Tag: finance

A former Goldman Sachs research analyst has just been barred from the securities industry for blatantly trading on insider information extracted from fellow analysts at Wall Street’s most powerful firm.

According to a statement from Finra, Maguire bought shares in two companies via undisclosed trading accounts after seeing internal emails that the research analyst covering those companies was upgrading his ratings from “neutral” to “buy” in April and June 2020.

What’s more, Maguire tried to cover up his insider trades by lying to Finra when it first started sniffing around. Jessica Hopper, Executive Vice President and Head of FINRA’s Department of Enforcement, released a statement about the decision on twitter: “Insider trading by securities industry professionals erodes the public trust in our capital markets. FINRA utilizes sophisticated surveillance tools to detect and remediate this type of misconduct. Ensuring market integrity is one of FINRA’s core missions and weeding out misconduct from within the industry will always be a priority for FINRA.”

JUST IN: We have barred former Goldman Sachs research analyst Brian Maguire for insider trading. Learn more ▶️ https://t.co/8Cm6YlnLCy pic.twitter.com/TjNtSMicHq

— FINRA (@FINRA) April 20, 2021

Maguire purchased the shares after the upgrades were approved internally but before the research reports announcing those upgrades were published.

Before the hammer came down, Maguire covered a variety of paper, packaging and environmental service companies according to his LinkedIn page. Data from Bloomberg lists his coverage universe as of Oct. 29 of last year, which is when the hammer apparently came down.

US Federal law prohibits the purchase or sale of a security of any issuer on the basis of material nonpublic information; a person trades “on the basis” of material nonpublic information if the person making the purchase or sale was aware of the material nonpublic information at the time of the transaction. An impending research analyst upgrade may be material and is nonpublic until the research report containing the upgrade is published.

FINRA said Maguire neither admitted nor denied the charges, though he consented to the entry of its charges.

There is no obvious news-driven catalyst for the un-exuberance, but since the US cash open, small cap stocks have been under pressure and the freefall is accelerating….

Russell 2000 broke below its 50DMA (red line) and doesn’t have much support down to its 100DMA (blue line)…

Notably “most shorted” stocks have broken out to the downside from their recent coiling pattern…

At the same time, bonds are bid…

Gold and the dollar are also marginally higher.

Via AlMasdarNews.com,

Militants created a camouflaged base northeast of Syria’s Palmyra, where groups were formed for terrorist attacks and explosive devices were made. Russian Aerospace Forces planes have hit these targets, Rear Adm. Alexander Karpov, deputy head of the Russian Center for Reconciliation of Warring Parties in Syria, said on Monday.

“As a result… two shelters, up to 200 militants, 24 pickup trucks with heavy machine guns, as well as about 500 kilograms of ammunition and components for making improvised explosive devices were destroyed,” Karpov said.

During a press briefing, he noted that Russian forces received information that “militants set up a camouflaged base northeast of Palmyra, where combat groups were formed to send and carry out terrorist attacks in various regions of the country, as well as the manufacture of improvised explosive devices was set up.”

Karpov added that after the location of these objects had been confirmed, air strikes had been inflicted on them by Russian Aerospace Forces.

According to him, “illegal armed groups have planned terrorist attacks and attacks on government agencies in large cities in order to destabilize the situation in the country ahead of the presidential election,” scheduled for 26 May.

Russian Aerospace Forces launched airstrikes on ISIS targets northeast of Palmyra, central Syria. pic.twitter.com/XwnXHpLuYO

— 🚨Military Blog (@MilitaryBlog) April 19, 2021

And Interfax noted…

Some 200 “terrorists” in Syria have been killed in airstrikes launched by the Russian military, according to the Interfax news agency on Monday. 

The Russian Air Force reportedly struck a site located in northwestern Syria. It remains unclear which group the militants belonged to. 

The terrorists are trained in the training camps of the militants, which are located “in the territories not controlled by the Syrian authorities, including in the At-Tanf zone, which is controlled by the US armed forces,” according to Monday’s Russian military statement. 

In a move that could lead the IOC to cancel this summer’s Olympic Games in Tokyo, Japan’s capital city is reportedly seeking a full-fledged state of emergency declaration from the Japanese government as COVID amid a resurgence of COVID cases in the country’s most populous areas.

Source: Worldometer

According to media reports, Tokyo Governor Yuriko Koike told ruling Liberal Democratic Party Secretary General Toshihiro Nikai that she plans to seek a state of emergency designation for the capital. The metropolitan government will hold a monitoring conference to gauge the state of infections on April 22, the Mainichi added, and a final decision will be made after hearing the opinion of experts. The metropolitan government is also considering making requests for business suspensions and is coordinating the details with the central government.

The news sent Japanese stock futures lower, as cash trading had closed for the evening by the time the headlines hit. Futures contracts of the Nikkei 225 extended its decline to 2.1%.

The decision isn’t exactly a surprise, as yesterday we reported that both Tokyo and Osaka were considering asking for full-fledged lockdowns. Koike said Sunday during an interview that she might ask the central government to issue a fresh coronavirus state of emergency for the capital to deal with a recent spike in cases.

“Taking a proactive approach is indispensable in responding” to the spike, Koike said, as the capital reported 543 new COVID-19 cases the same day, surpassing 500 for the sixth consecutive day, with only three months left before the opening of the Tokyo Olympics.

“I have instructed senior metropolitan government officials to study countermeasures with a sense of urgency, while considering (the possible option of) requesting a state of emergency,” the governor said.

If issued, it would be a third COVID-19 state of emergency for the capital. The first one was in place between April and May 2020, and the second between January and March this year.

Safety investigators from the IOC are expected to visit Tokyo this month to try and assess whether the international community should move ahead with the Summer Games, which were cancelled last year. President Biden has given his blessing for the Games to proceed, but wouldn’t commit to attending in person.

Authored by Dave DeCamp via AntiWar.com,

The European Union had to correct a claim made by its foreign policy chief, Josep Borrell, concerning Russian troops near the Ukrainian border. Borrell told reporters on Monday that there were “over 150,000” Russian troops near the border. The number was corrected in a transcript of his briefing on the EU’s website to “over 100,000.”

Despite the change, it’s still unclear how the EU determined that there are over 100,000 Russian troops near the border. Russia has announced the deployment of additional forces near Ukraine in recent weeks, but nothing has indicated it sent over 100,000 troops to the region. Last week, a spokesperson for Ukrainian President Volodymyr Zelensky claimed there were 80,000 troops stationed along the border of Ukraine, with 40,000 of them in Crimea.

The fact that Russia has troops in Crimea is no surprise. Moscow had a military base in the peninsula even before Crimea joined the Russian Federation in 2014. An alarmist report from the Daily Mail published satellite images that it claims show a Russian military build-up at a base in Crimea.

But the base is located in southern Crimea, nowhere near the conflict zone in Ukraine’s eastern Donbas region. Demonstrating that the Daily Mail report lacks any credibility, it repeats Borrell’s original claim that 150,000 Russian troops have amassed as fact.

When asked about Borrel’s comments, Pentagon spokesman John Kirby said the situation is “concerning” to the US. “What I can tell you is, in general, we have continued to see this build-up increase. And again, that is concerning to us,” he said.

While Kirby didn’t offer any numbers, he claimed the Russian troop deployment is “certainly bigger” than the 2014 deployment Kirby said resulted in a “violation of Ukrainian sovereignty and territorial integrity.”

Throughout the virus pandemic, all cargo terminals at the Port of Los Angeles, one of the most important seaports in the US, have remained opened and are experiencing incoming record cargos as trillions of dollars in stimulus results in one-sided trade with Asia. 

The US logistical economy continues to overheat as the federal government has been on a multi-trillion dollar helicopter money drop since the beginning of the virus pandemic. The latest is $1.9 trillion, with hundreds of billions of dollars issued in the form of checks to Americans. 

“Helicopter money” was first defined by economist Milton Friedman in 1969 as a thought experiment where a helicopter drops cash over a town. It was thought to be a one-off event, but today’s federal government has continued to drop free money in the form of stimulus checks to supercharge consumers. 

The stimulative effect of handing out free money to households is surging consumption. Tens of millions of Americans bought goods, many of which are produced overseas and have to flow through West Coast ports, such as the Port of Los Angeles, in containerized form. 

S&P Global Platts reports the Port of Los Angeles had the busiest March and first quarter on record, handing upwards of 2.6 million 20-foot equivalent units (TEU) of imports in the three months ending March 2021. 

In March alone, the port moved 957,599 TEUs, doubling levels moved during the same month of last year, right before the virus pandemic. 

“The consumer spending surge continues unabated, with more of us vaccinated, businesses opening, economic outlook looks strong,” said Gene Seroka, executive director of the port. “Consumers are spending as fast as importers can stock their shelves.”

Stimulus checks sparked one-sided trade with Asia, making China to US West Coast shipping lane one of the world’s busiest over the last year. For instance, volumes at the port (as of March) recorded the eighth consecutive month of year-on-year increases. Over this period, the port averaged 900,000 TEU per month, another record. 

“The port handled 490,115 loaded TEU imports, up 122.5% on the year. Firm consumer demand for furniture, home goods and appliances, athletic equipment and automotive parts helped drive the record number of imports,” Seroka said.

Exports from the port were a measly 122,899 TEU, up just 1.5% compared with March of 2020. 

The latest round of stimulus is expected to continue strong inbound volumes for the port through quarter two. April estimates show volumes of around 880,000 TEU, up 20% over the same period last year. 

Other estimates show, for the first time, the port could exceed 10 million TEU for its fiscal year ending June 30. 

The influx of containerships means the port is at capacity as a massive congestion crisis of moored vessels is waiting to unload their cargo.

It’s not just a ship pileup that Californian ports are dealing with; one-sided trade with Asia (mainly China), sparked by fiscal stimulus, has resulted in the greatest demand-pull for consumer products ever. Over the months, we’ve documented the massive container shortage in Asia as containers pile up at US West Coast ports. 

Empty exports in March topped nearly 345,000 TEU, representing a 219% increase on the year.

“Based on our assessment, it’s quicker [for ocean carriers] to get the empties moved out on the ships and to the loading port in Asia than it would be to give containers to exporters here,” Seroka said.

Due to the trade imbalance, which by the way, sent the US trade deficit to a record high in February, containerized shipping rates for the West Coast North America to North Asia was about $630/FEU (forty-foot equivalent unit) on April 14. For North Asia to West Coast North America, the rate was much higher, at around $4,000/FEU. 

… and come to think about it, stimulus checks are just supporting foreign manufacturing economies as Americans buy electronics, furniture, home goods, and appliances, mainly produced overseas. 

The high containerized flows into the West Coast ports are not sustainable unless the federal government ushers in universal basic income, which appears not that far off. 

By Michael Every of Rabobank

Big ideas are “Sparse”

Yesterday was one of those market days like Marlon Brando in ‘The Wild One’:

“Hey Johnnie, what are you selling against?”

“Whaddaya got?”

Down went most things. Which is only fitting really, because we live in an age with absolutely no intellectual foundations, and while most people don’t care to notice, once those go, everything else follows.

Look around you and see that our beliefs in how we should manage everything, from ourselves as individuals, to our family relations, to our local communities, to our political economy, to our borders, to our highest international architecture is all in flux. What guiding principles are we living by now individually and collectively? What internally-consistent, morally-justified, popularly-supported philosophy underpins how we should do things? What “-ism” are we looking to as a template that ticks all three of those boxes? We don’t have one. Hence, in an age of *very* big developments, we are ironically bereft of any matching big ideas. Can you name a genuine public intellectual who has original thought, rather than repeating older wisdom? Or a musician or band who will blaze a trail for the ages? Or an author, or even a recent book? Or a play-write? Or a film director? Or an artist?

Yes, we can cling to Build Back Better –in all its glorious nebulousness– or any political buzzword. But that won’t provide a concrete blueprint for where next. That won’t show us where the relative winners and losers are going to be longer term. As such, is it any wonder markets still don’t know if we face reflation or stagflation or disinflation or deflation; or globalism or protectionism; or liberalism or corporatism? I stress yet again these are all linked like beads on a thread, frustrating as that is to economists who “don’t do politics”.

In this muddled interregnum, the old is refusing to die and, if we chose to look, the new is struggling to be born too. It’s just unclear which is the one dying, and which being born.

Note again the plans of 12 European football clubs to breakaway to keep all of the new riches of the global game for themselves, even if this means an end to the discipline of relegation; the collapse of the lower leagues that are a huge part of European working-class tradition; the end of substantive international competition; and, over time, of teams playing at home as local and national icons, or for anything of real substance, and instead becoming traveling global Vegas-style entertainment like WWF or Cirque du Soleil. As a board member at one of the clubs involved told the press yesterday, their primary goal is revenue and profit, with the wider good of football secondary.

That is our current guiding “-ism”, now being taken to even more ludicrous extremes. In football as in life, a system carved out without social consensus: allergic to competition; that does not see trickle down, but rather pull-the-ladder-up monopoly and monopsony economics; and that hates the national, “legacy fans”, and the deep traditions that created all the property it now claims control of – via massive leverage on borrowed money in a financial system guided by central banks who are piously claiming to care about equality and social justice.

Yet, as expected, public and *political* fury over this is mounting rapidly. Indeed, there is talk of fan boycotts, and even the most passionate YouTubers for some teams say they would rather see their teams die than mutate in this way. There are suggestions some of the key players involved might refuse to take part if it means they lose the right to play for their country, which it probably will, showing some things matter more than money. Moreover, the British government is suggesting legislation to give fans back control of their clubs to stop this European Super League (ESL) from happening, which would take ownership away from foreign billionaires and giving it back to the local communities. What’s more, local councils are saying they could potentially strip the six British clubs of their rights to use local names such as Liverpool and Manchester, so that they are set adrift etymologically and become a rootless travelling circus under new names such The Red Devils, with a new set of “fans of the future” – no joke: this is what the ESL are calling for.

I have some other choice new names to use, in the best working-class football tradition, but they were a little too working class for this Daily, sadly. Yet perhaps we need some lucrative M&A in the spirit of our guiding philosophy: bitter rivals, but now business partners, Spurs and Arsenal could become Spursenal or Arsenspur, or, more appropriately given both teams’ poor performance in recent years that underlines what a joke the ESL is to almost everyone in the game – Sparse.

In short, either a new, more regulated football that is less capitalist and more local and communitarian will soon be born: or football as late-era Elvis karate-kicking in a glittering jump suit all round the world will be instead…and our interest will have left the building.

Meanwhile, Bloomberg tells me excitedly today’s big speech is from China’s Xi Jinping at the annual Boao forum, and that it will “showcase China’s dramatic recovery from the pandemic and plans to open up the economy further to foreign investors”. First of all, that recovery is moderate and set to slow due to huge structural challenges, whereas the last set of US economic data were actually dramatic. (Retail sales up nearly 10% m/m, anyone?) Second, such opening up is talked about every year by free-wheeling Western neoliberals, when China has as much appetite for actual free-wheeling Western neoliberalism as the average football fan – and, as we see, arguably for some good reasons. True, Wall Street has managed to wheedle its way into opening up shop there a little more, which is why Bloomberg –also no doubt excited by the cash of the new ESL– is abuzz. But let’s see how much free-wheeling they get to do in such highly-regulated, highly-political markets, apart from bringing in useful foreign capital, of course. (Tellingly, today saw China’s key lending rate that isn’t a key lending rate, the 1-year MLR, remain unchanged at 3.85%. I know, I know: the excitement!)

Indeed, if there is one place that is still super strong on the whole “-ism” thing, and on big picture thinking, and on what individuals, family relations, local communities, political economy, borders, and our highest international architecture should ideally look like, it’s China.

…and if there’s one place that isn’t, it’s Australia, where we just got the latest RBA minutes. Despite parts of the economy being anecdotally on fire, and even the minutes saying things were bouncing back far better than expected, nothing is going to change on rates until 2024, and even more bond buying is on offer if needed. How ironic that this is where neoliberalism ends up: not too different from the utopianism, buzzword mantras, double-speak –and monetary policy– of a planned economy.

It was no sooner than we wrote yesterday that Elon Musk had gone “all in” in insisting that a Tesla involved in a fatal Houston wreck didn’t have Autopilot turned on than Texas regulators have “called”. Now, we move to the showdown.

Texas police are going to be serving search warrants on Tesla to get the data involved in the fatal crash, Reuters reported late Monday. To matters even more interesting, Mark Herman, Harris County Constable Precinct 4, said he had already obtained witness statements indicating there was no one in the drivers’ seat prior to the wreck. 

“We have witness statements from people that said they left to test drive the vehicle without a driver and to show the friend how it can drive itself,” Herman said.

He also said that he had not seen the data that Musk claimed Tesla had sifted through: “If he is tweeting that out, if he has already pulled the data, he hasn’t told us that. We will eagerly wait for that data.”

On Monday, we reported about thje Tesla Model S wreck that killed two men when the vehicle with “no driver” slammed into a tree and caught fire. It appeared to be an obvious instance where Autopilot and/or Full Self Driving could and would be the “front and center” suspect for the wreck.

Then came what can only be described as either a baffling truth, or an all-in moment (as one Twitter user called it): Elon Musk took to Twitter Monday night to assert in a tweet that data logs “recovered so far” show Autopilot was not enabled in the car and that Full Self Driving had not been purchased on the vehicle.

Your research as a private individual is better than professionals @WSJ!

Data logs recovered so far show Autopilot was not enabled & this car did not purchase FSD.

Moreover, standard Autopilot would require lane lines to turn on, which this street did not have.

— Elon Musk (@elonmusk) April 19, 2021

Leaving out the unknown of what “so far” means and how it basically negates Musk’s point, we pointed out that Musk’s Tweet was stunning for a couple of reasons:

1. The fact that nobody was in the driver seat of the car makes Autopilot the “Occam’s Razor” explanation for the wreck. The NY Times also wrote earlier in the day that the men in the vehicle had discussed Autopilot before leaving for their drive together, in addition to Herman’s witness statements. 
2. It comes off as a preemptive PR effort to potentially mitigate and/or influence the outcome of the National Highway Traffic Safety Administration (NHTSA) and the National Transportation Safety Board (NTSB)’s look into the wreck.
3. If it turns out that Autopilot was, in fact, off, the circumstances behind the wreck become even more baffling. But if it turns out that one of the regulators finds that Autopilot and/or FSD was on during (or seconds before) the wreck, Musk may need further PR efforts to repair the harm it could do to him and/or his brand. Several people on social media have brought this up:

Jason you are an enabler of Elon Musk’s lies and fraud.

The police are certain there was no one in the drivers seat of the car. The car crashed into a tree at a high speed. Who was driving the car?

Why couldn’t the occupants of the car get out of the 🚘 before or during the 🔥? https://t.co/kmuhqtWSF4

— JC Oviedo (@JCOviedo6) April 19, 2021

Additionally, it has already been noted that these type of preemptive suggestions prior to investigations are frowned upon by regulators:

Elon Musk’s claim that the car was not in Autopilot according to data “so far” comes independent of federal investigators, who bristle at these types of preemptive disclosures. NTSB booted Tesla from a previous investigation over this exact issue. https://t.co/ARjoO7siWQ

— Faiz Siddiqui (@faizsays) April 19, 2021

Recall, the Tesla slammed into a tree near Hammock Dunes Place in the Houston Area, a local NBC affiliate reported. The wreck was in the “Carlton Woods subdivision near the Woodlands,” the report says. According to authorities, “the vehicle failed to negotiate a cul-de-sac turn, ran off the road and hit the tree.”

Of the two occupants, one was seated in the passenger seat of the front of the car while the other was seated in the passenger seat of the back of the car. A reported 23,000 gallons of water needed to be used to extinguish the flames because the Tesla’s battery “kept reigniting”. 

The National Highway Traffic Safety Administration (NHTSA) and the National Transportation Safety Board (NTSB) are aware of the fatal Tesla crash that killed two, which occurred on Saturday night in Spring, Texas. Both agencies are sending investigators to conduct a safety analysis. 

“NHTSA is aware of the tragic crash involving a Tesla vehicle outside of Houston, Texas. NHTSA has immediately launched a Special Crash Investigation team to investigate the crash. We are actively engaged with local law enforcement and Tesla to learn more about the details of the crash and will take appropriate steps when we have more information,” the NHTSA told local news KHOU11 in a statement. 

And the NTSB tweeted Monday afternoon that their investigation team, “in coordination with the Harris County Precinct 4 Constable’s Office,” will “conduct a safety investigation of the fatal Apr. 17, 2021, Tesla vehicle crash near Spring, TX.”

NTSB also said their “investigation would focus on the vehicle’s operation and the post-crash fire. NTSB investigators will arrive in the area later this afternoon.” 

Sitting across the table from regulators, Musk has once again pushed “all in”. So far, he has been able to defy the odds and suck out. Will that remain the case?

That tweet was an all-in move by Elon

— TC, Master of Chart (@TESLAcharts) April 19, 2021

Authored by Bill Blain via MorningPorridge.com,

Watching The Sky For Clues

“When beggars die, there are no comets seen; the heavens themselves blaze forth the death of princes….”

There is a general sense that “something wicked this way comes” towards current priced for perfection markets, but trying to define the exact no-see-um likely to trigger a market correction or meltdown is a notoriously pointless game. However, there are plenty of ways to prepare for whatever comes next…

It’s never events you predict or expect that roil markets – it’s the no-see-ums, the unexpected shocks and surprises that snowball and trigger corrections, meltdowns and crashes.

Predicting the exact nature of no-see-ums is like waiting for a meteor thats spent billions of years wandering the solar system to neatly land in your catchers glove – it just ain’t going to happen. Yet, It feels like everyone is watching the heavens for portents of the next/coming crisis… Does the Greensill scandal, or the Archegos conflabulation hint at further scandals rooted in greed set to floor markets?

They are probably wasting their time looking for detail in single stars or constellations. They would be better to pick a big patch of the sky and watch. Meteor showers, which occur as the earth passes through the tails of old comets can pretty much be predicted. It hints that can have an inkling of timing and direction from whatever bas things might be coming towards markets.

Markets are about sentiment – understanding its direction can give a good idea of what may happen. Sure, there are multiple sentiment indices to peruse and ponder, but I prefer asking folk I know about what is bothering them.

Talking to a number of fund managers yesterday, most agreed the market seems due some kind of correction – it is just too perfectly priced for perfection. As prices make lower highs and higher lows, there is a definite feel momentum is slowing. The coronavirus newsflow is anything but perfect – new variants, new nations being added to “no-travel” red-lists, and few real reasons to expect the global travel economy to open as fast as airline stocks are pricing.

Not everyone is panicking. Some think the market is priced for a period of flatline activity, taking a breather before ultra-low interest rates and the sheer volume of money pumping into financial assets triggers a resumption in the stock upside. Global trade is recovering. Supply chains are being re-established.

There are an increasing number of money managers hedging the current market by going back into bonds – extending duration to juice returns and beat inflation at the long-end – taking the view bonds will rally on the back of any equity correction. Others think the trick is to buy bonds ahead of the sell off, expecting central banks will intervene to stabilise markets if stocks slip, and then exit quickly to re-invest in the inevitable stock price recovery. That’s exactly what happened last March.

Other folk are keeping a weather eye on inflationary signals – a good reason to exit any concept of a bond hedge. But what would it mean for stocks? Without the oxygen of ultra-low rates will equities continue to rally? In an inflationary environment driven by growth – stocks are good. But if we see an over-hyped post-pandemic recovery slow into recession plus inflation; Stagflation – a distinct possibility if the recovery gloss wears thin – then where is all that money going to go?

More than a few fund managers believe the correlation between bonds and equities – where bond prices and equity prices rose together as a result of the QE/low rate distortion – is now breaking down. That makes sense as Central Banks look to normalise rates. When we see rates start to rise – it spells massive pain for over-indebted zombie junk, triggering all kinds of consequences for economic growth.

And, Central Banks may not be that concerned about inflation – a few years of modest inflation could inflate away significant amounts of their burgeoning national debt.

So – where to put money instead?

The traditional investment world – listed bonds and stocks – is looking jaded, tired and vulnerable. The consequences of years of distortion as a result of hasty post 2008 regulation, subsequent unnecessary tinkering with market mechanisms, and the pernicious consequences of addicting markets to low rates and flooding liquidity from QE, are becoming clear.

Much of the stock market today looks a lottery – which stocks will be quadruple baggers on the back of mispriced money driving exaggerated hopes? Its driven by FOMO, greed, inequality, and made markets less stable. When market rallies are driven by taxi-drivers and bored marketing executives bigging-up each other on Reddit sites about crypto-currencies and EV makers, we are in serious trouble trying to explain the logic of stock moves.

The answer is to ignore it. Forget about the mistakes others are making.

Fundamentals and logic is out the window. The trick is to ignore the noise. Focus on strategies instead:

• Prepare for inflation: what assets are less likely to suffer? Assets where their underlying income and returns move in line with inflation – which isn’t just inflation-linked bonds. Most “rents” will move in line with inflation – rents meaning anything from property, leases, contracted payments, and even supply chain financing!

• Prepare for liquidity crisis: famously there are 27 doors market “entry” in the New York Stock exchange. There is said to be only one marked “exit”. When the rush for the exits starts, don’t get caught in offered-only markets. Stick with liquidity – which in bond terms means US Bonds.

• Get Real: think about alternative assets that offer returns based on the performance and income garnered by real assets rather than notional financial moves. Asset backed, private debt and equity, and outright ownership.

• Understand the Zeitgeist and Fashions: some assets will remain deeply unpopular, from smoking to fossil fuels – but critical. Look at where you are sitting, what you are wearing and what you do through today: something will have been dug out the ground, transported around the planet or grown on a farm. We can’t do without them. You can’t make steel without metallurgical coal, you can’t make paints without oil, and won’t get a new fridge without global shipping. There are luxury/stupid anti-environment plays like coin-mining that will get wiped out, but other income streams will survive intact…. Or society wont…

In the meantime… lets standby to standby waiting to see where this market goes…

Following a series of disappointments that has seen a string of would-be successors to Chancellor Angela Merkel rise and fall, Germany’s Christian Democratic Union, the dominant party in the country’s ruling coalition, has finally chosen a successor to the long-ruling Merkel.

On Monday, Conservative Armin Laschet put an end to a messy standoff over the future of Germany’s most powerful political party when he clinched the nomination to run for the chancellorship, signaling that, after 16 years of Merkel’s centrism, Germany might be heading in a more conservative direction.

Laschet, who, as leader of the CDU, is firmly entrenched within the party establishment, fended off an upstart challenge by Markus Soder, the minister-president of Bavaria and leader of the Christian Social Union in Bavaria, which serves in a ruling coalition with the CDU.

With rising fears about the liberal “Greens” potentially stealing power away from the German political establishment, Bloomberg noted that By picking the 60-year-old moderate, Germany’s conservatives are “foregoing Soeder’s greater electoral appeal and making a potentially risky bet that Laschet will be able to lift his flagging poll numbers, even as the Greens close in.”

Outside the ruling coalition, the Greens already have the biggest presence in the Bundestag following the parliamentary vote in 2019.

Source: Politico

In a statement acknowledging Laschet’s victory, Soeder – never one to skimp on the dramatic flourishes – proclaimed that “the die is cast”.

“The die is cast: Armin Laschet will be the chancellor candidate of the Union,” Markus Soeder, leader of the Christian Social Union (CSU) Bavarian sister party of Laschet’s Christian Democrats (CDU) told a news conference.

“The CDU met yesterday and decided. We accept that, and I respect that,” Soeder said, ending a damaging rift in the CDU/CSU alliance known as ‘the Union.’ “I called Armin Laschet and congratulated him. I told him that we as the CSU accept it. We offered him our full support. We will support him without a grudge and with all our power.”

As for the Greens, Annalena Baerbock, a 40-year-old political scientist and foreign-policy expert, was named the party’s first official chancellor candidate on Monday. She called out the conservatives for all the “mudslinging” that has taken place during the contest so far.

As analysts try to parse what all of this means for the ruling CDU, Bloomberg pointed out that the fact that Germany’s dominant party wound up in such a mess with just five months to go to polling day is a testament to the difficulties of moving past the 66-year-old Merkel, who has governed for 16 years and dominated the CDU for a generation.

Source: Bloomberg

While it’s still on track to be the biggest party in the next parliament in the latest polls, the CDU-CSU is heading for its worst-ever result in a federal election and is facing a challenge by the Greens to become Germany’s strongest force. That leaves Laschet with little time and little margin for error.