Tag: news

Brickbats: February 2021

brickbats1

Chicago Mayor Lori Lightfoot campaigned on a promise to reduce the city’s dependence on fines and fees to balance its budget, noting that fines and fees fall disproportionately on the poor and minorities. Now that Lightfoot is facing the possibility of a more than $1 billion deficit in 2021, her budget proposal calls for $35 tickets for anyone the city’s speed cameras detect driving as little as 6 mph over the limit.

When Geauga County, Ohio, Juvenile Court Judge Timothy J. Grendell ordered two teenage boys to resume visitation with their estranged father, they refused. So Grendell had them locked up in a juvenile detention center for the weekend instead.

 Oklahoma County, Oklahoma, District Attorney David Prater has charged two former detention officers and their supervisor with cruelty to a prisoner and conspiracy. Prater says the three forced inmates to listen to the children’s song “Baby Shark” for extended periods of time.

Qatari officials took all the women off a flight scheduled to leave for Australia in October and strip-searched them. An infant had been found in a restroom at the airport terminal, and officials were reportedly examining the women for signs that one of them had recently given birth.

Four police officers in Milan, Italy, stopped a couple and issued them a 400 euro ($486) fine for kissing in public, a violation of the nation’s mandatory mask rule. The couple protested that they are engaged and have been romantically involved for two years, but police would not budge.

In October, the Gloucestershire Constabulary in England said it would begin patrolling routes out of Wales looking for Welsh drivers who appear to be taking long trips. Cops will stop such drivers and order them to turn around; if they don’t, police will report them to their Welsh counterparts for possibly violating a ban on nonessential travel.

The Château des ducs de Bretagne museum in France has postponed an exhibit on Genghis Khan and the Mongol Empire. It was being put together with the help of a museum in Hohhot, China. But the Chinese Bureau of Cultural Heritage demanded control over the exhibit and ordered that certain words and phrases, including Genghis Khan, empire, and Mongol, be removed.

In the runup to the November election, a federal judge ordered that Tyler Maxwell, 18, be allowed to keep parking his truck at Florida’s Spruce Creek High School. The principal had rescinded Maxwell’s parking pass after he refused to remove a pro-Trump display, including a large elephant statue, from the truck.

When Dade City, Florida, police found Gwen Donahue, a 74-year-old dementia patient who had wandered away from her nursing home, they ran her name through their database and found that she had a warrant from nearly a decade ago. Rather than return her to her nursing home, they arrested her. Donahue’s daughter says the warrant was for driving under the influence and that her mother completed her sentence, except for a two-hour online course. It took the family nearly a week to get a judge to sign a release order to get her out of jail.

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Facebook Oversight Reverses Hydroxychloroquine Censorship Decision

Facebook Oversight Reverses Hydroxychloroquine Censorship Decision

Facebook’s independent Oversight Board has ruled against the social media giant’s decision to remove an October 2020 post touting hydroxychloroquine (HCQ) – the antimalarial which Democrats and their media surrogates were cautiously optimistic about until former President Trump promoted it.

“In October 2020, a user posted a video and accompanying text in French in a public Facebook group related to COVID-19,” explained the board on its website. “The post alleged a scandal at the Agence Nationale de Sécurité du Médicament (the French agency responsible for regulating health products), which refused to authorize hydroxychloroquine combined with azithromycin for use against COVID-19, but authorized and promoted remdesivir. The user criticized the lack of a health strategy in France and stated that “[Didier] Raoult’s cure” is being used elsewhere to save lives. The user’s post also questioned what society had to lose by allowing doctors to prescribe in an emergency a “harmless drug” when the first symptoms of COVID-19 appear.“

The Oversight Board noted that the user’s post did not encourage people to take HCQ without a prescription, and was instead “opposing a governmental policy and aimed to change that policy.”

“The combination of medicines that the post claims constitute a cure are not available without a prescription in France and the content does not encourage people to buy or take drugs without a prescription. Considering these and other contextual factors, the Board noted that Facebook had not demonstrated the post would rise to the level of imminent harm, as required by its own rule in the Community Standards,” the Board continued, adding that Facebook failed to satisfactorily explain why it removed the post, annd that their ‘misinformation and imminent harm rule’ is too vague – recommending that the company clarify its standards on health misinformation.

“The Board also found Facebook’s misinformation and imminent harm rule, which this post is said to have violated, to be inappropriately vague and inconsistent with international human rights standards,” wrote the panel. “A patchwork of policies found on different parts of Facebook’s website make it difficult for users to understand what content is prohibited. Changes to Facebook’s COVID-19 policies announced in the company’s Newsroom have not always been reflected in its Community Standards, while some of these changes even appear to contradict them.”

One can’t help but wonder how many lives left’s politicization of HCQ may have cost, after several studies have concluded that when taken early into a COVID-19 infection, the antimalarial has been shown to reduce mortality.

The currently completed retrospective studies and randomized trials have generally shown these findings: 1) when started late in the hospital course and for short durations of time, antimalarials appear to be ineffective, 2) when started earlier in the hospital course, for progressively longer durations and in outpatients, antimalarials may reduce the progression of disease, prevent hospitalization, and are associated with reduced mortality. –American Journal of Medicine

 

One Brazilian study found 4.6x fewer hospitalizations in patients who took HCQ and azithromycin within seven days of infection, while a retrospective study of cases in Detroit showed a 71% reduction in mortality with early treatment using the HCQ / Azithromycin combination.
 
A meta-analysis of 105,040 cases from 20 studies in 9 countries found a reduction in mortality by up to three times in groups treated early with Hydroxychloroquine and Azithromycin.
 
Unfortunately for those hoping to use HCQ, Trump made the mistake of endorsing it, setting off a cascade of anti-HCQ propaganda which has been largely disproven.
 
We’re beginning to like this Oversight Board.

Tyler Durden
Mon, 02/01/2021 – 12:04

via ZeroHedge News https://ift.tt/2L9pWuP Tyler Durden

Actually, there is an alternative

On March 12, 1989, a research fellow at CERN named Tim Berners-Lee submitted a paper to the agency’s senior management, proposing a new way to organize information across computer networks.

The Internet was already in full swing by 1989, at least among governments and universities. But it was mostly used for email at that point, because there was no easy way to post and access different types of content.

Berners-Lee solved that problem, and his creation became known as the World Wide Web.

A few years later, a young software engineer named Marc Andreessen led the development of the first graphical web browser; it was called Mosaic, and it was instrumental in popularizing the Internet around the world.

Andreessen broke away from the Mosaic project and founded a new company– Netscape Communications. And its ‘Netscape Navigator’ quickly became the most popular web browser in the world.

Barely a year after its founding, Netscape decided to go public. And this was extremely unusual at the time.

Back in the 1980s, nearly EVERY company to IPO was profitable, and fairly seasoned. Apple, Microsoft, Adobe, etc. were all making money when they went public.

Sure, it was normal that sophisticated investors who could bear the risk would buy shares of unprofitable startups. But it was unthinkable that an unprofitable company would go public, or that mainstream investors would actually want to own the stock.

Netscape, despite the popularity of its browser, was losing tons of money, so its decision to go public was highly unusual.

But that didn’t seem to matter to investors; Netscape’s IPO was a smashing success. When it went public in August 1995, the share price doubled on the first day, and it was up 600% within a few months.

And soon, it seemed like every 20 year old with a website was going public. And not only were most of these companies unprofitable, many of them weren’t even generating revenue.

It took another 4+ years for the dot-com bubble to burst. And when it did, the decline was ferocious; the NASDAQ stock index dropped nearly 80% from its peak, and most of the former high-flying dotcoms went bust.

You’d think that would have been a valuable lesson, and that no one would repeat the same mistakes of the dot-com bubble again.

But that’s precisely what we’re seeing now– companies that lose tons of money are some of the most popular stocks in the world.

Uber, for example, has never turned a profit. Its operating cash flow has totaled NEGATIVE $11 billion over the past five years with no end in sight. Yet its stock is worth roughly $100 billion.

SnapChat similarly has lost billions of dollars over the years. Yet its stock is worth nearly $80 billion.

Even stocks that are profitable are trading at absurd valuations.

I know its sacrilege to criticize Tesla… but let’s be honest– even though the company finally had a full year of positive Free Cash Flow, the stock is trading at an unbelievable 1600x earnings.

In fact MOST of the market is overvalued; the current P/E ratio of the S&P 500 is nearly FORTY (versus a long-term average of 15).

Yet people keep piling into the market despite these extreme valuations, let alone the fact that the new ruling party wants to raise their taxes and create all sorts of debilitating regulations.

The common refrain is that ‘There is No Alternative,” or TINA. In other words, because the Federal Reserve is printing so much money, it’s nearly impossible to find a fairly valued asset anymore.

But this TINA mentality demonstrates a remarkable lack of creativity or insight. And one need only look as far as gold.

Now, typically when I write about gold, I discuss its utility as a hedge against systemic risk.

Gold is like an insurance policy. And if the proverbial ever hits the fan, its not a bad idea to own a little bit of an asset with a 5,000 year history of value and marketability.

But today I’d point to gold’s potential speculative upside.

Remember when the pandemic first hit last year? Gold went through the roof because everyone was in a panic. And by early August, gold hit an all-time high of $2,058.

About two days prior to that record high, when the price was in excess of $2,000 per troy ounce, I wrote that “a short-term correction” in gold prices might occur, especially “if a Covid vaccine is produced.”

And that’s pretty much what happened; gold prices started to decline slightly and are now down roughly 10.5% from the peak.

The S&P 500, on the other hand, is up 12% since August. Oil and natural gas prices are up more than 25%. Real estate across the United States (according to Zillow data) is up 6%.

Even prices of industrial and agricultural commodities like corn, rubber, copper, lumber, cotton, and iron are WAY up since August.

But gold is DOWN.

This makes gold one of the only major assets to fall over the past five months.

And yet the world is not exactly on a positive trend right now.

Public health officials have been terrorizing their citizens about the evil new Covid strain; one government minister in Singapore just said it would be 4-5 YEARS before Covid conditions went away.

Politicians still want to restrain economic activity and pay people to stay home. Governments are still going deeper into debt and creating all sorts of debilitating regulations. Central banks are actively debasing their currencies.

Amid all of this, stock market valuations are near record levels… but gold is down 10%.

Now, I’m not suggesting anyone should sell their stocks to buy gold (we aren’t investment advisors anyhow); in fact there’s a case to be made that stocks will rise even further as long as the central bank keeps printing money.

The larger point is that this TINA mentality is total nonsense. It seems obvious that gold is a very credible alternative when so many other assets are overvalued.

Source

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In Defense Of Hedge Funds – Gamestop Squeeze Hides Market Excess Risk

In Defense Of Hedge Funds – Gamestop Squeeze Hides Market Excess Risk

Authored by Daniel Lacalle,

The short-squeeze forced in Gamestop and other stocks through Reddit’s WallStreetBets has generated a massive media frenzy against hedge funds and comments all over social media hailing the decision of a group of small investors to trigger a huge repurchase of a beaten-down stock.

The first thing we need to understand is that hedge funds play an essential role in markets. They provide liquidity, and in many cases are the ones that buy when the largest proportion of equity and bond markets, long-only investment funds, panic, and sell massively.

It is interesting to see how the average citizen and the media tends to blame hedge funds for market crashes when these investment firms account for less than 3% of global assets under management.

When markets crash it is not because of hedge funds attack, but because long-only large funds sell. However, the activity of shorting (borrowing a stock and selling it to repurchase it afterward at a cheaper price) has been demonized numerous times, and usually by CEOs of companies that are missing earnings, underdelivering on their strategy, and destroying value.

Hedge Funds are the easiest scapegoat to blame for the excesses of markets. However, they are a small proportion of the global market and, more importantly, their main activity is not to short stocks or bonds.

There are many fallacies about hedge funds that we read constantly:

  1. Hedge Funds profit from market crashes. The vast majority of hedge funds are net long, which means that they have more bets on a rising market than short exposure: In the latest Hedge Fund Review conducted by HSBC, the average net length of hedge funds is 40%, a very strong exposure to rising markets.

  2. Hedge funds are massively leveraged and create distortions in markets. According to a study by Columbia Business School, the average net leverage of hedge funds is 0.59 and the average long-only leverage is 1.36.

  3. Hedge Funds make solid companies collapse. A short position is not a guarantee to bring a stock down. As I have witnessed as a hedge fund manager, short positions can often be very painful, especially in a rising market, because the risk in a short position is asymmetric: A stock can go up more than 100% but cannot fall more than 100%. Short-squeezes (the process by which hedge funds need to cover their shorts when the price of an asset rises fast and the losses become unbearable) happen more often than what people think.

  4. Hedge Funds make concentrated attacks on companies. Collusion is illegal and penalized with jail sentences and heavy fines. In reality, hedge funds have a multitude of different strategies and very different objectives, that is why often one can find a large hedge fund with a short position in a headline-grabbing stock and a competitor building a long position in that same stock. If one or two hedge funds decided to attack a stock, it is not just illegal if there is collusion, but immediately we would see a large group of investors buying to prove them wrong if fundamentals and catalysts are positive.

The latest episode of hedge fund-bashing came with the Gamestop saga.

Obviously, having a massive short position in a $300 million equity value company with 136% of its free float in short interest is a very risky and unprofessional bet.

Most hedge funds use shorts to finance long investments and reduce exposure to market (beta) factors in order to isolate the idiosyncratic value of the investment. If I buy a large technology company for its superb strategy and I want to hedge (hence the name) exposure to interest rates, money supply changes, regulation, or other external factors, I may decide to use a short in a similar, but weaker, technology company. this is what most hedge funds do, not place massive short bets on a bankrupt company that may blow up the risk metrics and performance of the entire fund.

It makes no sense to expose an entire portfolio to the risk of a short-squeeze. In an ideal portfolio, the hedge fund manager will place risk-adjusted bets on the long and the short side so that one position does not destroy the performance of the portfolio if the bet goes wrong, either because a long investment collapses or a short one rises. Why? because the manager’s objective is to grow the fund, keep adding names and attract more investors thanks to a low-volatility and risk-adjusted strategy.

There is a lot to be said about those that kept unadjusted bets on Gamestop ignoring the daily volumes, the high concentration of shorts, and the diminishing free float. But that is not what most hedge funds do and is even less what any hedge fund should have as a strategy.

The strategy of a hedge fund is to mitigate volatility and generate absolute returns adjusting risk limits and keeping a strict control of the exposures to different factors. No serious hedge fund manager would finance long positions in liquid names with massive shorts in illiquid and crowded-short trades. That person would be fired immediately from a Citadel or Millennium, houses where portfolio managers spend hours-on-end analysing risk and exposure limits to be as neutral as possible. Hedge fund managers like Izzy Englander or Ken Griffin are precisely the ones that promote in their firms a no-nonsense strict approach to risk analysis and specifically weighted factor exposures.

It is precisely this, the dedicated and strict risk analysis with strong limits to market and external exposures that differentiate real hedge funds from a “long-only with a few shorts”, firms that have unfortunately flourished in a bull market driven by central bank insanity.

Hedge Funds have been essential providers of liquidity when markets have crashed and some of the best and most talented investors I have met in my life have built their careers in the hedge fund world.

Without hedge funds, we would also miss an increasingly rare but essential part of markets: the ones that think outside the box, the investors that actually identify bubbles and excessive risk in a world where all we hear every day from consensus is that nothing is bad and markets can only go up.

Gamestop has exposed a few bad strategies but not destroyed the true value of a well-hedged and low-risk long-term portfolio with quality longs and good sources of funds hedging them. There is nothing in the Gamestop saga that debunks the proven strategy of so many really market-neutral hedge funds.

The Gamestop saga only proves three things.

a) There are too many people taking excessive risk due to the insane monetary policy we live in, including the alleged Robin Hood investors trying to force short-squeezes in bankrupt companies.

b) It is amazing to see that the same people that -rightly- criticize when there is an episode of collusion between investment firms hailing the ultimate collusion promoted by a website that moves 197 million shares of a stock in one day and wants us to believe that it is all the action of a few young investors who decided that a bankrupt company is a place to put their hard-earned savings on.

c) A short-squeeze is relatively easy to trigger. The problem, as so many will find, is to sell afterward.

Small investors benefit a lot more from websites where they share ideas and opinions. Colluding to trigger short-squeezes in an almost-bankrupt company may seem fun but it is behaving in the same casino non-fundamental insane way that many of these investors accuse others of implementing.

If you want to invest, learn from successes achieved by great investors and the mistakes committed by them analyzing companies, do not play the greater fool theory and hope for the best.

Learn from the best, not from the reckless.

Tyler Durden
Mon, 02/01/2021 – 11:30

via ZeroHedge News https://ift.tt/2YAvwcA Tyler Durden

“This Is Unprecedented In History” APMEX CEO Explains Why They Halted Silver Bullion Sales Over The Weekend

“This Is Unprecedented In History” APMEX CEO Explains Why They Halted Silver Bullion Sales Over The Weekend

As we noted over the weekend, online bullion dealers saw such huge demand for silver ahead of today’s moves as ‘Reddit-Raiders’ prepared to take aim at the precious metals markets.

Sites from Money Metals and SD Bullion to JM Bullion and APMEX, all halted sales amid the unprecedented demand.

Over the weekend, Tyler Wall, the CEO of SD Bullion wrote the following (emphasis ours): 

In the 24 hours proceeding Friday market close, SD Bullion sold nearly 10x the number of silver ounces that we normally would sell in an entire weekend leading to Sunday market open.

In a normal market, we normally can find at least one supplier/source willing to sell some ounces over the weekend if we exceed our long position (the number of ounces we predict we will sell over the weekend).

However, everyone we talk to is afraid of a gap up at Sunday night market open.

This is about ready to get really interesting as there was very little inventory left from suppliers/mints going into Friday close.

Our direct AP supplier informed us after close on Friday that the “US Mint will be on allocation for the remainder of Type 1” (Current Silver Eagle Design).

Our sales for the month of January exceeded any one month last year during the heart of the pandemic. It was an all-time record month in our company history. 

And, perhaps most importantly, as QTR tweets so succinctly, “no matter what happens with #SilverSqueeze, a lot of younger people are for the first time informing themselves that metals are the only true real money. That realization sticks for life, even when squeezes end… this is a red pill moment for many, and it’s beautiful.“

However, the comments from APMEX’s CEO Ken Lews were just as shocking… (emphasis ours)

To our valued customers,

APMEX Statement On Current Market Conditions:

In the last week, we have seen a dramatic shift in Silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week. 

Any Precious Metal dealer will take a long position in the futures market to protect against spot price exposure when the markets open. We do this because it is our goal not to take a speculative position on metal. The weekends are unique as we are not able to real-time hedge our position. We took an aggressive position this weekend, but clearly could not have predicted the volumes that were seen. We have partnerships around to world that allowed us to cover these long positions, but only to a point. Once we exceeded our comfort levels, we had little choice but to stop the sale of Silver on our website. This was a difficult decision to make and unprecedented in our history. 

As we evaluate the markets, it is difficult to know where Silver’s price and demand will go in the coming day and weeks. APMEX is highly capitalized and has more than $150 million in inventory to support demand. We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place. We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs, when we can even locate the metal. It is also highly likely that we will need an additional day or two to fill orders based on current order counts. The one guarantee we can make to our customers is that you will only be sold metal that is on-site, or we have procured the metal with a firm commitment date from our partners. In markets like this, we feel this is the best approach a retailer can take, as no one can predict product availability.

We want to thank our customers for their patience and understanding during these turbulent times. APMEX prides itself on best in class service and delivering on promises to our customers.

We wonder if Nelson, Lamar, and William Hunt would approve of Reddit’s approach?

Tyler Durden
Mon, 02/01/2021 – 11:12

via ZeroHedge News https://ift.tt/3j6B87W Tyler Durden

Biden’s Orders Continue the Presidency’s Slide Toward Elective Monarchy

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“Ease up on the executive actions, Joe,” The New York Times urged recently inaugurated President Biden last week. While supportive of the president’s broadly progressive agenda, the newspaper’s editorial board found his flurry of executive orders and other unilateral actions both troubling and vulnerable to easy reversal by future presidents. “This is no way to make law,” the Times added.

Unfortunately, creeping rule-by-decree has become common for presidents, and Biden’s impatience with the normal frustrations of the legislative process builds on the conduct of his predecessors. While partisans tend to pick sides on executive power depending on who holds the White House, the devolution of the presidency into something resembling elective monarchy should worry everybody.

Not that executive orders are supposed to be royal decrees. At their root, they are nothing more than the authority of leaders to set rules for their organizations.

“Presidents have historically utilized various written instruments to direct the executive branch and implement policy,” the Congressional Research Service noted in 2014. “These include executive orders, presidential memoranda, and presidential proclamations.”

“The substance of an executive order, including any requirements or prohibitions, may have the force and effect of law only if the presidential action is based on power vested in the President by the U.S. Constitution or delegated to the President by Congress,” the 2014 report added.

But the limits of such orders are fuzzy since there is no mention of them in the Constitution; they evolved as a matter of convenience and so have their powers.

“When carried out pursuant to legislative or constitutional authority, executive orders are unobjectionable,” the Cato Institute’s Gene Healy observed in his 2008 book, The Cult of the Presidency. “Yet many of the orders issued by modern presidents lack such authority and justification.”

Professor Dana D. Nelson of Vanderbilt University agrees. In her 2008 book Bad for Democracy, Nelson called such unilateral commands “power tools” that “allow the president to enact both foreign and domestic policy directly, without aid, interference, or consent from the legislative branch.”

That’s not to say that executive actions can’t be challenged; judges do occasionally overturn them. But it takes less time to issue a memo than to fight it in court, so orders accumulate along with their reach.

Under Coolidge and Hoover, most executive orders applied to such matters as civil service rules. However, by the 1960s, the majority were policy-specific, filling the role of legislation. Issuing orders is easy; persuading lawmakers to pass your bills is difficult and time-consuming. As a result, unilateral action is tempting even for critics of such governance.

“A polarized, narrowly divided Congress may offer Mr. Biden little choice but to employ executive actions or see his entire agenda held hostage,” the Times sniffed while objecting to the practice.

For its part, the Biden administration makes no secret of its impatience with normal legislative channels.

“There are steps, including overturning some of the harmful, detrimental and yes, immoral, actions of the prior administration that he felt he could not wait to overturn,” White House press secretary Jen Psaki told reporters who questioned the Biden administration’s reliance on unilateral action.

But every faction thinks its agenda is important and that its ideological foes do harm; that’s why political parties oppose each other. If the refusal of lawmakers to enact a president’s policies is justification for unilateral executive action, then a slide toward elective monarchy is inevitable. And that’s exactly what seems to be happening.

“Biden’s use of the executive power in his first two days far outpaced that of his predecessors,” PolitiFact confirmed amidst public concern over the issue. “Biden issued 17 executive orders on his first two days in office, compared with Trump who issued one and Obama who issued two. Biden issued three proclamations, while Trump and Obama each issued one.”

But those predecessors also relied heavily on executive actions. “Trump is on pace to sign more executive orders than any president in the last 50 years,” CNN reported in 2017 of the 45th president.

“Once a presidential candidate with deep misgivings about executive power, Mr. Obama will leave the White House as one of the most prolific authors of major regulations in presidential history,” The New York Times concluded at the end of the 44th president’s time in office.

Notably, before taking office, Obama, Trump, and Biden were all critics of presidential rule through unilateral orders. “We’re a democracy. We need consensus,” Biden told ABC News in October. Just months later he issued his flurry of executive actions.

Maybe that’s because consensus is difficult to find in a vast nation of millions of people with varying values and preferences. That’s especially true when the country is as bitterly divided as the United States is now, into factions that despise each other to the point of violence. Presidents and their supporters often complain of a “do-nothing Congress” when legislators are in fact doing something: they’re blocking the president’s agenda. That may well be what their constituents want them to do.

Such relative inaction may actually be best when there’s so little agreement on what people desire from government—and what they fear from it.

“Overwhelming majorities of both Biden and Trump supporters say that if the other candidate wins in November they would not only be very concerned about the country’s direction, but that this would lead to lasting harm to the nation,” Pew Research found before the presidential election. That was before the Capitol riot and further souring of the national mood, with a majority of Americans now fearing each other as “domestic enemies.”

America’s divisions have deepened as government has become more involved in our lives and as presidents have indulged their taste for bypassing Congress. To reverse that dangerous trend, we need a president willing to do less, especially when it comes to issuing unilateral orders. That’s a tough ask for people who spend their lives pursuing political power. We may have to settle, again, for the next president unilaterally reversing this one’s actions.

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Gamestop Slides After Short Interest Said To Collapse

Gamestop Slides After Short Interest Said To Collapse

After starting the day solidly in the green, Gamestop – along with other most shorted names – traded as high as $383 after Robinhood eased its trading limits over the weekend, which saw the brokerage effectively halt trading in as many as 50 stocks. However, the early euphoria did not last long, and moments ago the stock tumbled as much as 34%, before getting halted after triggering a circuit breaker.

And while there was no actual news, traders were scrambling to figure out if there was a catalyst to the move.

There was: according to trading analytics firm S3 Partners, after holding steady in the triple digits, the company’s short interest plunged, with the company’s founder Ihor Dusaniwsky reporting that according to the firm’s analytics, as of this morning, “short interest is just $8.82BN or 27.12M shares shorted” as the shares short have declined by a whopping 35.2 million shares over the last week.

According to S3 calculations, this represents just 53.15% short interest of the % Float (or 34.1% using S3’s version of SI % Float which excludes synthetic share); Confirming that shorting is now far easier, the borrow fee has plunged from 26% to just 10% indicating that millions of shares have indeed been unlocked for shorting.

And with both short interest and borrow fees tumbling, the main catalyst behind the squeeze – namely GME being the most shorted Russell 3000 stock – is now gone.

So how long before GME trades back in the double digits?

 

Tyler Durden
Mon, 02/01/2021 – 10:52

via ZeroHedge News https://ift.tt/3j6yoY2 Tyler Durden

Biden’s Orders Continue the Presidency’s Slide Toward Elective Monarchy

sfphotosfour854657

“Ease up on the executive actions, Joe,” The New York Times urged recently inaugurated President Biden last week. While supportive of the president’s broadly progressive agenda, the newspaper’s editorial board found his flurry of executive orders and other unilateral actions both troubling and vulnerable to easy reversal by future presidents. “This is no way to make law,” the Times added.

Unfortunately, creeping rule-by-decree has become common for presidents, and Biden’s impatience with the normal frustrations of the legislative process builds on the conduct of his predecessors. While partisans tend to pick sides on executive power depending on who holds the White House, the devolution of the presidency into something resembling elective monarchy should worry everybody.

Not that executive orders are supposed to be royal decrees. At their root, they are nothing more than the authority of leaders to set rules for their organizations.

“Presidents have historically utilized various written instruments to direct the executive branch and implement policy,” the Congressional Research Service noted in 2014. “These include executive orders, presidential memoranda, and presidential proclamations.”

“The substance of an executive order, including any requirements or prohibitions, may have the force and effect of law only if the presidential action is based on power vested in the President by the U.S. Constitution or delegated to the President by Congress,” the 2014 report added.

But the limits of such orders are fuzzy since there is no mention of them in the Constitution; they evolved as a matter of convenience and so have their powers.

“When carried out pursuant to legislative or constitutional authority, executive orders are unobjectionable,” the Cato Institute’s Gene Healy observed in his 2008 book, The Cult of the Presidency. “Yet many of the orders issued by modern presidents lack such authority and justification.”

Professor Dana D. Nelson of Vanderbilt University agrees. In her 2008 book Bad for Democracy, Nelson called such unilateral commands “power tools” that “allow the president to enact both foreign and domestic policy directly, without aid, interference, or consent from the legislative branch.”

That’s not to say that executive actions can’t be challenged; judges do occasionally overturn them. But it takes less time to issue a memo than to fight it in court, so orders accumulate along with their reach.

Under Coolidge and Hoover, most executive orders applied to such matters as civil service rules. However, by the 1960s, the majority were policy-specific, filling the role of legislation. Issuing orders is easy; persuading lawmakers to pass your bills is difficult and time-consuming. As a result, unilateral action is tempting even for critics of such governance.

“A polarized, narrowly divided Congress may offer Mr. Biden little choice but to employ executive actions or see his entire agenda held hostage,” the Times sniffed while objecting to the practice.

For its part, the Biden administration makes no secret of its impatience with normal legislative channels.

“There are steps, including overturning some of the harmful, detrimental and yes, immoral, actions of the prior administration that he felt he could not wait to overturn,” White House press secretary Jen Psaki told reporters who questioned the Biden administration’s reliance on unilateral action.

But every faction thinks its agenda is important and that its ideological foes do harm; that’s why political parties oppose each other. If the refusal of lawmakers to enact a president’s policies is justification for unilateral executive action, then a slide toward elective monarchy is inevitable. And that’s exactly what seems to be happening.

“Biden’s use of the executive power in his first two days far outpaced that of his predecessors,” PolitiFact confirmed amidst public concern over the issue. “Biden issued 17 executive orders on his first two days in office, compared with Trump who issued one and Obama who issued two. Biden issued three proclamations, while Trump and Obama each issued one.”

But those predecessors also relied heavily on executive actions. “Trump is on pace to sign more executive orders than any president in the last 50 years,” CNN reported in 2017 of the 45th president.

“Once a presidential candidate with deep misgivings about executive power, Mr. Obama will leave the White House as one of the most prolific authors of major regulations in presidential history,” The New York Times concluded at the end of the 44th president’s time in office.

Notably, before taking office, Obama, Trump, and Biden were all critics of presidential rule through unilateral orders. “We’re a democracy. We need consensus,” Biden told ABC News in October. Just months later he issued his flurry of executive actions.

Maybe that’s because consensus is difficult to find in a vast nation of millions of people with varying values and preferences. That’s especially true when the country is as bitterly divided as the United States is now, into factions that despise each other to the point of violence. Presidents and their supporters often complain of a “do-nothing Congress” when legislators are in fact doing something: they’re blocking the president’s agenda. That may well be what their constituents want them to do.

Such relative inaction may actually be best when there’s so little agreement on what people desire from government—and what they fear from it.

“Overwhelming majorities of both Biden and Trump supporters say that if the other candidate wins in November they would not only be very concerned about the country’s direction, but that this would lead to lasting harm to the nation,” Pew Research found before the presidential election. That was before the Capitol riot and further souring of the national mood, with a majority of Americans now fearing each other as “domestic enemies.”

America’s divisions have deepened as government has become more involved in our lives and as presidents have indulged their taste for bypassing Congress. To reverse that dangerous trend, we need a president willing to do less, especially when it comes to issuing unilateral orders. That’s a tough ask for people who spend their lives pursuing political power. We may have to settle, again, for the next president unilaterally reversing this one’s actions.

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Citron Sends Shares Of Conversion Labs Higher, Suggests Stock Could Go To $140

Citron Sends Shares Of Conversion Labs Higher, Suggests Stock Could Go To $140

If you needed proof that short sellers were scrambling to update their business models after last week’s chaos, look no further than Citron Research.

Citron’s Andrew Left, as we noted last week, said he was discontinuing short research in favor of long-biased work. And he wasted no time getting after his “new” model by sending shares of CVLB soaring on Monday.

First thing Monday morning Citron was out with its first long call, noting that shares of Conversion Labs should be at $140 per share. Citron posted a basic financial model and called the company’s newest presentation “compelling”.

Recall, last week we documented when Citron’s Left said he was “discontinuing” short reports. Left announced in a video on Friday morning:

“Citron Research discontinues short selling research. After 20 years of publishing Citron will no longer publish ‘short reports’. We will focus on giving long side multibagger opportunities for individual investors”

“For the first 15 years of existence,” Left said, “no financial news outlets wanted to even cover that we existed.” 

“We uncovered more fraud than any non-governmental agency out there,” Left said in his video. “We have done this whole thing without hiding from lawsuits and without publishing anonymously,” he continued. 

After 20 years, we’ve noticed that “we’ve actually become the establishment,” he says. “It has completely, now, lost its focus”. 

You can watch his full announcement here:

Tyler Durden
Mon, 02/01/2021 – 10:40

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Russian Fighter Jet Buzzes US Warship In Black Sea As American Presence Builds

Russian Fighter Jet Buzzes US Warship In Black Sea As American Presence Builds

The United States military has condemned a provocative low flyby of the USS Donald Cook by a Russian fighter jet as the American warship traversed the Black Sea on Sunday.

“The Sukhoi Su-24 fighter-bomber screeched past the U.S. destroyer while it was operating in international waters, the U.S. Navy’s 6th Fleet said in a statement,” according to Stars and Stripes.

The Navy subsequently released video of the Russian jet buzzing the US warship as it conducted what a statement called legitimate operations to “ensure security and stability” in the Black Sea region.

We reported earlier that the US has beefed up its presence there within the week after recently sworn in President Biden entering the White House. Last Thursday a guided-missile destroyer, the USS Porter, was the third American naval vessel to have entered the Black Sea within the week prior, with the other two – the USS Donald Cook and USNS Laramie – having been there since the prior Sunday. 

Russia is said to be closely tracking the US vessels’ movements, also as they are apparently conducting military exercises while deployed, as Stripes details:

4A Navy P-8A aircraft also was taking part in drills with the vessels in recent days. But more Navy ships and planes in the Black Sea can also mean additional attention from Russian forces, who routinely track their movements.

In response late last week Russia publicized that the defense ministry last Thursday deployed a mobile coastal defense anti-ship system in Crimea.

A mobile coastal defense anti-ship system Bastion has carried out a march to a deployment site in Crimea within the framework of an exercise being held against the backdrop of the US destroyer Donald Cook’s visit to the Black Sea, the Black Sea Fleet’s information support office said on Thursday.

Via Task & Purpose

Crucially the Russian military press release noted that the mobile systems are armed with anti-ship missiles, and are currently prepping for joint drills with Russia Black Sea frigates. “Combat crews arrived in the designated area, readied the systems for combat and carried out preparations for virtual fire,” the TASS report continued.

The weekend Russian plane “buzzing” incident is nothing new, as it’s happened in recent years, and appears a favored but highly dangerous tactic of Russia’s air force in harassing US warships as a ‘warning’ message in the Black Sea, which is also very close to the geopolitical flashpoint of Ukraine and Crimea.

Tyler Durden
Mon, 02/01/2021 – 10:35

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