One of the most prominent Bitcoin narratives is that it is an asset not correlated with the going-ons of Wall Street, of the traditional world. Although this was seemingly the case for much of its earliest years, the past few years have seen macroeconomic and geopolitical trends affect the cryptocurrency market.
This was accentuated in March when there was a global liquidity event that saw investors in all markets rush to sell their assets for U.S. dollars.
On March 12th, stocks, commodities, Bitcoin, and even precious metals all fell in tandem, experiencing their worst trading days in years. That day has since been dubbed “Black Thursday.”
But, the effect that traditional finance has on Bitcoin could be a good thing, with the asset’s bull case recently getting a massive boost as calls for negative interest rates in the U.S. have mounted.
NEGATIVE INTEREST RATES IN THE U.S.?
Over the past few weeks, the economic situation around the world has trended worse and worse, despite the 35% rally in the S&P 500 and similar gains in other assets like Bitcoin and gold.
To combat these trends, the central banks and governments of the world have gone into overdrive, embarking on more fiscal and monetary stimulus than ever before in an attempt to save companies, save people, and ultimately save society. It’s a move that has had Bitcoin bulls buzzing.
In the past two months alone, the U.S. Federal Reserve has added over $2.3 trillion to its balance sheet, which is a 50% increase from its year-end balance for 2019. But it isn’t enough, analysts are saying.
Narayana Kocherlakota, an economist who served as president of the Federal Reserve Bank of Minneapolis in the six years after 2008, recently penned a Bloomberg article titled “The Fed Should Go Negative Next Week” outlining a case for the U.S. central bank to bring rates to the negative.
This was echoed by Alan Greenspan, a former Fed chairman, late last year.
Tyler Winklevoss, the co-founder of Gemini and a prominent Bitcoin bull, commented on Kocherlakota’s article with the tweet seen below, accentuating how he thinks this move would be unprecedented and potentially dangerous.
The idea goes that Bitcoin stands to benefit from this trend.
Unlike cash, which soon may require soon be expensive to hold due to negative interest rates, Bitcoin offers 0% yield and is a relatively deflationary currency due to the existence of halvings.
Furthermore, the idea goes that with negative interest rates, with increasingly bizarre monetary policy, comes the slow (but increasingly rapid) debasement of fiat currency, which should prove to be a benefit for a scarce and decentralized form of money like Bitcoin or gold.
Bank Of China Clients Lose Over $1 Billion During Oil Crash, Many End Up Owing The Bank Money
It’s not just investors in the largest US oil ETF, the USO, the suffered billions in losses last week after WTI plunged, its May contract settling at minus $37.63 on Monday: the shockwave from the crash in near-dated crude prices, which has forced the USO to halt for trading on several occasions as it scrambles to rebalance daily and purchase as many longer-dated futures as it possibly can to avoid another deliverable disaster and stay in business, has also wiped out countless Chinese investors, many of whom ended up owing money to the bank.
The latest Bank of China estimates for the carnage to retail investors from the collapse in a product linked to U.S. crude oil futures has surged 11-fold to more than 7 billion yuan ($1 billion) as it consolidated reports from its nationwide network, Bloomberg reported. The fourth largest Chinese bank’s estimate of losses to customers across China increased from just 600 million yuan in the middle of last week as more information was gathered from its over 10,000 outlets, said the sources. And since the number “isn’t final and subject to further changes as the lender examines the data from its branches”, the full loss will likely be even greater.
The losses stem from the bank settling May West Texas Intermediate contracts that underpinned its very inappropriately named “Crude Oil Treasure” (Yuan You Bao in Chinese) product on April 20 at minus $37.63 a barrel, leaving Bank of China customers caught in the middle of oil’s unprecedented collapse below zero, one which some had speculated could leave clients owing money to the bank. Hundreds of investor took to the Internet to protest the lender’s handling of the contract rollover and to demand it shoulder some of the losses.
Bank of China hasn’t disclosed the size or performance of “Crude Oil Treasure” since launching the product in January 2018, although it did suspend trading in the product on Tuesday after Monday’s historic rout. China’s biggest banks including China Construction Bank and Bank of Communications also halted sales of similar vehicles that had become a popular way for individuals to speculate on swings in oil.
More than 60,000 clients have invested in Bank of China’s product, Caixin reported, adding that investors have lost their margins of 4.2 billion and owed the bank a further 5.8 billion yuan. BoC said Wednesday that investors still need to settle their positions at the Monday WTI settlement price, and the bank has completed settlement of all May contracts. Over the next few days, more investors were likely settling their losses with some strategically disappearing and hoping they can leave the bank to foot the bill. As Caixin adds, one investor took a 9.2 million yuan ($1.3 million) loss on a 3.9 million yuan investment in the product, according to a document circulating online. The oil price slump left the investor owing 5.3 million yuan to the bank.
On Saturday, Bloomberg carried a vivid depiction of how some Chinese investors lost all their life savings in the blink of an eye investing in the “Crude Oil Treasure”:
26-year-old named A’Xiang Chen watched events unfold on her phone in stunned disbelief. A few weeks earlier, she and and her boyfriend had sunk their entire nest egg of about $10,000 into a product that the state-run Bank of China dubbed Yuan You Bao, or Crude Oil Treasure.
As the night wore on, A’Xiang began preparing to lose it all. At 10 p.m. in Shenzhen — 10 a.m. in New York — she checked her phone one last time before heading to bed. The price was now $11. Half their savings had been wiped out.
As the couple slept, the rout deepened. The price set new low after new low in rapid-fire succession: the lowest since the Asian financial crisis of the 1990s, the lowest since the oil crises of the 1970s, the first time ever below zero.
And then, in a 20-minute span that ranks among the most extraordinary in the history of financial markets, the price cratered to a level that few, if any, thought conceivable. Around the world, Saudi princes and Texan wildcatters and Russian oligarchs looked on with horror as the world’s most important commodity closed the trading day at a price of minus $37.63. That’s what you’d have to pay someone to take a barrel off your hands.
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“It was mind-bending,” said Keith Kelly, a managing director at the energy group of Compagnie Financiere Tradition SA, a leading broker. “Are you seeing what you think you’re seeing? Are your eyes playing tricks on you?”
For A’Xiang who bet enthusiastically on oil, waking up the next day meant a new world with no life savings. She awoke to a text at 6 a.m. from Bank of China informing her that not only had their savings been lost but that she and her boyfriend may actually owe money.
“When we saw the oil price start plunging, we were prepared that our money may be all gone,” she said. They hadn’t understood, she said, what they were getting into. “It didn’t occur to us that we had to pay attention to the overseas futures price and the whole concept of contract rolling.”
Yes, well, that’s what happens when retail investors, or rather “investors” get complacent in a centrally planned market where central banks have removed all risk… except when risk makes an ugly appearance.
Naturally investors – none of whom ever expected that oil prices could turn negative and end up owing the bank money for being long a security – were livid, But multiple bank traders told Caixin that the settlement date was set well in advance, so it wasn’t as if the bank had suddenly changed it. A bank trader said this was a situation where the “trading mechanism encountered an extreme situation in the extreme.”
Several traders and market participants told Caixin that some investors in the paper crude trading products were caught up in the price plunge because they tried to “buy on the dip” when crude prices dropped to $20 a barrel… without considering that prices could sink further into negative territory. As a result buyers ended up owing money to the bank.
Scientists Find More Evidence Novel Coronavirus Can Travel On Air Pollution Particles
Scientists are scrambling to find explanations for why the coronavirus outbreak in the Italian north was so much more pervasive and deadly than outbreaks in other parts of Europe, and even other parts of Italy. Some have proposed that Italy’s elderly population might have something to do with it – though Japan’s demographics are similar, and the outbreak in that country has been far less deadly.
Now, a team of researchers who have been studying air pollution levels in Italy’s Bergamo Province have found more evidence that the virus can travel on air pollution particles, the Guardian reports, which might offer some insight into the issue.
Leonardo Setti at the University of Bologna in Italy, who led the work, said it was important to investigate if the virus could be carried more widely by air pollution.
“I am a scientist and I am worried when I don’t know,” he said. “If we know, we can find a solution. But if we don’t know, we can only suffer the consequences.”
To be sure, while the scientists found evidence of viral genetic material on air particles, the research offers no insight on whether these particles can actually transmit the virus in a way that would allow it to infect other humans.
The Italian scientists used standard techniques to collect outdoor air pollution samples at one urban and one industrial site in Bergamo province and identified a gene highly specific to Covid-19 in multiple samples. The detection was confirmed by blind testing at an independent laboratory.
[…]
The potential role of air pollution particles is linked to the broader question of how the coronavirus is transmitted. Large virus-laden droplets from infected people’s coughs and sneezes fall to the ground within a metre or two. But much smaller droplets, less than 5 microns in diameter, can remain in the air for minutes to hours and travel further.
Experts are not sure whether these tiny airborne droplets can cause coronavirus infections, though they know the 2003 Sars coronavirus was spread in the air and that the new virus can remain viable for hours in tiny droplets.
But researchers say the importance of potential airborne transmission, and the possible boosting role of pollution particles, mean it must not be ruled out without evidence.
Setti isn’t the first researcher to find evidence that air pollution particles could enable the virus to travel further by essentially hitching a ride on the particles. According to the Guardian, two other research projects have arrived at similar findings.
A statistical analysis of the data by Setti suggests that higher levels of pollution might explain – or partly explain – the higher rates of infection in Northern Italy, which is more industrious, and struggles with higher levels of air pollution (it’s one of the most badly polluted areas in Europe). By contrast, the impoverished Italian south has an economy that’s more agrarian in its focus.
None of these studies have been peer reviewed – at least not yet. But a link between air pollution and infection levels is ever definitively proven, at least readers can find solace in the fact that the global economic shutdown has helped reduce air pollution levels around the world – at least for now.
Credit Acceptance Corp., the lender to car buyers with subprime credit scores, warned it’s seeing a sharp drop-off in payments as people shift their financial priorities to get through the coronavirus pandemic.
As unemployment soars, borrowers are putting off payments or “reallocating resources,” Credit Acceptance said in a regulatory filing Monday, explaining that it needs more time to publish a quarterly report.
New lending is also slowing as dealerships across the U.S. are forced to shutter their lots, the company said.
Ally Financial Inc. said on Monday that about 25% of its auto-loan customers have taken advantage of its payment-deferral program.
Forbearance Masks Problems
The filing by Credit Acceptance shows some consumers already can’t keep up.
Meanwhile, loan applications have plunged as dealers have closed their lots.
Archive Of Biden Accuser’s Mother Calling CNN Scrubbed From Google Play Catalog
An archived episode of CNN’s “Larry King Live” featuring a call from an anonymous caller later identified as the mother of Biden accuser Tara Reid appears to have been scrubbed from the Google Play catalog.
The August 11, 1993 broadcast is conspicuously missing from the catalog in between the August 10 and August 12 episodes, according to a screenshot taken by Twitter user @absinthol, who writes “CNN removed the August 11th, 1993 Larry King Episode from Google Play, the episode featuring a call from Tara Reade’s mother.”
“CNN is actively colluding with the Biden campaign to cover up evidence of Biden’s sexual assault,” the tweet continues.
CNN removed the August 11th, 1993 Larry King Episode from Google Play, the episode featuring a call from Tara Reade’s mother. CNN is actively colluding with the Biden campaign to cover up evidence of Biden’s sexual assault. pic.twitter.com/JqTcofIyqs
The Intercept broke the news that a transcript existed of the Aug. 11, 1993 broadcast, while Reade confirmed with Fox News that the woman on the call was in fact her mother, Jeanette Altimus.
“San Luis Obispo, California, hello,” King begins.
“Yes, hello. I’m wondering what a staffer would do besides go to the press in Washington? My daughter has just left there, after working for a prominent senator, and could not get through with her problems at all, and the only thing she could have done was go to the press, and she chose not to do it out of respect for him,” the caller says.
“In other words, she had a story to tell but, out of respect for the person she worked for, she didn’t tell it?” King inquires – to which the woman says “That’s true.”
And now, it appears we have yet another example of Silicon Valley and CNN bending over backwards to help a Democratic presidential candidate – even if it means tossing a woman’s credible allegation of sexual assault in the dumpster.
OPEC and its partners have been cutting production since September 2016. Between September and November 2016 they cut production by more than 1.7 million barrels a day, a historical cut that was wrongly prolonged throughout the expansionary phase of the global economy. In December 2018 they cut production again.
OPEC’s most serious mistake in recent years has been forgetting its mission and principles and trying to artificially inflate the price of oil. No oil-producing country lost money at 2016 prices, the only thing they could not afford was to pay huge subsidies, civil servants and non-oil expenses that many OPEC members finance with export earnings.
This strategic error led to two negative effects for producing countries:
On the one hand, supply diversification and technological substitution accelerated. Customers responded.
And, on the other hand, the market share of OPEC fell to almost a decade-low.
The subsequent fiscal and monetary effects turned a strategic error into a disaster. The vast majority of these countries entered into significant fiscal and trade deficits (twin deficits) and, in the absence of local and international demand for their domestic currency, the vast majority increased their US dollar-denominated debt. With falling exports and dollar revenues, now they face a massive dollar shortage in the middle of a demand collapse.
Those production cuts, moreover, worked as an unintended subsidy to United States producers. The short-term rise in the price of oil due to the supply cuts meant an unprecedented capital injection for the North American oil industry, which was going through very dire financial times. OPEC bailed out shale and lost market share. This led to the United States reaching an all-time production record, beating Saudi Arabia and Russia in daily production.
Additionally, between 2015 and 2019 we witnessed an expansion of credit and historical levels of the global money supply. From China to the European Union, credit expansion was encouraged in such a way that investments of dubious profitability were financed at historically low rates, excess capacity and questionable oil investments were kept zombified and the companies that should have gone bust were kept alive through constant refinancing. issuing high-risk debt at increasingly lower yields. A tsunami of idle capacity was brewing despite the previously mentioned production cuts. New debt issued by the oil sector to finance investments and operations reached 200 billion US dollars a year, according to the Wall Street Journal … And with very low yields.
The oil industry became one of the main areas of malinvestment in the years of massive liquidity and low yields. This perpetuated excess capacity and kept inefficient companies unnecessarily alive. OPEC cuts added another layer of support that ultimately came back to bite producer nations.
Before Covid-19, there were dangerous signs of a slowdown in the energy world. The IEA (International Energy Agency) already lowered demand growth estimates in 2019 and warned of the pace of weakening. In June 2019, the Oil Market Report lowered demand growth expectations to 1.2 million barrels a day, a cut in estimates that it had also made in May and April of the same year. Global oil inventories were comfortably at the average of the previous five years and oil stored on sea was beginning to rise worryingly for a world that was apparently growing steadily.
America’s storage problems were already evident years before the Covid-19 crisis. The United States has a historic problem with the storage and evacuation of oil. Cushing storage issues surfaced already in 2007. Back in 2007, a price crash on WTI (West Texas Intermediate) occurred when a Valero refinery in Texas was temporarily closed. Storage filled quickly and the reference price of crude oil collapsed. The United States has 91 million barrels of crude oil storage capacity in Oklahoma, but most refineries are a long distance away or in other states, and there is an evacuation problem that was not solved when some major pipeline projects were halted by government and judicial decisions.
The oil market was showing a small backwardation curve in mid-2019, reflecting a reasonably positive environment for the sector, yet idle capacity and weakening demand growth were already evident. Then, Covid-19 arrived and, with it, the forced closure of the economy.
All of these factors have been key to the perfect storm, which was generated in April 2020 when the May WTI crude oil contract price came to a negative price. Storage capacity collapsed with slumping demand, which in March and April fell in the United States to the lowest levels seen since 1995. According to Bloomberg, oil demand in the United States would drop more than 9 million barrels a day in April. 2020, erasing all the consumption growth of the decade. The collapse of the price of crude oil led to monster “margin calls” and an urgent fire sale when nobody wanted to buy and those who could execute the contract had no place to store it.
In the most international benchmark crude (Brent) the situation is similar but not as dramatic. The price has plummeted more than 70% in 2020.
Crude oil stored in tanks has soared in 2020 to 3.2 billion barrels, and to this must be added hundreds of ships floating in the world’s seas with crude oil. At least 160 million barrels in ports from Singapore to Suffolk.
Worldwide, there is an idle capacity to store crude oil of around 1.4 billion barrels, not much considering the speed at which demand is destroyed and a point has been reached where many producers have to continue delivering barrels because shutting down production is more expensive than maintaining it, and others need to generate any possible cash. Demand, according to the IEA, may drop by 9.3 million barrels a day in all of 2020, with a slump of 29 million barrels a day in April.
Supply will likely be cut in 2020 by about 12 million barrels a day, but it is not enough to mitigate the destruction of demand or the lack of storage capacity.
Many market participants are wrong when they think that bankruptcies in the oil sector will balance the market and limit supply. When a company goes bankrupt, the assets are absorbed by another more efficient and debt-free business.
Governments all over the world are going to bail out their so-called strategic sectors, and the energy complex stands at the forefront of these actions. Betting on creative destruction to curb overcapacity will be a mistake. Governments and central banks will bail out the entire malinvestment binge of the past decade and, more importantly, incentivize even more overcapacity through massive stimuli, liquidity injections, and negative rates.
The oil market was already weak in 2019. Now it faces a cataclysm. Producers will have to adapt, as always, by adjusting costs. Cutting production only disguises the problem in the short term and creates more problems later, as we explain in The Energy World Is Flat (Wiley).
The reason why the oil market is broken is because it was not a free market. It benefitted from direct and indirect subsidies to create overcapacity and excess supply, and it has become a consequence of the excess in monetary and fiscal policies. The energy sector has become the clearest example of a “too-big-to-fail” mistake. Unfortunately, malinvestment will be -again-rewarded, and the oil market is likely to remain as inefficient and bloated as the coal and alluminium ones.
There will be volatility. But the long-term value destruction of the sector, both from state-owned and private entities, will remain.
Small Businesses In Catch-22 Begin Revolt: ‘Defy State’s Stay-At-Home Order Or Face Collections’
As some states begin hesitantly reopening aspects of their economies, many small business owners find themselves in a Catch-22, as one Atlanta fitness studio operator who says he lost a family member to a likely coronavirus-related illness describes.
“I am in a Catch-22,” Ramese Long – who had only opened his gym in January of this year – lamented, saying“I am anxious to get open. However, rolling the dice medically, I don’t think is a good idea.”
States like Georgia, Colorado, Florida, Texas and a handful of others have stay-at-home orders expiring by end of this month, and have signaled that restrictions will begin to be rapidly lifted. Colorado, Minnesota and Montana are among those planning further to drastically ease social distancing guidelines. And Tennessee plans to go so far as to allow restaurants to welcome diners at 50% capacity starting Wednesday, according to Governor Bill Lee.
File image via CNBC
But as decision-making regarding freedom to open or close is set to be transferred back to the individual businesses, it’s unclear just how fast things will actually get back to normal.
“For small-business owners, it can come down to life-or-death decisions, for their firm, for their employees and for their customers,” Bloomberg writes. “The tasks at hand are concrete: how to rearrange a restaurant to allow for social distancing and where to buy noncontact infrared thermometers. While many owners are struggling to obtain financial aid and simply get by every day, they wrestle with daunting questions: Is my business model viable at half-capacity and will the customers come back?“
Yet other states, considered to have been more hard-hit by the pandemic such as New York, New Jersey, Oregon and Washington, have yet to suggest any level of a timetable as to when businesses might resume.
Some health officials are advancing models which call for state-wide lockdowns to continueall the way into late June and early July. Researchers behind a University of Washington model that’s now making waves say that no state should open their economies before May 1.
Getty Images
While some sit on the fence in terms of the health risks of welcoming clients and customers – or at least fearing they won’t come back over negative perceptions – others in more restrictive states have taken matters into their own hands.
For example, despite California hair salons and barbershops being ordered closed across the state since March, at least two are making local and national headlines for defying the order:
After more than a month without income, two business owners in Auburn have decided to defy that order and reopen their doors to customers anyway.
For Clip Cage owner Breann Curtis, it was either defy the state’s stay-at-home order or face collections.
“I have to do what I have to do. I’m fighting to provide for my children and myself and my family right now,” explained Curtis.
A local FOX affiliate describes that the hair salons have lost thousands in income as debts are mounting.
They’re forced into a ‘defy or die’ situation, where they’ve out of desperation opted to open while implementing a vigorous sanitization regimen:
“It’s been very hard. I’m pregnant. I have children at home,” said Curtis.
Closing shop in March meant she could no longer work to support her family, missing out on thousands of dollars in lost income.
She’s not the only salon owner who reached their breaking point.
Tisha Fernhoff runs the Beauty Bar Salon in the same Auburn shopping complex and also made the call to open her doors.
“How much longer am I supposed to go down the rabbit hole before I just throw in the towel and go back to work?” Fernhoff told FOX40.
Hair salons and barbershops across the state have been closed since March under the state’s stay-at-home order. https://t.co/4TjKdpfYYx
They say they were denied applications for the Paycheck Protection Program. Meanwhile it’s unclear whether they’ll suffer legal backlash from local authorities.
In many instances across the US, police have visited local business – especially ones where people come into close contact like hair and nail salons, or gyms and massage parlors – to order them closed.
But as some states reopen, it’ll be all the more temptation for many businesses still in neighboring restricted states to take the early initiative and defy state and local closure orders.
Harvard University law professor has called for a “presumptive ban” on homeschooling — claiming that the freedom to do so under our current laws is “authoritarian.”
“The issue is, do we think that parents should have 24/7, essentially authoritarian control over their children from ages zero to 18? I think that’s dangerous,” Elizabeth Bartholet said in an interview with Harvard Magazine.
“I think it’s always dangerous to put powerful people in charge of the powerless, and to give the powerful ones total authority.”
Bartholet stated that there is “an essentially unregulated regime in the area of homeschooling,” with “very few requirements that parents do anything.”
“[P]eople can homeschool who’ve never gone to school themselves, who don’t read or write themselves,” she said.
Bartholet also stated that homeschooling can make it easier for parents to get away with abusing their children and/or indoctrinating them with white supremacy and misogyny:
[I]t’s also important that children grow up exposed to community values, social values, democratic values, ideas about nondiscrimination and tolerance of other people’s viewpoints.
I do not, of course, want to minimize the absolute horror of child abuse. It’s disgusting; it’s heartbreaking; and anyone who isn’t a sociopath agrees that it’s necessary to protect our children.
Unfortunately, however, it’s also true that abuse is hardly something that can occur only in a child’s home. In fact, as Harvard grad and homeschooler Kerry McDonald pointed out in a letter to Harvard Magazine in response to its article, “many parents choose to homeschool their children to remove them from abuse at school, whether it’s widespread bullying by peers or, tragically, rampant abuse by teachers and school administrators themselves.”
“Banning homeschooling, or adding burdensome regulations on homeschooling families, who in many instances are fleeing a system of education that they find harmful to their children, are unnecessary attacks on law-abiding families,” McDonald continues.
What’s more, another of Bartholet’s suggestions — that the freedom to homeschool equals masses of children being painfully undereducated by illiterate parents — is as offensive as it is inaccurate. In fact, many, many children don’t simply receive an adequate education through homeschooling but an exemplary one that sets them up for greater success than any traditional school could have. As McDonald pointed out in her letter, although “there may always be outliers and more research is needed, most peer-reviewed studies on homeschooling outcomes find that homeschoolers generally outperform their schooled peers academically, and have positive life experiences.”
In any case, and even apart from all of this, Bartholet’s characterization of the freedom to homeschool as “authoritarian” is nothing short of absurd. A government allowing its citizens the freedom to educate their own children is not only not authoritarian, it is also the exact opposite of authoritarian. That’s a fact, and you don’t even need to know the first thing about homeschooling to understand that — really, you just need to know what the word means.
In terms of knowing about homeschooling, though, I can also say that I personally do know more than the average person.
I was homeschooled for fourth and fifth grade, and can confidently say that the two years I spent with my father as my teacher were responsible for countless positive outcomes in my life — ones that I wouldn’t have had otherwise. For example: Before I was homeschooled, I was struggling to learn math the way that the public school had been teaching it, and getting the chance to learn some fundamentals in a way that worked for my own particular brain was instrumental in making the subject much easier for me in the future.
But that wasn’t all. See, unlike math, I loved reading and writing. Those subjects had always come easily to me, and I enjoyed them. Homeschooling provided an advantage for me in this area, too. It allowed me to learn advanced aspects of grammar. I had the liberty to read works of literature that I wouldn’t have studied in a traditional school because they would have been “above” the designated level for my classroom. I wrote poetry and short stories about subjects of my own choosing. When I returned to public school in the sixth grade, the English lessons were things that I’d already learned — but fortunately, having had the opportunity to develop a love of writing and curiosity about books is something that kept me reading and writing what I wanted in my own time. Hell, I’m still doing it now.
Finally, it’s also patently ignorant how Bartholet aims to use the fact that children must be exposed to varying viewpoints and people while they’re growing up as some kind of argument against homeschooling. McDonald states that “research on homeschoolers finds that they are tightly connected with their larger community and may have more community involvement and participation in extracurricular and volunteer activities than schooled children due to their more flexible schedules and interaction with a wide assortment of community members,” and I’m not surprised. In fact, this was my experience exactly.
I mean, does Bartholet think not attending a traditional school somehow means that I never left the house at all? Because honestly, that couldn’t have been less true. I was quite active in my community, even participating in activities such as Girl Scouts with my friends from public school. I didn’t miss out on any of that.
In fact, I was actually exposed to far more experiences and perspectives specifically because I was homeschooled. I was able to act in community theater plays at multiple venues, interacting with all kinds of interesting people from various walks of life, without having to worry that a late-night dress rehearsal would make me too exhausted to learn in the morning because my schedule revolved around me. For the same reason, my family was able to take a random trip to New York City to see my father’s friend’s play — and within hours of arrival, I decided I was definitely going to move here when I grew up and work either on a stage, in front of a camera, or both. I had the luxury of learning from truly transformative, unique experiences, ones that I certainly wouldn’t have had if I’d been forced to spend that time square dancing in a gymnasium.
Harvard Magazine points out that “rapidly increasing” numbers of Americans are choosing to homeschool their children. (By “choosing,” by the way, I mean that this was true before coronavirus essentially forced this lifestyle on everyone.) Bartholet apparently sees this as some kind of tragedy that will lead to a future generation full of sexist Nazis who don’t know how to read, but this simply isn’t fair. No, homeschooling isn’t perfect for everyone, but it can and has worked uniquely well for many people, myself included. We shouldn’t be taking that option away, and certainly not in the name of stopping authoritarianism.
It isn’t hard to see how completely a**-backwards that “logic” is — after all, even a former homeschooler like me was able to figure it out.
New bull market? No. Unproven. New lows to come or a retest? No. Unproven.
Markets are engaged in a key battle between the worst evolving fundamental picture in our lifetimes on the one hand, and the largest set of liquidity injections in history. A looming $3.7 trillion deficit, a Fed balance sheets on a path to $10 trillion, zero rates as far as the eye can see and even calls for negative rates in the US with no plan or vision to ever extract ourselves from this future growth sapping venture. Record deficits, record debt, record unemployment are not a recipe for organic growth. Far from it. But let’s chase record liquidity injections.
The footprints of these liquidity injections can be found in the distortions in asset prices versus the fundamentals.
And this is what this market right now is all about, the three pillars: Fundamentals, liquidity and technicals.
Last week we saw a correction off of the key monthly 2oMA pivot (Just One Chart), this rejection produced a 170 handle correction on $ES, then more liquidity announcements on the side of the Fed on Thursday evening, and a new stimulus package by Congress to the tune of nearly half a trillion dollars and the correction was again saved, but has so far produced lower highs.
This is what it takes. Ever more intervention. But hopes for a structural quick recovery are misplaced. Recovery yes, but back to where we were? Hardly.
For a run down on the macro picture I encourage you to watch these two interviews belie if you haven’t seen them:
Firstly, my own take on things on the macro view via ABC in Australia this week:
Laugh with me at my buzzcut, cry with me at the reality of the situation we’re all confronted with.
Good conversation with @ElysseMorgan, thanks for having me on!
The liquidity injections can’t fix the economy, all they can do it goose asset prices above their fundamental worth.
Next week will be an important week in markets: A key new Fed meeting next week, what will they think of now? And of course we have month end with motivation to perhaps mark up stocks right in front of Sell in May? In addition, the big 5 mega cap tech stocks that have carried this entire market on the way up last year (and are again doing so now) will report earnings and speak to outlooks.
Be clear without these 5 stocks the entire index picture would look far worse than it now appears:
Be the massive divergence in equal weight vis-à-vis $SPX:
Or be it relative index performance (since the January 2018 highs):
The largest liquidity injections in history and 5 stocks only are masking the extent of the damage inflicted on markets. The bull market remains unproven. Bulls need to prove their case by getting above key resistance levels and then defend these areas as support. Without capturing these levels this rally here looks to follow the historic script of a bear market counter rally.
For the levels and this week’s macro and technical assessment please see the video below:
Please be sure to watch it in HD for clarity. To get notified of future videos feel free to subscribe to our YouTube Channel.
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Lindsey Graham Explains Why He’ll Be “Shocked” If North Korea’s Kim Isn’t Dead
The well-known hawkish Senator Lindsey Graham took to Fox over the weekend to explain he’ll be shocked if ongoing rumors and speculation about the death of North Korean dictator Kim Jong Un don’t turn out to be true.
Graham told Fox host Jeanine Pirro that international reports are so rampant at this point that Pyongyang would otherwise be forced to offer proof that he’s alive. Instead there’s been deafening silence.
“It’s a closed society. I haven’t heard anything directly, but I’ll be shocked if he’s not dead or in some incapacitated state because you don’t let rumors like this go forever or go unanswered in a closed society which is really a cult, not a country, called north Korea,” the senator said.
Via Daily Express
He concluded: “So I pretty well believe he is dead or incapacitated”.
He added that the people of North Korea “will get some relief” if Kim is indeed dead, and that it remains in such a case that President Trump “is willing to do business with North Korea in a win-win fashion”.
Lindsey Graham believes Kim Jong-un is dead or incapacitated. He calls North Korea a cult and hopes the next leader will work with the president pic.twitter.com/GgfyNMrNmD
“So if this guy is dead, I hope the guy who takes over will work with President Trump to make North Korea a better place for everybody,” the Republican Senator and Trump ally stated.
Graham, who chairs the Senate Judiciary Committee and sits on the Senate Foreign Relations Committee, made the comments late Saturday just two days following Trump saying in a Thursday press briefing he believed the early reports saying Kim died following a botched heart surgery were “incorrect”.
The rumor mill over the fate of Kim Jong Un has gone into overdrive, as the North Korean leader hasn’t been seen since April 11 – over two weeks ago.
And as the New York Times notes in a Sunday morning report, North Korea’s recent silence on Kim is indeed highly unusual, considering that rumors are flying that their leader is either dead or in a vegetative state, which has reportedly begun to send the local population in Pyongyang into a panic as international reports from outside the country seep back in.
