Month: March 2021

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

Today’s political landscape is looking more and more like the classic Monty Python ‘Dead Parrot’ sketch…

You know the one, John Cleese walks into the shop to complain about the parrot he’d just been sold was dead and he wants his money back.  The shopkeeper, Michael Palin, insists it isn’t.

Hilarity ensues.

The Dead Parrot sketch is one of the high points of Python’s particular blend of absurdism and social commentary that transcends its time. 

Everywhere I look I see Michael Palins doing their best to convince us of the most absurd lies to hide the rank incompetence at every level of our society’s power structure.

And it doesn’t matter what issue we’re discussing: masks, vaccines, election fraud, racism, Joe Biden’s health, climate change, the sovereign bond markets, lockdowns.

No matter the issue or the question Biden’s Press Secretary, the uniquely incompetent Jenn Psaki, will be happy to ‘circle back to that later’ but never doing so hoping to just get through the next news cycle without a revolt.

Everyone’s doing the ‘believe me’ look that body language experts talk about all the time.  It’s all so tiresome and exhausting.  And you can feel the level of frustration building like John Cleese’s anger in the sketch.

It even looks to me like the people in the media are getting fed up with having to disseminate the lies.  But, since their access to power and livelihoods depend on playing along with the charade even the best ones act out on the stage prepared for them.

We all know they are lying.  They know we know they are lying.  We know they know that we know they are lying.

And yet the lying continues. 

Worse than that, the dying continues. 

Because that is the net outcome of all this lying, the wasted time and energy billions of people who eventually are asked to fight wars on behalf of these venal liars desperate to retain power and privilege.

The endless lying comes from the need to sell us on a future we don’t want for a price we can’t afford to pay.  That the pols in D.C. think they can bribe us with a couple thousand bucks of stimmy money after they’ve destroyed our quality of life is the clearest sign ever that they are completely out of touch.

But what is clear as well is that they do not care.  They don’t have to care because our government has openly morphed into the phone company from the old Lily Tomlin sketch of a few years after the Pythons’ heyday.

This absurd level of lying betrays the elites’ utter contempt for us.  They’re obsessed with squashing all traces of the only truly four-letter word in Brussels and D.C. “populism.’

Populism is the bane of tyrants and comedy like the Dead Parrot sketch can no longer be tolerated in the coming brave new world where you’ll own nothing and like it… or else.

I can’t stress enough that this obsession with narrative control is equal parts terrifying and hilarious at the same time.

Terrifying because the real world consequences are destroyed businesses, suicidal children, bombed cities, starved local populations, sanctions, threats, embargoes and migrations.

Hilarious because these people are patently absurd.  And we all know that comedy is, unfortunately, tragedy plus time. 

Because if we don’t laugh at this just a little bit the only recourse is insanity and violence.

Who takes Dr. Anthony Fauci seriously anymore other than those putting on the mask of corporate shill to interview him?

When more than one-third of the people you interact with on social media are literal bots the level of surreality we deal with daily approaches that of the most incoherent Philip K. Dick novel of the 1960’s.

[leans into the camera, extreme close-up] “Believe me, I’ve read them all.” [end scene]  

It all is a full-frontal assault on our senses, gluing us to tiny screens in a constant state of anxiety, noradrenaline-addicted doom-porn junkies begging for someone to just once, for pity’s sake, tell the freakin’ truth.

But it’s impossible to do so now without the entire operation collapsing into a chaotic mess.  The financial system is rightly described by its free market critics as a Ponzi Scheme.  But the real Ponzi Scheme is our faith in the efficacy of our elected officials and their handlers to keep all the lies spinning and the dying off the screens.

Those telling these lies are doing to out of fear.

They fear losing potency and power, the only thing psychopaths truly care about. 

Worse, many of us still go along with the lies.  We’ve believed them enough to have bought the dead parrot in the first place. 

But once we get out from underneath the spell of the shopkeeper and see the parrot for what it is, that’s when things have to change.  Because lies are expensive.  The truth sells itself. 

To date, we’ve tried bargaining with these liars’ humanity to just admit the parrot’s dead and give us a refund.

But they won’t do that.  Their contempt for us knows no limits.

Theirs is a system of pelf and privilege the benefits of which accrue to them while sucking our time and energy from us daily, driving us to distraction at best and fits of unconstrained rage at worst.

Our frustration is rising.  Protests against lockdowns in Europe are rising.  Revolts against their vaccines are real.  Now they’re trying to bribe us with Krispy Kreme donuts to take the jab while in Germany, the epicenter for the Great Reset, an even more brutal lockdown was just ordered and rescinded by the politically dead Angela Merkel.

French farmers are dumping cow manure on the steps of government.

Me: #Bitcoin is the best form of political activism

French farmers: *Dump loads of shit on governemt*

Me: #Bitcoin is the second best form of political activism https://t.co/k55GRzddYo

— Ben Kaufman (@_benkaufman) March 29, 2021

And that’s all they can do, keep raising the stakes of their lies, keep denying reality while trading on their command of the police hoping that making an example of some will keep the rising anger at bay.

They do this because like the shopkeeper they have nothing of value to offer us.  Dead Parrots not live ones.  They are incompetent, having managed society to the brink of collapse. When faced with that incompetence they deny it, suppress the truth and meet our decency with bullying while mistaking our passivity for compliance.

And while they may think we’ll just give up and start pining for the fjords, their lies will be the ones pushing up the daisies.

*  *  *

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“I’m concerned about excess risk-taking and if that excess risk-taking goes too far, whether it creates excesses and imbalances, that could ultimately create challenges,” Federal Reserve Bank of Dallas President Robert Kaplan says in an interview with Nikkei posted on its website.

“Equity market cap, divided by gross domestic product, that’s at a historically elevated level. Credit spreads, in the corporate bond markets, are at, relatively speaking, historically tight levels. There’s no question that financial assets, broadly, are at elevated valuation levels.”

Source: Bloomberg

While he is 100% correct, it’s an odd admission from a Fed President whose more typical response to any bubble-forming warnings is as follows…

All of which is comical given that the CDC director and Fauci and Biden all fearmongered the end of the world today and small caps (with a strong bias to “reopening” stocks) exploded higher today as the rest of the US Majors slipped lower…Ugly close like yesterday…

On the week, that late day weakness pushed the Dow red with Small Caps worst…

And as President Biden prepares to announce another $4 trillion in wasteful spending, why wouldn’t gold plunge to its lowest close since April 2020…

Instead, Bitcoin appeared to be the asset of choice to reflect the foolhardiness of politicians

Source: Bloomberg

Cathie Wood’s new Space ETF crash-landed…

Cyclicals outperformed Defensives today, erasing yesterday’s move entirely…

Source: Bloomberg

Equity vol continues to languish near cycle lows as rate vol explodes higher…

Source: Bloomberg

Treasuries dumped’n’pumped today with 30Y erasing yesterday afternoon’s weakness back to unch on the day. The belly of the curve remains higher in yield on the week…

Source: Bloomberg

The 10Y Yield spiked above 1.75% overnight in Asia but was bid back to unch by the close during the EU and US session

Source: Bloomberg

Are Japanese and European investors waiting for Q2 to pile in to USTs? And scoop up all that extra carry?

Source: Bloomberg

Real yields continued to push higher (and drag gold down with it)

Source: Bloomberg

The dollar continued its charge higher off the FOMC spike lows, taking out the early March highs to close at its highest since early November…

Source: Bloomberg

And it wasn’t just Bitcoin, Ethereum surged today also…

Source: Bloomberg

Silver puked back below $24 to its lowest since early December…

The dollar also weighed on oil prices (as well as the re-opening of the Suez Canal)

Finally, the rates market is pricing in over 5 rate-hikes between Dec ’22 and Dec ’24… that’s not at all what the equity market thinks is going on

Source: Bloomberg

And is pretty much a lock for rate-hike by the end of 2022…

Source: Bloomberg

And just in case you thought the Archegos debacle was over, it appears the market is still very anxious about Credit Suisse…

Source: Bloomberg

After abruptly delaying the release of a long-waited report on the origins of the coronavirus, a version of the report was leaked over the weekend (following reports that Chinese officials had interfered in the review process).

On Sunday night, 60 Minutes raised some serious questions about the WHO’s investigation of the pandemic’s origins in the city of Wuhan. When interviewer Lesley Stahl accused a member of the WHO team of simply taking Beijing’s word for it. He replied, incredulously, “what else can we do?”

Well, it appears the WHO leadership in Geneva has accepted the fact that their “report” on the virus’s origins, which essentially confirmed speculation that first surfaced more than a year ago (that the virus entered the human population from bats via an intermediary, possibly a civet or another such creature) has failed to dissuade the public of the notion that the virus likely leaked from a nearby lab, the Wuhan Institute of Virology.

WHO Director-General Dr. Tedros Adhanom Ghebreyesus heralded the report’s release on Tuesday with a mea culpa for the WHO: Dr. Tedros said the mission to China didn’t adequately explore whether the virus might have leaked from the lab, before saying that more studies will be needed.

“In my discussions with the team, they expressed the difficulties they encountered in accessing raw data,” Dr. Tedros said. “I expect future collaborative studies to include more timely and comprehensive data sharing.” The conclusions that the virus origins remains incomplete likely means that tensions over how the pandemic started – and whether China has helped or hinder efforts to find out, as the United States has alleged – will continue.

This marks the first time the WHO has appeared willing to countenance the possibility that the virus might have leaked from the lab, something former Trump national security official Matt Pottinger has repeatedly warned about.

What’s more, Dr. Tedros said China withheld raw data on early COVID cases from the team of researchers, which had requested it.

In a tweet published just hours before Dr. Tedros made his remarks, former Secretary of State Mike Pompeo slammed the report as a “sham”.

The WHO report is a sham continuation of the CCP-WHO disinformation campaign. It’s why I recommended we leave WHO. Dr. Tedros collaborated with Xi to hide human to human transmission at a CRITICAL juncture. WIV remains the most likely source of the virus — and WHO is complicit.

— Mike Pompeo (@mikepompeo) March 30, 2021

Mission leader Peter Ben Embarek said Tuesday as the report was released that the team hadn’t done a “full audit” of laboratories (since it’s so obvious that nobody is hiding anything.). He described the report as “a work in progress” and added that “until we have a firm lead leading us in one direction we aren’t closing the other doors”.

*WHO’S BEN EMBAREK: HAVEN’T DONE FULL AUDIT OF LABORATORIES

Because clearly nobody is hiding anything

— zerohedge (@zerohedge) March 30, 2021

As far as the lab-leak theory goes, Embarek acknowledged that “it’s possible.” But more studies are needed, and whether or not Beijing will cooperate remains unclear.

“I think there is a consensus that new studies need to be undertaken preferably as soon as possible…but in the proper way…well-planned…well-organized.” Some are ongoing, some still need to be started, Ben Embarek said.

In the report, the team acknowledged that despite China’s insistence that the Huanan Wet Market was ground zero for the Wuhan outbreak, none of the animal products sampled at the market tested positive. Still, they insisted that the “lab leak” scenario was the least likely hypothesis.

One way the team could help determine the virus’s origin, and thus test the theory that it occurred naturally, would be to access massive troves of patient data from across China stretching back to Sept. 2019, months before the outbreak was reported to the WHO.

But China has steadfastly refused to provide this data. And as such, Dr Tedros added in a tweet that “all hypotheses remain on the table.”

Finding the origin of a virus takes time and we owe it to the world to find the #COVID19 virus source so we can collectively take steps to reduce the risk of this happening again. No single research trip can provide all the answers.

— Tedros Adhanom Ghebreyesus (@DrTedros) March 30, 2021

He better be careful…

Watch it Ted or there is a mansion in Xinjian with your name on it https://t.co/FeeWikYFcc

— zerohedge (@zerohedge) March 30, 2021

While the WHO’s willingness to anger Beijing with this latest pronouncement about the virus’s origins may come as a surprise, in one respect, the agency had little choice: to western readers, the lack of Chinese cooperation and the obvious dissembling surrounding key aspects of the investigation are simply too suspicious to ignore. And no matter what the agency says, readers could easily come to their own conclusions.

Readers can read Dr. Tedros’ full remarks here. The closing remarks, where Dr. Tedros noted the fact the review is essentially incomplete, can be found in full below:

Thank you, Dr Peter Ben Embarek, Professor Liang and the whole team for sharing your report and presenting your findings.

I welcome your report, which advances our understanding in important ways.

It also raises further questions that will need to be addressed by further studies, as the team itself notes in the report.

As Member States have heard, the report presents a comprehensive review of available data, suggesting that there was unrecognized transmission in December 2019, and possibly earlier.

The team reports that the first detected case had symptom onset on the 8th of December 2019. But to understand the earliest cases, scientists would benefit from full access to data including biological samples from at least September 2019.

In my discussions with the team, they expressed the difficulties they encountered in accessing raw data. I expect future collaborative studies to include more timely and comprehensive data sharing.

I welcome the recommendations for further studies to understand the earliest human cases and clusters, to trace the animals sold at markets in and around Wuhan, and to better understand the range of potential animal hosts and intermediaries.

The role of animal markets is still unclear.

The team has confirmed that there was widespread contamination with SARS-CoV-2 in the Huanan market in Wuhan, but could not determine the source of this contamination.

Again, I welcome the recommendations for further research, including a full analysis of the trade in animals and products in markets across Wuhan, particularly those linked to early human cases.

I concur with the team’s conclusion that farmers, suppliers and their contacts will need to be interviewed.

The team also addressed the possibility that the virus was introduced to humans through the food chain.

Further study will be important to identify what role farmed wild animals may have played in introducing the virus to markets in Wuhan and beyond.
The team also visited several laboratories in Wuhan and considered the possibility that the virus entered the human population as a result of a laboratory incident.

However, I do not believe that this assessment was extensive enough. Further data and studies will be needed to reach more robust conclusions.

Although the team has concluded that a laboratory leak is the least likely hypothesis, this requires further investigation, potentially with additional missions involving specialist experts, which I am ready to deploy.

We will keep you informed as plans progress, and as always, we very much welcome your input.

Let me say clearly that as far as WHO is concerned all hypotheses remain on the table.

This report is a very important beginning, but it is not the end. We have not yet found the source of the virus, and we must continue to follow the science and leave no stone unturned as we do.

Finding the origin of a virus takes time and we owe it to the world to find the source so we can collectively take steps to reduce the risk of this happening again.

No single research trip can provide all the answers.

It is clear that we need more research across a range of areas, which will entail further field visits.

Before I conclude I want to express my thanks to the experts from around the world and China who participated in the report, and look forward to continuing this important work.

Excellencies, as always, we are grateful for your continuing engagement, and we look forward to your questions and comments.

Embarek also pushed back against reports that China tried to meddle with the report, which can be read in its entirety below:

WHO Convened Global Study of Origins of SARS CoV 2 China Part Joint Report by Joseph Adinolfi Jr. on Scribd

In addition to the ongoing controversy about Tesla’s Full Self Driving, which, ironically has clearly turned out to not be full self driving, and yet another Tesla wreck into a white tractor trailer in New Jersey just hours ago, Elon Musk’s automaker has found itself embroiled in another controversy.

The company is reportedly double charging some customers for new cars. And even better, the customers are struggling to try and get refunded from the company.

Three Southern California customers said they were charged twice for their cars, resulting in “tens of thousands” of dollars being withdrawn from their bank accounts that shouldn’t have been, CNBC revealed in a new report. They said they were given a “frustrating runaround” when seeking refunds. 

One customer, Tom Slattery, said he “woke up to find his bank account depleted by nearly $53,000 more than he expected — the sum he agreed to pay for a long-range, all-wheel-drive, 2021 Tesla Model Y”. Five days later, he is still waiting for a refund. “They told me to call my bank and have my bank reverse the charge. That was not acceptable. When you debit more than $50,000 and tell a customer to solve it on their own? I kept pushing.”

He also says he was told by an employee at the Burbank store than “hundreds of customers” were experiencing the same issues. 

“It’s hard to imagine sales and service getting worse. I had almost $53,000 unauthorized stolen from my bank account. And nobody, nobody has called me, emailed me, there’s no sense of urgency in resolving this,” he said.  

Customer Clark Peterson said he had a similar situation. On March 26, he noticed his account had been double charged and that Tesla gave him a similar answer: “He told me to call the bank and stop payment on that. I said the money has left my account. I’m pretty familiar with the way wire transfers work. When the money’s gone the money’s gone! He was insistent I should call my bank. So I did. They confirmed like no, the money is in Tesla’s account now. We cannot do anything about that until we hear from them.”

“This was not some operator error. And for a company that has so much technology skill, to have this happening to multiple people really raises questions.”

Another customer, Christopher T. Lee, told CNBC: “I was supposed to only pay $56,578.63 for my Model 3. … They ended up charging me twice for the car.”

Two other customers echoed similar stories to CNBC, stating that they experienced “duplicate debit charges” from Tesla. One customer said they face “overdraft fees and looming finance charges” as a result of the second charge. 

Even more surprising than the fact that some Americans actually have enough in their checking accounts lying around to fund the second purchase of a vehicle is the fact that the second charges even happen at all. Tesla vehicles range from $37,000 to about $71,000 – and any reasonable person would assume that necessary steps would be taken so that a purchase of such size is handled with care and calculation, instead of sloppiness and disorganization. 

“The best thing is to go back to the merchant and let them know an error occurred. Ask them to reverse or refund the money. That should be the easiest way,” Dave Excell, founder of a financial crime prevention tech firm called Featurespace, said. 

Caught between the rock of Xi JInping tracking down on local tech companies (see “China Considers Creating State-Backed Company to Oversee Tech Data“)  and the hard place of the continued dumping by Archegos of various Chinese tech blocks, Bloomberg’s Julia Fioretti notes that “the cracks are appearing in Asia’s tech listings boom.”

The latest to disappoint was US-traded Chinese video-streaming service Bilibili in Hong Kong, which closed 1% lower on Monday after raising $2.6 billion in a secondary listing in the city. Bilibili’s coming-out party in Hong Kong was hurt by a revived delisting threat of Chinese companies over stricter U.S. audit inspections, as well as regulatory clouds out of China.

Meanwhile, Chinese fintech firm Linklogis is due to price its IPO of as much as $1.1 billion in Hong Kong on Wednesday, providing further clues on investor appetite.

These deals come as debuts lose their shine. Companies that have raised at least $200 million from listings on Asian exchanges this year have posted an average first-day rise of 70% but a month after going public, they were just up 43% from their offer price, data compiled by Bloomberg show. Compare this to the second half of 2020, when market debutantes were up 60% in their first month, with an average first-day gain of 51%.

As Fioretti notes, it could be argued that some of the muted performances isn’t a bad thing: eye-popping gains by IPOs by Kuaishou Technology and Yidu Tech earlier this year were seen as signaling frothiness. After closing 161% above its IPO price in February, short-video service Kuaishou gave up some of the gains and is now trading at 130% above its issue price. Yidu Tech is just trading 37% above its IPO price after surging 148% on its debut.

But in a major hit to sentiment, the unprecedented spree of block trades in the U.S. as a result of the forced sale of Archegos’ holdings further hit sentiment towards the Chinese tech sector. Chinese tech giant Baidu ended its Hong Kong debut last week flat and has since slumped 20%. Its U.S. shares were among the $2.64 billion of stock offloaded on Monday in connection with the wind-down of Bill Hwang’s Archegos Capital Management.

An overall rotation out of technology into value and cyclical shares benefiting from a global economic rebound is also taking a toll on the sector. As a result, more companies are trading under water weeks in 2021. This year, 29% of companies that raised at least $200 million with one month of trading under their belt in Asia have dropped below their offer prices, up from 22% in the second half of last year, the data show.

Still, there are bright spots. Artificial intelligence software company Appier Group Inc. jumped 19% on its Tokyo debut on Tuesday after pricing its $271 million IPO at the top of the range, showing investors aren’t completely retreating from tech.

Here is a snapshot of some upcoming listings:

Bairong

• Hong Kong stock exchange
• Size $507m
• Listing March 31
• Morgan Stanley, CICC, CMBC Capital

Linklogis

• Hong Kong stock exchange
• Size up to $1.1b
• Pricing March 31, listing April 9
• Goldman Sachs, CICC

Archi Indonesia

• Indonesia stock exchange
• Size about $300m
• Pre-marketing March 12-26
• Citi, Credit Suisse

Smart Share Global

• Nasdaq
• Size up to $219m
• Pricing March 31
• Goldman Sachs, Citi, China Renaissance

Top Glove

• Hong Kong stock exchange
• Size up to $1.9b
• Filed Feb. 26
• CICC

Gateway Strategic Acquisition Co

• NYSE
• Size $300m
• Credit Suisse, Citi
• Filed March 24

Hony Capital Acquisition Co

• NYSE
• Size $300m
• Citi, Credit Suisse
• Filed March 24

Artisan Acquisition Corp.

• Nasdaq
• Size $300m
• Credit Suisse, UBS
• Filed March 24

Earlier, we presented JPMorgan’s thoughts on what the monetary hit from the Archegos fiasco would be to those banks who were also the fund’s prime brokers.

While significant – with the bank expecting as much as $10BN in total losses concentrated at Credit Suisse – these loses will not be game changing.

Yet last Friday’s fiasco is likely to have far-reaching consequences for the broader financial sector for two main reasons as explained earlier today by JPMorgan’s Andrew Tyler, author of the bank’s Market Intelligence report. We excerpt from his note below:

Yesterday’s session was dominated by the block trades from the HF liquidation.

This is sparking concerns about (i) reduced leverage and (ii) increased regulation.

• On the leverage point, investors are increasingly concerns that prime brokers may reduce their risk by increasing capital requirements and/or lower their amounts of outstanding credit. This would potentially exacerbate thin liquidity situations, depending on size and timing.

• On regulation, given the market’s lack of transparency into OTC derivatives and swaps that allow investors to exceed regulatory disclosure rules, investors are asking if there will there be a behavioral change from the SEC. If so, how would that change manifest.

Tyler ends on a cheerful note, writing that for all the drama, “this may be an isolated event that dissipates as we move past quarter-end and the holiday on Friday.”

“If so,” he concludes – as JPM always does when addressing its client – that this is the time to BTFD: “this week represents a great buying opportunity since the macro story is unchanged (fiscal stimulus, Fed, and vaccines).