Tag: finance

We are sure, somewhere deep down in the bureaucracy of banality that is California’s representative government, there is good reason for each of these ‘policies’… but seriously, one could be forgiven for thinking that the Golden State’s massive liberal majority is just making it up as they go along to punish the most undeserving people the most vociferously.

Presented with little comment, res ipsa loquitor…

California’s covid laws are getting out of control pic.twitter.com/ttYgnkhLkx

— Pardes Seleh (@PardesSeleh) September 7, 2020

Hours after CNN reported the existence of the now-infamous Steele Dossier on January 10, 2017 – choosing to withhold key details because they hadn’t been “independently corroborated,” BuzzFeed’s Ben Smith decided to kick the door in – publishing the salacious and unverified document funded by Hillary Clinton and the DNC.

The decision seriously pissed off CNN‘s Jake Tapper – who emailed Smith later that day, writing “I think your move makes the story less serious and credible[.] I think you damaged its impact,” according to emails released Friday and reported by the Daily Caller‘s Chuck Ross.

The emails were released in response to a federal judge’s order to unseal documents from a lawsuit against BuzzFeed, which was sued in February 2017 by a Russian businessman who was accused in the dossier of being a Russian agent.

Lawyers for the Russian, Aleksej Gubarev, picked out the Tapper-Smith exchange in hopes of showing BuzzFeed failed to do its due diligence before publishing the dossier, which was funded by Democrats and compiled by former British spy Christopher Steele. –Daily Caller

“That was pretty uncollegial[.] Not to mention irresponsible[.] No one has verified this stuff,” Tapper continued.

Smith replied, saying that publishing the dossier was “not an easy call,” to which Tapper responded “Collegiality wise it was you stepping on my dick,” adding “You could have waited til morning.”

“Professionally this is unverified info[.] Your guys unlike us don’t even seem to know who the former agent i[s],” Tapper continued, seemingly referring to dossier author Christopher Steele.

Smith replied that “of course” he knew who wrote the dossier.

Three years and many investigations later, the Dossier was proven to be a hoax, the FBI was revealed to have spied on Trump’s campaign, manipulated evidence, and lied to the FISA court – and Democrats pivoted to Ukraine in their unsuccessful attempt to remove Trump from office.

In its latest attack on Western journalists that’s part of both a broader “New Cold War” with the US, and a crackdown on dissent in the aftermath of the pandemic, engineered by President Xi, Beijing is throwing up new roadblocks to stop western journalists from Bloomberg, CNN & WSJ from remaining in China.

The delays were couched as retaliation for the Trump Administration’s latest limitations on visa term limits for reporters working in the US on behalf  of state-controlled Chinese press. These organizations have been subjected to myriad new requirements by Trump and the administration in a push to limit electoral interference from Beijing.

Here’s more from Bloomberg:

Chinese authorities delayed renewing the press credentials of some journalists working for American media outlets, including Bloomberg News, CNN and the Wall Street Journal, in response to the Trump administration limiting visa terms for Chinese reporters in the US.

The journalists in Beijing were told their residence permits will at this stage be extended until Nov. 6, which appears to coincide with the date when the 90-day visas given to Chinese press in the U.S. will need to be renewed. Two non-Americans at Bloomberg News received a letter allowing them to work and stay in the country in lieu of having official press credentials, which in the past were normally good for 12 months.

An organization for foreign correspondents put out a statement slamming Beijing’s decision.

A Bloomberg spokesperson declined to comment. The Foreign Correspondents’ Club of China called on Beijing to reverse the move.

“These coercive practices have again turned accredited foreign journalists in China into pawns in a wider diplomatic conflict,” the group said in a statement Monday. “The FCCC calls on the Chinese government to halt this cycle of tit-for-tat reprisals in what is quickly becoming the darkest year yet for media freedoms.”

A spokesperson for China’s Foreign Ministry played down the delays, saying all the reporters affected would be allowed to stay in China for an extended period.

@StateDept @statedeptspox: You should be honest to tell people since 2018 StateDept has delayed&denied visas of about 30 Chinese journalists&expelled 60 in Mar, limited visas for all Chinese journalists to a max 90-day stay in May&has not approved visa extension of any of them.

— Hua Chunying 华春莹 (@SpokespersonCHN) September 7, 2020

#CNN journalist and a few other #US journalists’ visa extension applications are being processed, during which they can continue to live and work here with no problems at all. We’ve made it very clear to your colleagues in Beijing.

— Hua Chunying 华春莹 (@SpokespersonCHN) September 7, 2020

As per usual, Beijing denounced the Trump Administration’s latest crackdown on Chinese state media with characteristically aggressive rhetoric.

At a regular news briefing later Monday, Foreign Ministry spokesman Zhao Lijian accused the U.S. of “kidnapping” journalists and taking “hostages” in the dispute. “For China, all options are on the table,” he said, noting that the U.S. had also refused to rule out any actions.

“If the U.S. truly cares about American journalists in China, it should extend the visas for all Chinese journalists as soon as possible instead of kidnapping Chinese and American journalists out of selfish political purposes,” Zhao said.

Beijing has said the U.S. has expelled more than 60 Chinese media personnel and denied visas to more than 20 others. Meanwhile, the FCCC said the Chinese government had forced a record 17 foreign correspondents to leave in the first half of this year and put at least a dozen more on visas as short as one month.

The Trump Administration has frequently taken the lead on curbing the influence of Chinese state-backed media in the US. Social media companies like Twitter have often been more focused on censoring the President and his allies.

And for all the criticism of Beijing published by NYT and WaPo, they were still more than willing to take the CCP’s ad money.

Authored by Matthew Vadum via The Epoch Times,

California Gov. Gavin Newsom quietly signed a law on Sept. 4 repealing parts of an unpopular law that put independent contractors in the state out of work and limited the earnings of freelancers, including visual artists, musicians, writers, translators, and film support crews by classifying them as employees.

The enactment of the new measure, which came after months of political and legal pressure from the trucking industry, companies such as Uber and Postmates, and groups such as the American Society of Journalists and Authors Inc. and the National Press Photographers Association, is a rare defeat for the labor movement in solidly progressive California.

The new law, known as AB 2257, passed both chambers of the state legislature unanimously on Aug. 31.

The Democratic governor announced on his website Sept. 4 that he had signed the measure but offered no explanation for why he had done so. The governor’s office could not immediately be reached for comment.

The new law took effect immediately upon signing.

AB 2257 amended AB 5, which attempted to determine who is a contractor and who is an employee and forced companies to reclassify their freelancers as employees. The new law provides greater flexibility to freelancers.

When AB 5 took effect Jan. 1, that law made it hard for so-called gig-economy companies to classify people who work for them as independent contractors instead of employees. The idea being the measure was to prevent freelancers from being unfairly exploited by employers.

Assemblywoman Lorena Gonzalez, a San Diego Democrat, wrote AB5 to implement a 2018 California Supreme Court decision known as Dynamex Operations West Inc. v. Superior Court, that deemed many freelancers to be employees, a status that entitled them to the minimum wage, overtime pay, unemployment insurance, and health benefits.

Employees in California are entitled to benefits not available to contractors, such as the minimum wage, health insurance, and paid time off. AB 5 was strongly backed by labor organizations critical of hard-to-unionize freelance jobs. Unions hoped the law would give them an edge in recruiting new members.

AB 5 was enacted ostensibly to help workers by preventing their “misclassification” as non-employees.

It adopted the so-called “ABC” test to determine employee status, according to the Economic Policy Institute (EPI). The test stipulates that workers may only be considered independent contractors when a business proves the workers:

“a. Are free from control and direction by the hiring company;

b. Perform work outside the usual course of business of the hiring entity;

and c. Are independently established in that trade, occupation, or business.”

But mere weeks after the enactment of AB 5, which is still being challenged in the courts, the law ran into headwinds as freelance workers and others in a state with many independent contractors suddenly found themselves out of work or with their ability to earn a living severely restricted.

It stopped freelance writers from accepting more than 35 assignments from a single publisher and hindered the ability of musicians to accept regular paying gigs. Companies outside California stopped using freelancers in the state as they feared financial penalties for violating the law.

Gonzalez admitted there were problems back in February.

Gonzalez wrote in a Feb. 6 tweet that she was willing to consider easing the restriction affecting journalists. “Based on dozens of meetings with freelance journalists & photographers, we have submitted language to legislative counsel that … will cut out the 35 [articles] submission cap & instead more clearly define freelancer journalism,” she wrote.

Later in the month she reported progress on writing what turned out to be AB 2257.

“Having heard additional feedback from a variety of freelance writers, photographers and journalists, we are making changes to Assembly Bill 5 that accommodate their needs and still provide protections from misclassification,” she said February 27.

AB 2257 abolishes the 35 item submission limit for writers and photographers contained in AB 5. It also exempts translators, appraisers, and registered foresters from the restrictions.

Gig-economy companies are supporting a state ballot initiative this Nov. 3, Proposition 22, that would treat app-based drivers as independent contractors, not as employees.

In a stark reminder of the market excesses reached last week, Goldman writes that the Nasdaq had one of the largest 2-day declines in the last 30 years after the SoftBank gamma trade was exposed.

Meanwhile, the sheer buying frenzy into this plunge was unprecedented, and was characterized by a significant increase in options positioning into US equity and US Tech in particular, with the put/call ratio in the US reaching a historical low, the single stock skew back to pre-Covid levels and the spot-vol correlation turned into positive territory. “Such stretched option positioning has historically highlighted a negative asymmetry of near-term equity returns”, Goldman writes, pointing out that Nasdaq net equity future positioning at the peak was close to historical highs.

The silver lining is that as the meltup breadth was relatively narrow, so was the selloff, and here a key catalyst in addition to merely positional unwind is that the US 10y real rates increase (+8bps since the lows) “has likely triggered a rotation out of longer duration equities such as ‘Growth’ and Tech.”

Echoing what we said in our discussion of the unprecedented divergence between real rates and breakevens, Goldman points out that with nominal yields being anchored by central banks, “breakeven rates and real rates are more likely to move in opposite direction” adding that “while phases of increasing breakeven rates coupled with lower real rates are usually very friendly for both risky assets and safe assets, lower breakeven rates and higher real rates tend to be very negative for markets as all assets typically decline.” In line with this framework, since Sep. 2 most assets are down and multi-asset investors struggled to diversify the correction.

This also means that amid the gamma trade unwind, the dollar performance, usually positive in this environment, was mixed given the resilience of EM FX.

Nonetheless, despite conceding that the risk of corrections remains elevated, and warning that “a near-term setback” is likely, Goldman expects the current bull market to continue “as the improved growth outlook coupled with supportive monetary policies should maintain the search for yield elevated and foster a compression of the ERPs.” Specifically, Goldman lists the following ten reasons why despite one of the biggest 2-day crashes in the Nasdaq on record, the levitation will continue:

1. We are in the first phase of a new investment cycle, following a deep recession. The ‘Hope’ phase – the first part of a new cycle, which usually begins in a recession as investors start to anticipate a recovery, is typically the strongest part of the cycle. That is what we have been seeing this year.
2. The economic recovery looks more durable as vaccines become more likely.
3. Goldman economists have recently made upward revisions to their economic forecasts and it is likely that analysts’ expectations will follow.
4. The bank’s Bear Market Indicator (which was at very elevated levels in 2019) is pointing to relatively low risks of a bear market despite very high valuations.
5. Policy support remains very supportive for risk assets. There is both a central bank ‘put’ – a belief that central banks will be there to provide as much liquidity as is required – and a fiscal ‘put’ as governments have scaled up their willingness to support growth.
6. The Equity Risk Premium has room to fall.
7. The resumption of zero nominal interest rate policy in the recent past, together with the extended forward guidance, has created an environment of greater negative real interest rates. This should be highly supportive to risk assets in an economic recovery.
8. Equities offer a reasonable hedge to higher inflation expectations.
9. Equities look cheap relative to corporate debt, particularly for strong balance sheet companies (60% of US companies and 80% of European companies have dividend yields above the average corporate bond yield).
10. The digital revolution continues to gather pace. We think this transformation of the economy and stock markets has further to go. These companies could continue to drive valuations and returns in this bull market.

Authored by Karl Evers-Hillstrom via OpenSecrets.org,

President Donald Trump is edging out Democratic nominee Joe Biden in political donations from members of the military, even as more U.S. troops say they would vote for Biden over their current commander in chief.

Trump has raised nearly $1.1 million from military members, compared to roughly $859,000 for Biden. Trump receives far more campaign cash from members of the U.S. Air Force and beats out Biden among members of the U.S. Army and U.S. Marine Corps. Biden fares better with members of the Department of Defense and U.S. Navy. 

The president’s campaign cash lead with military donors was much higher when earlier this cycle when he had a larger overall fundraising advantage over Biden. That narrow lead could continue to slip when the campaigns officially report their August fundraising figures, as Biden raised record money last month. 

Trump has claimed he has strong support from the military, touting pay raises he and Congress authorized for active-duty troops. But a recent Military Times poll found that Biden leads Trump by 4 points among active-duty troops. Roughly 38 percent of active-duty troops said they had a favorable view of Trump, compared to 50 percent holding an unfavorable view of the president. 

The president’s support with the military has declined during the course of his presidency. A 2016 Military Times poll found that Trump had a 2-to-1 lead over then Democratic nominee Hillary Clinton. At the start of his presidency, Trump’s approval with troops sat at 46 percent. His decline has come amid criticism from former high-ranking defense officials. The most shocking rebuke came from former Secretary of Defense James Mattis, who described the president as a threat to the Constitution after Trump sent troops into Washington, D.C., to quell protests. 

Citing anonymous officials at the Defense Department and U.S. Marine Corps, The Atlantic reported last week that Trump described dead American troops as “losers” and “suckers.”

Trump strongly denied the report, calling it “Fake News.” Trump has previously disparaged military heroes in front of large audiences, including the late Sen. John McCain (R-Ariz.), saying in 2015, “I like people who weren’t captured.” He’s also publicly feuded with Gold Star families. 

Biden does best compared to Trump with donors from the U.S. Navy. Trump clashed with Navy leadership and fired Navy Secretary Richard Spencer over the department’s handling of a Navy Seal accused of war crimes who was pardoned by Trump. Trump also fired a Navy captain who wrote a letter to military leadership asking for help with a COVID-19 outbreak on his warship. That captain, Brett Crozier, received a roaring applause from his crew when he left the ship. 

TRUMP: “I’m not saying the military’s in love with me. The soldiers are. The top people in the Pentagon probably aren’t because they want to do nothing but fight wars, so all of those wonderful companies that make the bombs and make the planes and make everything else stay happy”

— Josh Caplan (@joshdcaplan) September 7, 2020

Biden has sought to make inroads with former military officials who have expressed disgust with Trump’s presidency. More than 70 former senior national security officials, all Republicans, endorsed Biden last month, calling Trump “unfit to lead.”

Former Secretary of State and four-star general Colin Powell endorsed Biden during the Democratic National Convention, calling the Democrat “a president we will all be proud to salute.” Trump responded on Twitter by calling Powell “a real stiff who was responsible for getting us into the disastrous Middle East Wars.”

In this Real Vision Daily Briefing, managing editor, Ed Harrison, and senior editor, Ash Bennington, answer questions from Real Vision subscribers, about markets, their respective journeys, as well as Real Vision itself. Ed shares his experience of working in the foreign service, and he describes how his time spent working in the fixed income markets caused him to become more receptive to Austrian economics. Ash discusses his journey of transitioning from working in fintech to becoming a financial reporter, and he also explores his passion for cryptocurrency.

Expanded patios have been key to survival for some restaurants, clubs, and entertainment venues able to make up for the lost indoor space due to public health orders limiting capacity, or, in some cases, outright banning indoor gatherings. With fall and winter steadily approaching, some restaurateurs are fretting the cold season as it could put them out of business, reported CP24. 

“If the next few months of COVID does not go away or they don’t find a solution or medication or something, it’s going to cripple the city for sure,” said Charles Khabouth, who operates Toronto-based Ink Entertainment, a company that runs dozens of clubs, restaurants, entertainment venues, and music festivals.

Ink Entertinament Properties 

Khabouth warned, “It’s going to get worse because come October, November, December, it gets cold, there’s no traffic, people are not on patios and people are not walking around.” 

To his point, heating degree day (HDD), a measurement designed to quantify the demand for energy needed to heat a building, will steadily increase in Canada and the US through mid-Oct. 

HDD Canada 

HDD US 

In Canada and certain northern parts of the US, cold weather could render outdoor seating or standing areas for restaurants or clubs useless, further pressuring cash flows as indoor spaces continue to be limited or banned. This poses a significant problem for operators that must shrink operations in the colder months as people stay home, unwilling to have a meal or drink in freezing outdoor weather. 

Ahead of the winter season, operators must choose to keep staff and operations running at full tilt or reduce the workforce in anticipation of collapsing demand come October, November, December, January, and February. 

Some restaurants are purchasing electric and gas heaters to keep patrons warm during the upcoming cold season – with those added costs, does that mean operators will pass it along to patrons? 

Here’s the next question: Will Old Man Winter lead to an even larger bust cycle of restaurants? 

Authored by Bill O’Reilly,

A friend of mine has a sign on his lawn that says “Black Lives Matter.” Since I grew up with him in Levittown, New York, where blacks were not allowed to purchase homes, that piqued my interest.

He explained to me that justice is important to him and he believes African-Americans are denied a fair shake in America.

Millions of people believe that and their opinions should be respected.

I see the justice issue as more about poverty than skin color at this point in history.

My opinion should be respected as well.

Then I asked my friend if he was aware of the philosophy behind the Black Lives Matter movement. I mean a sign is one thing, a well thought out political plan is quite something else.

Most Americans, including my boyhood chum, have no clue.

Enter Alicia Garza, one of the founders of the Black Lives Matter Global Foundation and a proud Marxist, and we’re not talking Groucho here. Nope, Alicia is a follower of Karl Marx, one of the architects of communism. She freely admits that.

Ms. Garza is also an “opinion contributor” for USA Today and she lays it all out there – if you read between the lines.

On August 30, Alicia Garza wrote this:

“We are in the midst of a black rebellion, spurred by decades of unequal treatment and undue violence against our communities…

“My work is about uprooting structural racism from every aspect of our society – our economy, our government and our communities.”

You can read “uprooting” as “overthrowing” because that is exactly what the Black Lives Matter Global Foundation wants to do. The well thought out plan is to use racial disenchantment to batter the entire “white” power structure and eventually destroy the capitalistic system.

It could work because few understand the end game including the Democratic Party, and more than a few corporations that are pumping millions of donated dollars into the Black Lives Matter “movement.”

The smoke signals are key.

The far left including BLM are now demanding “economic” justice.

That means onerous taxation on the affluent and the seizure of private property through a series of “wealth taxes.”

Then there’s “housing justice.”

That means the government pays for sheltering low-income Americans.

“Education justice” means free college.

“Worker justice” means guaranteed jobs and a “living wage.”

You get the idea.

A central government run by “woke” activists would provide pretty much everything and would confiscate private and corporate wealth to pay for it.

So that’s what’s in play and, again, the pro athletes, the casual liberal folks, the corporate virtue-signalers have no blankin’ clue.

However, some in the media do understand but will not report the truth for fear their bosses will harm them.

So the next time you see a BLM sign please consider there is much more to this movement than words on paper or graffiti on a wall. Marxism is now being slyly mainstreamed in America. Somebody resurrect Paul Revere.

While Wall Street debates if it is time to move on from the Big Short 2.0 (malls) to the Big Short 3.0 (hotels), the broader commercial real estate market continues to implode and nowhere more so than in ground zero of the covid/riot crisis, New York City, where CRE deals have hit a brick wall as the pandemic continues to roil the local economy.

According to the Real Estate Board of New York, investment sales totaled $10.5 billion across 1,229 recorded deals in the first half of 2020, a 32% drop in transaction volume and a 54% plunge in total consideration compared to the first half of 2019, and a record low since the Real Estate Board of New York began reporting the data in 2015.

Apartment buildings suffered the biggest drops in prices, at 50% on average. Offices and hotels saw decreases of 28% and 37%, respectively, while prices for retail properties were flat.

Some more details:

• Citywide investment sales transactions declined 32%, consideration declined 54% and the average price declined 32% year-over-year.
• Multifamily rental, elevator transactions declined 7%, consideration declined 56% and the average price declined 53% year-over-year.
• Multifamily rental, non-elevator transactions declined 32%, consideration declined 42% and the average price declined 13% year-over-year.
• Office transactions declined 27%, consideration declined 47% and the average price declined 27% year-over-year.
• Garages/gas stations/auto transactions declined 31%, consideration increased 18% and the average price increased 71% year-over-year
• Vacant land transactions declined 30%, consideration declined 19% and the average price increased 15% year-over-year.
• Industrial transactions declined 37%, consideration declined 60% and the average price declined 37% year-over-year.
• Hotel transactions declined 70%, consideration declined 81% and the average price declined 37% year-over-year.
• Retail transactions declined 27%, consideration declined 27% and the average price remained flat year-over-year.
• Commercial condo transactions declined 68%, consideration declined 98% and the average price declined 93% year-over-year

“We continue to see the devastating and long-lasting impacts the pandemic has had on the health and stability of the New York economy,” James Whelan, the trade group’s president, said in a statement Friday.

“Real estate is a fundamental driver of the city’s economy”, he added summarizing perfectly just why NYC is in so much trouble.

The total tax revenue for the City and State generated from investment sales was $314 million, with $62 million in NYS transfer tax and $252 million in NYC transfer tax. Total tax revenue in the first half of 2020 was down 49% from the previous 6 months and 58% from the previous 12 months, suggesting that NYC will likely hike taxes on investment sales to make up for the shortfall, resulting in even greater declines in investment sales.

According to the REB NY, the largest transaction in the first half of 2020 was the $978 million sale of the Lord & Taylor Building, 424 5th Avenue, from WeWork to Amazon in March. As Bloomberg notes, many deals have been frozen as the gap between what buyers are willing to pay and what sellers will accept has widened to a record.