Republicans, Democrats Debate Whether Next Relief Bill Should Be $1 Trillion or $2 Trillion


Talks over another coronavirus relief package have stalled following House Speaker Nancy Pelosi’s (D–Calif.) insistence that the White House agree to at least $2 trillion in new spending as a precondition of continued negotiations.

Senate Republicans have introduced a $1 trillion relief bill; a not insubstantial sum that is nevertheless short of the $3.5 trillion measure House Democrats passed back in May.

“Democrats have compromised. Repeatedly, we have made clear to the Administration that we are willing to come down $1 trillion if they will come up $1 trillion,” Pelosi and Senate Minority Leader Chuck Schumer (D–N.Y.) said in a joint statement released Wednesday evening. “We have again made clear to the Administration that we are willing to resume negotiations once they start to take this process seriously.”

U.S. Treasury Secretary Steve Mnuchin issued a statement of his own blaming Pelosi, who he says “made clear that she was unwilling to meet to continue negotiations unless we agreed in advance to her proposal, costing at least $2 trillion,” Mnuchin added that “the Administration is willing to move forward with legislation that allows for substantial funds for schools, child care, food, vaccines, hospitals, PPP for small businesses, rental assistance, broadband, airports, state and local government assistance, and liability protection for universities, schools, and businesses.”

Helping to hold things up is White House Chief of Staff and former House Freedom Caucus Chairman Mark Meadows, who The Wall Street Journal reports is taking a tougher line on additional spending measures.

Senate Republicans’ $1 trillion proposal includes calls for another round of $1,200 stimulus checks, $150 billion in aid to state and local governments, a $200 weekly unemployment benefit, as well as a few pet defense projects.

Democrats’ $3 trillion proposal would instead provide a $600 unemployment bonus, plus close to $1 trillion in aid to state and local governments. It also includes $175 billion in assistance to homeowners and renters.

President Donald Trump signed an executive memorandum on Saturday that taps $44 billion of already-appropriated disaster relief funding to create a new $400 unemployment bonus, of which $100 would have to be provided by state governments.

Senate Majority Leader Mitch McConnell (R–Ky.) is reportedly urging Democrats and the White House to come to a deal. Up to 20 senate Republicans are reportedly a no vote on any new relief funding, meaning McConnell will need every Democratic vote he can get.

Regardless of what passes, it is remarkable that the lower-bound proposal on the table is a $1 trillion relief effort that comes just months after the passage of the $2.3 trillion CARES Act.


Rideshare giants Uber and Lyft both say they may have to pause service in California due to a court decision from earlier this week requiring them to treat drivers on their platforms as employees.

“If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” said Uber CEO Dara Khosrowshahi Wednesday during an MSNBC interview.

Lyft President John Zimmer said the same thing during a quarterly earnings call with investors on Wednesday.

On Monday, a San Francisco Superior Court judge ruled that California’s infamous A.B. 5 labor law forbids rideshare companies from classifying drivers as independent contractors, meaning these companies must provide benefits like health insurance and sick pay.

An internal Uber assessment found that this would require the company to raise prices by 20-111 percent in California, with less densely populated areas seeing larger price hikes.

Lyft, Uber, and delivery businesses like Doordash and Instacart, are backing a state ballot initiative that would exempt workers using their apps from the requirements of A.B. 5.


New Zealand is reimposing lockdown restrictions in the city of Auckland after a rash of new COVID-19 cases. Most businesses and schools in the city must now close. Restaurants and bars can offer take-out only.

The island nation had gone more than 100 days without any community spread, reports NPR.

The new cases appear to have spread in a workplace setting, reports Science. One New Zealand public health professor speculates the cases are the result of some sort of screening failure at the border.


  • The U.S. State Department might require Chinese government-funded Confucian institutes on college campuses to register as foreign agents.
  • Instagram’s answer to social media app Tik Tok is reportedly a “dud.”
  • The Trump administration is considering whether it can cut taxes without Congress.
  • You thought 2021 was going to be better? Think again.
  • Socialist publication In These Times has a series of pieces on Sen. Kamala Harris’ (D–Calif.) surprising foreign policy hawkishness.
  • Republicans and Democrats near agreement on further reforms to the Paycheck Protection Program, which has provided loans to distressed small businesses during the pandemic.
  • Life got you down? Perhaps thinking about death will make you feel better.
  • The six podcast genders:

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250 Million Reasons Why MicroStrategy Adopted Bitcoin… And Why Others Will Too

250 Million Reasons Why MicroStrategy Adopted Bitcoin… And Why Others Will Too

Tyler Durden

Thu, 08/13/2020 – 09:25

Authored by William Suberg via,

The CEO of the company that just bought 21,454 BTC calls it “digital gold,” and the tide will cause the business world to admit the same, say supporters.

image courtesy of CoinTelegraph

MicroStrategy has adopted Bitcoin (BTC) as its reserve currency – and stunned commentators by purchasing over 21,000 BTC on Aug. 11.

The world’s largest publicly-traded business intelligence company has swapped fiat for Bitcoin as its treasury reserve asset, but the reasons behind it suggest that more big businesses will have no choice but to do the same.

Why did MicroStrategy choose Bitcoin, and will others follow?

Digital gold

In a press release issued on Aug. 11, CEO Michael Saylor went further than most by calling Bitcoin “digital gold.”

With no “ifs” or “buts,” Saylor unreservedly plugged the largest cryptocurrency over both fiat and other traditional safe-haven assets such as gold.

“Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it,” he commented. 

That angle closely mimics some of Bitcoin’s foremost proponents, notably Saifedean Ammous, who in his book, “The Bitcoin Standard,” repeatedly explains that so-called “digital scarcity” puts Bitcoin in a separate league to any other form of money which has ever existed.

Like Ammous, Saylor also believes that Bitcoin’s very structure will ensure that its value will only increase with time.

He added: 

“We expect its value to accrete with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”

Doubts over fiat’s future

Bitcoiners were particularly excited about MicroStrategy because it unashamedly replaced fiat currency for cryptocurrency.

Its purchase of 21,454 BTC for an aggregate price of $250 million late last month may not only be symbolic (given the total 21M BTC) but it also means that the company controls 0.1% of the total Bitcoin supply — something competitors will find increasingly expensive to replicate.

“MicroStrategy bought 0.1% of the Bitcoin supply. Very few companies will be able to copy this strategy,” What Bitcoin Did podcast host Peter McCormack tweeted in response.

For Saylor, there were multiple red flags that swayed him to turn to Bitcoin.

These were “among other things, the economic and public health crisis precipitated by COVID-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty,” he said.

Continuing, he argued that what began as a result of Covid-19 would only cause further problems later on:

We believe that, together, these and other factors may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types, including many of the assets traditionally held as part of corporate treasury operations.”

Cointelegraph has often reported on the detrimental impact of practices such as quantitative easing, and the voices urging consumers to abandon the fiat system en masse to protect their prosperity in the long term.

For Jason Yanowitz, founder of financial media network BlockWorks Group, Saylor’s reservations will ultimately spark trailblazing from the entire business sphere.

“MicroStrategy’s CEO said they bought Bitcoin to avoid inflation,” he summarized.

Eventually every public company will do the same.”

This week, Cointelegraph noted that Bitcoin’s value appeared to be tracking central banks’ inflating balance sheets in 2020.

Bitcoin’s “Schelling point”

Finally, Saylor was highly complimentary about Bitcoin in particular — and did not mention that the company even considered any other cryptocurrencies.

“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility, and community ethos of Bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value,” he said.

Bitcoin’s eleven-year lifespan has seen it both remain the largest cryptocurrency and fend off multiple concerted efforts to undermine it.

As Ammous and various others often explain, Bitcoin has proven itself via this method — and alternative cryptocurrencies have failed to demonstrate that they can gain Bitcoin’s status and popularity.

Miners’ preference for BTC supports the theory that in the long term, security and market prowess will only increase — Bitcoin’s technical fundamentals remain in a broad uptrend, a result of miners dedicating more and more resources to the network.

via ZeroHedge News Tyler Durden

After “Extraordinary Event” Crushes Traders, Credit Suisse Forced To Accelerate “Berserk” NatGas ETN

After “Extraordinary Event” Crushes Traders, Credit Suisse Forced To Accelerate “Berserk” NatGas ETN

Tyler Durden

Thu, 08/13/2020 – 09:05

Following yesterday’s “berserk” price action in Credit Suisse’s 3x Inverse Natural Gas ETN, the Swiss banking giant has been forced to do something about it.

In recent years the price hadn’t risen above $600, but it advanced in each of the past five sessions with percentage increases of 35%, 34%, 29%, 223% and 400%, and closed on Wednesday at $15,000.

That compares with the note’s net asset value of $124.01. The market cap is $4.58 billion, versus total assets of $37.9 million.

The note had already seen securities issuance suspended on June 22 and been delisted from the NYSE Arca exchange on July 12, but after the last few days, Credit Suisse has been forced to liquidate the note as soon as possible.

Investors in the ETN will receive a cash payment per note equal to the average of the closing indicative value during a period of five consecutive business days expected to be Aug. 14-20.

And given the stock is halted, this means because Credit Suisse was completely lazy, greedy and incompetent, some traders are about to eat a 99% loss if they bought in the last few days.

Here is Credit Suisse’s full press release explaining their actions:

Credit Suisse AG (“Credit Suisse”) announced today that it will accelerate at its option its VelocityShares™ 3x Inverse Natural Gas ETNs (the “ETNs”), which were previously delisted from the NYSE Arca.

The ETNs were originally listed on the NYSE Arca, but were delisted from the NYSE Arca as of July 12, 2020. On June 22, 2020, Credit Suisse suspended further issuances of the ETNs. Following the delisting from the NYSE Arca, the ETNs traded on an over-the-counter basis.

As described in the related pricing supplement for the ETNs (the “Pricing Supplement”), Credit Suisse, as the issuer of the ETNs, may, at its option, accelerate all issued and outstanding ETNs on any business day after the inception date. Credit Suisse expects to deliver notice of the acceleration of the ETNs via the Depository Trust Company on August 12, 2020.

As described in the Pricing Supplement, investors will receive a cash payment per ETN equal to the arithmetic average of the closing indicative values of the ETNs during the accelerated valuation period. The accelerated valuation period will be a period of five consecutive index business days, which is expected to be from August 14, 2020 to August 20, 2020. The acceleration date is expected to be August 25, 2020, three business days after the last day of the accelerated valuation period. If you have questions regarding the impact of the acceleration of the ETNs on your position, please contact your broker.

Credit Suisse ends by noting specifically that “none of the other ETNs offered by Credit Suisse are affected by this announcement,” but it is quite clear that between illiquidity, leverage, and mechanics, something is very broken in any number of ETFs/ETNs across the world.

As Bloomberg Intelligence’s ETF Analysts, James Seyffart details, Credit Suisse’s decision to liquidate an exchange-traded note with outsized premiums leaves eight of the bank’s other ETNs still trading over the counter while creating no new shares — posing similar risks to investors.

The ETNs hold $1.7 billion in assets, and we believe their inability to adjust to demand opens the door to price manipulation.

Delisted active products that lack the ability to create shares should be closed, in our view, since they put investors at risk and could hurt the industry’s reputation by fueling outsized pricing gaps.  “

And given that ETFs now dominate price action, that is hardly a good sign for financial stability going forward. Will The Fed start buying commodity ETFs if they crash? Who will protect the retail investor?

via ZeroHedge News Tyler Durden

How Reality Became A James Bond Movie: Rabobank Explains

How Reality Became A James Bond Movie: Rabobank Explains

Tyler Durden

Thu, 08/13/2020 – 08:43

By Michael Every of Rabobank

What’s Your Favourite Bond Theme?

We live in a world where all can agree on very little – but one thing that should be clear is that it’s all very James Bond. Charismatic billionaires; Cold War; secret agents; skulduggery; poisonings; spy apps in innocuous devices; military build-ups and warnings of hot war; police crack-downs; and, of course, a killer virus. Ironically, Bond himself is absent because the latest movie iteration, “No Time To Die”, has been delayed because of Covid-19: when it eventually comes out, is it going to be a wilder ride than what we already see in real life? And could Hollywood ever tell a story that contains any elements of real life developments given how it is now financed? That’s what US Republicans are asking anyway. (Personally, I feel Bond lost his mojo with the internet. Who wants to see a man licensed to double-click to save the day?)

Anyway, a British poll of ‘Who was the best Bond?’, the kind of thing Brits ask themselves all the time for some reason, unsurprisingly had Sean Connery as the top 007, but with Timothy Dalton as #2, followed by Pierce Brosnan, then Roger Moore, current Bond Daniel Craig, and finally and naturally, George Lazenby. Besides being rather unkind to Roger Moore, the king of eyebrow-raising and cheesy puns, this got me thinking: what’s your favorite Bond theme to describe what we see around us at the moment?

Perhaps “All Time High”? Which suits both US equities, shortly, and virus infection numbers. “Tomorrow Never Dies” perhaps suits equities more though.

There’s “Skyfall” for those who look at bond yields (as well as Bond) instead, because despite the recent upside surprise in US inflation, it’s surely still a deflationary, lower-yield world out there (as the RBNZ are showing us). Indeed, don’t forget “The Writing’s On the Wall” for those who listened to the Fed yesterday saying there won’t be a V-shaped recovery, but rather a W-shaped one. Plus “You Only Live Twice” for those getting a nice Fed bailout anyway.

Maybe “Die Another Day” or “Another Way to Die” for those –just chastised by the Fed– who say the virus isn’t a real threat? Or “No Time to Die” for those who won’t take the vaccine if it ever arrives (which is as high as one in two in some surveys).

Could it be “Goldeneye” or “The Man With the Golden Gun” as we see reports that even Chinese state banks are complying with US sanctions against key figures in Hong Kong? What a goldeneye the SWIFT system is and what a golden gun the USD still proves.

Maybe “Goldfinger” for those who think the USD isn’t and that it’s time to plan to live in a secret lair under the sea or up in space and give up on life on earth? “Diamonds are Forever”, they seem to also be humming. In which case there’s “Moonraker” for those billionaires dreaming of colonizing space – once they have sorted out downtown LA traffic.

Closer to home, there’s “You Know My Name” regarding the US Vice-Presidential candidacy; or “Nobody Does it Better” for supporters of either presidential candidate. Plus, how about “From Russia with Love” for those still wrapped up in the #Russiagate scandal, which seems about to take a new twist ahead as possible indictments are made against the original accusers (not accused)? Or “The Living Daylights” for those on the wrong side of this scandal in the end, whichever way it blows, now that “For Your Eyes Only” is no longer true for the evidence?

“The World is Not Enough”, “Licensed to Kill”, “A View to a Kill” and “Live and Let Die” certainly sum up current geopolitics nicely, even as “We Have All the Time in the World” is still the EU’s theme song when it comes to joint foreign policy action.

And there’s always “Thunderball” for the lottery that is the key Aussie jobs data, which today ostensibly show 115K employment gains in a country with 1/13 of the US population, and a drop in unemployment to 7.5% from 7.8% at a time when the economy is flat-lining and large parts are once again on hard lockdown (after the survey period, admittedly).

Do you expect me fall, Mr Aussie Bonds?

No, I expect you to rise!

via ZeroHedge News Tyler Durden

After “Big Jobs Numbers”, Initial Jobless Claims Fall Below 1 Million For First Time In 21 Weeks

After “Big Jobs Numbers”, Initial Jobless Claims Fall Below 1 Million For First Time In 21 Weeks

Tyler Durden

Thu, 08/13/2020 – 08:35

For the first time in 21 weeks, Initial Jobless Claims for the last week was less than 1 million, printing at 963k (vs 1.1mm exp)

Following last week’s “big jobs numbers”, Continuing Jobless Claims fell (improved) for the second week in a row (after a brief blip higher)…

Nevada, Puerto Rico, and Kansas saw the biggest jumps in jobless claims last week while Florida, New York, and Georgia saw big drops…

A total of 56.29 million Americans have now applied for jobless benefits for the first time since the pandemic lockdowns began (that’s over 360 layoffs for every COVID death in America), and massively more than the 22.1 million during the great financial crisis.

However, Despite today’s relatively positive news (yes 963,000 Americans still filed for first time benefits), following President Trump’s EOs, leaving the latest round of virus relief continuing to be stuck in gridlock, we suspect things will get depressingly worse before they get better.

via ZeroHedge News Tyler Durden

Soros Reveals How He’s Invested Amid “Fed Liquidity Bubble”; Says Trump “Very Dangerous”

Soros Reveals How He’s Invested Amid “Fed Liquidity Bubble”; Says Trump “Very Dangerous”

Tyler Durden

Thu, 08/13/2020 – 08:25

Billionaire financier and political puppeteer George Soros says he’s no longer invested in financial markets – admitting to Italy’s La Repubblica that we’re caught in a bubble fueled by Fed liquidity, and that ever since he shared his methodology in his book, “Alchemy of Finance,” he no longer has an advantage.

Soros explained that “two simple propositions” drove his investment strategy, according to MarketWatch.

“One is that in situations that have thinking participants the participants’ view of the world is always incomplete and distorted. That is fallibility,” he said, adding “The other is that these distorted views can influence the situation to which they relate and distorted views lead to inappropriate actions. That is reflexivity.”

He went on to say the market, which he no longer participates in, is sustained by the expectation of more fiscal stimulus along with hopes Trump will announce a vaccine before November.MarketWatch

“We are in a crisis, the worst crisis in my lifetime since the Second World War. I would describe it as a revolutionary moment when the range of possibilities is much greater than in normal times. What is inconceivable in normal times becomes not only possible but actually happens. People are disoriented and scared. They do things that are bad for them and for the world,” he told the outlet.

Turning his attention to politics and the pandemic, Soros – who’s contributed $52 million towards political spending during the 2020 election cycle, said that the United States is better positioned to weather COVID-19, but President Trump “remains very dangerous” because “he’s fighting for his life and he will do anything to stay in power.

“Even in the United States, a confidence trickster like Trump can be elected president and undermine democracy from within,” he said, adding “But in the U.S. you have a great tradition of checks and balances and established rules. And above all you have the Constitution. So I am confident that Trump will turn out to be a transitory phenomenon, hopefully ending in November.”

In May, Soros claimed that Trump would be a “dictator” without the US Constitution in place, according to Breitbart‘s Josh Caplan. “But he cannot be one because there is a constitution in the United States that people still respect. And it will prevent him from doing certain things. That does not mean that he will not try, because he is literally fighting for his life,” Soros told the Independent.

“I will also say that I have put my faith in Trump to destroy himself, and he has exceeded my wildest expectations.”

via ZeroHedge News Tyler Durden

Blain Blasts Bloated Bureaucracy (Not BoJo) For Britain’s “Full-Blown Apocalypse”

Blain Blasts Bloated Bureaucracy (Not BoJo) For Britain’s “Full-Blown Apocalypse”

Tyler Durden

Thu, 08/13/2020 – 08:10

Authored by Bill Blain via,

Who To Blame?

“Just doing my job sir…”

I feel a bit of rant coming on… Yesterday’s dismal UK numbers were not a surprise – unless you expected them to be even worse.  A 20% quarter on quarter Q2 decline in GDP, deeper than anywhere else (except possibly Spain), and the deepest and fastest recession on record. Germany was down 12%, while US GDP was down a mere 10.5%. Sweden – which didn’t lockdown, was down 8.6%. Unemployment is going through the roof. Companies are planning redundancies, and no one is going to get Christmas holidays again. Ever.  We have become addicted to government support – the papers say we face a house price collapse next year when stamp-tax holiday ends, and it’s a stark choice of putting everyone on permanent furlough or redundancy. 

Why is the UK so shockingly bad?

There are probably good reasons for our miserable performance in terms of the detail of how our retail and services sector works, the density and health of our population, our genetics, even our habit of stopping to chat and greet friends and neighbours.. or it might have been issues like the length of lockdown.  It might also be the way we record data – already the number of Covid Deaths has been revised downwards, and could go lower yet. What the UK did wasn’t so different to what other countries tried – the timing of when we started and finished lockdown was days rather than months, but it has been seized upon as critical evidence of government incompetence.

The result is going to be a witch-hunt. We need someone to blame. 

Whatever the UK did right or wrong, somehow we managed to turn a mere economic catastrophe into a full blown apocalypse. If this was the Olympic COVID Pants Performance competition, we just scored a perfect set of 10s for our sheer crapness. 

And it’s unlikely to get much better. Half the nation still believes the Virus is going to kill them given any chance – they have been properly scared. The other half has no interest in returning to work while there are still beaches with pubs on them… assuming their jobs are doomed, so they are enjoying their last furlough cheques before Winter comes a knocking…  

It’s very easy to blame government – Boris’s shambolic nature means he’s going to be very easy to scapegoat. But consider the alternatives… it would hardly be fair to inflict even worse politicians on out poor benighted county.  Her Majesty’s Loyal Opposition are braying for blood – but they would have done equally badly, if not worse. 

And blaming government is exactly what the establishment is hoping for. Anything to deflect from the multiple failings of the UK’s bloated, self-serving and unaccountable establishment – the multiple bureaucracies of uncivil service. Poorly advised governments tend to underperform. If there was failure in the UK, then it occurred at the institutional level – not in parliament, but within the apparatus of state that advises and runs the country.  If we want to sort it and avoid repeat.. then it’s time to shake the foundations of the state and introduce the concepts of responsibility and accountability. With prejudice. 

Let’s give government some credit for the swift application of furlough and bailouts. It would be easy to blame the BBC for dramatizing crisis, but I stopped watching TV news months ago…. It was just too pointless and depressing.  

The Pandemic triggered successive failures across the nation. Heads should be rolling – but not the ones we know. 

  • I want to know why NHS England was so unprepared despite having gamed the Pandemic a few years ago.

  • I want the models investigated. 

  • I want to know what idiot thought it was fine for care home staff to continue working in multiple homes – thus the example of a care home in Skye taking on agency staff from London as a virus vector. 

  • I want to know who advised government on schools. 

  • I want a public enquiry on every aspect of the successive mistakes and escalating cascade of stupidity that characterised the virus in the UK. 

Let’s look back at this farrago from start to finish – and let’s have some real accountability. When it is done..  let’s put the guilty up against the proverbial wall.   

The real problem might be even worse. Fish rot from the head down – and I wonder just how fundamentally broken the country is. Once we were the envy of the world. Today we are a nation of petty bureaucrats. This is the country that’s never been conquered (well not since 1066 and all that), that’s taken on every European despot from Louis, Phillipe, Napoleon, The German and Barnier – and bowled them all out no matter how sticky the wicket. 

Yet, we now face a far greater enemy – ourselves… 

We’ve got Menshevik teachers in revolt – they’re happy enough to go an sit and drink Lady Petrol on crowded Cornish beaches with the rest of the Garuniad intellectual woke brigades – but ask them to look at the evidence and go back to actually teach kids and it’s no chance… “far too dangerous” they say.. 

Yesterday my wife tried to speak to her bank re her business accounts. She waited over an hour listening to a voice telling her how unexpectedly busy the bank was at this time.  It suggested she go online – but that’s not pertinent when you need to speak to someone urgently to trace cash that’s gone adrift. Of course the bank in question was Britain’s most embarrassing institution – the People’s Democratic State Bank of Hong Kong and Shanghai – which isn’t picking up the phone to customers because: 1) it doesn’t give a ****, 2) its busily sacking thousands of staff while lecturing clients on how to be ESG, 3) It still doesn’t give a **** and 4) its new masters in Beijing don’t give a **** either. 

Or while trying to cheer yourself up and boost the local economy, you go into your favourite restaurant and you are faced with a limited menu – limited because of the requirement of the chefs to socially distance in the kitchens. But actually, the chain is delighted with the limited menu because they can bring in the cheap junior staff to serve stuff your kids will learn to cook in school – if there was any school to go to…. Cheap nosh at full price with half the staff in the hope you will be “understanding about the problems created by the Coronavirus.” It’s a rip. 

Of course, there are moments of light humour… like the anxious pub landlady who threw us out her pub and asked us to shout orders from the other side of the road because she was worried by our “London accents”. (I don’t have a London accent… but wtf..) “I can’t take the risk.. I have to think about the staff..” she said.. Congratulations.. your pub will be bust by September, and your staff will all be redundant.. That’s one way of looking after them… 

Sadly, the UK has become complicit in our own downfall… 

And the clearest signal of the complete and utter collapse of the UK as going long-term concern is The Decline of Sticky-Toffee Pudding

The decline of STP is symptomatic of where our once proud nation is headed.  In my spare time I am publisher of the world renowned “Sticky-Toffee Pudding International”, the journal of record for STP fans everywhere. Each quarter the top STP features on the front page.  

In recent weeks I’ve noted a terrifying trend. Even top STP restaurants are now producing a shallow false shadow of the STP – they are serving Sticky Toffee Cake. FFS!! It’s not a STP without dates. Last time I checked the supply of dates into this island set upon a silver sea was not blocked by the pandemic.. there is no reason to blame the virus for a lack of dates!!! It’s just an excuse… lazy chefs hiding behind pandemic to cut out dates – the core, the essence, the life and very soul of a proper, scrumptious STP! 

I am willing, in extemis, to accept this modern fashion of having vanilla ice-cream instead of custard (frankly its daft, but if it leaves more custard for me, I’m delighted.) But STP without dates is like Christmas without Santa, Arsenal without losing, a wedding without a fight, or Eric without Ernie.. What is being served today is simply Sticky Toffee Cake – a travesty of the traditional STP. 

It’s wrong and it needs to be stopped. Any chef with STP on the menu who serves up Sticky Toffee Cake should be boiled in their own caramel. I shall be shaming certain restaurants in the October edition of STPI. I have already written to my MP demanding action – but I’m told he’s on a Cornish beach….

via ZeroHedge News Tyler Durden

Futures Drop From All Time High As Concerns Over Stimulus Stalemate Grow

Futures Drop From All Time High As Concerns Over Stimulus Stalemate Grow

Tyler Durden

Thu, 08/13/2020 – 07:58

S&P 500 futures dipped along with European stocks on Thursday, one day after briefly rising above the previous record high and closing just a few points below its all time high close, as the global rally showed signs of faltering as stimulus talks in Washington remained deadlocked. Gold and Treasurys were flat, while the dollar fell before key unemployment data.

Wall Street indexes had rallied on Wednesday with gains across most sectors, bringing the S&P 500 about 0.4% below its intraday record high hit on Feb. 19 before shares faltered as investors continue to wonder when Congress will agree on the much needed fiscal stimulus. The concern is that government lifelines merely deferred even more unemployment.

Cisco Systems dropped 5.8% premarket after forecasting first-quarter revenue and profit below Wall Street estimates and laying out a restructuring plan. 

“It seems that the markets have been in glass-half-full mode in the past couple of sessions,” said Jane Foley, a strategist at Rabobank in London. “Even if we did get a new record today, the lack of liquidity in August would detract from the credibility of such a move.”

European stocks fell, ending their largest four-day rally in two months, with insurers and mining stocks pulled down benchmarks. Dutch insurer Aegon NV tumbled after its profit missed estimates and as it withdrew financial targets over uncertainty from the pandemic. The Stoxx Europe 600 Basic Resources Index led declines, dropping as much as 2.1% the most among sectors in Europe, as the global rally in equities fades and copper, zinc trade lower although th gold rebound continues. Miners fall even as gold pares some of this week’s slump: Rio Tinto -2.9%, Anglo American -3%, BHP Group -2.3%, Glencore -2.3%, ArcelorMittal -2.8%, Antofagasta -2.1%.

Markets continued to hold on to hopes the Democrats and the White House would reach an agreement to pump more money into the economy, with unemployment benefits being a sticking point.

Attention now turns to the weekly U.S. jobless claims data which is expected to show the number of Americans filing for state unemployment benefits dipped slightly from the prior week, printing at 1.1 million, although the labor market continues to struggle due to the pandemic. Last week, the government’s July jobs report showed the economy has regained only 9.3 million of the 22 million jobs lost between February and April.

Meanwhile, as we noted several weeks ago, the most hard-hit U.S. states continued to show signs of improvement, with Texas and California reporting falling hospitalizations from the virus.

In rates, Treasuries were unchanged, reversing a modest gain during the Asian session despite a record $26BN 30-year auction at 1pm ET (WI 30-year yield at ~1.358% is ~3bp cheaper than last month’s, which stopped 2.7bp through the WI yield at the bidding deadline; yesterday’s 10- year auction stopped through by less than 1bp after a selloff). Yields declined during Asia session as demand emerged following two-day selloff, are edging higher in early U.S. trading as dealers prepare to underwrite final event of this week’s auction cycle. Yields richer by 0.5bp to 2bp with 10-year around 0.67%, outperforming bunds by 2.5bp, gilts by 1.5bp. According to Bloomberg, large short base may support a covering bid into the auction, while leaving the sector vulnerable to a squeeze.

In FX, the dollar dipped and the euro and pound both advanced against the greenback, mostly helped by sustained dollar weakness. Sterling was stable against the euro, but it remains vulnerable to the common currency, according to Rabobank’s head of FX strategy Jane Foley.

In commodities, oil steadied after rising earlier on signs of improving demand while gold resumed its advance after the Monday crash.

Looking at the day ahead now, the data highlights include the weekly initial jobless claims from the US along with the final July CPI reading from Germany. Fed speakers include Bostic and Brainard, while the Mexican central bank will also be deciding on rates. Tapestry and Applied Materials are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures little changed at 3,369.25
  • STOXX Europe 600 down 0.5% to 373.17
  • MXAP up 0.5% to 171.17
  • MXAPJ up 0.09% to 564.39
  • Nikkei up 1.8% to 23,249.61
  • Topix up 1.2% to 1,624.15
  • Hang Seng Index down 0.05% to 25,230.67
  • Shanghai Composite up 0.04% to 3,320.73
  • Sensex down 0.1% to 38,331.48
  • Australia S&P/ASX 200 down 0.7% to 6,091.00
  • Kospi up 0.2% to 2,437.53
  • Brent futures little changed at $45.41/bbl
  • Gold spot up 1% to $1,935.22
  • U.S. Dollar Index down 0.3% to 93.14
  • German 10Y yield fell 1.4 bps to -0.461%
  • Euro up 0.4% to $1.1830
  • Italian 10Y yield rose 1.8 bps to 0.836%
  • Spanish 10Y yield fell 0.3 bps to 0.3%

Market Snapshot

  • Virus resurgence across Europe continues with Germany recording the highest number of new cases in more than three months, with daily infections topping 1,000 for three days in a row. Meanwhile two Chinese patients test positive again several months after having recovered, raising fears that the virus could linger and reappear in people previously infected.
  • Around 3.4 million people in England — or 6% of the population — have caught coronavirus, according to a large-scale antibody study. The rate in the capital is twice as high, with 13% of Londoners having contracted the virus.
  • Australian employment rebounded in July, with an additional 114,700 jobs added to the economy, beating estimates. Unemployment lowered to 7.5%.
  • Sweden’s controversial virus policy may have saved the economy from a further 4% drop in GDP, according to Capital Economics. Sweden did not impose a strict lockdown, and the country suffered a higher death rate than comparable countries which did impose a lockdown. The Swedish economy contracted 8.6% in the second quarter.

Asian equity markets began mostly higher as the region took impetus from the tech-led gains on Wall St where the S&P 500 and Nasdaq moved to within close proximity of record highs, fuelled by strength across the big tech names and with Tesla front-running the advances following the recent announcement of a 5-for-1 stock split. However, some of the elation gradually waned overnight as focus turned to the deluge of earnings. ASX 200 (-0.7%) and Nikkei 225 (+1.8%) were mixed with price action for the biggest movers in Australia dictated by results, in particular the worst performers AGL Energy and Telstra after both posting weaker bottom lines for the full year, while the Japanese benchmark outperformed on a breakout above 23,000 to print its highest level since February. Hang Seng (Unch.) and Shanghai Comp. (Unch.) were indecisive with only minimal support seen from another substantial PBoC liquidity injection as geopolitical tensions remain in the background and tentativeness ahead of US-China talks on Saturday to assess the Phase-1 deal in which China will reportedly bring up WeChat and TikTok issues. Furthermore, Hong Kong was also kept indecisive amid choppy trade in index heavyweight Tencent which was eventually pressured despite topping earnings estimates as it refrained from an interim dividend and as it faces the impending WeChat ban in US. Finally, 10yr JGBs traded marginally higher after rebounding from yesterday’s floor and despite the strength in Japanese stocks, while the BoJ were also present in the market today for nearly JPY 1.2tln of JGBs in 1yr-10yr maturities.

Top Asia News

  • China Investors Pick Winners From Xi’s New Economic Mantra
  • Duterte to Use Russian Vaccine After Philippine Human Trials
  • Modi’s Key Ministers Hit by Coronavirus as Pandemic Grips India
  • Australia Employment Surges as Economy Absorbs Victoria Relapse

European equities have largely seen modest broad-based losses [Euro Stoxx 50 -0.2%] after a mixed APAC lead as earnings take focus amid a lack of fresh catalysts. UK’s FTSE 100 (-1.1%) sees more pronounced losses vs. the region amid currency dynamics, but more notably due to a slew of large-cap ex-dividends including the likes of AstraZeneca (-1.5%), BP (-2.4%), Diageo (-1.1%), GSK (-2.4%) and Shell (-2.5%) – together equating to just under a quarter (~24%) of the FTSE 100 by weighting. Sectors are mixed with no clear risk profile to be derived – Energy underperforms, IT remains somewhat afloat after its underperformance yesterday, whilst Telecom names see a firm performance on the back of Deutsche Telekom’s (+2.1%) earnings, which topped revenue and adj. EBITDA forecasts whilst the Co. also raised its FY20 adj. EBITDA AL guidance.  In terms of individual movers, Airbus (-1.4%) shares remain pressured after the US maintained tariffs on the European aviation sector. Thyssenkrupp (-14.3%) shares tumbled at the open amid dismal numbers, whilst Wirecard (-13.8%) follows a close second after Deutsche Boerse has announced that subsequent to approving new rules in light of the Wirecard scandal, the new composition of the DAX will be published on August 19th, the review will see Wirecard removed from the index. Separate reports also noted that the Philippines government is mulling criminal charges for Wirecard executives forging travel data. Other earnings-related movers include RWE (+1.4%), Deutsche Wohnen (Unch), Lanxess (-1.1%), Swisscom (-0.3%) and Carlsberg (-4.8%).

Top European News

  • Zurich Insurance Sticks With Outlook as Virus Hits Profit
  • Sweden May Be Facing a Much Milder Recession Than First Feared
  • Wirecard’s Jan Marsalek Added to Interpol’s Most Wanted List

In FX, the Dollar remains depressed following another dead cat bounce and failure to reach 94.000 in index terms with the aid of firm US inflation data, and a retreat in Treasury yields amidst re-flattening across the curve is not helping the Greenback sustain gains as the DXY slips closer to the round number below. Meanwhile, bouts of risk-off trade due to the lack of progress on fiscal stimulus to replace maturing COVID-19 relief are fleeting and not providing the Buck any safe-haven sustenance, as 2nd wave concerns linger alongside global trade, diplomatic and geopolitical threats to the economic recovery. Ahead, initial claims will be monitored in context of the latter and recent signs that the re-opening return to employment is waning.

  • EUR/GBP/CHF/JPY – All benefiting at the expense of the Dollar, and technically in the case of the Euro as it builds a firmer base above the 200 HMA around 1.1800 eyeing 1.1850 next on the upside, while Sterling has recovered well from successive retreats towards 1.3000, albeit with Cable unable to reach 1.3100 again. Elsewhere, the Franc is probing 0.9100 and Yen has bounced a bit further from 107.00 to sit within a 106.92-57 range on the aforementioned less bearish UST yield/curve backdrop.
  • CAD/AUD/NZD – The Loonie has lost some impetus from crude, but meandering between 1.3256-26 parameters and the Aussie is holding above 0.7150 after better than expected jobs data, albeit mainly due to a jump in temporary workers keeping the overall unemployment rate relatively steady, but the Kiwi is lagging again following an attempt to revisit 0.6600 as the NZ pandemic resurgence continues and PM Ahern warns that the situation could get worse before slowing down again. Moreover, RBNZ Deputy Governor Bascand acknowledges a big risk to the outlook due to the growing cluster and a policy response in the event of an extended lockdown likely in the form of NIRP in tandem with a funding for lending facility.
  • SCANDI/EM – Some consolidation after recent volatile trade, and little reaction from the Nok or Sek to mixed Norwegian consumer sentiment, firmer Swedish 1-year CPIF expectations and NIER’s less recessionary 2020 GDP forecast. However, the Zar may respond to SA Gold and mining production as Eskom projects more load-shedding and the Brl has Brazilian services sector growth to digest.

In commodities, WTI September and Brent October futures eke modest gains after a flat APAC session, with prices on either side of 42.75/bbl and 45.50/bbl respectively. The IEA monthly report trimmed its 2020 demand growth forecast by 140k BPD, citing poor jet fuel demand, whilst also cutting the 2021 metric by 240k BPD. The report chimes more with the OPEC’s monthly report as opposed to the EIA’s STEO, as OPEC also trimmed its 2020 global demand forecast view in light of second wave fears, although IEA specifically mentioned poor jet fuel demand. The IEA and OPEC do however differ in their 2021 view as latter left its forecast unchanged. Elsewhere, Russian Energy Minister Novak pushed back against some speculation that OPEC+ could taper their cuts sooner than agreed on. Novak stated that there has not been any proposals to alter the OPEC+ deal and added the JMMC will not discuss changes to the OPEC+ deal this month when they meet on August 18th. Elsewhere, spot gold remains firmer within recent ranges having had found some interim support at USD 1925/oz, whilst spot silver remains somewhat capped by mild resistance near 26/oz. In terms of base metals, LME copper trades softer despite Shanghai September copper futures closing higher, as the former tracks European stock performance. Shanghai Stainless steel futures also saw a session of gains amid robust demand and recent slump in inventories.

US Event Calendar

  • 8:30am: Import Price Index MoM, est. 0.6%, prior 1.4%; Import Price Index YoY, est. -3.05%, prior -3.8%
  • 8:30am: Export Price Index MoM, est. 0.4%, prior 1.4%; Export Price Index YoY, prior -4.4%
  • 8:30am: Initial Jobless Claims, est. 1.1m, prior 1.19m; Continuing Claims, est. 15.8m, prior 16.1m
  • 9:45am: Bloomberg Consumer Comfort, prior 44.9

DB’s Jim Reid concludes the overnight wrap

Normal service appears to have resumed in markets again with the S&P 500 (+1.40%) doing its best to prove that Tuesday’s move was all but a small blip on its one-way ascent to new record highs. The index momentarily hit new highs yesterday but a move of just +0.18% or more today is all it will take to get it there on a closing basis now. Unlike previous days it was a rotation back into tech stocks which did most of the hard work yesterday, with the NASDAQ (+2.13%) recouping a decent chunk of the move lower in the three days into Tuesday.

To be honest there wasn’t a huge amount for markets to get stuck into. Democratic House Speaker Pelosi reiterated for the umpteenth time that the two sides were “miles apart” on some of the issues in stimulus talks – although markets once again turned a blind eye. Treasury Secretary Mnuchin reiterated the Republican offer of just over $1 trillion in stimulus, telling Fox Business Network that Democratic demands for higher spending could always be done later in the year or in January, and that “we don’t have to do everything at once.” Fed speakers also waded in, with Rosengren saying it would be very bad news it there isn’t additional stimulus. The bottom line is that the main negotiators haven’t spoken since Friday and it’s not clear when talks will resume.

Risk also survived a bumper US inflation print. In fact, the +0.6% mom core CPI reading was the largest monthly rise in almost 3 decades and was well above the +0.2% reading anticipated. In response, US 10-year breakevens rose to 1.666% (up to 1.684% overnight), putting them back at their mid-February levels before worries about the global spread of the pandemic gathered pace. The Treasury curve had already bear steepened prior to the data and in fact if anything, some of the wind was taken out of the sails with 10y yields ending just +3.4bps higher – a record 10y auction also being absorbed with ease – and the 2s10s curve +2.3bps higher at 51.2bps (it did touch 52.7bps at the intraday highs).

Meanwhile, the USD struggled with the Dollar index ending -0.20% (is down a further -0.21% overnight) while the Japanese Yen was the worst-performing G10 currency for a second day running. A host of dovish comments from Fed officials did little to help the Dollar’s case. Gold was one of the exceptions to this safe-haven selloff, seeing a modest recovery from its worst day in 7 years on Tuesday to move +0.21% higher, and silver was also up +2.90%. Gold and silver are building up on yesterday’s advances by being up +0.86% and +0.96% respectively this morning too. Elsewhere in the commodities sphere though, oil prices reached new post-pandemic highs, with Brent crude up +2.09% to reach $45.43/bbl.

In terms of Asia this morning, it’s been a more mixed trading session with Nikkei (+1.87%) leading the advance and the Kopsi (+0.80%) also up but the ASX (-0.76%) and Hang Seng (-0.12%) are down and the Shanghai Comp unchanged. Futures on the S&P 500 are also flat. The only data out this morning came from Japan where July PPI came in at -0.9% yoy (vs. -1.1% yoy expected).

As for the latest on the virus, overnight New Zealand saw another 13 new cases in its fresh outbreak while Singapore quarantined 800 migrant workers after a case was discovered in a dormitory that had been cleared. Meanwhile, in the US, new cases grew by 1.1% in the past 24 hours. Hospitalizations in Texas dropped to a six week low and in New Jersey, Governor Murphy gave the state’s public schools the option of all-remote classes.

Back to markets yesterday, where in Europe the STOXX 600 rallied +1.11% to post its fourth consecutive daily gain. European banks faded into the close but still finished up +0.31% with bonds selling off. Indeed yields on 10yr bunds (+2.9bps), OATs (+2.8bps) and gilts (+3.8bps) all moved higher. However, the tightening of peripheral spreads in Europe continued, with the spread of Italian (-1.3bps) and Spanish (-0.5bps) 10yr yields over bunds falling to their tightest level in almost 6 months.

In terms of other data yesterday, here in the UK, the economic impact of the pandemic was made clear by the Q2 GDP reading showing a -20.4% contraction, a number considerably worse than that already seen for the US, France, Germany and Italy. It was also the largest quarterly contraction since the series begins back in 1955, and comes off the back of a -2.2% decline in Q1. Looking forward however, the June GDP reading did show a month-on-month increase of +8.7%, stronger than the +8.0% reading expected, which continues the recovery from the trough back in April. Furthermore, as our UK economist Sanjay Raja writes (link here ), Q3 is poised for a strong recovery, with high frequency data showing a sizeable rebound in many industries.

The final data point yesterday came from Euro Area industrial production, which missed estimates with a +9.1% increase in June (vs. 10.3% expected). That said, the rebound from the nadir in April continued, with the year-on-year decline now “only” at -12.3%, a long way above the -28.6% yoy fall back in April.

To the day ahead now, and data highlights include the weekly initial jobless claims from the US along with the final July CPI reading from Germany. Fed speakers include Bostic and Brainard, while the Mexican central bank will also be deciding on rates.

via ZeroHedge News Tyler Durden