Tag: news

George Orwell’s Animal Farm gave us the useful phrase “All animals are equal, but some animals are more equal than others.”

That book was written as an allegorical warning against communism, but, as PJMedia’s Bryan Preston details below, since COVID struck Democrats tend to use it as a how-to.

The latest case in point is Austin Mayor Steve Adler. Back in November, he told Austin to stay home to stay safe. But he wasn’t at home at all when he said this.

Statesman.com’s Tony Plohetski reports the details that in early November, as health officials warned of a impending COVID-19 spike, Austin Mayor Steve Adler hosted an outdoor wedding and reception with 20 guests for his daughter at a trendy hotel near downtown.

The next morning, Adler and seven other wedding attendees boarded a private jet bound for Cabo San Lucas, Mexico, where they vacationed for a week at a family timeshare.

One night into the trip, Adler addressed Austin residents in a Facebook video:

“We need to stay home if you can. This is not the time to relax. We are going to be looking really closely. … We may have to close things down if we are not careful.”

In hosting the wedding and traveling internationally, Adler said he broke neither his own order or those established by Gov. Greg Abbott.

But at the time, the city was recommending people not gather in groups of more than 10, and the day after Adler’s departure, Austin’s health authority warned that “it’s important that we drive the (COVID-19) numbers down in advance of Thanksgiving.”

As he pressed the public to help stop the spread of the virus in recent weeks, Adler had not previously disclosed details of his private actions. He gave no indication in his Facebook video that he was outside the city as he discussed Austin’s rising number of cases and reviewed the number of hospital patients.

In an interview this week with the American-Statesman, the mayor said he and his family put hours of consideration into how to hold an intimate event and vacation as safely as possible. He said he consulted with interim health director Dr. Mark Escott prior to the wedding at the Hotel St. Cecilia, just east of South Congress Avenue, and established rules to ensure guests’ safety. The 20 attendees had to undergo a rapid COVID-19 test and maintain social distancing, he said.

Adler added that masks were distributed, although he acknowledged that guests were “probably not” wearing them all the time.

“At that point, I am with my family group and people who just tested,” he said. “It is not perfect. Obviously, there are infections that could happen, but I think all of us should be minimizing risks as best we can.”

In a media briefing the day after Adler’s party left for Cabo on Mexico’s Pacific coast, Escott told the public:

“If you’re going out to a restaurant, go out with your family, the people who live in your household, not with family and friends outside your household and start to decrease those travels outside of your home that are not necessary.”

A month later, City Hall insiders and political operatives have quietly started questioning the actions of Adler, a Democrat serving his second term, as officials across the country have been found breaking their own rules or recommendations.

• Williamson County Judge Bill Gravell, a Republican, paid a $1,000 fine for violating his stay-home order by visiting his grandson on his birthday after donning fire protection equipment.

• Denver Mayor Michael Hancock, a Democrat, issued a public apology after urging residents not to travel for Thanksgiving, then flying to Missisissippi to see his family.

• California Governor Gavin Newsom, also a Democrat, was recently caught at a posh restaurant at a large table without a mask.

• San Francisco Mayor London Breed, a Democrat, dined at the same posh restaurant the very next night with seven other people to celebrate socialite Gorretti Lo Lui’s 60th birthday.

• San Jose Mayor Sam Liccardo, also a Democrat, apologized on Tuesday for attending a thanksgiving dinner in violation of California health protocols. 

The situation underscores the greater-than-normal scrutiny on public officials during the pandemic as they issue public pleas for people to take coronavirus precautions and balance other demands in their personal lives.

Political opponents often are standing guard to capitalize on any misstep or hint of hypocrisy.

Adler has been involved heavily in the city’s COVID-19 response, taking what many considered a bold and politically risky step in March of canceling the South by Southwest Festival, a premier event and economic boon for the city, days before the first local cases were confirmed. He has appeared on national TV cable shows discussing the city’s measures to help stop the spread of the virus.

Adler said his conduct is different from other officials because he did not behave in a way that was inconsistent with his message at the time. He added that his actions did not violate his regulations.

“Everyday since March, I repeat that being home is the safest place for people to be,” Adler said in a statement Wednesday. “Only at our most trying moments, like around Thanksgiving, have I asked people not to travel as part of extra precautions. It is safest to stay home. However, we aren’t asking people to never venture out. We ask everyone to be as safe as possible when they do.”

The rate of people testing positive in Austin was less than 4% but started climbing after Adler was in Mexico. New cases rose dramatically as Thanksgiving neared.

Adler said his daughter wanted a much larger wedding but, due to the pandemic, downsized to mostly parents and siblings, some of whom flew into Austin. The event also included a Seattle-based wedding photographer.

“She, like so many other brides, was having to make adjustments in order to stay compliant with the orders from the health director here in Austin and the orders I issued as mayor,” he said. “My daughter and my family are no exception.”

Under Texas Department of Health guidelines, wedding planners are urged to hold events outside but are not subject to an occupancy limit. Indoor weddings must have a 75% occupancy cap.

At the time, Austin was under Stage 3 recommendations, meaning that people should avoid gatherings of more than 10 people and only higher risk people were urged to avoid non-essential travel.

Adler said the eight people with whom he traveled to Mexico operated as a “COVID pod,” meaning that they had all agreed to the same safety guidelines.

“There was no recommendation for people not to travel during that period of time,” he said.

“Someone could look at me and say, ‘He traveled.’ But what they could not say is that I traveled at a time when I was telling other people not to travel.”

Adler said that he does not believe he took a test upon his return to Austin but “generally quarantined.”

The U.S. in March limited inbound land crossings from Mexico to essential travel, but the prohibition did not prevent citizens from returning home. And while the U.S. outbreak has prompted many countries, including much of Europe, to ban American travelers, air travel to Mexico has been allowed during the pandemic, making it one of the few countries that has continued to allow American tourists without stringent restrictions.

Days before Thanksgiving, the U.S. Centers for Disease Control and Prevention warned Americans to “avoid all travel to Mexico” because of the spiking coronavirus infections.

It seems, once again, that The Simpsons traveled in their time machine…

PJMedia’s Bryan Preston  sums it all up perfectly: It’s leadership 101.

Don’t ask your folks to do anything you’re not willing to do yourself. Set the example and then live it. Basic. But how many elected Democrats have thrown this whole idea out and violated their own edicts while also shutting down churches and businesses but leaving other similar but politically-approved crowd-magnets open, and also by the way shutting down schools not because the kids there are at risk, but because the teachers’ unions demand the schools be shut down?

We’re gonna need a spreadsheet to keep track of all of ’em.

On the day our technological AI overlords decide to finally end the human race, we will be able to tout the feather in our cap that at one point they helped us solve some of the world’s toughest mysteries. 

Such was the case with a science problem that the medical and scientific community has been struggling with for more than 5 decades. The problem of “mapping the three-dimensional shapes of the proteins that are responsible for diseases from cancer to Covid-19” appears to now have a solution – thanks to AI.

Google’s Deepmind now says it has created a program called AlphaFold that can solve the mapping problems in “a matter of days”, according to a new report from The Independent. If it works as claimed, the solution will have arrived “decades” before it was expected, the piece notes. 

Of the 200 million known proteins, only a small amount are understood. The task of figuring out how each individual protein works is time consuming and expensive. This development could dramatically move our understanding forward further, and faster. 

DeepMind claims that “AlphaFold determined the shape of around two-thirds of the proteins with accuracy comparable to laboratory experiments.”

The 14th Community Wide Experiment on the Critical Assessment of Techniques for Protein Structure Prediction (CASP14) partnered with Google for the project. The group is comprised of scientists who have been working on a solution for protein mapping since 1994, more than 25 years. 

Dr John Moult, chair of CASP14, commented: “Proteins are extremely complicated molecules, and their precise three-dimensional structure is key to the many roles they perform, for example the insulin that regulates sugar levels in our blood and the antibodies that help us fight infections.”

He continued: “Even tiny rearrangements of these vital molecules can have catastrophic effects on our health, so one of the most efficient ways to understand disease and find new treatments is to study the proteins involved. There are tens of thousands of human proteins and many billions in other species, including bacteria and viruses, but working out the shape of just one requires expensive equipment and can take years.”

Nobel Laureate and Professor Venki Ramakrishnan said: “This computational work represents a stunning advance on the protein-folding problem, a 50-year-old grand challenge in biology. It has occurred decades before many people in the field would have predicted. It will be exciting to see the many ways in which it will fundamentally change biological research.”

The next step will be submitting a paper detailing the findings for peer-review. 

Real Vision managing editor Ed Harrison joins editor Max Wiethe to discuss the potentially negative jobs data that Ed is watching out for later this week. Harrison also highlights the four fiscal cliffs between now and the inauguration that could potentially cause permanent economic damage and undermine the optimism surrounding the vaccine rotation trade. They also discuss the importance of perceived duration in how certain assets react to these surprises in real economic data. In the intro, Real Vision’s Peter Cooper discusses the new ADP numbers, the latest data on the spread of COVID-19 in the U.S., the U.K.’s emergency-use authorization of Pfizer and BioNTech SE’s vaccine, and president-elect Biden’s nominations for key economic positions in his administration.

By Harley Bassman, creator of the MOVE index, the “VIX for bonds”

The lack of (CPI) inflation should not distract anyone from recognizing that our financial economy is presently overwhelmed by too much debt, both public and private; and it is beneath the cloak of systemic risk management that the Federal Reserve (FED) flipped on their printing press to support an alphabet soup of asset purchase programs.

And while I do not begrudge most of the FEDs actions to offer relief from both the Great Financial Crisis (GFC) and the COVID pandemic, what we all must recognize is that the financial remediation of these two crises have pulled forward the day of reckoning for how to fund the promise of Social Security and Medicare for the retiring Baby Boomer demographic.

The political game of “kick the can” for managing the two largest strands of our social safety net has reached an end; about a decade sooner than hoped. We are at a crossroads where one path is well trodden by financial history, and the other newly paved by an economic Pied Piper. But her siren song has been too sweet, and we are turning to the perfidy of Modern Monetary Theory (MMT).

Here we consider the reason and consequence of this dangerous road.

Only Congress can legally “spend” money (Fiscal Policy), and since they would not offer sufficient support in response to the GFC, the FED stepped in with (Monetary Policy) Large Scale Asset Purchases (LSAP), also known as Quantitative Easing (QE), as their most potent tool. These assets landed on the FED’s balance sheet.

While indeed much has changed over the past decade, sometimes to the point where facts do not exist, what has remained constant are the rules for double entry bookkeeping, where every asset must be paired with a liability.

Thus, the assets on the FED’s ledger are paid for by the creation of Money; an incongruity since by law the FED cannot “spend” money.

A Zero Interest Rate Policy (ZIRP) and QE were supposed to be interim measures that would be reversed upon an economic recovery; a progression always followed in the past. However, FED attempts at normalization were thwarted by the 2013 bond “taper tantrum” and the late 2018 equity tizzy.

The FED recognized that there are only two ways out of a debt crisis – either default or inflate with the caveat that inflation is simply a slow-motion default.

Since the market would not allow the FED to reduce its balance sheet via asset sales (or even the slow bleed of letting bonds mature), the alternate solution was to create inflation as a way to reduce the value of debt.

The FEDs dog-eared play book posited that if they increased the supply of Money (M2), and the economy held constant (Quantity), then Prices must rise (inflation) to keep the equation in balance.

GDP = Money * Velocity = Price * Quantity

Such a pity that Velocity collapsed, almost fully offsetting the increase (printing) of Money.

But do not toss out your economic textbooks just yet, as the seeming lack of inflation from the FEDs money-printing is a David Copperfield style illusion.

While CPI inflation barely registers a pulse, asset inflation is rampant. The Case-Shiller Index of residential housing is up 63% from its December 2011 low, and is 23% above its previous peak in June 2006. Gold kissed 2000 in August, an alltime high. And, of course, the S&P 500 is a five-bagger from early 2009.

Notice how much of our national wealth is held by the Top 1%. While a 3%-point increase over the previous peaks may seem small, let me assure you that 3% of a huge number is an extremely large number. Strangely, income distribution held steady. If FED  policies favored the wealthy, and their share of wealth increased, why did their share of income not rise in a similar fashion ?

Wealth concentration increased despite a static distribution of income because the affluent do not spend additional income. The Velocity of money declined because the dollars the FED created went into asset purchases instead of hourly wages where those funds would be recycled back into the economy.

A recent FED study reported that nearly 40% of US households do not have cash on hand to cover a $400 emergency expense (car repair or broken appliance). Surely funds directed to these households would soon be spent (recycled). Velocity is a measure of recycled spending; financial asset purchases are static.

I am loath to offer the topic of politics on these pages, if only because half my readers would soon use a hardcopy version for lining their bird cage.

But as a public policy comment, middle-class citizens should be mad as hell that Government resources were directed at policies that widened the wealth gap. I will stipulate this was NOT the intention of the FED; and that Fiscal policies by both parties have been grossly insufficient.

Thus, the trumpets have blared for the salve of Modern Monetary Theory.

As a reminder, Modern Monetary Theory (MMT) advocates suggest that Governments that create their own fiat currency can borrow so long as there is spare capacity in the economy. In a nutshell, deficits do not matter until debt capacity is reached, which will be signaled by rising inflation.

Never mind that nary an agency has created a predictive model for inflation; at best one can back test a few variables, but these models collapse in real time. Neither the FED, the CBO, nor the major Wall Street banks have successfully modeled inflation – as such, our policy makers will only dial back a debt binge after inflation occurs. This sort of risk management is akin to racing a car down a foggy lane and not hitting the brakes until after one slams into a tree.

But MMT has arrived as a confluence of events are making economic demands on the Government that cannot be denied by a political class whose priority is reelection. The combination of a COVID support package, perhaps Millennial relief of college debt, and most important, the promise to Baby Boomers to fund Social Security (SS) will draw bipartisan votes in favor of a MMT-fiscal expansion.

Let’s be clear, MMT was coming with or without COVID, no matter who was elected President, but recent events have accelerated the process.

The high-end for a COVID relief package is tagged at $3Tn, and the notion of forgiving all college debt would cost $1.68Tn. But this is my bar bill at the club compared to the funding gap to support Social Security.

The chart above borrows from a scholarly report by James Moore, PhD. It shows the total US Treasury debt outstanding while the lines are the projected Social Security deficit. From the Social Security Trustees (SST), the orange line is their base-case while the gray line represents the SST’s high-risk scenario. Both were calculated using historical assumptions for interest rates, inflation, and economic growth.

The red line is the result of using current market-based inputs for interest rates and inflation. Notice how this estimate was between the SSTs base-case and high-risk scenarios until 2010, but impact of the Great Financial Crisis (GFC) exploded the future liability.

In case I was too coy, let’s link these thoughts. The US Government has run a cumulative deficit over the past 100 years of $22.7Tn; in contrast, to fully fund Social Security using current metrics would cost an additional $45.6Tn. Unless eligibility or benefits are significantly altered, some form of debt issuance that rhymes with MMT will be required.

The chart from the CBO offers a similar outlook as a percent of GDP. Notice the steep increase from 2030 to 2050 starts near 100% of GDP instead of closer to 40% of GDP before the GFC and COVID. These two events accelerated an already challenging decision process.

Here is the main point: This past decade’s money printing was used to purchase assets; this next decade’s money printing will be used to fund an expansive Fiscal policy which will funnel money into the hands of people who will spend it. Thus, the Velocity of money will increase and produce inflation.

By 2026 all of the Baby Boomers will qualify for Social Security, and the Millennials will be the largest voting cohort. Both will demand Fiscal support which can only be funded via MMT budgeted borrowing. The most prescient bond bulls (Lacy Hunt, David Rosenberg, Albert Edwards) have noted that the FED’s money creation has been a self-defeating process that may reduce rates further, with the caveat that direct monetization of fiscal spending could lead to inflation. In other words, direct funding the US Treasury.

This is a quibble that deserves a push. In the same way that one “borrows beer” at a party, having the Treasury wash their issuance through Wall Street dealers to the FED’s QE balance sheet is still “money printing”. The key difference is how those funds are used. Presently the FED’s asset purchases have coincided with reduced Velocity which dampened inflation; this will change when Fiscal money is directed toward those who will spend it upon receipt.

Modern Monetary Theory is nonsense; the excessive creation of a fiat currency (eventually) leads to inflation. If it did not, I can assure you there would be a shelf of books detailing such miracles over the past five thousand years of recorded history. “Stop eating when you are fat” is not a healthy diet.

Not to go native on you, but don’t you wonder why the Old Testament called for a trumpet to be sounded on the tenth day of the seventh month every 50 years for a Jubilee where all debts were cancelled ?

While it may take longer than I expect for the final denouement, mark this as the moment our political class shirked their duty to make the hard decisions.

Investment advice:

Don’t panic (yet) as MMT will be terrific for the first number of years. There will be a “sugar high” as expansive Fiscal policy transfuses money to those who will spend it. Similar to how corporate earnings expanded with the 2017 tax cut, so too should earnings enjoy the tailwind from Fiscal support to those who tend to spend.

College debt relief will initially increase retail sales, but will ultimately migrate towards home sales as this is the household formation demographic.

Developed Market (DM) Equities should do well, especially when the dividend yield for most DM Indices exceeds their Central Bank controlled rate.

I love Mortgage REITs despite a nice rally; their dividend yield is still ~9%. This payout should be stable if the FED keeps its promise of ZIRP until 2023.

Other ways of riding the FEDs rate suppression coattails can be sourced via well-managed BDCs and Muni CEFs that employ financial leverage. For CEFs, pay particular attention to the Undistributed Net Investment Income (UNII) as a deficit here usually presages a distribution cut.

I think it’s “safe in the pool” until 2023-25, then it will be adult swim only. This is why I own long-dated options to protect against rising interest rates – a product outlined in “Pigs Can Fly” – January 28, 2020, and I will detail again soon.

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it…the truth is the mortal enemy of the lie.” – Joseph Goebbels

You know my rejoinder: “It’s never different this time.”

Critics of Trump and Pompeo’s maximum pressure campaign against Iran have argued that the sanctions strangulation and ‘dirty tricks’ actions which put the Islamic Republic on the extreme defensive and thus a militarized posture will only push it to pursue a nuclear bomb at all costs. 

After all the mullahs see what happened to Libya and Iraq, and especially since the last January assassination of IRGC Quds Force chief Qassem Soleimani (and now the killing of its top nuclear scientist last Friday) consider that Iran is at war on multiple fronts against its enemies. As yet more proof, Iran is ready to take the most dramatic step yet pulling further away from prior designated restrictions on its nuclear energy development program:

A bill requiring Iran’s government to suspend nuclear inspections unless sanctions are lifted, and ignore other restraints on its nuclear program agreed with major powers, was passed by the hardline-led parliament on Tuesday.

If this is done before Trump’s exit, it could serve as casus belli for military action. This after administration hawks – with Pompeo leading the way – have reportedly been given free reign to hammer Iran short of provoking major war.

A new report in The Daily Beast claims that “Trump has given some of his most hawkish administration officials, particularly his top diplomat, Mike Pompeo, carte blanche to squeeze and punish the Islamic Republic as aggressively as they wish in the coming weeks.”

The Iranians attached a timeline for the potential looming booting out of international inspectors: “Lawmakers later passed the full bill, including a provision requiring the government to suspend United Nations nuclear inspections if Western powers which are still part of the 2015 nuclear accords, as well as China and Russia, do no re-establish Iran’s access to world banking and oil markets within a month,” according to Reuters.

Iran will be asked for additional concessions for sanctions relief, says Biden’s new NSA head.

Opening gambit? Negotiations will be bumpy. Iran will ramp up refinement & and use China’s willingness to break sanctions as counter gambit. https://t.co/mNeteCki0l

— Joshua Landis (@joshua_landis) November 29, 2020

This is also likely designed to give Iran greater leverage going into talks and negotiations with the new Biden administration. The President-Elect has vowed to try and get the US back into the 2015 nuclear deal brokered under Obama, but of course Iran has already blasted past nuclear enrichment level caps stipulated by the deal as a response to US sanctions. 

The current US administration has also promised to derail any future Biden attempts to restore participation in the JCPOA. If Iran does move to end the nuclear inspections program, this could indeed seriously hinder any Biden initiative to restore peaceful relations.

A contractor for Dominion Voting Systems who was present during the Nov. 3 election at Detroit’s TCF Center testified at a Senate Committee hearing on Tuesday, telling the panel that she saw fraud throughout the day, as well as on Nov. 4, according to the Epoch Times.

“What I witnessed at the TCF Center was complete fraud. The whole 27 hours I was there, there were batches of ballots being ran through the tabulating machines numerous times, being counted 8 to 10 times. I watched this with my own eyes; I was there to assist with IT,” said Melissa Carone, who added that there were ‘completely untrained’ people working night shift – including a friend she’s known for two decades.

“They were allowed to do whatever they wanted to do. I, Nick, and Samuel, that worked for Dominion, they were on the stage. They had a contract employee, me, and another one that was from Texas—I have his name right here, Miles Smiley, 90-year-old man, there to assist with IT work. And he did not have any kind of background in IT and lived in Tennessee. So this man was just walking around aimlessly. I was really the only one running around like crazy helping these people,” she said.

Carone also claims that batches of ballots were being scanned 8-10 times, and that ballots were able to be accessed by election workers after being scanned – when they are supposed to be dropped into a sealed box and preserved.

The boxes, she said, were moved across the room and used to block GOP observers. In addition, Carone said that one Dominion employee disappeared to a “warehouse” for several hours before there was a large ‘data dump for Biden.

More via Miguel Moreno at the Epoch Times

Carone says the proper way to scan ballots when there’s a paper jam is to reset the count, in other words, discard the count, on the machine and rescan all of them with the jammed paper on top.

But, apparently, that didn’t happen and counters rescanned ballots without resetting the count.

In an interview with The Epoch Times, Carone says that Dominion hasn’t contacted her since she submitted her affidavit.