Tag: news

More Criminalization: “Harassment” and Stop-Talking-About-Plaintiff Injunctions

I’m continue to serialize my forthcoming UC Davis Law Review article What Cheap Speech Has Done: (Greater) Equality and Its Discontents; you can read the Introduction, but in this post I’m talking about how “cheap speech” has led to criminal remedies for the disclosure of private facts. Recall that the article is mostly descriptive, focusing on what’s happening, for better or worse.

[* * *]

Some courts are also issuing broad injunctions against “harassment” or “stalking,” often barring defendants from posting anything at all about plaintiffs. And these orders are often just responses to defendants’ repeatedly criticizing plaintiffs, even in the absence of defamation or true threats.

Let me offer three examples:

The poet: Linda Ellis wrote a poem called The Dash, about life and death. Many people found the poem moving, and posted it on their own webpages — only to draw letters from Ellis threatening copyright infringement lawsuits, and demanding payments of thousands of dollars as settlements. People began to criticize her in discussions on a site run by Matthew Chan, which had been set up to criticize allegedly excessive demands by copyright owners; there were eventually thousands of posts condemning her. Ellis then sued Chan and got an “antistalking” injunction, which ordered Chan to remove “all posts relating to Ms. Ellis” from the site — not just allegedly defamatory posts, not just allegedly threatening posts, but all posts.

The police officer: Patrick Neptune believed police officer Philip Lanoue cut him off in traffic, gave him an unjustifiable ticket, and then informed Neptune’s parents of the incident. Neptune responded by criticizing police officer Philip Lanoue on the site copblock.org, sending several letters to public officials, and sending three letters to Lanoue’s home address. Lanoue got a court order barring Neptune from, among other things, “posting anything on the Internet regarding the officer.”

The ex-girlfriend and successful video game developer: Zoë Quinn, a prominent video game developer, had a short romantic relationship with Eron Gjoni, also a video game programmer. After the relationship ended, Gjoni posted a webpage that condemned what he saw as Quinn’s emotional mistreatment of him. This led to a torrent of online criticism of Quinn by others, including some threats of violence, partly because Gjoni’s post was interpreted as suggesting that some of the favorable reviews of Quinn’s games were written by reviewers who were themselves romantically involved with Quinn. That in turn led to an ongoing debate between Quinn’s supporters and opponents — the Gamergate controversy, which is too long and complicated to detail here. But what is significant for our purposes is that Quinn got a court order forbidding Gjoni from “post[ing] any further information about [Quinn] or her personal life online or . . . encourag[ing] ‘hate mobs.'”

These are just a few examples out of many more that I can offer. Many appellate courts have rejected such orders as unconstitutional, though others have upheld them. I discuss elsewhere why I think the injunctions do violate the First Amendment.

Here, I just want to speculate about why courts are so willing to enter such extraordinarily broad orders. And the reason, I suspect, is connected to the democratized, cheap speech provided by the Internet.

Repeated criticism, even if it consists of opinions and accurate factual statements, is undoubtedly disquieting. It can damage reputation, often using claims that a judge may view as unfair, even though not libelous. That is especially so if the criticism becomes prominent in Google searches for one’s name, and defines one to strangers or casual acquaintances. And if the criticism gets more of a direct readership, for instance if it gets redistributed via Twitter or Facebook, it can lead to threats against the person being criticized, or even physical attacks.

Such criticism can be perceived as intruding on privacy by making its targets feel that they have become the object of others’ curiosity or amusement. The law does not generally treat that as actionable invasion of privacy (outside the narrow zone of the disclosure of private facts), but I suspect many people perceive it as an intrusion, and some judges may agree. The criticism, especially if repeated and seemingly obsessive, may make the targets feel vaguely menaced, even in the absence of constitutionally unprotected true threats of violence.

Now all of this, by itself, cannot save the injunctions from being invalidated on First Amendment grounds, and I think almost no judges would enjoin such speech in a newspaper. Yet for some reason, some judges are willing to enjoin such speech by individuals. Why?

I suspect this flows from three related reasons, both again connected to cheap speech and the democratization caused by the Internet.

[1.] Precisely because newspapers cost money to publish, and try to make money from subscribers or advertisers, they tend to be accountable to their readers and tend to publish what their readers want, in the style the readers want. That a newspaper is printing something itself indicates the likely value of the speech. Even a judge who found the speech loathsome or pointless might have thought twice about imposing his own views in preference to the views of editors and readers. Likewise, if an established political advocacy group thought some speech worth saying, that was evidence that the speech had value to public debate.

[2.] Newspaper speech can have many motives, but the most plausible ones tend to be public-regarding — a desire to inform the public, or to spread a particular perspective about the world. Perhaps a newspaper is just pandering to readers’ tastes, but even that means that they want to entertain or inform readers about something that many readers care about. It’s possible that newspaper writers are just trying to wreak private vengeance, or are irrationally obsessed. But it seems unlikely, especially since such motivations (at least if transparent enough) are likely to lead to market pushback from readers.

And the same is likely true for speech by advocacy groups: whatever a judge might think of their ideology, it seems likely that the speech was motivated by ideology. Even a judge who suspects that base motives are at play (e.g., that a rich publisher is trying to get revenge against a politician or business leader who had frustrated the publisher’s business plans) might be reluctant to enjoin such mainstream speech based on speculation about motive.

But once individuals can easily speak, without having to persuade any intermediary about the worth of their speech, judges are likely to see much more speech that seems pointless and ill-motivated. Motive turns out to be very important under many harassment or stalking statutes, which condemn speech that is said with “the intent to annoy” or with “no legitimate purpose.” Indeed, some courts have taken the view, in government employee speech cases, that speech motivated by purely personal motives is to be treated as on a matter of “private concern,” even when its content would suggest that it’s on a matter of public concern.

Of course, such individual speakers would likely take a different view of the value of the speech, and of their own motives. I suspect that they think they really do have valuable things to say, and that their motives are to inform the public.

Indeed, none of these cases, with the possible exception of Van Valkenburg v. Gjoni, involve speech that would likely have been seen as “purely on a matter of private concern” if it had been published in a newspaper or had been distributed by a political advocacy group. And even Gjoni’s speech, tied as it is to broader discussions of romantic relationships, alleged emotional abuse, and the like, may well be seen as on a matter of public concern — compare, for instance, Bonome v. Kaysen, where a woman’s published book that discussed the sexual details of a past relationship was seen as being enough on a matter of public concern to defeat a disclosure of private facts lawsuit. Explaining how one feels, and who made one feel that way, is an important part of telling the story of one’s life, whether in a memoir or on a blog post.

If I’m right, then some judges just aren’t trusting individual speakers in the newly democratized mass communications system to define what is worth talking about, and to talk about it without being second-guessed about their motivations. Media organizations and political organizations are given latitude to say even things that judges may view as unfair or cruel. But private speakers are sometimes given less latitude — and the judges think that threatening criminal punishment for violating an injunction is the necessary means for stopping such speech.

[3.] When a judge sees an individual defendant’s speech as a campaign of defamation — and indeed thinks that the defendant is obsessed with criticizing the plaintiff, perhaps to the point of irrationality — trying to forbid just defamatory statements may seem futile. The judge may suspect that any future criticism by the defendant of the plaintiff, or perhaps any speech at all about the plaintiff, would just degenerate into further defamation, and a prophylactic prohibition is needed to keep that from happening.

Indeed, remedies law sometimes allows injunctions that go further than the initial violation, even injunctions that forbid behavior that, absent the initial misdeed, would not be tortious. First Amendment law, I think, does not allow such preventative measures when they ban otherwise protected speech based on its content. But judges who view an individual defendant as a dangerous kook may react in ways that they wouldn’t when dealing with an established media outlet.

As I mentioned, I think that such a view is wrong, and that speech outside the traditional First Amendment exceptions (speech that isn’t, for instance, libel or true threats) should remain free even if judges think it’s worthless or ill-intentioned, without regard to the speaker’s identity. But I think these injunctions come about because judges see that everyone can now speak the way that established media and political organization have long spoken — and judges often don’t like it.

 

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Americans’ Lust To ‘Cancel’ One Another Should Spark Soul Searching

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After annoying some progressive activists years ago over a column I wrote about a property dispute between a predominantly Latino school district and one of its neighbors, I had to sit through a meeting where I was questioned about my ethnic sensitivity. It was a weird feeling given that my column covered land-use matters and not race or nationality. Fortunately, my critics were polite and the editors had my back. Life went on.

Nevertheless, the incident provided a “note to self” moment. Imagine what can happen to those who say or write something that’s too close to—or slightly over—the (ill-defined) line. I’ve published 200,000 words In recent years, canceling has become quite the phenomenon. It’s the result of our overly politicized culture where many people like to shame and destroy their enemies. Since it seems that we’re all now members of warring political tribes, there are plenty of enemies to go around. Social media platforms make that shaming process fast, fun, and easy.

Did you read about the 30-year-old executive who, before boarding a 2013 flight from New York to South Africa in 2013, sent out snarky tweets from the airport? She joked about a German with body odor, Brits with bad teeth, and then—to her regret—let loose an offensive tweet about AIDS and Africa. Despite having only 170 followers, the tweet went viral. Her career and reputation were ruined by the time the flight landed in Cape Town.

Last week, we learned that The New York Times ousted a top reporter, 45-year veteran Donald McNeil Jr., after 150 fellow employees demanded his firing. They learned that he had used the N-word while representing the newspaper during a 2019 trip to Peru. In his apology, McNeil explained that he was “asked at dinner by a student whether I thought a classmate of hers should have been suspended for a video she had made as a 12-year-old in which she used a racial slur.”

McNeil said he “asked if she had called someone else the slur or whether she was rapping or quoting a book title. In asking the question, I used the slur itself.” The Times took an unyielding approach. “We do not tolerate racist language regardless of intent,” the newspaper’s top editors said in explanation. No wonder so many normal, non-racist Americans are concerned about canceling.

Intent should always be a factor. Not that these incidents usually are judicial matters, but our legal system provides a guide. There are much stiffer penalties for those who plot an elaborate murder and for those who accidentally kill someone through recklessness or even by accident. If intent doesn’t matter and due process is denied, then we all better clam up, keep our heads down, and not look at anyone the wrong way.

Certainly, private companies are free to set their own standards. I’m legally allowed to spend my weekends speaking at neo-Nazi rallies, publicly praying for an Islamic state, or organizing the local chapter of the Communist Party, but my employer has every right to dismiss my “at will” contract after learning about any of those activities. (Note: Do not call the editor or “cancel” your subscription. That was only a joke.)

Many of us, however, feel frustrated by the inconsistent standards. The Times embraced “zero tolerance” with McNeil, but took a different approach in 2018 when it hired Sarah Jeong, who had used the hashtag #CancelWhitePeople. Among her many odd tweets: “Are white people genetically predisposed to burn faster in the sun, thus logically being only fit to live underground like groveling goblins?” I ponder the intent of that question.

What do we do? There are no simple answers, but we can embrace general guidelines. Canceling was designed to attack public figures. How about cutting non-public figures slack? Let’s recognize a statute of limitations. Saturday Night Live featured a hilarious skit about cancel warriors who doxed 5-year-olds for their insensitive words. It should make us think twice before ruining someone’s life because of a stupid teen-aged post.

Despite the Times‘ editors’ arguments, I think intentions matter. So do apologies. And how about recognizing that punishments ought to fit the transgression? People who incite online mobs ride a moral high horse. Let’s view them for what they really are: the online version of Mean Girls, who take perverse pleasure in humiliating others.

I’m not calling for policy or legal changes, but for Americans to do some soul-searching as they navigate a brave new social-media world where small mistakes can be telegraphed to millions. The bottom line: Let’s be more forgiving and embrace a broader culture of open dialogue.

This column was first published in The Orange County Register.

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Futures Rebound As Yields Stabilize, Overheating Fears Fade

Futures Rebound As Yields Stabilize, Overheating Fears Fade

US equity futures faded yesterday’s weakness and rebounded from overnight lows, as European stocks snapped their longest streak of losses since October as 10Y yields steadied and attention shifted to corporate earnings and economic data away from reflation fears.

Global shares edged up on Friday, reversing three days of losses, as investors clung to hopes of economic recovery ahead, even as German and British 10-year bond yields touched multi-month highs, spurred by bets of global reflation. Oil added to recent losses while the dollar slumped even as sentiment out of China remained muted after another day of liquidity drains from the PBOC.

The MSCI world equity benchmark was 0.2% stronger. On Thursday, Wall Street logged its biggest daily drop in nearly three weeks on a slide in technology-related firms, ahead of today’s PMI report. At 715 a.m. ET, Dow e-minis were up 52 points, or 0.172%, S&P 500 e-minis were up 13.5 points, or 0.35%, and Nasdaq 100 e-minis were up 57.25.75 points, or 0.42%. Some of the notable pre-market movers include:

  • Uber fell 2.3% after Britain’s Supreme Court ruled on Friday that a group of Uber drivers are entitled to worker rights such as the minimum wage.
  • Applied Materials rose 5.1% after it forecast second-quarter revenue above market expectations, as demand for its semiconductor manufacturing tools picked up during a global shortage of semiconductors.
  • Roku added 3.8% after it reported quarterly revenue above market expectations, thanks to an influx

Amid strong earnings, progress in vaccination roll-outs and hopes of a $1.9 trillion federal stimulus package, U.S. stock indexes hit record highs at the start of the week but since slumped as fears that surging 10Y yields could lead to a drop in appetite for high duration stocks and hammer stocks if the plunge in 10Ys extended to 1.50% (according to Nomura). Late on Thursday, JPM strategists wrote that the “S&P is -53bps WTD but some of the client conversations seem to indicate a bit more panic than is warranted, potentially induced by the bond market moves this week.” As a result of this “panic”, the Dow was nearly flat for the week, while the benchmark S&P 500 and the tech-heavy Nasdaq were tracking their first weekly loss this month.

Concerns over higher stock market valuations and a potential snag in inoculation efforts have led to fears of a short-term pullback in equities. As noted last week, BofA expects a more than 10% pullback in stocks which are trading at more than 22 times 12-month forward earnings, the most expensive since the dotcom bubble of the late 1990s.

“It’s kind of odd to think that only a year ago investors were worried about depression and deflation and now they are worried about overheating and inflation,” said Shane Oliver, an economist for AMP.

“The big-picture backdrop of still-low underlying inflation and spare capacity in jobs markets, combined with economic and profit recovery and low interest rates, is a positive one for growth assets, particularly shares,” he said.

Stocks in Europe snapped their longest streak of losses since October with the Stoxx 600 index fluctuating before heading higher for the first time in four days. The Eurostoxx 50 rose 0.5% with France’s CAC the marginal outperformer as miners, travel and insurance names rose while healthcare and media are soft. The energy and utilities sub-indexes are the two worst performers in the Stoxx 600 benchmark on a drag from renewable-energy names. The Energy index was down as much as 1.5%, utilities index down as much as 1.1% Solar firm Scatec and wind-turbine maker Vestas among the biggest fallers in the energy index, after Credit Suisse analyst Mark Freshney said in a Feb. 18 note that Vestas now trading close to the broker’s blue-sky valuation on the stock; remains at underperform on valuation grounds. Here are some of the biggest European movers today:

  • Hermes shares surge as much as 8.9% to a record high after the luxury group delivered what Bernstein said was an “outstanding” result given the tough year the luxury sector had.
  • Danone shares gain as much as 4.6%, hitting the highest since September 16, amid expectations of changes to come at the French yogurt maker after CEO and Chairman Emmanuel Faber said the potential split of his role may become a topic in the future and that the group may divest assets.
  • Moncler shares rise as much as 7.6%, hitting a record, with analysts saying the Italian luxury outdoor clothing maker delivered a strong end to 2020 and its full-year results were “significantly” above expectations.
  • BE Semiconductor shares jump as much as 8.7%, the most since April 30, with analysts at Kempen highlighting “blowout” guidance from the chip-equipment maker. Other chip stocks also gain, boosted by readacross from the strong results and outlook from U.S. bellwether Applied Materials.
  • Kingspan shares rise as much as 10% as Jefferies said it expects low-single-digit consensus upgrades for the Irish insulation supplier following a small beat on its FY results.
  • Sinch shares gain as much as 8.8% after analysts raised their price targets on the cloud communication software firm following this week’s deal to buy Inteliquent, which Handelsbanken says looks like a great match.
  • Copper miners continue to rally in line with the metal with Goldman Sachs warning that a “historic” shortage is on the horizon. Poland’s KGHM and Chile-focused Antofagasta are among the top gainers.
  • Renault shares slump as much as 8.5%, the most since July 30, after the carmaker posted a wider net loss than expected, with Jefferies highlighting the impact a global semiconductor shortage may have on the automaker.

The euro strengthened after Germany’s manufacturing PMI climbed more than forecast in February, though composite figures for the common-currency region were less encouraging. The German composite PMI increased by 0.5pt to 51.3 in February, above expectations for a small decline. The lockdown restrictions remained in place through February and have been extended recently (with non-essential shops closed until at least March 7). The composite improvement reflected divergent changes across sectors, with stronger manufacturing output (+3.2pt to 62.2) more than offsetting a weaker services PMI (-0.9 to 45.9). The headline manufacturing PMI was further supported by another lengthening of suppliers’ delivery times (which reached a record high[1] of 80), with reports of raw material (often steel) shortages and squeezed transport capacity.

Earlier in the session, Asian stocks dropped for a second day, led by a group of energy names as oil prices slid on the restart of production in Texas. Australia’s S&P/ASX 200 led declines among national benchmarks, pulled lower by commodities-related shares including BHP and Rio Tinto. While energy was the worst-performing sector in the region, chipmaker TSMC was the biggest drag on the MSCI Asia Pacific Index. The benchmark was set for its first weekly drop of the month. The regional gauge pared a decline of as much as 1% to 0.2% in late-afternoon trading, as Chinese and South Korean shares erased earlier losses

Over in Japan, markets also fell, with the Topix capping its first weekly drop since January, as automakers and railways declined. Service-sector firms were also among the biggest contributors to the benchmark’s drop. Automakers fell as production was hampered in Mexico by the shortage of natural gas and in Japan by last weekend’s earthquake. The Nikkei 225 retreated but managed to stay above the 30,000 level it regained earlier this week for the first time since 1990. Semiconductor supply-chain stocks rose after U.S. peer Applied Materials forecast revenue that exceeded analyst estimates.

“It looks like the Nikkei 225 is trying to consolidate its moves around the 30,000 level. There’s a lot of investors, domestically, who continue to hold a bullish view on Japanese equities,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. “The fall in U.S. equities against the backdrop of rising yields, is weighing on the market for now.”

India’s stock benchmark fell for a fourth day, capping its worst day in three weeks, as investors sold off equities after the gauge reached a record Monday. The S&P BSE Sensex slipped 0.9% to 50,889.76 at the close, completing its worst week this month. The NSE Nifty 50 Index dropped 0.9%, also down for the week. “The market is in an overbought scenario, and whenever this happens, a four-to-nine-day drop is possible. But I don’t see much downside,” said Vishal Wagh, head of research at Bonanza Portfolio Ltd. “This is just the market at its normal correction, which was overdue after a significant rally post-budget.”

Late on Thursday, Janet Yellen reiterated that the benefits of stimulus will outweigh the costs and she hopes to see progress on the bill in the next two weeks, while she added the Fed has the tools to deal with inflation and she wants to make sure stimulus checks are appropriately targeted. Yellen also stated that details of the infrastructure plan have not yet been provided but noted a tax increase would likely be used to pay for part of Biden’s infrastructure package which will be proposed later this year and suggested that the US could return to full employment by next year.

In rates, the 10Y reversed and traded lower after buying in the Asian turned to selling; the 10Y yield was 2bps wider last seen at 1.31%. Japan’s 10-year sovereign bond yield rose to the highest in more than two years Friday, intensifying speculation about the central bank’s next move at an upcoming review.

In FX, the Bloomberg Dollar Spot Index fell a second day as the greenback weakened against all of its Group-of-10 peers. The pound shrugged of data showing that U.K. retail sales fell more than twice as fast as expected in January and surged through $1.40 for the first time in nearly three years as expectations for negative rates faded; Gilts bear steepened, underperforming bunds as pricing for easier monetary policy continued to be unwound. Australia’s dollar climbed against all its Group-of-10 peers after influential Westpac Banking Corp. economist Bill Evans boosted his forecast for the nation’s 10- year bond yield.  The euro strengthened after Germany’s manufacturing PMI climbed more than forecast in February, though composite figures for the common-currency region were less encouraging.

In commodities, oil dropped below $60 a barrel as wells slowly restarted in Texas after being hit by a big freeze. The White House said it would be willing to meet with Iran, potentially paving the way for more crude exports from the Persian Gulf nation.

LME copper rallies over 2% to outperform what is a well bid base metals complex. Elsewhere, gold dropped to a seven-month low on Friday, and futures also declined, deepening gold’s worst start to a year in three decades as it fell through a support level that analysts say could portend further losses. Bitcoin had no such concerns as it continued to rise to new all time highs, trading just shy of $53,000.

Looking at the day ahead now, the highlight will be latest flash PMIs from the US. On top of this, we’ll get January data on UK retail sales, German PPI and US existing home sales. From central banks, we’ll hear from the Fed’s Barkin and Rosengren.

Market Snapshot

  • S&P 500 futures up 0.3% to 3,919.75
  • SXXP Index up 0.3% to 413.84
  • MXAP little changed at 218.13
  • MXAPJ little changed at 734.81
  • Nikkei down 0.7% to 30,017.92
  • Topix down 0.7% to 1,928.95
  • Hang Seng Index up 0.2% to 30,644.73
  • Shanghai Composite up 0.6% to 3,696.17
  • Sensex down 1.1% to 50,774.33
  • Australia S&P/ASX 200 down 1.3% to 6,793.79
  • Kospi up 0.7% to 3,107.62
  • Brent futures down 0.7% to $63.49/bbl
  • Gold spot down 0.1% to $1,774.27
  • U.S. Dollar Index down 0.3% to 90.28
  • German 10Y yield up 2 bps to -0.33%
  • Euro up 0.4% to $1.2137

Top Overnight News from Bloomberg

  • The euro should now play a bigger role at the international level and this should be a priority for the euro zone member countries, Bank of France governor Francois Villeroy de Galhau says in an interview with French business daily Les Echos published on Friday
  • Business activity in the euro-area economy shrank for a fourth month in February as services struggled with continued lockdowns and factories ran into increasing supply constraints. A composite gauge for both sectors stood at 48.1, slightly higher than in January but still below the 50 mark that separates expansion from contraction. Services deteriorated at the fastest pace since November, while manufacturing output rose the most in four months
  • Markit said its composite U.K. Purchasing Managers Index rose to 49.8 in February, well above the 42.6 forecast by economists. It’s still below the critical 50 mark that signals expansion. A gauge of services activity climbed to 49.7, while manufacturing rose to 54.9
  • Bitcoin is closing in on a market value of $1 trillion, a surge that’s helping cryptocurrency returns far outstrip the performance of more traditional assets like stocks and gold
  • The pandemic is still making developments uncertain, and the need for expansionary monetary policy and low interest rates will remain for a long time, Sweden’s Riksbank says in minutes from its Feb. 9 meeting

A quick look at global markets courtesy of Newsquawk

Asian equity markets traded initially negatively, though China did pick-up towards the close, following a weak handover from Wall St where major indices declined as markets remained in consolidation mode following discouraging releases. ASX 200 (-1.3%) was dragged lower by underperformance in the commodity-related stocks, especially energy names due to the pullback in oil prices and after Woodside Petroleum was forced to delay talks to sell LNG to China amid ongoing trade frictions, with a miss on Retail Sales adding to the glum mood. Nikkei 225 (-0.7%) retreated beneath the 30k level with large automakers suffering from recent disruptions due to chip supply issues and Toyota also warned its Mexico operations will be impacted by a natgas shortage. Hang Seng (+0.2%) and Shanghai Comp. (+0.6%) were initially uninspired before posting mild gains. Baby-related stocks were underpinned by reports China is considering lifting birth restrictions in the northeast part of the country. The PBoC continued with its liquidity drains and Chinese press reports stated that the central bank may keep its open market operations at a limited scale, although PBoC-affiliated media suggested not to mistake the recent liquidity withdrawal as a policy signal. Finally, 10yr JGBs were subdued after failing to benefit from the widespread risk aversion and despite the presence of the BoJ in the market for nearly JPY 1.2tln of JGBs in 1yr-10yr maturities, while the 10yr JGB yield hovered around 0.10% to reach its highest since November 2018.

Top Asian News

  • Myanmar Protester Shot in Head Dies, First Death Since Coup
  • Honda Appoints Japan R&D Chief Toshihiro Mibe as New CEO
  • China Gives New Details of Deadliest India Clash in Decades
  • Distressed Japan Hotel Chain Unizo Sparks Hedge Fund Battle

European stocks opened the last session of the week with a firmer footing evident across the board (Euro Stoxx 50 +0.5%) following a mixed/softer APAC lead. Meanwhile, US equity futures are trading with mild upside as the RTY outpacing peers and perhaps provides some weight to the reflationary narrative. Back to Europe, bourses did trade mixed during the early cash hours, although the region was lifted into positive territory following the release of regional Flash PMI figures. The FTSE 100 (unch) felt early pressure due to the firm up of the Pound as GBP/USD eclipsed 1.4000 to the upside, with mass vaccination a potential driving force. The UK benchmark then staged a brief recovery following blockbuster UK PMI figures which topped forecasts on all fronts, although the Sterling strength took the helm again. Moving on, sectors in Europe opened predominantly in the green but are currently trading mixed with no indicative risk bias. The Personal & Household goods (+0.7%) sector is an outperformer due to Moncler (+6.8%) and Hermes (+5.5%) reporting stellar earnings. Banking (+0.3%) opened firmer amid higher yields and NatWest (+1.0%) has seen morning gains despite underwhelming earnings metrics as the Co. looks to resumed payments. Oil & Gas (-0.6%) is the laggard which is in-fitting with WTI and Brent price action. On to individual movers, Leonardo (+7.7%) is gaining after reports the Co. is set to raise over EUR 2bln from the listing of its US unit DRS. Porsche (+3.0%) is seeing further upside after yesterday’s news of the potential IPO which would in turn boost VW’s market cap. Sticking with the auto sector, Renault (-5.5%) is dented after they reported sub-par earnings whilst announcing they will not pay a 2020 dividend and warning that the chip shortage is likely to impact 100k vehicles for the year and will likely reach a peak in Q2. The chip shortage news could result in a follow through action for other Autos and be used as a gauge of what is expected by auto-makers going forward. Other notable earnings include Allianz (+1.3%) and Swiss Re (+0.4%).

Top European News

  • U.K. Retail Sales Plunge More Than Expected in January Lockdown
  • Sunak Delays Consideration of U.K. Online Sales Tax to the Fall
  • Danone CEO Faces Mounting Pressure Amid Tough Start to 2021
  • Eni Reports Surprise Quarterly Profit With Recovery in Crude

In FX, a strong end to the week for the Antipodean Dollars and considerably firmer rebounds from lows vs their US counterpart, as Aud/Usd takes a firmer grasp of the 0.7800 handle and Nzd/Usd tags along. The Aussie has shrugged aside somewhat disappointing preliminary consumption figures for January amidst a spike in bond yields, partly in catch up trade, but also on the back of Westpac lifting its 10 year cash rate forecast for end 2021 to 1.9% from 1.5% and a tad more than the US Treasury equivalent to widen the differential marginally (latter now seen at 1.8% vs 1.5% previously). Meanwhile, the Kiwi has revisited 0.7265+ w-t-d peaks by virtue of the fact that the Aud/Nzd cross remains capped below 1.0800 more than anything NZ specific although the output component of Q4 PPI rose 0.4% from -0.3% in the prior quarter.

  • EUR/JPY/DXY – The Euro has also taken advantage of EGB/UST yield divergence, though unlike the Aussie Eur/Usd has extended gains beyond 1.2100 to around 1.2140 with assistance from flash Eurozone PMIs showing ongoing strength in manufacturing to more than offset services sector underperformance. Similarly, the Yen is putting the squeeze on Greenback as the index retreats further from 91.000 through the 21 DMA (90.662), 90.500 and the 50 DMA (90.378) to 90.243, with Usd/Jpy back below 105.50 and the 21 DMA (105.48) in wake of fractionally firmer expected Japanese CPI.
  • CHF/CAD/GBP – Also firmer vs the Buck, as the Franc pivots 0.8950, Loonie hovers around 1.2650 awaiting Canadian retail sales and Pound probes barrier defences at 1.4000 following significant beats in UK PMIs, including services that were so ravaged by the return to lockdown last time. On that note, ONS retail sales data was extremely weak in contrast to public finances, but neither impacted that much.
  • SCANDI/EM/PM – Dovish-leaning Riksbank minutes have not derailed the Sek from its 10.0500 axis against the Eur, but retreating oil prices amidst efforts to restore US crude output after weather enforced shutdowns are undermining the Nok circa 10.2400 in cross terms, Rub and Mxn to varying degrees. However, precious metals are reeling again and cryptos continue to rally, with Gold tripping some stops sub-key support around Usd 1765/oz and Bitcoin posting yet another ATH close to Usd 53k.

In commodities, WTI and Brent Apr’21 futures continue to post losses with the former extending losses below USD 60/bbl (vs high USD 60.16/bbl) whilst the latter dips below USD 63.50/bbl (vs high 63.62/bbl). The complex has waned off lows as the broader risk sentiment picked up following the EZ and UK flash PMI data, although oil prices remain pressured amid some supply-side developments – as the complex carries on unwinding the Texas deep-freeze premium with the oil patch is slowly restarting wells – reflected in the steeper losses in WTI vs Brent. Some geopolitical premium is also potentially unravelling amid reports the Biden admin is willing to negotiate with Iran, with an interim agreement mulled in a bid to build confidence on both sides. Expanding on the first point, Texas produced some 4.6mln BPD of oil according to the latest EIA data, whereby a bulk was shuttered throughout the week. However, as the deep-freeze in the region abates and power is restored, the question now turns to how swiftly operations can fully resume. Oil traders, alongside executives, hope for production to be re-available within days, although warned that a small number may remain shut for longer due to repairs – with the actual timeframe for full restoration still up in the air. Elaborating on the geopolitical factor, markets have been flirting with the prospect of Iranian oil returning to the market amid hopes US will lift some sanctions against the country. Cold water was poured on this earlier in the month after President Biden firmly suggested he will not lift sanctions to get Iran to the negotiating table with regards to its nuclear activity. However, reports overnight via Politico suggested scope for a new deal between the countries, with an interim deal touted as an option to ease tensions between the sides. “A broader deal could possibly include non-nuclear aspects, such as limits on Iran’s ballistic missile program, and have provisions that last longer than the original deal or are permanent”, the report said. This development raises the possibility of Iranian oil returning to the market, albeit it’ll then have to tackle the OPEC+ hurdle in relation to the output cut quotas – likely to be a topic to touch upon in the upcoming JMMC and OPEC+ meetings on Mar 3rd and 4th respectively. Meanwhile, the demand backdrop remains constructive with reports also suggesting that vaccines appear to lower COVID-19 infections and transmissions by 2/3, according to data from Public Health England (set to be published later this month), as disclosed by The Telegraph in which it labels the study as the first to use “real world data”. Elsewhere precious metals are mixed with spot gold resuming its real-yield-driven downside after yesterday testing support at around USD 1,764/oz, whilst the technical “death cross” confirmation earlier in the weak flagged a bearish signal. Spot silver meanwhile is firmer as a function of the softer Dollar. Turning to base metals, Dalian iron ore futures fell overnight amid a significant increase in post-Lunar New Year inventories. Meanwhile, LME copper rallied past USD 8,700/oz on rosy demand prospects, the softer Buck, and mild recovery in stocks. On this note, analysts at GS raised their 3/6/12M copper targets to USD 9,200/t, USD 9,800/t, and USD 10,500/t respectively (from USD 8,500/t, UDF 9,000/t, and USD 10,000/t previously).

US Event Calendar

  • 9:45am: Feb. Markit US Composite PMI, prior 58.7
  • 9:45am: Feb. Markit US Services PMI, est. 58.0, prior 58.3
  • 9:45am: Feb. Markit US Manufacturing PMI, est. 58.8, prior 59.2
  • 10am: Jan. Existing Home Sales MoM, est. -2.4%, prior 0.7%

DB’s Jim Reid concludes the overnight wrap

It’s complicated. No, not my relationship status on Facebook from the noughties but financial markets this year. As regular readers will be aware I think the forces that will be unleashed on markets this year will be too big to see perfect calibration. So a much more complicated and higher vol environment than many believe. Ironically the smoothest period will likely be when we’re mostly locked down as we will be for several weeks/a few months longer. After that it gets more interesting with likely very strong growth, inflationary concerns mounting (whether realised or not), and bubbles being more vulnerable to burst. As I mentioned yesterday, I think this week might be a mini dress rehearsal with the spike in yields. Indeed yesterday global equities resumed their decline as concerns continued to rise among investors that higher sovereign bond yields could call a halt on the recent strong rally in risk assets. Indeed, both the S&P 500 (-0.44%) and Europe’s STOXX 600 (-0.82%) lost ground for a 3rd day running, which is the first time that’s happened for either index this year. It was the lowest closing level for the S&P in just over a week, with both higher bond yields (especially real yields yesterday) as well as weak economic data putting pressure on valuations.

In terms of the specifics, tech stocks led the declines once again, with the NASDAQ losing a further -0.72% and the NSYE FANG+ index seeing an even larger -1.07% decline, which marks the biggest 2-day decline for the index (-2.54%) since the end of January. Meanwhile Walmart (-6.48%) had its worst day since March last year after the company said that net sales and earnings per share were both expected to decline in FY22. As mentioned, matters weren’t helped by weaker-than-expected data from the US, where the weekly initial jobless claims for the week through February 13 hit a 4-week high of 861k (vs. 773k expected), and the previous week’s reading was also revised up by +55k. The weekly frequency of this reading means it’s one of the timeliest indicators we get on the state of the economy, and the 4-week moving average has now been stuck between 814k and 857k since mid-December, which raises questions as to the speed of the recovery in the labour market. On top of this, Oil prices reversed after hitting their highest levels in more than a year as the disruption to oil refineries in Texas remains the dominant story. WTI fell -1.01% and Brent retreated -1.35% on the day – the largest one day decline since January 15 for both crude futures. WTI (-1.39%) and Brent (-1.14%) are again trading lower this morning as Texas shale oil production has started to slowly comeback online. Oil prices are also being weighed down by news that the White House is willing to talk to Iran to discuss a “diplomatic way forward” in efforts to return to the nuclear deal, a move which could potentially lead to more crude exports from the nation.

Back to bond yields and the selloff resumed yesterday even though there was a swift turn in US rates just before the European session closed. Yields on 10yr Treasuries were up as much as +4.6bps to 1.316% before coming back in and settling +2.5bps higher on the day at 1.296%. Notably, it was higher real yields rather than inflation expectations which drove the moves, with yields on inflation-protected US debt climbing +6.9bps to move above -0.90% for the first time since November. In contrast 10yr breakevens actually fell -4.5bps to 2.17% – the biggest one day drop since the end of January. It was much the same story in Europe, where a similarly sharp rise in real yields sent bond yields higher, with those on 10yr bunds up +2.2bps at -0.35%, their highest level since June last year, and real yields up +2.2bps to their highest level since November too.

Overnight, Asian markets have taken Wall Street’s lead with the Nikkei (-0.82%), Hang Seng (-0.67%), Shanghai Comp (-0.03), CSI (-0.30%) and Kospi (-0.16%) all trading lower. Futures on the S&P are down -0.21%. In keeping with the theme of rising yields, those on 10yr JGBs have also moved up by +1bp this morning to 0.1%, the highest level since 2018.

Speaking of real yields, the release of the ECB minutes yesterday actually touched on this issue, with Isabel Schnabel’s review of financial markets mentioning that “stock prices could eventually become vulnerable to a rise in real yields globally.” So an indication that policymakers are paying attention to this risk, not least given higher real yields would also threaten the inflation outlook. Another notable line from the minutes was that “it was argued that the fast rebound in growth foreseen in the December staff projections might be too optimistic, with growth in the second quarter of 2021 possibly at risk from extended lockdowns.” So it’ll be very interesting to see how the growth and inflation forecasts are revised in March to take account of this given the extended lockdowns seen in numerous countries.

Staying on Europe, Mario Draghi’s new government in Italy resoundingly won a confidence vote in the lower house yesterday by a 535-56 vote, which comes on the heels of the big victory in the Senate the previous day. However, a notable consequence of the vote has been a split in the Five Star Movement, from which 15 senators were expelled yesterday following their vote against the government. The decision to back Draghi has been contentious in the party given its roots as an anti-establishment force, but a 59% majority of its members voted to support the Draghi government in an online vote last week.

Today’s main highlight for markets will be the release of the flash PMIs from around the world, which will give us an initial indication of how the global economy has been faring into February. Overnight we’ve already had the releases from Japan and Australia, which showed Japan’s manufacturing reading climbing back above 50 to 50.6 (vs. 49.8 last month) despite the extension of a state of emergency in most prefectures including Tokyo. Japan’s services PMI was a touch softer at 45.8 (vs. 46.1 last month). Australia’s manufacturing (at 56.6 vs. 57.2 last month) and services (54.1 vs. 55.6) PMI both printed a bit softer.

Later this morning we’ll get the releases from Europe, where the consensus expectations are pointing towards little change on last month, when the Euro Area composite PMI remained in contractionary territory at 47.8. According to our European economists, based on the historic relationship between mobility and the PMIs, we’re unlikely to see any big changes given that the mobility readings have been pretty flat since the start of the year. It’ll be interesting to keep an eye out on the US later too, since last month their composite PMI (58.7) rose to its highest level since March 2015.

Turning to the pandemic, there were concerning signs that the weather disruption in the US was slowing down the pace of vacinations. Florida Governor DeSantis said that the shipment from Moderna would arrive late, while NYC Mayor de Blasio said that 30-35k appointments had to be held back. Massachusetts announced that they could send the National Guard to receive vaccine shots if the weather continues to disrupt supply chains. In more positive vaccine news out of the US, Bloomberg estimated that the US vaccine supply is expected to double by March. Given statements from Pfizer, Moderna, Johnson & Johnson executives and government officials vaccine supply could rise from 10-15 million per week currently to 20 million in March and 25 million in April and over 30 million in the following months. Elsewhere, in the UK, it was announced that the Northern Ireland lockdown would be extended until April 1, although children aged 4-7 would return to school on March 8. Cases have continued to fall across the UK, with the 7-day average now down to 12,084, the lowest since early October.

Overnight, the UK has said that it will share the “majority” of any future surplus coronavirus vaccines with the Covax program while Novavax has said that it will supply the program with 1.1bn doses. Novavax shares were up +7% in post market trading on the news. President Biden has also pledged that the US will contribute $4bn to Covax and France has said that it will donate 5% of its secured doses to the WHO initiative which aims to distribute vaccines to lower income countries. Meanwhile, reaffirming the high efficacy of a single shot of Pfizer/ BioNTech, the Lancet medical journal published a study overnight that said among health-care workers who received the vaccine, symptomatic infections were reduced by 85% in the 15 to 28 days after the first dose, compared with those who didn’t get a shot.

Looking at yesterday’s other data releases, US housing starts fell to an annualised rate of 1.580m in January (vs. 1.660m expected), though building permits rose to an annualised 1.881m (vs. 1.680m expected), their highest level since 2006. Elsewhere, the European Commission’s advance consumer confidence reading for the Euro Area in February rose to -14.8 (vs. -15.0 expected).

To the day ahead now, and the likely highlight will be the aforementioned release of the flash PMIs from around the world. On top of this, we’ll get January data on UK retail sales, German PPI and US existing home sales. From central banks, we’ll hear from the Fed’s Barkin and Rosengren.

 

Tyler Durden
Fri, 02/19/2021 – 07:59

via ZeroHedge News https://ift.tt/37wawJ3 Tyler Durden

Beware the COVID-19 Debt Hangover

dreamstime_xxl_118030050

After the rush, brace yourself for the hangover. That’s the warning from experts with the University of Pennsylvania’s Wharton Business School, who caution that plans for massive “stimulus” spending by the Biden administration will administer only a brief boost to the country followed by a nasty and prolonged comedown.

The White House objects to the forecast, but it squares with earlier predictions from the Congressional Budget Office that accumulated debt, worsened by heavy pandemic-related spending, will hobble the economy for years to come.

President Joe Biden’s proposed $1.9 trillion relief package would increase economic growth by 0.6 percent in 2021, according to analyses by the Penn Wharton Budget Model (PWBM). After that, though, it would start to slow the economy, decreasing GDP by 0.2 percent in 2022 and by 0.3 percent as late as 2040, showing lingering negative effects after the initial spending.

The big problem for the longer-term outlook is “the large amount of additional money that we’re adding to our already very large debt,” according to Efraim Berkovich, PWBM’s director of computational analysis. “The existence of the debt saps the rest of the economy. When the government is running budget deficits, the money that could have gone to productive investment is redirected.”

U.S. government debt is already sky-high, having increased by $7 trillion dollars in the last four years alone to reach 100 percent of GDP at the end of 2020. That burden threatens to act as a dead weight on economic growth.

Unsurprisingly, the Biden White House takes exception to Wharton’s gloomy forecast. Press Secretary Jen Psaki insists the prediction is “way out of step with the majority of studies on this plan.” In particular, she complains “the analysis concludes that our economy is near capacity, which would be news to the millions of Americans who are out of work or facing reduced hours and reduced paychecks.”

In response, the Wharton analysts point to ongoing recovery in many sectors. They also point out that continuing lockdowns prevent some production and employment that would otherwise occur.

“[R]ecovery in the affected sectors is limited by pandemic-related shutdowns and individual behavior,” they wrote. “There is no mechanism by which additional household spending will stimulate those sectors until pandemic-related restrictions ease.”

Unemployment claims unexpectedly increased last week to 861,000. The official unemployment rate of 6.3 percent remains above its pre-pandemic/pre-lockdown rate of 3.5 percent (just one year ago!). But that’s a steep drop from the April peak of 14.8 percent.

Industrial production, too, at 75.6 percent of capacity in January, remains about 4 percent lower than it was a year ago. But it’s higher than it was just a few years ago and steadily rising. “At 107.2 percent of its 2012 average, total industrial production in January was 1.8 percent lower than its year-earlier level,” according to a February 17 Federal Reserve update. So, while the economy isn’t entirely back, it’s moving in the right direction—a process that could be interrupted by massive government spending.

“[E]ffectively, what we’re doing is taking money from [some] people and giving it to other people for consumption purposes,” notes Berkovich of stimulus schemes. “That has value for social safety nets and redistributive benefits, but longer-term, you’re taking away from the capital that we need to grow our economy in the future.”

Stimulus spending also has the potential to delay the inevitable shakeout as businesses and workers scramble to adapt to a changing environment. Both the McKinsey Global Institute and the Bureau of Labor Statistics recently published studies predicting that remote work is here to stay for many people.

“In the moderate impact scenario, increased telework is the primary force of economic change and has both direct and spillover effects,” notes the BLS report. “With more employees teleworking, the need for office space will decline, and so will nonresidential construction.”

That’s going to necessitate a lot of adjustment in sectors including restaurants, travel, and commercial real estate; government checks just delay the day of reckoning. That is already a problem in Europe, where economists and business owners worry that subsidies prop up “zombie” companies that would otherwise disappear and clear the way for healthier enterprises.

“These zombie companies…run their business for a couple of months below costs,” Alexander Alban, managing partner at German mechanical parts manufacturer Walter Schimmel GmbH told the Wall Street Journal. “They ruin the market. Afterwards, it’s very hard to get this business back. Usually it’s good if the market is cleaned.”

The result is a poorer and less-productive economy than would have existed in the absence of government spending sprees. That’s in addition to the depressing effects of deficits and debt.

In analyses predating the latest stimulus proposals, the Congressional Budget Office voiced concerns similar to those of the Wharton Business School about debt-fueled spending.

“CBO estimates that the legislation will boost the level of real (inflation-adjusted) gross domestic product (GDP) by 4.7 percent in 2020 and 3.1 percent in 2021,” according to a September 2020 report forecasting the impact of pandemic-related federal spending. “From fiscal year 2020 through 2023, for every dollar that it adds to the deficit, the legislation is projected to increase GDP by about 58 cents. In the longer term, the legislation will reduce the level of real GDP, CBO estimates.”

That is, the CBO predicted two years of benefit, followed by each dollar spent producing far less than its value in return. The ultimate result is a smaller economy than would have existed without the addition of trillions to the national debt.

“The legislation will increase federal debt as a percentage of GDP, and in the longer term, CBO expects that increase to raise borrowing costs, lower economic output, and reduce the income of U.S. households and businesses,” adds the CBO.

With the House of Representatives poised to consider the stimulus package as early as next week, we may soon have an opportunity to find out just how bad the hangover will be.

from Latest – Reason.com https://ift.tt/3k1fJxz
via IFTTT

Beware the COVID-19 Debt Hangover

dreamstime_xxl_118030050

After the rush, brace yourself for the hangover. That’s the warning from experts with the University of Pennsylvania’s Wharton Business School, who caution that plans for massive “stimulus” spending by the Biden administration will administer only a brief boost to the country followed by a nasty and prolonged comedown.

The White House objects to the forecast, but it squares with earlier predictions from the Congressional Budget Office that accumulated debt, worsened by heavy pandemic-related spending, will hobble the economy for years to come.

President Joe Biden’s proposed $1.9 trillion relief package would increase economic growth by 0.6 percent in 2021, according to analyses by the Penn Wharton Budget Model (PWBM). After that, though, it would start to slow the economy, decreasing GDP by 0.2 percent in 2022 and by 0.3 percent as late as 2040, showing lingering negative effects after the initial spending.

The big problem for the longer-term outlook is “the large amount of additional money that we’re adding to our already very large debt,” according to Efraim Berkovich, PWBM’s director of computational analysis. “The existence of the debt saps the rest of the economy. When the government is running budget deficits, the money that could have gone to productive investment is redirected.”

U.S. government debt is already sky-high, having increased by $7 trillion dollars in the last four years alone to reach 100 percent of GDP at the end of 2020. That burden threatens to act as a dead weight on economic growth.

Unsurprisingly, the Biden White House takes exception to Wharton’s gloomy forecast. Press Secretary Jen Psaki insists the prediction is “way out of step with the majority of studies on this plan.” In particular, she complains “the analysis concludes that our economy is near capacity, which would be news to the millions of Americans who are out of work or facing reduced hours and reduced paychecks.”

In response, the Wharton analysts point to ongoing recovery in many sectors. They also point out that continuing lockdowns prevent some production and employment that would otherwise occur.

“[R]ecovery in the affected sectors is limited by pandemic-related shutdowns and individual behavior,” they wrote. “There is no mechanism by which additional household spending will stimulate those sectors until pandemic-related restrictions ease.”

Unemployment claims unexpectedly increased last week to 861,000. The official unemployment rate of 6.3 percent remains above its pre-pandemic/pre-lockdown rate of 3.5 percent (just one year ago!). But that’s a steep drop from the April peak of 14.8 percent.

Industrial production, too, at 75.6 percent of capacity in January, remains about 4 percent lower than it was a year ago. But it’s higher than it was just a few years ago and steadily rising. “At 107.2 percent of its 2012 average, total industrial production in January was 1.8 percent lower than its year-earlier level,” according to a February 17 Federal Reserve update. So, while the economy isn’t entirely back, it’s moving in the right direction—a process that could be interrupted by massive government spending.

“[E]ffectively, what we’re doing is taking money from [some] people and giving it to other people for consumption purposes,” notes Berkovich of stimulus schemes. “That has value for social safety nets and redistributive benefits, but longer-term, you’re taking away from the capital that we need to grow our economy in the future.”

Stimulus spending also has the potential to delay the inevitable shakeout as businesses and workers scramble to adapt to a changing environment. Both the McKinsey Global Institute and the Bureau of Labor Statistics recently published studies predicting that remote work is here to stay for many people.

“In the moderate impact scenario, increased telework is the primary force of economic change and has both direct and spillover effects,” notes the BLS report. “With more employees teleworking, the need for office space will decline, and so will nonresidential construction.”

That’s going to necessitate a lot of adjustment in sectors including restaurants, travel, and commercial real estate; government checks just delay the day of reckoning. That is already a problem in Europe, where economists and business owners worry that subsidies prop up “zombie” companies that would otherwise disappear and clear the way for healthier enterprises.

“These zombie companies…run their business for a couple of months below costs,” Alexander Alban, managing partner at German mechanical parts manufacturer Walter Schimmel GmbH told the Wall Street Journal. “They ruin the market. Afterwards, it’s very hard to get this business back. Usually it’s good if the market is cleaned.”

The result is a poorer and less-productive economy than would have existed in the absence of government spending sprees. That’s in addition to the depressing effects of deficits and debt.

In analyses predating the latest stimulus proposals, the Congressional Budget Office voiced concerns similar to those of the Wharton Business School about debt-fueled spending.

“CBO estimates that the legislation will boost the level of real (inflation-adjusted) gross domestic product (GDP) by 4.7 percent in 2020 and 3.1 percent in 2021,” according to a September 2020 report forecasting the impact of pandemic-related federal spending. “From fiscal year 2020 through 2023, for every dollar that it adds to the deficit, the legislation is projected to increase GDP by about 58 cents. In the longer term, the legislation will reduce the level of real GDP, CBO estimates.”

That is, the CBO predicted two years of benefit, followed by each dollar spent producing far less than its value in return. The ultimate result is a smaller economy than would have existed without the addition of trillions to the national debt.

“The legislation will increase federal debt as a percentage of GDP, and in the longer term, CBO expects that increase to raise borrowing costs, lower economic output, and reduce the income of U.S. households and businesses,” adds the CBO.

With the House of Representatives poised to consider the stimulus package as early as next week, we may soon have an opportunity to find out just how bad the hangover will be.

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via IFTTT

The Queen’s Gambit

minisqueensgambit-march-2021

The Netflix adaptation of Walter Tevis’ 1983 novel The Queen’s Gambit has punched above its weight since it started streaming in October. The sets and costume are gorgeous and the acting is good, but the stakes are nonexistent: We know from the first episode that child chess prodigy Beth Harmon (played by 24-year-old Anya Taylor-Joy) is going to win a lot of matches, even with a tranquilizer habit clinging to her back.

But there is more to this story than a phenom making the most of her gifts. Set in the 1950s and ’60s, The Queen’s Gambit has more to say about geopolitics and culture than it does about opening moves. Episode by episode, we learn that America’s best players were largely anonymous, duking it out in drabby hotels and high school cafeterias, while in other countries—particularly Mexico, France, and the Soviet Union—chess was a celebrated and even glamorous sport.

It’s fascinating to watch Taylor-Joy as the only woman climbing the American ranks, but her speedy evolution into an anti–Cold Warrior is the better subplot. Upon qualifying to play in Moscow against the USSR’s top talent, Harmon is recruited first by a Christian nonprofit hellbent on fighting the evils of atheism and then by a State Department apparatchik who cares only that Harmon can beat the Soviets “at their own game.”

She rebuffs both parties by refusing the former’s funding and the latter’s instructions to bash the Soviet Union. For Harmon, chess no more “belongs” to any nation or gender than does the moon. When she wins, it’s for her, not the jingoists.

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“Pandemic Precautions” Left Some Texas Shelters Closed As Homeless Froze To Death

“Pandemic Precautions” Left Some Texas Shelters Closed As Homeless Froze To Death

“For over six hours, a long line of people in search of shelter stood huddled together waiting for the doors of the George R. Brown convention center to open,” local Houston media reported of the chaos that unfolded earlier this week as Texas temperatures plunged to deadly levels. 

The homeless in Houston as well as in other states hit by the monstrous winter storm and polar vortex which pummeled up to two-thirds of the nation this week in many cases barely escaped the streets in time to avoid exposure, also as social services and charitable centers themselves struggled to stay properly staffed or even open given the widespread power outages and water infrastructure problems. But a number of homeless also died in circumstances that could have likely been easily averted.

Record low temperatures this week in Oklahoma City, OK. Via Reuters

As of Thursday night the death toll nationally from the winter storm which most intensely impacted the unprepared southern states topped 40 killed – some among these were homeless who didn’t enter a warming center in time, or even tried to survive inside cars. 

As Bloomberg describes, unexpected blizzard-like conditions which rapidly swept most of Texas prompted ‘rescue teams’ to deploy in search of homeless who hadn’t yet entered shelters:

In Houston, Dallas, San Antonio and other cities, social workers and volunteers fanned out to search for unhoused people and usher them into emergency warming centers; when community shelters reached capacity, churches and nonprofits opened their doors to those seeking refuge.

However, the report continues, “Not all found shelter: On Monday, a Houston man was found dead in a van after he declined to be taken to a warming center; another man was found dead on a highway median.”

Tragically and almost unbelievably, in some cases shelters were “limited” or actually shuttered altogether by preexisting COVID-19 restrictions:

Many said because of COVID-19 there was no room in other shelters and that this was their last hope to find warmth before the temperatures plummet Sunday night.

“They gave out a list, a resource list, I called them and it’s the same thing – everybody is not opening due to the COVID-19 restrictions,” Houston resident David Barker told KTRK news channel.

Via Getty Images: A homeless camp under a bridge on I-35 in Austin, Texas, this week.

A separate report out of Louisiana similarly described the city of Lake Charles “grappling” with “ways of addressing the local homeless problem, made worse by restrictions posed by the COVID-19 pandemic,” which had severely limited resources and building space based on ‘social distancing’ and other precautions. It’s believed the pandemic precautions left many more on the streets than normally would have been at a moment the homeless were exposed to freezing temperatures, blizzard conditions, falling ice, and negative wind chills.

“Just too cold to be sleeping out of my vehicle at this time,” a homeless man was quoted as saying. A recent Houston initiative to place over 1000 people on the brink of homelessness into permanent housing which kicked off last year likely saved more lives. Yet it’s also looking like some warm, immediately usable shelters sat empty or at mere partial capacity …because “science”.

Meanwhile, The New York Times has only very recently discovered the serious danger and potentially calamitous impact of what’s known as Covid absolutism: 

But controversially there may be significant resources still going unused across many Texas cities amid the scramble, as Bloomberg underscores: 

Yet in Texas and other states struck by uncharacteristically severe winter weather, some of the best tools to address the current crisis are going unused. On Jan. 21, President Joe Biden signed an executive order directing the Federal Emergency Management Agency to fully reimburse local and state governments for the costs of moving unhoused people into hotels and motels during the pandemic. Austin, Dallas, Fort Worth and Houston have taken the federal government up on the offer, but many cities and counties in Texas have not. 

Below: note the ‘socially distanced’ cots…

An emergency warming center within the Kay Bailey Hutchison Convention Center in Dallas, via ReligionNews.com

It remains though that the broad blackouts impacting millions of Texans had a trickledown effect which impacted the homeless and the ability for cities to tap into this program in one obvious way: motels and hotels across the state were quickly booked full by those fleeing their frigid or waterless homes… assuming the hotels themselves had enough power or staff.

Given these very hotels too are under COVID restrictions, there’s little doubt they could have been much better utilized or more available, similar to the apparently (in some cases) locked and shuttered ‘Covid restricted’ shelters in major cities. 

Tyler Durden
Fri, 02/19/2021 – 06:45

via ZeroHedge News https://ift.tt/3slxhYf Tyler Durden

The Queen’s Gambit

minisqueensgambit-march-2021

The Netflix adaptation of Walter Tevis’ 1983 novel The Queen’s Gambit has punched above its weight since it started streaming in October. The sets and costume are gorgeous and the acting is good, but the stakes are nonexistent: We know from the first episode that child chess prodigy Beth Harmon (played by 24-year-old Anya Taylor-Joy) is going to win a lot of matches, even with a tranquilizer habit clinging to her back.

But there is more to this story than a phenom making the most of her gifts. Set in the 1950s and ’60s, The Queen’s Gambit has more to say about geopolitics and culture than it does about opening moves. Episode by episode, we learn that America’s best players were largely anonymous, duking it out in drabby hotels and high school cafeterias, while in other countries—particularly Mexico, France, and the Soviet Union—chess was a celebrated and even glamorous sport.

It’s fascinating to watch Taylor-Joy as the only woman climbing the American ranks, but her speedy evolution into an anti–Cold Warrior is the better subplot. Upon qualifying to play in Moscow against the USSR’s top talent, Harmon is recruited first by a Christian nonprofit hellbent on fighting the evils of atheism and then by a State Department apparatchik who cares only that Harmon can beat the Soviets “at their own game.”

She rebuffs both parties by refusing the former’s funding and the latter’s instructions to bash the Soviet Union. For Harmon, chess no more “belongs” to any nation or gender than does the moon. When she wins, it’s for her, not the jingoists.

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via IFTTT