Tag: news

Affirmative Action in College Admissions Will Be on California’s Ballot in November

UCSD_1161x653

California voters will be asked in November whether they want to end a ban on affirmative action in college admissions, even though the state college system’s own demographic data shows increasingly diverse campuses absent preferential treatment.

Proposition 209, passed in 1996, added to the state’s constitution a ban on racial or sex preferences in education and hiring decisions in government institutions. This meant that on top of forbidding discrimination against somebody on the basis of sex, race, or ethnicity, the state couldn’t give somebody an advantage in public college admissions or government jobs on the basis of these factors.

In June, Democratic lawmakers voted to put on the November ballot a measure that would strike down Proposition 209. It’s on the ballot as Proposition 16, and the new proposition would simply strike out the text added to the state’s constitution by Proposition 209.

The proposition is supported by the regents of the University of California, which is notable because former leaders of the college system led the campaign for Proposition 209 in the first place. Former regent Ward Connerly, a Republican, said at the time that affirmative action was intended to be a temporary measure to recover from decades of racist practices, but that “[t]hree decades later, affirmative action is permanent and firmly entrenched as a matter of public policy. … not because of any moral imperative but because it has become the battleground for a political and economic war that has racial self-interest as its centerpiece.”

The arguments for eliminating Proposition 209 are odd and not terribly compelling (which would explain why Prop. 16 is currently doing poorly in polls). Assembly Member Shirley Weber (D–San Diego) authored the bill that would become Prop. 16 and explained in June that “The ongoing pandemic, as well as recent tragedies of police violence, is forcing Californians to acknowledge the deep-seated inequality and far-reaching institutional failures that show that your race and gender still matter.” Affirmative action, notably, does nothing to solve either COVID-19 or police violence.

Coverage in The Los Angeles Times is giving a lot of attention to a study from U.C. Berkeley released in August claiming that in the immediate wake of Prop. 209, there was a drop in enrollment by black and Latino students in the University of California system, which drove down their future wages.

The study further argues that prior to Prop. 209, when affirmative action was permitted in California, white and Asian American students were not harmed because they just went to other high-quality schools and ended up with similar earnings.

Affirmative action proponents could argue that the market provided for those students who were negatively affected by affirmative action, which would appear to echo the libertarian argument that gay couples have access to a market for wedding cakes and thus Christian bakers should not be forced to act against their own beliefs under threat of government penalty.

But there is a significant difference here, and it is that gay couples can’t be forced to pay a bakery if it won’t make a cake for them. The same is not true for California’s state-run college system and applicants who would be accepted on the merits but rejected under affirmative action. Because about 12 percent of the University of California’s budget comes from state funding—a total of $3.69 billion for the 2018-2019 school year—and about 12 percent of California’s general fund goes to higher education across the state, bringing back affirmative action would require some Californians to pay into an education system that would likely discriminate against them and their children on the basis of their race if they are white or Asian. As one might imagine, this does not play well with leaders of some Asian organizations in California who are tired of being pitted against other minorities.

“This is a troubling trend where our public university in the state is taking backwards steps in history to allow racial favoritism in college admissions,” said Crystal Lu, president of the Silicon Valley Chinese Assn. Foundation, in June.

On Thursday, UC’s board of regents banned the use of race quotas in admissions, hiring, and contracting, but race and gender would be used as a factor in admissions (along with more typical considerations like grades, talents, and coursework). Even without the quotas, though, it’s part of the college system’s stated goal to more closely match the demographics of California’s school age population.

What’s a bit strange about this effort is that the data showing drops in minority attendance at the University of California is from 20 years ago. The U.C. system responded to the drop after Prop. 209’s passage by finding effective ways to increase minority representation at their colleges that don’t depend on racial favoritism.

Here’s what the Los Angeles Times noted in June at the same time as the U.C. regents were calling for repealing Prop. 209:

UC campuses increased outreach to underserved communities. UCLA, for instance, works with 20 Los Angeles Unified high schools and several Black churches in the Inland Empire to scout promising students and keep them on track. The strategy, spearheaded by Youlonda Copeland-Morgan, UCLA vice provost of enrollment management, has helped the campus increase the proportion of resident Black students admitted as freshmen from 3.7% in 2012 to 6.3% in 2019.

The measures have produced some progress. The share of admission offers to California freshmen who are Black increased from 4.3% in fall 2010 to 4.7% in 2019, while the Latino share grew from 22.9% to 34.3% during the same period. Asian Americans also increased from 33.9% to 35.72% while whites declined from 32.4% to 21.9%.

The share of students admitted to California colleges who are black is just one percentage point less than the estimated 5.8 percent of the state that is black, and the share of students admitted who are Latino is just five percentage points below the estimated 39 percent of the state that is Latino.

Most importantly, even without affirmative action, white college admissions are dropping as a percentage of the total enrolled population right now! The most recent data about college admissions in California actually shows that affirmative action is not needed to create a college campus that better reflects the state’s population.

The one big outlier in these stats is the percentage of the freshman that identifies as Asian, which is more than twice the 14 percent of the California population that is Asian. That would explain why Asian community leaders are so angry: The people trying to sell Californians on bringing back affirmative action want voters to think it’s those privileged white folks who are hogging all the seats in the lecture hall. But white enrollment is actually declining, which means returning affirmative action to California colleges will ultimately pit minority groups against each other.

from Latest – Reason.com https://ift.tt/3iJtpM9
via IFTTT

Trump Wants More Stimulus Spending. Biden Wants a National Mask Mandate. Both Are Wrong.

sfphotosthree429951

The 2020 presidential election is shaping up to be a choice between a man who wants to spend America further into oblivion to solve a problem that money can’t fix, and a man who believes being president gives him license to regulate the personal behaviors of more than 330 million people (and also wants to spend America into oblivion).

In the first corner is President Donald Trump, who is now trying to paper over his administration’s many, many early mistakes in handling the coronavirus by running the federal printing press at warp speed.

Trump on Wednesday agreed with Speaker of the House Rep. Nancy Pelosi (D-Calif.) that more stimulus spending is necessary. In May, Pelosi’s House passed a $3 trillion coronavirus stimulus bill—that’s $3 trillion on top of about $4 trillion in emergency coronavirus spending already authorized, some of which remains unspent—but the Republican-controlled Senate has refused to pass it. Citing concerns about the size of the deficit, Senate Republicans have pushed for a smaller package that would cost about $500 billion.

Trump left no doubt where he stood on Wednesday.

“I like the larger amount,” he said from the podium in the White House briefing room yesterday evening. “Some of the Republicans disagree, but I think I can convince them to go along with that.”

Over 13 million Americans remain out of work in large part due to the pandemic. There may be a good argument for a limited federal response that helps those most hurt by the pandemic and by mandatory shutdowns. Another round of business-focused aid might be necessary as the crisis drags on. But the “higher number” that Trump prefers in the House-passed stimulus bill is a mess of special interest handouts and unnecessary aid to states that shouldn’t be looking to the deeply indebted federal government for help in the first place.

It is difficult to comprehend just how much money the federal government has already spent because of the COVID-19 pandemic. Here’s a useful illustration—compare the total government spending during this year to the 2009 stimulus, which looks like a tiny bump in comparison:

Continuing to spend like this is beyond reckless.

Meanwhile, Trump’s opponent in November’s election also made coronavirus-related news yesterday—but not in a good way.

During a news conference in Delaware, former vice president Joe Biden said he believed the president has the authority to issue a national mandate requiring the wearing of face masks in public. “Our legal team thinks I can do that, based upon the degree to which there’s a crisis in those states, and how bad things are for the country,” Biden said, according to CBS News.

Biden has been beating the “mask mandate” drum since the Democratic National Convention but has not been forthcoming about the details of that plan, like how his administration would enforce such a rule.

Wednesday’s remarks, however, suggest that Biden’s team is actually building a legal case for having a president require that individuals dress in a certain way. That’s beyond ridiculous, of course, and seems likely to be unconstitutional.

Should all Americans wear masks when they are unable to socially distance during the pandemic? Yes. Should the president be ordering this behavior? Absolutely not.

As Elizabeth Nolan Brown wrote last month, the biggest problem with a national mask mandate is that someone has to enforce it. “That means either turning federal agents to the task of monitoring mask-wearing or giving more funds to state and local police departments so they can do so,” she argued. “No matter how it’s accomplished, there’s no way that doesn’t lead to more spending on law enforcement, more government surveillance, and more contact between cops and communities that are already overpoliced—all at a moment when millions of Americans are demanding just the opposite of that.”

Oh, and Biden also supports the passage of the House’s $3 trillion stimulus package—part of roughly $11 trillion in new spending that Biden’s campaign is proposing to pay for with about $3 trillion in new taxes. You can do that math on that one by yourself.

What neither Trump nor Biden has figured out yet is that it is impossible to stimulate your way out of an economic crisis that’s been created by people being unwilling or unable to spend money. When the federal printing press churned out $1,200 checks for every American at the start of the pandemic, personal savings rates shot through the roof. There are some people who might need additional help to get through this crisis, but throwing money at the rest of us—to say nothing of bailing out the postal service and the Kennedy Center—makes no sense.

The mask mandate has a similar problem. It is impossible to enforce, so the only realistic option is to convince Americans to voluntarily wear masks—which is something you can do without a mandate. The president, like all other government officials, should encourage the wearing of masks and endeavor to provide accurate, timely information to all people so they can make their own risk assessments. That’s all. Just please do that one thing.

It is a near certainty that either Trump or Biden will be elected president less than two months from now. It is also a near certainty, regardless of who wins, that federal spending will continue to rise and that presidential power will continue to metastasize.

There might be good reasons to vote for either Biden or Trump—and there are plenty of reasons to vote against both, as the new issue of Reason explores—but when it comes to their plans for the next stage of dealing with this pandemic, neither man deserves our confidence.

from Latest – Reason.com https://ift.tt/32Fo9Uc
via IFTTT

Affirmative Action in College Admissions Will Be on California’s Ballot in November

UCSD_1161x653

California voters will be asked in November whether they want to end a ban on affirmative action in college admissions, even though the state college system’s own demographic data shows increasingly diverse campuses absent preferential treatment.

Proposition 209, passed in 1996, added to the state’s constitution a ban on racial or sex preferences in education and hiring decisions in government institutions. This meant that on top of forbidding discrimination against somebody on the basis of sex, race, or ethnicity, the state couldn’t give somebody an advantage in public college admissions or government jobs on the basis of these factors.

In June, Democratic lawmakers voted to put on the November ballot a measure that would strike down Proposition 209. It’s on the ballot as Proposition 16, and the new proposition would simply strike out the text added to the state’s constitution by Proposition 209.

The proposition is supported by the regents of the University of California, which is notable because former leaders of the college system led the campaign for Proposition 209 in the first place. Former regent Ward Connerly, a Republican, said at the time that affirmative action was intended to be a temporary measure to recover from decades of racist practices, but that “[t]hree decades later, affirmative action is permanent and firmly entrenched as a matter of public policy. … not because of any moral imperative but because it has become the battleground for a political and economic war that has racial self-interest as its centerpiece.”

The arguments for eliminating Proposition 209 are odd and not terribly compelling (which would explain why Prop. 16 is currently doing poorly in polls). Assembly Member Shirley Weber (D–San Diego) authored the bill that would become Prop. 16 and explained in June that “The ongoing pandemic, as well as recent tragedies of police violence, is forcing Californians to acknowledge the deep-seated inequality and far-reaching institutional failures that show that your race and gender still matter.” Affirmative action, notably, does nothing to solve either COVID-19 or police violence.

Coverage in The Los Angeles Times is giving a lot of attention to a study from U.C. Berkeley released in August claiming that in the immediate wake of Prop. 209, there was a drop in enrollment by black and Latino students in the University of California system, which drove down their future wages.

The study further argues that prior to Prop. 209, when affirmative action was permitted in California, white and Asian American students were not harmed because they just went to other high-quality schools and ended up with similar earnings.

Affirmative action proponents could argue that the market provided for those students who were negatively affected by affirmative action, which would appear to echo the libertarian argument that gay couples have access to a market for wedding cakes and thus Christian bakers should not be forced to act against their own beliefs under threat of government penalty.

But there is a significant difference here, and it is that gay couples can’t be forced to pay a bakery if it won’t make a cake for them. The same is not true for California’s state-run college system and applicants who would be accepted on the merits but rejected under affirmative action. Because about 12 percent of the University of California’s budget comes from state funding—a total of $3.69 billion for the 2018-2019 school year—and about 12 percent of California’s general fund goes to higher education across the state, bringing back affirmative action would require some Californians to pay into an education system that would likely discriminate against them and their children on the basis of their race if they are white or Asian. As one might imagine, this does not play well with leaders of some Asian organizations in California who are tired of being pitted against other minorities.

“This is a troubling trend where our public university in the state is taking backwards steps in history to allow racial favoritism in college admissions,” said Crystal Lu, president of the Silicon Valley Chinese Assn. Foundation, in June.

On Thursday, UC’s board of regents banned the use of race quotas in admissions, hiring, and contracting, but race and gender would be used as a factor in admissions (along with more typical considerations like grades, talents, and coursework). Even without the quotas, though, it’s part of the college system’s stated goal to more closely match the demographics of California’s school age population.

What’s a bit strange about this effort is that the data showing drops in minority attendance at the University of California is from 20 years ago. The U.C. system responded to the drop after Prop. 209’s passage by finding effective ways to increase minority representation at their colleges that don’t depend on racial favoritism.

Here’s what the Los Angeles Times noted in June at the same time as the U.C. regents were calling for repealing Prop. 209:

UC campuses increased outreach to underserved communities. UCLA, for instance, works with 20 Los Angeles Unified high schools and several Black churches in the Inland Empire to scout promising students and keep them on track. The strategy, spearheaded by Youlonda Copeland-Morgan, UCLA vice provost of enrollment management, has helped the campus increase the proportion of resident Black students admitted as freshmen from 3.7% in 2012 to 6.3% in 2019.

The measures have produced some progress. The share of admission offers to California freshmen who are Black increased from 4.3% in fall 2010 to 4.7% in 2019, while the Latino share grew from 22.9% to 34.3% during the same period. Asian Americans also increased from 33.9% to 35.72% while whites declined from 32.4% to 21.9%.

The share of students admitted to California colleges who are black is just one percentage point less than the estimated 5.8 percent of the state that is black, and the share of students admitted who are Latino is just five percentage points below the estimated 39 percent of the state that is Latino.

Most importantly, even without affirmative action, white college admissions are dropping as a percentage of the total enrolled population right now! The most recent data about college admissions in California actually shows that affirmative action is not needed to create a college campus that better reflects the state’s population.

The one big outlier in these stats is the percentage of the freshman that identifies as Asian, which is more than twice the 14 percent of the California population that is Asian. That would explain why Asian community leaders are so angry: The people trying to sell Californians on bringing back affirmative action want voters to think it’s those privileged white folks who are hogging all the seats in the lecture hall. But white enrollment is actually declining, which means returning affirmative action to California colleges will ultimately pit minority groups against each other.

from Latest – Reason.com https://ift.tt/3iJtpM9
via IFTTT

Trump Wants More Stimulus Spending. Biden Wants a National Mask Mandate. Both Are Wrong.

sfphotosthree429951

The 2020 presidential election is shaping up to be a choice between a man who wants to spend America further into oblivion to solve a problem that money can’t fix, and a man who believes being president gives him license to regulate the personal behaviors of more than 330 million people (and also wants to spend America into oblivion).

In the first corner is President Donald Trump, who is now trying to paper over his administration’s many, many early mistakes in handling the coronavirus by running the federal printing press at warp speed.

Trump on Wednesday agreed with Speaker of the House Rep. Nancy Pelosi (D-Calif.) that more stimulus spending is necessary. In May, Pelosi’s House passed a $3 trillion coronavirus stimulus bill—that’s $3 trillion on top of about $4 trillion in emergency coronavirus spending already authorized, some of which remains unspent—but the Republican-controlled Senate has refused to pass it. Citing concerns about the size of the deficit, Senate Republicans have pushed for a smaller package that would cost about $500 billion.

Trump left no doubt where he stood on Wednesday.

“I like the larger amount,” he said from the podium in the White House briefing room yesterday evening. “Some of the Republicans disagree, but I think I can convince them to go along with that.”

Over 13 million Americans remain out of work in large part due to the pandemic. There may be a good argument for a limited federal response that helps those most hurt by the pandemic and by mandatory shutdowns. Another round of business-focused aid might be necessary as the crisis drags on. But the “higher number” that Trump prefers in the House-passed stimulus bill is a mess of special interest handouts and unnecessary aid to states that shouldn’t be looking to the deeply indebted federal government for help in the first place.

It is difficult to comprehend just how much money the federal government has already spent because of the COVID-19 pandemic. Here’s a useful illustration—compare the total government spending during this year to the 2009 stimulus, which looks like a tiny bump in comparison:

Continuing to spend like this is beyond reckless.

Meanwhile, Trump’s opponent in November’s election also made coronavirus-related news yesterday—but not in a good way.

During a news conference in Delaware, former vice president Joe Biden said he believed the president has the authority to issue a national mandate requiring the wearing of face masks in public. “Our legal team thinks I can do that, based upon the degree to which there’s a crisis in those states, and how bad things are for the country,” Biden said, according to CBS News.

Biden has been beating the “mask mandate” drum since the Democratic National Convention but has not been forthcoming about the details of that plan, like how his administration would enforce such a rule.

Wednesday’s remarks, however, suggest that Biden’s team is actually building a legal case for having a president require that individuals dress in a certain way. That’s beyond ridiculous, of course, and seems likely to be unconstitutional.

Should all Americans wear masks when they are unable to socially distance during the pandemic? Yes. Should the president be ordering this behavior? Absolutely not.

As Elizabeth Nolan Brown wrote last month, the biggest problem with a national mask mandate is that someone has to enforce it. “That means either turning federal agents to the task of monitoring mask-wearing or giving more funds to state and local police departments so they can do so,” she argued. “No matter how it’s accomplished, there’s no way that doesn’t lead to more spending on law enforcement, more government surveillance, and more contact between cops and communities that are already overpoliced—all at a moment when millions of Americans are demanding just the opposite of that.”

Oh, and Biden also supports the passage of the House’s $3 trillion stimulus package—part of roughly $11 trillion in new spending that Biden’s campaign is proposing to pay for with about $3 trillion in new taxes. You can do that math on that one by yourself.

What neither Trump nor Biden has figured out yet is that it is impossible to stimulate your way out of an economic crisis that’s been created by people being unwilling or unable to spend money. When the federal printing press churned out $1,200 checks for every American at the start of the pandemic, personal savings rates shot through the roof. There are some people who might need additional help to get through this crisis, but throwing money at the rest of us—to say nothing of bailing out the postal service and the Kennedy Center—makes no sense.

The mask mandate has a similar problem. It is impossible to enforce, so the only realistic option is to convince Americans to voluntarily wear masks—which is something you can do without a mandate. The president, like all other government officials, should encourage the wearing of masks and endeavor to provide accurate, timely information to all people so they can make their own risk assessments. That’s all. Just please do that one thing.

It is a near certainty that either Trump or Biden will be elected president less than two months from now. It is also a near certainty, regardless of who wins, that federal spending will continue to rise and that presidential power will continue to metastasize.

There might be good reasons to vote for either Biden or Trump—and there are plenty of reasons to vote against both, as the new issue of Reason explores—but when it comes to their plans for the next stage of dealing with this pandemic, neither man deserves our confidence.

from Latest – Reason.com https://ift.tt/32Fo9Uc
via IFTTT

Watch: CNN (Seriously) Claims That COVID Will Spread At Trump Rallies But Not BLM Protests

Watch: CNN (Seriously) Claims That COVID Will Spread At Trump Rallies But Not BLM Protests

Tyler Durden

Fri, 09/18/2020 – 10:15

Authored by Steve Watson via Summit News,

In response to criticism that CNN is continuously praising mass gatherings when they are BLM organised, but condemning Trump campaign rallies for breaking COVID restrictions, the network seriously attempted to argue that the Trump rallies are scientifically more likely to spread the virus than BLM gatherings.

On Wednesday, Trump campaign communications director Tim Murtaugh called out CNN’s hypocrisy on this matter, noting that “if people can protest in the streets by the tens of thousands, if people can riot, if people can gamble in casinos, then certainly they can gather peaceably under the First Amendment to hear from the president of the United States.”

Butthurt from this exchange, CNN Newsroom drafted in “medical analyst” Leana Wen, who happens to be a former Planned Parenthood president, to explain why science means COVID doesn’t affect BLM protests as much as Trump rallies.

“It does not care why it is that people are gathering but it does care about the conditions under which they’re gathering,” Wen argued, adding “outdoors much safer than indoors and wearing masks obviously much safer than not wearing masks.”

“I would also in this case would distinguish between the behavior of the participants while at protests versus rallies,” she continued, arguing that BLM protesters are more “aware” of the risks than Trump supporters.

“At protests many people are aware of the risks and doing everything they can to reduce that risk versus at many of the rallies we are seeing people going in defiance,” Wen claimed.

“It’s their behavior during those events. I also worry about what they do after the events. They may not be self-quarantining and testing as then getting tested as they should be,” Wen baselessly conjectured.

She even cited a study carried out in June that found “[T]here have not been surges of infections that have been tied” to protests.

Of course, there is no evidence that Trump rallies are tied to any surges of infections either, but that doesn’t seem to matter because the orange man is bad.

Host Jim Sciutto thanked Wen for “breaking through the fog of confusion and disinformation to lead us back to the facts.”

Diligent viewers were left wondering exactly what facts they’d been ‘led back to’ and questioning why the ‘fog of confusion bullshit’ appeared thicker than ever at the end of this segment.

via ZeroHedge News https://ift.tt/2RKll1z Tyler Durden

UMich Sentiment Jumps To Six-Month High As Democrats’ Confidence Soars

UMich Sentiment Jumps To Six-Month High As Democrats’ Confidence Soars

Tyler Durden

Fri, 09/18/2020 – 10:10

Having utterly failed to confirm the ‘v’-shaped recovery in stocks so far, preliminary UMich sentiment data was expected to show more of the same – mixed moves and disappointment – but it actually came in considerably better than expected.

The headline sentiment index for September advanced to 78.9 from a final August reading of 74.1, and well above the 75.0 expectations. That is the highest in 6 months (but well below the pre-COVID highs)

The measure of expectations rose 4.8 points to 73.3, also a six-month high, while a gauge of current conditions increased 4.6 points to 87.5.

Source: Bloomberg

Somewhat shockingly, only 16% of respondents said they expected the economy to worsen in the year ahead, the smallest share since 2015 and consistent with an economy and labor market that are slowly recovering.

“Over the next several months, there are two factors that could cause volatile shifts and steep losses in consumer confidence: how the election is decided and the delays in obtaining vaccinations,’’ Richard Curtin, director of the survey, said in a statement.

Additionally shocking is the fact that Democrats’ sentiment surged in early September…

Source: Bloomberg

Finally, despite The Fed’s best efforts to create and inflationary environment, sentiment on future inflation tumbled…

Source: Bloomberg

The Michigan surveys have traditionally asked consumers which candidate they thought would win the election, not whom they favored or how they intended to vote. The data from July to September indicate a virtual tie. This question has been asked since Carter ran against Ford in 1976, and in every presidential election, consumers correctly chose the winner, save one: when Trump ran against Clinton in 2016, two-thirds of consumers expected a Clinton victory. In one other election had the data been as close as now—in the 1980 election that had Reagan over Carter by one percentage point.

When consumers were directly asked which candidate would be better for the economy and for their personal finances, Trump was chosen over Biden as more likely to benefit the economy and their finances, although most consumers said there was no difference with regard to their own finances.

via ZeroHedge News https://ift.tt/3mB92mv Tyler Durden

Quad-Witch Trigger: “Staggering Gamma Collapse” Opens Market Trapdoor If QQQ Slides Below 270

Quad-Witch Trigger: “Staggering Gamma Collapse” Opens Market Trapdoor If QQQ Slides Below 270

Tyler Durden

Fri, 09/18/2020 – 09:54

The relentless gamma meltup of late August, early September is now ancient history, and following today’s “quad witch” expiration, Nomura’s Charlie McElligott writes that the “Nasdaq is open to a MUCH larger trading range coming-out” following what he calls a “staggering collapse” in dealer gamma, with 63% running off and now totaling a negative -$564.5mm, which is not only the lowest since late 2018 when the market suffered its first mini bear market of the post crisis period, but is also just a 2.3 percentile since 2014…

… while dealer Delta is -$15.5B, just 2.8%ile since 2014…

And unlike just two weeks ago, when spot was solidly in positive gamma territory, dealers are now near the extremes of “short gamma” territory vs spot, with QQQ spot at $272…

… far below the “gamma neutral” line at $281.64.

To McElligott, this matters “because the QQQ $270 strike probably needs to and probably will be well-defended today by market-makers short this monster in size”, but if selling persists and the $270 “trigger” in QQQs is taken out, that’s when “things could get sloppy to the downside into next week.”

Away from the Nasdaq, the Nomura cross-asset strategist believes that the S&P seems “safe” as it is currently pinning around the “gamma neutral” level of ~3380 (3360 spot ref).

A few more observations as we head into this key for market volatility day, first looking at factors, where McElligott notes that the last few days look pretty “gross-down-ish” which he views as “rational” in the risk-management sense, as books trade through VaR limits in light of the recent vol events and need to be reduced. This is important because what on the surface may look like “Value over Growth” rotation “is really about the mechanical realities of reducing partial of your longs and covering a portion of your shorts.”

Meanwhile, in volatility, Charlie recently discussed the disconnect and dysfunction in the vol space imminently prior to the crash and noted that “smart guys were taking-advantage of the rich implieds in the Tech bellwether single-names and began to short vol again because the demand drivers were blown out of the market, thus effectively putting on “buy the dip” market expressions thereafter, and those vols have since been SMASHED.“

Looking at vol now, the Nomura strategist says that it now seams reasonable again to look at going long some vol/gamma/owning optionality into pending risk event catalysts (the election, trade deal, vaccine and earnings), especially since Dealers are increasingly unable to go sizeably short gamma or vega into that wall of “risk events” and as they look to protect themselves from a risk-management PNL perspective.

Next, picking up on the recent discussion of vol control funds, McElligott notes that the switch he anticipated from Vol Control moving from the 3m- to 1m- realized as their allocation input has been a critical shift in flows, “as we removed what had been a source of almost daily latent buying to one that has now turned a local incremental “seller” with -$18.3B over the past 2w since the vol shock event.“

As a result, Nomura we would anticipate a sell in almost every circumstance: only a flat 0% return would see a small “buy” (+$0.3B), while -2% is a sale of -$5.4B and +2% is a sale as well (-$5.1B).

Finally, Charlie mentions increasing market chatter “among a handful of clients that contrary to the rapid shift in consensus that a new stimulus (4.0) deal would not happen before the election, “could be caught flat-footed, with a few folks believing that this year’s election “October Surprise” might not be vaccine-related (as speculated by some), but instead, potentially about a stimulus “deal” getting done by mid/late Oct as a potential monster pain-trade catalyst for a “pro-cyclical” risk-ON and bear-steepening/reflation catalyst” into what is already a powerful year-end seasonal going forward. And since so many have now given up hope of this possibility, the market implications could be profound.

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

Goldman Sachs Latest Wall Street Bank To Suffer Trading Floor COVID-19 Outbreak

Goldman Sachs Latest Wall Street Bank To Suffer Trading Floor COVID-19 Outbreak

Tyler Durden

Fri, 09/18/2020 – 09:50

Goldman Sachs has become the latest megabank to suffer a COVID-19 outbreak in its Manhattan offices. Earlier this month, several JPM traders based in the bank’s Madison Ave. office tower were reportedly sent home after an outbreak on their floor. Still, the incident hasn’t dissuaded JPM from moving all of its traders in NYC and London back into the office by Monday.

Though infection numbers have declined substantially in Manhattan, a trader at Goldman’s offices at 200 West Street tested positive for COVID-19, prompting the bank to send several traders home.

Of course, finance bros who spent the summer out east did’t let the virus stop them from attending parties and other events in the Hamptons summer social scene. As they head back to the city, many are carrying the virus with them.

Goldman’s timeline for moving its most critical workers back into the officer is more measured than JPM’s: GS has told staffers across most divisions to prepare for week-in, week-out rotational shifts” beginning in October.

“Our people’s safety is our first priority, and we are taking appropriate precautions to make sure our workplaces remain safe for those who choose to return,” said Leslie Shribman, a top spokeswoman for Goldman, in a statement released to Bloomberg.

There’s no sign that the virus is spreading within the bank’s headquarters, and the outbreak appears to only affect a small group of traders, according to bank insiders. But Wall Street moving employees back to the office was politicized by President Trump  when he publicly congratulated Jamie Dimon on bringing JPM employees back (a decision that, we speclated at the time, might be driven by a desire to reassure clients, or potential clients, who have been impacted by the ructions in the commercial real estate market).

Just yesterday, reports about an outbreak on a Barclays’ trading floor emerged. On Friday, London Mayor Sadiq Khan said he was seriously considering another ‘lockdown’, which could impede plans devised by American investment banks to bring traders and other personnel based in Europe back to the office.

European banks like Deutsche, on the other hand, have taken a much more relaxed approach, telling staff that it doesn’t expect workers to return to the office until mid-2021.

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

Institutional Demand Will Drive Gold Ever Higher, Von Greyerz Warns “Central Banks Are Panicking”

Institutional Demand Will Drive Gold Ever Higher, Von Greyerz Warns “Central Banks Are Panicking”

Tyler Durden

Fri, 09/18/2020 – 09:34

Authored by Egon von Greyerz via GoldSwitzerland.com,

Embrace uncertainty has long been one of my personal mottos. Because from this moment on, everything is uncertain whether it is your personal health, the stock market or the economy. Sure, we work with probabilities and the most likely is that the sun will rise tomorrow again and that I won’t die today. But we are now at a point in history when trend extrapolation is going to be not only precarious but also both foolish and impossible.

END OF A MAJOR CYCLE

That we are at the end of a major economic and social cycle is totally clear in my mind. But cycles don’t end overnight, if the world isn’t hit by a massive meteorite or nuclear bomb. Whether we are at the end of a 300 year cycle or a 2,000 year cycle, only future historians can tell the world. What is clear, at least to me, is that the end of this cycle started in 1971 when Nixon closed the gold window. Since then global debt has gone up exponentially and now we are in the very final stage of the cycle. This end of the end, that we are now in, was first evidenced by gold turning up at the beginning of this century.

This significant trend change in gold that started 20 years ago was a clear indicator that we are now seeing the end of the fiat money system. Even though manipulated through a corrupt paper market, gold still reveals the deceitful actions of governments and central banks. There is no better evidence than the fall of fiat in this century.

CENTRAL BANKS ARE PANICKING

Central banks are failing and they are panicking. The price of gold is telling us this. Since 2000, most major currencies are down circa 85% against gold. That is a total condemnation of the central banks and their failed experiments in creating unlimited money that has ZERO value. The fall of fiat money started in earnest in 1971 and since then all currencies have lost 97-99% of their value.

But as the table shows, only in this century, most currencies have lost more than 80%/

THE US ROAD TO PERDITION

The road to perdition for the US really started in 1913 with the creation of the Federal Reserve – a private bank set up for the benefit of private bankers under the disguise of a national bank. The Fed never had the intention of keeping the money supply and the debt under control. Instead their private agenda was always to create as much money as possible for their own benefit.

It is for that reason that the US federal debt has increased virtually every single year since 1930 when the debt was $17b. There have been 4 years with insignificant reduction of the debt (1947-8, 1956-7). But except for those four years, the US has lived above its means for 90 years. Everybody believes the Clinton administration’s rhetoric that they created major surpluses in 1998-2001. One of the objectives of governments is to mislead the people and the Clinton administration certainly succeeded with that. I haven’t met one American who is aware that there were no real surpluses in the Clinton years. Not only did they report surpluses but they were also talking about totally eliminating debt in ensuing years.

Very few people are aware that during the years 1998-2001 when the Clinton administration reported major surpluses, the actual federal debt increased every one of those years. So fake surpluses were created above the line and the actual deficits below the line were never reported. But the increase in debt revealed it all.

Not only were there no surpluses in the final Clinton years but the pipe dream of eliminating the debt didn’t just go up in smoke, but caught fire. Clinton exited with a debt of $5.7t and today it is 5x higher at $26.750t.

US DEBT DOUBLING EVERY 8 YEARS

When Trump was elected president in November 2016, I published the debt and tax revenue graph below. US debt had on average doubled every 8 years since Reagan rose to power in 1981. Thus, I made the simplistic forecast that 8 years after Trump’s victory, the debt would double from $20t to $40t and after the first 4 years the debt would be $28t. Not many believed that forecast. A $8t increase in debt in 4 years seemed totally outrageous. My forecast obviously included a severe economic downturn and this is exactly what the US is in now. Currently the debt is $26.750t and is up $3.5t since the end of March. An increase by $1.25t to at least $28t by the time the new president enters office in January 2021 seems very likely to fulfil my forecast.

As the graph above shows, tax revenue has increased 6x since 1981 whilst the debt has gone up 31x. So here we have a country that has been running a real budget deficit virtually every year since 1930 and can only increase taxes at a fraction of the rate of the deficit growth. How can anyone believe that the US economy, with the real deficit going up every year for 90 years, has a chance of survival.

GOLD IS THE GUARDIAN OF TRUTH

Yes of course the US could maybe survive for yet a few years by massive money printing, bigger deficits and exponentially higher debt. But the real problem will be the dollar. It is already down 98% since 1971 and 85% since 2000. These falls are measured in real terms which is gold of course. The US government can try to fool the people with the so-called strong dollar policy but gold stands as the guardian of the truth and reveals governments’ deceitful actions.

TOTAL DOLLAR ANNIHILATION INEVITABLE

The petrodollar and a strong military has so far prevented the dollar from total destruction in the last 50 years. Still a 98% loss of value since 1971 is as near annihilation as you can get. And the dollar has now started its final journey to ZERO. It has only got 2% to go, measured form 1971 but we must remember that the 2% means a 100% fall from now.

No one must believe that the dollar will avoid the same destiny as the Denarius in the Roman Empire between 190 and 290 AD or the French Franc’s collapse in the 1720s. There are dozens of other examples where currencies have gone to zero, like Weimar, Zimbabwe, Venezuela etc.

The demise of the petrodollar could also be accelerated by massive improvements in battery technology. The Quantum Glass Battery invented by the Nobel Prize winner John Goodenough could be revolutionary. This battery is capable of storing considerable more energy than the lithium-ion battery and can be charged in a fraction of the time. Several companies are now developing the glass battery including Panasonic, Samsung, Tesla & Albemarle. Virtually every car manufacturer in the world is now producing electric cars. As the Quantum Glass Battery comes into production, this will change the transport industry dramatically and put an end to piston engines as well as the petrodollar. It will also fatally wound the oil industry. In the US for example, 70% of all oil consumed is used for transportation. So it won’t be that long before every car, truck and bus will be battery driven.

INSTITUTIONAL GOLD BUYING

Until recently, virtually no major investor has bought gold or gold stocks in quantity. But Warren Buffett broke the ice with his $600 million investment in Barrick Gold. It didn’t take long for the next institutional gold investor to follow. The Ohio Police and Fire Pension Fund recently announced that they are investing 5% of their $16b fund into gold. That means a $800 million investment in gold. The interesting question is if they are going to buy futures, an ETF like GLD or physical gold. Few institutions or advisors understand that futures or ETFs are as far from physical gold as you can get. I have discussed the dangers of investing in these instruments in many articles and most recently in my article “Buyer Beware – Gold ETF’s Like GLD Own No Gold”. Many institutional investors don’t yet understand that gold is not just an investment but it is also the ultimate form of wealth preservation. This is why it should not be held in paper form but in physical gold held outside a precarious financial system. If you hold gold futures or a gold ETF like GLD, you don’t hold physical gold but just a promise to settle in fiat money. It is similar to holding lumber futures rather than investing directly into physical forests.

The interesting point is that institutions have until now not understood gold and not known that it has been the best performing asset class in this century. The first two investments into gold this year by institutional investors are likely to be followed by a flood of funds into the gold sector. Institutions are now smelling inflation and must therefore hedge against this. The problem is that there is neither enough physical gold available nor gold and silver stocks to satisfy the coming demand.

THERE IS NOT ENOUGH PHYSICAL GOLD IN THE WORLD

The 21.7 metre cube below represents all the gold ever mined in history amounting to 197 thousand tonnes or $12 trillion in value. Out of this amount, only 21% or 43 thousand tonnes are investment gold. The rest is gold for jewellery, gold held by central banks, or for industrial use. The gold available for investment has a value of $2.6 trillion.

Total above-ground stocks (end-2019)
Total above-ground stocks (end-2019): 197,576 tonnes

  1. Jewellery: 92,947 tonnes, 47.0%

  2. Private investment: 42,619 tonnes, 21.6%

  3. Official Holdings: 33,919 tonnes, 17.2%

  4. Other: 28,090 tonnes, 14.2%

  5. Below ground reserves: 54,000 tonnes

Annual production of gold is around 3,000 tonnes ($187b) and expected to decline. As the cube above shows, the total gold reserves available underground is 54,000 tonnes which is only 27% of all gold ever mined which means that the world has reached peak gold.

FUTURE GOLD DEMAND CANNOT BE SATISFIED AT THE CURRENT PRICE

If we assume that world financial assets are $500 trillion, the total investment gold of $2.6t represents 0.5% of this amount. The Ohio Police Fund is investing 5% of its fund into gold. If 5% of world financial assets were to be invested into physical gold that would be $25 trillion which is 10x all the investment gold today. Most of his gold is of course not available and certainly not at the current price. But even if just 1% total assets went into gold, that would be $5 trillion which is 2x all the investment gold today. It would be totally impossible to acquire this amount of gold at current prices.

In my view, it is a virtually certain that institutions will be forced by trustees or their boards to inflation proof their assets by holding some gold. The figures above prove that the gold they need is not available at current prices. The only way to satisfy institutional demand will be with a much higher price. So what will happen is that an institution which decides to invest $1 billion in gold will not get it at the current price of $1,940 per ounce but instead at say 10x that price or more. So instead of getting 16 tonnes at $1,940 per ounce, the institution will receive 1.6 tonnes at $19,400 per ounce for the $1 billion invested.

The paper market in gold is likely to collapse at some point in the not too distant future. There is no possibility to deliver physical gold against the outstanding paper claims which are 100-300x times the available physical. Therefore institutions who are intending to buy gold would be extremely unwise to buy anything but physical gold in their own possession.

The combination of institutional gold buying and private buying will drive the gold price to levels that few can imagine. The $19,400 price example given above is most probably much too low, especially with the amount of money printing that the world will experience.

Gold at $1,970 today is clearly an absolute bargain.

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

Trump’s 1776 Commission to ‘Promote Patriotic Education’ Is Executive Overreach

birfphotos111252

The federal government shouldn’t dictate what local schools across the country teach—and in the past, conservatives have rightly denounced the idea that it should. Here, for instance, is Phyllis Schlafly in 2014 railing against Obama-era Common Core standards, which Schlafly saw as an “attempt to compel all U.S. children to be taught the same material and not taught other things parents might think important.” Yet like so many other conservative principles, this one seems to have fallen by the wayside in the Trump era. Now, President Donald Trump is announcing plans for (yet another!) executive order, this one to create a “patriotic education” curriculum for U.S. public schools.

“Today I’m also pleased to announce that I will soon sign an executive order establishing a national commission to promote patriotic education,” Trump said Thursday in a speech at the National Archives Museum. “It will be called the 1776 Commission.”

Trump opined that “American parents are not going to accept indoctrination in our schools”…while detailing his own plan for more indoctrination into our schools.

Rep. Justin Amash (L–Mich.) has the right idea about this:

Not only is Trump’s plan an attempt to impose curriculum on local school districts across the country with merely the president’s pen and phone, but that curriculum sounds like the sort of propaganda we’ve come to expect from authoritarian regimes.

If Trump’s announcement speech is any indication, the kind of “patriotism” the president has in mind comes with a hefty dose of MAGA rhetoric about the “anti-American” left trying to indoctrinate small children with “Marxist doctrine holding that America is a wicked and racist nation.”

“It is so urgent that we finally restore patriotic education to our schools,” Trump continued. “Under our leadership, the National Endowment for the Humanities has awarded a grant to support the development of a pro-American curriculum that celebrates the truth about our nation’s great history.”

The curriculum “will encourage our educators to teach our children about the miracle of American history and make plans to honor the 250th anniversary of our founding,” he added.

There’s of course nothing wrong with honoring America’s roots and teaching children about all the beautiful and positive things in American history. (And we currently do just that!) There’s also nothing wrong with teaching the children the truth about all the ugliness in American history too. A good education should—in age-appropriate ways—encompass both.

Many schools fall short of this ideal at present. One way to ensure that gets even worse is to have whoever is in power in Washington—be that Trump, or Joe Biden, or some future unknown leader—setting an American history curriculum for every single student in every public school district across the country. Whoever is in charge, that’s a recipe for a biased and propagandistic version of history.

Can individual states, cities, or school districts do much better? Some will, some won’t—but the beauty of a decentralized system is that 1) it’s easier for parents and teachers to change the bad parts of a local curriculum than it is a national one, and 2) it leaves room for parents to pull their children out of schools that don’t do well at this, or at something else, and enroll them a school that does better.

Ultimately, the best antidote for politicized lessons and public-school propaganda is school choice. When parents can choose between a range of local education options—traditional public schools, traditional private schools, charter schools, online schools, small-group-based “education pods,” homeschooling, etc.—we leave fewer kids trapped in schools whose values don’t align with their families and communities—and less room for whoever is in the White House to try to set everyone’s lessons from on high.

FREE MINDS

A reminder that the world is still getting better in some ways:

FREE MARKETS

A cautionary tale:

QUICK HITS

  • “If you’ve ever read a Regency romance novel or watched a Jane Austen adaptation, you probably have a passing acquaintance with the trope of the ruined woman: that tragic victim of some caddish man who loved her, left her, and wrecked her societal resale value on his way out the door,” writes Kat Rosenfield at Persuasion, in a very astute critique of the modern (liberal) version of this. “Today, the notion that sexual contact is degrading to women has become wrapped up in the contemporary progressive language of trauma and consent. The damage in question is emotional, not material, but the paternalistic message is the same: innocent women must be protected.”
  • Three ways to improve school finances right now.
  • Tyler Cowen talks with Matt Yglesias about Yglesias’ new book:

  • Meet the new boss…

from Latest – Reason.com https://ift.tt/2H6l1Z2
via IFTTT