, explaining that “It’s for governments to decide. It’ll be the country that’ll decide if they will allow people to come in if they are not vaccinated.”

Fernandes’ comments echo those of Todd Handcock, the Asia Pacific president of Collinson Group, which owns Priority Pass airport lounges.

Handcock said recently that “We believe that vaccinations will be required for entry to many countries in the future. And for a period of time, parallel requirements of (being) vaccinated or pre-flight negative tests.”

Air Asia has already implemented a digital ‘health pass’ called Scan2Fly which is being used on routes from Kuala Lumpur to Singapore, Surabaya, and Jakarta.

The app, use of which is voluntary at this stage, allows passengers to upload medical certificates when checking in online. The app also details entry documentation required by the destination country, including Covid-19 related data.

Screenshot: Air Asia’s Scan2Fly app

The airline expects the technology to eventually be rolled out to other Air Asia destinations.

The developments come after multiple other airline chiefs and transport executives have commented that so called ‘vaccination passports’ are coming.

The president of travel company Acendas, Brent Blake, told Fox 4 News that he believes the immunity documents will be introduced, requiring anyone who wishes to board a plane to be vaccinated.

Lance Gokongwei, President and CEO of Cebu Pacific, the largest budget airline in the Philippines, recently said “I think we have to work on a single, global COVID passport so that each country respects the passport.”

“That has to be the number one priority: to get vaccines in the hands in as much of the global population as possible, and then connecting this to a COVID passport,” he further urged.

Korean Air has also said there’s a “real possibility” airlines will mandate passengers take a COVID-19 vaccine before being allowed to travel.

The CEO of Qantas Airlines also announced in November that the COVID-19 vaccine will be mandatory for anyone boarding his flights and that this will become the norm for all international travel.

Testing of the passports has already begun in airports all over the globe.

In addition, the world’s largest air transport lobby group is developing a global ‘COVID travel pass’ app designed to link vaccination status and coronavirus test results to a person’s travel documents.

Another ‘COVID passport’ type system known as the CommonPass, sponsored by the World Economic Forum, is under development.

A further ‘COVID passport’ app called the AOKpass from travel security firm International SOS is currently undergoing trials  between Abu Dhabi and Pakistan.

Hundreds of Tech companies are scrambling over themselves to develop these COVID passport systems.

Anyone still labelling this a ‘conspiracy theory’ is either wilfully ignorant or just plain uninformed.

The big day has finally arrived. Two days after the NHS vaccinated the first elderly patients with the new mRNA-vector Pfizer vaccine (before quietly asking patients with a history of severe allergic reactions to wait before receiving the first jab).

Meanwhile, as we await the final ruling, here’s a roundup of what to look out for courtesy of CNBC.

When Are They Voting?

The FDA advisory meeting is scheduled to run from 9 a.m. ET to 6 p.m. ET. The vote is likely to happen towards the end of the meeting. Before the vote, outside medical experts will assess Pfizer’s clinical trial data and offer their opinions on the vaccine, including whether the benefits outweigh the risks for an emergency use authorization. Emergency use authorization means the FDA will allow some people to receive the vaccine as the agency continues to evaluate data. It isn’t the same as a full approval, which can typically take months. So far, Pfizer has only submitted two months of follow-up safety data, but the agency usually requires six months for full approval. The advisory committee, which is expected to include 23 members for the meeting, has already been reviewing documents sent by the FDA on Pfizer’s vaccine, said Dr. Paul Offit, a voting member of the committee. Those documents were made available to the public on Tuesday. “The public will see everything that we see,” Offit added.

What Happens Next?

The FDA will make a decision on whether to approve the vaccine for emergency use, which could come as early as Friday, James Hildreth, a member of the committee, told NBC’s “Weekend Today” on Saturday. Health and Human Services Secretary Alex Azar told ABC News’ “This Week” on Sunday that an authorization could come “within days” following the meeting. The committee’s recommendation is non-binding, meaning the agency doesn’t have to accept it. But it often does. FDA Commissioner Stephen Hahn said in September that he had “no intention” of overruling career scientists at the agency, including Peter Marks, who runs the division that oversees vaccine approvals. “I have complete and absolute confidence in the scientists at the FDA and the decision-making that they have here,” he said Sept. 10.vv

How soon will the vaccine be distributed?

The federal government is expected to ship 2.9 million doses of Pfizer’s vaccine to jurisdictions across the nation within 24 hours after an emergency use authorization from the FDA, Army Gen. Gustave Perna, chief operations officer for Operation Warp Speed, said at a briefing on Wednesday.

An additional 2.9 million doses will be held to be distributed 21 days later for second doses, he added.

States had already submitted early plans to the CDC on how they intend to inoculate some 331 million Americans against Covid-19 once a vaccine is approved. The CDC has allocated $200 million to jurisdictions for vaccine preparedness, though much of that funding hasn’t trickled down to the local level.

When will I get the vaccine?

Initial doses of the vaccine will be limited as manufacturing ramps up, with officials predicting it will take months to immunize everyone in the U.S. who wants to be vaccinated. The vaccine is expected to be distributed in phases, with the Centers for Disease Control and Prevention asking states to prioritize health-care workers and nursing homes first.

Dr. Moncef Slaoui, who is leading President Donald Trump’s vaccine program Operation Warp Speed, has said the U.S. should be able to distribute enough vaccine doses to immunize 100 million Americans by the end of February, nearly a third of the U.S. population. He has said the entire U.S. population could be vaccinated against Covid-19 by June.

Then again, depending on your position in the societal class hierarchy, one might find themselves receiving the vaccine sooner than they might expect.

The latest inflation print for the month of November came in hotter than expected, with the BLS reporting that headline and core CPI rose by 0.2%, above expectations of a modest 0.1% increase. Both prints were 0.0% in October.  The food index decreased 0.1% in Nov. after rising 0.2% in Oct, while the Energy index increased 0.4% in Nov. after rising 0.1% in Oct. The index for all items less food and energy increased 0.2 percent in November after being unchanged the prior month. The indexes for lodging away from home, household furnishings and operations, recreation, apparel, airline fares, and motor vehicle insurance all increased in November. The indexes for used cars and trucks, medical care, and new vehicles all declined over the month.

On an annual basis, headline CPI rose 1.2% while core CPI increased 1.6%, both also stronger than the expected 1.1% and 1.5%, respectively. The food index rose 3.7% over the last 12 months, while the energy index fell 9.4%t.

Broken down by components:

The food index declined 0.1 percent in November following a 0.2-percent increase in October. The index for food at home declined 0.3 percent after rising in October. Major grocery store food group indexes were mixed in November. The index for nonalcoholic beverages fell 0.9 percent in November, its largest monthly decline since December 2010. The index for other food at home fell 0.6 percent in November, and the index for cereals and bakery products decreased 0.5 percent; both indexes increased in October.

• The food at home index increased 3.6 percent over the past 12 months. All six major grocery store food group indexes increased over the period. The largest increase was the meats, poultry, fish, and eggs index which rose 5.9 percent as the beef index increased 7.5 percent. The smallest increase was for the cereals and bakery products index, which increased 2.4 percent over the last 12 months. The index for food away from home rose 3.8 percent over the last year. The index for limited service meals rose 5.9 percent, and the index for full service meals rose 2.9 percent over the span.

The energy index rose for the sixth month in a row in November, increasing 0.4 percent. The index for natural gas rose 3.1 percent in November after declining in October. The electricity index rose 0.5 percent in November, its third consecutive monthly increase. The index for fuel oil also increased in November, rising 3.6 percent. In contrast to these increases, the gasoline index declined for the second month in a row, falling 0.4 percent.

• The energy index fell 9.4 percent over the past 12 months. Energy commodity indexes fell sharply over the period, with the fuel oil index declining 26.4 percent and the gasoline index decreasing 19.3 percent. Energy service indexes rose over the last 12 months, with the index for natural gas increasing 4.4 percent and the index for electricity rising 1.6 percent.

The index for all items less food and energy rose 0.2 percent in November after being unchanged in October; it was driven higher by prices for lodging away from hom and airline fares as Americans took a little break from lockdowns to actually travel for once this year. The shelter index rose 0.1 percent in November, the fourth 0.1-percent increase in a row. However, the indexes for rent and owners’ equivalent rent were both unchanged in November after both rising 0.2 percent in October. The index for lodging away from home rose sharply in November, increasing 3.9 percent after falling 3.2 percent in October. The index for household furnishings and operations rose 0.7 percent in November after falling in each of the prior 2 months. The recreation index rose 0.4 percent in November; this was the same increase as last month and the fourth consecutive monthly advance. The apparel index rose 0.9 percent in November after declining in September and October. The index for airline fares rose 3.5 percent in November after increasing 6.3 percent in October. The index for motor vehicle insurance rose 1.1 percent in November after falling in September and October. The indexes for education, for alcoholic beverages, and for tobacco also increased in November.

The index for used cars and trucks fell 1.3 percent in November, its second consecutive monthly decline after sharp increases in prior months. The index for medical care declined slightly in November, falling 0.1 percent. The index for hospital services rose 0.3 percent and the index for physicians’ services rose 0.1 percent, while the index for prescription drugs declined 0.1 percent over the month. The new vehicles index declined 0.1 percent in November after rising in September and October. The used cars and trucks index increased 10.9 percent over the last 12 months and the medical care index increased 2.4 percent.

Despite the monthly increases in November, the indexes for apparel, airline fares, and motor vehicle insurance all declined over the past 12 months.

Finally, the shelter index rose 1.9 percent over the last 12 months, its smallest 12-month increase since the period ending December 2011.

By Michael Every of Rabobank

“If you want a picture of the future, imagine a boot stamping on a human face—for ever.” So said Orwell in 1984. Nowadays one could add or conflate it with “Imagine a boot kicking a can—for ever.”

There is little to report on Brexit. Dinner last night between BoJo and von der Leyen was indeed fish and scallops. A load of scallops, in fact, because nothing was agreed. The latest deadline is perhaps this Sunday. However, there are also suggestions December 31 might be the day of days. GBP is down from nearly 1.3480 to under 1.34 this morning: presumably somebody thought the fish was a bit off. So is British travel to the EU from 1 January: its current virus status means no visits to Europe –which has no Covid at all– will be allowed.

There is equally little to report on US fiscal stimulus.

The EU starts its summit today happy the rule-of-law stand-off with Poland and Hungary over the 2021 budget has been “resolved”. A German-brokered deal was struck yesterday, but with no transparency whatsoever, which seems to run counter to the whole rule-of-law thing. The press suggest the importance of EU rule of law will be entrenched – but any financial sanctions stemming from breaches of it can’t be triggered before the European Court of Justice has ruled on the matter, which will take more than a year. So nothing is fundamentally resolved and yet everyone gets to claim victory and the money they want in 2021 – and so markets are happy. EUR tested to nearly 1.2150 yesterday but is just under 1.21 at time of writing.

The next big EU discussion point is Turkey: will the bloc agree on sweeping financial sanctions over Turkish actions in the Med? Of course not. Bloomberg reports the EU are “poised to reiterate the threat” of punitive sanctions, falling short of Greek demands. They will also seek to coordinate with the US. On which, the must-pass end of year US defence bill says the US president must sanction Turkey over its S-400 military purchase from Russia.

The ECB will meet today. We expect it to ‘recalibrate’ policy, with a very clear message that easing will be based around PEPP and TLTRO; they will choose stability over flexibility by extending both PEPP and the TLTRO discount by 12 months, pinning policy through H1 2022; and by shifting focus on the duration of PEPP, blurring the line between forward guidance and (implicit) yield curve control. While the size of the ECB package may initially disappoint inflated market expectations, its duration should be supportive. In short, rates on hold forever and more acronyms, more QE, more market distortion, and more attempts at upbeat messaging.

Big Tech is in the news. President Trump is threatening to veto said US defence spending bill because it does not remove Article 230 protections from US tech firms. Now Facebook is also being sued by 48 US states and the US government in an antitrust case alleging it uses its acquisitions to cause harm to the competition, following a similar case against Google. YouTube has started a new censorship row, following Twitter, telling video creators what they are and aren’t allowed to say about US politics. The FT also reports Europe is demanding Big Tech ‘police the internet’ or face penalties of up to 6% of turnover. Which conflates with other developments.

There are now 18 states, and the US president, attached to the election-related complaint made to the Supreme Court, the deadline for defendant replies to which is 3pm today. Legal opinion is universally that this a “long shot” or a “hail Mary”, or that it is of a piece with the Four Seasons Total Landscaping press conference held in a car park in front of a garage door next to a sex shop. Indeed, though docketed it may not even be heard by the Court, or may be heard and dismissed. Just be careful how you cover the topic if you want to post videos about it. On which:  

The DOJ announced Hunter Biden is under investigation over tax fraud and dealings with China, and that this investigation had been ongoing since 2018 before being paused around the election. Social media was not exactly enthusiastic about people sharing these allegations pre-election, if one recalls, and over 50 former US intelligence officials publicly stated the ’laptop’ allegations had the hallmarks of a Russian influence campaign.

On China, President Trump has appointed China hawk Michael Pillsbury to head the Defence Policy Board; the Biden team announced Katherine Tai will be their US Trade Representative, a fluent Mandarin speaker, and on record as saying China needs to be confronted strongly and strategically; a member of the US House Intelligence Committee previously known for breaking wind on live TV is caught up in a scandal over a Chinese spy ‘honey trap’; and The Guardian says Switzerland is being typically efficient and paying for Chinese spies to come and operate on its territory. Wall Street is nonetheless still diving into Chinese capital markets hard and fast, with capital inflows picking up to the point where it would appear that the PBOC (or someone for it) is intervening to keep CNY from appreciating too much.

Meanwhile, as the feel-good political and market can-kicking forever continues, Australia has followed Portugal to enter negative yield territory: it just sold 3-month Treasury notes at -0.01%, following New Zealand regionally on that path. This seems hard to square with everything else being bid through the roof, including AUD, until one recalls this is the ‘There can be no risk’ scenario that central banks have been stamping on the free market’s face for decades.

Yes, it doesn’t work in the long run, and the more it doesn’t work the more of it we will need to see: it’s Orwell, not ends well. But let’s ignore that and lie back and think of the short run.

War is peace; Freedom is slavery; Ignorance is strength.

We are at war with inflation. We have always been at war with inflation.

As lockdowns began to spread virally across America, the number of Americans seeking unemployment benefits has surged higher.

Initial claims printed 853k (vs 725k exp), a 137k jump from last week and the biggest weekly increase in new claims since March…

Source: Bloomberg

This is the highest amount of new benefits seekers in three months.

Continuing Claims also rose on the week, from 5.527mm to 5.757mm – the first increase since August and biggest increase since May…

Source: Bloomberg

But, the total number of unemployment claimants has dropped below 20 million…

Source: Bloomberg

Sadly this data reflects the period BEFORE lockdowns really accelerated in California and other states.

The ECB announced that in order to arrest Europe’s economic double dip, it will expand its PEPP (pandemic emergency purchase programme) QE by €500BN (as expected), will extend the duration of the PEPP through March 2022 (it was expected to end 2021); calibrates TLTRO further by adding three more operations in 2021 and extended it by 12 months.

But, for now markets seem disappointed (EUR is higher) and so we look forward to Christine Lagarde explaining just how “more of the same” will result in a different outcome this time…

Watch Live (due to start at 0825ET):

Authored by Bill Blain via MorningPorridge.com,

After hearing the disappointing news from Brussels – a dinner where nothing really moved forward, except a splutter-saving agreement to stretch out the talking till Sunday – it looks like a no-deal Brexit exit is on the cards. The blocks to a deal were put in position the moment Boris took No 10 and grandly promised the UK the best deal ever with his faux-Trumpian bluster.

It’s clear the UK and Yoorp remain miles apart. (21 miles from Dover.)

You can paint it as Europe punishing the UK for the temerity of abandoning the project, Europe being defensive to demonstrate to waverers how leaving the EU is impossible, the UK’s foolishness for leaving, or for the UK being silly for not agreeing to give up its fish and leave its sovereignty with Brussels. Or, it might be the reasons the UK are leaving are most obvious in our likely rejection of Europe’s demands. 

My immediate thought was to panic buy. I was thinking of running to the shops this morning to buy a big wheel of Brie, a couple of cases of Champagne, and all the other stuff we all love about Yoorp.. and then I thought about it. Who cares if there are suddenly shortages of Yoorpean stuff.

Nope. Don’t care

I’ve bought my Christmas sparkler – a couple of cases of the excellent Black Dog, crafted just off the South Downs on the slopes of Ditchling Beacon by my chum Jim Nolan. (Seriously it’s a cracking sparkling wine, knocks the expensive UK wines and top champagnes out..) Cheese this Christmas will all be British, including Isle of Wight Blue – it really is excellent. In fact, my big worry is can I get some Gallybagger? It will be sad to be without a toasted camembert, but Welsh Rarebit is some much better.

And from next year.. Well I guess we will all be become pescatarians… because the UK is going to have an awful lot of fish. I know some Scots and Devon fishermen and can guarantee they won’t be happy.. there will be so much fish they’ll be giving it away for nothing! (Yes, we will find an accommodation to let the Dutch, Spanish and Danes have access to our fish, but any French boat a milli-inch over on our side will be sunk with prejudice!)

Sure, we might have to build a couple of gunboats to protect our maritime borders – but that will create jobs!, Heaven help you if your French car breaks down – your fault for buying it in first place. 

The bottom line is if the UK exits without a sane and logical trade deal than would have benefited everyone, it’s not the end of the world. Dashed awkard though. Messy, but just means we will have to try even harder to recover from the ravages of Covid and the stupidity of Boris. 

Whenever you think it may overwhelm you, remember: Things are never as good as we hope, but never as bad as we fear. 

I am pretty sure the UK and Yoorp have reached the end of what could have have been a constructive negotiation where the UK would have got back our impression of sovereignty and retained Europe as our closest trading partner. We would have been outside the EU, but within Europe. Everyone would have been nice and happy. 

The UK decided to leave Europe for (somewhat misguided and badly informed) reasons of sovereignty and pride. Yoorp wants to keep us tied to their rules – and I can understand exactly why when face with what they’ve seen in Westminster.  We Brits are not perfect – and it’s now time we learn that the hard way. Neither side has room left to compromise. So let’s just get on with it. 

And if we get to tar and feather Boris Johnson for not delivering another promise… what’s to worry about..?

As previewed earlier, the ECB announced that in order to arrest Europe’s economic double dip, it will expand its PEPP (pandemic emergency purchase programme) QE by €500BN (as expected), will extend the duration of the PEPP through March 2022 (it was expected to end 2021); calibrates TLTRO further by adding three more operations in 2021 and extended it by 12 months.

Here are the highlights from what the ECB just did in its final meeting for 2020:

• Rates unchanged, expects rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 per cent within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
• Increases the envelope of the pandemic emergency purchase programme (PEPP) by €500 billion to a total of €1,850 billion.
• Extended the horizon for net purchases under the PEPP to at least the end of March 2022, and the Governing Council will conduct net purchases until it judges that the coronavirus crisis phase is over.
• Extends the reinvestment of principal payments from maturing securities purchased under the PEPP until at least the end of 2023.
• In any case, the future roll-off of the PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance.
• Further recalibrate the conditions of the third series of targeted longer-term refinancing operations (TLTRO III); extends the period over which considerably more favourable terms will apply by twelve months, to June 2022. Three additional operations will also be conducted between June and December 2021.
• Decided to raise the total amount that counterparties will be entitled to borrow in TLTRO III operations from 50 per cent to 55 per cent of their stock of eligible loans. In order to provide an incentive for banks to sustain the current level of bank lending, the recalibrated TLTRO III borrowing conditions will be made available only to banks that achieve a new lending performance target.
• To extend to June 2022 the duration of the set of collateral easing measures adopted by the Governing Council on 7 and 22 April 2020. The extension of these measures will continue to ensure that banks can make full use of the Eurosystem’s liquidity operations, most notably the recalibrated TLTROs.
• The Governing Council will reassess the collateral easing measures before June 2022, ensuring that Eurosystem counterparties’ participation in TLTRO III operations is not adversely affected.
• Decided to offer four additional pandemic emergency longer-term refinancing operations (PELTROs) in 2021, which will continue to provide an effective liquidity backstop.

In response to the announcement of yet another massive liquidity injection – which was in line with expectation- the EURUSD actually jumped, as most of what Lagarde unveiled was already priced in, on the lack of additional dovish surprises, and amid concerns that the ECB is running out of ammo to truly stimulate the economy.

The full statement is below:

In view of the economic fallout from the resurgence of the pandemic, today the Governing Council recalibrated its monetary policy instruments as follows:

First, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00 per cent, 0.25 per cent and -0.50 per cent respectively. The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 per cent within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.

Second, the Governing Council decided to increase the envelope of the pandemic emergency purchase programme (PEPP) by €500 billion to a total of €1,850 billion. It also extended the horizon for net purchases under the PEPP to at least the end of March 2022. In any case, the Governing Council will conduct net purchases until it judges that the coronavirus crisis phase is over.

The Governing Council also decided to extend the reinvestment of principal payments from maturing securities purchased under the PEPP until at least the end of 2023. In any case, the future roll-off of the PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance.

Third, the Governing Council decided to further recalibrate the conditions of the third series of targeted longer-term refinancing operations (TLTRO III). Specifically, it decided to extend the period over which considerably more favourable terms will apply by twelve months, to June 2022. Three additional operations will also be conducted between June and December 2021. Moreover, the Governing Council decided to raise the total amount that counterparties will be entitled to borrow in TLTRO III operations from 50 per cent to 55 per cent of their stock of eligible loans. In order to provide an incentive for banks to sustain the current level of bank lending, the recalibrated TLTRO III borrowing conditions will be made available only to banks that achieve a new lending performance target.

Fourth, the Governing Council decided to extend to June 2022 the duration of the set of collateral easing measures adopted by the Governing Council on 7 and 22 April 2020. The extension of these measures will continue to ensure that banks can make full use of the Eurosystem’s liquidity operations, most notably the recalibrated TLTROs. The Governing Council will reassess the collateral easing measures before June 2022, ensuring that Eurosystem counterparties’ participation in TLTRO III operations is not adversely affected.

Fifth, the Governing Council also decided to offer four additional pandemic emergency longer-term refinancing operations (PELTROs) in 2021, which will continue to provide an effective liquidity backstop.

Sixth, net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion. The Governing Council continues to expect monthly net asset purchases under the APP to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.

The Governing Council also intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

Seventh, the Eurosystem repo facility for central banks (EUREP) and all temporary swap and repo lines with non-euro area central banks will be extended until March 2022.

Finally, the Governing Council decided to continue conducting its regular lending operations as fixed rate tender procedures with full allotment at the prevailing conditions for as long as necessary.

Separate press releases with further details of the measures taken by the Governing Council will be published this afternoon at 15:30 CET.

The monetary policy measures taken today will contribute to preserving favourable financing conditions over the pandemic period, thereby supporting the flow of credit to all sectors of the economy, underpinning economic activity and safeguarding medium-term price stability. At the same time, uncertainty remains high, including with regard to the dynamics of the pandemic and the timing of vaccine roll-outs. We will also continue to monitor developments in the exchange rate with regard to their possible implications for the medium-term inflation outlook. The Governing Council therefore continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.

Lagarde’s final press conference for the year will be at 830am. Watch it live here.