March 2018 – Page 26

Uneven Economy & The Hidden Depression

Authored by John Coumarianos via RealInvestmentAdvice.com,

Are we in a depression?

The question seems absurd.

There has been GDP growth since 2009 and some mild inflation to go with it. In fact, this is the second longest economic expansion on record.

As Robert Shiller said over the weekend (though in the context of warning against complacency), “[i]f the economy manages to expand for 16 more months, the United States will have set a record.” Unemployment is the lowest in history, nothing like the 17% we had by a U.S. Bureau of Labor Statistics estimate a decade after the stock market crash in 1929 and the average of 18% in the 1930s. House prices have come screaming back across the nation. The stock market has increased by more than 15% annually beginning in 2009. And even middle-class wages have shown signs of picking up lately.

Depression-Era Demographics In Some Exurbs

And yet, even overlooking the opioid epidemic and the 42 million Americans on food stamps (happily down from nearly 48 million in 2013), there are disturbing signs around the country that all is not well.

For example, a recent article in the New York Times by Robert Gebeloff focusing on Hunterdon County in New Jersey shows that many suburban and exurban Northeast and Midwest counties have stopped booming. More people are dying than being born or moving in through immigration or migration. Hunterdon County, 60 miles from New York City, is the sixth richest county nationally with a median household income is over $100,000. But young people are having fewer children, and the recession-stalled migration patterns are only resuming in certain parts of the country. According to Geberloff, “Some of the once-fastest-growing counties in the United States are growing no more, and nationwide, the birthrate has dropped to levels not seen since the Great Depression.” Since a recent peak in 2007, lifetime births per woman in the U.S. is down 16%.

Because deaths are outnumbering births in so many outer-ring counties, flummoxing demographers waiting for a trend reversal, migration is crucial. But lower immigration puts stress on Northeastern suburban counties losing population to the South and West. And while more people living in cities may lower long-distance commuting and urban decay, “population stagnation in places that had been growing will most likely bring its own sets of problems, including pressures on real estate values and eventual shrinking of political representation.”

While births have declined, migration within the U.S. has resumed to pre-recession levels. However, the trend is toward Florida, Texas, and Arizona, which have all seen population inflows. Rural parts of the country have been struggling with these demographic problems for a while now, but Gebeloff’s article shows that they are hitting what have been much more well-off areas now. In Hunterdon County, a 460-acre Merck campus sits abandoned, and enrollment in some school districts is down 20%.

Patio Man Still Thrives

But if outer ring Northeastern suburbs are in jeopardy, that’s not the situation everywhere. In 2002, when it looked like exurbia or life in what he called “Sprinkler Cities” was the future, David Brooks wrote a column for the Weekly Standard called “Patio Man and the Sprawl People” partly about how urban types were annexing old line, inner ring suburbs, while more traditional suburbanites were claiming the outer rings where they could enjoy peaceful patios, happy kids, slender friends and “the massive barbecue grill towering over it all.”

Now, it seems, the outer rings are struggling mightily, but perhaps only in the Northeast and Midwest. In other words, Brooks’s 2002 analysis somehow holds up today. This is how he described the trend in defending suburbia, or the movement from old suburbia to new suburbia — “The truth, of course, is that suburbia is not a retreat from gritty American life, it is American life. Already, suburbanites make up about half of the country’s population (while city people make up 28 percent and rural folk make up the rest), and American gets more suburban every year.” And they make up 53% of America now, according to Jed Kolko in a post for the statistically oriented news site, FiveThirtyEight. Moreover, in a 2017 post, Kolko wrote, “The suburbanization of America marches on,” as he noted the fast growth of Southern and Western metro areas, including Cap Coral-Fort Myers, FL, Provo-Orem, UT, and Austin-Round Rock, TX. Kolko also highlighted educated rural areas and the Pacific Northwest as growing regions. Those include Olympia and Spokane in Washington and Eugene and Salem in Oregon. Boise also made his list for growth of metro areas with 250,000 or more people.

The big population losers, unsurprisingly, have been rural areas. And while the “urban revival” is real, according to Kolko, it has mostly been for rich, educated people, in particular hyperurban neighborhoods rather than broad-based return to city living. Patio Man continues to thrive – just not in Hunterdon County, New Jersey.

Overall, the country is hardly in a depression, but things are grimmer than many think in some surprising places.

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Tesla Bonds Crash After Moodys Downgrade Due To “Liquidity Pressures”

With perfectly ironic timing, we pointed out that investors had built a record short position in Tesla bonds, and had been adding to it as the price had plunged.

Tonight, after hours, yield have smashed above 7% (and price plunged) as Moody’s downgrades the carmaker.

As Bloomberg reports, the rating agency says the company also faces liquidity pressures due to its large negative free cash flow and the pending maturities of convertible bonds.

Full Moody’s Statement:

Moody’s Investors Service downgraded Tesla, Inc.’s (Tesla) Corporate Family Rating (CFR) to B3 from B2, unsecured note rating to Caa1 from B3, and Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative.

RATINGS RATIONALE

Tesla’s ratings reflect the significant shortfall in the production rate of the company’s Model 3 electric vehicle. The company also faces liquidity pressures due to its large negative free cash flow and the pending maturities of convertible bonds ($230 million in November 2018 and $920 million in March 2019). Tesla produced only 2,425 Model 3s during the fourth quarter of 2017; it is currently targeting a weekly production rate of 2,500 by the end of March, and 5,000 per week by the end of June. This compares with the company’s year-earlier production expectations of 5,000 per week by the end of 2017 and 10,000 by the end of 2018.
The Caa1 rating of the unsecured notes reflects the junior position of the notes relative to the company’s $1.9 billion secured credit facility.

Tesla continues to benefit from solid market acceptance of Models S and X, which collectively hold over a third of the US luxury market. In addition, third-party evaluations of the Model 3 remain favorable, consumer response to the vehicle is sound, and advance purchase reservations and deposits remain high. Finally, regulatory support for battery electric and zero-emission vehicles continues to grow.

The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity short-fall. Prospects for addressing its liquidity requirements (whether equity, convertible notes or debt) will be supported if the company can establish credibility for reaching Model 3 production levels — 2,500 per week by the end of March, and 5,000 per week by the end of June.

Tesla’s liquidity consists principally of $3.4 billion in cash and securities at December 31, 2017. The company also has moderate availability under the $1.9 billion ABL facility. This liquidity position is not adequate to cover: 1) the approximately $500 million in minimum cash that we estimate Tesla must maintain for normal operations; 2) a 2018 operating cash burn that will approximate $2 billion if Tesla maintains high discretionary capital expenditures to increase capacity; and 3) convertible debt maturities of approximately $1.2 billion through early 2019. These cash needs will likely require Tesla to undertake a near-term capital raise exceeding $2 billion. Moreover, if the company maintains its expected pace of expansion, it will likely need to raise additional capital during the second half of 2019.

Tesla’s rating could be lowered further if there are shortfalls from its updated Model 3 production targets. The rating will also be pressured if the company is unable to raise sufficient new capital to cover its late-2018 and early-2019 convertible maturities, and to cover the operating cash consumption that will likely continue into 2019.

The rating could be raised if production rates of the Model 3 meet Tesla’s current expectations and if the company maintains good liquidity.

* * *

Penny for your thoughts Elon?

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BofA: “What If January Was The Peak And We Are Now In A New Bear Market?”

In a new report from BofA’s equity derivatives team, the bank analyzes how vol regimes have existed through time spanning subsequent bull and bear markets, where bull market vol tends to be a good predictor of the following bear market vol (chart below, left-hand side). The bank has found that vol tends to be somewhat predictable within market cycles, and that bull markets in particular exhibit a “volatility smile” in which realized vol is more elevated during the first and fourth quartiles of each period relative to the second and third quartiles (chart below, right-hand side).

Simplified, and rather intuitive, this shows that volatility rises heading into the end of a bull market. Which is ironic because as Nitin Saksena notes, as recently as the end of January and before the Feb vol shock, realized vol was near the most depressed levels in history, suggesting perhaps even more upside pressure as we head into the late stages of this bull market. For perspective, 12m realized vol as of 26-Jan-2018 (the peak of the current cycle) was 7.0%, a level below even the least volatile bull market in history from June-1962 to Feb-1966 when realized vol was only 8.4%.

How quickly things have changed in the past 2 months, when both implied and realized vol has exploded higher.

So what happens next in theory?

To answer that question, BofA first looks at a stylized example, and finds that based on historical data, vol has risen 3/4ths of the time in the last 12 months of a bull market relative to the period prior to the last 12 months. The BofA chart below on the left-hand side plots looks at some of the more popular recent bull markets and plots the SPX realized vol 24 months to 12 months prior to the end of period vs. SPX realized vol during the last 12 months. The chart shows that 9 of the 12 periods (those above the dashed line) saw vol pick up, the biggest being the bull market ended by the start of WW2 (Apr-42 to May-46). In other words, “history suggests that if we are indeed in the final innings of the current bull market, it is more likely than not that we will see upward pressure on realized vol.”

To be sure, rising vol in itself is not a necessary and sufficient condition for a recession, although even if the bear market is 24 months away, vol still tends to rise according to BofA. What’s more, even if the there is some gas left in today’s bull market – a case made by virtually every Wall Street analyst – increasingly more are expecting an uptick in realized vol.

Specifically, we found that vol also tends to increase heading into the final two years of a bull market relative to the year before. The most prominent examples occurred during the Oct-90 to Jul-98 bull market, which saw a large pickup in vol in the last two years amid the start of the Tech Bubble, and the Aug-82 to Aug-87 bull market, which saw vol take off ahead of the Black Monday crash in Oct-87.

Stepping back from the abstract, BofA’s next question is troubling, if only for the bulls, because the bank asks, point blank, “what if Jan-2018 was the peak and we are now at the beginning of a new bear market?”

To answer this, BofA extends the above analysis further to examine how vol reacts during the first 12 months of a subsequent bear market relative to the final 12 months of a bull market. The bank’s results indicate that in 13 of 15 bull-to-bear market rollovers, vol increased. Of course, this result is not exactly surprising as everyone – perhaps with the exception of a 23-year-old “hedge fund manager” – expects bear market vol to surpass bull market vol (after all, full period median bear market vol is 21.0% versus a bull’s 12.9%).

There is one caveat, or rather two: there are two instances in which vol declined at the start of the bear market relative to the end of the prior bull market: Jun-49 to Aug-56 and Oct-74 to Nov-80.

So going back to the original question: was Jan 2018 the peak for the market… something which Morgan Stanley determined last week, and has a new bear market unofficially begun, the first in a decade? Should we get a few more days like today’s Nasdaq collapse, we won’t need complex vol analyses for the answer.

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Happy 20th Birthday to Viagra, the Accidental Boner Pill That Changed America

Twenty years ago today, the Food and Drug Administration (FDA) approved orally administered sildenafil citrate tablets for the treatment of erectile dysfunction in the U.S., under the brand name Viagra.

The little blue pill, the most popular use of which was discovered by accident, helped change how prescription drugs are marketed, and shifted public perceptions of what drugs can and should do.

It was also an instant hit. Within two months of going to market, “approximately one million prescriptions had been written in the U.S. alone,” according to a 2005 paper in the International Journal of Clinical Practice.

But Pfizer Inc., the company behind the drug, had bigger ambitions for Viagra, which was the first treatment of its kind for erectile dysfunction. The company wanted to hit $1 billion in sales during its first year of availability, but was on track for only $800 million by December of 1998. To close the gap, Pfizer hired one-time GOP presidential candidate and former Sen. Bob Dole (R-Kans.) to serve as pitchman for the drug.

Dole, then 75, was perfect for the role. A social conservative from the midwest who’d served in World War II, Dole acknowledged in May of 1998 that he’d participated in Viagra’s clinical trial to treat the “impotence” he experienced as a result of undergoing surgery for prostate cancer in the early 1990s.

“It is a great drug. I’ll be honest. I was in the protocol and participated in the program,” Dole said during a live appearance on CNN’s Larry King Live. “There are many men out there, millions of men out there, who suffer from impotence, and this may be the first step.”

Various stories provide different explanations for how Pfizer learned sildenafil citrate worked better in the male member than the heart. In 2008, NPR told this story:

Pfizer was testing it as a cardiovascular drug for its ability to lower blood pressure, but it raised something else, earning it the nickname “the Pfizer Riser.” So how did the researchers find out? Well, the apocryphal story goes, you can take this or leave it, the trial subjects who took the drug for its original purpose, they wouldn’t give back the samples.

Last year, Quartz unearthed this story:

All seemed to be going well—except for one weird thing the men enrolled in the study did when nurses went to check on them. “They found a lot of the men were lying on their stomachs,” John LaMattina, who was the head of research and development at Pfizer while this research was ongoing, said on a 2016 episode of the STAT Signal Podcast. “A very observant nurse reported this, saying the men were embarrassed [because] they were getting erections.” It appeared that the blood vessels dilating were not in the heart, but rather the penis.

When Viagra went generic last year, Bloomberg’s Joe Nocera noted its cultural impact thusly:

Viagra was the first drug to allow impotent men to maintain erections. That made it the first true “lifestyle” drug and showed the pharmaceutical industry that there was money to be made developing drugs that improved people’s lives without curing disease or alleviating pain.

If creating a lifestyle drug was the first innovation, selling one was the second. Traditionally, companies sold drugs by having salespeople persuade doctors to prescribe them. But that wouldn’t work for Viagra; doctors were as reluctant to ask patients about their sex lives as anyone else. The only way doctors were going to prescribe Viagra in large quantities was if patients asked for it.

Dole’s ads became a “textbook case in condition branding,” Colgate University’s Meika Loe told NPR in 2008. That model—in which direct-to-consumer ads “educate” patients about the symptoms of a disease they often didn’t know existed as part of promoting a branded treatment—is now the lifeblood of the drug industry.

It’s probably one of the biggest reasons why prescription drugs that both work and feel good—narcotic sleep aids for insomnia, benzodiazepines for anxiety, amphetamines for ADHD, and testosterone for “Low-T”—saw their prescription rates increase dramatically over the last two decades, in lockstep with diagnoses of the associated conditions. Patients recognized some of their (ambiguous and/or common) “symptoms” in advertising, and knew exactly what to ask their doctor for when they went in to talk about it. Condition branding has also been used to “create” new diseases in order to find a use for compounds that don’t otherwise have an obvious application.

Is condition branding bad? Did Pfizer and Dole open Pandora’s Box? Many policy wonks have come to see the pharmaceutical information ecosystem as toxic, thanks in no small part to the role of physician-targeted marketing in the opioid crisis. But I’m skeptical that ads play the same role today, or that they are more bad than good. Between online social networks and drug and disease forums, pharmaceutical ads don’t have near the informational monopoly they once did. It’s also easier than ever before to check what a pitchman tells you against the available scientific evidence.

I also think we are bad at acknowledging the impact of things we cannot measure. When it comes to drugs, we can measure how much they cost and the rates of consumption, hospitalization, and death. We are less good at—and perhaps less interested in—measuring how drugs improve people’s lives.

Regardless, Dole talking about his erectile dysfunction helped shift the Overton Window. He made it easier for American men to both accept that they were experiencing a problem they could not think their way out of and to seek an effective remedy. Yes, the success of Viagra helped drug companies develop a wildly profitable new advertising model. But I don’t see that as a net negative if it paved the way for a social ecosystem in which more people talk about, and get help for, ailments like depression, anxiety, acne, and obesity; in which we feel free to talk openly with each other and our care providers about things like family planning and oft-embarrassing autoimmune disorders like IBD and plaque psoriasis.

As with every other aspect of modern life, the prescription drug landscape is not perfectly unproblematic. But as Viagra proved 20 years ago, “right now” is always the best time in history to have a medical problem.

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Dem Lawmaker: We Don’t Want To Confiscate Guns, We Want To “Seize” Them

Authored by Mac Slavo via SHTFplan.com,

A Georgia state lawmaker said she didn’t want to take guns away from Americans, but she also supports legislation that would seize guns from Americans.

Likely missing a dictionary and basic common sense, Erica Thomas still expects us to believe that the government isn’t coming for our guns.

During an interview with Tucker Carlson, Thomas claims to not be talking about “taking the guns from law-abiding citizens, I’m talking about a ban on assault rifles. We are not trying to promote a militia. What war are we going at that we need assault rifles?”

But Carlson quotes the bill Thomas herself said she supported, which states,

“The Georgia Bureau of Investigation shall seize and take possession of any assault weapon, large capacity magazine, armor piercing bullet or incendiary fifty caliber bullet.”

Carlson then asks how that confiscation will be received by hundreds of thousands of law-abiding gun owners in her state and in typical democrat fashion, can’t answer what a “seizure” of guns from law-abiding citizens who don’t want to give up their morally acquired property would look like.

Then the conversation between Carlson and Thomas eventually drifted into gun statistics, and The Daily Caller co-founder wondered why Thomas wasn’t calling for a ban on handguns since they are responsible for the majority of gun deaths in America.

“Don’t demagogue it with me. I am not downplaying the significance of anyone’s death,” Carlson asserted. “Since assault rifles, relatively speaking, cause few deaths, handguns cause the overwhelming majority of deaths, why are you not calling for banning handguns and seizing and taking possession of handguns…if you care so much about gun violence?”

Instead of answering the question, Thomas decided to turn it around on Carlson, insisting, “I would ask you the same question. Would you call for a ban on handguns? No, you wouldn’t!” she exclaimed. “So why can we not put a ban on assault rifles? That is the question. Why not?” This is what gun owners have to deal with almost daily: Overly emotional outburst from those who know next to nothing about guns and the way the work, and even less about the statistics they claim to care about changing.

After several more seconds of the pair talking over one another, Carlson finally cut Thomas’ mic and video feed, stating, “I give up, I’m trying to ask you adult questions and you don’t want to answer them.”

Democrats often wonder why we can’t have a civilized discussion about guns, and this video boldly declares the reason why. There’s little, if any, respect for facts or basic human rights when it comes to a person who wants more gun legislation. One simply cannot have a civilized discussion with anyone who seeks to erode the rights of others based on misinformation and fabricated statistics.

But Carlson presented an interesting question while Thomas was talking.

“What if Americans don’t want to give up their guns?”

There’s still not been a rational and logical response on how that would be handled from any Democrat; politician or otherwise.

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WTI/RBOB Extend Losses After Surprisingly Large Crude Build

The whole energy complex tumbled today (as the usd strengthened) amid the riskoff rout, and extended losses after API reported an unexpectedly large crude build.

“Oil prices gained and now they’re testing this key resistance level” of the January high, said Hans Van Cleef, senior energy economist at ABN Amro. “We’re waiting for the inventory data to see if it can push prices higher. Markets expect them to remain little changed, so any surprise drop could do the trick.”

API

Crude +5.321mm (+850k exp)
Cushing +1.655mm
Gasoline -5.799mm
Distillates -2.23mm

The 4th weekly crude build in the last 5 – and much bigger than expected – but gasoline and distillates saw notable draws…

“It’s slowing the momentum just enough to stop us from making new highs right now,” said Phil Flynn, senior market analyst at Price Futures Group. Inventory data this week is “going to be critical for the mood of the market.”

Prices were heading south into the API print and kneejerked lower after -though RBOB’s draw is stabiliziung price action…

In China, oil futures for September delivery declined 1.7 percent to 426.4 yuan ($68) a barrel on Tuesday.

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Linda Brown Dies, Mark Zuckerberg Agrees to Testify Before Congress, and Kim Jung Un Might Be In China: P.M. Links

Linda Brown of Brown v. Board fame died today.

Mark Zuckerberg has agreed to testify before Congress about Facebook’s privacy policies.

Paul Krugman argues that crooked conservative politicians get a pass, while dodgy Democrats have their careers ended.

Beloved PNW burger chain threated by IWW takeover.

North Korean mystery train arrives in Beijing, fueling speculation that Kim Jung Un is on board.

Opposition to California’s sanctuary city law grows in Orange County.

Writing endings can be hard.

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If Republicans Are Doomed in 2018, It’s Not Because Some Gerrymandered Districts Got Redrawn

Gerrymandering—the process of drawing congressional districts within a given state to deliberately advantage one party or another—distorts the will of the voters and has significant consequences for policy making. It helps entrench incumbents, makes life more difficult for third parties, and often gives an edge to candidates at the extremes of the political spectrum.

Libertarians, and others outside the red-blue binary, should want to reduce gerrymandering as much as possible, in the interest of creating a somewhat level playing field for future elections. As I write in this month’s print edition of Reason, it’s probably not possible to fully remove partisan influence from congressional map-making, but mapping technology and district-drawing algorithms can help limit some of the worst abuses on both sides. To the extent that those solutions can be implemented at the state level, they should be welcomed and encouraged.

But we should be careful, I think, about overstating the extent that gerrymandering is responsible for macro-level outcomes like control of the U.S. House of Representatives. Gerrymandering can have significant influence on the outcome of individual congressional races—and for that reason alone deserves attention—but gerrymandered districts (or the lack thereof) did not singlehandedly swing Republicans into power during the 2010s. And if the GOP is bounced from control of the House this November, gerrymandering will not be the reason why.

That’s not what partisans on either side want you to think. No one less significant than former President Barack Obama has blamed Democratic losses during his admininstration on “sharply gerrymandered districts that are very safely Republican.” Eric Holder, Obama’s attorney general, is now heading a campaign organization aimed at helping Democrats retake state legislative seats before the 2021 reapportionment happens.

On the right, Rep. Ryan Costello (R-Penn.) announced this week that he would not run for reelection, a decision that has been widely attributed to the fact that his district—one of the most highly gerrymandered in the state, until it was recently redrawn by the Pennsylvania Supreme Court—now tilts towards Democrats.

Summing all this up, The Week‘s Damon Linker, a former conservative, says Republicans “decided to embrace flagrant cheating” in the last redistricting cycle to ensure a House majority via gerrymandering. Take Pennsylvania, he writes, where Republicans lost the statewide cumulative vote in the 2016 House elections but ended up winning 13 of the 18 districts. Remove that unfair advantage, Linker concludes, and Republicans would rightfully become a minority party.

It’s certainly true that gerrymandering helped to shore up Republican majorities in Congress during the Obama years, but un-gerrymandering is not going to be the thing that costs the GOP it’s control of the House. To understand why, look at this analysis from The Cook Political Report. It compares the Republican-drawn districts used in Pennsylvania for the 2012, 2014, and 2016 cycles with the new districts drawn by the state Supreme Court for the 2018 cycle.

I’ve recreated the The Cook Political Report‘s chart below, to better illustrate the point:

Most observers agree that the new map tilts towards Democrats in subtle ways (more on that here), but overall it’s a more fair product than the map it replaced.

You’ll notice that Republicans are still favored to win 11 of the 18 districts, based on registration alone. That’s despite the fact that Pennsylvania has about 900,000 more registered Democrats than registered Republicans. The reason? Pennsylvania, like America as a whole, is a natural Republican gerrymander—by which I mean that Democrats tend to be clustered closely together and Republicans spread out over larger areas. The GOP has a natural advantage, given the current ideological and geographical bent of the two major parties, even without any creative district-drawing.

What does this mean for November? In a year with no generic advantage for one party or the other—like in 2016, when the GOP lost the statewide cumulative vote by a narrow margin—Pennsylvania’s new congressional map might cost Republicans one or two seats, depending on how the votes were distributed. Going from a 13–5 edge (which the GOP had before the special election in the 18th district earlier this month) to a 11–7 edge would be a disappointment for Republicans, but hardly enough to doom the GOP’s chance of controlling Congress, as Linker predicts.

What would doom Republicans, though, would be an election cycle where Democrats had an overall five-point advantage. On the new map, that would be enough to give Democrats 10 of the state’s 18 seats. A result like the one in the special election earlier this month, where Connor Lamb overcame an R+11 registration edge to win in the old 18th district, would be catastrophic for the Pennsylvania GOP.

But if that happens, it won’t be because new lines were drawn. A D+11 wave would have swamped the GOP even under the old map.

If Republicans get crushed in November in Pennsylvania (and elsewhere), it won’t be because of redistricting. It will be because they tied themselves to an unpopular president, because Republicans are less likely to vote for a party that abandoned promises to downsize government, and because Democrats are increasingly energized to vote the GOP out. And it will be because voters of all stripes are still angry at the status quo—and for now at least, Republicans are the status quo.”

Whatever its effects, redistricting reform is a worthwhile project for both parties to pursue before the next round of map-making occurs in 2021.

If and when Democrats “breach the barriers erected by the GOP in Congress and key states,” Linker writes, “liberals and progressives can begin to dismantle these institutional obstacles to majority rule.” He believes Democrats will be “unlikely to enact in-kind countermajoritarian hurdles against Republicans,” and will be happy to have merely “a fair chance to compete.”

I’m skeptical about that too. Democrats—given the chance—would likely attempt to enact favorable gerrymanders in Pennsylvania and North Carolina, just as they’ve already done in places like Maryland and Illinois. I hope Linker is right, but in the event that he’s wrong, citizens should push politicians of both parties to mutually disarm the congressional gerrymandering threat.

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Spot The Odd Day Out!!

Presented without comment…

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Momo Massacred, Tech Wrecked, & Bond Yields Battered

Today was yesterday’s alternative ending…

Only NASDAQ remains marginally green on the year…

Today’s fun and games started with comments from Wilbur Ross on “emergency” curbs on Chinese investment but then a series of headlines on megatech – NVDA self-driving car suspension, TSLA NTSB probe, FB hearings and more headlines, and GOOGL and TWTR being dragged into the furore. All in all – a bloodbath!

What goes up (on low volume) collapses on heavy volume… (Nasdaq – green, was worst; The Dow – blue, managed to hold some gains)…