Tag: finance

Aunt Jemima survived 130 years: the Great Depression, two World Wars, the Civil Rights movement, Vietnam and 9/11. But the brand has finally been cast aside by Quaker Oats – which is owned by Pepsi – due to its “racist past” at the hands of today’s relentless cancel culture.

PepisCo’s packaged-foods unit said Wednesday it would remove imagery of the black woman from the Aunt Jemima brand’s pancake mixes, syrups and other products, and change its name. The company didn’t disclose the new name, but said packaging changes will appear throughout the fourth quarter.

The company told CNN: “As we work to make progress toward racial equality through several initiatives, we also must take a hard look at our portfolio of brands and ensure they reflect our values and meet our consumers’ expectations.”

The appearance of Aunt Jemima has changed over the years, the article notes. Its name is “based off the song ‘Old Aunt Jemima’ from a minstrel show performer and reportedly sung by slaves,” according to CNN. The logo was based on Nancy Green, who was a cook and missionary worker that NBC later disclosed had been born into slavery. 

“We recognize Aunt Jemima’s origins are based on a racial stereotype. While work has been done over the years to update the brand in a manner intended to be appropriate and respectful, we realize those changes are not enough,” said Kristin Kroepfl, chief marketing officer at PepsiCo’s Quaker Foods North America business. The unit also sells Quaker Oats and Rice-A-Roni.

Despite its iconic history, there have been recurring calls to change the logo for years, with Cornell University professor Riché Richardson one of the latest voices to speak out against it in 2015. He called the logo “very much linked to Southern racism.” 

He also said the logo was based on a “devoted and submissive servant who eagerly nurtured the children of her white master and mistress while neglecting her own.” In 2017, the husband of B. Smith called the logo the epitome of “female humiliation.”

But today the brand is just described by the company as standing for “warmth, nourishment and trust — qualities you’ll find in loving moms from diverse backgrounds who want the very best for their families.”

Gladys Knight was even a spokesperson for the brand in the 1990s, during such time the logo evolved. But that apparently is woefully insufficient in this day and age. Quaker Oats said: “While work has been done over the years to update the brand in a manner intended to be appropriate and respectful, we realize those changes are not enough.”

So it’s best to simply deleted over a century of history and pretend it never existed.

Additionally, the company announced that the Aunt Jemima brand will donate $5 million over the next five years “create meaningful, ongoing support and engagement in the Black community.”

As one user on social media pointed out, the lag time from satire to reality has sadly now become just 5 days.

Lag time from Onion to reality reduced to 5 days pic.twitter.com/CtvQnsf0Ci

— David Burge (@iowahawkblog) June 17, 2020

Farcical-er and farcical-er…

Hertz stock is soaring this morning after comments by SEC Chair sparked ‘optimism’ among the muppet gallery…

SEC Chair Jay Clayton told CNBC this morning that the SEC told Hertz, which filed for bankruptcy during the pandemic, the agency has issues with its plan to sell stock.

“In this particular situation we have let the company know that we have comments on their disclosure,” Clayton said on CNBC’s “Squawk on the Street” on Wednesday.

“In most cases when you let a company know that the SEC has comments on their disclosure they do not go forward until those comments are resolved.”

So it would appear the market is taking that as “good news” for the worthless stock since it will not be diluted by a stock offering… and that’s why someone is panic-buying HTZ stock.

You cannot make this stuff up!

We suspect it will not last!

A relatively volatile overnight session saw prices fade after API’s surprise crude build, then ramp back on the back of nothing other than stocks levitating, only to fade back as OPEC predicted that fuel demand will remain “under pressure” during the second half of this year because of the ongoing economic fallout from the COVID-19 pandemic.

Anxiety over a second wave in China (and the US) is also weighing on sentiment this morning.

“China’s shuttering of Beijing’s schools is a significant setback to the country’s recovery from the Covid-19 virus, and it could be a real blow to the petroleum demand recovery outlook, which had been improving,” said John Kilduff, a partner at Again Capital LLC.

API

• Crude +3.857mm (-3.5mm exp)

• Cushing -3.289mm

• Gasoline +4.267mm (-2.2mm exp)

• Distillates +919k (+3.1mm exp)

DOE

• Crude +1.22mm (-3.5mm exp)

• Cushing -2.608mm

• Gasoline -1.666mm (-2.2mm exp)

• Distillates -1.358mm (+3.1mm exp)

Distillates saw a surprise draw last week – the first in 11 weeks – as official EIA data showed a surprise crude build (albeit smaller than API had reported)…

Source: Bloomberg

Production numbers took a hit in today’s report, as expected, following the passage of Tropical Storm Cristobal through the Gulf of Mexico last week. Production fell by 600k b/d to its lowest since March 2018…

Source: Bloomberg

As Bloomberg’s Julian Lee notes, an average of 465,000 barrels a day of the region’s crude production was shut-in during the week to June 12, according to the Bureau of Safety and Environmental Enforcement, as operators evacuated platforms and halted production. So you’ll need to factor that in before assessing any underlying change in production.

WTI was hovering around $37.50 ahead of the official DOE data and rallied back above $38 on the production drop, product draws…

 

Finally, Bloomberg Intelligence Energy Analyst Fernando Valle warns: “The easing of lockdowns should spur U.S. demand and potentially drive draws on inventories for gasoline. But consumption remains well below seasonal norms and faces further headwinds as states that opened early see a rise in hospitalizations and cities such as Houston contemplate containment measures.”

 

Senate Republicans are pushing back against President Trump’s $1 trillion infrastructure spending push, warning that it’s too “rich” and would be a “heavy lift” for Congress, according to The Hill.

Senate Majority Leader Mitch McConnell has been warning over a surging federal deficit – insisting that the top priority should be the reauthorization of a $287 billion Highway Trust Fund instead of passing another expensive coronavirus relief bill.

Trump’s plan would set aside money for roads, bridges, rural broadband and 5G wireless. Of note, McConnell’s wife, Elaine Chao, is Trump’s Transportation secretary.

Meanwhile, House Democratic leaders say they’ll approve a $500 billion surface transportation bill, of which Senate Finance Committee Chairman Chuck Grassley (R-IA) says his panel will need to find a way to pay for $93 billion.

Asked about a news report that Trump is getting ready to unveil a new $1 trillion infrastructure spending proposal, Grassley said whatever bill Senate Republicans come up with “could be a lot less.”

At the very least, the Senate GOP plan “won’t be over that,” he added.

If the House and Senate are able to pass their respective surface transportation bills, the final measure — and the ways to pay for it — would be ironed out in conference. –The Hill

Trump’s $1 trillion plan, meanwhile, would be a “heavy lift” according to Sen. Pat Toomey (R-PA), a member of the Finance Committee. 

Given the difficulty of coming up with ways to pay for a $287 billion highway bill, a $1 trillion infrastructure initiative would likely add significantly to the federal deficit, which the Congressional Budget Office projects will reach $3.7 trillion in 2020.

A $1 trillion plan from the administration would double the $500 billion green infrastructure bill that House Democrats rolled out earlier this month. –The Hill

Mike Enzi (R-WY) – Chairman of the Senate Budget Committee who also sits on the Finance Panel, says that the priority should be directly addressing the coronavirus pandemic – noting that a large portion of the $2.2 trillion CARES act, along with $484 billion in interim coronavirus relief legislation which passed in April, has yet to be tapped.

“For the last few days I’ve been talking about not paying for the national parks’ infrastructure. A trillion is a lot more than the $17 billion we’re talking about there,” said Enzi, referring to the pending Great American Outdoors Act.

“Nothing we’re doing right now is fiscally responsible,” he said, adding “I’m much more inclined to stick to solving the virus problem.”

In late April, McConnell began pushing back against the idea of tacking an infrastructure component onto the next round of coronavirus relief legislation – telling Fox News at the time: “Infrastructure is unrelated to the coronavirus pandemic that we’re all experiencing and trying to figure out how to go forward,” adding “We need to make sure that whatever additional legislation we do is directly related to this pandemic.”

Trump’s $1 trillion election-year infrastructure package was first reported by Bloomberg, which ‘largely caught GOP Senators by surprise,’ according to The Hill.

When Trump tweeted in late March that he wanted a “VERY BIG & BOLD” infrastructure package costing $2 trillion, Republican senators mostly ignored the request.

Sen. John Cornyn (R-Texas), another member of the Finance panel, said the administration is going about it backward by coming up with a $1 trillion price tag before laying out what it would be spent on.

“You don’t start with the price tag. You start with what it is you want to accomplish and figure out what that is. Seems to me to be the opposite way to approach this by starting it with how much money you’re willing to spend,” he said.

Sen. Rob Portman (R-Ohio), also a Finance Committee member, said “the trillion dollars may be a little rich.”

But Portman said there are potential areas of common ground.

“I think there are areas where we can do something. Rural broadband is very popular among many of my colleagues,” he said. –The Hill

According to Rob Portman, there are ongoing disagreements over how to bankroll the Highway Trust Fund reauthorization, which was on the Senate’s schedule before the COVID-19 pandemic after the Environment and Public Works Committee approved the bill in July.

In the latest installment tracking the retail euphoria phase of the bubble now known by everyone as “Jay’s Market” (recall that for much of the past decade, the recurring complaints among bulls was that there was zero retail participation so it wasn’t really a bull market, well… how about now), Bloomberg profiles not the now infamous Robinhood trading platform which has emerged as the “battleground” for an entire generation of 10-year-old traders, but rather its derivative – the website that tracks the action on Robinhood and which we have frequently used to show recent moves and changes in retail trading momentum: Robintrack.

As Bloomberg reports this morning, RobinTrack – which is not affiliated with the Robinhood investing app, but uses information gleaned from it to show trends in positioning among the brokerage’s users – is a two-year old product of Casey Primozic, “who was wrapping up his undergraduate years at Valparaiso University in Indiana. He was also building a website — for fun. Little did he know it would grow into a Wall Street obsession.”

Now in 2020, his college side project, Robintrack.net, has seen site traffic explode as everyone from day traders to institutions flock there for a picture of what retail investors are buying. Primozic says there’s evidence hedge funds are scraping his data. The 23-year-old programmer can hardly keep up with an overflowing email inbox and is getting barraged with pitches from advertisers.

Why is Robinhood – and by extension Robintrack – so popular among trend watchers? Because “no other brokerage provides this data publicly and directly – making Robinhood users a proxy for all individual investors.”

Robinhood displays stock ownership data publicly for informational purposes, according to a company spokesperson.

And in a time when as we reported one month ago “retail traders have taken over the market“, as institutions remain paralyzed unable or unwilling to buy stocks in a market where a record number of Wall Street professionals say the S&P is overvalued…

… the result has been a reflexive cottage industry of Robinhood “analyst”, or as Peter Tchir, head of macro strategy at Academy Securities says, there’s a “cult of Robinhood watchers developing.”

Anywhere between 20,000 and 50,000 unique users now visit Robintrack on an average day, according to Primozic. Before this year, a typical day would only see up to 4,000 visitors. In the seven days before Monday, the website attracted 167,000 unique users and 286,000 separate sessions. The spike began back in late April, as Robinhood users piled into the United States Oil Fund LP (USO) amid negative crude prices.

On the other hand, as SocGen quant Andrew Lapthorne wrote in a note Monday: “The number of ‘odd’ trades coupled with the availability of Robinhood data via Robintrack.net, has increased the noise level.” Yet in world where markets make no sense, coupled with their own reflexivity, the noise generated by millions of retail daytraders chasing momentum is neatly repackaged as “big data” (i.e. trends and paterns), as “strategists” seek to justify investing theses based on what a bunch of teenagers are buying or selling at any given moment:

Primozic has had to make a couple changes to the site’s operations to keep up with the overflow. Visitors to the site aren’t just perusing. Rather, many are pulling the available data into their own programs.

“These days, especially, there’s at least three or four people who will run these scrapers at any given time,” he said. “I’ve actually had to limit the rate at which they can do it just to prevent them from overloading my hardware.”

So starved is Wall Street for noise signal that according to Primozic, there is “evidence that users at hedge funds including D.E. Shaw & Co. and Point72 have looked into or are directly collecting data from Robintrack. Representatives of the firms declined to comment on whether they’re plugging into Robinhood.”

I’ve confirmed one more hedge fund to be looking into Robintrack data: Capital Fund Management from Paris.

That brings the total up to 4 so far: D. E. Shaw, Point72, Two Sigma, and CFM

In case you were wondering if this data is useful, here’s proof the pros are interested too! pic.twitter.com/7EXDKSUEpD

— Robintrack (@robintrack) May 6, 2020

What was left unsaid by the Bloomberg expose (and we may have an idea why) is that by the time the RH trade data hits Robintrack, it’s extremely stale and virtually non-actionable except for those looking at very big picture trends (on Wall Street nanoseconds matter – minutes do not) which is why HFT firms pay tens of millions in dollars to Robinhood every month for its orderflow enabling the “free brokerage” model in the first place – to have real-time access and in some unspoken cases to frontrun, the massive retail orderflow.

Below is an example of how much various HFT venues paid Robinhood in March alone to “execute” its stock and option trades, based on the company’s latest 606 statement.

It goes without saying that if firms are paying millions for this orderflow, one can be absolutely certain that they are making hundreds of times more in revenue on the same Robinhood data.

Yet if Robintrack is a first derivative of Robinhood, which in turn is a derivative of overall retail euphoria in the market, then traffic and search interest in Robintrack is a second derivative, and based on Google searches for Robintrack, the retail euphoria peaked some time last week – probably around the time bankrupt HTZ market cap hit $900 million, and is finally rolling over.

Remember: Robinhood – and retail daytrading in general – is all about momentum, and it just turned down.

Perhaps the government stimulus money that millions of bored Millennials and teenagers were using to fund their trading accounts h as finally ran out?

Whatever the case, as retail investors realize that upside momentum is suddenly missing – and one look at HTZ stock shows that last week’s upside insanity is long gone – watch as the euphoric scramble ensues in reverse, and all those trading warriors who were buying suddenly turn sellers as even retail investors realize that once the euphoria peak is behind us, those who sells last are the biggest losers.

Another overnight ramp effort evaporates as cash markets open…

Still plenty of time left to jawbone this thing back to the highs – vaccine, stimulus,

As a reminder, since the start of May, the S&P 500 has gained 208 points during the overnight session and just 4.5 points during the day session…

Trade accordingly.

Via SchiffGold.com,

On Tuesday, Federal Reserve Chairman Jerome Powell testified before the Senate Committee on Banking, Housing, and Urban Affairs.

It was classic Fed “open mouth operations” as Powell tried to talk up the central bank’s policies and assure everybody that everything is under control. But is it, really?

Peter Schiff hit some of the highlights of Powell’s testimony during his podcast.

Earlier this week, the Federal Reserve announced that it would begin buying individual corporate bonds.

Why?

The stock market is way up. The unemployment situation is better than expected. (At least that’s the mainstream view.) There are signs that the economy is rebounding from the government shutdowns. Why is the Fed still upping the ante on its monetary stimulus?

Powell gave us a hint. He insisted the central bank is not “an elephant running through the bond market” but said they felt they had to “follow through” and buy bonds because the plan was announced in March.

In the first place, as Peter points out, when Powell claims the bond-buying program isn’t really impacting the market, he’s blowing smoke. The whole point of the program is to impact the market.

Well, if the Fed wasn’t having an impact on the market, then why do it? The purpose of this program is to impact the market. Otherwise, the Fed would not be doing it, if it had no impact.”

As far as feeling obligated to follow through on its promise to buy corporate bonds, Peter asks the poignant question – why?

It really shows you that the Fed is beholden to Wall Street speculators. Those are the ones who are counting on the Fed buying those bonds. Because they already bought those bonds. They front-ran the trade. As soon as the Fed announced its intention to buy corporate bonds, what did speculators do? They ran into the market and bought up corporate bonds and bid up their prices. So, now you have a bunch of overpriced corporate bonds. And how do these speculators get out? They sell to the Fed. That’s the reason they bought — so they could sell to the Fed. And now the Fed is coming forward and saying, ‘Well, even though the prices have gone way up, they’re not way down where they were when we said we were coming to the rescue, even though we’ve had this recovery in the markets, we’re going to buy them anyway because we made a commitment.’ So, what they’re saying is they want to honor their commitment to the speculators. They want to make sure the people who followed the Fed’s advice get rewarded.”

The central bankers know they need those speculators so they can talk up the markets.

It wants speculators to know that when the Fed says something, it means something, so its ‘open mouth operations’ actually have teeth. Because if the Fed didn’t follow through, then the next time they cried wolf, nobody would come running and buy those bonds.”

This reveals what the Fed’s monetary policy is really all about. It’s not about the economy. It’s about propping up Wall Street.

Powell also said he’s not concerned about inflation because the Federal Reserve knows what to do if inflation becomes a problem. But as Peter said, knowing what to do and doing what you know are two different things.

Yes, the Fed knows what to do. Raise interest rates sharply and shrink your balance sheet, right? Contract the money supply. Sell Treasuries. Sell corporate bonds. Take money out of the economy and sell the assets you bought to expand the money supply and jack up interest rates. Is the Fed going to do that?  Not a chance! What would happen if the Fed did that? The economy would crash like it’s never crashed before. So, the Fed knows how to fight inflation. It just knows that it can’t fight inflation with what it knows. Because it also knows what it will do to the bubble that it inflated.”

We have said the Fed doesn’t have an exit strategy. Powell so much as admitted this when Sen. Robert Kennedy asked how the central bank plans to shrink its balance sheet to a level that isn’t “other-worldly.” In fact, the chairman actually laughed at the question and then talked about “the peaceful period” from 2014-2017 when the Fed just froze the size of the balance sheet, letting the economy grow into it.

His entire plan to shrink the balance sheet is to stop growing the balance sheet and hope the economy continues to grow so that whatever the balance sheet is when he stops expanding it, it becomes a smaller percentage of the economy. Basically, he’s saying the balance sheet is never going to shrink in actual terms. It’s never going to go down.”

Keep in mind, when the Fed started trying to normalize after the ’08 crisis, the markets went into convulsions.

Powell is really admitting again, as if people didn’t know by now, I mean, how many times do you got to be hit on the head, that this is QE infinity, that the Fed’s balance sheet is never going to shrink.”

It was the anticipation of normalization that caused the dollar to bounce back and gold to sell off after the 2008 crisis.

That whole bubble, that whole recovery was predicated on the ability of the Fed to shrink its balance sheet and normalize interest rates. Well, now that everybody should know, because the Fed has told them that neither of those things are ever going to happen, the bottoms got to fall out of the dollar and gold’s going to go through the roof, and this whole house of cards is going to come tumbling down.”

Back in February, HSBC, Europe’s largest bank and troubled lender, announced a plan that would slash upwards of 35,000 jobs. Shortly after, the lender put restructuring plans on hold for three months due to the COVID-19 outbreak. Now, Bloomberg reports, HSBC is resuming plans to cut tens of thousands of jobs as a way to boost profitability in today’s challenging environment. 

“Since February, we have pressed forward with some aspects of our transformation program, but we now need to look to the long term and move ahead with others, including reducing our costs,” CEO Noel Quinn wrote in a memo obtained by Bloomberg.

“Against this backdrop, I’m writing to let you know we now need to lift the pause on job losses,” Quinn said. “I know that this will not be welcome news and that it will create understandable concern and uncertainty, but I want to be open with you about the reality of the current situation.”

Quinn unveiled plans to “remodel” large parts of the bank in late 2019. The actual restructuring wasn’t revealed until February — which said the global lender’s 235,000 workforce will be lowered by 35,000 over the next three years. As the lender shrinks its footprint, it expects to save $4.5 billion at underperforming units.

“Europe and the U.S. are expected to face the brunt of the cuts as HSBC attempts to turn around its businesses in regions where it has struggled to make money. The lender’s global banking and markets business, which houses its corporate advisory and market units, is expected to face significant reductions in areas such as equities sales and trading.

“HSBC is eyeing the sale of some of its businesses and is already looking for a buyer for its French retail operations, the disposal of which would take several thousand staff off its payroll,” Bloomberg notes. 

A downturn in the global economy, no recovery for several years, and a harsh operating climate, HSBC is expected to announce deeper cuts:

“Despite banks’ commitments to retain staff through the pandemic crisis, we believe it is only a matter of time before substantial further cost-trimming plans are announced, with efficiencies identified as we work through the COVID crisis important in this context too,” John Cronin, an analyst at Goodbody, wrote in a note.

HSBC shares have widely underperformed European peers 

HSBC negatively diverges global stocks 

European banks have been operating in an ultra-low interest rate environment, strict regulations, and a continually evolving industry where fintech companies have upended old banking business models.

Doubleline Capital CEO Jeffrey Gundlach recently said in his DoubleLine Total Return Bond Fund webcast that negative interest rates had killed bank stocks in Europe and Japan. 

We noted in late 2019, 50 banks laid off 77,780 jobs, the most since 91,448 in 2015 — we’re assuming by now, in a post-corona world, where the global economy is in recession — that a record number of banking jobs will be lost from now until the end of 2021.

Most of the HSBC job cuts will be based in Europe and the US. 

Submitted by Michael Every of Rabobank

Waking up to the Bloomberg headlines today feels a bit odd. The main story is “BORDER CLASH” (which was then subsequently changed to “FIREFIGHT”) as 20 Indian soldiers have died and China has almost certainly suffered casualties too. The acerbic Global Times makes that clear but it says Beijing is refusing to release the figure “to de-escalate”: US intelligence sources estimate the figure could be as high as 43. That’s two nuclear powers and neighbours, and the two most populous countries on earth, fighting each other (and apparently in melee combat) for the first time since 1975.

The second story is North Korea blowing up the North-South Korea liaison office and moving military police into the DMZ and other strategic locations between the two states (who are still technically at war). That’s a proto nuclear-armed power acting rouge – and it had already stated it has no interest in ever speaking to the US again.

The headlines are odd because both of these were things to be worrying about yesterday, when they happened. Yesterday’s headlines, however, were instead about a USD1 trillion White House infrastructure package that is unlikely to arrive any time soon. It seems that we really don’t see things as one world even when we strive to.

Regardless, Asia had a risk-off session so far today largely because it realises that the above events do matter. It is not the immediate risk of war between the Koreas or between India and China, either of which would be devastating: yet both are necessarily still fat tail risks. It is more a recognition that Asia has fault-lines running through it which are only going to deepen now that the era of “Chimerica”-led globalisation is coming to an end.

How does one resolve North Korea? No good answers. A few years ago people were discussing when India would sign the RCEP trade deal with China: does that look likely now? The more realistic question is how quickly India instead integrates with countries around China such as the Five Eyes group, Indonesia, Japan, and Vietnam. As the world faces more and more binary ‘US or China?’ product choices this will mean disruption of the kind that business does not like. Consider the recent editorial from Singapore’s Prime Minister worrying that this won’t be the Asian century after all if a new Cold War splits the region. (Against which backdrop note that publication of former US National Security Advisor John Bolton’s warts-and-all book about his time in the White House is being delayed by legal action claiming it will compromise US national security: is it called “Spy Kvetcher”?)

Naturally such a scenario would not be win-win: there would instead be winners and losers. On which front, Nikkei Asian Review is running a story today that Huawei has delayed production of parts for its newest flagship smartphone series in response to tighter US export controls. Let that sink in for a moment: China’s flagship firm is having difficulty with its flagship product; and things are only going to get worse from here for it if the US is serious about the legislation and executive orders it has been rolling out from a hawkish production line.

Of course, Asia was also gloomy about the fact that the virus situation in Beijing appears serious. Schools are closed again, for example. Then again, in the UK they still haven’t even opened, and that does not seem to stop the government/public from pressing ahead with all manner of lockdown unwinding.

The virus is clearly also still spreading in the US: yet it seems to be focusing more on shopping. Retail sales jumped 17.7% in May, as we saw yesterday, which was a huge beat of consensus. Yes, that is encouraging, and largely reverses the equivalent plunge seen the previous month as shops re-opened again. However, can we do a little maths, people? Start at 100 and go down 20%: you get to 80. Start at 80 and go up 20% to reverse the fall: you get to 96. That’s 4% down from where you started – which used to be called a recession. Furthermore, this is while federal government cheques are still boosting people’s bank accounts, and as my colleague Christian Lawrence correctly points out, in 30 of the 50 US states current government support is above the median salary level. It’s not that we can’t see a sustained rebound or a V-shape; it’s that it will take a whole lot more to achieve it….and ironically the stronger the numbers like yesterday’s look, the harder it will be to persuade Congress to pass such legislation.

And from some elephants in the room, India and geopolitics/Cold War, to another, the Fed. Yesterday Chair Powell stated to the Senate “I don’t see us wanting to run through the bond market like an elephant snuffling out price signals and things like that.” There’s a quote for the ages. He continued: “We want to be there if things turn bad in the economy or if things go in a negative direction.” Did he mean “stocks” when he said “things”? Because that is how the market has been reading it. (I recall once seeing a baby elephant in Thailand trying to sneak across the floor on all fours to steal some spilt milk. You could see in its eyes that it genuinely thought it was being stealthy “Nobody can see me!”: it was still four-feet high in that position and had all the subtlety of a central bank.)

Powell also mentioned Yield Curve Control (YCC), noting the Fed had been briefed on what the BOJ and RBA have done on that front. “Absolutely no decision” had been made on it so far, but he admitted it might be used if Treasury rates were “to move up a lot, and for whatever reason, we wanted to keep them low to keep monetary policy accommodative, [then] we might think about using it on some part of the curve.” So YCC won’t be used unless Treasury yields go a lot higher…in just the same way the Fed does not act on stocks/things unless they go lower. It’s a market; in one direction. Moreover, can you also think of “whatever reason” the Fed might also have to keep yields low? How about the fact that the last time they used YCC was back in the early 1950s to help ensure that debt built up in WW2 could be inflated away?

So ironically some elephants in the room are now front-page news – which should be risk-off for emerging markets; and yet the Fed-ephant is stomping on volatility anywhere it sees it, which is risk-on for emerging markets. Short-term, which elephant should you back? And longer term? How did those WW2 era debs occur in the first place?  

The DoJ just escalated its burgeoning feud with Silicon Valley by introducing a new legislative plan meant to make certain changes proposed in a Trump executive order signed late last month permanent – including a measure to strip tech giants of “liability shields” for activity and speech that happens on their platforms.

In effect, the DoJ proposal would rollback protections centered in Section 230 of the Communications Decency Act of 1996, something that’s gaining bipartisan support (albeit for vastly different reasons).

The proposal calls for the rolling back of legal protections that online platforms have enjoyed for more than 20 years to try and make tech companies more responsible in how they police their content, CNET reports. The proposed reforms, to be announced later on Wednesday, are designed to require social media platforms like Twitter, Facebook or YouTube (owned by Google parent Alphabet) to be more active in policing sites for illicit or harmful content, while also requiring them to be more consistent in decisions to remove content they find objectionable.

If adopted by Congress and passed, the bill would effectively make some of the changes outlined in an executive order signed by Trump late last month the law of the land: It would rollback protections for these digital ‘platforms’ that engage in active political censorship of users on said platforms.Because of this, it represents a serious escalation of the Trump Administration’s fight against Big Tech, which President Trump has long criticized for discriminating against conservatives and their ideas.

The new framework might gain more traction on capital hill, particularly after the events of yesterday, when a journalist-activist employed by NBC News published a story claiming that the “far-right” websites Zero Hedge and the Federalist (two sites that have both been described as about as conservative as the Drudge Report) were recently demonetized by Google. Shortly after, Google clarified that it was working with the two publishers to rein in hate speech in comment sections.

Furthermore, Jonathan Turley, a law professor at GW who often writes on free speech issues, criticized an NBC News report on the “de-monetization” (later denied by Google) of Zero Hedge and the Federalist) and argued that Google’s actions support the DOJ legislative proposal and the Trump Administration’s incipient anti-trust effort.

As we discussed earlier in regards to Twitter, Google seems to be making the case for not only pushing forward with anti-trust inquiries but stripping it and other companies of immunity protections. Indeed, the Justice Department just announced that it is moving forward with proposals to strip away protections.  Google and other companies were given protections under Section 320 because it has claimed to being a neutral supplier of virtual space for people to speak with one another.  It is now effectively shutting down sites because they allow others to comment freely on their sites.  This biased targeting of sites has led to congressional objections and renewed threats to amend the federal law.  Indeed, Google is undermining the support with some of us who viewed protections are fostering free speech values.  It is now using its role to stifle and regulate speech, the very antithesis of not just free speech but the federal protections.

The White House has made it abundantly clear that it won’t tolerate social media platforms continuing to censor and de-monetize conservative speech while ignoring similar behavior by radical leftists. If these platforms want to continue to ‘curate’ the information and speech found therein, then they should be treated more like a publisher than a platform.