Twitter Restricts Account Of Flynn Attorney Sidney Powell Tyler Durden
Mon, 06/29/2020 – 09:54
Twitter has restricted the account of Michael Flynn’s lawyer, Sidney Powell.
Trying to access Powell’s account (@SidneyPowell1) results in a warning which reads “Caution: This account is temporarily restricted” due to “unusual activity.” Users can then bypass the message and access Powell’s account.
It is unclear if this restriction began before or after she retweeted an article from The Federalist calling for conservatives to fight back against Black Lives Matter and its “radical agenda” which have resulted in “angry mobs pulling down statues, taunting police, attacking passersby, and taking over entire city blocks.”
Powell’s involvement Flynn’s case changed the fate of the retired general, who – under advisement from his prior legal counsel from Eric Holder’s law firm – pleaded guilty to lying to the FBI about his interactions with the Russian ambassador during the presidential transition.
Powell fought to force the government to release exculpatory evidence which revealed that rogue agent Peter Strzok overrode the agency’s recommendation to close the Flynn case – instead launching a ‘perjury trap’ against the former Trump adviser.
As a result, the Justice Department dropped its case against Flynn. The judge in the case, Emmet Sullivan, would not accept the DOJ’s request and instead called on a 3rd party judge to outline why Flynn should still be prosecuted. Last week, the Second Court of Appeals for DC ordered Sullivan to drop the matter.
All thanks to Sidney Powell.
via ZeroHedge News https://ift.tt/2ZjPKHt Tyler Durden
Key Events In THe Coming Holiday-Shortened Week Tyler Durden
Mon, 06/29/2020 – 09:40
As the mid-summer sun rises, we see a shortened trading week with Friday a US holiday in lieu of Independence Day on Saturday, and as DB’s Jim Reid predicts, Thursday will likely see activity wind down early and rapidly ahead of the weekend.
That said, the last major act of the week will be the all-important payrolls report brought forward to Thursday, where DB’s economists are looking for a further +2m gain in non-farm payrolls, following last month’s unexpected +2.509m increase, along with a further reduction in the unemployment rate to 12.6% (unclear if this assume the BLS will continue making the same admitted mistake it has been doing for the past two months). This improved labor market performance chimes with what we’ve seen in other indicators, such as the weekly initial jobless claims that have fallen for 12 consecutive weeks now. That said, it’s worth remembering that given the US shed over 22m jobs in March and April, even another +2m reading would still mean that payrolls have recovered less than a quarter of their total losses, suggesting there’s still a long way to go before the labor market returns to normality again.
The other main data highlight will be the final June PMI releases from around the world. The manufacturing numbers are out on Wednesday before the services and composite PMIs come out on Friday for the most part (ex US), while there’ll also be the ISM manufacturing index too from the US (on Wednesday). For the countries where we already have a flash PMI reading, they generally surprised to the upside, even as many remained below the 50-mark. It’ll also be worth keeping an eye on the numbers for China, given they’re some way ahead in the reopening process relative to the US and Europe.
In politics, a key highlight this week will be a meeting between Chancellor Merkel and President Macron taking place today, where both the EU budget and the recovery fund will be on the agenda. That comes ahead of another summit of EU leaders scheduled for the 17-18th July, where the 27 leaders will meet in person in Brussels for further discussions on the recovery fund. Meanwhile, the start of July on Wednesday formally sees Germany take over the rotating EU presidency, which they’ll hold for the next six months.
Staying with politics, Reid points out that Brexit negotiations between the UK and the EU on their future relationship will return once again. This will be the first set of intensified talks that are taking place every week over the next five weeks, as the two sides look to come to an agreement following fairly slow progress in the talks thus far. Since the last round of negotiations, a high-level meeting took place between Prime Minister Johnson and the Presidents of the European Commission, Council and Parliament, where the two sides agreed in their statement that “new momentum was required” in the discussions. There does seem a bit more positivity now than there was a month ago but much work still needs to be done.
Elsewhere we have the release of the FOMC minutes for the June meeting on Wednesday, along with an appearance by Fed Chair Powell and Treasury Secretary Mnuchin tomorrow before the House Financial Services Committee. Otherwise, speakers next week include the BoE’s Governor Bailey and Deputy Governor Cunliffe, along with the ECB’s Schnabel and New York Fed President Williams.
Courtesy of Deutsche Bank, here is a day-by-day calendar of events:
Monday
Data: Japan May retail sales; Spain preliminary June CPI; UK May consumer credit, mortgage approvals, M4 money supply; Euro area June economic, industrial, services and consumer confidence; Germany preliminary June CPI; US May pending home sales and June Dallas Fed manufacturing activity index.
Central Banks: BoE’s Bailey, Breeden and Vlieghe speeches; Fed’s Daly and Williams speeches; IMF’s Georgieva speech.
Politics: German and French leaders meet to discuss clinching a deal on the EU recovery fund.
Others: EU Brexit chief negotiator Michel Barnier meets UK counterpart David Frost for further talks on a trade deal.
Tuesday
Data: Japan preliminary May industrial production; China June official PMIs; UK final June GfK consumer confidence, June Lloyds business barometer, final 1Q GDP, private consumption, government spending, gross fixed capital formation, exports, business investments, current account balance, imports; France preliminary June CPI, May PPI and consumer spending; Spain final 1Q GDP; Italy preliminary June CPI and May PPI; Euro area preliminary June CPI and Core CPI; US April S&P CoreLogic house price index, June Chicago Fed PMI, Conference board consumer confidence, expectations and present situation index.
Central Banks: ECB Schnabel speech; BoE Cunliffe and Haldane speeches; Fed Williams speech; Colombia rate decision.
Others: Fed’s Powell and US Treasury Secretary Mnuchin testify before the House Finance Panel.
Politics: European Council President Charles Michel and European Commission President Ursula von der Leyen meet with South Korean President Moon Jae-in in a virtual summit, NATO Secretary General Jens Stoltenberg speaks on the geopolitical implications of Covid-19.
Wednesday
Data: Japan 2Q Tankan survey results, June consumer confidence and final June manufacturing PMI; China June Caixin manufacturing PMI; Spain June manufacturing PMI; Italy June manufacturing PMI; France final June manufacturing PMI; Germany final June manufacturing PMI, June unemployment claims rate and unemployment change; Euro area final June manufacturing PMI; UK final June manufacturing PMI; US latest weekly MBA mortgage applications, June Challenger job cuts and ADP employment change, final June manufacturing PMI, May construction spending, June ISM manufacturing, new orders, prices paid and employment, June FOMC meeting minutes, June Wards total vehicles sales.
Central Banks: Sweden rate decision, BoE Haskel speech; Fed Evans speech.
Politics: Russia holds the final day of voting on changes to the nation’s constitution.
Others: The head of Germany’s BaFin financial regulator testifies before the German parliament on the accounting scandal at payment-processing firm Wirecard AG; the U.S.-Mexico-Canada Agreement is due to take effect.
Thursday
Data: Euro area May PPI and unemployment rate; US May trade balance, June nonfarm payrolls, unemployment rate and average hourly earnings, latest weekly initial and continuing claims, May factory orders, final May durable goods and capital goods orders.
Others: SIFMA has recommended an early close (14:00 EDT) for the fixed-income market before the U.S. Independence Day holiday
Friday
Data: Final June services and composite PMIs for Japan, China (Caixin), Spain, Italy, France, Germany, Euro area and UK; France May YtD budget balance; UK June official reserve changes.
Central Banks: ECB Knot speech.
Others: US Independence Day holiday
* * *
Finally, courtesy of Goldman, here is a preview of events in the US, where as Jan Hatzius notes, key events this week are the ISM manufacturing index on Wednesday and the employment report on Thursday. The minutes of the June FOMC meeting will be released on Wednesday.
Monday, June 29
10:00 AM Pending home sales, May (GS +33.0%, consensus +18.0%, last -21.8%): We estimate that pending home sales rebounded by 33.0% in May based on regional home sales data, following a 21.8% drop in April. We have found pending home sales to be a useful leading indicator of existing home sales with a one-to-two-month lag.
10:30 AM Dallas Fed manufacturing index, June (consensus -22.0, last -49.2)
11:00 AM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will speak on a panel discussion on higher education. Prepared text is not expected. Audience and media Q&A are expected.
3:00 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will moderate a discussion with IMF Managing Director Georgieva.
Tuesday, June 30
09:00 AM S&P/Case-Shiller 20-city home price index, April (GS +0.7%, consensus +0.5%, last +0.47%); We estimate the S&P/Case-Shiller 20-city home price index increased by 0.7% in April, following a 0.47% increase in March.
09:45 AM Chicago PMI, June (GS 46.0, consensus 44.0, last 32.3); We estimate that the Chicago PMI rebounded by 13.7pt to 46.0 in June—following a 3.1pt decline in May—reflecting improved June readings for other manufacturing surveys.
10:00 AM Conference Board consumer confidence, June (GS 94.0, consensus 90.5, last 86.6): We estimate that the Conference Board consumer confidence index increased to 94.0 in June from 86.6 in May.
11:00 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will give a speech via webinar on central banking during the pandemic. Prepared text and moderator Q&A are expected.
12:30 PM Fed Chair Powell (FOMC voter) speaks: Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will testify before the House Financial Services Committee. Prepared text is TBD and questions from Members are expected.
02:00 PM: Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a virtual panel discussion on race and social justice in economics. Prepared text is not expected. Audience Q&A is expected.
Wednesday, July 1
08:15 AM ADP employment report, June (GS +2,500k, consensus +2,950k, last -2,760k); We expect a 2,500k gain in ADP payroll employment, reflecting a boost from falling jobless claims and higher oil prices. We expect the “active” employment input to understate actual job gains in the ADP model.
10:00 AM ISM manufacturing index, June (GS 49.0, consensus 49.5, last 43.1); We expect the ISM manufacturing index to increase by 5.9pt to 49.0 in June, after rebounding by 1.6pt in May. While we expect the key components – new orders, production, and employment – to improve; faster delivery times will likely weigh on the degree of recovery in the composite index.
10:00 AM Construction spending, May (GS +0.8%, consensus +0.9%, last -2.9%): We estimate a 0.8% increase in construction spending in May, with a faster recovery in non-residential than residential construction.
10:00 AM Chicago Fed President Evans (FOMC non-voter) speaks: Chicago Fed President Charles Evans will host a forum on the future of the city of Chicago. Prepared text is not expected, nor is discussion of monetary policy. Audience Q&A is expected.
02:00 PM Minutes from the June 9-10 FOMC meeting: At its June meeting, the FOMC left the target range for the policy rate unchanged at 0-0.25%; and in the Summary of Economic Projections, participants expected high unemployment, low inflation, and a flat funds rate through 2022. In the minutes, we will look for further discussion of the economic outlook and the Fed’s toolkit, including the Committee’s discussion of yield curve control.
05:00 PM Lightweight motor vehicle sales, May (GS 13.1m, consensus 13.0m, last 12.2m)
Thursday, July 2
08:30 AM Nonfarm payroll employment, June (GS +4,250k, consensus +3,000k, last +2,509k); Private payroll employment, June (GS +4000k, consensus +2,519k, last +3,094k); Average hourly earnings (mom), June (GS -1.0%, consensus -0.8%, last -1.0%); Average hourly earnings (yoy), June (GS +5.3%, consensus +5.3%, last +6.7%); Unemployment rate, June (GS 12.7%, consensus 12.4%, last 13.3%): We estimate nonfarm payroll growth accelerated from the +2.5mn record gain in May to +4.25mn in June. With much of the economy reopening, our forecast reflects a rapid albeit partial reversal of temporary layoffs. While jobless claims remain elevated, alternative data suggest unprecedented increases in the number of workers at work sites. We also expect a seasonal bias in education categories to boost job growth by roughly 0.5mn.
We expect that about half of the 4.9mn excess workers that were employed but not at work for “other reasons” in May will be reclassified as unemployed in the June household survey, applying upward pressure on the unemployment rate. Additionally, we expect the labor force participation rate increased as business reopenings encouraged job searches. Taken altogether, we estimate the unemployment rate as reported will fall by 0.6pp to 12.7% in Thursday’s report. Correcting for misclassification of unemployed workers, we estimate the “true” unemployment rate declined more significantly, but to an even higher level (-2.4pp to 14.0% in June from 16.4% in May).
We estimate average hourly earnings declined 1.0% month-over-month and 5.3% year-over-year as lower-paid workers are rehired and the associated composition shift unwinds.
08:30 AM Trade balance, May (GS -$54.0bn, consensus -$53.0bn, last -$49.4bn): We estimate the trade deficit increased by $4.1bn in May, reflecting a rise in the goods trade deficit.
08:30 AM Initial jobless claims, week ended June 27 (GS 1,375k, consensus 1,336k, last 1,480k): Continuing jobless claims, week ended June 20 (consensus 18,904k, last 19,522k); We estimate initial jobless claims declined but remained elevated at 1,375k in the week ended June 27.
10:00 AM Factory orders, May (GS +11.1%, consensus +7.9%, last -13.0%); Durable goods orders, May final (last +15.8%); Durable goods orders ex-transportation, May final (last +4.0%); Core capital goods orders, May final (last +2.3%); Core capital goods shipments, May final (last +1.8%)
Friday, July 3
US Independence Day holiday observed. US equity and bond markets are closed.
Source: DB, BofA
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At a recent meeting to discuss back-to-school procedures amid the ongoing pandemic, officials representing a school district in Wake County, North Carolina, detailed a complicated plan that would require bus drivers to administer temperature checks to students.
Any student who failed the check would be denied entry onto the bus, and a parent would be summoned to come get them. But bus drivers can’t leave kids alone at bus stops, so the entire bus would have to stay put until the child was retrieved.
“Bus driver should remain on the bus to continue supervising other students on the bus, while also visually monitoring the student,” declared the proposed guidance. “Bus remains with the student until they have been picked up by their parent/guardian or until another transportation official arrives to supervise the student.”
It should be obvious that this plan—which is maximally disruptive for all students, parents, and employees involved—will never work. You can easily imagine kids spending all day on a bus, their restlessness and frustration mounting, as the driver waits in vain for an adult who either couldn’t be reached or can’t leave work.
As educators across the country begin to plan how classes will function in the fall, many proposals to make schools safer from the virus involve heavy degrees of unreality: children in masks throughout the day, classrooms half empty to accommodate social distancing, playgrounds closed, heavy reliance on virtual instruction, and so on. These precautions are largely unworkable—it’s no more reasonable to expect children to wear masks and avoid interacting with each other all day than it is to make the bus wait hours if somebody fails a temperature check.
They are also at odds with the current scientific consensus about the coronavirus: that the risk to young people is minimal, and that they do not seem to spread the virus easily.
There is much that we don’t know for certain about COVID-19. But the available evidence suggests that reopening schools as close to normal as possible is the most pragmatic approach. In Wired, David Zweig has presented a compelling case that the U.S. should follow Europe’s lead and let students go back to school with minimal disruption:
Let’s review some facts: Children are, by and large, spared the effects of the virus. According to the latest data from the CDC, infants, little kids, and teenagers together have accounted for roughly 5 percent of all confirmed cases, and 0.06 percent of all reported deaths. The Covid-linked child inflammatory syndrome that received fervent media attention last month, while scary, has even more infinitesimal numbers. “Many serious childhood diseases are worse, both in possible outcomes and prevalence,” said Charles Schleien, chair of pediatrics at Northwell Health in New York. Russell Viner, president of the UK’s Royal College of Pediatrics and Child Health, noted that the syndrome was not “relevant” to any discussion related to schools.
There is also a wealth of evidence that children do not transmit the virus at the same rate as adults. While experts note that the precise transmission dynamics between children, or between children and adults, are “not well understood“—and indeed, some argue that the best evidence on this question is that “we do not have enough evidence“—many tend to think that the risk of contagion is diminished. Jonas F. Ludvigsson, a pediatrician and a professor of clinical epidemiology at Sweden’s Karolinska Institute, reviewed the relevant research literature as of May 11 and concluded that, while it’s “highly likely” children can transmit the virus causing Covid-19, they “seldom cause outbreaks.” The World Health Organization’s chief scientist, Soumya Swaminathan, suggested last month that “it does seem from what we know now that children are less capable of spreading” the disease, and Kristine Macartney, director of Australia’s National Centre for Immunisation Research and Surveillance, noted a lack of evidence that school-aged children are superspreaders in her country. A study in Ireland found “no evidence of secondary transmission of Covid-19 from children attending school.” And Kári Stefánsson, a leading researcher in Iceland, told The New Yorker that out of some 56,000 residents who have been tested, “there are only two examples where a child infected a parent. But there are lots of examples where parents infected children.” Similar conclusions were drawn in a study of families in the Netherlands.
This is hardly surprising, given that closing the schools in the first place does not appear to have been a sound strategy for containing the coronavirus. Studies in JAMA Pediatricsand The Lancet have found ample reason to doubt whether school closures saved a significant number of lives. As Mother Jones‘ Kevin Drum pointed out in a review of the scientific literature, closures “have (a) little effect and (b) are probably nowhere near worth the tremendous impact they have on both parents and kids.”
That’s an important point: Reducing the amount of time that children spend at school is terribly burdensome for many parents who rely on school’s day care effect. Keep in mind that public schools are funded through taxes. It’s hardly fair for the state to confiscate vast sums of money from its citizens, in part for the purpose of child care, and then suddenly cease offering this service while keeping the money. States that want to make it possible for people to return to work—for the economy to reopen—really need to prioritize schools: They are among the first elements of public life that must return to a semblance of normality, and the risks seem comparatively low.
It won’t be possible to have a completely normal school year, of course. Officials should axe egregiously risky activities—no indoor pep rallies, for instance—and adult school employees might very well opt to wear masks or take other precautions, especially if they are elderly or immunocompromised. Wherever possible, district officials should make it possible for at-risk employees to work from home, or even to take the semester off. But they should not force kids to stay at home, clinging to the delusion that distance learning under these circumstances is anything other than an horrible burden on parents, and they should not force kids to hermetically seal themselves in bubbles when they do return to class.
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At a recent meeting to discuss back-to-school procedures amid the ongoing pandemic, officials representing a school district in Wake County, North Carolina, detailed a complicated plan that would require bus drivers to administer temperature checks to students.
Any student who failed the check would be denied entry onto the bus, and a parent would be summoned to come get them. But bus drivers can’t leave kids alone at bus stops, so the entire bus would have to stay put until the child was retrieved.
“Bus driver should remain on the bus to continue supervising other students on the bus, while also visually monitoring the student,” declared the proposed guidance. “Bus remains with the student until they have been picked up by their parent/guardian or until another transportation official arrives to supervise the student.”
It should be obvious that this plan—which is maximally disruptive for all students, parents, and employees involved—will never work. You can easily imagine kids spending all day on a bus, their restlessness and frustration mounting, as the driver waits in vain for an adult who either couldn’t be reached or can’t leave work.
As educators across the country begin to plan how classes will function in the fall, many proposals to make schools safer from the virus involve heavy degrees of unreality: children in masks throughout the day, classrooms half empty to accommodate social distancing, playgrounds closed, heavy reliance on virtual instruction, and so on. These precautions are largely unworkable—it’s no more reasonable to expect children to wear masks and avoid interacting with each other all day than it is to make the bus wait hours if somebody fails a temperature check.
They are also at odds with the current scientific consensus about the coronavirus: that the risk to young people is minimal, and that they do not seem to spread the virus easily.
There is much that we don’t know for certain about COVID-19. But the available evidence suggests that reopening schools as close to normal as possible is the most pragmatic approach. In Wired, David Zweig has presented a compelling case that the U.S. should follow Europe’s lead and let students go back to school with minimal disruption:
Let’s review some facts: Children are, by and large, spared the effects of the virus. According to the latest data from the CDC, infants, little kids, and teenagers together have accounted for roughly 5 percent of all confirmed cases, and 0.06 percent of all reported deaths. The Covid-linked child inflammatory syndrome that received fervent media attention last month, while scary, has even more infinitesimal numbers. “Many serious childhood diseases are worse, both in possible outcomes and prevalence,” said Charles Schleien, chair of pediatrics at Northwell Health in New York. Russell Viner, president of the UK’s Royal College of Pediatrics and Child Health, noted that the syndrome was not “relevant” to any discussion related to schools.
There is also a wealth of evidence that children do not transmit the virus at the same rate as adults. While experts note that the precise transmission dynamics between children, or between children and adults, are “not well understood“—and indeed, some argue that the best evidence on this question is that “we do not have enough evidence“—many tend to think that the risk of contagion is diminished. Jonas F. Ludvigsson, a pediatrician and a professor of clinical epidemiology at Sweden’s Karolinska Institute, reviewed the relevant research literature as of May 11 and concluded that, while it’s “highly likely” children can transmit the virus causing Covid-19, they “seldom cause outbreaks.” The World Health Organization’s chief scientist, Soumya Swaminathan, suggested last month that “it does seem from what we know now that children are less capable of spreading” the disease, and Kristine Macartney, director of Australia’s National Centre for Immunisation Research and Surveillance, noted a lack of evidence that school-aged children are superspreaders in her country. A study in Ireland found “no evidence of secondary transmission of Covid-19 from children attending school.” And Kári Stefánsson, a leading researcher in Iceland, told The New Yorker that out of some 56,000 residents who have been tested, “there are only two examples where a child infected a parent. But there are lots of examples where parents infected children.” Similar conclusions were drawn in a study of families in the Netherlands.
This is hardly surprising, given that closing the schools in the first place does not appear to have been a sound strategy for containing the coronavirus. Studies in JAMA Pediatricsand The Lancet have found ample reason to doubt whether school closures saved a significant number of lives. As Mother Jones‘ Kevin Drum pointed out in a review of the scientific literature, closures “have (a) little effect and (b) are probably nowhere near worth the tremendous impact they have on both parents and kids.”
That’s an important point: Reducing the amount of time that children spend at school is terribly burdensome for many parents who rely on school’s day care effect. Keep in mind that public schools are funded through taxes. It’s hardly fair for the state to confiscate vast sums of money from its citizens, in part for the purpose of child care, and then suddenly cease offering this service while keeping the money. States that want to make it possible for people to return to work—for the economy to reopen—really need to prioritize schools: They are among the first elements of public life that must return to a semblance of normality, and the risks seem comparatively low.
It won’t be possible to have a completely normal school year, of course. Officials should axe egregiously risky activities—no indoor pep rallies, for instance—and adult school employees might very well opt to wear masks or take other precautions, especially if they are elderly or immunocompromised. Wherever possible, district officials should make it possible for at-risk employees to work from home, or even to take the semester off. But they should not force kids to stay at home, clinging to the delusion that distance learning under these circumstances is anything other than an horrible burden on parents, and they should not force kids to hermetically seal themselves in bubbles when they do return to class.
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The only realistic Plan B is a fundamental, permanent re-ordering of the cost structure of the entire U.S. economy.
The fantasy of a V-shaped recovery has evaporated, and expectations for a W or L-shaped recovery are increasingly untenable. So forget V, W and L; the letters that will shape the future are N, P, B: there is No Plan B.
All the hopes for a recovery were based on a quick return to the economy that existed in late 2019. All the bailouts and stimulus programs were based on this single goal: a quick return to The Old Normal. This was Plan A.
For all the reasons that have been laid out here over the past six months, The Old Normal is gone for good.The Old Normal economy was too precarious, too brittle and too fragile to survive the toppling of any domino, as the only Plan A “solution” was to push destabilizing extremes to new extremes, i.e. doing more of what failed spectacularly and increasing the fragility of precariously fragile systems.
A short list of what’s been irreversibly destabilized due to a systemic collapse in demand, exponential rise in risk and uncertainty, dependence on over-indebtedness, imploding global supply chains, structural decline in income and employment and the rapid emergence of new business models that obsolete high-cost, inefficient, sclerotic, bureaucratic monopolies include:
1. Healthcare
2. Higher education
3. Commercial real estate
4. Tourism
5. Restaurants / live entertainment
6. Business travel / conferences
7. Office parks, commutes, urban work forces, etc.
8. High-cost urban lifestyles
We could also include entire sectors that have yet to recognize the tsunami that’s about to wash away their Old Normal: marketing, finance, local governance, etc.
The problem is there’s no Plan B for anything in the U.S. economy. There is only Plan A, a return to 2019 / The Old Normal. If that’s no longer possible, there is literally nothing left on the policy / response plate.
What nobody dares even ask is: what businesses and industries will still be financially viable running at 50% capacity? How many cafes, restaurants, resorts, airlines, etc. will turn a profit operating at 50% capacity? How many can not just survive half of the seats being empty, but turn a profit?
The short answer is very few, because the operating costs of most businesses are unbearably high. The likely survivors are those enterprises with low fixed costs and low operating costs– enterprises that own their facilities in locales with low property taxes, and enterprises that can be run by the owners without employees.
How many enterprises have these kinds of barebones cost structures? Very few.
For most enterprises, the only way they can lower their costs to a level that enables their survival is to cut costs by half: cut rent, mortgages, debt service, property taxes, fees, utilities, insurance, etc. by half.
That would mean everyone down the line would have to survive on half of their previous revenues: landlords, banks, local municipalities, service providers, and so on.
How many of these institutions and enterprises could survive on 50% of their previous revenues?
The only realistic Plan B is a fundamental, permanent re-ordering of the cost structure of the entire U.S. economy. Call it DeGrowth, or creative destruction, or disruption if you prefer, but whatever name we use, the reality will be extraordinarily disruptive, uncertain, risky and unpredictable.
As many of us has explained over the years, unstable, brittle, fragile systems characterized by soaring inequality, pay-to-play political corruption and dependence on debt, leverage and speculative bubbles were unsustainable.
Plan B can be a chaotic mess of denial and failed half-measures that only make all the problems worse, or it can be a positive transformation that results in a society that does more with less. The choice is ours.
Unfortunately, the pandemic chart I composed on February 2, 2020 is still playing out, increasing uncertainty.
Iran Calls For Trump’s Arrest Over ‘Brutal Murder’ Of Revolutionary Guard General Tyler Durden
Mon, 06/29/2020 – 09:05
Update (0920ET): Iran’s call for the arrest of President Trump has been dismissed as “a propaganda stunt” by the Trump Administration’s special representative for Iran, Brian Hook.
* * *
A top Iranian prosecutor has called for the arrest of President Trump and dozens of other Americans for their involvement in the “brutal murder” of former IRGC General Qassem Soleimani in Baghdad.
According to the AP, “the charges underscore the heightened tensions between Iran and the US since President Trump unilaterally withdrew America from Tehran’s nuclear deal with world powers,” though President Trump “faces no danger of arrest.”
Iran’s state-run IRNA news agency reported Monday that Tehran prosecutor Ali Alqasimehr has accused Trump and more than 30 other Americans (whom Iran believes were involved in planning and executing the Jan. 3 strike that killed Gen. Qassem Soleimani in Baghdad) of “murder and terrorism charges”. The identities of those other than Trump weren’t disclosed, however.
After filing the charges, Alqasimehr on behalf of Iran reportedly requested an Interpol “red notice” be issued calling for the arrest of Trump and the others, which represents the highest level arrest request issued by Interpol. Local authorities end up making the arrests on behalf of the country that request it. The notices cannot force countries to arrest or extradite suspects, though they can put subjects at risk of arrest or detention if they travel abroad.
Interpol hasn’t commented on the requests, suggesting that it isn’t taking Iran’s petition seriously. Interpol’s guidelines for red notices explicitly states that the agency can’t get involved in political issues.
Soleimani, the head of the IRGC’s Quds Force (an international arm tasked with coordinating terror attacks in accordance with Iran’s interests around the world) was killed during the opening days of 2020, kicking off what has been a year of non-stop news and activity as both Iran and the US were soon hammered by the coronavirus as it spread internationally from Wuhan, China.
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Can The Trillions Keep Ahead Of The Millions? Tyler Durden
Mon, 06/29/2020 – 08:48
Submitted by Michael Every of Rabobank
10 million. That’s now the global total of virus infections. Less than a week ago it was 9 million. Deaths are over 500,000. In the US, Texas and Arizona have banned bar drinking as Covid surges in the sunbelt, and 5.3% of NBA players tested are coming back positive as a worrying benchmark; in the UK, Leicester faces a new local lockdown, and one of the government’s scientific advisors says things nationally are on a “knife edge” with a spike in new infections expected by July; Germany has reportedly put in place internal quarantine for domestic travellers in Bavaria; Australia has seen a breakout in Victoria that might mean a new lockdown there; Brazil just had its worst week yet with 259,105 new cases; the New Delhi healthcare system is reported as on the brink of collapse; and as schools get ready to reopen in Europe after the summer, note that Israel –which liked to think it had beaten the virus– is officially now at the start of a second Covid wave (and soon, it sees, lockdown) being blamed on the hasty reopening of schools, which appear to have acted as a major transmission mechanism.
There are people out there still saying that this is not serious, especially in economies that desperately want to open up, or which still refuse to lock own. They point to lower hospitalisation rates and death rates with this second spike than with the first. That is true, but let’s wait a few weeks and see if they follow with a lag once hospitals are overloaded. Moreover, scientists increasingly report that even moderate Covid cases can mean permanent damage to lungs, nerves, the heart, and the pancreas, potentially causing diabetes. So “Happy Monday”…and that’s before we consider other news.
US-China decoupling continues apace. Late last week we saw suggestions from China that US interference via sanctions, especially over Hong Kong, would be a red line that might see Beijing walk away from the US-China trade deal. Tomorrow we will see the national security law for Hong Kong passed in Beijing, and it appears it will include life imprisonment for breaking it. Indeed, the sole pro-Beijing Hong Kong representative working on the bill has openly lobbied for the law to have more than the proposed ten-year penalty –which appears to have been successful– and for it to be retroactive. It is hard to see the current China hawks in the US Congress remaining silent if such a red line is crossed on Tuesday.
It is not like we are short of other US-China decoupling stories anyway: they are spreading like the virus. Even China considering allowing its giant commercial banks to develop into US-style investment banks can be seen as bad news when one wonders exactly what future market share Beijing can then dangle to the Wall Street firms it uses as political counterweights to China hawks.
In other geopolitics the picture is also messy. The India-China border stand-off is far from over, with both sides building up their forces and the Global Times tweeting: “If #India wants to take advantage of US support in border dispute with #China, it is terribly mistaken, as the Chinese PLA is fully prepared & capable of defending on multiple fronts including China-India border, South China Sea and Taiwan Straits: analysts” (How is that trade deal looking again?) In the Middle East we have a major explosion in Iran and potentially explosive Israeli actions from as soon as 1 July, while Egypt is serious about intervention in Libya that would see it facing off against Turkey. In Europe, the US continues to press ahead with plans to move troops from Germany to Poland, which will inflame Germans, Russians, and much of the US establishment alike.
Which is already inflamed by allegations US President Trump has allowed Russia to pay a bonus to those who kill US troops in Afghanistan. Trump claims he had not been presented with this information, and that it is not credible. Is Vladimir Putin deliberately trying to weaken a president whom the New York Times, which published this story, likes to repeatedly claim is a close friend of Moscow? The allegations are literally explosive. The lack of market reaction is partly due to a generalised liquidity anaesthesia, and partly due to little expectation that the US will act on it (other than by say moving troops to Poland in violation of long-held understandings with Moscow); and perhaps partly because the story can be seen as a replay of #Russiagate (i.e., domestic US politics)?
In domestic politics the picture is equally messy. The US is still wracked with protests; French President Macron’s party was handily defeated in mayoral elections in Paris and other major cities by the Green Party, and in the south the far-right National Rally did well; Poland’s incumbent President Duda won the first round of elections with 41.8% of votes, and the outcome of the second round on 12 July vs. the pro-EU and liberal Warsaw mayor Trzaskowski will decide whether the country continues to lean firmly towards conservatism populism or not; and in Australia, an MP is being investigated over allegations his office was infiltrated by Chinese intelligence..
On the economy, the one number so far today was Chinese industrial profits, which were up 6.0% y/y in May. How this is possible when exports are not up and neither is domestic demand, while the Chinese Beige Book says the entire economy remained in recession in Q2, is a good question. To which the answer will be “Look, China! Look, 6%!” The PBOC keeps underlining that it is there to provide ever-more credit to the economy, even as CNY will be kept simultaneously stable. That’s why 10-year Chinese bond yields are at 2.87%, over 220bp above the US.
Indeed, against this global backdrop we have US 10-year yields at 0.64%, the USD on reasonable footing for now, and equities having rare red sessions (the S&P closing -2.4% on Friday, the Nikkei -2.0% at time of writing today). Obviously the key focus will be on tomorrow’s Congressional testimony where Fed Chair Powell and Treasury Secretary Mnuchin will be able to flesh out how many USD trillion more they propose pumping into the economy ahead to try to stabilize the situation.
Can the trillions keep ahead of the millions? That’s the key dynamic.
via ZeroHedge News https://ift.tt/3eNYaxq Tyler Durden
Facebook Pummeled In Pre-Market As Boycott Builds, Liberal Media Takes Aim At Zuck Tyler Durden
Mon, 06/29/2020 – 08:28
Facebook shares are set for the second day of declines as a boycott of advertisers on the social media platform is quickly gaining momentum.
The latest companies pausing ads on the social media platform in response to its handling of hate speech and violence are Starbucks Corp. and Diageo Plc., reported Bloomberg.
Here’s a list of the companies that have said they’re decreasing or halting ad spending with Facebook:
Unilever
Verizon
Hershey’s
Honda
The North Face
Ben & Jerry’s
REI
Patagonia
Eddie Bauer
Upwork
Mozilla
Magnolia Pictures
Birchbox
Dashlane
TalkSpace
LendingClub
Starbucks Corp.
Diageo Plc.
Facebook shares declined about 2.5% in pre-market trading on Monday after the news Starbucks Corp. and Diageo Plc. would pull back on spending. Shares plunged 8.3% on Friday after Unilever, one of the world’s largest advertisers, halted advertisements on the social media channel. From last week’s high, shares are down 16%.
Now it seems Washington Post is going after Facebook’s CEO Mark Zuckerberg…
(WaPo) – Hours after President Trump’s incendiary post last month about sending the military to the Minnesota protests, Trump called Facebook chief executive Mark Zuckerberg.$FBhttps://t.co/rBpzC1cYwI
There is an amusing piece on the FTs’ Alphaville listing 20 things investors should look for when trying to work out who will be the next Wirecard. You don’t need to be a financial genius to work out which company they might be talking about… It’s a basic wake-up call. In periods of economic darkness, its all-to-easy to be persuaded as to the efficacy of snake oil. If something over-promises, makes lots of noise while underdelivering, and is basically a personality cult – then it’s long-term unlikely to be a particularly successful investment.
Back in the real world…
We are nearly half-way through 2020. Although we’ve been shocked, surprised and buffeted by the Virus, and buoyed by the swift and effective intervention of Governments to support companies and mitigate job losses while Central Banks have calmed markets with the opium of QE Infinity, I can’t help wonder if the real earthquake is yet to come.
I am still bullish about long-term recovery as we adapt to the virus and it spurs a new tech development age. But I can’t help feeling deeply uneasy about current markets and the resilience of global financial systems.
This crisis is unlike anything I’ve experienced before. Normally a market crash is explosive event – it occurs when something in the financial sphere breaks; like confidence in housing and financial systems in 2007, or valuations in the Dot.Com crash, or faith in credit constructs like during the European Sovereign Debt crisis in the 2010s. In each of case of financial mayhem I’ve experienced since the Great Perp Crash of 1986, the initial shock and horror gradually lessens as the market discounts the shock, shrugs it off, and carries on.
The Global Financial Crisis of 2007-2008 has some similarities to current events – it was slow. It took more than a year from the gating of Bear Stearns structured credit funds, through the collapse of commercial paper markets, the run on Northern Rock, till we got to the collapse of Lehman in September 2008. As banks were bailed out and rescued, there were around three months in 2008 when it felt like financial markets were irreparably broken. Of course, they weren’t – governments and central banks nursed them through. Stock markets were extremely volatile – but were equally swift to arbitrage that support – triggering a rally that lasted 12 years! (Largely on the back of markets being distorted by ultra-low rates and QE.)
This time it feels different.The crisis started off with a meteor strike – the virus. We’ve never seen anything impact the real economy so dramatically. Normally – it happens the other way around: financial crashes impact the markets and only then does the pain trickle down into the real world. This time it’s real jobs and production that got hit first. That’s fundamentally different.
I’m not convinced that markets really understand that difference. The effect on the real economy of financial failure is felt in terms of the flow of capital to businesses. If a bank blows up – it will impact savers and borrowers. This time we’re looking at how will crashing earnings and diminished rental incomes will hit the financial markets – but they are behaving as if it’s just another round of QE Infinity for the markets to arbitrage. As we all know markets are completely delinked to the real world at present.
Yet, the damage the real world is going to inflict on financial markets is going to be huge – but that’s not what I see the banking regulators and authorities preparing for. They’re pushing financial institutions to participate by easing lending and supporting confidence. You can understand why – yet they also know a crisis coming. Just read the dissenting statement by Fed Governor Lael Brainard after she stepped back from the Fed’s decision to allow bank dividends: “many large banks are likely to need greater loss absorbing capital to avoid breaching their buffers in adverse circumstances next year.”
The bottom line is global central banks know a financial crisis is possible/probable.
There are many issues here. Is the market pricing in a major financial systems crisis – to a limited extent. What if rising real world problems trigger a massive NPL crisis? Effectively the whole financial system now sits on financial assets (stocks and shares) which are underpinned by government support. How sustainable is that?
For instance, In the UK we know commercial landlords have received less than 20% of their rental incomes on the last 2 quarter days – the day tenants are supposed to pay the next three months rent. Property “experts” expect landlords will recover much of that rent in the aftermath of the virus. That will be interesting – how many more names are likely to disappear from high streets and how many more shopping malls will fall into receivership as folk keep shopping from home?
Companies failing to pay rents or dividends is no longer just a banking problem. Risk is now far more widely spread across the whole financial system: insurance companies and sovereign wealth funds own most City offices. Fund managers that rely on dividend income are likely to be sadly disappointed as incomes dry up as a result of government fiat or on the back of the dismal earnings season we’re about to experience.
The path for markets will depend on what surprises us next. In previous crisis I’ve watched markets roiled by a massive shock before falling in a predictable path: the daily news becomes less shocking, the markets become less volatile, and start to seek opportunities.
This time I don’t think the real financial shock has yet occurred. The dominant issue remains the virus. The market news creating the current RO/RO (risk on/risk off) volatility is all about how COVID-19 is slow burning its way across the Southern US stats, triggering renewal lockdowns, and spooking the markets. The sheer size of the US is one issue, but lax lockdowns and early re-openings in states that hadn’t reached anything close to a peak infections is another.
The virus is going to remain a massive threat, but real economic and political issues are going to emerge in coming weeks. Dismal corporate earnings and stories like the collapse of Gas fraker Chesapeake energy, or Boeing struggling to re-launch the dismal 737 MAX will dominate the news flow.
Geopolitics ranging from the deepening China/US standoff, to the EU fighting battles on Brexit, the Poor South and the democratic challenge from the East, are likely to remain negative.
And lets not forget domestic politics. An increasing number of fund managers list the US November Election as their biggest fear. Few would admit to being Trump supporters, but there is clear fear of a Biden presidency achieving a clean sweep of both the Senate and Congress. Meanwhile, Macron’s drubbing in French local elections, and the hopefull pro-European vote in Poland highlights voters unhappiness with current regimes.
As I said – I’m bullish… but selectively, and there is a lot of noise coming our way.
via ZeroHedge News https://ift.tt/2BMBOOb Tyler Durden
