Tag: finance

After a ham-handed attempt at damage control with a non-apology over biased “diversity” training sparked outrage from President Trump – which in turn sparked a boycott by conservatives, Goodyear CEO Rich Kramer issued a direct apology on Thursday.

“To be clear, Goodyear does not endorse any political organization, party or candidate,” reads Kramer’s statement, which adds that the company “strongly supports our law enforcement partners and deeply appreciates all they do to put their lives on the line each and every day for their communities.”

“We have clarified our policy to make it clear associates can express support for law enforcement through apparel at Goodyear facilities,” which means – no MAGA hats, but presumably means ‘Blue Lives Matter’ and ‘All Lives Matter’ attire is now acceptable.

(Cue BLM boycott)..

A message from Rich Kramer: By now, you are aware of a visual from our Topeka factory that has been circulating in the media. I want to personally clear the record on what you are seeing and hearing. pic.twitter.com/UqqFeFQn6t

— Goodyear (@goodyear) August 20, 2020

On Wednesday, President Trump tweeted “Don’t buy GOODYEAR TIRES” after a leaked photo of an external firm’s ‘diversity training’ slide appeared to show that the company considers “Blue Lives Matter,” “All Lives Matter” and “MAGA” attire “unacceptable,” while at the same time encouraging “Black Lives Matter” and “Lesbian, Gay, Bisexual, Transgender Pride (LGBT)” attire. 

Don’t buy GOODYEAR TIRES – They announced a BAN ON MAGA HATS. Get better tires for far less! (This is what the Radical Left Democrats do. Two can play the same game, and we have to start playing it now!).

— Donald J. Trump (@realDonaldTrump) August 19, 2020

Real consequences for @goodyear’s actions pic.twitter.com/roRkC35JgK

— Rob O’Donnell (@odonnell_r) August 20, 2020

Cancel all the things!

Authored by Darren Brady Nelson via The Mises Institute,

Even those in the nonfinancial media have noticed the skyrocketing price of gold this year. Some partially identify, but don’t quite understand, some of the many (and more measurable) intermediary effects in the chain of causation such as a “weakened US dollar” and “low bond yields.” Those in the financial press add to these factors with ones like “central bank reserves” management, along with mining production and “jewelry and industrial demand.”

 One mainstream headline surprisingly hit closest to the mark regarding the few (and less measurable) underlying causes: “Fear and Cheap Money Send Gold Price Soaring.”

But the chief cause for this and all major rises in gold prices is not “fear and” but fear of cheap money.

In a 2013 interview titled “What Is Key for the Price Formation of Gold?,” Robert Blumen makes the following seven key points, not only for then, but for today and the foreseeable (fiat money) future:

1. “There might be a statistical correlation between, for example, a net inflow into one sector and higher (or lower) prices. If someone has a statistical model that works, that is great. But it’s not causal. But it seems to me that even if someone has discovered correlations like that, they will be coincident with the price, rather than predictive. In order to forecast the price, you need an indicator that moves in advance of the price.”

2. “[There] is [a] vast amount of brainpower that goes into quantifying gold flows into market segments, such as industry, jewelry, coins, and funds. These quantities may be interesting for some purposes, but they’re not really that relevant if what you’re trying to do is understand the gold price, because there is not a connection between quantities and price in the way that most people think there is.”

3. “The gold market is not segregated into one market for the gold that was mined this year and another market for gold that was mined in past years. The buyer doesn’t care whether he’s buying a newly mined ounce of gold or buying from somebody who had purchased gold that was mined 100 years ago. All of the buyers are competing to buy and all of the sellers are competing to sell.”

4. “Gold is primarily an asset. It is true that a small amount of gold is produced and a very small amount of gold is destroyed in industrial uses. But the stock to annual production ratio is in the 50 to 100:1 range. Nearly all the gold in the world that has ever been produced since the beginning of time is held in some form.”

5. “In an asset market, consumption and production do not constrain the price. The bidding process is about who has the greatest economic motivation to hold each unit of the good. The pricing process is primarily an auction over the existing stocks of the asset. Whoever values the asset the most will end up owning it, and those who value it less will own something else instead. And that, in in my view, is the way to understand gold price formation.”

6. “Most of the market research about gold deals with exchange demand, which has the advantage that you can measure it. But reservation demand is far more relevant to the price. The profile of reservation demand among people who own gold is the main determinant of the gold price from the supply side….Reservation demand is where you demand something by holding onto it rather than selling it….I have reservation demand at the moment for an auto, a dining room table, a couch, a mobile phone, and so forth.”

7. Thus: “The gold price is set by investor preferences, which cannot be measured directly. But I think that we understand the main factors in the world that influence investor preferences in relation to gold. These factors are the growth rate of money supply, the volume and quality of debt, political uncertainty, confiscation risk, and the attractiveness (or lack thereof) of other possible assets.”

The 2015 book Austrian School for Investors: Austrian Investing between Inflation and Deflation serves as an important complement to Blumen’s work on gold price formation. The four authors are not just Austrians in an economic sense, but literal Austrians from the country of the same name. What follows are five key points from the “Precious Metals” section of chapter 9 on “Austrian Investment Practice”:

1. “The marginal utility of gold declines at a slower rate than that of other goods. It is owing to this superior characteristic that gold and silver enjoy their monetary status, and not their supposed scarcity. Their high marketability represents also their decisive advantage over other stores of value….For this reason, central banks hold gold as a currency reserve, and not real estate, artworks or commodities.”

2. “Most analysts assert that gold has the characteristics of an inflation hedge. There are, however, also critical voices. They opine that there is no statistical correlation between gold prices and price inflation rates, and conclude that the inflation hedge notion is thus a myth. We examined this question and drew the following conclusion: gold does not correlate with the rate of inflation as such, but with the rate of change of the inflation rate.

3. “If gold is already weakening in a period of disinflation, it must be even weaker in a period of deflation. This is however a fallacy. The trend of gold in a deflationary environment has barely been analyzed, not least because there exist only very few examples of deflationary periods….In a period of pronounced deflation, [not only do] government budgets become overstretched [but] trust in the financial system and paper currencies declines, while gold gains in importance due its top-notch credit quality.”

4. “Akin to an hourglass, liquidity in the financial system gradually flows downward as the willingness to take risks declines. At the very bottom is gold. Due to general skepticism, the circulation of gold declines as it is increasingly hoarded. The degree of hoarding is always proportional to the confidence in government and its currency.”

5. “Gold exhibits a very low correlation with most other asset classes, especially stocks and bonds.”

The answer to the question of why gold is skyrocketing is “follow the money printing.” US M0 money supply has been subject to a number of quantitative easing (QE) programs since 2008, pushing money supply growth ever higher.

All this suggests that “fear of cheap money” really is a primary factor in pushing up demand for gold. Such fear increases in times of economic turmoil. Such turmoil is almost always caused, and made worse, by government intervention. In 2020 that includes, not just more QE, but also the chaotic government responses to the coronavirus and civil unrest. But don’t expect economists or investors to agree on all this any time soon. I will end with a quote from an article by economist Bob Murphy:

There’s an old joke that the price of gold is understood by exactly two people in the entire world. They both work for the Bank of England and they disagree.

In January 2017, former State Department official Jonathan Winer destroyed several years worth of reports from former UK spy Christopher Steele, at Steele’s request, according to the Daily Caller, citing a report released Tuesday.

Winer, a former legislative assistant to former Sen. John Kerry who became the State Department’s Special Envoy for Libya when Kerry was Secretary of State – was Steele’s contact at the State Department, and received the now-debunked reports claiming that President Trump had been compromised by the Russians.

According to the Senate report, Winer disclosed that he destroyed reports that Steele had sent him over the years. The Senate report also says that Winer failed to reveal when asked in his first interview with the committee that he had arranged the meeting for Steele at the State Department months earlier. –Daily Caller

“After Steele’s memos were published in the press in January 2017, Steele asked Winer to make note of having them, then either destroy all the earlier reports Steele had sent the Department of State or return them to Steele, out of concern that someone would be able to reconstruct his source network,” reads the Senate report, which quote sWiner as saying “So I destroyed them, and I basically destroyed all the correspondence I had with him.“

In total, Winer had received over 100 intelligence reports from Steel between 2014 and 2016.

Emails that The Daily Caller News Foundation obtained through a Freedom of Information Act lawsuit show that Winer shared Steele’s reports with a small group of State Department officials. The Senate report says that the State Department was able to provide the committee with Steele’s reports from 2015 and 2016, though most from 2014 are missing. –Daily Caller

In March, Steele told a UK court that he had “wiped” all of his dossier-linked correspondence in December, 2016 and January, 2017, and had no records of communications with his primary dossier source, Igor Danchenko.

In addition to receiving reports from Steele, Winer gave Steele various anti-Trump memos from Clinton operative Sidney Blumenthal, which originated with Clinton “hatchet man” Cody Shearer. Winer claims he didn’t think Steele would share the Clinton-sourced information with anyone else in the government.

“But I learned later that Steele did share them — with the FBI, after the FBI asked him to provide everything he had on allegations relating to Trump, his campaign and Russian interference in U.S. elections,” Winer wrote in a 2018 Op-Ed.

Steele was paid $168,000 by opposition research firm Fusion GPS to produce his anti-Trump dossier, which was funded in part by Hillary Clinton and the DNC, who used law firm Perkins Coie as an intermediary. 

Read the rest of the Daily Caller report here.

It looks like Epic Games decision to sue Google and Apple, alleging anti-competitive and punitive reprisals illegally undertaken by both tech giants against Epic when it tried to avoid pay what it says was an unjust “tax”. Both companies removed Fortnite, a popular game made by Epic, from their respective app stores when the company tried to install its own payment mechanism within the apps that wouldn’t go through Apple.

In its lawsuit against Apple, Epic Games alleged Apple had become “what it once railed against”, citing the company’s legendary “1984” ad where Apple accused IBM of trying to drive Apple out of business. Apple was doing the same thing by denying Fortnite and Epic Games access to offer their products on the app store.

Now, it looks like Epic’s gambit – ie that more companies, including publishers who have been grumbling over the raw “Apple News” deal that many ended up pulling out of – has paid off. Because on Thursday afternoon, news broke about how a coalition of publishers are seeking to retain 15% more in subscription fees siphoned off by Apple as an additional tax for being displayed in the app store.

The Wall Street Journal, which is also owned by one of the company’s backing the complaint, broke the story.

In a letter to Apple Chief Executive Tim Cook on Thursday, a trade body representing the New York Times, the Washington Post, The Wall Street Journal and other publishers said the outlets are looking to qualify for improved deal terms to keep more money from digital subscriptions sold through Apple’s app store.

News publishers currently pay Apple 30% of the revenue from first-time subscriptions made through iOS apps; that commission is reduced to 15% after the subscriber’s first year.

“The terms of Apple’s unique marketplace greatly impact the ability to continue to invest in high-quality, trusted news and entertainment particularly in competition with other larger firms,” said the letter, which is signed by Jason Kint, chief executive of the trade body, Digital Content Next.

We now wait to see whether more groups will join the battle against Apple, as well as Alphabet’s “Google Play” app store.

Is the establishment panicking at the nomination of someone that dclearly thinks for herslf and refuses to accept as writ the groupthink of The Federal Reserve?

Judging by the wording of the following open-letter to The Senate urging Shelton be rejected, because her “views are so extreme and ill-considered as to be an unnecessary distraction from the tasks at hand,” and of course, the fact that she has not publicly disavowed the President as #OrangeManBad:

” She has advocated for a return to the gold standard; she has questioned the need for federal deposit insurance; she has even questioned the need for a central bank at all. Now, she appears to have jettisoned all of these positions to argue for subordination of the Fed’s policies to the White House – at least as long as the White House is occupied by a president who agrees with her political views. “

Here is the letter (emphasis ours):

Dear Senators:

President Trump has nominated Judy Shelton to one of the vacancies on the Board of Governors of the Federal Reserve System. The nomination recently cleared the Senate Banking Committee and will soon reach the Senate floor. We urge the Senate to reject this nomination.

The undersigned all served on the staffs of either the Board of Governors or the Federal Reserve Banks. We have served in various capacities as economists, lawyers, bank supervisors, and in other professional capacities. We know and appreciate the unique position of the Federal Reserve in our nation’s economy and the need to preserve its nonpartisan approach to its many responsibilities.

The Federal Reserve is a vital part of our government and has been particularly important during our current crisis. The COVID-19 pandemic has required the suspension of much of the nation’s and the world’s economic activity. The Fed’s quick action to provide the markets with the necessary liquidity was crucial to restoring order to those markets and ensuring that the economic crisis that we are enduring did not become much, much worse. However, like the pandemic, the economic challenges persist.

Ms. Shelton has a decades-long record of writings and statements that call into question her fitness for a spot on the Fed’s Board of Governors. She has advocated for a return to the gold standard; she has questioned the need for federal deposit insurance; she has even questioned the need for a central bank at all. Now, she appears to have jettisoned all of these positions to argue for subordination of the Fed’s policies to the White House — at least as long as the White House is occupied by a president who agrees with her political views.

The Fed has serious work ahead of it. While we applaud the Board having a diversity of viewpoints represented at its table, Ms. Shelton’s views are so extreme and ill-considered as to be an unnecessary distraction from the tasks at hand.

The late Chairman Paul Volcker was noted for advising new governors that “when you enter this building, you leave your politics at the door.” Sound advice that, from her record, Ms. Shelton is incapable of following.

We urge the Senate to reject her nomination.

The signatories are mostly lawyers…

In an attempt to provide some balance, here is The Mises Institute’s Robert Aro explaining the reason why the establishment hates Judy Shelton…

Imagine if a member of the Federal Reserve’s Board of Governors said the following :

“When governments manipulate exchange rates to affect currency markets, they undermine the honest efforts of countries that wish to compete fairly in the global marketplace. Supply and demand are distorted by artificial prices conveyed through contrived exchange rates.

Or something honest like:

“The Fed should focus on stable money as a key factor in economic performance. Given that central banks today are the world’s biggest currency manipulators, it’s imperative that the next chairman prioritize the integrity of the dollar.”

And what if they showed an understanding of both history and sound money principles with something intelligent:

“For all the talk of a “rules-based” system for international trade, there are no rules when it comes to ensuring a level monetary playing field. The classical gold standard established an international benchmark for currency values, consistent with free-trade principles.

While she’s not a governor yet, the quotes were from Trump’s appointee Judy Shelton, approved this week by the Senate banking committee on party line at a vote of 13-12. To be nominated to the board of directors, Ms. Shelton will now be put forward to be voted on by the full senate, 53 of the 100 being Republicans.

Yet below, we can see everything wrong with the Mainstream Media (MSM), mainstream economists, and American politics starting with theNew York Times article entitled, God Help Us if Judy Shelton Joins the Fed. Former counselor to the Treasury secretary during the Obama administration, Steven Rattner began with :

Trump’s latest unqualified nominee to the Federal Reserve Board must be rejected.

The defaming article shows Mr. Rattner has no care nor understanding of economics. According to him, Ms. Shelton is known for taking “long-discredited positions in the monetary system,” referring to the gold standard, as he claims it was the “culprit in deepening the Great Depression.” Clearly he is no fan of (or perhaps isn’t educated enough to have heard of) Mises or Rothbard.

In what some may described as laudable on Ms. Shelton’s behalf, Mr. Rattner, fueled by ignorance, continues:

Among other heretical stances, she has supported the abolition of the Federal Reserve itself, putting her in a position to undermine the very institution she is being nominated to serve.

A similar tone was found in the National Review, a magazine which defines itself using the highly nebulous and ill-defined “modern conservative movement.” Going back several months the “controversy” surrounding Judy Shelton was shared in an oxymoronic write-up called: The Wrong Kind of ‘Intellectual Diversity’ at the Fed. It is nothing more than a rant showing the senior editor also knows little about history or economics, but being in a position to publish, does so with a vociferous opinion. He begins with the usual appeal to popularity:

First, she has been a single-minded advocate of a policy that most economists rightly reject: the revival of the gold standard.

What is popular is not always true, especially regarding economics. The article cites quotes from 2009 to the Wall Street Journal in an attempt to discredit her by showing she has not always been consistent in her stances over the span of the past decade. By contrast, the rant implies all other members of the Fed and economists have.

Unfortunately, some people claim to like diversity, but not when it’s different from their own bias. The senior editor who wrote the hit piece can be found on twitter.

Unlike the New York Times and National Review, surprising as it may seem, CNBC’s position was more neutral when discussing the senate hearing, noting :

She faced persistent and at-times hostile questions about her support for the gold standard, her beliefs on whether bank deposits should be insured and whether the Fed should be independent of political influences.

Last but not least, the Wall Street Journal wrote it best , much to the chagrin of its rivals:

the news write-ups inevitably described her with adjectives like “controversial.” She should take it as a badge of honor, given how she would provide needed intellectual diversity at the Fed.

Only in a world this backwards where, in a supposed free country, socialism is considered good and capitalism bad that Shelton could receive so much scorn. To think, 1 out of 7 members of the board could have ideas other than inflationist dogma but they would be shunned for speaking up, says a lot of the society in which we are living. Perhaps the real reason is, if appointed, it could set Judy Shelton in line to the position of Federal Reserve Chair?

Ironically enough, as long Congress stays partisan, we may see her in one of the most powerful central banking positions in the world. It won’t “End the Fed” overnight, but maybe it’s one step closer!

And finally, as  Mark Hendrickson concludes, Shelton is 100 percent correct when she questions why a dozen people (the Federal Reserve Board of Governors) should set the prices of capital (interest rates) any more than they should set the price of cars, houses, or bubble gum.

Markets can do that and do it better – as they did before there even was a Federal Reserve system. Shelton opposes policies that would be more at home in a centrally planned economy. That alone is reason enough to confirm her.

Between September of 2019 and today, the Fed increased the size of the SOMA portfolio from $3.56 trillion to $6.2 trillion, an increase of $2.64 trillion.

And although the Fed effectively absorbed roughly the same amount of net new Treasurys issued by the Treasury, Curvature securities’ strategist Scott Skyrm points out that the composition of new Treasurys entering the market is different from the Treasurys the Fed purchased.

That’s because the Treasury issued new on-the-runs and bills, while the Fed purchased off-the-run issues. That is, older, seasoned securities. (as a reminder, one of the reasons LTCM blew up is that it had a massive convergence trade between On and Off the Runs which suddenly went haywire and required a Fed bailout, the first of many).

As Skyrm points out, one result of the Fed’s aggressive purchases of off-the-run securities is that the Fed now holds a large percentage of the outstanding amount of several issues. The maximum amount the Fed will buy is 70% of the amount outstanding. This means the Fed has taken a significant amount of some Treasury issues out of the market.

Luckily, in order to address this growing shortage of Off the Runs, the Fed has a “fix” for this problem through the SOMA Securities Lending program, where the Fed will auction the securities in their portfolio to loan to the Street at 12:00 noon each day. Some off-the-run securities, like the 4.5% 2/36 (FT0), 1.75% 11/29 (YS3), and 1.625% 8/29 (YB0), trade slightly special in the morning, but don’t fail because there is plenty of supply available through the Securities Lending at noon.

And that’s the problem: only Primary Dealers have access to the Fed’s Securities Lending program and the securities are not available until 5 hours after the market opens.

As the Curvature strategist concludes, “as the Fed continues QE purchases and continues to accumulate large amounts of some off-the-runs, this will be a continuing Repo market dynamic going forward.”

Which of course means that the new “repo dynamic” which resolves this On/Off the run divergence won’t be forced upon the market until there is another shortage-driven crisis (giving those who wish to take the other side plenty of space), similar to the “NOT QE” that the Fed unleashed in Sept 2019 to bail out countless basis-trading hedge funds as we first explained last year.

Readers can keep track of the Fed’s Securities Lending Operation results at the following page, which also reveals which Off The Run cusips are expecially in demand which means – wink wink nudge nudge – that someone would be willing to pay a lot for these if they were to be made available for sale insteqad of for rent.

Authored by Jesse Felder via TheFelderReport.com,

Almost two years ago I wrote, “Why Warren Buffett Would Be Buying Precious Metals Again (If He Could).” In that piece, I referenced a quote from his 1997 Letter to Berkshire Hathaway Shareholders: 

“Last year, we purchased 111.2 million ounces. Marked to market, that position produced a pre-tax gain of $97.4 million for us in 1997. In a way, this is a return to the past for me: Thirty years ago, I bought silver because I anticipated its demonetization by the U.S. Government.” 

Last week, Berkshire Hathaway revealed a stake in Barrick Gold, one of the BANG stocks I have been writing about for the past couple of years.

And I believe this investment is once again related to “demonetization.”

However, in 1967 the word meant one thing; today it means something slightly different.

• 53 years ago, “demonetization” meant the breaking of the dollar’s official link to gold.

• Today, because there is no longer any official link, it means the dollar’s value relative to gold will deteriorate, and possibly to a significant degree, just not all at once like it did in 1971 as a result of the “Nixon Shock.”

The demonetization of the dollar today is less of a shock and more of a slow and steady burn which only makes it more insidious.

Just over a year ago, Charlie Munger, Warren’s parter at Berkshire, had to say in this regard,

“I am so afraid of a democracy getting the idea that you can just print money to solve all problems and eventually I know that will fail…

All the politicians in Europe and America have learned to print money…

Who knows when money printing runs out of control?

At the end, if you print too much you end up with something like Venezuela.”

Since then, the affinity for money printing has only grown in Washington and the Fed’s balance sheet has nearly doubled as a result.

In this light, it’s not hard to see why the recent actions by Congress and the Fed to generate the biggest fiscal deficit-to-GDP in history and monetize the entire amount would inspire the greatest investor of modern times to put on an inflation hedge.

As I wrote a while back, Berkshire is too big today to buy precious metals directly but an equity investment that may be a much more efficient inflation hedge than your average stock is right up their alley.

And it doesn’t hurt that Barrick has spent the past several years remaking itself in Berkshire’s image.

The similarities with the housing bubble boom-bust are growing by the day. Not only are stocks at all time highs, to which we can now add record low yields and an all time high gold price as the 10Y real yield has dropped to an unprecedented minus 1% all time low sparking rampant risk-on euphoria among the retail investing community, but over the past year there has also been a veritable explosion of “blank check” companies  which are shell companies that have no operations but plan to go public with the intention of acquiring or merging with a company with the proceeds of the SPAC’s initial public offering.

As we discussed three weeks ago, investment in SPACs usually surges near market peaks, when there is broad consensus among the professional investing community that equities are overvalued as there is now – as a reminder the August Fund Manager Survey from BofA found that a record 78% of Wall Street professionals believe that not only stocks but every other assets is the overvalued on record.

The last time we saw such a surge in SPACs? 2007, just before the housing/credit bubble crashed and Lehman defaulted.

And while the SPAC bubble burst in 2008 along with the rest of the housing/credit bubble, it has now completely recovered, and as Goldman’s David Kostin showed in a recent Weekly Kickstart, SPAC capital raising has soared YTD.

For those who missed it, some statistics: since the start of 2020 through the end of July, 51 SPAC offerings have been completed raising $21.5 billion, up 145% from the comparable year-ago period. In 2019, 51 SPAC IPOs were completed totaling $13.2 billion and 2018 witnessed 35 offerings for $9.3 billion. SPACs have accounted for one-third of all US IPO activity since the start of 2019. Completed SPAC offerings currently searching for acquisitions exceeds $38 billion.

Well, to this “blank check” frenzy we can now add the consummate smooth-talking politician and former vice-presidential candidate, Paul Ryan, who according to Dow Jones is also “jumping into the rush on Wall Street toward blank-check acquisition companies.”

According to the report, the former Republican House speaker will serve as chairman of a SPAC known as Executive Network Partnering which will seek to raise roughly $300 million in an initial public offering.

While SPACs have been all the rage among Wall Street icons including Bill Ackman and Chamath Palihapitiya, Ryan is the first prominent politician to join a surge this year in the creation of blank-check companies.

And now that the fusion of Wall Street and K Street has been tapped, expect a flood of other US politicians hoping to capitalize on the biggest stock bubble in history which their total dysfunction made possible as it left the Fed in charge of virtually every aspect of the US economy.

Authored by Jonathan Turley,

When I testified on the violence in current protests in cities like Portland, most of the Democratic senators insisted that violence in Portland was due to the arrival of federal officers to protect the federal courthouse and that the violence subsided after the federal officers were withdrawn. 

As other witnesses pointed out, the violence had been raging for weeks and a riot was declared by the Portland police the very night before.  The violence has indeed continued though the coverage has been light, including the arson at a county government building yesterday.

One of the most shocking incidents involve the attack at a Black Lives Matter demonstration of a man who was beaten after people filmed and mocked him. Police say one of the chief attackers was Marquise Love, 25, and he is someone already familiar to police. In an interesting twist, Love is now reportedly raising funds while on the run from police.

The attack in Portland was vicious and various individuals attacked Adam Haner but Love is allegedly the individual who kicked him in the head. It was captured on video.

Love has seven arrests in Washington County, Oregon alone. This includes a 2017 arrest for domestic assault and domestic harassment. He also has two separate arrests in 2016 for providing false information in connection with the transfer of a firearm, and domestic assault and criminal trespass.

He has violated probation and has been forced to accept paternity over a child. In 2012, Love was arrested twice in 2012 for second-degree theft interfering with public transportation and criminal trespass.

Love goes by “Keese” and, according to Heavy, his Facebook page says that he is a “Dj for Portland Oregon clubs. Living life to the fullest. Keep lurking.”

Haner was the not only one attacked at the BLM protest. A transgender female was shown on videotape being attacked and robbed.

Love claims that he was merely fighting a racist and is now being hunted down by police.

In his recent alleged postings according to The Sun, Love states:

“Might go to jail for murder tonight for a racist when all I did was fight him look it up on twitter put money on my books and come see me.”

The fund campaign could be raised in any sentencing to show the court that Love evaded police while soliciting funds.  Moreover, his social media comments would be admissible at a trial.  The videotape does not show Haner resisting. These postings can be used to show a lack of remorse if Love pleads guilty. That is why this type of social media campaign is never recommended by criminal defense attorneys, particularly before you surrender.

Meanwhile, the victim of this crime, Adam Haner, has raised over $125,000 on his GoFundMe to pay for medical care and rehab.

While stocks have soared to new all time highs, there has been one aspect about this latest meltup that suggests the rally is built on nothing but hot air (and trillions in Fed liquidity injections of course): the complete lack of volume, prompting some to wonder if the Fed has finally succeeded in ‘killing’ the market. And sure enough, as Morgan Stanley’s Rob Cronin writes in an overnight note, “this is NOT a typical August lull in liquidity.”

The Market Has Died

The MS team points out that volumes across almost all products are way below historic seasonal averages. Which is bizarre because this is on the back of the highest volume Jan-to-July we have seen since 2010 (except single name options where volumes were the worst Jan-July since 2010). As the bank explains, the exaggerated August drop in liquidity (leading to higher impact costs) is driven by:

1. large amounts of trading behind us in 2020

2. spot level in equities ~65% recovered

3. in options, vol levels are still too high for many directional funds.

The exception is cash equities where volumes are only slightly below August norms, bid/offer spreads are not wide and data shows more intraday trading vs. closing auction use than normal – indicative of more active trading in single names, which in turn suggests that retail trading remains solid. The rest of August is likely to remain subdued as seasonally volumes are unlikely to pick up until the first week of September.

Below we republish key excerpts from the MS note:

We look at liquidity across 6 products and compare average volumes traded from Aug 1st to 18th from 2010 to now.

• Over the last 10Y, SX5E futures would typically have traded an average ~$41bn a day so far in August. This year it’s just $29bn (-28% lower than normal August levels).

• SX5E index options traded an average of just 639k contracts/day so far in August, –48% below normal levels. 20d volumes this low were last seen in 2013.

• From 1st to 18th August 2019, SX5E dividend futures traded $380m/day – this year it’s just $84m (-62% vs. normal Aug levels).

Cash equities stands out as being more ‘normal’, registering volumes that are only slightly below historic norms for this time of year. SX5E traded on average $12bn/day in August (-10% below seasonal norms) and SXXP traded $39bn (-4% below seasonal norms).

Chart on the left breaks out SX5E futs vs. cash volumes (the cash volumes include data across all execution venues). We can see the drop in futures volumes is more pronounced as cash. Chart on the right shows the volume difference from Aug 1st to 18th of 2020 vs. the average of the same period of the last 10Y. The actual ADV for this year is marked on each bar. Again, you can see here the relatively better cash volumes vs. other products for this time of year.

With the exception of dividend futures (where notional traded is typically <0.5% of equity futs), the biggest seasonal drop in volumes has come in SX5E index options where 20d MA volumes just hit levels last seen in 2013 (left chart below). In the last 5 days, we traded $5bn of combined put/call delta per day vs. ~$12bn/day 5Y average. Over-writing programs appear as active as ever, but non-directional volatility selling strategies (var sellers) and directional option users are less active.

Single name options had the WORST Jan-July of volumes since 2010 – totally at odds with other asset classes. In March, the ratio of notional SX5E index option notional volume traded vs. notional traded in SX5E single names reached 37x – a 10Y high (we have adjusted the SX5E single name basket to allow for index rebals through time). The ratio has since fallen to 15x (right chart below) driven by the drop in index. Both SNO and index option volumes are <1st %-ile vs. 2010.

Separately, MS also notes that in Q1 2020, bid offer spreads in cash hit new highs. The average SX5E name traded ~12bps wide at their worst (vs. Jan 1st level of 3bps) while the Small Cap SCXP index names traded as high as 32bps wide (vs. Jan 1st level of 12bps). The good news is that spreads have tightened by ~80% since with the indices now trading 4bps and 15bps wide respectively, which is a “sign of normality in cash”, at least until the next time the market goes bidless.

Finally, at the SX5E/SXXP level, use of the closing auction has fallen sharply in the last month. It’s likely that those trading cash equities are more active/intraday players. This is supported further by the fact that key cyclical sectors are seeing the least use of the auction over the last week (Banks use is just 13%, 1st percentile vs. 2012).