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Today, I debunk Sen. Josh Hawley’s purported victim status and First Amendment theories in an op-ed in the St. Louis Post-Dispatch with Berin Szoka, president of TechFreedom.
The First Amendment doesn’t give Sen. Hawley the right to force tech platforms to carry the speech of white supremacists and/or those who incite violence, as Berin and I break down both in the op-ed and accompanying Twitter thread.
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Here’s Everything You Need To Know As Second Trump Impeachment Trial Opens
The big day has finally arrived: After weeks of bickering, the first session in Trump’s impeachment trial will feature presentations from both sides over the Senate’s authority to hear the case, followed by a vote on the matter, which would require a simple majority, and is expected to pass in the Democratic-controlled chamber.
Of course, starting with the Senate likely won’t be a good look for Trump, as the opposition supporting impeachment is expected to draw some Republican votes. As many asccc five GOP senators, including Sen. Mitt Romney of Utah and Sen. Susan Collins of Maine, have previously sided with Democrats on a question related to the constitutionality of trying the former president.
67 votes are required to convict Trump, meaning at least 17 Republicans would need to join all 50 Democrats. Only a handful of Republicans have indicated they could vote guilty. But if enough do, then Trump will be barred from seeking office.
The Democratic impeachment managers, mostly members of they hyperpartisan House of Representatives, warned that they are “set to argue that a president isn’t exempt from a trial just because impeachable actions occurred in the final weeks of the administration.”
“Presidents do not get a free pass to commit high crimes and misdemeanors near the end of their term,” impeachment managers argued in a brief last week. “Allowing presidents to subvert elections without consequence would encourage the most dangerous of abuses.”
As far as whatever this impeachable actions might be, on Monday, Trump’s lawyers said the president didn’t incite the crowd and that the rioters who breached the Capitol “did so of their own accord and for their own reasons.”
The lawyers said that in Trump’s speech that day he used the word “fight” a “little more than a handful of times and each time in the figurative sense,” making no explicit mention of rioting. The lawyers said the president was exercising his First Amendment rights.
The impeachment managers, acting as prosecutors during the trial, responded in their own five-page brief, saying Mr. Trump “has no valid excuse or defense” for his actions. “His efforts to escape accountability are entirely uunraveling.
Beyond impeachment, even if the Biden team did somehow manage to pacify the GOP, the Democratic Party’s insurgent leftists, a group of House legislators led by AOC, Ilhan Omar along with her rockstar peers are placing tremendous pressure on Nancy Pelosi to back, or at least hold a caucus vote on the $15 national minimum wage.
For the record, this is how the trial will unfold:
Feb. 9: There will be four hours of debate equally divided between prosecutors and defense on whether the trial is constitutional, followed by a vote needing a simply majority to proceed e
Feb. 10: House of Representatives will begin arguing its case; prosecutors and defense will have up to 16 hours each to present their arguments, with neither side permitted to present for more than eight hours per day.
Feb. 11: On Tuesday, up to four hours of debate are allotted for the question of whether it is within the bounds of the Constitution to hold a trial for a president who is out of office but whose alleged crimes occurred during his tenure. A Congressional Research Service report from January concluded that while the matter is open to debate, the weight of scholarly authority agrees that former officials can be impeached and tried.
Feb. 12: The trial will break through Saturday Feb. 14, 2:00 p.m. ET: The trial will reconvene Sunday Arguments will be followed by four hours for senators’ questions If the House impeachment managers want to call witnesses or subpoena documents, there will be two hours of debate by each side followed by a Senate vote on whether to allow this If witnesses are called, there will be enough time given to depose them, and for each party to complete discovery before testimony is given Once witnesses and evidence is dealt with, there will be four hours of closing arguments divided evenly between the prosecutors and defense Lastly will come the vote on conviction or acquittal, for which a two-thirds majority is required yeah qtr did i think great
To be sure, there are some skeptics within the Trump camp: personal lawyers Bruce L. Castor Jr., David Schoen and Michael van der Veen, have all argued that the trial is improper, and just another major risk for President Trump , who could have simply walked away.
Tyler Durden
Tue, 02/09/2021 – 08:45
via ZeroHedge News https://ift.tt/36X3lcu Tyler Durden
Peter Schiff: All Of This Smells Like Stagflation
We ended last week with some weaker than expected economic data – particularly the jobs numbers, but the stock market continues to go up.
These days, the mainstream reacts to everything as good news. No matter what the data suggests, everybody seems to think things will come up smelling roses because of stimulus.
But in a recent podcast, Peter said all of this smells more like stagflation.
Peter said at this point, it doesn’t really matter whether the economic data is good, bad, or indifferent. The markets just keep going up.
Everybody knows that the Fed is on hold indefinitely at zero percent rates. They’re not even thinking about thinking about thinking about raising interest rates. Wall Street knows that.”
The Fed could also be considering another round of QE. After all, there will likely be even more debt to monetize as the Biden administration gets rolling with its spending programs. The central bank has held its balance sheet relatively steady at around $7.4 trillion of late, but Peter said he thinks it’s about to take off to “a whole new level.”
I think that is what is really driving the stock market higher.”
One of the telling economic data points last week was the big drop in productivity. Wages are up (with businesses competing against enhanced unemployment benefits) and companies are paying more for workers. That’s driving down the overall productivity number. Peter said this is an indication of the building inflationary pressure.
And that inflationary pressure is showing up in the bond market. Typically, weak economic data sparks a rally in bonds. That hasn’t happened. Bond yields continue to nudge upward. Peter said he thinks the bond market is looking at things more realistically now when it comes to Fed policy and stimulus.
When you have weaker than expected economic data, that just means that bigger stimulus is coming. And that means more deficits, more bonds being sold, more supply, and that is pushing down bond prices and pushing up bond yields. And of course, it means the Federal Reserve is going to be printing more money, creating more inflation, so now the inflationary premiums that get built into the yield curve have to rise as well.”
In another inflationary sign, oil was up again last week and closed just above $57 a barrel.
So, all those people who say there’s nothing to worry about, there’s no inflation, look what’s happening to labor costs. Look what’s happening to oil prices. Bond yields are rising despite weaker than expected economic data. All of this smells like stagflation. But the market doesn’t care because everything is on autopilot. Everybody is buying everything.”
But people don’t seem to be buying gold. Peter called that “ironic.”
Gold has had to claw its way back after a big plunge on Thursday that took it below $1,800 an ounce. The catalyst for the selloff was rising bond yields. People tend to think rising interest rates are bad for gold. Peter said people have to throw out that playbook.
Rising rates are actually the most bullish thing that could possibly happen for gold because rising rates simply ensure that the Fed is going to have to print even more money in order to prevent yields from rising. Again, that is the box the Fed is in. We have so much debt, everybody is so leveraged, we have such a massive bubble in the stock market that the Fed can’t let interest rates go up regardless of how much inflation rises. So, they have to pretend there’s no inflation or pretend it’s not a big deal that we have more inflation because that’s exactly what they want. And so they’re going to ignore the inflation and it’s just going to get worse and worse. And so the gold price should be going up on rising bond yields because all that guarantees is even more inflation.”
In this podcast, Peter also talks about the ballooning trade deficit and broke down some of the new stimulus proposals.
Tyler Durden
Tue, 02/09/2021 – 08:42
via ZeroHedge News https://ift.tt/2Oo8owb Tyler Durden
How perfect is it that GameStop of all things is what is revealing the cracks in our capital markets to the masses? Many of us found ourselves fielding confused communiqués from loved ones about just why everyone was talking about the memeable video game rental chain last week. Apparently, it was about to bring down our financial system?
The truth is not quite as immediately apocalyptic as the many talking head “suits” on financial TV might have conveyed, but there is no denying that the “GameStonk” episode bares real flaws on Wall Street. It’s no surprise that two groups most interested in overcoming or exploiting these weaknesses—the Bitcoin and r/WallStreetBets communities—rallied around this incident-turned-movement. Regardless of how the GameStonk saga eventually plays out, the problems it exposed need addressing, and technology may already be providing the solutions.
Most people get what Bitcoin is about by now. It’s inflation- and censorship-resistant private digital cash. People like it because it provides an escape from both monetary manipulation that enriches the few at the expense of everyone else and financial deplatforming by intermediaries. It’s a technological exit from a financial system mostly oriented to the benefit of the connected.
WallStreetBets (WSB) is a more obscure beast. It’s a Reddit community centered around picking stocks on apps like the video game-like Robinhood. They describe it as “if 4chan got ahold of a Bloomberg terminal.” They’re novice investors, younger, and obviously have much skimpier pockets than professional hedge fund and institutional wealth managers.
But they’re not idiots (well, most of them aren’t, at least). Actually, there’s a good number of professional traders that lurk and post on WSB—the infamous Martin Shkreli being one former (and level-headed) moderator.
And GameStop was not picked because it was funny. Users noticed that the stock price didn’t reflect GameStop’s otherwise decent financial position. Not only was the stock being shorted, which means that big investors were making bets that the price would go down, it looked like more stocks were being traded than even existed. This would not just be nonsensical, such apparent “naked short selling” is supposed to be illegal.
The interest surrounding GameStop actually started way back in 2019, when a user (who was later revealed to be a young professional trader) noticed some irregularities with GameStop trading. Heterodox investors like The Big Short’s Michael Burry noticed the opportunity for what’s called a “short squeeze“; slowly other posters started understanding the strategy and bought up shares, causing the price to inch up.
Hedge funds had a lot of money on the line betting that GameStop stock would fall. With some assists from a few puckish billionaires, WSB bought up the stock to keep the price high—absurdly high, actually: the stock that had coasted for around a few bucks peaked at almost $500 in late January—which would ruin the hedge funds’ positions. This is the squeeze.
Although their tongue-in-cheek rallying cry was that they “liked the stock,” of course WSB knew GameStop stock was not worth more than, say, Mastercard (~$340). And most of them knew they would probably lose money once the price eventually fell. Like Bitcoiners insist on “hodling” through bear markets, WSB posters encouraged each other to maintain their “diamond hands” and hold the stock no matter what. This was about sending a message.
The message was that Wall Street is absurd and, ultimately, weak. Insiders do whatever they want and get bailed out while normal people—like WSB posters and their parents—lose their houses and jobs. Hedge fund flaks go on TV to trash talk stocks in the process of being shorted; never mind the companies ruined in the wake. All kinds of naked shenanigans go down without anyone in the government much noticing or caring.
Here was an opportunity for WSB to beat the hedge funds at their own game and cost them a dozen billion or so in the process. Market manipulation? No, “we like the stock :^).”
This is where the short squeeze was itself squeezed a bit. Strange things started happening when the price of GameStop and other companies like AMC Theaters and Nokia started shooting up. Trading apps like Robinhood limited users’ abilities to buy the stocks. There was a forced meme about a silver squeeze. Irate billionaires showed up on TV to sputter about the peasants’ audacity in demanding a “fair share.” Communications platforms started shutting down WSB communities. Government agents seemed to threaten to investigate retail investors for “market manipulation.” Remind you of anything? It looked like the whole of the establishment was coming down to crush the new capital riots.
It’s true that platforms like Robinhood could have restricted trading if one of their friends at a hedge fund gave them a call (albeit illegally—the dog and pony show is scheduled for later this month). And it’s true that platforms like Robinhood have special relationships with some of the financial institutions that stood to lose (or win!) bigly from the GameStop saga (not everyone on Wall Street was short on GameStop). It’s also true that top regulators regularly receive handsome payouts from the firms they’re supposed to be overseeing.
But even without these possible avenues for corruption, our financial plumbing all but ensured that platforms like Robinhood would have had to clamp down on the GameStop run. This is because apps like Robinhood don’t connect buyers and sellers like a simple broker, and users aren’t really spending “their” money when they make a trade.
When a Robinhood user makes a trade, the platform is actually contracting out to a third party “market maker” (like Citadel Securities) that provides the liquidity to cover the trade. Robinhood settles up with them in a few days—two, to be precise, which is why this settlement system is called “T+2.” Businesses that participate in this kind of clearinghouse arrangement are regulated by an industry-owned organization called the Depository Trust & Clearing Corporation (DTCC), which sets things like capital requirements to make sure that companies like Robinhood have enough collateral on hand to cover the trades before they’re settled up at the clearinghouse two days later. The extreme trading volume for stocks like $GME drew down on Robinhood’s available capital, which is why the CEO says the platform had to pause those trades.
In other words, setting aside the potential for corruption, the Robinhood debacle was a problem of both business model—Robinhood users weren’t its real “customers”—and technology—the trades don’t settle immediately, so this rare event gunked up the financial plumbing of the clearinghouse system.
No wonder the cryptocurrency and WSB communities are so simpatico. When it comes to financial corruption and inefficiencies, Bitcoin and related technologies have a lot to offer.
Bitcoiners were cheering on the financial rebellion from the sidelines—some of them threw in a few satoshis at $GME to support the cause. WSB personalities started tweeting about how Wall Street can only control our finances to the extent that they are connected to the controls of currency—a common cryptocurrency refrain. There’s a good deal of overlap in the Venn diagram here: using a currency that is free from the potential for political manipulation limits the hijinks that insiders can pull in financial markets.
Blockchains can help address technological problems with settlement, too. This is the aim of the “decentralized finance” or “DeFi” movement which employs smart contracts and digital assets to facilitate peer-to-peer and instant capital settlement. It’s not magic—a poorly coded smart contract could spell disaster for financial trades. But it is very innovative, and DeFi techniques could provide a much-needed jolt to our creaky and sometimes corrupt financial markets.
One of the most exciting things about DeFi is that is provides a way to route around the financial middlemen so central to the recent friction in financial markets. With direct digital asset transfers, there is no “Robinhood” that can be pressured by the SEC or DTCC or even something like Citadel to halt trades. Your assets are yours, so long as you protect your cryptographic key. We should not be surprised to see WSB veterans migrate to the cryptocurrency and DeFi world after their eye-opening lesson in realpolitikal finance.
As I write, the GameStonk rebellion keeps chugging along, although the price is steadily flagging. It seems the energy is mostly lost. But not everyone who participated will chalk this up as a fun prank and move on with their lives. For those serious about addressing the problems with our financial system, the cryptocurrency movement has the values and tools to create lasting change. They are more than welcome to join.
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How perfect is it that GameStop of all things is what is revealing the cracks in our capital markets to the masses? Many of us found ourselves fielding confused communiqués from loved ones about just why everyone was talking about the memeable video game rental chain last week. Apparently, it was about to bring down our financial system?
The truth is not quite as immediately apocalyptic as the many talking head “suits” on financial TV might have conveyed, but there is no denying that the “GameStonk” episode bares real flaws on Wall Street. It’s no surprise that two groups most interested in overcoming or exploiting these weaknesses—the Bitcoin and r/WallStreetBets communities—rallied around this incident-turned-movement. Regardless of how the GameStonk saga eventually plays out, the problems it exposed need addressing, and technology may already be providing the solutions.
Most people get what Bitcoin is about by now. It’s inflation- and censorship-resistant private digital cash. People like it because it provides an escape from both monetary manipulation that enriches the few at the expense of everyone else and financial deplatforming by intermediaries. It’s a technological exit from a financial system mostly oriented to the benefit of the connected.
WallStreetBets (WSB) is a more obscure beast. It’s a Reddit community centered around picking stocks on apps like the video game-like Robinhood. They describe it as “if 4chan got ahold of a Bloomberg terminal.” They’re novice investors, younger, and obviously have much skimpier pockets than professional hedge fund and institutional wealth managers.
But they’re not idiots (well, most of them aren’t, at least). Actually, there’s a good number of professional traders that lurk and post on WSB—the infamous Martin Shkreli being one former (and level-headed) moderator.
And GameStop was not picked because it was funny. Users noticed that the stock price didn’t reflect GameStop’s otherwise decent financial position. Not only was the stock being shorted, which means that big investors were making bets that the price would go down, it looked like more stocks were being traded than even existed. This would not just be nonsensical, such apparent “naked short selling” is supposed to be illegal.
The interest surrounding GameStop actually started way back in 2019, when a user (who was later revealed to be a young professional trader) noticed some irregularities with GameStop trading. Heterodox investors like The Big Short’s Michael Burry noticed the opportunity for what’s called a “short squeeze“; slowly other posters started understanding the strategy and bought up shares, causing the price to inch up.
Hedge funds had a lot of money on the line betting that GameStop stock would fall. With some assists from a few puckish billionaires, WSB bought up the stock to keep the price high—absurdly high, actually: the stock that had coasted for around a few bucks peaked at almost $500 in late January—which would ruin the hedge funds’ positions. This is the squeeze.
Although their tongue-in-cheek rallying cry was that they “liked the stock,” of course WSB knew GameStop stock was not worth more than, say, Mastercard (~$340). And most of them knew they would probably lose money once the price eventually fell. Like Bitcoiners insist on “hodling” through bear markets, WSB posters encouraged each other to maintain their “diamond hands” and hold the stock no matter what. This was about sending a message.
The message was that Wall Street is absurd and, ultimately, weak. Insiders do whatever they want and get bailed out while normal people—like WSB posters and their parents—lose their houses and jobs. Hedge fund flaks go on TV to trash talk stocks in the process of being shorted; never mind the companies ruined in the wake. All kinds of naked shenanigans go down without anyone in the government much noticing or caring.
Here was an opportunity for WSB to beat the hedge funds at their own game and cost them a dozen billion or so in the process. Market manipulation? No, “we like the stock :^).”
This is where the short squeeze was itself squeezed a bit. Strange things started happening when the price of GameStop and other companies like AMC Theaters and Nokia started shooting up. Trading apps like Robinhood limited users’ abilities to buy the stocks. There was a forced meme about a silver squeeze. Irate billionaires showed up on TV to sputter about the peasants’ audacity in demanding a “fair share.” Communications platforms started shutting down WSB communities. Government agents seemed to threaten to investigate retail investors for “market manipulation.” Remind you of anything? It looked like the whole of the establishment was coming down to crush the new capital riots.
It’s true that platforms like Robinhood could have restricted trading if one of their friends at a hedge fund gave them a call (albeit illegally—the dog and pony show is scheduled for later this month). And it’s true that platforms like Robinhood have special relationships with some of the financial institutions that stood to lose (or win!) bigly from the GameStop saga (not everyone on Wall Street was short on GameStop). It’s also true that top regulators regularly receive handsome payouts from the firms they’re supposed to be overseeing.
But even without these possible avenues for corruption, our financial plumbing all but ensured that platforms like Robinhood would have had to clamp down on the GameStop run. This is because apps like Robinhood don’t connect buyers and sellers like a simple broker, and users aren’t really spending “their” money when they make a trade.
When a Robinhood user makes a trade, the platform is actually contracting out to a third party “market maker” (like Citadel Securities) that provides the liquidity to cover the trade. Robinhood settles up with them in a few days—two, to be precise, which is why this settlement system is called “T+2.” Businesses that participate in this kind of clearinghouse arrangement are regulated by an industry-owned organization called the Depository Trust & Clearing Corporation (DTCC), which sets things like capital requirements to make sure that companies like Robinhood have enough collateral on hand to cover the trades before they’re settled up at the clearinghouse two days later. The extreme trading volume for stocks like $GME drew down on Robinhood’s available capital, which is why the CEO says the platform had to pause those trades.
In other words, setting aside the potential for corruption, the Robinhood debacle was a problem of both business model—Robinhood users weren’t its real “customers”—and technology—the trades don’t settle immediately, so this rare event gunked up the financial plumbing of the clearinghouse system.
No wonder the cryptocurrency and WSB communities are so simpatico. When it comes to financial corruption and inefficiencies, Bitcoin and related technologies have a lot to offer.
Bitcoiners were cheering on the financial rebellion from the sidelines—some of them threw in a few satoshis at $GME to support the cause. WSB personalities started tweeting about how Wall Street can only control our finances to the extent that they are connected to the controls of currency—a common cryptocurrency refrain. There’s a good deal of overlap in the Venn diagram here: using a currency that is free from the potential for political manipulation limits the hijinks that insiders can pull in financial markets.
Blockchains can help address technological problems with settlement, too. This is the aim of the “decentralized finance” or “DeFi” movement which employs smart contracts and digital assets to facilitate peer-to-peer and instant capital settlement. It’s not magic—a poorly coded smart contract could spell disaster for financial trades. But it is very innovative, and DeFi techniques could provide a much-needed jolt to our creaky and sometimes corrupt financial markets.
One of the most exciting things about DeFi is that is provides a way to route around the financial middlemen so central to the recent friction in financial markets. With direct digital asset transfers, there is no “Robinhood” that can be pressured by the SEC or DTCC or even something like Citadel to halt trades. Your assets are yours, so long as you protect your cryptographic key. We should not be surprised to see WSB veterans migrate to the cryptocurrency and DeFi world after their eye-opening lesson in realpolitikal finance.
As I write, the GameStonk rebellion keeps chugging along, although the price is steadily flagging. It seems the energy is mostly lost. But not everyone who participated will chalk this up as a fun prank and move on with their lives. For those serious about addressing the problems with our financial system, the cryptocurrency movement has the values and tools to create lasting change. They are more than welcome to join.
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From Patent Holder Identified in Exh. 1 v. Does 1-254, as Identified in Exh. 2, decided Saturday by Judge Matthew F. Kennelly (N.D. Ill.); it’s not quite my field, so I’m not sure what to think of it, but it seemed interesting enough to be worth passing along:
It has become commonplace in this district for holders of trademark and trade dress rights to file suits naming dozens or even hundreds of claimed infringers and counterfeiters, alleging that they are selling knock-off products via the Internet. The plaintiffs seek an injunction and recovery of damages. In these lawsuits, the actual identities and locations of the sellers are unknown to the trademark holder because they have used assumed names. The lawsuits are typically filed against a group of sellers whose assumed names are listed on an attachment to the complaint, usually called “Schedule A.”
In these lawsuits, the plaintiff typically requests permission to file “Schedule A” and other information that would identify the sellers under seal, to avoid tipping off the defendants that a lawsuit has been filed. Public identification of the defendants, the plaintiff contends, would lead them to hide or transfer ill-gotten gains and destroy relevant evidence.
Once the lawsuit is filed, the plaintiff typically moves ex parte for entry of a temporary restraining order that, among other things, bars further infringing sales and freezes any assets held in the defendants’ PayPal or similar accounts. The plaintiff also typically moves for permission to serve the defendants with summons via e-mail, as their addresses are unknown and often hidden, and they are typically based overseas.
Once the court enters a TRO, the plaintiff serves it along with the complaint on the defendants via e-mail; serves PayPal and other similar entities with the TRO to freeze the defendants’ assets; and takes other steps to effectuate the TRO’s terms. Due to the limited duration of a TRO, the plaintiff then seeks entry of a preliminary injunction with similar terms that will carry through to the conclusion of the case. Most cases of this type are concluded relatively quickly, after the plaintiff negotiates settlements with the defendants who make contact with the plaintiff’s attorney and obtains default judgments against those who do not respond.
The present case is similar, but there are two differences from the usual suit. The first is that the plaintiff seeks to conceal even its own name; it asks to file the case, effectively, as a “Doe” plaintiff pending issuance and service of the hoped-for temporary restraining order. In support of this request, the plaintiff has filed a one-page motion that includes only the following by way of justification:
“If Defendants were to learn of these proceedings prematurely, the likely result would be the destruction of relevant documentary evidence and the hiding or transferring of assets to foreign jurisdictions, which would frustrate the purpose of the underlying law and would interfere with this Court’s power to grant relief.
“We know it is likely Defendants will impede justice because Defendants participate in or operate a website, sellerdefense.cn, that monitors this District’s PACER filings and screens for Plaintiff counsel’s filings as well as all Trademark and Patent filings throughout the District. Without sealing these filings, Plaintiffs will have their remedies thwarted.”
The first sentence isn’t a justification; it’s a conclusion. The only justification is the second sentence, which says that the defendants participate in a website that monitors filings in this district. That might be part of a justification, but instead plaintiff asks the Court to make the inferential leap—worthy of Bob Beamon in the 1968 Olympics—that if it becomes known that the plaintiff has filed a lawsuit against someone, the defendants will all hide their assets. The Court is unwilling to draw this inference without some supporting evidence and argument. For this reason, the motion to seal is denied—to the extent it asks to conceal the plaintiff’s identity—without prejudice to filing a new motion by February 10, 2021.
The second difference between this case and the usual “Schedule A” case is that the present case is a patent infringement suit, not a trademark infringement suit. The plaintiff alleges that each of the “Schedule A” defendants (actually, in this case, they are the “Exhibit 2” defendants) is selling products that infringe a patent issued to the plaintiff. The infringement allegations in the complaint itself are relatively conclusory; they include no information about how the claimed infringing products are alleged to infringe the design patent. And none of the allegations in the complaint says anything specific about any defendant; all of the defendants are lumped together.
Without addressing at this point the sufficiency of the complaint under Federal Rules of Civil Procedure 8(a) and 12(b)(6) as to each of the two hundred fifty-four defendants, there is a threshold problem with this particular case that does not exist in the typical “Schedule A” trademark/trade dress case. Specifically, the joinder of all the defendants in a single suit appears to run afoul of a provision of the America Invents Act, adopted in 2013.
Before the AIA, it was common for patent holders to sue or attempt to sue multiple infringers in a single suit. The AIA sought to put a stop to this. Under 35 U.S.C. § 299, parties that are accused infringers of a patent may be joined in a single action as defendants only if a right to relief “is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences” that involve making, using, importing, offering, or selling “the same accused product or process,” and only if there are questions of fact common to all defendants that will arise. Importantly, “accused infringers may not be joined in one action as defendants … based solely on allegations that they each have infringed the patent or patents in suit.”
In this case, it is questionable whether the plaintiff can clear all of the hurdles imposed by section 299. It alleges that that the defendants all sold infringing products, but that is not enough in light of section 299(b). The plaintiff also alleges that “some” of the defendants use “identical or equivalent language” to sell the products and use images taken from the plaintiff’s website; that there are unspecified “similarities and indicia of being related to one another” among the defendants; and that they offer the product at similar prices. But it would not be particularly surprising for multiple sellers to attempt to match other sellers’ prices, and it would not be at all surprising for counterfeiters of a product to copy images from the legitimate seller’s site or even from other counterfeiters’ sites.
The plaintiff also alleges that the defendants tend to post information to a “seller defense” website, but parallel action does not amount to action in concert. The Court questions whether these allegations are sufficient to satisfy the “same transaction, occurrence, or series of transactions or occurrences” requirement of section 299(a)(1), given Congress’s express determination in section 299(b) that an allegation of infringement by multiple entities is not enough to allow joining all of them in one lawsuit. In addition, the plaintiff does not allege or explain how questions of fact common to all of the defendants will arise in the case, as required by section 299(a)(2).
Finally, the plaintiff does not allege that the defendants are selling the same accused product. This is a separate requirement of section 299(a)(1) that the plaintiff does not appear to satisfy or even address, even if it could legitimately contend that the defendants’ conduct was part of the same series of transactions or occurrences and that fact questions common to all defendants will arise.
The Court notes that section 299(c) provides that an accused infringer may waive the statute’s limitations as applied to itself. But the Court is not inclined to allow a lawsuit that appears on its face to run afoul of a Congressional enactment to proceed on the possibility that the defendants may eventually waive the statute’s protections. Such an approach does not seem to the Court to be appropriate here, particularly given the manner in which lawsuits of this type typically proceed, with under-seal filing, ex parte temporary restraining orders, asset freezes, and the like.
The Court also notes that in a case like this one, the benefit to the plaintiff of naming multiple defendants in a single case is quite significant. Specifically, by suing 254 defendants in a single suit rather than 254 separate ones, the plaintiff will save, in one fell swoop, over $100,000 in filing fees.
For these reasons, plaintiff is ordered to show cause in writing by February 10, 2021 why the case should not be dismissed under 35 U.S.C. § 299….
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‘It Looks Like Mars’ – Saharan Dust-pocalypse Blankets Europe
A significant intrusion of Saharan-desert dust has blanketed parts of Europe this week, with tremendous impacts on the environment, health, and power generation, according to Bloomberg.
The sand and dust storm began on Feb. 5 in northern Algeria. Dust particles were whipped up into the atmosphere and eventually transported to southeast Spain and southern and central Europe. Already, snow-covered mountains on the Pyrenees and Alps mountains have been coated with dust, buildings and cars have been covered in dust, and the skies in some parts of Europe have been transformed into a yellowish-orange tint.
“We saw air quality values in the affected regions drop significantly,” said Mark Parrington, a scientist at the Copernicus Atmosphere Monitoring Service (CAMS). “The impact of the Saharan dust clouds is clearly visible for affected cities, such as, for example, Barcelona or Marseille.”
Scientists at CAMS estimated that several micrograms of dust particles per square meter were dumped over Europe since late last week.
“Our forecasts, even those from Feb. 2, were very reliable in describing the size and extent of the dust plume as well as its development and direction,” Parrington said. Utility companies that use Copernicus data had to alter power generation during the dust storm as solar energy was dramatically reduced. Even airlines had to fly different routes because of low visibility.
Pictures posted by The Guardian show the extent of dust that was dumped across Europe in the last couple of days.
Skiers at the Alpine resort of Anzere, Switzerland, were greeted with dust-covered snow over the weekend.
Here’s a view of River Saone in eastern France.
Switzerland’s sky was a yellowish-orange color.
One skier shows just how much dust has fallen.
Skiing in the sand… I mean snow.
Truly remarkable scenes emerging from parts of Europe as thick layer of Saharan dust blankets ski resorts today.
Via @Meteo_Pyrenees pic.twitter.com/qNFJV2HxUZ
— Scott Duncan (@ScottDuncanWX) February 6, 2021
A previous dust storm from the Sahara desert blanketed parts of the Caribbean region last year.
Tyler Durden
Tue, 02/09/2021 – 08:25
via ZeroHedge News https://ift.tt/3a5hnLg Tyler Durden
Lilly’s CFO Resigns After Allegations Of “Inappropriate Personal Relationship”
Yet another executive bites the dust after a consensual relationship among employees turns up.
On Tuesday, Eli Lilly announced the appointment of Anat Ashkenazi as Senior Vice President and CFO. The change at the top comes after former Chief Financial Officer, Josh Smiley, resigned after “the company was made aware of allegations of an inappropriate personal relationship,” according to Bloomberg.
The company said it hired external counsel to conduct a “thorough, independent investigation” of the relationship. That investigation revealed “consensual though inappropriate personal communications between Smiley and certain Lilly employees”.
As a result of the findings, the company’s Board determined that Smiley exhibited poor judgement and he later resigned. He may also be available to assist in the transition of his role, the report said.
The company said the findings had nothing to do with the company’s financial controls or any other business matters.
That continues to beg the question of what counts as an inappropriate relationship anymore? How much are two consenting adults allowed to share outside of the workplace and/or on “personal communication” mediums? Perhaps we’ll get the answers to these questions as more details emerge on this case.
For now, Smiley can rest assured that he isn’t the first – and won’t be the last – to lose their job due consensual behavior that corporations, or the woke mob, views as “inappropriate”.
Tyler Durden
Tue, 02/09/2021 – 08:11
via ZeroHedge News https://ift.tt/3q3VeCl Tyler Durden
From Patent Holder Identified in Exh. 1 v. Does 1-254, as Identified in Exh. 2, decided Saturday by Judge Matthew F. Kennelly (N.D. Ill.); it’s not quite my field, so I’m not sure what to think of it, but it seemed interesting enough to be worth passing along:
It has become commonplace in this district for holders of trademark and trade dress rights to file suits naming dozens or even hundreds of claimed infringers and counterfeiters, alleging that they are selling knock-off products via the Internet. The plaintiffs seek an injunction and recovery of damages. In these lawsuits, the actual identities and locations of the sellers are unknown to the trademark holder because they have used assumed names. The lawsuits are typically filed against a group of sellers whose assumed names are listed on an attachment to the complaint, usually called “Schedule A.”
In these lawsuits, the plaintiff typically requests permission to file “Schedule A” and other information that would identify the sellers under seal, to avoid tipping off the defendants that a lawsuit has been filed. Public identification of the defendants, the plaintiff contends, would lead them to hide or transfer ill-gotten gains and destroy relevant evidence.
Once the lawsuit is filed, the plaintiff typically moves ex parte for entry of a temporary restraining order that, among other things, bars further infringing sales and freezes any assets held in the defendants’ PayPal or similar accounts. The plaintiff also typically moves for permission to serve the defendants with summons via e-mail, as their addresses are unknown and often hidden, and they are typically based overseas.
Once the court enters a TRO, the plaintiff serves it along with the complaint on the defendants via e-mail; serves PayPal and other similar entities with the TRO to freeze the defendants’ assets; and takes other steps to effectuate the TRO’s terms. Due to the limited duration of a TRO, the plaintiff then seeks entry of a preliminary injunction with similar terms that will carry through to the conclusion of the case. Most cases of this type are concluded relatively quickly, after the plaintiff negotiates settlements with the defendants who make contact with the plaintiff’s attorney and obtains default judgments against those who do not respond.
The present case is similar, but there are two differences from the usual suit. The first is that the plaintiff seeks to conceal even its own name; it asks to file the case, effectively, as a “Doe” plaintiff pending issuance and service of the hoped-for temporary restraining order. In support of this request, the plaintiff has filed a one-page motion that includes only the following by way of justification:
“If Defendants were to learn of these proceedings prematurely, the likely result would be the destruction of relevant documentary evidence and the hiding or transferring of assets to foreign jurisdictions, which would frustrate the purpose of the underlying law and would interfere with this Court’s power to grant relief.
“We know it is likely Defendants will impede justice because Defendants participate in or operate a website, sellerdefense.cn, that monitors this District’s PACER filings and screens for Plaintiff counsel’s filings as well as all Trademark and Patent filings throughout the District. Without sealing these filings, Plaintiffs will have their remedies thwarted.”
The first sentence isn’t a justification; it’s a conclusion. The only justification is the second sentence, which says that the defendants participate in a website that monitors filings in this district. That might be part of a justification, but instead plaintiff asks the Court to make the inferential leap—worthy of Bob Beamon in the 1968 Olympics—that if it becomes known that the plaintiff has filed a lawsuit against someone, the defendants will all hide their assets. The Court is unwilling to draw this inference without some supporting evidence and argument. For this reason, the motion to seal is denied—to the extent it asks to conceal the plaintiff’s identity—without prejudice to filing a new motion by February 10, 2021.
The second difference between this case and the usual “Schedule A” case is that the present case is a patent infringement suit, not a trademark infringement suit. The plaintiff alleges that each of the “Schedule A” defendants (actually, in this case, they are the “Exhibit 2” defendants) is selling products that infringe a patent issued to the plaintiff. The infringement allegations in the complaint itself are relatively conclusory; they include no information about how the claimed infringing products are alleged to infringe the design patent. And none of the allegations in the complaint says anything specific about any defendant; all of the defendants are lumped together.
Without addressing at this point the sufficiency of the complaint under Federal Rules of Civil Procedure 8(a) and 12(b)(6) as to each of the two hundred fifty-four defendants, there is a threshold problem with this particular case that does not exist in the typical “Schedule A” trademark/trade dress case. Specifically, the joinder of all the defendants in a single suit appears to run afoul of a provision of the America Invents Act, adopted in 2013.
Before the AIA, it was common for patent holders to sue or attempt to sue multiple infringers in a single suit. The AIA sought to put a stop to this. Under 35 U.S.C. § 299, parties that are accused infringers of a patent may be joined in a single action as defendants only if a right to relief “is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences” that involve making, using, importing, offering, or selling “the same accused product or process,” and only if there are questions of fact common to all defendants that will arise. Importantly, “accused infringers may not be joined in one action as defendants … based solely on allegations that they each have infringed the patent or patents in suit.”
In this case, it is questionable whether the plaintiff can clear all of the hurdles imposed by section 299. It alleges that that the defendants all sold infringing products, but that is not enough in light of section 299(b). The plaintiff also alleges that “some” of the defendants use “identical or equivalent language” to sell the products and use images taken from the plaintiff’s website; that there are unspecified “similarities and indicia of being related to one another” among the defendants; and that they offer the product at similar prices. But it would not be particularly surprising for multiple sellers to attempt to match other sellers’ prices, and it would not be at all surprising for counterfeiters of a product to copy images from the legitimate seller’s site or even from other counterfeiters’ sites.
The plaintiff also alleges that the defendants tend to post information to a “seller defense” website, but parallel action does not amount to action in concert. The Court questions whether these allegations are sufficient to satisfy the “same transaction, occurrence, or series of transactions or occurrences” requirement of section 299(a)(1), given Congress’s express determination in section 299(b) that an allegation of infringement by multiple entities is not enough to allow joining all of them in one lawsuit. In addition, the plaintiff does not allege or explain how questions of fact common to all of the defendants will arise in the case, as required by section 299(a)(2).
Finally, the plaintiff does not allege that the defendants are selling the same accused product. This is a separate requirement of section 299(a)(1) that the plaintiff does not appear to satisfy or even address, even if it could legitimately contend that the defendants’ conduct was part of the same series of transactions or occurrences and that fact questions common to all defendants will arise.
The Court notes that section 299(c) provides that an accused infringer may waive the statute’s limitations as applied to itself. But the Court is not inclined to allow a lawsuit that appears on its face to run afoul of a Congressional enactment to proceed on the possibility that the defendants may eventually waive the statute’s protections. Such an approach does not seem to the Court to be appropriate here, particularly given the manner in which lawsuits of this type typically proceed, with under-seal filing, ex parte temporary restraining orders, asset freezes, and the like.
The Court also notes that in a case like this one, the benefit to the plaintiff of naming multiple defendants in a single case is quite significant. Specifically, by suing 254 defendants in a single suit rather than 254 separate ones, the plaintiff will save, in one fell swoop, over $100,000 in filing fees.
For these reasons, plaintiff is ordered to show cause in writing by February 10, 2021 why the case should not be dismissed under 35 U.S.C. § 299….
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Stock Rally Reverses Amid “Overheating” Concerns As Bitcoin Powers Toward $50,000
The roaring stock rally of the past six days week took a breather on Tuesday, with futures dipping from a record high of 3,913 as investors sifted through earnings and weighed the impact of soaring inflation expectations which saw 10Y Breakeven rates hit 7 year highs amid signs the Biden administration is committed to passing a sizable aid bill..
The MSCI All-Country World Index edged up 0.1% to its own record high, although early moves in Europe’s top indexes suggested further gains may be tougher to find, with Britain’s FTSE 100 flat on the day even as a record high close for Wall Street overnight gave Asian stocks the confidence to push on further, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.3%, led by Chinese blue chips, up 2.2%.
European equities turned red after a choppy start even as bitcoin powered on, rising above $48,000 overnight following widespread speculation that more companies will follow Tesla in purchasing the cryptocurrency outright. Oil reversed its recent rally while the dollar slide accelerated. Futures for the S&P 500 were modestly in the red, suggesting a quiet start to the U.S. trading day.
“Reflation on the back of U.S. fiscal stimulus and positive vaccine news remains the major theme for markets,” strategists at National Australia Bank wrote.
While Emini futures drifted around the 3,900 gamma “call wall”, Bitcoin’s surge continued as it rapidly approached the $50,000 mark on Tuesday as the afterglow of Elon Musk-led Tesla’s investment in the cryptocurrency had investors reckoning it may become a mainstream asset class for both corporations and money managers. The price of one bitcoin climbed to a peak of $48,216 – almost enough to buy one of the best-selling Tesla vehicles, Tesla Model Y SUV. Rival cryptocurrency ethereum struck a record high of $1,784.85 on Tuesday. Bitcoin exploded 20% higher on Monday after Tesla announced it had a $1.5 billion investment and that it would eventually take the cryptocurrency as payment for its cars. That was its largest daily rise in more than three years.
Musk foresees accepting the currency as a payment for Tesla cars and analysts reckon this is a larger shift as companies and big investment houses follow small traders into the asset.
“Bitcoin is definitely capturing investors’ attention — I get more and more questions about it,” said Marija Vertimane, senior strategist at State Street Global Markets. “From a practical point of view, using bitcoin to buy anything – Tesla cars – would be still extremely difficult given its excessive volatility.”
“Right now, it still seems like a bit of a leisurely pursuit, to acquire bitcoin. But I think by the end of the year, with the current rate of institutional flow inbound, it will become clear that this is a once-in-a-lifetime landgrab,” said Jehan Chu, founder and managing partner at Kenetic, which invests in blockchain-related companies.
Going back to equities, the euphoria was far more muted: Europe was broadly, if modestly, in the red with the Eurostoxx 50 down 0.3% and the Stoxx 600 index down 0.4% despite positive results from French oil giant Total SE and online grocer Ocado Group Plc. Utilities, media and construction names are a drag on indexes; oil & gas is the sole sector in positive territory. Natixis SA shares were suspended after French financial group BPCE SA was said to be in advanced discussions about a potential offer to buy out minority shareholders of the investment bank. Here are some of the biggest European movers today:
Earlier in the session, Asian stocks posted modest gains, with the benchmark gauge rising for a third day as it looked set for another record high. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, led by Chinese blue chips, up 2.2%. In Japan, SoftBank Group shares rose 3.4% after reporting record profit in its Vision Fund. The stock was the biggest boost to Japan’s Topix Index for a second straight day and is closing on a record high. Telecommunications providers were the largest boost to the Topix, which extended its gain after climbing Monday to its highest level since 1991. The Nikkei 225 added to Monday’s 2.1% surge, powered by a jump in SoftBank after it reported a record profit in its Vision Fund. The Topix itself climbed 0.1%, extending gains from Monday when it reached its highest level since 1991. Blockchain and cryptocurrency stocks jumped after Bitcoin reached a fresh peak in the wake of Tesla’s announcement that it made a $1.5 billion investment in the digital currency. Meanwhile, Indonesia’s Jakarta Composite slumped 0.4% even after the central bank governor said it’s weighing whether to slash interest rates further because inflation was falling “too low.”
China’s CSI 300 Index extended gains in afternoon trade to surpass January’s peak and reach its highest level in 13 years, led higher by materials and technology stocks. The benchmark index closed 2.19% higher with Iflytek, Han’s Laser Technology and Zoomlion Heavy Industry among biggest gainers.
Stretched valuations are giving investors pause as they cheer advancing vaccination efforts, rising stimulus prospects and a slowdown in coronavirus infections across the globe. With inflation expectations near the highest since 2013, questions have also begun to be raised about when the so-called reflation trade in bonds could start to threaten equities. On Monday, Goldman pulled forward its forecast for a first rate hike from late 2024 to early 2024 after raising its GDP forecasts for 2022 and 2023, which put the US economy on the verge of redlining and inflation set to be red hot.
“We are getting to the point where we have to start worrying about the risk of how do we pull back on that stimulus, will it cause the economy to overheat, are these valuations becoming too expensive,” Saira Malik, Nuveen head of global equities, said on Bloomberg TV. “That is something we are going to be grappling with as the year goes on.”
In addition to growing worries about higher bond yields, concern remains over the pace of vaccination, the efficacy of the vaccines against new strains of the COVID-19 virus and the damage being done to economies, including the impact on the dollar of a planned $1.9 trillion stimulus package.
That suite of negativity helped weigh further on the dollar. Against a basket of other currencies, the dollar weakened broadly against its Group-of-10 peers, with haven currencies leading gains. At the same time, the euro extended gains in early European hours, rising above $1.21, while Italian bonds rallied to send the country’s borrowing costs to a record low. The euro volatility skew has undergone a sharp repricing once again in the front-end, which shows cash positioning drives the market as the dollar remains in a bearish trend. The yen advanced beyond 105 per dollar and was set for its biggest daily gain since November amid the decline in Treasury yields. The pound rose to its highest in nearly three years, helped by broad dollar weakness amid cautious optimism about a recovery in equities. The Australian and New Zealand dollars climbed for a third day as rising commodity prices brightened the outlook for the nations’ exports; Brent crude rose an eight consecutive day, the longest streak in almost a year, and gold climbed for a third day.
As noted above, Bitcoin hit a fresh record above $48,000 on Tuesday after Tesla Inc.’s announcement of a $1.5 billion investment in the largest cryptocurrency.
In rates, Treasuries were higher led by long-end of the curve after dip-buying during Asia session sent yields to session lows, after hitting 1.20% yesterday. U.S. bonds outperformed bunds and gilts with additional support from S&P 500 futures easing from record high levels. Yields were richer by ~2bp across long-end of the curve, flattening 5s30s by 1.5bp and 2s10s by 1.9bp; 10s around 1.15%, outperforming bunds and gilts more than 1bp. Today the Treasury refunding starts with 3-year note sale; 10- and 30-year are later this week. The difference between the US 5 and 30 year yield curve and its German equivalent reached its widest since 2011, mainly reflecting expectations for a stronger inflation pickup in America.
In commodities, In keeping with the risk-on sentiment, oil earlier hit 13-month highs, helped by rising optimism about a return in fuel demand, with Brent crude up 0.8% before giving up gains.
“There is a sense that the glut of oil supply is disappearing more rapidly than anybody thought possible,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “There seems to be a paradigm shift in the market.”
Jim Bullard, St Louis Fed President, is today’s designated Fed speaker before we move on tomorrow’s CPI data and Jay Powell speech at the Economic Club of New York. Yesterday, Kansas Fed President Esther George was very much on-message and helped smooth the bond market, setting the scene for the risk recovery.
Finally before the day ahead a quick few lines on ECB President Lagarde’s comments after the European close. She again pledged to continue offering the bloc monetary support as lockdowns in the region continue on longer than what many originally anticipated. She called on countries to follow on as well saying that “ it remains crucial that monetary and fiscal policy continue to work hand in hand. Fiscal policy – both at the national and at the European level – remains crucial to bolster the recovery.”
To the day ahead now we and will get data on both the German December trade balance and current account balance along with Italian December industrial production. From the US, there will be the January NFIB small business optimism survey and December JOLTS job openings. From central banks, ECB Chief Economist Philip Lane will be speaking. Some of the largest companies reporting today include Cisco Systems, Dupont de Nemours, Twitter and Fiserv.
Market Snapshot
Top Overnight News from Bloomberg
A quick look at global markets courtesy of Newsquawk:
Asian equity markets were mostly positive after the stimulus-driven momentum on Wall St. which lifted all major US indices to fresh unprecedented levels and the S&P 500 to above 3900 for the first time ever, but with gains capped as focus in the region shifted to the deluge of earnings releases. ASX 200 (-0.9%) underperformed with the index dragged by defensives and cautiousness in the largest-weighted financials sector after the RBNZ announced to reinstate LVR restrictions from March 1st to curb risks to financial stability from high-risk mortgage lending. There were also varied corporate updates including Macquarie Group which was boosted despite forecasting its FY21 results to be slightly lower Y/Y as it also noted its market-facing businesses’ combined Q3 net profit contribution was significantly higher Y/Y and with Suncorp lifted by an increase in H1 cash earnings, although Challenger slumped after it reported weaker H1 net. Nikkei 225 (+0.4%) was kept afloat amid supportive measures whereby the government announced to spend JPY 1.4tln in emergency reserves for pandemic-related measures and as earnings also provided a tailwind including SoftBank which posted blockbuster results and was helped by record profit in its Vision Fund. However, most of the advances in Tokyo were eventually faded on currency flows and with wage growth at its largest contraction since December 2009. Hang Seng (+0.5%) and Shanghai Comp. (+2.0%) were initially tentative heading closer to the Lunar New Year holiday closures and after the PBoC reiterated its prudent approach, although support was seen in the blue-chip oil names after further gains in the underlying commodity, while Geely Auto outperformed after its sales rose 40% Y/Y to 156.3k units in January. Finally, 10yr JGBs were steady as prices found a platform around the 151.50 level and with the BoJ also present in the market today for more than JPY 1.2tln of JGBs heavily concentrated in 1yr-10yr maturities.
Top Asian News
European stocks take a breather from the recent rally and see a mild downside bias in early trade (Euro Stoxx 50 -0.3%) following a relatively mixed APAC session, as the stimulus-driven momentum seen on Wall Street gradually fizzled out. US equity futures also see shallow losses with the ES, NQ, YM and RTY lower by some 0.1-0.2% as participants await the next catalyst for further conviction. Sectors in Europe are mostly lower with no clear risk bias but with some defensives seeing less pronounced losses, although Energy outpaces as crude prices remain near pre-COVID levels. Delving deeper into the sectors Food & Beverage and Healthcare reside near the top of the table, just below Oil & Gas, whilst the other side of the spectrum sees Construction, Tech and Banks – with the latter potentially a function of yields pulling back. Spain’s IBEX (-0.9%) resides as the underperformer amid losses in its heavyweight banking sector coupled with some earnings-hit stock – with Solaris (-9%) the laggard in the Spanish benchmark. Elsewhere, France’s CAC (+0.1%) is cushioned by gains in Total (+1.6%) post-earnings, whereby the Co. beat on adj. net expectations and noted that the group maintains its priorities for cash flow allocations and the implementation of the Co’s transformation strategy, support dividends and maintain a strong balance sheet. Other earnings-related movers include Micro Focus (+3.19%), TUI (-0.5%), ASM (+0.9%) and Randstad (+2.5%).
Top European News
In FX, the Dollar has fallen further from best levels, and almost across the board on a mixture of fundamental and technical factors, including more retracement and reconvergence in yield spreads that had been favouring US Treasuries, even loftier record peaks on Wall Street and further progress towards fiscal relief. Meanwhile, crude and fellow commodities are also applying greater downside pressure on the Greenback and G10 counterparts have either scaled or are testing key chart and sentimental levels. Hence, the DXY is now struggling to stay above 90.500 between 90.963-502 parameters compared to Monday’s 91.288 high.
In commodities, WTI and Brent futures trade off best levels but remain elevated on the reflationary prospect emanating from the US stimulus bill, which comes against a supportive backdrop of vaccine hopes and OPEC+ supply tweaks – with Saudi’s extra output cuts exacerbating the tightening in the oil market. The oil complex has also been tracking the broader market sentiment amid the slowing in pace of COVID infections alongside calls from monetary and fiscal figures not to taper stimulus too soon. Desks also note that refinery margins are pointing towards a recovery in fuel demand – with jet fuel demand also supported by measures mulled by officials to ensure cross-country travel can occur safely. That being said, downside risks include the prolongation of lockdown measures due to staggered vaccine rollouts or the emergence of a more potent variant – this sentiment was also reflected in the outlook by oil giant Total. Furthermore from a supply standpoints, the high oil prices could prove tempting for producers to unwind or at least call for the tapering of COVID-related output cuts. Meanwhile, US active oil rigs have seen a consistent rise since the latter part of November – with the number seen rising on the back of attractive prices. WTI resides just north of USD 58/bbl (vs. high 58.59/bbl) whilst Brent itself back on a USD 60-handle after briefly topping USD 61/bbl to a high of around USD 61.23/bbl. Elsewhere, precious metals benefit from the softer Dollar with spot gold inching closer back towards 1850/oz with its 200DMA seen around USD 1855/oz followed by its 50DMA at USD 1859/oz. Spot silver meanwhile extends its gains above USD 27.50 (vs. low 27.23/oz). Finally, base metals are firmer amid the softer Buck and reflationary backdrop, with LME copper meandering around the USD 8,100/t mark.
US Event Calendar
DB’s Jim Reid concludes the overnight wrap
After a weekend of pathetic attempts to snow here in Surrey, yesterday a more meaningful attempt was made and I’ve woken up to a few more centimetres this morning. One of the things that has kept me going in lockdown 3 is that over the last 5 weeks of tedium, I suspect the golf course would have been closed a lot more than it was open given a bad month of rain, snow and cold weather. I was telling my kids last night that when I was about 4 I used to believe that every garden in the world had exactly the same amount of snow regardless of its size. So I thought a small garden saw a huge depth of snow. When I told this to my kids they looked at me as if I was the most stupid person in the world.
The reflation trade helped markets hit new pandemic highs yesterday with recent market storms a distant memory as the prospect of a substantial US fiscal stimulus package and slowing Covid-19 infection rates caused risk assets to continue their February rally. The renewed optimism was particularly strong in commodity markets, where Brent crude rose +2.06% to $60.56/bbl – closing over $60/bbl for the first time since January 2020. This led energy stocks to lead equity indices on both sides of the Atlantic, with the S&P 500 energy industry rallying +4.17% and the STOXX 600 Energy sector gaining +1.21%. Banks similarly rallied even as bond yields took a break from their recent rise, with US banks adding +1.78% as their European counterparts rose +0.86%. Overall the S&P 500 rose +0.74%, to gain for a sixth straight session and reach another record high. Meanwhile, US small cap stocks outperformed significantly as the Russell 2000 rose +2.53% to a fresh all-time high of its own and is now up +130% from its pandemic lows, compared to the S&P’s 74.5% rally from its low.
While not really a commodity (yet) and not necessarily a risk asset, Bitcoin rose +15.8% and to a new all-time high ($44,692) with Tesla (+1.31%) just shy of theirs after we learnt yesterday that Tesla had acquired $1.5bn Bitcoin in January. Bitcoin is up another 4% this morning. In last month’s survey (link here) we asked whether you thought Bitcoin and Tesla were more likely to double or halve over the next 12 months. Doubling was seen by 25% and 18% for Bitcoin and Tesla respectively with 56% and 62% thinking they halve.
Perhaps with Elon Musk’s space ventures he will try to make Bitcoin the currency of the universe going forward. Why stop at global domination? Anyway, whatever you think of Bitcoin (and Tesla’s) valuations this announcement gives the crypto currency further institutional credibility in the near-term. Marion Laboure on my team wrote a great piece last week on the future of digital and crypto currencies. She is firmly of the view that both are going increasingly mainstream. See her report here.
Overnight, most Asian markets have continued to climb up with the Hang Seng (+0.63%), Shanghai Comp (+1.30%) and Kospi (+0.48%) all posting gains. Japanese markets are a bit more mixed with the Nikkei (+0.13%) up after erasing early losses while the Topix is down -0.27%. Futures on the S&P 500 are trading broadly flat as we type while the US dollar index is down -0.22%. Yields on 10y USTs are down -1.2bps overnight to 1.159%. In terms of overnight data releases, Japan’s December real cash earnings came in at -1.9% yoy (vs. -3.4% yoy expected) while the previous month’s reading was revised to -0.7% yoy from -1.1% yoy.
Back to yesterday and in Europe, the STOXX 600 gained +0.30% on the same reflation and pro-cyclical forces driving other markets. Meanwhile the FTSEMIB rallied a further +1.48% as Mario Draghi has won the backing of the main Italian political parties and is now expected to announce cabinet picks shortly as he tries form a new government. The risk on mentality did not see a significant weakening in sovereign debt though as yields and curves were mostly unchanged by the end of their sessions. Just prior to the start of trading in the US, 30yr Treasury bonds traded at 2.0% before falling back to 1.95% by the end of the day, while the 10yr yield was as high as 1.198% before finishing the day just a bit higher (+0.7bps) at 1.171%. In Europe, 10yr German bund yields were up +0.3bps to -0.45% while 10yr Gilt yields fell back -0.7bps to 0.48%.
On the topic of fiscal stimulus, Congressional Democrats in the US will start committee votes on elements of the Biden Administration’s Covid-19 relief bill later today. After the equity market closed yesterday, Senate Minority leader McConnell noted that “Democrats have decided to go at virus relief alone” in a sign that budget reconciliation is indeed the path forward and the Democrats will be able to pass the bill with a simple majority. Keeping an eye on what measures stay in the administration’s plan as it makes its way through the various House committees will be key in understanding where exactly the stimulus bill will affect the economy. See DB’s Matt Luzzetti (here) and Peter Hooper’s pieces ( here ) for more on how the economy would be impacted by various levels of stimulus and also on how the plan could be optimised to get political acceptance while still stimulating the economy.
Elsewhere, in terms of the worrying AstraZeneca weekend news, the U.K. Deputy Chief Medical Officer suggested yesterday that the South African strain shows no evidence of becoming the dominant strain in the U.K. over the coming months, and said it doesn’t appear to have a transmissible advantage over the current dominant domestic strain which is the so-called “Kent strain”. At the moment there have “only” been 147 SA cases in total in the U.K. and no new ones for two days which is important as lots of surge (mass) testing has been done in areas where it has been found. If it eventually does take over the hope is that adapted booster jabs will then be ready (likely by the autumn) that can be adapted to deal with mutations. It is also hoped that vaccines will help reduce dramatically severe illness and hospitalisations. Even though I’m a vaccine and global economy bull for this year I still think that these mutations will complicate the reopening plans a bit more than I was expecting at the end of last year or at least be associated with a higher level of restrictions when reopening than would be the case with vaccines perfectly protecting against all the mutations. International travel is probably going to be the biggest problem in 2021.
On the coronavirus more broadly, German Health minister Spahn expressed the need to keep the country’s restrictions in place for the time being as new infections are likely to remain above the government’s target in coming days. While in France, a government official said yesterday that the UK variant probably makes up about 20% of French cases currently and that the country may not move on to vaccinating the less vulnerable until May. In the US, it was announced that indoor dining would reopen as soon as Friday in order to take advantage of the Valentine Day holiday weekend, though capacity will remain limited to 25%. The new head of the CDC suggested requiring Covid-19 tests before all domestic flights in order to reduce transmission, and the new Transportation Secretary Buttigieg said any final decision on the policy would “guided by data, by science, by medicine, and by the input of the people who are actually going to have to carry this out.”
Finally before the day ahead a quick few lines on ECB President Lagarde’s comments after the European close. She again pledged to continue offering the bloc monetary support as lockdowns in the region continue on longer than what many originally anticipated. She called on countries to follow on as well saying that “ it remains crucial that monetary and fiscal policy continue to work hand in hand. Fiscal policy – both at the national and at the European level – remains crucial to bolster the recovery.”
To the day ahead now we and will get data on both the German December trade balance and current account balance along with Italian December industrial production. From the US, there will be the January NFIB small business optimism survey and December JOLTS job openings. From central banks, ECB Chief Economist Philip Lane will be speaking. Some of the largest companies reporting today include Cisco Systems, Dupont de Nemours, Twitter and Fiserv.
Tyler Durden
Tue, 02/09/2021 – 07:54
via ZeroHedge News https://ift.tt/3aLWOT2 Tyler Durden
