Senior editor Ash Bennington joins managing editor Roger Hirst to discuss the latest developments in macro, markets, and coronavirus. Bennington and Hirst talk about the trajectory of the global recovery and growth—specifically, they explore the exponential increase in the savings rate, the vicious cycle the Fed might find itself in as they continue to support asset prices, and the potential for “zombification” of corporations through misallocated capital. They also dive into how sentiment is currently driving financial markets, why passive investors may not be prepared for the air pockets of potential drawdowns, and how easy monetary policy actually encourages growth deflation. In the intro, Nick Correa analyzes today’s ECB announcement to expand its Pandemic Emergency Purchase Program (PEPP).
via ZeroHedge News https://ift.tt/3eRRRsl Tyler Durden
I was recently stunned to learn of the serious consideration being given to deliberately infecting human volunteers with the SARS-CoV-2 virus in order to assess the effectiveness of potential COVID-19 vaccines.
My first reaction was that the advocates of such “human challenge studies” had gone so mad with panic that they had forgotten the history and horrors of medical experimentation on humans. But on closer inspection, I saw that they included some of the world’s most respected vaccine researchers and medical ethicists, and even the World Health Organization.
As far as I can tell, their principal argument is that waiting for an answer from naturally occurring infections will take too long. The new coronavirus has already infected 6.5 million people worldwide and killed more than 386,000, including 107,000 in the United States alone. And in the absence of safe, effective vaccines and treatments, measures aimed at controlling the virus’s spread are ruining economies around the world. The WHO’s recent white paper on the use of human subjects for vaccine research makes it clear that such trials are a desperate last resort.
Vaccines are indeed the most effective medications we have. Some have conferred long-term immunity against great scourges such as smallpox, polio, typhoid, diphtheria, typhus, and tetanus. But there are just as many diseases for which no truly effective vaccine exists, including HIV/AIDS, malaria, and tuberculosis. And some vaccines can do more harm than good, as attempts to develop a dengue vaccine have demonstrated.
Caveats notwithstanding, the rush to develop a COVID-19 vaccine that will definitively end the loss of life and stop the economic devastation has already produced more than 100 candidates, all in very early stages of development. With so many pharmaceutical companies and governments scrambling to get some skin in the game, each day seems to bring announcements of new programs, most of them unaccompanied by supporting data.
But deliberately infecting volunteers with SARS-CoV-2 to test the efficacy of vaccine candidates is unnecessary, uninformative, and unethical.
Why unnecessary?
Most vaccines are developed in the context of active epidemics. But one prominent British researcher recently opined that there is only a 50% chance that enough people in the United Kingdom will be infected with the virus for the University of Oxford vaccine field trial (as currently designed) to yield a statistically significant result. What a curious statement. Does it mean that the trial is too small, or too short, or that the Oxford team expects their vaccine to be only partly effective – or all three?
After all, there is no shortage of new infections. On an average day, close to 100,000 newly confirmed cases are reported worldwide, and I cannot recall another disease for which such a number was insufficient for a field trial of a drug or vaccine. Surely, with more time and patience, a real test is possible.
Moreover, the major departure from the norm entailed by human challenge studies presupposes a lack of alternative means to control the pandemic. But many East Asian countries, as well as some Nordic states, New Zealand, and Australia, have so far successfully controlled the virus in the absence of highly effective drugs or vaccines. And Wuhan, the Chinese city where it originated, is now essentially free of COVID-19, save for minor, containable flare-ups.
In each case, the relevant authorities have executed well-known, proven public-health measures: clear messaging, strong stay-at-home orders, vigorous disease detection, contact tracing, and mandatory supervised controlled isolation for all those exposed to the virus.
Although not every country is capable of implementing what works, all should try their best to control the pandemic through proven methods, rather than pinning their hopes on a vaccine that either will be slow in coming or may not work at all. In addition, medical ethicists should consider governments’ moral obligations to protect citizens through proper use of public-health measures, rather than by opening a Pandora’s box of unnecessary human experimentation.
Challenge studies are also uninformative. To the best of my knowledge, all current protocols for vaccine trials envisage enrolling only young, healthy adults. This is understandable from a recruitment perspective, but COVID-19 morbidity and mortality are highest among the elderly, who have a plethora of underlying chronic diseases.
Numerous studies have shown that vaccines that are effective among the young can fail in older populations – sometimes completely. Our bodies’ ability to respond to most, if not all, vaccines declines precipitously with age. Are today’s COVID-19 vaccine developers seriously entertaining the idea of trials that use a live virus in this vulnerable population?
Furthermore, preliminary studies using non-human primates have already shown that potential vaccines may not provide complete protection; when confronted with the virus, the vaccinated animals were spared serious infection of the lungs, but not of the nasal passages. The same was true of the wide variety of vaccine candidates previously developed for severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS), also coronaviruses. And the implications of partial protection for both community spread and human disease are not well understood.
Finally, human challenge trials are unethical. SARS-CoV-2 causes multi-system disease in about 20% of those infected, and the incidence may be even higher in challenge studies, given the large virus doses likely to be used. Infection may permanently damage the heart, lungs, brain, and kidneys, in the young as well as the old. Moreover, once someone is infected, there is no known drug that completely cures or even ameliorates COVID-19, much less reverses serious damage. And because it is extremely unlikely that all vaccine candidates will work in all trials, a number of volunteers will be permanently harmed.
If such trials are unnecessary, uninformative, and dangerous, then they are by definition unethical. I fear that in the rush to find a “medical miracle” to end the pandemic’s toll in human lives and livelihoods, we will jeopardize the centuries-old moral imperative to do no harm, possibly destroying trust in the integrity of science and medicine for generations to come. In that case, the losses we will face will be far greater.
* * *
William A. Haseltine, a scientist, biotech entrepreneur, and infectious disease expert, is Chair and President of the global health think tank ACCESS Health International.
via ZeroHedge News https://ift.tt/370sOk9 Tyler Durden
“Woke” NYT Staffers Revolt After Paper Publishes Tom Cotton’s ‘Send In The Army’ Column Tyler Durden
Thu, 06/04/2020 – 17:45
A long-simmering culture war at the New York Times, once the undisputed national paper of record, has burst into public view on Thursday as a group of young “woke” staffers at the paper denounced the opinion section’s decision to publish a column penned by GOP Sen. Tom Cotton urging President Trump to call in the military to restore order in cities across the US where violence and looting have broken out.
By now, more police officers have been killed since George Floyd’s murder after a Minneapolis police officer kneeled on his neck, cutting off circulation. An autopsy report blamed the officer’s decision to pin Floyd to the ground by his throat as the cause of death. The office is now facing second degree murder and manslaughter charges. But leftists continue to insist that all opposition to the looting in violence is a fascist dog whistle. Whether you think Cotton is an incorrigible fascist, or you agree with his position, the notion that a small but vocal minority of the body politic is pushing for the active suppression of political speech.
In a twitter thread, NYT columnist Bari Weiss – who has frequently attracted the ire of the “woke”/DSA/Bernie Bro faction, which hates “neoliberals” just as much as it hates “conservatives” (aka fascists, since everybody who isn’t a “democratic” socialist is a fascist, in their view) – explains the division between the younger “woke” reporters/staffers, and the older liberals, with executive editor Dean Baquet, the paper’s first black executive editor, caught in the middle.
The civil war inside The New York Times between the (mostly young) wokes the (mostly 40+) liberals is the same one raging inside other publications and companies across the country. The dynamic is always the same. (Thread.)
The Old Guard lives by a set of principles we can broadly call civil libertarianism. They assumed they shared that worldview with the young people they hired who called themselves liberals and progressives. But it was an incorrect assumption.
Perhaps the cleanest example of this dynamic was in 2018, when David Remnick, under tremendous public pressure from his staffers, disinvited Steve Bannon from appearing on stage at the New Yorker Ideas Festival. But there are dozens and dozens of examples.
I’ve been mocked by many people over the past few years for writing about the campus culture wars. They told me it was a sideshow. But this was always why it mattered: The people who graduated from those campuses would rise to power inside key institutions and transform them.
I’m in no way surprised by what has now exploded into public view. In a way, it’s oddly comforting: I feel less alone and less crazy trying to explain the dynamic to people. What I am shocked by is the speed. I thought it would take a few years, not a few weeks.
Here’s one way to think about what’s at stake: The New York Times motto is “all the news that’s fit to print.” One group emphasizes the word “all.” The other, the word “fit.”
W/r/t Tom Cotton’s oped and the choice to run it: I agree with our critics that it’s a dodge to say “we want a totally open marketplace of ideas!” There are limits. Obviously. The question is: does his view fall outside those limits? Maybe the answer is yes.
Of course, many of the NYT reporters and staffers who denounced the op-ed also denounced their colleague’s take. One reporter even said the very decision to print the op-ed put the paper’s black reporters “in danger”.
— Taffy Brodesser-Akner (@taffyakner) June 4, 2020
In a post weighing in on the debate, the Columbia Journalism Review argued that Cotton’s views shouldn’t have been published because it was “built on lies”. However, the sections of the paper that it described as lies weren’t lies at all, but descriptions of the chaos across the country, recounted with perhaps a touch of hyperbole. But leftists frequently test the bounds of what’s believable, like when they accuse crime reporters of “spreading false narratives” when they report on black-on-black crime statistics.
The problem with this idea of the Times as an open forum for views of all stripes — no matter how abhorrent — is that by opening the door to all “operative opinion” (as a member of the Opinion section described it to me a couple of years ago), the Times becomes a platform for those who are hostile to its core values and at direct odds with the New York Times Company mission to “seek the truth and help people understand the world.”
The core problem with Cotton’s column, it seems to me, isn’t that its arguments are painful or dangerous (though they are those things too). It’s that it’s built on lies. “This week, rioters have plunged many American cities into anarchy, recalling the widespread violence of the 1960s,” it begins, before trotting out hyperbolic (and false) phrases like “the riots were a carnival for the thrill-seeking rich as well as other criminal elements,” “orgy of violence,” and “cadres of left-wing radicals like Antifa infiltrating protest marches.”
Recent days have been marked by looting and violence. But the violence has sometimes been prompted by the police themselves, and the incidents getting the most attention have been isolated to a few commercial districts. The areas around the protests (to say nothing of the entirety of “American cities”) have been relatively calm and peaceful. As Davey Alba, a Times reporter who covers misinformation, pointed out on Twitter, the paper’s news side has already reported how promoting claims of unbridled urban unrest is part of the “untruths, conspiracy theories, and other false information…running rampant online” and being pushed by Trump and his allies.
Remember: These are the same people who forced their employers to describe riots as “protests” and looters as “demonstrators” leading to jarring headlines like “Violence and looting rage as George Floyd protests lead to clashes with cops in several states”.
The notion that we can trust them to be arbiters of the truth as simply laughable.
via ZeroHedge News https://ift.tt/2U8Z7Ic Tyler Durden
That which has failed is unsustainable, no matter how many trillions the Federal Reserve tosses against the tides of history.
The chapter titles of Michael Grant’s excellent account of The Fall of the Roman Empire identify the core dynamics of decline:
The Gulfs Between the Classes
The Credibility Gap
The Partnerships That Failed
The Groups That Opted Out
The Undermining of Effort
Every one of these is a manifestation of institutional failure. The Gulfs Between the Classes (see chart of soaring inequality below) manifests a completely broken economic and social order, and the abject failure of core institutions (for example, the source of wealth inequality, the Federal Reserve).
The Gulfs Between the Classes also reflects our pay-to-play political system, in which wealth buys political power and everyone else gets to watch a pantomime of democracy.
The Credibility Gap is as wide as the Grand Canyon, as unaccountable insiders comfortably secure in institutions do what serves their interests, which can be summarized as: Truth Is What We Hide, Cover Stories Are What We Sell.
Government agencies widen The Credibility Gap with bogus, rigged statistics and complexity thickets (“We have to pass the bill so that you can find out what is in it.”) designed to make accountability and transparency effectively impossible.
The Partnerships That Failed include the alliances of various warring elites and the pantomime partnerships of elites and constituencies (“We pretend to obey and you pretend to listen to us.”)
The Groups That Opted Out are as yet largely invisible because all the small business owners who closed down and stopped being Tax Donkeys are under the radar, and all the debt-serfs who have renounced their debts are carefully hidden by the appropriate bureaucracies, lest the enormity of the debt-serf opt-outs becomes visible.
The Groups That Opted Out include those who have lost trust in the corporate media, the government’s statistical claims and the leadership of failing institutions.
The Undermining of Effort manifests as the impossibility of reforming the institutions that have lost their legitimacy due to self-serving looting, incompetence and the disavowal of accountability, a topic I addressed in my books Why Things Are Falling Apart and Why Our Status Quo Failed and Is Beyond Reform.
When institutions have lost public trust and thus their legitimacy, the solution is fragmentation and decentralization so the unit size is reduced to the point where accountability and transparency can be enforced by the citizenry and/or members.
Management author Peter Drucker (Post-Capitalist Society) noted that in the transition to a post-capital economy, legacy institutions in everything from higher education to healthcare are the wrong unit size, meaning that they are too large to be effective, accountable and transparent, as their sheer mass encourages processes and thickets insiders can use to avoid accountability and transparency.
When fiat currencies fail, fragmentation and competition between transparently priced currencies will be the solution. The ideal solution is a spectrum of currencies ranging from bitcoin and other mined cryptocurrencies to privately issued gold-backed currencies, state-issued gold-backed currencies, local currencies intended for use in local economies, and my proposed labor-backed currency which I outlined in my book A Radically Beneficial World.
That which has failed is unsustainable, no matter how many trillions the Federal Reserve tosses against the tides of history. The current travesty of a mockery of a sham system will fragment no matter how desperate the looters, parasites and predators are to maintain their swag.
NYC Finance Jobs Won’t Recover Until 2026, Dashing Hopes Of V-Shaped Recovery Tyler Durden
Thu, 06/04/2020 – 17:05
Many on Wall Street are trying to forecast the shape of the economic recovery in a post-corona world. Some are split between either a V-shaped, U-shaped and or L-shaped recovery. In the last three decades of recoveries following an economic shock, each recovery has been slower and slower.
Stock investors in a post-corona world are pricing in the best-case scenario: a V-shaped recovery, which would suggest economic growth soars in the back half of the year and reaches 2019 levels. However, new signs are emerging, that narrative is a load of shit – clearly to suck retail into the markets while “smart money” continues to dump stocks.
The report, via ThinkIQ, and first reported by Bloomberg, found New York City’s finance industry won’t recover until 2026.
It said at least 8% of all finance jobs in the Big Apple have already been lost because fo the COVID-19 induced economic crash. With the loss of employment, this will have a domino effect on the local economy, anything from rents to mortgage payments to restaurant spending.
ThinkIQ projects that employment levels in the world’s top financial hub will be back to normal in six years. Most industries will take years to recover; for instance, leisure and hospitality will only reach 90% of its 2019 level by 2026.
As for the US, 18 million jobs could be eliminated in a post-corona world. Small business operators in a recent NFIB Small Business survey were overly bearish on the recovery timeline, with a majority indicating recovery won’t be seen until sometime in 2021 (40%) and 19% said between 2022-2024. So in total, two-thirds of respondents believe a recovery is several years away.
The shape of the economic recovery is increasingly becoming more of a U or L-shaped.
via ZeroHedge News https://ift.tt/2A1HROp Tyler Durden
As protests continue across America, it’s clear that there’s widespread frustration and anger held by a large percentage of the population who feels downtrodden by the status quo and demoralized by slim prospects for things getting better.
I’m by no means an experienced revolutionary, so take everything that follows with a massive boulder of salt. But watching the nightly riots raises the question: Is there a more effective way to create positive societal change?
I spend a lot of time analyzing and criticizing the worsening and morally unjust equality divide that has accelerated over recent decades. In my opinion, most of the major ills in today’s society have their roots there. The recent death of George Floyd has served to emphasize how certain communities bear more of the brunt of this inequality than others. And very understandably and predictably, more and more of these communities are reaching their breaking point.
So, if the objective is to engage the current power structure and influence it to change, presented below is a preliminary exploration of several methods that may offer better odds for success than what we’ve seen over the past week.
Focus On The Cracks In The Armor
The current system is not going to willingly change. Those who control it receive too much benefit from the status quo to give up their advantage by choice.
As John Kenneth Galbraith aptly put it:
“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.”
Therefore, success in changing the status quo lies in making it too painful to continue.
Which leads to the questions: How can we, the oppressed masses, do that? What agency do we have?
Riots, with their violence and destruction, are often counter-productive. Yes, they generate media coverage, but they also galvanize central control. Political leaders now see themselves involved in a just crusade against mob rule; so they commit more tightly to ‘restoring order’ and to not letting ‘thugs’ direct the action. Police and/or military involvement ramps up and a lot of demonstrators can become collateral damage with little change to the system to show for it.
So, how can the populace create enough discomfort for those at the top to effect change?
By strategically focusing their collective power on weak points within the system. By targeting the cracks in the armor and pressing them hard via coordinated action that is — and this is essential — peaceful and legal.
Chris and I want to be clear on this: while we understand the tremendous fear, anger and frustration many of the seriously aggrieved rightly feel, and while we completely agree that the deeply unfair status quo needs massive and immediate reform, we don’t support violence against others nor the destruction of property and livelihoods. Not only do those tactics undermine the moral authority of any protest, we don’t think they’re effective in producing long-term positive change.
Ideas For A Righteous Revolution
Elements of a righteous revolution for our modern era could include:
1. Boycotting The Big Banks
The lifeblood of today’s economy is credit (i.e. debt). Or to be more accurate: exponentially increasing credit.
As growth in credit slows, economic instability skyrockets.
As a visual of this, note the period in the below chart where Total US Credit barely dipped from 2008-2009. That little wiggle nearly destroyed the global economy:
Therefore a social movement that impairs the growth of credit is one that will get attention.
The biggest engine of credit growth is the banking system, which is in the business of making loans. In fact, banks are able to generate 10x more loans than they hold in deposits through the process of fractional reserve lending.
The big national and international Too Big To Fail banks are by far the most important institutions for maintaining the status quo. They fund and grease its smooth operation.
So anything that throws sand in those gears, like a national boycott of the big banks, will get noticed.
If a meaningful percentage of US households suddenly moved our savings and banking services out of Bank of America, JP Morgan Chase, Citibank and Wells Fargo, and into small local savings banks and credit unions, that would send a powerful message.
Those four banks hold more than $4 trillion in customer deposits. Let’s assume 5% of that, $200 billion, walked out the door. Given the 10x nature of fractional reserve lending, that equates to $2 trillion(!) in lost loan potential.
That’s hitting the banks, and the US economy, where it hurts. Imagine the pain if 10% or even 20% of deposits left this way?
And imagine the beneficial impact this movement of capital would have at the local level. Today, the lion’s share of bank deposits goes to these TBTF institutions and are then loaned out to massive corporations to use in advancing their already grossly unfair advantage. Wouldn’t it be far preferable to fund development in your community instead?
Imagine further the signal such a “banking revolt” would have if orchestrated to happen on the same day. Banks are required to hold only a small fraction of reserves on hand at any given time. Enough withdrawal demands occurring simultaneously would essentially create a run on the bank (remember this scene from It’s A Wonderful Life?).
Co-incident runs at multiple TBTF banks will get a LOT of notice. From the media, from our political leaders, and from those running the system. And no one gets tear gassed, beaten, jailed, or killed.
2. Living Debt-Free
Complementing the idea above, another way to reduce total credit is to adopt a debt-free lifestyle.
US consumers currently hold over $20 trillion in mortgage, credit card, auto and student loans. Decreasing that by even just a few trillion would be exceptionally concerning to the banking industry.
Debt is extremely hard to avoid taking on in today’s world — given our current way of living. And once in debt, most households are wage-slaves to the bank until their balances are paid off (which they aren’t, ever, for most).
But there are ways to change our lifestyles to be debt independent. They are not easy at present. But the personal freedom that results, as well as the financial freedom that grows with savings that otherwise would have been directed to interest payments, are immense.
A social movement that elevates debt-free living as a driving cause will unleash all sorts of creativity for how to make it possible and enjoyable: co-habitation, communal resource pooling, new models for education/health services/commerce, and many others.
And by making ourselves less captive to the system currently controlling us, we gain more bargaining power with those running it.
3. Converting The Media
Right now, the mass media has proven itself little more than a parrot of what its corporate backers tell it to report.
Criticism of the status quo and worthy ideas for its evolution are often derided, demonized or simply not mentioned.
How do you influence a corrupted media to report on the ideas you want? Speak to its self-interest.
Most large mainstream media companies are in financial straits. The digital era destroyed the old publishing business models and the survivors are struggling to find a sustainable way to operate profitably.
Here’s one way a citizen movement could use that to its advantage:
Have 100,000 people sign up for the New York Times print+digital package on the same day.
Given current promotions, that’s an immediate out of pocket cost per person of $40. Total immediate revenue to NYT: $4 million; total projected customer value to the NYT over the next two years: $156 million
Have those people then send the executive editor of the NYT an email saying they will immediately cancel and demand a refund if the news organization doesn’t start balanced reporting on key topics important to the movement (e.g., the economic and social inequality being created by the Federal Reserve’s actions, or exposing injustice when corrupt politicians/executive/cops aren’t held accountable for their crimes)
Staring at an unexpected windfall of millions of dollars and many thousands of new subscribers, one that could disappear in a moment, the executive staff at the NYT would consider this opportunity very seriously. Even if they rejected it, the commercial power of the topics being requested will shape their future thinking and coverage.
This simple strategy is scalable and can be deployed to nearly any major media organization. And it uses the weight of the collective to press hard in a peaceful, legal way on the weak spot of an influential player in the system — providing both a carrot and a stick for constructive change without anybody exposed to the threat of violence.
4. Exposing The Villains
Government and corporate institutions control the world we live in. But it’s important remember these institutions are run by people — people who have daily commutes, social outings, dogs to walk, etc, just like the rest of us.
Continuing on the idea of applying collective pressure to the weak points of the system, it’s easy to make decisions with far-reaching impact from the perch of a boardroom table. It’s a lot harder to do so when staring into the judging eyes of the people who will suffer from the repercussions of those decisions.
The members of the Federal Reserve Open Market Committee, the managing editors of the major media outlets, the C-level executives of the TBTF banks, — these are real people.
40 million US workers (that we know of) have lost their jobs over the past two months. Imagine if just a few thousand of these folks peacefully lined both sides of the streets that a few of these senior policymakers take to work, holding signs asking the tough questions like “Why Is The Fed Killing Savers?” “Is Blackrock Really More Important Than Black Lives?”
Candelight vigils in their neighborhoods. Photos mailed to their homes of the victims pushed further into despair by the growing inequality their current policies create. Questions asked respectfully from a non-threatening distance on the street, in the grocery store, at a restaurant — anywhere public and where legally allowed.
It may not work on every target, but most humans can’t ignore and remain insensitive to such visible pain of so many others for long. Most, if not all, of these people believe they are “doing god’s work” and don’t see themselves as villains. A large and persistent demonstration like this can be quite effective in shaking their faith in their current beliefs and opening the door for them to realize their actions are responsible for much more damage than they’ve realized.
Again and especially here, peaceful non-violence is essential. To have credibility and integrity, the movement needs to be far above the evils it’s rejecting. Should it devolve into the abuse of a single individual at mob hands, the movement loses its moral legitimacy.
What Is The Platform?
The above are just ideas. None of them is a silver bullet. There may be, and probably are, many better ones out there for the righteous revolutionary to adopt.
The point of this piece is to demonstrate that there are effective options for protest and rebellion that don’t require bloodshed, looting and property damage. And that may prove materially more effective than confrontation in the streets at resulting in positive change.
But whatever tactics are ultimately pursued, it’s key to have an ideological platform underlying the revolution. You can’t just be “against” the current order; you need to stand “for” a constructive vision or set of principles for doing things better.
As Buckminster Fuller said:
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
Your platform sets the north star that your movement will organize behind and orient itself against. Distill your message into a small number of clear, big principles (“Equal treatment under the law”, “Govern within our means”, and “Main Street over Wall Street” are a few good ones to consider) and make sure everybody rallying to your banner knows what they are.
Should you indeed be successful in bringing the existing power brokers to the negotiating table, or replacing them completely in the case of extreme revolution, these principles will determine your resulting programs and policies. Be sure to put as much effort into clarifying these up front as you do into your protest of the current regime.
Deeper Into The Fourth Turning We Go
Look, as I admitted up front, I’m no experienced social warrior. The ideas above are conceptual; I can’t speak with the authority of having led people to put them into practice (though I do live debt-free and am a big advocate for that lifestyle).
We have warned for years in our writing here at PeakProsperity.com that we are all now well into a Fourth Turning, where the old order breaks down and a new one, often violently, replaces it.
The protests and riots we’re now seeing are not unexpected. In fact, we anticipate growing social unrest over this next decade as those in control become more desperate in their actions to preserve their advantage while the rest of society rebels harder for a new and better order.
Our general advice to concerned individuals is to prioritize staying safe and reducing your vulnerability profile to crime and violence. That remains the case.
But collectively, if we’re against much of what’s happening around us and to us, we need to stand for something better if we want a brighter future.
Chris and I plan to take Buckminster Fuller’s advice and devote some serious brain cycles to what principles we’d like to see in a new model to replace the imperfect one we’ve currently got. In the process, we’ll welcome any suggestions you may have to offer.
via ZeroHedge News https://ift.tt/2AJfNz6 Tyler Durden
“A Protester Shot My Sister”: Teenager Records Gut Wrenching Message After Deadly Riot Tyler Durden
Thu, 06/04/2020 – 16:25
A distraught teenager took to Facebook Live just two hours after her sister was murdered at a George Floyd protest.
“I hope y’all know what the fuck y’all did,” said 19-year-old Jasmine Kelley following the death of 22-year-old Italia Marie Kelley at a Davenport protest on Sunday.
Italia Marie Kelley
“My sister is gone because one of you, a protester, shot my sister. A protester, not the police!” she said through tears, adding “I lost my sister because of you. You! You are so mad at the police that you are hurting everyone else. You’re so mad at the police, you guys killed my sister.” (via the New York Post)
“By you’re f—ing ignorance I gotta bury my sister. I gotta bury my sister because y’all brought guns. It wasn’t a rubber bullet, it was a f—ing gun.”
Kelly blamed the “ignorance of every single one of y’all that decided to shoot into a f—ing crowd” for the bullet that “just happened to hit my sister.”
Kelly vowed to “find out who the f–k did it,” saying it will be “the last thing you’ll ever remember.”
“Now I gotta bury the only person I had in my life, the person that took care of me, the person who took beatings for me so I didn’t have to, the person who was there for everything,” she sobbed. –New York Post
Watch:
This woman lost her sister to these “protesters”. Italia Marie Kelly, was a peaceful protester, protesting in Davenport, IA. Her life was taken by rioters. Hear Jasmine Kelly’s crying over her lost and know, this is what you (the rioters) did. pic.twitter.com/AxYtc4JyTM
The Nasdaq 100 reached a new all-time record high today… because, fun-durr-mentals…
Source: Bloomberg
This is Madness…
…No, This is The Fed!!
Source: Bloomberg
This is the greatest 51-day surge in stocks since June 1933…
Source: Bloomberg
1. What is driving the swift recovery of equities?
a) Fed – 73%
b) Earnings Optimism – 0%
c) Labor market recovery – 6%
d) Further fiscal stimulus – 5%
…
But, after the Nasdaq 100 tagged all-time record highs, sellers were quick to appear…
…but as the afternoon rolled around, dip-buyers were back lifting The Dow to unchanged, but another wave of selling hit in the afternoon…only to be rescued by another 1550ET apnic-bid pushing The Dow marginally green…
Airlines exploded higher today – seriously, come on!!!
Source: Bloomberg
Here’s why! Because they are the 4th and 5th most widely held stocks on Robinhood…
Here’s what JPMorgan’s Baker said: “investors appear to be confused on AAL today.”
Bank stocks continued to surge this week
Source: Bloomberg
While stocks slipped, Bonds were also dumped with a significant steepening intraday…
Source: Bloomberg
With the 10Y back above 80bps…
Source: Bloomberg
Driving 10Y yields up out of their 3-month range…
Source: Bloomberg
Notably, equity momentum is significantly underperforming value, reverting back to yields…
Source: Bloomberg
The dollar was dumped yet again today (after some gains overnight)…
Source: Bloomberg
This is the biggest 14-day drop in the dollar since Oct 2011 as the EUR explodes higher for the 8th straight day (on higher than expected ECB QE…?) This is the longest streak of gains for euro since 2011
Source: Bloomberg
Cryptos managed gains on the day…
Source: Bloomberg
As the dollar slid, gold rallied back above $1700…
Silver also gained ground, back above $18…
With gold/silver rising for the 3rd day in a row…
Source: Bloomberg
Finally, Bloomberg’s Eddie van der Walt points out that raw material and equity prices have become severely disconnected. A correction will probably entail both lower stocks and higher commodity prices.
Source: Bloomberg
The Nasdaq Composite Index is trading at a 152x multiple of the Bloomberg Commodity Index, surpassing even the highs seen during the Dot Com bubble. The average since the end of 2001 is nearer 37. That divergence stems from the Nasdaq approaching record highs set earlier this year while commodities languish near pandemic-crisis lows.
And then there’s this utter bullshit… Small Caps are the most overvalued… ever… by a bloody mile! (h/t @BiancoResearch)
Source: Bloomberg
As a reminder – this is what none other than Jay Powell said in 2012:
“I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.”
Trade accordingly.
via ZeroHedge News https://ift.tt/3dALHMO Tyler Durden
Researchers Retract Botched Anti- Hydroxychloroquine Study Which Was Used To Attack Trump Tyler Durden
Thu, 06/04/2020 – 15:53
An influential study which found anti-malaria drug hydroxychloroquine raised the risk of cardiac issues has been retracted by its three authors.
The study, published on May 22 in the UK’s prestegious Lancet medical journal, relied on bogus data from a company called Surgisphere, which would not transfer the full dataset for an independent review, and “can no longer vouch for the veracity of the primary data sources.”
While the company that produced the original data, Surgisphere Corp., had signaled that it would cooperate with an independent review, it ultimately reneged and said doing so would violate confidentiality agreements, wrote the study authors. “As such, our reviewers were not able to conduct an independent and private peer review,” the authors said. –Bloomberg
Notably, the World Health Organization halted trials of the drug, only to reverse course after the Lancet issued a major disclaimer regarding the study.
“On the basis of the available mortality data, the members of the committee recommended that there are no reasons to modify the trial protocol”-@DrTedros#COVID19
— World Health Organization (WHO) (@WHO) June 3, 2020
It wasn’t just the WHO who used it to knock HCQ either – as the study was heavily relied upon by the left to mock President Trump for taking the drug.
The entire study was fake. Congratulations on using garbage science from con artists to scare sick people away from potentially life-saving treatment. Hope the dank anti-Trump burns were worth it. https://t.co/Gq27Z0FFcz
“We all entered this collaboration to contribute in good faith and at a time of great need during the Covid-19 pandemic,” said the authors. “We deeply apologize to you, the editors, and the journal readership for any embarrassment or inconvenience that this may have caused.“
Birx, Fauci, and the corrupt media who peddled this fake study from a washed-up sci-fi author and a cam girl owe the entire nation an apology. How many people died from lack of treatment because our nation’s “experts” once again got duped by con artists?? pic.twitter.com/bflRhyS2oy
The Staggering “Powell Bubble” In Just One Amazing Chart Tyler Durden
Thu, 06/04/2020 – 15:50
With three in four finance professionals convinced that Fed is behind the current rally thanks to an unprecedented firehose of liquidity which is anywhere between $8 and $12 trillion based on asset purchases, backstops, and guarantees, there is no denying that what we are experiencing now is a continuation of the bubble spawned by Bernanke in 2008, nursed by Yellen and now desperately defended by the same Powell who back on October 23, 2012 said “I think we are actually at a point of encouraging risk-taking… investors really do understand now that we will be there to prevent serious losses.”
So how does one quantify or visualize just how big the “Powell Bubble” is? While there are many ways to represent the bubble spawned by the Fed across all asset classes which have become the receptacle of the Fed’s unlimited liquidity torrent, but a fascinating one was proposed today by Bloomberg’s Eddie van der Walt who writes that “raw material and equity prices have become severely disconnected” adding that “a correction will probably entail both lower stocks and higher commodity prices.”
As the Bloomberg commodity analyst notes, the Nasdaq is trading at a 152x multiple of the Bloomberg Commodity Index, surpassing the highs seen during the Dot Com bubble by almost a factor of two!
In other words, the bulk of newly created liquidity has flooded into stocks even as commodities – which tend to be a far better representation of the overall economic state – languish. The average ratio since the end of 2001 has been nearer 37. That divergence stems from the Nasdaq approaching record highs set earlier this year while commodities languish near pandemic-crisis lows.
As van der Walt concludes, “And while the tech-heavy shares in the Nasdaq aren’t big consumers of industrial metals and oil, this matters because it shows just how disconnected stock prices have become from the real economy. Something has got to give.”
He’s absolutely right, but that “something” won’t give without an existential fight from the Fed’s Powell: while we excerpted from his comments above, below is all one needs to know courtesy of the Oct 2012 FOMC Minutes, in which Powell explained precisely what is going on:
The market in most cases will cheer us for doing more. It will never be enough for the market. Our models will always tell us that we are helping the economy, and I will probably always feel that those benefits are overestimated. And we will be able to tell ourselves that market function is not impaired and that inflation expectations are under control. What is to stop us, other than much faster economic growth, which it is probably not in our power to produce?
I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.
Incidentally, for those who want to fight the Fed, well there’s your pair trade: short the Nasdaq and go long the Bloomberg commodity index.
via ZeroHedge News https://ift.tt/3gU3wsA Tyler Durden
