Gamestop Slides After Short Interest Said To Collapse

Gamestop Slides After Short Interest Said To Collapse

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

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

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

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

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

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

 

Tyler Durden
Mon, 02/01/2021 – 10:52

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You can watch his full announcement here:

Tyler Durden
Mon, 02/01/2021 – 10:40

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

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

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

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

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

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

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

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

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

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

Via Task & Purpose

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

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

Tyler Durden
Mon, 02/01/2021 – 10:35

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Market Jenga

Market Jenga

Authored by Bill Blain via MorningPorridge.com,

What Ever You Want To Believe

“No wise man has the power to reason away”

Market Jenga: At some point… it going to come crashing down.. 

This is going to be an interesting Month. We’ve going to get it all: emotion, manipulation, the behaviour of crowds, what people want to believe, what is true, and fundamental facts about markets; primarily that any financial asset is only worth what people believe it to be worth. What the actual/real worth of any stock is, is an empty question – it’s the price the market is willing to pay that counts. 

As we start the week, it’s going to be about Silver as the Reddit traders follow the posts imploring them to buy-into the feeding frenzy and ramp up the precious metal on non-sensical promises they are going to bring down the banks by forcing them to cover trading positions. Ask the Bunker-Hunts how well that worked for them back in 1980.

To understand the current Reddit mentality, check the interview in the Journal with one of the Reddit traders behind the Gamestop mania. Keith Gill is a former marketing chap from Mass Mutual. Today is he “DeepF***ingValue” on Reddit, also known as “Roaring Kitty” on You Tube, and he’s got $33 million in his bank account – which is impressive, but demonstrates the power of convincing others to back your belief. He made a paper gain of $20mm on Gamestop while being interviewed by the WSJ!

What’s interesting is it’s not just Reddit. Since Wednesday I’ve seen dozens of posts from astute financial professionals urging their colleagues to follow the money and join the Silver ramp. Who doesn’t like a free-lunch? It’s kind of logical from a market perspective, but totally unjustifiable from any fundamental narrative about Silver suddenly being worth more. Nope, the only reason to buy is to coat-tail the “let’s destroy Wall Street by ramping Silver” story. I guess you might call it a “career hedge”?

All of which must be making bank analysts and professional investment stock pickers nervous – for all the screeds of data they scan, the balance sheets they crunch, the top-down and bottom-up analysis they do of companies… it would actually be better just to say.. “Heck yes.. this is a great company because some 19-year old just spun a great options trade, and the mob followed him to push it higher on the belief it might destroy Blackrock!” Wow… Can I buy that? 

You can fulminate about how unjustified and unsafe it all is, or you can follow the money, secure in the knowledge central banks aren’t going to let markets collapse – no matter how much the day-trading Reddit traders riot all over it. Which is a whole other problem…. 

Mr Market is loving it.. The more marks join the money game, the more money is sucked in, the more it’s going to hurt.. It’s basically an enormous game of Market Jenga. At some point… it going to come crashing down! Yay… 

It’s maybe surprising to financial professionals just how few civilians actually understand it’s possible to short a stock – selling something you don’t actually own. It makes sense from a market perspective – the price of any stock is a vote between those who think it’s cheap (who buy to go long) and those who think it’s too expensive, (who sell). If you want to sell a stock it would create a false market price if you had to buy it first! As long as you sell a stock, and deliver that stock (through the clearing mechanisms) then it’s simple. It’s a mechanical process for institutional investors to borrow stock at a certain price to deliver it. For retail, they do have to cover their shorts or face being “bought-in” if they don’t deliver. 

The basis of the Reddit Revolution is the power of mob and the platform – get enough people together, get them bought into the concept and persuade them to join the attack. Juice them up with reinforcing social media and fake-news, the easy ways to persuade people to believe what you want them to believe, and it becomes a Rolling Stone on its way down the hill. 

Apparently its not illegal because no one is doing it to mislead others. While “concert-parties” of linked investors are subject to regulation in certain instances, you can’t stop people believing what they want to believe. But if Mr Roaring Kitty was to be urging people to buy Gamestop while he was shorting it – that’s when you’d expect Jordan Belfort to jump out of the cake offering to sell you penny stocks. (In the background I am sure there are multiple Belfort’s already howling round these markets….)

Strange days indeed.. 

Meanwhile.. Back in Yoorp…

Apparently, polls show a majority of Europeans believe Astra-Zeneca is 100% responsible for the delays and failures getting vaccines out and around the European Union… (even though the EU only approved the vaccine on Friday and the Germans say it doesn’t work.) 

Again, people believe what they want to believe. It all got so emotional in Brussels on Friday, that VDL, (the nickname of choice for thrice-failed German politician and ditherer-in-chief (DIC) in Brussels), panicked and decided to stop vaccine deliveries to the UK while closing the Irish border – all without bothering to inform the Irish, the British, or any other EU officials outside her core group. 

(Wind-up time: I can’t understand why the Dublin Quislings are so incensed.. as a vassal-state of the Brussels Reich should they not do exactly what VDL tells them to do..? (I can’t wait for the Dublin response – which I shall savour… best comment from an Irishman gets published tomorrow.))

The widely circulated tale this weekend is all about how Michel Barnier, the EU’s Brexit supremo, saved the day and forced VDL to step back from the abyss. I reckon it’s a political play… After 15-years in Europe (from special advisor, then Commissioner for Internal Market, and then chief Brexit negotiator) Barnier is returning to French politics, and has his eyes on the Elysée as the Candidate of the Centre Right. 

Macron is unlikely to see a second term. His delusions of grandeur, his mis-handling of Gillet-Jaune, the growing unpopularity of the European superstate, and now Covid and the vaccine delays, leaves him vulnerable to collapse in the 2022 elections. As his En-Marche evaporates, the election is likely to be a repeat face-off with Marine Le Pen’s Far Right, a competent looking Centre-right alternative could well prove attractive to French voters. Watch that space… 

The truth about the promised Astra-Zeneca vaccine deliveries and contracts with Yoorp will probably never be known – to protect the guilty. It’s clear there was utter incompetence on someone’s part. It will be covered up because the Pharma executives are smart enough to know that exposing their clients to ridicule would be expensive from both a regulatory and future orders perspective.

The drug maker agreed to produce the Vaccine at zero-profit on a best-efforts basis. It agreed terms with the UK months ago. Making vaccines isn’t simple, but its fairly well understood second-year brewing and microbiology. To ramp up production isn’t an overnight process. It does require some fairly substantial plant to be fitted, including very large high-spec refrigeration. I’m told these units were delayed, and only fitted in the new UK production facilities over Christmas. 

Back in Yoorp, it took the EU a further 3 months of quibbling about the price on Astra-Zeneca’s contract (a zero-profit deal) before they inked the deal and insisted on production in Europe. At that point AZ ordered the required capital plant, including the refrigeration units – which just like in the UK are taking time to instal – hence the delays. 

These delays are entirely due to EU delays in signing the contract. Yet the EU won’t accept its responsibility. What we saw over the weekend was bully-boy swagger. VDL’s coterie were willing to trigger a trade war with the UK, trample rough-shod all over Ireland, and deny UK citizens a second dose of the Pfizer vaccine, in punishment for being the home of Astra-Zeneca. 

Europe should wake up to the monster they’ve created in Brussels. Someone, probably not VDL herself, but a top level minion, should be shot. 

Tyler Durden
Mon, 02/01/2021 – 10:16

via ZeroHedge News https://ift.tt/39yEoWy Tyler Durden

US Manufacturing Survey Hits Record High Amid Soaring Inflation, Supply-Chain Disruptions

US Manufacturing Survey Hits Record High Amid Soaring Inflation, Supply-Chain Disruptions

Amid declining ‘hard’ economic data, ‘soft’ survey data on US manufacturing surged to a record high in January, according to Markit. But, according to ISM, Manufacturing in the US slowed in January too?

  • Markit Manufacturing 59.2, up from 59.1, and above 59.1 expectations to a record high.

  • ISM Manufacturing 58.7, down from 60.5, and below 60.0 expectations.

So take your pick!?

Source: Bloomberg

However, the surge in Markit’s PMI was driven by intensifying cost pressures amid raw material shortages (with near-record supply chain disruption).

Firms were able to partially pass on higher costs, however, with selling prices rising at the fastest pace since July 2008.

The last time Prices Paid was here, Oil was trading at $140!

The Manufacturing survey’s surge is not matched by output…

Supplier delays persisted. Excluding December’s record low, vendor performance deteriorated to the greatest extent since data collection began in May 2007. Supply chain disruption reportedly stemmed from raw material and transportation shortages, notably trucking.

This surge is modeled within ISM/Markit as a ‘positive’ sign of demand but clearly this is anything but in a COVID-locked-down world of supply chain disruptions.

The less optimistic ISM report showed respondents split into two cohorts:

Soaring business

  • “Supplier factory capacity is well utilized. Increased demand, labor constraints and upstream supply delays are pushing lead times. This is more prevalent with international than U.S.-based suppliers.” (Computer & Electronic Products)

  • “Business remains strong. Manufacturing running at full capacity.” (Chemical Products)

  • “Very strong demand with limitations in supply to meet increased demand.” (Transportation Equipment)

  • “Our current business demand is going way past pre-COVID-19 [levels].” (Fabricated Metal Products)

and lack of workers

  • “We have had an increase in employees testing positive for COVID-19, negatively impacting manufacturing.” (Miscellaneous Manufacturing)

  • “Labor continues to be one of our largest challenges.” (Food, Beverage & Tobacco Products)

  • “Business is improving, but we are still struggling with a shortage of available labor.” (Primary Metals)

Chris Williamson, Chief Business Economist at IHS Markit said:

“US manufacturing started 2021 on an encouragingly strong footing, with production and order books growing at the fastest rates for over six years.

“Demand from both domestic and export customers picked up sharply in January, buoyed by several driving forces. Consumer demand has improved while businesses are investing in more equipment and restocking warehouses, preparing for better times ahead as vaccine roll outs allow life to increasingly return to normal over the course of 2021.

“Manufacturers are encountering major supply problems, however, especially in relation to sourcing inputs from overseas due to a lack of shipping capacity. Lead times are lengthening to an extent not previously seen in the survey’s history, meaning costs are rising as firms struggle to source sufficient quantities of inputs to meet production needs. These higher costs are being passed on to customers in the form of higher prices, which rose in January at the fastest rate since 2008. These price pressures should ease assuming supply conditions start to improve soon, but could result in some near-term uplift to consumer goods price inflation.”

With inflation soaring, optimistic investors should be careful what they wish for as The Fed’s dovish hand may be forced sooner than they think.

Tyler Durden
Mon, 02/01/2021 – 10:07

via ZeroHedge News https://ift.tt/3j7sBSn Tyler Durden

Rabobank: Uprisings And Revolutions Are Often The Result Of Expensive Silver

Rabobank: Uprisings And Revolutions Are Often The Result Of Expensive Silver

By Michael Every of Rabobank

Long, John: Silver

You won’t fight, as gentlemen o’ fortune should; then, by thunder, you’ll obey, and you may lay to it!

Friday was still Game On for the Redd-olution not Game Over, and the new target today is to go long, John: silver. The word is that, like GameStop, gold and silver prices are being repressed by shorts as a way to hide the inflation that our central-bank money printing is creating. If you don’t look at the price of houses, or healthcare, or education, or food, or commodities, or stocks, or junk bonds then, yes, I suppose low gold and silver prices are worth considering. So the Redd-olution is going to sail on to attack asset after asset like The Crimson Permanent Assurance, forcing those short to walk the plank, and leaving regulators and the financial media pearl-clutching in their wake. That’s already important. However, the fact that silver seems the booty all Reddit pirates are a-sailin’ for leads this particular captain to cry “Fair warned be ye, says I.”

We all know modern economic textbooks are irrelevant in their treatment of money, which is exogenous to their ‘models’, but older studies are instructive. ‘The Mystery of Money’ (Taylor, 1862) is a product of its time and a British mind-set, but makes claims on money and metals that relate to the Redditors today. For example, prior to the Norman invasion of 1066, kings demanded tribute from their subjects in the form of direct labour or goods (crops, sheep, oxen, etc.). This meant everyone could pay their taxes. It also made physical production of key goods doubly worthwhile, both to eat/store, and to pay taxes with. (Taylor calls this ‘tribute money’.) However, subsequent kings shifted to allowing tax payments first as either labor/goods or in silver coin –which as a precious metal had its own value – ‘mercantile money’ as he dubs it– and eventually to only in silver. Notably, this came with serious, negative side effects.

Tribute money “was the servant of the people: they could use it or not, as it suited them; but when payments in coined money were made absolute, then the king’s money became the master of the people…Then to accumulate money was to accumulate sheep and oxen in advance, without the trouble of feeding them…The corn-grower, therefore, would be tempted to hoard his money, rather than to expend it in increasing the productions of the soil; and this would go on until the progressive increase of the population having, at last, overtaken the average productions of the cultivated lands, a famine would ensue; and a famine from the scarcity of money, unlike that arising from a temporary interruption in the order of nature.”

Obviously, this made kings far more powerful: “…an absolute money system was infinitely superior, as a means of oppression, to the absolute military power of the conqueror.” However, by switching to silver the kings also made themselves less powerful. For centuries, royals failed to maintain an adequate physical supply of silver coinage, with crippling economic, deflationary effects. Uprisings and revolutions were often the result of expensive silver!

Ironically, if the royals spent too much, they had to borrow; and given no productive investment, every boom was then followed by a bust – and most so if the money went on a war. Moreover, if they then debased the silver coinage, people would simply hoard good coins and only use bad ones, or melt them down into silver bullion and ship it to places which would pay a higher market price. So there was a check on state spending, but alongside total local domination via taxation, a semi-permanent lack of money, and a focus on the zero-sum of squeezing out existing silver supplies rather than growing more wheat or rearing more oxen, etc.

Taylor explains at great length the gradual transition from a local silver standard to a local and then an international gold standard. He also underlines the permanent tensions in trying to balance local silver supply with the gold needed for imports and debt service; and then how things got far more complicated with the introduction of paper money and bank credit, which actually sat alongside the supposed gold standard most of the time despite popular imagination to the contrary. He also argues that this standard was ruinously deflationary for much of the time it was used – again causing serious political instability.

The key lesson here is that the power to create money, and to demand that money as taxation, IS power (which is also an MMT argument). In that regard one can see why Redditors are lashing out at ‘The System’. Yet if we were to take this power away from central banks and give it to gold or silver –which going long silver will not result in, John– we would simply replace one master with another, and an exogenous one which can’t respond to populism. Yes, such a move would burst our unfair asset bubbles. However, anything so deeply deflationary would likely lead to something far worse than people discussing asset prices on Reddit. There is no Treasure Island waiting – just scurvy, weevils, the lash, and sharks.

We need to find a monetary system that incentivises physical production (and wages) rather than speculation in financial assets; and which resolves global imbalances at the same time, so all benefit equally: chastising Redditors for speculation while pretending that our existing financial system does that job, when it clearly doesn’t, is not a solution. Yet how does the West find this treasure without greater state control? Taylor talks about how an independent central bank open to supporting bank credit for national development goals works better than the purely laissez-faire British model, and how the UK risked being left behind as powers like France used this strategy. He was right – one can see the parallel with the US and China today.

In which case also recall how even silver and gold could flow abroad in the old days: so when do we see capital controls? Taylor adds that *Adam Smith* was an advocate of capital controls in order to keep British gold and silver coins circulating locally: he argued for public seignorage (clipping the coins), so they could not be melted down and exported as bullion if metal prices fluctuated above the level locally due to excess issuance of bank notes, which were a monetary substitute. So Smith supported capital controls, believed there would be no foreign FDI, and backed anti-trust actions. You want real sabre rattling at ‘The System’? Try Smith!

Meanwhile, we just saw even the free-trade (and internal gold-standard) loving EU come close to imposing a hard border on Northern Ireland(!) in contradiction to the Good Friday Agreement, and institute virus vaccine export restrictions. The risks are of much more of this kind of economic nationalism ahead, just as there was during the almost the entire period of precious metals as money. THAT is a key lesson to draw from the Redd-olution: not the price of silver.

The score! Three goes o’ rum! Why, shiver my timbers, if I hadn’t forgotten my score!

Tyler Durden
Mon, 02/01/2021 – 10:00

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

Key Events In The Coming Action-Packed Week: Payrolls, PMIs, Politics And Tons Of Earnings

Key Events In The Coming Action-Packed Week: Payrolls, PMIs, Politics And Tons Of Earnings

It’s another big week for earnings and data, with the PMIs for January (today and Wednesday) as well as the US jobs report (Friday) the main highlights. In terms of a peak week of earnings, Amazon and Alphabet tomorrow are going to see the main focus.

As DB’s Jim Reid adds, there’s also the Bank of England’s latest decision on Thursday, along with further political developments in Italy as consultations continue on forming a new government. Expect to hear more about the US stimulus package with the reconciliation process likely starting as a bipartisan approach is probably unlikely to work even if GOP lawmakers have offered a $600bn package over the weekend. Biden will meet with 10 Republican senators today to discuss.

A quick note on PMIs: overnight China’s Caixin manufacturing PMI disappointed after coming in at 51.5 (vs. 52.6 expected). Earlier, official Chinese PMIs also showed the same theme with manufacturing printing at 51.3 (vs. 51.6 expected) and services at 52.4 (vs. 55.0 expected). Japan’s final manufacturing PMI was at 49.8, +0.1pt better than flash. Manufacturing PMIs for other countries in the region remained relatively stable, with Vietnam at 51.3 (vs. 51.7 last month), Taiwan at 60.2 (vs. 59.4 last month), India at 57.7 (vs. 56.4 last month) and Indonesia at 52.2 (vs. 51.3 last month).

Looking at other data, DB economists expect a +100k increase in payrolls, which comes off the back of a -140k decline in December, and see the unemployment rate remaining at 6.7%. That decline in nonfarm payrolls in December marked the first time that the US economy had shed jobs since the height of the first wave of the pandemic back in March and April 2020, and it’s worth noting that the number of people in work still remains nearly 10m lower than its prepandemic peak back in February, so there’s still a long way to go before we get back to normality in the labor market. After last week one wonders how many of these unfortunately displaced were part of the r/wallstreetbets crew.

Meanwhile, earnings season continues in full flow over the week ahead, with a further 111 companies from the S&P 500 reporting and 71 Stoxx 600 companies. In terms of the highlights to look out for, today we’ll hear from Thermo Fisher Scientific, then tomorrow we’ll get results from Amazon, Alphabet, Pfizer, Exxon Mobil, Amgen, UPS, BP, Alibaba and Ferrari. Wednesday then brings releases from PayPal, AbbVie, Qualcomm, Novo Nordisk, Siemens, GlaxoSmithKline, Santander, Sony, Biogen, Volvo and Nomura. On Thursday, we’ll hear from Roche, Gilead, Merck & Co., T-Mobile US, Unilever, Royal Dutch Shell, Bristol Myers Squibb, Philip Morris International, Ford and Nokia. Finally on Friday there’s results from Linde, Sanofi and BNP Paribas.

At the midpoint of earnings season – 52% of the S&P has reported – the market has seen a record high number of beats (85%), with the size of those beats roughly in line with last quarter at 17% which is close to the highest on record. This reflects how estimates have continued to lag the macro data, however the market has not necessarily rewarded these beats. Equity positioning was relatively high coming into the earnings season, valuations high and investors may be looking ahead to further lockdowns in the coming quarter and worries over upcoming guidance.

Courtesy of DB, here is a day-by-day calendar of events

Monday February 1

  • Data: January manufacturing PMIs from South Korea, Indonesia, Japan, India, Russia, Turkey, Italy, Germany, South Africa, Euro Area, UK, Brazil, Canada, US, Japan January vehicle sales, Italy preliminary December unemployment rate UK December mortgage approvals, Euro Area December unemployment rate, US December construction spending, US January ISM manufacturing
  • Central Banks: Fed’s Bostic speaks
  • Earnings: Thermo Fisher Scientific

Tuesday February 2

  • Data: France preliminary January CPI, Italy Q4 GDP, Euro Area Q4 GDP
  • Central Banks: Reserve Bank of Australia monetary policy decision, Fed’s Mester speaks
  • Earnings: Amazon, Alphabet, Pfizer, Exxon Mobil, Amgen, UPS, BP, Alibaba, Ferrari

Wednesday February 3

  • Data: January services and composite PMIs from Japan, China, India, Russia, Italy, France, Germany, Euro Area, UK, Brazil and US, Italy preliminary January CPI, Euro Area January CPI estimate, US January ADP employment change, ISM services index
  • Central Banks: Fed’s Bullard, Harker, Mester and Evans speak
  • Earnings: PayPal, AbbVie, Qualcomm, Novo Nordisk, Siemens, GlaxoSmithKline, Santander, Sony, Biogen, Volvo, Nomura

Thursday February 4

  • Data: Germany January construction PMI, UK January construction PMI, US weekly initial jobless claims, December factory orders, preliminary Q4 nonfarm productivity
  • Central Banks: Bank of England monetary policy decision, ECB publishes Economic Bulletin, Fed’s Daly speaks
  • Earnings: Roche, Gilead, Merck & Co., T-Mobile US, Unilever, Royal Dutch Shell, Bristol Myers Squibb, Philip Morris International, Ford, Nokia

Friday February 5

  • Data: Japan preliminary December leading index, Germany December factory orders, Italy December retail sales, US January change in nonfarm payrolls, unemployment rate, December trade balance
  • Central Banks: Reserve Bank of India monetary policy decision, BoE Governor Bailey and ECB Vice President de Guindos speak
  • Earnings: Linde, Sanofi, BNP Paribas

* * *

Finally looking at just the US, Goldman notes that the key economic data releases this week are the ISM manufacturing and non-manufacturing reports on Monday and Wednesday, jobless claims on Thursday, and the January employment report on Friday. There are several speaking engagements from regional Fed presidents this week.

Monday, February 1

  • 09:45 AM Markit manufacturing PMI, January final (consensus 59.1, last 59.1)
  • 10:00 AM Construction spending, December (GS +1.0%, consensus +0.8%, last +0.9%): We estimate a 1.0% increase in construction spending in December, with scope for an increase in private residential and a rebound in public construction spending.
  • 10:00 AM ISM manufacturing index, January (GS 61.0, consensus 60.0, last 60.5): We expect the ISM manufacturing index to rise by 0.5pt to 61.0 in the January report, reflecting net improvement in the regional manufacturing surveys and the GSAI as well as our expectation of continued industrial resilience during the third wave.
  • 12:00 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will speak on the economic outlook as part of a virtual event. Prepared text is not expected. Questions from the audience are expected.
  • 01:00 PM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will participate in a virtual event hosted by the Chicago Council on Global Affairs.
  • 02:00 PM Atlanta and Boston Fed Presidents Bostic (FOMC voter) and Rosengren (FOMC non-voter) speak: Atlanta Fed President Raphael Bostic and Boston Fed President Eric Rosengren will give remarks at the Atlanta Fed’s “Uneven Outcomes in the Labor Market” virtual conference.

Tuesday, February 2

  • 01:00 PM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will discuss the economic and fiscal outlook in an event hosted by the Dallas/Fort Worth Association for Corporate Growth.
  • 02:00 PM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Fed President Loretta Mester will give remarks at the Atlanta Fed’s “Uneven Outcomes in the Labor Market” virtual conference.
  • 05:00 PM Lightweight motor vehicle sales, January (GS 16.0mn, consensus 16.1mn, last 16.3mn)

Wednesday, February 3

  • 08:15 AM ADP employment report, January (GS +25k, consensus +70k, last -123k): We expect a 25k rise in ADP payroll employment, reflecting an increase in jobless claims and the impact of declining December payrolls on the ADP model.
  • 08:30 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a discussion on the economic outlook as part of an event hosted by the Northside Economic Opportunity Network.
  • 09:45 AM Markit services PMI, January final (last 58.0)
  • 10:00 AM ISM services index, January (GS 56.2, consensus 56.7, last 57.2): We estimate the ISM services index declined by 1.0pt to 56.2 in January, reflecting the impact of the third wave as well as convergence towards our GS Non-Manufacturing Survey Tracker (at 52.9 in January). We also note scope for a pullback in the supplier deliveries component, following elevated holiday shipping trends in November and December.
  • 01:00 PM St. Louis Fed President Bullard (FOMC non-voter) speaks: St. Louis Fed President James Bullard will speak on the economic and monetary policy outlook at an event hosted by the CFA Society of St. Louis.
  • 02:00 PM Philadelphia Fed President Harker (FOMC non-voter) speaks: Philadelphia Fed President Patrick Harker will speak at the Atlanta Fed’s “Uneven Outcomes in the Labor Market” virtual conference.
  • 05:00 PM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Fed President Loretta Mester will participate in a moderated discussion with a panel of former regional Fed presidents at an event hosted by the Council for Economic Education.
  • 05:00 PM Chicago Fed President Evans (FOMC voter) speaks: Chicago Fed President Charles Evans will participate in a discussion on the economy and monetary policy as part of a virtual event.

Thursday, February 4

  • 08:30 AM Nonfarm productivity, Q4 preliminary (GS -2.8%, consensus -3.0%, last +4.6%); Unit labor costs, Q4 preliminary (GS +4.2%, consensus +3.8%, last -6.6%); We estimate nonfarm productivity growth contracted by 2.8% in Q4 (qoq saar), reflecting a larger increase in hours worked than in business output. We expect Q4 unit labor costs—compensation per hour divided by output per hour—to increase by 4.2% qoq ar.
  • 08:30 AM Initial jobless claims, week ended January 30 (GS 815k, consensus 830k, last 847k); Continuing jobless claims, week ended January 23 (last 4,771k): We estimate initial jobless claims declined to 815k in the week ended January 30.
  • 10:00 AM Factory orders, December (GS +0.7%, consensus +0.7%, last +1.0%); Durable goods orders, December final (last +0.2%); Durable goods orders ex-transportation, December final (last +0.7%); Core capital goods orders, December final (last +0.6%); Core capital goods shipments, December final (last +0.5%): We estimate factory orders increased by 0.7% in December following a 1.0% increase in November. Durable goods orders rose by 0.7% in the December advance report, and core capital goods orders rose by 0.5%.
  • 01:00 PM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will participate in a discussion hosted by the Urban Land Institute.
  • 02:00 PM San Francisco Fed President Daly (FOMC voter) speaks: San Francisco Fed President Mary Daly will give remarks at the Atlanta Fed’s “Uneven Outcomes in the Labor Market” virtual conference.

Friday, February 5

  • 08:30 AM Nonfarm payroll employment, January (GS +125k, consensus +58k, last -140k); Private payroll employment, January (GS +100k, consensus +40k, last -95k) ;Average hourly earnings (mom), January (GS +0.3%, consensus +0.3%, last +0.8%); Average hourly earnings (yoy), January (GS +5.1%, consensus +5.1%, last +5.1%); Unemployment rate, January (GS 6.7%, consensus 6.7%, last 6.7%): We estimate nonfarm payrolls rose 125k and private payrolls rose 100k in January. The coronavirus resurgence weighed on the December report, but we note subsequent stabilization in dining activity and in the severity of business restrictions in January. Big Data employment signals were mixed in the month, but generally showed stabilization or improvement relative to December. Despite higher jobless claims, we also expect fewer seasonal layoffs of retail, leisure, and temp help workers, reflecting already depressed employment levels in those industries. We estimate an unchanged unemployment rate (6.7%) and a 0.3% increase in average hourly earnings (mom sa), the latter reflecting positive calendar effects.
  • 08:30 AM Trade balance, December (GS -$65.1bn, consensus -$65.8bn, last -$68.1bn): We estimate the trade deficit decreased by $3.0bn in November, reflecting a decline in the goods trade deficit. Goods imports have returned to their pre-pandemic level, and following a large increase in November, goods exports are now only slightly below their pre-pandemic level. Both imports and exports of services have recovered only slightly from their 2020Q2 troughs.

Source: DB, Goldman, BofA

Tyler Durden
Mon, 02/01/2021 – 09:58

via ZeroHedge News https://ift.tt/3alaOD7 Tyler Durden

Federal Masks Cops To Start Targeting Travelers Today

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Cue the federal mask cops. Americans are now required to wear masks in planes, trains, buses, subways, taxis, car services, boats, and transportation hubs, per a new order from the Centers for Disease Control and Prevention (CDC) that took effect today. Masks must be of a style approved by the federal government and must fit properly. Failure to comply will result in being prohibited from traveling, booted from the transit in question, and potential criminal penalties.

The order will be enforced by Transportation Security Administration (TSA) agents and “other federal authorities,” as well as state and local officials. “To the extent permitted by law…federal agencies are required to implement additional measures enforcing the provisions of this Order,” the CDC says.

“CDC reserves the right to enforce through criminal penalties,” the agency adds, though it claims not to intend “to rely primarily on these criminal penalties.” The feds may also implement “additional civil measures enforcing the provisions” of the order (which “is not a rule within the meaning of the Administrative Procedure Act,” the CDC notes, “but rather is an emergency action”).

Creating a vast network of law enforcement officials empowered to enforce these mask rules will of course provide a handy new excuse for monitoring and surveilling citizens.

Meanwhile, deputizing federal agents, state authorities, and local cops to enforce transit mask rules will open up all sorts of new police harassment and abuse opportunities.

Only targeting people without masks might not seem to leave a lot of room for discriminatory enforcement. But the CDC order doesn’t just stop at people not wearing masks. In fact, it leaves a lot up to officials’ discretion.

For instance, travelers can take masks off while eating, drinking, or taking medication—leaving room for a lot of individual judgments in how long it’s reasonable or appropriate to remove a mask for during these activities, as well as misinterpretation in whether someone is allowed to have a mask on or off at a given moment.

The CDC order also says it’s not enough to simply wear a mask—it has to be a certain kind of mask. It can’t be a bandana, scarf, ski mask, or balaclava. It can’t fit too loosely or too tightly. It can’t contain an exhalation valve or be made from knitted fabrics, leather, plastic, or vinyl.

Again, that leaves a lot of room for authorities to choose who they target for enforcement.

“The CDC rule came just over a week after Biden’s executive order, which already mandated masks on certain modes of public transportation including planes and trains, and it mandated masks on federal property,” notes The Atlanta Journal-Constitution.

The new CDC rules apply to any passengers, operators, or staff of any “aircraft, train, road vehicle, vessel…or other means of transport,” including “rideshares meaning arrangements where passengers travel in a privately owned road vehicle driven by its owner in connection with a fee or service.” The order also applies “on the premises of a transportation hub,” defined as “any airport, bus terminal, marina, seaport or other port, subway station, terminal (including any fixed facility at which passengers are picked-up or discharged), train station, U.S. port of entry, or any other location that provides transportation subject to the jurisdiction of the United States.”

Kids under two years old, people with disabilities that disallow them from wearing masks, and people for whom “wearing a mask would create a risk to workplace health, safety, or job duty” are exempted.


FREE MINDS

Trump PAC, lawyers, and impeachment defense raise eyebrows. A political action committee (PAC) launched by former President Donald Trump “raised $31.5 million in the weeks after Election Day,” reports The Washington Post. But as of January 1, “Trump had held on to the majority of that money in the coffers of Save America, his new leadership PAC, which carries few restrictions on how the money can be spent and can now be used to finance his post-presidential political career.”

With his second impeachment trial fast approaching, Trump has “abruptly parted ways with five lawyers handling his impeachment defense,” The New York Times‘ Maggie Haberman reported over the weekend.

Mr. Trump had pushed for his defense team to focus on his baseless claim that the election was stolen from him, one person familiar with the situation said. A person close to Mr. Trump disputed that that was the case but acknowledged that there were differences in opinion about the defense strategy. However, Mr. Trump has insisted that the case is “simple” and has told advisers he could argue it himself and save the money on lawyers. (Aides contend he is not seriously contemplating doing so.)


FREE MARKETS

E.U. threatens nut milks and vegan ice creams. The latest in Big Dairy protectionism: The European Union is considering a law that “would prohibit plant-based milk producers from using words or images on their food labels that may also be used to describe or refer to animal-based dairy products,” Baylen Linnekin reports.

Worse still, the rules could expand beyond simply censoring words and pictures on food packaging. It could even prohibit the use of some common food packaging itself.

“They would also be unable to use packaging designs that call to mind dairy products, such as yoghurt [containers] or milk cartons,” The Conversation explains. “Even simply showing climate impact by comparing the carbon footprint of their products with dairy equivalents could become illegal.”


QUICK HITS

• The sordid history of the Fairness Doctrine.

• Footage released by the Rochester Police Department in New York shows cops pepper-spraying a 9-year-old girl.

• “Urban collapse is a modern-day version of an apocalypse prophecy: It’s always lurking just around the corner, seductive and terrifying, but it never quite happens,” writes Annalee Newitz, author of Four Lost Cities: A Secret History of the Urban Age, in a new Atlantic article challenging the idea that the COVID-19 pandemic is threatening the existence of big cities like New York and San Francisco. “Lost-city anxieties, like the ones aroused by the pandemic, result from a misunderstanding of what causes cities to decline.”

• A new Department of Justice memo “rescinded a 2017 memo that ordered federal prosecutors to seek the toughest charges and maximum possible sentences on the books,” notes Reason‘s C.J. Ciaramella.

• Two members of the Proud Boys who participated in the January 6 Capitol riot have been charged with federal conspiracy.

• Were your photos used to help build facial recognition databases?

• Department of relaxed rules that need to be permanent:

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The Brokers Are Breaking… Again

The Brokers Are Breaking… Again

With another day of most shorted stocks ramping higher, most notably the squeeze in silver, users of multiple discount retail brokerages are reporting issues or outages. 

Downdetector reports Fidelity, E-Trade, Robinhood, and Ameritrade are experiencing issues and outages as the US cash session opens up. 

Timeline of issues and outages at Robinhood. 

On a geographic basis, the issues and outages with Robinhood are widespread. 

Reuters’ Most Shorted Index jumped more than 2% this morning. 

*This story is developing. 

Tyler Durden
Mon, 02/01/2021 – 09:49

via ZeroHedge News https://ift.tt/39Cr9En Tyler Durden